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Federal Deposit Insurance Corporation.
Final rule.
The FDIC is revising its regulation on forms, instructions, and reports to make the information contained in it current. The revised regulation includes current FDIC addresses and websites, and updated descriptions of FDIC forms.
April 17, 2002.
Thomas E. Nixon, Senior Program Attorney, Office of the Executive Secretary, (202) 898-8766; Robert Walsh, Manager, Policy and Program Development Section, Division of Supervision (202) 898-6911; Philip Houle, Counsel, Legal Division (202) 898-3722, Federal Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC 20429.
The FDIC's regulation, “Forms, Instructions, and Reports” informs the public where it may obtain forms and instructions for reports, applications and other submittals used by the FDIC and describes certain forms used by the FDIC, including the Consolidated Reports of Condition and Income (Call Report), that are not described elsewhere in FDIC regulations. It also implements requirements of the Federal Deposit Insurance Corporation Improvement Act (FDICIA), Public Law 102-242 (Dec. 19, 1991), which require the inclusion of “off balance sheet” items in any financial reports from an insured institution to a Federal banking agency and for the FDIC to collect information on small business and small farm lending from insured depository institutions in their annual reports of condition.
This final rule updates the regulation to provide current information. It does not change any regulatory requirement imposed on the public by the FDIC, including any reporting or record keeping requirement. The FDIC is also publishing today in this document, directly following the final rule, a list of forms used by the FDIC that provides form numbers, descriptive titles, Paperwork Reduction Act clearance numbers, and citations to regulations that refer to the forms. This “Forms Used by the FDIC” list will not be codified into the Code of Federal Regulations, but will be periodically updated by the FDIC and made available to the public.
As noted, this final rule updates information in part 304 and does not affect any regulatory requirement imposed by the FDIC on the public. The changes are matters of “agency organization, procedure, or practice” and are thus not subject to the general requirement of the Administrative Procedure Act (APA) for notice and comment, pursuant to 5 U.S.C. 553(b)(A). The changes are also routine, technical, non-substantive and insignificant in nature and impact. They are also inconsequential to the industry and the public, except to the extent that they correct errors, update information and improve access to information concerning forms, instructions and reports required by the FDIC. Thus, the FDIC finds, for good cause, that the APA notice-and-comment provisions are unnecessary. 5 U.S.C. 553(b)(B).
This final rule is also effective immediately, because: (a) The changes are routine, technical, and not substantive; (b) the public does not need a delayed period of time to conform or adjust; and (c) the current part 304 contains inaccurate information which should be corrected as promptly as possible. Therefore, it is determined that good cause exists for making these amendments effective on publication in the
This final rule does not create or modify any collection of information pursuant to the Paperwork Reduction Act (44 U.S.C. 3501
A regulatory flexibility analysis under the Regulatory Flexibility Act (RFA) is required only when an agency must publish a notice of proposed rulemaking. 5 U.S.C. 603 and 604. As already noted, the FDIC has determined that publication of a notice of proposed rulemaking is not necessary here. Accordingly, the RFA does not require a regulatory flexibility analysis.
The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) (Pub. L. 104-121) provides generally for agencies to report rules to Congress for review. The reporting requirement is triggered when the FDIC issues a final rule as defined by the APA. 5 U.S.C. 551. Because the FDIC is issuing a final rule as defined by the APA, the FDIC will file the reports required by the SBREFA.
The Office of Management and Budget has determined that this proposal does not constitute a “major” rule as defined by SBREFA.
The FDIC has determined that this final rule will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999, Public Law 105-277, 112 Stat. 2681 (1998).
Bank deposit insurance, Banks, banking, Freedom of information, Reporting and recordkeeping requirements.
5 U.S.C. 552; 12 U.S.C. 1817, 1831, 1867.
Part 304 informs the public where it may obtain forms and instructions for reports, applications, and other submittals used by the FDIC, and also describes certain forms that are not described elsewhere in FDIC regulations.
Forms and instructions used in connection with applications, reports, and other submittals used by the FDIC can be obtained by contacting the FDIC Public Information Center (801 17th Street, NW., Washington, DC 20434; telephone: 800-276-6003 or 202-416-6940), except as noted below in § 304.3. In addition, many forms and instructions can be obtained from FDIC regional offices. A list of FDIC regional offices can be obtained from the FDIC Public Information Center or found at the FDIC's web site at http://www.fdic.gov, or in the directory of FDIC Law, Regulations and Related Acts published by the FDIC.
(a) Consolidated Reports of Condition and Income, Forms FFIEC 031 and 041. Pursuant to section 7(a) of the Federal Deposit Insurance Act (12 U.S.C. 1817(a)), every national bank, state member bank, and insured state nonmember bank is required to file Consolidated Reports of Condition and Income (also known as the Call Report) in accordance with the instructions for these reports. All assets and liabilities, including contingent assets and liabilities, must be reported in, or otherwise taken into account in the preparation of, the Call Report. The FDIC uses Call Report data to calculate deposit insurance assessments and monitor the condition, performance, and risk profile of individual banks and the banking industry. Reporting banks must also submit annually such information on small business and small farm lending as the FDIC may need to assess the availability of credit to these sectors of the economy. The report forms and instructions can be obtained from the Division of Supervision, FDIC, Washington, DC 20429.
(b) Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks, Form FFIEC 002. Pursuant to section 7(a) of the Federal Deposit Insurance Act (12 U.S.C. 1817(a)), every insured U.S. branch of a foreign bank is required to file a Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks in accordance with the instructions for the report. All assets and liabilities, including contingent assets and liabilities, must be reported in, or otherwise taken into account in the preparation of the report. The FDIC uses the reported data to calculate deposit insurance assessments and monitor the condition, performance, and risk profile of individual insured branches and the banking industry. Insured branches must also submit annually such information on small business and small farm lending as the FDIC may need to assess the availability of credit to these sectors of the economy. Because the Board of Governors of the Federal Reserve System collects and processes this report on behalf of the FDIC, the report forms and instructions can be obtained from Federal Reserve District Banks or through the web site of the Federal Financial Institutions Examination Council,
(c) Summary of Deposits, Form FDIC 8020/05. Form 8020/05 is a report on the amount of deposits for each authorized office of an insured bank with branches; unit banks do not report. Reports as of June 30 of each year must be submitted no later than the immediately succeeding July 31. The report forms and the instructions for completing the reports will be furnished to all such banks by, or may be obtained upon request from, the Division of Supervision, FDIC, 550 17th Street, NW., Washington, DC 20429.
(d) Notification of Performance of Bank Services, Form FDIC 6120/06. Pursuant to Section 7 of the Bank Service Company Act (12 U.S.C. 1867), as amended, FDIC supervised banks must notify the agency about the existence of a service relationship within thirty days after the making of the contract or the performance of the service, whichever occurs first. Form FDIC 6120/06 may be used to satisfy the notice requirement. The form contains identification, location and contact information for the bank, the servicer, and a description of the services provided. In lieu of the form, notification may be provided by letter. Either the form or the letter containing the notice information must be submitted to the regional director—Division of Supervision of the region in which the bank's main office is located.
By order of the Board of Directors.
[“Forms Used by the FDIC” will not appear in the Code of Federal Regulations.]
Federal Housing Finance Board.
Final rule.
The Federal Housing Finance Board (Finance Board) is amending its regulation governing the operation of the Affordable Housing Program (AHP) to improve the operation and effectiveness of the AHP. The changes include: making the requirements for approval of post-completion project modifications the same as the current requirements for pre-completion project modifications; allowing the Federal Home Loan Banks (Banks) to define “homeless household” for purposes of scoring applications for AHP subsidies to finance housing for such households; allowing the Banks to award scoring points to projects using Federal government properties, and to projects using non-Federal government properties conveyed for an amount significantly below their fair market value; permitting the Banks to allow members or project sponsors to re-use repaid AHP direct subsidy to assist another AHP-eligible household to purchase or rehabilitate an owner-occupied unit in the same project; permitting a Bank to allocate up to the greater of $3 million or 25 percent of its annual required AHP contribution for the subsequent year to the current year's AHP competitive application program; adding the Federal Financial Institutions Examination Council as a source of area median income data that may be used to determine household income eligibility; removing the requirement that the amount of AHP subsidies offered by a Bank in each funding period must be comparable; removing the requirement that the Banks must determine the feasibility of projects before their applications may be scored; and allowing the Banks up to one year and 120 days after completion of a rental project to review the documentation received from the project owner for project compliance.
The final rule shall be effective on May 17, 2002.
Charles E. McLean, Deputy Director, (202) 408-2537, Melissa L. Allen, Program Analyst, (202) 408-2524, Office of Policy, Research and Analysis; or Sharon B. Like, Senior Attorney-Advisor, (202) 408-2930, Office of General Counsel, Federal Housing Finance Board, 1777 F Street, NW., Washington, DC 20006.
Section 10(j)(1) of the Federal Home Loan Bank Act (Bank Act) requires each Bank to establish a program to subsidize the interest rate on advances to members of the Bank System engaged in lending for long-term, low- and moderate-income, owner-occupied and affordable rental housing at subsidized interest rates.
Various amendments have been made to the AHP regulation since 1998 in order to clarify AHP requirements and improve the operation and effectiveness of the AHP. The Banks, members, project sponsors and Finance Board staff have, over the course of implementation of the AHP, identified additional amendments that it is believed would improve the operation and effectiveness of the AHP. On December 27, 2001, the Finance Board published in the
The Finance Board received comments on the proposed rule from 41 parties. Commenters included: 9 Banks; 2 Bank Affordable Housing Advisory Councils; 1 financial services holding company representing a Bank member; 25 Native American tribal housing authorities, tribally designated housing entities, and tribes; 1 Native American housing trade association; 1 community development lender; 1 nonprofit housing lender; and 1 community development corporations trade association. Commenters generally supported some or all of the proposed amendments. Comments that raised issues beyond the scope of the proposed rule changes are not addressed in this final rule, but will be considered by the Finance Board in any future rulemaking under the AHP. The provisions of the proposed rule on which significant comments were received are discussed below.
For the reasons discussed in section F. below, the final rule removes the definition of “homeless household” in § 951.1 of the AHP regulation, and allows each Bank to define the term for purposes of scoring applications for AHP subsidy to finance housing for
Under the AHP regulation, households are eligible for AHP subsidies if they have an income at or below the targeted income level, expressed as a percentage of median income for the area, specified in the AHP application.
a. The median income for the area, as published annually by the U.S. Department of Housing and Urban Development (HUD);
b. The applicable median family income, as determined under 26 U.S.C. 143(f) and published by a state mortgage revenue bond program;
c. The median income for the area, as published by the U.S. Department of Agriculture; or
d. The median income for any definable geographic area, as published by a Federal, state or local government entity for purposes of that entity's housing programs, and approved by the Finance Board, at the request of a Bank, for use under the AHP.
As discussed in the
Therefore, under the proposed rule, new paragraphs (1)(ii) and (2)(ii) would be added to the existing definition of “median income for the area” in § 951.1 to include FFIEC as a data source, and the remaining paragraphs would be renumbered accordingly. Commenters generally supported this proposed change.
Accordingly, the final rule adopts, without change, the proposed amendments to § 951.1 to include FFIEC as a source of median income data.
The AHP regulation provides that in cases where the amount of AHP homeownership set-aside funds applied for by members in a given year exceeds the amount available for that year, a Bank may allocate up to the greater of $3 million or 25 percent of its annual required AHP contribution for the subsequent year to the current year's homeownership set-aside programs.
As discussed in the
Several Banks also have raised the issue that a change in generally accepted accounting principles in the United States, contained in Statement of Financial Accounting Standards (SFAS) 133, could cause fluctuations in a Bank's net earnings and thereby cause fluctuations in the Bank's required AHP contributions from year to year. Allowing the Banks to allocate AHP funds from the subsequent year's required AHP contribution to the current year under the competitive application program would give the Banks flexibility to mitigate some of these year-to-year fluctuations in required AHP contributions.
The Finance Board agrees that allowing allocation of AHP funds from the subsequent year's required AHP contribution to the current year's competitive application program could be beneficial to the AHP. The Finance Board recognizes that allowing such allocation of AHP funds may result in fewer AHP funds available for the subsequent year. However, the overall amount of AHP funds available would not decrease; a portion of the funds would simply be available in the current year rather than in the subsequent year. Moreover, there is no guarantee in any case that the amount of AHP funds available in a given year will be the same as the amount available in the previous year, given fluctuations in Bank net earnings from year to year.
Therefore, under the proposed amendment to § 951.3(a)(2), a Bank, in its discretion, could allocate up to the greater of $3 million or 25 percent of its annual required AHP contribution for the subsequent year to the current year's competitive application program. This authority would be separate from and in addition to a Bank's existing authority to allocate up to the greater of $3 million or 25 percent of its annual required AHP contribution for the subsequent year to the current year's homeownership set-aside programs at such Bank.
Accordingly, the final rule adopts, without change, the proposed amendments to § 951.3(a)(2) to allow a Bank to allocate up to the greater of $3 million or 25 percent of its annual required AHP contribution for the subsequent year to the current year's competitive application program, as well as the CPI adjustment provision.
The AHP regulation provides that the amount of AHP subsidies offered by a Bank in each funding period under the
Therefore, under the proposed rule, the requirement in § 951.6(b)(1) that the amount of AHP subsidies offered in each Bank's funding period must be comparable would be removed. Commenters generally supported this proposed change.
Accordingly, the final rule adopts, without change, the proposed amendment to § 951.6(b)(1) removing the requirement that the amount of AHP subsidies offered in each Bank's funding period must be comparable.
The AHP regulation provides that projects receiving AHP subsidies pursuant to a Bank's competitive application program must meet the eligibility requirements of the regulation.
As discussed in the
Therefore, under the proposed rule, the requirement in § 951.6(b)(4)(i) that the Bank score only those applications meeting the regulatory eligibility requirements would be removed. Commenters generally supported this proposed change.
Accordingly, the final rule adopts, without change, the proposed amendment to § 951.6(b)(4)(i) removing the requirement that the Bank score only those applications meeting the regulatory eligibility requirements.
The AHP regulation includes, as one of nine criteria for scoring AHP applications, the creation of housing using a significant proportion of units or land donated or conveyed for a “nominal” price by the Federal government or any agency or instrumentality thereof, or by any other party.
As discussed in the
Therefore, under the proposed rule, § 951.6(b)(4)(iv)(A) would have been amended to provide that a Bank may award scoring points to projects using a significant proportion of housing units conveyed by the Federal government or any agency or instrumentality thereof, “regardless of the amount charged for such conveyance.” Commenters generally supported this proposed change. A Bank commenter and Bank Affordable Housing Advisory Council commenter argued that projects that limit acquisition costs are better positioned to charge low rents and, therefore, serve very low-income households, and should be able to receive more scoring points on that basis. Consequently, these commenters did not want the Banks to be required to give the same number of scoring points to projects using Federal government properties conveyed at market value as are given to projects using properties conveyed at below-market value. The commenters recommended allowing the Banks to decide, in their discretion, whether to award variable scoring points that would give more points for projects using properties conveyed for an amount significantly below their fair market value, whether conveyed by a Federal or non-Federal government entity.
The regulation currently allows the Banks to designate a scoring criterion as a variable-point criterion if there are varying degrees to which an application satisfies the criterion.
Accordingly, consistent with the proposed rule, the final rule removes the “nominal” price requirement for properties conveyed by Federal government entities in § 951.6(b)(4)(iv)(A)(
As discussed in the
Therefore, under the proposed rule, § 951.6(b)(4)(iv)(A) would be amended by removing the “nominal price” requirement and adding language clarifying that a Bank may award scoring points for projects using a significant proportion of properties conveyed by a non-Federal government entity at an amount that is significantly below their fair market value, as defined by the Bank in its AHP implementation plan. As noted above, the language in proposed § 951.6(b)(4)(iv)(A)(
Accordingly, consistent with the proposed rule, the final rule adopts the proposed amendment to § 951.6(b)(4)(iv)(A)(
The AHP regulation also includes as a scoring criterion the creation of housing for homeless households, as further described in the regulation.
1. Lack a fixed, regular and adequate nighttime residence; or
2. Have a primary nighttime residence that is:
a. A supervised publicly or privately operated shelter designed to provide temporary living accommodations (including welfare hotels, congregate shelters, and transitional housing for the mentally ill);
b. An institution that provides a temporary residence for individuals intended to be institutionalized; or
c. A public or private place not designed for, or ordinarily used as, a regular sleeping accommodation for human beings.
As discussed in the
Therefore, under the proposed rule, the definition of “homeless household” in § 951.1 would be removed and § 951.6(b)(4)(iv)(D) would be amended to provide that, for purposes of scoring applications that reserve units for “homeless households,” a “homeless household” shall have the meaning as defined by the Bank in its AHP implementation plan. Commenters generally supported this proposed change.
Accordingly, the final rule adopts, without change, the proposed amendments removing the definition of “homeless household” from § 951.1, and providing in § 951.6(b)(4)(iv)(D) that, for purposes of scoring applications that reserve units for “homeless households,” a “homeless household” shall have the meaning as defined by the Bank in its AHP implementation plan.
1. The AHP regulation sets forth different requirements that must be satisfied in order for a Bank to approve, in its discretion, a modification to the terms of a project's approved
a. The project, incorporating any such changes, would meet the regulatory eligibility requirements;
b. The application, as reflective of such changes, continues to score high enough to have been approved in the funding period in which it was originally scored and approved by the Bank; and
c. There is good cause for the modification.
2. A Bank, in its discretion, may approve modification requests, not including requests for additional AHP subsidy, made after project completion, provided that:
a. The project, incorporating any material changes, would meet the regulatory eligibility requirements;
b. The application, as reflective of such changes, continues to score high enough to have been approved in the funding period in which it was originally scored and approved by the Bank;
c. The project is in financial distress, or is at substantial risk of falling into such distress (financial distress requirement); and
d. The project sponsor or owner has made best efforts to avoid noncompliance with the terms of the application for subsidy and the requirements of the regulation.
As discussed in the
Therefore, under the proposed rule, § 951.9, including the financial distress requirement, would be removed, and § 951.7 would be amended to include authorization for the Banks, in their discretion, to approve increases in subsidy after project completion and to otherwise make the post-completion modification requirements the same as those currently applicable to pre-completion modifications. Commenters generally supported these proposed changes.
The
Commenters generally supported, and one Bank in particular strongly endorsed, retaining the rescoring requirement. One Bank commenter opposed retaining the rescoring requirement for post-completion modification requests, on the basis that other limitations could be incorporated into the AHP regulation to address the concerns about scoring manipulation. The Bank suggested the adoption of three standards for assessing post-completion modification requests for projects that cannot rescore successfully, including a requirement that the Bank make a factual determination that no intentional manipulation occurred or over-commitments were made in the initial AHP application. In the alternative, the Bank recommended that rescoring only be required for modification requests received during the first year after project completion.
The Finance Board's objective in amending the AHP regulation is to give the Banks greater flexibility in determining how to deal with post-completion modifications. The Finance Board's view is that the circumstances surrounding an individual request for a post-completion modification may vary widely, and the regulatory standards proposed by the Bank are likely to reduce the Bank's flexibility rather than to increase it. For example, it may be difficult for a Bank to make a factual determination that there was no intentional overcommitting in the application. Moreover, there may be instances where a post-completion modification would be appropriate even if the project sponsor is shown to have overcommitted in the application, such as where affordable units would be lost and their low- or moderate-income occupants displaced if the modification were not approved. The Bank always has the discretion to set its own standards, within the existing regulatory framework, for approving or denying modification requests that can successfully rescore. In the case of modification requests that cannot rescore successfully, a showing of good cause could form the basis for requesting a waiver of the rescoring requirement from the Finance Board. The Finance Board does not believe that requiring a Bank to obtain a waiver from the Finance Board if a modification request cannot rescore successfully would impose such an undue burden on the Bank as to warrant a change in the long-standing requirement for rescoring of modification requests. The Finance Board also does not agree that the Bank's alternative proposal of a one-year time limit for the rescoring requirement will eliminate the possible incentive to manipulate the scoring system. Therefore, the final rule does not adopt the Bank's suggestions to remove the rescoring requirement, or to limit the
Accordingly, the final rule adopts, without change, the proposed amendment removing § 951.9, including the financial distress requirement, and the proposed amendment to § 951.7 authorizing the Banks, in their discretion, to approve increases in AHP subsidy after project completion and otherwise making the post-completion modification requirements the same as those currently applicable to pre-completion modifications.
1. The AHP regulation provides that within the first year after completion of a rental project, the project owner must:
a. Certify to the Bank that the services and activities committed to in the AHP application have been provided in connection with the project; and
b. Provide a list of actual tenant rents and incomes to the Bank, and certify that the tenant rents and incomes are accurate and in compliance with the rent and income targeting commitments made in the AHP application, and that the project is habitable.
2. The regulation further provides that each Bank must take the steps necessary to determine that:
a. Within the first year after completion of a rental project, the services and activities committed to in the AHP application have been provided in connection with the project; and
b. The AHP subsidies were used for eligible purposes, the project's actual costs were reasonable and customary in accordance with the Bank's project feasibility guidelines, and the subsidies were necessary for the financial feasibility of the project, as currently structured.
As discussed in the
The Finance Board concurs that the Banks should have sufficient time to complete the compliance reviews. The Finance Board also believes that this time period should apply not only for completing the services and activities review, but also for the review of eligible purposes, actual costs and feasibility required under existing § 951.10(c)(2)(ii).
Therefore, § 951.10(c)(2) of the proposed rule would have been amended to require each Bank to complete the compliance reviews required thereunder within 120 days after receiving the rental project owner documentation.
Commenters generally supported this proposed change. One Bank commenter supported the change, provided the Banks would still have up to one year from project completion to complete the compliance review. The Finance Board agrees that, consistent with the existing regulatory monitoring framework for rental projects, the review period should commence from the date of project completion rather than from the date of receipt of the project documentation. The Finance Board also has determined that, regardless of when the documentation is received during the first year after project completion, for ease of implementation, the Banks should have up to one year and 120 days from the date of project completion to complete their compliance reviews.
Accordingly, the final rule revises § 951.10(c)(2) to provide that each Bank must complete the compliance reviews required thereunder within one year and 120 days after rental project completion.
As discussed in the
The current AHP regulation, which went into effect in 1998, continues to prohibit such re-use of repaid AHP direct subsidies by members or project sponsors. Specifically, § 951.13(d)(1) of the AHP regulation provides generally that a member must ensure that an owner-occupied unit that is purchased, constructed, or rehabilitated with the proceeds of an AHP direct subsidy is subject to a deed restriction or other retention agreement requiring that if the unit is sold to an income-ineligible household or refinanced prior to the end of the five-year retention period and is no longer subject to a deed restriction, a
A number of Banks and project sponsors have requested that the Finance Board allow members, in the case of AHP direct subsidies provided through a homeownership set-aside program, or project sponsors, in the case of AHP direct subsidies provided through the competitive application program, to re-use repaid AHP direct subsidies in the same project in the ways described above. The Banks and project sponsors maintain that allowing such re-use of repaid direct subsidies can be an efficient use of AHP subsidies. The amounts repaid generally would be quite small, the project sponsor would receive no additional AHP subsidy from the Bank, and the re-used AHP subsidy would continue to assist other AHP-eligible households in the same project in accordance with the original AHP application commitments. Any household assisted through the re-use of repaid direct subsidy would be subject to a new five-year retention agreement.
Therefore, under § 951.12(e)(2) of the proposed rule, members or project sponsors would be able to re-use repaid AHP direct subsidies in the same project if authorized by the Bank, in its discretion, in its AHP implementation plan and within the time period specified by the Bank in the plan. Commenters generally supported this proposed change.
Accordingly, consistent with the proposed rule, § 951.12(e)(2) of the final rule generally authorizes each Bank to adopt AHP direct subsidy re-use programs. The final rule makes some technical changes to the language in § 951.12(e)(2) to provide greater clarity, and makes a conforming change to § 951.3(b)(1) by adding paragraph (ix), which requires each Bank to include in its AHP implementation plan any requirements, including time limits, for re-use of AHP direct subsidies.
As discussed in the
Accordingly, § 951.12(e)(2) of the final rule corrects this omission by adding rehabilitation costs as an eligible use of repaid AHP direct subsidy.
As discussed in the
The Finance Board agrees that existing monitoring requirements, as well as new disbursement and monitoring requirements included in the final rule and discussed further below in section I.4., should ensure that any repaid AHP subsidy retained by a member or project sponsor will be re-used promptly and in compliance with the requirements of the AHP regulation and the commitments of the approved AHP application.
Accordingly, § 951.12(e)(2) of the final rule provides that the Bank shall have discretion, as provided in its AHP implementation plan, to determine whether to allow members and project sponsors to retain repaid AHP direct subsidies for re-use in the same project, or to require their repayment to the Bank for subsequent disbursement by the Bank to the members or project sponsors for re-use in the same project. If a Bank should decide to allow members or project sponsors to retain repaid AHP direct subsidies for re-use, the Bank would have the discretion to determine any requirements to place on the project sponsor's administration of those funds during the period before their re-use.
The final rule also makes conforming changes to § 951.13(d)(1), which requires execution of a five-year retention agreement for each new household assisted with AHP direct subsidy, including re-used AHP direct subsidy, to incorporate the repayment obligations to the Bank, or to the member or project sponsor, depending on whether or not the Bank has authorized retention and re-use of repaid AHP direct subsidy by the member or project sponsor.
In order to ensure the timely use of repaid AHP direct subsidies, § 951.12(e)(2) of the final rule, consistent with the proposed rule, requires a Bank to specify in its AHP implementation plan the time period within which the repaid subsidies must be re-used for an eligible household. Under the proposed rule, the repaid subsidies would have been repaid to the Bank. Since the Bank would have been re-disbursing the repaid subsidies to the member for re-use under both the homeownership set-aside program and the competitive application program, the Bank would have been able to verify, upon its disbursement of the repaid subsidies, whether the re-use was in compliance with the requirements of the AHP regulation and the commitments of the approved AHP application.
However, under § 951.12(e)(2) of the final rule, a member or project sponsor, pursuant to the homeownership set-aside program or competitive application program, respectively, may, if authorized by the Bank, retain the repaid subsidies for re-use rather than return them to the Bank for subsequent disbursement. Under the current AHP regulation, prior to initial disbursement of homeownership set-aside funds by a Bank to a member, the Bank must require the member to certify that the funds will be provided to a household meeting the eligibility requirements of § 951.5(a)(2) and that they will be provided in accordance with the homebuyer counseling requirements of § 951.5(a)(7), if applicable. In order for the Bank to be able to verify compliance of the re-use of homeownership set-aside funds that have been repaid to and retained by a member, the Bank would need to receive a certification from the
Accordingly, the final rule amends § 951.8(b)(2) by adding a requirement that prior to disbursement by a member of homeownership set-aside funds repaid to and retained by such member, the Bank shall require the member to provide a certification to the Bank on household eligibility and homebuyer counseling requirements, if applicable.
In addition, in order for the Bank and the member to be able to verify compliance of the re-use of subsidies repaid to and retained by the project sponsor under the competitive application program (see further discussion of initial monitoring requirements in sections I.4.c. and d. below), the Bank and member would need to be notified of when the repaid subsidies are being re-used by the project sponsor.
Accordingly, the final rule amends § 951.8 by adding paragraph (c)(5), which requires that, prior to disbursement by a project sponsor of AHP subsidy repaid to and retained by such project sponsor, the project sponsor shall provide written notice to the member and the Bank of its intent to disburse the repaid subsidy to a household satisfying the requirements of the AHP regulation and the commitments in the approved AHP application.
Under the initial monitoring requirements of the existing AHP regulation, where AHP subsidies are used under the competitive application program to finance the purchase of owner-occupied units, project sponsors must maintain household income verification documentation available for review by the member or the Bank.
Under the initial monitoring requirements of the existing AHP regulation, within one year after disbursement to an owner-occupied project of all approved AHP subsidies under the competitive application program, the member must review the project documentation and certify to the Bank that:
(i) The AHP subsidies have been used according to the commitments made in the approved AHP application; and
(ii) The AHP-assisted units are subject to deed restrictions or other legally enforceable retention agreements or mechanisms meeting the requirements of § 951.13(d)(1).
Accordingly, the final rule amends § 951.10(b)(1)(ii) to provide that, within 60 days after receipt of a notice of disbursement of repaid subsidy provided by the project sponsor pursuant to § 951.8(c)(5), the member must review the project documentation and make the certification on re-use of the AHP subsidy and existence of the retention agreement.
The initial monitoring requirements of the existing AHP regulation provide generally that a Bank must take the steps necessary to determine, based on a review of the documentation for a sample of projects and units within one year of receiving the member certifications described above, that:
(i) The households receiving the AHP subsidies under the competitive application program were income-eligible;
(ii) The AHP subsidies were used for eligible purposes, the project's actual costs were reasonable and customary in accordance with the Bank's project feasibility guidelines, and the subsidies were necessary for the financial feasibility of the project; and
(iii) The AHP-assisted units are subject to legally enforceable retention agreements meeting the requirements of § 951.13(d)(1).
Accordingly, the final rule amends § 951.10(c)(1) to provide that the Bank must review the project documentation and member certification for each disbursement of repaid AHP subsidy under a subsidy re-use program, upon receipt of such certification.
Proposed § 951.13(c)(1)(iii) would have allowed the Banks to authorize the re-use of the unused AHP interest rate subsidy of prepaid mortgage loans to subsidize the interest rate on another mortgage loan to an eligible household that replaced the prepaid mortgage loan in a pool of mortgage loans held by the member. The only comments received on this proposal were from four entities that currently participate together in a particular type of AHP-assisted loan pool transaction in one Bank district. The commenters indicated that the actual loan pool structure used in this transaction is different from the structure set forth in the proposed rule. The commenters recommended that the final rule authorize the re-use of unused AHP subsidy in the type of loan pool structure used by the commenters. The commenters also recommended that the current regulatory five-year retention period requirement for owner-occupied projects, which applies to individual mortgage loans within the pool, be amended to apply broadly to a pool of AHP-assisted mortgage loans.
The commenters' loan pool proposal differs significantly from the loan pool proposal set forth in the proposed rule, and Finance Board staff has determined that additional information is needed on the nature of this proposal before a determination can be made on whether to authorize the re-use of unused AHP subsidy in such a transaction.
The final rule does not contain any collections of information pursuant to the Paperwork Reduction Act of 1995.
The final rule applies only to the Banks, which do not come within the meaning of “small entities,” as defined
Community development, Credit, Federal home loan banks, Housing, Reporting and recordkeeping requirements.
12 U.S.C. 1430(j).
(1) * * *
(ii) The median income for the area obtained from the Federal Financial Institutions Examination Council;
(2) * * *
(ii) The median income for the area obtained from the Federal Financial Institutions Examination Council;
The additions and revisions read as follows:
(a) * * *
(2)
(b) * * *
(1) * * *
(ix) Any requirements, including time limits, for re-use of repaid AHP direct subsidy, adopted by the Bank pursuant to § 951.12(e)(2).
The revisions read as follows:
(b) * * *
(4) * * *
(iv) * * *
(A)
(
(
(D)
(b) * * *
(2)
(i) The funds received by the member will be provided to a household meeting the eligibility requirements of § 951.5(a)(2);
(ii) * * *
(iii) Funds received by the member for homebuyer counseling costs will be provided according to the requirements of § 951.5(a)(7).
(c) * * *
(5)
The revisions read as follows:
(b) * * *
(1) * * *
(ii) Within one year after disbursement to a project of all approved AHP subsidies, or in the case of a re-use of repaid AHP direct subsidy pursuant to § 951.12(e)(2), within 60 days after receipt of a notice of disbursement of such repaid subsidy provided by a project sponsor pursuant to § 951.8(c)(5), the member must review the project documentation and certify to the Bank that:
(c)
(2)
(i) The services and activities committed to in the AHP application have been provided in connection with the project; and
The revision reads as follows:
(e)
(2)
(i) The member or the project sponsor originally provided the direct subsidy as downpayment, closing cost, rehabilitation or interest rate buydown assistance to an eligible household to purchase or rehabilitate an owner-occupied unit pursuant to an approved AHP application;
(ii) The AHP direct subsidy, including any interest, was repaid to the member or project sponsor as a result of a sale by the household of the unit prior to the end of the retention period to a purchaser that is not a low-or moderate-income household; and
(iii) The repaid AHP direct subsidy is made available by the member or project sponsor, within the period of time specified by the Bank in its AHP implementation plan, to another AHP-eligible household to purchase or rehabilitate an owner-occupied unit in the same project in accordance with the terms of the approved AHP application.
(d) * * *
(1) * * *
(ii) In the case of a sale of the unit prior to the end of the retention period, an amount equal to a pro rata share of the direct subsidy that financed the purchase, construction, or rehabilitation of the unit, reduced for every year the seller owned the unit, shall be repaid to the following parties, as applicable, from any net gain realized upon the sale of the unit after deduction for sales expenses, unless the purchaser is a low-or moderate-income household:
(A) To the Bank: If the Bank has not authorized re-use of the repaid subsidy pursuant to § 951.12(e)(2); if the Bank has authorized re-use of the repaid subsidy but not retention of such subsidy by the member or project sponsor pursuant to § 951.12(e)(2); or if the Bank has authorized retention and re-use of such subsidy by the member or project sponsor pursuant to § 951.12(e)(2) and the repaid subsidy is not re-used in accordance with the requirements of the Bank and § 951.12(e)(2); or
(B) To the member or project sponsor for re-use by such member or project sponsor, if the Bank has authorized retention and re-use of such subsidy by the member or project sponsor pursuant to § 951.12(e)(2);
(iii) In the case of a refinancing prior to the end of the retention period, an amount equal to a pro rata share of the direct subsidy that financed the purchase, construction, or rehabilitation of the unit, reduced for every year the occupying household has owned the unit, shall be repaid to the following parties, as applicable, from any net gain realized upon the refinancing, unless the unit continues to be subject to a deed restriction or other legally enforceable retention agreement or mechanism described in this paragraph (d)(1):
(A) To the Bank: If the Bank has not authorized re-use of the repaid subsidy pursuant to § 951.12(e)(2); if the Bank has authorized re-use of the repaid subsidy but not retention of such subsidy by the member or project sponsor pursuant to § 951.12(e)(2); or if the Bank has authorized retention and re-use of such subsidy by the member or project sponsor pursuant to § 951.12(e)(2) and the repaid subsidy is not re-used in accordance with the requirements of the Bank and § 951.12(e)(2); or
(B) To the member or project sponsor for re-use by such member or project sponsor, if the Bank has authorized retention and re-use of such subsidy by the member or project sponsor pursuant to § 951.12(e)(2); and
(iv) The obligation to repay AHP subsidy to the Bank, or to the member or project sponsor, as applicable, shall terminate after any foreclosure.
By the Board of Directors of the Federal Housing Finance Board.
Federal Housing Finance Board.
Final rule.
The Federal Housing Finance Board (Finance Board) is adopting as final, without change, the proposed rule to amend its regulation governing the minimum number of meetings that the Office of Finance board of directors must hold each year. The final rule requires the Office of Finance board of directors to hold at least six in-person meetings per year.
This final rule shall become effective on May 17, 2002.
Patricia L. Sweeney, Office of Policy, Research and Analysis, 202/408-2872,
On March 7, 2002, the Finance Board published a proposed rule to amend the Finance Board regulation that currently requires the Office of Finance (OF) board of directors (OF board) to meet no fewer than nine times per year, which was published on June 7, 2000 in connection with a regulatory action that broadened the duties of the OF.
Section 985.8(b) of the Finance Board regulations requires the OF board to hold no fewer than nine meetings annually.
The OF board has asked the Finance Board to reduce the minimum number of meetings for the OF board to six in-person meetings annually. As discussed in the
The final rule adopts the proposed rule without change. The final rule reduces the minimum number of meetings that the OF board must hold each year from nine to six in-person meetings. The Finance Board received no comments on the proposed rule. The Finance Board believes that reducing the minimum number of meetings would not affect the ability of the OF board to monitor the operations of the OF, or the ability of the Finance Board to oversee the OF. The rule, which sets a minimum number of meetings, establishes a floor rather than a ceiling on the number of meetings the OF board may hold. The OF board may hold more meetings than the minimum number required, in order to carry out its duties and properly oversee the OF's operations. The Finance Board's experience with the reduced number of meetings for the Banks suggests that the boards of directors have been able to fully discharge their oversight duties under this revised framework.
The Finance Board believes that setting the minimum number of in-person board meetings at six per year strikes an appropriate balance between the needs of the Finance Board as the safety and soundness regulator of the Banks and the obligation incumbent on the OF board to determine the number
The final rule would apply only to the OF, which does not come within the meaning of small entities as defined in the Regulatory Flexibility Act (RFA).
This final rule does not contain any collections of information pursuant to the Paperwork Reduction Act of 1995.
Federal Home Loan Banks.
12 U.S.C. 1422b(a)(1).
(b)
By the Board of Directors of the Federal Housing Finance Board.
Federal Aviation Administration (FAA), DOT.
Final special conditions; request for comments.
These special conditions are issued to Elliott Aviation, Inc., Quad City Airport, P.O. Box 100, Moline, Illinois 61266, for a Supplemental Type Certificate for the Raytheon Aircraft Model 200, B200, 200C, B200C, 200CT, B200CT, B200T, 300, 300LW, B300 and B300C. This airplane will have novel and unusual design features when compared to the state of technology envisaged in the applicable airworthiness standards. These novel and unusual design features include the installation of electronic flight instrument system (EFIS) displays manufactured by Universal Avionics Corporation for which the applicable regulations do not contain adequate or appropriate airworthiness standards for the protection of these systems from the effects of high intensity radiated fields (HIRF). These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to the airworthiness standards applicable to these airplanes.
The effective date of these special conditions is April 2, 2002. Comments must be received on or before May 17, 2002.
Comments may be mailed in duplicate to: Federal Aviation Administration, Regional Counsel, ACE-7, Attention: Rules Docket Clerk, Docket No. CE181, Room 506, 901 Locust, Kansas City, Missouri 64106. All comments must be marked: Docket No. CE181. Comments may be inspected in the Rules Docket weekdays, except Federal holidays, between 7:30 a.m. and 4:00 p.m.
Ervin Dvorak, Aerospace Engineer, Standards Office (ACE-110), Small Airplane Directorate, Aircraft Certification Service, Federal Aviation Administration, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone (816) 329-4123.
The FAA has determined that notice and opportunity for prior public comment hereon are impracticable because these procedures would significantly delay issuance of the approval design and thus delivery of the affected aircraft. In addition, the substance of these special conditions has been subject to the public comment process in several prior instances with no substantive comments received. The FAA, therefore, finds that good cause exists for making these special conditions effective upon issuance.
Interested persons are invited to submit such written data, views, or arguments as they may desire. Communications should identify the regulatory docket or notice number and be submitted in duplicate to the address specified above. All communications received on or before the closing date for comments will be considered by the Administrator. The special conditions may be changed in light of the comments received. All comments received will be available in the Rules Docket for examination by interested persons, both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerning this rulemaking will be filed in the docket. Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this action must include a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. CE181.” The postcard will be date stamped and returned to the commenter.
On December 28, 2001, Elliott Aviation, Inc., Quad City Airport, P.O. Box 100, Moline, Illinois 61266, made an application to the FAA for a new Supplemental Type Certificate for the Raytheon Aircraft Model 200, B200, 200C, B200C, 200CT, B200CT, B200T, 300, 300LW, B300, and B300C. The aircraft is currently approved under TC No. A24CE, revision 78. The proposed modification incorporates a novel or unusual design feature, such as digital avionics consisting of an EFIS, that is
Under the provisions of 14 CFR part 21, § 21.101, Elliott Aviation, Inc. must show that the Raytheon 200 and 300 series aircraft meet the following provisions, or the applicable regulations in effect on the date of application for the change to the Model 200 and 300.
If the Administrator finds that the applicable airworthiness standards do not contain adequate or appropriate safety standards because of novel or unusual design features of an airplane, special conditions are prescribed under the provisions of § 21.16.
Special conditions, as appropriate, as defined in § 11.19, are issued in accordance with § 11.38 after public notice and become part of the type certification basis in accordance with § 21.101.
Special conditions are initially applicable to the model for which they are issued. Should the applicant apply for a supplemental type certificate to modify any other model already included on the same type certificate to incorporate the same novel or unusual design feature, the special conditions would also apply to the other model under the provisions of § 21.101.
Elliott Aviation, Inc. plans to incorporate certain novel and unusual design features into an airplane for which the airworthiness standards do not contain adequate or appropriate safety standards for protection from the effects of HIRF. These features include EFIS, which are susceptible to the HIRF environment, that were not envisaged by the existing regulations for this type of airplane.
Furthermore, the HIRF environment has undergone a transformation that was not foreseen when the current requirements were developed. Higher energy levels are radiated from transmitters that are used for radar, radio, and television. Also, the number of transmitters has increased significantly. There is also uncertainty
The combined effect of the technological advances in airplane design and the changing environment has resulted in an increased level of vulnerability of electrical and electronic systems required for the continued safe flight and landing of the airplane. Effective measures against the effects of exposure to HIRF must be provided by the design and installation of these systems. The accepted maximum energy levels in which civilian airplane system installations must be capable of operating safely are based on surveys and analysis of existing radio frequency emitters. These special conditions require that the airplane be evaluated under these energy levels for the protection of the electronic system and its associated wiring harness. These external threat levels, which are lower than previous required values, are believed to represent the worst case to which an airplane would be exposed in the operating environment.
These special conditions require qualification of systems that perform critical functions, as installed in aircraft, to the defined HIRF environment in paragraph (1) or, as an option to a fixed value using laboratory tests, in paragraph (2), as follows:
(1) The applicant may demonstrate that the operation and operational capability of the installed electrical and electronic systems that perform critical functions are not adversely affected when the aircraft is exposed to the HIRF environment defined below:
(2) The applicant may demonstrate by a system test and analysis that the electrical and electronic systems that perform critical functions can withstand a minimum threat of 100 volts per meter, peak electrical field strength, from 10 kHz to 18 GHz. When using this test to show compliance with the HIRF requirements, no credit is given for signal attenuation due to installation.
A preliminary hazard analysis must be performed by the applicant, for approval by the FAA, to identify either electrical or electronic systems that perform critical functions. The term “critical” means those functions whose failure would contribute to, or cause, a failure condition that would prevent the continued safe flight and landing of the airplane. The systems identified by the hazard analysis that perform critical functions are candidates for the application of HIRF requirements. A system may perform both critical and non-critical functions. Primary electronic flight display systems, and their associated components, perform critical functions such as attitude, altitude, and airspeed indication. The HIRF requirements apply only to critical functions.
Compliance with HIRF requirements may be demonstrated by tests, analysis, models, similarity with existing systems, or any combination of these. Service experience alone is not acceptable since normal flight operations may not include an exposure to the HIRF environment. Reliance on a system with similar design features for redundancy as a means of protection against the effects of external HIRF is generally insufficient since all elements of a redundant system are likely to be exposed to the fields concurrently.
As discussed above, these special conditions are applicable to Raytheon Aircraft models 200, B200, 200C, B200C, 200CT, B200CT, B200T, 300, 300LW, B300, B300C. Should Elliott Aviation, Inc. apply at a later date for a supplemental type certificate to modify any other model on the same type certificate to incorporate the same novel or unusual design feature, the special conditions would apply to that model as well under the provisions of § 21.101.
This action affects only certain novel or unusual design features on one model of airplane. It is not a rule of general applicability and affects only the applicant who applied to the FAA for approval of these features on the airplane.
The substance of these special conditions has been subjected to the notice and comment period in several prior instances and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. For this reason, and because a delay would significantly affect the certification of the airplane, which is imminent, the FAA has determined that prior public notice and comment are unnecessary and impracticable, and good cause exists for adopting these special conditions upon issuance. The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment described above.
Aircraft, Aviation safety, Signs and symbols.
49 U.S.C. 106(g), 40113 and 44701; 14 CFR 21.16 and 21.101; and 14 CFR 11.38 and 11.19.
Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for the Raytheon Aircraft Model 200, B200, 200C, B200C, 200CT, B200CT, B200T, 300, 300LW, B300, and B300C airplane modified by Elliott Aviation, Inc. to add an EFIS.
1. Protection of Electrical and Electronic Systems from High Intensity Radiated Fields (HIRF). Each system that performs critical functions must be designed and installed to ensure that the operations, and operational capabilities of these systems to perform critical functions, are not adversely affected when the airplane is exposed to high intensity radiated electromagnetic fields external to the airplane.
2. For the purpose of these special conditions, the following definition applies:
Federal Aviation Administration, DOT.
Final rule; request for comments.
This amendment supersedes an existing airworthiness directive (AD) for Enstrom Helicopter Corporation (EHC) Model F-28, F-28A, F-28C, F-28F, 280, 280C, 280F, and 280FX helicopters. That AD currently requires determining the radius of the shaft fillet, performing certain visual and dye-penetrant inspections before further flight, and replacing certain main rotor transmissions. This amendment requires the same actions as the previous AD, adds additional main rotor gear box part numbers, and corrects various errors contained in the current AD. This amendment is prompted by a commenter who noted that two additional main rotor gear box part numbers should have been included in the AD. The actions specified by this AD are intended to prevent shaft failure and subsequent loss of control of the helicopter.
Effective May 2, 2002.
Comments for inclusion in the Rules Docket must be received on or before June 17, 2002.
Submit comments in triplicate to the Federal Aviation Administration (FAA), Office of the Regional Counsel, Southwest Region, Attention: Rules Docket No. 2001-SW-67-AD, 2601 Meacham Blvd., Room 663, Fort Worth, Texas 76137. You may also send comments electronically to the Rules Docket at the following address: 9-asw-adcomments@faa.gov.
Joseph McGarvey, Fatigue Specialist, FAA, Chicago Aircraft Certification Office, Airframe and Administrative Branch, 2300 East Devon Ave., Des Plaines, Illinois 60018, telephone (847) 294-7136, fax (847) 294-7834.
On October 16, 2001, the FAA issued AD 2001-22-01, Amendment 39-12479 (66 FR 54418, October 29, 2001), to require determining the radius of the shaft fillet, performing certain visual and dye-penetrant inspections before further flight, and replacing certain main rotor transmissions. That AD was prompted by the failure of a shaft on an EHC Model F-28A helicopter due to a fatigue crack. Previously, on August 16, 1976, the FAA issued AD 76-17-08, Amendment 39-2700 (41 FR 36015, August 26, 1976). On September 16, 1976, the FAA revised that AD by issuing AD 76-17-08 R1, Amendment 39-3043 (42 FR 51563, September 29, 1977). That AD was prompted by the FAA's determination, after a review of the service experience, that shaft crack sites may be introduced by allowing the shafts to remain in service for extended periods without modification. That condition, if not corrected, could result in shaft failure and subsequent loss of control of the helicopter. AD 2001-22-01 superseded AD 76-17-08 and AD 76-17-08R1.
Since the issuance of AD 2001-22-01, Amendment 39-12479, the FAA received a comment that the AD should have cited additional part numbers (part number (P/N) 28-13101-3 and P/N 28-13101-3-R) in Table 1 of the AD. Further, Figure 1 of AD 2001-22-01 contained an error—“2.7mm” is now corrected to state “12.7mm”. This AD also corrects another part number and other minor typographical errors. Also, since the issuance of the previous AD, the manufacturer has revised its service information and issued Enstrom Helicopter Corporation Service Directive Bulletin No. 0094, Revision 2, dated February 15, 2002.
Since an unsafe condition has been identified that is likely to exist or develop on other helicopters of the same type designs, this AD supersedes AD 2001-22-01 to require the following:
• Before further flight, determine the transmission P/N and the radius of the shaft fillet.
• For certain models, replace any transmission having a shaft with a small radius fillet with an airworthy transmission before further flight.
• For certain other models, replace the transmission having a small radius shaft fillet that is not P/N 28-13101-1, P/N 28-13101-1-R, P/N 28-13101-3, or P/N 28-13101-3-R, with an airworthy transmission before further flight.
• For certain models with transmission, P/N 28-13101-1, P/N 28-13101-1-R, P/N 28-13101-3, or P/N 28-13101-3-R, having a small radius shaft fillet installed:
• Before further flight and at recurring intervals, visually inspect the shaft for a crack using a 10x or higher magnifying glass. If there is any indication of a crack, dye penetrant inspect the shaft before further flight, and if there is a crack, replace the transmission.
• Within 5 hours time-in-service (TIS), and thereafter at specified intervals, dye penetrant inspect the shaft for a crack and polish out specified nicks and scratches.
• If a crack is found or if a nick or scratch exceeds a specified limit, replace the transmission with an airworthy transmission before further flight.
• Within 300 hours TIS or at the next transmission overhaul, whichever occurs first, replace transmission, P/N 28-13101-1, P/N 28-13101-1-R, P/N 28-13101-3, or P/N 28-13101-3-R, with an airworthy transmission having a large radius shaft fillet.
Since a situation exists that requires the immediate adoption of this regulation, it is found that notice and opportunity for prior public comment hereon are impracticable, and that good cause exists for making this amendment effective in less than 30 days.
The FAA estimates that 17 helicopters will be affected by this AD, that it will take approximately 1.4 work hours to accomplish the inspections and that the average labor rate is $60 per work hour. A replacement shaft will cost approximately $3,000 per helicopter, and overhauling the transmission and replacing the shaft will cost approximately $12,000. Based on these figures, the total cost impact of the AD on U.S. operators is estimated to be $256,428, assuming replacement of the
Although this action is in the form of a final rule that involves requirements affecting flight safety and, thus, was not preceded by notice and an opportunity for public comment, comments are invited on this rule. Interested persons are invited to comment on this rule by submitting such written data, views, or arguments as they may desire. Communications should identify the Rules Docket number and be submitted in triplicate to the address specified under the caption
Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the rule that might suggest a need to modify the rule. All comments submitted will be available in the Rules Docket for examination by interested persons. A report that summarizes each FAA-public contact concerned with the substance of this AD will be filed in the Rules Docket.
Commenters wishing the FAA to acknowledge receipt of their mailed comments submitted in response to this rule must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. 2001-SW-67-AD.” The postcard will be date stamped and returned to the commenter.
The regulations adopted herein will 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 final rule does not have federalism implications under Executive Order 13132.
The FAA has determined that this regulation is an emergency regulation that must be issued immediately to correct an unsafe condition in aircraft, and that it is not a “significant regulatory action” under Executive Order 12866. It has been determined further that this action involves an emergency regulation under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979). If it is determined that this emergency regulation otherwise would be significant under DOT Regulatory Policies and Procedures, a final regulatory evaluation will be prepared and placed in the Rules Docket. A copy of it, if filed, may be obtained from 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 amends part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD applies to each helicopter identified in the preceding applicability provision, regardless of whether it has been otherwise modified, altered, or repaired in the area subject to the requirements of this AD. For helicopters 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 (e) 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 prevent main rotor shaft (shaft) failure and subsequent loss of control of the helicopter, accomplish the following:
(a) Before further flight, determine the part number (P/N) of the main rotor transmission (transmission) and the radius of the upper fillet of the shaft (as shown in the following Figure 1):
(b) For EHC Model F-28C, F-28F, 280C, 280F, and 280FX helicopters, before further flight, replace any transmission having a small radius shaft fillet with an airworthy transmission having a large radius shaft fillet as specified in Table 1 of this AD.
(c) For EHC Model F-28, F-28A and 280 helicopters:
(1) If the transmission has a shaft with a small radius fillet and the transmission P/N is not listed in Table 1, before further flight, replace the transmission with an airworthy transmission specified in the following Table 1 of this AD:
(2) If the installed transmission is P/N 28-13101-1 or -1-R, or P/N 28-13101-3 or -3-R, and has a small radius shaft, before further flight and thereafter at intervals not to exceed 25 hours TIS, visually inspect each transmission for a crack in the shaft upper fillet using a 10X or higher magnifying glass.
(i) If there is any indication of a crack, before further flight, a level II nondestructive inspector must dye-penetrant inspect the shaft using materials approved by MIL-I-25135.
(ii) If the shaft is cracked, before further flight, replace the transmission with an airworthy transmission having a large radius shaft fillet.
(3) If the transmission is P/N 28-13101-1 or -1-R, or P/N 28-13101-3 or -3-R, within 5 hours TIS, and thereafter at intervals not to exceed 100 hours TIS:
(i) Dye-penetrant inspect the shaft upper fillet for a crack, a nick, or a scratch.
(ii) Polish out nicks or scratches less than 0.005-inch deep.
(iii) If the shaft is cracked or has a nick or scratch 0.005 inch or more deep, replace the transmission with an airworthy transmission having a large radius shaft fillet before further flight.
(4) Within 300 hours TIS or at the next overhaul after the effective date of this AD, whichever occurs first, replace transmission, P/N 28-13101-1 or -1-R, or P/N 28-13101-3 or -3-R, with an airworthy transmission having a large radius shaft fillet.
(d) Installing an airworthy transmission with a shaft, P/N 28-13104-1 or -1-R, Revision K, L, M, N, P, R or S, or P/N 28-13140-1 or -1-R, is terminating action for the requirements of this AD.
Enstrom Helicopter Corporation Service Directive Bulletin No. 0094, Revision 2, dated February 15, 2002, pertains to the subject of this AD.
(e) 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, Chicago, Aircraft Certification Office (ACO), FAA. Operators shall submit their requests through an FAA Principal Maintenance Inspector, who may concur or comment and then send it to the Manager, Chicago ACO.
Information concerning the existence of approved alternative methods of compliance with this AD, if any, may be obtained from the Chicago ACO.
(f) Special flight permits may be issued in accordance with 14 CFR 21.197 and 21.199 to operate the helicopter to a location where the requirements of this AD can be accomplished provided an inspection in accordance with paragraph (c)(2) of this AD reveals no crack in the shaft.
(g) This amendment becomes effective on May 2, 2002.
Federal Aviation Administration, DOT.
Final rule.
This amendment adopts a new airworthiness directive (AD) that applies to certain Fairchild Aircraft, Inc. (Fairchild) SA226 and SA227 series airplanes equipped with Skidmore-Wilheim Manufacturing Co. (Skidmore-Wilheim) (formerly Hydromotive) Model V1-15-1000 brake master cylinders. This AD requires you to replace these brake master cylinders with new or overhauled units of the same design. This AD is the result of reports of dragging brakes during taxi operations. The actions specified by this AD are intended to correct and prevent future malfunctioning brake master cylinders. Malfunctioning brake master cylinders could cause dragging brakes, which can result in overheated brakes and a wheelwell fire if the dragging takes place during takeoff and the gear is later retracted.
This AD becomes effective on June 6, 2002.
The Director of the Federal Register approved the incorporation by reference of certain publications listed in the regulations as of June 6, 2002.
You may get the service information referenced in this AD from Fairchild Aircraft, Inc., P.O. Box 790490, San Antonio, Texas 78279-0490; telephone: (210) 824-9421; facsimile: (210) 820-8609. You may view this information at the Federal Aviation Administration (FAA), Central Region, Office of the Regional Counsel, Attention: Rules Docket No. 2001-CE-17-AD, 901 Locust, Room 506, Kansas City, Missouri 64106; or at the Office of the Federal Register, 800 North Capitol Street, NW., suite 700, Washington, DC.
Werner Koch, Aerospace Engineer, FAA, Airplane Certification Office, 2601 Meacham Boulevard, Fort Worth, Texas 76193-0150; telephone: (817) 222-5133; facsimile: (817) 222-5960.
The FAA received several reports of dragging brakes on Fairchild SA226 series airplanes when the brake pedals were operated during taxi operations. After troubleshooting by maintenance personnel, the problem was traced to the brake master cylinder. Disassembly of the malfunctioning master cylinders revealed broken check valve spring washers that, together with the action of the shuttle valve, prevented the release of brake pressure. Based on observed failures, FAA has determined that the brake master cylinders should be replaced at intervals of 15,000 hours time-in-service.
This condition, if not detected or corrected, could cause dragging brakes, which can result in overheated brakes and cause an in-flight wheelwell fire if the dragging takes place during takeoff and the gear is later retracted.
We issued a proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an AD that would apply to certain Fairchild SA226 and SA227 series airplanes equipped with Skidmore-Wilheim Model V1-15-1000 brake master cylinders. This proposal was published in the
The FAA encouraged interested persons to participate in the making of this amendment. We did not receive any comments on the supplemental proposed rule or on our determination of the cost to the public.
After careful review of all available information related to the subject presented above, we have determined that air safety and the public interest require the adoption of the rule as proposed except for minor editorial corrections. We have determined that these minor corrections:
We estimate that this AD affects 140 airplanes in the U.S. registry.
We estimate the following costs to accomplish the replacements:
The regulations adopted herein will 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 final rule does not have federalism implications under Executive Order 13132.
For the reasons discussed above, I certify that this action (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) 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 final 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, Incorporation by reference, Safety.
49 U.S.C. 106(g), 40113, 44701.
(a)
(b)
(c)
(d)
(e)
(1) Your alternative method of compliance provides an equivalent level of safety; and
(2) The Manager, Fort Worth Airplane Certification Office (ACO), approves your alternative. Submit your request through an FAA Principal Maintenance Inspector, who may add comments and then send it to the Manager, Fort Worth ACO.
This AD applies to each airplane identified in paragraph (a) of this AD, 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 (e) 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 you have not eliminated the unsafe condition, specific actions you propose to address it.
(f)
(g)
(h)
(i)
Federal Aviation Administration, DOT.
Final rule; request for comments.
This document publishes in the
Effective May 2, 2002, to all persons except those persons to whom it was made immediately effective by Emergency AD 2002-06-52, issued on March 15, 2002, which contained the requirements of this amendment.
The incorporation by reference of certain publications listed in the regulations is approved by the Director of the Federal Register as of May 2, 2002.
Comments for inclusion in the Rules Docket must be received on or before June 17, 2002.
Submit comments in triplicate to the Federal Aviation Administration (FAA), Office of the Regional Counsel, Southwest Region, Attention: Rules Docket No. 2002-SW-08-AD, 2601 Meacham Blvd., Room 663, Fort Worth, Texas 76137. You may also send comments electronically to the Rules Docket at the following address:
The applicable service information may be obtained from Bell Helicopter Textron Canada, 12,800 Rue de l'Avenir, Mirabel, Quebec J7J1R4, telephone (450) 437-2862 or (800) 363-8023, fax (450) 433-0272. This information may be examined at the FAA, Office of the Regional Counsel, Southwest Region, 2601 Meacham Blvd., Room 663, Fort Worth, Texas; or at the Office of the Federal Register, 800 North Capitol Street, NW., suite 700, Washington, DC.
Paul Madej, Aviation Safety Engineer, FAA, Rotorcraft Directorate, Rotorcraft Standards Staff, Fort Worth, Texas 76193-0110, telephone (817) 222-5125, fax (817) 222-5961.
On February 10, 2000, the FAA issued Final Rule AD 2000-02-12 (65 FR 8032, February 17, 2000), to require inspecting each oil cooler blower bearing (bearing) for roughness and replacing any rough bearing before further flight. That AD was prompted by reports of failure of the bearing. Since the issuance of that AD, continued bearing failures and identifications of effects of engine exhaust gas ingestion have been reported. On March 15, 2002, the FAA issued superseding Emergency AD 2002-06-52 for BHTC Model 407 helicopters. That emergency AD requires a one-time replacement of certain bearings within 100 hours time-in-service, and before further flight, adding a limitation and caution to the RFM and at specified intervals, inspecting and, if necessary, replacing certain bearings and lubricating certain bearings. That action was prompted by several occurrences of failure of an oil cooler blower bearing. Particular tailwind conditions during flight can result in engine exhaust gas ingestion by the oil cooler blower and deterioration of the bearing grease. This condition, if not corrected, could result in bearing failure, loss of tail rotor drive, and a subsequent forced landing.
The FAA has reviewed Bell Helicopter Textron Alert Service Bulletin (ASB) Nos. 407-01-44, Revision A, dated October 25, 2001; 407-01-47, dated November 9, 2001; and 407-02-49, dated January 7, 2002. ASB 407-01-44, Revision A, dated October 25, 2001, specifies replacing specific oil cooler blower bearings and clarifies and expands the bearing lubrication procedure and schedule. ASB 407-01-47, dated November 9, 2001, updates the inspection and lubrication procedures and schedule for specified bearings at all oil cooler blower and tail rotor driveshaft locations. ASB 407-02-49, dated January 7, 2002, introduces a new limitation and a new caution for tailwind operations in the RFM and maintenance actions for exceeding the limitations.
Transport Canada, which is the airworthiness authority for Canada, notified the FAA that an unsafe condition may exist on this helicopter model. Transport Canada advises that testing indicates premature failure of an oil cooler blower bearing can occur, under certain conditions, due to ingesting exhaust gases into the aft fairing inlet resulting in elevated temperatures. Also, Transport Canada advises that research indicates that over-greasing the bearing can result in elevated bearing temperatures and failure of a bearing. Transport Canada classified the service bulletins as mandatory and issued AD No. CF-2002-18, dated March 4, 2002, to ensure
This helicopter model is manufactured in Canada and is type certificated for operation in the United States under the provisions of 14 CFR 21.29 and the applicable bilateral agreement. Pursuant to the applicable bilateral agreement, Transport Canada has kept the FAA informed of the situation described above. The FAA has examined the findings of Transport Canada, 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.
This unsafe condition is likely to exist or develop on other BHTC Model 407 helicopters of the same type design registered in the United States. Therefore, the FAA issued Emergency AD 2002-06-52 to prevent failure of an oil cooler blower bearing, loss of tail rotor drive, and a subsequent forced landing. The AD requires:
• Before further flight, adding the tailwind limitation and caution contained in Temporary Revision 9 (the temporary revision is attached to ASB 407-02-49, dated January 7, 2002) to the RFM.
• At specified intervals, inspecting the oil cooler blower bearings; and if a bearing is rough, a seal is torn, the expelled grease has turned black, or metal particles are visible in the expelled grease, replacing the affected bearing before further flight.
• At a specified time-in-service, replacing certain bearings.
• At specified intervals, lubricating the bearings.
The actions must be accomplished in accordance with the ASBs described previously. The short compliance time involved is required because the previously described critical unsafe condition can adversely affect the structural integrity and controllability of the helicopter. Therefore, the actions previously described are required at the specified time intervals, and this AD must be issued immediately.
Since it was found that immediate corrective action was required, notice and opportunity for prior public comment thereon were impracticable and contrary to the public interest, and good cause existed to make the AD effective immediately by individual letters issued on March 15, 2002, to all known U.S. owners and operators of BHTC Model 407 helicopters. These conditions still exist, and the AD is hereby published in the
The FAA estimates that 281 helicopters of U.S. registry will be affected by this AD. It will take approximately 1 work hour for each RFM revision; 2 work hours per helicopter for the initial inspection; 0.5 hour for each repetitive inspection; 0.5 hour to lubricate the oil cooler blower bearing; and 4 work hours per helicopter to replace the oil cooler blower bearing. Required parts will cost approximately $1,926 per helicopter. Based on these figures, the total cost impact of the AD on U.S. operators is estimated to be $996,426, assuming 20 repetitive inspections and 20 bearing lubrications on each helicopter and bearing replacement on all the helicopters in the fleet.
Although this action is in the form of a final rule that involves requirements affecting flight safety and, thus, was not preceded by notice and an opportunity for public comment, comments are invited on this rule. Interested persons are invited to comment on this rule by submitting such written data, views, or arguments as they may desire. Communications should identify the Rules Docket number and be submitted in triplicate to the address specified under the caption
Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the rule that might suggest a need to modify the rule. All comments submitted will be available in the Rules Docket for examination by interested persons. A report that summarizes each FAA-public contact concerned with the substance of this AD will be filed in the Rules Docket.
Commenters wishing the FAA to acknowledge receipt of their mailed comments submitted in response to this rule must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. 2002-SW-08-AD.” The postcard will be date stamped and returned to the commenter.
The regulations adopted herein will 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 final rule does not have federalism implications under Executive Order 13132.
The FAA has determined that this regulation is an emergency regulation that must be issued immediately to correct an unsafe condition in aircraft, and that it is not a “significant regulatory action” under Executive Order 12866. It has been determined further that this action involves an emergency regulation under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979). If it is determined that this emergency regulation otherwise would be significant under DOT Regulatory Policies and Procedures, a final regulatory evaluation will be prepared and placed in the Rules Docket. A copy of it, if filed, may be obtained from the Rules Docket at the location provided under the caption
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
49 U.S.C. 106(g), 40113, 44701.
This AD applies to each helicopter identified in the preceding applicability provision, regardless of whether it has been otherwise modified, altered, or repaired in the area subject to the requirements of this AD. For helicopters 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
To prevent oil cooler blower bearing failure, loss of tail rotor drive, and a subsequent forced landing, accomplish the following:
(a) Before further flight, insert the tailwind limitation and caution, contained in Temporary Revision (TR) 9, dated January 15, 2002, into the Bell Model 407 Rotorcraft Flight Manual (RFM), dated February 9, 1996.
TR 9 is attached to Bell Helicopter Textron (BHT) Alert Service Bulletin (ASB) 407-02-49, dated January 7, 2002.
(b) Within 10 hours time-in-service (TIS), inspect the forward and aft oil cooler blower bearings by hand-rotating the driveshaft with the oil cooler driveshaft connected. If a bearing is rough, a seal is torn, the expelled grease has turned black, or metal particles are visible in the expelled grease, replace the affected bearing before further flight.
(c) At intervals not to exceed 25 hours TIS, for oil cooler blower bearings, P/N 406-040-339-ALL and 407-340-339-103:
(1) Inspect the bearings by hand-rotating the driveshaft in accordance with the Accomplishment Instructions, Part I, paragraph 2, of BHT ASB 407-01-47, dated November 9, 2001 (ASB 407-01-47). If a bearing is rough, a seal is torn, the expelled grease has turned black, or metal particles are visible in the expelled grease, replace the affected bearing before further flight.
(2) Lubricate the bearings in accordance with the Accomplishment Instructions, Part II, paragraph 2, of ASB 407-01-47.
(d) For oil cooler blower bearings, P/N 407-340-339-101:
(1) At intervals not to exceed 25 hours TIS, inspect the bearings by hand-rotating the driveshaft in accordance with the Accomplishment Instructions, Part II, paragraph 1, of BHT ASB 407-01-44, Revision A, dated October 25, 2001 (ASB 407-01-44, Revision A). If a bearing is rough, a seal is torn, the expelled grease has turned black, or metal particles are visible in the expelled grease, replace the affected bearing before further flight.
(2) At intervals not to exceed 100 hours TIS, lubricate the bearings in accordance with the Accomplishment Instructions, Part III, paragraphs 1 and 2, of ASB 407-01-44, Revision A.
(e) Within 100 hours TIS, replace the forward and aft oil cooler blower bearings, P/N 406-040-339-ALL and 407-340-339-103, if installed, with airworthy bearings, P/N 407-340-339-101. Continue to inspect and lubricate the bearings in accordance with paragraph (d) of this AD.
(f) 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, Regulations Group, Rotorcraft Directorate, FAA. Operators shall submit their requests through an FAA Principal Maintenance Inspector, who may concur or comment and then send it to the Manager, Regulations Group.
Information concerning the existence of approved alternative methods of compliance with this AD, if any, may be obtained from the Regulations Group.
(g) Special flight permits will not be issued.
(h) The inspections and lubrication of the oil cooler blower bearings shall be done in accordance with the Accomplishment Instructions, Part I, paragraph 2, of Bell Helicopter Textron Alert Service Bulletin 407-01-47, dated November 9, 2001 and Part II, paragraph 1, of Bell Helicopter Textron Alert Service Bulletin 407-01-44, Revision A, dated October 25, 2001. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies may be obtained from Bell Helicopter Textron Canada, 12,800 Rue de l'Avenir, Mirabel, Quebec J7J1R4, telephone (450) 437-2862 or (800) 363-8023, fax (450) 433-0272. Copies may be inspected at the FAA, Office of the Regional Counsel, Southwest Region, Attention: Rules Docket No. 2002-SW-08-AD, 2601 Meacham Blvd., Room 663, Fort Worth, Texas 76137; or at the Office of the Federal Register, 800 North Capitol Street, NW., suite 700, Washington, DC.
(i) This amendment becomes effective on May 2, 2002, to all persons except those persons to whom it was made immediately effective by Emergency AD 2002-06-52, issued March 15, 2002, which contained the requirements of this amendment.
The subject of this AD is addressed in Transport Canada AD CF-2002-18, dated March 4, 2002.
Federal Aviation Administration (FAA), DOT.
Final rule.
This action revises Federal Airway 105 (V-105) and Jet Route 86 (J-86) in the vicinity of Phoenix, AZ. The FAA is revising V-105 between the Drake and Phoenix, AZ, Very High Frequency Omnidirectional Radio Range and Tactical Air Navigation Aids (VORTAC) in order to enhance the management of aircraft operations in the Phoenix, AZ, terminal area. Additionally, the FAA is revising J-86 between Winslow, AZ, as part of the National Airspace Redesign effort and to improve system efficiency in the Pheonix, AZ, area. The FAA is also modifying the descriptions for J-58 and J-86, and renaming portions of J-58 and J-86 in the state of Florida. These modifications are also part of the National Airspace Redesign effort to improve system efficiency.
0901 UTC, August 8, 2002.
Ken McElroy, Airspace and Rules Division, ATA-400, Office of Air Traffic Airspace Management, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591; telephone: (202) 267-8783.
On June 20, 2001, FAA-2001-9559, Airspace Docket No. 01-AWP-02, (66 FR 30654), was published in the
Currently the navigational signal in the vicinity of the Gulf of Mexico is not sufficient to support the segment of J-58 between the Harvey, LA, VORTAC, and the Sarasota VORTAC. The same problem affects that segment of J-86 between the Leeville VORTAC and the Sarasota, FL, VORTAC. Due to the weak navigational signal coverage on these routes, they no longer pass flight inspection. In this action, the FAA revokes the route over the Gulf, and terminates the routes at the Harvey VORTAC (for J-58) and the Leeville VORTAC (for J-86) respectively.
To replace the revoked segments, over-water advanced navigation routes
This action amends Title 14 Code of Federal Regulations (14 CFR) part 71 by revising V-105 and J-86 in the vicinity of Phoenix, AZ. The FAA is also revising J-58 by terminating the route at the Harvey, LA, VORTAC; revoking the segment of J-58 between the Harvey VORTAC and the Sarasota, FL, VORTAC; and renaming the route from the Sarasota VORTAC to the Dolphin, FL, VORTAC, J-614. Additionally, the FAA is revising J-86 between Winslow, AZ, and the Leeville, LA, VORTAC; revoking the segment of J-86 between the Leeville VORTAC and the Sarasota, FL, VORTAC; and renaming the J-86 route segment from the Sarasota VORTAC to the Dolphin, FL, VORTAC, J-616. These actions are necessary because J-58 and J-86 failed to pass flight inspection due to gaps in navigation signal coverage over the Gulf of Mexico. These changes are also part of the National Airspace Redesign effort to improve system efficiency and safety.
Jet routes and domestic VOR Federal Airways are published in paragraphs 2004 and 6010(a), respectively, of FAA Order 7400.9J, dated August 31, 2001, and effective September 16, 2001, which is incorporated by reference in 14 CFR 71.1. The jet routes and VOR Federal Airways listed in this document will be published subsequently in the Order.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this regulation: (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1D, Policies and Procedures for Considering Environmental Impacts. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.
Airspace, Incorporation by reference, Navigation (air).
49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p.389.
From Oakland, CA, via Manteca, CA; Coaldale, NV; Wilson Creek, NV; Milford, UT; Farmington, NM; Las Vegas, NM; Panhandle, TX; Wichita Falls, TX; Ranger, TX; Alexandria, LA; Harvey, LA.
From Beatty, NV; INT Beatty 131° and Boulder City, NV, 284° radials; Boulder City; Peach Springs, AZ; INT of Peach Springs 091° and Winslow, AZ, 301° radials, Winslow, AZ; El Paso, TX; Fort Stockton, TX; Junction, TX; Humble, TX; Leeville, LA.
Sarasota; Lee County, FL; to the INT Lee County 120° and Dolphin, FL, 293° radials; Dolphin.
Sarasota; INT Sarasota 103° and La Belle, FL, 313° radials; La Belle; to Dolphin, FL.
From Tucson, AZ; INT Tucson 300° and Stanfield, AZ 145° radials; Stanfield; Phoenix, AZ; INT Phoenix 333° and Drake, AZ, 182° radials; Drake; 25 miles, 22 miles 85 MSL; Boulder City, NV; Las Vegas, NV; INT Las Vegas 266° and Beatty, NV, 142° radials; 17 miles, 105 MSL; Beatty; 105 MSL, Coaldale, NV; 82 miles, 110 MSL; to Mustang, NV.
Federal Trade Commission.
Final rule amendment.
The Federal Trade Commission (“the Commission”) issues a final amendment to the Children's Online Privacy Protection Rule (“the Rule”) to extend, until April 21, 2005, the time period during which website operators may use an e-mail message from the parent, coupled with additional steps, to obtain verifiable parental consent for the collection of personal information from children for internal use by the website operator.
April 21, 2002.
Requests for copies of the amended Rule and the Statement of Basis and Purpose should be sent to: Public Reference Branch, Federal Trade Commission, Room H-130, 600 Pennsylvania Avenue NW, Washington, DC 20580.
Elizabeth Delaney, (202) 326-2903, Rona Kelner, (202) 326-2752, or Mamie Kresses, (202) 326-2070, Division of Advertising Practices, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580.
As part of the effort to protect children's online privacy, Congress enacted the Children's Online Privacy Protection Act of 1998, 15 U.S.C. 6501
The Rule provides that, “[a]ny method to obtain verifiable parental consent must be reasonably calculated, in light of available technology, to ensure that the person providing consent is the child's parent.”
In contrast, if the website operator is collecting personal information for its internal use only, the Rule allows verifiable parental consent to be obtained through the use of an e-mail message from the parent, coupled with additional steps. Such additional steps are designed to provide assurances that the person providing the consent is the parent and include: sending a confirmatory e-mail to the parent after receiving consent; or obtaining a postal address or telephone number from the parent and confirming the parent's consent by letter or telephone call.
At the time it issued the final Rule, the Commission anticipated that the sliding scale was necessary only in the short term because the more reliable methods of obtaining verifiable parental consent would soon be widely available and affordable.
In the October 2001 NPR, the Commission proposed a two-year extension of the sliding scale mechanism because it appeared that the expected progress in technology had not occurred to the extent necessary to phase out the sliding scale mechanism and require the most reliable methods of parental consent for all uses of personal information collected from children by websites. After careful consideration, the Commission has decided to extend the sliding scale mechanism for three years, from April 21, 2002 until April 21, 2005.
The Rule provides that, “[a]ny method to obtain verifiable parental consent must be reasonably calculated, in light of available technology, to ensure that the person providing consent is the child's parent.”
Having reviewed the rulemaking record, the Commission concludes that secure electronic mechanisms and/or infomediary services for obtaining verifiable parental consent are not yet widely available at a reasonable cost.
However, one commenter noted that many children's websites had made the necessary adjustments and investments within the original timeframe provided by the Rule. Circle 1 Network (Comment 8). Another commenter said that digital signature technology is available from at least one company and should be implemented on a mandatory basis in cases where personal information is shared with third parties. Jennifer Melendez et al. (Comment 14). Three commenters did not address the issue of whether secure electronic mechanisms and/or infomediary services are widely available and affordable. Aristotle (Comment 3); Association of Educational Publishers (“AEP”) (Comment 5); and Office of Attorney General, State of Connecticut (Comment 20).
Although none of the commenters articulated specific examples of misuse of the sliding scale mechanism, three commenters found the email plus method of obtaining parental consent to be ineffective and unreliable. Romain Carrere (Comment 6) (children can impersonate their parents); Privo (Comment 17) at 2-3 (“e-mail plus may not and often does not result in reliable verification” and “[i]t is commonplace for children to have the requisite knowledge to falsify their age or fabricate a spurious e-mail message that is allegedly from the parent or guardian”); and TRUSTe (Comment 21) (“it would be unwise to extend the lessened protection of `email plus' rule two additional years, unless the rule is modified, so that a delayed email to the parent's email address is not considered sufficient verifiable parental consent”).
The Commission finds that the record also shows that the anticipated date for the development and deployment of secure electronic mechanisms and/or infomediary services on a widespread and affordable basis does not appear to be able to be predicted with any reasonable certainty at this point in time.
The Regulatory Flexibility Act, 5 U.S.C. 601-612, requires agencies to prepare and make available to the public regulatory flexibility analyses at the proposed and final stages of a rulemaking proceeding, except in cases where the agency certifies that the Rule will not have a significant economic impact on a substantial number of small entities. 5 U.S.C. 605. In its notice of proposed rulemaking, the Commission certified that its proposed rule amendment to extend by two years the time period during which Web site operators could continue to obtain verifiable parental consent under a “sliding scale” of compliance options would not have a significant economic impact on a substantial number of small entities. 66 FR at 54964. Nonetheless, to ensure that no significant economic impact on a substantial number of small entities is overlooked, the Commission requested public comment on the effect of the proposed amendment to the Rule on the costs, profitability, and competitiveness of, and employment in, small entities.
The Commission did not receive any comments directly addressing the
This amendment does not amend any information collection requirements that have previously been reviewed and approved by the Office of Management and Budget pursuant to the Paperwork Reduction Act, as amended, 44 U.S.C. 3501
Children, Communications, Consumer protection, Electronic mail, E-mail, Internet, Online service, Privacy, Record retention, Safety, Science and technology, Trade practices, Website, Youth.
15 U.S.C. 6501
2. Amend § 312.5 by revising the second sentence of paragraph (b)(2) to read as follows:
(b) * * *
(2) * * *
By direction of the Commission.
Department of State.
Interim rule with request for comments.
In the interest of greater accuracy and clarity, this rule revises the recently added amendment relating to INTELSAT (following privatization) as an “international organization.”
Effective April 17, 2002. Written comments may be submitted on or before June 17, 2002.
Written comments may be submitted, in duplicate, to the Chief, Legislation and Regulations Division, Visa Services, Department of State, Washington, DC 20520-0106, or by e-mail to
Elizabeth J. Harper, Legislation and Regulations Division, Visa Services, Department of State, Washington, DC 20520-0106, telephone 202-663-1221, e-mail
On January 11, 2002, the Department amended its regulation pertaining to international organizations to include INTELSAT following privatization (67 FR 1413). Following further internal considerations and consultation with INS, the Department feels it necessary to revise that regulation to clarify the status of the organization and the personnel affected.
The regulation published earlier (22 CFR 41.24(a)) was intended, essentially, just to distinguish the fact that the source of authority for INTELSAT to retain a limited status as an international organization after privatization was Public Law 196-306 rather than a Presidential designation. The law, however, conferred the status of international organization on the privatized INTELSAT only in connection with a special immigrant classification for certain “international organization aliens.” At the same time, however, it allowed certain officers and employees of privatized INTELSAT to retain their G-4 visa status, despite the fact that INTELSAT no longer met the definition of “international organization” for purposes of visa classification under INA 101(a)(15)(G). In addition, the special legislation did not provide for G-5 status for servants of privatized INTELSAT officers and employees. Those limitations and subtleties although not included in the existing regulation, are included in this amendment to it. The Department recognizes that greater specificity is necessary for a full understanding of the effects of section 301 of Public Law 106-306.
Yes it would. Nevertheless, it is best for purposes of administration and for full disclosure to the public that the regulation be made as unequivocal and thorough as possible. This revised version makes it explicit that INTELSAT is not an “international organization” for all purposes. This, in turn, means that the officers and employees of the privatized INTELSAT who are still classifiable as G-4s are not “international organization aliens” for all purposes, but only for the purpose of the special immigrant visa provisions of INA 101(a)(27)(I).
In addition to clarifying the definition and the status of the G-4 officers and employees of the privatized INTELSAT, this regulation makes it clear that only officers and employees of INTELSAT who had been employed in G-4 status for at least six months prior to the time of privatization, and officers and employees who meet those criteria but moved to a successor or separated entity after at least six months such employment and after March 17, 2000, but prior to INTELSAT privatization, are still classifiable under INA 101(a)(15)(G)(iv). Newly hired officers and employees of the privatized INTELSAT and successor or separated
The Department is publishing this rule as an interim rule, with a 60-day provision for post-promulgation public comments, based on the “good cause” exceptions set forth at 5 U.S.C. 553(b)(3)(B) and 553(d)(3). The rule makes no substantive changes in visa operations. It merely rectifies any confusion deriving from the earlier amendment noting that a different statute conferred the designation of “international organization” in this instance.
Pursuant to section 605 of the Regulatory Flexibility Act, the Department has assessed the potential impact of this rule, and the Assistant Secretary for Consular Affairs hereby certifies that is not expected to have a significant economic impact on a substantial number of small entities and will benefit those that engage temporary agricultural workers.
This rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million in any year and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.
This rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Act of 1996. This rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.
The Department of State does not consider this rule to be a “significant regulatory action” under Executive Order 12866, section 3(f), Regulatory Planning and Review. In addition, the Department is exempt from Executive Order 12866 except to the extent that it is promulgating regulations in conjunction with a domestic agency that are significant regulatory actions. The Department has nevertheless reviewed the regulation to ensure its consistency with the regulatory philosophy and principles set forth in that Executive Order.
This regulation will not have substantial direct effects 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, in accordance with section 6 of Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement.
This rule does not impose any new reporting or record-keeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35.
Aliens, Nonimmigrants, Passports and visas.
8 U.S.C. 1104; Pub. L. 105-277, 112 Stat. 2681-795 through 2681-801.
(a)
(1) Any public international organization which has been designated by the President by Executive Order as entitled to enjoy the privileges, exemptions, and immunities provided for in the International Organizations Immunities Act (59 Stat. 669, 22 U.S.C. 288); and
(2) For the purpose of special immigrant status under INA 101(a)(27)(I), INTELSAT or any successor or separated entity thereof.
(c)
(2) Aliens who had had G-4 status as officers and employees of INTELSAT but became officers or employees of a successor or separated entity of INTELSAT after at least six months of such employment, but prior to and in anticipation of privatization and subsequent to March 17, 2000, will also continue to be classifiable under INA 101(a)(15)(G)(iv) for so long as that employment continues.
(3) Family members of officers and employees described in paragraphs (c)(1) and (2) of this section who qualify as “immediate family” under § 41.21(a)(3) and who are accompanying or following to join the principal are also classifiable under INA 1010(a)(15)(G)(iv) for so long as the principal is so classified.
(4) Attendants, servants, and personal employees of officers and employees described in paragraphs (c)(1) and (2) of this section are not eligible for classification under INA 101(a)(15)(G)(v), given that the officers and employees described in paragraphs (c)(1) and (2) of this section are not officers or employees of an “international organization” for purposes of INA 101(a)(15)(G).
Mine Safety and Health Administration (MSHA), Labor.
Final rule; correction.
This corrects the Mine Safety and Health Administration's final rule establishing new mandatory standards for the design, installation, use, and maintenance of high-voltage longwall mining systems used in underground coal mines published March 11, 2002.
Effective on May 10, 2002.
Marvin W. Nichols, Jr., Director, Office of Standards, Regulations and Variances, MSHA, 4015 Wilson Boulevard, Arlington, Virginia 22203-1984. Mr. Nichols can be reached at
On March 11, 2002, the Mine Safety and Health Administration published a final rule (67 FR 10972) revising our electrical safety standards for underground coal mines. This document corrects the final rule by adding the heading for Appendix A to Subpart I and corrects the placement of the appendix.
In the
Office of the Secretary, DoD.
Final rule.
This final rule removes the exclusion of enuresis alarms, corrects contradictory language as it relates to breast reconstructive surgery, changes the valid period of an authorization for services and items under the Program for Persons with Disabilities, implements Section 640 of Public Law 105-17, which establishes the Civilian Health and Medical Program of the Uniformed Service (CHAMPUS) payment relationship for IDEA Part C services and items.
This final rule is effective May 17, 2002.
Margaret Brown and Michael Kottyan, TRICARE Management Activity, Office of Medical Benefits and Reimbursement Systems (303) 676-3581 and (303) 676-3520 respectively.
On November 15, 2000 (65 FR 68957), the Department of Defense published a proposed rule with a public comment period. All respondents concurred with the proposed amendments. Five suggested several minor changes. Therefore, all comments were analyzed and considered in the formulation of this final rule.
The following provides an overview of the changes in this final rule to §§ 199.2; 199.4; 199.5; and 199.8.
This final rule removes the exclusion of enuresis alarms, corrects contradictory language as it relates to breast reconstructive surgery, changes the valid period of an authorization for services and items under the Program for Persons with Disabilities (PFPWD), and establishes the CHAMPUS payment relationship for IDEA Part C services and items, and revises a statement to the paragraph at 32 CFR 199.4(g)(15)(i)(D).
The TRICARE Management Activity received a request from the medical community that we re-evaluate our policy regarding enuretic devices, which currently are excluded from cost sharing under the CHAMPUS Basic Program. Recent literature review indicates that the medical community considers enuresis alarms the most effective method for treating enuresis. Having found no contradictory evidence, we agree that enuretic devices should be removed from the exclusions in the regulation. The removal of this exclusion allows physicians to select rational treatment options and insure that CHAMPUS pays only for the most appropriate and highest quality medical care possible.
Enuretic conditioning programs are also specifically excluded from CHAMPUS cost sharing. Enuretic conditioning programs will continue to be excluded. The basis for excluding enuretic conditioning programs is to restrict the payment for professional guidance on the use of these devices to an authorized health care provider, such as, the attending physician or a physician's assistant or a nurse practitioner.
Benefits under the basic program are not available for cosmetic, reconstructive, or plastic surgery. However, the regulation provides exceptions for procedures that are essentially cosmetic when performed in response to a congenital anomaly, post mastectomy breast reconstruction for malignancy, fibrocystic disease, or other covered mastectomies, an accidental injury or disfiguring scars resulting from neoplastic surgery.
The regulation currently contains contradictory provisions relating to post mastectomy breast reconstruction. Paragraph 199.4 (e)(8)(i)(D) specifically authorizes post mastectomy breast reconstruction. However, paragraph 199.4 (e)(8)(ii)(D) excludes breast augmentation mammoplasty even when performed as a part of post mastectomy breast reconstruction procedure. Because an augmentation mammoplasty is an integral part of most post mastectomy breast reconstruction procedures, it is inconsistent to exclude it as a part of that procedure.
Further, in the context of post mastectomy breast reconstruction, reduction mammoplasty may be performed to achieve symmetry of the collateral breast. This too is an integral part of the post mastectomy breast reconstruction process and should not be excluded from cost sharing by CHAMPUS. We are adding language to clarify the rule that reduction mammoplasty on the collateral breast is an authorized part of the post mastectomy breast reconstruction procedure.
Cosmetic, reconstructive or plastic surgery that is performed to reshape normal structures of the body for the sole purpose of electively improving the patient's appearance remains an exclusion.
The regulation currently provides that a valid authorization for receipt of services and items under the Program for Persons with Disabilities (PFPWD) shall not exceed six consecutive months. For services that are required for more than six months, and for the allowable cost of durable equipment and durable medical equipment that is prorated for more than six months, this requirement places unnecessary hardship on the family of an individual with a disability and additional administrative workload on the managed care support contractors. Changing the valid period of a PFPWD authorization to a maximum of twelve consecutive months enhances the PFPWD without compromising its accountability.
Part C of the Individuals with Disabilities Education Act (IDEA) Amendments of 1997, Public Law 105-17, enacted June 4, 1997, provides financial assistance to States to, among other provisions, facilitate the coordination of payment for early intervention services from Federal, State, local, and private sources (including public and private insurance coverage). Early intervention services are developmental services provided to individuals under age three (3) who have a developmental delay or who would be at risk of experiencing a substantial developmental delay if those services were not provided.
Part C, Section 640, Payer of Last Resort, establishes that funds provided under the Act may not be used to satisfy a financial commitment for services that would have been paid for from another public or private source, including any medical program administered by the Secretary of Defense. This language establishes CHAMPUS as first payer for medical services and items provided as early intervention services in accordance with Part C and that are otherwise allowable under the CHAMPUS Basic Program or the Program for Persons with Disabilities.
The revised statement clarifies that the consensus among experts must be based on reliable evidence.
Executive Order 12866 requires certain regulatory assessments for any significant regulatory action, defined as one that would result in an annual effect on the economy of $100 million, or more or have other substantial impacts.
The Regulatory Flexibility Act (RFA) requires that each Federal Agency prepare, and make available for public comment, a regulatory flexibility analysis when the agency issues a regulation which would have a significant impact on a substantial number of small entities.
This rule has been designated as significant and has been reviewed by the Office Management and Budget as required under the provisions of Executive Order 12866.
The changes set forth in this final rule are minor revisions to the existing regulation. This final rule will not impose additional information collection requirements on the public under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3511).
Claims, Health insurance, Individuals with disabilities, Military personnel.
5 U.S.C. 301; 10 U.S.C. Chapter 55.
(v) Part C of the Individuals with Disabilities Education Act for services and items provided in accordance with Part C of the IDEA that are medically or psychologically necessary in accordance with the Individualized Family Service Plan and that are otherwise allowable under the CHAMPUS Basic Program or the Program for Persons with Disabilities.
(e) * * *
(8) * * *
(iv) * * *
(C)
(E)
(g) * * *
(15) * * *
(i) * * *
(D) If reliable evidence shows that the consensus among experts regarding the medical treatment or procedure is that further studies or clinical trials are necessary to determine its maximum tolerated doses, its toxicity, its safety, or its effectiveness as compared with the standard means of treatment or diagnosis (see the definition of reliable evidence in § 199.2 for the procedures used in determining if a medical treatment or procedure is unproven).
(g) * * *
(58)
4. Section 199.5 is amended by revising paragraph (a)(4)(iii) and adding paragraph (a)(5)(v) to read as follows:
(a) * * *
(4) * * *
(iii)
(5) * * *
(v) The requirements of this paragraph (a)(5) notwithstanding, no Public Facility Use Certification is required for medical services and items that are provided under Part C of the Individuals with Disabilities Education Act in accordance with the Individualized Family Service Plan and that are otherwise allowable under the CHAMPUS Basic Program or the PFPWD.
(d) * * *
(5) The requirements of paragraph (d)(4) of this section notwithstanding, CHAMPUS is primary payer for services and items that are provided under Part C of the IDEA that are medically or psychologically necessary in accordance with the Individualized Family Service Plan and that are otherwise allowable under the CHAMPUS Basic Program or the Program for Persons with Disabilities.
Federal Communications Commission.
Final rule.
This document adopts rules to govern and streamline review of applications for section 214 of the Communications Act of 1934, as amended (the Act), to transfer control of domestic transmission lines. Specifically, this document establishes a thirty day streamlined review process that will presumptively apply to domestic section 214 transfer applications meeting specified criteria, and that will apply on a case-by-case basis to all other domestic section 214 applications. This document also sets forth the information that applicants must provide in their domestic section 214 applications, whether filed separately or in combination with an international section 214 applications. Moreover, this document defines pro forma transactions in a manner that is consistent with the definition used by the Commission in other contexts, and harmonizes the treatment of asset acquisitions with the treatment of acquisitions of corporate control.
Effective May 17, 2002, except §§ 63.01, 63.03 and 63.04 which contain information collection requirements that have not been approved by the Office of Management and Budget (OMB). The Federal Communications Commission will publish a document in the
Aaron Goldberger, Attorney-Advisor, Policy and Program Planning Division, Common Carrier Bureau, at (202) 418-1580, or via the Internet at
This is a summary of the Commission's Report and Order in CC Docket No. 01-150, FCC 02-78, adopted March 14, 2002, and released March 21, 2002. The complete text of this Report and Order is available for inspection and copying during normal business hours in the FCC Reference Information Center, Portals II, 445 12th Street, SW, Room CY-A257, Washington, DC, 20554. This document may also be purchased from the Commission's duplicating contractor, Qualex International, Portals II, 445 12th Street, SW, Room CY-B402, Washington, DC 20554, telephone 202-863-2893, facsimile 202-863-2898, or via e-mail
1. The Commission's goals in adopting this Report and Order are: (1) To add predictability, efficiency, and transparency to the Commission's domestic section 214 transfer of control review process; and (2) greatly improve the Commission's current domestic section 214 transfer of control procedures, which carriers have sometimes found confusing, cumbersome, and overly burdensome to navigate.
2.
3. In 1999, the Commission adopted the current version of § 63.01 of the Commission's rule, granting all carriers blanket authority under section 214 to provide domestic interstate services and to construct, acquire, or operate any domestic transmission line. The blanket authority in § 63.01, however, does not extend to the transfer of lines resulting from an acquisition of corporate control. Accordingly, with respect to acquisitions of corporate control, the Commission decided that carriers must file a section 214 application with the Commission and obtain Commission approval prior to consummating a proposed transaction.
