Notices. Notice of availability; notice of public meeting; request for comments

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A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

BILLING CODE 4910-57-M DEPARTMENT OF TRANSPORTATION Maritime Administration [USCG-2005-22611] Neptune LNG, L.L.C., Liquefied Natural Gas Deepwater Port License Application; Preparation of Environmental Impact Statement AGENCY: Maritime Administration, DOT. ACTION: Notice of availability; notice of public meeting; request for comments. SUMMARY: The Maritime Administration (MARAD) announces the availability of the Draft Environmental Impact Statement

(DEIS)for the Neptune LNG, L.L.C., Liquefied Natural Gas Deepwater Port license application. The application describes a project that would be located in Federal waters of Massachusetts Bay, in Block 125, approximately 8 miles southeast of Gloucester, MA and 22 miles northeast of Boston, MA. The Coast Guard and MARAD request public comments on the DEIS. Publication of this notice begins a 45 day comment period and provides information on how to participate in the process. As a point of clarification, there is another deepwater port application by Northeast Gateway Energy Bridge, L.L.C. in the same vicinity. These applications are being processed and reviewed independently. The Northeast Gateway Energy Bridge, L.L.C. DEIS was noticed May 19, 2006 and is available on the Docket at USCG-2005-22219. DATES: Public meetings will be held in Salem, MA on June 21, 2006 and in Gloucester, MA on June 22, 2006. Both meetings will be from 6 p.m. to 8 p.m. and will be preceded by an informational open house from 4:30 p.m. to 6 p.m. The public meetings may end later than the stated time, depending on the number of persons wishing to speak. Material submitted in response to the request for comments on the DEIS must reach the Docket Management Facility by July 17, 2006. ADDRESSES: The public meeting in Salem will be at the Salem State College Library, Charlotte Forten Hall, 360 Lafayette Street, Salem, MA, telephone: 978-542-7192. The public meeting in Gloucester will be held at the Gloucester High School Auditorium, 32 Leslie O. Johnson Road, Gloucester, MA, telephone: 617-635-4100. The DEIS, the application, and associated documentation is available for viewing at the DOT's Docket Management System Web site: *http://dms.dot.gov* under docket number 22611. The DEIS is also available at public libraries in Beverly, MA, Boston, MA (Central Library), Gloucester, MA, Manchester-by-the-Sea, MA, Marblehead, MA, and Salem, MA. Address docket submissions for USCG-2005-22611 to: Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Washington, DC 20590-0001. The Docket Management Facility accepts hand-delivered submissions, and makes docket contents available for public inspection and copying at this address, in room PL-401, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Facility's telephone number is 202-366-9329, the fax number is 202-493-2251, and the Web site for electronic submissions or for electronic access to docket contents is *http://dms.dot.gov* . FOR FURTHER INFORMATION CONTACT: Roddy Bachman, U.S. Coast Guard, telephone: 202-372-1451, e-mail: *rbachman@comdt.uscg.mil* . If you have questions on viewing the docket, call Renee V. Wright, Program Manager, Docket Operations, telephone: 202-493-0402. SUPPLEMENTARY INFORMATION: Public Meeting and Open House We invite you to learn about the proposed deepwater port at an informational open house, and to comment at a public meeting on the proposed action and the evaluation contained in the DEIS. In order to allow everyone a chance to speak at the public meeting, we may limit speaker time, or extend the meeting hours, or both. You must identify yourself, and any organization you represent, by name. Your remarks will be recorded or transcribed for inclusion in the public docket. You may submit written material at the public meeting, either in place of or in addition to speaking. Written material must include your name and address, and will be included in the public docket. Public docket materials will be made available to the public on the Docket Management Facility's Docket Management System (DMS). See “Request for Comments” for information about DMS and your rights under the Privacy Act. All of our public meeting locations are wheelchair-accessible. If you plan to attend the open house or public hearing, and need special assistance such as sign language interpretation or other reasonable accommodation, please notify the Coast Guard (see FOR FURTHER INFORMATION CONTACT ) at least 3 business days in advance. Include your contact information as well as information about your specific needs. Request for Comments We request public comments or other relevant information on the DEIS. The public meeting is not the only opportunity you have to comment. In addition to or in place of attending a meeting, you can submit comments to the Docket Management Facility during the public comment period (see DATES ). We will consider all comments and materials received during the comment period and prepare the Final EIS (FEIS). We will announce the availability of the FEIS and once again give you the opportunity to review and comment. If you want a notice sent directly to you, please contact representatives at the public hearing or the Coast Guard representative identified in FOR FURTHER INFORMATION CONTACT. Submissions should include: • Docket number USCG-2005-22611. • Your name and address. • Your reasons for making each comment or for bringing information to our attention. Submit comments or material using only one of the following methods: • Electronic submission to DMS, *http://dms.dot.gov* . • Fax, mail, or hand delivery to the Docket Management Facility (see ADDRESSES ). Faxed or hand delivered submissions must be unbound, no larger than 8 1/2 by 11 inches, and suitable for copying and electronic scanning. If you mail your submission and want to know when it reaches the Facility, include a stamped, self-addressed postcard or envelope. Regardless of the method used for submitting comments or material, all submissions will be posted, without change, to the DMS Web site ( *http://dms.dot.gov* ), and will include any personal information you provide. Therefore, submitting this information makes it public. You may wish to read the Privacy Act notice that is available on the DMS Web site, or the Department of Transportation Privacy Act Statement that appeared in the **Federal Register** on April 11, 2000 (65 FR 19477). You may view docket submissions at the Docket Management Facility (see ADDRESSES ), or electronically on the DMS Web site. Background Information about deepwater ports, the statutes, and regulations governing their licensing, and the receipt of the current application for a liquefied natural gas