4. In the Notice of Proposed Rulemaking adopted in this proceeding on July 12, 2001 (66 FR 41823 (2001)), the Commission tentatively concluded that a substantial number of transactions do not raise public interest concerns and should be granted on a streamlined basis. Therefore, the Commission sought comment on ways to streamline its review process for these transactions. Following from the Notice of Proposed Rulemaking, this Report and Order takes several significant steps to lessen the burden on carriers seeking authorization to acquire domestic transmission lines.
5.
6. Second, the Commission adopts rules to provide guidance concerning the information that carriers should provide in domestic section 214 applications. The Commission also eases filing burdens by adopting rules that enable carriers to file a single document with the Commission that combines both domestic and international section 214 applications.
7. Third, the Commission eliminates application filing requirements for all pro forma transactions, requiring simple post-transaction notifications to the Commission only for certain transfers in bankruptcy proceedings. The Commission also defines pro forma transactions in the domestic section 214 context in a manner that is consistent with how the Commission defines pro forma transactions involving other types of Commission authorization.
8. Fourth, the Commission modifies its filing requirements with regard to asset acquisitions, by requiring that they now be treated as transfers of control.
9. Finally, the Report and Order removes sections of the Commission's rules that the Commission has determined to be obsolete.
10. The action contained herein has been analyzed with respect to the Paperwork Reduction Act of 1995 and found to impose new or modified reporting and recordkeeping requirements or burdens on the public. Implementation of these new or modified reporting and recordkeeping requirements will be subject to approval by the Office of Management and Budget (OMB) as prescribed by the Act. The new paperwork requirement contained in the Report and Order will go into effect in the
11. As required by the Regulatory Flexibility Act, as amended, (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the
12. The Commission initiated the
13. In this Order, the Commission adopts rules to govern and streamline review of domestic section 214 transfer of control applications. By adopting these rules, the Commission intends to reduce the burden on carriers of complying with the Commission's review requirements and, at the same time, increase the predictability and transparency of these requirements.
14. First, under the new streamlined procedures, for example, transactions involving small entities such as incumbent LECs, are presumed to be of the kind not likely to raise public interest concerns and would receive automatic approval after a 30 day review period unless otherwise notified by the Commission. This streamlined approach reduces the amount of business and legal resources an applicant may need to expend to manage an application through the Commission review process because applicants can now predict the level of scrutiny an application is likely to receive. The streamlined approach also offers small entities the benefit of business certainty by designating a date certain on which transactions would be permitted to close.
15. No party specifically commented in response to the Regulatory Flexibility Act. However, commenters proposed many of the streamlined measures the Commission enacted. For example, in this Order, the Commission adopts commenters' proposals to presumptively streamline transfer applications involving domestic, interstate carriers that are non-dominant in the provision of any service where their combined post-transaction market presence is unlikely to raise public interest concerns. If a transaction proposes to combine the interexchange services of two non-dominant carriers, the application will be presumptively streamlined if the transferee's market share in the interstate, interexchange market following the transaction would be less than 10 percent. Similarly, if a transaction proposes to combine the telephone exchange services and/or exchange access services of two non-dominant carriers, the application will be presumptively streamlined if their services are offered exclusively in geographic areas served by a dominant local exchange carrier. These adopted streamlining measures proposed by commenters, while not directly responsive to the RFA, will nevertheless benefit both small and large carriers.
16. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the rules adopted herein. The RFA defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” The term “small business” has the same meaning as the term “small business concern” under the Small Business Act,
17. The most reliable source of information regarding the total numbers of certain common carrier and related providers nationwide appears to be data the Commission publishes annually in its
18. The Commission has included small incumbent local exchange carriers (LECs) in this present RFA analysis. As noted above, a “small business” under the RFA is one that,
19.
20.
21.
22.
23. The streamlining requirements discussed herein will not require additional reporting, recordkeeping or compliance requirements for service providers. In this Order, the Commission is not mandating new recordkeeping and compliance requirements. Rather, the Commission is articulating more clearly the categories of information that must be contained in a domestic section 214 application for transfer of control in order for the Commission to grant streamlined review. While there has been some uncertainty concerning the appropriate content of a section 214 application, the Commission believes that these new requirements will lessen the regulatory burden on small carriers.
24. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.
25. The Commission concludes that measures adopted and described in this Order would reduce regulatory burdens for small carriers including resellers and small incumbent LECs. For example, in this Order, the Commission eases filing burdens by adopting rules that enable carriers to file a single document with the Commission that combines both domestic and international section 214 applications. Aside from cases involving bankruptcy, where a simple notice will be required, the Commission eliminates filing requirements for
26. In this Order, the Commission also describes commenters' alternative streamlining proposals and state why those proposals would not improve efficiency or predictability, or would not serve the public interest. For example, CenturyTel proposed that “after the fact” notice for corporate transfers of control by small and medium-sized carriers would serve the public interest. However, the Commission must fulfill its statutorily imposed duty to determine whether the transaction serves the public interest, notwithstanding the legitimate desire of applicants to obtain the most expedited review possible. Therefore, the Commission concludes that applicants shall continue current practice and provide the Commission prior notice of proposed transfers of control to permit a short period for comment and review, even in the context of streamlined processing of domestic section 214 applications. Moreover, the Commission gains assurance from knowing that the rule would continue to benefit small carriers and serve the public interest by providing applicants with a date certain for domestic transfers of control, after which every transaction may close, unless the Commission otherwise notifies the applicant.
27.
28.
29.
30.
Reporting and recordkeeping requirements.
Communications common carriers, Reporting and recordkeeping requirements, Telecommunications.
Communications common carriers, Reporting and recordkeeping requirements, Telephone.
Secs. 5, 48 Stat. 1068, as amended; 47 U.S.C. 155.
47 U.S.C. 151, 154(i), 154(j), 155, 225, 303(r), 309, and 225(e).
Sections 1, 4(i), 4(j), 10, 11, 201-205, 214, 218, 403, and 651 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 154(j), 160, 201-205, 214, 218, 403, and 571, unless otherwise noted.
(a) Any party that would be a domestic interstate communications common carrier is authorized to provide domestic, interstate services to any domestic point and to construct or operate any domestic transmission line as long as it obtains all necessary authorizations from the Commission for use of radio frequencies.
Any domestic carrier that seeks to transfer control of lines or authorization to operate pursuant to section 214 of the Communications Act of 1934, as amended, shall be subject to the following procedures:
(a)
(b)
(i) Both applicants are non-facilities-based carriers;
(ii) The transferee is not a telecommunications provider; or
(iii) The proposed transaction involves only the transfer of the local exchange assets of an incumbent LEC by means other than an acquisition of corporate control.
(2) Where a proposed transaction would result in a transferee having a market share in the interstate, interexchange market of less than 10 percent, and the transferee would provide competitive telephone exchange services or exchange access services (if at all) exclusively in geographic areas served by a dominant local exchange carrier that is not a party to the transaction, the streamlined procedures provided in this rule shall be presumed to apply to transfer of control applications in which:
i. Neither of the applicants is dominant with respect to any service;
ii. The applicants are a dominant carrier and a non-dominant carrier that provides services exclusively outside the geographic area where the dominant carrier is dominant; or
iii. The applicants are incumbent independent local exchange carriers (as defined in § 64.1902 of this chapter) that have, in combination, fewer than two (2) percent of the nation's subscriber lines installed in the aggregate nationwide, and no overlapping or adjacent service areas.
(3) For purposes of (b)(1) and (2) of this paragraph, the terms “applicant,” “carrier,” “party,” and “transferee” (and their plural forms) include any affiliates of such entities within the meaning of section 3(1) of the Communications Act of 1934, as amended.
(c)
(i) An application is associated with a non-routine request for waiver of the Commission's rules;
(ii) An application would, on its face, violate a Commission rule or the Communications Act;
(iii) An applicant fails to respond promptly to Commission inquiries;
(iv) Timely-filed comments on the application raise public interest concerns that require further Commission review; or
(v) The Commission, acting through the Chief of the Wireline Competition Bureau, otherwise determines that the application requires further analysis to determine whether a proposed transfer of control would serve the public interest.
(2) Notification will be by public notice that states the reason for removal or non-streamlined treatment, and indicates the expected timeframe for Commission action on the application. Except in extraordinary circumstances, final action on the application should be expected no later than 180 days from public notice that the application has been accepted for filing.
(d) Pro Forma Transactions. (1) Any party that would be a domestic common carrier under section 214 of the Communications Act of 1934, as amended, is authorized to undertake any corporate restructuring, reorganization or liquidation of internal business operations that does not result in a change in ultimate ownership or control of the carrier's lines or authorization to operate, including transfers in bankruptcy proceedings to a trustee or to the carrier itself as a debtor-in-possession.
(2) Any party that would be a domestic common carrier under section 214 of the Communications Act of 1934, as amended, must notify the Commission no later than 30 days after control of the carrier is transferred to a trustee under Chapter 7 of the Bankruptcy Code, a debtor-in-possession under Chapter 11 of the Bankruptcy Code, or any other party pursuant to any applicable chapter of the Bankruptcy Code when that transfer does not result in a change in ultimate ownership or control of the carrier's lines or authorization to operate. The notification can be in the form of a letter (in duplicate to the Secretary). The letter or other form of notification must also contain the information listed in paragraphs (a)(1) through (a)(4) in § 63.04. A single letter may be filed for more than one such transfer of control. If a carrier files a discontinuance request within 30 days of the transfer in bankruptcy, the Commission will treat the discontinuance request as sufficient to fulfill the pro forma post-transaction notice requirement.
(3) Notwithstanding any other provision in this part, any party that would be a domestic common carrier under section 214 of the Communications Act of 1934, as amended, including a carrier that begins
(a)
(1) The name, address and telephone number of each applicant;
(2) The government, state, or territory under the laws of which each corporate or partnership applicant is organized;
(3) The name, title, post office address, and telephone number of the officer or contact point, such as legal counsel, to whom correspondence concerning the application is to be addressed;
(4) The name, address, citizenship and principal business of any person or entity that directly or indirectly owns at least ten (10) percent of the equity of the applicant, and the percentage of equity owned by each of those entities (to the nearest one (1) percent);
(5) Certification pursuant to §§ 1.2001 through 1.2003 of this chapter that no party to the application is subject to a denial of Federal benefits pursuant to section 5301 of the Anti-Drug Abuse Act of 1988.
(6) A description of the transaction;
(7) A description of the geographic areas in which the transferor and transferee (and their affiliates) offer domestic telecommunications services, and what services are provided in each area;
(8) A statement as to how the application fits into one or more of the presumptive streamlined categories in this section or why it is otherwise appropriate for streamlined treatment;
(9) Identification of all other Commission applications related to the same transaction;
(10) A statement of whether the applicants are requesting special consideration because either party to the transaction is facing imminent business failure;
(11) Identification of any separately filed waiver requests being sought in conjunction with the transaction; and
(12) A statement showing how grant of the application will serve the public interest, convenience and necessity, including any additional information that may be necessary to show the effect of the proposed transaction on competition in domestic markets.
(b)
Federal Communications Commission.
Final rule.
The Commission, at the request of KWTX/KBTX License Corporation, licensee of station KBTX-TX, Bryan, Texas, substitutes DTV channel 50 for DTV channel 59 at Bryan.
With is action, this proceeding is terminated.
Effective May 30, 2002.
Pam Blumenthal, Media Bureau, (202) 418-1600.
This is a synopsis of the Commission's Report and Order, MM Docket No. 00-124, adopted April 8, 2002, and released April 15, 2002. The full text of this document is available for public inspection and copying during regular business hours in the FCC Reference Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC. This document may also be purchased from the Commission's duplicating contractor, Qualex International, Portals II, 445 12th Street., SW, CY-B402, Washington, DC, 20554, telephone 202-863-2893, facsimile 202-863-2898, or via e-mail
Television, Digital television broadcasting.
47 U.S.C. 154, 303, 334, 336.
Federal Communications Commission.
Final rule.
The Commission, at the request of Smoky Hills Public Television, licensee of noncommercial educational station KSWK-T, NTSC channel *3, Lakin, Kansas, substitutes DTV channel *8 for DTV channel *23 at Lakin.
Effective May 30, 2002.
Pam Blumenthal, Media Bureau, (202) 418-1600.
This is a synopsis of the Commission's Report and Order, MM Docket No. 02-3, adopted April 8, 2002, and released April 15, 2002. The full text of this document is available for public inspection and copying during regular business hours in the FCC Reference Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC. This document may also be purchased from the Commission's duplicating contractor, Qualex International, Portals II, 445 12th Street, SW., CY-B402, Washington, DC, 20554, telephone 202-863-2893, facsimile 202-863-2898, or via e-mail
Television, Digital television broadcasting.
47 U.S.C. 154, 303, 334, 336.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule.
NMFS adopts as final, without change, an interim final rule that amends the regulations that require summer flounder trawlers to use Turtle Excluder Devices (TEDs) in waters off Virginia and North Carolina to reduce the incidental capture of endangered and threatened sea turtles. NMFS is requiring that any approved hard TED or special TED installed in a summer flounder trawl be installed in a TED extension (a cylinder of webbing in which the TED is installed). NMFS also is providing specifications for the TED extension and requiring that it be constructed of webbing no larger than 3.5-inch (8.9 cm) stretched mesh. The intent of this final rule is to prevent adverse impacts to turtles in the course of summer flounder trawling.
This final rule is effective May 17, 2002.
Requests for a copy of the environmental assessment (EA) prepared for the interim final rule should be addressed to the Chief, Endangered Species Division, Office of Protected Resources, NMFS, 1315 East-West Highway, Silver Spring, MD 20910.
David M. Bernhart (ph. 727-570-5312, fax 727-570-5517, e-mail David.Bernhart@noaa.gov).
Through an interim final rule published October 15, 1999 (64 FR 55860), NMFS amended 50 CFR part 223 to require that an approved hard TED or special hard TED installed in a summer flounder trawl be installed in a TED extension. The interim final rule provided specifications for the length and webbing size of the required extension. The rationale for the regulatory amendment was provided in the preamble to the interim final rule and is not repeated here. Comments were requested. No comments were received.
NMFS prepared an EA for the interim final rule which concluded that the rule would have no significant impact on the human environment. A copy of the EA is available (
This final rule has been determined to be not significant for purposes of Executive Order 12866.
Because prior notice and comment were not required for the interim final rule or this final rule by U.S.C. 553, or any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601
This final rule does not contain a collection-of-information requirement for purposes of the Paperwork Reduction Act.
Accordingly, the interim final rule amending 50 CFR part 223 that was published at 64 FR 55860 on October 15, 1999, is adopted as final without change.
16 U.S.C. 1531,
Food and Drug Administration, HHS.
Proposed rule; correction.
The Food and Drug Administration (FDA) is correcting a proposed rule that appeared in the
Andrew Zajac, Center for Food Safety and Applied Nutrition (HFS-265), Food and Drug Administration, 5100 Paint Branch Pkwy., College Park, MD 20740-3835, 202-418-3095.
In the FR Doc. 02-4327, appearing in the
1. On page 8744, in the third column,
Internal Revenue Service (IRS), Treasury.
Notice of proposed rulemaking by cross-reference to temporary regulations.
In the Rules and Regulations section of this issue of the
Written or electronic comments must be received by July 16, 2002.
Send submissions to: CC:ITA:RU (REG-108697-02), room 5226, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand delivered Monday through Friday between the hours of 8 a.m. and 5 p.m. to: CC:ITA:RU (REG-108697-02), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC. Alternatively, taxpayers may submit comments electronically directly to the IRS Internet site at
Cathy Vohs at 622-6090.
Final and Temporary regulations in the Rules and Regulations portion of this issue of the
It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. Because § 1.401(a)(9)-6 imposes no new collection of information on small entities, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of the Internal Revenue Code, this notice of proposed rulemaking will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.
Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments (a signed original and eight (8) copies) that are submitted timely to the IRS. All comments will be available for public inspection and copying.
A public hearing may be scheduled if requested in writing by a person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the hearing will be published in the
The principal authors of these regulations are Marjorie Hoffman and Cathy A. Vohs of the Office of the Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). However, other personnel from the IRS and Treasury participated in their development.
Income taxes, Reporting and recordkeeping requirements.
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
26 U.S.C. 7805 * * *
§ 1.401(a)(9)-6 is also issued under 26 U.S.C. 401(a)(9).* * *
[The text of proposed § 1.401(a)(9)-6 is the same as the text of § 1.401(a)(9)-6T published elsewhere in this issue of the
Internal Revenue Service (IRS), Treasury.
Withdrawal of previous notice of proposed rulemaking; notice of proposed rulemaking and notice of public hearing.
This document contains proposed amendments to the final regulations on the arbitrage and private activity restrictions applicable to tax-exempt bonds issued by State and local governments. The proposed amendments affect issuers of tax-exempt bonds and provide guidance on the definitions of investment-type property and private loan to help issuers comply with the arbitrage and private activity restrictions. This document also provides notice of a public hearing on these proposed regulations.
The previous notice of proposed rulemaking (REG-113526-98), published on August 25, 1999, relating to arbitrage and related restrictions applicable to tax-exempt bonds issued by State and local governments, is withdrawn.
Written or electronic comments must be received by July 16, 2002. Outlines of topics to be discussed at the public hearing scheduled for September 24, 2002, at 10 a.m., must be received by September 10, 2002.
The previous notice of proposed rulemaking (REG-113526-98), published on August 25, 1999, relating to arbitrage and related restrictions applicable to tax-exempt bonds issued by State and local governments, is withdrawn.
Send submissions to: CC:ITA:RU (REG-105369-00), room 5226, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand delivered between the hours of 8 a.m. and 5 p.m. to: CC:ITA:RU (REG-105369-00), courier's desk, Internal Revenue Service, 1111 Constitution Avenue NW., Washington, DC. Alternatively, submissions may be made electronically to the IRS Internet site at
Concerning the proposed regulations, Johanna Som de Cerff, (202) 622-3980; concerning submissions and the hearing, Sonya Cruse, (202) 622-7180 (not toll-free numbers).
This document contains proposed amendments to 26 CFR part 1 (the proposed regulations). On August 25, 1999, the IRS published in the
With certain exceptions, section 148 prohibits the use of proceeds of a tax-exempt bond issue to acquire investment property with a yield that materially exceeds the yield on the issue. Section 148(b)(2)(D) provides that the term
As an economic matter, prepayments for property or services generally contain a built-in investment return. That is, if a buyer of property or services makes a cash payment to the seller in advance of the seller's performance, the buyer may expect to receive an implicit investment return based on the time value of money. In the case of a prepayment financed with tax-exempt bond proceeds, the presence of a built-in investment return raises the issue of whether the prepayment gives rise to investment-type property.
The existing regulations, at § 1.148-1(e)(2), contain rules for determining when a prepayment for property or services results in investment-type property. Under that provision, a prepayment generally gives rise to investment-type property if a principal purpose for prepaying is to receive an investment return from the time the prepayment is made until the time payment otherwise would be made. However, a prepayment does not give rise to investment-type property under the existing regulations if (1) it is made
The 1999 proposed regulations proposed a modification to § 1.148-1(e)(2) to establish that a prepayment of a contract for property or services that is made after the date that the contract is entered into can give rise to investment-type property. This modification was proposed in light of the opinion in
Commentators generally agreed with the suggestion that a prepayment for property or services can occur after the date the purchase contract is executed. The proposed regulations retain the proposed change to § 1.148-1(e)(2), with clarifying modifications that are consistent with this concept.
Although commentators generally agreed with the 1999 proposed amendments to § 1.148-1(e)(2), they requested additional clarification of other aspects of the definition of
Commentators generally did not recommend modifying the basic framework for determining whether a prepayment gives rise to investment-type property under § 1.148-1(e)(2). The proposed regulations retain this basic structure, but make certain modifications. In particular, the proposed regulations: (1) Amend the business purpose exception; (2) retain the customary exception in its present form; (3) add an exception for certain prepayments by municipal utilities to acquire a supply of natural gas; and (4) add a
As indicated, the existing regulations provide that a prepayment does not give rise to investment-type property if it is made for a substantial business purpose other than investment return and the issuer has no commercially reasonable alternative to the prepayment. This provision, which was intended to be a narrow exception to the definition of investment-type property, has raised difficult interpretive questions. For example, in many instances it may be unclear whether the alternatives available to the issuer are “commercially reasonable.”
Commentators suggested certain changes to the provision to clarify its application. For example, they suggested that a prepayment should be considered made for a substantial business purpose other than investment return if the effect of the prepayment is (1) to fix the price of the property or service, (2) to assure a supply of the property or service, (3) to guarantee delivery of the property or service at a location favorable to the issuer, or (4) to enable the issuer to obtain a price discount that materially exceeds the investment return that could be earned between the time the prepayment is made and the time the property or services are delivered. Commentators suggested that an alternative should be viewed as “commercially reasonable” if it is reasonably available to the issuer, it would achieve the same substantial business purpose as the prepayment except that no investment return is received, and it is not more expensive by an amount that materially exceeds the investment return from the prepayment. Some commentators recommended that a safe harbor be added under which an alternative would not be considered commercially reasonable if the cost of the alternative exceeded the cost of the prepayment by a specified amount on a present value basis.
Treasury and the IRS have considered these suggested factors and have concluded that they do not, in and of themselves, represent administrable standards for distinguishing between prepayments that are made primarily for arbitrage purposes and those that are not. That is, a prepayment transaction may contain one or more of these features, even if it is primarily arbitrage-motivated. Therefore, the proposed regulations do not adopt these suggested amendments. Nevertheless, as discussed below, these factors are taken into account, together with all the other facts and circumstances, in determining whether a prepayment satisfies the business purpose exception as revised by the proposed regulations.
In this regard, the proposed regulations amend the business purpose exception in order to clarify that it is to be applied narrowly in a manner that is consistent with the broad scope of the investment-type property concept. In particular, under the proposed regulations a prepayment meets the business purpose exception if the facts and circumstances clearly establish that the primary purpose for the prepayment is to accomplish one or more substantial business purposes that (1) are unrelated to any investment return based on the time value of money, and (2) cannot be accomplished without the prepayment. This exception is intended to be very narrow and to apply only in very unique circumstances, such as the situation illustrated by an example in the proposed regulations.
As indicated, the existing regulations provide that a prepayment does not give rise to investment-type property if prepayments on substantially the same terms are made by a substantial percentage of persons who are similarly situated to the issuer but who are not beneficiaries of tax-exempt financing. This provision implements the legislative history cited above that indicates that customary prepayments should not result in investment-type property.
Commentators suggested that a safe harbor be added for determining a “substantial percentage” of similarly situated persons. However, Treasury and the IRS have concluded that the determination of whether a transaction is customary is appropriately made on a case-by-case basis, taking into account all the facts and circumstances, rather than by reference to a precise mathematical formula or predetermined
Commentators also recommended that the “substantial percentage” requirement should be deemed satisfied if a substantial number of similarly situated persons who are not beneficiaries of tax-exempt financing make a similarly sized prepayment. The proposed regulations do not adopt this comment because the incidence of a particular number of transactions by similarly situated persons may not establish that the transaction is customary if those persons represent only a small percentage of all the similarly situated persons.
Finally, some commentators suggested that the customary exception should be automatically satisfied if the issuer and the supplier of the property or services certify reasonably and in good faith that its requirements are met. The proposed regulations do not adopt this comment because a certification by the parties to a transaction should not be sufficient to establish the legal conclusion that the transaction meets the requirements of the exception.
The preamble to the 1999 proposed regulations identified certain transactions involving the issuance of bonds to prepay for a supply of natural gas and the simultaneous execution by the issuer of a commodity swap under which the issuer receives fixed payments and makes variable payments based on an index. The 1999 preamble stated that Treasury and the IRS were concerned that the transactions create investment-type property and requested comments on the transactions.
Most, but not all, of the commentators disagreed with the suggestion that the identified transactions should result in investment-type property. They stated that deregulation of the natural gas industry has threatened the ability of municipal utilities to obtain a secure supply of natural gas on commercially reasonable terms. They stated that the natural gas prepayment transactions are necessary to obtain a guaranteed supply of natural gas on favorable terms in light of deregulation.
The proposed regulations add an exception to the definition of investment-type property for certain natural gas prepayments that are made by or for one or more utilities that are owned by a governmental person, as defined in § 1.141-1(b) (for example, where a joint action agency acquires a natural gas supply for one or more municipal gas or electric utilities). The exception applies only if at least 95 percent of the natural gas purchased with the prepayment is to be consumed by retail customers in the service area of a municipal gas utility, or used to produce electricity that will be furnished to retail customers that a municipal electric utility is obligated to serve under state or Federal law. For this purpose, the service area of a municipal gas utility is defined as (1) any area throughout which the municipal utility provided (at all times during the five-year period ending on the issue date) gas transmission or distribution service, and any area that is contiguous to such an area, or (2) any area where the municipal utility is obligated under state or Federal law to provide gas distribution services as provided in such law. Issuers may apply principles similar to the rules of § 1.141-12 in order to cure a violation of this 95 percent requirement.
A transaction will not fail to qualify for this exception by reason of any commodity swap contract that may be entered into between the issuer and an unrelated party (other than the gas supplier), or between the gas supplier and an unrelated party (other than the issuer), so long as each swap contract is an independent contract. For this purpose, a swap contract is an independent contract if the obligation of each party to perform under the swap contract is not dependent on performance by any person (other than the other party to the swap contract) under another contract (for example, a gas supply contract or another swap contract).
Comments are requested on the exception for natural gas prepayments in the proposed regulations, including the definition of service area and the workability of the 95 percent test.
Commentators recommended adding to the regulations a
The preamble to the 1999 proposed regulations requested comments regarding the proper treatment of contracts that provide for a timing mismatch between the buyer's cash payments and the seller's delivery of property or services.
Commentators generally expressed the view that, depending on the particular facts, payments made over time may give rise to investment-type property when the payment schedule does not match the schedule for the provision of property or services. The commentators did not recommend any changes to the regulations on this issue. Treasury and the IRS have determined that § 1.148-1(e)(2) appropriately addresses mismatches in payment and delivery obligations. Therefore, the proposed regulations do not propose any amendments in this regard.
Some commentators recommended that the regulations be modified to provide that a prepayment does not give rise to investment-type property if it is in substance a reimbursement to a seller of all or a portion of the seller's capital costs of a specific, tangible project through which the seller produces or delivers a service or commodity. The proposed regulations do not contain a specific exception for prepayments that reimburse a seller for its capital costs because a prepayment may be made primarily for arbitrage purposes even if it effectively reimburses the seller for capital costs. Nevertheless, this factor is taken into account, together with all the other facts and circumstances, in determining whether a prepayment meets the business purpose exception.
With certain exceptions, interest on an issue that meets the private loan financing test is not excluded from gross income. Under section 141(c), an issue generally meets the private loan financing test if more than the lesser of 5 percent or $5 million of its proceeds are used to make loans to nongovernmental persons. Section 1.141-5(c)(1) states that, for purposes of the private loan financing test, a loan may arise from the direct lending of bond proceeds or may arise from transactions in which indirect benefits that are the economic equivalent of a loan are conveyed. Thus, the determination of whether a loan is made depends on the substance of a
The existing regulations, at § 1.141-5(c)(2)(ii), provide that a prepayment for property or services generally is treated as a loan for purposes of the private loan financing test if a principal purpose for prepaying is to provide a benefit of tax-exempt financing to the seller. However, under the existing regulations a prepayment is not treated as a loan for purposes of the private loan financing test if (1) it is made for a substantial business purpose other than providing a benefit of tax-exempt financing to the seller and the issuer has no commercially reasonable alternative to the prepayment; or (2) prepayments on substantially the same terms are made by a substantial percentage of persons who are similarly situated to the issuer but who are not beneficiaries of tax-exempt financing. The proposed regulations amend the private loan provisions of § 1.141-5(c)(2) to conform to the amendments to the definition of investment-type property in this notice of proposed rulemaking.
The proposed regulations will apply to bonds sold on or after the date of publication of final regulations in the
It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedures Act (5 U.S.C. chapter 5) does not apply to these regulations, and, because the regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.
Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments that are submitted timely (preferably a signed original and eight copies) to the IRS. The Treasury Department and IRS specifically request comments on the clarity of the proposed rules and how they may be made easier to understand. All comments will be available for public inspection and copying.
A public hearing has been scheduled for September 24, 2002, at 10 a.m. in the Auditorium, Internal Revenue Building, 1111 Constitution Avenue, NW., Washington, DC. Because of access restrictions, visitors will not be admitted beyond the lobby more than 30 minutes before the hearing starts.
The rules of 26 CFR 601.601(a)(3) apply to the hearing.
Persons who wish to present oral comments at the hearing must submit written comments by July 16, 2002, and submit an outline of the topics to be discussed and the amount of time to be devoted to each topic by September 10, 2002.
A period of 10 minutes will be allotted to each person for making comments.
An agenda showing the scheduling of the speakers will be prepared after the deadline for receiving outlines has passed. Copies of the agenda will be available free of charge at the hearing.
The principal authors of these regulations are Rebecca L. Harrigal and Johanna Som de Cerff, Office of Chief Counsel (TE/GE), IRS, and Stephen J. Watson, Office of Tax Policy, Treasury Department. However, other personnel from the IRS and Treasury Department participated in their development.
Income taxes, Reporting and recordkeeping requirements.
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
26 U.S.C. 7805 * * *
1. Paragraph (c)(2)(ii) introductory text is revised.
2. Paragraph (c)(2)(ii)(A) is revised.
3. Paragraph (c)(2)(ii)(B) is amended by removing the period at the end of the paragraph and adding a semicolon in its place.
4. Paragraphs (c)(2)(ii)(C), (c)(2)(ii)(D), and (c)(2)(iii) are added.
The revisions and additions read as follows:
(c) * * *
(2) * * *
(ii)
(A) The primary purpose for the prepayment is to accomplish one or more substantial business purposes that—
(
(
(C) The prepayment is made within 90 days of the date of delivery to the issuer of all of the property or services for which the prepayment is made; or
(D) The prepayment meets the requirements of § 1.148-1(e)(2)(ii) (relating to certain prepayments to acquire a supply of natural gas).
(iii)
(e)
(2)
(A) The primary purpose for the prepayment is to accomplish one or more substantial business purposes that—
(
(
(B) Prepayments on substantially the same terms are made by a substantial percentage of persons who are similarly situated to the issuer but who are not beneficiaries of tax-exempt financing;
(C) The prepayment is made within 90 days of the date of delivery to the issuer of all of the property or services for which the prepayment is made; or
(D) The prepayment meets the requirements of paragraph (e)(2)(ii) of this section.
(ii)
(A)
(
(
(B)
(
(
(C)
(iii)
The Commissioner may, by published guidance, set forth additional circumstances in which a prepayment does not give rise to investment-type property.
(iv)
In 1998, City A enters into a ten-year contract with Company Y. Under the contract, Company Y is to provide services to City A over the term of the contract and in return City A will pay Company Y for its services as they are provided. In 2004, City A issues bonds to finance a lump sum payment to Company Y in satisfaction of City A's obligation to pay for Company Y's services to be provided over the remaining term of the contract. The use of bond proceeds to make the lump sum payment constitutes a prepayment for services under paragraph (e)(2)(i) of this section, even though the payment is made after the date that the contract is executed.
Internal Revenue Service (IRS), Treasury.
Notice of proposed rulemaking.
This document contains proposed regulations relating to restrictions on levy during the period that an installment agreement is proposed or in effect. The proposed regulations reflect changes to the law made by the Internal Revenue Service Restructuring and Reform Act of 1998.
Written or electronically generated comments and requests for a public hearing must be received by July 16, 2002.
Send submissions to: CC:ITA:RU (REG-104762-00), room 5226, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand delivered Monday through Friday between the hours of 8 a.m. and 5 p.m. to: CC:ITA:RU (REG-104762-00), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC. Alternatively, taxpayers may submit comments electronically via the IRS Internet site at www.irs.gov/regs.
Concerning the regulations, Frederick W. Schindler, (202) 622-3620; concerning submissions of comments or requests for a hearing Treena Garret, (202) 622-7180 (not toll-free numbers).
This document contains proposed amendments to the Procedure and Administration Regulations (26 CFR part 301) under section 6331 of the Internal Revenue Code (Code). The proposed regulations reflect the amendment of section 6331 by section 3462 of the Internal Revenue Service Restructuring and Reform Act of 1998 Public Law, 105-206, (112 Stat. 685, 764) (RRA 1998). New subsection 6331(k) codifies the IRS practice of withholding collection during consideration of a taxpayer's offer to compromise and extends that practice to proposed installment agreements. The proposed regulations deal principally with the effect of subsection 6331(k) when an installment agreement has been proposed and is pending, is in effect, or has been rejected or terminated.
Prior to the enactment of RRA 1998, the IRS had a long-standing practice of staying action to collect a liability while an offer to compromise that liability was being evaluated and considered, unless the interests of the United States would be jeopardized by doing so. See Policy Statement P-5-97 (Approved July 10, 1959), reprinted at IRM 1.5.17. To insure that the interests of the United States would not be jeopardized while collection was withheld, the IRS required that taxpayers execute a waiver of the statute of limitations for collection of the liabilities the taxpayer was attempting to compromise.
Section 3462 of RRA 1998 added subsection 6331(k) to the Code. Paragraph (1) of the new subsection codifies the IRS policy of withholding collection during the pendency of an offer to compromise by prohibiting levy while an offer to compromise is pending, for thirty days after a rejection, and during any appeal of that rejection. Temporary regulations published in the
Prior to RRA 1998, the IRS did not stay collection when a taxpayer submitted an offer of an installment agreement. Because installment agreements provide for the full payment of the tax liabilities at issue, the processing of requests for installment agreements is less formal and most requests were accepted or rejected within several days of receipt. Once an installment agreement took effect, regulations prohibited levy, as well as certain other enforced collection measures, unless the installment agreement provided otherwise. See § 301.6159-1(d).
Paragraph 6331(k)(2) prohibits levy while a taxpayer's proposal of an installment agreement is pending with the IRS, for thirty days after rejection of such a proposal, while an installment agreement is in effect, for thirty days after termination of an installment agreement by the IRS, and during a timely filed appeal by the taxpayer to the IRS Office of Appeals of a rejection or termination decision.
Paragraph 6331(k)(3) provides that “rules similar to” those contained in paragraphs (3), (4), and (5) of subsection 6331(i) shall apply generally for the purposes of subsection 6331(k). Subsection 6331(i) governs the prohibition on levy during the pendency of a proceeding for refund of a divisible tax. The cross-referenced provisions provide exceptions to the prohibitions on levy, prohibit the initiation by the IRS of court proceedings to collect while the refund proceeding is pending, and provide that the statute of limitations for collection is suspended while levy is prohibited.
The proposed regulations implement the provisions of subsection 6331(k) as they relate to installment agreements. In addition to setting forth the periods during which levy is prohibited, they adapt the rules of paragraphs (3), (4), and (5) of subsection 6331(i) in a manner tailored to the installment agreement process. The legislative history accompanying RRA 1998 explains that Congress did not intend that levy would be prohibited if the IRS determined that an offer to compromise was submitted solely to delay collection. H.R. Conf. Rep. No. 509, 105th Cong., 2d Sess. 288 (1998). Because the legislative history indicates that Congress intended the same restrictions on levy with respect to offers in compromise be applicable to installment agreements, these proposed regulations adopt the same rule with respect to proposed installment agreements that are submitted solely to delay collection.
The proposed regulations provide that, subject to certain exceptions, the IRS may not levy to collect a liability while a proposal to enter into an installment agreement for payment of that liability is pending, for thirty days after rejection of such a proposal, while an installment agreement is in effect, for thirty days after termination of an installment agreement by the IRS, and during a timely filed appeal of a rejection or termination by the IRS. A proposed installment agreement is considered pending when it is accepted for processing by the IRS, and remains pending until the IRS accepts or rejects it or the taxpayer withdraws the proposal. If a proposed installment agreement does not contain sufficient information for the IRS to determine whether the proposal should be accepted, the IRS will request the additional necessary information from the taxpayer and provide a reasonable time period for the taxpayer to respond. The IRS may reject the proposed installment agreement if the requested information is not provided.
Collection by levy is not prohibited if the taxpayer waives the restriction on levy in writing, if the IRS determines that the proposed installment agreement was submitted solely to delay collection, or if the IRS determines that collection of the tax liability is in jeopardy.
The proposed regulations provide that the IRS may take actions other than levy to protect the interests of the United States with respect to collection of the liability to which an installment agreement or proposed installment agreement relates. Those actions include, but are not limited to: crediting an overpayment against the liability pursuant to section 6402, filing or refiling notices of Federal tax lien, and taking action to collect from persons liable for the tax but not named in the installment agreement.
Under the proposed regulations, the IRS cannot institute a court proceeding against the taxpayer named in the installment agreement to collect the tax covered by the installment agreement. The IRS, however, may file a claim in
While an installment agreement allows the IRS to accept the payment of tax in installments, the agreement does not conclusively establish the taxpayer's liability. A taxpayer therefore is not prohibited from seeking a refund of taxes paid pursuant to an installment agreement. Allowing the IRS to join the taxpayer in a proceeding where the liability for the tax may be established or disputed will protect the Government from having to litigate the same tax in multiple forums only to face the argument in each separate case (including, potentially, from the taxpayer named in an installment agreement) that the person or persons not party to that suit were solely or principally liable for non-payment of the taxes at issue. The proposed regulations provide, however, that if a taxpayer named in an installment agreement is joined in a proceeding and the IRS obtains a judgment against that person, then collection will continue to occur pursuant to the terms of the installment agreement.
The regulations provide that the statute of limitations for collection under section 6502 is suspended while a proposed installment agreement is pending, for thirty days after rejection or termination of an installment agreement, and during a timely filed appeal of the rejection or termination decision. The running of the collection statute resumes, however, after an installment agreement takes effect. The statute of limitations for collection shall continue to run if an exception under this section applies and levy is not prohibited with respect to the taxpayer.
These regulations apply to installment agreements proposed or entered into on or after the date final regulations are published in the
It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because the regulation does not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.
Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments (a signed original and eight (8) copies) or electronically generated comments that are submitted timely to the IRS. The IRS generally requests any comments on the clarity of the proposed rule and how it may be made easier to understand.
All comments will be available for public inspection and copying.
A public hearing may be scheduled if requested in writing by a person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the hearing will be published in the
The principal author of these regulations is Frederick W. Schindler, Office of the Associate Chief Counsel (Procedure & Administration), Collection, Bankruptcy & Summonses Division.
Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements.
Accordingly, 26 CFR Part 301 is proposed to be amended as follows:
26 U.S.C. 7805 ***
(a)
(2)
(3)
(4)
(b)
(i) Crediting an overpayment against the liability pursuant to section 6402;
(ii) Filing or refiling notices of Federal tax lien; and
(iii) Taking action to collect from any person who is not named on the installment agreement or proposed installment agreement but who is liable for the tax to which the installment agreement relates.
(2)
(c)
(2)
(d)
Postal Service.
Proposed rule.
The Automated Flat Sorting Machine (AFSM) 100 represents the next step into the automated processing environment envisioned for flats mail. Mailpieces that currently qualify for automation flat rates under FSM 881 standards (
Comments must be received on or before May 6, 2002.
Mail or deliver written comments to the Manager, Mail Preparation and Standards, Postal Service Headquarters, 1735 N Lynn Street, Room 3025, Arlington VA 22209-6038. Copies of all written comments will be available for inspection and photocopying at Postal Service Headquarters Corporate Library, 475 L'Enfant Plaza, SW, Room 11800, Washington, DC, between 9 a.m. and 4 p.m., Monday through Friday.
Karen A. Magazino, (703) 292-3644.
AFSM 100 deployment will be completed in April 2002 with 534 systems installed in field offices. With deployment of the AFSM 100s, the FSM 881s are being phased out. Currently, pieces may qualify for a flats automation rate based on the FSM 881 physical criteria as defined in Domestic Mail Manual (DMM) C820. The Postal Service plans to replace the current FSM 881 standards, with new criteria based on the physical mailpiece requirements for the AFSM 100.
Processing mail on the AFSM 100 provides tremendous savings opportunities. One of the Postal Service's objectives is to reduce processing costs by moving flat's processing from the labor-intensive manual/mechanized environment to the more efficient automated mode. The additional machine capacity provided by AFSM 100 deployment enables a reduction in the overall amount of mail processed in manual/mechanized operations.
The processing and technological capabilities of the AFSM 100 machine are vastly superior to those of the FSM 881. The AFSM 100 has three automatic feeders with throughput rates capable of exceeding 17,000 pieces per hour, and 120 individual sort separations. Challenges that arise with high speed feeders compared to manual inductions include singulation (double feeds) and acceleration (jams, stoppages). The AFSM 100 also has Optical Character (OCR) and Barcode (BCR) reader functionality. The reader scans the mailpiece in search of an address block and barcode. If a POSTNET barcode is found, the piece is sorted based on the ZIP Code information. If a POSTNET barcode is not found or cannot be read, the OCR looks for the delivery address and the piece is sorted based on the result returned by the OCR.
If the address is unreadable by the OCR, a video-coding operator must key the image and the pieces then sorted to the correct bin or worked manually. The AFSM 100 does not apply (spray on) a POSTNET barcode.
To determine the range of mailpieces compatible with the AFSM 100, we conducted controlled tests using a variety of physical mailpiece characteristics. Three mail characteristic studies were performed: a preliminary test in Baltimore, Maryland, from February 26, 2001, to March 13, 2001; a test in Denver, Colorado, from July 9, 2001, to August 1, 2001; and a study to determine maximum weight conducted in Palantine, Illinois from February 25, 2002, to March 12, 2002.
The mailing industry assisted the Postal Service and supplied many of the
The AFSM 100 preliminary test was designed with specific analytical objectives, including: (1) Identifying mail characteristic ranges where additional data would be required to determine automation compatibility, (2) identifying factors that have a significant impact on sorter performance, (3) providing data to identify threshold levels, and (4) determining mailpiece characteristics that would not require further testing. Included in this test was the evaluation of a large number of mailpiece characteristics and a subset of combinations, each individually replicated over several test decks. The data represented: jams, double-feeds, missorts, thickness, weight limitations, physical dimensions, mechanical rejects, and mailpiece damage. In addition, we tested several different polywrap materials to analyze factors such as seam and wrap direction, contents, polywrap characteristics, and overhang (selvage).
The primary mail types included in the test were folded pieces (
We designed this test to define acceptable physical mailpiece characteristics and polywrap characteristics. The results from the pilot test in Baltimore eliminated some obvious mailpieces for the second test in Denver (
Data from these two tests have shown that the majority of the existing standards for physical dimensions—height, length, and thickness—developed for flats processed on the FSM 881 are applicable to flats processed on the AFSM 100. On the basis of these findings, the Postal Service proposes a minimum of 5 inches height x 6 inches length x 0.009 inches thick, and a maximum of 12 inches height x 15 inches length x 0.75 inches thick to qualify for AFSM 100 automation-based flat rates. The length and height of an automation-compatible flat-size mailpiece is not determined by the orientation of the address. For a piece that has a bound, folded, or closed edge (
Anaylsis from all three tests identified a maximum weight of 20 ounces for AFSM 100 enveloped, bound, and polywrapped flat mailpieces. This will allow more BPM pieces, which primarily weigh 16 ounces or more, to qualify as flats. The resolution of the rate case has been accelerated, and the Board of Governors has approved the new rates with implementation in June 2002. Those new rates will include distinct rates for BPM flats and parcels. Flats that meet the AFSM 100 mail characteristics and criteria will be eligible for a new barcode discount of 3 cents. Therefore, defining a “flat” will have significant impact on mailpiece design and rate eligibility.
The test data for polywrapped pieces led us to conclude that the current seven polywrap requirements for the FSM 881 will continue to be required for polywrapped pieces processed on the AFSM 100. A new property number 8 known as “blocking” will also be added. Blocking is simply the property that prevents polywrapped pieces from sticking together. Overhang (selvage) requirements will remain unchanged. Polywrapped flats for which automation rates based on AFSM 100 compatibility are claimed must be individually endorsed to show they are automation-compatible. The endorsement “USPS AFSM 100 Approved Poly” must be placed on the address side of the piece, either on the flat itself or on the polywrap, preferably below the postage area or in another prominently visible location on the outside of the mailpiece. The polywrap certification process conducted by the mailpiece design analysts will remain the same as current procedures.
We tested three types of newspapers: broadsheet, tabloid, and quarter-fold pieces. Analysis of data collected on the processing of these newspapers resulted in our recommendation that all newpapers be prepared as quarter-folds.
The flat mail machineability tester, currently used to test FSM 881 mailpieces for rigidity, flexibility, and turning ability, will continue to be used for pieces processed on the AFSM 100. The performance of pieces with flimsy covers did cause some machine jams and damage to the mailpieces, however; sufficient data has not been collected to determine specific requirements for this type of mailpiece.
We need to conduct additional studies to determine if a basis weight for covers is critical enough to require specifications and design requirements for those mailpieces.
Although exempt from the notice and comment requirements of the Administrative Procedure Act (5 U.S.C. 401(a)), the Postal Service invites comments on the following proposed revisions to the DMMl, incorporated by reference in the Code of Federal Regulations.
Postal Service.
1. The authority citation for 39 CFR part 111 continues to read as follows:
5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 3001-3011, 3201-3219, 3403-3406, 3621, 3626, 5001.
2. Revise the DMM as set forth below:
Flats claimed at automation rates must meet the standards in 1.0 through 8.0 and the general and specific standards for mail, the class of mail, and the rate claimed. Pieces may qualify for
The length and height of an automation-compatible flat-size mailpiece is not determined by the orientation of the address. Instead, for this standard:
b. For a piece that has a bound, folded, or closed edge (
An AFSM 100 flat-size piece with a final fold must be designed so that the address is in view when the final folded edge is at the bottom and any intermediate bound or folded edge is to the right of the mailpiece.
Each flat-size piece must be rectangular and:
a. For height, no more than 12 inches and no less than 5 inches high.
b. For length, no more than 15 inches and no less than 6 inches long.
c. For thickness, no more than 0.75 and no less than 0.009 inch thick.
Maximum weight limits are as follows:
a. For First-Class Mail, 13 ounces.
b. For Periodicals, 20 ounces.
c. For Standard Mail, 16 ounces.
d. For Bound Printed Matter, 20 ounces.
a. Turning Ability. The mailpiece must fit between two concentric arcs drawn on a horizontal flat surface, one with a radius of 15.72 inches and the other with a radius of 16.72 inches, in one of the following ways:
(1) The piece must be flexible enough to bend between the two arcs when positioned vertically, with (if applicable) the bound, folded, or final folded edge perpendicular to the surface where the arcs are drawn.
(2) If rigid (constructed of or containing inflexible materials), the piece must be small enough to allow its longest edge to be placed between the two arcs without touching the lines of the arcs.
b. Deflection. A flat-size mailpiece meeting the AFSM 100 dimensions must be rigid enough so that, when placed flat on a surface to extend unsupported 5 inches off that surface, no part of the edge of the piece that is opposite the bound, folded, or final folded edge (as applicable) deflects more than 1
c. Test Device. Testing for compliance with the above standards must be done with a flat mail machineability tester constructed to USPS specification USPS-STD-28 and following the instructions for use of that device.
The following requirements apply to folded publications:
a. A flat-size piece with a final fold must be designed so that the address is in view when the final folded edge is to the right and any intermediate bound or folded edge is at the bottom.
b. Unbound flat-sized publications must be double-folded.
Polywrapped automation flats that meet the dimensions and criteria for the AFSM 100 in 2.0 must be prepared with polywrap that meets all eight properties in this exhibit. For other pieces prepared with polywrap that do not meet all of the dimensions and characteristics for processing on the AFSM 100 and that meet the dimensions and other criteria for processing on the FSM 1000 in 3.0, the polywrap need to meet only physical property number 2 (haze).
1. Wrap direction will be specified as around the longer axis of the mailpiece so that the seam is along the addressed side of the mailpiece, and oriented parallel to the longest direction. This seam must not cover any part of the address and barcode read areas.
2. a. For AFSM 100 mailpieces, overhang (selvage) cannot be more than 0.75 inches from the top of the mailpiece and 0.75 inches from the bottom of the mailpiece when the mailpiece is centered inside of the polywrap. Overhang (selvage) of not more than 1.5 inches will be allowed at the top of the mailpiece when the contents are totally positioned at the bottom of the polywrap. Overhang on each side must not be more than 0.25 inch. The piece must not be wrapped so tightly as to cause the mailpiece to bend.
b. For FSM 1000 mailpieces, overhang (selvage) cannot be more than 0.75 inches from any edge when the mailpiece is centered inside of the polywrap. Overhang (selvage) of not more than 1.5 inches will be allowed at the top of the mailpiece when the contents are totally positioned at the bottom of the polywrap and not more than 1.5 inches when the contents are positioned totally to the left or to the right side of the polywrap.
Polywrapped flats must be endorsed to show that the polywrap has been approved by the USPS as automation compatible regardless of the placement of the address label. * * *
* * * When the address label is placed on the outside of the polywrap, the haze requirement does not apply.
Mailers may combine AFSM 100 packages and FSM 1000 packages in the same tray (First-Class Mail) or in the same sack (Standard Mail, Bound Printed Matter, and Periodicals).
1. Lower maximum weight limits apply: letter-size at 3 ounces (or 3.3 ounces for heavy letters); flat-size at 20 ounces for enveloped, bound and polywrapped pieces (AFSM 100) and 6 pounds (FSM 1000).
An appropriate amendment to 39 CFR 111.3 to reflect these changes will be published if the proposal is adopted.
Legal Services Corporation.
Regulation negotiation working group meeting.
LSC is conducting a Negotiated Rulemaking to consider revisions to its alien representation regulations at 45 CFR Part 1626. This document announces the dates, times, and address of the next meeting of the working group, which is open to the public.
The Legal Services Corporation's 1626 Negotiated Rulemaking Working Group will meet on May 9-10, 2002. The meeting will begin at 9 a.m. on May 9, 2002. It is anticipated that the meeting will end by 3:30 p.m. on May 10, 2002.
The meeting will be held in the First Floor Conference Room at the offices of Marasco Newton Group, Inc., 2425 Wilson Blvd., Arlington, VA 22201.
Mattie C. Condray, Senior Assistant General Counsel, Legal Services
LSC is conducting a Negotiated Rulemaking to consider revisions to its alien representation regulations at 45 CFR Part 1626. The working group will hold its next meeting on the dates and at the location announced above. The meeting is open to the public. 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 Ms. Condray.
Corporation for National and Community Service.
Proposed rule.
These amendments to the Final Regulation governing the Senior Companion Program include the addition of persons with limited English speaking proficiency as eligible participants, clarify that the value of food, clothing and shelter is to be counted as income if provided at no cost by any source, adjust income eligibility levels in high cost areas, reduce restrictions on sponsors and volunteer eligibility, provide for volunteer leaders authorized by the Domestic Volunteer Service Act of 1973, as amended, and permit Senior Companions to serve the 1044 hours in a nine month period.
Submit comments on or before June 17, 2002.
Send comments to the Corporation for National and Community Service, National Senior Service Corps, Attn: Mr. Peter L. Boynton, 9th Floor, 1201 New York Avenue, NW, Washington, DC, 20525. Comments may be e-mailed to
Peter L. Boynton, 202-606-5000, ext. 499.
The Final Regulation that is the subject of this amendment implemented changes to the Domestic Volunteer Service Act of 1973, as amended, and established or clarified minimum program requirements. The following changes to the Final Regulation are being proposed:
(1) Section 2551.23 (c) (2) (iv) provides that the Memorandum of Understanding between a sponsor and a volunteer station must contain an assurance that the volunteer station will not discriminate against Foster Grandparents or in the operation of its station. Executive Order 13166 issued August 11, 2000, requires that each Federal agency develop a plan to improve access to its programs by eligible persons who, as a result of national origin, are limited in their English proficiency. The intent of the proposed amendment is to improve access of persons with limited English proficiency.
(2) Section 2551.42 (b) provides that annual income is counted for the past 12 months. As currently worded, this applies to new applicants to the program as well as those who continue in service. However, in the case of new applicants to become stipended Senior Companions, the Corporation intends that sponsors use the applicant's projected income over the following 12 months to determine eligibility. This proposed amendment would permit additional recent retirees, or others whose household income has been reduced within the past 12 months, to serve as Senior Companions.
(3) Section 2551.51 provides that a Senior Companion must serve a minimum of nine months a year for an average of 20 hours of service per week and a maximum of 1044 hours per year. The proposed amendment would allow Senior Companion Program sponsors increased flexibility in determining the hours of service for Senior Companions in accordance with local needs, within a range of from 15 to 40 hours per week, subject to a maximum of 2088 hours per year.
(4) Section 2551.61 details conditions under which a Senior Companion Program sponsor may serve as a volunteer station. The Corporation believes these conditions should be expanded. Since each sponsor currently submits workplans with its grant application for approval by the Corporation State Office, the Corporation believes the review of these workplans provides sufficient basis for deciding the appropriateness of a given sponsor serving as a volunteer station. The proposed amendment would permit a sponsor to serve as a volunteer station provided that this is part of a workplan submitted with the application.
(5) When the Final Regulation was published, in an effort to be consistent with Foster Grandparent Program Regulations, we did not include provision for volunteer leaders. The Domestic Volunteer Service Act of 1973, as amended, authorizes volunteer leaders in the Senior Companion Program. Sections 2551.45, 2551.71 and 2551.72 are being amended to include volunteer leaders.
Aged, Grant programs—social programs, Volunteers.
For the reasons set forth in the preamble, the Corporation for National and Community Service proposes to amend 45 CFR part 2551 as follows:
1. The authority citation for part 2551 continues to read as follows:
42 U.S.C. 4950
2. Revise § 2551.23(c)(2)(iv) to read as follows:
(c) * * *
(2) * * *
(iv) That states the station assures it will not discriminate against volunteers or in the operation of its program on the basis of race; color; national origin, including individuals with limited English proficiency; sex; age; political affiliation; religion; or on the basis of disability, if the participant or member is a qualified individual with a disability; and
3. In § 2551.42, revise paragraph (b) to read as follows:
(b) For applicants to become stipended Senior Companions, annual income is projected for the following 12 months, based on income at the time of application. For serving stipended Senior Companions, annual income is counted for the past 12 months. Annual income includes the applicant or enrollee's income and that of his/her spouse, if the spouse lives in the same residence. Sponsors shall count the value of shelter, food, and clothing, if
4. Amend § 2551.45 by republishing the introductory text and adding paragraph (f) to read as follows:
Cost reimbursements include:
(f)
5. Revise § 2551.51 to read as follows:
A Senior Companion shall serve a minimum of 15 hours per week and a maximum of 40 hours per week. A Senior Companion shall not serve more than 2088 hours per year. Within these limitations, a sponsor may set service policies consistent with local needs.
6. Revise § 2551.61 to read as follows:
Yes, a sponsor may serve as a volunteer station, provided this is part of the application workplan approved by the Corporation.
7. Revise § 2551.71 to read as follows:
(a) Senior Companion assignments shall provide for Senior Companions to give direct services to one or more eligible adults that:
(1) Result in person-to-person supportive relationships with each client served.
(2) Support the achievement and maintenance of the highest level of independent living for their clients.
(3) Are meaningful to the Senior Companion.
(4) Are supported by appropriate orientation, training, and supervision.
(b) Senior Companions may serve as volunteer leaders, and in this capacity may provide indirect services. Senior Companions with special skills or demonstrated leadership ability may assist newer Senior Companion volunteers in performing their assignments and in coordinating activities of such volunteers.
(c) Senior Companions shall not provide services such as those performed by medical personnel, services to large numbers of clients, custodial services, administrative support services, or other services that would detract from their assignment.
8. Revise § 2551.72 to read as follows:
(a) All Senior Companions performing direct services to individual clients in home settings and individual clients in community-based settings, shall receive a written volunteer assignment plan developed by the volunteer station that:
(1) Is approved by the sponsor and accepted by the Senior Companion;
(2) Identifies the client(s) to be served;
(3) Identifies the role and activities of the Senior Companion and expected outcomes for the client(s);
(4) Addresses the period of time each client is expected to receive such services; and
(5) Is used to review the status of the Senior Companion's services in working with the assigned client(s), as well as the impact of the assignment on the client(s).
(b) If there is an existing plan that incorporates paragraphs (a)(2), (3), and (4) of this section, that plan shall meet the requirement.
(c) All Senior Companions serving as volunteer leaders shall receive a written volunteer assignment plan developed by the volunteer station that:
(1) Is approved by the sponsor and accepted by the Senior Companion;
(2) Identifies the role and activities of the Senior Companion and expected outcomes;
(3) Addresses the period of time of service; and
(4) Is used to review the status of the Senior Companion's services identified in the assignment plan, as well as the impact of those services.
Corporation for National and Community Service.
Proposed rule.
These amendments to the Final Regulation governing the Foster Grandparent Program include: providing increased flexibility to sponsors to determine the hours of service of Foster Grandparents; reducing restrictions on sponsors serving as volunteer stations; clarifying what income should be counted for purposes of determining income eligibility of an applicant to become a stipended Foster Grandparent; and improving access of persons with limited English speaking proficiency.
Submit comments on or before June 17, 2002.
Send comments to the Corporation for National and Community Service, National Senior Service Corps, Attn: Mr. Peter L. Boynton, 9th Floor, 1201 New York Avenue, NW, Washington, DC 20525. Comments may be e-mailed to
Peter L. Boynton, 202-606-5000, ext. 499.
The Final Regulation that is the subject of this amendment implemented changes to the Domestic Volunteer Service Act of 1973, as amended, and established or clarified minimum program requirements. The following changes to the Final Regulation are being proposed:
(1) Section 2552.23(c)(2)(iv) provides that the Memorandum of Understanding between a sponsor and a volunteer station must contain an assurance that the volunteer station will not discriminate against Foster Grandparents or in the operation of its station. Executive Order 13166 issued August 11, 2000, requires that each Federal agency develop a plan to improve access to its programs by eligible persons who, as a result of national origin, are limited in their English proficiency. The intent of the proposed amendment is to improve access of persons with limited English proficiency.
(2) Section 2552.42(b) provides that annual income is counted for the past 12 months. As currently worded, this applies equally to new applicants to the program as well as those who continue in service. However, in the case of new applicants to become stipended Foster Grandparents, the Corporation intends that sponsors use the applicant's projected income over the following 12 months to determine eligibility. This amendment would permit additional recent retirees, or others whose household income has been reduced within the past 12 months, to serve as Foster Grandparents.
(3) Section 2552.51 provides that a Foster Grandparent must serve a
(4) Section 2552.61 details conditions in which a Foster Grandparent Program sponsor may serve as a volunteer station. The Corporation believes these conditions should be expanded. Since each sponsor currently submits workplans with its grant applications for approval by the Corporation State Office, the Corporation believes the review of these workplans provides sufficient basis for deciding the appropriateness of a given sponsor serving as a volunteer station. The proposed amendment would permit a sponsor to serve as a volunteer station provided that this is part of a workplan submitted with the application.
Aged, Grant programs—social programs, Volunteers.
For the reasons set forth in the preamble, the Corporation for National and Community Service proposes to amend 45 CFR part 2552 as follows:
1. The authority citation for part 2552 continues to read as follows:
42 U.S.C. 4950
2. Revise § 2552.23(c)(2)(iv) to read as follows:
(c) * * *
(2) * * *
(iv) That states the station assures it will not discriminate against Foster Grandparents or in the operation of its program on the basis of race; color; national origin, including individuals with limited English proficiency; sex; age; political affiliation; religion; or on the basis of disability, if the participant or member is a qualified individual with a disability; and
3. In § 2552.42, revise paragraph (b) to read as follows:
(b) For applicants to become stipended Foster Grandparents, annual income is projected for the following 12 months, based on income at the time of application. For serving stipended Foster Grandparents, annual income is counted for the past 12 months. Annual income includes the applicant or enrollee's income and that of his/her spouse, if the spouse lives in the same residence. Sponsors shall count the value of shelter, food, and clothing, if provided at no cost by persons related to the applicant, enrollee, or spouse.
4. Revise § 2552.51 to read as follows:
A Foster Grandparent shall serve a minimum of 15 hours per week and a maximum of 40 hours per week. A Foster Grandparent shall not serve more than 2088 hours per year. Within these limitations, a sponsor may set service policies consistent with local needs.
5. Revise § 2552.61 to read as follows:
Yes, a sponsor may serve as a volunteer station, provided this is part of the application workplan approved by the Corporation.
Federal Communications Commission.
Notice of proposed rulemaking.
This document addresses the consequences of the Commission's classification of cable modem service as an information service as defined in section 3(20) of the Communications Act, 47 U.S.C. 153(20). Cable modem service is a service that uses cable system facilities to provide residential subscribers with high-speed Internet access, as well as many applications or functions that can be used with high-speed Internet access.
The Notice of Proposed Rulemaking asks questions about whether, and if so, how, cable modem service should be regulated by the Commission. This document also seeks comment on how the classification decision may affect State and local regulation of cable modem service. This document provides persons with the opportunity to submit comments and information with which the Commission can address these issues.
Comments are due on or before June 17, 2002 and reply comments are due on or before July 16, 2002.
Federal Communications Commission, 445 12th Street, SW., Washington, DC 20554.
Steve Garner, Media Bureau at (202) 418-1063 or via Internet at
This is a synopsis of the Commission's Notice of Proposed Rulemaking, CS Docket No. 02-52, adopted March 14, 2002, and released March 15, 2002. The full text of this decision is available for inspection and copying during normal business hours in the FCC Reference Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554, and may be purchased from the Commission's copy contractor, Qualex International, Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone (202) 863-2893, facsimile (202) 863-2898, or via e-mail
1. This Notice of Proposed Rulemaking (“NPRM”) was initiated based on the record developed in the Notice of Inquiry (“NOI”) proceeding initiated in GN Docket No. 00-185 in September 2000. The NOI pleading cycle, in which interested parties (“commenters”) could file pleadings, ended in January 2001.
2. This NPRM concerns cable modem service, which is a high-speed (or “broadband”) Internet access service provided to residential subscribers over cable system facilities. The Commission found in a Declaratory Ruling accompanying the NPRM that cable modem service is an information service as that terms is defined in Section 3(20) of the Communications Act of 1934, as amended (“the 1934 Act”), 47 U.S.C. 153(20). The NPRM addresses a number of possible consequences of the Commission's classification of cable modem service as an information service. The following paragraphs
3. The NPRM first seeks comment on the Commission's jurisdiction and authority to regulate cable modem service. The NRPM also seeks comment on whether the Commission may, and, if so, should, impose any form of so-called “multiple ISP (Internet Service Provider) access” requirements on operators of cable systems (“cable operators”). The NPRM describes multiple ISP access as a requirement that cable operators provide unaffiliated ISPs with the right access to cable modem service customers directly. Previously, the NOI sought comment on a variety of models by which a cable operator could be required to provide multiple ISP access. The NPRM requests commenters to specify, in asking the questions summarized below, whether commenters are addressing any form of multiple ISP access in particular, on all forms described in the Notice of Inquiry, and whether any access requirement should specifically limit ISP access to uses related to the offering of cable modem service, or should explicitly permit other uses by ISPs.
4. Given its classification of cable modem service as an interstate information service, the Commission asks for comment on whether the Commission should exercise its ancillary authority under Title I of the 1934 Act with regard to the provision of cable modem service. In another recent NPRM, concerning broadband Internet access service provided by traditional wireline telecommunications common carriers (the “
5. The NPRM seeks comment on any explicit statutory provisions, including expressions of congressional goals, which would be furthered by the Commission's exercise of ancillary jurisdiction over cable modem service. The Commission mentions as possibilities sections 1, 230(b), and 601(4) of the 1934 Act and section 706 of the 1996 Telecommunications Act. The NPRM requests comment on the use of these or other statutory provisions as the basis for the Commission's exercise of Title I jurisdiction. It also requests comment on whether reliance on ancillary jurisdiction in support of these or other provisions would be analogous to the Commission's reliance on ancillary jurisdiction in adoption of its
6. The NPRM seeks comment on whether a federally mandated system of multiple ISP access would violate the First Amendment rights of cable operators. The NPRM seeks comment in particular on the level of First Amendment scrutiny that would apply to a federal multiple ISP access requirement, especially in light of recent case law or Commission precedent concerning the First Amendment. Have marketplace conditions in the residential high-speed Internet access business changed since the close of the pleading cycle in this proceeding in ways that alter the First Amendment analysis? Have trials and limited commercial offerings of different kinds of multiple ISP access shown that certain types of access place a minimal burden on the cable operators while achieving the maximum choice for subscribers?
7. The NPRM also seeks comment whether multiple ISP access would constitute a “
8. The NPRM asks that commenters update the record on what has changed in the cable modem service marketplace since the pleading cycle on the Notice of Inquiry closed, particularly with respect to evolving business relationships among cable operators and their service offerings. Do recent events demonstrate that the market will provide consumers a choice of ISPs without government intervention, or that the absence of widespread business arrangements raises a level of concern sufficient to warrant Commission action? The NPRM asks that commenters who believe that Commission intervention is necessary describe in detail what sort of regulations the Commission should impose. It also asks for comment regarding whether any decision the Commission makes about multiple access requirements for cable systems in this proceeding should apply to Open Video Systems.
9. The NPRM asks whether, in current and likely future market conditions, any form of multiple ISP access is needed to promote the Commission's goals of, for example, promoting the deployment of advanced telecommunications capability; spurring investment in facilities to provide high-speed Internet access service and innovation among service providers, ISPs, and creators of content; and/or facilitating intramodal or intermodal competition. Or would multiple ISP access, if mandated by regulation, have the opposite effects? The NPRM seeks comment on whether the Commission's decision-making should be guided by principles that embrace intramodal competition. If so, the NPRM seeks comment on whether the market can or will satisfy these principles or whether some form of multiple ISP access regime for cable systems is needed to do so. To what extent should any decision regarding multiple ISP access requirements be influenced by the desirability of ‘regulatory parity,’ namely the presence or absence of multiple ISP access regimes for other technologies (such as wireline, terrestrial wireless, and satellite) that offer residential high-speed Internet access service? To what extent should that decision be impacted by cable operators' current status as the leading providers of residential broadband services?
10.
11.
12. The NPRM asks what lessons, if any, trials and current commercial offerings of multiple ISP access reveal about the costs and benefits of multiple ISP access and how such costs and benefits can be balanced. Has recent experience with the addition of source-based routers showed that technology to be an efficient form of multiple ISP access?
13. The NPRM asks for comment on be the costs of regulatory enforcement of a multiple ISP access mandate. Would a multiple ISP access mandate lead to significant opportunities for regulatory arbitrage—businesses making decisions based on regulatory classifications rather than on customers' preferences and innovative and sustainable business plans? Would a multiple ISP access mandate impose long-term costs on the market? In light of the new and fast-changing nature of the residential high-speed Internet access business, would a multiple ISP access requirement, imposed at this time, hinder the development of a market that is still evolving? In particular, might a requirement preclude the discovery of network design, content, applications, and business models that would otherwise enjoy widespread adoption and enhance long-term consumer welfare? Is there a way to implement multiple ISP access now that would avoid any such harmful interference in the future and that would achieve the Commission's goals? If the Commission adopts a multiple ISP access mandate for cable systems generally, should it exempt small cable systems from such a mandate because of the particular conditions that they face?
14. The NPRM notes that the Commission is particularly interested in comments that provide updated information and discuss relevant regulatory and judicial decisions issued since the comment period closed for the Notice of Inquiry in GN Docket 00-185. The Commission is likely to find particularly relevant and persuasive empirically supported studies that use well-established methods for quantifying benefits and harms, as well as comments based on well-established economic theory.
15.
16. The NPRM also seeks comment on indicia that a cable operator is offering a common carrier telecommunications service (other than local telephone service) or a private carrier service, on a stand-alone basis, to ISPs or subscribers. The NPRM asks how the Commission might detect that a cable operator is, in fact, making such an offering. If and when a cable operator makes such an offering, what, if any, access requirements should the Commission impose on it? For example, if the Commission found that a cable operator were making such an offering, would that trigger the requirements of the
17.
18. State and Local Regulation of Cable Modem Service and Rights-of-Way. The NPRM seeks comment whether the Commission should interpret its assertion of jurisdiction over cable modem service under the Communications Act to preclude State and local authorities from regulating cable modem service and facilities in particular ways. The NPRM notes that the courts have recognized the Commission's authority under Title I to preempt non-Federal regulations that negate the Commission's goals, including regulations affecting enhanced services. The NPRM seeks comment as to any additional basis for preempting such regulations, including, for example, section 624(b) of the Communications Act.
19. In addition to the access requirements, franchise requirements, and franchise fees discussed below, the NPRM seeks comment on any other forms of State and local regulation that would limit the Commission's ability to achieve its national broadband policy, discourage investment in advanced communications facilities, or create an unpredictable regulatory environment. Specifically, the NPRM seeks comment as to whether the Commission should use its preemption authority to preempt specific State laws or local regulations. It asks commenters to specify what preemption authority the Commission would rely on in each case.
20.
21.
22. The NPRM also seeks comment generally on the scope of local franchising authority over facilities-based providers of information services. Do State statutes and Constitutional provisions authorizing local franchising in terms of utility services generally, or cable and telecommunications networks and services specifically, authorize localities to franchise providers of information service under existing law? If so, is there any basis for treating facilities-based providers of information services differently based on the facilities used? The NPRM expresses concern that State or local regulation beyond that necessary to manage rights-of-way could impede competition and impose unnecessary delays and costs on the development of new broadband services. It notes questions about potential State and local actions that could restrict entry, impose access or other requirements on cable modem service, or assess fees or taxes on cable Internet service. It seeks comment on these issues.
23. In the NPRM, the Commission tentatively concludes that Title VI of the 1934 Act does not provide an independent basis of authority for assessing franchise fees on cable modem service. The NPRM seeks comment on this issue.
24.
25.
26.
27. As required by the Regulatory Flexibility Act of 1980, 5 U.S.C. 601
28. Need for, and Objectives of, the Proposed Rules. With our declaratory ruling herein, we have sought to provide regulatory certainty for the emerging cable modem service industry by resolving a nationwide controversy concerning the proper regulatory classification of cable modem service under federal law. In doing so, we recognize that there are a number of related issues that may need resolution in the form of federal rules. By this Notice of Proposed Rulemaking, we seek comment on certain issues related to the practical implementation of our classification of cable modem service as an information service.
29. Legal Basis. The authority for the action proposed in this rulemaking is contained in sections 1, 2(a), 3, 4(i), 4(j), 303, and 601 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152(a), 153, 154(i), 154(j), 303, and 521, and Section 706 of the Telecommunications Act of 1996, 47 U.S.C. 157 nt.
30. Description and Estimate of the Number of Small Entities to Which the Proposed Rules Will Apply. The RFA, 5 U.S.C. 603(b)(3), directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA, 5 U.S.C. 601(6), generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act, 5 U.S.C. 601(3) (incorporating by reference the definition of “small business concern” in the Small Business Act, 15 U.S.C. 632). Under 15 U.S.C. 632, a “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.
31. The SBA has developed a small business size standard, 13 CFR 121.201, North American Industry Classification System (“NAICS”) code 513220, for cable and other program distribution,” which includes all such companies generating $11 million or less in revenue annually. This category includes, among others, cable operators, closed circuit television services, direct broadcast satellite services, multipoint distribution services, open video systems (“OVS”), satellite master antenna television (“SMATV”) systems, and subscription television services. According to the Census Bureau data from 1992, there were 1,788 total cable and other pay television services and 1,423 had less than $11 million in revenue. The Commission addresses cable operators and OVS operators below to provide a more precise estimate of the affected small entities. The Commission does not believe that the other pay television services would be affected by the proposals in the NPRM.
32.
33. The Communications Act of 1934, 47 U.S.C. 543(m)(2) as amended, also contains a size standard for a “small cable operator,” which is “a cable operator that, directly or through an affiliate, serves in the aggregate fewer than one percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.” The Commission has determined that there are 67,700,000 subscribers in the United States. Therefore, an operator serving fewer than 677,000 subscribers shall be deemed a small operator, if its annual revenues, when combined with the total annual revenues of all of its affiliates, do not exceed $250 million in the aggregate. See 47 CFR 76.1403(b). Based on available data, the Commission estimates that the number of cable operators serving 677,000 subscribers or less totals approximately 1,450. The Commission does not request or collect information on whether cable operators are affiliated with entities whose gross annual revenues exceed $250,000,000, and therefore is unable to estimate accurately the number of cable system operators that would qualify as small cable operators under the definition in the Communications Act.
34.
35. Description of Projected Reporting, Recordkeeping and Other Compliance Requirements. The NPRM seeks comment on the regulatory implications of the Commission's finding that cable modem service is an information service under the Communications Act, 47 U.S.C. 153(20) as amended. Specifically, the NPRM seeks comment on whether the Commission should require cable operators that provide cable modem service to allow unaffiliated ISPs to have direct access to the cable operator's subscribers via the cable system facilities.
36. The NPRM also seeks comment on the scope of state and local government authority over cable modem service in light of the Commission's finding that it is an information service. This determination may not have a direct effect on small entities, but indirectly it may impact small entities, such as small cable operators, if local governments are permitted to require cable operators to grant unaffiliated ISPs access to the cable system or if local governments are permitted to enforce other regulations that affect a cable operator's provision of cable modem service.
37. Steps Taken to Minimize Significant Impact on Small Entities and Significant Alternatives Considered. The IRFA requires an agency to describe any significant alternatives that it has considered in proposing regulatory approaches, which may include, among others, the following four alternatives: (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.
38. The NPRM seeks comment on several regulatory alternatives to implement the Commission's classification of cable modem service as an information service under the Communications Act. For example, alternatives considered in the NPRM include whether unaffiliated ISPs should be provided with access to cable systems and, if so, which of the various access models should be adopted. In addition, the Commission will also consider whether any access requirements ultimately adopted should be different for large cable operators from those imposed on small cable operators. Finally, the NPRM considers whether the Commission should refrain entirely from imposing any ISP access requirements on cable operators. The Commission expects that whichever alternatives are chosen the Commission will seek to minimize any adverse effects on small entities.
39. Federal Rules Which Duplicate, Overlap, or Conflict with the Commission's Proposals. None.
40. This proceeding will be treated as a “permit-but-disclose” proceeding subject to the “permit-but-disclose” requirements under § 1.1206(b) of the Commission's rules, 47 CFR 1.1206(b), as revised. Ex parte presentations are permissible if disclosed in accordance with Commission rules, except during the Sunshine Agenda period when presentations, ex parte or otherwise, are generally prohibited. Persons making oral ex parte presentations are reminded that a memorandum summarizing a presentation must contain a summary of the substance of the presentation and not merely a listing of the subjects discussed. More than a one or two sentence description of the views and arguments presented is generally required.
41. Pursuant to applicable procedures set forth in §§ 1.415 and 1.419 of the Commission's rules, interested parties may file comments on or before June 17, 2002, and reply comments on or before July 15, 2002. Comments may be filed using the Commission's Electronic Comment Filing System (“ECFS”) or by filing paper copies.
42. Parties who choose to file by paper must file an original and four copies of each filing in CS Docket No. 02-52. If parties want each Commissioner to receive a personal copy of their comments, an original plus nine copies must be filed. Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail (although we continue to experience delays in receiving U.S. Postal Service mail). The Commission's contractor, Vistronix, Inc., will receive hand-delivered or messenger-delivered paper filings for the Commission's Secretary at 236 Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing hours at this location are 8 a.m. to 7 p.m. All hand deliveries must
43. Comments, reply comments, and
44. This document is available in alternative formats (computer diskette, large print, audio cassette, and Braille). Persons who need documents in such formats may contact Brian Millin at (202) 418-7426, TTY (202) 418-7365, or send an e-mail to
45. The Media Bureau contact for this proceeding is Steve Garner at (202) 418-1063,
46. This Notice of Proposed Rulemaking is issued pursuant to authority contained in sections 1, 2, 3, 4, 303, 403, and 601 of the Communications Act of 1934, as amended, and section 706 of the Telecommunications Act of 1996.
Federal Communications Commission.
Department of Agriculture.
Notice.
In accordance with the Paperwork Reduction Act of 1995, Chapter 35, Title 44 of the United States Code, this notice announces the Department of Agriculture's intention to request an extension on the currently approved information collection in support of debt collection.
Comments on this notice must be received by June 17, 2002, to be assured of consideration.
Address all comments concerning this notice to Dale Theurer, Credit, Travel and Accounting Policy, Office of the Chief Financial Officer, USDA, Room 4628 South Building, 1400 Independence Avenue, SW, Washington, DC 20250.
Joyce Baumgartner on 202-720-4958, FAX 202-690-1529, e-mail to
The Debt Collection Act of 1982, Public Law 97-365, 96 Stat. 1749, as amended by Public Law 98-167, 97 Stat. 1104, and the Debt Collection Improvement Act of 1996, Public Law 104-134, requires that any monies that are payable or may become payable from the United States under contracts and other written agreements to any persons or a legal entity not an agency or subdivision of a State or local government may be subject to administrative offset for the collection of a delinquent debt the person or legal entity owes to the United States.
All responses to this notice will be summarized and included in the request for Office of Management and Budget approval. All comments will also become a matter of public record.
Office of the Under Secretary for Food Safety, USDA.
Notice of public meeting, request for comments.
The Office of the Under Secretary for Food Safety, United States Department of Agriculture (USDA), the Center for Veterinary Medicine (CVM), and the Food and Drug Administration (FDA), are sponsoring a public meeting on Tuesday June 4, 2002, to provide information and receive public comments on agenda items that will be discussed at the Second Session of the Codex ad hoc Intergovernmental Task Force on Animal Feeding, which will be held in Copenhagen, Denmark, June 17-20, 2002. The Under Secretary and the Director of CVM recognize the importance of providing interested parties the opportunity to obtain information about the Intergovernmental Task Force on Animal Feeding of the Codex Alimentarius Commission and to address items on the Agenda for the 3rd Session of the Task Force.
The public meeting is scheduled for Tuesday, June 4, 2002, from 9:30 a.m. to 12:30 p.m.
The public meeting will be held in Room 0161 South Agricultural Building, U.S. Department of Agriculture, 1400 Independence Avenue, SW, Washington, DC 20250 (Metro Stop: Smithsonian on the blue and orange line). To receive copies of the documents referenced in the notice contact the FSIS Docket Room, U.S. Department of Agriculture, Food Safety and Inspection Service, Room 102, Cotton Annex, 300 12th Street, SW, Washington, DC 20250-3700. The documents will also be accessible via the World Wide Web at the following address:
Edith Kennard, Staff Officer, U.S. Codex Office, Food Safety and Inspection Service, Room 4861, South Building, 1400 Independence Avenue SW, Washington, DC 20250, Phone: (202) 205-7760, Fax: (202) 720-3157. Persons requiring a sign language interpreter or other special accommodations should notify Edith Kennard at the above telephone number.
The Codex Alimentarius Commission was established in 1962 by two United Nations organizations, the Food and Agriculture Organization (FAO) and the World Health Organization (WHO). Codex is the major international organization for encouraging fair international trade in food and protecting the health and economic interests of consumers. Through adoption of food standards, codes of practice, and other guidelines developed by its committees, and by promoting their adoption and implementation by governments, Codex seeks to ensure that the world's food supply is sound, wholesome, free from adulteration, and correctly labeled. In the United States, USDA, FDA, and EPA manage and carry out U.S. Codex.
The Codex ad hoc Intergovernmental Codex Task Force on Animal Feeding was established by the 23rd Session of the Codex Alimentarius Commission to develop Guidelines or Standards as appropriate on Good Animal Feeding practices with the aim of ensuring safety and quality of foods of animal origin. The ad hoc Task Force is chaired by Denmark.
Provisional agenda items to be discussed during the public meeting:
At the June 4th public meeting, the agenda items will be described, discussed, and attendees will have the opportunity to pose questions and offer comments. Comments may be sent to the FSIS Docket Room (see
Public awareness of all segments of rulemaking and policy development is important. Consequently, in an effort to better ensure that minorities, women, and persons with disabilities are aware of this notice, FSIS will announce it and provide copies of this
For more information and to be added to the constituent fax list, fax your request to the Congressional and Public Affairs Office, at (202) 720-5704.
Forest Service, USDA.
Notice of intent to prepare an Environmental Impact Statement.
The Coconino National Forest is planning to prepare an Environmental Impact Statement on a proposal to amend the Coconino Forest Plan. This amendment provides clarification to current Forest Plan language and adds additional direction for management of lands surrounding the City of Flagstaff, the Flagstaff Area National Monuments and the Lake Mary Watershed. A Proposed Action is located on the Coconino National Forest website at
Comments in response to this Notice of Intent concerning the scope of the analysis should be received in writing on or before 30 days after publication of this notice in the
Send written comments to USDA Forest Service, Coconino National Forest, 2323 E Greenlaw Lane, Flagstaff, AZ 86004. Electronic mail may be sent to
The Forest Supervisor of the Coconino National Forest, Supervisor's Office, 2323 E. Greenlaw Lane, Flagstaff AZ 86004, will decide what actions are most appropriate for the Amendment to the Coconino Forest Plan for the Flagstaff/Lake Mary Ecosystem Analysis Area.
Debbie Kill or Alvin Brown, 928-526-0866, 5075 Highway 89, Flagstaff, AZ 86004,
The Proposed Action adds an emphasis on fire risk reduction and recreation management for lands in close proximity to residential areas. There are proposed objectives for recreation settings (including recommendations for motorized versus nonmotorizied settings) based on landscape analysis and design. Recreation settings provide a framework for future site-specific planning and decision making for outfitter/guide and group uses, road management, and camping. There is new rock climbing direction proposed. There are proposed adjustments to wildlife cover and a redistribution of Mexican spotted owl habitat near residential areas. Items such as scenery, noxious weeds, land exchange, watershed, mountain meadows and riparian areas have added language for clarification and emphasis. There is proposed language that references continued cooperation and coordination with local, State, and Federal agencies. New Management Areas are delineated with additional emphasis items and direction. Management Areas were
The past and proposed scoping process for this project is as follows. In May of 1999 the
Issues include disagreement with the Proposed Action related to Recreation Opportunity Settings at certain sites, and requirements for big game hiding/thermal cover in areas of fire risk concern.
Four alternatives have been developed that include a different mix of forest settings and wildlife cover requirements.
No permits or licenses are required.
This Forest Plan amendment will be referenced during project-level analysis and decision-making. Implementation of the desired condition described in the Forest Plan, including this amendment, will occur over a period of years.
The estimated date for availability of the DEIS is May 2002. The estimated date for filing the Final Environmental Impact Statement is September 2002.
Comments may be sent by electronic mail (e-mail) to
The Forest Service believes, at this early stage, it is important to give reviewers notice of several court rulings related to public participation in the environmental review process. To be the most helpful, comments on the draft environmental impact statement should be as specific as possible and may address the adequacy of the statement or the merits of the alternatives discussed (see Council of Environmental Quality Regulations for implementing the procedural provisions of the National Environmental Policy Act at 40 CFR 1503.3).
In addition, Federal court decisions have established that reviewers of draft environmental impact statements must structure their participation in the environmental review of the proposal so that it is meaningful and alerts an agency to the reviewers' position and contentions.
To assist the Forest Service in identifying and considering issues and concerns on the proposed action, comments on the DEIS 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 environmental impact statement 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.
Forest Service, USDA.
Revision of the notice of intent to prepare an environmental impact statement.
The previous notice published in the Federal Register (Vol. 65, No. 183, pgs. 56864-56865, Sept. 20, 2000) is revised to update the estimated filing dates of the draft and final environmental impact statements, and include changes in the proposed action and purposes and need. The Department of Agriculture, Forest Service, will prepare an Environmental Impact Statement (EIS) on a proposal to harvest timber in the Woronkofski Timber Sale project area, Wrangell Ranger District, Tongass National Forest. The proposed action is to harvest an estimated 10 million board feet (mmbf) on approximately 1000 acres, with 2 miles of road construction and 2 miles of reconstruction, and development of two new log transfer facilities. The range of alternatives being developed to respond to the significant issues, besides no action, will likely be 5-15 million board feet of timber on an estimated 700-1500 acres in one or more timber sales. The purpose and need of the timber sale is to: contribute to the production of a sustained yield of timber and mix of other resource activities from the Tongass National Forest, consistent with Forest Plan Standards and Guidelines; seek to provide a timber supply sufficient to meet the annual and planning cycle market demand for Tongass National Forest timber; provide a diversity of opportunities for resource uses that contribute to the economies of Southeast Alaska; and support a wide range of natural resource employment opportunities within Southeast Alaska's communities. The Tongass Forest Supervisor will decide on whether or not to harvest timber from this area, and if so, how this timber would be harvested. The decision will be documented in a Record of Decision based on the information disclosed in the EIS and the goals, objectives and desired future conditions as stated in the Forest Plan.
Opportunities for comment are available throughout the process. Individuals interested in receiving a scoping package should contact us within 30 days of the publication of this NOI. Comments will be most helpful if received by 3/31/02. Additional opportunities for comment will be provided after the release of the Draft EIS, projected to be in the summer of 2002.
Please send written comments to Wrangell Ranger District;
Chip Weber, District Ranger; Randy Hojem, District Planning Staff; or Dee Galla, IDT Leader; Wrangell Ranger District, Tongass National Forest, PO Box 51, Wrangell, AK 99929 telephone (907) 874-2323.
This revised notice is required by the Forest Service handbook (FSH 1909.15, 21.2). The proposed timber harvest is located within Tongass Forest Plan Value Comparison Unit 461 on Woronkofski Island, Alaska, Wrangell Ranger District of the Tongass National Forest. Approximately 95% of proposed sale units are located within the Woronkofski Inventoried Roadless Area. The Forest Service is reevaluating its Roadless Area Conservation Rule (Roadless Rule) and is currently enjoined from implementing all aspects of the Roadless Rule by the US District Court, District of Idaho. In 2001, the Secretary of Agriculture began a review of the roadless area rule and the Chief of the Forest Service undertook a review of the road management policy. These reviews have led the agency to initiate several Interim Directives with the intent that the values associated with inventoried roadless areas are fully considered within the context of forest planning. In Sierra Club v. Lyons (J00-0009 (CV)), the US District Court, District of Alaska enjoined the Tongass National Forest from taking any action to change the wilderness character of any eligible roadless area until a supplemental environmental impact statement (SEIS) has been completed. The injunction was lifted and the Forest Service is currently preparing the SEIS to address wilderness recommendations. Planning for the Woronkofski Timber Sale Project will continue simultaneously and in coordination with the SEIS and meet the requirements in the Interim Directives. The sale is currently listed on the Tongass 10-year action plan to be sold in 2005. The repercussions of delaying the project planning process regarding road building and timber harvest, even for a relatively short period, can have a significant effect on the amount of timber available for sale on the Tongass over the next few years. The Woronkofski Timber Sale Project is consistent with the 1997 Tongass Land Management Plan.
Public participation has been and will continue to be an integral component of the study process and will be especially important at several points during the analysis. The first occurred during the initial scoping process conducted in the Spring of 1999. That was followed up with a second scoping package sent out with the original Notice of Intent for this project, published in the
Based on results of scoping and the resource capabilities within the project area, alternatives including a “no action” alternative will be developed for the Draft Environmental Impact Statement (Draft EIS). The Draft EIS is projected to be filed with the Environmental Protection Agency (EPA) in summer 2002. The Final EIS is anticipated in the spring of 2003.
The comment period on the draft environmental impact statement will be 45 days from the date the Environmental Protection Agency publishes the notice of availability in the
The Forest Service believes it is important to give reviewers notice of several court rulings related to public participation in the environmental review process. First, reviewers of draft environmental impact statements 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 of the proposed action, comments during scoping and comments on the draft environmental impact statement 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 environmental impact statement 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. Comments received in response to this solicitation, 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 or 217. 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. Requesters should be aware that, under 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 7 days.
Permits: Permits required for implementation include the following:
1. U.S. Army Corp of Engineers
2. Environmental Protection Agency
3. State of Alaska, Department of Natural Resources
4. State of Alaska, Department of Environmental Conservation
Thomas Puchlerz, Forest Supervisor, Tongass National Forest, Federal Building, Ketchikan, Alaska 99901, is the responsible official. The responsible official will consider the comments, response, disclosure of environmental consequences, and applicable laws, regulations, and policies in making the decision and stating the rationale in the Record of Decision.
Forest Service, USDA.
Notice of meeting.
The Intergovernmental Advisory Committee (IAC) will meet on May 2, 2002, at the Double Tree Hotel, Lloyd Center, 1000 NE Multnomah, Portland, Oregon 97220. The primary purpose of the meeting is to continue with discussions on implementation of the Northwest Forest Plan (NWFP). The meeting is scheduled to begin at 10 a.m. and continue until 4:30 p.m. Agenda items to be discussed include, but are not limited to: Options for the Supporting Organizational Structure for the NWFP, Endangered Species Act salmonid Recovery Planning, Potential Future Direction of NWFP implementation, and recent court rulings related to the NWFP. The IAC meeting will be open to the public and is fully accessible for people with disabilities. Interpreters are available upon request at least 10 days in advance of the meeting. Written comments may be submitted for the record at the meeting. A time slot for oral public comments during the meeting is scheduled. Interested persons are encouraged to attend.
Questions regarding this meeting may be directed to Steve Odell, Executive Director, Regional Ecosystem Office, 333 S.W. First Avenue, P.O. Box 3623, Portland, OR 97208 (Phone: 503-808-2165).
Import Administration, International Trade Administration, Department of Commerce.
In response to a request by the petitioners and one producer/exporter of the subject merchandise, the Department of Commerce is conducting an administrative review of the antidumping duty order on frozen concentrated orange juice from Brazil. This review covers one manufacturer/exporter of the subject merchandise to the United States. The period of review is May 1, 2000, through April 30, 2001.
We have preliminarily determined that no sales have been made below the normal value by Branco Peres Citrus S.A. in this review. In addition, we have preliminarily determined to rescind the review with respect to Citrovita Agro-Industrial Ltda., CTM Citrus S.A., and Sucorrico S.A. If these preliminary results are adopted in the final results of this administrative review, we will instruct the Customs Service not to assess antidumping duties on any entries subject to this review.
We invite interested parties to comment on these preliminary results. Parties who wish to submit comments in this proceeding are requested to submit with each argument: (1) a statement of the issue; and (2) a brief summary of the argument.
April 17, 2002.
Irina Itkin or Elizabeth Eastwood, Office of AD/CVD Enforcement, Office 2, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC, 20230; telephone (202) 482-0656 or (202) 482-3874, 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 (URAA). In addition, unless otherwise indicated, all citations are to the Department's regulations at 19 CFR part 351 (2001).
On May 1, 2001, the Department of Commerce (the Department) published in the
In accordance with 19 CFR 351.213(b)(1), on May 31, 2001, one producer and exporter of FCOJ, Branco Peres Citrus, S.A. (Branco Peres), requested an administrative review covering the period May 1, 2000, through April 30, 2001. On May 31, 2001, the petitioners, Florida Citrus Mutual, Caulkins Indiantown Citrus Co., Citrus Belle, Citrus World, Inc., Orange-Co of Florida, Inc., Peace River Citrus Products, Inc., and Southern Gardens Citrus Processors Corp., also requested an administrative review for the following four producers and exporters of FCOJ: Branco Peres; Citrovita Agro-Industrial Ltda. and its affiliated parties Cambuhy MC Industrial Ltda. and Cambuhy Citrus Comercial e Exportadora (collectively “Citrovita”); CTM Citrus S.A. (CTM); and Sucorrico S.A. (Sucorrico). On June 4, 2001, we issued questionnaires to each of these companies.
On June 19, 2001, the Department initiated an administrative review for Branco Peres, Citrovita and its affiliates Cambuhy and Cambuhy Exportadora, CTM, and Sucorrico (66 FR 32934).
On August 1, 2001, Sucorrico informed the Department that it had no shipments of subject merchandise to the United States during the period of review (POR). We reviewed Customs data to confirm that neither Sucorrico nor CTM had shipments of subject merchandise during the POR. Consequently, in accordance with 19 CFR 351.213(d)(3) and consistent with our practice, we are preliminarily rescinding our review for CTM and Sucorrico. For further discussion, see the “Partial Rescission of Review” section of this notice, below.
In August 2001, we received a response from Branco Peres to sections
In January 2002, the petitioners withdrew their request for review for Citrovita. Consequently, we are also preliminarily rescinding our review for Citrovita. For further discussion, see the “Partial Rescission of Review” section of this notice, below.
In January and February 2002, we issued additional supplemental questionnaires to Branco Peres. We received responses to these supplemental questionnaires in February and March 2002.
The merchandise covered by this review is frozen concentrated orange juice from Brazil. The merchandise is currently classifiable under item 2009.11.00 of the
The POR is May 1, 2000, through April 30, 2001.
As noted above, Sucorrico informed the Department that it had no shipments of subject merchandise to the United States during the POR. We have confirmed with the Customs Service that neither Sucorrico nor CTM had shipments of subject merchandise during the POR. Therefore, in accordance with 19 CFR 351.213(d)(3) and consistent with the Department's practice, we are preliminarily rescinding our review with respect to CTM and Sucorrico. (
In addition, on January 9, 2002, the petitioners withdrew their request for an administrative review of Citrovita. Although the petitioners asked to withdraw their review request after the 90-day time limit specified in 19 CFR 351.213(d)(1), the review for this company had not yet progressed beyond a point where it would have been unreasonable to allow the petitioners to withdraw their request for review. Therefore, in accordance with 19 CFR 351.213(d)(1) and consistent with our practice, we are also rescinding our review with respect to Citrovita.
To determine whether sales of FCOJ from Brazil to the United States were made at less than normal value (NV), we compared the export price (EP) to the NV, as specified in the “Export Price” and “Normal Value” sections of this notice, below.
When making comparisons in accordance with section 771(16) of the Act, we considered all products sold in the home market as described in the “Scope of the Review” section of this notice, above, that were in the ordinary course of trade for purposes of determining appropriate product comparisons to U.S. sales.
In accordance with section 773(a)(1)(B) of the Act, to the extent practicable, we determine NV based on sales in the comparison market at the same level of trade as EP. 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 (SG&A) and profit. For EP, it is also the level of the starting-price sales, which is usually from the exporter to the importer.
To determine whether NV sales are at a different level of trade than EP sales, 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.
Branco Peres claimed that it made home market and U.S. sales at only one level of trade (i.e., sales to end users). Because Branco Peres performed the same selling activities for sales to all customers in the home market and the United States, we determined that these sales are at the same level of trade. Therefore, no level of trade adjustment is warranted for Branco Peres.
For sales by Branco Peres, we based the starting price on EP, in accordance with section 772(a) of the Act, because the subject merchandise was sold to unaffiliated purchasers in the United States prior to importation and because constructed export price methodology was not otherwise applicable.
We based EP on the gross unit price to the first unaffiliated purchaser in the United States. Where appropriate, we made deductions for foreign inland freight, foreign warehousing expenses and foreign brokerage and handling expenses, in accordance with section 772(c)(2)(A) of the Act. We recalculated warehousing expenses using the per-ton amount charged by the warehouse each month and the average inventory carrying period reported by Branco Peres.
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 (
In the eleventh administrative review, which was the most recently completed segment of the proceeding involving Branco Peres, the Department initiated an investigation to determine whether Branco Peres made home market sales during that POR at prices below the cost of production (COP).
In this review, we calculated the COP based on the sum of Branco Peres' costs of materials and fabrication for the foreign like product, plus amounts for general and administrative and financing expenses, in accordance with section 773(b)(3) of the Act. We made the following adjustments to the reported cost data:
We compared the COP to home market prices 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, selling expenses, and packing costs.
In determining whether to disregard home market sales made at prices below the COP, we examined whether such sales were made: 1) in substantial quantities within an extended period of time; and 2) 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)(i) of the Act, where less than 20 percent of a company's sales of a given product are made at prices less than the COP, we do not disregard any below-cost sales of that product because we determine that the below-cost sales were not made in “substantial quantities.” Where 20 percent or more of Branco Peres' sales of a given product were at prices below the COP, we find that sales of the merchandise were made in “substantial quantities” within an extended period of time, as defined in sections 773(b)(2)(B) and (C) of the Act. In this case, we also determine whether such sales were made at prices which would permit recovery of all costs within a reasonable period of time, in accordance with section 773(b)(2)(D) of the Act.
We found that 100 percent of Branco Peres" home market sales were made at prices above the cost of production. Therefore, we did not disregard any home market sales. Accordingly, we based NV on delivered prices to home market customers because we found that all home market sales were in the ordinary course of trade. We made deductions from the starting price for taxes in accordance with section 773(a)(6)(B)(iii) of the Act.
Pursuant to section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410(c), we made a circumstance-of-sale adjustment for credit expenses. We recalculated credit expenses to use the average interest rate for the POR, rather than the annualized monthly rate reported by Branco Peres.
We also deducted home market packing costs and added U.S. packing costs in accordance with sections 773(a)(6)(A) and (B) of the Act.
We made currency conversions into U.S. dollars in accordance with section 773A(a) of the Act, based on the 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 for the daily rate, in accordance with established practice.
As a result of our review, we preliminarily determine that the following margin exists for the period May 1, 2000, through April 30, 2001:
The Department will disclose to parties the calculations performed in connection with these preliminary results within five days of the date of publication of this notice. Interested parties may request a hearing within 30 days of the date of publication. Any hearing, if requested, will be held seven days after the date rebuttal briefs are filed. Interested parties may submit case briefs not later than 30 days after the date of publication of this notice. Rebuttal briefs, limited to issues raised in the case briefs, may be filed not later than 37 days after the date of publication of this notice. The Department will publish a notice of the final results of this administrative review, which will include the results of its analysis of issues raised in any such case briefs, within 120 days of the publication of these preliminary results.
Upon completion of this administrative review, the Department shall determine, and the Customs Service shall assess, antidumping duties on all appropriate entries. We have calculated importer-specific assessment rates for the merchandise in question by aggregating the dumping margins calculated for all U.S. sales to each importer and dividing this amount by the total quantity of those sales. The assessment rate will be assessed uniformly on all entries of that particular importer made during the POR, where appropriate. The Department will issue appraisement instructions directly to the Customs Service.
Further, the following deposit requirements will be effective for all shipments of FCOJ from Brazil entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided for by section 751(a)(1) of the Act: 1) the cash deposit rates for Branco Peres will be the rate established in the final results of this review, except if the rate is less than 0.50 percent and, therefore, de minimis within the meaning of 19 CFR 351.106, the cash deposit will be zero; 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, a prior review, or the less-than-fair-value (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) the cash deposit rate for all other manufacturers or exporters will continue to be 1.96
These deposit 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.
This administrative review and notice are in accordance with sections 751(a)(1) and 777(i)(1) of the Act.
This decision is made pursuant to section 6(c) of the Educational, Scientific, and Cultural Materials Importation Act of 1966 (Pub. L. 89-651, 80 Stat. 897; 15 CFR part 301). Related records can be viewed between 8:30 a.m.. and 5 p.m. in Suite 4100W, Franklin Court Building, U.S. Department of Commerce, 1099 14th Street, NW., Washington, DC.
This is a decision consolidated pursuant to section 6(c) of the Educational, Scientific, and Cultural Materials Importation Act of 1966 (Pub. L. 89-651, 80 Stat. 897; 15 CFR part 301). Related records can be viewed between 8:30 a.m. and 5 p.m. in Suite 4100W, Franklin Court Building, U.S. Department of Commerce, 1099 14th Street, NW., Washington, DC.
Pursuant to section 6(c) of the Educational, Scientific and Cultural Materials Importation Act of 1966 (Pub. L. 89-651; 80 Stat. 897; 15 CFR part 301), we invite comments on the question of whether instruments of equivalent scientific value, for the purposes for which the instruments shown below are intended to be used, are being manufactured in the United States.
Comments must comply with 15 CFR 301.5(a)(3) and (4) of the regulations and be filed within 20 days with the Statutory Import Programs Staff, U.S. Department of Commerce, Washington, DC 20230. Applications may be examined between 8:30 A.M. and 5:00 P.M. in Suite 4100W, U.S. Department of Commerce, Franklin Court Building, 1099 14th Street, NW, Washington, DC.
Pursuant to section 6(c) of the Educational, Scientific and Cultural Materials Importation Act of 1966 (Pub. L. 89-651; 80 Stat. 897; 15 CFR part 301), we invite comments on the question of whether an instrument of equivalent scientific value, for the purposes for which the instrument shown below is intended to be used, is being manufactured in the United States.
Comments must comply with 15 CFR 301.5(a)(3) and (4) of the regulations and be filed within 20 days with the Statutory Import Programs Staff, U.S. Department of Commerce, Washington, DC 20230. Applications may be examined between 8:30 A.M. and 5:00 P.M. in Suite 4100W, U.S. Department of Commerce, Franklin Court Building, 1099 14th Street, NW, Washington, DC.
(a) Signaling through the high affinity IgE receptor of basophils and mast cells.
(b) Functional analysis of Rabs in Polycystic Kidney Disease.
(c) Membrane lipid topography and signal transduction/intracellular trafficking of cytokines.
(d) Localizing the formylpeptide receptor by gold labeling and electron microscopy.
(e) Relationship of the membrane topography of adhesion molecules to leukocyte adhesive activity.
(a) Effect of peroxynitrite on myelin compaction.
(b) Role of RNA-protein interactions in the control of GAP-43 mRNA stability.
(c) SNAP-25 expression of hyperactivity in Coloboma mice.
(a) Function of mRNA binding proteins in mRNA 3” end formation and intranuclear trafficking.
(b) Human papillomavirus synthesis and early infection events.
(c) Structure of mammalian DNA replication complexes. Application accepted by Commissioner of Customs: March 18, 2002.
International Trade Administration, Department of Commerce.
The Department of Commerce is publishing a notice of reduction of Canadian most favored nation rates of duty for certain worsted wool fabrics.
Jay Dowling, Office of Textiles and Apparel, U.S. Department of Commerce, (202) 482-4058.
Title V of the Trade and Development Act of 2000 (the Act) creates two tariff rate quotas, providing for temporary reductions in the import duties on two categories of worsted wool fabrics suitable for use in making suits, suit-type jackets, or trousers. For worsted wool fabric with average fiber diameters greater than 18.5 microns (HTS heading 9902.51.11), the reduction in duty is limited to 2,500,000 square meters per year. For worsted wool fabric with average fiber diameters of 18.5 microns or less (HTS heading 9902.51.12), the reduction is limited to 1,500,000 square meters per year. Both of these limitations may be modified by the President, not to exceed 1,000,000 square meters per year for each tariff rate quota.
Title V of the Act authorizes the President to proclaim a reduction in the rate of duty applicable to imports of worsted wool fabrics classified under subheading 9902.51.12 of the HTS that is necessary to equalize such rate of duty with the most favored nation rate of duty applicable to imports of worsted wool fabrics of the kind described in such subheading imported into Canada.
Presidential Proclamation 7383 of December 1, 2000, authorizes the Secretary of Commerce to monitor the most favored nation rate of duty applicable to imports into Canada of worsted wool fabric of the kind classified under heading 9902.51.12 of the HTS and to notify the President of any reduction, effective on or after May 18, 2000, in the Canadian most favored nation rate of duty on such imports. The Secretary is further directed to cause to be published in the Federal Register a notice describing any such reduction.
The Secretary of Commerce has notified the President of these reductions.
The Department of Commerce hereby provides notice that during 2001, Canada established four new tariff provisions for certain worsted wool fabrics. Canada established a most-favored-nation rate of duty for each of these four new tariff provisions of “Free”. The goods described by these tariff provisions would otherwise be subject to a duty of 16 percent ad valorem, but not to exceed C$4.56/kg. These tariff provisions include worsted wool fabrics of the kind classified under subheading 9902.51.12 of the Harmonized Tariff Schedule of the United States (HTS).
Notice.
The Department of Commerce, 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, Public Law 104-13 (44 U.S.C. 3506 (2)(A)).
Written comments must be submitted on or before June 17, 2002.
Direct written comments to Madeleine Clayton, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6608, 14th and Constitution Avenue, NW., Washington, DC 20230, (202) 482-3129 (or via the Internet at
Requests for additional information or copies of the information collection instrument(s) and instructions should be directed to Karen Lellock, National Institute of Standards and Technology, Manufacturing Extension Partnership, 100 Bureau Drive, Stop 4800, Gaithersburg, MD 20899-4800, (301) 975-4269 (phone) and (301) 926-3787 (fax).
This collection of information sponsored by National Institute of Standards and Technology (NIST), the Manufacturing Extension Partnership (MEP) is a national network of locally based manufacturing extension centers working with small manufacturers to help them improve their productivity, improve profitability and enhance their economic competitiveness.
Obtaining specific information from clients about the impact of MEP services is essential for NIST officials to evaluate program strengths and weaknesses and plan improvements in program effectiveness and efficiency. This information is not available from existing programs or other sources.
Clients have three options for completing the survey including Computer Assisted Telephone (CATI), Interactive Voice Response (IVR) or via the Internet.
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 shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and costs) of the proposed collection of information; (c) ways to enhance the quality, utility, and
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they will also become a matter of public record.
National Oceanic and Atmospheric Administration (NOAA).
Notice.
The Department of Commerce, 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)).
Written comments must be submitted on or before June 17, 2002.
Direct all written comments to Madeleine Clayton, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6086, 14th and Constitution Avenue NW, Washington DC 20230 (or via Internet at MClayton@doc.gov).
Requests for additional information or copies of the information collection instrument(s) and instructions should be directed to Jennifer Sepez, Anthropologist, Alaska Fisheries Science Center, 7600 Sand Point Way NE, Seattle, WA 98115-0070 (Jennifer.Sepez@noaa.gov).
Social science data for selected Alaska fisheries will be collected for communities and individual participants involved in the following sectors: commercial harvesting and processing, sport-fishing, and subsistence. In general, the questions asked will be about the social aspects of fisheries and impacts on individuals and communities. The data collected will include information on topics such as fishery participation and impacts, life histories, community structure and dynamics, knowledge and perceptions, decision-making criteria, and geographical distribution. This information will be used to (1) describe and analyze the social aspects of fisheries, (2) monitor the social impacts of fisheries, (3) analyze the social impacts of current management measures; and (4) analyze the social impacts of alternative management measures.
The large scale and wide geographic area relevant to Alaska fisheries will not permit fieldwork in every fishing community. However, a goal of the research over a five-year period will be to conduct fieldwork in each general region and in representative communities.
The data will be collected principally by the National Marine Fisheries Service (NMFS) social scientists and contractors, and will include interviews, surveys, and focus groups. In-depth interviews and focus groups generally will be administered in person and on-site in the fishing community, or by telephone. Surveys may be administered in person on-site, or may additionally be conducted by mail, telephone, or Internet.
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 shall have practical utility; (b) the accuracy of the agency’s estimate of the burden (including hours and cost) of the proposed collection of information; (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 respondents, including through the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record.
National Ocean Service (NOS), National Oceanic and Atmospheric Administration (NOAA), Department of Commerce.
Notice.
The National Oceanic and Atmospheric Administration (NOAA) is announcing funding availability for graduate students pursuing masters or doctoral level degrees in oceanography, marine biology, or maritime archaeology through the Dr. Nancy Foster Scholarship Program and is inviting applications for such scholarships. The intent of this program is to recognize outstanding scholarship and encourage independent graduate level research in the above mentioned fields.
Applications must be received by May 17, 2002, no later than 5 p.m. Eastern Standard Time. Scholarship awards will be announced around July 2002.
Applications should be sent to the Dr. Nancy Foster Scholarship Program, Attention: Office of the Assistant Administrator, 13th Floor, National Ocean Service, 1305 East-West Highway, Silver Spring, MD 20910. Information on the scholarship program may be obtained from the Web site:
Dr. Nancy Foster Scholarship Program, Office of the Assistant Administrator, 13th Floor, National Ocean Service, 1305 East-West Highway, Silver Spring, MD 20910 (301-713-3074).
The Dr. Nancy Foster Scholarship Program is authorized by the National Marine Sanctuaries Amendments Act of 2000 (Pub. L. 106-513) to recognize outstanding scholarship in oceanography, marine biology, or maritime archaeology, particularly by women and members of minority groups, and encourage independent graduate-level research through financial support of graduate studies in such fields.
The annual stipend will be paid directly to the scholar. The stipend is intended to defray cost-of-living expenses, and not to support research costs. NOAA anticipates the student and their faculty advisor will secure research funds independent of the scholarship. Tuition and academic fees will be negotiated between the academic institution and the Dr. Nancy Foster Scholarship program manager at NOAA prior to the receipt of funds. This negotiation is intended to leverage scholarship funds and enhance opportunities for scholarship recipients. In those instances in which tuition and academic fees are not totally waived by the academic institution, the tuition allowance in an amount equal to the tuition and fees not waived (but not to exceed $12,000) will be paid directly to the scholar for remittance to the academic institution. If tuition and fees are reduced or waived by the academic institution, then that portion of the tuition allowance not needed (
Specific instructions regarding the disbursement, management, and reporting requirements for all stipend and tuition allowance payments will be provided to the scholarship recipients upon selection for the award. The awarding of funds beyond the first year will be based on availability of funds, continued eligibility of the student, periodic certification by the academic institution that adequate academic progress is being made, and compliance with applicable reporting requirements. At its discretion, each academic institution may supplement a scholar's stipend from institutional funds in accordance with the supplementation policy of the institution.
(I) General Information Sheet
(II) Statement of Intent
(III) Institute Certification or Letter of Acceptance (for those applicants who are currently enrolled in a graduate program for which support is requested, or who have received acceptance for fall 2002 enrollment in a graduate program for which support is requested)
(IV) Transcripts
(V) Three Letters of Recommendation
(VI) Declaration.
The Statement of Intent is a self-description of your academic, research, and career goals, and how your proposed course of study or research will help you achieve these goals but more importantly, this is your opportunity to present yourself, your beliefs, your inspiration. Include any background information you believe is pertinent, and provide insight into why you have chosen the goals you are pursuing. This statement should not be a research proposal or scientific abstract. This statement will be used to evaluate you as an individual, not necessarily as a scientist, and your motivation for applying for this scholarship. This statement should demonstrate your organizational, analytical, and written communication skills. The Statement of Intent should be typewritten in a size “12” font and single-spaced on a blank sheet of paper, and not exceed one page in length. Statements longer than one page will not be accepted and will result in the application being disqualified.
A letter from the applicant's institution certifying that the student is enrolled or has been accepted to a graduate program must be submitted with your application. The letter should consist of the following information on school letterhead and be signed by a school official: Name and location of the academic institution, the school and department that you currently are attending or plan to attend, and the month and year your studies will begin if you are not currently enrolled. If you have a graduate advisor, list his/her name, address, phone, fax, and e-mail, if available, in the Institute Certification portion of your application. Current transcripts will not be accepted in lieu of Institute Certification. Failure to include the Institute Certification specifically as indicated above will result in the application being disqualified.
Provide transcripts for all previous university/college-level studies. Photocopied transcripts are acceptable. Transcripts must be included with all other application materials. Those mailed separately will not be accepted. Failure to include transcripts from all previous university/college-level studies will result in the application being disqualified.
Each application must include three, but only three, signed letters of recommendation from individuals who have knowledge of your academic record, research effort, work and/or life experience. Relevant unpaid work, such as internships and volunteer efforts, is applicable. If you have a sponsor or advisor in the program, one of these letters should be from that individual. Letters of recommendation sent apart from the application will not be accepted. Applications without three, signed letters of recommendation or with more than three letters of recommendation will result in the application being disqualified.
Applicants must certify that all statements and information in their applications are true and correct by copying the following on a plain sheet of paper, signing it, and including it in their application:
I, the undersigned, declare, under penalty of perjury, that all statements and information in my application are true and correct.
Signature
Failure to include this statement, signed by the applicant, will result in the application being disqualified.
Applications under this program are not subject to Executive Order 12372, Intergovernmental Review of Federal Programs.
This action has been determined to be not significant for purposes of Executive Order 12866.
Because notice and comment are not required under 5 USC 553, or any other law, for notices relating to public property, loans, grants, benefits or contracts, a Regulatory Flexibility Analysis, 5 USC 601
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Issuance of permit amendment.
Notice is hereby given that Michael Kundu, Project Sea Wolf, 5516 64th Place, NE, Marysville, Washington has been issued a minor amendment to commercial/educational photography Permit No.954-1517-01.
The amendment and related documents are available for review upon written request or by appointment in the following office(s):
Permits, Conservation and Education Division, Office of Protected Resources, NMFS, 1315 East-West Highway, Room 13705, Silver Spring, MD 20910; phone (301) 713-2289; fax (301) 713-0376;
Northwest Region, NMFS, 7600 Sand Point Way NE, BIN C15700, Bldg. 1, Seattle, WA 98115-0700; phone (206) 526-6150; fax (206) 526-6426.
Lynne Barre or Trevor Spradlin, (301) 713-2289.
The subject amendment to Permit No. 954-1517-01, originally issued on December 30, 1999 (65 FR 1853) has been granted under the authority of the Marine Mammal Protection Act of 1972, as amended (16 U.S.C. 1361
The permit holder requested authorization to extend Permit No. 954-1517-01 for an additional 12 months. The new expiration date for the permit is December 31, 2002 and the permit number has been changed to No. 954-1517-02 to reflect that the permit has been amended.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Issuance of permit amendment.
Notice is hereby given that Dr. James T. Harvey (Principal Investigator, PI), Moss Landing Marine Laboratories, P.O. Box 450, Moss Landing CA 95039 has been issued an amendment to scientific research Permit No. 555-1565-00.
The amendment and related documents are available for review upon written request or by appointment in the following office(s):
Permits, Conservation and Education Division, Office of Protected Resources, NMFS, 1315 East-West Highway, Room 13705, Silver Spring, MD 20910; phone (301) 713-2289; fax (301) 713-0376;
Northwest Region, NMFS, 7600 Sand Point Way NE, BIN C15700, Bldg. 1, Seattle, WA 98115-0700; phone (206) 526-6150; fax (206) 526-6426;
Southwest Region, NMFS, 501 West Ocean Blvd., Suite 4200, Long Beach, CA 90802-4213; phone (562) 980-4001; fax (562) 980-4018.
Amy Sloan or Ruth Johnson, (301) 713-2289.
On January 8, 2002, notice was published in the
The amendment authorizes the Permit Holder to collect from the wild up to 8 harbor seals (
Committee for the Implementation of Textile Agreements (CITA).
Issuing a directive to the Commissioner of Customs adjusting limits.
April 18, 2002.
Ross Arnold, International Trade Specialist, Office of Textiles and Apparel, U.S. Department of Commerce, (202) 482-4212. For information on the quota status of these limits, refer to the Quota Status Reports posted on the bulletin boards of each Customs port, call (202) 927-5850, or refer to the U.S. Customs website at http://www.customs.gov. For information on embargoes and quota re-openings, refer to the Office of Textiles
Section 204 of the Agricultural Act of 1956, as amended (7 U.S.C. 1854); Executive Order 11651 of March 3, 1972, as amended.
The current limits for certain categories are being adjusted for swing and the adjustment allowed to certain apparel categories for traditional folklore products made of hand-loomed fabric.
A description of the textile and apparel categories in terms of HTS numbers is available in the CORRELATION: Textile and Apparel Categories with the Harmonized Tariff Schedule of the United States (see
Dear Commissioner: This directive amends, but does not cancel, the directive issued to you on November 27, 2001, by the Chairman, Committee for the Implementation of Textile Agreements. That directive concerns imports of certain cotton, wool, man-made fiber, silk blend and other vegetable fiber textiles and textile products, produced or manufactured in Indonesia and exported during the twelve-month period which began on January 1, 2002 and extends through December 31, 2002
Effective on April 18, 2002, you are directed to adjust the limits for the categories listed below, as provided for under the Uruguay Round Agreement on Textiles and Clothing:
The Committee for the Implementation of Textile Agreements has determined that these actions fall within the foreign affairs exception to the rulemaking provisions of 5 U.S.C. 553(a)(1).
Sincerely,
Committee for the Implementation of Textile Agreements (CITA).
Issuing a directive to the Commissioner of Customs adjusting limits.
April 18, 2002.
Roy Unger, International Trade Specialist, Office of Textiles and Apparel, U.S. Department of Commerce, (202) 482-4212. For information on the quota status of these limits, refer to the Quota Status Reports posted on the bulletin boards of each Customs port, call (202) 927-5850, or refer to the U.S. Customs website at http://www.customs.gov. For information on embargoes and quota re-openings, refer to the Office of Textiles and Apparel website at http://www.otexa.ita.doc.gov.
Section 204 of the Agricultural Act of 1956, as amended (7 U.S.C. 1854); Executive Order 11651 of March 3, 1972, as amended.
The current limits for certain categories are being adjusted for carryforward used, swing, special shift and carryforward.
A description of the textile and apparel categories in terms of HTS numbers is available in the CORRELATION: Textile and Apparel Categories with the Harmonized Tariff Schedule of the United States (see
Dear Commissioner: This directive amends, but does not cancel, the directive issued to you on November 27, 2001, by the Chairman, Committee for the Implementation of Textile Agreements. That directive concerns imports of certain cotton, wool, man-made fiber, silk blend and other vegetable fiber textiles and textile products, produced or manufactured in Sri Lanka and exported during the twelve-month period which began on January 1, 2002 and extends through December 31, 2002.
Effective on April 18, 2002, you are directed to adjusting the limits for the following categories, as provided for under the Uruguay Round Agreement on Textiles and Clothing:
The Committee for the Implementation of Textile Agreements has determined that these actions fall within the foreign affairs exception of the rulemaking provisions of 5 U.S.C. 553(a)(1).
Sincerely,
Department of the Army, DoD.
Notice of availability.
This announces the availability of the FEIS which assesses the potential environmental impacts of the design, construction, operation and closure of a facility to destroy the chemical agent and munitions currently stored at the Pueblo Chemical Depot. The FEIS examines the potential environmental impacts of the following destruction facility alternatives: (1) Baseline incineration facility; (2) modified baseline incineration facility; (3) neutralization followed by supercritical water oxidation; (4) neutralization followed by biodegradation (preferred alternative); and (5) no action (i.e., continued storage of chemical munitions at Pueblo Chemical Depot). Although the no action alternatives is not viable under Public Law 99-145 (Department of Defense Authorization Act of 1986), it was analyzed to provide a comparison with the proposed action.
The waiting period on the FEIS will end 30 days after publication of the notice of availability in the
To obtain copies of the FEIS, contact the Program Manager for Chemical Demilitarization, Public Outreach and Information Office (ATTN: Ms. Sandra Clawson-Freeo), Building E-4585, Aberdeen Proving Ground, Maryland 21010-4005.
Ms. Sandra Clawson-Freeo at 410-436-1479, by fax at 410-436-5122, by electronic mail at Sandra.Clawson-Freeo@pmcd.apgea.army.mil or by mail at the above listed address.
In its Record of Decision on February 26, 1988 (53 FR 5816, February 26, 1988) for the Final Programmatic Environmental Impact Statement on the Chemical Stockpile Disposal Program (CSDP), the Department of the Army selected on-site disposal by incineration at all eight chemical munition storage sites located within the continental United States as the method by which it will destroy its lethal chemical stockpile. The Department of the Army published a Notice of Intent in the
The Program Manager for Assembled Chemical Weapons Assessment (ACWA) is preparing a separate EIS. The ACWA EIS is for follow-on pilot testing of the ACWA program pursuant to the process established by Congress in Public Laws 104-208 and 105-261. The ACWA EIS is distinct from this FEIS for the Pueblo Chemical Depot in that its emphasis is on the feasibility of pilot testing one or more of the ACWA technologies at one or more sites. One of the four sites evaluated in the ACWA EIS is the Pueblo Chemical Depot. The ACWA EIS does not specifically address the use of a full-scale facility to accomplish destruction of the inventory stored at Pueblo. Information provided by the ACWA program concerning the neutralization technologies provides the basis for analysis of the neutralization technologies and comparison with incineration is this site-specific FEIS for stockpile destruction at Pueblo. This Program Manager for Chemical Demilitarization FEIS and the ACWA EIS serve complementary but distinct purposes. This FEIS continues the process that began with Congress established the Program Manager for Chemical Demilitarization in 1985.
A decision on which of the alternatives will be implemented in carrying out destruction of the chemical munitions at Pueblo will be made by the Defense Acquisition Board (DAB) through a process that will consider a wide range of factors. The factors include, but are not limited to, environmental considerations, laws and regulations, mission needs (at Pueblo as well as from a national perspective), implications for compliance with the Chemical Weapons Convention, budget considerations, schedule, public concerns, and political concerns.
A Record of Decision will be made following the end of the 30-day review period.
Department of Education.
The Leader, Regulatory Information Management Group, Office of the Chief Information Officer invites comments on the submission for OMB review as required by the Paperwork Reduction Act of 1995.
Interested persons are invited to submit comments on or before May 17, 2002.
Written comments should be addressed to the Office of Information and Regulatory Affairs, Attention: Karen Lee, Desk Officer, Department of Education, Office of Management and Budget, 725 17th Street, NW, Room 10235, New Executive Office Building, Washington, DC 20503 or should be electronically mailed to the internet address
Section 3506 of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35) requires
This information collection is being submitted under the Streamlined Clearance Process for Discretionary Grant Information Collections (1890-0001). Therefore, the 30-day public comment period notice will be the only public comment notice published for this information collection.
Requests for copies of the proposed information collection request may be accessed from
Comments regarding burden and/or the collection activity requirements should be directed to Kathy Axt at her Internet address
Idaho Operations Office, DOE.
Notice of availability of solicitation for awards of financial assistance.
The U.S. Department of Energy (DOE), Idaho Operations Office (ID) is seeking cost shared applications for plant-wide assessments that will lead to substantial improvements in industrial energy efficiency, enhanced competitiveness and reduced environmental impacts. The objective is to continue industry participation in the Industry of the Future (IOF) Plant-Wide Opportunity Assessment Program. The industrial sites at which the assessment is conducted must fall within the Office of Industrial Technologies (OIT) Industry of the Future strategy areas. These include: Forest Products, Chemicals, Petroleum Refining, Steel, Aluminum, Metal Castings, Glass, Mining, and Agriculture.
The issuance date of Solicitation Number DE-PS07-02ID14323 will be on or about April 9, 2002. The deadline for receipt of applications is June 6, 2002, at 3 p.m. MDT.
The solicitation will be available in its full text on the Internet by going to the DOE's Industry Interactive Procurement System (IIPS) at the following URL address:
Trudy Harmel, Contract Specialist at
Information about the Office of Industrial Technologies Best Practices Program can be found at
DOE anticipates making 7 to 9 cooperative agreement awards, with total estimated DOE funding of up to $900K, with no individual award to exceed $100,000 and a project period of no more than one year. A minimum 50% non-federal cost share is required. Only industrial “end-users” are eligible to submit project proposals. “End-users” are defined as those companies who own and operate the facility that is the focus of the assessment. In addition to end-user participation, a project team may involve other partners including, but not limited to, design and consulting engineering firms, manufacturers, distributors, utilities, energy service companies, state energy offices, research institutions, etc. The statutory authority for the program is the Federal Non-Nuclear Energy Research and Development Act of 1974 (Pub. L. 93-577).
The Catalog of Federal Domestic Assistance (CFDA) Number for this program is 81.086.
Bonneville Power Administration (BPA), Department of Energy (DOE).
Notice of Proposed Adjustment to the Rate for Generation Imbalance Service, Schedule ACS-02.
By this notice, BPA's Transmission Business Line (TBL) announces its proposal to revise the ACS-02 Generation Imbalance Service rate (rate) found in its 2002 Transmission and Ancillary Service Rate Schedules. BPA proposes to eliminate the 100 mills per kilowatthour minimum rate for wind resources for imbalances that exceed the Generation Imbalance Deviation Band and where energy delivered in a schedule hour is less than the energy scheduled. The revision will remove an impediment to continued development of wind resources in the BPA Control Area.
A proposed schedule for the proceeding is supplied in Supplementary Information, Section I.B. Petitions to Intervene must be received by BPA at the address below no later than 12:00 noon on April 22, 2002. All references to timelines are Pacific prevailing time. At 10:00 a.m. on April 24, 2002, a scheduling conference will be held in the BPA Rate Hearing Room to discuss the proposed schedule. The rate adjustment proceeding will begin with a pre-hearing conference at 9:00 a.m. on April 25, 2002. Persons intending to intervene in the proceeding as a party must appear in person at the pre-hearing conference. Written comments by non-party participants must be received by BPA no later than 4:30 p.m. May 28, 2002, at the address below.
BPA File No. GI-02. BPA requests that all comments and documents intended to become a part of the Official Record in this proceeding refer to this file number.
Persons wishing to become a party to the proceeding must notify BPA in writing of their intention to do so. Petitions to Intervene as a party in the proceeding must be submitted to Judy Cornish, Hearing Clerk—L-7, Bonneville Power Administration, P.O. Box 3621, 905 NE 11th Ave., Portland, OR, 97208-3621. In addition, petitioners must concurrently serve a copy of their Petition to Intervene on BPA's Office of General Counsel, directed to Eric H. Carter, Bonneville Power Administration, Office of General Counsel—LT-7, P.O. Box 3621, 905 N.E. 11th Ave., Portland, OR, 97208-3621.
Written comments must be submitted to BPA Communications—KC-7, Comments, Bonneville Power Administration, P.O. Box 12999, Portland, Oregon 97212. Comments may also be sent by facsimile to (503) 230-3285, or by e-mail to
The pre-hearing conference on April 25, 2002, will be held in the BPA Rate Hearing Room, 2nd Floor, Room 223, 911 NE 11th Ave., Portland, Oregon. The Hearing Officer will establish a final schedule at the pre-hearing conference. During or after the pre-hearing conference the Hearing Officer will also issue orders addressing special rules of practice to govern the proceedings, document handling, and discovery.
BPA's Initial Proposal to revise the rate will be provided at the April 24th scheduling conference and at the April 25th pre-hearing conference and will be available for public viewing after that date at BPA's Public Information Center, BPA Headquarters Building, 1st Floor, 905 NE 11th Avenue, Portland, Oregon. The documents will also be available on BPA's Web site at
Information related to this proceeding may also be obtained by telephone at (503) 230-4413 or toll free at 1-800-622-4519. Ms. Mary A. Dalton, Transmission Rates Manager, is the official responsible for this rate case. Ms. Dalton may be contacted at P.O. Box 491, 5411 NE Hwy 99, Vancouver, WA 98663.
The Pacific Northwest Electric Power Planning and Conservation Act (Northwest Power Act) provides that BPA must establish and periodically review its rates so that they are adequate to recover, in accordance with sound business principles, the costs associated with the acquisition, conservation, and transmission of electric power, and to recover the Federal investment in the Federal Columbia River Power System (FCRPS) and other costs incurred by BPA. Section 7(i) of the Northwest Power Act requires that BPA's rates be established based on the record in a formal hearing (proceeding).
By this notice, BPA's Transmission Business Line (TBL) announces its proposal to revise the ACS-02 Generation Imbalance Service rate (rate) found in its 2002 Transmission and Ancillary Service Rate Schedules. Generation Imbalance Service is taken when there is a difference between scheduled and actual energy delivered from a generation resource in the BPA Control Area during a schedule hour. The existing Generation Imbalance Service rate was established in BPA's 2002 Transmission and Ancillary Service rate proceeding and subsequently was approved by the Federal Energy Regulatory Commission (FERC) for use during the October 1, 2001 to September 30, 2003 rate period.
Section 7 of the Northwest Power Act, 16 U.S.C. 839e, contains a number of general directives that the BPA Administrator must consider in establishing rates for the sale of electric energy and transmission capacity. In particular, section 7(a)(1), 16 U.S.C. 839e(a)(1), provides in part that:
Such rates shall be established and, as appropriate, revised to recover, in accordance with sound business principles, the costs associated with the acquisition, conservation, and transmission of electric power, including the amortization of the Federal investment in the Federal Columbia River Power System
Rates established by BPA are effective on an interim or final basis when approved by the Federal Energy Regulatory Commission (FERC). 16 U.S.C. 839e(a)(2). In addition to the Northwest Power Act, BPA ratemaking is governed by the Federal Columbia River Transmission System Act, 16 U.S.C. 838
Section 7(i) of the Northwest Power Act, 16 U.S.C. 839e(i), requires that BPA's rates be established according to certain procedures. These procedures include issuance of a
This proceeding is governed by the Procedures Governing Bonneville Power Administration Rate Hearings (BPA's Procedures), 51 FR 7611 (March 5, 1986), which implement and expand upon these statutory requirements.
Pursuant to Rule 1010.3(c) of BPA's Procedures, this hearing will be conducted as a 90-day Expedited Rate Proceeding under section 1010.10 of BPA's Procedures. The expedited procedures will be used rather than the procedures for General Rate Proceedings (Rule 1010.9), which are intended for use when the Administrator proposes to revise all, or substantially all, of BPA's wholesale power and transmission rates.
The Administrator has elected to do an expedited rate procedure because this proceeding is limited in scope, involves the revision of a single rate, and the rate revision adopted as a result of this proceeding, if any, will be in effect for one year, the remainder of the current rate period for BPA's 2002 Transmission and Ancillary Services Rate Schedules. A 90-day rate proceeding will be adequate to develop a full and complete record, and receive public comment and argument related to the proposed rate, upon which the Administrator will establish the final rate.
BPA expects to issue a final Record of Decision related to this rate revision on July 15, 2002. The following proposed schedule is provided for informational purposes. The Hearing Officer will establish a final schedule at the pre-hearing conference.
The procedural schedule established for Docket No. GI-02 will provide an opportunity for interested persons to review BPA's proposed rate adjustment, to participate in the rate hearing, and to submit oral and written comments.
The purpose of the hearing is to revise the ACS-02 Generation Imbalance Service charge under BPA's 2002 Transmission and Ancillary Service Rate Schedules. BPA proposes to eliminate the 100 mills per kilowatthour minimum rate for wind resources for imbalances that exceed the Generation Imbalance Deviation Band and where energy delivered in a schedule hour is less than the energy scheduled.
TBL's ACS-02 Ancillary Services and Control Area Services Rate Schedule includes a Control Area Service Rate for Generation Imbalance Service (
This section provides guidance to the Hearing Officer as to those matters that are within the scope of this transmission rate proceeding and those that are outside the scope of this proceeding.
Pursuant to Rule 1010.3(f) of BPA's Procedures, the Administrator directs the Hearing Officer to limit the scope of this hearing to the rate adjustment proposed herein. No other issues will be considered in this proceeding, including without limitation: (1) Issues related to any other rates adopted in BPA's 2002 Transmission and Ancillary Service rates proceeding; (2) other rates within the ACS-02 rate schedule; (3) aspects of the existing Generation Imbalance Service rate other than those relating to the rate adjustment proposed herein; (4) the General Rate Schedule Provisions; (5) revenue requirements; (6) rate design issues; (7) segmentation studies; and (8) transmission rate studies or other rate issues. Further, no issues relating to BPA's Open Access Transmission Tariff will be considered in this proceeding. The Hearing Officer will interpret the scope of this proceeding in the narrowest possible manner.
BPA has assessed the potential environmental effects of its rate proposal, as required by the National Environmental Policy Act (NEPA). In the Business Plan Environmental Impact Statement (Business Plan EIS) BPA evaluated the environmental impacts of a range of business structure alternatives that included, among other things, various combinations of rate designs and resulting rate levels for BPA's transmission services. In August 1995, the BPA Administrator issued a Record of Decision (Business Plan ROD) that adopted the Market-Driven Alternative from the Business Plan Final EIS completed in June 1995. In the Business Plan ROD, the Administrator committed to avoid the environmental impacts from new generation resources by not discouraging renewable resources. This rate proposal would reduce the
BPA distinguishes between “participants in” and “parties to” its ratemaking hearings. Apart from the formal hearing process, BPA will receive comments, views, opinions, and information from “participants,” who are defined in the BPA Procedures as persons who may submit comments without being subject to the duties of, or having the privileges of, parties. Participants' written comments will be made part of the official record and considered by the Administrator. Participants are not entitled to participate in the pre-hearing conference, may not cross examine parties' witnesses, seek discovery, or serve or be served with documents, and are not subject to the same procedural requirements as parties.
Written comments by participants will be included in the record if they are received by BPA on or before May 28, 2002. Participants' written views, supporting information, questions, and arguments should be submitted to the Hearing Clerk at the address listed in the
The second category of interest is that of a “party” as defined in Rules 1010.2 and 1010.4 of the BPA Procedures. 51 FR 7611 (1986). Parties may participate in any aspect of the hearing process after intervening in the proceeding as provided below.
Persons wishing to become a party to BPA's rate proceeding must notify BPA in writing of their interest. Petitioners may designate no more than two representatives upon whom service of documents will be made. Petitions to Intervene shall state the name and address of the person requesting party status and the person's interest in the hearing. Petitioners must also explain their interest in the outcome of the hearing in sufficient detail to permit the Hearing Officer to determine whether they have a relevant interest in the hearing to be a party. Finally, petitioners must state whether they intend to file a brief on exceptions.
Petitions to Intervene as a party in the rate proceeding are due to the Hearing Officer by 12 noon on April 22, 2002. Petitions to Intervene should be directed to the Hearing Clerk at the address specified in the
Pursuant to Rule 1010.1(d) of the BPA Procedures, BPA waives the requirement in Rule 1010.4(d) that an opposition to a Petition to Intervene be filed and served 24 hours before the pre-hearing conference. Any opposition to a Petition to Intervene may instead be made orally at the pre-hearing conference. Any party, including BPA, may oppose a Petition to Intervene. Persons who have been denied party status in any past BPA rate proceeding shall continue to be denied party status unless they establish a significant change of circumstances. The Hearing Officer will rule on all timely Petitions to Intervene at the pre-hearing conference. Late interventions are strongly disfavored. Oppositions to an untimely Petition to Intervene shall be filed and served on BPA within two days after service of the untimely petition.
The hearing record will include, among other things, the transcripts of the hearing, written materials entered into the record by BPA and the parties, written comments from participants and other materials accepted into the record by the Hearing Officer. The Hearing Officer will then review, supplement (if necessary) and certify the record to the BPA Administrator for decision.
The Hearing Officer, at his discretion, may schedule reasonable opportunity for cross-examination following completion of the filing of all parties and BPA's direct cases, and rebuttal testimony. Parties will have the opportunity to file initial briefs at the close of the evidentiary portion of the hearing. Parties may file briefs on exceptions, or if all parties have previously agreed, oral argument may be substituted for briefs on exceptions. If oral argument is scheduled in lieu of briefs on exceptions, the argument will be transcribed and made part of the record. After the close of the hearing, and following submission of initial briefs, BPA will issue a Draft Record of Decision (ROD).
The Administrator will develop the final rate for Generation Imbalance Service based on the entire record, documents prepared pursuant to the National Environmental Policy Act and other statutes and such other material or information as may have been submitted to or developed by the Administrator. The basis for the final adjustment will be expressed in the Administrator's Final ROD, which shall be issued July 15, 2002. The Administrator will serve copies of the Final ROD on all parties and will file the final proposed rate adjustment, together with the record, with the Federal Energy Regulatory Commission for confirmation and approval.
BPA must continue to meet with customers in the ordinary course of business during the rate proceeding. To comport with section 1010.7 of BPA's Procedural Rules on
BPA proposes to revise the rate for Generation Imbalance Service by eliminating the 100 mills per kilowatthour floor rate when actual energy is less than scheduled energy for wind generation resources. The revision will remove an impediment to continued development of wind resources in the BPA Control Area.
Below is the proposed adjustment to the Generation Imbalance Service rate. The proposed revision to the rate is the addition of the second sentence in the first paragraph of section III.B.1.b.(i), below (in
The rates below apply to generation resources in the BPA Control Area if
BPA-TBL will maintain a deviation account showing the net Generation Imbalance (the sum of positive and negative deviations from schedule for each hour). Return energy must be scheduled to bring the deviation account balance to zero each month. BPA-TBL will designate the hours and amounts of return energy for each hour that will be scheduled. The customer shall make the arrangements and submit the schedule for the balancing transaction.
i. When energy delivered in a schedule hour by the generation resource,
BPA's incremental cost will be based on an hourly energy index in the PNW, if one exists. If one does not exist, an alternative index will be based on: The Dow-Jones Mid-Columbia, California PX, or NYMEX Mid-Columbia index prices. On September 30 each year, BPA-TBL will post on the OASIS the index to be used for the ensuing fiscal year.
ii. When energy delivered by the generation resource is greater than the scheduled amount, a credit equal to 90% of BPA's decremental cost may be given for deviations.
For each hour a Generation Imbalance occurs, the Billing Factor for the rates specified in section 1.b. for Imbalance Outside the Generation Imbalance Deviation Band, is:
a. The amount of energy that the customer delivers, in kilowatthours, less than the lower limit of the Generation Imbalance Deviation Band, or
b. The amount of energy the customer delivers, in kilowatthours, in excess of the upper limit of the Generation Imbalance Deviation Band. No credit will be given for an energy difference if: (a) The imbalance was an Intentional Deviation (as determined by BPA-TBL); or (b) the Federal System was in a Spill Condition at any time during the month.
Take notice that on April 5, 2002, ANR Pipeline Company (ANR), tendered for filing one IPLS Service Agreement and a description of the essential conditions involved in agreeing to a Negotiated Rate Arrangement. ANR requests that the Commission approve the Negotiated Rate Arrangements to be retroactively effective on May 1, 2002.
ANR states that the filed Negotiated Rate Arrangement reflects a negotiated rate between ANR and AEP Energy Services, Inc. for transportation service, under one transportation agreement for a period to be effective beginning May 1, 2002 for a primary term of ten (10) years thereafter.
Any person desiring to be heard or to protest said filing should file a motion to intervene or a protest with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, in accordance with sections 385.214 or 385.211 of the Commission's Rules and Regulations. All such motions or protests must be filed in accordance with section 154.210 of the Commission's Regulations. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceedings. Any person wishing to become a party must file a motion to intervene. Copies of this filing are on file with the Commission and are available for public inspection. This filing may also be viewed on the Web at
Take notice that on March 29, 2002, Bridgeline Gas Distribution LLC (Bridgeline) filed pursuant to section 284.123(b)(2) of the Commission's regulations, a petition for rate approval requesting that the Commission approve the proposed rates as fair and equitable for transportation and storage services performed under section 311 of the Natural Gas Policy Act of 1978 (NGPA). Bridgeline proposes an effective date of March 29, 2002.
Bridgeline states that it is a local distribution company with a blanket certificate issued in Docket No. CP93-190 authorizing it to engage in NGPA Section 311 services as if it were an intrastate pipeline. Bridgeline owns and operates transportation and storage facilities in the State of Louisiana.
Pursuant to section 284.123(b)(2)(ii), if the Commission does not act within 150 days of the date of this filing, the rates will be deemed to be fair and equitable and not in excess of an amount which interstate pipelines would be permitted to charge for similar transportation service. The Commission may, prior to the expiration of the 150 day period, extend the time for action or institute a proceeding to afford parties an opportunity for written comments and for the oral presentation of views, data, and arguments.
Any person desiring to participate in this rate proceeding must file a motion to intervene or protest with the Federal Energy Regulatory Commission, 888
Take notice that on April 5, 2002, Columbia Gas Transmission Corporation (Columbia), 12801 Fair Lakes Parkway, Fairfax, Virginia 22030-0146, filed in Docket No. CP02-142-000, an application, pursuant to sections 7(b) and (c) of the Natural Gas Act (NGA) and part 157 of the Commission's Regulations for abandonment authorization and a certificate of public convenience and necessity authorizing the construction and operation of certain natural gas transmission facilities in Pennsylvania to provide firm transportation service (FTS) under part 284 of the Commission's Regulations for Rock Springs Generation, LLC (Rock Springs) and CED Rock Springs, Inc. (CEDRS) (together, “Customer”), all as more fully set forth in the application which is on file with the Commission and open to public inspection.
Columbia proposes to abandon 8.6 miles of 14-inch pipeline and replace it with 8.6 miles of 24-inch pipeline in Chester County, Pennsylvania, between its Eagle and Downingtown Compressor Stations. It is stated that Columbia will use this pipeline to transport up to 270,000 Dekatherms (dt) per day of natural gas to the Customer's power plant to be located in Rock Springs, Cecil County, Maryland, in order to serve the fuel requirements of the power plant and to serve future electric demand requirements. Columbia states that it has signed contracts with Rock Springs and CEDRS to transport gas for a term of 20 years, delivering 135,000 dt of gas per day to each. It is asserted that the replacement of the line will enhance reliability and flexibility for Columbia's existing customers through the creation of additional capacity during off-peak periods. Columbia will make deliveries to the Customer using the existing Rock Springs Meter Station which was constructed by Columbia under the automatic provisions of its blanket certificate and paid for by the Customer.
Columbia estimates the cost of the project at $15,059,400 and requests rolled-in rate treatment for the cost, asserting that the project satisfies the requirements of the Commission's Pricing Policy Statement for new construction. Columbia requests that a certificate be issued by October 1, 2002, in order to begin service by April 1, 2003.
Any questions regarding this application should be directed to Fredric J. George, Certificates, at (304)357-2359, Columbia Gas Transmission Company, P.O. Box 1273, Charleston, West Virginia 25325-1273.
There are two ways to become involved in the Commission's review of this project. First, any person wishing to obtain legal status by becoming a party to the proceedings for this project should, on or before May 2, 2002, file with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, a motion to intervene in accordance with the requirements of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214) and the regulations under the NGA (18 CFR 157.10). A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies of all documents filed by the applicant and by all other parties. A party must submit 14 copies of filings made with the Commission and must mail a copy to the applicant and to every other party in the proceeding. Only parties to the proceeding can ask for court review of Commission orders in the proceeding. Comments and protests may be filed electronically via the internet in lieu of paper. See 18 CFR 385.2001(a)(1)(iii) and the Commission's website at
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commenters will be placed on the Commission's environmental mailing list, will receive copies of environmental documents, and will be able to participate in meetings associated with the Commission's environmental review process. Commenters will not be required to serve copies of filed documents on all other parties. However, Commenters will not receive copies of all documents filed by other parties or issued by the Commission, and will not have the right to seek rehearing or appeal the Commission's final order to a Federal court.
The Commission will consider all comments and concerns equally, whether filed by commenters or those requesting intervenor status.
The Commission may issue a preliminary determination on non-environmental issues prior to the completion of its review of the environmental aspects of the project. This preliminary determination typically considers such issues as the need for the project and its economic effect on existing customers of the applicant, on other pipelines in the area, and ion landowners and communities. For example, the Commission considers the extent to which the applicant may need to exercise eminent domain to obtain rights-of-way for the proposed project and balances that against the non-environmental benefits to be provided by the project. Therefore, if a person has comments on community and landowner impacts from this proposal, it is important to file comments or to intervene as early in the process as possible.
If the Commission decides to set the application for a formal hearing before an Administrative Law Judge, the Commission will issue another notice describing that process. At the end of the Commission's review process, a final Commission order approving or denying a certificate will be issued.
Take notice that on March 27, 2002, East Tennessee Natural Gas Company (East Tennessee) tendered for filing as part of its FERC Gas Tariff, Original Volume No. 1, the revised tariff sheets listed on Appendix A and Appendix B of the filing.
East Tennessee states that the purpose of this filing is to comply with the Commission's January 30, 2002 Order on East Tennessee's Order No. 637 Settlement.
East Tennessee states that copies of its filing have been mailed to all parties on the official service lists compiled by the Secretary of the Commission in these proceedings.
Any person desiring to protest said filing should file a protest with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, in accordance with section 385.211 of the Commission's Rules and Regulations. All such protests must be filed in accordance with section 154.210 of the Commission's Regulations. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceedings. Copies of this filing are on file with the Commission and are available for public inspection. This filing may also be viewed on the web at
Take notice that on April 4, 2002, Gulf South Pipeline Company, LP (Gulf South) tendered for filing contracts between Gulf South and the following company for disclosure of a recently negotiated rate transaction. As shown on the contract, Gulf South requests an effective date of April 1, 2002.
Special Negotiated Rate Between Gulf South Pipeline Company, LP and Reliant Entergy Entex
Gulf South states that it has served copies of this filing upon all parties on the official service list created by the Secretary in this proceeding
Any person desiring to be heard or to protest said filing should file a motion to intervene or a protest with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, in accordance with Sections 385.214 or 385.211 of the Commission's Rules and Regulations. All such motions or protests must be filed in accordance with Section 154.210 of the Commission's Regulations. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceedings. Any person wishing to become a party must file a motion to intervene. Copies of this filing are on file with the Commission and are available for public inspection. This filing may also be viewed on the web at
Take notice that an informal settlement conference will be convened in these proceedings on May 1, 2002 commencing at 10 a.m. at the offices of the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, D.C., 20426, for the purpose of exploring the possible settlement of the issues and drafting possible settlement documents in this proceeding.
Any party, as defined by 18 CFR 385.102(c), or any participant as defined by 18 CFR 385.102(b), is invited to attend. Persons wishing to become a party must move to intervene and receive intervenor status pursuant to the Commission's regulations (18 CFR 385.214).
For additional information, contact Marc G. Denkinger (202) 208-2215 or Daniel R. Simon (202) 208-1125.
Take notice that on April 5, 2002, Tennessee Gas Pipeline Company (Tennessee), tendered for filing a notice of a change in the rates for the October 18, 2001 Negotiated Rate Agreement between Tennessee and NJR Energy Services (Negotiated Rate Agreement) which was accepted by the Commission in
Any person desiring to be heard or to protest said filing should file a motion to intervene or a protest with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, in accordance with sections
Take notice that on April 5, 2002, Texas Gas Transmission Corporation (Texas Gas) tendered for filing as part of its FERC Gas Tariff, First Revised Volume No. 1, the following tariff sheet to become effective March 31, 2002:
Texas Gas states that the purpose of this filing is to update the title page of Texas Gas's FERC Gas Tariff, First Revised Volume No. 1, to reflect a recent change in organizational structure and reporting responsibility.
Any person desiring to be heard or to protest said filing should file a motion to intervene or a protest with the Federal Energy Regulatory Commission, 888 First Street, NE, Washington, DC 20426, in accordance with sections 385.214 or 385.211 of the Commission's Rules and Regulations. All such motions or protests must be filed in accordance with section 154.210 of the Commission's Regulations. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceedings. Any person wishing to become a party must file a motion to intervene. Copies of this filing are on file with the Commission and are available for public inspection. This filing may also be viewed on the Web at
Take notice that on April 4, 2002, Transcontinental Gas Pipe Line Corporation (Transco), P. O. Box 1396, Houston, Texas 77251-1096, filed in Docket No. CP02-141-000 an application pursuant to Section 7(b) of the Natural Gas Act (NGA) and the rules and regulations of the Federal Energy Regulatory Commission (Commission), for an order permitting and approving the abandonment by sale of certain pipeline facilities known as the South Texas Pipeline Facilities located in onshore Texas in Bee, Brooks, DeWitt, Duval, Goliad, Hidalgo, Jackson, Jim Hogg, Jim Wells, Kleberg, LaSalle, Live Oak, McMullen, Nueces, Refugio, San Patricio, Starr, Victoria, Wharton, Willacy, and Zapata Counties, all as more fully set forth in the application which is on file with the Commission and open to public inspection. The filing may be viewed on the web at
Transco states that it proposes to abandon by sale to Enbridge Pipelines (Texas Intrastate) Inc. (Enbridge), an intrastate pipeline entity not affiliated with Transco, a 100 percent interest in the South Texas Pipeline Facilities. Transco requests that the Commission determine that, upon sale of the South Texas Pipeline Facilities to Enbridge, neither the facilities nor the services provided by Enbridge utilizing the facilities will be subject to the Commission's Natural Gas Act jurisdiction.
Transco states that since its principal role is that of a transporter, it no longer requires its extensive gathering facilities to provide gas sales. Moreover, it states that most of its customers purchase gas at Transco's pooling points, not at the wellhead. As a result, Transco states that it has reevaluated its facilities and services in order to position itself to compete effectively as a transporter in this changed environment. Transco's states that it has determined to sell or spindown those facilities historically relied on primarily to perform a gas supply gathering function.
Transco states that it thus offered for sale all of its onshore transmission and gathering facilities upstream of its station 30 compressor station. According to Transco, while various parties submitted bids for portions of the assets being offered for sale, it determined that Enbridge's bid was the most attractive overall package. Transco notes that, in addition to its jurisdictional facilities, certain non-jurisdictional gathering laterals contiguous to the McMullen lateral portion of the South Texas Pipeline Facilities will be simultaneously transferred to Enbridge by WFS Gathering Company (WFS Gathering) and Goebel Gathering Company (Goebel), which are gathering affiliates of Transco. Additional, Transco states that WFS Gathering has already sold and transferred to Enbridge the non-jurisdictional facilities upstream of the Tilden Plant. Transco states that all of these non-jurisdictional facilities were spundown to WFS Gathering and Goebel by Transco pursuant to the Commission order authorizing the transfer in Docket No. CP98-236-000. It states that Enbridge is purchasing these gathering laterals according to separate Purchase and Sale Agreements with WFS Gathering and Goebel.
Specifically, Transco states that it proposes to abandon by sale to Enbridge the following South Texas Pipeline Facilities:
1. Mainline A from Mile Post 0.00 to Mile Post 258.40, which consists of 37.63 miles of 10-inch pipeline, 41.26 miles of 14-inch pipeline, 99.99 miles of 24-inch pipeline, and 79.49 miles of 26-inch pipeline;
2. Station 20, located at Mile Post 170.25 on Mainline A near Refugio, Texas, which is a 8800 horsepower compressor station;
3. Starr lateral and loop, which consists of 23.17 miles of 10-inch
4. North Rucias lateral, which consists of 6.5 miles of 8-inch pipeline;
5. Driscoll lateral, which consists of 10.86 miles of 6-inch pipeline and 22.35 miles of 8-inch pipeline;
6. LaGloria lateral and loop, which consists of 4.53 miles of 10-inch pipeline and 3.47 miles of 12-inch pipeline, respectively;
7. McMullen lateral, which consists of 139.05 miles of 24-inch pipeline from Tilden Junction in McMullen County, Texas, to Station 30 in Wharton County, Texas; and
8. Several meter stations, valves, miscellaneous tie-in piping, and other related appurtenances along the above pipeline segments.
Transco states that the South Texas Pipeline Facilities also include any other equipment, tangible personal property and related meter station facilities (but excluding all Excluded Property, as defined in the Purchase and Sale Agreement, attached as Exhibit U to the application), which is used by Transco in connection with the operation of the South Texas Pipeline Facilities.
Transco states that it has agreed to sell its 100 percent interest in the South Texas Pipeline Facilities to Enbridge for $32.8 million. It states that the cost to Enbridge will compensate Transco for the total estimated net book value of the assets at the time of closing, including the unamortized balance of the purchase price that was assigned to these assets when Williams purchased Transco in 1995. Transco further states that closing of the sale of the facilities is contingent upon receipt of the a determination from the Commission that upon their sale to Enbridge, neither the facilities nor the services provided by Enbridge through the facilities will be subject to the Commission's Natural Gas Act jurisdiction.
According to Transco, abandonment of the facilities will not require physical removal of any facilities. However, Transco states that it will make all necessary piping modifications and Enbridge will install the necessary metering equipment at Station 30 required to separate Enbridge's facilities from Transco's pipeline system. Transco further states that the abandonment will have no impact on the daily design capacity of, or operating conditions on, Transco's system.
Transco contends that approval of the abandonment will enable Enbridge to further develop and grow its intrastate pipeline system in Texas to provide competitive gathering, transportation, and gas processing services, as well as greatly expand market access to the producers currently connected to both the South Texas Pipeline Facilities and the North Padre Island Lateral. It states that at the same time, approval will allow Williams to shed facilities which are no longer associated with its primary service functions, and will ultimately result in reduced costs for its customers by the removal of these facilities from the cost of service rate base.
Transco states that Enbridge has represented that, after acquisition, it will use the South Texas Pipeline Facilities only for intrastate transportation or transportation pursuant to Section 311(a)(1) of the Natural Gas Policy Action of 1978.
Transco states that two of its customers (Sun Company, Inc. And Coastal Eagle Point Oil Company) are currently entitled to Part 284 firm transportation service from certain receipt points that are proposed to be abandoned. In an effort to effectuate the transfer of facilities so that neither customer is adversely affected, Transco states that it and Enbridge and willing to offer alternative arrangements to the shippers to provide continued service. In that regard, Transco states that Enbridge is willing to offer continued service form these receipt points to Transco's Station 30 delivery point, pursuant to the terms and conditions of its Statement of General Terms and Conditions, which will be filed with the Texas Railroad Commission in the near future. Transco, therefore, seeks authorization to partially abandon service to Sun and Coastal under their existing FT service agreements by removing the affected receipt points that will no longer be available from Transco. It states that all other provisions of the FT service agreements would remain unaffected. Upon Commission authorization of its abandonment application, Transco states that it will amend the two firm service agreements to delete the affected receipt points.
In addition to the two shippers noted above, Transco states that IT shippers on the North Padre Island Lateral will be required to make arrangements with Enbridge should they desire to sell their gas into the Transco markets at Station 30 or other points downstream.
Transco further states that receipt and delivery points on nine certificate transportation X-rate schedule service agreements, which are no subject to pre-granted abandonment authorization, are also affected. According to Transco, there has been no gas flow recorded under any of these agreements since 1992. It states that upon abandonment and transfer of the facilities to Enbridge, the referenced receipt and delivery points will no longer be available to be used under the affected certificated agreements. Transco states that it has notified the affected parties in writing of its intent to terminate and abandon the certificated service. Transco requests abandonment authorization to the extent necessary to terminate services under the affected rate schedules and contracts.
Any questions regarding this application should be directed to Gisela B. Cherches, Transcontinental Gas Pipe Line Corporation, P. O. Box 1396, Houston, Texas 77251-1396 or call (713) 215-2000. In addition, Transco states that it will establish a toll-free telephone number so that interested parties can call with questions about the Momentum project.
There are two ways to become involved in the Commission's review of this project. First, any person wishing to obtain legal status by becoming a party to the proceedings for this project should, on or before May 2, 2002, file with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, a motion to intervene in accordance with the requirements of the Commission's Rules of Practice and Procedure (18 CFR 385.214 or 385.211) and the Regulations under the NGA (18 CFR 157.10). A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies of all documents filed by the applicant and by all other parties. A party must submit 14 copies of filings made with the Commission and must mail a copy to the applicant and to every other party in the proceeding. Only parties to the
However, a person does not have to intervene in order to have comments considered. The second way to participate is by filing with the Secretary of the Commission, as soon as possible, an original and two copies of comments in support of or in opposition to this project. The Commission will consider these comments in determining the appropriate action to be taken, but the filing of a comment alone will not serve to make the filer a party to the proceeding. The Commission's rules require that persons filing comments in opposition to the project provide copies of their protests only to the party or parties directly involved in the protest.
Comments, protests and interventions may be filed electronically via the Internet in lieu of paper. See, 18 CFR385.2001(a)(1)(iii) and the instructions on the Commission's web site under the “e-filing” link.
If the Commission decides to set the application for a formal hearing before an Administrative Law Judge, the Commission will issue another notice describing that process. At the end of the Commission's review process, a final Commission order approving or denying the abandonment will be issued.
Take notice that on April 2, 2002, Transwestern Pipeline Company (Transwestern), 1400 Smith Street, Houston, Texas 77002-7361, filed in Docket No. CP02-134-000, a certificate of public convenience and necessity application, pursuant to section 7 (c) of the Natural Gas Act (NGA) for authorization to add capacity on its San Juan lateral in New Mexico and Colorado, all as more fully set forth in the application which is on file with the Commission and open to public inspection. This filing may be viewed on the Web at
Transwestern proposes to add an incremental 10,000 Dekatherms of capacity on a daily, year-round basis to the existing San Juan lateral, which extends from Transwestern's LaPlata “A” Compressor Station in LaPlata County, Colorado, to a point on Transwestern's mainline near Thoreau, New Mexico. Transwestern states that the capacity will be made available as the result of installation of air-cooling facilities at Transwestern's Bloomfield Compressor Station, located in San Juan County, New Mexico. It is stated that Transwestern is installing the air-cooling facilities under section 2.55 of the Commission's Regulations for the purpose of obtaining more efficient and economical operation of the gas turbine units at the Bloomfield Compressor Station. It is asserted that the existing capacity of the San Juan lateral is fully subscribed and that the additional capacity would be available for sale on a long-term basis and would enable Transwestern to respond to increasing market demand. It is explained that Transwestern proposes to hold an open season for commitments for the additional capacity.
Any questions regarding this application should be directed to Robert B. Kilmer, Vice President, Rates and Certificates, Transwestern Gas Transmission Company, at 713-853-6160.
There are two ways to become involved in the Commission's review of this project. First, any person wishing to obtain legal status by becoming a party to the proceedings for this project should, on or before April 15, 2002, file with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, a motion to intervene in accordance with the requirements of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214) and the regulations under the NGA (18 CFR 157.10). A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies of all documents filed by the applicant and by all other parties. A party must submit 14 copies of filings made with the Commission and must mail a copy to the applicant and to every other party in the proceeding. Only parties to the proceeding can ask for court review of Commission orders in the proceeding. Comments and protests may be filed electronically via the Internet in lieu of paper.
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commenters will be placed on the Commission's environmental mailing list, will receive copies of environmental documents, and will be able to participate in meetings associated with the Commission's environmental review process. Commenters will not be required to serve copies of filed documents on all other parties. However, Commenters will not receive copies of all documents filed by other parties or issued by the Commission, and will not have the right to seek rehearing or appeal the Commission's final order to a Federal court.
The Commission will consider all comments and concerns equally, whether filed by commenters or those requesting intervenor status.
The Commission may issue a preliminary determination on non-environmental issues prior to the completion of its review of the environmental aspects of the project. This preliminary determination typically considers such issues as the need for the project and its economic effect on existing customers of the applicant, on other pipelines in the area, and ion landowners and communities. For example, the Commission considers the extent to which the applicant may need to exercise eminent domain to obtain rights-of-way for the proposed project and balances that against the non-environmental benefits to be provided by the project. Therefore, if a person has comments on community and landowner impacts from this proposal, it is important to file comments or to intervene as early in the process as possible.
If the Commission decides to set the application for a formal hearing before an Administrative Law Judge, the Commission will issue another notice describing that process. At the end of the Commission's review process, a final Commission order approving or denying a certificate will be issued.
Take notice that on April 8, 2002, Vector Pipeline L.P. (Vector), tendered for filing revised pro forma tariff sheets to its FERC Gas Tariff, Volume No. 1, to become effective upon issuance of a Commission order. Vector states that the purpose of this filing is to submit tariff sheets in compliance with Commission requirements in Order Nos. 637,
Vector states that it has tendered revised pro forma tariff sheets supplementing its September 29, 2000 submittal to address the following matters, as required in Order No. 637 and subsequent orders: segmentation and flexible receipt and delivery points, penalties and penalty crediting, operational flow orders, and capacity release.
Any person desiring to protest said filing should file a protest with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, in accordance with Section 385.211 of the Commission's Rules and Regulations. All such protests must be filed in accordance with Section 154.210 of the Commission's Regulations. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceedings. Copies of this filing are on file with the Commission and are available for public inspection. This filing may also be viewed on the web at
Take notice that on April 5, 2002, Williams Gas Pipelines Central, Inc. (Williams) tendered for filing as part of its FERC Gas Tariff, Original Volume No. 1, the following tariff sheet to become effective March 31, 2002:
Williams states that the purpose of this filing is to update the title page of Williams' FERC Gas Tariff, Original Volume No. 1, to reflect a recent change in organizational structure and reporting responsibility.
Any person desiring to be heard or to protest said filing should file a motion to intervene or a protest with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, in accordance with Sections 385.214 or 385.211 of the Commission's Rules and Regulations. All such motions or protests must be filed in accordance with Section 154.210 of the Commission's Regulations. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceedings. Any person wishing to become a party must file a motion to intervene. Copies of this filing are on file with the Commission and are available for public inspection. This filing may also be viewed on the web at
Take notice that the following filings have been made with the Commission. Any comments should be submitted in accordance with Standard Paragraph E at the end of this notice.
Take notice that on April 5, 2002, Duke Energy Murray, LLC (Duke Murray or Applicant) filed with the Federal Energy Regulatory Commission (Commission) an application pursuant to Section 203 of the Federal Power Act for authorization of a disposition of jurisdictional facilities whereby Duke Murray will transfer to the Tennessee Valley Authority (TVA) certain transmission components of the Loopers Farm 230 kV Substation, which is located near Duke Murray's 1240 MW generating facility in Murray County, Georgia (the Facility) and which will interconnect a portion of the Facility to the TVA transmission system. In accordance with the terms of an interconnection agreement that will be executed between Duke Murray and TVA, the disposition will be accomplished through a bill of sale. Because TVA is a federal agency, authorization for TVA's purchase of the jurisdictional facilities is not required.
Take notice that La Rosita Energy, B.V. (La Rosita Energy), tendered for filing with the Federal Energy Regulatory Commission (Commission), an application for determination of exempt wholesale generator status pursuant to Part 365 of the Commission's regulations.
Applicant proposes to own or operate, or both own and operate, natural gas-fired electric generating facilities with an aggregate capacity of approximately 1,060 megawatts (along with certain appurtenant interconnected transmission facilities and an adjacent sewage treatment plant to supply water to the facilities), located near the city of Mexicali in the state of Baja California, Mexico. All output from the generating facilities will be sold exclusively at wholesale.
Take notice that on January 23, 2002, Duke Power, a Division of Duke Energy Corporation tendered for filing with the Federal Energy Regulatory Commission (Commission), a letter committing it will treat Engage Energy America LLC and Frederickson Power L.P. as affiliates pending and following the consummation of the Duke Energy/Westcoast transaction.
Take notice that on April 3, 2002, Duke Energy Oakland, LLC (DEO) tendered for filing a copy of its refund report in compliance with the Commission's order in this proceeding, dated February 1, 2002.
Take notice that on April 4, 2002, PJM Interconnection, L.L.C. (PJM) supplemented its March 29, 2002 filing in this docket by tendering for filing the executed signature page of the PJM West Reliability Assurance Agreement among Load Serving Entities in the PJM West Region (RAA West) for FirstEnergy Solutions Corp.
PJM requests an effective date of April 1, 2002 for FirstEnergy Solutions Corp.”s the RAA West signature page, consistent with the April 1, 2002 implementation date of RAA West and the requested effective date for the signature pages previously filed in this docket.
PJM states that it served a copy of its filing on all parties to the RAA West, including the parties for which a signature page is being tendered with this filing, the PJM members, and each of the state electric regulatory commissions within the PJM region.
Take notice that on April 2, 2002 Xcel Energy Services Inc. (XES), on behalf of Public Service Company of Colorado (Public Service), submitted for filing a Service Agreement between Public Service and Energy USA-TPC Corp., which is an umbrella service agreement under Public Service's Rate Schedule for Market-Based Power Sales (FERC Electric Tariff, First Revised Volume No. 6). XES requests that this agreement become effective on March 19, 2002.
Take notice that on April 2, 2002, Public Service Company of New Mexico (PNM) submitted for filing an executed copy of a Wholesale Power Purchase Agreement (Agreement) dated February 28, 2001 between PNM and Tri-State Generation and Transmission Association, Inc. (Tri-State). The Agreement is being filed as Service Agreement No. 32 under PNM's FERC Electric Tariff, First Revised Volume No. 3 (Power and Energy Sales Tariff), and sets forth the terms and conditions under which PNM and Tri-State will exchange energy and under which PNM will purchase surplus energy from Tri-State. PNM's filing is available for public inspection at its offices in Albuquerque, New Mexico.
Copies of this filing have been served upon Tri-State, the New Mexico Public Regulation Commission, and the New Mexico Attorney General.
Take notice that on April 2, 2002, Western Resources, Inc. (WR) (d.b.a. Westar Energy) tendered for filing with the Federal Energy Regulatory Commission (Commission) a Service Agreement between WR and the Southeastern Power Administration (SEPA). WR states that the purpose of this agreement is to permit SEPA to take service under WR's Market Based Power Sales Tariff on file with the Commission. This agreement is proposed to be effective March 20, 2002.
Copies of the filing were served upon SEPA and the Kansas Corporation Commission.
Take notice that on April 2, 2002, KeySpan-Glenwood Energy Center LLC (Glenwood) tendered for filing pursuant to section 205 of the Federal Power Act its proposed FERC Electric Tariff No. 1.
Glenwood seeks authority to sell energy and capacity, as well as ancillary services, at market-based rates, together with certain waivers and preapprovals. Glenwood also seeks authority to sell, assign, or transfer transmission rights that it may acquire in the course of its marketing activities. Glenwood requests waiver of the Commission's 60-day notice requirement to allow an effective date of April 15, 2002 for its proposed rate schedule.
Take notice that on April 2, 2002, Tampa Electric Company (Tampa Electric) filed notices of cancellation of its qualifying facility transmission service agreement and related interconnection agreement with Mulberry Phosphates, Inc. (Mulberry). Tampa Electric proposes that the cancellations be made effective on April 1, 2002.
Copies of the filing have been served on Mulberry and the Florida Public Service Commission.
Take notice that on April 2, 2002, Entergy Services, Inc., on behalf of Entergy Gulf States, Inc., tendered for filing an unexecuted, amended and restated Interconnection and Operating Agreement with Cottonwood Energy Company, LP (Cottonwood), and an updated Generator Imbalance Agreement with Cottonwood (the First Revised Interconnection Agreement).
Take notice that on April 2, 2002, Florida Power & Light Company (FPL) filed a Power Sales Agreement between FPL and Florida Municipal Power Agency.
Take notice that on April 3, 2002, Virginia Electric and Power Company (Dominion Virginia Power) tendered for filing an execute Generator Interconnection and Operating Agreement (Interconnection Agreement) with Industrial Power Generating Corporation (Ingenco). The Interconnection Agreement sets forth the terms and conditions governing the interconnection between Ingenco's generating facility and Dominion Virginia Power's transmission system.
Dominion Virginia Power requests that the Federal Energy Regulatory Commission (Commission) waive its notice of filing requirements and accept this filing to make the Interconnection Agreement effective on May 24, 2000. Copies of the filing were served upon Ingenco and the Virginia State Corporation Commission.
Take notice that on April 3, 2002, Troy Energy, LLC (the Company) tendered for filing the following Service Agreement by Troy Energy, LLC to Dominion Energy Marketing, Inc., designated as Service Agreement No 1 under the Company's Market-Based Rate Tariff, FERC Electric Tariff, Original Volume No. 1, effective on December 1, 2001. The Company requests an effective date of April 2, 2002, as requested by the customer.
Copies of the filing were served upon the Dominion Energy Marketing, Inc., the Virginia State Corporation Commission, and the North Carolina Utilities Commission.
Take notice that on April 3, 2002, Pleasants Energy, LLC (the Company) tendered for filing the following Service Agreement by Pleasants Energy, LLC to Dominion Energy Marketing, Inc., designated as Service Agreement No 2 under the Company's Market-Based Rate Tariff, FERC Electric Tariff, Original Volume No. 1, effective on December 1, 2001. The Company requests an effective date of March 20, 2002, as requested by the customer.
Copies of the filing were served upon the Dominion Energy Marketing, Inc., the Virginia State Corporation Commission, and the North Carolina Utilities Commission.
Take notice that on April 3, 2002, Western Resources, Inc. (WR) (d.b.a. Westar Energy) tendered for filing a Service Agreement between WR and the East Texas Electric Cooperative, Inc. (ETEC). WR states that the purpose of this agreement is to permit ETEC to take service under WR's Market Based Power Sales Tariff on file with the Federal Energy Regulatory Commission (Commission) Commission. This agreement is proposed to be effective April 12, 2002.
Copies of the filing were served upon ETEC and the Kansas Corporation Commission.
Take notice that on April 3, 2002, Duke Energy Oakland, LLC (DEO) tendered for filing a Third Revised Sheet No. 151 and First Revised Sheet No. 157 to DEO's FERC Electric Rate Schedule No. 2. DEO states that these sheets are filed to amend (1) the Variable O&M Rate reflected in Schedule C, Table C1-18, and (2) the mmBtu figure for Unit No. 1 in schedule D, Table D-1. DEO requests an effective date of January 1, 2002, for these revisions.
Copies of this filing were served upon the California ISO, General Counsel, 151 Blue Ravine Road, Folsom, California 95630, and the Public Utilities Commission of the State of California, Suite 3105, 505 Van Ness Avenue, San Francisco, California 94102.
Take notice that on April 3, 2002, PG&E Dispersed Generating Company, LLC (PG&E Dispersed Gen) tendered for filing a service agreement for power sales (Service Agreement) with its affiliate, RAMCO, INC. (RAMCO) pursuant to which PG&E Dispersed Gen will sell electric wholesale services to RAMCO at market-based rates according to its FERC Electric Tariff, Original Volume No. 1.
Take notice that on April 3, 2002, Virginia Electric and Power Company (Dominion Virginia Power) tendered for filing with the Federal Energy Regulatory Commission (Commission) an executed Generator Interconnection and Operating Agreement (Interconnection Agreement) with Industrial Power Generating Corporation (Ingenco). The Interconnection Agreement sets forth the terms and conditions governing the interconnection between Ingenco's generating facility and Dominion Virginia Power's transmission system.
Dominion Virginia Power requests that the Commission waive its notice of filing requirements and accept this filing to make the Interconnection Agreement effective on February 1, 2001. Copies of the filing were served upon Ingenco and the Virginia State Corporation Commission.
Take notice that on April 3, 2002, Carolina Power & Light Company (CP&L) tendered for filing Service Agreements for Non-Firm and Short-Term Firm Point-to-Point Transmission Service with Progress Ventures, Inc. Service to this Eligible Customer will be in accordance with the terms and conditions of the Open Access Transmission Tariff filed on behalf of CP&L.
CP&L is requesting an effective date of March 7, 2002 for these Service Agreements. A copy of the filing was served upon the North Carolina Utilities Commission and the South Carolina Public Service Commission.
Take notice that on April 3, 2002, New England Power Company (NEP) submitted for filing First Revised Service Agreement No. 178 for service under NEP's Open Access Transmission Tariff, FERC Electric Tariff, Second Revised Volume No. 9 between NEP and Middleborough Municipal Gas & Electric Department (Middleborough).
NEP states that a copy of this filing has been served upon Middleborough and all appropriate state regulators.
Take notice that on April 3, 2002, Florida Power Corporation (FPC) filed a Service Agreement with Old Dominion Electric Cooperative under FPC's Short-Form Market-Based Wholesale Power Sales Tariff (SM-1), FERC Electric Tariff No. 10.
FPC is requesting an effective date of March 10, 2002, for this Agreement. A copy of this filing was served upon the Florida Public Service Commission and the North Carolina Utilities Commission.
Take notice that on April 4, 2002, Public Service Electric and Gas Company (PSE&G) submitted for filing an executed Interconnection and Operating Agreement, dated April 3, 2002, between Public Service Electric and Gas Company and PSE&G Fossil LLC.
PSE&G requests an effective date of April 1, 2002. Copies of PSE&G's filing have been served upon the New Jersey Board of Public Utilities.
Take notice that on April 4, 2002, Power Contract Finance, L.L.C. (PCF), filed with the Federal Energy Regulatory Commission an application for approval of its initial tariff (FERC Electric Tariff Original Volume No. 1), and for blanket approval for market-based rates pursuant to Part 35 of the Commission's regulations.
PCF is a limited liability company formed under the laws of Delaware. PCF does not own any generating facilities.
Take notice that on April 4, 2002, Cogen Technologies NJ Venture (Cogen Technologies), filed with the Federal Energy Regulatory Commission an application for approval of its initial tariff (FERC Electric Tariff Original Volume No. 1), and for blanket approval for market-based rates pursuant to Part 35 of the Commission's regulations.
Cogen Technologies is a joint venture formed under the laws of New Jersey. NJ Venture owns and operates a 177-MW cogeneration facility located in Bayonne, New Jersey.
Take notice that on April 4, 2002, Midwest Independent Transmission System Operator, Inc. (Midwest ISO) pursuant to section 205 of the Federal Power Act and section 35.13 of the Federal Energy Regulatory Commission's (Commission) regulations, 18 CFR 35.13 submitted for filing Service Agreements for the transmission service requested by Powerex Corp.
A copy of this filing was sent to Powerex Corp.
Take notice that on April 4, 2002, STI Capital Company tendered for filing with the Federal Energy Regulatory Commission (Commission) the long-term service agreement between SIT Capital Company and Fenton LLC and Bowles LLC.
Take notice that on April 4, 2002, Perryville Energy Partners, L.L.C. tendered for filing with the Federal Energy Regulatory Commission (Commission), a First Revised Tolling Agreement between Perryville Energy Partners, L.L.C. and Mirant Americas Energy Marketing, L.P. The filing is made pursuant to Perryville Energy Partners, L.L.C.”s authority to sell power at market-based rates under its Market-Based Rates Tariff, FERC Electric Tariff Original Volume No. 1, approved by the Commission May 3, 2001 in Docket No. ERO1-1397-000.
Take notice that on April 4, 2002, Kentucky Utilities Company (KU) tendered for filing executed amendments for 21 contracts with full requirements municipal customers of KU. The amendment provides for a modification of the Method of Reimbursement language for contracts where the municipal utilities are allocated power from the Southeastern Power Administration (SEPA). The amendment adds language that provides for third party participation in the procurement and distribution of SEPA power allocated to the municipal utilities and the resulting billing credits that the municipal utilities will receive. The amendment also specifically requires the municipal utilities to bear all the risk of non-payment by the third party.
Take notice that on April 4, 2002, Louisville Gas and Electric/Kentucky Utilities Company (LG&E/KU) filed a termination notice for power sales service between LG&E/KU and FirstEnergy Solutions Corp. The terminated services agreement was accepted by the FERC in Docket No. ER98-1274.
Take notice that on April 3, 2002, Kansas Gas and Electric Company submitted an amendment to its original application in this proceeding, pursuant to section 204 of the Federal Power Act. The amendment seeks authorization to pledge first mortgage bonds to secure an aggregate of $500 million worth of short-term debt securities, rather than $1.0 billion, issued by Western Resources.
Take notice that on April 3, 2002, Kansas Gas and Electric Company (KG&E) submitted an amendment to its original application in this proceeding, pursuant to section 204 of the Federal Power Act. The amendment seeks authorization to eliminate the request for medium-term securities and to clarify that the authorization requested to pledge first mortgage bonds would apply only to KG&E's short-term securities. KG&E states the proposed short-term debt securities would maintain and/or replace the existing revolving credit facility of Western Resources in the aggregate principal amount of $500 million.
Take notice that on April 3, 2002, Western Resource, Inc. submitted an amendment to its original application in this proceeding, pursuant to section 204 of the Federal Power Act. The amendment seeks authorization to eliminate the request for medium-term securities and to clarify that the authorization requested to pledge first mortgage bonds would apply only to Western Resources, Inc.”s short-term securities. Western Resources, Inc. states the proposed short-term debt securities would maintain and/or replace its existing revolving credit facility in the aggregate principal amount of $500 million.
Take notice that on April 4, 2002, Vineland Cogeneration Limited Partnership, 536 West Elmer Road, Vineland, NJ 08360, filed with the Federal Energy Regulatory Commission (Commission) an application for recertification of a facility as a qualifying cogeneration facility pursuant to section 292.207(b) of the Commission's regulations.
The Commission previously certified the facility as a qualifying cogeneration facility in Docket No. QF90-176-001. Recertification is sought to reflect a change in the upstream ownership interests in the facility. The facility is interconnected with and supplies electric power to the Vineland Municipal Electric Utility.
E.Any person desiring to be heard or to protest such filing should file a
In accordance with the National Environmental Policy Act of 1969 and the Federal Energy Regulatory Commission's (Commission) regulations, 18 CFR Part 380 (Order No. 486, 52 FR 47910), the Office of Energy Projects has reviewed Public Utility District No. 1 of Chelan County's application for license amendment to construct and operate a permanent juvenile fish bypass system at the Rocky Reach Hydroelectric Project, located on the Columbia River in Chelan and Douglas Counties, Washington, and has prepared an Environmental Assessment (EA). The project occupies lands managed by the Bureau of Land Management and the U.S. Forest Service.
The EA contains the staff's analysis of the potential environmental impacts of the proposed amendment and concludes that approval of the proposed amendment with staff's modifications would not constitute a major federal action that would significantly affect the quality of the human environment.
The EA is attached to a Commission order issued on April 10, 2002, for the above application. Copies of the EA are available for review at the Commission's Public Reference Room, located at 888 First Street, NE., Washington, DC 20426, or by calling (202) 208-1371. The EA may be viewed on the web at http://www.ferc.gov/online/rims.htm (call (202) 208-2222 for assistance).
For further information, contact Bob Easton at (202) 219-2782.
The staff of the Federal Energy Regulatory Commission (FERC or Commission) will prepare an environmental assessment (EA) that will discuss the environmental impacts of the Maritimes Phase IV Project involving construction and operation of facilities by Maritimes & Northeast Pipeline, L.L.C. (Maritimes) in Washington, Penobscot, York, Cumberland, Waldo, and Sagadahoc Counties, Maine and Essex and Middlesex Counties, Massachusetts.
If you are a landowner receiving this notice, you may be contacted by a pipeline company representative about the acquisition of an easement to construct, operate, and maintain the proposed facilities. The pipeline company would seek to negotiate a mutually acceptable agreement. However, if the project is approved by the Commission, that approval conveys with it the right of eminent domain. Therefore, if easement negotiations fail to produce an agreement, the pipeline company could initiate condemnation proceedings in accordance with state law.
A fact sheet prepared by the FERC entitled “An Interstate Natural Gas Facility On My Land? What Do I Need To Know?” was attached to the project notice Maritimes provided to landowners. This fact sheet addresses a number of typically asked questions, including the use of eminent domain and how to participate in the Commission's proceedings. It is available for viewing on the FERC Internet website (www.ferc.gov).
Maritimes wants to expand the capacity of its facilities in Maine and Massachusetts to transport an additional 385,000 dekatherms per day of natural gas to provide additional service for the Northeastern United States. Maritimes seeks authority to construct and operate:
• 30.1 miles of 36-inch-diameter pipeline loop in Washington County, Maine;
• 26,800 hp of gas turbine-driven compression at the new Brewer Compressor Station in Penobscot County, Maine;
• 26,800 hp of gas turbine-driven compression at the new Searsmont Compressor Station in Waldo County, Maine;
• 26,800 hp of gas turbine-driven compression at the new Gorham Compressor Station in Cumberland County, Maine;
• 26,800 hp of gas turbine-driven compression at the new Eliot Compressor Station in York County, Maine;
• Modification and repiping of the existing Baileyville Compressor Station in Washington County, Maine;
• Modification and repiping of the existing Richmond Compressor Station in Sagadahoc County, Maine;
• A new KeySpan-Haverhill Meter Station in Essex County, Massachusetts;
• Modification of the existing Dracut Meter Station in Essex County, Massachusetts;
• Modification of the existing Westbrook Meter Station in Cumberland County, Maine; and
• Two new block valves in Washington County, Maine.
The location of the project facilities is shown in appendix 1.
Construction of the proposed pipeline would require about 377.5 acres of land. Following construction, about 94.8 acres would be maintained as permanent right-of-way. In addition, construction of the compressor and meter stations would require about 59.9 acres of land. Following construction, about 39.4 acres would be maintained for the stations, the remaining 20.5 acres of land would be restored.
The National Environmental Policy Act (NEPA) requires the Commission to take into account the environmental impacts that could result from an action whenever it considers the issuance of a Certificate of Public Convenience and Necessity. NEPA also requires us
The EA will discuss impacts that could occur as a result of the construction and operation of the proposed project under these general headings:
• Geology and soils
• Vegetation and wildlife
• Land use
• Cultural resources
• Water resources and fisheries
• Wetlands
• Public safety
• Endangered and threatened species
• Air quality and noise
We will also evaluate possible alternatives to the proposed project or portions of the project, and make recommendations on how to lessen or avoid impacts on the various resource areas.
Our independent analysis of the issues will be in the EA. Depending on the comments received during the scoping process, the EA may be published and mailed to Federal, state, and local agencies, public interest groups, interested individuals, affected landowners, newspapers, libraries, and the Commission's official service list for this proceeding. A comment period will be allotted for review if the EA is published. We will consider all comments on the EA before we make our recommendations to the Commission.
To ensure your comments are considered, please carefully follow the instructions in the public participation section below.
We have already identified several issues that we think deserve attention based on a preliminary review of the proposed facilities and the environmental information provided by Maritimes. This preliminary list of issues may be changed based on your comments and our analysis.
• The potential impacts of noise and air emissions from the four new compressor stations.
• The federally listed endangered Atlantic Salmon may be present in 17 perennial streams that would be crossed.
You can make a difference by providing us with your specific comments or concerns about the project. By becoming a commentor, your concerns will be addressed in the EA and considered by the Commission. You should focus on the potential environmental effects of the proposal, alternatives to the proposal (including alternative locations/routes), and measures to avoid or lessen environmental impact. The more specific your comments, the more useful they will be. Please carefully follow these instructions to ensure that your comments are received in time and properly recorded:
• Send an original and two copies of your letter to: Magalie R. Salas, Secretary, Federal Energy Regulatory Commission, 888 First St., N.E., Room 1A, Washington, DC 20426.
• Label one copy of the comments for the attention of Gas 2.
• Reference Docket No. CP02-78-000.
• Mail your comments so that they will be received in Washington, DC on or before May 13, 2002.
Please note that we are continuing to experience delays in mail deliveries from the U.S. Postal Service. As a result, we will include all comments that we receive within a reasonable time frame in our environmental analysis of this project. However, the Commission encourages electronic filing of any comments or interventions or protests to this proceeding. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's web site at
We may mail the EA for comment. If you are interested in receiving it, please return the Information Request (appendix 3). If you do not return the Information Request, you will be taken off the mailing list.
In addition to involvement in the EA scoping process, you may want to become an official party to the proceeding known as an “intervenor”. Intervenors play a more formal role in the process. Among other things, intervenors have the right to receive copies of case-related Commission documents and filings by other intervenors. Likewise, each intervenor must provide 14 copies of its filings to the Secretary of the Commission and must send a copy of its filings to all other parties on the Commission's service list for this proceeding. If you want to become an intervenor you must file a motion to intervene according to Rule 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.214) (see appendix 2).
Affected landowners and parties with environmental concerns may be granted intervenor status upon showing good cause by stating that they have a clear and direct interest in this proceeding which would not be adequately represented by any other parties. You do not need intervenor status to have your environmental comments considered.
This notice is being sent to individuals, organizations, and
Additional information about the proposed project is available from the Commission's Office of External Affairs at (202) 208-1088 or you can call the FERC operator at 1-800-847-8885 and ask for External Affairs. Information is also available on the FERC website (www.ferc.gov) using the “RIMS” link to information in this docket number. Click on the “RIMS” link, select “Docket #” from the RIMS Menu, and follow the instructions. For assistance with access to RIMS, the RIMS helpline can be reached at (202) 208-2222.
Similarly, the “CIPS” link on the FERC Internet website provides access to the texts of formal documents issued by the Commission, such as orders, notices, and rulemakings. From the FERC Internet website, click on the “CIPS” link, select “Docket #” from the CIPS menu, and follow the instructions. For assistance with access to CIPS, the CIPS helpline can be reached at (202) 208-2222.
The staff of the Federal Energy Regulatory Commission (FERC or Commission) will prepare an environmental assessment (EA) that will discuss the environmental impacts of the South Texas Expansion Project involving construction and operation of facilities by Tennessee Gas Pipeline Company (Tennessee) in Hidalgo, Victoria, and Nueces Counties, Texas.
If you are a landowner receiving this notice, you may be contacted by a pipeline company representative about the acquisition of an easement to construct, operate, and maintain the proposed facilities. The pipeline company would seek to negotiate a mutually acceptable agreement. However, if the project is approved by the Commission, that approval conveys with it the right of eminent domain. Therefore, if easement negotiations fail to produce an agreement, the pipeline company could initiate condemnation proceedings in accordance with state law.
A fact sheet prepared by the FERC entitled “An Interstate Natural Gas Facility On My Land? What Do I Need To Know?” was attached to the project notice Tennessee provided to landowners. This fact sheet addresses a number of typically asked questions, including the use of eminent domain and how to participate in the Commission's proceedings. It is available for viewing on the FERC Internet website (www.ferc.gov).