(LNG)deepwater port appears at 70 FR 58729, October 7, 2005. The Notice of Intent to Prepare an EIS for the proposed action was published in the **Federal Register** at 70 FR 61151, October 20, 2005. Application materials and associated comments are available on the docket. Information from the “Summary of the Application” from previous **Federal Register** notices is included below for your convenience. Proposed Action and Alternatives The proposed action requiring environmental review is the Federal licensing of the proposed deepwater port described in “Summary of the Application” below. The alternatives to licensing the proposed port are:

(1)Licensing with conditions (including conditions designed to mitigate environmental impact), and

(2)denying the application, which for purposes of environmental review is the “no-action” alternative. These alternatives are more fully discussed in the DEIS. The Coast Guard is the lead Federal agency for the preparation of the EIS/EIR. You can address any questions about the proposed action or the DEIS to the Coast Guard project manager identified in FOR FURTHER INFORMATION CONTACT. Summary of the Application Neptune LNG, L.L.C. proposes to own, construct, and operate a deepwater port, named Neptune, in the Federal waters of the Outer Continental Shelf on blocks NK 19-04 6525 and NK 19-04 6575, approximately 8 miles southeast of Gloucester, MA and 22 miles northeast of Boston, MA, in a water depth of approximately 250 feet. The Neptune deepwater port would be capable of mooring up to two approximately 140,000 cubic meter capacity LNG carriers by means of a submerged unloading buoy system. The LNG carriers, or shuttle and regasification vessels (SRVs), would be equipped to store, transport and vaporize LNG, and to odorize and meter natural gas which would then be sent out by conventional subsea pipelines. Each SRV would have insulated storage tanks located within its hull. Each tank would be equipped with an in-tank pump to circulate and transfer LNG to the vaporization facilities located on the deck of the SRV. The proposed vaporization system would be a closed-loop water-glycol heat exchanger heated by steam from natural gas-fired boilers. The major fixed components of the proposed deepwater port would be an unloading buoy system, eight mooring lines consisting of wire rope and chain connecting to anchor points on the seabed, eight suction pile anchor points, approximately 2.3 miles of natural gas flow line with flexible pipe risers and risers manifolds, and approximately 11 miles of 24-inch natural gas transmission line to connect to the existing Algonquin HubLine. Neptune would have an average throughput capacity of 500 million standard cubic feet per day (MMscfd) and a peak capacity of approximately 750 MMscfd. Natural gas would be sent out by means of two flexible risers and subsea flowlines leading to a 24-inch gas transmission pipeline. The transmission pipeline would connect the deepwater port to the existing 30-inch Algonquin HubLine. No onshore components or storage facilities are associated with the proposed deepwater port application. Construction of the deepwater port components would be expected to take 36 months, with a startup of commercial operations in late 2009. The deepwater port would be designed, constructed and operated in accordance with applicable codes and standards and would have an expected operating life of approximately 20 years. As required by their regulations, the U.S. Army Corps of Engineers (USACE) will maintain a permit file. The USACE New England District phone number is 978-318-8338 and their Web site is *http://www.nae.usace.army.mil* . Comments sent to the USACE will also be incorporated into the DOT docket and EIS to ensure consistency with the NEPA process. The USACE among others are cooperating agencies and will assist in the NEPA process as described in 40 CFR 1501.6 and will conduct joint public hearings with the Coast Guard and MARAD. Massachusetts Environmental Policy Act