Tennessee wants to expand the capacity of its facilities in Texas to transport 320,000 Decatherms per day of natural gas to a delivery point located at the International Boundary between the United States in Hidalgo County, Texas and Mexico in the State of Tamaulipas (International Boundary). Tennessee seeks Section 7”) authority to construct and operate:
• 9.28 miles of 30-inch-diameter lateral (Rio Bravo Lateral) in Hidalgo County, Texas, which would commence from milepost 9.02 on Tennessee's existing Pipeline No. 409A-100 (Donna Line) to an interconnection at the International Boundary;
• 7.58 miles of 24-inch-diameter loop of Tennessee's Donna Line in Hidalgo County, Texas;
• A new compressor station consisting of two gas-fired reciprocating compressors rated at 4,735 hp each and located near the town of Edinburg in Hidalgo County, Texas (Edinburg Compressor Station);
• A new meter station near the interconnection of the Rio Bravo Lateral and Tennessee's border crossing facility at the International Boundary; and
• Modifications of Tennessee's existing Compressor Station 1 located in Nueces County, Texas, and existing Compressor Station 9 located in Victoria County, Texas.
In addition, Tennessee requests Section 3 authorization and a Presidential Permit to site, construct, and operate a border crossing facility at the terminus of the Rio Bravo Lateral for the importation and exportation of natural gas at the International Boundary. Tennessee's border crossing facility would consist of a 1,800-foot-long segment of 30-inch-diameter pipeline which would interconnect with a proposed pipeline in Mexico to be constructed by Gasoducto del Rio, a wholly owned Mexican subsidiary of EDF International. Tennessee's proposed project and the Gasoducto del Rio pipeline would provide natural gas service to a developing power generation complex (Rio Bravo Market) comprised of four new electric power plants located in Northern Mexico.
The general location of the South Texas Expansion Project facilities is shown in appendix 1.
Construction of the proposed facilities would require about 276.5 acres of land. Following construction, about 118.9 acres would be maintained as permanent right-of-way, including 9.5 acres for new aboveground facility sites. The remaining 157.6 acres of temporary workspace would be restored and allowed to revert to its former use.
The National Environmental Policy Act (NEPA) requires the Commission to take into account the environmental impacts that could result from an action whenever it considers the issuance of a Certificate of Public Convenience and Necessity. NEPA also requires us
The EA will discuss impacts that could occur as a result of the construction and operation of the proposed project under these general headings:
• Geology and soils
• Water resources, fisheries, and wetlands
• Vegetation and wildlife
• Endangered and threatened species
• Land use
• Cultural resources
• Air quality and noise
• Public safety
We will also evaluate possible alternatives to the proposed project or portions of the project, and make recommendations on how to lessen or avoid impacts on the various resource areas.
Our independent analysis of the issues will be in the EA. Depending on the comments received during the scoping process, the EA may be published and mailed to Federal, state, and local agencies, public interest groups, interested individuals, affected landowners, newspapers, libraries, and the Commission's official service list for this proceeding. A comment period will be allotted for review if the EA is published. We will consider all comments on the EA before we make our recommendations to the Commission.
To ensure your comments are considered, please carefully follow the instructions in the public participation section beginning on page 5.
We have already identified several issues that we think deserve attention based on a preliminary review of the proposed facilities and the environmental information provided by Tennessee. This preliminary list of issues may be changed based on your comments and our analysis.
• Six single-family residences are within 50 feet of the proposed pipeline construction corridors.
• A directionally drilled crossing of the Rio Grande River.
• The Edinburg Compressor Station would effect the local air quality and noise environment.
Also, we have made a preliminary decision to not address the impacts of the nonjurisdictional facilities. We will briefly describe their location and status in the EA.
You can make a difference by providing us with your specific comments or concerns about the project. By becoming a commentor, your concerns will be addressed in the EA and considered by the Commission. You should focus on the potential environmental effects of the proposal, alternatives to the proposal (including alternative locations/routes), and measures to avoid or lessen environmental impact. The more specific your comments, the more useful they will be. Please carefully follow these instructions to ensure that your comments are received in time and properly recorded:
• Send an original and two copies of your letter to: Magalie R. Salas, Secretary, Federal Energy Regulatory Commission, 888 First St., NE., Room 1A, Washington, DC 20426.
• Label one copy of the comments for the attention of Gas 1, PJ-11.1.
• Reference Docket Nos. CP02-116-000 and CP02-117-000.
• Mail your comments so that they will be received in Washington, DC on or before May 13, 2002.
Please note that we are continuing to experience delays in mail deliveries from the U.S. Postal Service. As a result, we will include all comments that we receive within a reasonable time frame in our environmental analysis of this project. However, the Commission encourages electronic filing of any comments or interventions or protests to this proceeding. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's web site at
We may mail the EA for comment. If you are interested in receiving it, please return the Information Request (appendix 4). If you do not return the Information Request, you will be taken off the mailing list.
On April 22, 2002, the staff of the OEP will conduct a site inspection of the proposed South Texas Expansion Project facilities in Hidalgo County, Texas. Anyone interested in attending the site inspection should contact the Commission's Office of External Affairs at (202) 208-1088 for more details and must provide their own transportation.
In addition to involvement in the EA scoping process, you may want to become an official party to the proceeding known as an “intervenor”. Intervenors play a more formal role in the process. Among other things, intervenors have the right to receive copies of case-related Commission documents and filings by other intervenors. Likewise, each intervenor must provide 14 copies of its filings to the Secretary of the Commission and must send a copy of its filings to all other parties on the Commission's service list for this proceeding. If you want to become an intervenor you must file a motion to intervene according to Rule 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.214) (see appendix 2).
Affected landowners and parties with environmental concerns may be granted intervenor status upon showing good cause by stating that they have a clear and direct interest in this proceeding which would not be adequately represented by any other parties. You do not need intervenor status to have your environmental comments considered.
This notice is being sent to individuals, organizations, and government entities interested in and/or potentially affected by the proposed project. It is also being sent to all identified potential right-of-way grantors. By this notice we are also asking governmental agencies, especially those in appendix 3, to express their interest in becoming cooperating agencies for the preparation of the EA.
Additional information about the proposed project is available from the Commission's Office of External Affairs at (202) 208-1088 (direct line) or you can call the FERC operator at 1-800-847-8885 and ask for External Affairs. Information is also available on the FERC website (www.ferc.gov) using the “RIMS” link to information in this docket number. Click on the “RIMS” link, select “Docket #” from the RIMS Menu, and follow the instructions. For assistance with access to RIMS, the RIMS helpline can be reached at (202) 208-2222.
Similarly, the “CIPS” link on the FERC Internet website provides access to the texts of formal documents issued by the Commission, such as orders, notices, and rulemakings. From the FERC Internet website, click on the “CIPS” link, select “Docket #” from the CIPS menu, and follow the instructions. For assistance with access to CIPS, the CIPS helpline can be reached at (202) 208-2222.
Take notice that the following notice of intent has been filed with the Commission and is available for public inspection:
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h. Pursuant to section 16.19 of the Commission's regulations, the licensee is required to make available the information described in section 16.7 of the regulations. Such information is available from the Alaska Power & Telephone Company at 110 Spring Street, Skagway, Alaska.
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l. The licensee states its unequivocal intent to submit an application for a new license for Project No. 1051. Pursuant to 18 CFR 16.9(b)(1), each application for a new license and any competing license applications must be filed with the Commission at least 24 months prior to the expiration of the existing license. All applications for license for this project must be filed by August 29, 2005.
A copy of the notice of intent is available for inspection and reproduction at the Commission's Public Reference Room, located at 888 First Street, NE., Room 2A, Washington, DC 20426, or by calling (202) 208-1371. The notice may be viewed on
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection.
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All documents (original and eight copies) should be filed with: Magalie R. Salas Secretary, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426.
The Commission's rules of practice require all intervenors filing documents with the Commission to serve a copy of that document on each person on the official service list for the project. Further, if an intervenor files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency.
Comments, recommendations, terms and conditions, and prescriptions may be filed electronically via the Internet in lieu of paper. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's web site (
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o. The Commission directs, pursuant to Section 4.34(b) of the Regulations (see Order No. 533 issued May 8, 1991, 56 FR 23108, May 20, 1991) that all comments, recommendations, terms and
Anyone may obtain an extension of time for these deadlines from the Commission only upon a showing of good cause or extraordinary circumstances in accordance with 18 CFR 385.2008.
All filings must (1) bear in all capital letters the title “COMMENTS”, “REPLY COMMENTS”, “RECOMMENDATIONS,” “TERMS AND CONDITIONS,” or “PRESCRIPTIONS;” (2) set forth in the heading the name of the applicant and the project number of the application to which the filing responds; (3) furnish the name, address, and telephone number of the person submitting the filing; and (4) otherwise comply with the requirements of 18 CFR 385.2001 through 385.2005. All comments, recommendations, terms and conditions or prescriptions must set forth their evidentiary basis and otherwise comply with the requirements of 18 CFR 4.34(b). Agencies may obtain copies of the application directly from the applicant. Each filing must be accompanied by proof of service on all persons listed on the service list prepared by the Commission in this proceeding, in accordance with 18 CFR 4.34(b), and 385.2010.
Environmental Protection Agency (EPA).
Notice of meeting.
Pursuant to the Federal Advisory Committee Act (Public Law 92-463), the U.S. Environmental Protection Agency (EPA) gives notice of a meeting of the National Advisory Committee (NAC) and Governmental Advisory Committee (GAC) to the U.S. Representative to the North American Commission for Environmental Cooperation (CEC).
The National and Governmental Advisory Committees advise the Administrator of the EPA in her capacity as the U.S. Representative to the Council of the North American Commission for Environmental Cooperation. The Committees are authorized under Article 17 and 18 of the North American Agreement on Environmental Cooperation (NAAEC), North American Free Trade Agreement Implementation Act, Public Law 103-182 and as directed by Executive Order 12915, entitled “Federal Implementation of the North American Agreement on Environmental Cooperation.” The Committees are responsible for providing to the U.S. Representative on a wide range of strategic, scientific, technological, regulatory and economic issues related to implementation and further elaboration of the NAAEC. The National Advisory Committee consists of 12 representatives of environmental groups and non-governmental organizations, business and industry, and educational institutions. The Governmental Advisory Committee consists of 12 representatives from state, local and tribal governments.
The Committees are meeting to discuss issues that the U.S. Government should consider as it prepares for the annual North American Commission for Environmental Cooperation Council of Ministers Session.
The Committees will meet on Thursday, May 2, 2002 from 8:30 a.m. to 5 p.m., and on Friday, May 3, 2002 from 8:30 a.m. to 3 p.m.
The meeting will be held at the Marriott at Metro Center, 775 12th Street, NW., Washington, DC. The meeting is open to the public, with limited seating on a first-come, first-served basis.
Mr. Mark Joyce, Designated Federal Officer, U.S. EPA, Office of Cooperative Environmental Management, at (202) 564-9802.
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-1080, must be received on or before May 17, 2002.
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
Shaja R. Brothers, Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number: (703) 308-3194; e-mail address: brothers.shaja@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
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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-1080 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 listed under
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 Cosmetic Act (FFDCA), 21 U.S.C. 346a. EPA has determined that these petitions contain 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.
Petitioner summaries of the pesticide petitions are printed below as required by section 408(d)(3) of the FFDCA. The summaries of the petitions were prepared by the petitioners and represent the views of the petitioners. EPA is publishing the petition summaries verbatim without editing them 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 pesticide petitions (1E6351, 2E6394, and 2E6396) from the Interregional Research Project Number 4 (IR #4), 681 U.S. Highway #1 South,
EPA has also received pesticide petitions (5F4440 and 5F4572) from the Valent U.S.A. Corporation, 1333 North California Boulevard, Suite 600, Walnut Creek, CA 94596-8025 proposing, pursuant to section 408(d) of the FFDCA, 21 U.S.C. 346a(d), to amend 40 CFR 180.458 by replacing existing time-limited tolerances, for residues of clethodim in or on the following RACs with permanent tolerances: Alfalfa forage at 6.0 ppm, alfalfa hay at 10.0 ppm, dry bean at 2.0 ppm, peanut hay at 3.0 ppm, peanut meal at 5.0 ppm, peanut at 3.0 ppm, tomato paste at 3.0 ppm, and tomato puree at 2.0 ppm.
EPA has determined that the petitions contain 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 support granting of the petitions. Additional data may be needed before EPA rules on the petitions.
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The developmental toxicity study conducted with clethodim technical in the rat resulted in a developmental and maternal NOAEL and lowest observed adverse effect level (LOAEL) of 100 and 350 (mg/kg/day), respectively. The NOAEL and LOAEL for developmental toxicity were based on reductions in fetal body weight and increases in skeletal anomalies.
The developmental toxicity study conducted with clethodim technical in the rabbit resulted in a maternal toxicity NOAEL and LOAEL of 25 and 100 mg/kg/day, respectively. Maternal toxicity was manifested as clinical signs of toxicity and reduced weight gain and food consumption during treatment. Developmental toxicity was not observed, and therefore the developmental toxicity NOAEL was 300 mg/kg/day, highest dose tested (HDT). The 2-generation reproduction study conducted with clethodim technical in the rat resulted in parental toxicity NOAEL and LOAEL of 500 ppm and 2,500 ppm, respectively, based on reductions in body weight in males, and decreased food consumption in both generations. The NOAEL for reproductive toxicity was 2,500 ppm, the HDT.
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Chronic NOAELs were 200 ppm for an 18-month feeding study in mice and 500 ppm for a 24-month study in rats. EPA has established a chronic population adjusted dose (cPAD) for clethodim of 0.01 mg/kg bwt/day, based on the NOAEL in the 1-year oral dog study and an uncertainty factor (UF) of 100. Effects observed at the LOAEL include alterations in hematology and
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In consideration of potential cumulative effects of clethodim and other substances that may have a common mechanism of toxicity, there are currently no available data or other reliable information indicating that any toxic effects produced by clethodim would be cumulative with those of other chemical compounds. Thus, only the potential risks of clethodim have been considered in this assessment of aggregate exposure and effects. Valent USA Corporation will submit information for EPA to consider concerning potential cumulative effects of clethodim consistent with the schedule established by EPA on August 4, 1997 (62 FR 42020) (FRL-5734-6), and other subsequent EPA publications pursuant to the Food Quality Protection Act (FQPA).
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Using the conservative exposure assumptions described above (anticipated residues and percent of crop treated), the percentage of the cPAD that will be utilized by dietary (food only) exposure to residues of clethodim was 22.7% for 2-year old
Codex, Canadian, or Mexican maximum residue levels (MRLs) have been established or proposed for residues of clethodim in/on sugar beets (0.1 ppm), potatoes (0.2 ppm), rape seed (0.5 ppm), rape seed oils (0.5 ppm), sunflower seed (0.5 ppm), and sunflower seed oils (0.05 ppm). There are no conflicts between this proposed action and existing international residue limits.
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-1079, must be received on or before May 17, 2002.
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
James A. Tompkins, Registration Division (7505C), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number: (703) 305-5697; e-mail address: tompkins.jim@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
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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-1079 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 listed under
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 Cosmetic Act (FFDCA), 21 U.S.C. 346a. EPA has determined that these petitions contain 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's summaries of the pesticide petitions are printed below as required by section 408(d)(3) of the FFDCA. The summaries of the petitions were prepared by the petitioner and represent the views of the petitioner. EPA is publishing the petition summaries verbatim without editing them 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 several pesticide petitions (PP 0F6130, PP 0F6195, PP 1F6273, PP 1F6274, PP 1F6295) from Monsanto Company, 600 13th Street, NW., Washington, DC 20005 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 several tolerances for residues of glyphosate (
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The qualitative nature of the residue in animals is adequately understood, and will not be affected by the proposed tolerance change. Glyphosate herbicides are not applied directly to livestock, so their only exposure is via plant residues in their diet. The terminal residue to be regulated in livestock is glyphosate
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In an
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In a prenatal developmental toxicity in rabbits the maternal NOAEL = 175 mg/kg/day, the maternal LOAEL = 350 mg/kg/day based on mortality, and clinical signs. The developmental NOAEL = 175 mg/kg/day and the developmental LOAEL = 350 mg/kg/day (insufficient litters available to assess development.
In a reproduction and fertility study with rats the parental/systemic NOAEL = 500 mg/kg/day for males and females, the parental/systemic LOAEL = 1,500 mg/kg/day for males and females based on clinical signs, decreased body weights, decreased weight gain, and decreased food consumption in both sexes. The reproductive/offspring NOAEL = 500 kg/day for males and females and the reproductive/offspring LOAEL = 1,500 mg/kg/day for males and females based on reduced pup weights in both sexes during second and third weeks of lactation.
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Risk assessments were conducted by EPA to assess dietary exposure from glyphosate in food as follows:
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The Agency lacks sufficient monitoring exposure data to complete a comprehensive dietary exposure analysis and risk assessment for glyphosate in drinking water. Because the Agency does not have comprehensive monitoring data, drinking water concentration estimates are made by reliance on simulation or modeling taking into account data on the physical characteristics of glyphosate.
The Agency uses the generic expected environmental concentration (GENEEC) or the pesticide root zone/exposure analysis modeling system (PRZM/EXAMS) to estimate pesticide concentrations in surface water and the screening concentration and ground water (SCI-GROW) model, which predicts pesticide concentrations in ground water. In general, EPA will use GENEEC (a Tier 1 model) before using PRZM/EXAMS (a Tier 2 model) for a screening-level assessment for surface water. The GENEEC model is a subset of the PRZM/EXAMS model that uses a specific high-end runoff scenario for pesticides. GENEEC incorporates a farm pond scenario, while PRZM/EXAMS incorporate an index reservoir environment in place of the previous pond scenario. The PRZM/EXAMS model includes a percent crop area factor as a possible adjustment to account for the maximum percent crop coverage within a watershed or drainage basin.
None of these models include consideration of the impact processing (mixing, dilution or treatment) of raw water for distribution as drinking water would likely have on the removal of pesticides from the source water. The primary use of these models by the Agency at this stage is to provide a coarse screen for sorting out pesticides for which it is highly unlikely that drinking water concentrations would ever exceed human health levels of concern.
Since the models used are considered to be screening tools in the risk assessment process, the Agency does not use estimated environmental concentrations (EECs) from these models to quantify drinking water exposure and risk as a %RfD or percent of population adjusted dose (%PAD). Instead, drinking water levels of comparison (DWLOCs) are calculated and used as a point of comparison against the model estimates of a pesticide's concentration in water. DWLOCs are theoretical upper limits on a pesticide's concentration in drinking water in light of total aggregate exposure to a pesticide in food, and from residential uses. Since DWLOCs address total aggregate exposure to glyphosate they are further discussed in the aggregate risk sections below.
Using available environmental fate parameters and assuming two applications with a retreatment interval of 90 days at a rate of 5 lbs. active ingredient/arce (3.75 lbs active ingredient/acre), the ground water EEC from glyphosate using SCI-GROW was 0.0038 parts per billion (ppb). The current label allows multiple applications of 0.37 - 5 lbs active ingredient/acre up to a maximum of 10.6 lbs active ingredient/acre/year. The ground water EECs generated by SCI-GROW are based on the largest 90-day average recorded during the sampling period. Since there is relatively little temporal variation in ground water concentrations compared to surface water, the concentrations can be considered as acute and chronic values.
The GENEEC model was used to estimate surface water concentrations for glyphosate resulting from its maximum use rate on crops. GENEEC is a single event model (one runoff event), but can account for spray drift from multiple applications. GENEEC represents a 10 hectare field immediately adjacent to a 1 hectare
To estimate the possible concentration of glyphosate in surface water resulting form direct application to water, EPA assumed application to a water body 6 feet deep. At an application rate of 3.75 lbs active ingredient/acre, the estimated peak concentration is 230 ppb. Using this peak value in a first-order dissipation model with a half-life for glyphosate in water of 7.5 days, the resulting 56-day average is 54.6 ppb. Following the EPA guidance, as described above, the 56-day average value divided by 3, or 15.4 ppb, is the predicted surface water EEC resulting from direct application to water. Because the glyphosate water-application estimate is greater than the crop-application estimate, 15.4 ppb is the appropriate chronic value to compare to the calculated DWLOC chronic value for aggregate risk considerations.
Based on the GENEEC and SCI-GROW models the EECs of glyphosate for chronic exposures are estimated to be 15.4 ppb for surface water and 0.004 ppb for ground water.
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i. Ornamentals, greenhouses, residential areas, lawns, and industrial rights of way.
ii. Glyphosate is formulated in liquid and solid forms and it is applied using ground or aerial equipment.
iii. Based on the low acute toxicity and the lack of other toxicological concerns, exposures from residential uses of glyphosate are not expected to pose undue risks.
Cumulative exposure to substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residue and “other substances that have a common mechanism of toxicity.”
EPA does not have, at this time, available data to determine whether glyphosate has a common mechanism of toxicity with other substances or how to include this pesticide in a cumulative risk assessment. Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, glyphosate does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has not assumed that glyphosate has a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see the final rule for bifenthrin pesticide tolerances (62 FR 62961)(FRL-5754-7),
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A DWLOC will vary depending on the toxic endpoint, drinking water consumption, and body weights. Default body weights and consumption values as used by EPA's Office of Water are used to calculate DWLOCs: 2L/70 kg (adult male), 2L/60 kg (adult female), and 1L/10 kg (child). Default body weights and drinking water consumption values vary on an individual basis. This variation will be taken into account in more refined screening-level and quantitative drinking water exposure assessments. Different populations will have different DWLOCs. Generally, a DWLOC is calculated for each type of risk assessment used: acute, short-term, intermediate-term, chronic, and cancer.
When EECs for surface water and ground water are less than the calculated DWLOCs, the Office of Pesticide Programs (OPP) concludes with reasonable certainty that exposures to the pesticide in drinking water (when considered along with other sources of exposure for which OPP has reliable data) would not result in unacceptable levels of aggregate human health risk at this time. Because OPP considers the aggregate risk resulting from multiple exposure pathways associated with a pesticide's uses, levels of comparison in drinking water may vary as those uses change. If new uses are added in the future, OPP will reassess the potential impacts of residues of the pesticide in drinking water as a part of the aggregate risk assessment process.
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• The toxicology data base is complete.
• There is no indication of increased susceptibility of rats or rabbits to
• The use of generally high quality data, conservative models and/or assumptions in the exposure assessment provide adequate protection of infants and children.
Several maximum residue limits (MRLs) for glyphosate have been established by CODEX in or on various commodities. These limits are based on the residue definition of glyphosate
Environmental Protection Agency (EPA).
Notice.
EPA is publishing as an appendix to this notice a guidance on the CERCLA section 101(10)(H) federally permitted release definition for certain air emissions.
Visit the OECA Docket Web Site at www.epa.gov/oeca/polguid/enfdock.html or contact the RCRA/UST, Superfund and EPCRA Hotline at (800) 424-9346 or (703) 412-9810 in Washington, DC area. For general questions about this guidance, please contact Lynn Beasley at (703) 603-9086 and for enforcement related questions, please contact Ginny Phillips at (202) 564-6139 or mail your questions to: U.S. EPA, 1200 Pennsylvania Ave., NW., Washington DC 20460, attention Lynn Beasley, mail code 5204G.
Today's guidance discusses the federally permitted release definition, which is an exemption to the reporting requirements under two federal emergency response and public right to know laws: section 103 of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), as amended, 42 U.S.C. 9603 and section 304 of the Emergency Planning and Community Right-to-Know Act (“EPCRA”), 42 U.S.C. 11004. Federally permitted releases are defined in CERCLA section 101(10), which specifically identifies certain releases that are permitted or controlled under several environmental statutes and exempts these releases from the notification requirements of CERCLA section 103 and EPCRA section 304. CERCLA section 101(10)(H) identifies releases that are exempt from reporting because they are subject to permits and regulations under the Clean Air Act (“CAA”).
This guidance reflects our consideration of the general concerns raised by previous
This guidance does not impose new reporting requirements or change the types of releases which are required to be reported under CERCLA section 103 and EPCRA section 304 or the implementing regulations at 40 CFR parts 302 and 355. The legal authority for the reporting requirements arises from those statutory and regulatory provisions, as well as the statutory provisions on federally permitted releases, not from this guidance. This guidance has no effect on CAA permit requirements.
The CAA provides EPA and states the authority to impose a wide variety of permits, regulatory limits and control requirements on emission sources. Whether a particular air release of a hazardous substance or extremely hazardous substance is exempt from CERCLA section 103 and EPCRA section 304 reporting requirements requires a case-by-case determination based on the specific permit language or applicable control requirement. As a consequence, it is difficult to establish a “bright line” for when releases qualify for the
The public has had several opportunities to comment on our interpretation of the CERCLA definition of federally permitted release. We originally requested comments on this issue in 1983, when we proposed regulations for CERCLA notification requirements and reportable quantity adjustments. See 48 FR 23552 (May 25, 1983). Subsequently, in a 1988 proposed rule, we addressed some comments on federally permitted releases, explained our understanding of the term in certain circumstances and requested additional comments. See 53 FR 27268 (July 19, 1988). In 1989, we published a Supplemental Notice of Proposed Rulemaking and requested further comment on our interpretation of federally permitted releases. See 54 FR 20305 (July 11, 1989). On December 21, 1999, we published in the
This guidance supercedes the Interim Guidance, which is now deemed to be withdrawn. It also differs from the Interim Guidance in several aspects. First, this guidance clarifies the discussion of volatile organic compounds (“VOC”) and particulate matter (“PM”) limits and controls and when releases of hazardous substances which are constituents of these criteria pollutants could qualify for the CERCLA federally permitted release exemption. Second, the Guidance adds a section addressing air emissions of nitrogen oxide (“NO”) and nitrogen dioxide (“NO
The changes from the Interim Guidance are based on the information we received from comments on the Interim Guidance. For example, commentors provided us with examples of permits that have VOC and/or PM control requirements that may also effectively limit or control the emissions of hazardous substances. Therefore, in response to this information, we clarified and expanded our discussion of when a release of a hazardous constituent of VOC or PM could be considered a federally permitted release.
Although releases of NO and NO
We also received a significant number of comments concerned with the possible impacts of the Interim Guidance on the notification requirements for releases from CAA minor sources. Commentors have provided us with useful information on the number of minor sources they feel are potentially impacted by this guidance, the treatment of minor sources under federal and state air regulatory programs and why they feel that releases from minor sources meet the definition of federally permitted release under CERCLA. Most commentors believe that emissions from minor sources meet the CERCLA federally permitted release definition. We agree with one group of commentors which has pointed out that in some situations emissions that are in compliance with a federally enforceable threshold limit meet the definition of federally permitted releases. The specific situations are discussed in section V of the guidance.
Finally, we have reformatted this guidance to more clearly respond to the questions raised by commentors, and to make the document easier to read in accordance with President Clinton's June 1, 1998, Executive Memorandum on Plain Language in Government Writing. The word “we” in this guidance means EPA. The word “you” in this guidance means the reader and, depending on context, may mean state, local or tribal government agencies, industry, environmental groups or other stakeholders.
The Office of Solid Waste and Emergency Response and the Office of Enforcement and Compliance Assurance jointly issue this guidance.
The Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. 9601
Any person in charge of a vessel or an offshore or an onshore facility shall, as soon as he has knowledge of any release (other than a federally permitted release) of a hazardous substance from such vessel or facility in quantities equal to or greater than those determined pursuant to section 9602 of this title, immediately notify the National Response Center * * *
The Emergency Planning and Community Right-to-Know Act (“EPCRA”), 42 U.S.C. 11001
CERCLA section 101(14) defines the term “hazardous substance” by reference to provisions in other environmental statutes that identify substances as hazardous and to CERCLA section 102, which authorizes the EPA Administrator to designate additional hazardous substances when their release may present substantial danger to the public health or welfare or the environment. Pursuant to CERCLA section 102, the Administrator sets the quantities for hazardous substances known as reportable quantities (“RQ”) that, when released, require reporting. If the Administrator has not established an RQ, section 102(b) provides for a default RQ. A table at 40 CFR 302.4 lists the CERCLA hazardous substances with their RQs, and tables at 40 CFR part 355, appendices A & B list the EPCRA EHSs with their RQs.
Immediate notification provides emergency planning authorities with the information they need to respond to the release as quickly as possible in order to minimize the danger to human health and the environment, including dangers to children, other sensitive populations and sensitive ecosystems. The release reports also alert emergency planning personnel to the potential for future risks so that local communities can work with facilities to minimize those risks. Emergency planning authorities can also use the release reports to assess emergency planning needs, to identify and develop appropriate responses to acute as well as chronic exposure and to assess cumulative effects of chemical exposures from many different sources in local areas. EPCRA gives members of the public, including local communities and individuals, the right to know the types and amounts of releases of certain chemicals in their communities.
Congress exempted “federally permitted releases” as defined in CERCLA section 101(10) from the notification requirements in CERCLA section 103 and EPCRA section 304. The definition of federally permitted release in CERCLA section 101(10) specifically identifies releases that are regulated under other environmental programs, such as the National Pollutant Discharge Elimination System of the Clean Water Act; Resource Conservation and Recovery Act; and the Underground Injection Control program of the Safe Drinking Water Act, among others. Our guidance document only addresses certain air releases when the source of the release is regulated under the Clean Air Act (“CAA”). CERCLA section 101(10)(H) defines federally permitted releases under the CAA as:
This guidance document discusses the most common questions we have received from the public on the federally permitted release definition and discusses the principles we consider most important in evaluating whether an air release may be considered a CERCLA section 101(10)(H) federally permitted release.
The Senate committee that considered the CERCLA definition of federally permitted release recognized that the CAA controls air pollutants in several ways:
Because of the numerous programs under the CAA and their complexity, this guidance does not address each application of the exemption. This guidance is intended for you to use as a general guide to determine, on a case-by-case basis, whether an air release of a hazardous substance qualifies as a federally permitted release. You should consider any permit language as a whole rather than reviewing specific language in isolation and also look at all applicable control requirements in order to determine whether, taken together, they subject a release of a hazardous substance to a relevant CAA permit or control regulation.
The CERCLA, EPCRA and CAA statutory provisions and the EPA regulations described in this guidance contain legally binding requirements. This guidance does not substitute for those provisions or regulations, nor is it a regulation itself. Thus, it does not impose new legally-binding requirements on EPA, states or the regulated community, and may not
• I have discovered a violation at my facility which resulted in a release of a hazardous substance in excess of the CAA control regulation. Does this release qualify for the CERCLA section 101(10)(H) federally permitted release exemption?
The EPA Environmental Appeals Board (“EAB”) concluded that “* * * a release ‘subject to’ Clean Air Act regulatory requirements must be in conformance with those requirements in order to be exempt from EPCRA and CERCLA emergency reporting provisions * * *” In re Mobil Oil Corp., EPCRA Appeal No. 94-2, 5 EAD 490, 508, 1994 WL 544260 (EAB, Sept. 29, 1994).
The EAB reasoned that:
• My facility has a CAA permit which contains emission limits for VOC and PM and is not subject to NESHAPs. The facility releases are in compliance with the VOC or PM limits. Are the releases of hazardous substances that are also either VOCs or emitted as particulate matter federally permitted releases under CERCLA?
If you are in compliance with your federally enforceable CAA permit limit or control regulation for volatile organic compounds (“VOC”) or particulate matter (“PM”), and those limits or controls include conditions that, when viewed together, control the release of a constituent hazardous substance, such a release would likely qualify as a federally permitted release. The Senate Report language states that to qualify for the CERCLA 101(10)(H) federally permitted release exemption, the means of controlling the hazardous substance emissions must be “* * * specifically designed to limit or eliminate emissions of a designated hazardous pollutant or a criteria pollutant” (Senate Report No. 848 at 49).
When evaluating whether a release qualifies for the federally permitted release exemption, you should consider whether your federally enforceable CAA permit limit or the applicable control regulations limit or eliminate the release of the designated hazardous substance or EHS. Because of the variety of VOC and PM permit terms and controls, we cannot establish any “bright line” tests to determine whether a control regulation or permit limit for VOC or PM is adequate to qualify a release of a designated hazardous substance or EHS as a CERCLA federally permitted release. You should consider whether the permit provides direct or indirect control of a designated hazardous substance or EHS by reviewing the federally enforceable permit limits and control regulations that apply to your releases of hazardous substances or EHSs. Where the federally enforceable permit limits and control regulations, considered together, have the specific effect of limiting or eliminating releases of a hazardous substance or EHS, we will infer that these permit limits and control regulations were designed to achieve that result unless circumstances or evidence clearly indicate to the contrary. The following criteria may help you determine whether a permit limit or control requirement for VOC or PM has the specific effect of limiting or eliminating the release of a hazardous substance or EHS:
• Are the federally enforceable permit limits short term, or do the federally enforceable control requirements minimize the likelihood of a substantial release of a hazardous substance or EHS? If short term limits control releases of the hazardous substances or EHS, even when the limit is expressed in VOC or PM terms, the releases of those substances subject to short term limits would probably qualify for the CERCLA federally permitted release definition.
• Does the permit application or applicable regulation (including supporting materials such as preambles, technical background documents, or details in the permit application that are referenced in the permit) include information that clearly shows that the federally enforceable VOC or PM limits have the specific effect of limiting or eliminating the release of the designated hazardous substance or EHS? If so, then the releases of those substances would probably qualify for the CERCLA section 101(10)(H) federally permitted release exemption.
Permit limits and control regulations usually do not control or limit unanticipated releases such as accidents or malfunctions and for that reason such releases generally do not qualify for the CERCLA section 101(10)(H) federally permitted release exemption.
• If I am in compliance with my federally enforceable permit limit for NO
Yes. NO
• NESHAP, SIP or other CAA permitting requirements are not applicable to my source because my emissions are below an annual threshold limit. Would my releases meet the definition of CERCLA section 101(10)(H) federally permitted release?
Releases in compliance with a federally enforceable threshold as well as releases that comply with any federally enforceable technology requirements, operational requirements, work practices or other control practices, would generally meet the definition of federally permitted releases in CERCLA section 101(10)(H) when the emission threshold limits or eliminates the release of the designated
In addition to thresholds under the CAA section 112, some states have incorporated regulations into their federally enforceable CAA section 110 state implementation plans (“SIPs”) imposing federally enforceable thresholds on air toxics in addition to criteria pollutants such as NO
These thresholds, however, generally do not control unanticipated releases such as accidents or malfunctions. The thresholds for minor sources are usually only directed at the facility's releases from its normal operations. Even a very small source could have an accident or malfunction that causes a release of a hazardous substance or EHS that requires an immediate response. The Senate committee report stated that “Accidents—whatever their cause—which result in, or can reasonably be expected to result in releases of hazardous pollutants would not be exempt from the requirements and liabilities of this bill. Thus, fires, ruptures, wrecks and the like invoke the response and liability provisions of the bill.” Senate Report No. 96-848 at 48. Area sources and other sources that are subject to a regulation that limits their total annual emissions should generally report their releases at or above the RQ of hazardous substances and EHSs that are caused by accidents, malfunctions, unanticipated releases and other releases that are not part of the facility's normal operations.
• My hazardous release is subject to a waiver pursuant to CAA section 111. Would this release qualify for the CERCLA federally permitted release exemption?
Yes, your release subject to the waiver is a CERCLA federally permitted release. Section 101(10)(H) of CERCLA exempts releases subject to “* * * any schedule or waiver granted, promulgated, or approved under * * *” the CAA sections 110, 111, 112 and Title I Parts C and D. 42 U.S.C. 9601(10)(H)(internal citations omitted).
As an example, under section 111(j)(1) of the CAA, we may grant a waiver from a New Source Performance Standard (“NSPS”) in order to encourage the use of an innovative technological system or systems of continuous emission reduction. If the technology does not result in an emission reduction that equals or exceeds the applicable standard, we will terminate the waiver and establish a schedule for compliance. The release of a hazardous substance or EHS that would have been controlled by the NSPS without the waiver is a CERCLA federally permitted release, as long as it is in compliance with the terms of the CAA waiver.
• I had an accidental release of a hazardous substance above the CERCLA RQ while I was operating consistent with my accident and malfunction plan. Would my release, qualify for the CERCLA section 101(10)(H) federally permitted release exemption?
In most circumstances, releases resulting from accidents and malfunctions do not qualify for the federally permitted release exemption as defined in CERCLA section 101(10)(H). Releases due to accidents and malfunctions, because they are by definition not anticipated, are difficult to subject to controls which limit or eliminate emissions. Congress did not intend to exempt unanticipated releases such as accidents and malfunctions from CERCLA section 103 and EPCRA section 304. As explained in the Senate Report, “Accidents—whatever their cause—which result in, or can reasonably be expected to result in releases of hazardous pollutants would not be exempt from the requirements and liabilities of this bill. Thus, fires, ruptures, wrecks and the like invoke the response and liability provisions of the bill.” Senate Report No. 96-848 at 48.
Although the CAA requires accident and malfunction plans in order to prevent, identify and minimize accidental releases, these plans may be too general to be considered specifically designed to limit or eliminate emissions of a designated hazardous pollutant or a criteria pollutant, and thus releases resulting from accidents and malfunctions would generally not qualify as CERCLA federally permitted releases.
For example, in
Nevertheless, we realize that there are a wide variety of approaches to dealing with accidents and malfunctions in CAA regulations, permits and SIPs. Accordingly, there may be unusual circumstances in which a release of a hazardous substance or EHS that resulted from an accident or malfunction might qualify for the federally permitted release exemption in section 101(10)(H) of CERCLA. Regardless, EPA strongly encourages the prompt reporting of any release associated with an accident or malfunction. In addition, remember that under many provisions in the CAA, in order for a release to qualify as an accident or malfunction it must not be preventable. Releases that were preventable may violate the general duty clause of the CAA.
• I am operating under an approved start-up/shut-down plan. If I have a release of a hazardous substance during a start-up or shut-down, will it qualify as a federally permitted release?
If your release is in compliance with the requirements in an approved start-up/shut-down plan which contains federally enforceable procedures which limit or control your releases during start-up or shut-down, then your release would generally qualify for the federally permitted release exemption. As discussed above, like accidents and malfunctions, emissions from start-ups and shut-downs have been handled in a variety of ways in CAA regulations, permits and SIPs. In many instances, facilities must have a start-up and shut-down plan that sets forth procedures for operating and maintaining a source during those periods. See, e.g., 40 CFR 63.6(e)(3). Unlike malfunctions and accidents which are unpredictable, releases from start-ups or shut-downs may be anticipated and therefore they may be more likely to have emission limitations or controls.
However, if a release of a hazardous substance or EHS is exempt from CAA regulation, or is otherwise not subject to emission limits or other controls during the start-up or shut-down of an operation, then these uncontrolled releases do not qualify for the federally permitted release exemption and must comply with CERCLA and EPCRA notification requirements.
The federally permitted release exemption to the CERCLA section 103 and EPCRA section 304 notification requirements exempts from the notification requirements certain air emissions of hazardous substances and EHSs when the release of the hazardous substance or EHS is subject to a permit or control regulation issued pursuant to CAA sections 111 and 112, Title I part C, Title I part D, or a section 110 SIP. Each facility is responsible for determining whether its hazardous substance and EHS releases qualify for the notification exemption in light of the particular CAA requirements that apply to the facility.
In a memorandum dated February 15, 2000, and in subsequent extensions dated September 13, 2000, November 30, 2000, April 20, 2001, July 31, 2001, October 10, 2001, January 16, 2002, and March 7, 2002, the Assistant Administrator of the Office of Enforcement and Compliance Assurance exercised discretion to not enforce against facilities for failure to report certain types of air releases until publication of the revised guidance. We are extending this discretion for 180 days following the date of this notice unless the release is:
(1) an unanticipated release, such as an accident or malfunction;
(2) a release in excess of a permit limit or control regulation as described in the EAB decision In re Mobil Oil Corp., EPCRA Appeal No. 94-2, 5 EAD 490 (EAB Sept. 29, 1994);
(3) a release from an emergency relief valve, as described in the ALJ's decision In re Borden Chemicals & Plastics, Co., [CERCLA] EPCRA 003-1992 (Order Granting Partial Accelerated Decision Concerning Liability, Feb. 18, 1993);
(4) a release from a source that is grandfathered and not subject to CAA permits or control regulations; or
(5) a release from a source that is otherwise exempt and not subject to any federally enforceable CAA permit or control regulation.
Furthermore, we recognize that certain uncontrolled air emissions of nitrogen oxide (“NO”) and nitrogen dioxide (“NO
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 current 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 17, 2002. 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-A804, 445 12th Street, SW, Washington, DC 20554, or via the Internet to
For additional information or copies of the information collection(s) contact Les Smith at 202-418-0217 or via the Internet at
Frequency of Response: On occasion reporting requirements; Third party disclosure.
Federal Communications Commission.
Notice.
On March 15, 2002, the Commission released a Declaratory Ruling in Inquiry Concerning High-Speed Access to the Internet Over Cable and Other Facilities and Internet Over Cable Declaratory Ruling, GN Docket No. 00-185. The Commission ruled that cable modem service, as it is currently offered, is an interstate information service, not a cable service, and that there is no separate offering of telecommunications service. Consistent with §§ 1.103 and 1.4(b)(2) of the Commission's rules, 47 CFR 1.103, 1.4(b)(2), the effective date for the Declaratory Ruling is the date of release of the ruling, March 15, 2002.
Copies of the Declaratory Ruling may be obtained on the Internet through
Steve Garner, Media Bureau, at (202) 418-1063 or via Internet at
Federal Communications Commission.
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board’s Regulation Y (12 CFR 225.41) to acquire a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the office of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than May 2, 2002.
In connection with this application, Rick H. Singer, New York, New York, also has applied to acquire voting shares of Broadstreet, Inc., Atlanta, Georgia, and thereby indirectly acquire voting shares of AmTrade International Bank of Georgia, Atlanta, Georgia.
Board of Governors of the Federal Reserve System, April 12, 2002.
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 10, 2002.
In connection with this application, Applicant also has applied to indirectly acquire voting shares of Sylvan Agency, Inc., Sylvan Grove, Kansas, and thereby engage in insurance activities in a town of less than 5,000 in population, pursuant to § 225.28(b)(11)(iii)(A) of Regulation Y.
Board of Governors of the Federal Reserve System, April 11, 2002.
Section 7A of the Clayton Act, 15 U.S.C. 18a, as added by Title II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, requires persons contemplating certain mergers or acquisitions to give the Federal Trade Commission and the Assistant Attorney General advance notice and to wait designated periods before consummation of such plans. Section 7A(b)(2) of the Act permits the agencies, in individual cases, to terminate this waiting period prior to its expiration and requires that notice of this action be published in the
The following transactions were granted early termination of the waiting period provided by law and the premerger notification rules. The grants were made by the Federal Trade Commission and the Assistant Attorney General for the Antitrust Division of the Department of Justice. Neither agency intends to take any action with respect to these proposed acquisitions during the applicable waiting period.
Sandra M. Peay or Chandra L. Kennedy, Contact Representatives, Federal Trade Commission, Premerger Notification Office, Bureau of Competition, Room 303, Washington, DC 20580, (202) 326-3100.
In accordance with section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463), the Agency for Toxic Substances and Disease Registry (ATSDR) announces the following subcommittee and committee meetings.
Written comments are welcomed and should be received by the contact person listed below prior to the opening of the meeting.
Agenda items are subject to change as priorities dictate.
Robert Spengler, Sc.D., Executive Secretary, BSC, ATSDR, M/S E-28, 1600 Clifton Road, NE, Atlanta, Georgia 30333, telephone 404/498-0003.
The Director, Management Analysis and Services Office, has been delegated the authority to sign
The Centers for Disease Control and Prevention (CDC) publishes a list of information collection requests under review by the Office of Management and Budget (OMB) in compliance with the Paperwork Reduction Act (44 U.S.C. Chapter 35). To request a copy of these requests, call the CDC Reports Clearance Officer at (404) 498-1210. Send written comments to CDC, Desk Officer, Human Resources and Housing Branch, New Executive Office Building, Room 10235, Washington, DC 20503. Written comments should be received within 30 days of this notice.
Reports on notifiable diseases were received from very few states and cities prior to 1900, but gradually more states submitted monthly and annual summaries. In 1912, state and territorial health authorities in conjunction with PHS recommended immediate telegraphic reports of five diseases and monthly reporting by letter of 10 additional diseases, but it was not until after 1925 that all states reported regularly. In 1942, the collection, compilation, and publication of morbidity statistics, under the direction of the Division of Sanitary Reports and Statistics, PHS, was transferred to the Division of Public Health Methods, PHS.
A PHS study in 1948 led to a revision of the morbidity reporting procedures, and in 1949 morbidity reporting activities were transferred to the National Office of Vital Statistics. Another committee in PHS presented a revised plan to the Association of State and Territorial Health Officers (ASTHO) at its meeting in Washington, DC, October 1950. ASTHO authorized a Conference of State and Territorial Epidemiologists (CSTE) for the purpose of determining the diseases that should be reported by the states to PHS. Beginning in 1951, national meetings of CSTE were held every two years until 1974, then annually thereafter.
In 1961, responsibility for the collection of data on nationally notifiable diseases and deaths in 122 U.S. cities was transferred from the National Office of Vital Statistics to CDC. For 37 years the Morbidity and Mortality Weekly Report (MMWR) has consistently served as CDC's premier communication channel for disease outbreaks and trends in health and health behavior. In collaboration with the Council of State and Territorial Epidemiologists (CSTE), CDC has demonstrated the efficiency and effectiveness of computer transmission of data. The data collected electronically for publication in the MMWR provides information which CDC and State epidemiologists use to detail and more effectively interrupt outbreaks. Reporting also provides the timely information needed to measure and demonstrate the impact of changed immunization laws or a new therapeutic measure.
Users of data include, but are not limited to, congressional offices, state and local health agencies, health care providers, and other health related groups.
The dissemination of public health information is accomplished through the MMWR series of publications. The publications consist of the MMWR, the CDC Surveillance Summaries, the Recommendations and Reports, and the Annual Summary of Notifiable Diseases. The estimated annualized burden is 4,654 hours.
This gives notice under the Federal Advisory Committee Act (Pub. L. 92-463) of October 6, 1972, that the Advisory Committee on Immunization Practices (ACIP), Centers for Disease Control and Prevention (CDC), Department of Health and Human Services, has been renewed for a 2-year period beginning April 1, 2002, through April 1, 2004.
For further information, contact Dixie E. Snider, Jr., M.D., Executive Secretary, ACIP, CDC, 1600 Clifton Road, NE, (M/S D-50), telephone 404/639-7240 or fax 404/639-7341.
The Director, Management Analysis and Services Office, has been delegated the authority to sign
In accordance with section 10(a)(2) of the Federal Advisory
Committee Act (Pub. L. 92-463), the Centers for Disease Control and Prevention (CDC) announces the following committee meeting:
Working Group.
The Director, Management Analysis and Services Office, has been delegated the authority to sign
In accordance with section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463), the Centers for Disease Control and Prevention (CDC) announces the following conference call committee meeting.
Agenda items are subject to change as priorities dictate.
This conference call is scheduled for 11 a.m. Eastern Time. To access the teleconference, you must dial 1-800-713-1971. To be automatically connected to the call, you will need to provide the operator with the conference code “727816.”
Dr. Lewis Wade, Executive Secretary, MSHRAC, NIOSH, CDC, HHH Building, Room 715H, M/S P12, Washington, DC 20201-0004, telephone 202-401-2192.
The Director, Management Analysis and Services Office, has been delegated the authority to sign
In accordance with section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463), the Centers for Disease Control and Prevention (CDC) announces the following committee meeting.
1. Opening Session: NCID Update
a. Institute of Medicine
b. Facilities
c. Budget
2. Program Updates:
a. West Nile
b. Waterborne Disease
c. Malaria
d. CDC Global Infectious Diseases Strategy
3. Bioterrorism Updates and Discussion
a. Organizational Approach/Structure
b. Anthrax Investigations
c. Smallpox Activities
4. Other issues, e.g., antimicrobial resistance/ widespread use of antibiotics
5. Board meets with Director, CDC
6. Discussions and Recommendations
Other agenda items include announcements/introductions; follow-up on actions recommended by the Board at the previous meeting; and consideration of future directions, goals and recommendations.
Agenda items are subject to change as priorities dictate.
Written comments are welcome and should be received by the contact person listed below prior to the opening of the meeting.
Diane S. Holley, Office of the Director, NCID, CDC, Mailstop C-19, 1600 Clifton Road, NE, Atlanta, Georgia 30333, e-mail
The Director, Management Analysis and Services Office, has been delegated the authority to sign
In accordance with section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463), the Agency for Toxic Substances and Disease Registry (ATSDR) and the Centers for Disease Control and Prevention (CDC) announce the following meeting.
In addition, a memo was signed in October 1990 and renewed in November 1992, 1996, and in 2000, between ATSDR and DOE. The MOU delineates the responsibilities and procedures for ATSDR's public health activities at DOE sites required under sections 104, 105, 107, and 120 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or “Superfund”). These activities include health consultations and public health assessments at DOE sites listed on, or proposed for, the Superfund National Priorities List and at sites that are the subject of petitions from the public; and other health-related activities such as epidemiologic studies, health surveillance, exposure and disease registries, health education, substance-specific applied research, emergency response, and preparation of toxicological profiles.
Natasha Friday, Executive Secretary, INEELHES, Radiation Studies Branch, Division of Environmental Hazards and Health Effects, NCEH, CDC, 1600 Clifton Road, NE, (E-39), Atlanta, GA 30333, telephone (404) 498-1800, fax (404) 498-1811.
The Director, Management Analysis and Services Office, has been delegated the authority to sign
Part C (Centers for Disease Control and Prevention) of the Statement of Organization, Functions, and Delegations of Authority of the Department of Health and Human Services (45 FR 67772-76, dated October 14, 1980, and corrected at 45 FR 69296, October 20, 1980, as amended most recently at 66 FR 39178-39179, dated July 27, 2001) is amended to reorganize the Office of Management, NCHS.
Section C-B, Organization and Functions, is hereby amended as follows:
Delete in its entirety the functional statement for the
Delete in its entirety the functional statement for the
Part C (Centers for Disease Control and Prevention) of the Statement of Organization, Functions, and Delegations of Authority of the Department of Health and Human Services (45 FR 67772-76, dated October 14, 1980, and corrected at 45 FR 69296, October 20, 1980, as amended most recently at 66 FR 39178-39179, dated July 27, 2001) is amended to reorganize the National Center for Infectious Diseases.
Section C-B, Organization and Functions, is hereby amended as follows:
Delete the functional statement for the
Plans, directs, and coordinates a national program to improve the identification, investigations, diagnosis, prevention, and control of infectious diseases. In carrying out the mission, the Center: (1) Provides leadership in investigation and diagnosis of infectious diseases of public health significance: (2) maintains surveillance of infectious diseases, disability, and death; (3) conducts applied and operational research related to definition, distribution, diagnosis, prevention, and control of infectious diseases, including vaccine development; (4) administers a
Delete in its entirety the title and functional statement for the
After the Division of Global Migration ad Quarantine (HCR2), insert the following:
Food and Drug Administration, HHS.
Notice; extension of comment period.
The Food and Drug Administration (FDA) is extending to April 26, 2002, the comment period for the regulatory review period determination for MIFEPREX, published in the
Submit written or electronic comments on the regulatory review period determination for MIFEPREX by April 26, 2002.
Submit written comments and petitions to the Dockets Management Branch (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852. Submit electronic comments to http://www.fda.gov/dockets/ecomments.
Claudia V. Grillo, Office of Regulatory Policy (HFD-007), Food and Drug Administration, 5600 Fishers Lane, Rockville, MD 20857, 301-594-2041.
In the
FDA received a letter dated March 22, 2002, from an attorney representing the Population Council (the patent holder) and others, requesting that the agency extend the comment period on the regulatory review period for 30 days, until April 26, 2002, explaining that additional time was needed to reach a licensing agreement. FDA has determined that it is appropriate to grant this request.
Interested persons may submit to the Dockets Management Branch (see
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.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB approval number (2506-0020) 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; Fax number
Wayne Eddins, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 Seventh Street, Southwest, Washington, DC 20410; e-mail
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.
Minerals Management Service (MMS), Interior.
Notice of availability.
MMS implemented a new financial management system on November 1, 2001. As part of the implementation process, royalty and production data reported to our predecessor system was transferred to the new system. Reporters will need this information to make accurate adjustments and corrections to previously reported data. This notice informs reporters where and how they may obtain their historical royalty and production data.
This information is available April 17, 2002.
To request access to historical data via the Internet, send a completed System Access Request Form (SARF) to Minerals Management Service, Attention: Information Technology Center, Policy and Security Group, P.O. Box 25165, Mail Stop 340G4, Denver, CO 80225. To request historical data on a compact disk, send a written request to Minerals Management Service, Reporting Services, Attention: Kathy Ciferri, P.O. Box 5760, Mail Stop 357B1, Denver, CO 80217-5760.
Ms. Kathy Ciferri, Minerals Management Service, P.O. Box 5760, MS-357B1, Denver, CO 80217-5760; telephone number (303) 231-3060; fax number (303) 231-3608; e-mail kathleen.ciferri@mms.gov.
Before the new financial management system was implemented November 1, 2001, royalty data reported to MMS on Federal and Indian mineral leases was entered into the Auditing and Financial System (AFS). Production data reported to MMS on Federal and Indian mineral leases was entered into the Production Accounting and Auditing System (PAAS).
As part of the implementation of the new financial management system, MMS converted all royalty data received between January 1, 1983, and October 16, 2001, to the new Report of Sales and Royalty Remittance (Form MMS-2014, revised October 1, 2001) format. MMS converted all production data reported on the Monthly Report of Operations (Form MMS-3160), the Oil and Gas Operations Report (OGOR), and the Production Allocation Schedule Report (PASR) received between January 1, 1983, and October 16, 2001, to the new OGOR and PASR (Forms MMS-4054 and MMS-4058, revised October 1, 2001) formats. This historical royalty and production data is stored in the new financial management system in the revised formats.
This historical data is available to the original reporters of the data. MMS is fully aware of the necessity to protect proprietary data; consequently, data will not be released to anyone, other than the original reporter, unless the requester demonstrates a legal right to that data. MMS will provide historical data by reporter code to companies who merge when complete ownership can be legally demonstrated. Companies that acquire only a portion of another company's leases will not receive
To obtain historical data via the Internet, refer to MMS's “Dear Reporter” letter dated October 22, 2001, for detailed instructions on how to complete the required SARF. The SARF was an attachment to the October 22, 2001 letter, and is also available on MMS's Internet site at www.mrm.mms.gov. Send the SARF to the address listed in the
To obtain historical data via CD, send a written request to the address listed in the
In accordance with section 223 of the Trade Act of 1974, as amended, the Department of Labor herein presents summaries of determinations regarding eligibility to apply for trade adjustment assistance for workers (TA-W) issued during the period of March and April, 2002.
In order for an affirmative determination to be made and a certification of eligibility to apply for worker adjustment assistance to be issued, each of the group eligibility requirements of Section 222 of the Act must be met.
(1) that a significant number or proportion of the workers in the workers' firm, or an appropriate subdivision thereof, have become totally or partially separated,
(2) that sales or production, or both, of the firm or subdivision have decreased absolutely, and
(3) that increases of imports of articles like or directly competitive with articles produced by the firm or appropriate subdivision have contributed importantly to the separations, or threat thereof, and to the absolute decline in sales or production.
In each of the following cases the investigation revealed that criterion (3) has not been met. A survey of customers indicated that increased imports did not contribute importantly to worker separations at the firm.
In the following cases, the investigation revealed that the criteria for eligibility have not been met for the reasons specified.
Increased imports did not contribute importantly to worker separations at the firm.
The workers firm does not produce an article as required for certification under section 222 of the Trade Act of 1974.
The investigation revealed that criteria (2) has not been met. Sales or production did not decline during the relevant period as required for certification.
The investigation revealed that criteria (1) and (2) have not been met. A significant number or proportion of the workers in the workers' firm, or an appropriate subdivision did not become totally or partially separated. Sales or production did not decline during the relevant period as required for certification.
The following certifications have been issued; the date following the company name and location of each determination references the impact date for all workers of such determination.
Also, pursuant to Title V of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182) concerning transitional adjustment assistance hereinafter called (NAFTA-TAA) and in accordance with Section 250(a), Subchapter D, Chapter 2, Title II, of the Trade Act as amended, the Department of Labor presents summaries of determinations regarding eligibility to apply for NAFTA-TAA issued during the months of March and April, 2002.
In order for an affirmative determination to be made and a certification of eligibility to apply for NAFTA-TAA the following group eligibility requirements of section 250 of the Trade Act must be met:
(1) that a significant number or proportion of the workers in the workers' firm, or an appropriate subdivision thereof, (including workers in any agricultural firm or appropriate subdivision thereof) have become totally or partially separated from employment and either—
(2) that sales or production, or both, of such firm or subdivision have decreased absolutely,
(3) that imports from Mexico or Canada of articles like or directly competitive with articles produced by such firm or subdivision have increased, and that the increases imports contributed importantly to such workers' separations or threat of separation and to the decline in sales or production of such firm or subdivision; or
(4) that there has been a shift in production by such workers' firm or subdivision to Mexico or Canada of articles like or directly competitive with articles which are produced by the firm or subdivision.
In each of the following cases the investigation revealed that criteria (3) and (4) were not met. Imports from Canada or Mexico did not contribute importantly to workers' separations. There was no shift in production from the subject firm to Canada or Mexico during the relevant period.
I hereby certify that the aforementioned determinations were issued during the months of March and April, 2002. Copies of these determinations are available for inspection in Room C-5311, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210 during normal business hours or will be mailed to persons who write to the above address.
By application of December 10, 2001, the company requested administrative reconsideration of the Department's negative determination regarding eligibility for workers and former workers of the subject firm to apply for Trade Adjustment Assistance (TAA) under petition TA-W-39,382, and North American Free Trade Agreement-Transitional Adjustment Assistance (NAFTA-TAA) under petition NAFTA-4942. The denial notices applicable to workers of Allied Vaughn, Clinton, Tennessee, were signed on November 27, 2001, and published in the Federal Register on December 18, 2001 (66 FR 65220 and 66 FR 65221, respectively).
Pursuant to 29 CFR 90.18(c) reconsideration may be granted under the following circumstances:
(1) If it appears on the basis of facts not previously considered that the determination complained of was erroneous;
(2) if it appears that the determination complained of was based on a mistake in the determination of facts not previously considered; or
(3) If in the opinion of the Certifying Officer, a mis-interpretation of facts or of the law justified reconsideration of the decision.
The TAA petition, filed on behalf of workers at Allied Vaughn, Clinton, Tennessee, engaged in customer service activities for a firm which replicated VHS video activities, was denied because the petitioning workers did not
The NAFTA-TAA petition, filed on behalf of workers engaged in customer service activities for a firm which replicated VHS video, was denied because the petitioning workers did not produce an article within the meaning of Section 250(a) of the Trade Act, as amended.
The petitioner alleges that the Allied Vaughn, Clinton, Tennessee workers were engaged in activities related to the replication of VHS video cassettes.
Upon examination of the application and information provided in the initial investigation, the Department of Labor concurs with the petitioners' allegation that the workers were engaged in activities related to the replicating of VHS videos.
The petitioner further alleges that the subject plant workers should be tied to another group of workers who were certified under TA-W-39,344 and NAFTA-TAA-4913. Those workers were engaged in the replication of compact discs at the same location under the company name AmericDisc, Inc. This allegation is based on the fact that workers of Allied Vaughn commingled various administrative and other non-manufacturing functions at the Clinton facility.
Prior to December 2000, the two product lines were under the control of Allied Digital Technologies, Clinton, Tennessee. Allied Digital Technologies then sold each product line to a different company. The compact disc line was purchased by AmericDisc, Inc. and the VHS cassette line went to Allied Vaughn, a.k.a. Willette Acquisition Corporation. However, although the companies now owned separate product lines, they agreed to continue to share non-manufacturing workers as a cost saving measure.
Since the workers of Allied Vaughn were engaged exclusively in the replication of VHS cassettes, the inport data of compact discs used to certify workers at AmericDisc, Inc. cannot be used in this investigation.
The major contributing factor leading to the layoffs at the subject plant was completely unrelated to imports of replicated VHS cassettes. The sole catalyst concerned the transfer of AmericDisc, Inc. operations to Canada. This led Allied Vaughn to close the facility, as it was no longer efficient for their needs, effectively causing the subject plant to shift their production domestically.
Finally, since the companies are not legally affiliated, the subject firm cannot be tied to the AmeriDisc, Inc. TAA and/or NAFTA certifications.
After review of the application and investigative findings, I conclude that there has been no error or misinterpretation of the law or of the facts which would justify reconsideration of the Department of Labor's prior decisions. Accordingly, the application is denied.
By application of January 21, 2002, the petitioner requested administrative reconsideration of the Department's negative determination regarding eligibility for workers and former workers of the subject firm to apply for Trade Adjustment Assistance (TAA) under petition TA-W-39,977 and North American Free Trade Agreement—Transitional Adjustment Assistance (NAFTA-TAA) under petition NAFTA-5262. The TAA and NAFTA-TAA denial notices applicable to workers of Lamtech, LLC, Hartsville, Tennessee, were signed on December 11, 2001 and published in the
Pursuant to 29 CFR 90.18(c) reconsideration may be granted under the following circumstances:
(1) If it appears on the basis of facts not previously considered that the determination complained of was erroneous;
(2) if it appears that the determination complained of was based on a mistake in the determination of facts not previously considered; or
(3) if in the opinion of the Certifying Officer, a misinterpretation of facts or of the law justified reconsideration of the decision.
The TAA petition, filed on behalf of workers at Lamtech, LLC, Hartsville, Tennessee engaged in employment related to the production of sew stands and sew tops, was denied because the “contributed importantly” group eligibility requirement of section 222(3) of the Trade Act of 1974, as amended, was not met. The “contributed importantly” test is generally demonstrated through a survey of the workers' firm's customers. The survey revealed that none of the respondents increased their imports of products like or directly competitive with what the subject plant produced during the relevant period. The subject firm did not import sew stands and sew tops.
The NAFTA-TAA petition for the same worker group was denied because criteria (3) and (4) of the group eligibility requirements in paragraph (a) (1) of Section 250 of the Trade Act, as amended, were not met. The survey revealed that none of the respondents increased their imports of products like or directly competitive with what the subject plant produced from Canada or Mexico during the relevant period. The subject firm did not import (including Canada or Mexico) products like or directly competitive with what the subject plant produced, nor was the subject plant's production shifted from the workers' firm to Mexico or Canada.
The petitioner alleges that their major customers purchased imported products like or directly competitive with what the subject firm produced from foreign sources, specifically Mexico and Central America. The petitioner further states that some of their customers are purchasing products from other domestic sources that are importing.
The Department, as already indicated, examines the impact of imports (including Canada and Mexico) by a survey of the subject firm's major declining customers to examine if the “contributed importantly” test is met. The survey conducted during the initial investigation revealed that none of the respondents increased their imports (including Canada or Mexico), while decreasing their purchases from the subject firm during the relevant period.
The petitioner further attached a list of major declining customers with corresponding allegations concerning their customer purchases from foreign sources.
A review of the customer list revealed that some of the major customers were located in foreign countries. Also, some of the domestic customers on the list were surveyed during the initial investigation, the respondents as already indicated, did not increase their imports of products like or directly competitive with what the subject firm produced. A further review of the list in combination with the survey results and data supplied by the company further shows that some of the customers did not purchase any products from the subject firm during the relevant period
The petitioner further stated that the respondents may not have had an understanding of what they were being asked in the survey and also may not have answered in a factual manner.
The survey the Department conducted was specific to the products produced by the subject plant, as reported by the company. The respondents in the survey were provided with a Department contact if they needed any further clarification. In respect to the respondents reported results, they are reviewed and accepted if they appear to be filled out correctly. If further clarification of the customer response is necessary, the customer is contacted.
After review of the application and investigative findings, I conclude that there has been no error or misinterpretation of the law or of the facts which would justify reconsideration of the Department of Labor's prior decisions. Accordingly, the application is denied.
On February 12, 2002, the Department issued an Affirmative Determination Regarding Application for Reconsideration for the workers and former workers of the subject firm. The notice was published in the
The Department initially denied TAA to workers of ME International, Inc., Duluth, Minnesota because criteria (1) and (3) were not met. A significant number or proportion of the workers did not become totally or partially separated from employment as required for certification. The “contributed importantly” group eligibility requirement of section 222(3) of the Trade Act of 1974, as amended, was not met. Imports did not contribute importantly to the worker separations.
The Department denied NAFTA-TAA because criteria (1), (3) or (4) have not been met. A significant number or proportion of the workers did not become totally or partially separated from employment as required for certification. Imports from Canada or Mexico did not contribute importantly to workers' separations. There was no shift in production from the subject firm to Canada or Mexico during the relevant period.
The workers at the subject firm were engaged in employment related to the production of mining wear parts (such as mill linings).
The petitioner alleges the workers were impacted by increased imports from Canada that are like or directly competitive with what the subject plant produced. The petitioner also states that employment declines occurred at the subject plant during the relevant period meeting the requirements of criterion (1).
The Department of Labor concurs with the petitioners' allegation that employment declines occurred at the subject plant.
On reconsideration, the Department contacted the company for a list of major declining customers of the subject plant and further requested a detailed explanation of the reasons for the declines in sales, production and employment at the subject firm.
The U.S. Department of Labor conducted a survey of the declining customer(s) of the subject firm regarding their purchases of mill linings during the relevant period. The survey revealed that a customer increased their imports of mill linings from Canada, while decreasing their purchases from the subject firm during the relevant period. However, the reduced purchases from the subject firm are relatively small in relation to the sales declines at the subject plant, thus the imports did not contribute importantly to the declines at the subject plant. A major customer, LTV Steel, was not surveyed due to bankruptcy in December 2000. They were a major customer of the subject firm.
The company indicated that the Duluth facility experienced a small decline in sales dollars related to lower prices. The overwhelming majority of those declines was attributed to price concessions given to customers as a direct result of competing with a Canadian company. Price, however, is not a factor relevant to the TAA or NAFTA-TAA investigations that were filed on behalf of workers producing mining wear parts. Any potential lost business due to imports was considered as described in the survey results.
The company provided additional information concerning sales, production and employment declines at the subject plant.
The company indicated that nearly half of the sales declines are the direct result of a shift in subject plant production to Tempe, Arizona. That coupled with softening of Original Equipment Manufacturers (OEM) markets and mining closures and curtailments further contributed to the declines at the subject plant. The combination of these factors account for nearly all the sales and production declines at the subject firm.
The company further indicated that sometime during the third quarter of 2000 it implemented manufacturing efficiencies. These improved manufacturing efficiencies led to a corresponding reduction in the manufacturing work force at the Duluth facility during the relevant period.
Therefore, based on the information as indicated above, imports of products like or directly competitive with what the subject plant produced did not contribute importantly to the declines at the subject firm. Also, the subject plant did not shift any plant production to Canada or Mexico during the relevant period.
The preponderance in the declines in employment at the subject firm is the direct result of a shift in production to another domestic location, softening of OEM markets and mining closures and curtailments and improved manufacturing efficiencies at the subject plant.
After reconsideration, I affirm the original notice of negative determinations regarding eligibility to apply for worker adjustment assistance and NAFTA—Transitional Adjustment Assistance for workers and former workers of ME International, Inc., Duluth, Minnesota.
By application of November 15, 2001, the petitioner requested administrative reconsideration of the Department's negative determination regarding eligibility for workers and former workers of the subject firm to apply for Trade Adjustment Assistance (TAA) under petition TA-W-40,196 and North American Free Trade Agreement-Transitional Adjustment Assistance (NAFTA-TAA) under petition NAFTA-05250. The denial notices applicable to workers of Motorola, Atlanta Order Fulfillment Center, and Consumer Products Division, Suwanee, Georgia, were signed on October 30, 2001 (TA-W-40,196), and November 5, 2001 (NAFTA-5250) and published in the
Pursuant to 29 CFR 90.18(c) reconsideration may be granted under the following circumstances:
(1) If it appears on the basis of facts not previously considered that the determination complained of was erroneous;
(2) if it appears that the determination complained of was based on a mistake in the determination of facts not previously considered; or
(3) if in the opinion of the Certifying Officer, a mis-interpretation of facts or of the law justified reconsideration of the decision.
The negative TAA determination issued by the Department on October 30, 2001, was based on the finding that imports of products similar to what the subject plant produced (primarily packaged cell phones and distribution) did not contribute importantly to the worker group eligibility requirements under section 222 of the Trade Act of 1974, as amended.
The negative NAFTA-TAA determination issued by the Department on November 5, 2001, was based on the finding that imports (primarily packaged cell phones and distribution) from Canada or Mexico did not contribute importantly to separations at the subject plant, nor were there any shifts in production to Canada or Mexico under paragraph (a)(1) of section 250 of the Trade Act of 1974, as amended.
The application of November 15, 2001 requesting administrative reconsideration indicates that Motorola, Atlanta Order Fulfillment Center, Suwanee, Georgia shifted operations to Elgin, Illinois and Harvard, Illinois for the purpose of supporting cost reduction strategies throughout the corporation. The request further appears to indicate that the Harvard, Illinois facility was certified eligible for TAA benefits due to the fact that manufacturing operations were eliminated. The request further appears to indicate that the evidence used to support certification at the Harvard facility should be sued as grounds for certification of the subject workers.
A review of company data supplied during the initial investigation shows that the preponderance in the declines in employment at the subject plant is related to the transfer of the operations to two affiliated domestic facilities located in Illinois. The domestic transfer and minimal fluctuations in subject plant sales and production and stable customer base do not depict factors of imports impacting the workers of the subject firm.
The production (cellular phones) done at Harvard, Illinois was moved overseas prior to the subject plant's operations being shifted to the Harvard location. The work performed by the workers certified at the Harvard location was different from the work performed by the subject plant. The Atlanta Order Fulfillment Center workers were primarily engaged in the packaging and distribution of products they received from outside affiliated sources. The Consumer Products Division performed administrative support, materials tracking, ordering, engineering and sale/marketing and refurbishing.
The functions as described above are different from those of the workers certified at the Harvard facility. Although the workers at Motorola Personal Communications Sector, Harvard, Illinois (producing cell phones) were certified under TA-W-38,928 and NAFTA-4646 and Motorola, Inc., Energy System Groups, Harvard, Illinois (producing cell phone batteries) were certified under TA-W-37,850, the workers of the subject plant can not tied to those certifications.
Motorola made a business decision to transfer work previously done at Suwanee to Harvard, Illinois as excess capacity occurred. The impact of imports did not eliminate the Suwanee functions, it allowed the company to move those functions elsewhere. The worker separations were caused by the domestic transfer of functions and thus the workers can not be considered for eligibility as those workers at the Harvard, Illinois facility.
After review of the application and investigative findings, I conclude that there has been no error or misinterpretation of the law or of the facts which would justify reconsideration of the Department of Labor's prior decisions. Accordingly, the application is denied.
The United States Court of International Trade (USCIT) granted the Secretary of Labor's motion for a voluntary remand for further investigation in
The Department's initial negative determination of eligibility to apply for trade adjustment assistance (TAA) for the workers and former workers of Henderson Sewing Machine Company located in Andalusia, Georgia was issued on August 29, 2001 and published in the
On voluntary remand, the Department conducted further investigation concerning the eligibility of former workers at Henderson Sewing Company, Inc., Andalusia, Georgia to apply for trade adjustment assistance (TAA).
The results of the investigation on remand revealed that during the relevant period, the company laid off a total of two administrative workers. Another five workers left on their own accord, due to various personal reasons. None of these workers were engaged in the manufacture of any product while employed at the subject facility.
Further, the overwhelming portion of the activities performed at the subject facility relates to the sales of industrial sewing machines and related parts. The company also produces components that attach to the sewing machine (value added) before they are sold. The company indicated that this is a negligible portion of the total functions performed at the subject facility.
After careful consideration of the results of the remand investigation, I affirm the original notice of negative determination of eligibility to apply for trade adjustment assistance for workers and former workers of Henderson Sewing Machine Company, Inc., Andalusia, Georgia.
Pursuant to section 221 of the Trade Act of 1974, an investigation was initiated on March 4, 2002 in response to a petition that filed on behalf of workers at Honeywell International, Elyria, Ohio.
The petitioner has requested that the petition be withdrawn. Consequently, further investigation in this case would serve no purpose, and the investigation has been terminated.
By application of January 31, 2002, the petitioners requested administrative reconsideration of the Department's negative determination regarding eligibility for workers and former workers of the subject firm to apply for Trade Adjustment Assistance (TAA). The denial notice was signed on December 17, 2001 and published in the
Pursuant to 29 CFR 90.18(c) reconsideration may be granted under the following circumstances:
(1) If it appears on the basis of facts not previously considered that the determination complained of was erroneous;
(2) if it appears that the determination complained of was based on a mistake in the determination of facts not previously considered; or
(3) if in the opinion of the Certifying Officer, a misinterpretation of facts or of the law justified reconsideration of the decision.
The TAA petition, filed on behalf of workers at Incoe Corporation, North plant, Frankfort, Michigan engaged in the production of plastic injection molds, was denied because the “contributed importantly” group eligibility requirement of section 222(3) of the Trade Act of 1974, as amended, was not met. The “contributed importantly” test is generally demonstrated through a survey of the workers' firm's customers. However, a survey was not conducted since the products produced by the subject plant were shipped to another affiliated domestic facility. The company did not import products like or directly competitive with what the subject plant produced during the relevant period. The investigation further revealed that the dominant factor leading to the closure of the plant was related to a shift in plant production to another domestic affiliated facility.
The petitioner alleges that the workers do not produce plastic injection molds as addressed in the “Negative Determination Regarding Eligibility To Apply for Workers Adjustment Assistance”.
A review of the initial investigation indicates that the workers were engaged in activities related to the production of plastic injection molding machine tooling for injection molding systems (injection molding components). The TAA decision was based on the correct products produced by the subject firm. The Department inadvertently referenced the wrong product in the decision.
The petitioner further alleges that a representative from the corporate office was sent to a foreign source to compare the manufacturing processes and prices of the foreign sources products which were like or directly competitive with the subject firm's products. The petitioners indicated that the subject firm exported the product to the foreign source, which in turn sold the product back to the subject firm's only customer (affiliated with the subject firm) in the United States.
The comparison of manufacturing processes and price from a foreign source is not relevant to the TAA investigation that was filed on behalf of workers producing plastic injection molding machine tooling for injection molding systems (injection molding components). In reference to the foreign source shipping products like or directly competitive with what the subject firm produced, the company reported no imports of products like or directly competitive with what the subject plant produced (including the affiliated customer) during the relevant period.
After review of the application and investigative findings, I conclude that there has been no error or misinterpretation of the law or of the facts which would justify reconsideration of the Department of Labor's prior decisions. Accordingly, the application is denied.
By application of December 19, 2001, petitioners requested administrative reconsideration of the Department's negative determination regarding eligibility for workers and former workers of the subject firm to apply for Trade Adjustment Assistance (TAA). The denial notice applicable to workers of Innovex, Inc., Chandler, Arizona was issued on November 27, 2001, and was published in the
Pursuant to 29 CFR 90.18(c) reconsideration may be granted under the following circumstances:
(1) If it appears on the basis of facts not previously considered that the determination complained of was erroneous;
(2) If it appears that the determination complained of was based on a mistake in the determination of facts not previously considered; or
(3) If in the opinion of the Certifying Officer, a misinterpretation of facts or of the law justified reconsideration of the decision.
The investigation findings revealed that criterion (3) of the group eligibility requirements of Section 222 of the Trade Act of 1974 was not met. Increased imports of articles like or directly competitive with articles produced by the firm did not contribute importantly to worker separations at the subject firm.
The request for reconsideration claims that the company imported products like or directly competitive with what the subject plant produced, due to a partial shift in plant production to a foreign source. The petitioner provided a list of the subject plant's customers that they believe are now receiving these products for foreign sources.
A review of data supplied during the initial investigation and clarification provided by the company shows that over three-quarters of plant production of flexible circuits was shifted to other domestic locations. The remaining production was shifted to Thailand. The production performed in Thailand is then distributed to countries all over the world. The amount of flexible circuits shipped from Thailand to the firm's customers located in the United States is negligible in relation to the production that was performed at the subject plant.
After review of the application and investigative findings, I conclude that there has been no error or misinterpretation of the law or of the facts which would justify reconsideration of the Department of Labor's prior decision. Accordingly, the application is denied.
Pursuant to section 221 of the Trade Act of 1974, an investigation was initiated on January 28, 2002, in response to a petition filed on behalf of workers at Internet Arena, Portland, Oregon.
The petitioning group of workers submitting the petition has requested that the petition be withdrawn. Consequently, further investigation in this case would serve no purpose, and the investigation has been terminated.
By application of December 31, 2001, the petitioners requested administrative reconsideration of the Department's negative determination regarding eligibility for workers and former workers of the subject firm to apply for Trade Adjustment Assistance (TAA). The denial notice applicable to workers of Tennford Weaving, Sanford, Maine, was issued on December 11, 2001, and was published in the
Pursuant to 29 CFR 90.18(c) reconsideration may be granted under the following circumstances:
(1) If it appears on the basis of facts not previously considered that the determination complained of was erroneous;
(2) If it appears that the determination complained of was based on a mistake in the determination of facts not previously considered; or
(3) If in the opinion of the Certifying Officer, a mis-interpretation of facts or of the law justified reconsideration of the decision.
The negative TAA determination issued by the Department on December 11, 2001 was based on the fact that the subject plant's assets were sold to Alkahn Labels, Inc., New York, New York and that Alkahn Labels, Inc. did not import woven labels during the relevant period.
The request for administrative reconsideration indicates that Tennford Weaving, Sanford, Maine sold their assets (machinery) to Alkahn Labels, Inc. The new owner of the equipment then shipped the machinery to Weston, West Virginia where some of the machinery was reconfigured for use overseas in Hong Kong.
Declines in subject plant employment is related to the subject plant's machinery being sold on August 1, 2001 to Alkahn Labels, Inc. The new owner consolidated their manufacturing operations by transferring the subject plant machinery to factories located in West Virginia, South Carolina and Hong Kong. The investigation further revealed that the subject plant and Alkahn Labels, Inc. did not import woven labels during the relevant period.
The shift of plant machinery to a foreign source does not meet the “contributed importantly” group eligibility requirement of section 222(3) of the Trade Act of 1974, as amended. To meet the eligibility requirements of criterion (3) the increases of imports of articles like or directly competitive with articles produced by the subject firm or appropriate subdivision have to contribute importantly to the separations and to the absolute decline in sales or production. This is not the case for the workers of the subject firm.
The petitioners in their request for administrative reconsideration also attached shipping invoices to their request.
An examination of the attached shipping invoices revealed that Sher
After review of the application and investigative findings, I conclude that there has been no error or misinterpretation of the law or of the facts which would justify reconsideration of the Department of Labor's prior decision. Accordingly, the application is denied.
On February 11, 2002, the Department issued a Affirmative Determination Regarding Application on Reconsideration applicable to workers and former workers of the subject firm. The notice will soon be published in the Federal Register.
The Department initially denied TAA to workers of United States Steel, LLC, Fairless Hills, Pennsylvania, engaged in the production of tin mill products because the “contributed importantly” group eligibility requirement of section 222(3) of the Trade Act of 1974, as amended, was not met.
On reconsideration, the Department conducted further survey of the major customers of the subject firm regarding their purchases of tin mill products. The survey revealed that major customer significantly increased their imports, while decreasing their purchases from the subject firm during the relevant period.
After careful review of the additional facts obtained on reconsideration, I conclude that increased imports of articles like or directly competitive with tin mill products, contributed importantly to the declines in sales or production and to the total or partial separation of workers of United States Steel, LLC, Fairless Hills, Pennsylvania. In accordance with the provisions of the Act, I make the following certification:
“All workers of United States Steel, LLC, Fairless Hills, Pennsylvania engaged in the production of tin mill products who became totally or partially separated from employment on or after May 4, 2000 are eligible to apply for adjustment assistance under section 223 of the Trade Act of 1974.”
Signed in Washington, DC this 11th day of March 2002.
Employment and Training Administration (ETA), Labor.
Notice of availability of funds and solicitation for grant applications (SGA). This notice contains all of the necessary information and forms needed to apply for grant funding.
The Employment and Training Administration (ETA), U.S. Department of Labor (DOL) announces the availability of funds to award a grant to “grass-roots” organizations or small faith-based and community-based non-profit organizations with the ability to connect to the nation's workforce development system. The term “grassroots” is defined under the Eligibility Criteria.
This grant award has three important objectives:
• Increase the number of faith-based and community-based organizations serving as committed and active partners in the One-Stop delivery system .
• Expand the access of faith-based and community-based organizations' clients and customers to the services offered by the nation's One-Stops.
• Identify, document, showcase and replicate successful and innovative instances of faith- and community-based involvement in One-Stop delivery system-building.
ETA has identified $500,000 from funds authorized under Section 171 of the Workforce Investment Act for this competition to meet the system-building objectives.
The closing date for receipt of applications is Monday, May 20, 2002. Application must be received by 4 p.m. (Eastern Standard Time) at the address below: No exceptions to the mailing and hand-delivery conditions set forth in this notice will be granted. Applications that do not meet the conditions set forth in this notice will not be honored. Telefacsimile (FAX) applications will not be honored. Applicants are advised that the Department's receipt of mail has encountered delays because of mail screening procedures at local post offices.
Applications must be mailed to the U.S. Department of Labor, Employment and Training Administration, Division of Federal Assistance, Attention: Ms. Linda Forman, SGA/DFA 02-108, 200 Constitution Avenue, NW., Room S-4203, Washington, DC 20210.
• Was sent by U.S. Postal Service registered or certified mail not later than the fifth day (5th) calendar day before the closing date specified for receipt of applications (
• Was sent by U.S. Postal Service Express Mail Next Day Service, Post Office to Addressee, not later than 5 p.m. at the place of mailing two working days prior to the deadline date specified for receipt of proposals in this SGA. The term “working days” excludes weekends and U.S. Federal holidays.
The only acceptable evidence to establish the date of mailing of an application received after the deadline date for the receipt of proposals sent by the U.S. Postal Service registered or certified mail is the U.S. postmark on the envelope or wrapper affixed by the U.S. Postal Service and on the original receipt from the U.S. Postal Service. The term “post marked” means a printed, stamped, or otherwise place impression (exclusive of a postage meter machine impression) that is readily identifiable without further action as having been supplied or affixed on the date of mailing by employees of the U.S. Postal Service.
Questions should be faxed to Linda Forman, Grants Management Specialist, Division of Federal Assistance, Fax (202) 693-3296. This is not a toll-free number. All inquiries should include the SGA 02-108 and a contact name, fax and phone number. This solicitation will be published on the Internet on the Employment and Training Administration's home page at
Through this grant award, ETA seeks to ensure that an important Workforce Investment Act tenet—universal access to the programs and services offered under WIA—is further rooted in the customer-responsive delivery systems already established by the Governors, local elected officials and local Workforce Investment Boards. Through this grant competition, ETA also reaffirms its continuing commitment to those customer-focused reforms instituted by State and local governments which help Americans access the tools they need to manage their careers through information and high quality services, and to help U.S. companies find skilled workers.
On January 29, 2001, President George W. Bush issued Executive Order 13198, creating the Office for Faith-Based and Community Initiatives in the White House and centers in the departments of Labor, Health and Human Services (HHS), Housing and Urban Development (HUD), Education (ED), Justice (DOJ). President Bush charged the Cabinet centers with identifying statutory, regulatory, and bureaucratic barriers that stand in the way of effective faith-based and community initiatives, and to ensure, consistent with the law, that these organizations have equal opportunity to compete for federal funding and other support.
SGA/DFA 02-108 reflects the outcome of discussions between the Department's Center for Faith-Based and Community-Based Initiatives (CFBCI) and ETA to provide expanded opportunities for the Federal-State-local partnerships under WIA to engage the faith-based and community-based organizations in service delivery, while providing additional points of entry for customers into the One-Stop system. The solicitation also reflects the Administration's interest in creating new avenues through which qualified “grass-roots” organizations can more fully participate under the Workforce Investment Act while bringing their particular strengths and talents in service provision to the customers. A Training and Employment Guidance Letter (TEGL) will be issued in April 2002 to state workforce agencies, worker adjustment liaisons, workforce liaisons, and One-Stop Center system leads. The TEGL will request these principals to commit to a full engagement with faith-based and community-based organizations. The TEGL will encourage local workforce boards to appoint member(s) who are familiar with the FBOs/CBOs that provide job training, soft skills training and employment services in the labor market, and work in conjunction with the state workforce agency's faith-based liaison to share ideas and collect promising practices. The TEGL also will ask the state principals to collaborate with the local workforce investment areas in creating a campaign to educate the appropriate FBOs/CBOs about the workforce investment system, One-Stop Centers, available grants-in-aid, and to invite their participation.
Faith-based and community-based organizations present credentials for full partnership in our mutual system-building endeavors. FBOs/CBOs are often trusted institutions within our poorest neighborhood, serving the very hardest-to-reach constituents in a cost-effective manner. FBOs/CBOs are home to a large number of volunteers who not only bring the transformational power of personal relationships to the provision of social service but a sustained allegiance to the well-being of their participants they serve. Through their daily work and specific programs, FBOs/CBOs strive to achieve some common purposes shared with government—reduction of welfare dependency, attainment of occupational skills, entry and retention of all our citizens in good-paying jobs. With appropriate planning, the FBO/CBO programs and resources can be leveraged into the workforce investment strategies already embodied in State and local strategic plans.
This grant is made under the following authorities:
• The Workforce Investment Act of 1998 (WIA or the Act) (Pub. L. 105-220, 29 U.S.C. 2801
• WIA Final Rule, 20 CFR parts 652, 660-671 (65 FR 49294 (August 11, 2000));
• Interim Final Rule implementing the nondiscrimination and equal opportunity provision (section 188) of WIA, 29 CFR part 37 (64 FR 61692 (November 12, 1999));
• Planning Guidance and Instructions for Submission of the Strategic Five-Year State Plan for title I of the Workforce Investment Act of 1998 and the Wagner-Peyser Act (64 FR 9402 (February 25, 1999))
• Final Unified Plan Planning Guidance (65 FR 2464 (January 14, 2000))
• Executive Order 13198; “Rallying the Armies of Compassion”
• “Report on a Unlevel Playing Field: Barriers to Participation by Faith-Based and Community Organization in Federal Service Programs”
The Workforce Investment Act of 1998 (WIA) established a comprehensive reform of existing Federal job training programs with amendments impacting service delivery under the Wagner-Peyser Act, Adult Education and Literacy Act, and the Rehabilitation Act. A number of other Federal programs are also identified as required partners in the One-Stop delivery system to provide comprehensive services for all Americans to access the information and resources available that can help in the achievement of their career goals. The intention of the One-Stop system is to establish a network of programs and providers in co-located and integrated settings that are accessible for individuals and businesses alike in over 600 workforce investment areas established throughout the nation.
One of the principles of WIA is empowerment of local leaders and organizations to respond to community issues and needs. Under WIA, state and local Workforce Investment Boards are required to develop strategies and programs that address the workforce development needs of their communities and develop an awareness of the range of worker education, training and employment, and other services offered throughout the local area.
Under WIA, services are provided to adults/dislocated workers and eligible youth 14-21 years of age. There are three levels of services for adults/dislocated workers—core services, intensive services and training. While these services are provided through the One-stop center, service providers (approved by the local board), including contracts with private non-profits may provide core and intensive services.
Local boards are required to establish Youth Councils as a sub group. As authorized by the Board Chair, the youth Council is responsible for developing portions of the local plan relating to youth and recommending the providers of youth activities. Most youth services are delivered by entities that are competitively awarded a grant or contract by the local board to provide services. An individual assessment of skill levels and service needs and the development of a youth service strategy are required for each youth participant.
The provided services under this grant would supplement the services that local One-Stop delivery systems currently provide. The recipient organizations receiving grant funds will partner with the local Workforce Investment Boards and One-Stop operators to carry out various services of direct benefit to customers. The organization would offer, for example, “soft-skills” training such as communications, problem-solving, and time management which will allow the individual to function in a new work environment. Other activities can include GED tutoring of at-risk youth, after school programs for youth, day care for elders, job loss counseling, language translation services, “community audits” (a resource guide to support services within the community), and “cultural sensitivity” training programs.
A total of $500,000 is reserved for small private non-profit or “grassroots” organizations to provide authorized services to WIA participants. ETA expects to award approximately 20 to 25 grants under this competition.
The period of performance is one year.
DOL will consider a “grassroots” or small faith-based and community-based non-profit organizations if:
(a) The organization is headquartered in the local community to which it provides services; and,
(i) Has a social services budget of $300,000 or less, or
(ii) Has 6 or fewer full-time equivalent employees.
(b) Local affiliates of national organizations are not considered “grassroots.”
(c) The $300,000 or less budget includes only that portion of an organization's budget allocated to providing social services. It does not include other portions of the budget such as salaries and expenses.
Except as specifically provided, DOL/ETA acceptance of a proposal and an award of federal funds to sponsor any program(s) does not provide a waiver of any grant requirement and/or procedures. For example, the OMB circulars require that an entity's procurement transaction must be conducted, as practical, to provide open and free competition. If a proposal identifies a specific entity to provide the services, the DOL/ETA's award does not provide the justification or basis to sole-source the procurement,
The application must clearly identify the applicant (or the fiscal agent), the grant recipient (and/or fiscal agent), and its capacity to administer this project. Applicants must submit one copy with an original signature and two additional copies of their proposal. The proposal must include the Application for Federal Assistance (SF 424A), signed by an authorized representative of the organization to enter into grant agreement.
This application must be double-spaced, and on single-sided, numbered pages. There are four required sections:
ETA will not consider applications that fail to provide complete information in these four sections.
• A “page” is 8.5″ x 11″ (on one side only) with one-inch margins (top, bottom, and sides).
• Double-space (no more than three lines per vertical inch).
• If using a proportional computer font, use no smaller than 12-point font, and an average character density no greater than 10 characters per inch.
Section I—
Section II—
Each applicant must submit an Executive Summary identifying the following:
• The applicant's capacity to administer this project (including affiliate organizations that will be part of the grant.
• The geographic area to be served through this grant (
• The amount of funding requested and planned period of performance up to one year.
• Applicant must ensure that
• Timeline for project activities to be undertaken in the Statement of Work.
Section III—
The Statement of Work sets forth a strategic plan for the use of awarded funds, establishes measurable goals for increasing “organizational” participation in the One-Stop service delivery system to more fully serve the clientele and members of community-based and faith-based organizations.
• Describe the population to be served.
• Describe the services and/or soft-skills training to be provided.
• Describe current and/or proposed involvement with local Workforce Investment Boards and One-Stop Centers.
• Describe any relevant history in managing resources through grant awards from Federal, State or units of local governments, and/or from private organizations.
• Describe objectives, how project results will be measured, and who will
Section IV—
ETA, CFBCI and other Federal agency staff are expected to serve on the technical panel(s) that will review all applications against the criteria listed below. The panel recommendations are advisory. The ETA grant officer will fully consider the panel recommendations but take into account geographical balance and other factors to ensure the most advantageous award of these funds to accomplish the system-building purposes outlined in the Summary and Statement of Work. The grant officer may consider any information that comes to his or her attention The grant officer reserves the right to award without further negotiation. Each application will be evaluated against the following rating criteria.
The applicant must provide a statement of its performance history with managing resources under governmental grants-in-aid programs. The Department will be evaluating applications based on scope, strength, and record of achievement. Applicant may provide a recent history of any involvement as a partner or provider in the Workforce Development system.
The applicant must describe how it plans to use the investments and activities under this grant to prepare individuals for career opportunities and the skills needed by employers. The applicant must clearly describe how unmet customer workforce needs will be accomplished and illustrate its ability to help bridge those needs.
The applicant must describe thoroughly plans to work as partners with the One-Stop Service Delivery system to provide clients with the needed skills and training in preparation for entering the workforce. The applicant should include plans to brief One-Stop centers in the local area about the purpose of this grant and the CFBCI/ETA faith- and community-based initiative. Applicant should include ideas for further strengthening these CBO and FBO relationships with the One-Stop delivery system.
The applicant must describe the methodology for measuring success of this project. The objectives must be clearly defined and the applicant must describe how it will report the number of participants served, (a) how many received employment, (b) training and/or services, (c) number of applicants that were referred to local One-Stop center after receiving soft skills training. The applicant should describe how customers and the staff who serve them are provided with opportunities for suitable access to One-Stop Career Centers, neighborhood centers, and on-line web-based applications that provide valuable information on services, training, jobs, career and local labor market information.
DOL must receive a quarterly report that addresses scope of work, progress under grant, and financial reporting. Further, a final report is required that summarizes progress, and accomplished objectives, and final financial report that includes expenditures.
Employment and Training Administration (ETA), Labor.
Notice of availability of funds and solicitation for grant applications (SGA).
This notice contains all of the necessary information and forms needed to apply for grant funding.
The Employment and Training Administration (ETA), U.S. Department of Labor (DOL) announces the availability of funds to be awarded to States under one of three separate competitions to award grants to (1) States, (2) intermediaries, and (3) small faith-based and community-based non-profit organizations. These awards have three important objectives:
• Increase the number of faith-based and community-based organizations serving as committed and active partners in the One-Stop delivery system
• Expand the access of faith-based and community-based organizations' clients and customers to the services offered by the nation's One-Stops
• Identify, document, showcase and replicate successful and innovative instances of faith- and community-based involvement in our system-building.
ETA has identified $14.9 million from the FY 2001 appropriation for One-Stop/America's Labor Market Information System and $500,000 from funds authorized under Section 171 of the Workforce Investment Act for these system-building objectives. A total of $9.9 million is available to be awarded to States under this notice.
The closing date for receipt of applications is Thursday, May 16, 2002. Application must be received by 4 p.m. (Eastern Standard Time) at the address below: No exceptions to the mailing and hand-delivery conditions set forth in this notice will be granted. Applications that do not meet the conditions set forth in this notice will not be honored. Telefacsimile (FAX) applications will not be honored. Applicants are advised that the Department's receipt of mail has encountered delays because of mail screening procedures at local post offices.
Applications must be mailed to the U.S. Department of Labor, Employment and Training Administration, Division of Federal Assistance, Attention: B. Jai Johnson, SGA/DFA 02-106, 200 Constitution Avenue, NW., Room S-4203, Washington, DC 20210
Hand Delivered Proposals. If proposals are hand delivered, they must be received at the designated address by 4 p.m., Eastern Time on Thursday, May 16, 2002. All overnight mail will be considered to be hand delivered and must be received at the designated place by the specified closing date and time. Telegraphed, e-mail and/or fax proposals will not be honored. Failure to adhere to the above instructions will be a basis for determination of non-responsive.
Late Proposals. A proposal received at the designated office after the exact time specified for receipt will not be considered unless it is received before the award is made and it:
• Was sent by U.S. Postal Service registered or certified mail not later than the fifth day (5th) calendar day before the closing date specified for receipt of applications (e.g. an offer submitted a response to a solicitation requiring receipt of application by the 20th of the month must be mailed by the 15th):
• Was sent by U.S. Postal Service Express Mail Next Day Service, Post Office to Addressee, not later than 5 p.m. at the place of mailing two working days prior to the deadline date specified for receipt of proposals in this SGA. The term “working days” excludes weekends and U.S. Federal holidays.
The only acceptable evidence to establish the date of mailing of an application received after the deadline date for the receipt of proposals sent by the U.S. Postal Service registered or certified mail is the U.S. postmark on the envelope or wrapper affixed by the U.S. Postal Service and on the original receipt from the U.S. Postal Service. The term “post marked” means a printed, stamped, or otherwise place impression (exclusive of a postage meter machine impression) that is readily identifiable without further action as having been supplied or affixed on the date of mailing by employees of the U.S. Postal Service.
Withdrawal of Applications. Applications may be withdrawn by written notice or telegram (including mailgram) received at any time before an award is made. Application may be withdrawn in person by the applicant or by an authorized representative thereof, if the representative's identity is made known and the representative signs a receipt for the proposal.
Questions should be faxed to B. Jai Johnson, Grants Management Specialist, Division of Federal Assistance, Fax (202) 693-2879. This is not a toll-free number. All inquiries should include the SGA number (DFA 02-106) and a contact name, fax and phone number. This solicitation will also be published on the Internet on the Employment and Training Administration's Homepage at
Through the grants awarded under these three announcements, ETA seeks to ensure that an important Workforce Investment Act tenet—universal access to the programs and services offered under WIA—is further rooted in the customer-responsive delivery systems already established by the Governors, local elected officials and local Workforce Investment Boards. Through these grant competitions, ETA also reaffirms its continuing commitment to those customer-focused reforms instituted by State and local governments which help Americans access the tools they need to manage their careers through information and high quality services, and to help U.S. companies find skilled workers.
On January 29, 2001, President George W. Bush issued Executive Order 13198, creating the Office for Faith-Based and Community Initiatives in the White House and centers in the departments of Labor, Health and Human Services (HHS), Housing and Urban Development (HUD), Education (ED), Justice (DOJ). President Bush charged the Cabinet centers with identifying statutory, regulatory, and bureaucratic barriers that stand in the way of effective faith-based and community initiatives, and to ensure, consistent with the law, that these organizations have equal opportunity to compete for federal funding and other support.
These solicitations reflect the outcome of discussions between the Department's Center for Faith-Based and Community-Based Initiatives (CFBCI) and ETA to provide expanded opportunities for the Federal-State-local partnerships under WIA to engage the faith-based and community-based organizations in service delivery, while providing additional points of entry for customers into the One-Stop system. These solicitations also reflect the Administration's interest in creating new avenues through which qualified grass-roots organizations can more fully participate under the Workforce Investment Act while bringing their particular strengths and talents in service provision to our customers.
These solicitations also proceed from an ETA-CFBCI mutual premise: the involvement of community-based organizations and faith-based organizations can complement and supplement the efforts of local workforce development systems in providing universal access and serving the training-, job- and career-support needs of many of our customers. Success in the implementation of the Workforce Investment Act is clearly derived from the power of partnerships. Many community-based organizations have fully participated with distinction as direct recipients or as sub-recipients of Federal resources under the Comprehensive Employment and Training Act (CETA) , the Job Training Partnership Act (JTPA) and are currently doing so under WIA. These solicitations are designed to bring other community-based organizations to the decision-making and service delivery mechanisms under WIA.
Faith-based and community-based organizations present credentials for full partnership in our mutual system-building endeavors. FBOs/CBOs are often trusted institutions within our poorest neighborhood, serving the very hardest-to-reach constituents in a cost-effective manner. FBOs/CBOs are home to a large number of volunteers who not only bring the transformational power of personal relationships to the provision of social service but a sustained allegiance to the well-being of their participants they serve. Through their daily work and specific programs, FBOs/CBOs strive to achieve some common purposes shared with government—reduction of welfare dependency, attainment of occupational skills, entry and retention of all our citizens in good-paying jobs. With appropriate planning, the FBO/CBO programs and resources can be leveraged into the workforce investment strategies already embodied in State and local strategic plans.
These three solicitations represent an important element of an overall strategy for outreach to the people served by our nation's community-based organizations and faith-based organizations. A Training and Employment Guidance Letter (TEGL) will be issued in April 2002 to state workforce agencies, worker adjustment liaisons, workforce liaisons, and One-Stop Center system leads. The TEGL will request these principals to commit to a full engagement with faith-based and community-based organizations. The TEGL will encourage local workforce boards to appoint member(s) who are familiar with the FBOs/CBOs that provide job training, soft skills training and employment services in the labor market, and work in conjunction with the state workforce agency's faith-based liaison to share ideas and collect promising practices. The TEGL also will ask the state principals to collaborate with the local workforce investment areas in creating a campaign to educate the appropriate FBOs/CBOs about the workforce investment system, One-Stop Centers, available grants-in-aid, and to invite their participation.
A total of $500,000 is reserved for from small private non-profit organizations to provide authorized services to WIA participants. ETA expects to award approximately 20 to 25 grants under this competition.
The provided services would supplement the services that local One-Stop delivery systems currently provide. The recipient organizations receiving grant funds will partner with the local Workforce Investment Boards and One-Stop operators to carry out various services of direct benefit to customers. The sub-grantees could offer, for example, “soft-skills” training such as communications, problem-solving, and time management which will allow the individual to function in an employment environment Other sub-grantee activities can include GED tutoring of at-risk youth, after school programs for youth, day care for elders, job loss counseling, language translation services, “community audits” (a resource guide to support services within the community), and “cultural sensitivity” training programs.
A total of $5.0 million is reserved for grants for eligible intermediary organizations. ETA expects to award between 5 to 8 grants, with the awards ranging between $500,000 and $1,000,000. ETA will set the amount for each grant after reviewing the proposed activities, and evaluating the ability of each applicant on a State and multi-State basis to achieve the desired system-building objectives. Some intermediary grant recipients, therefore, may be authorized to proceed with a portion—but not the entirety—of their presented project plan.
Under this competition, eligible “intermediaries” include those non-profit, community, and/or faith-based organizations with connections to grassroots faith-based and community organizations with the ability to connect those organizations to the nation's workforce development system in more than one service area. The eligible intermediary does not have to be located in more than one jurisdiction as long as their reach extends beyond one jurisdiction, and the application addresses providing services in more than one jurisdiction.
The selected intermediaries under this competition will develop necessary infrastructure, perform outreach and recruitment of community-based and faith-based organizations, conduct information dissemination campaigns, and engage in capacity-building efforts to establish and strengthen the administrative potential of grassroots organizations to receive future grants. These intermediaries will award and manage sub-grants to FBOs/CBOs for service provision in local workforce development areas.
Under this award, the intermediary may issue a sub-grant to a grassroots organization which
(a) Is headquartered in the local community to which it provides services; and,
(i) Has a social services budget of $300,000 or less, or
(ii) Has 6 or fewer full-time equivalent employees.
The “$300,000 or less” budget includes only that portion of an organization's budget allocated to providing social services. It does not include other portions of the budget such as salaries and expenses. For purposes of this announcement local affiliates of national organizations are not considered “grassroots” and would not be eligible for a sub-grant award.
The Establishment Clause of the First Amendment of the United States Constitution prohibits the government from directly funding religious activity. These grants may not be used for instruction in religion or sacred literature, worship, prayer, proselytizing or other inherently religious practices. The services provided under these grants must be secular and non-ideological. Grant or sub-grant recipients, therefore, may not and will not be defined by reference to religion. Neutral, secular criteria that neither favor nor disfavor religion must be employed in their selection. In addition, under the WIA and DOL regulations implementing the Workforce Investment Act, a recipient may not employ or train a participant in sectarian activities, or permit participants to construct, operate, or maintain any part of a facility that is primarily used or devoted to sectarian instruction or worship. Under WIA, no individual shall be excluded from participation in, denied the benefits of, subjected to discrimination under, or denied employment in the administration of or in connection with, any such program or activity because of race, color, religion, sex (except as otherwise permitted under title IX of the
Through these grants, the Department expects to assist the State, local partners and new intermediaries in reaching out to additional customers who would otherwise not be served by the publicly-funded workforce development system. The Department views these investments as instrumental in supporting and broadening partnerships which will strengthen One-Stop service delivery.
These grants are made under the following authorities:
• The Workforce Investment Act of 1998 (WIA or the Act) (Public Law 105-220, 29 U.S.C. 2801
• WIA Final Rule, 20 CFR parts 652, 660-671 (65 FR 49294 (August 11, 2000));
• Interim Final Rule implementing the nondiscrimination and equal opportunity provision (section 188) of WIA, 29 CFR part 37 (64 FR 61692 (November 12, 1999));
• Planning Guidance and Instructions for Submission of the Strategic Five-Year State Plan for title I of the Workforce Investment Act of 1998 and the Wagner-Peyser Act (64 FR 9402 (February 25, 1999))
• Final Unified Plan Planning Guidance (65 FR 2464 (January 14, 2000))
• Executive Order 13198; “Rallying the Armies of Compassion”
• “Report on a Unlevel Playing Field: Barriers to Participation by Faith-Based and Community Organization in Federal Service Programs”
All states, District of Columbia, Puerto Rico, and Virgin Islands are eligible to apply for these grants.
Except as specifically provided, DOL/ETA acceptance of a proposal and an award of federal funds to sponsor any program(s) does not provide a waiver of any grant requirement and/or procedures. For example, the OMB circulars require that an entity's procurement procedures must require that all procurement transactions must be conducted, as practical, to provide open and free competition. If a proposal identifies a specific entity to provide the services, the DOL/ETA's award does not provide the justification or basis to sole-source the procurement, i.e., avoid competition.
The application must clearly identify the applicant (or the fiscal agent), the grant recipient (and/or fiscal agent), and its capacity to administer this project. Applicants must submit one copy with an original signature and two additional copies of their proposal. The proposal must contain the Standard Form (SF) 424, Application for Federal Assistance, signed by the Governor or the individual designated in the State Workforce Investment Act Strategic Plan.
The application's Statement of Work must be double-spaced, and on single-sided, numbered pages. A font size of at least twelve (12) pitch is required throughout.
There are three required sections:
ETA will not consider applications that fail to provide complete information in these three sections.
(See Attachment “A”)
The Statement of Work sets forth a strategic context for the use of these funds, establishes measurable goals for increasing “organizational” participation, and documents those sustainable State and local partner actions to more fully serve the clientele and members of community-based and faith-based organizations. The narrative in Section II will be evaluated in accordance with the guidance under “Review Process and Evaluation Criteria” contained in this announcement.
(See Attachment “B”)
Pursuant to 20 CFR 667.210(b), grantees are advised that there is a 10% limitation on administrative costs on funds administered under this grant. The Grant Officer may, however, approve additional administrative costs, up to a maximum of 15% of the total award amount, for that grantee providing adequate justification. In no event, may administrative costs exceed 15% of the total award amount. The cost of administration shall include those disciplines enumerated in 20 CFR 667.220(b) and (c).
(Note: Please follow the evaluation criteria when writing and assembling your proposal.) ETA, CFBCI and other Federal agency staff are expected to serve on the technical panel(s) that will review all applications against the criteria listed below. The panel recommendations are advisory. The ETA grant officer will fully consider the panel recommendations but take into account geographic balance and other factors to ensure the most advantageous award of these funds to accomplish the system-building purposes outlined in the Summary and Statement of Work. The grant officer may consider any information that comes to his or her attention. The grant officer reserves the right to award without further negotiation.
Each application will be evaluated against the following rating criteria.
The State application must relate the investments and activities under this grant to the workforce development vision, goals and objectives reflected in its current WIA Strategic Plan. The application should clearly establish a link between unmet customer service needs and the ability of community-based and faith-based organizations to help bridge those needs. (5 points)
The application in this section and in its entirety should evidence the capability to document successful instances of faith-based and community-based organization involvement (both existing as well as those made possible through this grant). Describe how these examples can be successfully transferred and replicated consistent with the Federal-state-local emphasis on “promising practices.” Describe how this investment would fit with other Federally funded initiatives which engage the CBOs/FBOs. (5 points)
Describe State plans to conduct outreach to community-based organizations and faith-based organizations to seek their new (or enlarged) participation in the One-Stop delivery system. Identify the stakeholders and principals in the State and local workforce development systems who will contribute to the outreach and evaluation responsibilities identified in these plans. Summarize the innovative approaches that will be used in working with grassroots organizations to catalogue the full range of community
Describe the formal State evaluation criteria for measuring the success of engagement with the grass-roots organizations under this grant. Describe how these criteria will be developed through consultation with One-Stop operator(s), State and local board(s). (10 points)
Describe “leveraging opportunities': i.e., how these grant funds can leverage (and can also be leveraged) with financial and non-financial resources provided by the community-based and faith-based organizations in service of the workforce preparation needs of each community. (10 points)
Outline how State and local governance will “add the voice” of community-based and faith-based organizations (individually or within coalitions) in future board-based strategic planning. (10 points)
Describe how the applicant will ensure that signatories to the “memorandum(a) of understanding” in each local area of the State are thoroughly briefed on the purposes of the CFBCI/ETA faith- and community-based initiative and the purposes of these grants-in-aid. Describe how local partner suggestions and ideas for further strengthening these CBO and FBO relationships with the workforce development system have been incorporated into this application. (10 points)
Describe how the grant funds will be used to expand the opportunity of individuals served by the community-based organizations and faith-based organizations to learn about and gain access to the services offered by the One-Stop delivery system within the State. Describe plans to sustain the increased access of individuals served by CBOs and FBOs beyond the term of this grant. (20 points)
Describe how customers and the staff who serve them are provided with suitable access to the web-based, State-developed applications and websites which provide valuable information on services, training, jobs, career and the local labor markets as well as those electronic tools contained within America's Labor Market Information System and America's Career Kit (America's Job Bank, America's Career InfoNet, O*NET, and Workforce Tools of the Trade). Describe the training and tutoring support that will be provided on these electronic tools. Summarize how the CBOs/FBOs and the individuals they serve will gain knowledge about the Federal Bonding Program and Work Opportunity Tax Credit programs. (20 points)
The grantee must submit quarterly narrative progress and financial reports. The grantee must also prepare and submit a final report summarizing all accomplishments under the grant. The format of all reports and submission instructions will be contained in the grant document.
Employment and Training Administration, Department of Labor.
Notice of availability of funds and solicitation for grant applications (SGA). This notice contains all of the necessary information and forms needed to apply for grant funding.
The Employment and Training Administration (ETA), U.S. Department of Labor (DOL) announces the availability of funds under three separate competitions to award grants (1) States, (2) intermediaries, and (3) small private non-profit organizations. Under these competitions, eligible “intermediaries” are defined as those non-profit, community, and/or faith-based organizations with connections to grassroots faith-based and community organizations with the ability to connect those organizations to the nation's workforce development system in more than one service area. The eligible intermediary does not have to be located in more than one jurisdiction as long as their reach extends beyond one jurisdiction, and the application addresses providing services in more than one jurisdiction.
These awards have three important objectives:
• Increase the number of faith-based and community-based organizations serving as committed and active partners in the One-Stop delivery system
• Expand the access of faith-based and community-based organizations' clients and customers to the services offered by the nation's One-Stops
• Identify, document, showcase and replicate successful instances of faith- and community-based involvement in our system-building.
ETA has identified $14.9 million from the FY 2001 appropriation for One-Stop/America's Labor Market Information System and $500,000 from funds authorized under Section 171 of the Workforce Investment Act for these system-building objectives. A total of $5.0 million is available for this intermediary competition.
The closing date for receipt of applications is Friday, May 17, 2002. Applications must be received by 4 p.m. (Eastern Standard Time) at the address below: No exceptions to the mailing and hand-delivery conditions set forth in this notice will be granted. Applications that do not meet the conditions set forth in this notice will not be honored. Telefacsimile (FAX) applications will not be honored. Applicants are advised that the Department's receipt of mail has encountered delays because of mail screening procedures at local post offices.
Applications must be mailed to: U.S. Department of Labor, Employment and Training Administration, Division of Federal Assistance, Attention: Denise Roach, Reference: SGA/DFA 02-107, 200 Constitution Avenue, NW., Room S-4203, Washington, DC 20210.
• Was sent by U.S. Postal Service registered or certified mail not later than the fifth day (5th) calendar day before the closing date specified for receipt of applications (
• Was sent by U.S. Postal Service Express Mail Next Day Service, Post Office to Addressee, not later than 5 p.m. at the place of mailing two working days prior to the deadline date specified for receipt of proposals in this SGA. The term “working days” excludes weekends and U.S. Federal holidays.
The only acceptable evidence to establish the date of mailing of an application received after the deadline date for the receipt of proposals sent by the U.S. Postal Service registered or certified mail is the U.S. postmark on the envelope or wrapper affixed by the U.S. Postal Service and on the original receipt from the U.S. Postal Service. The term “post marked” means a printed, stamped, or otherwise place impression (exclusive of a postage meter machine impression) that is readily identifiable without further action as having been supplied or affixed on the date of mailing by employees of the U.S. Postal Service.
Questions should be faxed to Denise Roach, Grants Management Specialist, Division of Federal Assistance at (202) 693-2879 (This is not a toll free-number). All inquiries should include the SGA/DFA 02-107 and a contact name, fax and phone number. This solicitation will be also published on the Internet, on the Employment and Training Administration (ETA) home page at
The Workforce Investment Act of 1998 (WIA) established a comprehensive reform of existing Federal job training programs with amendments impacting service delivery under the Wagner-Peyser Act, Adult Education and Literacy Act, and the Rehabilitation Act. A number of other Federal programs are also identified as required partners in the One-Stop delivery system to provide comprehensive services for all Americans to access the information and resources available that can help in the achievement of their career goals. The intention of the One-Stop system is to establish a network of programs and providers in co-located and integrated settings that are accessible for individuals and businesses alike in approximately 600 workforce investment areas established throughout the nation.
WIA established State and Local Workforce Investment Boards focused on strategic planning, policy development, and oversight of the workforce investment system, and accorded significant authority to the nation's Governors and local chief elected officials to further implement innovative and comprehensive delivery systems. The vision, goals and objectives for workforce development under the WIA decentralized system are fully described in the State strategic plan required under section 112 of the legislation. This State strategic workforce investment plan—and the operational experience gained by all the
Through these grants awards, ETA seeks to ensure that an important Workforce Investment Act tenet—universal access to the programs and services offered under WIA—is further rooted in the customer-responsive delivery systems already established by the Governors, local elected officials and local Workforce Investment Boards. Through these grant competitions, ETA also reaffirms its continuing commitment to those customer-focused reforms instituted by State and local governments which help Americans access the tools they need to manage their careers through information and high quality services, and to help U.S. companies find skilled workers.
On January 29, 2001, President George W. Bush issued Executive Order 13198, creating the Office for Faith-Based and Community Initiatives in the White House and centers in the departments of Labor, Health and Human Services (HHS), Housing and Urban Development (HUD), Education (ED), Justice (DOJ). President Bush charged the Cabinet centers with identifying statutory, regulatory, and bureaucratic barriers that stand in the way of effective faith-based and community initiatives, and to ensure, consistent with the law, that these organizations have equal opportunity to compete for federal funding and other support.
These solicitations reflect the outcome of discussions between the Department's Center for Faith-Based and Community-Based Initiatives (CFBCI) and ETA to provide expanded opportunities for the Federal-State-local partnerships under WIA to engage the faith-based and community-based organizations in service delivery, while providing additional points of entry for customers into the One-Stop system. These solicitations also reflect the Administration's interest in creating new avenues through which qualified grass-roots organizations can more fully participate under the Workforce Investment Act while bringing their particular strengths and talents in service provision to our customers.
These solicitations also proceed from an ETA-CFBCI mutual premise: the involvement of community-based organizations and faith-based organizations can complement and supplement the efforts of local workforce development systems in providing universal access and serving the training-, job- and career-support needs of many of our customers. Success in the implementation of the Workforce Investment Act is clearly derived from the power of partnerships. Many community-based organizations have fully participated with distinction as direct recipients or as sub-recipients of Federal resources under the Comprehensive Employment and Training Act (CETA) , the Job Training Partnership Act (JTPA) and are currently doing so under WIA. These solicitations are designed to bring other community-based organizations to the decision-making and service delivery mechanisms under WIA.
Faith-based and community-based organizations present credentials for full partnership in our mutual system-building endeavors. FBOs/CBOs are often trusted institutions within our poorest neighborhood, serving the very hardest-to-reach constituents in a cost-effective manner. FBOs/CBOs are home to a large number of volunteers who not only bring the transformational power of personal relationships to the provision of social service but a sustained allegiance to the well-being of their participants they serve. Through their daily work and specific programs, FBOs/CBOs strive to achieve some common purposes shared with government—reduction of welfare dependency, attainment of occupational skills, entry and retention of all our citizens in good-paying jobs. With appropriate planning, the FBO/CBO programs and resources can be leveraged into the workforce investment strategies already embodied in State and local strategic plans.
These three solicitations represent an important element of an overall strategy for outreach to the people served by our nation's community-based organizations and faith-based organizations. A Training and Employment Guidance Letter (TEGL) will be issued in April 2002 to state workforce agencies, worker adjustment liaisons, workforce liaisons, and One-Stop Center system leads. The TEGL will request these principals to commit to a full engagement with faith-based and community-based organizations. The TEGL will encourage local workforce boards to appoint member(s) who are familiar with the FBOs/CBOs that provide job training, soft skills training and employment services in the labor market, and work in conjunction with the state workforce agency's faith-based liaison to share ideas and collect promising practices. The TEGL also will ask the state principals to collaborate with the local workforce investment areas in creating a campaign to educate the appropriate FBOs/CBOs about the workforce investment system, One-Stop Centers, available grants-in-aid, and to invite their participation.
A total of $9.9 million is reserved for State grants. ETA expects to award 5 to 10 grants under this competition. The selected States under this competition will work toward increasing the number of community- and faith-based organizations as partners in the One-Stop delivery system. These states will seek to increase the access of those served by the community- and faith-based organizations to the many services offered by the One-Stops. The selected States will also share responsibility for identifying, showcasing and replicating successful instances of faith-based and community-based involvement.
A total of $500,000 is reserved for faith-based and community-based organizations to provide authorized services to WIA participants. ETA expects to award approximately 20 to 25 grants under this competition.
The provided services would supplement the services that local One-Stop delivery systems currently provide. The recipient organizations receiving grant funds will partner with the local Workforce Investment Boards and One-Stop operators to carry out various services of direct benefit to customers. The sub-grantees could offer, for example, “soft-skills” training such as communications, problem-solving, and time management which will allow the individual to function in an employment environment. Other sub-grantee activities can include GED tutoring of at-risk youth, after school programs for youth, day care for elders, job loss counseling, language translation services, “community audits” (a resource guide to support services within the community), and “cultural sensitivity” training programs.
These grants are made under the following authorities:
• The Workforce Investment Act of 1998 (WIA or the Act) (Pub. L. 105-220, 29 U.S.C. 2801 et seq.)
• WIA Final Rule, 20 CFR parts 652, 660-671 (65 FR 49294 (August 11, 2000));
• Interim Final Rule implementing the nondiscrimination and equal opportunity provision (section 188) of WIA, 29 CFR part 37 (64 FR 61692 (November 12, 1999));
• Planning Guidance and Instructions for Submission of the Strategic Five-Year State Plan for title I of the Workforce Investment Act of 1998 and the Wagner-Peyser Act (64 FR 9402 (February 25, 1999))
• Final Unified Plan Planning Guidance (65 FR 2464 (January 14, 2000))
• Executive Order 13198; “Rallying the Armies of Compassion”
• “Report on a Unlevel Playing Field: Barriers to Participation by Faith-Based and Community Organization in Federal Service Programs”
The period of performance is one year.
For purposes of this competition, “intermediaries” are defined as those non-profit, community, and/or faith-based organizations with connections to grassroots faith-based and community organizations with the ability to connect those organizations to the nation's workforce development system in more than one service area. The eligible intermediary does not have to be located in more than one jurisdiction as long as their reach extends beyond one jurisdiction, and the application addresses providing services in more than one jurisdiction.
Except as specifically provided, DOL/ETA acceptance of a proposal and an award of federal funds to sponsor any program(s) does not provide a waiver of any grant requirement and/or procedures. For example, the OMB circulars require that an entity's procurement procedures must require that all procurement transactions must be conducted, as practical, to provide open and free competition. If a proposal identifies a specific entity to provide the services, the DOL/ETA's award does not provide the justification or basis to sole-source the procurement,
For purposes of this announcement, the intermediary may issue a sub-grant to a grassroots organization which
(a) is headquartered in the local community to which it provides services; and,
(i) Has a social services budget of $300,000 or less, or
(ii) Has 6 or fewer full-time equivalent employees.
The “$300,000 or less” budget includes only that portion of an organization's budget allocated to providing social services. It does not include other portions of the budget such as salaries and expenses. For purposes of this announcement local affiliates of national organizations are not considered “grassroots” and would not be eligible for a sub-grant award.
The Establishment Clause of the First Amendment of the United States Constitution prohibits the government from directly funding religious activity. These grants may not be used for instruction in religion or sacred literature, worship, prayer, proselytizing or other inherently religious practices. The services provided under these grants must be secular and non-ideological. Grant or sub-grant recipients, therefore, may not and will not be defined by reference to religion. Neutral, secular criteria that neither favor nor disfavor religion must be employed in their selection. In addition, under the WIA and DOL regulations implementing the Workforce Investment Act, a recipient may not employ or train a participant in sectarian activities, or permit participants to construct, operate, or maintain any part of a facility that is primarily used or devoted to sectarian instruction or worship. Under WIA, no individual shall be excluded from participation in, denied the benefits of, subjected to discrimination under, or denied employment in the administration of or in connection with, any such program or activity because of race, color, religion, sex (except as otherwise permitted under title IX of the Education Amendments of 1972), national origin, age, disability, or political affiliation or belief.
The application must clearly identify the applicant (or the fiscal agent), the grant recipient (and/or fiscal agent), and its capacity to administer this project. Applicants must submit one copy with an original signature and two additional copies of their proposal. The proposal must include the Application for Federal Assistance (SF-424A) signed by the representative authorized by the governing body of the applicant to enter into grant agreement.
This application must be double-spaced, and on single-sided, numbered pages. A font size of at least twelve (12) pitch is required throughout.
There are four required sections: Application for Federal Assistance (SF 424A), Intermediary Description and Project Timeline, Statement of Work, and Budget Information (SF 424B). ETA will not consider applications that fail to provide complete information in these four sections.
Format requirements for Section II are limited to no more than two to three pages. This section should include:
• The geographic area to be addressed through this grant (enumeration of State, multiple States, or identifiable subset of local workforce investment areas within State(s).
• The names of the local investment workforce areas in the State(s) proposed to be served through the activities of this grant. (A State-by-State listing of local workforce areas may be found at
• The constituent members (as appropriate) of this intermediary.
• The primary mission of these constituent members irrespective of participation in the grant proposal, and what political and geographic jurisdictions (e.g., cities, counties, subsections of cities/counties) they serve.
• Written confirmation from the applicant that it will cooperate with all entities receiving funding under the Workforce Investment Act and (as appropriate) and with all other recipients of community-based and faith-based investments under the ETA/OFCBI grant strategy outlined in this announcement.
• A general timeline for all discrete projects and activities to be undertaken under the Statement of Work.
The Statement of Work represents the applicant's plans to meet the system-building objectives through assisting grass-roots organizations in developing grant management expertise and skills to allow a fuller participation in the nation's workforce development system. The Department expects that the intermediary will accomplish these objectives through a series of sub-grants to qualified grass-roots organizations. The intermediary will manage the grants, removing the administrative burden from the smaller organization. The intermediary's staff will provide mentoring and technical assistance to build the smaller organizations' capacity.
The Statement of Work will include:
(1) Prior grants management experience (as described on “Performance History with Grants Management” in the “Review Process and Evaluation Criteria”).
(2) Description of the proposed program (as described in “Project Plan” in the “Review Process and Evaluation Criteria”).
Administrative Costs: Pursuant to 20 CFR 667.210(b), grantees are advised that there is a 10% limitation on administrative costs on funds administered under this grant. The Grant Officer may, however, approve additional administrative costs, up to a maximum of 15% of the total award amount, for that grantee providing adequate justification. In no event, may administrative costs exceed 15% of the total award amount. The cost of administration shall include those disciplines enumerated in 20 CFR 667.220(b) and (c).
Through this grant (and the other allocation of Federal resources outlined in the Summary), ETA and OFCBI seek:
• A verifiable increase in the participation of community-based organizations and faith-based organizations participating in the nation's decentralized One-Stop delivery system.
• A verifiable increase in the number of community service points from which customers and clients of faith-based and community-based organizations gain access to the information products and services provided through the system.
• An increase in the number of total individuals assisted by the publicly-funded workforce development system, with corresponding improvements in service delivery, grantee and service provider performance, and customer satisfaction.
ETA, CFBCI and other Federal agency staff are expected to serve on the technical panel(s) which will review all applications against the criteria listed below. The panel recommendations are advisory. The ETA grant officer will fully consider the panel recommendations but take into account geographic balance and other factors to ensure the most advantageous award of these funds to accomplish the system-building purposes outlined in the Summary and Statement of Work. The grant officer reserves the right to award without further negotiation.
The applicant must provide a statement of its performance history with management of resources under governmental grants-in-aid programs. The Department will be evaluating applications based on the scope, strength, and “record of achievement:” which will be demonstrated by responses to the following requirements:
Provide the names of the local investment workforce areas in the State(s) proposed to be served through the activities of this grant. (A State-by-State listing of local workforce areas may be found at
Relevant history of the intermediary in managing resources through grant awards from Federal Departments (particularly those from the Departments of Labor, Education, Housing and Urban Development, and Health and Human Services), State governments or units of local governments.
Applicant's history of working with small organizations. (Be sure to include past experience in developing other organization's capacity for social service delivery, competing for grants, and managing grants.)
Information campaigns used and technical assistance provided to other organizations to develop their capacity.
Discuss any recent involvement of the intermediary as a partner or provider in the One-Stop Stop delivery system for employment and training services. Describe any current relationship with the State Workforce Investment Board(s) and/or local Workforce Investment Boards.
The Project Plan provides the applicant's “road-map” for building infrastructure and a set of working relationships with smaller grass-roots organizations. The Department will be evaluating the scope and quality of the Project Plan against several criteria. Both outreach and the management of the sub-grant process are critical to the project plan. The narrative, therefore, should offer the applicant's strategies that meet the requirements listed below.
Describe the steps the intermediary will undertake to take advantage of the partnership and participation opportunities offered by WIA.
Describe the methodology for identification of grassroots organizations that will be eligible for sub-grant awards. Describe the outreach strategies that will support this identification. Define the criteria and methodology for awarding sub-grants to the identified grassroots FBOs/CBOs. (The sub-grant award schedule should be consistent with the project timeline contained in Section II).
Outline the plans for the intermediary's sub-grant management, technical assistance and mentoring. Describe the capacity-building efforts to be undertaken through these resources to establish (or strengthen) the existing administrative potential of grassroots organizations to receive future grants or sub-grants from State and local workforce investment principals.
Describe “methods of evaluation” to determine the success of the mentoring and technical assistance efforts with its sub-grantees. Summarize the documentation strategies for the activities undertaken during the life of the grant for ETA and CFBCI use in working with other intermediaries.
The grantee must submit quarterly narrative progress and financial reports. The grantee must also prepare and submit a final report summarizing all accomplishments under the grant. The format of all reports and submission instructions will be contained in the grant document.
By application of January 25, 2002, the company, requested administrative reconsideration of the Department's denial regarding eligibility to Apply for North American Free Trade Agreement-Transitional Adjustment Assistance (NAFTA-TAA), applicable to workers and former workers of the subject firm. The denial notice was issued on December 21, 2001 and published in the
Workers were engaged in employment related to the production of surgical blankets. That worker group is separately identifiable from other functions performed at the subject plant.
The workers were denied NAFTA-TAA on the basis that there was no shift in production to Mexico or Canada, nor did imports from Canada or Mexico contribute importantly to workers' separations.
The company in their request for administrative reconsideration indicated that the subject plant production of surgical blankets was shifted to Mexico.
Upon further clarification from the company, it became clear that the subject firm did not shift company production to Mexico. However, it became apparent that the subject firm's major customer who owned the machinery at the subject plant shifted production that was produced at the subject plant to an affiliated plant located in Juarez, Mexico. The customer was contacted and confirmed that the production of surgical blankets which was performed at the subject firm was in fact being produced at an affiliated facility plant located in Juarez, Mexico. That facility produced the same product (surgical blankets) as the subject firm prior to the closure of the subject firm and that the Mexican facility has been importing all production of surgical blankets to the United States to be sold to domestic and foreign customers. The customer further reported that they increased their reliance on imported surgical blankets from Mexico during the relevant period of the investigation.
After careful review of the facts obtained in the investigation, I conclude that there was an increase in imports from Mexico of surgical blankets that are like or directly competitive with those produced by the subject firm. In accordance with the provisions of the Trade Act, I make the following certification:
“All workers of Commercial Warehouse and Cartage, Inc., El Paso, Texas engaged in activities related to the production of surgical blankets, who became totally or partially separated from employment on or after October 24, 2000, through two years from the date of certification, are eligible to apply for NAFTA-TAA under section 250 of the Trade Act of 1974.”
National Endowment for the Arts.
Notification of availability.
The National Endowment for the Arts is requesting proposals leading to one (1) award of a Cooperative Agreement for a project with the goal of creating greater public awareness of and demand for universal designed environments. The successful proposal should include educational efforts targeted to designers, consumers, and decision makers, and involve collaboration with the targeted audiences, as well as the use of innovative strategies to bring the benefits of universal design into the mainstream. Endowment funding is limited to $75,000. A one-to-one match is required. Those interested in receiving the solicitation package should reference Program Solicitation PS 02-02 in their written request and include two (2) self-addressed labels. Verbal requests for the Solicitation will not be honored. The Program Solicitation will also be posted on the Endowment's Web site at
Program Solicitation PS 02-02 is scheduled for release approximately May 1, 2002 with proposals due on July 31, 2002.
Requests for the Solicitation should be addressed to the National Endowment for the Arts, Grants & Contracts Office, Room 618, 1100 Pennsylvania Ave., NW., Washington, DC 20506.
William Hummel, Grants & Contracts Office, National Endowment for the Arts, Room 618, 1100 Pennsylvania Ave., NW., Washington, DC 20506 (202/682-5482).
FBR Asset Investment Corporation, a Virginia corporation (“Issuer”), has filed an application with the Securities and Exchange Commission (“Commission”), pursuant to section 12(d) of the Securities Exchange Act of 1934 (“Act”)
The Issuer stated in its application that it has met the requirements of Amex Rule l8 by complying with all applicable laws in effect in the State of Virginia, in which it is incorporated, and with the Amex's rules governing an issuer's voluntary withdrawal of a security from listing and registration. The Amex has in turn informed the Issuer that it does not object to the proposed withdrawal of the Issuer's Security from listing and registration on the Exchange.
The Board of Trustees (“Board”) of the Issuer approved a resolution on March 14, 2002 to withdraw the Issuer's Security from listing on the Amex and to list such Security on the New York Stock Exchange, Inc. (“NYSE”), effective April 10, 2002. In making its decision, the Board opined that listing the Security on the NYSE will (i) provide lasting benefits to its
The Issuer's application relates solely to the withdrawal of the Security from listing and registration on the Amex and shall have no effect upon the Security's continued listing and registration on the NYSE under section 12(b) of the Act.
Any interested person may, on or before May 1, 2002, submit by letter to the Secretary of the Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609, facts bearing upon whether the application has been made in accordance with the rules of the Amex and what terms, if any, should be imposed by the Commission for the protection of investors. The Commission, based on the information submitted to it, will issue an order granting the application after the date mentioned above, unless the Commission determines to order a hearing on the matter.
For the Commission, by the Division of Market Regulation, 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 May 6, 2002, to the Secretary, Securities and Exchange Commission, Washington, DC 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 of any hearing, if ordered, and will receive a copy of any notice or order issued in the matter. After May 6, 2002, the application(s) and/or declaration(s), as filed or as amended, may be granted and/or permitted to become effective.
Pepco Holdings Inc. (“PHI”), a company not currently subject to the Act; PHI's parent company, Potomac Electric Power Company (“Pepco”), an electric public utility company; Pepco's direct and indirect nonutility subsidiaries (“Pepco Nonutilities”), all located at 701 Ninth Street, 10th Floor, Suite 1300, Washington, DC 20068; Conectiv, a registered public utility holding company; Conectiv's wholly owned electric and gas public utility subsidiaries, Delmarva Power & Light Company (“Delmarva”) and Atlantic City Electric Company (“ACE”); Conectiv Energy Holding Company (“CEH”), a registered holding company subsidiary of Conectiv; CEH's wholly owned electric public utility subsidiaries, Conectiv Delmarva Generation, Inc. (“CDG”) and Conectiv Pennsylvania Generation, Inc. (“CPGI”); ACE REIT, Inc. (“ACE REIT”), a registered holding company subsidiary of CEH; ACE REIT's wholly owned electric public utility subsidiary Conectiv Atlantic Generation, LLC (“CAG”); Conectiv Energy Supply, Inc. (“CESI”) a nonutility holding company subsidiary of CEH and Conectiv's direct and indirect nonutility subsidiaries (“Conectiv Nonutilities”), all located at 800 King Street, Wilmington, Delaware 19801 (collectively, “Applicants”), have filed a joint application-declaration (“Application”) under sections 6(a), 7, 9(a), 10, 12(b), 12(c), 13(b), 32, and 33 of the Act, and rules 42, 43, 45, 46, 52, 53, 54, 90 and 91 under the Act in connection with various proposed transactions.
In a separate file, Applicants request authority for Conectiv and Pepco to merge and situate PHI as a holding company above them (“Merger”).
The proposed transactions will be subject to the following general terms and conditions (“Financing Parameters”):
• The effective cost of money on long-term debt borrowings will not exceed the greater of (i) 500 basis points over the comparable-term U.S. Treasury securities or (ii) a gross spread over U.S. Treasuries that is consistent with similar securities of comparable credit quality and maturities issued by other companies.
• The effective cost of money on short-term debt borrowings will not exceed the greater of (i) 500 basis points over the comparable-term London Interbank Offered Rate (“LIBOR”) or (ii) a gross spread over LIBOR that is consistent with similar securities of comparable credit quality and maturities issued by other companies.
• The dividend rate on any series of preferred securities will not exceed the greater of (i) 500 basis points over the yield to maturity of a U.S. Treasury security having a remaining term equal to the term of the series of preferred securities or (ii) a rate that is consistent with similar securities of comparable credit quality and maturities issued by other companies.
• The maturity of indebtedness will not exceed fifty years. Preferred securities may not have any mandatory redemption provisions.
Applicants request authority for PHI to issue equity, preferred securities and debt securities in an aggregate amount not to exceed $3.5 billion outstanding at any time through the Authorization Period (“External Limit”). Applicants seek authority for PHI to issue short-term debt securities in an aggregate amount not to exceed $2.5 billion (“Short-Term Limit”). Any short-term debt issued through the Authorization Period will count against the External Limit. In addition, Applicants request authority for PHI to issue up to twenty million shares of common stock or options to purchase shares under stock purchase/dividend reinvestment plans and stock-based management incentive and employee benefit plans (“Common Stock Plan Limit”).
Applicants request authority for PHI to issue common stock in an aggregate amount outstanding not to exceed the External Limit at any time during the Authorization Period. Specifically, Applicants propose that PHI issue and sell common stock, options, warrants or other stock purchase rights exercisable for common stock. Common stock issuances may be through (i) underwriting agreements of a type generally standard in the industry; (ii) negotiation with underwriters, dealers or agents; (iii) competitive bidding among underwriters; (iv) private placements or other non-public offerings to one or more persons; (v) directly to employees through employee benefit plans (or to trusts established for their benefit) or (vi) directly to shareholders and others through PHI's stock purchase/dividend reinvestment plans and stock-based management incentive. All common stock sales will be at rates or prices, and under conditions negotiated, based upon, or otherwise determined by, competitive capital markets. Underwriters may resell common stock from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. PHI also may grant underwriters a “green shoe” option permitting common stock to be offered solely for the purpose of covering over-allotments.
Applicants also propose that PHI issue common stock or options, warrants, or other stock purchase rights exercisable for common stock in public or privately negotiated transactions as consideration for the equity securities or assets of other companies, provided that the acquisition of any equity securities or assets has been authorized in this proceeding or a separate proceeding, or is exempt under the Act or rules under the Act.
Applicants request authority for PHI to establish a stock purchase/dividend reinvestment plan that is expected to incorporate the existing features of the plans currently offered by Pepco and Conectiv. Upon consummation of the Merger, the stock purchase/dividend reinvestment plans of Pepco and Conectiv will be terminated (or one company's plan will be adopted by PHI) and participants will be eligible to become participants in PHI's new or adopted plan. Applicants propose that PHI, from time to time during the Authorization Period, issue and/or acquire in open market transactions, or other acceptable method, shares of common stock under stock-based management incentive and employee benefit plans and under a stock purchase/dividend reinvestment plan in an amount not to exceed the Common Stock Plan Limit.
PHI common stock issued to participants in the existing Pepco and Conectiv plans at the time of the Merger will not be included in the calculation of the Common Stock Plan Limit. PHI common stock issued on an ongoing basis to participants in the PHI stock purchase/dividend reinvestment plan will not be included in the calculation of the External Limit.
Applicants also request authority for PHI to issue preferred securities (including its authorized preferred stock, trust preferred securities or monthly income preferred securities) directly or indirectly through one or more financing subsidiaries. Preferred securities may be convertible or exchangeable into shares of PHI common stock or unsecured indebtedness. Preferred securities may be sold directly through underwriters or dealers in connection with an acquisition in a manner similar to that described for common stock above.
Applicants propose that PHI issue unsecured long-term debt securities that may include, but not be limited to, medium-term notes or debentures, under one or more indentures or long-term indebtedness under agreements with banks or other institutional lenders. Any long-term debt security would have a designated aggregate principal amount, maturity, interest rate or methods of determining the same, terms of payment of interest, redemption provisions, sinking fund terms and other terms and conditions as PHI may determine at the time of issuance. Any long-term debt: (i) May be convertible into any other authorized securities of PHI; (ii) will have maturities ranging from one to fifty years; (iii) may be subject to optional and/or mandatory redemption, in whole or in part, at par or at various premiums above the principal amount; (iv) may be entitled to mandatory or optional sinking-fund provisions; (v) may provide for reset of the coupon pursuant to a remarketing arrangement; (vi) may be subject to tender or the obligation of the issuer to repurchase at the election of the holder or upon the occurrence of a specified event; (vii) may be called from existing investors by a third party or (viii) may be entitled to the benefit of financial or other covenants.
Specific terms of any borrowings, such as maturity dates, interest rates, redemption and sinking fund provisions, tender or repurchase and conversion features, if any, with respect to the long-term securities of a particular series, will be determined by PHI at the time of issuance and will comply in all regards with the Financing Parameters. Associated placement, underwriting or selling agent fees, commissions and discounts, if any, will be established by negotiation or competitive bidding.
Applicants seek authority for PHI to issue short-term debt in an aggregate amount not to exceed the Short-Term Debt Limit. Short-term debt may include (i) borrowings under one or more revolving credit facilities or bank loans; (ii) commercial paper; (iii) short-term notes and (iv) bid notes. Specific terms of any short-term borrowings will be determined by PHI at the time of issuance and will comply in all regards with the Financing Parameters. If the notional maturity of short-term debt is greater than 364 days, the debt security will include put options at appropriate points in time to cause the security to be accounted for as a current liability under United States generally accepted accounting principles (“GAAP”). Applicants propose that PHI issue other types of short-term debt securities generally available in the credit markets, money markets or capital markets, whose specific terms, in all cases, will comply in all regards with the Financing Parameters. Applicants state that all short-term debt issued by PHI will be unsecured.
Applicants request authority for PHI to sell commercial paper, from time to time, in established domestic or European commercial paper markets. Commercial paper would be sold directly to investors or sold to dealers at the discount rate or the coupon rate per annum prevailing at the date of issuance for commercial paper of comparable quality and maturities. It is expected that the dealers acquiring commercial paper from PHI will reoffer this paper at a discount to corporate, institutional and, with respect to European commercial paper, individual investors. Institutional investors are expected to include commercial banks, insurance companies, pension funds, investment trusts, foundations, colleges and universities and finance companies.
Applicants propose that PHI sell short-term notes through one or more private placements or public offerings primarily to traditional money market investors. Specific terms of any borrowings will be determined by PHI at the time of issuance and will comply in all regards with the Financing Parameters.
PHI proposes to enter into individual agreements (“Bid Note Agreements”) with one or more commercial banks that may be lenders under PHI credit facilities. The Bid Note Agreements would permit PHI to negotiate with one or more banks (“Bid Note Lenders”) on any given day for the Bid Note Lender, or any affiliate or subsidiary of the lender, to purchase promissory notes directly from PHI.
Applicants request authority for PHI to issue guarantees (“PHI Guarantees”), to third parties, obtain letters of credit, enter into support or expense agreements, or otherwise provide credit support with respect to the obligations of Subsidiaries, as may be appropriate in the ordinary course of their respective businesses, and to enter into guarantees of non-affiliated third parties' obligations in the ordinary course of PHI's business in an aggregate amount not to exceed $3.5 billion (“PHI Guarantee Limit”).
A portion of the PHI Guarantees may be in connection with the business of CESI or Pepco Energy Services, Inc. (“PES”), both wholly owned indirect subsidiaries of PHI. CESI conducts power marketing and trading operations and PES provides energy efficiency contracting, building and systems operation and maintenance, as well as conducting gas and electric marketing. In addition, PHI may wish to provide credit support in connection with the trading positions of CESI and PES entered into in the ordinary course of CESI's and PES's energy marketing and trading businesses. PHI may also provide credit support for PES' construction obligations entered into in the ordinary course of PES's energy contracting business. The portion of the PHI Guarantee Limit to be used on behalf of the trading activities of CESI and PES allows only for a modest increase over the Authorization Period.
Certain of the PHI Guarantees may be in support of obligations that are not capable of exact quantification. In these cases, PHI will determine the exposure under a guarantee for purposes of measuring compliance with the PHI Guarantee Limit by appropriate means, including estimation of exposure based on loss experience or potential payment amounts. PHI proposes to charge each Subsidiary a fee for any guarantee provided on its behalf that is not greater than the cost, if any, of obtaining the liquidity necessary to perform the guarantee for the period of time the guarantee remains outstanding.
Applicants request authority for PHI to enter into, perform, purchase and sell financial instruments intended to reduce or manage the volatility of interest rates, including but not limited to, interest rate swaps, caps, floors, collars and forward agreements or any other similar agreements. Hedges may also include the issuance of structured notes (
In addition, Applicants request authority for PHI to enter into interest rate Hedging Transactions with respect to anticipated debt offerings (“Anticipatory Hedges”), subject to certain limitations and restrictions. These Anticipatory Hedges would only be entered into with Approved Counterparties, and would be utilized to fix and/or limit the interest rate risk associated with any new issuance through (i) a forward sale of exchange-traded Hedge Instruments (“Forward Sale”); (ii) the purchase of put options on Hedge Instruments (“Put Options Purchase”); (iii) a Put Options Purchase in combination with the sale of call options Hedge Instruments (“Zero Cost Collar”); (iv) transactions involving the purchase or sale, including short sales, of Hedge Instruments or (v) some combination of a Forward Sale, Put Options Purchase, Zero Cost Collar and/or other derivative or cash transactions, including, but not limited to, structured notes, caps and collars, appropriate for the Anticipatory Hedges. Anticipatory Hedges may be executed on-exchange (“On-Exchange Trades”) with brokers through the opening of futures and/or options positions traded on the Chicago Board of Trade, the opening of over-the-counter positions with one or more counterparties (“Off-Exchange Trades”), or a combination of On-Exchange Trades and Off-Exchange Trades. PHI will determine the optimal structure of each Anticipatory Hedge transaction at the time of execution. PHI may decide to lock in interest rates and/or limit its exposure to interest rate increases.
In addition to the following requests for financing authority, Applicants request authority for Pepco to maintain its existing financing arrangements described in exhibit K-1 to the Application.
Applicants request authority for Pepco and Delmarva to issue short-term debt securities in aggregate amounts not to exceed $300 million and $275 million for Pepco and Delmarva, respectively, outstanding at any one time during the Authorization Period. Applicants request authority for Pepco and Delmarva to issue the same type of short-term debt securities with the same
Applicants request authority for Pepco to issue an aggregate of up to $800 million in long-term debt securities and preferred securities during the Authorization Period. Applicants propose that Pepco will issue the same types of long-term debt securities and preferred securities under the same terms as requested for PHI in III.A.4, above, except that Pepco may issue secured as well as unsecured debt securities. It is anticipated that any secured long-term debt issued by Pepco will be under a Mortgage and Deed of Trust Dated July 1, 1936, as amended and supplemented, between Potomac Electric Power Company and The Bank of New York, as Successor Trustee to Riggs National Bank of Washington, D.C. However, Pepco may enter into other similar secured financing arrangements, such as a new mortgage indenture, a fallaway indenture, pursuant to which Pepco would issue debt securities that would be secured by a new series of mortgage bonds until such time as its mortgage indenture was terminated or it secured financing agreements with banks or institutional lenders (
Applicants request authority for Pepco to enter into guarantees (“Pepco Guarantees”) under the same conditions as requested for the PHI Guarantees. The Pepco Guarantees will count against the PHI Guarantee Limit, exclusive of any guarantees and other forms of credit support that are exempt under rule 45(b) and rule 52(b); provided however, that the amount of Nonutility Guarantees in respect of obligations of any subsidiaries acquired under rule 58 (“Rule 58 Subsidiaries”) shall remain subject to the limitation of rule 58(a)(1). Applicants state that certain of the guarantees may be in support of obligations that are not capable of exact quantification. In these cases, Pepco will determine the exposure under a guarantee for purposes of measuring compliance with the PHI Guarantee Limit by appropriate means including estimation of exposure based on loss experience or potential payment amounts. Applicants request authority for Pepco to charge its associate company a fee for each guarantee provided on its behalf determined in the same manner as specified above for guarantees issued by PHI.
Applicants request authority for Pepco and Delmarva to enter into, perform, purchase and sell Hedge Instruments and Anticipatory Hedges according to the same limitations and requirements applicable to PHI described above, to the extent not exempt under rule 52.
Applicants request authority for CEH, a subsidiary of CEH or a financing entity established by CEH (“collectively, “CEH Companies”) to fund the generation activities of the CEH Companies during the Authorization Period to issue preferred securities, long-term debt and short-term debt in an aggregate amount not to exceed $1.5 billion outstanding at any time during the Authorization Period (“Genco Limit”). Any issuance of securities by the CEH Companies to unrelated third parties will count towards the PHI Financing Limit, except those issued by associate companies or the PHI System Money Pool. Any then outstanding short-term debt issued by the CEH Companies will be included in the calculation of the PHI Short-Term Debt Limit.
Applicants request authority for the CEH Companies to issue preferred stock or other types of preferred securities in one or more series with rights, preferences and priorities as may be designated in the instrument creating each series. Dividends or distributions on preferred securities will be made periodically and to the extent funds are legally available for such purpose, but may be made subject to terms that allow the issuer to defer dividend payments for specified periods. Preferred Securities may be sold directly through underwriters or dealers in connection with an acquisition in a manner similar to that described for common stock above.
Applicants propose that the CEH Companies issue long-term debt securities including, but not limited to, notes, medium-term notes or debentures under one or more indentures, or long-term indebtedness under agreements with banks or other institutional lenders. Long-term debt may be secured by the CEH Companies' generation assets or unsecured. Any long-term debt security would have a designation of aggregate principal amount, maturity, interest rate(s) or methods of determining the same, terms of payment of interest, redemption provisions, sinking fund terms, and other terms and conditions as the CEH Companies may determine at the time of issuance. Any long-term debt (i) may be convertible into any authorized securities of the CEH Companies; (ii) will have maturities ranging from one to fifty years; (iii) may be subject to optional and/or mandatory redemption, in whole or in part, at par, or at various premiums above the principal amount thereof; (iv) may be entitled to mandatory or optional sinking-fund provisions; (v) may provide for reset of the coupon pursuant to a remarketing arrangement; (vi) may be subject to tender to the issuer for repurchase or be subject to the obligation of the issuer to repurchase at the election of the holder or upon the occurrence of a specified event and (vii) may be called from existing investors by a third party.
Specific terms of any borrowings such as maturity dates, interest rates, redemption and sinking fund provisions, tender, or repurchase and conversion features, if any, with respect to the long-term securities of a particular series, will be determined by the issuer at the time of issuance and will comply in all regards with the parameters for financing authorization set forth above. Associated placement, underwriting, or selling agent fees, commissions and discounts, if any, will be established by negotiation or competitive bidding.
Applicants request authority for the CEH Companies to issue the same types of short-term debt securities under the same terms as requested above for PHI. CEH Companies may, without counting against the limits set forth above, maintain back-up lines of credit. Outstanding external short-term debt issued by CEH Companies will be included in the calculation of the PHI Short-Term Debt Limit.
Applicants request authority for CEH to enter into guarantees of the obligations of its subsidiaries under the same terms as the PHI Guarantees and for subsidiaries of CEH or financing entities established by CEH to issue guarantees to external lenders in support of their financing activities (collectively, “CEH Guarantees”). The CEH Guarantees will count towards the
A portion of the CEH Guarantees may be issued in connection with the business of CESI, a wholly owned direct subsidiary of CEH. CESI conducts power marketing and trading operations. CEH may wish to provide credit support in connection with the trading positions of CESI entered into in the ordinary course of CESI's energy marketing and trading businesses. The portion of the PHI Guarantee Limit represented by CEH Guarantees allows only for a modest increase in the energy trading activities of CESI.
CEH Guarantees may be in support of obligations that are not capable of exact quantification. In these cases, CEH will determine the exposure under a guarantee for purposes of measuring compliance with the PHI Guarantee Limit by appropriate means, including estimation of exposure based on loss experience or potential payment amounts. CEH may charge each of its subsidiaries a fee for any guarantee provided on its behalf. The fee will not be greater than the cost, if any, of obtaining the liquidity necessary to perform the guarantee for the period of time the guarantee remains outstanding.
CEH or a financing subsidiary established by CEH, request authority to enter into, perform, purchase and sell interest rate management devices and Anticipatory Hedges subject to the limitations and requirements applicable to PHI described above in section III.A.7.
Conectiv, CAG, CDG and any new utility company established by Conectiv (“New Utility Subsidiary”), are currently authorized to acquire up to $1 billion of utility property.
PHI requests that the authorizations previously granted in the Conectiv Financing Orders for CAG, CDG and the New Utility Subsidiaries to acquire and fund up to $1 billion of utility property be consolidated in this file. For purposes of this request, the acquisition of utility property by CAG, CDG, CPGI and the New Utility Subsidiaries (but not Pepco, Delmarva or ACE) would include any newly constructed facilities, any property acquired from unaffiliated third parties and any property acquired from associated companies that are public utility companies or EWGs. Any acquisition of utility property made under the Conectiv Financing Orders will count against the authorization for the acquisition of utility property sought in this Application.
Applicants request that Conectiv maintain certain financing arrangements in place following the merger. These financing arrangements are more fully described in exhibit K-2 to this Application.
Applicants request authority for Conectiv to enter into guarantees of the obligations of its subsidiaries (“Conectiv Guarantees”) under the same terms and conditions as requested for PHI above in section III.A.6. The Conectiv Guarantees will count towards the PHI Guarantee Limit, exclusive of any guarantees and other forms of credit support that are exempt pursuant to rule 45(b) and rule 52(b).
A portion of the Conectiv Guarantees may be in connection with the business of CESI, a wholly owned, indirect subsidiary of Conectiv. CESI conducts power marketing and trading operations. Conectiv may wish to provide credit support in connection with the trading positions of CESI entered into in the ordinary course of CESI's energy marketing and trading businesses. The portion of the PHI Guarantee Limit represented by Conectiv Guarantees allows only for a modest increase in the energy trading activities of CESI.
Certain of the Conectiv Guarantees may be in support of obligations that are not capable of exact quantification. In these cases, Conectiv will determine the exposure under a guarantee for purposes of measuring compliance with the PHI Guarantee Limit by appropriate means, including estimation of exposure based on loss experience or potential payment amounts.
Applicants propose that Conectiv charge each subsidiary a fee for any guarantee provided on its behalf that is not greater than the cost, if any, of obtaining the liquidity necessary to perform the guarantee for the period of time the guarantee remains outstanding.
Applicants request that certain Nonutility Subsidiaries maintain financing arrangements currently in place following consummation of the Merger. These financings are more fully described in exhibit K-2 to the Application.
In order to be exempt under rule 52(b), any loans by PHI, CEH or Conectiv to a Nonutility Subsidiary, or by one Nonutility Subsidiary to another, must have interest rates and maturities that are designed to parallel the lending company's effective cost of capital. However, in the limited circumstances where the Nonutility Subsidiary making the borrowing is not wholly owned, directly or indirectly, by PHI, authority is requested for PHI, CEH, Conectiv or a Nonutility Subsidiary, as the case may be, to make loans to those Nonutility Subsidiaries at interest rates and maturities designed to provide a return to the lending company of not less than its effective cost of capital. The Nonutility Subsidiary receiving the loan in this situation will not sell any services to any associate Nonutility Subsidiary unless the transaction is exempt from the “at cost” standard by rule or Commission order.
Applicants request authority for the Nonutility Subsidiaries to provide guarantees and other forms of credit support to other Nonutility Subsidiaries (“Nonutility Subsidiary Guarantees”). The Nonutility Subsidiary Guarantees will count against the $3.5 billion PHI Guarantee Limit, along with the PHI Guarantees, Pepco Guarantees, CEH Guarantees and Conectiv Guarantees. Applicants request authorization for a Nonutility Subsidiary providing credit
Applicants request authorization to establish a system Money Pool. Applicants further request authorization for the Subsidiaries to make unsecured short-term borrowings from the Money Pool, to contribute surplus funds to the Money Pool and to lend and extend credit to one another through the Money Pool. Applicants request authority for PHI, Conectiv, CEH and ACE REIT to contribute surplus funds and to lend and extend credit to the Money Pool. Applicants state that no loans through the Money Pool would be made to, and no borrowings through the Money Pool would be made by PHI and Conectiv.
Under the proposed terms of the Money Pool, short-term funds would be available from the following sources for short-term loans to the Subsidiaries from time to time: (i) surplus funds in the treasuries of lenders to the Money Pool (“Internal Funds”) and (ii) proceeds from the issuance of short-term debt securities by lenders to the Money Pool which are loaned to the Money Pool (“External Funds”). Funds would be made available from such sources in such order as the administrator of the Money Pool may determine would result in a lower cost of borrowing, consistent with the individual borrowing needs and financial standing of the companies providing funds to the pool. The determination of whether a Money Pool participant shall lend funds to the Money Pool would be made by the participant's chief financial officer or treasurer, or by a designee thereof, on the basis of cash flow projections and other relevant factors, in the participant's sole discretion. No party would be required to effect a borrowing through the Money Pool if it is determined that it could, and had authority to, effect a borrowing at lower cost directly from other lenders.
The cost of compensating balances, if any, and fees paid to banks to maintain credit lines and accounts by Money Pool participants lending External Funds to the Money Pool would initially be paid by the participant maintaining the line. A portion of the costs, or all of the costs in the event a Money Pool participant establishes a line of credit solely for purposes of lending any External Funds obtained into the Money Pool, would be retroactively allocated every month to the companies borrowing the External Funds through the Money Pool in proportion to their respective daily outstanding borrowings of External Funds.
If only Internal Funds make up the funds available in the Money Pool, the interest rate applicable and payable to or by Subsidiaries for all loans of the Internal Funds will be the rates for high-grade, unsecured thirty day commercial paper sold through dealers by major corporations as quoted in
If only External Funds comprise the funds available in the Money Pool, the interest rate applicable to loans of the External Funds would be equal to the lending company's weighted average of the cost for the External Funds. If more than one Money Pool participant had made available External Funds on a certain day, the applicable interest rate would be a composite rate equal to the weighted average of the cost incurred by the respective Money Pool participants for the External Funds.
In cases where both Internal Funds and External Funds are concurrently borrowed through the Money Pool, the rate applicable to all loans comprised of these “blended” funds would be a composite rate equal to the weighted average of the cost of all the External Funds.
Funds not required by the Money Pool to make loans (with the exception of funds required to satisfy the Money Pool's liquidity requirements) would ordinarily be invested in one or more short-term investments, including: (i) Interest-bearing accounts with banks; (ii) obligations issued or guaranteed by the U.S. government and/or its agencies and instrumentalities, including obligations under repurchase agreements; (iii) obligations issued or guaranteed by any state or political subdivision thereof, provided that these obligations are rated not less than “A” by a nationally recognized rating agency; (iv) commercial paper rated not less than “A-1” or “P-1” or their equivalent by a nationally recognized rating agency; (v) money market mutual funds; (vi) bank certificates of deposit; (vii) Eurodollar funds and (viii) other investments as are permitted by section 9(c) of the Act and rule 40 under the Act.
The interest income earned on investments in the Money Pool would be allocated among the participants in the Money Pool in accordance with the weighted average proportion each participant's contribution of funds bears to the total amount of funds in the Money Pool.
Each Subsidiary receiving a loan through the Money Pool would be required to repay the principal amount of the loan, together with all interest accrued, on demand and in any event not later than one year after the date of the loan. All loans made through the Money Pool may be prepaid by the borrower without premium or penalty.
Applicants request authority for Pepco and Delmarva to borrow up to $300 million and $275 million, respectively, at any one time outstanding, from the Money Pool. Any short-term debt borrowed from the Money Pool by Pepco and Delmarva will count against each company's short-term debt authority requested in section III.B.1, above.
Applicants expect that PHI, CEH, Conectiv and the Nonutility Subsidiaries will lend funds, extend credit, make capital contributions and open account advances without interest to Nonutility Subsidiaries. Applicants state that these transactions will typically be exempt under rules 52(b) and 45(b). However, if intrasystem transactions are not exempt under rules 52(b) and 45(b), Applicants request that the company making a loan or extending credit may charge interest at the same effective rate of interest as the daily weighted average effective rate of commercial paper, revolving credit and/or other short-term borrowings currently held by the borrowing company, including an allocated share of commitment fees and related expenses. If the borrowing company has no outstanding borrowings, then the interest rate shall be predicated on the Federal Funds effective rate of interest as quoted daily by the Federal Reserve Bank of New York.
In the limited circumstances where the Nonutility Subsidiary effecting the borrowing is not wholly owned by PHI, CEH, Conectiv, or a Nonutility Subsidiary, directly or indirectly, Applicants request authority for PHI, CEH, Conectiv, or a Nonutility Subsidiary to make loans to these subsidiaries at interest rates and maturities designed to provide a return to the lending company of not less than its effective cost of capital. If such loans
If these loans are made to a Nonutility Subsidiary, such Nonutility Subsidiary will not provide any services to any associate Nonutility Subsidiary except to a wholly or partially owned subsidiary that meets one of the following conditions: (i) The Nonutility Subsidiary is a FUCO or an EWG that derives no part of its income, directly or indirectly, from the generation and sale of electric energy within the United States; (ii) the Nonutility Subsidiary is an EWG that sells electricity at market-based rates that have been approved by the Federal Energy Regulatory Commission (“FERC”) or the relevant state public utility commission, provided that the purchaser is not one of Pepco Holdings' regulated public utility subsidiaries; (iii) the Nonutility Subsidiary is a “qualifying facility” (“QF”) under the Public Utility Regulatory Policies Act of 1978, as amended (“PURPA”), that sells electricity exclusively at rates negotiated at arm's length to one or more industrial or commercial customers purchasing the electricity for their own use and not for resale, or to an electric utility company (other than one of Pepco Holdings' regulated public utility subsidiaries) at the purchaser's “avoided costs” as determined under the regulations under PURPA; (iv) the Nonutility Subsidiary is an EWG or QF that sells electricity at rates based upon its cost of service, as approved by the FERC or any state public utility commission having jurisdiction, provided that the purchaser of the electricity is not one of Pepco Holdings' regulated public utility subsidiaries or (v) the Nonutility Subsidiary is engaged solely in the business of developing, owning, operating and/or providing services to a company described in clauses (i)-(iv) above. In the event these loans are made, PHI will include in the next certificate filed under rule 24 substantially the same information as required on form U-6B-2 with respect to the transaction.
Applicants request authority for PHI and the Subsidiaries to acquire, directly or indirectly, the equity securities of one or more corporations, trusts, partnerships, or other entities (“Financing Subsidiaries”) created specifically for the purpose of facilitating the financing of the authorized and exempt activities (including exempt and authorized acquisitions) of PHI and the Subsidiaries. Applicants request authority for the Financing Subsidiaries to issue short-term debt, long-term debt, preferred securities or equity securities to third parties and transfer the proceeds of these financings to PHI or their respective parent Subsidiaries. If required, Applicants propose that PHI or a Subsidiary, guarantee or enter into support or expense agreements with respect to the obligations of the Financing Subsidiaries. Applicants request authority for each of the Subsidiaries to enter into an expense agreement with its respective Financing Subsidiary, under which it would agree to pay all expenses of the Financing Subsidiary. Any amounts issued by the Financing Subsidiaries to third parties under this authorization will be included in the overall external financing limitation authorized for the immediate parent of the Financing Subsidiary, however, the underlying intrasystem mirror debt and parent guarantee shall not be included.
The portion of an individual Subsidiary's aggregate financing to be effected through the sale of stock to PHI or another immediate parent company during the Authorization Period cannot be ascertained at this time. It may happen that the proposed sale of capital securities may in some cases exceed the then-authorized capital stock of the Subsidiary. In addition, the Subsidiary may choose to use capital stock with no par value.
Applicants request authority to change the terms of any wholly owned Subsidiary's authorized capital stock capitalization or other equity interests by an amount deemed appropriate by PHI or other intermediate parent company, as needed to accommodate these proposed transactions and to provide for future issues. A Subsidiary would be able to change the par value, or change between par value and no-par stock, without obtaining additional Commission approval. Any action by a Utility Subsidiary (other than CAG, CDG and the New Utility Subsidiaries) would be subject to and would only be taken upon the receipt of any necessary approvals by the state commission in the state or states where the Utility Subsidiary is incorporated and doing business.
Conectiv has authorization to invest proceeds of securities issuances in EWGs in amounts not to exceed $350 million (“Conectiv EWG Project Limit”).
As of June 30, 2001, Pepco had investments in EWGs of $31.2 million, which consisted of investments in the Benning Road and Buzzard Point power generation plants. As of December 21, 2001, Pepco had investments in FUCOs of $643.1 million in FUCOs. These investments consist of interests in projects located in the Netherlands, Australia and Austria and were made under long-term leveraged leases.
Applicants request that the authorizations previously granted by the Commission for Conectiv to invest in EWGs continue in effect upon consummation of the Merger pending authorization of the request for further investment in EWGs and FUCOs described in the Application. Applicants further request that Pepco maintain its current investments in FUCOs.
After the Merger, Applicants seek authority to finance additional EWG and FUCO investments in an aggregate amount of up to 100 percent of PHI's consolidated retained earnings plus $3.5 billion (“PHI Exempt Project Limit”) during the Authorization Period. These financings may include the issuance or sale of securities for the purpose of financing the acquisition or operations of an EWG or FUCO or the guarantee of a security of an EWG or FUCO.
Applicants propose that PHI and Conectiv be permitted to pay dividends, from time to time through the Authorization Period, out of capital and unearned surplus, to the extent permitted under applicable corporate law. Applicants request that the Commission reserve jurisdiction over this proposal pending completion of the record.
Applicants propose that the Utility Subsidiaries be permitted to pay dividends, from time to time through the Authorization Period, out of capital and unearned surplus, to the extent permitted under applicable corporate law. Applicants request that the
Applicants propose that the Nonutility Subsidiaries (including CEH, ACE REIT, CAG, CDG, CPGI and the New Utility Subsidiaries upon the receipt of EWG status) be permitted to pay dividends, from time to time through the Authorization Period, out of capital and unearned surplus, to the extent permitted under applicable corporate law.
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Amex is proposing to modify its Member Fee Schedule to pass through to Amex specialist units any fee paid by the Exchange to a third party in connection with the listing and trading of a security allocated to such specialist unit.
The text of the proposed rule change, as amended, is available at the Amex and at the Commission.
In its filing with the Commission, the Amex included statements concerning the purpose of and basis for the proposed rule change, as amended, 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 Amex has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
In connection with the listing and trading of certain securities on the Exchange, the Exchange may be required to pay fees to third parties as a condition to listing. For example, the Exchange may pay license fees to index providers to list index options or exchange-traded funds based on a stock index. The Exchange may also pay other types of fees to third parties in connection with a particular listing.
The Exchange proposes to pass such fees through to the Amex specialist unit allocated a security for which the Exchange pays such fees. This fee, which will be included in the Amex Member Fees Schedule under “Membership Fees,” will be applicable to any securities traded on the Exchange for which the Exchange pays a fee in connection with Amex listing or trading, including equities, options, structured products, exchange-traded funds and Trust Issued Receipts.
The Exchange currently imposes license fees on a per transaction basis applicable to specialists and registered options traders in connection with trading of options on the Nasdaq 100 Index Tracking Stock (symbol QQQ), Nasdaq 100 Index (symbol: NDX), Mini NDX (symbol: MNX), and options on S&P 100 iShares (symbol: OEF). These fees were filed with the Commission in SR-Amex-2001-101.
The Exchange represents that any fee passed through to the specialist unit pursuant to this filing will reflect only actual costs incurred by the Exchange in connection with Exchange listing or trading of the allocated security. Such fee could be imposed in connection with any security traded on the Exchange, whether a listed security or a security traded pursuant to unlisted trading privileges. The fee is not intended to cover any form of payment for order flow by the Exchange (in the event the Exchange determines to engage in such payment), and any imposition of fees on members or member organizations to permit the Exchange to recoup such payment would be filed separately with the Commission pursuant to Rule 19b-4.
The Exchange believes the proposed rule change, as amended, is consistent with section 6 of the Act,
The Amex does not believe that the proposed rule change, as amended, will impose any burden on competition.
Written comments on the proposed rule change, as amended, were neither solicited nor received.
The foregoing proposed rule change, as amended, has become effective pursuant to section 19(b)(3)(A)(ii) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, 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, as amended, 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 Amex. All submissions should refer to File No. SR-Amex-2002-08 and should be submitted by May 8, 2002.
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 the Amex's Registration and IntraDay Comparison (“IDC”) Fees Schedule relating to Equity IDC Fees. New language is in italics.
I. Membership Registration
No change
II. Options IDC
No change
III.
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 Amex has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
The Amex will be implementing a new trade comparison system for equities called Intra-Day Comparison System for Equities (“IDC-E”), as developed by the Securities Industry Automation Corporation (“SIAC”). IDC-E will provide real-time intra-day trade comparisons applicable to all trades, including system and non-system trades. System trades include executions of orders entered in the Amex Order File (“AOF”), the Exchange's automated order routing facility; non-system trades include execution of orders not entered into AOF (
Amex proposes to charge the following IDC-E transaction processing fees to Amex clearing firm members, effective May 1, 2002. The Questioned Trade Charge per questioned trade (applied to T+1, T+2, etc. trades) will be $0.20 per side. The transaction processing fee for transactions submitted for trade date comparison (per side) will be $0.03 for transactions of 1,000-2,999 shares per side, and $0.09 for transactions of 3,000 shares or more per side. (Transactions of less than 1,000 shares per side will not be charged.)
The Exchange also proposes to charge each clearing firm member a Dedicated Remote Access Fee of $2,400 annually. This is equal to Amex's Dedicated Remote Access fee of $2,400 per year for Intra-Day Comparison for Options (“IDC-O”). The Exchange will charge each clearing firm member $600
IDC-E charges are intended to be cost-neutral to the clearing firm members and are not expected to result in overall increased comparison charges for clearing firm members.
The proposed rule change is consistent with section 6(b) of the Act
The Exchange does not believe that the proposed rule change will impose any burden on competition.
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change has become effective pursuant to section 19(b)(3)(A)(ii) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. 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 Amex. All submissions should refer to File No. SR-Amex-2002-17 and should be submitted by May 8, 2002.
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 is proposing to adopt a rule requiring members to participate in specified systems tests. Below is the text of the proposed rule change. Proposed new language is in
(c) A member or member organization that is subject to this Rule and that fails to conduct or participate in the tests, fails to file the required reports, or fails to maintain the required documentation, may be subject to disciplinary action pursuant to the Exchange's rules.
(d) Violations Subject to Fines. The following is a list of rule violations subject to, and the applicable sanctions that may be imposed by the Exchange pursuant to, this Rule:
In its filing with the Commission, the ISE 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 ISE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
According to the ISE, the purpose of the proposed rule change is to give the Exchange flexibility to require members to participate in mandated system tests. The ISE believes that it is critical that its members work closely with the Exchange in testing new software releases, especially as the Exchange implements new versions of its software. The ISE represents that, while its members generally have been responsive to its testing schedule, at times the Exchange has had difficulty getting the proper level of attention of a member, resulting in some members failing to be prepared to test according to the ISE's time schedule. The proposed rule change would give the Exchange the ability to designate certain tests as mandatory for specified classes of members. Failure to engage in a test would subject a member to disciplinary action, including possible fines pursuant to changes proposed to the ISE's minor rule violation program.
The ISE believes that the proposed rule change is consistent with section 6(b) of the Act,
The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties.
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 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 will also be available for inspection and copying at the principal office of the ISE. All submissions should refer to File No. SR-ISE-2002-07 and should be submitted by May 8, 2002.
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” or “Exchange Act”),
The Exchange proposes to adopt listing standards for the listing and trading, or the trading pursuant to unlisted trading privileges (“UTP”), of Trust Issued Receipts (“TIRs”) under NYSE Rules 1200 through 1202, and 703.20 of the NYSE's Listed Company Manual. The Exchange also proposes to amend its rules to incorporate the listing and trading of TIRs.
In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, 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 in Sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to adopt rules to provide standards that permit the listing and trading, or the trading pursuant to UTP, of TIRs, including generic listing standards of TIRs, pursuant to Rule 19b-4(e) of the Act. The Exchange proposes to adopt listing standards applicable to TIRs consistent with the listing criteria currently used by the American Stock Exchange LLC (“Amex”) and other exchanges, in order to trade TIRs on the Exchange, and/or on a UTP basis. Thus, the Exchange proposes to adopt standards that permit the listing and trading, or trading pursuant to UTP, of TIRs, under Section 19(b)(2) of the Act.
TIRs are negotiable receipts that are issued by a trust representing securities of issuers that have been deposited and are held on behalf of the holders of the TIRs. TIRs are designed to allow investors to hold interests in a variety of companies throughout a particular industry in a single, exchange-listed and traded instrument that represents beneficial ownership in the deposited securities. Holders may cancel their TIRs at any time to receive the deposited securities.
Beneficial owners of TIRs will have the same rights, privileges and obligations as they would have if they beneficially owned the deposited securities outside of the TIR program. Holders of TIRs have the right to instruct the trustee to vote the deposited securities evidenced by the receipts. They will receive reports, proxies, and other information distributed by the issuers of the deposited securities to their security holders and will receive dividends and other distributions declared and paid by the issuers of the deposited securities to the trustee.
TIRs are not leveraged instruments, and therefore do not possess any of the attributes of stock index options. The Exchange believes that the level of risk involved in the purchase and sale of TIRs is almost identical to the risk involved in the purchase or sale of the common stocks represented by the receipt.
TIRs will be issued by a trust created pursuant to a depository trust agreement. After the initial offering, the trust may issue additional receipts on a continuous basis when an investor deposits the requisite securities with the trust. An investor in TIRs will be permitted to withdraw his or her deposited securities upon delivery to the trustee of one or more round-lots of 100 TIRs. Orders for other than a round lot (or round lot multiples) will not be allowed. Conversely, an investor may deposit the necessary securities and receive the TIRs in return.
The Exchange believes that the listing criteria proposed in its new rule are generally consistent with the listing criteria currently used by the Amex, the Chicago Stock Exchange, Inc. (the “CHX”), the Chicago Board Options Exchange, Inc. (the “CBOE”) and the Boston Stock Exchange, Inc. (the “BSE”).
If TIRs are to be listed on the NYSE, the Exchange will establish a minimum number of receipts that must be outstanding at the time trading commences on the Exchange, and such minimum number will be included in any required submission to the Commission. In connection with continued listing, the Exchange will consider the suspension of trading in, or removal from listing of, a series of TIRs when any of the following circumstances arise: (1) The trust has more than 60 days remaining until termination and there have been fewer than 50 record and/or beneficial holders of the TIRs for 30 or more consecutive trading days; (2) the trust has fewer than 50,000 receipts issued and outstanding; (3) the market value of all receipts issued and outstanding is less than $1 million; or (4) such other event occurs or condition exists which, in the opinion of the Exchange, makes further dealings on the Exchange inadvisable. These flexible criteria will allow the Exchange to avoid delisting TIRs (and possibly terminating the trust) due to relatively brief fluctuations in market conditions that may cause the number of holders to vary. However, these delisting criteria will not be applied for the initial 12-month period following formation of a trust and commencement of trading on the Exchange.
In addition, if the number of companies represented by the deposited securities drops to fewer than nine, and each time the number of companies is reduced thereafter, the Exchange will consult with the staff of the Division of Market Regulation to confirm the
To accommodate the efficient listing and trading, or trading pursuant to UTP, of additional TIRs, the Exchange proposes to adopt generic listing and trading standards of TIRs pursuant to Rule 19b-4(e).
The Commission has previously approved requests of the Amex, CHX,
TIRs are considered “securities” pursuant to NYSE Rule 3 and are subject to all applicable trading rules. TIRs will be deemed “eligible securities” for purposes of the Intermarket Trading System (“ITS”) Plan and therefore will be subject to the trade-through provisions of NYSE Rule 15A. TIRs are also subject to NYSE rules and policies governing, among other things, equity margin, priority, parity and precedence of orders, market volatility related trading halts, and responsibilities of member firms.
The Exchange's surveillance procedures for TIRs will be similar to those used for investment company units and will incorporate and rely upon existing NYSE surveillance procedures governing equities.
Prior to the commencement of trading in TIRs, the Exchange will distribute a circular to the membership highlighting the characteristics of TIRs, including that TIRs are not individually redeemable. In addition, the circular will advise members of the Exchange about policies relating to trading halts in TIRs. Specifically, the circular will note that the Exchange may consider factors such as the extent to which trading is not occurring in the underlying security(s); whether trading has been halted or suspended in the primary market(s) for any combination of underlying stocks accounting for 20% or more of the applicable current portfolio value; and whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present.
The Exchange will require its members to provide all purchasers of newly issued TIRs with a prospectus for that series of TIRs.
Upon approval of the NYSE's listing standards for TIRs, the Exchange intends to begin trading, on a UTP basis, some or all TIRs that are currently trading on other securities exchanges. The following paragraph contains information about TIRs generally.
Each of the companies represented by the securities in the portfolios underlying the existing TIRs are required to meet the following minimum criteria of proposed NYSE Rule 1202 and Supplementary Material .10 when they are listed on the NYSE, or traded pursuant to UTP. The generic listing standards require the following: (1) That each company's common stock must be registered under Section 12 of the Exchange Act; (2) the minimum public float of each company included in the portfolio was at least $150 million; (3) each security was either listed on a national securities exchange or traded through the facilities of Nasdaq and a reported national market system security; (4) the average daily trading volume for each security was at least 100,000 shares during the preceding sixty-day trading period; and (5) the average daily dollar value of the shares traded during the preceding sixty-day trading period was at least $1 million. The initial weighting of each security in the portfolio was based on its market capitalization; however, any security that represented more than 20% of the overall value of the receipt on the date of the weighting was determined, was reduced to no more than 20% of the receipt value.
A round lot of any of the above TIRs represents a holder's individual and undivided beneficial ownership interest in the whole number of securities represented by the receipt. The amount of deposited securities for each round lot of 100 TIRs will be determined at the beginning of the marketing period and will be disclosed in the prospectus to investors. Because TIRs may be acquired, held or transferred only in round lots of 100 receipts or round lot multiples, orders for other than a round lot (or round lot multiples) will not be allowed.
The Exchange believes that TIRs will not trade at a material discount or
The Exchange represents that its rules and policies currently applicable to investment company units will also apply to TIRs. These include the Exchange's policies regarding mandatory dissemination of pre-opening price indications (other than ITS pre-opening notifications) in the case of significant order imbalances, and the Exchange's MOC and LOC procedures (which do not apply to investment company units and will also not apply to TIRs). Other such rules and policies include those relating to specialist allocation, capital and net liquid assets requirements for specialist member organizations, market making activity by a specialist, and control relationships involving a specialist.
Except when a reconstitution event occurs, as described below, the securities represented by a TIR will not change. According to the prospectus of TIRs, under no circumstances will a new company be added to the group of issuers of the underlying securities, and weightings of component securities will not be adjusted after they are initially set.
Trust agreements will provide for, and prospectuses for TIRs will describe, the automatic distribution of specified deposited securities in the trust's portfolio to the beneficial owners of TIRs in the circumstances referred to in such trust agreements and prospectuses as “reconstitution events.” The reconstitution events occur under the following circumstances:
(1) If the issuer of the underlying securities no longer has a class of common stock registered under Section 12 of the Act, then its securities will no longer be an underlying security and the trustee will distribute the securities of that company to the owners of the TIRs;
(2) If the Commission finds that an issuer of underlying securities should be registered as an investment company under the Investment Company Act of 1940, and the trustee has actual knowledge of the Commission's finding, then the trustee will distribute the shares of that company to the owners of the TIRs;
(3) If the underlying securities of an issuer cease to be outstanding as a result of a merger, consolidation or other corporate combination, the trustee will distribute the consideration paid by and received from the acquiring company to the beneficial owners of the TIRs, unless the acquiring company's securities are already included in the TIR as deposited securities, in which case such additional securities will be deposited into the trust; and
(4) If an issuer's underlying securities are delisted from trading on a national securities exchange or Nasdaq and are not listed for trading on another national securities exchange or through Nasdaq within five business days from the date the deposited securities are delisted.
As described in the prospectus, if a reconstitution event occurs, the trustee will deliver the deposited security to the investor as promptly as practicable after the date that the trustee has knowledge of the occurrence of a reconstitution event.
The trust will issue and cancel—and an investor may obtain, hold, trade or surrender—TIRs only in round lots of 100 or in round lot multiples. Orders for other than a round lot or round lot multiples will not be allowed. While investors will be able to acquire, hold, transfer and surrender a round lot of 100 TIRs, the bid and asked prices will be quoted on a per receipt basis. The trust will issue additional receipts on a continuous basis when an investor deposits the required securities with the trust.
An investor may obtain TIRs by either purchasing them on an exchange or by delivering to the trustee the underlying securities evidencing a round lot of TIRs. The trustee will charge an issuance and cancellation fee of up to $10.00 per 100 TIRs. Lower charges may be assigned for bulk issuances and cancellations. An investor may cancel TIRs and withdraw the deposited securities by delivering a round lot or round lot multiple of the TIRs to the trustee, during normal business hours. According to the prospectus, the trustee expects that, in most cases, it will deliver the deposited securities within one business day of the withdrawal request.
The trust shall terminate upon the earlier of: (1) The removal of the TIRs from listing on a national securities exchange or Nasdaq if they are not listed for trading on another national securities exchange or Nasdaq within five business days from the date the receipts are delisted; (2) the trustee resigns and no successor trustee is appointed within 60 days from the date the trustee provides notice to the initial depositor of its intent to resign; (3) 75% of the beneficial owners of outstanding TIRs (
The Exchange believes that the basis under Act for this proposed rule change is the requirement under section 6(b)(5) of the Act,
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
After careful review, the Commission finds that the proposed rule change is consistent with the requirements of section 6(b)(5) of the Act
As noted in the Amex approval order, the Commission believes that TIRs will provide investors with an alternative to trading a broad range of securities on an individual basis, and will give investors the ability to trade TIRs representing a portfolio of securities continuously throughout the business day in secondary market transactions at negotiated prices. TIRs will allow investors to: (1) Respond quickly to changes in the overall securities markets generally and for the industry represented by a particular trust; (2) trade, at a price disseminated on a continuous basis, a single security representing a portfolio of securities that the investors owns beneficially; (3) engage in hedging strategies similar to those used by institutional investors; (4) reduce transaction costs for trading a portfolio of securities; and (5) retain beneficial ownership of the securities underlying the TIRs.
Although TIRs are not leveraged instruments, and therefore do not possess any of the attributes of stock index options, their prices will be derived and based upon the securities held in their respective trusts. Accordingly, the level of risk involved in the purchase or sale of trust issued receipts is similar to the risk involved in the purchase or sale of traditional common stock, with the exception that the pricing mechanism for trust issued receipts is based on a basket of securities.
The Commission finds that the NYSE's proposal contains adequate rules and procedures to govern the trading of TIRs, whether by listing or pursuant to UTP. TIRs are equity securities that will be subject to the full panoply of NYSE rules governing the trading of equity securities on the NYSE,
In addition, the NYSE has developed specific listing and delisting criteria for TIRs that will help to ensure that a minimum level of liquidity will exist for TIRs to allow for the maintenance of fair and orderly markets. The delisting criteria also allows the NYSE to consider the suspension of trading and the delisting of a TIR if an event occurred that made further dealings in such securities inadvisable. This will give the NYSE flexibility to delist TIRs if circumstances warrant such action. The NYSE's proposal also provides procedures to halt trading in TIRs in certain enumerated circumstances.
Moreover, in approving this proposal, the Commission notes the Exchange's belief that TIRs will not trade at a material discount or premium in relation to the overall value of the trusts' assets because of potential arbitrage opportunities. The Exchange also represents that the potential for arbitrage should keep the market price of a TIR comparable to the overall value of the deposited securities.
The Commission believes that such trading should enhance market liquidity, and should promote more accurate pricing, tighter quotations, and reduced price fluctuations. The Commission also believes that such trading should allow customers to receive the best possible execution of their transactions in TIRs.
Finally, the NYSE will apply surveillance procedures for TIRs that will be similar to the procedures used for investment company units and will incorporate and rely upon existing NYSE surveillance procedures governing equities. The Commission believes that these surveillance procedures are adequate to address concerns associated with listing and trading TIRs, including any concerns associated with purchasing and redeeming round-lots of 100 receipts. Accordingly, the Commission believes that the rules governing the trading of TIRs provide adequate safeguards to prevent manipulative acts and practices and to protect investors and the public interest.
The Commission believes that the Exchange's proposal will ensure that investors have information that will allow them to be adequately apprised of the terms, characteristics, and risk of trading TIRs. The prospectus will address the special characteristics of a particular TIR basket, including a statement regarding its redeemability and method of creation. The Commission notes that all investors in TIRs who purchase in the initial offering will receive a prospectus. In addition, anyone purchasing a TIR directly from the trust (by delivering the underlying securities to the trust) will also receive a prospectus. Finally, all NYSE member firms who purchase TIRs from the trust for resale to customers must deliver a prospectus to such customers.
The Commission also notes that upon the initial listing of any TIRs, the Exchange will issue a circular to its members explaining the unique characteristics and risks of this type of
The Commission further believes that adopting generic listing standards for these securities pursuant to Rule 19b-4(e) under the Act should fulfill the intended objective of the rule by giving the NYSE the ability to potentially reduce the time frame for bringing these securities to the market, or for permitting the trading of these securities pursuant to UTP, and thus enhances investors' opportunities. The Commission notes that it maintains regulatory oversight over any products listed under the generic standards through regular inspection oversight.
The Commission finds that the NYSE's proposal contains adequate rules and procedures to govern the listing and trading of TIRs pursuant to Rule 19b-4(e) on the NYSE, or pursuant to UTP. All TIR products listed under the generic standards will be subject to the full panoply of NYSE rules and procedures that now govern both the trading of TIRs and the trading of equity securities.
As described above, the Commission has previously approved similar Amex, CHX, and PCX rules that permit the generic listing and trading of individual TIRs. In approving these securities for trading, the Commission considered their structure, their usefulness to investors and the markets, and the Exchanges' rules and surveillance programs that govern their trading. The Commission concluded then, as it does now, that securities approved for listing under those rules would allow investors to: (1) Respond quickly to changes in the overall securities markets generally and for the industry represented by a particular trust; (2) trade, at a price disseminated on a continuous basis, a single security representing a portfolio of securities that the investor owns beneficially; (3) engage in hedging strategies similar to those used by institutional investors; (4) reduce transactions costs for trading a portfolio of securities; and (5) retain beneficial ownership of the securities underlying the TIRs.
The Commission notes that the NYSE's proposed generic listing standards are substantially similar to the Amex, CHX and PCX. The Commission therefore believes that TIRs that satisfy the NYSE's proposed generic listing standards should produce the same benefits to the NYSE and to investors.
The NYSE has requested that the Commission find good cause for approving the proposed rule change, and Amendments Nos. 1 and 2 prior to the thirtieth day after the date of publication of notice in the
As noted above, the Commission has approved the listing and trading of TIRs at the Amex, under rules that are substantially similar to the NYSE rules.
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 adopt standards for the trading pursuant to unlisted trading privileges (“UTP”), of certain Trust Issued Receipts (“TIRs”), known as Holding Company Depositary Receipts (“HOLDRS”).
In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, 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 in Sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to trade pursuant to UTP the following HOLDRs: (1) Broadband; (2) B2B Internet, (3) Europe 2001, (4) Internet Infrastructure, (5) Market 2000, (6) Wireless, and (7) Telecom (each a “HOLDR” and collectively, the “HOLDRs”). The HOLDRs currently are listed and traded on the Amex and trade on other securities exchanges, and in the over-the-counter market. The following paragraphs contain information applicable to all the HOLDRs generally.
HOLDRs, a type of TIRs, are negotiable receipts that are issued by a trust representing securities of issuers that have been deposited and are held on behalf of the holders of the TIRs. TIRs are designed to allow investors to hold interests in a variety of companies throughout a particular industry in a single, exchange-listed and traded instrument that represents beneficial ownership in the deposited securities. Holders may cancel their TIRs at any time to receive the deposited securities.