(MEPA)Through a Special Review Procedure established by the Massachusetts Executive Office of Environmental Affairs (EOEA), the USCG and the MEPA Office are conducting a coordinated NEPA/MEPA review allowing a single document to serve simultaneously as both the EIS under NEPA and the Environmental Impact Report

(EIR)under MEPA. The Certificates establishing the Special Review Procedure and the Scope for the Draft Environmental Impact Report can be viewed at *http://www.mass.gov/envir/mepa/secondlevelpages/recentdecisions.htm* . The Secretary of Environmental Affairs will accept written comments on the Draft Environmental Impact Report through July 17, 2006. Comments may be submitted electronically, by mail, via FAX, or by hand delivery. Please note that comments submitted on MEPA documents are public records. The mailing address for comments is: Secretary Stephen R. Pritchard, EOEA, Attn: MEPA Office, Richard Bourre, EOEA No. 13373/13374, 100 Cambridge Street, Suite 900, Boston, MA 02114. (Authority: 49 CFR 1.66). By Order of the Maritime Administrator. Dated: May 30, 2006. Joel C. Richard, Secretary, Maritime Administration. [FR Doc. E6-8632 Filed 6-2-06; 8:45 am] BILLING CODE 4910-81-P DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Finance Docket No. 34846] Pennsylvania Northeast Regional Railroad Authority 1 —Acquisition Exemption—Lackawanna County Railroad Authority 1 Formerly Monroe County Railroad Authority (MCRA). The corporate name change was effective on the consummation date of this transaction. Pennsylvania Northeast Regional Railroad Authority (PNRRA), a political subdivision of the State of Pennsylvania and a non-operating Class III rail carrier, has filed a verified notice of exemption under 49 CFR 1150.41 to acquire from Lackawanna County Railroad Authority

(LCRA)approximately 65 miles of rail lines it owns in Lackawanna, Monroe and Wayne Counties, PA, including the Carbondale Line from Fell Township to the Borough of Moosic (milepost 174.6 to milepost 196.9); Vine St. Branch in the City of Scranton (milepost 2.0 to milepost 0.3); Strawberry Hill Running Track in the City of Scranton (approximately 2,000 ft); the Pocono Line from Scranton to Mt. Pocono (milepost 134 to milepost 101); the Laurel Line and Brady Lead (milepost 0.0 to milepost 4.81); the Diamond Branch of the former Delaware Lackawanna & Western Railroad extending 0.85 miles from milepost 144.75 to milepost 145.6 in Scranton; and the Minooka Industrial Track in the City of Scranton extending 2.1 miles from Little Virginia to end of track including all sidings and spurs. The lines will continue to be operated by Delaware-Lackawanna Railroad Co. pursuant to contract. PNRRA certifies that its projected revenues as a result of this transaction will not result in the creation of a Class II or Class I rail carrier and will not exceed $5 million annually. The transaction was expected to be consummated on or after May 20, 2006. If the verified notice contains false or misleading information, the exemption is void *ab initio* . Petitions to revoke the exemption under 49 U.S.C. 10502(d) may be filed at any time. The filing of a petition to revoke will not automatically stay the transaction. An original and 10 copies of all pleadings, referring to STB Finance Docket No. 34846, must be filed with the Surface Transportation Board, 1925 K Street, NW., Washington, DC 20423-0001. In addition, one copy of each pleading must be served on Keith G. O'Brien, 1050 Seventeenth Street, NW., Suite 600, Washington, DC 20036. Board decisions and notices are available on our Web site at *http://www.stb.dot.gov* . Decided: May 26, 2006. By the Board, David M. Konschnik, Director, Office of Proceedings. Vernon A. Williams, Secretary. [FR Doc. E6-8633 Filed 6-2-06; 8:45 am] BILLING CODE 4915-01-P DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Docket No. AB-103 (Sub-No. 20X)] The Kansas City Southern Railway Company—Abandonment Exemption—in Jefferson Parish, LA The Kansas City Southern Railway Company

(KCSR)has filed a notice of exemption under 49 CFR part 1152 subpart F— *Exempt Abandonments* to abandon 0.71 miles of rail line, 1 extending from milepost 862.14 (near Turnbull Drive) to milepost 862.85 (near Causeway Blvd.), in Jefferson Parish, LA. The line traverses United States Postal Service Zip Code 70001. 1 The rail line is a segment of the former Louisiana & Arkansas Railway Company main line that was relocated. *See Louisiana & Arkansas Railway Company—Trackage Rights Exemption—Illinois Central Gulf Railroad Company and New Orleans Terminal Company* , Finance Docket No. 30639 (ICC served April 17, 1985). KCSR has certified that:

(1)No local traffic has moved over the line for at least 2 years;

(2)any overhead traffic on the line can be rerouted;

(3)no formal complaint filed by a user of rail service on the line (or by a state or local government entity acting on behalf of such user) regarding cessation of service over the line either is pending with the Surface Transportation Board or with any U.S. District Court or has been decided in favor of complainant within the 2-year period; and

(4)the requirements at 49 CFR 1105.7 (environmental reports), 49 CFR 1105.8 (historic reports), 49 CFR 1105.11 (transmittal letter), 49 CFR 1105.12 (newspaper publication), and 49 CFR 1152.50(d)(1) (notice to governmental agencies) have been met. As a condition to this exemption, any employee adversely affected by the abandonment shall be protected under *Oregon Short Line R. Co.—Abandonment—Goshen* , 360 I.C.C. 91 (1979). To address whether this condition adequately protects affected employees, a petition for partial revocation under 49 U.S.C. 10502(d) must be filed. Provided no formal expression of intent to file an offer of financial assistance

(OFA)has been received, this exemption will be effective on July 5, 2006, unless stayed pending reconsideration. Petitions to stay that do not involve environmental issues, 2 formal expressions of intent to file an OFA under 49 CFR 1152.27(c)(2), 3 and trail use/rail banking requests under 49 CFR 1152.29 must be filed by June 15, 2006. Petitions to reopen or requests for public use conditions under 49 CFR 1152.28 must be filed by June 26, 2006, with the Surface Transportation Board, 1925 K Street, NW., Washington, DC 20423-0001. 2 The Board will grant a stay if an informed decision on environmental issues (whether raised by a party or by the Board's Section of Environmental Analysis

(SEA)in its independent investigation) cannot be made before the exemption's effective date. *See Exemption of Out-of-Service Rail Lines* , 5 I.C.C.2d 377 (1989). Any request for a stay should be filed as soon as possible so that the Board may take appropriate action before the exemption's effective date. 3 Each OFA must be accompanied by the filing fee, which was increased to $1,300 effective on April 19, 2006. *See Regulations Governing Fees for Services Performed in Connection with Licensing and Related Services—2006 Update* , STB Ex Parte No. 542 (Sub-No. 13) (STB served March 20, 2006). A copy of any petition filed with the Board should be sent to KCSR's representative: David C. Reeves, Baker & Miller, PLLC, 2401 Pennsylvania Avenue, NW., Suite 300, Washington, DC 20037. If the verified notice contains false or misleading information, the exemption is void *ab initio.* KCSR has filed a combined environmental report and historic report which addresses the effects, if any, of the abandonment on the environment and historic resources. SEA will issue an environmental assessment

(EA)by June 9, 2006. Interested persons may obtain a copy of the EA by writing to SEA (Room 500, Surface Transportation Board, Washington, DC 20423-0001) or by calling SEA, at

(202)565-1539. [Assistance for the hearing impaired is available through the Federal Information Relay Service