Beneficial owners of TIRs will have the same rights, privileges and obligations as they would have if they beneficially owned the deposited securities outside of the TIR program. Holders of TIRs have the right to instruct the trustee to vote the deposited securities evidenced by the receipts. They will receive reports, proxies, and other information distributed by the issuers of the deposited securities to their security holders and will receive dividends and other distributions declared and paid by the issuers of the deposited securities to the trustee.
TIRs are not leveraged instruments, and therefore do not possess any of the attributes of stock index options. The Exchange believes that the level of risk involved in the purchase and sale of TIRs is almost identical to the risk involved in the purchase or sale of the common stocks represented by the receipt.
TIRs will be issued by a trust created pursuant to a depository trust agreement. After the initial offering, the trust may issue additional receipts on a continuous basis when an investor deposits the requisite securities with the trust. An investor in TIRs will be permitted to withdraw his or her deposited securities upon delivery to the trustee of one or more round-lots of 100 TIRs. Orders for other than a round lot (or round lot multiples) will not be allowed. Conversely, an investor may deposit the necessary securities and receive the TIRs in return.
TIRs, including the HOLDRs, are considered “securities” pursuant to NYSE Rule 3 and are subject to all applicable trading rules. The HOLDRs will be deemed “eligible securities” for purposes of the Intermarket Trading System (“ITS”) Plan and therefore will be subject to the trade-through provisions of NYSE Rule 15A. The HOLDRs, as TIRs, are also subject to NYSE rules and policies governing, among other things, equity margin, priority, parity and precedence of orders, market volatility related trading halts, and responsibilities of member firms.
The Exchange's surveillance procedures for HOLDRs will be similar to those used for investment company units and will incorporate and rely upon existing NYSE surveillance procedures governing equities.
Prior to the commencement of trading in HOLDRs, the Exchange will distribute a circular to the membership highlighting the characteristics of HOLDRs, including that HOLDRs are not individually redeemable. In addition, the circular will advise members of the Exchange about policies relating to trading halts in HOLDRs. Specifically, the circular will note that the Exchange may consider factors such as the extent to which trading is not occurring in the underlying security(s); whether trading has been halted or suspended in the primary market(s) for any combination of underlying stocks accounting for 20% or more of the applicable current portfolio value; and whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present.
The Exchange will require its members to provide all purchasers of newly issued TIRs with a prospectus for that series of HOLDRs.
A round lot of any of the above TIRs represents a holder's individual and undivided beneficial ownership interest in the whole number of securities represented by the receipt. The amount of deposited securities for each round lot of 100 TIRs will be determined at the beginning of the marketing period and will be disclosed in the prospectus to investors. Because TIRs may be acquired, held or transferred only in round lots of 100 receipts or round lot multiples, orders for other than a round lot (or round lot multiples) will not be allowed.
The Exchange believes that HOLDRs will not trade at a material discount or premium to the assets held by the issuing trust, because the arbitrage process should promote correlative pricing between the HOLDRs and the deposited securities. If the price of the HOLDR deviates enough from the portfolio of deposited securities to create a material discount or premium, an arbitrage opportunity would be created, allowing the arbitrageur to either: (1) Buy the HOLDRs at a discount, exchanging them for shares of the underlying securities and selling those shares at a profit; or (2) sell the HOLDRs short at a premium, buying the securities underlying the HOLDRs, depositing them in exchange for the HOLDRs, and delivering against the short position. In both instances, the arbitrageur locks in a profit and the markets move back into line.
The Exchange represents that its rules and policies currently applicable to investment company units will also
Except when a reconstitution event occurs, as described below, the securities represented by a HOLDR will not change. According to the prospectus of TIRs, under no circumstances will a new company be added to the group of issuers of the underlying securities, and weightings of component securities will not be adjusted after they are initially set.
Trust agreements will provide for, and prospectuses for HOLDRs will describe, the automatic distribution of specified deposited securities in the trust's portfolio to the beneficial owners of HOLDRs in the circumstances referred to in such trust agreements and prospectuses as “reconstitution events.” The reconstitution events occur under the following circumstances:
(1) If the issuer of the underlying securities no longer has a class of common stock registered under Section 12 of the Act, then its securities will no longer be an underlying security and the trustee will distribute the securities of that company to the owners of the HOLDRs;
(2) If the Commission finds that an issuer of underlying securities should be registered as an investment company under the Investment Company Act of 1940, and the trustee has actual knowledge of the Commission's finding, then the trustee will distribute the shares of that company to the owners of the HOLDRs;
(3) If the underlying securities of an issuer cease to be outstanding as a result of a merger, consolidation or other corporate combination, the trustee will distribute the consideration paid by and received from the acquiring company to the beneficial owners of the HOLDRs, unless the acquiring company's securities are already included in the HOLDRs as deposited securities, in which case such additional securities will be deposited into the trust; and
(4) If an issuer's underlying securities are delisted from trading on a national securities exchange or Nasdaq and are not listed for trading on another national securities exchange or through Nasdaq within five business days from the date the deposited securities are delisted.
As described in the prospectus, if a reconstitution event occurs, the trustee will deliver the deposited security to the investor as promptly as practicable after the date that the trustee has knowledge of the occurrence of a reconstitution event.
The trust will issue and cancel—and an investor may obtain, hold, trade or surrender—HOLDRs only in round lots of 100 or in round lot multiples. Orders for other than a round lot or round lot multiples will not be allowed. While investors will be able to acquire, hold, transfer and surrender a round lot of 100 HOLDRs, the bid and asked prices will be quoted on a per receipt basis. The trust will issue additional receipts on a continuous basis when an investor deposits the required securities with the trust.
An investor may obtain HOLDRs by either purchasing them on an exchange or by delivering to the trustee the underlying securities evidencing a round lot of HOLDRs. The trustee will charge an issuance and cancellation fee of up to $10.00 per 100 HOLDRs. Lower charges may be assigned for bulk issuances and cancellations. An investor may cancel HOLDRs and withdraw the deposited securities by delivering a round lot or round lot multiple of the TIRs to the trustee, during normal business hours. According to the prospectus, the trustee expects that, in most cases, it will deliver the deposited securities within one business day of the withdrawal request.
The trust shall terminate upon the earlier of: (1) The removal of the HOLDRs from listing on a national securities exchange or Nasdaq if they are not listed for trading on another national securities exchange or Nasdaq within five business days from the date the receipts are delisted; (2) the trustee resigns and no successor trustee is appointed within 60 days from the date the trustee provides notice to the initial depositor of its intent to resign; (3) 75% of the beneficial owners of outstanding HOLDRs (
Except as otherwise noted below, and in
When listing TIRs under Rule 1202, the Exchange will establish a minimum number of receipts that must be outstanding at the time trading commences on the Exchange, and such minimum number will be included in any required submission to the Commission. In connection with continued listing, the Exchange will consider the suspension of trading in, or removal from listing of, a series of TIRs when any of the following circumstances arise: (1) The trust has more than 60 days remaining until termination and there have been fewer than 50 record and/or beneficial holders of the TIRs for 30 or more consecutive trading days; (2) the trust has fewer than 50,000 receipts issued and outstanding; (3) the market value of all receipts issued and outstanding is less than $1 million; or (4) such other event occurs or condition exists which, in the opinion of the Exchange, makes further dealings on the Exchange inadvisable. These flexible criteria will allow the Exchange to avoid delisting the TIRs (and possibly terminating the trust) due
In addition, if the number of component securities drops to fewer than nine, and each time the number of component securities is reduced thereafter, the Exchange will consult with the staff of the Division of Market Regulation to confirm the appropriateness of continued listing of the TIRs.
NYSE Rule 1202 also contains specific “generic” listing criteria under which the Exchange may commence trading pursuant to Rule 19b-4(e). Those criteria are substantially similar to the criteria that have been applied to the initial listing of HOLDRs on the Amex. Specifically, each of the companies represented by the securities in the portfolios underlying the HOLDRs trusts (each of such companies referred to herein as a “component security”) were required to meet the following minimum criteria when they were selected: (1) Each component security common stock was registered under Section 12 of the Exchange Act; (2) the minimum public float of each component security was at least $150 million; (3) each component security was either listed on a national securities exchange or traded on Nasdaq and was a reported national market system security; (4) the average daily trading volume for each component security was at least 100,000 shares during the preceding sixty-day trading period; and (5) the average daily dollar value of the component security traded during the preceding sixty-day trading period was at least $1 million. The initial weighting of each component security in the portfolio was based on its market capitalization; however, if on the date such weighting was determined, a component security represented more than 20% of the overall value of the receipt, then the amount of such component security was to be reduced to no more than 20% of the receipt value.
Based on the fact that each of the HOLDRs was initially listed on the Amex, the Exchange assumes that each component security met the criteria described above. Presently, however, the Exchange represents that each of the HOLDRs that the Exchange proposes to trade on a UTP basis has one or more component securities that fail to meet the minimum criteria set forth above. As a result, while the HOLDRs are substantially in compliance with the aforementioned minimum standards, the HOLDRs do not satisfy the Exchange's generic standards for listing and trading TIRs pursuant to Rule 19b-4(e). Specifically, one or more component securities of each HOLDR do not meet the minimum public float requirement in clause (2) above and/or the average daily dollar value requirement in clause (5) above, as more specifically described in
Notwithstanding that fact, the Exchange believes that its proposal to trade the HOLDRs on a UTP basis is appropriate, and thus should be approved. The HOLDRs continue to be substantially in compliance with the minimum initial listing criteria listed above, and thus, are substantially similar to products previously approved by the Commission. These HOLDRs also continue to be traded on the Amex, on several regional exchanges and in the over-the-counter market. Permitting the Exchange to trade these HOLDRs on a UTP basis will afford investors the advantage of an additional market on which to trade the HOLDRs, and avoid the unfair discrimination against the Exchange that would otherwise result from precluding the Exchange from trading these securities while the aforementioned markets continue to do so.
The Exchange believes that the basis under the Act for this proposed rule change is the requirement under section 6(b)(5) of the Act,
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 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 NYSE. All submissions should refer to File No. SR-NYSE-2002-15 and should be submitted by May 8, 2002.
After careful review, the Commission finds that the proposed rule change is consistent with the requirements of section 6(b)(5) of the Act
As noted in the Amex approval order, the Commission believes that HOLDRs will provide investors with an alternative to trading a broad range of securities on an individual basis, and will give investors the ability to trade the HOLDRs representing a portfolio of securities continuously throughout the business day in secondary market
Although the HOLDRs are not leveraged instruments, and therefore do not possess any of the attributes of stock index options, their prices will be derived and based upon the securities held in their respective trusts. Accordingly, the level of risk involved in the purchase or sale of TIRs is similar to the risk involved in the purchase or sale of traditional common stock, with the exception that the pricing mechanism for TIRs is based on a basket of securities.
The Commission finds that the NYSE's proposal contains adequate rules and procedures to govern the trading of the HOLDRs pursuant to UTP. The HOLDRs are equity securities that will be subject to the full panoply of NYSE rules governing the trading of equity securities on the NYSE,
In addition, the NYSE has developed specific listing and delisting criteria for the HOLDRs that will help to ensure that a minimum level of liquidity will exist for the HOLDRs to allow for the maintenance of fair and orderly markets. The delisting criteria also allow the NYSE to consider the suspension of trading and the delisting of a HOLDR if an event occurred that made further dealings in such securities inadvisable. This will give the NYSE flexibility to delist the HOLDRs if circumstances warrant such action. The NYSE's proposal also provides procedures to halt trading in the HOLDRs in certain enumerated circumstances.
Moreover, in approving this proposal, the Commission notes the Exchange's belief that the HOLDRs will not trade at a material discount or premium in relation to the overall value of the trusts' assets because of potential arbitrage opportunities. The Exchange also represents that the potential for arbitrage should keep the market price of a HOLDR comparable to the overall value of the deposited securities.
Furthermore, the Commission believes that the Exchange's proposal to trade the HOLDRs should enhance market liquidity, and should promote more accurate pricing, tighter quotations, and reduced price fluctuations. The Commission also believes that such trading should allow customers to receive the best possible execution of their transactions in the HOLDRs.
Finally, the NYSE will apply surveillance procedures for the HOLDRs that will be similar to the procedures used for investment company units and will incorporate and rely upon existing NYSE surveillance procedures governing equities. The Commission believes that these surveillance procedures are adequate to address concerns associated with the trading of the HOLDRS pursuant to UTP, including any concerns associated with purchasing and redeeming round-lots of 100 receipts. Accordingly, the Commission believes that the rules governing the trading of the HOLDRs provide adequate safeguards to prevent manipulative acts and practices and to protect investors and the public interest.
The Commission believes that the Exchange's proposal will ensure that investors have information that will allow them to be adequately apprised of the terms, characteristics, and risks of trading the HOLDRs. The prospectus will address the special characteristics of a particular HOLDR basket, including a statement regarding its redeemability and method of creation. The Commission notes that all investors in the HOLDRs who purchase in the initial offering will receive a prospectus. In addition, anyone purchasing a HOLDR directly from the trust (by delivering the underlying securities to the trust) will also receive a prospectus. Finally, all NYSE member firms that purchase the HOLDRs from the trust for resale to customers must deliver a prospectus to such customers.
The Commission also notes that prior to the commencement of trading the HOLDRs, the Exchange will issue a circular to its members explaining the unique characteristics and risks of this type of security. The circular also will note the Exchange members' prospectus delivery requirements, and highlight the characteristics of purchases in HOLDRs, including that the HOLDRs are not individually redeemable. The circular also will inform members of Exchange policies regarding trading halts in HOLDRs.
As described above, the Commission has previously approved similar Amex, CHX, and Pacific Exchange, Inc. rules that permit the listing and trading of individual TIRs, including the trading of TIRs pursuant to UTP. In approving these securities for trading, the Commission considered their structure, their usefulness to investors and the markets, and the Exchanges' rules and surveillance programs that govern their trading.
The Commission notes that the HOLDRs that NYSE proposes to trade pursuant to UTP currently trade on other securities exchanges. The Commission therefore believes that it is appropriate to approve these HOLDRs for trading pursuant to UTP on the NYSE, as their trading should produce the same benefits to the NYSE and to investors.
The NYSE has requested that the Commission find good cause for approving the proposed rule change prior to the thirtieth day after the date of publication of notice in the
As noted above, the Commission has approved the listing and trading of HOLDRs at other securities exchanges, under rules that are substantially similar to the NYSE rules.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
On December 11, 2000, the Pacific Exchange, Inc. (“PCX” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange is proposing to eliminate position and exercise limits when certain qualified strategies are employed to establish a hedged equity option position and to establish a position and exercise limit of five times the standard limit for those strategies that include an OTC option contract. Accordingly, the PCX proposes to amend Commentary .07 of Exchange Rule 6.8(a) to expand the definition of a “qualified” hedged position. The proposed qualified hedged strategies are as follows:
1. Where each option contract is “hedged” by the number of shares underlying the option contract or securities convertible into the underlying security or, in the case of an adjusted option, the same number of shares represented by the adjusted contract: (a) Long call and short stock; (b) short call and long stock; (c) long put and long stock; or (d) short put and short stock.
2. Reverse Conversions—A long call position accompanied by a short put position, where the long call expires with the short put and the strike price of the long call and short put is the same, and where each long call and short put contract is hedged with 100 shares (or other adjusted number of shares) of the underlying security or securities convertible into such underlying security.
3. Conversions—A short call position accompanied by a long put position, where the short call expires with the long put and the strike price of the short call and long put is the same, and where each short call and long put contract is hedged with 100 shares (or other adjusted number of shares) of the underlying security or securities convertible into such underlying security.
4. Collars—A short call position accompanied by a long put position, where the short call expires at the same time as the long put and the strike price of the short call equals or exceeds the strike price of the long put position and where each short call and long put position, is hedged with 100 shares of the underlying security (or other adjusted number of shares).
5. Box Spreads—A long call position accompanied by a short put position, where both the long call and short put have the same strike price, and a short call position accompanied by a long put position, where the short call and long put have the same strike price as each other, but a different strike price than the long call/short put position.
6. Back-to-Back Options—A listed option position hedged on a one-for-one basis with an over-the-counter (“OTC”) option position on the same underlying security.
For reverse conversion, conversion and collar strategies, one of the option components can be an OTC option guaranteed or endorsed by the firm maintaining the proprietary position or carrying the customer account.
Within the list of proposed hedge strategies eligible for the equity hedge exemption, the Exchange proposes that the option component of a reversal, a conversion or a collar position can be treated as one contract rather than as two (2) contracts. All three strategies serve to hedge a related stock portfolio. Because these strategies require the contemporaneous
Under the proposed rule change, the standard position and exercise limits will remain in place for unhedged equity option positions. Once an account nears or reaches the standard limit, positions identified as a qualified hedge strategy will be exempted from position limit calculations. The exemption will be automatic (i.e. does not require pre-approval from the Exchange) to the extent that the member identifies that a pre-existing qualified hedge strategy is in place or is employed from the point that an account's position reaches the standard limit and provides the required supporting documentation to the Exchange.
The exemption will remain in effect to the extent that the exempt positions remain intact and the Exchange is provided with any required supporting documentation. Procedures to demonstrate that the option position remains qualified are similar to those currently in place. Exchange procedures currently require a qualified account to report to the Exchange hedge information each time the option position changes. Hedge information for member firm and customer accounts having 200 or more contracts are electronically reported via the Large Options Positions Report. Market maker account information is also reported to the Exchange electronically by the member's clearing firm. The existing requirement imposed on member firms to report hedge information for proprietary and customer accounts that maintain an options position in excess of 10,000 contracts will continue to apply.
The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange
Position and exercise limits serve as a regulatory tool designed to address potential manipulative schemes and adverse market impact surrounding the use of options. In general, the Commission has taken a gradual, evolutionary approach toward expansion of position and exercise limits. The Commission has been careful to balance two competing concerns when considering the appropriate level at which to set position and exercise limits. The Commission has recognized that the limits must be sufficient to prevent investors from disrupting the market in the component securities comprising the indexes. At the same time, the Commission has determined that limits must not be established at levels that are so low as to discourage participation in the options market by institutions and other investors with substantial hedging needs or to prevent specialists and market makers from adequately meeting their obligations to maintain a fair and orderly market.
The Commission has carefully considered the PCX's proposal to expand the hedge exemption from position and exercise limits. Given the market neutral characteristic of all the proposed qualified hedge strategies (except covered stock positions), the Commission believes it is permissible to expand the current equity hedge exemption without risk of disruption to the options or underlying cash markets. Specifically, the Commission believes that existing position and exercise limits, procedures for maintaining the exemption, and the reporting requirements imposed by the Exchange will help protect against potential manipulation. The Commission notes that the existing standard position and exercise limits will remain in place for unhedged equity option positions. To further ensure against market disruption, the PCX will establish a position and exercise limit equal to no greater than five times the standard limit for those hedge strategies that include an OTC option component.
Once an account nears or reaches the standard limit, positions identified as one or more of the proposed qualified hedge strategies will be exempted from limit calculations. Although the exemption will be automatic (
In addition, as described above, a qualified account must report hedge information each time the option position changes. Hedge information for member firm and customer accounts are reported to the Exchange electronically, via the Large Options Position Report. Market maker account information is also reported to the Exchange electronically by the member's clearing firm. For those option positions that do not change, a filing is generally required on a weekly basis. Finally, the existing requirement imposed on member firms to report hedge information for proprietary and customer accounts that maintain an options position in excess of 10,000 contracts will remain in place.
The Commission believes these reporting requirements will help the PCX to monitor options positions and ensure that only qualified hedges are being exempt from position and exercise limits. To the extent that any position raises concerns, the Commission believes that the PCX, through its monitoring, will be promptly notified, and the Commission would expect the PCX to take any appropriate action, as permitted by its rules.
Finally, the Commission notes that the proposal, as amended, is substantially identical to proposed rule changes submitted by the Chicago Board Options Exchange, Inc. (“CBOE”) and the American Stock Exchange LLC (“Amex”), which the Commission has
The Commission finds good cause, pursuant to section 19(b)(2) of the Act,
Interested persons are invited to submit written data, views, and arguments concerning Amendment No. 1, including whether it 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 PCX. All submissions should refer to File No. SR-PCX-00-45 and should be submitted by May 8, 2002.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
The following form has been submitted to the Office of Management and Budget (OMB) for extension of clearance in compliance with the Paperwork Reduction Act (44 U.S. Chapter 35):
Copies of the above identified form can be obtained upon written request to: Selective Service System, Reports Clearance officer, 1515 Wilson Boulevard, Arlington, Virginia 22209-2425.
Written comments and recommendations for the proposed extension of clearance of the form should be sent within 30 days of publication of this notice, to: Selective Service System, Reports Clearance Officer, 1515 Wilson Boulevard, Arlington, Virginia 22209-2425.
A copy of the comments should be sent to: Office of Information and Regulatory Affairs, Attention: Desk Officer, Selective Service System, Office of Management and Budget, New Executive Office Building, Room 3235, Washington, DC 20503.
The following forms have been submitted to the Office of Management and Budget (OMB) for extension of clearance in compliance with the Paperwork Reduction Act (44 U.S. Chapter 35):
Copies of the above identified forms can be obtained upon written request to the Selective Service System, Reports Clearance Officer, 1515 Wilson Boulevard, Arlington, Virginia 22209-2425.
No changes have been made to the above identified forms. OMB clearance is limited to requesting a three-year extension of the current expiration dates.
Written comments should be sent within 60 days after the publication of this notice, to: Selective Service System, Reports Clearance Officer, 1515 Wilson Boulevard, Arlington, Virginia 22209-2425.
A copy of the comments should be sent to Office of Information and Regulatory Affairs, Attention: Desk Officer, Selective Service System, Office of Management and Budget, New Executive Office Building, Room 3235, Washington, DC 20435.
Department of State.
Notice.
Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
For further information, including a list of the exhibit objects, contact David S. Newman, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State, (telephone: 202/619-6982). The address is U.S. Department of State, SA-44, 301 4th Street, SW., Room 700, Washington, DC 20547-0001.
Department of State.
Notice.
Notice is hereby given that all licenses and approvals to export or otherwise transfer defense articles and defense services to Zimbabwe pursuant to Section 38 of the Arms Export Control Act (AECA) are suspended until further notice. Further, effective immediately, it is the policy of the U.S. Government to deny all applications for licenses and other approvals to export or otherwise transfer defense articles and defense services to Zimbabwe.
April 17, 2002.
Mary F. Sweeney, Office of Defense Trade Controls, Bureau of Political-Military Affairs, Department of State (202) 663-2700.
The Government of Zimbabwe has subverted the democratic process through a badly flawed presidential election, a campaign of violence and intimidation against its political opposition, and a blatant disregard for the rule of law and serious human rights abuses. Consequently, it is the policy of the Department of State to deny all applications for licenses and other approvals to export or otherwise transfer defense articles and defense services to Zimbabwe, until further notice. In addition, U.S. manufacturers and exporters and any other affected parties (
In accordance with established procedures under the ITAR, exceptions to this policy will be considered on a case-by-case basis.
This action has been taken pursuant to sections 38 and 42 of the AECA (22 U.S.C. 2778, 2791) and section 126.7 of the ITAR in furtherance of the foreign policy of the United States.
Friday, May 10, 2002, 9 a.m.—5 p.m.
Allerton Crown Plaza Hotel, Chicago, IL.
David Tevelin, Executive Director, State Justice Institute, 1650 King Street, Suite 600, Alexandria, VA 22314, (703) 684-6100.
Maritime Administration, Department of Transportation.
Invitation for public comments on a requested administrative waiver of the Coastwise Trade Laws for the vessel CLEOPATRA.
As authorized by Pub. L. 105-383, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a description of the proposed service, is listed below. Interested parties may comment on the effect this action may have on U.S.
Submit comments on or before May 17, 2002.
Comments should refer to docket number MARAD-2002-12092. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. DOT Dockets, Room PL-401, Department of Transportation, 400 7th St., SW, Washington, DC 20590-0001. You may also send comments electronically via the Internet at
Kathleen Dunn, U.S. Department of Transportation, Maritime Administration, MAR-832 Room 7201, 400 Seventh Street, SW., Washington, DC 20590. Telephone 202-366-2307.
Title V of Pub. L. 105-383 provides authority to the Secretary of Transportation to administratively waive the U.S.-build requirements of the Jones Act, and other statutes, for small commercial passenger vessels (no more than 12 passengers). This authority has been delegated to the Maritime Administration per 49 CFR 1.66, Delegations to the Maritime Administrator, as amended. By this notice, MARAD is publishing information on a vessel for which a request for a U.S.-build waiver has been received, and for which MARAD requests comments from interested parties. Comments should refer to the docket number of this notice and the vessel name in order for MARAD to properly consider the comments. Comments should also state the commenter's interest in the waiver application, and address the waiver criteria given in § 388.4 of MARAD'S regulations at 46 CFR part 388.
(1) Name of vessel and owner for which waiver is requested.
(2) Size, capacity and tonnage of vessel.
(3) Intended use for vessel, including geographic region of intended operation and trade.
(4) Date and Place of construction and (if applicable) rebuilding.
(5) A statement on the impact this waiver will have on other commercial passenger vessel operators.
(6) A statement on the impact this waiver will have on U.S. shipyards.
By Order of the Maritime Administrator.
Maritime Administration, Department of Transportation.
Invitation for public comments on a requested administrative waiver of the Coastwise Trade Laws for the vessel FRITHA.
As authorized by Pub. L. 105-383, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a description of the proposed service, is listed below. Interested parties may comment on the effect this action may have on U.S. vessel builders or businesses in the U.S. that use U.S.-flag vessels. If MARAD determines that in accordance with Pub. L. 105-383 and MARAD's regulations at 46 CFR part 388 (65 FR 6905; February 11, 2000) that the issuance of the waiver will have an unduly adverse effect on a U.S.-vessel builder or a business that uses U.S.-flag vessels, a waiver will not be granted.
Submit comments on or before May 17, 2002.
Comments should refer to docket number MARAD-2002-12094. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. DOT Dockets, Room PL-401, Department of Transportation, 400 7th St., SW, Washington, DC 20590-0001. You may also send comments electronically via the Internet at
Kathleen Dunn, U.S. Department of Transportation, Maritime Administration, MAR-832 Room 7201, 400 Seventh Street, SW, Washington, DC 20590. Telephone 202-366-2307.
Title V of Pub. L. 105-383 provides authority to the Secretary of Transportation to administratively waive the U.S.-build requirements of the Jones Act, and other statutes, for small commercial passenger vessels (no more than 12 passengers). This authority has been delegated to the Maritime Administration per 49 CFR 1.66, Delegations to the Maritime Administrator, as amended. By this notice, MARAD is publishing information on a vessel for which a request for a U.S.-build waiver has been received, and for which MARAD requests comments from interested parties. Comments should refer to the docket number of this notice and the vessel name in order for MARAD to properly consider the comments. Comments should also state the commenter's interest in the waiver
(1) Name of vessel and owner for which waiver is requested.
(2) Size, capacity and tonnage of vessel.
(3) Intended use for vessel, including geographic region of intended operation and trade.
(4) Date and Place of construction and (if applicable) rebuilding.
(5) A statement on the impact this waiver will have on other commercial passenger vessel operators.
(6) A statement on the impact this waiver will have on U.S. shipyards.
By Order of the Maritime Administrator.
Maritime Administration, Department of Transportation.
Invitation for public comments on a requested administrative waiver of the Coastwise Trade Laws for the vessel OSPREY.
As authorized by Pub. L. 105-383, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a description of the proposed service, is listed below. Interested parties may comment on the effect this action may have on U.S. vessel builders or businesses in the U.S. that use U.S.-flag vessels. If MARAD determines that in accordance with Pub. L. 105-383 and MARAD's regulations at 46 CFR part 388 (65 FR 6905; February 11, 2000) that the issuance of the waiver will have an unduly adverse effect on a U.S.-vessel builder or a business that uses U.S.-flag vessels, a waiver will not be granted.
Submit comments on or before May 17, 2002.
Comments should refer to docket number MARAD-2002-12091. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. DOT Dockets, Room PL-401, Department of Transportation, 400 7th St., SW, Washington, DC 20590-0001. You may also send comments electronically via the Internet at
Kathleen Dunn, U.S. Department of Transportation, Maritime Administration, MAR-832 Room 7201, 400 Seventh Street, SW, Washington, DC 20590. Telephone 202-366-2307.
Title V of Pub. L. 105-383 provides authority to the Secretary of Transportation to administratively waive the U.S.-build requirements of the Jones Act, and other statutes, for small commercial passenger vessels (no more than 12 passengers). This authority has been delegated to the Maritime Administration per 49 CFR § 1.66, Delegations to the Maritime Administrator, as amended. By this notice, MARAD is publishing information on a vessel for which a request for a U.S.-build waiver has been received, and for which MARAD requests comments from interested parties. Comments should refer to the docket number of this notice and the vessel name in order for MARAD to properly consider the comments. Comments should also state the commenter's interest in the waiver application, and address the waiver criteria given in 388.4 of MARAD'S regulations at 46 CFR part 388.
(1) Name of vessel and owner for which waiver is requested.
(2) Size, capacity and tonnage of vessel.
(3) Intended use for vessel, including geographic region of intended operation and trade.
(4) Date and Place of construction and (if applicable) rebuilding.
(5) A statement on the impact this waiver will have on other commercial passenger vessel operators.
(6) A statement on the impact this waiver will have on U.S. shipyards.
By Order of the Maritime Administrator.
Maritime Administration, Department of Transportation.
Invitation for public comments on a requested administrative waiver of the Coastwise Trade Laws for the vessel REBEL II.
As authorized by Pub. L. 105-383, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a description of the proposed service, is listed below. Interested parties may comment on the effect this action may have on U.S. vessel builders or businesses in the U.S. that use U.S.-flag vessels. If MARAD determines that in accordance with Pub. L. 105-383 and MARAD's regulations at 46 CFR part 388 (65 FR 6905; February 11, 2000) that the issuance of the waiver will have an unduly adverse effect on a U.S.-vessel builder or a business that uses U.S.-flag vessels, a waiver will not be granted.
Submit comments on or before May 17, 2002.
Comments should refer to docket number MARAD-2002-12093. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. DOT Dockets, Room PL-401, Department of Transportation, 400 7th St., SW., Washington, DC 20590-0001. You may also send comments electronically via the Internet at
Kathleen Dunn, U.S. Department of Transportation, Maritime Administration, MAR-832 Room 7201, 400 Seventh Street, SW., Washington, DC 20590. Telephone 202-366-2307.
Title V of Pub. L. 105-383 provides authority to the Secretary of Transportation to administratively waive the U.S.-build requirements of the Jones Act, and other statutes, for small commercial passenger vessels (no more than 12 passengers). This authority has been delegated to the Maritime Administration per 49 CFR 1.66, Delegations to the Maritime Administrator, as amended. By this notice, MARAD is publishing information on a vessel for which a request for a U.S.-build waiver has been received, and for which MARAD requests comments from interested parties. Comments should refer to the docket number of this notice and the vessel name in order for MARAD to properly consider the comments. Comments should also state the commenter's interest in the waiver application, and address the waiver criteria given in § 388.4 of MARAD'S regulations at 46 CFR part 388.
(1) Name of vessel and owner for which waiver is requested.
(2) Size, capacity and tonnage of vessel.
(3) Intended use for vessel, including geographic region of intended operation and trade.
(4) Date and Place of construction and (if applicable) rebuilding.
(5) A statement on the impact this waiver will have on other commercial passenger vessel operators.
(6) A statement on the impact this waiver will have on U.S. shipyards.
By Order of the Maritime Administrator.
Maritime Administration, Department of Transportation.
Invitation for public comments on a requested administrative waiver of the Coastwise Trade Laws for the vessel SEBIM.
As authorized by Pub. L. 105-383, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a description of the proposed service, is listed below. Interested parties may comment on the effect this action may have on U.S. vessel builders or businesses in the U.S. that use U.S.-flag vessels. If MARAD determines that in accordance with Pub. L. 105-383 and MARAD's regulations at 46 CFR part 388 (65 FR 6905; February 11, 2000) that the issuance of the waiver will have an unduly adverse effect on a U.S.-vessel builder or a business that uses U.S.-flag vessels, a waiver will not be granted.
Submit comments on or before May 17, 2002.
Comments should refer to docket number MARAD-2002-12095. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. DOT Dockets, Room PL-401, Department of Transportation, 400 7th St., SW, Washington, DC 20590-0001. You may also send comments electronically via the Internet at
Kathleen Dunn, U.S. Department of Transportation, Maritime Administration, MAR-832 Room 7201, 400 Seventh Street, SW, Washington, DC 20590. Telephone 202-366-2307.
Title V of Pub. L. 105-383 provides authority to the Secretary of Transportation to administratively waive the U.S.-build requirements of the Jones Act, and other statutes, for small commercial passenger vessels (no more than 12 passengers). This authority has been delegated to the Maritime Administration per 49 CFR 1.66, Delegations to the Maritime Administrator, as amended. By this notice, MARAD is publishing information on a vessel for which a request for a U.S.-build waiver has been received, and for which MARAD requests comments from interested parties. Comments should refer to the docket number of this notice and the vessel name in order for MARAD to properly consider the comments. Comments should also state the commenter's interest in the waiver application, and address the waiver criteria given in § 388.4 of MARAD'S regulations at 46 CFR part 388.
(1) Name of vessel and owner for which waiver is requested.
(2) Size, capacity and tonnage of vessel.
(3) Intended use for vessel, including geographic region of intended operation and trade.
(4) Date and Place of construction and (if applicable) rebuilding.
(5) A statement on the impact this waiver will have on other commercial passenger vessel operators.
(6) A statement on the impact this waiver will have on U.S. shipyards.
By Order of the Maritime Administrator.
The Department of the Treasury has submitted the following public information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Copies of the submission(s) may be obtained by calling the Treasury Bureau Clearance Officer listed. Comments regarding this information collection should be addressed to the OMB reviewer listed and to the Treasury Department Clearance Officer, Department of the Treasury, Room 2110, 1425 New York Avenue, NW., Washington, DC 20220.
Written comments should be received on or before May 17, 2002, to be assured of consideration.
The Department of the Treasury has submitted the following public information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Copies of the submission(s) may be obtained by calling the Treasury Bureau Clearance Officer listed. Comments regarding this information collection should be addressed to the OMB reviewer listed and to the Treasury Department Clearance Officer, Department of the Treasury, Room 2110, 1425 New York Avenue, NW., Washington, DC 20220.
Written comments should be received on or before May 17, 2002, to be assured of consideration.
Respondents: Business or other for-profit.
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, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning Form 8801, Credit For Prior Year Minimum Tax—Individuals, Estates and Trusts.
Written comments should be received on or before June 17, 2002, to be assured of consideration.
Direct all written comments to Glenn Kirkland, Internal Revenue Service, room 6411, 1111 Constitution Avenue NW., Washington, DC 20224.
Requests for additional information or copies of the form and instructions should be directed to Allan Hopkins, (202) 622-6665, or through the internet
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.
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, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning Publication 3319, Low-Income Taxpayer Clinics-2002 Grant Application Package and Guidelines.
Written comments should be received on or before June 17, 2002, to be assured of consideration.
Direct all written comments to Glenn P. Kirkland, Internal Revenue Service, room 6611, 1111 Constitution Avenue NW., Washington, DC 20224.
Requests for additional information or copies of publication should be directed to Carol Savage, (202) 622-3945, or through the Internet (
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.
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, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning Form 9041, Application for Electronic/Magnetic Media Filing of Business and Employee Benefit Plan Returns.
Written comments should be received on or before June 17, 2002, to be assured of consideration.
Direct all written comments to Glenn P. Kirkland, Internal Revenue Service, room 6411, 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, or through the Internet (
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.
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, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning Revenue Procedure 99-21, Disability Suspension.
Written comments should be received on or before June 17, 2002, to be assured of consideration.
Direct all written comments to Glenn P. Kirkland, Internal Revenue Service, room 6411, 1111 Constitution Avenue NW., Washington, DC 20224.
Requests for additional information or copies of revenue procedure should be directed to Carol Savage, (202) 622-3945, or through the Internet (
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
“The Manual shall be identified as “Manual for Courts-Martial, United States (2002 edition).” Any amendments to the Manual made by Executive Order shall be identified as “2002” Amendments to the Manual for Courts-Martial, United States” ; “2002” being the year the Executive Order was signed. If two or more Executive Orders amending the Manual are signed during the same year, then the second and any subsequent Executive Orders will be identified by placing a small case letter of the alphabet after the last digit of the year beginning with “a” for the second Executive Order and continuing in alphabetic order for subsequent Executive Orders.”.
a. R.C.M. 201(f)(2)(B) is amended to read as follows:
“(i) Upon a finding of guilty, special courts-martial may adjudge, under limitations prescribed by this Manual, any punishment authorized under R.C.M. 1003 except death, dishonorable discharge, dismissal, confinement for more than 1 year, hard labor without confinement for more than 3 months, forfeiture of pay exceeding two-thirds pay per month, or any forfeiture of pay for more than 1 year.
“(ii) A bad-conduct discharge, confinement for more than six months, or forfeiture of pay for more than six months, may not be adjudged by a special court-martial unless:
“(a) Counsel qualified under Article 27(b) is detailed to represent the accused; and
“(b) A military judge is detailed to the trial, except in a case in which a military judge could not be detailed because of physical conditions or military exigencies. Physical conditions or military exigencies, as the terms are here used, may exist under rare circumstances, such as on an isolated ship on the high seas or in a unit in an inaccessible area, provided compelling reasons exist why the trial must be held at that time and at that place. Mere inconvenience does not constitute a physical condition or military exigency and does not excuse a failure to detail a military judge. If a military judge cannot be detailed because of physical conditions or military exigencies, a bad-conduct discharge, confinement for more than six months, or forfeiture of pay for more than
b. R.C.M. 701(b)(4) is amended to read as follows:
“(4) Reports of examination and tests. If the defense requests disclosure under subsection (a)(2)(B) of this rule, upon compliance with such request by the Government, the defense, on request of trial counsel, shall (except as provided in R.C.M. 706, Mil. R. Evid. 302, and Mil. R. Evid. 513) permit the trial counsel to inspect any results or reports of physical or mental examinations and of scientific tests or experiments made in connection with the particular case, or copies thereof, that are within the possession, custody, or control of the defense that the defense intends to introduce as evidence in the defense case-in-chief at trial or that were prepared by a witness whom the defense intends to call at trial when the results or reports relate to that witness' testimony.”
c. R.C.M. 806 is amended by adding at the end the following new subsection (d):
“(d) Protective orders. The military judge may, upon request of any party or sua sponte, issue an appropriate protective order, in writing, to prevent parties and witnesses from making extrajudicial statements that present a substantial likelihood of material prejudice to a fair trial by impartial members. For purposes of this subsection, “military judge” does not include the president of a special court-martial without a military judge.”.
d. R.C.M. 1001(b)(3)(A) is amended to read as follows:
“(A) In general. The trial counsel may introduce evidence of military or civilian convictions of the accused. For purposes of this rule, there is a “conviction” in a court-martial case when a sentence has been adjudged. In a civilian case, a “conviction” includes any disposition following an initial judicial determination or assumption of guilt, such as when guilt has been established by guilty plea, trial, or plea of
e. R.C.M. 1003(b)(3) is amended to read as follows:
“(3) Fine. Any court-martial may adjudge a fine in lieu of or in addition to forfeitures. Special and summary courts-martial may not adjudge any fine or combination of fine and forfeitures in excess of the total amount of forfeitures that may be adjudged in that case. In order to enforce collection, a fine may be accompanied by a provision in the sentence that, in the event the fine is not paid, the person fined shall, in addition to any period of confinement adjudged, be further confined until a fixed period considered an equivalent punishment to the fine has expired. The total period of confinement so adjudged shall not exceed the jurisdictional limitations of the court- martial;”
f. R.C.M. 1003(b)(7) is amended to read as follows:
“(7) Confinement. The place of confinement shall not be designated by the court-martial. When confinement for life is authorized, it may be with or without eligibility for parole. A court-martial shall not adjudge a sentence to solitary confinement or to confinement without hard labor;”.
g. R.C.M. 1004(e) is amended to read as follows:
“(e) Other penalties. Except for a violation of Article 106, when death is an authorized punishment for an offense, all other punishments authorized under R.C.M. 1003 are also authorized for that offense, including
h. R.C.M. 1006(d)(4)(B) is amended to read as follows:
“(B) Confinement for life, with or without eligibility for parole, or more than 10 years. A sentence that includes confinement for life, with or without eligibility for parole, or more than 10 years may be adjudged only if at least three-fourths of the members present vote for that sentence.”
i. R.C.M. 1009(e)(3)(B)(ii) is amended to read as follows:
“(ii) In the case of a sentence which includes confinement for life, with or without eligibility for parole, or more than 10 years, more than one-fourth of the members vote to reconsider; or”.
j. R.C.M. 1103(b)(2)(B)(i) is amended to read as follows:
“(i) Any part of the sentence adjudged exceeds six months confinement, forfeiture of pay greater than two-thirds pay per month, or any forfeiture of pay for more than six months or other punishments that may be adjudged by a special court-martial; or”.
k. R.C.M. 1103(c) is amended to read as follows:
“(c) Special courts-martial.
“(1) Involving a bad-conduct discharge, confinement for more than six months, or forfeiture of pay for more than six months. The requirements of subsections (b)(1), (b)(2)(A), (b)(2)(B), (b)(2)(D), and (b)(3) of this rule shall apply in a special court-martial in which a bad-conduct discharge, confinement for more than six months, or forfeiture of pay for more than six months, has been adjudged.
“(2) All other special courts-martial. If the special court-martial resulted in findings of guilty but a bad-conduct discharge, confinement for more than six months, or forfeiture of pay for more than six months, was not adjudged, the requirements of subsections (b)(1), (b)(2)(D), and (b)(3)(A)-(F) and (I)-(M) of this rule shall apply.”.
l. R.C.M. 1103(f)(1) is amended to read as follows:
“(1) Approve only so much of the sentence that could be adjudged by a special court-martial, except that a bad-conduct discharge, confinement for more than six months, or forfeiture of two-thirds pay per month for more than six months, may not be approved; or”.
m. R.C.M. 1104(a)(2)(A) is amended to read as follows:
“(A) Authentication by the military judge. In special courts-martial in which a bad-conduct discharge, confinement for more than six months, or forfeiture of pay for more than six months, has been adjudged and in general courts-martial, except as provided in subsection (a)(2)(B) of this rule, the military judge present at the end of the proceedings shall authenticate the record of trial, or that portion over which the military judge presided. If more than one military judge presided over the proceedings, each military judge shall authenticate the record of the proceedings over which that military judge presided, except as provided in subsection (a)(2)(B) of this rule. The record of trial of special courts-martial in which a bad-conduct discharge, confinement for more than six months, or forfeiture of pay for more than six months, was not adjudged shall be authenticated in accordance with regulations of the Secretary concerned.”
n. R.C.M. 1104(e) is amended to read as follows:
“(e) Forwarding. After every court-martial, including a rehearing and new and other trials, the authenticated record shall be forwarded to the convening authority for initial review and action, provided that in case of a special court-martial in which a bad-conduct discharge or confinement for one year was adjudged or a general court-martial, the convening authority shall refer the record to the staff judge advocate or legal officer for
o. R.C.M. 1106(a) is amended to read as follows:
“(a) In general. Before the convening authority takes action under R.C.M. 1107 on a record of trial by general court-martial or a record of trial by special court-martial that includes a sentence to a bad-conduct discharge or confinement for one year, that convening authority's staff judge advocate or legal officer shall, except as provided in subsection (c) of this rule, forward to the convening authority a recommendation under this rule.”.
p. R.C.M. 1107(d)(4) is amended to read as follows:
“(4) Limitations on sentence based on record of trial. If the record of trial does not meet the requirements of R.C.M. 1103(b)(2)(B) or (c)(1), the convening authority may not approve a sentence in excess of that which may be adjudged by a special court-martial, or one that includes a bad-conduct discharge, confinement for more than six months, forfeiture of pay exceeding two-thirds pay per month, or any forfeiture of pay for more than six months.”.
q. R.C.M. 1107(d) is amended by adding at the end the following new paragraph:
“(5) Limitations on sentence of a special court-martial where a fine has been adjudged. A convening authority may not approve in its entirety a sentence adjudged at a special court-martial when, if approved, the cumulative impact of the fine and forfeitures, whether adjudged or by operation of Article 58b, would exceed the jurisdictional maximum dollar amount of forfeitures that may be adjudged at that court-martial.”.
r. R.C.M. 1109(e) and (e)(1) are amended to read as follows:
“(e) Vacation of a suspended special court-martial sentence wherein a bad-conduct discharge or confinement for one year was not adjudged.
“(1) In general. Before vacating the suspension of a special court-martial punishment that does not include a bad-conduct discharge or confinement for one year, the special court-martial convening authority for the command in which the probationer is serving or assigned shall cause a hearing to be held on the alleged violation(s) of the conditions of suspension.”.
s. R.C.M. 1109(f) and (f)(1) are amended to read as follows:
“(f) Vacation of a suspended special court-martial sentence that includes a bad-conduct discharge or confinement for one year.
“(1) The procedure for the vacation of a suspended approved bad-conduct discharge or of any suspended portion of an approved sentence to confinement for one year, shall follow that set forth in subsection (d) of this rule.”.
t. R.C.M. 1110(a) is amended to read as follows:
“(a) In general. After any general court-martial, except one in which the approved sentence includes death, and after any special court-martial in which the approved sentence includes a bad-conduct discharge or confinement for one year, the accused may waive or withdraw appellate review.”.
u. R.C.M. 1111(b) is amended to read as follows:
“(1) Cases including an approved bad-conduct discharge or confinement for one year. If the approved sentence of a special court-martial includes a bad-conduct discharge or confinement for one year, the record shall be disposed of as provided in subsection (a) of this rule.
“(2) Other cases. The record of trial by a special court-martial in which the approved sentence does not include a bad-conduct discharge or confinement for one year shall be forwarded directly to a judge advocate for review under R.C.M. 1112. Four copies of the order promulgating the result of trial shall be forwarded with the record of trial, unless otherwise prescribed by regulations of the Secretary concerned.”.
v. R.C.M. 1112(a)(2) is amended to read as follows:
“(2) Each special court-martial in which the accused has waived or withdrawn appellate review under R.C.M. 1110 or in which the approved sentence does not include a bad-conduct discharge or confinement for one year; and”.
w. R.C.M 1305(d)(2) is amended to read as follows:
“(2) Forwarding to the convening authority. The original and one copy of the record of trial shall be forwarded to the convening authority after compliance with subsection (d)(1) of this rule.”.
a. All “Sample specification(s)” subparagraphs in the Punitive Articles (Part IV, M.C.M.) are amended by striking “_______ 19__” and inserting “_______ 20__.”.
b. Paragraph 27e(1)(a) is amended to read as follows:
“(a) of a value of $500.00 or less. Bad-conduct discharge, forfeiture of all pay and allowances, and confinement for 6 months.”.
c. Paragraph 27e(1)(b) is amended to read as follows:
“(b) of a value of more than $500.00 or any firearm or explosive. Dishonorable discharge, forfeiture of all pay and allowances, and confinement for 5 years.”.
d. Paragraph 27f(3) is amended to read as follows:
“(3) Dealing in captured or abandoned property. In that _____ (personal jurisdiction data), did, (at/on board - location), on or about _____ 20 _____, (buy) (sell) (trade) (deal in) (dispose of) (________) certain (captured) (abandoned) property, to wit: _____, (a firearm) (an explosive), of a value of (about) $_____, thereby (receiving) (expecting) a (profit) (benefit) (advantage) to (himself/herself) (_____, his/her accomplice) (_____, his/her brother) (________).”.
e. Strike paragraph 31c(6).
f. Paragraph 43e(1), is amended to read as follows:
“(1) Article 118(1) or (4)—death. Mandatory minimum—imprisonment for life with eligibility for parole.”.
g. Paragraph 45e(3) is amended to read as follows:
“(3) Carnal knowledge with a child under the age of 12 years at the time of the offense. Dishonorable discharge, forfeiture of all pay and allowances, and confinement for life without eligibility for parole.”.
h. Paragraph 46c(1)(h) is amended by adding at the end the following new clause:
“(vi) Credit, Debit, and Electronic Transactions. Wrongfully engaging in a credit, debit, or electronic transaction to obtain goods or money is an obtaining- type larceny by false pretense. Such use to obtain goods is usually a larceny of those goods from the merchant offering them. Such use to obtain money or a negotiable instrument (e.g., withdrawing cash from an automated teller or a cash advance from a bank) is usually a larceny of money from the entity presenting the money or a negotiable instrument. For the purpose of this section, the term 'credit, debit, or electronic transaction' includes the use of an instrument or device, whether known as a credit card, debit card, automated teller machine (ATM) card or by any other name, including access devices such as code, account
i. Paragraph 51e(1) is amended to read as follows:
“(1) By force and without consent. Dishonorable discharge, forfeiture of all pay and allowances, and confinement for life without eligibility for parole.”.
j. Paragraph 51e(3) is amended to read as follows:
“(3) With a child under the age of 12 years at the time of the offense. Dishonorable discharge, forfeiture of all pay and allowances, and confinement for life without eligibility for parole.”
k. Paragraph 62c is amended to read as follows:
“c. Explanation.
“(1) Nature of offense. Adultery is clearly unacceptable conduct, and it reflects adversely on the service record of the military member.
“(2) Conduct prejudicial to good order and discipline or of a nature to bring discredit upon the armed forces. To constitute an offense under the UCMJ, the adulterous conduct must either be directly prejudicial to good order and discipline or service discrediting. Adulterous conduct that is directly prejudicial includes conduct that has an obvious, and measurably divisive effect on unit or organization discipline, morale, or cohesion, or is clearly detrimental to the authority or stature of or respect toward a servicemember. Adultery may also be service discrediting, even though the conduct is only indirectly or remotely prejudicial to good order and discipline. Discredit means to injure the reputation of the armed forces and includes adulterous conduct that has a tendency, because of its open or notorious nature, to bring the service into disrepute, make it subject to public ridicule, or lower it in public esteem. While adulterous conduct that is private and discreet in nature may not be service discrediting by this standard, under the circumstances, it may be determined to be conduct prejudicial to good order and discipline. Commanders should consider all relevant circumstances, including but not limited to the following factors, when determining whether adulterous acts are prejudicial to good order and discipline or are of a nature to bring discredit upon the armed forces:
“(a) The accused's marital status, military rank, grade, or position;
“(b) The co-actor's marital status, military rank, grade, and position, or relationship to the armed forces;
“(c) The military status of the accused's spouse or the spouse of co-actor, or their relationship to the armed forces;
“(d) The impact, if any, of the adulterous relationship on the ability of the accused, the co-actor, or the spouse of either to perform their duties in support of the armed forces;
“(e) The misuse, if any, of government time and resources to facilitate the commission of the conduct;
“(f) Whether the conduct persisted despite counseling or orders to desist; the flagrancy of the conduct, such as whether any notoriety ensued; and whether the adulterous act was accompanied by other violations of the UCMJ;
“(g) The negative impact of the conduct on the units or organizations of the accused, the co-actor or the spouse of either of them, such as a detrimental effect on unit or organization morale, teamwork, and efficiency;
“(h) Whether the accused or co-actor was legally separated; and
“(i) Whether the adulterous misconduct involves an ongoing or recent relationship or is remote in time.
“(3) Marriage. A marriage exists until it is dissolved in accordance with the laws of a competent state or foreign jurisdiction.
“(4) Mistake of fact. A defense of mistake of fact exists if the accused had an honest and reasonable belief either that the accused and the co-actor were both unmarried, or that they were lawfully married to each other. If this defense is raised by the evidence, then the burden of proof is upon the United States to establish that the accused's belief was unreasonable or not honest.”.
l. Paragraph 92e is amended to read as follows:
“e. Maximum punishment. Dishonorable discharge, forfeiture of all pay and allowances, and confinement for life without eligibility for parole.”.
m. Paragraphs 32e, 33e, 46c(1)(g)(iii), 46e, 49e, 52e, 58e, 78e and 106e are amended by striking “$100.00” each place it appears and inserting “$500.00”.
a. The amendments made to Rules for Courts-Martial 806(d) and 1001(b)(3)(A) shall only apply in cases in which arraignment has been completed on or after May 15, 2002.
b. The amendments made to Rules for Courts- Martial 1003(b)(7), 1004(e), 1006(d)(4)(B), and 1009(e)(3)(B)(ii) shall only apply to offenses committed after November 18, 1997. In cases not involving these amendments, the maximum punishment for an offense committed prior to May 15, 2002, shall not exceed the applicable maximum in effect at the time of the commission of such offense. Provided further, that for offenses committed prior to May 15, 2002, for which a sentence is adjudged on or after May 15, 2002, if the maximum punishment authorized in this Manual is less than that previously authorized, the lesser maximum authorized punishment shall apply.
c. The amendment made to Military Rules of Evidence 615 shall apply only in cases in which arraignment has been completed on or after May 15, 2002.
d. Nothing in these amendments shall be construed to make punishable any act done or omitted prior to May 15, 2002, that was not punishable when done or omitted.
e. Nothing in these amendments shall be construed to invalidate any nonjudicial punishment proceeding, restraint, investigation, referral of charges, trial in which arraignment occurred, or other action begun prior to May 15, 2002, and any such nonjudicial punishment, restraint, investigation, referral of charges, trial, or other action may proceed in the same manner and with the same effect as if these amendments had not been prescribed.
“The amendment to paragraph 4 of the Preamble is intended to address the possibility of more frequent amendments to the Manual and the arrival of the 21st century. In the event that multiple editions of the Manual are published in the same year, the numbering and lettering of the edition should match that of the most recent Executive Order included in the publication.”
“The convening authority should acknowledge by an instruction that a bad-conduct discharge, confinement for more than six months, or forfeiture of pay for more than six months, may not be adjudged when the prerequisites under Article 19 will not be met.
“For specific rules concerning certain mental examinations of the accused or third party patients,
“There are other methods of protecting the proceedings from harmful effects of publicity, including a thorough
“A protective order may proscribe extrajudicial statements by counsel, parties, and witnesses that might divulge prejudicial matter not of public record in the case. Other appropriate matters may also be addressed by such a protective order. Before issuing a protective order, the military judge must consider whether other available remedies would effectively mitigate the adverse effects that any publicity might create, and consider such an order's likely effectiveness in ensuring an impartial court-martial panel. A military judge should not issue a protective order without first providing notice to the parties and an opportunity to be heard. The military judge must state on the record the reasons for issuing the protective order. If the reasons for issuing the order change, the military judge may reconsider the continued necessity for a protective order.”
“Except in a special court-martial not authorized to adjudge a bad-conduct discharge, confinement for more than six months, or forfeiture of pay for more than six months, the trial counsel should ensure that a qualified court reporter is detailed to the court-martial. Trial counsel should also ensure that all exhibits and other documents relating to the case are properly maintained for later inclusion in the record.
“Whether a civilian conviction is admissible is left to the discretion of the military judge. As stated in the rule, a civilian “conviction” includes any disposition following an initial judicial determination or assumption of guilt regardless of the sentencing procedure and the final judgment following probation or other sentence. Therefore, convictions may be admissible regardless of whether a court ultimately suspended judgment upon discharge of the accused following probation, permitted withdrawal of the guilty plea, or applies some other form of alternative sentencing. Additionally, the term “conviction” need not be taken to mean a final judgment of conviction and sentence.”
“At a special court-martial, if a bad-conduct discharge and confinement are adjudged, then the operation of Article 58b results in a forfeiture of two-thirds of pay only (not allowances) during that period of confinement. If only confinement is adjudged, and that confinement exceeds six months, then the operation of Article 58b results in a forfeiture of two-thirds of pay only (not allowances) during the period of confinement. If only a bad conduct discharge is adjudged, Article 58b has no effect on pay.”.
“Where the sentence adjudged at a special court-martial includes a fine,
“See Article 56a.”
“A proposal should state completely each kind and, where appropriate, amount of authorized punishment proposed by that member. For example, a proposal of confinement for life would state whether it is with or without eligibility for parole. See R.C.M. 1003(b).”
“When mitigating forfeitures, the duration and amounts of forfeiture may be changed as long as the total amount forfeited is not increased and neither the amount nor duration of the forfeitures exceeds the jurisdiction of the court-martial. When mitigating confinement or hard labor without confinement, the convening authority should use the equivalencies at R.C.M. 1003(b)(6) and (7), as appropriate. One form of punishment may be changed to a less severe punishment of a different nature, as long as the changed punishment is one that the court-martial could have adjudged. For example, a bad-conduct discharge adjudged by a special court-martial could be changed to confinement for up to one year (but not vice versa). A pretrial agreement may also affect what punishments may be changed by the convening authority.”.
“An officer exercising special court-martial jurisdiction may vacate any suspended punishments other than an approved suspended bad-conduct discharge or any suspended portion of an approved sentence to confinement for one year, regardless of whether they are contained in the same sentence as the bad-conduct discharge or confinement for one year. See Appendix 18 for a sample of a Report of Proceedings to Vacate Suspension of a Special Court-Martial Sentence including a bad-conduct discharge or confinement for one year under Article 72, UCMJ, and R.C.M. 1109 (DD Form 455).”.
“Appellate review is not available for special courts-martial in which a bad-conduct discharge or confinement for one year was not adjudged or approved or for summary courts-martial. Cases not subject to appellate review, or in which appellate review is waived or withdrawn, are reviewed by a judge advocate under R.C.M. 1112. Such cases may also be submitted to the Judge Advocate General for review.
“Advice in GCMs and SPCMs in which BCD or confinement for one year is adjudged”;
“[Note 100. In cases subject to review by a Court of Criminal Appeals, the following advice should be given. In other cases proceed to Note 101 or 102 as appropriate.]”;
“SPCM not involving a BCD or confinement for one year”; and
[Note 102. In special courts-martial not involving BCD or confinement for one year, the following advice should be given.]”.
“103 Captured, abandoned property; failure to secure, etc. Of value of $500.00 or less . . . . . BCD 6 mos. Total
Of value of more than $500.00 . DD, BCD 5 yrs. Total
Any firearm or explosive . . . . . . DD, BCD 5 yrs. Total
Looting, pillaging . . . . . . . . . . . . DD, BCD Life4 Total”; and
“[The (court-martial) (session) was (adjourned) (recessed) at ____ hours, ________.]”.
“[Note. Orders promulgating the vacation of the suspension of a dismissal will be published by departmental orders of the Secretary concerned. Vacations of any other suspension of a general court-martial sentence, or of a special court-martial sentence that as approved and affirmed includes a bad-conduct discharge or confinement for one year, will be promulgated by the officer exercising general court-martial jurisdiction over the probationer (Article 72(b)). The vacation of suspension of any other sentence may be promulgated by an appropriate convening authority under Article 72(c).
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“The public has a legitimate interest in the conduct of military justice proceedings. Informing the public about the operations of the criminal justice system is one of the “core purposes” of the First Amendment. In the appropriate case where the military judge is considering issuing a protective order, absent exigent circumstances, the military judge must conduct a hearing prior to issuing such an order. Prior to such a hearing the parties will have been provided notice. At the hearing, all parties will be provided an opportunity to be heard. The opportunity to be heard may be extended to representatives of the media in the appropriate case.
“Section (d) is based on the first Recommendation Relating to the Conduct of Judicial Proceedings in Criminal Cases, included in the Revised Report of the Judicial Conference Committee on the Operation of the Jury System on the “Free Press—Fair Trial” Issue, 87 F.R.D. 519, 529 (1980), which was approved by the Judicial Conference of the United States on September 25, 1980. The requirement that the protective order be issued in writing is based on Rule for Courts-Martial 405(g)(6). Section (d) adopts a “substantial likelihood of material prejudice” standard in place of the Judicial Conference recommendation of a “likely to interfere” standard. The Judicial Conference's recommendation was issued before the Supreme Court's decision in
“The first sentence of the discussion is based on the committee comment to the Recommendations Relating to the Conduct of Judicial Proceedings in Criminal Cases.
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“Unlike most civilian courts, this rule does not allow admission of more extensive criminal history information, such as arrests. Use of such additional information is not appropriate in the military setting where court-martial members, not a military judge, often decide the sentence. Such information risks unnecessarily confusing the members.
“The present rule clarifies the term “conviction” in light of the complex and varying ways civilian jurisdictions treat the subject. The military judge may admit relevant evidence of civilian convictions without necessarily being bound by the action, procedure, or nomenclature of civilian jurisdictions. Examples of judicial determinations admissible as convictions under this rule include accepted pleas of
“The two central factors in this rule are (1) judicial determination of guilt and (2) assumption of guilt. Assumption of guilt is an all-inclusive term meaning any act by the accused in a judicial proceeding accepting, acknowledging, or admitting guilt. As long as either factor is present, the “conviction” is admissible, if relevant. Consequently, this rule departs from the holding in
“In contrast, “deferred prosecutions,” where there is neither an admission of guilt in a judicial proceeding nor a finding of guilty, would be excluded. The rule also excludes expunged convictions, juvenile adjudications, minor traffic violations, foreign convictions, and tribal court convictions as matters inappropriate for or unnecessarily confusing to courts-martial members. What constitutes a “minor traffic violation” within the meaning of this rule is to be decided with reference only to federal law, and not to the laws of individual states.
“Additionally, because of the lack of clarity in the previous rule, courts sometimes turned to Mil. R. Evid. 609 for guidance.
“The Federal Sentencing Guidelines were consulted when drafting the present rule. Although informed by those guidelines, the present rule departs from them in many respects because of the wide differences between the courts-martial process and practice in federal district court.”.
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“Subsection (d)(5) is new. The amendment addresses the impact of Article 58b, UCMJ. In special courts-martial, where the cumulative impact of a fine and forfeitures, whether adjudged or by operation of Article 58b, would otherwise exceed the total dollar amount of forfeitures that could be adjudged at the special court-martial, the fine and/or adjudged forfeitures should be disapproved or decreased accordingly.
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“c.
“(2) When determining whether adulterous acts constitute the offense of adultery under Article 134, commanders should consider the listed factors. Each commander has discretion to dispose of offenses by members of the command. As with any alleged offense, however, under R.C.M. 306(b) commanders should dispose of an allegation of adultery at the lowest appropriate level. As the R.C.M. 306(b) discussion states, many factors must be taken into consideration and balanced, including, to the extent practicable, the nature of the offense, any mitigating or extenuating circumstances, the character and military service of the military member, any recommendations made by subordinate commanders, the interests of justice, military exigencies, and the effect of the decision on the military member and the command. The goal should be a disposition that is warranted, appropriate, and fair. In the case of officers, also consult the explanation to paragraph 59 in deciding how to dispose of an allegation of adultery.”.
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Internal Revenue Service (IRS), Treasury.
Final and temporary regulations.
This document contains final and temporary regulations relating to required minimum distributions from qualified plans, individual retirement plans, deferred compensation plans under section 457, and section 403(b) annuity contracts, custodial accounts, and retirement income accounts. These regulations will provide the public with guidance necessary to comply with the law and will affect administrators of, participants in, and beneficiaries of qualified plans; institutions that sponsor and individuals who administer individual retirement plans, individuals who use individual retirement plans for retirement income, and beneficiaries of individual retirement plans; and employees for whom amounts are contributed to section 403(b) annuity contracts, custodial accounts, or retirement income accounts and beneficiaries of such contracts and accounts. The text of the temporary regulations also serves as the text of the proposed regulations set forth in the notice of proposed rulemaking on this subject in the Proposed Rules section of the
These regulations are effective January 1, 2003.
Cathy A. Vohs, 202-622-6090 (Not a toll free number).
The collections of information contained in these final regulations have been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act (44 U.S.C. 3507) under control number 1545-0996, in conjunction with the notice of proposed rulemaking published on July 27, 1987, 52 FR 28070, REG-EE-113-82, Required Distributions From Qualified Plans and Individual Retirement Plans, under control number 1545-1466 for Third-Party Disclosure Requirements in IRS Regulations, and control number 1545-1573, in conjunction with the notice of proposed rulemaking published on December 30, 1997, 62 FR 67780, REG-209463-82, Required Distributions from Qualified Plans and Individual Retirement Plans. Responses to the collections of information under control numbers 1545-0996 and 1545-1466 are mandatory. Responses to the collection of information under control number 1545-1573 are required to obtain the benefit of a trust being treated as a designated beneficiary under a retirement plan.
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 control number assigned by the Office of Management and Budget.
The estimated annual burden per respondent under control number 1545-0996 is 1 hour.
The estimated annual burden per respondent under control number 1545-1466 is 9 minutes.
The estimated annual burden per respondent under control number 1545-1573 is 20 minutes.
Comments concerning the accuracy of this burden estimate and suggestions for reducing this burden should be sent to the Internal Revenue Service, Attn: IRS Reports Clearance Officer, W:CAR:MP:FP:S Washington, DC 20224, and to the Office of Management and Budget, Attn: Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503.
Books or records relating to this 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.
This document contains amendments to the Income Tax Regulations (26 CFR Part 1) and to the Pension Excise Tax Regulations (26 CFR Part 54) under sections 401, 403, 408, and 4974 of the Internal Revenue Code of 1986 (Code). These amendments conform the regulations to section 634 of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) (115 Stat. 117), section 1404 of the Small Business Job Protection Act of 1996 (SBJPA) (110 Stat. 1791), sections 1121 and 1852 of the Tax Reform Act of 1986 (TRA of 1986) (100 Stat. 2464 and 2864), sections 521 and 713 of the Tax Reform Act of 1984 (TRA of 1984) (98 Stat. 865 and 955), and sections 242 and 243 of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) (96 Stat. 521). The regulations provide guidance on the minimum distribution requirements under section 401(a)(9) for plans qualified under section 401(a) and for other arrangements that incorporate the section 401(a)(9) rules by reference. The section 401(a)(9) rules are incorporated by reference in section 408(a)(6) and (b)(3) for individual retirement accounts and annuities (IRAs) (including Roth IRAs, except as provided in section 408A(c)(5)), section 403(b)(10) for section 403(b) annuity contracts, and section 457(d) for eligible deferred compensation plans.
For purposes of this discussion of the background of the regulations in this preamble, as well as the explanation of provisions below, whenever the term
Section 401(a)(9) provides rules for distributions during the life of the employee in section 401(a)(9)(A) and rules for distributions after the death of the employee in section 401(a)(9)(B). Section 401(a)(9)(A)(ii) provides that the entire interest of an employee in a qualified plan must be distributed, beginning not later than the employee's required beginning date, in accordance with regulations, over the life of the employee or over the lives of the employee and a designated beneficiary (or over a period not extending beyond the life expectancy of the employee and a designated beneficiary).
Section 401(a)(9)(C) defines required beginning date for employees (other than 5-percent owners and IRA owners) as April 1 of the calendar year following the later of the calendar year in which the employee attains age 70
Section 401(a)(9)(D) provides that (except in the case of a life annuity) the life expectancy of an employee and the employee's spouse that is used to determine the period over which payments must be made may be redetermined, but not more frequently than annually.
Section 401(a)(9)(E) provides that the term
Section 401(a)(9)(G) provides that any distribution required to satisfy the incidental death benefit requirement of
Section 401(a)(9)(B)(i) provides that, if the employee dies after distributions have begun, the employee's interest must be distributed at least as rapidly as under the method used by the employee.
Section 401(a)(9)(B)(ii) and (iii) provides that, if the employee dies before required minimum distributions have begun, the employee's interest must be either: distributed (in accordance with regulations) over the life or life expectancy of the designated beneficiary with the distributions beginning no later than 1 year after the date of the employee's death, or distributed within 5 years after the death of the employee. However, under section 401(a)(9)(B)(iv), a surviving spouse may wait until the date the employee would have attained age 70
Comprehensive proposed regulations under section 401(a)(9) were previously published in the
With respect to annuity payments, the 2001 proposed regulations retained the basic structure of the 1987 proposed regulation. The preamble to the 2001 proposed regulations indicated that the IRS and Treasury were continuing to study these rules and specifically requested updated comments on current practices and issues relating to required minimum distributions from annuity contracts. Commentators provided information on the variety of annuity contracts being developed and available as insurance company products for purchase with separate accounts. In response to the comments received, temporary regulations under § 1.401(a)(9)-6T significantly expand the situations in which annuity payments under annuity contracts purchased with an employee's benefit may provide for increasing payments. These regulations are being issued in proposed (REG-108697-02) and temporary form rather than final form in order to give taxpayers an opportunity to comment on these changes.
These final regulations retain the simplifications to the minimum distribution rules for separate accounts provided in the 2001 proposed regulations, including the calculation of the required minimum distribution during the individual's lifetime using a uniform table. The basic calculation for individual accounts provides that the required minimum distribution is determined by dividing the account balance by the distribution period. For lifetime required minimum distributions, there is a uniform distribution period for almost all employees of the same age. The uniform lifetime distribution period table is based on the joint life and last survivor expectancy of an individual and a hypothetical beneficiary 10 years younger. However, if the employee's sole beneficiary is the employee's spouse and the spouse is more than 10 years younger than the employee, a longer distribution period measured by the joint life and last survivor life expectancy of the employee and spouse is permitted to be used.
For years after the year of the employee's death, the distribution period is generally the remaining life expectancy of the designated beneficiary. The beneficiary's remaining life expectancy is calculated using the age of the beneficiary in the year following the year of the employee's death, reduced by one for each subsequent year. If the employee's spouse is the employee's sole beneficiary, the distribution period during the spouse's life is the spouse's single life expectancy. For years after the year of the spouse's death, the distribution period is the spouse's life expectancy calculated in the year of death, reduced by one for each subsequent year. If there is no designated beneficiary, the distribution period is the employee's life expectancy calculated in the year of death, reduced by one for each subsequent year.
The 2001 proposed regulations provided that the life expectancies for purposes of section 401(a)(9) would be determined using the expected return multiples set forth in the regulations under section 72 that are used for other purposes under the Code. These tables, based upon the experience reflected in the 1983 individual annuity mortality table (without load), were adopted for purposes of section 72 in 1986 and had been used in both the 1987 proposed regulations and the 2001 proposed regulations under section 401(a)(9).
Section 634 of EGTRRA instructed the Secretary of Treasury to modify the life expectancy tables used for purposes of the minimum distribution rules to reflect current life expectancy. In accordance with that instruction, the final regulations adopt new tables of life expectancies to be used for determining required minimum distributions.
The new tables were derived by starting with the basic 2000 individual annuity mortality table and projecting mortality improvement for the period 2000 through 2003 using the assumed mortality improvement factors that were adopted in developing the Annuity 2000 mortality table. The resulting mortality rates were blended using a fixed 50% male 50% female blend. The uniform lifetime table provided in these final regulations has also been adjusted to reflect these new mortality tables.
These new tables also may be used to determine an employee's (or IRA owner's) life expectancy, or the joint life and last survivor expectancy of an employee (or IRA owner) and designated beneficiary, for purposes of calculating the amount of substantially equal periodic payments under section 72(t)(2)(A)(iv) when applying a method permitted under A-12 of Notice 89-25 (1989-1 C.B. 662, 666). One of these methods allows use of the methodology underlying the minimum distribution calculations for separate accounts in which the account balance in the prior year is divided by life expectancy or joint life and last survivor expectancy. Under this method, the payments are not equal but are treated as substantially equal if the life expectancy is determined in a consistent manner. A series of substantially equal periodic payments under section 72(t)(2)(A)(iv) determined under this methodology will not be considered to have been modified
The 2001 proposed regulations provided that, generally, the designated beneficiary is determined as of the end of the year following the year of the employee's death. Thus, any beneficiary eliminated by distribution of the beneficiary's benefit or through disclaimer during the period between the employee's death and the end of the year following the year of death is disregarded in determining the employee's designated beneficiary for purposes of calculating required minimum distributions. If, as of the end of the year following the year of the employee's death, the employee has more than one designated beneficiary and the account or benefit has not been divided into separate accounts or shares for each beneficiary, the beneficiary with the shortest life expectancy is the designated beneficiary. Further, if a person other than an individual is a beneficiary as of that date, the employee is treated as not having a beneficiary (except as provided below with respect to trusts).
Commentators applauded the basic principle of the approach in the 2001 proposed regulations but suggested that the designated beneficiary determination should be made before the end of the year following the year of death so that there will be adequate time to calculate and distribute the required minimum amount between the date the beneficiary determination is finalized and the end of the year following the year of the employee's death (i.e., the date that required minimum distributions to nonspouse designated beneficiaries must commence). In response to these comments, the date for determining the designated beneficiary has been changed to September 30 of the year following the year of the employee's death. In response to comments, these final regulations clarify that in order for a beneficiary to disclaim entitlement to a benefit for purposes of section 401(a)(9), the disclaimer must satisfy section 2518. Finally, the final regulations clarify that if a designated beneficiary dies during the period between the employee's date of death and September 30 of the year following the year of the employee's death, the individual continues to be treated as the designated beneficiary for purposes of determining the distribution period rather than the successor beneficiary.
Some commentators requested that final regulations provide that, if the employee's estate was named as the beneficiary in the beneficiary designation or the employee's estate became beneficiary by operation of law, the beneficiary of the estate or the beneficiary of the IRA named under the employee's will could replace the estate as beneficiary by September 30 of the year following the year of death. This change is not being adopted in these final regulations. The period between death and the beneficiary determination date is a period during which beneficiaries can be eliminated but not replaced with a beneficiary not designated under the plan as of the date of death. In order for an individual to be a designated beneficiary, any beneficiary must be designated under the plan or named by the employee as of the date of death.
These regulations retain the rule in the proposed regulations that, in determining an employee's beneficiaries for purposes of applying the multiple beneficiary rule or determining if the employee's spouse is the employee's sole beneficiary, all beneficiaries of the employee's interest in the plan, including contingent beneficiaries, are taken into account. The regulations also retain the exception to this rule under which, if a beneficiary (subsequent beneficiary) is entitled to any portion of an employee's benefit only if another beneficiary dies before the entire benefit to which that other beneficiary is entitled has been distributed by the plan, the subsequent beneficiary will not be considered a beneficiary. However, these regulations clarify that the exception from the multiple beneficiary rules for death contingencies only applies to a person who could be entitled to a portion of the employee's benefit by becoming the successor to the interest of one of the employee's beneficiaries after that beneficiary's death. The regulations provide that this rule does not apply to a person who has any right (including a contingent right) to an employee's benefit beyond being a mere potential successor to the interest of one of the employee's beneficiaries upon that beneficiary's death. Thus, for example, if one beneficiary has a right to any income on an employee's individual account during that beneficiary's life and another beneficiary has a right to the principal but only after the death of the income beneficiary (with any portion of the principal distributed during the life of the income beneficiary to be held in trust until that beneficiary's death), both beneficiaries must be taken into account in determining the beneficiary with the shortest life expectancy and whether only individuals are beneficiaries.
These regulations, as did the 2001 proposed regulations, provide that, if an employee dies before the employee's required beginning date and the employee has a designated beneficiary, then the life expectancy rule in section 401(a)(9)(B)(iii) (rather than the 5-year rule in section 401(a)(9)(B)(ii)) is the default distribution rule. Thus, absent a plan provision or election of the 5-year rule, the life expectancy rule applies in all cases in which the employee has a designated beneficiary, and the 5-year rule applies if the employee does not have a designated beneficiary. This is a change from the position in the 1987 proposed regulations that provided the 5-year rule as the default unless the spouse was the sole beneficiary. Commentators pointed out that, as a result of the default rule under the 1987 regulations, some beneficiaries did not commence distributions under the life expectancy rules. In response to those comments, these final regulations provide a transition rule that permits beneficiaries subject to the 5-year rule under the 1987 proposed regulations to switch to the life expectancy rule, provided that all amounts that would have been required to be distributed under an application of the life expectancy rule are distributed by the earlier of December 31, 2003 or the end of the 5-year period following the year of the employee's death.
These temporary regulations provide a number of changes to the annuity rules provided in the 2001 proposed regulations including changes designed to make the rules more consistent with the rules for individual accounts and reflect new product designs. In order to allow taxpayers to comment on these changes, the section of the regulations governing defined benefit plans and annuities is being issued as temporary and proposed regulations rather than final regulations.
In response to comments, the following changes are being made. First, annuity payments are permitted to be provided for a period certain that is as long as the period under the uniform lifetime table for the employee's age in the year in which the annuity starting date occurs, regardless of who is the employee's designated beneficiary. Further, the period does not change upon the death of the employee even if
These temporary regulations retain the rules in the 2001 proposed regulations interpreting the minimum distribution incidental benefit requirement. Under these rules, if the survivor of a joint and survivor annuity is not the employee's spouse and if the survivor annuitant is more than 10 years younger than the employee, then the survivor portion must be less than 100% of the employee's benefit. In such a case, the survivor annuity must be reduced so that it does not exceed the employee's benefit multiplied by the percentage provided in the table in the regulations. However, the regulations clarify that if the joint and survivor annuity also has a period certain, the reduction in survivor annuity is only required after expiration of the period certain.
Further, in response to comments, the temporary regulations make a number of changes that expand the situations in which increasing annuity payments are permitted. The additional situations are generally only available to annuities purchased from insurance companies.
Under these temporary regulations, an annuity purchased from an insurance company can increase annually by a constant percentage, provided that the initial payment is sufficiently large that the total expected payments, determined without regard to these increases, exceed the account value being annuitized. This minimum payment requirement, together with the adverse economic interests of the insurer and the annuity purchaser, effectively limits the constant percentage increase under an annuity to the assumed interest rate used in pricing the annuity.
These temporary regulations also provide explicit rules relating to the payments of dividends under participating annuity contracts. Under the temporary regulations, a variation in the amount of the annuity payment (referred to as a dividend or other payment resulting from favorable actuarial experience) can be made provided that: (1) The initial payment meets the minimum threshold described above, (2) actuarial experience is measured at least annually, and (3) the resulting dividend payment or other payment is either paid no later than the year following the year for which the actuarial experience is measured or is payable in the same form as the payment of the annuity over the remaining period of the annuity. These requirements are intended to preclude backloading of the distribution stream through the use of conservative pricing assumptions where actuarial gains with respect to those assumptions are deferred and paid at a later date. The definition of dividend or other payment resulting from actuarial gain is broad enough to encompass the contractual adjustment provided for in a variable annuity. Accordingly, the rules that permitted payments that vary with the investment performance of underlying assets has been replaced with this more general construct.
The temporary regulations allow full and partial withdrawals from purchased annuities in certain circumstances. The restrictions on these withdrawals are intended to preclude the use of a withdrawal or cash-out feature as a mechanism to distribute deferred actuarial gains. In the case of a full withdrawal (including a death benefit), the distribution must not exceed the expected future payments under the contract, taking into account the annuitants who are still alive and any remaining period certain, but without regard to any future increases. In the case of a partial withdrawal, the full withdrawal under the terms of the contract must satisfy the preceding sentence and, after the partial withdrawal, all future annuity payments must be reduced proportionately based on the ratio of the partial withdrawal to the maximum withdrawal under the terms of the contract.
As discussed above, these permitted increases are only available for insurance company products and not a distribution stream provided from a section 401(a) defined benefit trust. In addition, these temporary regulations do not permit annuity payments that vary with the value of the underlying assets of the plan to be provided by a defined benefit plan with a section 401(a) qualified trust. Further, these regulations clarify that an annuity under a defined benefit plan with a section 401(a) qualified trust is permitted to provide that annuity payments may increase with an annual percentage increase that does not exceed the percentage increase in a cost-of-living index that is based on prices of all items and issued by the Bureau of Labor Statistics. Finally, the temporary regulations clarify that increases in these annuity payments to reflect benefit increases must be pursuant to a plan amendment increasing benefits.
The preamble to the 2001 proposed regulations indicated that the IRS and Treasury were continuing to consider whether retention of the rule allowing an employee's minimum required distributions under a defined benefit plan to be determined using the rules for individual accounts was appropriate for defined benefit plans. Few comments specifically requested retention of this rule. As a result, the IRS and Treasury have concluded that this rule has little application outside of being used to determine the portion of a lump sum distribution of an employee's vested accrued benefit that is eligible for rollover. Accordingly, this rule has not been retained in these temporary regulations except for use in determining the amount that is eligible for rollover when a defined benefit plan pays an employee's entire vested accrued benefit in a lump sum. However, in response to comments, these temporary regulations permit a plan to treat the amount of a year of annuity payments that would have been payable under the normal form as the minimum required distribution for a year in the case of a lump sum payment.
Finally, in response to a comment, these temporary regulations clarify that actuarial increases to benefits under a defined benefit plan required under section 401(a)(9)(C)(iii), as added by SBJPA, need not be provided for any period before January 1, 1997.
These final and temporary regulations provide rules relating to the interaction of the section 401(a)(9) requirements and the incidental benefit requirement of § 1.401-1(b)(1)(i). Under these rules, generally if distributions with respect to an employee's benefit satisfy the minimum distribution incidental benefit requirement under these regulations, the distribution will be deemed to satisfy any requirement for distributions under the incidental benefit requirements of § 1.401-1(b)(1)(i). However, if a plan provides for certain post-retirement ancillary death benefits or a section 403(b) contract includes an undistributed pre-1987 account, the employee's benefits must continue to satisfy the distribution requirements of the incidental benefit requirement of § 1.401-1(b)(1)(i), determined without regard to these regulations. Existing revenue rulings continue to provide guidance with respect to the application of the incidental benefit requirements to
The final regulations retain the provision in the proposed regulations allowing an underlying beneficiary of a trust to be an employee's designated beneficiary for purposes of determining required minimum distributions when the trust is named as the beneficiary of a retirement plan or IRA, provided that certain requirements are met. One of these requirements is that documentation of the underlying beneficiaries of the trust be provided to the plan administrator or IRA trustee, custodian, or issuer. In the case of individual accounts, unless the lifetime distribution period for an employee is measured by the joint life expectancy of the employee and the employee's spouse, the deadline under these regulations for providing the beneficiary documentation is October 31 of the year following the year of the employee's death, rather than the end of the year following the year of the employee's death as provided under the 2001 proposed regulations.
This deadline for providing the trust documentation is coordinated with the deadline for determining the employee's designated beneficiary. Amendments to the 1987 proposed regulations published in 1997 eliminated the requirement that the trust be irrevocable before death. Commentators indicated that some beneficiaries would have qualified for a longer distribution period as a result of this change except for the fact that they had not provided the required documentation by the deadline provided in the regulations, which, in some cases, was a date before the regulation was published. Consequently, the commentators requested that final regulations provide a transition period for providing this documentation. In response to these comments, these regulations provide that, if the date for providing this documentation is before October 31, 2003, the documentation is permitted to be provided to the plan administrator (or IRA trustee, custodian, or issuer) until October 31, 2003.
Commentators asked for clarification as to whether an election by a revocable trust to be treated as part of an estate under section 645 causes the trust to be treated as an estate for purposes of section 401(a)(9). On this point, the IRS and Treasury intend that a revocable trust will not fail to be a trust for purposes of section 401(a)(9) merely because the trust elects to be treated as an estate under section 645, as long as the trust continues to be a trust under state law.
Several commentators requested clarification concerning when an employee's individual account can be divided into separate accounts that are permitted to satisfy section 401(a)(9) separately and concerning whether separate accounts could also provide for separate investments. In response to these comments, these final regulations provide that separate accounts with different beneficiaries under the plan can be established at any time, either before or after the employee's required beginning date. However, the final regulations provide that the separate accounts are recognized for purposes of determining required minimum distributions only after the later of the year of the employee's death (whether before or after the required beginning date) and the year the separate accounts are established. In addition, the final regulations clarify that, in order to determine the distribution period for the separate account by disregarding the beneficiaries of the other separate account, the separate account must be established no later than the end of the year following the year of the employee's death.
The separate accounting must allocate all post-death investment gains and losses for the period prior to the establishment of the separate accounts on a pro rata basis in a reasonable and consistent basis among the separate accounts for the different beneficiaries. The separate accounting must also allocate any post-death distribution to the separate account of the beneficiary receiving that distribution. Once the separate accounts are established, the final regulations permit the separate accounting to provide for separate investments for each separate account.
Some commentators requested relief under section 411(d)(6) for the elimination of optional forms of benefit that were needed to satisfy section 401(a)(9) under the 1987 proposed regulations but that are no longer needed to satisfy these final regulations. For defined contribution plans, this relief generally is not needed because paragraph (e) of A-2 of § 1.411(d)-4 gives broad authority to employers to amend their defined contribution plan to eliminate installment payout options as long as the right to a lump sum option payable at the same time is preserved. These final regulations also provide that, pursuant to section 411(d)(6)(B), a plan will not fail to satisfy section 411(d)(6) merely because the plan is amended to eliminate the availability of an optional form of benefit to the extent that the optional form does not satisfy section 401(a)(9). However, the IRS and Treasury invite public comment if additional relief under section 411(d)(6) is needed in order for defined benefit plans to satisfy section 401(a)(9).
These final regulations generally retain the clarifications in the 2001 proposed regulations regarding how and when a surviving spouse of a deceased IRA owner can elect to treat an IRA inherited by the surviving spouse from that owner as the spouse's own IRA. The 1987 proposed regulations provided that this election is deemed to have been made if the surviving spouse contributes to the IRA or does not take the required minimum distribution for a year under section 401(a)(9)(B) as a beneficiary of the IRA. Under the 2001 proposed regulations, this deemed election is permitted to be made only after the distribution of the required minimum amount for the account, if any, for the year of the individual's death. These final regulations provide that the election can be made at any time after the IRA owner's date of death, while clarifying that the minimum required distribution for the calendar year of the IRA's owner's death is determined assuming the IRA owner lived throughout the year. These regulations also clarify that the surviving spouse is required to receive a minimum distribution for the year of the IRA owner's death only to the extent that the amount required was not distributed to the owner before death.
Some commentators raised concerns about the other clarifications in the 2001 proposed regulations. The 2001 proposed regulations clarified that a deemed election is permitted only if the spouse is the sole beneficiary of the account and has an unlimited right to withdraw from the account. This requirement is not satisfied if a trust is named as beneficiary of the IRA, even if the spouse is the sole beneficiary of the trust. As explained in the 2001 preamble, these clarifications make the election consistent with the underlying premise that the surviving spouse could have received a distribution of the entire decedent IRA owner's account and rolled it over to an IRA established in the surviving spouse's own name as IRA owner.
If the spouse actually receives a distribution from the IRA, the spouse is
The 2001 proposed regulations required the trustee, custodian, or issuer of an IRA to report the amount of the required minimum distribution from the IRA at the time and in the manner provided under additional guidance issued by the IRS and applicable IRS forms and instructions. A significant number of commentators objected to the requirement that the amount of the required minimum distribution for a year be reported because of concerns that the number may be inaccurate in certain cases. After thorough consideration of these comments and consultation with interested parties, the final regulations continue to provide authority to the Service to determine the extent to which the trustee, custodian, or issuer of an IRA must report information with respect to the required minimum distribution from that IRA through guidance of general applicability as well as forms and publications.
In conjunction with these final regulations a notice is being published that specifies the reporting requirements that apply. Beginning in 2004, trustees, custodians, and issuers must identify to the IRS on Form 5498 each IRA for which a minimum distribution is required to be made to an IRA owner. The trustee, custodian or issuer does not need to report the amount of the required distribution to the IRS. However, the trustee, custodian, or issuer of such an IRA, must provide additional information regarding the IRA to the IRA owner required to receive a minimum required distribution, beginning with the minimum required distribution for 2003. The trustee, custodian or issuer of the IRA either must report the amount of the required minimum distribution for the IRA to the IRA owner, or must advise the IRA owner that a minimum distribution with respect to the IRA is required for the year, offer to calculate the amount of the required minimum distribution for the IRA owner upon request, and then, if requested, calculate the amount and provide it to the IRA owner. Although the delegation of authority in the regulations to require reporting would permit reporting to be required with respect to required minimum distributions to beneficiaries, no reporting is required with respect to beneficiaries at this time.
The reporting provisions in the 2001 proposed regulations, these final regulations, and the notice being published are intended to assist taxpayers in complying with the minimum distribution requirement. However, the Treasury and the IRS continue to have concerns about the overall level of compliance in this area and intend to monitor the effect of the new reporting regime on compliance to determine whether it would be appropriate to modify the regime in the future.
In response to comments that there are too many variables that might change during a distribution calendar year for an accurate calculation of the required minimum distribution for the year by the trustee at the beginning of the year, a number of simplifying changes are included in these final regulations. For lifetime distributions, the marital status of the employee is determined on January 1 each year. Divorce or death after that date is disregarded until the next year. Further, a change in beneficiary due to the spouse's death is not recognized until the following year. Contributions and distributions made after December 31 of a calendar year are disregarded for purposes of determining the minimum distribution for the following year. An employee's account balance for the valuation calendar year that is also the employee's first distribution calendar year is no longer reduced for a distribution on April 1 to satisfy the minimum distribution requirement for the first distribution calendar year. Contributions made after the calendar year that are allocated as of a date in the prior calendar year are no longer required to be added back. The only exceptions are rollover amounts, and recharacterized conversion contributions, that are not in any account on December 31 of a year. These changes are made to the qualified plan rules as well as IRA rules to maintain the parity between the rules.
These final regulations retain the general rule that the rules applying section 401(a)(9) to qualified plans apply also to IRAs, unless otherwise provided. In addition to retaining the special rules for IRAs provided in the 2001 proposed regulations, these final regulations provide a special rule for trustee-to-trustee transfers between IRAs to coordinate with the rule that allows aggregation of IRA distributions. Although the IRA to IRA transfer is not treated as a distribution for purposes of section 401(a)(9), in light of the fact that the required minimum distribution with respect to the transferor IRA can be taken from any IRA, the transferor IRA will be able to transfer the entire balance and will not be required to retain the amount of the required minimum distribution for the year.
These regulations retain the basic rule in the 1987 and 2001 proposed regulations that a section 403(b) contract is treated as an individual retirement plan for purposes of satisfying the required minimum distribution rules. Consequently, the delegation of authority to require reporting with respect to IRAs also applies to section 403(b) contracts. However, the notice being issued in conjunction with these regulations provides that no reporting is required at this time with respect to required minimum distributions from section 403(b) contracts.
As requested in comments to the 1987 and the 2001 proposed regulations, these regulations provide that an annuity provided with respect to a section 403(b)(9) retirement income account will not fail to satisfy the requirements for annuity payment under an annuity contract merely because the annuity is not provided under a contract purchased from an insurance company.
Section 1852(a) of TRA ’86 applied section 401(a)(9) to section 403(b) contracts effective for benefits accruing after December 31, 1986. The final regulations retain the rule in the proposed regulations interpreting the effective date of section 1852(a) of TRA ’86 that does not apply section 401(a)(9) to the undistributed portion of the employee's account balance in a section 403(b) contract as of December 31, 1986 (the pre-'87 account balance). Further, the final regulations clarify that a contract will not lose the grandfather for a pre-'87 account balance merely because the account balance is transferred from one section 403(b) contract to another, provided the issuer of the transferee contract satisfies the recordkeeping requirements for the pre-'87 account balance. However, a distribution and rollover (including a direct rollover) of an amount from the
The IRS intends to publish procedures in the near future that will provide guidance on amending qualified plans to reflect these final regulations under section 401(a)(9).
Rev. Proc. 2002-10 (2002-4 I.R.B. 401), provides guidance on when IRA documents must be updated for these final regulations and for changes made by EGTRRA.
The regulations apply for determining required minimum distributions for calendar years beginning on or after January 1, 2003. For determining required minimum distributions for calendar year 2002, taxpayers may rely on these final regulations, the 2001 proposed regulations, or the 1987 proposed regulations.
It has been determined that these regulations are not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It is hereby certified that the collection of information in these regulations does not have a significant economic impact on a substantial number of small entities. This certification is based on the following. The only provisions requiring collection of information are in A-2 of § 1.401(a)(9)-1, A-4 of § 1.401(a)(9)-3, A-5 and A-6 of § 1.401(a)(9)-4, and A-2 of § 1.403(b)-3. The election described in A-4 of § 1.401(a)(9)-3 is expected to be an unusual occurrence for small entities because few individuals with benefits in retirement plans maintained by small entities are likely to make these elections. In the case of A-2 of § 1.401(a)(9)-1 and A-5 and A-6 of § 1.401(a)(9)-4, when determining required minimum distributions in cases where a plan participant wishes to designate a trust as beneficiary of the participant's benefit, the reporting burden is primarily on the plan participant, or trustee of the trust named as beneficiary, to supply information rather than on the entity maintaining the retirement plan and the fact that the number of participants per plan to whom the burden applies is insignificant. In A-2 of 1.403(b)-3, the recordkeeping burden with respect to section 403(b) contracts under which the pre-1987 account balance must be maintained only applies to issuers and custodians of those contracts, which generally are not small entities. Therefore, a Regulatory Flexibility Analysis (5 U.S.C. chapter 6) is not required for this regulation. Pursuant to section 7805(f) of the Internal Revenue Code, the notices of proposed rulemaking preceding the final rule were submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business and temporary § 1.401(a)(9)-6T will be submitted to the Chief Counsel for such comments.
The principal authors of these regulations are Marjorie Hoffman and Cathy A. Vohs of the Office of the Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). However, other personnel from the IRS and Treasury participated in their development.
Income taxes, Reporting and recordkeeping requirements.
Excise taxes, Pensions, Reporting and recordkeeping requirements.
Reporting and recordkeeping requirements.
26 U.S.C. 7805 * * *
§ 1.401(a)(9)-1 is also issued under 26 U.S.C. 401(a)(9).
§ 1.401(a)(9)-2 is also issued under 26 U.S.C. 401(a)(9).
§ 1.401(a)(9)-3 is also issued under 26 U.S.C. 401(a)(9).
§ 1.401(a)(9)-4 is also issued under 26 U.S.C. 401(a)(9).
§ 1.401(a)(9)-5 is also issued under 26 U.S.C. 401(a)(9).
§ 1.401(a)(9)-6T is also issued under 26 U.S.C. 401(a)(9).
§ 1.401(a)(9)-7 is also issued under 26 U.S.C. 401(a)(9).
§ 1.401(a)(9)-8 is also issued under 26 U.S.C. 401(a)(9).
§ 1.401(a)(9)-9 is also issued under 26 U.S.C. 401(a)(9). * * *
§ 1.403(b)-3 is also issued under 26 U.S.C. 403(b)(10). * * *
§ 1.408-8 is also issued under 26 U.S.C. 408(a)(6) and (b)(3). * * *
This table of contents lists the regulations relating to required minimum distributions under section 401(a)(9) of the Internal Revenue Code as follows:
Q-1. What plans are subject to the minimum distribution requirement under section 401(a)(9), this section, and §§ 1.401(a)(9)-2 through 1.401(a)(9)-9?
A-1. Under section 401(a)(9), all stock bonus, pension, and profit-sharing plans qualified under section 401(a) and annuity contracts described in section 403(a) are subject to required minimum distribution rules. See this section and §§ 1.401(a)(9)-2 through 1.401(a)(9)-9 for the distribution rules applicable to these plans. Under section 403(b)(10), annuity contracts or custodial accounts described in section 403(b) are subject to required minimum distribution rules. See § 1.403(b)-3 for the distribution rules applicable to these annuity contracts or custodial accounts. Under section 408(a)(6) and 408(b)(3), individual retirement plans (including, for some purposes, Roth IRAs under section 408A) are subject to required minimum distribution rules. See § 1.408-8 for the distribution rules applicable to individual retirement plans and see § 1.408A-6 for the distribution rules applicable to Roth IRAs under section 408A. Under section 457(d)(2), certain deferred compensation plans for employees of tax exempt organizations or state and
Q-2. Which employee account balances and benefits held under qualified trusts and plans are subject to the distribution rules of section 401(a)(9), this section, and §§ 1.401(a)(9)-2 through 1.401(a)(9)-9?
A-2. (a)
(b)
(2) A designated beneficiary that is receiving payments under the 5-year rule of section 401(a)(9)(B)(ii), either by affirmative election or default provisions, may, if the plan so provides, switch to using the life expectancy rule of section 401(a)(9)(B)(iii) provided any amounts that would have been required to be distributed under the life expectancy rule of section 401(a)(9)(B)(iii) for all distribution calendar years before 2004 are distributed by the earlier of December 31, 2003 or the end of the 5-year period determined under A-2 of § 1.401(a)(9)-3.
(c)
Q-3. What specific provisions must a plan contain in order to satisfy section 401(a)(9)?
A-3. (a)
(b)
(c)
Q-1. In the case of distributions commencing during an employee's lifetime, how must the employee's entire interest be distributed in order to satisfy section 401(a)(9)(A)?
A-1. (a) In order to satisfy section 401(a)(9)(A), the entire interest of each employee must be distributed to such employee not later than the required beginning date, or must be distributed, beginning not later than the required beginning date, over the life of the employee or joint lives of the employee and a designated beneficiary or over a period not extending beyond the life expectancy of the employee or the joint life and last survivor expectancy of the employee and the designated beneficiary.
(b) Section 401(a)(9)(G) provides that lifetime distributions must satisfy the incidental death benefit requirements.
(c) The amount required to be distributed for each calendar year in order to satisfy section 401(a)(9)(A) and (G) generally depends on whether a distribution is in the form of distributions under a defined contribution plan or annuity payments under a defined benefit plan or under an annuity contract. For the method of determining the required minimum distribution in accordance with section 401(a)(9)(A) and (G) from an individual account under a defined contribution plan, see § 1.401(a)(9)-5. For the method of determining the required minimum distribution in accordance with section 401(a)(9)(A) and (G) in the case of annuity payments from a defined benefit plan or an annuity contract, see § 1.401(a)(9)-6T.
Q-2. For purposes of section 401(a)(9)(C), what does the term
A-2. (a) Except as provided in paragraph (b) of this A-2 with respect to a 5-percent owner, as defined in paragraph (c) of this A-2, the term
(b) In the case of an employee who is a 5-percent owner, the term
(c) For purposes of section 401(a)(9), a 5-percent owner is an employee who is a 5-percent owner (as defined in section 416) with respect to the plan year ending in the calendar year in which the employee attains age 70
(d) Paragraph (b) of this A-2 does not apply in the case of a governmental plan (within the meaning of section 414(d)) or a church plan. For purposes of this paragraph, the term
(e) A plan is permitted to provide that the required beginning date for purposes of section 401(a)(9) for all employees is April 1 of the calendar year following the calendar year in which an employee attains age 70
Q-3. When does an employee attain age 70
A-3. An employee attains age 70
Q-4. Must distributions made before the employee's required beginning date satisfy section 401(a)(9)?
A-4. Lifetime distributions made before the employee's required beginning date for calendar years before the employee's first distribution calendar year, as defined in A-1(b) of § 1.401(a)(9)-5, need not be made in accordance with section 401(a)(9). However, if distributions commence before the employee's required beginning date under a particular distribution option, such as in the form of an annuity, the distribution option fails to satisfy section 401(a)(9) at the time distributions commence if, under terms of the particular distribution option, distributions to be made for the employee's first distribution calendar year or any subsequent distribution calendar year will fail to satisfy section 401(a)(9).
Q-5. If distributions have begun to an employee during the employee's lifetime (in accordance with section 401(a)(9)(A)(ii)), how must distributions be made after an employee's death?
A-5. Section 401(a)(9)(B)(i) provides that if the distribution of the employee's interest has begun in accordance with section 401(a)(9)(A)(ii) and the employee dies before his entire interest has been distributed to him, the remaining portion of such interest must be distributed at least as rapidly as under the distribution method being used under section 401(a)(9)(A)(ii) as of the date of his death. The amount required to be distributed for each distribution calendar year following the calendar year of death generally depends on whether a distribution is in the form of distributions from an individual account under a defined contribution plan or annuity payments under a defined benefit plan. For the method of determining the required minimum distribution in accordance with section 401(a)(9)(B)(i) from an individual account, see § 1.401(a)(9)-5. In the case of annuity payments from a defined benefit plan or an annuity contract, see § 1.401(a)(9)-6T.
Q-6. For purposes of section 401(a)(9)(B), when are distributions considered to have begun to the employee in accordance with section 401(a)(9)(A)(ii)?
A-6. (a)
(b) If a plan provides, in accordance with A-2(e) of this section, that the required beginning date for purposes of section 401(a)(9) for all employees is April 1 of the calendar year following the calendar year in which an employee attains age 70
Q-1. If an employee dies before the employee's required beginning date, how must the employee's entire interest be distributed in order to satisfy section 401(a)(9)?
A-1. (a) Except as otherwise provided in A-10 of § 1.401(a)(9)-6T, if an employee dies before the employee's required beginning date (and, thus, before distributions are treated as having begun in accordance with section 401(a)(9)(A)(ii)), distribution of the employee's entire interest must be made in accordance with one of the methods described in section 401(a)(9)(B)(ii) or (iii) and (iv). One method (the 5-year rule in section 401(a)(9)(B)(ii)) requires that the entire interest of the employee be distributed within 5 years of the employee's death regardless of who or what entity receives the distribution. Another method (the life expectancy rule in section 401(a)(9)(B)(iii) and (iv)) requires that any portion of an employee's interest payable to (or for the benefit of) a designated beneficiary be distributed, commencing within one year of the employee's death, over the life of such beneficiary (or over a period not extending beyond the life expectancy of such beneficiary). Section 401(a)(9)(B)(iv) provides special rules where the designated beneficiary is the surviving spouse of the employee, including a special commencement date for distributions under section 401(a)(9)(B)(iii) to the surviving spouse.
(b) See A-4 of this section for the rules for determining which of the methods described in paragraph (a) of this A-1 applies. See A-3 of this section to determine when distributions under the exception to the 5-year rule in section 401(a)(9)(B)(iii) and (iv) must commence. See A-2 of this section to determine when the 5-year period in section 401(a)(9)(B)(ii) ends. For distributions using the life expectancy rule in section 401(a)(9)(B)(iii) and (iv), see § 1.401(a)(9)-4 in order to determine the designated beneficiary under section 401(a)(9)(B)(iii) and (iv), see § 1.401(a)(9)-5 for the rules for determining the required minimum distribution under a defined contribution plan, and see § 1.401(a)(9)-6T for required minimum distributions under defined benefit plans.
Q-2. By when must the employee's entire interest be distributed in order to satisfy the 5-year rule in section 401(a)(9)(B)(ii)?
A-2. In order to satisfy the 5-year rule in section 401(a)(9)(B)(ii), the employee's entire interest must be distributed by the end of the calendar
Q-3. When are distributions required to commence in order to satisfy the life expectancy rule in section 401(a)(9)(B)(iii) and (iv)?
A-3. (a)
(b)
(1) The end of the calendar year immediately following the calendar year in which the employee died; and
(2) The end of the calendar year in which the employee would have attained age 70
Q-4. How is it determined whether the 5-year rule in section 401(a)(9)(B)(ii) or the life expectancy rule in section 401(a)(9)(B)(iii) and (iv) applies to a distribution?
A-4. (a)
(1) If the employee has a designated beneficiary, as determined under § 1.401(a)(9)-4, distributions are to be made in accordance with the life expectancy rule in section 401(a)(9)(B)(iii) and (iv).
(2) If the employee has no designated beneficiary, distributions are to be made in accordance with the 5-year rule in section 401(a)(9)(B)(ii).
(b)
(c)
Q-5. If the employee's surviving spouse is the employee's sole designated beneficiary and such spouse dies after the employee, but before distributions have begun to the surviving spouse under section 401(a)(9)(B)(iii) and (iv), how is the employee's interest to be distributed?
A-5. Pursuant to section 401(a)(9)(B)(iv)(II), if the surviving spouse is the employee's sole designated beneficiary and dies after the employee, but before distributions to such spouse have begun under section 401(a)(9)(B)(iii) and (iv), the 5-year rule in section 401(a)(9)(B)(ii) and the life expectancy rule in section 401(a)(9)(B)(iii) are to be applied as if the surviving spouse were the employee. In applying this rule, the date of death of the surviving spouse shall be substituted for the date of death of the employee. However, in such case, the rules in section 401(a)(9)(B)(iv) are not available to the surviving spouse of the deceased employee's surviving spouse.
Q-6. For purposes of section 401(a)(9)(B)(iv)(II), when are distributions considered to have begun to the surviving spouse?
A-6. Distributions are considered to have begun to the surviving spouse of an employee, for purposes of section 401(a)(9)(B)(iv)(II), on the date, determined in accordance with A-3 of this section, on which distributions are required to commence to the surviving spouse, even though payments have actually been made before that date. See A-11 of § 1.401(a)(9)-6T for a special rule for annuities.
Q-1. Who is a designated beneficiary under section 401(a)(9)(E)?
A-1. A designated beneficiary is an individual who is designated as a beneficiary under the plan. An individual may be designated as a beneficiary under the plan either by the terms of the plan or, if the plan so provides, by an affirmative election by the employee (or the employee's surviving spouse) specifying the beneficiary. A beneficiary designated as such under the plan is an individual who is entitled to a portion of an employee's benefit, contingent on the employee's death or another specified event. For example, if a distribution is in the form of a joint and survivor annuity over the life of the employee and another individual, the plan does not satisfy section 401(a)(9) unless such other individual is a designated beneficiary under the plan. A designated beneficiary need not be specified by name in the plan or by the employee to the plan in order to be a designated beneficiary so long as the individual who is to be the beneficiary is identifiable under the plan. The members of a class of beneficiaries capable of expansion or contraction will be treated as being identifiable if it is possible, to identify the class member with the shortest life expectancy. The fact that an employee's interest under the plan passes to a certain individual under a will or otherwise under applicable state law does not make that individual a designated beneficiary unless the individual is designated as a beneficiary under the plan. See A-6 of § 1.401(a)(9)-8 for rules which apply to qualified domestic relation orders.
Q-2. Must an employee (or the employee's spouse) make an affirmative election specifying a beneficiary for a person to be a designated beneficiary under section 40l(a)(9)(E)?
A-2. No, a designated beneficiary is an individual who is designated as a beneficiary under the plan whether or
Q-3. May a person other than an individual be considered to be a designated beneficiary for purposes of section 401(a)(9)?
A-3. No, only individuals may be designated beneficiaries for purposes of section 401(a)(9). A person that is not an individual, such as the employee's estate, may not be a designated beneficiary. If a person other than an individual is designated as a beneficiary of an employee's benefit, the employee will be treated as having no designated beneficiary for purposes of section 401(a)(9), even if there are also individuals designated as beneficiaries. However, see A-5 of this section for special rules that apply to trusts and A-2 and A-3 of § 1.401(a)(9)-8 for rules that apply to separate accounts.
Q-4. When is the designated beneficiary determined?
A-4. (a)
(b)
(c)
Q-5. If a trust is named as a beneficiary of an employee, will the beneficiaries of the trust with respect to the trust's interest in the employee's benefit be treated as having been designated as beneficiaries of the employee under the plan for purposes of determining the distribution period under section 401(a)(9)?
A-5. (a) If the requirements of paragraph (b) of this A-5 are met with respect to a trust that is named as the beneficiary of an employee under the plan, the beneficiaries of the trust (and not the trust itself) will be treated as having been designated as beneficiaries of the employee under the plan for purposes of determining the distribution period under section 401(a)(9).
(b) The requirements of this paragraph (b) are met if, during any period during which required minimum distributions are being determined by treating the beneficiaries of the trust as designated beneficiaries of the employee, the following requirements are met—
(1) The trust is a valid trust under state law, or would be but for the fact that there is no corpus.
(2) The trust is irrevocable or will, by its terms, become irrevocable upon the death of the employee.
(3) The beneficiaries of the trust who are beneficiaries with respect to the trust's interest in the employee's benefit are identifiable within the meaning of A-1 of this section from the trust instrument.
(4) The documentation described in A-6 of this section has been provided to the plan administrator.
(c) In the case of payments to a trust having more than one beneficiary, see A-7 of § 1.401(a)(9)-5 for the rules for determining the designated beneficiary whose life expectancy will be used to determine the distribution period and A-3 of this section for the rules that apply if a person other than an individual is designated as a beneficiary of an employee's benefit. However, the separate account rules under A-2 of § 1.401(a)(9)-8 are not available to beneficiaries of a trust with respect to the trust's interest in the employee's benefit.
(d) If the beneficiary of the trust named as beneficiary of the employee's interest is another trust, the beneficiaries of the other trust will be treated as being designated as beneficiaries of the first trust, and thus, having been designated by the employee under the plan for purposes of determining the distribution period under section 401(a)(9)(A)(ii), provided that the requirements of paragraph (b) of this A-5 are satisfied with respect to such other trust in addition to the trust named as beneficiary.
Q-6. If a trust is named as a beneficiary of an employee, what documentation must be provided to the plan administrator?
A-6. (a)
(1) Provide to the plan administrator a copy of the trust instrument and agree that if the trust instrument is amended at any time in the future, the employee will, within a reasonable time, provide to the plan administrator a copy of each such amendment; or
(2) Provide to the plan administrator a list of all of the beneficiaries of the trust (including contingent and remaindermen beneficiaries with a description of the conditions on their entitlement sufficient to establish that the spouse is the sole beneficiary) for purposes of section 401(a)(9); certify that, to the best of the employee's knowledge, this list is correct and complete and that the requirements of paragraph (b)(1), (2), and (3) of A-5 of this section are satisfied; agree that, if the trust instrument is amended at any time in the future, the employee will, within a reasonable time, provide to the plan administrator corrected certifications to the extent that the amendment changes any information previously certified; and agree to provide a copy of the trust instrument to the plan administrator upon demand.
(b)
(1) Provide the plan administrator with a final list of all beneficiaries of the trust (including contingent and remaindermen beneficiaries with a description of the conditions on their entitlement) as of September 30 of the calendar year following the calendar year of the employee's death; certify that, to the best of the trustee's knowledge, this list is correct and complete and that the requirements of paragraph (b)(1), (2), and (3) of A-5 of this section are satisfied; and agree to provide a copy of the trust instrument to the plan administrator upon demand; or
(2) Provide the plan administrator with a copy of the actual trust document for the trust that is named as a beneficiary of the employee under the plan as of the employee's date of death.
(c)
(2) For purposes of determining the amount of the excise tax under section 4974, the required minimum distribution is determined for any year based on the actual terms of the trust in effect during the year.
Q-1. If an employee's benefit is in the form of an individual account under a defined contribution plan, what is the amount required to be distributed for each calendar year?
A-1. (a)
(b)
(c)
(d)
(e)
Q-2. If an employee's benefit is in the form of an individual account and, in any calendar year, the amount distributed exceeds the minimum required, will credit be given in subsequent calendar years for such excess distribution?
A-2. If, for any distribution calendar year, the amount distributed exceeds the minimum required, no credit will be given in subsequent calendar years for such excess distribution.
Q-3. What is the amount of the account of an employee used for determining the employee's required minimum distribution in the case of an individual account?
A-3. (a) In the case of an individual account, the benefit used in determining the required minimum distribution for a distribution calendar year is the account balance as of the last valuation date in the calendar year immediately preceding that distribution calendar year (valuation calendar year) adjusted in accordance with paragraphs (b) and (c) of this A-3.
(b) The account balance is increased by the amount of any contributions or forfeitures allocated to the account balance as of dates in the valuation calendar year after the valuation date. For this purpose, contributions that are allocated to the account balance as of dates in the valuation calendar year after the valuation date, but that are not actually made during the valuation calendar year, are permitted to be excluded.
(c) The account balance is decreased by distributions made in the valuation calendar year after the valuation date.
(d) If an amount is distributed by one plan and rolled over to another plan (receiving plan), A-2 of § 1.401(a)(9)-7 provides additional rules for determining the benefit and required minimum distribution under the receiving plan. If an amount is transferred from one plan (transferor plan) to another plan (transferee plan), A-3 and A-4 of § 1.401(a)(9)-7 provide additional rules for determining the amount of the required minimum distribution and the benefit under both the transferor and transferee plans.
Q-4. For required minimum distributions during an employee's lifetime, what is the applicable distribution period?
A-4. (a)
(b)
(2)
Q-5. For required minimum distributions after an employee's death, what is the applicable distribution period?
A-5. (a)
(1) If the employee has a designated beneficiary as of the date determined under A-4 of § 1.401(a)(9)-4, the longer of—
(i) The remaining life expectancy of the employee's designated beneficiary determined in accordance with paragraph (c)(1) or (2) of this A-5; and
(ii) The remaining life expectancy of the employee determined in accordance with paragraph (c)(3) of this A-5; or
(2) If the employee does not have a designated beneficiary as of the date determined under A-4 of § 1.401(a)(9)-4, the remaining life expectancy of the employee determined in accordance with paragraph (c)(3) of this A-5.
(b)
(c)
(2)
(3)
Q-6. What life expectancies must be used for purposes of determining required minimum distributions under section 401(a)(9)?
A-6. Life expectancies for purposes of determining required minimum distributions under section 401(a)(9) must be computed using the Single Life Table in A-1 of § 1.401(a)(9)-9 and the Joint and Last Survivor Table in A-3 of § 1.401(a)(9)-9.
Q-7. If an employee has more than one designated beneficiary, which designated beneficiary's life expectancy will be used to determine the applicable distribution period?
A-7. (a)
(2) See A-3 of § 1.401(a)(9)-4 for rules that apply if a person other than an individual is designated as a beneficiary and see A-2 and A-3 of § 1.401(a)(9)-8 for special rules that apply if an employee's benefit under a plan is divided into separate accounts and the beneficiaries with respect to a separate account differ from the beneficiaries of another separate account.
(b)
(c)
(2) If the individual beneficiary whose life expectancy is being used to calculate the distribution period dies after September 30 of the calendar year following the calendar year of the employee's death, such beneficiary's remaining life expectancy will be used to determine the distribution period without regard to the life expectancy of the subsequent beneficiary.
(3) This paragraph (c) is illustrated by the following examples:
(i) Employer M maintains a defined contribution plan, Plan X. Employee A, an employee of M, died in 2005 at the age of 55, survived by spouse, B, who was 50 years old. Prior to A's death, M had established an account balance for A in Plan X. A's account balance is invested only in productive assets. A named a testamentary trust (Trust P) established under A's will as the beneficiary of all amounts payable from A's account in Plan X after A's death. A copy of the Trust P and a list of the trust beneficiaries were provided to the plan administrator of Plan X by October 31 of the calendar year following the calendar year of A's death. As of the date of A's death, the Trust P was irrevocable and was a valid trust under the laws of the state of A's domicile. A's account balance in Plan X was includible in
(ii) Under the terms of Trust P, all trust income is payable annually to B, and no one has the power to appoint Trust P principal to any person other than B. A's children, who are all younger than B, are the sole remainder beneficiaries of the Trust P. No other person has a beneficial interest in Trust P. Under the terms of the Trust P, B has the power, exercisable annually, to compel the trustee to withdraw from A's account balance in Plan X an amount equal to the income earned on the assets held in A's account in Plan X during the calendar year and to distribute that amount through Trust P to B. Plan X contains no prohibition on withdrawal from A's account of amounts in excess of the annual required minimum distributions under section 401(a)(9). In accordance with the terms of Plan X, the trustee of Trust P elects, in order to satisfy section 401(a)(9), to receive annual required minimum distributions using the life expectancy rule in section 401(a)(9)(B)(iii) for distributions over a distribution period equal to B's life expectancy. If B exercises the withdrawal power, the trustee must withdraw from A's account under Plan X the greater of the amount of income earned in the account during the calendar year or the required minimum distribution. However, under the terms of Trust P, and applicable state law, only the portion of the Plan X distribution received by the trustee equal to the income earned by A's account in Plan X is required to be distributed to B (along with any other trust income.)
(iii) Because some amounts distributed from A's account in Plan X to Trust P may be accumulated in Trust P during B's lifetime for the benefit of A's children, as remaindermen beneficiaries of Trust P, even though access to those amounts are delayed until after B's death, A's children are beneficiaries of A's account in Plan X in addition to B and B is not the sole designated beneficiary of A's account. Thus the designated beneficiary used to determine the distribution period from A's account in Plan X is the beneficiary with the shortest life expectancy. B's life expectancy is the shortest of all the potential beneficiaries of the testamentary trust's interest in A's account in Plan X (including remainder beneficiaries). Thus, the distribution period for purposes of section 401(a)(9)(B)(iii) is B's life expectancy. Because B is not the sole designated
(i) The facts are the same as
(ii) In this case, B is the sole designated beneficiary of A's account in Plan X for purposes of determining the designated beneficiary under section 401(a)(9)(B)(iii) and (iv). No amounts distributed from A's account in Plan X to Trust P are accumulated in Trust P during B's lifetime for the benefit of any other beneficiary. Therefore, the residuary beneficiaries of Trust P are mere potential successors to B's interest in Plan X. Because B is the sole beneficiary of the testamentary trust's interest in A's account in Plan X, the annual required minimum distributions from A's account to Trust P must begin no later than the end of the calendar year in which A would have attained age 70
Q-8. If a portion of an employee's individual account is not vested as of the employee's required beginning date, how is the determination of the required minimum distribution affected?
A-8. If the employee's benefit is in the form of an individual account, the benefit used to determine the required minimum distribution for any distribution calendar year will be determined in accordance with A-1 of this section without regard to whether or not all of the employee's benefit is vested. If any portion of the employee's benefit is not vested, distributions will be treated as being paid from the vested portion of the benefit first. If, as of the end of a distribution calendar year (or as of the employee's required beginning date, in the case of the employee's first distribution calendar year), the total amount of the employee's vested benefit is less than the required minimum distribution for the calendar year, only the vested portion, if any, of the employee's benefit is required to be distributed by the end of the calendar year (or, if applicable, by the employee's required beginning date). However, the required minimum distribution for the subsequent distribution calendar year must be increased by the sum of amounts not distributed in prior calendar years because the employee's vested benefit was less than the required minimum distribution.
Q-9. Which amounts distributed from an individual account are taken into account in determining whether section 401(a)(9) is satisfied and which amounts are not taken into account in determining whether section 401(a)(9) is satisfied?
A-9. (a)
(b)
(1) Elective deferrals and employee contributions that, pursuant to § 1.415-6(b)(6)(iv), are returned (together with the income allocable to these corrective distributions) as a result of the application of the section 415 limitations.
(2) Corrective distributions of excess deferrals as described in § 1.402(g)-1(e)(3), together with the income allocable to these distributions.
(3) Corrective distributions of excess contributions under a qualified cash or deferred arrangement under section 401(k)(8) and excess aggregate contributions under section 401(m)(6), together with the income allocable to these distributions.
(4) Loans that are treated as deemed distributions pursuant to section 72(p).
(5) Dividends described in section 404(k) that are paid on employer securities. (Amounts paid to the plan that, pursuant to section 404(k)(2)(A)(iii)(II), are included in the account balance and subsequently distributed from the account lose their character as dividends.)
(6) The costs of life insurance coverage (P.S. 58 costs).
(7) Similar items designated by the Commissioner in revenue rulings, notices, and other guidance published in the Internal Revenue Bulletin. See § 601.601(d)(2)(ii)(b) of this chapter.
Q-1. How must distributions under a defined benefit plan be paid in order to satisfy section 401(a)(9)?
A-1. (a)
(1) With an annual percentage increase that does not exceed the annual percentage increase in a cost-of-living index that is based on prices of all items and issued by the Bureau of Labor Statistics;
(2) To the extent of the reduction in the amount of the employee's payments to provide for a survivor benefit upon death, but only if the beneficiary whose life was being used to determine the period described in section 401(a)(9)(A)(ii) over which payments were being made dies or is no longer the employee's beneficiary pursuant to a qualified domestic relations order within the meaning of section 414(p);
(3) To provide cash refunds of employee contributions upon the employee's death; or
(4) To pay increased benefits that result from a plan amendment.
(b)
(c)
(2) This paragraph (c) is illustrated by the following example:
A defined benefit plan (Plan X) provides monthly annuity payments of $500 for the life of unmarried participants with a 10-year period certain. An unmarried, retired participant (A) in Plan X attains age 70
(d)
(1) The portion of the single sum distribution that is a required minimum distribution is determined by treating the single sum distribution as a distribution from an individual account plan and treating the amount of the single sum distribution as the employee's account balance as of the end of the relevant valuation calendar year. If the single sum distribution is being made in the calendar year containing the required beginning date and the required minimum distribution for the employee's first distribution calendar year has not been distributed, the portion of the single sum distribution that represents the required minimum distribution for the employee's first and second distribution calendar years is not eligible for rollover.
(2) The portion of the single sum distribution that is a required minimum distribution is permitted to be determined by expressing the employee's benefit as an annuity that would satisfy this section with an annuity starting date as of the first day of the distribution calendar year for which the required minimum distribution is being determined, and treating one year of annuity payments as the required minimum distribution for that year, and not eligible for rollover. If the single sum distribution is being made in the calendar year containing the required beginning date and the required minimum distribution for the employee's first distribution calendar year has not been made, the benefit must be expressed as an annuity with an annuity starting date as of the first day of the first distribution calendar year and the payments for the first two calendar years would be treated as required minimum distributions, and not eligible for rollover.
(e)
(1) It is not paid as part of the employee's accrued benefit or under any optional form of the employee's benefit, and
(2) The death benefit, together with any other potential payments with respect to the employee's benefit that may be provided to a survivor, satisfy the incidental benefit requirement of § 1.401-1(b)(1)(i),
(f)
Q-2. How must distributions in the form of a life (or joint and survivor) annuity be made in order to satisfy the minimum distribution incidental benefit (MDIB) requirement of section 401(a)(9)(G) and the distribution component of the incidental benefit requirement of § 1.401-1(b)(1)(i)?
A-2. (a)
(b)
(c)
(2)
(3)
Distributions commence on January 1, 2003 to an employee (Z), born March 1, 1937, after retirement at age 65. Z's daughter (Y), born February 5, 1967, is Z's beneficiary. The distributions are in the form of a joint and survivor annuity for the lives of Z and Y with payments of $500 a month to Z and upon Z's death of $500 a month to Y, i.e., the projected monthly payment to Y is 100 percent of the monthly amount payable to Z. There is no provision under the option for a change in the projected payments to Y, and corresponding increase to Z, as of April 1, 2008, Z's required beginning date. Accordingly, under A-10 of this section, compliance with the rules of this section is determined as of the annuity starting date. Consequently, as of January 1, 2003 (the annuity starting date) the plan does not satisfy the MDIB requirement because, as of such date, the distribution option provides that, as of Z's required beginning date, the monthly payment to Y upon Z's death will exceed 60 percent of Z's monthly payment (the maximum percentage for a difference of ages of 30 years).
(d)
(e)
Q-3. How long is a period certain under a defined benefit plan permitted to extend?
A-3. (a)
(b)
(2) If the annuity starting date is in a calendar year before the first distribution calendar year, the period certain may not exceed the life expectancy of the designated beneficiary using the beneficiary's age in the year that contains the annuity starting date.
Q-4. Will a plan fail to satisfy section 401(a)(9) merely because distributions are made from an annuity contract which is purchased from an insurance company?
A-4. (a)
(b)
(1) By a constant percentage, applied not less frequently than annually;
(2) To provide a payment upon the death of the employee equal to the excess of the account value being annuitized over the total of payments before the death of the employee.
(3) As a result of dividend payments or other payments that result from actuarial gains, but only if actuarial gain is measured no less frequently than annually and the resulting dividend payments or other payments are either paid no later than the year following the year for which the actuarial experience is measured or paid in the same form as the payment of the annuity over the remaining period of the annuity (beginning no later than the year
(4) As a final payment under the annuity contract, but only if the payment does not exceed the total future expected payments as of the date of the payment; or
(5) As a partial distribution under the contract, but only if the contract provides for a final payment as of the date of partial distribution that satisfies paragraph (b)(4) of this A-4 and the future payments under the contract are reduced by multiplying the otherwise applicable future payments by a fraction, the numerator of which is the excess of that final payment over the amount of the partial distribution and the denominator of which is the amount of that final payment. For the purpose of determining this ratio, the denominator is reduced by the amount of any regularly scheduled payment due on the date of the partial distribution.
(c)
(1) Account value being annuitized means the value of the employee's entire interest (within the meaning of A-12 of this section) being annuitized (valued as of the date annuity payments commence) or, in the case of a defined contribution plan, the value of the employee's account balance used to purchase an immediate annuity under the contract.
(2) Actuarial gain means the difference between the actuarial assumptions used in pricing (i.e., investment return, mortality, expense, and other similar assumptions) and the actual experience with respect to those assumptions. Actuarial gain also includes differences between the actuarial assumptions used in pricing when an annuity was purchased and actuarial assumptions used in pricing annuities at the time the actuarial gain is determined.
(3) Total future expected payments means the total future payments to be made under the annuity contract as of the date of the determination, calculated using the Single Life Table in A-1 of § 1.401(a)(9)-9 (or, if applicable, the Joint and Last Survivor Table in A-3 of in § 1.401(a)(9)-9) for annuitants who are still alive, without regard to any increases in annuity payments after the date of determination, and taking into account any remaining period certain.
(d)
A participant (Z1) in defined contribution plan X attains age 70 on March 5, 2005, and thus, attains age 70
A participant (Z2) in defined contribution plan X attains age 70 on May 1, 2005, and thus, attains age 70
The facts are the same as in
The facts are the same as in
A participant (Z3) in defined contribution plan X attains age 70
The facts are the same as in
(i) A participant (Z4) in defined contribution Plan X attains age 78 in 2005. Z4 elects to purchase Contract Y4 from Insurance Company W. Contract Y4 provides for fixed annual payments for 20 years (which does not exceed the maximum period certain permitted under A-3(a) of this section) and provides that, on any payment date, before receiving his payment due on that date, Z4 may cancel Contract Y4 and receive as a final payment an amount equal to his remaining payments discounted with interest at 4 percent. The value of Z4's account balance in Plan X at the time of purchase is $500,000, and the purchase price of Contract Y4 is $500,000. Contract Y4 provides Z4 with an initial payment in 2005 of $35,376.
(ii) Under Contract Y4, the amount that Z4 could receive upon cancellation of Contract Y4 as a final payment, for all possible cancellation dates, will always be less than the total future expected payments on such cancellation date. This is so because the total future expected payments on any such cancellation date is equal to the remaining payments on such date, not discounted, an amount always greater than the final payment amount of these same remaining payments, discounted at 4 percent.
(iii) The total future expected payments to Z4 under Y4 are $707,520, calculated as the annualized initial payment of $35,376 multiplied by the period certain of 20 years. Because the total future expected payments on the purchase date exceed the account value used to purchase Contract Y4 and it is not possible for a final payment under Contract Y4 to ever exceed the total future expected payments on the day of such final payment, distributions received by Z4 under Contract Y4 meet the requirements under paragraph (b)(4) of this A-4.
(iv) As an illustration of the above, if Participant Z4 were to elect to cancel Contract Y4 on the day he was due to receive his eleventh payment, his contractual final payment would be $298,408 (including the $35,376 he was due to receive on that day) which is less than his total future expected payments on that date ($353,760). These amounts are determined as follows. On the day Z4 was to receive his eleventh payment, Z4 was entitled to receive ten future payments of $35,376 (including the payment he was due to receive on that day). The discounted value of an annuity of ten payments of $35,376, with the first payment due on the date of the calculation of the discounted value, and a discount rate of 4 percent, is $298,408. The product of the payment amount of $35,376 multiplied by 10, the number of future payments to which Z4 would be entitled on the day Z4 was to receive the eleventh payment, is $353,760.
(i) The facts are the same as in
(ii) To illustrate the workings of this partial distribution option, assume Z4 takes a distribution of $100,000 on the date he was to receive his eleventh payment of $35,376. In such a case, under this partial distribution option, his remaining nine payments, absent any other extraordinary distributions, will be reduced to $26,685. This amount is determined as follows. The numerator of the ratio described in the paragraph above is equal to $ 198,408 (that is, the excess of a total distribution of $298,408 over the partial distribution of $100,000). The denominator of the ratio described in the paragraph above is equal to $263,032 (that is, the maximum distribution on the date of the partial distribution of $298,408 (see
(i) A participant (Z5) in defined contribution plan X attains age 70
(ii) Contract Y5 fails to meet the requirements of paragraph (b) of this A-4, and thus fails to satisfy the requirements of section 401(a)(9), because the expected total payments without regard to any increases in the annuity payment is only 43 percent of the purchase price (that is, an amount not exceeding the account value used to purchase the annuity), calculated as 5 percent of the purchase price in year one and two percent of the purchase price in each of years two through twenty (or, .05 multiplied by 1 year plus .02 multiplied by 19 years).
Q-5. In the case of annuity distributions under a defined benefit plan, how must additional benefits that accrue after the employee's first distribution calendar year be distributed in order to satisfy section 401(a)(9)?
A-5. (a) In the case of annuity distributions under a defined benefit plan, if any additional benefits accrue in a calendar year after the employee's first distribution calendar year, distribution of the amount that accrues in a calendar year must commence in accordance with A-1 of this section beginning with the first payment interval ending in the calendar year immediately following the calendar year in which such amount accrues.
(b) A plan will not fail to satisfy section 401(a)(9) merely because there is an administrative delay in the commencement of the distribution of the additional benefits accrued in a calendar year, provided that the actual payment of such amount commences as soon as practicable. However, payment must commence no later than the end of the first calendar year following the calendar year in which the additional benefit accrues, and the total amount paid during such first calendar year must be no less than the total amount that was required to be paid during that year under A-5(a) of this section.
Q-6. If a portion of an employee's benefit is not vested as of December 31 of a distribution calendar year, how is the determination of the required minimum distribution affected?
A-6. In the case of annuity distributions from a defined benefit plan, if any portion of the employee's benefit is not vested as of December 31 of a distribution calendar year, the portion that is not vested as of such date will be treated as not having accrued for purposes of determining the required minimum distribution for that distribution calendar year. When an additional portion of the employee's benefit becomes vested, such portion will be treated as an additional accrual. See A-5 of this section for the rules for distributing benefits which accrue under a defined benefit plan after the employee's first distribution calendar year.
Q-7. If an employee (other than a 5-percent owner) retires after the calendar year in which the employee attains age 70
A-7. (a)
(b)
(c)
(d)
Q-8. What amount of actuarial increase is required under section 401(a)(9)(C)(iii)?
A-8. In order to satisfy section 401(a)(9)(C)(iii), the retirement benefits payable with respect to an employee as of the end of the period for actuarial increases (described in A-7 of this section) must be no less than: the actuarial equivalent of the employee's retirement benefits that would have been payable as of the date the actuarial increase must commence under paragraph (a) of A-7 of this section if benefits had commenced on that date; plus the actuarial equivalent of any additional benefits accrued after that date; reduced by the actuarial equivalent of any distributions made with respect to the employee's retirement benefits after that date. Actuarial equivalence is determined using the plan's assumptions for determining actuarial equivalence for purposes of satisfying section 411.
Q-9. How does the actuarial increase required under section 401(a)(9)(C)(iii) relate to the actuarial increase required under section 411?
A-9. In order for any of an employee's accrued benefit to be nonforfeitable as required under section 411, a defined benefit plan must make an actuarial adjustment to an accrued benefit the payment of which is deferred past normal retirement age. The only exception to this rule is that generally no actuarial adjustment is required to reflect the period during which a benefit is suspended as permitted under section 203(a)(3)(B) of the Employee Retirement Income Security Act of 1974 (ERISA). The actuarial increase required under section 401(a)(9)(C)(iii) for the period described in A-7 of this section is generally the same as, and not in addition to, the actuarial increase required for the same period under section 411 to reflect any delay in the payment of retirement benefits after normal retirement age. However, unlike the actuarial increase required under section 411, the actuarial increase required under section 401(a)(9)(C)(iii) must be provided even during any period during which an employee's benefit has been suspended in accordance with ERISA section 203(a)(3)(B).
Q-10. What rule applies if distributions commence to an employee on a date before the employee's required beginning date over a period permitted under section 401(a)(9)(A)(ii) and the distribution form is an annuity under which distributions are made in accordance with the provisions of A-1 (and if applicable A-4) of this section?
A-10. (a)
(b)
Q-11. What rule applies if distributions commence on an irrevocable basis (except for acceleration) to the surviving spouse of an employee over a period permitted under section 401(a)(9)(B)(iii)(II) before the date on which distributions are required to commence and the distribution form is an annuity under which distributions are made as of the date distributions commence in accordance with the provisions of A-1 (and if applicable A-4) of this section.
A-11.If distributions commence to the surviving spouse of an employee on an irrevocable basis (except for acceleration) over a period permitted under section 401(a)(9)(B)(iii)(II) before the date on which distributions are required to commence and the distribution form is an annuity under which distributions are made as of the date distributions commence in accordance with the provisions of A-1 (and if applicable A-4) of this section, distributions will be considered to have begun on the actual commencement date for purposes of section 401(a)(9)(B)(iv)(II). Consequently, in such case, A-5 of § 1.401(a)(9)-3 and section 401(a)(9)(B)(ii) and (iii) will not apply upon the death of the surviving spouse as though the surviving spouse were the employee. Instead, the annuity distributions must continue to be made, in accordance with the provisions of A-1 (and if applicable A-4) of this section over the remaining period over which distributions commenced (single life or period certain, as applicable).
Q-12. In the case of an annuity contract under an individual account plan from which annuity payments have not commenced to on an irrevocable basis (except for acceleration), how is section 401(a)(9) satisfied with respect to the employee's or beneficiary's entire interest under the annuity contract for the period prior to the date annuity payments so commence?
A-12. Prior to the date that annuity payments commence on an irrevocable basis (except for acceleration) under an individual account plan from an annuity contract, the interest of an employee or beneficiary under that contract is treated as an individual account for purposes of section 401(a)(9). Thus, the required minimum
Q-1. If an amount is distributed by one plan (distributing plan) and is rolled over to another plan, is the required minimum distribution under the distributing plan affected by the rollover?
A-1. No, if an amount is distributed by one plan and is rolled over to another plan, the amount distributed is still treated as a distribution by the distributing plan for purposes of section 401(a)(9), notwithstanding the rollover. See A-1 of § 1.402(c)-2 for the definition of a rollover and A-7 of § 1.402(c)-2 for rules for determining the portion of any distribution that is not eligible for rollover because it is a required minimum distribution.
Q-2. If an amount is distributed by one plan (distributing plan) and is rolled over to another plan (receiving plan), how are the benefit and the required minimum distribution under the receiving plan affected?
A-2. If an amount is distributed by one plan (distributing plan) and is rolled over to another plan (receiving plan), the benefit of the employee under the receiving plan is increased by the amount rolled over for purposes of determining the required minimum distribution for the calendar year immediately following the calendar year in which the amount rolled over is distributed. If the amount rolled over is received after the last valuation date in the calendar year under the receiving plan, the benefit of the employee as of such valuation date, adjusted in accordance with A-3 of § 1.401(a)(9)-5, will be increased by the rollover amount valued as of the date of receipt. In addition, if the amount rolled over is received in a different calendar year from the calendar year in which it is distributed, the amount rolled over is deemed to have been received by the receiving plan in the calendar year in which it was distributed.
Q-3. In the case of a transfer of an amount of an employee's benefit from one plan (transferor plan) to another plan (transferee plan), are there any special rules for satisfying section 401(a)(9) or determining the employee's benefit under the transferor plan?
A-3. (a) In the case of a transfer of an amount of an employee's benefit from one plan (transferor plan) to another (transferee plan), the transfer is not treated as a distribution by the transferor plan for purposes of section 401(a)(9). Instead, the benefit of the employee under the transferor plan is decreased by the amount transferred. However, if any portion of an employee's benefit is transferred in a distribution calendar year with respect to that employee, in order to satisfy section 401(a)(9), the transferor plan must determine the amount of the required minimum distribution with respect to that employee for the calendar year of the transfer using the employee's benefit under the transferor plan before the transfer. Additionally, if any portion of an employee's benefit is transferred in the employee's second distribution calendar year but on or before the employee's required beginning date, in order to satisfy section 401(a)(9), the transferor plan must determine the amount of the minimum distribution requirement for the employee's first distribution calendar year based on the employee's benefit under the transferor plan before the transfer. The transferor plan may satisfy the minimum distribution requirement for the calendar year of the transfer (and the prior year if applicable) by segregating the amount which must be distributed from the employee's benefit and not transferring that amount. Such amount may be retained by the transferor plan and must be distributed on or before the date required under section 401(a)(9).
(b) For purposes of determining any required minimum distribution for the calendar year immediately following the calendar year in which the transfer occurs, in the case of a transfer after the last valuation date for the calendar year of the transfer under the transferor plan, the benefit of the employee as of such valuation date, adjusted in accordance with A-3 of § 1.401(a)(9)-5, will be decreased by the amount transferred, valued as of the date of the transfer.
Q-4. If an amount of an employee's benefit is transferred from one plan (transferor plan) to another plan (transferee plan), how are the benefit and the required minimum distribution under the transferee plan affected?
A-4. In the case of a transfer from one plan (transferor plan) to another (transferee plan), the benefit of the employee under the transferee plan is increased by the amount transferred in the same manner as if it were a plan receiving a rollover contribution under A-2 of this section.
Q-5. How is a spinoff, merger or consolidation (as defined in § 1.414(
A-5. For purposes of determining an employee's benefit and required minimum distribution under section 401(a)(9), a spinoff, a merger, or a consolidation (as defined in § 1.414(
Q-1. What distribution rules apply if an employee is a participant in more than one plan?
A-1. If an employee is a participant in more than one plan, the plans in which the employee participates are not permitted to be aggregated for purposes of testing whether the distribution requirements of section 401(a)(9) are met. The distribution of the benefit of the employee under each plan must separately meet the requirements of section 401(a)(9). For this purpose, a plan described in section 414(k) is treated as two separate plans, a defined contribution plan to the extent benefits are based on an individual account and a defined benefit plan with respect to the remaining benefits.
Q-2. If an employee's benefit under a defined contribution plan is divided into separate accounts (or under a defined benefit plan is divided into segregated shares), do the distribution rules in section 401(a)(9) and these regulations apply separately to each separate account?
A-2. (a)
(2) If the employee's benefit in a defined contribution plan is divided into separate accounts and the beneficiaries with respect to one separate account differ from the beneficiaries with respect to the other separate accounts of the employee under the plan, for years subsequent to the calendar year containing the date on which the separate accounts were established, or date of death if later, such separate account under the plan is not aggregated with the other separate accounts under the plan in order to determine whether the distributions from such separate account under the plan satisfy section 401(a)(9). Instead, the rules in section 401(a)(9) separately apply to such separate account under the plan. However, the applicable distribution period for each such separate account is determined disregarding the other beneficiaries of the employee's benefit only if the separate account is established on a date no later than the last day of the year following the calendar year of the employee's death. For example, if, in the case of a distribution described in section 401(a)(9)(B)(iii) and (iv), the only beneficiary of a separate account under the plan established on a date no later than the end of the year following the calendar year of the employee's death is the employee's surviving spouse, and beneficiaries other than the surviving spouse are designated with respect to the other separate accounts with respect to the employee, distribution of the spouse's separate account under the plan need not commence until the date determined under the first sentence in A-3(b) of § 1.401(a)(9)-3, even if distribution of the other separate accounts under the plan must commence at an earlier date. Similarly, in the case of a distribution after the death of an employee to which section 401(a)(9)(B)(i) does not apply, distribution from a separate account of an employee established on a date no later than the end of the year following the year of the employee's death may be made over a beneficiary's life expectancy in accordance with section 401(a)(9)(B)(iii) and (iv) even though distributions from other separate accounts under the plan with different beneficiaries are being made in accordance with the 5-year rule in section 401(a)(9)(B)(ii).
(3) A portion of an employee's account balance under a defined contribution plan is permitted to be used to purchase an annuity contract while another portion stays in the account. In that case, the remaining account under the plan must be distributed in accordance with § 1.401(a)(9)-5 in order to satisfy section 401(a)(9) and the annuity payments under the annuity contract must satisfy § 1.401(a)(9)-6T in order to satisfy section 401(a)(9).
(b)
Q-3. What are separate accounts for purposes of section 401(a)(9)?
A-3. For purposes of section 401(a)(9), separate accounts in an employee's account are separate portions of an employee's benefit reflecting the separate interests of the employee's beneficiaries under the plan as of the date of the employee's death for which separate accounting is maintained. The separate accounting must allocate all post-death investment gains and losses, contributions, and forfeitures, for the period prior to the establishment of the separate accounts on a pro rata basis in a reasonable and consistent manner among the separate accounts. However, once the separate accounts are actually established, the separate accounting can provide for separate investments for each separate account under which gains and losses from the investment of the account are only allocated to that account, or investment gain or losses can continue to be allocated among the separate accounts on a pro rata basis. A separate accounting must allocate any post-death distribution to the separate account of the beneficiary receiving that distribution.
Q-4. If a distribution is required to be made to an employee by section 401(a)(9)(A) or is required to be made to a surviving spouse under section 401(a)(9)(B), must the distribution be made even if the employee, or spouse where applicable, fails to consent to a distribution while a benefit is immediately distributable?
A-4. Yes, section 411(a)(11) and section 417(e) (see §§ 1.411(a)(11)-1(c)(2) and 1.417(e)-1(c)) require employee and spousal consent to certain distributions of plan benefits while such benefits are immediately distributable. If an employee's normal retirement age is later than the employee's required beginning date and, therefore, benefits are still immediately distributable, the plan must, nevertheless, distribute plan benefits to the employee (or where applicable, to the spouse) in a manner that satisfies the requirements of section 401(a)(9). Section 401(a)(9) must be satisfied even though the employee (or spouse, where applicable) fails to consent to the distribution. In such a case, the plan may distribute in the form of a qualified joint and survivor annuity (QJSA) or in the form of a qualified preretirement survivor annuity (QPSA), as applicable, and the consent requirements of sections 411(a)(11) and 417(e) are deemed to be satisfied if the plan has made reasonable efforts to obtain consent from the employee (or spouse if applicable) and if the distribution otherwise meets the requirements of section 417. If, because of section 401(a)(11)(B), the plan is not required to distribute in the form of a QJSA to a employee or a QPSA to a surviving spouse, the plan may distribute the required minimum distribution amount to satisfy section 401(a)(9) and the consent requirements of sections 411(a)(11) and 417(e) are deemed to be satisfied if the plan has made reasonable efforts to obtain consent from the employee (or spouse if applicable) and if the distribution otherwise meets the requirements of section 417.
Q-5. Who is an employee's spouse or surviving spouse for purposes of section 401(a)(9)?
A-5. Except as otherwise provided in A-6(a) of this section (in the case of distributions of a portion of an employee's benefit payable to a former spouse of an employee pursuant to a qualified domestic relations order), for purposes of section 401(a)(9), an individual is a spouse or surviving spouse of an employee if such individual is treated as the employee's spouse under applicable state law. In the case of distributions after the death of an employee, for purposes of determining whether, under the life expectancy rule in section 401(a)(9)(B)(iii) and (iv), the provisions of section 401(a)(9)(B)(iv) apply, the spouse of the employee is determined as of the date of death of the employee.
Q-6. In order to satisfy section 401(a)(9), are there any special rules which apply to the distribution of all or a portion of an employee's benefit payable to an alternate payee pursuant to a qualified domestic relations order as defined in section 414(p) (QDRO)?
A-6. (a) A former spouse to whom all or a portion of the employee's benefit is payable pursuant to a QDRO will be treated as a spouse (including a surviving spouse) of the employee for purposes of section 401(a)(9), including the minimum distribution incidental benefit requirement, regardless of whether the QDRO specifically provides that the former spouse is treated as the
(b)(1) If a QDRO provides that an employee's benefit is to be divided and a portion is to be allocated to an alternate payee, such portion will be treated as a separate account (or segregated share) which separately must satisfy the requirements of section 401(a)(9) and may not be aggregated with other separate accounts (or segregated shares) of the employee for purposes of satisfying section 401(a)(9). Except as otherwise provided in paragraph (b)(2) of this A-6, distribution of such separate account allocated to an alternate payee pursuant to a QDRO must be made in accordance with section 401(a)(9). For example, in general, distribution of such account will satisfy section 401(a)(9)(A) if required minimum distributions from such account during the employee's lifetime begin not later than the employee's required beginning date and the required minimum distribution is determined in accordance with § 1.401(a)(9)-5 for each distribution calendar year (using an applicable distribution period determined under A-4 of § 1.401(a)(9)-5 for the employee in the distribution calendar year either using the Uniform Lifetime Table in A-2 of § 1.401(a)(9)-9 or using the joint life expectancy of the employee and a spousal alternate payee in the distribution calendar year if the spousal alternate payee is more than 10 years younger than the employee). The determination of whether distribution from such account after the death of the employee to the alternate payee will be made in accordance with section 401(a)(9)(B)(i) or section 401(a)(9)(B)(ii) or (iii) and (iv) will depend on whether distributions have begun as determined under A-6 of § 1.401(a)(9)-2 (which provides, in general, that distributions are not treated as having begun until the employee's required beginning date even though payments may actually have begun before that date). For example, if the alternate payee dies before the employee and distribution of the separate account allocated to the alternate payee pursuant to the QDRO is to be made to the alternate payee's beneficiary, such beneficiary may be treated as a designated beneficiary for purposes of determining the minimum distribution required from such account after the death of the employee if the beneficiary of the alternate payee is an individual and if such beneficiary is a beneficiary under the plan or specified to or in the plan. Specification in or pursuant to the QDRO is treated as specification to the plan.
(2) Distribution of the separate account allocated to an alternate payee pursuant to a QDRO will satisfy the requirements of section 401(a)(9)(A)(ii) if such account is to be distributed, beginning not later than the employee's required beginning date, over the life of the alternate payee (or over a period not extending beyond the life expectancy of the alternate payee). Also, if the plan permits the employee to elect whether distribution upon the death of the employee will be made in accordance with the 5-year rule in section 401(a)(9)(B)(ii) or the life expectancy rule in section 401(a)(9)(B)(iii) and (iv) pursuant to A-4(c) of § 1.401(a)(9)-3, such election is to be made only by the alternate payee for purposes of distributing the separate account allocated to the alternate payee pursuant to the QDRO. If the alternate payee dies after distribution of the separate account allocated to the alternate payee pursuant to a QDRO has begun (determined under A-6 of § 1.401(a)(9)-2) but before the employee dies, distribution of the remaining portion of that portion of the benefit allocated to the alternate payee must be made in accordance with the rules in § 1.401(a)(9)-5 or 1.401(a)(9)-6T for distributions during the life of the employee. Only after the death of the employee is the amount of the required minimum distribution determined in accordance with the rules of section 401(a)(9)(B).
(c) If a QDRO does not provide that an employee's benefit is to be divided but provides that a portion of an employee's benefit (otherwise payable to the employee) is to be paid to an alternate payee, such portion will not be treated as a separate account (or segregated share) of the employee. Instead, such portion will be aggregated with any amount distributed to the employee and will be treated as having been distributed to the employee for purposes of determining whether section 401(a)(9) has been satisfied with respect to that employee.
Q-7. Will a plan fail to satisfy section 401(a)(9) merely because it fails to distribute an amount otherwise required to be distributed by section 401(a)(9) during the period in which the issue of whether a domestic relations order is a QDRO is being determined?
A-7. A plan will not fail to satisfy section 401(a)(9) merely because it fails to distribute an amount otherwise required to be distributed by section 401(a)(9) during the period in which the issue of whether a domestic relations order is a QDRO is being determined pursuant to section 414(p)(7), provided that the period does not extend beyond the 18-month period described in section 414(p)(7)(E). To the extent that a distribution otherwise required under section 401(a)(9) is not made during this period, any segregated amounts, as defined in section 414(p)(7)(A), will be treated as though the amounts are not vested during the period and any distributions with respect to such amounts must be made under the relevant rules for nonvested benefits described in either A-8 of § 1.401(a)(9)-5 or A-6 of § 1.401(a)(9)-6T, as applicable.
Q-8. Will a plan fail to satisfy section 401(a)(9) where an individual's distribution from the plan is less than the amount otherwise required to satisfy section 401(a)(9) because distributions were being paid under an annuity contract issued by a life insurance company in state insurer delinquency proceedings and have been reduced or suspended by reasons of such state proceedings?
A-8. A plan will not fail to satisfy section 401(a)(9) merely because an individual's distribution from the plan is less than the amount otherwise required to satisfy section 401(a)(9) because distributions were being paid under an annuity contract issued by a life insurance company in state insurer delinquency proceedings and have been reduced or suspended by reasons of such state proceedings. To the extent that a distribution otherwise required under section 401(a)(9) is not made during the state insurer delinquency proceedings, this amount and any additional amount accrued during this period will be treated as though such amounts are not vested during the period and any distributions with respect to such amounts must be made under the relevant rules for nonvested benefits described in either A-8 of § 1.401(a)(9)-5 or A-6 of § 1.401(a)(9)-6T, as applicable.
Q-9. Will a plan fail to qualify as a pension plan within the meaning of section 401(a) solely because the plan permits distributions to commence to an employee on or after April 1 of the calendar year following the calendar year in which the employee attains age 70
A-9. No, a plan will not fail to qualify as a pension plan within the meaning of section 401(a) solely because the plan permits distributions to commence to an employee on or after April 1 of the calendar year following the calendar year in which the employee attains age 70
Q-10. Is the distribution of an annuity contract a distribution for purposes of section 401(a)(9)?
A-10. No, the distribution of an annuity contract is not a distribution for purposes of section 401(a)(9).
Q-11. Will a payment by a plan after the death of an employee fail to be treated as a distribution for purposes of section 401(a)(9) solely because it is made to an estate or a trust?
A-11. A payment by a plan after the death of an employee will not fail to be treated as a distribution for purposes of section 401(a)(9) solely because it is made to an estate or a trust. As a result, the estate or trust which receives a payment from a plan after the death of an employee need not distribute the amount of such payment to the beneficiaries of the estate or trust in accordance with section 401(a)(9)(B). Pursuant to A-3 of § 1.401(a)(9)-4, an estate may not be a designated beneficiary. Thus, pursuant to A-4 of § 1.401(a)(9)-3, distribution to the estate must satisfy the 5-year rule in section 401(a)(9)(B)(iii) if the distribution to the employee had not begun (as defined in A-6 of § 1.401(a)(9)-2) as of the employee's date of death. However, see A-5 and A-6 of § 1.401(a)(9)-4 for provisions under which beneficiaries of a trust with respect to the trust's interest in an employee's benefit are treated as having been designated as beneficiaries of the employee under the plan.
Q-12. Will a plan fail to satisfy section 411(d)(6) if the plan is amended to eliminate the availability of an optional form of benefit to the extent that the optional form does not satisfy section 401(a)(9)?
A-12. No, pursuant to section 411(d)(6)(B), a plan will not fail to satisfy section 411(d)(6) merely because the plan is amended to eliminate the availability of an optional form of benefit to the extent that the optional form does not satisfy section 401(a)(9). (See also A-3 of § 1.401(a)(9)-1, which requires a plan to provide that, notwithstanding any other plan provision, it will not distribute benefits under any option that does not satisfy section 401(a)(9).)
Q-13. Is a plan disqualified merely because it pays benefits under a designation made before January 1, 1984, in accordance with section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA)?
A-13. No, even though the distribution requirements added by TEFRA were retroactively repealed by the Tax Reform Act of 1984 (TRA of 1984), the transitional election rule in section 242(b) of TEFRA was preserved. Satisfaction of the spousal consent requirements of section 417(a) and (e) (added by the Retirement Equity Act of 1984) will not be considered a revocation of the pre-1984 designation. However, sections 401(a)(11) and 417 must be satisfied with respect to any distribution subject to those sections. The election provided in section 242(b) of TEFRA is hereafter referred to as a section 242(b)(2) election.
Q-14. If an amount is transferred from one plan (transferor plan) to another plan (transferee plan), may the transferee plan distribute the amount transferred in accordance with a section 242(b)(2) election made under either the transferor plan or under the transferee plan?
A-14. (a) If an amount is transferred from one plan (transferor plan) to another plan (transferee plan), the amount transferred may be distributed in accordance with a section 242(b)(2) election made under the transferor plan if the employee did not elect to have the amount transferred and if the amount transferred is separately accounted for by the transferee plan. However, only the benefit attributable to the amount transferred, plus earnings thereon, may be distributed in accordance with the section 242(b)(2) election made under the transferor plan. If the employee elected to have the amount transferred, the transfer will be treated as a distribution and rollover of the amount transferred for purposes of this section.
(b) In the case in which an amount is transferred from one plan to another plan, the amount transferred may not be distributed in accordance with a section 242(b)(2) election made under the transferee plan. If a section 242(b)(2) election was made under the transferee plan, the amount transferred must be separately accounted for. If the amount transferred is not separately accounted for under the transferee plan, the section 242(b)(2) election under the transferee plan is revoked and section 401(a)(9) will apply to subsequent distributions by the transferee plan.
(c) A merger, spinoff, or consolidation, as defined in § 1.414(l)-1(b), will be treated as a transfer for purposes of the section 242(b)(2) election.
Q-15. If an amount is distributed by one plan (distributing plan) and rolled over into another plan (receiving plan), may the receiving plan distribute the amount rolled over in accordance with a section 242(b)(2) election made under either the distributing plan or the receiving plan?
A-15. No, if an amount is distributed by one plan (distributing plan) and rolled over into another plan (receiving plan), the receiving plan must distribute the amount rolled over in accordance with section 401(a)(9) whether or not the employee made a section 242(b)(2) election under the distributing plan. Further, if the amount rolled over was not distributed in accordance with the election, the election under the distributing plan is revoked and section 401(a)(9) will apply to all subsequent distributions by the distributing plan. Finally, if the employee made a section 242(b)(2) election under the receiving plan and such election is still in effect, the amount rolled over must be separately accounted for under the receiving plan and distributed in accordance with section 401(a)(9). If amounts rolled over are not separately accounted for, any section 242(b)(2) election under the receiving plan is revoked and section 401(a)(9) will apply to subsequent distributions by the receiving plan.
Q-16. May a section 242(b)(2) election be revoked after the date by which distributions are required to commence in order to satisfy section 401(a)(9) and this section of the regulations?
A-16. Yes, a section 242(b)(2) election may be revoked after the date by which distributions are required to commence in order to satisfy section 401(a)(9) and this section of the regulations. However, if the section 242(b)(2) election is revoked after the date by which distributions are required to commence in order to satisfy section 401(a)(9) and this section of the regulations and the total amount of the distributions which would have been required to be made prior to the date of the revocation in order to satisfy section 401(a)(9), but for the section 242(b)(2) election, have not been made, the plan must distribute by the end of the calendar year following the calendar year in which the revocation occurs the total amount not yet distributed which was required to have been distributed to satisfy the requirements of section 401(a)(9) and continue distributions in accordance with such requirements.
Q-1. What is the life expectancy for an individual for purposes of determining required minimum distributions under section 401(a)(9)?
A-1 The following table, referred to as the Single Life Table, is used for
Q-2. What is the applicable distribution period for an individual account for purposes of determining required minimum distributions during an employee's lifetime under section 401(a)(9)?
A-2.
Q-3. What is the joint life and last survivor expectancy of an individual and beneficiary for purposes of determining required minimum distributions under section 401(a)(9)?
A-3. The following table, referred to as the Joint and Last Survivor Table, is used for determining the joint and last survivor life expectancy of two individuals:
Q-4. May the tables under this section be changed?
A-4. The Single Life Table, Uniform Lifetime Table and Joint and Last Survivor Table provided in A-1 through A-3 of this section may be changed by the Commissioner in revenue rulings, notices, and other guidance published in the Internal Revenue Bulletin. See § 601.601(d)(2)(ii)(b) of this chapter.
Q-1. Are section 403(b) contracts subject to the distribution rules provided in section 401(a)(9)?
A-1. (a) Yes, section 403(b) contracts are subject to the distribution rules provided in section 401(a)(9). For purposes of this section, the term
(b) For purposes of applying the distribution rules in section 401(a)(9), section 403(b) contracts will be treated as individual retirement annuities described in section 408(b) and individual retirement accounts described in section 408(a) (IRAs). Consequently, except as otherwise provided in paragraph (c) of this A-1, the distribution rules in section 401(a)(9) will be applied to section 403(b) contracts in accordance with the provisions in § 1.408-8 for purposes of determining required minimum distributions for calendar years beginning on or after January 1, 2003.
(c)(1) The required beginning date for purposes of section 403(b)(10) is April 1 of the calendar year following the later of the calendar year in which the employee attains 70
(2) The rule in A-5 of § 1.408-8 does not apply to section 403(b) contracts. Thus, the surviving spouse of an employee is not permitted to treat a section 403(b) contract of which the spouse is the sole beneficiary as the spouse's own section 403(b) contract.
(3) Annuity payments provided with respect to retirement income accounts described in section 403(b)(9) will not fail to satisfy the requirements of A-4 of § 1.401(a)(9)-6T merely because the payments are not made under an annuity contract purchased from an insurance company, provided the relationship between the annuity payments and the retirement income accounts is not inconsistent with any rules prescribed by the Commissioner in revenue rulings, notices, and other guidance published in the Internal Revenue Bulletin. See § 601.601(d)(2)(ii)(b) of this chapter.
Q-2. To what benefits under section 403(b) contracts do the distribution rules provided in section 401(a)(9) apply?
A-2. (a) The distribution rules provided in section 401(a)(9) apply to
(b) The issuer or custodian of the section 403(b) contract must keep records that enable it to identify the pre-'87 account balance and subsequent changes as set forth in paragraph (b) of this A-2 and provide such information upon request to the relevant employee or beneficiaries with respect to the contract. If the issuer or custodian does not keep such records, the entire account balance will be treated as subject to section 401(a)(9).
(c) In applying the distribution rules in section 401(a)(9), only the post-'86 account balance is used to calculate the required minimum distribution for a calendar year. The amount of any distribution from a contract will be treated as being paid from the post-'86 account balance to the extent the distribution is required to satisfy the minimum distribution requirement with respect to that contract for a calendar year. Any amount distributed in a calendar year from a contract in excess of the required minimum distribution for a calendar year with respect to that contract will be treated as paid from the pre-'87 account balance, if any, of that contract.
(d) If an amount is distributed from the pre-'87 account balance and rolled over to another section 403(b) contract, the amount will be treated as part of the post-'86 account balance in that second contract. However, if the pre-'87 account balance under a section 403(b) contract is directly transferred to another section 403(b) contract, the amount transferred retains its character as a pre-'87 account balance, provided the issuer of the transferee contract satisfies the recordkeeping requirements of paragraph (b) of this A-2.
(e) The distinction between the pre-'87 account balance and the post-'86 account balance provided for under this A-2 has no relevance for purposes of determining the portion of a distribution that is includible in income under section 72.
Q-3. Must the pre-'87 account balance be distributed in accordance with the incidental benefit requirement?
A-3. Yes, the pre-'87 account balance must be distributed in accordance with the incidental benefit requirement of § 1.401-1(b)(1)(i). Distributions attributable to the pre-'87 account balance are treated as satisfying this requirement if all distributions from the section 403(b) contract (including distributions attributable to the post-'86 account balance) satisfy the requirements of § 1.401-1(b)(1)(i) without regard to this section, and distributions attributable to the post-'86 account balance satisfy the rules of this section. Alternatively, distributions attributable to the pre-'87 account balance are treated as satisfying the incidental benefit requirement if all distributions from the section 403(b) contract (including distributions attributable to both the pre-'87 account balance and the post-'86 account balance) satisfy the rules of this section.
Q-4. Is the required minimum distribution from one section 403(b) contract of an employee permitted to be distributed from another section 403(b) contract in order to satisfy section 401(a)(9)?
A-4. Yes, as provided in paragraph (b) of A-1 of this section, the distribution rules in section 401(a)(9) will be applied to section 403(b) contracts in accordance with the provisions in § 1.408-8. Thus, the required minimum distribution must be separately determined for each section 403(b) contract of an employee. However, as provided in A-9 of § 1.408-8 with respect to IRAs, such amounts may then be totaled and the total distribution taken from any one or more of the individual section 403(b) contracts. However, consistent with the rules in A-9 of § 1.408-8, only amounts in section 403(b) contracts that an individual holds as an employee may be aggregated. Amounts in section 403(b) contracts that an individual holds as a beneficiary of the same decedent may be aggregated, but such amounts may not be aggregated with amounts held in section 403(b) contracts that the individual holds as the employee or as the beneficiary of another decedent. Distributions from section 403(b) contracts or accounts will not satisfy the minimum distribution requirements for IRAs, nor will distributions from IRAs satisfy the minimum distribution requirements for section 403(b) contracts or accounts.
The following questions and answers relate to the distribution rules for IRAs provided in sections 408(a)(6) and 408(b)(3).
Q-1. Is an IRA subject to the distribution rules provided in section 401(a)(9) for qualified plans?
A-1. (a) Yes, an IRA is subject to the required minimum distribution rules provided in section 401(a)(9). In order to satisfy section 401(a)(9) for purposes of determining required minimum distributions for calendar years beginning on or after January 1, 2003, the rules of §§ 1.401(a)(9)-1 through 1.401(a)(9)-9 and 1.401(a)(9)-6T for defined contribution plans must be applied, except as otherwise provided in this section. For example, whether the 5-year rule or the life expectancy rule applies to distributions after death occurring before the IRA owner's required beginning date is determined in accordance with § 1.401(a)(9)-3 and the rules of § 1.401(a)(9)-4 apply for purposes of determining an IRA owner's designated beneficiary. Similarly, the amount of the minimum distribution required for each calendar year from an individual account is determined in accordance with § 1.401(a)(9)-5. For purposes of this section, the term
(b) For purposes of applying the required minimum distribution rules in §§ 1.401(a)(9)-1 through 1.401(a)(9)-9 and 1.401(a)(9)-6T for qualified plans, the IRA trustee, custodian, or issuer is treated as the plan administrator, and the IRA owner is substituted for the employee.
(c) See A-14 and A-15 of § 1.408A-6 for rules under section 401(a)(9) that apply to a Roth IRA.
Q-2. Are IRAs that receive employer contributions under a simplified employee pension (defined in section 408(k)) or a SIMPLE IRA (defined in section 408(p)) treated as IRAs for purposes of section 401(a)(9)?
A-2. Yes, IRAs that receive employer contributions under a simplified employee pension (defined in section 408(k)) or a SIMPLE plan (defined in section 408(p)) are treated as IRAs, rather than employer plans, for purposes of section 401(a)(9) and are, therefore, subject to the distribution rules in this section.
Q-3. In the case of distributions from an IRA, what does the term
A-3. In the case of distributions from an IRA, the term
Q-4. What portion of a distribution from an IRA is not eligible for rollover because the amount is a required minimum distribution?
A-4. The portion of a distribution that is a required minimum distribution from an IRA and thus not eligible for rollover is determined in the same manner as provided in A-7 of § 1.402(c)-2 for distributions from qualified plans. For example, if a minimum distribution is required under section 401(a)(9) for a calendar year, an amount distributed during a calendar year from an IRA is treated as a required minimum distribution under section 401(a)(9) to the extent that the total required minimum distribution for the year under section 401(a)(9) for that IRA has not been satisfied. This requirement may be satisfied by a distribution from the IRA or, as permitted under A-9 of this section, from another IRA.
Q-5. May an individual's surviving spouse elect to treat such spouse's entire interest as a beneficiary in an individual's IRA upon the death of the individual (or the remaining part of such interest if distribution to the spouse has commenced) as the spouse's own account?
A-5. (a) The surviving spouse of an individual may elect, in the manner described in paragraph (b) of this A-5, to treat the spouse's entire interest as a beneficiary in an individual's IRA (or the remaining part of such interest if distribution thereof has commenced to the spouse) as the spouse's own IRA. This election is permitted to be made at any time after the individual's date of death. In order to make this election, the spouse must be the sole beneficiary of the IRA and have an unlimited right to withdraw amounts from the IRA. If a trust is named as beneficiary of the IRA, this requirement is not satisfied even if the spouse is the sole beneficiary of the trust. If the surviving spouse makes the election, the required minimum distribution for the calendar year of the election and each subsequent calendar year is determined under section 401(a)(9)(A) with the spouse as IRA owner and not section 401(a)(9)(B) with the surviving spouse as the deceased IRA owner's beneficiary. However, if the election is made in the calendar year containing the IRA owner's death, the spouse is not required to take a required minimum distribution as the IRA owner for that calendar year. Instead, the spouse is required to take a required minimum distribution for that year, determined with respect to the deceased IRA owner under the rules of A-4(a) of § 1.401(a)(9)-5, to the extent such a distribution was not made to the IRA owner before death.
(b) The election described in paragraph (a) of this A-5 is made by the surviving spouse redesignating the account as an account in the name of the surviving spouse as IRA owner rather than as beneficiary. Alternatively, a surviving spouse eligible to make the election is deemed to have made the election if, at any time, either of the following occurs —
(1) Any amount in the IRA that would be required to be distributed to the surviving spouse as beneficiary under section 401(a)(9)(B) is not distributed within the time period required under section 401(a)(9)(B); or
(2) Any additional amount is contributed to the IRA which is subject, or deemed to be subject, to the lifetime distribution requirements of section 401(a)(9)(A).
(c) The result of an election described in paragraph (b) of this A-5 is that the surviving spouse shall then be considered the IRA owner for whose benefit the trust is maintained for all purposes under the Internal Revenue Code (e.g., section 72(t)).
Q-6. How is the benefit determined for purposes of calculating the required minimum distribution from an IRA?
A-6. For purposes of determining the minimum distribution required to be made from an IRA in any calendar year, the account balance of the IRA as of December 31 of the calendar year immediately preceding the calendar year for which distributions are required to be made is substituted in A-3 of § 1.401(a)(9)-5 for the account balance of the employee. Except as provided in A-7 and A-8 of this section, no adjustments are made for contributions or distributions after that date.
Q-7. What rules apply in the case of a rollover to an IRA of an amount distributed by a qualified plan or another IRA?
A-7. If the surviving spouse of an employee rolls over a distribution from a qualified plan, such surviving spouse may elect to treat the IRA as the spouse's own IRA in accordance with the provisions in A-5 of this section. In the event of any other rollover to an IRA of an amount distributed by a qualified plan or another IRA, the rules in § 1.401(a)(9)-7 will apply for purposes of determining the account balance for the receiving IRA and the required minimum distribution from the receiving IRA. However, because the value of the account balance is determined as of December 31 of the year preceding the year for which the required minimum distribution is being determined and not as of a valuation date in the preceding year, the account balance of the receiving IRA is only adjusted if the amount is not received in the calendar year in which the amount rolled over is distributed. In that case, for purposes of determining the required minimum distribution for the calendar year in which such amount is actually received, the account balance of the receiving IRA as of December 31 of the preceding year must be adjusted by the amount received in accordance with A-2 of § 1.401(a)(9)-7.
Q-8. What rules apply in the case of a transfer (including a recharacterization) from one IRA to another?
A-8. (a)
(b)
Q-9. Is the required minimum distribution from one IRA of an owner permitted to be distributed from another IRA in order to satisfy section 401(a)(9)?
A-9. Yes, the required minimum distribution must be calculated separately for each IRA. The separately calculated amounts may then be totaled and the total distribution taken from any one or more of the individual's IRAs under the rules set forth in this A-9. Generally, only amounts in IRAs that an individual holds as the IRA owner may
Q-10. Is any reporting required by the trustee, custodian, or issuer of an IRA with respect to the minimum amount that is required to be distributed from that IRA?
A-10. Yes, the trustee, custodian, or issuer of an IRA is required to report information with respect to the minimum amount required to be distributed from the IRA for each calendar year to individuals or entities, at the time, and in the manner, prescribed by the Commissioner in revenue rulings, notices, and other guidance published in the Internal Revenue Bulletin (see § 601.601(d)(2)(ii)(b) of this chapter) as well as the applicable Federal tax forms and accompanying instructions.
Q-11. Which amounts distributed from an IRA are taken into account in determining whether section 401(a)(9) is satisfied?
A-11. (a)
(b) Amounts not taken into account. The following amounts are not taken into account in determining whether the required minimum amount with respect to an IRA for a calendar year has been distributed—
(1) Contributions returned pursuant to section 408(d)(4), together with the income allocable to these contributions;
(2) Contributions returned pursuant to section 408(d)(5);
(3) Corrective distributions of excess simplified employee pension contributions under section 408(k)(6)(C), together with the income allocable to these distributions; and
(4) Similar items designated by the Commissioner in revenue rulings, notices, and other guidance published in the Internal Revenue Bulletin. See § 601.601(d)(2)(ii)(b) of this chapter.
26 U.S.C. 7805 * * *
Section 54.4974-2 also issued under 26 U.S.C. 4974. * * *
Q-1. Is any tax imposed on a payee under any qualified retirement plan or any eligible deferred compensation plan (as defined in section 457(b)) to whom an amount is required to be distributed for a taxable year if the amount distributed during the taxable year is less than the required minimum distribution?
A-1. Yes, if the amount distributed to a payee under any qualified retirement plan or any eligible deferred compensation plan (as defined in section 457(b)) for a calendar year is less than the required minimum distribution for such year, an excise tax is imposed on such payee under section 4974 for the taxable year beginning with or within the calendar year during which the amount is required to be distributed. The tax is equal to 50 percent of the amount by which such required minimum distribution exceeds the actual amount distributed during the calendar year. Section 4974 provides that this tax shall be paid by the payee. For purposes of section 4974, the term required minimum distribution means the minimum distribution amount required to be distributed pursuant to section 401(a)(9), 403(b)(10), 408(a)(6), 408(b)(3), or 457(d)(2), as the case may be, and the regulations thereunder. Except as otherwise provided in A-6 of this section, the required minimum distribution for a calendar year is the required minimum distribution amount required to be distributed during the calendar year. A-6 of this section provides a special rule for amounts required to be distributed by an employee's (or individual's) required beginning date.
A-2. For purposes of section 4974, each of the following is a qualified retirement plan—
(a) A plan described in section 401(a) which includes a trust exempt from tax under section 501(a);
(b) An annuity plan described in section 403(a);
(c) An annuity contract, custodial account, or retirement income account described in section 403(b);
(d) An individual retirement account described in section 408(a) (including a Roth IRA described in section 408A);
(e) An individual retirement annuity described in section 408(b) (including a Roth IRA described in section 408A); or
(f) Any other plan, contract, account, or annuity that, at any time, has been treated as a plan, account, or annuity described in paragraphs (a) through (e) of this A-2, whether or not such plan, contract, account, or annuity currently satisfies the applicable requirements for such treatment.
Q-3. If a payee's interest under a qualified retirement plan is in the form of an individual account, how is the required minimum distribution for a given calendar year determined for purposes of section 4974?
A-3. (a)
(1) Section 401(a)(9) and §§ 1.401(a)(9)-1 through 1.401(a)(9)-5 and 1.401(a)(9)-7 through 1.401(a)(9)-9 in the case of a plan described in section 401(a) which includes a trust exempt under section 501(a) or an annuity plan described in section 403(a);
(2) Section 403(b)(10) and § 1.403(b)-3 (in the case of an annuity contract, custodial account, or retirement income account described in section 403(b));
(3) Section 408(a)(6) or (b)(3) and § 1.408-8 (in the case of an individual retirement account or annuity described in section 408(a) or (b)); or
(4) Section 457(d) in the case of an eligible deferred compensation plan (as defined in section 457(b)).
(b)
(c)
Q-4. If a payee's interest in a qualified retirement plan is being distributed in the form of an annuity, how is the amount of the required minimum distribution determined for purposes of section 4974?
A-4. If a payee's interest in a qualified retirement plan is being distributed in the form of an annuity (either directly from the plan, in the case of a defined benefit plan, or under an annuity contract purchased from an insurance company), the amount of the required minimum distribution for purposes of section 4974 will be determined as follows:
(a)
(b)
(1) If the qualified retirement plan under which distributions are being made is a defined benefit plan, the minimum distribution amount required to be distributed each year will be the amount which would have been distributed under the plan if the distribution option under which distributions to the payee were being made was the following permissible annuity distribution option:
(i) In the case of distributions commencing before the death of the employee, if there is a designated beneficiary under the impermissible annuity distribution option for purposes of section 401(a)(9), the permissible annuity distribution option is the joint and survivor annuity option under the plan for the lives of the employee and the designated beneficiary that provides for the greatest level amount payable to the employee determined on an annual basis. If the plan does not provide such an option or there is no designated beneficiary under the impermissible distribution option for purposes of section 401(a)(9), the permissible annuity distribution option is the life annuity option under the plan payable for the life of the employee in level amounts with no survivor benefit.
(ii) In the case of distributions commencing after the death of the employee, if there is a designated beneficiary under the impermissible annuity distribution option for purposes of section 401(a)(9), the permissible annuity distribution option is the life annuity option under the plan payable for the life of the designated beneficiary in level amounts. If there is no designated beneficiary, the 5-year rule in section 401(a)(9)(B)(ii) applies. See paragraph (b)(3) of this A-4. The determination of whether or not there is a designated beneficiary and the determination of which designated beneficiary's life is to be used in the case of multiple beneficiaries will be made in accordance with § 1.401(a)(9)-4 and A-7 of § 1.401(a)(9)-5. If the defined benefit plan does not provide for distribution in the form of the applicable permissible distribution option, the required minimum distribution for each calendar year will be an amount as determined by the Commissioner.
(2) If the qualified retirement plan under which distributions are being made is a defined contribution plan and the impermissible annuity distribution option is an annuity contract purchased from an insurance company, the minimum distribution amount required to be distributed each year will be the amount that would have been distributed in the form of an annuity contract under the permissible annuity distribution option under the plan determined in accordance with paragraph (b)(1) of this A-4 for defined benefit plans. If the defined contribution plan does not provide the applicable permissible annuity distribution option, the required minimum distribution for each calendar year will be the amount that would have been distributed under an annuity described in paragraph (b)(2)(i) or (ii) of this A-4 purchased with the employee's or individual's account used to purchase the annuity contract that is the impermissible annuity distribution option.
(i) In the case of distributions commencing before the death of the employee, if there is a designated beneficiary under the impermissible annuity distribution option for purposes of section 401(a)(9), the annuity is a joint and survivor annuity for the lives of the employee and the designated beneficiary which provides level annual payments and which would have been a permissible annuity distribution option. However, the amount of the periodic payment which would have been payable to the survivor will be the applicable percentage under the table in A-2(c) of § 1.401(a)(9)-6T of the amount of the periodic payment which would have been payable to the employee or individual. If there is no designated beneficiary under the impermissible distribution option for purposes of section 401(a)(9), the annuity is a life annuity for the life of the employee with no survivor benefit which provides level annual payments and which would have been a permissible annuity distribution option.
(ii) In the case of a distribution commencing after the death of the employee, if there is a designated beneficiary under the impermissible annuity distribution option for purposes of section 401(a)(9), the annuity option is a life annuity for the life of the designated beneficiary which provides
(3) If the 5-year rule in section 401(a)(9)(B)(ii) applies to the distribution to the payee under the contract (or distribution option), no amount is required to be distributed to satisfy the applicable enumerated section in paragraph (a) of this A-4 until the calendar year which contains the date 5 years after the date of the employee's death. For the calendar year which contains the date 5 years after the employee's death, the required minimum distribution amount required to be distributed to satisfy the applicable enumerated section is the payee's entire remaining interest in the annuity contract (or under the plan in the case of distributions from a defined benefit plan).
(4) If the plan provides that the required beginning date for purposes of section 401(a)(9) for all employees is April 1 of the calendar year following the calendar year in which the employee attained age 70
Q-5. If there is any remaining benefit with respect to an employee (or IRA owner) after any calendar year in which the entire remaining benefit is required to be distributed under section 401(a)(9), what is the amount of the required minimum distribution for each calendar year subsequent to such calendar year?
A-5. If there is any remaining benefit with respect to an employee (or IRA owner) after the calendar year in which the entire remaining benefit is required to be distributed, the required minimum distribution for each calendar year subsequent to such calendar year is the entire remaining benefit.
Q-6. With respect to which calendar year is the excise tax under section 4974 imposed in the case in which the amount not distributed is an amount required to be distributed by April 1 of a calendar year (by the employee's or individual's required beginning date)?
A-6. In the case in which the amount not paid is an amount required to be paid by April 1 of a calendar year, such amount is a required minimum distribution for the previous calendar year, i.e., for the employee's or the individual's first distribution calendar year. However, the excise tax under section 4974 is imposed for the calendar year containing the last day by which the amount is required to be distributed, i.e., the calendar year containing the employee's or individual's required beginning date, even though the preceding calendar year is the calendar year for which the amount is required to be distributed. There is also a required minimum distribution for the calendar year which contains the employee's or individual's required beginning date. Such distribution is also required to be made during the calendar year which contains the employee's or individual's required beginning date.
Q-7. Are there any circumstances when the excise tax under section 4974 for a taxable year may be waived?
A-7. (a)
(1) The shortfall described in section 4974(a) in the amount distributed in any taxable year was due to reasonable error; and
(2) Reasonable steps are being taken to remedy the shortfall.
(b)
(1) The payee described in section 4974(a) is an individual who is the sole beneficiary and whose required minimum distribution amount for a calendar year is determined under the life expectancy rule described in § 1.401(a)(9)-3 A-3 in the case of an employee's or individual's death before the employee's or individual's required beginning date; and
(2) The employee's or individual's entire benefit to which that beneficiary is entitled is distributed by the end of the fifth calendar year following the calendar year that contains the employee's or individual's date of death.
26 U.S.C. 7808.
(b) * * *
Environmental Protection Agency (EPA).
Review of regulations; request for comments.
The Safe Drinking Water Act (SDWA) requires the United States Environmental Protection Agency (EPA) to conduct a periodic review of existing National Primary Drinking Water Regulations (NPDWRs). EPA is requesting public comment on the results of its review of 69 NPDWRs that were established prior to 1997, including 68 chemical NPDWRs and the Total Coliform Rule (TCR). The intended purpose of the review is to identify those NPDWRs for which current health risk assessments, changes in technology, and/or other factors, provide a health or technical basis to support a regulatory revision that will improve or strengthen public health protection. Based on its review, and pending an evaluation of public comments, the Agency preliminarily believes that the 68 chemical NPDWRs remain appropriate at this time, and that the TCR should be revised.
EPA must receive public comments on this action by June 17, 2002.
Please send your comments to the W-01-14 Comments Clerk. Submit electronic comments to:
For technical inquiries contact: Judy Lebowich, (202) 564-4884, e-mail:
EPA will accept written or electronic comments (please do not send both). EPA prefers electronic comments. Commenters should use a separate paragraph for each issue discussed. No facsimiles (faxes) will be accepted. Commenters who want EPA to acknowledge receipt of their comments should also send a self-addressed, stamped envelope. If you submit written comments, please submit an original and three copies of your comments and enclosures (including references).
Electronic comments must be submitted in WordPerfect 8 (or an older version) or ASCII file format. Compressed or zipped files will not be accepted. You may file electronic comments on this action online at many Federal Depository Libraries.
The Agency's response-to-comments document for the final decision will address the comments received on this action, and the response-to-comments document will be made available in the docket.
The docket is available for inspection from 9:00 a.m. to 4:00 p.m., Monday through Friday, excluding legal holidays, at the Water Docket, East Tower Basement (EB Room 57), Waterside Mall, USEPA, 401 M Street, SW; Washington, DC. For access to docket (Docket Number W-01-14) materials, please call (202) 260-3027 between 9:00 a.m. and 3:30 p.m., Eastern Time, Monday through Friday, to schedule an appointment.
This action itself does not impose any requirements on anyone. Instead, it notifies interested parties of EPA's preliminary revise/not revise decisions for 69 NPDWRs.
Under the SDWA, as amended in 1996, EPA must periodically review existing national primary drinking water regulations (NPDWRs) and, if appropriate, revise them. Section 1412(b)(9) of SDWA states:
The Administrator shall, not less often than every 6 years, review and revise, as appropriate, each national primary drinking water regulation promulgated under this title. Any revision of a national primary drinking water regulation shall be promulgated in accordance with this section, except that each revision shall maintain, or provide for greater, protection of the health of persons.
While the Agency expects that modifications to the protocol will be made in subsequent six-year reviews to address changing circumstances, the Agency expects to use the framework developed for the current review as the starting point. EPA, therefore, is seeking public comment on the protocol that has been applied to the current review.
EPA plans to publish its final findings with respect to the initial review of these 69 NPDWRs in the
In addition to these 69 NPDWRs, there are additional pre-1997 NPDWRs, which are being or have been reviewed separately from today's action. Section III explains how the Agency plans to satisfy the Six-Year Review requirement for those regulations. In most cases, EPA has performed or is performing the review in conjunction with recent or ongoing rulemakings. NPDWRs published after the 1996 SDWA Amendments will be reviewed as a part of the 2002-2008 review cycle.
Stakeholders include:
• The general public;
• Congress;
• Other Federal agencies;
• State, Tribal, and local officials;
• Public health/health care providers;
• Public interest groups;
• Public water suppliers;
• National trade associations;
• Environmental groups;
• Manufacturers; and
• Agricultural producers.
EPA involved stakeholders by: holding a stakeholder meeting; participating in national meetings, workshops, and technical forums; meeting informally with associations and technical experts; posting information on the Office of Ground Water and Drinking Water's (OGWDW's) web page (
EPA invited representatives from State and Tribal communities, public water systems (PWSs), public health organizations, academia, environmental and public interest groups, engineering firms, and other stakeholders to a stakeholder meeting in Washington, DC, in November 1999 (64 FR 55711, October 14, 1999 (USEPA, 1999c)). Approximately 50 participants attended, including representatives from the invited groups. EPA discussed its preliminary strategy for the Six-Year Review and invited stakeholder comment. Stakeholders generally agreed that EPA had identified the appropriate key elements for the review; however, in some cases, stakeholders suggested that EPA needed to be more proactive in seeking out new information that might affect the regulatory decision (USEPA, 1999e). For more detailed information about this stakeholder meeting, the docket for this action (Docket Number W-01-14) contains the stakeholder meeting discussion papers, the agenda, the participant list, presentation materials, and an executive meeting summary which includes the specific comments and questions posed by stakeholders. The executive meeting summary is also available on EPA's drinking water web page,
In the Spring of 2000, the National Drinking Water Advisory Council (NDWAC) formed a working group to develop recommendations regarding the process the Agency should apply to conduct a periodic and systematic review of existing NPDWRs. The Working Group held two meetings and a conference call during June through September 2000 (USEPA, 2000b; USEPA, 2000c; USEPA, 2000d). The NDWAC approved the Working Group's recommendations in November 2000 and formally provided them to EPA in December 2000 (NDWAC, 2000). The NDWAC recommended that EPA's review include consideration of five key elements, as appropriate: health effects, analytical and treatment feasibility, implementation-related issues, occurrence and exposure, and economic impacts. The NDWAC suggested that the Agency conduct an initial screening review of each NPDWR to identify potential candidates for an in-depth analysis. As discussed in more detail in section IV of today's action, EPA has followed the general protocol recommended by the NDWAC.
In addition to the November 1999 stakeholder meeting and consultation with the NDWAC, EPA representatives have delivered presentations at a variety of meetings held by other organizations, including: two American Water Works Association (AWWA) Technical Advisory Workgroup meetings, one held in February 2001 in Washington, DC, and one held in February 2002 in San Diego, CA; a meeting held by the Association of State Drinking Water Administrators (ASDWA) in March 2001 in Alexandria, VA; and the annual AWWA meeting held in Washington, DC in June 2001. At each of these meetings, stakeholders were given the opportunity to comment on the protocol by which EPA was planning to perform the review of existing NPDWRs. EPA received valuable input from stakeholders on the planned protocol.
EPA plans to consult with the SAB Drinking Water Committee on today's action. The Agency will request their review and comment on whether the protocol EPA developed based on the NDWAC recommendations was consistently applied and appropriately documented.
Table III-1 lists the pre-1997 NPDWRs covered by today's action and the rulemaking by which they were originally promulgated. Table III-2 lists the NPDWRs not covered by today's action. These include the remaining pre-1997 NPDWRs which are being or have already been reviewed in separate actions and the NPDWRs promulgated after the 1996 SDWA Amendments. The
The document, “EPA Protocol for the Review of Existing National Primary Drinking Water Regulations” (USEPA, 2002f), contains a detailed description of the process the Agency used to review the 69 NPDWRs discussed in today's action. EPA's primary goal was to identify and prioritize candidates for regulatory revision in order to target those revisions that are most likely to result in an increased level of public health protection and/or result in substantial cost savings while maintaining the level of public health protection. This section provides an overview of the review process. Sections IV.B and IV.C of today's action provide a more detailed description of how EPA applied the process to the review of 68 chemical NPDWRs and the TCR, respectively.
EPA applied the following basic principles to the review process:
• Health effects, analytical feasibility, treatment data, and analyses underlying existing regulations remain adequate and relevant, except in those instances where reliable, peer-reviewed, new data are available that indicate a need to re-evaluate an NPDWR (e.g., where a change in health risk assessment has occurred).
• If new data were available, EPA determined whether changes in existing standards were warranted. For example, in determining whether there was a change in analytical feasibility, the Agency applied the current policy and procedures for calculating the practical quantitation level for drinking water contaminants.
• EPA was unable to complete evaluation of certain new data within the time available for the review. For example, if a new health risk assessment for a contaminant was not completed during the review cycle, EPA generally made a “not revise” decision on the rationale that it was not appropriate to revise the regulation while the assessment was ongoing. When an updated assessment is completed, EPA will review the update and any new conclusions or additional information associated with the contaminant during the next review cycle. The Agency may make a determination to revise a particular NPDWR before August 2008 where justified by new public health risk information.
• During the review, EPA identified areas where information is inadequate or unavailable (data gaps) and is needed before an NPDWR may be considered as a candidate for revision. Where the Agency has been unable to fill such gaps during the review process, today's action provides information about the data gaps so that further research and data collection can be considered as part of the second review cycle. For example, the review may identify a need to better understand new treatment technologies. Such an information gap will need to be considered in the context of EPA's overall OGWDW research strategy.
• During the review process, the Agency did not consider potential regulatory revisions that were already the subject of other rulemaking activities.
• EPA applied the Agency's peer review policy (USEPA, 2000i), where appropriate, to any new analyses.
Figure 1 provides an overview of the review process. To most efficiently utilize limited resources and assure
The initial review phase included these three screening and general evaluation steps:
•
•
•
EPA generally determined that an NPDWR was not a candidate for revision after the initial review if a health risk assessment was in process or was initiated as a result of the review, since the Agency does not believe it is appropriate to revise the NPDWR while a health risk assessment is underway. The Agency also determined that an NPDWR was not a candidate for revision after the initial screening if none of the initial screening analyses identified a health or technological basis for a regulatory revision.
The Agency subjected the remaining NPDWRs to more in-depth technical analyses. If the initial review indicated a possible revision to the MCLG/MCL, EPA further considered health and technology factors that might affect the development of a revised MCLG/MCL or revised MCLG/TT requirements. The Agency also estimated potential occurrence and exposure at PWSs at concentrations of regulatory interest for the chemical NPDWRs and conducted a qualitative evaluation of economic impacts. EPA based the qualitative economic evaluation primarily on available occurrence and exposure data, to determine whether the possible revision was likely to present an opportunity for significant gains in public health protection and/or significant cost savings that could be realized without lessening the level of public health protection.
In the case of three contaminants, EPA identified data gaps that could not be filled during the current review cycle. Figure 1 shows the identification of data gaps as the final step in the review; however, in some instances, data gaps were identified during earlier steps in the process. Where this occurred, EPA did not conduct some or all of the remaining analyses. If the Agency identified data gaps, EPA determined not to revise the NPDWR.
After completing these comprehensive analyses, EPA identified those NPDWRs that remain appropriate at this time, and those NPDWRs that may be appropriate for revision.
Today's action discusses the Agency's preliminary determinations and seeks public comment on them. After considering the public comments received and any new peer-reviewed data that may become available to the Agency, EPA will publish its final decision in the FR.
This section describes the specific technical reviews that EPA conducted for the chemical NPDWRs.
The document, “Six-Year Review—Chemical Contaminants—Health Effects Technical Support Document” (USEPA, 2002i), describes how EPA reviewed the chemical contaminants discussed in today's action and provides the results of the health effects technical review. The principal objective of the health effects review was to identify each contaminant for which a new health risk assessment indicated that a change in MCLG might be appropriate. For most of
• EPA Integrated Risk Information System (IRIS);
• EPA Office of Pesticide Programs (OPP);
• Agency for Toxic Substances and Disease Registry (ATSDR); and
• National Academy of Sciences (NAS).
Table IV-1 reflects the outcome of the health effects review for the 68 chemical NPDWRs discussed in today's action. EPA placed each contaminant into one of the following categories.
•
•
•
•
Thus, only contaminants in the first category might be potential candidates for an MCLG revision at this time.
The initial health effects review identified beryllium, oxamyl, and picloram as potential candidates for an MCLG revision, depending on the outcome of the more in-depth health effects review and on the other technical analyses (e.g., analytical feasibility, treatment, occurrence, etc.). The initial health effects review also identified changes in the RfD for chromium as well as data gaps with respect to its potential carcinogenicity via oral ingestion. EPA also identified health effects-related data gaps for fluoride. Contaminants in any of the categories except the third (risk assessment in process) may be candidates for a new assessment if the initial health effects review identified new studies that may affect the contaminant's RfD or cancer classification. EPA has initiated a new assessment for cyanide, di(2-ethylhexyl)adipate, and thallium as a result of the health effects technical review.
Since EPA has a process in place to approve new analytical methods for drinking water contaminants, the actual review and approval of potential new methods are outside the scope of the Six-Year Review protocol. EPA recognizes that the approval and addition of new and/or improved analytical methods (since the promulgation of the NPDWRs under this review) may enhance the ability of laboratories to quantify contaminants at lower levels. For this reason, EPA evaluated whether there have been changes in analytical feasibility for a subset of the 68 chemical NPDWRs discussed in today's action. The document, “Analytical Feasibility Support Document for the Six-Year
EPA performed the analytical feasibility analyses under two circumstances. First, for those contaminants where the MCL is currently limited by analytical feasibility (i.e., the MCL is set at the PQL) and the MCLG is still appropriate, EPA evaluated the currently approved methods for those contaminants and available WS data to determine whether it might be possible to lower the PQL and hence set an MCL that is closer to the MCLG. Section V of today's action provides the results of the analytical feasibility review of 11 contaminants that are not currently undergoing a health risk assessment and for which the MCL was limited by analytical feasibility. These 11 contaminants include 10 with zero MCLGs
The second circumstance under which EPA re-evaluated the PQL was for three of the four contaminants identified under the health effects technical review as potential candidates for revision (see Table IV-2). These three contaminants were evaluated to determine if any potential MCL revision would be limited by analytical feasibility. Based on this review, EPA believes that analytical feasibility may be a limiting factor for revising the MCL for oxamyl (see section V.A.50 of today's action for a more detailed discussion). The Agency believes that analytical feasibility would not be a limiting factor for the remaining two contaminants identified by the health effects review as having potential changes in their MCLG (i.e., beryllium and chromium).
An NPDWR either identifies the Best Available Technology (BAT) for meeting an MCL, or establishes enforceable treatment technique (TT) requirements. Currently, for all the chemical NPDWRs covered in today's action that include an MCL, the MCL is set equal to either the MCLG or the PQL. None of these MCLs are currently limited by treatment feasibility. Thus, as a part of the Six-Year Review process, EPA only needed to review available information on treatment technologies if either of the following conditions applied:
• The health effects technical review identified a potential change to the MCLG/MCL (applied to 4 NPDWRs); or
• A health risk assessment is not in process for the contaminant and one of the following two conditions apply:
(1) the analytical feasibility review identified a possible change to the PQL and thus to the MCL (applied to 10 NPDWRs); or
(2) the NPDWR is a TT-type rule (applied to 3 NPDWRs).
The draft EPA document, “Water Treatment Technology Feasibility Support Document for Chemical Contaminants; In Support of EPA Six-Year Review of National Primary Drinking Water Regulations” (USEPA, 2002k), describes the process EPA used to evaluate treatment feasibility, where appropriate, for the chemical NPDWRs discussed in today's action and provides the results of these analyses. As a part of this review, EPA utilized the same sources that have been the primary resources in development of EPA regulations and guidance, including published EPA treatment reports, peer-reviewed journals, and other technology sources, as well as information received from EPA stakeholders.
a.
Based upon this preliminary evaluation, the Agency believes that treatment capabilities would be adequate to support a lower MCL value, if EPA were to revise the MCL for any of the contaminants for which a lower MCL may be appropriate (USEPA, 2002k). Treatment technologies specified as BAT within the current NPDWR, and small system compliance technologies which were specified by EPA in 1998 (USEPA, 1998a) are considered to be efficient and practical for implementation at PWSs. However, if EPA were to determine that it is appropriate to revise any of these NPDWRs, it would undertake a more thorough review of treatment feasibility, including a consideration of costs, to
In two instances (beryllium
b.
The Agency found no new information relating to new treatment or other technology which would support a revision to the TT for epichlorohydrin at this time. EPA also reviewed issues relating to current TT requirements for copper and lead that were identified by EPA and/or stakeholders. Sections V.A.15 and V.A.43 of today's action summarize these issues for copper and lead, respectively. EPA believes these TT requirements remain appropriate at this time; however, EPA has identified a few potential treatment effectiveness research needs and will consider them in the context of the overall drinking water research strategy (USEPA, 2002k).
In addition to possible revisions to MCLGs, MCLs, and TTs, EPA considered other regulatory revisions, such as monitoring and system reporting requirements, as a part of the Six-Year Review process. EPA focused this review on issues that are not already being addressed, or have not been addressed, through alternative mechanisms (e.g., as part of a recent or ongoing rulemaking, in conjunction with possible chemical monitoring reform, etc.). Where appropriate alternative mechanisms do not exist, EPA considered these implementation-related concerns if the potential revision met the following criteria:
• It indicated a potential change in the 40 Code of Federal Regulations (CFR) 141 requirements;
• It was “ready” for rulemaking—that is, the problem to be resolved has been clearly identified and specific option(s) have been formulated to address the problem; and
• It met at least one of the following conditions:
The document, “Consideration of Other Regulatory Revisions for Chemical Contaminants in Support of the Six-Year Review of National Primary Drinking Water Regulations” (USEPA, 2002e) summarizes the specific issues identified during the review process. Some of these issues (e.g., the need to specifically define new system/new source monitoring requirements for chemical contaminants) have already been addressed in the recently published arsenic and radionuclides NPDWRs (66 FR 6975, January 22, 2001 (USEPA, 2001a); 65 FR 76707, December 7, 2000 (USEPA, 2000g)). Additional issues are contaminant-specific, and are discussed in conjunction with the review of the NPDWR in section V of today's action.
EPA's goal in evaluating contaminant occurrence was to estimate the number of PWSs at which contaminants occur at levels of regulatory interest in drinking water, and to evaluate the number of people exposed to these levels. For its occurrence analysis, EPA used drinking water compliance monitoring data from 16 States, collected in the 1993 to 1997 time frame, and statistically analyzed the data to estimate occurrence. The
a.
EPA developed the 16-State contaminant occurrence data set in two stages. In the first stage, EPA developed an 8-State cross-section to support occurrence analyses for its Chemical Monitoring Reform (CMR) evaluation. The Agency selected the eight States for use in a national analysis because they provided the best data quality and completeness, and formed a balanced national cross-section of occurrence data based on the States' geographic distribution and relative rankings in pollution potential, as described later in this section. The methodology for selecting the State data sets is described in an EPA report, “A Review of Contaminant Occurrence in Public Water Systems” (USEPA, 1999d). EPA had this report externally peer reviewed and also received public comment from stakeholders. In the second stage, for the current Six-Year Review, EPA augmented the data from the CMR 8-State data set with data from 8 additional States. The resulting data set includes 13 million analytical results, from approximately 41,000 PWSs in 16 States. For the 14 contaminants that EPA identified for detailed occurrence analysis, i.e., those with either new health effects information or a potential change in the PQL (see Table IV-3 of today's action), the number of analytical results per contaminant varies from about 34,000 to greater than 200,000; the number of PWSs with data varies from about 8,000 to 23,000; and the number of States providing relevant data varies from 13 to 16.
All samples in the 16-State data set were standard SDWA compliance samples. Data were limited to those with confirmed water source and sampling type information. “Special” samples, “investigation” samples (investigating a contaminant problem, that would likely bias the results), or samples of unknown type were excluded from further analysis. EPA conducted various quality control and review checks of the results, including follow-up questions to the States providing the data to clarify potential reporting inconsistencies, records with invalid codes, or use of analytical units. The Agency then compiled State data sets into a single database with a unified format.
In selecting a cross-section of State data sets that is generally representative of the U.S., EPA considered two broad factors: geographic or spatial diversity, and pollution potential. Geographic diversity in the data set helps to ensure that contaminant occurrence data come from areas representing the range of climatic and hydrologic conditions across the U.S. A range of agricultural and industrial pollution potential helps to ensure that the data represent the range of likely contaminant occurrence across the United States.
As indicators of States' pollution potential, EPA used two primary measures: the number of manufacturing facilities per square mile (to reflect the potential for VOC occurrence), and the total expenditures on farm agricultural chemicals (to reflect the potential for synthetic organic chemical (SOC) occurrence). In order to construct a cross-section with a balance of pollution potential, EPA divided the 50 States into high and low pollution potential groups based on their rank orderings with respect to the two primary pollution potential indicators. For each of the two pollution potential indicators, EPA ranked the 50 States from 1 to 50 (1 being the highest and 50 being the lowest). The States were then plotted on a two-dimensional scatter plot (see Figure 2), with the x- and y-axes representing the manufacturing and agricultural ranking, respectively, of each State. The amount spent on agricultural chemicals per State increases along the y-axis from bottom to top. The number of manufacturing establishments per square mile per State increases along the x-axis from left to right. EPA then reviewed the rankings and selected a subset of 16 States (the “cross-section States”) in order to give approximate balance across the range of pollution indicators.
The bold cross in the center of Figure 2 separates the plot into four quadrants. The upper right-hand quadrant contains the States with the most manufacturing establishments per square mile and the greatest amount of farm agricultural chemical expenses. These States, therefore, have the greatest amount of pollution potential based on these manufacturing and agricultural indicators. The lower left-hand quadrant
The Agency performed analyses to verify the validity of this approach. The results of these analyses support the applicability of these indicators relative to pollution potential. The mean concentration values for select contaminants were estimated for groups of top quartile and bottom quartile States. The cross-section development approach presumes that the top quartile States have a higher pollution potential than the bottom quartile States, and, therefore, the estimated mean concentrations for the top quartile States should be greater than those for the bottom quartile States. The estimated mean concentration values for the top quartile States were always higher than the mean concentration for the bottom quartile States with the lone exception of heptachlor (a very low occurrence SOC).
EPA believes the distribution of the 16 selected States is representative of the national distribution of States with respect to these pollution indicators. Eight of the selected States comprised EPA's original 8-State cross-section that was used for the CMR analyses; EPA solicited occurrence data from the remaining eight. The geographic distribution of the resulting 16-State cross-section is shown in Figure 3. Other, secondary pollution potential indicators were also considered in order to help ensure that the data were representative of the range of pollution potential across the U.S.
While this cross-section does not represent a statistical random sample of States, and thus, does not capture all local variations in occurrence, EPA, nonetheless, believes that the data set provides a reliable picture of overall distribution of contaminant occurrence in the U.S.
b.
Occurrence analysis proceeded in two stages. For the initial, or “Stage 1” analysis, EPA computed simple occurrence measures which are more straightforward and conservative than a full probabilistic analysis. In this stage of analysis, EPA estimated the percent of PWSs and total population served by PWSs with at least one analytical result exceeding concentrations equal to specified contaminant levels. EPA considered three specified contaminant levels: The lower limit of detection reported by the States, one-half the current MCL, and the current MCL. Of the 68 chemicals discussed in today's
• The two contaminants for which not enough data were available (dioxin and asbestos);
• The four contaminants for which the NPDWR specifies a TT-type requirement instead of an MCL (acrylamide, copper, epichlorohydrin, and lead); and
• The two contaminants for which EPA did not request data, since the Agency determined there was no health or technological basis for revising, and because these data would have required extra effort for States to transmit (nitrate and nitrite).
Following the initial occurrence analysis, EPA performed a more detailed, “Stage 2” statistical analysis of occurrence for the 14 contaminants identified as potential candidates by the health effects and analytical feasibility technical reviews. This analysis used a statistical model, known as a Bayesian hierarchical model, to estimate the number of systems (and the corresponding affected populations) with mean contaminant concentrations above the levels of regulatory interest. Statistical modeling is usually required in order to estimate mean contaminant concentrations, because many sample concentrations are non-detects, meaning that the true concentration is unknown and may range anywhere from zero to the detection limit of the analytical method. In the hierarchical model, individual samples are assumed to be log-normally distributed within entry points to a distribution system (EPTDS) (e.g., wells or treatment plants); EPTDS means are assumed to be log-normally distributed within each water system; and system means are assumed to be log-normally distributed nationwide. This model can be applied to estimate the number of systems with mean concentrations above levels of interest, and also the amount of variability between sources within a system. Population exposure can also be estimated at the same time, by using information from EPA's SDWIS database about the population served by each system in the database. The hierarchical model has important advantages:
• It provides a unified model for estimating occurrence, both between and within systems;
• It uses information about non-detected concentrations; and
• It provides uncertainty intervals around each estimate, taking into account both sampling variability over time and across systems, and uncertainty due to non-detected concentrations.
Details of the hierarchical model, and its application to estimating mean contaminant concentrations, are provided in the occurrence support document (USEPA, 2002g).
The results of the Stage 2 analyses for each of the 14 contaminants listed in Table IV-3 are presented in section V.A of today's action. These results represent only the systems in EPA's 16-State database. EPA considered this the most straightforward and accurate way to present the data that were available for the review process. As indicated in the preceding discussion of the development of the analysis of contaminant occurrence, EPA developed the more refined Stage 2 analysis based on the preliminary evaluation using the results of the Stage 1 analysis. A detailed explanation of this process is provided in EPA's occurrence support document and is available for review and comment (USEPA, 2002g).
For those contaminants where occurrence was evaluated with respect to the revise/not revise decision, EPA used the Stage 2 occurrence analysis for the 16 States to determine the percentage of PWSs that could be impacted, and the percentage of the exposed population served by these systems. Section V contains a discussion of the incremental percentage of systems and the incremental percentage of the population served by these systems. That is, EPA considered the difference between levels of occurrence and exposure above the current MCL and the occurrence and exposure at the potentially revised level(s).
While SDWA provides the Agency with broad discretion to consider economics in the context of the Six-Year Review, the statute precludes EPA from using economics as the sole basis for a revision that would provide less health protection than the current standard (i.e., anti-backsliding). However, if new peer-reviewed scientific health effects research indicates that an MCLG could be raised while maintaining public health protection, then such a change is permitted. For NPDWRs published after the 1996 SDWA Amendments, Congress added specific requirements for economic and cost-benefit analyses in their development. Where EPA decides to revise an NPDWR based on health effects or other technical reasons, economic factors, including feasibility and an assessment of costs and benefits in accordance with Section 1412(b)(6) of the SDWA, must then be taken into consideration. EPA considered likely economic impacts, based primarily on available occurrence and exposure data, to qualitatively evaluate whether the potential revisions identified by the health and technology reviews may present a significant opportunity for improved or strengthened public health standards and/or a significant cost savings while maintaining public health protection (USEPA, 2002c).
The memorandum, “Six-Year Review of the Total Coliform Rule—Comments Received” (USEPA, 2002j), describes the process EPA applied to the review of the TCR. Where appropriate, EPA applied the same approach to reviewing the TCR as it did to the review of the chemical NPDWRs discussed in today's action. However, because of the nature of the TCR and the pathogens it controls, the Agency focused its review on the implementation-related requirements. As discussed in section V.B of today's action, these analyses indicate that a rulemaking to initiate possible revisions to the TCR is appropriate at this time.
The 1996 amendments to SDWA require special consideration of all sensitive populations (infants, children, pregnant women, elderly, and immunocompromised) in the development of drinking water regulations (Section 1412(b)(3)(C)(V) of SDWA, as amended in 1996). Over the past decade, the amount of available data on the impact of chemical contaminants on conception and early developmental life stages has increased dramatically. Accordingly, as a part of the Six-Year Review process, EPA completed a literature search covering developmental and reproductive endpoints (fertility, embryo survival, developmental delays, birth defects, endocrine effects, etc.) for regulated chemicals that have a non-zero MCLG and have not been the subject of an updated 1997 or later risk assessment (see section IV.B.1 of today's action). EPA reviewed the output from the literature searches to identify any studies that might have an influence on the present MCLG. Three chemicals were identified with potential developmental/reproductive endpoints of concern: cyanide, di(2-ethylhexyl)adipate (DEHA), and
Young children, especially infants, are generally at greater health risk from infections caused by waterborne pathogens. Any revision to the TCR will maintain or improve the control of waterborne pathogens and, therefore, the protection afforded to children.
Table V-1 lists EPA's preliminary revise/not revise decision for each of the 69 NPDWRs discussed in today's action along with the principal rationale for the decision. If EPA has decided it is not appropriate to revise an NPDWR at this time, that decision is based on one of the following reasons.
•
•
•
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b.
c.
a.
b.
c.
a.
b.
c.
a.
b.
c.
a.
b.
c.
a.
b.
A review of analytical or treatment feasibility is not necessary for barium because changes to the MCLG are not warranted at this time and the current MCL is set at the MCLG. In addition, the results of EPA's review of possible “other regulatory revisions” did not identify any barium-specific issues (USEPA, 2002e). Since EPA did not identify a health or technology basis for revising the barium NPDWR, the Agency did not conduct a detailed occurrence and exposure analysis.
c.
a.
b.
The current MCL for benzene is based on a PQL of 0.005 mg/L. As a part of the Six-Year Review, EPA analyzed more recent WS data to determine if it might be possible to recalculate the PQL (USEPA, 2002d). In addition, the Agency evaluated whether more sensitive analytical methods have been approved and put into use by a wide number of laboratories. The analysis of the WS data indicates that an improvement in analytical feasibility might exist. Evaluation of the WS data shows that EPA Regional and State laboratories exhibit greater than 95 percent laboratory passing rates at concentrations around the current PQL of 0.005 mg/L. Because most of the laboratory passing rates exceeded the 75 percent criterion typically used to derive a PQL from WS studies, this information indicates that a lower PQL corresponding to the 75 percent passing rate might exist for benzene. While this information is indicative of a possibly lower PQL, the WS data are insufficient at this time to actually recalculate what the lower PQL for benzene might be.
Using information about the analytical methods most widely used to report results in the WS studies, the MDLs for these methods, and the 10 times MDL multiplier, EPA estimated what the possibly lower PQL/MCL might be. For the analysis of benzene in the more recent WS studies, laboratories predominantly used EPA Method 524.2 (Gas Chromatography/Mass Spectrometry or GC/MS), which has an upper limit MDL of 0.00004 mg/L. A 10 times MDL multiplier predicts that the PQL could lie around 0.0004 mg/L. The 0.0004 mg/L value is used as a threshold in the occurrence analysis, which is discussed in this section.
Since the analytical feasibility analysis indicates that the PQL for benzene (and therefore the MCL) could possibly be lower if EPA had more definitive data to recalculate the PQL, EPA considered whether treatment feasibility is likely to pose any limitations (USEPA, 2002k). The current BATs for benzene are packed tower aeration (PTA) and granular activated carbon (GAC). Small system compliance technologies for benzene include GAC and several aeration technologies. EPA believes these BATs are still practical and would not pose any limitations for benzene at a possibly lower MCL.
The results of EPA's review of possible “other regulatory revisions” did not identify any benzene-specific issues (USEPA, 2002e).
EPA evaluated the results of the occurrence and exposure analyses for benzene to determine whether changes to the MCL might be appropriate and likely to result in additional public health protection if the PQL were recalculated (USEPA, 2002g; USEPA 2002h). Table V-2 shows the results of the detailed occurrence and exposure analysis based on the 16-State cross-section for the current MCL (0.005 mg/L) and the possible PQL/MCL based on the analytical feasibility analysis (0.0004 mg/L).
The results of the detailed occurrence and exposure analysis indicate that approximately 0.3 percent of the 23,266 systems sampled in the 16 cross-section States and approximately 0.3 percent of the population served by those systems, might be affected if EPA were to gather information to recalculate the PQL (to a lower PQL of around 0.0004 mg/L) and revise the MCL accordingly.
c.
a.
b.
c.
a.
b.
EPA believes that any likely revision to the MCLG for beryllium could range from 0.01 mg/L to 0.001 mg/L, based on the change in the RfD in the 1998 assessment, the inclusion or non-inclusion of the risk management factor, and using a 20 percent relative source contribution (RSC).
Because of changes in the health risk assessment for beryllium, EPA considered whether analytical feasibility is likely to be a limitation if the Agency were to lower the MCLG/MCL. The results of the analytical feasibility analyses indicate that the current PQL of 0.001 mg/L for beryllium is still appropriate and is unlikely to change. Therefore, the Agency believes the PQL is unlikely to be a limiting factor if EPA decides to lower the MCLG/MCL (USEPA, 2002d).
EPA also considered whether treatment feasibility is likely to pose any limitations if EPA were to lower the MCLG/MCL. The current BATs for beryllium include activated alumina (AA), ion exchange, lime softening, coagulation/filtration, and reverse osmosis (RO) with removal efficiencies ranging from 80 to 99 percent. Small system compliance technologies also include point-of-use (POU) RO and POU ion exchange. The Agency believes these BATs are still practical and would not pose any limitations if the Agency were to lower the MCLG/MCL (USEPA, 2002k).
The results of EPA's review of possible “other regulatory revisions” did not identify any issues which are specific to beryllium (USEPA, 2002e).
EPA evaluated the results of the occurrence and exposure analyses for beryllium to determine whether possible changes to the MCLG/MCL would be likely to result in additional public health protection or an opportunity for significant cost savings to PWSs and their customers (USEPA, 2002g; USEPA, 2002h). Table V-3 shows the results of the detailed occurrence and exposure analysis based on the 16-State cross-section at the current MCL (0.004 mg/L), the possible lower level of any MCLG/MCL value (0.001 mg/L), and the possible upper level of any MCLG/MCL value (0.01 mg/L).
The results of the detailed occurrence and exposure analysis indicate that approximately 0.07 percent of the 18,933 systems sampled in the 16 cross-section States, and approximately 0.02 percent of the population served by those systems, might be affected if EPA were to raise the MCLG/MCL. The current BATs and small system compliance technology for beryllium also apply to other contaminants. In addition to the removal of beryllium, these treatment technologies have other beneficial effects (e.g., reduction of hardness or other common impurities) (USEPA, 2002k). Therefore, if EPA were to raise the MCLG/MCL, the Agency does not know how many of these PWSs currently treating to comply with the current MCL of 0.004 mg/L would discontinue any treatment that is already in place. If, on the other hand, EPA were to retain the risk management factor and lower the MCLG/MCL, less than 1 percent of the 18,933 systems sampled in the 16 cross-section States and less than 0.7 percent of the population served by those systems might be affected.
c.
a.
b.
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a.
b.
c.
a.
b.
c.
a.
b.
EPA based the current MCL for chlordane on a PQL of 0.002 mg/L. As a part of the Six-Year Review, EPA analyzed more recent WS data to determine if it might be possible to recalculate the PQL (USEPA, 2002d). In addition, the Agency evaluated whether more sensitive analytical methods have been approved and put into use by a wide number of laboratories. The results of these analyses indicate that only a slight improvement in analytical feasibility might exist. Evaluation of the WS data shows that EPA Regional and State laboratories exhibit greater than 85 percent laboratory passing rates at concentrations around the current PQL of 0.002 mg/L. Because most of the laboratory passing rates exceeded the 75 percent criterion typically used to derive a PQL from WS studies, this information indicates that a lower PQL corresponding to the 75 percent passing rate might exist for chlordane. While this information is indicative of a possibly lower PQL, the WS data are insufficient at this time to actually recalculate what the lower PQL for chlordane might be.
Using information about the analytical methods most widely used to report results in the WS studies, the MDLs for these methods, and the 10 times MDL multiplier, EPA estimated what the possibly lower PQL/MCL might be. For the analysis of chlordane in the more recent WS studies, laboratories predominantly used EPA Methods 505 (Gas Chromatography with microextraction) and 508 (Gas Chromatography with Electron Capture Detector), which have MDLs of 0.00014 mg/L and 0.0000041 mg/L, respectively. A 10 times MDL multiplier predicts that the PQL could range from 0.0014 mg/L to 0.000041 mg/L. EPA averaged these two values, rounded up to 0.001 mg/L, and used this value as a threshold in the occurrence analysis discussed in this section.
Since the analytical feasibility analysis indicates that the PQL for chlordane (and therefore the MCL) could possibly be lower if EPA had more definitive data to recalculate the PQL, EPA considered whether treatment feasibility is likely to pose any limitations (USEPA, 2002k). The current BAT for chlordane is GAC. Small system compliance technologies for chlordane include GAC, POU GAC, and powdered activated carbon (PAC). Because chlordane is a moderately adsorbed pesticide, EPA believes that GAC is still a practical treatment and would not pose any limitations for chlordane at a possibly lower MCL.
The results of EPA's review of possible “other regulatory revisions” did not identify any issues which are specific to chlordane (USEPA, 2002e).
EPA evaluated the results of the occurrence and exposure analyses for chlordane to determine whether changes to the MCL might be appropriate and likely to result in additional public health protection if the PQL were recalculated (USEPA, 2002g; USEPA, 2002h). Table V-4 shows the results of the detailed occurrence and exposure analysis based on the 16-State cross-section for the current MCL (0.002 mg/L) and the possible PQL/MCL based on the analytical feasibility analysis (0.001 mg/L).
The detailed occurrence and exposure analysis indicates that chlordane is unlikely to occur at the current MCL or any potential MCL revision for the States used in the cross-section. Since chlordane uses were canceled in the United States in 1988 and since it is subject to the United Nations Prior Informed Consent procedure (USEPA, 2002g; USEPA, 2002h), EPA expects the occurrence of chlordane in PWSs to be rare.
c.
a.
b.
The 1998 assessment of chromium VI made no change to the cancer classification of Group D for oral exposures and determined that the carcinogenicity of chromium VI cannot be determined because of a lack of sufficient epidemiological or toxicological studies under the 1996 Proposed Guidelines for Carcinogen Risk Assessment. Chromium VI is a Group A known human carcinogen by the inhalation route of exposure.
Public concern over the adverse health effects of chromium VI has increased in recent years. One issue is whether chromium VI is a human carcinogen through oral ingestion. In 2001, the State of California convened a Blue Ribbon Panel to evaluate the available data on this issue. The Panel issued its report in August 2001 (Flegal
The availability of new data on the contribution of dietary chromium to total chromium exposure supports a re-evaluation of the RSC (NAS, 2001). The Agency applied an RSC of 70 percent in determining the current MCLG. Using the new Agency RfD of 0.003 mg/kg/day along with the application of 20 percent, 50 percent, or 70 percent as RSC values, the Agency believes that any likely revisions to the MCLG could range from 0.02 mg/L to 0.07 mg/L. A general evaluation of the data indicates that a revised RSC would likely fall within the 20 percent to 50 percent range.
Because the results of the health effects review support consideration of whether it may be appropriate to revise the NPDWR for chromium based on changes in the RfD and possible changes in the RSC assumptions, EPA considered whether analytical feasibility is likely to be a limitation. The results of the analytical feasibility analyses indicate that the current PQL of 0.01 mg/L for chromium is still appropriate and is unlikely to change. Therefore, the Agency believes the PQL is unlikely to be a limiting factor if EPA decides to revise the MCLG/MCL (USEPA, 2002d).
EPA also considered whether treatment feasibility is likely to pose any limitations if EPA were to revise the MCLG/MCL. The current BATs for chromium include ion exchange, lime softening, coagulation/filtration, and RO. Small system compliance technologies also include POU RO and POU ion exchange. At the present time, EPA believes these BATs are still practical and would not pose any limitations if the Agency were to revise the MCLG/MCL (USEPA, 2002k).
The results of EPA's review of possible “other regulatory revisions” did not identify any issues which are specific to chromium (USEPA, 2002e).
EPA evaluated the results of the occurrence and exposure analyses for chromium to determine whether a revised MCLG/MCL would be likely to result in additional public health protection (USEPA, 2002g; USEPA, 2002h). Table V-5 shows the results of the detailed occurrence and exposure analysis based on the 16-State cross-section for the current MCLG/MCL (0.1 mg/L), the possible MCLG/MCL value retaining the 70 percent RSC (0.07 mg/L), the possible MCLG/MCL value using a 50 percent RSC (0.05 mg/L), and the possible MCLG/MCL value using a 20 percent RSC (0.02 mg/L).
The results of detailed occurrence and exposure analysis indicate that less than 0.4 percent of the 19,695 systems sampled in the 16 cross-section States and approximately 0.1 percent of the population served by those systems, might be affected if EPA were to lower the MCL to 0.02 mg/L.
c.
a.
b.
EPA has initiated an assessment of health risks resulting from exposure to copper that will include the findings of NAS as well as more recently published data (USEPA, 2002i). This assessment will consider relevant studies on the toxicity of copper including its effects on genetically and developmentally sensitive populations. The Agency expects the new risk assessment to be completed in the 2002 or 2003 time frame (USEPA, 2002i).
EPA has received comments on the copper NPDWR suggesting that EPA discontinue copper as a regulated contaminant or change it to a secondary standard (USEPA, 2002e). EPA is not aware of any new information that would warrant such a revision.
EPA has identified several potential research needs which may be considered in the context of an overall drinking water research strategy. These research needs are described in the “Water Treatment Technology Feasibility Support Document for Chemical Contaminants; In Support of EPA Six-Year Review of National Primary Drinking Water Regulations” (USEPA, 2002k).
c.
a.
b.
A review of analytical or treatment feasibility is not necessary for cyanide because changes to the MCLG are not warranted at this time and the current MCL is set at the MCLG. EPA's review of “other regulatory revisions” identified a potential revision relating to an error in the BAT specified for cyanide in the CFR (USEPA, 2002e). The CFR currently specifies “chlorine” as a BAT for cyanide for compliance with the MCL and with variance and exemption requirements (40 CFR 141.62 and 142.62, respectively); however, the CFR should specify “alkaline chlorination”, as BAT. EPA plans to correct this error through a technical amendment to the cyanide NPDWR in the near future. In the meantime, water systems and States should continue to be guided by the “Public Water System Warning: Cyanide” (USEPA, 1994a) that EPA distributed through its regional offices. The warning includes information on the use of chlorination (non-alkaline) and the potential for formation of harmful cyanogen chloride due to reaction of chlorine with cyanide
Since the potential regulatory revision identified by these analyses does not affect the MCLG or the MCL, EPA does not believe it is necessary to conduct a detailed occurrence and exposure analysis for cyanide.
c.
a.
b.
c.
a.
b.
A review of analytical or treatment feasibility is not necessary for dalapon because changes to the MCLG are not warranted at this time and the current MCL is set at the MCLG. In addition, the results of EPA's review of possible “other regulatory revisions” did not identify any dalapon-specific issues (USEPA, 2002e). Since EPA did not identify a health or technology basis for revising the dalapon NPDWR, the Agency did not conduct a detailed occurrence and exposure analysis.
c.
a.
b.
EPA based the current MCL for DBCP on a PQL of 0.0002 mg/L. As a part of the Six-Year Review, EPA analyzed more recent WS data to determine if it might be possible to recalculate the PQL (USEPA, 2002d). In addition, the Agency evaluated whether more sensitive analytical methods have been approved and put into use by a wide number of laboratories. The results of these analyses indicate that a slight improvement in analytical feasibility might exist. Evaluation of the WS data shows that EPA Regional and State laboratories exhibit greater than 85 percent laboratory passing rates at concentrations around the current PQL of 0.0002 mg/L. Because most of the laboratory passing rates exceeded the 75 percent criterion typically used to derive a PQL from WS studies, this information indicates that a lower PQL corresponding to the 75 percent passing rate might exist for DBCP. While this information is indicative of a possibly lower PQL, the WS data are insufficient at this time to actually recalculate what the lower PQL for DBCP might be.
Using information about the analytical methods most widely used to report results in the WS studies, the MDLs for these methods, and the 10 times MDL multiplier, EPA estimated what the possibly lower PQL/MCL might be. For the analysis of DBCP in the more recent WS studies, laboratories predominantly used EPA Method 504.1 (Gas Chromatography with microextraction), which has an MDL of 0.00001 mg/L. A 10 times MDL multiplier predicts that the PQL may be around 0.0001 mg/L (also one-half the current MCL). The 0.0001 mg/L value is used as a threshold in the occurrence analysis, which is discussed in this section.
Since the analytical feasibility analysis indicates that the PQL for DBCP (and therefore the MCL) could possibly be lower if EPA had more definitive data to recalculate the PQL, EPA considered whether treatment feasibility is likely to pose any limitations (USEPA, 2002k). The BATs for DBCP include aeration and GAC. Small system compliance technologies for DBCP include GAC, POU GAC, PAC, and several aeration technologies. Since the Henry's Law coefficient for DBCP is relatively low (i.e., DBCP is “less strippable” than other contaminants), GAC may in some cases be the preferred treatment. Considering that only a slight improvement in analytical feasibility may exist, EPA believes that these BATs are still practical and would not pose any limitations for DBCP at a possibly lower MCL.
The results of EPA's review of possible “other regulatory revisions” did not identify any issues which are specific to DBCP (USEPA, 2002e).
EPA evaluated the results of the detailed occurrence and exposure analyses for DBCP to determine whether changes to the MCL might be appropriate and likely to result in additional public health protection if
The results of detailed occurrence and exposure analysis indicate that approximately 0.5 percent of the 14,042 systems sampled in the 16 cross-section States and approximately 0.6 percent of the population served by those systems, might be affected if EPA were to gather the information to recalculate the PQL (estimated to be around 0.0001 mg/L) and to revise the MCL accordingly.
a.
b.
c.
a.
b.
c.
a.
b.
A review of analytical or treatment feasibility is not necessary for cis-1,2-dichloroethylene because changes to the MCLG are not warranted at this time and the current MCL is set at the MCLG. In addition, the results of EPA's review of possible “other regulatory revisions” did not identify any issues that were specific to cis-1,2-dichloroethylene (USEPA, 2002e). Since EPA did not identify a health or technology basis for revising the cis-1,2-dichloroethylene NPDWR, the Agency did not conduct a detailed occurrence and exposure analysis.
c.
a.
b.
A review of analytical or treatment feasibility is not necessary for trans-1,2-dichloroethylene because changes to the MCLG are not warranted at this time and the current MCL is set at the MCLG. In addition, the results of EPA's review of possible “other regulatory revisions” did not identify any issues that were specific to trans-1,2-dichloroethylene (USEPA, 2002e). Since EPA did not identify a health or technology basis for revising the trans-1,2-dichloroethylene NPDWR, the Agency did not conduct a detailed occurrence and exposure analysis.
c.
a.
b.
The current MCL for dichloromethane is based on a PQL of 0.005 mg/L. As a part of the Six-Year Review, EPA analyzed more recent WS data to determine if it might be possible to recalculate the PQL (USEPA, 2002d). In addition, the Agency evaluated whether more sensitive analytical methods have been approved and put into use by a wide number of laboratories. The analysis of the WS data indicates that a slight improvement in analytical feasibility might exist. Evaluation of the WS data shows that EPA Regional and State laboratories exhibit greater than 90 percent laboratory passing rates at concentrations around the current PQL of 0.005 mg/L. Because most of the laboratory passing rates exceeded the 75 percent criterion typically used to derive a PQL from WS studies, this information indicates that a lower PQL corresponding to the 75 percent passing rate might exist for dichloromethane. While this information is indicative of a possibly lower PQL, the WS data are insufficient at this time to actually recalculate what the lower PQL for dichloromethane might be.
Using information about the analytical methods most widely used to report results in the WS studies, the MDLs for these methods, and the 10 times MDL multiplier, EPA estimated what the possibly lower PQL/MCL might be. For the analysis of dichloromethane in the more recent WS studies, laboratories predominantly used EPA Methods 524.2 (GC/MS) and 502.2 (Purge and Trap Gas Chromatography), which have MDLs of 0.00003 mg/L and 0.00002 mg/L, respectively. A 10 times MDL multiplier predicts that the PQL may be around 0.0003 to 0.0002 mg/L. The Agency used the average of these two values (0.00025 mg/L) as a threshold (i.e., possible PQL) in the occurrence analysis discussed in this section.
Since the analytical feasibility analysis indicates that the PQL for dichloromethane (and therefore the MCL) could possibly be lower if EPA had more definitive data to recalculate the PQL, EPA considered whether treatment feasibility is likely to pose any limitations (USEPA, 2002k). The current BAT for dichloromethane is PTA. EPA believes this BAT is still practical and would not pose any limitations for dichloromethane at a possibly lower MCL.
The results of EPA's review of possible “other regulatory revisions” did not identify any dichloromethane-specific issues (USEPA, 2002e).
EPA evaluated the results of the occurrence and exposure analyses for dichloromethane to determine whether changes to the MCL might be appropriate and likely to result in additional public health protection if the PQL were recalculated (USEPA, 2002g; USEPA, 2002h). Table V-7 shows the results of the detailed occurrence and exposure analysis based on the 16-State cross-section for the current MCL (0.005 mg/L) and the possible PQL/MCL based on the analytical feasibility analysis (0.00025 mg/L).
The results of the detailed occurrence and exposure analysis indicate that less than 5 percent of the 21,530 systems sampled in the 16 cross-section States and slightly more than 9 percent of the population served by those systems, might be affected if EPA were to gather information to recalculate the PQL (to a lower PQL of around 0.00025 mg/L) and revise the MCL accordingly.
c.
a.
b.
The current MCL for 1,2-dichloropropane is based on a PQL of 0.005 mg/L. As a part of the Six-Year Review, EPA analyzed more recent WS data to determine if it might be possible to recalculate the PQL (USEPA, 2002d). In addition, the Agency evaluated whether more sensitive analytical methods have been approved and put into use by a wide number of laboratories. The results of these analyses indicate that some improvement in analytical feasibility might exist. Evaluation of the WS data shows that EPA Regional and State laboratories exhibit greater than 95 percent laboratory passing rates at concentrations around the current PQL of 0.005 mg/L. Because most of the laboratory passing rates exceeded the 75 percent criterion typically used to derive a PQL from WS studies, this information indicates that a lower PQL corresponding to the 75 percent passing rate might exist for 1,2-dichloropropane. While this information is indicative of
Using information about the analytical methods most widely used to report results in the WS studies, the MDLs for these methods, and the 10 times MDL multiplier, EPA estimated what the possibly lower PQL/MCL might be. For the analysis of 1,2-dichloropropane in the more recent WS studies, laboratories predominantly used EPA Methods 524.2 (GC/MS) and 502.2 (Purge and Trap Gas Chromatography), which have MDLs of 0.00004 mg/L and 0.00003 mg/L, respectively. A 10 times MDL multiplier predicts that the PQL may be around 0.0004 to 0.0003 mg/L. EPA used the 0.0004 mg/L value as a threshold in the occurrence analysis discussed in this section.
Since the analytical feasibility analysis indicates that the PQL for 1,2-dichloropropane (and therefore the MCL) could possibly be lower if EPA had more definitive data to recalculate the PQL, EPA considered whether treatment feasibility is likely to pose any limitations (USEPA, 2002k). The current BATs for 1,2-dichloropropane are GAC and PTA. Small system compliance technologies for 1,2-dichloropropane include GAC, PTA, and several other aeration technologies. EPA believes that these BATs are still practical and would not pose any limitations for 1,2-dichloropropane at a possibly lower MCL.
The results of EPA's review of possible “other regulatory revisions” did not identify any issues that are specific to 1,2-dichloropropane (USEPA, 2002e).
EPA evaluated the results of the occurrence and exposure analyses for 1,2-dichloropropane to determine whether changes to the MCL might be appropriate and likely to result in additional public health protection if the PQL were recalculated (USEPA, 2002g; USEPA, 2002h). Table V-8 shows the results of the detailed occurrence and exposure analysis based on the 16-State cross-section for the current MCL (0.005 mg/L) and the possible PQL/MCL based on the analytical feasibility analysis (0.0004 mg/L).
The results of the detailed occurrence and exposure analysis indicate that less than 0.05 percent of the 21,988 systems sampled in the 16 cross-section States and approximately 0.1 percent of the population served by those systems, might be affected if EPA were to gather the information to recalculate the PQL
c.
a.
b.
The current MCL is not limited by the analytical or treatment feasibility. Review of these capabilities is not necessary since no changes to the MCL are warranted at this time. The results of EPA's review of possible “other regulatory revisions” did not identify any issues that are specific to DEHA (USEPA, 2002e). Because none of these analyses indicate a change to the DEHA regulation, it is not necessary to conduct a detailed occurrence and exposure analysis.
c.
a.
b.
c.
a.
b.
A review of analytical or treatment feasibility is not necessary for dinoseb because changes to the MCLG are not warranted at this time, and the current MCL is set at the MCLG. In addition, the results of EPA's review of possible “other regulatory revisions” did not identify any dinoseb-specific issues (USEPA, 2002e). Since EPA did not identify a health or technology basis for revising the dinoseb NPDWR, the Agency did not conduct a detailed occurrence and exposure analysis.
c.
a.
b.
c.
a.
b.
c.
a.
b.
A review of analytical or treatment feasibility is not necessary for endrin because changes to the MCLG are not warranted at this time and the current MCL is set at the MCLG. In addition, the results of EPA's review of possible “other regulatory revisions” did not identify any endrin-specific issues (USEPA, 2002e). Since EPA did not identify a health or technology basis for revising the endrin NPDWR, the Agency did not conduct a detailed occurrence and exposure analysis. (Note: Endrin uses were canceled in 1986 except for use on bird perches, which was canceled in 1991 (USDA, 1998)).
c.
a.
b.
There are no standardized methods available for epichlorohydrin at low levels in drinking water (56 FR 3526 at 3558, July 1, 1991 (USEPA, 1991a)). Therefore, no analysis of analytical feasibility is appropriate for this contaminant. EPA has no new information that indicates it is appropriate to revise the TT requirement for epichlorohydrin at this time (USEPA, 2002k). The results of EPA's review of possible “other regulatory revisions” did not identify any issues which are specific to epichlorohydrin (USEPA, 2002e). Since EPA did not identify a health or technology basis for revising the epichlorohydrin NPDWR, the Agency did not conduct a detailed occurrence and exposure analysis.
c.
a.
b.
c.
a.
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c.
a.
Fluoride is unique as a drinking water contaminant because of its beneficial effects at low level exposures, and because it is voluntarily added to some drinking water systems as a public health measure for reducing the incidence of cavities among the treated population. The amount of fluoride added to drinking water for fluoridation ranges from 0.7 to 1.2 mg/L, depending on ambient air temperatures. The decision to fluoridate a water supply is made by the State or local municipality, and is not mandated by EPA or any other Federal entity.
b.
In addition, the NAS established age and gender specific Adequate Intake (AI) values for fluoride. AI values are set when the data do not permit determination of the more precise and better known Recommended Dietary Allowance (RDA). The NAS (1997) AI for infants, 0 through 6 months, is 0.01 mg/day and for infants, 7 through 12 months, is 0.5 mg/day. Values for children range from 0.7 mg/day to 3 mg/day increasing with age. For adults, the NAS (1997) AI is 3 mg/day for females, and 4 mg/day for males.
There are new studies regarding the effects of fluoride on bone that have been published since EPA established the MCLG/MCL. EPA believes that it is important to review these new data, since effects on bone are the basis of the present MCLG and MCL. The Agency has conducted a literature search to identify reports of the clinical and epidemiological data on fluoride and the skeletal system. The results of that search indicate that a review of the new data is justified as part of the regulatory review process. EPA plans to request NAS to conduct a review of these data. In light of this planned assessment, EPA does not believe it is appropriate to revise the MCLG at this time.
As part of the continuing review of the new toxicological data for fluoride, EPA also intends to examine the RSC used in the 1986 regulation. At that time, a 100 percent RSC was applied in setting the regulation. The increased use of fluoride in dental products, the tendency for children to swallow these dental products, and the potential for increased exposure from foods support a re-evaluation of the RSC as a component of the fluoride review.
As a part of the review of possible “other regulatory revisions,” EPA identified one issue pertaining to the public notification requirement associated with exceedance of the SMCL and the timing of the notification. Currently, PWSs that exceed the SMCL of 2.0 mg/L are required to notify their customers within 12 months of the exceedance. Concern has been expressed that this requirement is not sufficiently timely since dental fluorosis occurs as a result of exposure to high levels of fluoride while the tooth enamel is being laid down. Waiting 12 months to provide public notification may result in young children being exposed to high levels of fluoride during the time at which they are most vulnerable. The Agency will consider any such revisions, if they are still appropriate, once the results of the NAS evaluation are available.
c.
a.
b.
a.
b.
The current MCL for heptachlor is based on a PQL of 0.0004 mg/L. As a part of the Six-Year Review, EPA analyzed more recent WS data to determine if it might be possible to recalculate the PQL (USEPA, 2002d). In addition, the Agency evaluated whether more sensitive analytical methods have been approved and put into use by a wide number of laboratories. The results of these analyses indicate that some improvement in analytical feasibility might exist. Evaluation of the WS data shows that EPA Regional and State laboratories exhibit greater than 90 percent laboratory passing rates at concentrations around the current PQL of 0.0004 mg/L. Because most of the laboratory passing rates exceeded the 75 percent criterion typically used to derive a PQL from WS studies, this information indicates that a lower PQL corresponding to the 75 percent passing rate might exist for heptachlor. While this information is indicative of a possibly lower PQL, the WS data are insufficient at this time to actually recalculate what the lower PQL for heptachlor might be.
Using information about the analytical methods most widely used to report results in the WS studies, the MDLs for these methods, and the 10 times MDL multiplier, EPA estimated what the possibly lower PQL/MCL might be. For the analysis of heptachlor in the more recent WS studies,
Since the analytical feasibility analysis indicates that the PQL for heptachlor (and therefore the MCL) could possibly be lower if EPA had more definitive data to recalculate the PQL, EPA considered whether treatment feasibility is likely to pose any limitations (USEPA, 2002k). The current BAT for heptachlor is GAC. Compliance technologies for small systems include GAC, PAC, and POU GAC. Since heptachlor is a moderately adsorbed contaminant, EPA believes that the BAT and compliance technologies are still practical and would not pose any limitations for heptachlor at a possibly lower MCL.
The results of EPA's review of possible “other regulatory revisions” did not identify any heptachlor-specific issues (USEPA, 2002e).
EPA evaluated the results of the occurrence and exposure analyses for heptachlor to determine whether changes to the MCL might be appropriate and likely to result in additional public health protection if the PQL were recalculated (USEPA, 2002g; USEPA, 2002h). Table V-9 shows the results of the detailed occurrence and exposure analyses based on the 16-State cross-section for the current MCL (0.0004 mg/L) and the possible PQL/MCL based on the analytical feasibility analysis (0.0001 mg/L).
Based on the detailed occurrence and exposure analysis, heptachlor is unlikely to occur at the current MCL or any potential MCL revision for the States used in the cross-section. Since all heptachlor uses were canceled in the United States in 1988 (except for fire ant use), and since it is subject to the United Nations Prior Informed Consent procedure (USEPA, 2002g; USEPA, 2002h), EPA expects the occurrence of heptachlor in PWSs to be rare.
c.
a.
b.
The current MCL for heptachlor epoxide is based on a PQL of 0.0002 mg/L. As a part of the Six-Year Review, EPA analyzed more recent WS data to determine if it might be possible to recalculate the PQL (USEPA, 2002d). In addition, the Agency evaluated whether more sensitive analytical methods have been approved and put into use by a wide number of laboratories. The results of these analyses indicate that a slight improvement in analytical feasibility might exist. Evaluation of the WS data shows that EPA Regional and State laboratories exhibit greater than 85 percent laboratory passing rates at concentrations around the current PQL of 0.0002 mg/L. Because most of the laboratory passing rates exceeded the 75 percent criterion typically used to derive a PQL from WS studies, this information indicates that a lower PQL corresponding to the 75 percent passing rate might exist for heptachlor epoxide. While this information is indicative of a possibly lower PQL, the WS data are insufficient at this time to actually recalculate what the lower PQL for heptachlor epoxide might be.
Using information about the analytical methods most widely used to report results in the WS studies, the MDLs for these methods, and the 10 times MDL multiplier, EPA estimated what the possibly lower PQL/MCL might be. For the analysis of heptachlor epoxide in the more recent WS studies, laboratories predominantly used EPA Methods 505 (GC microextraction), 508 (GC/MS), and 525.2 (Purge and Trap GC), which have MDLs of 0.000004 mg/L, 0.0000059 mg/L, and 0.00013 mg/L, respectively. A 10 times MDL multiplier predicts PQLs of 0.00004 mg/L, 0.000059 mg/L, and 0.0013 mg/L. EPA chose the intermediate value, rounded up to 0.0001 mg/L, and used this value as a threshold in the occurrence analysis discussed in this section.
Since the analytical feasibility analysis indicates that the PQL for heptachlor epoxide (and therefore the MCL) could possibly be lower if EPA had more definitive data to recalculate the PQL, EPA considered whether treatment feasibility is likely to pose any limitations (USEPA, 2002k). The current BAT for heptachlor epoxide is GAC. Compliance technologies for small systems include GAC, PAC, and POU GAC. EPA believes that the BAT and compliance technologies would not pose any limitations for heptachlor epoxide at a possibly lower MCL.
The results of EPA's review of possible “other regulatory revisions” did not identify any issues that are specific to heptachlor epoxide (USEPA, 2002e).
EPA evaluated the results of the occurrence and exposure analyses for heptachlor epoxide to determine whether changes to the MCL might be appropriate and likely to result in additional public health protection if the PQL were recalculated (USEPA, 2002g; USEPA, 2002h). Table V-10 shows the results of the detailed occurrence and exposure analyses based on the 16-State cross-section for the current MCL (0.0002 mg/L), and the possible PQL/MCL based on the analytical feasibility analysis (0.0001 mg/L).
Based on detailed occurrence and exposure analysis, it appears that heptachlor epoxide is unlikely to occur at the current MCL or any potential MCL revision for the States used in the cross-section. Since the parent of heptachlor epoxide (i.e., heptachlor) was canceled for use (except for fire ant use) in the United States and since it is subject to the United Nations Prior Informed Consent procedure (USEPA, 2002g; USEPA, 2002h), EPA expects the occurrence of heptachlor epoxide in PWSs to be rare.
c.
a.
b.
The current MCL for hexachlorobenzene is based on a PQL of 0.001 mg/L. As a part of the Six-Year Review, EPA analyzed more recent WS data to determine if it might be possible to recalculate the PQL (USEPA, 2002d). In addition, the Agency evaluated whether more sensitive analytical methods have been approved and put into use by a wide number of laboratories. The results of these analyses indicate that some improvement in analytical feasibility might exist. Evaluation of the WS data shows that EPA Regional and State laboratories exhibit greater than 90 percent laboratory passing rates at concentrations around the current PQL of 0.001 mg/L. Because most of the laboratory passing rates exceeded the 75 percent criterion typically used to derive a PQL from WS studies, this information indicates that a lower PQL corresponding to the 75 percent passing rate might exist for hexachlorobenzene. While this information is indicative of a possibly lower PQL, the WS data are insufficient at this time to actually
Using information about the analytical methods most widely used to report results in the WS studies, the MDLs for these methods, and the 10 times MDL multiplier, EPA estimated what the possibly lower PQL/MCL might be. For the analysis of hexachlorobenzene in the more recent WS studies, laboratories predominantly used EPA Methods 508 (GC/MS), 505 (GC microextraction), and 525.2 (Purge and Trap GC), which have MDLs of 0.0000077 mg/L, 0.000002 mg/L and 0.000001 mg/L, respectively. A 10 times MDL multiplier predicts PQLs of 0.000077 mg/L, 0.00002 mg/L, and 0.00001 mg/L. EPA chose the highest value, rounded up to 0.0001 mg/L, and then used this value as a threshold in the occurrence analysis discussed in this section.
Since the analytical feasibility analysis indicates that the PQL for hexachlorobenzene (and therefore the MCL) could possibly be lower if EPA had more definitive data to recalculate the PQL, EPA considered whether treatment feasibility is likely to pose any limitations (USEPA, 2002k). The current BAT for hexachlorobenzene is GAC. Compliance technologies for small systems include GAC, PAC, and POU GAC. Since hexachlorobenzene is a moderately adsorbed contaminant, EPA believes that the BAT and compliance technologies are still practical and would not pose any limitations for hexachlorobenzene at a possibly lower MCL.
The results of EPA's review of possible “other regulatory revisions” did not identify any issues that are specific to hexachlorobenzene (USEPA, 2002e).
EPA evaluated the results of the occurrence and exposure analyses for hexachlorobenzene to determine whether changes to the MCL might be appropriate and likely to result in additional public health protection if the PQL were recalculated (USEPA, 2002g; USEPA, 2002h). Table V-11 shows the results of the detailed occurrence and exposure analyses based on the 16-State cross-section for the current MCL (0.001 mg/L) and the possible PQL/MCL based on the analytical feasibility analysis (0.0001 mg/L).
The detailed occurrence and exposure analysis indicates that hexachlorobenzene is unlikely to occur at the current MCL or any potential MCL revision for the States used in the cross-section. Since hexachlorobenzene
c.
a.
b.
A review of analytical or treatment feasibility is not necessary for hexachlorocyclopentadiene because changes to the MCLG are not warranted at this time and the current MCL is set at the MCLG. In addition, the results of EPA's review of possible “other regulatory revisions” did not identify any hexachlorocyclopentadiene-specific issues (USEPA, 2002e). Since EPA did not identify a health or technology basis for revising the hexachlorocyclopentadiene NPDWR, the Agency did not conduct a detailed occurrence and exposure analysis.
c.
a.
The NPDWR requires water systems to monitor for lead at the tap. Water systems must optimize corrosion control. This requires water systems serving more than 50,000 persons (except those with extremely low levels of lead in their distribution systems) and those smaller size systems that exceed the lead action level to install corrosion control treatment and to monitor for specified water quality control parameters. The NPDWR also includes other TT requirements for those systems exceeding the lead action level. These systems must: (1) Monitor for lead in source water; (2) install source water treatment, if appropriate; (3) conduct public education for as long as they continue to exceed the action level; and (4) replace the portion of lead service line in the distribution system they own, if they continue to exceed the action level after installing corrosion control treatment and/or source water treatment. EPA published revisions to the lead NPDWR on January 12, 2000 (65 FR 1950 (USEPA, 2000a)). These revisions made changes to monitoring and reporting requirements, public education, and the lead service line replacement requirements but did not affect the lead MCLG, action level, or other TT requirements.
b.
EPA identified several potential research needs which may be considered in the context of an overall drinking water research strategy. These research needs are described in the “Water Treatment Technology Feasibility Support Document of Chemical Contaminants in Support of EPA Six-Year Review of National Primary Drinking Water Regulations” (USEPA, 2002k).
Some stakeholders have suggested that EPA allow alternatives to corrosion control treatment (e.g., monitoring and flushing at non-transient, non-community water systems (NTNCWSs)) (USEPA, 2002e). EPA considered these alternatives as a part of the January 2000 revisions and determined that it was not appropriate to make such revisions to the TT requirements for lead and copper (65 FR 1950, January 12, 2000 (USEPA, 2000a)). If new peer-reviewed scientific information becomes available, it will be considered.
EPA also considered several potential revisions to requirements pertaining to the monitoring requirements for lead and copper in drinking water based on concerns recently expressed by stakeholders (USEPA, 2002e). As a part of the Six-Year Review process, EPA considered issues including: (1) Further reduction of the monitoring requirements; (2) monitoring for lead and copper on the same frequency as other inorganic and organic chemicals; (3) expanding the monitoring waiver program to water systems that have not exceeded one-half the lead and copper action levels for three monitoring rounds, regardless of plumbing materials used; (4) revising the protocol by which tap water sampling sites are identified; and (5) allowing fewer than five tap water samples for NTNCWSs
The current action level and TT requirements are not limited by analytical feasibility, therefore review of these capabilities is not needed. Since none of the analyses indicate a change to the lead regulation at this time, the Agency did not conduct detailed occurrence and exposure analyses.
c.
a.
b.
c.
a.
b.
The MSRC evaluated data for carcinogenicity of inorganic mercury, largely from studies of mercuric chloride. Based on the absence of human data and limited data in animals, inorganic mercury was categorized as Group C, possible human carcinogen; this determination was posted on IRIS for mercuric chloride (USEPA, 1995). The MSRC also applied the proposed revisions to the Cancer Guidelines (61 FR 17960, April 23, 1996 (USEPA, 1996)) to the evaluation of inorganic mercury. The conclusion was that inorganic mercury is not likely to be a human carcinogen under conditions of exposure generally encountered in the environment. This was based in part on the observation that all tumors were observed at very high doses, in excess of the maximum tolerated dose (MTD) and that likely modes of action for these tumors involved irritation and cytotoxic effects not expected to occur at environmental levels.
The revised risk assessments show that inorganic mercury is not likely to be a carcinogen at levels found in water and that there are insufficient data to categorize inorganic mercury as a developmental toxicant. The EPA RfD has not changed, and thus, EPA does not believe it is appropriate to revise the MCLG at this time.
A review of analytical or treatment feasibility is not necessary for mercury because, in EPA's judgment, changes to the MCLG are not warranted at this time and the current MCL is set at the MCLG. In addition, the results of EPA's review of possible “other regulatory revisions” did not identify any mercury-specific issues (USEPA, 2002e). Since EPA did not identify a health or technology basis for revising the mercury NPDWR, the Agency did not conduct a detailed occurrence and exposure analysis.
c.
a.
b.
c.
a.
b.
A review of analytical or treatment feasibility is not necessary for monochlorobenzene because changes to the MCLG are not warranted at this time and the current MCL is set at the MCLG. In addition, the results of EPA's review of possible “other regulatory revisions” did not identify any monochlorobenzene-specific issues (USEPA, 2002e). Since EPA did not identify a health or technology basis for revising the monochlorobenzene NPDWR, the Agency did not conduct a detailed occurrence and exposure analysis.
c.
a.
b.
The current MCL is not limited by the analytical or treatment feasibility. Review of these capabilities is not necessary since no changes to the MCL are warranted at this time.
As a part of the Six-Year Review, several States have suggested that EPA revise the current monitoring requirements for nitrate to allow less frequent monitoring in systems with consistently low nitrate/nitrite levels. Some have suggested that EPA place nitrate monitoring under the same monitoring framework used for most other inorganic chemicals (USEPA, 2002e). EPA previously considered these suggestions when the Agency considered chemical monitoring reform and decided not to change the frequency of nitrate monitoring. However, primacy agencies currently have the flexibility to reduce nitrate monitoring for ground water systems from annually to biennial if the Primacy Agency adopts (and EPA approves) an alternative monitoring provision. EPA has established guidance for such alternative monitoring in the Alternative Monitoring Guidelines (USEPA, 1997a). These guidelines were issued after consultation with stakeholders and no new information has been identified that warrants reconsideration of this issue.
Detailed occurrence and exposure analysis is not necessary since none of the analyses indicate a change to the nitrate regulation at this time.
c.
a.
b.
The current MCL is not limited by the analytical or treatment feasibility. Review of these capabilities is not necessary since no changes to the MCL are warranted at this time.
As a part of the Six-Year Review of “other regulatory revisions,” EPA received several suggestions regarding the current monitoring requirements for nitrite.
• A need for flexibility for States to require systems to collect a distribution system sample for nitrite under certain circumstances, such as if the entry point sample is greater than 50 percent of the MCL, if there is a large amount of ammonia in the raw water, or if chloramines are applied;
• A need for flexibility for States to require systems to monitor for ammonia in raw water; and
• Flexibility to eliminate nitrite monitoring when a disinfection residual is present.
EPA does not believe it has sufficient data at this time on which to base possible changes in monitoring requirements (USEPA, 2002e).
Detailed occurrence and exposure analysis is not necessary since none of the technical analyses indicate a change to the nitrite regulation at this time.
c.
EPA also published an MCLG and an MCL of 10 mg/L (as N) for the sum of nitrate and nitrite on January 30, 1991 (56 FR 3526 (USEPA, 1991a)). The Agency established this joint nitrate/nitrite standard to account for the possible additive toxicity of these two chemicals and also to protect against the deterioration of drinking water quality, since the presence of nitrite in water is indicative of water contaminated with sewage. The Agency has not identified any new data as a part of the Six-Year Review process that indicates that this joint nitrate/nitrite standard needs to be revised.
a.
b.
Based on the change in the RfD for oxamyl and using a 20 percent RSC
In setting the MCLG/MCL in 1992, the Agency determined the PQL for oxamyl to be 0.02 mg/L and analytical feasibility was not considered to be a limitation. EPA has analyzed more recent WS data to determine if analytical feasibility is likely to be a limiting factor in setting a lower MCL (USEPA, 2002d). In addition, the Agency evaluated whether more sensitive methods have been approved and are in use by a wide number of laboratories. The results of these analyses indicate that analytical feasibility is likely to be a limiting factor if EPA were to revise the MCLG and MCL. Although not definitive, the available WS data indicate that the PQL could lie between 0.02 and 0.04 mg/L. EPA used the 0.02 mg/L and the 0.04 mg/L values as thresholds in the occurrence analysis discussed in this section.
Since the health effects technical review supports consideration of whether a revision to the MCLG and MCL may be appropriate, EPA evaluated whether treatment feasibility is likely to pose any limitations (USEPA, 2002k). The current BAT for oxamyl is GAC. Compliance technologies for small systems include GAC, PAC, and POU GAC. EPA believes that the BAT and compliance technologies are still practical and would not pose any limitations for oxamyl at a possibly lower level (i.e., a possibly lower MCL).
The results of EPA's review of possible “other regulatory revisions” did not identify any issues that are specific to oxamyl (USEPA, 2002e).
EPA evaluated the results of the occurrence and exposure analyses for oxamyl to determine whether changes to the MCL might be appropriate and likely to result in additional public health protection if the PQL were recalculated (USEPA, 2002g; USEPA, 2002h). Table V-12 shows the results of the detailed occurrence and exposure analyses based on the 16-State cross-section for several concentrations: the current MCL (0.2 mg/L), the possible upper and lower PQLs based on the analytical feasibility analysis (0.02 and 0.04 mg/L), and the possible lower limit of any MCLG value (0.007 mg/L). Based on the detailed analysis of 16 cross-section States, it appears that oxamyl is unlikely to occur at the current MCL or any potential MCL value.
c.
a.
b.
c.
a.
b.
Based on the change in the RfD for picloram and using a 20 percent RSC,
Analytical or treatment feasibility do not pose any limitations for the current MCL and would not be a limiting factor if EPA were to raise the MCLG. The Agency's review of possible “other regulatory revisions” did not identify any issues that are specific to picloram (USEPA, 2002e).
EPA evaluated the results of the occurrence and exposure analyses for picloram to determine whether possible changes to the MCL would be likely to result in opportunities for significant cost savings to PWSs and their customers (USEPA, 2002g; USEPA, 2002h). Table V-13 shows the results of the detailed occurrence and exposure analysis based on the 16-State cross-section for the current MCL (0.5 mg/L), and the concentration that would be considered if the EPA revised the MCLG and MCL (i.e., the possible MCLG/MCL of 1 mg/L) based on the new RfD and a 20 percent RSC. Based on the detailed analysis, it appears that picloram is unlikely to occur at concentrations above 0.5 mg/L in the States used for the cross-section.
The results of the detailed occurrence and exposure analysis indicate that few, if any, of the 12,907 systems sampled in the 16 cross-section States might be affected if EPA were to raise the MCLG/MCL.
c.
a.
b.
c.
a.
b.
A review of analytical or treatment feasibility is not necessary for selenium because changes to the MCLG are not warranted at this time, and the current MCL is set at the MCLG. In addition, the results of EPA's review of possible “other regulatory revisions” did not identify any selenium-specific issues (USEPA, 2002e). Since EPA did not identify a health or technology basis for revising the selenium NPDWR, the Agency did not conduct a detailed occurrence and exposure analysis.
c.
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b.
The current MCL for toxaphene is based on a PQL of 0.003 mg/L. As a part of the Six-Year Review, EPA analyzed more recent WS data to determine if it might be possible to recalculate the PQL (USEPA, 2002d). In addition, the Agency evaluated whether more sensitive analytical methods have been approved and put into use by a wide number of laboratories. The results of these analyses indicate that some improvement in analytical feasibility might exist. Evaluation of the WS data shows that EPA Regional and State laboratories exhibit greater than 90 percent laboratory passing rates at concentrations around the current PQL of 0.003 mg/L. Because most of the laboratory passing rates exceeded the 75 percent criterion typically used to derive a PQL from WS studies, this information indicates that a lower PQL corresponding to the 75 percent passing rate might exist for toxaphene. While this information is indicative of a possibly lower PQL, the WS data are insufficient at this time to actually recalculate what the lower PQL for toxaphene might be.
Using information about the analytical methods most widely used to report results in the WS studies, the MDLs for these methods, and the 10 times MDL multiplier, EPA estimated what the possibly lower PQL/MCL might be. For the analysis of toxaphene in the more recent WS studies, laboratories predominantly used EPA Methods 508 (GC/MS) and 505 (Purge and Trap GC). No MDL data are available for EPA Method 508 and the MDL for 505 is listed as 0.001 mg/L. A 10 times MDL multiplier based on EPA Method 505 predicts a PQL of 0.01 mg/L, which is higher than the current PQL. Therefore, the 10 times multiplier could not be used to predict a lower PQL and EPA did not use this higher value as a threshold in the occurrence analysis discussed in this section. Instead, EPA used concentration thresholds of one-half the current MCL and the lower limit of detection reported by the States. EPA believes if a lower PQL does exist, that the magnitude of the change would be minimal.
Since the analytical feasibility analysis indicates that the PQL for toxaphene (and therefore the MCL) could possibly be lower if EPA had more definitive data to recalculate the PQL, EPA considered whether treatment feasibility is likely to pose any limitations (USEPA, 2002k). The current BAT for toxaphene is GAC. Compliance technologies for small systems include GAC, PAC, and POU GAC. EPA believes that the BAT and compliance technologies are still practical and would not pose any limitations for toxaphene at a possibly lower MCL.
The results of EPA's review of possible “other regulatory revisions” did not identify any issues that are specific to toxaphene (USEPA, 2002e).
EPA evaluated the results of the occurrence and exposure analyses for toxaphene to determine whether changes to the MCL might be appropriate and likely to result in additional public health protection if EPA had sufficient data to recalculate the PQL (USEPA, 2002g; USEPA, 2002h). Table V-14 shows the results of the detailed occurrence and exposure analyses based on the 16-State cross-section for the current MCL (0.003 mg/L), one-half the current MCL (0.0015 mg/L), and the lower level of detection reported by the States (0.001 mg/L).
The detailed occurrence and exposure analysis indicates that toxaphene is unlikely to occur at the current MCL or any potential MCL revision for the States used in the cross-section. Since toxaphene uses were canceled in the United States in 1990 and since it is subject to the United Nations Prior Informed Consent (USEPA, 2002g; USEPA, 2002h), EPA expects the occurrence of toxaphene in PWSs to be rare.
c.
a.
b.
A review of analytical or treatment feasibility is not necessary for 2,4,5-TP because changes to the MCLG are not warranted at this time and the current MCL is set at the MCLG. In addition, the
c.
a.
b.
A review of analytical or treatment feasibility is not necessary for 1,2,4-trichlorobenzene because changes to the MCLG are not warranted at this time and the current MCL is set at the MCLG. In addition, the results of EPA's review of possible “other regulatory revisions” did not identify any 1,2,4-trichlorobenzene-specific issues (USEPA, 2002e). Since EPA did not identify a health or technology basis for revising the 1,2,4-trichlorobenzene NPDWR, the Agency did not conduct a detailed occurrence and exposure analysis.
c.
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b.
c.
a.
b.
The current MCL for 1,1,2-trichloroethane is based on a PQL of 0.005 mg/L. As a part of the Six-Year Review, EPA analyzed more recent WS data to determine if it might be possible to recalculate the PQL (USEPA, 2002d). In addition, the Agency evaluated whether more sensitive analytical methods have been approved and put into use by a wide number of laboratories. The results of these analyses indicate that a slight improvement in analytical feasibility might exist. Evaluation of the WS data shows that EPA Regional and State laboratories exhibit greater than 90 percent laboratory passing rates at concentrations around the current PQL of 0.005 mg/L. Because most of the laboratory passing rates exceeded the 75 percent criterion typically used to derive a PQL from WS studies, this information indicates that a lower PQL corresponding to the 75 percent passing rate might exist for 1,1,2-trichloroethane. While this information is indicative of a possibly lower PQL, the WS data are insufficient at this time to actually recalculate what the lower PQL for 1,1,2-trichloroethane might be.
Using information about the analytical methods most widely used to report results in the WS studies, the MDLs for these methods, and the 10 times MDL multiplier, EPA estimated what the possibly lower PQL/MCL might be. For the analysis of 1,1,2-trichloroethane in the more recent WS studies, laboratories predominantly used EPA Methods 524.2 (GC/MS) and 502.2 (Purge and Trap GC), which both have upper limit MDLs of 0.00003 mg/L. A 10 times MDL multiplier predicts a PQL of 0.0003 mg/L. Since this value is below the current MCLG, this supports consideration of whether the MCL might be set at the MCLG if sufficient data were available to recalculate the PQL. EPA did not use the possibly lower PQL as a threshold in the occurrence analysis but instead used 0.003 mg/L (the current MCLG) since this is the lowest level to which the MCL would possibly be revised.
Since the analytical feasibility analysis indicates that the PQL for 1,1,2-trichloroethane (and therefore the MCL) could possibly be lower if EPA had more definitive data to recalculate the PQL, EPA considered whether treatment feasibility is likely to pose any limitations (USEPA, 2002k). The current BATs for 1,1,2-trichloroethane include both PTA and GAC. Small system compliance technologies for 1,1,2-trichloroethane include GAC and several aeration technologies. EPA believes that these BATs and compliance technologies are still practical and would not pose any limitations for 1,1,2-trichloroethane at a possibly lower level.
The results of EPA's review of possible “other regulatory revisions” did not identify any issues that are specific to 1,1,2-trichloroethane (USEPA, 2002e).
EPA evaluated the results of the occurrence and exposure analyses for 1,1,2-trichloroethane to determine whether changes to the MCL might be appropriate and likely to result in additional public health protection if sufficient data were available to recalculate the PQL and subsequently set the MCL at the MCLG (USEPA, 2002g; USEPA, 2002h). Table V-15 shows the results of the detailed occurrence and exposure analyses based on the 16-State cross-section for the current MCL (0.005 mg/L) and the potentially revised MCL (0.003 mg/L)
c.
a.
b.
c.
a.
b.
The current MCL for vinyl chloride is based on a PQL of 0.002 mg/L. As a part
A review of treatment feasibility is not necessary for vinyl chloride because no changes to the MCLG or the MCL are warranted at this time. In addition, the results of EPA's review of possible “other regulatory revisions” did not identify any vinyl chloride-specific issues (USEPA, 2002e). Since EPA did not identify a health or technology basis for revising the vinyl chloride NPDWR, the Agency did not conduct a detailed occurrence and exposure analysis.
c.
a.
b.
c.
EPA published the TCR on June 29, 1989 (54 FR 27544 (USEPA, 1989b)). The TCR is one of several EPA regulations that protect the public from pathogens in drinking water. The TCR requires all PWSs to monitor for the presence of total coliforms in the distribution system. Total coliforms are a group of closely related bacteria that are (with few exceptions) not harmful to humans. They are natural and common inhabitants of the soil and ambient waters (e.g., lakes, rivers and estuaries), as well as in the gastrointestinal tract of animals. A few of these coliforms (fecal coliforms, including
The 1989 TCR set an MCLG of zero for total coliforms because EPA was not aware of any data in the scientific literature supporting a particular value for the concentration of coliforms below which no known or anticipated adverse health effects occur, with an adequate margin of safety. The TCR requires systems to monitor for total coliforms at a frequency proportional to the number of people served. If any sample is total coliform-positive, the system must:
• Test the positive culture for the presence of either fecal coliforms or
• Take one set of 3-4 repeat samples at sites located within five or fewer sampling sites adjacent to the location of the routine positive sample within 24 hours; and
• Take at least 5 routine samples the next month of operation.
Since the TCR was promulgated in 1989, few technical papers on the occurrence of coliforms in treated water have been published. Much of the recent technical data on coliforms are associated with biofilm studies, specifically the factors that facilitate the growth of coliforms and other microbes within the distribution system (e.g., LeChevallier
One recent study examined the relationship between total coliforms and waterborne disease outbreaks (Craun
Since promulgation of the TCR, EPA has received comments from a number of stakeholders. Stakeholders have suggested modifications to reduce the burden of implementing the TCR. EPA has determined that an opportunity for implementation burden reduction exists and will analyze the effect that such changes would have on public health protection as part of the Agency's regulatory development/revision process. Only those measures which reduce the TCR implementation burden while still assuring public health protection will be considered by EPA.
EPA intends to undertake a rulemaking process to initiate possible revisions to the TCR. As part of this process, EPA believes it may be appropriate to include this rulemaking in a wider effort to review and address broader issues associated with drinking water distribution systems. This would be one way of addressing some of the recommendations of the Microbial/ Disinfection Byproducts (M/DBP) Federal Advisory Committee in the Stage 2 M/DBP Agreement in Principle (65 FR 83015, December 29, 2000 (USEPA, 2000h)). As part of the TCR rulemaking, EPA plans to assess the
Today's action solicits public comment on the following broad issues.
(1) Is EPA's protocol for the review of the 69 NPDWRs discussed in today's action reasonable and appropriate?
(2) Based on the review, are EPA's revise/not revise conclusions appropriate for each of the 69 NPDWRs?
EPA also invites commenters to submit any new, relevant peer-reviewed data pertaining to the NPDWRs discussed in today's action. Peer-reviewed data are studies/analyses that have been reviewed by qualified individuals (or organizations) who are independent of those who performed the work, but who are collectively equivalent in technical expertise (i.e., peers) to those who performed the original work. A peer review is an in-depth assessment of the assumptions, calculations, extrapolations, alternate interpretations, methodology, acceptance criteria, and conclusions pertaining to the specific major scientific and/or technical work products and of the documentation that supports them (USEPA, 2000i). Relevant data include studies/analyses pertaining to health effects, analytical feasibility, treatment feasibility, and occurrence/exposure related to the contaminants discussed in today's action.
Table VI-1 summarizes the specific comments requested in today's action and provides a cross reference to the section of today's action where the issue is discussed.
EPA also invites commenters to submit any new, relevant peer-reviewed data pertaining to the NPDWRs discussed in today's action.
Executive Order 12866 and the President's memorandum of June 1, 1998, require each agency to write all rules in plain language. We invite your comments on how to make this action easier to understand. For example:
• Have we organized the material to suit your needs?
• Are the decisions in the notice and our rationale for those decisions clearly stated?
• Does the notice contain technical language or jargon that isn't clear?
• Would a different format (grouping and order of sections, use of headings, paragraphing) make the notice easier to understand?
• Would more (but shorter) sections be better?
• Could we improve clarity by adding tables, lists, or diagrams?
• What else could we do to make the notice easier to understand?
EPA plans a 60-day comment period following this action. For each NPDWR for which the Agency has published its preliminary revise/not revise decision in today's action, EPA will consider the public comments received and review any new peer-reviewed data submitted in support of those public comments to determine whether a different revise/not revise decision is appropriate in light of the submitted data. The Agency plans to publish its final revise/not revise decisions for these NPDWRs in the August 2002 time frame.
The publication of a decision to revise pursuant to SDWA Section 1412(b)(9) is not the end of the regulatory process, but is the beginning of one. A decision to revise starts a regulatory process for a contaminant that involves more detailed analyses concerning health effects, costs, benefits, occurrence, and other matters relevant to deciding whether and how an NPDWR should be revised. At any point in this process, EPA may find that regulatory revisions are no longer appropriate and may discontinue regulatory revision efforts at that time. Review of that contaminant would continue in future six-year reviews.
Similarly, a decision not to revise at this time means only that EPA does not believe that regulatory changes to a particular NPDWR are appropriate now, based on lack of new data, ongoing scientific reviews, low priority, or other reasons discussed in this action. Review of these contaminants continues and future six-year reviews may lead to a decision that regulatory changes are appropriate.
Since the identification of contaminants for potential revision may be dependent on whether or not the maximum contaminant level goal (MCLG) could change, a brief explanation of the derivation of the MCLG is warranted. The MCLG is the maximum level of a contaminant in drinking water at which no known or anticipated adverse health effects occur, allowing for an adequate margin of safety. MCLGs are non-enforceable health goals. EPA establishes the maximum contaminant level (MCL) based on the MCLG. The MCL is the maximum permissible level of a contaminant in water which is delivered to any user of a public water system. It is derived based on the MCLG. Prior to the 1996 Amendments to the Safe Drinking Water Act (SDWA), the MCL was set as close to the MCLG as is feasible, taking costs into consideration. The 1996 Amendments to the SDWA permit consideration of costs relative to benefits in establishing a MCL. MCLs are enforceable standards.
For chemicals exhibiting a threshold for toxic effects, EPA establishes the MCLG on the basis of an oral reference dose (RfD). A change in the RfD could lead to a change in the MCLG and thus in the MCL. The RfD is an estimate (with uncertainty spanning perhaps an order of magnitude) of a daily oral exposure to the human population (including sensitive subgroups) that is likely to be without an appreciable risk of deleterious noncancer effects during a lifetime. The RfD is derived as follows:
The MCLG is then derived from the RfD as follows:
The relative source contribution (RSC) is one factor which will determine how much a change in the RfD will lead to a change in the MCLG. RSC refers to the method of accounting for human exposure from multiple sources when setting health-based criteria. The purpose of the RSC is to ensure that the level of a chemical allowed by a criterion or multiple criteria, when combined with other identified sources of exposure common to the population of concern, will not result in exposures that exceed the RfD. The policy of considering multiple sources of exposure when deriving health-based criteria has become common in EPA's risk characterizations, as well as criteria and standard-setting actions. The drinking water program has applied a ceiling level of 80 percent of the RfD and a floor level of 20 percent of the RfD. That is, the MCLG cannot account for more than 80 percent of the RfD, nor less than 20 percent of the RfD. EPA applies an RSC factor of 20 percent to the RfD when adequate exposure data do not exist.
EPA has now revised its RSC method to improve consistency when considering non-water sources of exposure (both ingestion exposures (e.g., food) and exposures other than the oral route (e.g., inhalation). The approach is called the Exposure Decision Tree. RSC estimates will be made by EPA using this approach, which allows for use of either subtraction or percentage methods, depending on chemical-specific circumstances, within the 20 to 80 percent range described in the previous paragraph. For a detailed discussion on the revised approach, refer to the “Methodology for Deriving Ambient Water Quality Criteria for the Protection of Human Health” (USEPA, 2000f).
It has also been the Agency policy to apply an additional safety factor to the RfD for chemicals with equivocal evidence of carcinogenicity. This practice is another factor that must be evaluated to determine the impact of a change in RfD on the MCLG.
For drinking water contaminants regulated prior to the 1996 SDWA, EPA's Office of Water (OW) followed a three-category regulatory cancer classification system (Categories I, II, or III). These categories specify decisions as to degree of concern for an agent's carcinogenic potential as a contaminant of drinking water, and define to some extent the approach to risk management which is taken for establishing MCLGs. Categories I, II, and III are designations not defined in guidelines but which reflect OW policy.
EPA used the six alphanumeric categories (A, B1, B2, C, D, E) of the 1986 cancer guidelines (51 FR 33992, September 24, 1986 (USEPA, 1986b)) in establishing the MCLG. The six-group classification system is often equated to the three-category system in the National Primary Drinking Water Regulation (NPDWR)
Recent Agency assessments also use the 1996 Proposed Guidelines for Carcinogen Risk Assessment (61 FR 17960, April 23, 1996 (USEPA,1996)) or the draft revised Guidelines for Carcinogen Risk Assessment (USEPA, 1999b). The proposed guidelines use standard descriptors as part of the hazard narrative to express the weight-of-evidence for carcinogenic hazard potential. The 1996 descriptors are in three categories: “Known/likely,” “cannot be determined,” and “not likely.” Subdescriptors are provided under these categories to further differentiate an agent's carcinogenic potential. The new descriptors permit consideration of exposure route and mode of action when making an assessment of carcinogenicity. The hazard descriptors of the 1996 proposed Guidelines are given in the text to this action whenever appropriate. None of the chemicals discussed in this action have been evaluated under the 1999 draft revised Guidelines for Carcinogen Risk Assessment.
Bureau of Reclamation, Interior.
Final rule with request for comments.
The Bureau of Reclamation (Reclamation) is issuing this rule to establish regulations regarding public conduct on all Reclamation lands (including waters) and Reclamation projects. Reclamation is required by law to issue this rule in order to provide for the security of dams, facilities, and resources under its jurisdiction.
This rule is effective on April 17, 2002, and shall expire on April 17, 2003. Reclamation must receive any comments on this final rule no later than June 17, 2002.
Any comments on this rule should be sent to Bureau of Reclamation, P.O. Box 25007, Denver, CO 80225, Attention: John Lambert, D-6020.
Larry Todd, Director, Operations, Bureau of Reclamation, 1849 C Street, NW., Washington, DC 20240, telephone (202) 513-0615.
On September 11, 2001, terrorists launched attacks on targets within the United States killing large numbers of people and damaging properties of national significance. Reclamation is responsible for protecting 348 reservoirs and more than 500 Federal dams, 58 hydroelectric power plants, and over 8 million acres of Federal property including 300 recreation areas, many of national significance. Additionally, Reclamation projects host 90 million visitors each year. Personnel, vehicles or water vessels operating at Reclamation lands, facilities, and waters could gain unauthorized access to these lands, facilities, and water, threaten the safety of Reclamation employees and visitors, or launch terrorist attacks or commit other criminal acts against dams, power plants, property, and adjacent population centers.
Public Law 107-69 (November 12, 2001) provides for law enforcement authority within Reclamation projects and on Reclamation lands and section 1(a) of this law requires us to “issue regulations necessary to maintain law and order and protect persons and property within Reclamation projects and on Reclamation lands.” This regulation establishes rules and regulations governing public conduct on all Reclamation lands and Reclamation projects, including all waters subject to the jurisdiction of Reclamation. The regulation establishes the minimum rules and regulations necessary for law enforcement officers to ensure the safety of the public and Reclamation employees, to protect critical water and power resource facilities, and to address potential criminal activities against Reclamation facilities and individuals within those facilities. Further, many of these regulations are derived from long-standing National Park Service regulations, which are well-known and well-understood by the public, and which in most, if not all, cases were subject to public comment and review when first proposed.
We did not publish a notice of proposed rulemaking for this regulation. In keeping with the requirements of 5 U.S.C. 553 (b), we find that good reason exists for not publishing a notice of proposed rulemaking. In keeping with the requirements of 5 U.S.C. 553 (d)(3), we also find that good reason exists for making this regulation effective in less than 30 days after publication in the
We have analyzed this rule in accordance with the criteria of the National Environmental Policy Act and Department Manual 516 DM. This rule does not constitute a major Federal action significantly affecting the quality of the human environment. An environmental assessment is not required. The rule is categorically excluded from NEPA review under 40 CFR 1508.4, Departmental Manual 516 DM 2, Appendix 1, paragraph 1.10.
Under Executive Order (E.O.) 12866, (58 FR 51735, Oct. 4, 1993), an agency must determine whether a regulatory action is significant and therefore subject to Office of Management and Budget (OMB) review and the requirements of the E.O. Executive Order 12866 defines a “significant regulatory action” as a regulatory action meeting any one of four criteria specified in the E.O. This rulemaking is considered a significant regulatory action under criterion number 4, because it raises novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the E.O. We have therefore submitted the regulation to OMB for review.
The Department of the Interior certifies that this document will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq). A Regulatory Flexibility Analysis is not required. Accordingly, a Small Entity Compliance Guide is not required.
This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Fairness Act. The rule:
(1) Will not have an annual effect on the economy of $100 million or more.
(2) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions.
(3) Will not have significant adverse effects on competition, employment, investment, productivity, innovation, or
This rule does not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. Moreover, the rule does not have a significant or unique effect on State, local, or tribal governments or the private sector. A statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq) is not required.
In accordance with Executive Order 12630, the rule does not have significant takings implications. Thus, a takings implication assessment is not required. This rule only addresses the possible consequences of public conduct on Reclamation lands and Reclamation projects.
This rule does not require any information collection under the Paperwork Reduction Act. Therefore, an OMB Form 83-I is not required.
In accordance with Executive Order 13132, this rule does not have Federalism implications. A Federalism assessment is not required. The rule will not affect the roles, rights, and responsibilities of States in any way. The rule will not result in the Federal Government taking control of traditional State responsibilities, nor will it interfere with the ability of States to formulate their own policies. In addition, the rule will not affect the distribution of power, the responsibilities among the various levels of government, nor preempt State law.
In accordance with Executive Order 12988, the Department's Office of the Solicitor has determined that this rule does not unduly burden the judicial system and meets the requirements of section 3(a) and 3(b)(2) of the Executive Order.
In accordance with Executive Order 13211, the rule will not have a significant adverse effect on the supply, distribution, and use of energy. Therefore, a Statement of Energy Effects is not required.
If you wish to comment on this rule, you may submit your comments by one of two methods. You may mail comments to: Bureau of Reclamation, P.O. Box 25007, Denver, CO 80403, Attn: Diana Trujillo, D-5300. You may also hand-deliver comments to the Bureau of Reclamation, Denver Federal Center, 6th and Kipling, Building 67, Room 124, Lakewood, Colorado. Our practice is to make comments, including names and home addresses of respondents, available for public review during regular business hours. Individual respondents may request that we withhold their home address from the rulemaking record. We will honor the request to the extent allowable by law. There also may be circumstances in which we would withhold from the rulemaking record a respondent's identity, as allowable by law. If you wish us to withhold your name and/or address, you must state this prominently at the beginning of your comment. However, we will not consider anonymous comments. We will make all submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, available for public inspection in their entirety.
Law Enforcement, Public Conduct, Reclamation Lands and Reclamation Projects.
43 U.S.C. 373b, 16 U.S.C. 460 l-31
The purpose of this part is to maintain law and order and protect persons and property on Reclamation lands, as defined in this part and at Reclamation projects as defined in this part. This part shall not apply where the Federal government has no ownership interest.
(1) Fighting or threatening, or violent behavior;
(2) Language, utterance, gesture, or display or act that is obscene, physically threatening or menacing, or that is likely to inflict injury or incite an immediate breach of the peace;
(3) Unreasonable noise, considering the nature and purpose of the person's conduct, location, time of day or night, and other factors that would govern the conduct of a reasonably prudent person under the circumstances; or
(4) Creating or maintaining a hazardous or physically offensive condition.
(1) A firearm, which is a loaded or unloaded pistol, rifle, shotgun or other device which is designed to, or may be readily converted to expel a projectile by the ignition of a propellant;
(2) A compressed gas or spring-powered pistol or rifle, irritant gas device, explosive device; or
(3) Any other implement designed to discharge missiles.
(a) The following activities are prohibited:
(1)
(2)
(3)
(b) Reclamation reserves the right to close and restrict public access to Reclamation lands and Reclamation projects subject to this part for security or public safety reasons. Each closure order or order restricting public access must:
(1) Identify the facilities, lands or waters that are closed or restricted as to public use;
(2) Specify the uses that are restricted;
(3) Specify the period of time during which the closure or restriction shall apply (including indefinite periods, if necessary); and
(4) Be posted at places near or within the area to which the closure or restriction applies, in such manner and location as is reasonable to bring prohibitions to the attention of the public.
(c) Within 15 days of the beginning of the closure or restriction, Reclamation will publish the closure or restriction in the
The following are prohibited:
(a) Operating a vessel in a closed area;
(b) Failing to observe restrictions established by a regulatory marker (i.e., signs, buoys);
(c) Operating a vessel, or knowingly allowing another person to operate a vessel, in a reckless or negligent manner, or in a manner that endangers or is likely to endanger a person or property; and
(d) Operating a vessel when under the influence of alcohol or legally-used controlled substance that may endanger life or property.
Any person operating a vehicle within Reclamation lands or Reclamation projects is subject to State laws in effect at the time.
(a) Carrying or possessing a weapon in violation of applicable Federal or State law is prohibited.
(b) Discharge of a weapon, except where allowed by State law, is prohibited.
(c) Authorized Federal, State, local and tribal law enforcement officers may carry and use weapons in the performance of their official duties.
Disorderly conduct is prohibited.
The following are prohibited:
(a) Threatening, resisting, intimidating, or intentionally interfering with a government employee or agent engaged in an official duty, or on account of the performance of an official duty;
(b) Violating the lawful order of a government employee or agent authorized to maintain order and control public access and movement during law enforcement actions, and emergency operations that involve a threat to public safety or Reclamation resources, or other activities where the control of public movement and activities is necessary to maintain order and public safety;
(c) Knowingly giving a false or fictitious report or other false information to an authorized person investigating an accident or violation of law or regulation; and
(d) Knowingly giving a false report or false information for the purpose of misleading a government employee or agent in the conduct of official duties.
Using, possessing, storing, or transporting explosives, blasting agents, or explosive materials is prohibited except as allowed by State and Federal law and as authorized by Reclamation.
In accordance with Section 1(b) of Public Law 107-69, anyone responsible for violation of the provisions of this part is subject to a fine under subchapter 227, subchapter C of title 18 United States Code, can be imprisoned for not more than 6 months, or both.