(FIRS)at 1-800-877-8339.] Comments on environmental and historic preservation matters must be filed within 15 days after the EA becomes available to the public. Environmental, historic preservation, public use, or trail use/rail banking conditions will be imposed, where appropriate, in a subsequent decision. Pursuant to the provisions of 49 CFR 1152.29(e)(2), KCSR shall file a notice of consummation with the Board to signify that it has exercised the authority granted and fully abandoned the line. If consummation has not been effected by KCSR's filing of a notice of consummation by June 5, 2007, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire. Board decisions and notices are available on our Web site at *http://www.stb.dot.gov.* Decided: May 25, 2006. By the Board, David M. Konschnik, Director, Office of Proceedings. Vernon A. Williams, Secretary. [FR Doc. E6-8648 Filed 6-2-06; 8:45 am] BILLING CODE 4915-01-P 71 107 Monday, June 5, 2006 Rules and Regulations Part II Department of Housing and Urban Development 24 CFR Part 320 Government National Mortgage Association: Excess Yield Securities; Final Rule DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 24 CFR Part 320 [Docket No. FR-4958-F-02] RIN 2503-AA18 Government National Mortgage Association: Excess Yield Securities AGENCY: Government National Mortgage Association, HUD. ACTION: Final rule. SUMMARY: The Government National Mortgage Association (Ginnie Mae) has developed a new program under which Ginnie Mae will guarantee securities backed by the excess servicing income relating to one or more mortgage pools or loan packages underlying previously issued Ginnie Mae mortgage-backed securities (Excess Yield Securities). This final rule clarifies the authority of Ginnie Mae to guarantee this new product and establishes a new regulation that defines Excess Yield Securities and sets out the Ginnie Mae guaranty. This final rule follows publication of a September 14, 2005, proposed rule and public comment period. After Ginnie Mae's careful consideration of the public comment received, the proposed rule is being adopted without change. DATES: *Effective Date:* July 5, 2006. FOR FURTHER INFORMATION CONTACT: Stephen L. Ledbetter, Director, Securities Policy and Research, Government National Mortgage Association, 451 Seventh Street, SW., Room B-133, Washington, DC 20410; telephone

(202)401-8970 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number through TTY by calling the toll-free Federal Information Relay Service at

(800)877-8339. SUPPLEMENTARY INFORMATION: I. Background In order to further its statutory mission of expanding affordable housing in America by linking domestic and global capital markets to the nation's housing markets, Ginnie Mae, operating under its current legal authority, proposed to implement an Excess Yield Securities program (Excess Yield Program) by providing its guaranty to interest-only securities backed by a portion of the servicing fee that is paid out of the monthly cash flows from government-insured or government-guaranteed mortgage loans backing previously issued Ginnie Mae-guaranteed mortgage-backed securities. The cash flows backing the Excess Yield Securities would be that portion of a qualifying issuer's servicing cash flows with respect to the related mortgage pools or loan packages that is greater than the minimum amount of servicing required by Ginnie Mae. The Excess Yield Securities would be “based on and backed by a trust or pool composed of mortgages which are insured under the National Housing Act” and would therefore be eligible for guaranty as authorized by 12 U.S.C. 1721(g)(1), just as their related Ginnie Mae-guaranteed mortgage-backed securities are. Under the program, servicing cash flows would be pooled and would back securities guaranteed by Ginnie Mae and upon which Ginnie Mae would charge a guaranty fee pursuant to 12 U.S.C. 1721(g)(1) and 24 CFR 320 of the implementing regulations. The guarantee fee would be no more than six basis points, as stipulated by 12 U.S.C. 1721(g)(3)(A). Although a guaranty fee has been assessed against related mortgage-backed securities previously guaranteed by Ginnie Mae, the servicing cash flows that serve as the collateral for these new securities have not backed securities upon which a fee has been assessed. The Excess Yield Program was introduced as a proposed rule in order to provide an opportunity for public notice and comment before implementation of it as a new program. The proposed rule, published September 14, 2005 (70 FR 54449), sought to affirm Ginnie Mae's authority to guarantee Excess Yield Securities, to charge guaranty fees for such guarantees, and to revise Ginnie Mae's authorizing regulations to clarify their application to the Excess Yield Program. The Excess Yield Program will allow qualifying Ginnie Mae issuers to reduce the amount of mortgage servicing rights on their balance sheets, which should reduce the amount of capital they are required to hold against that asset. The program will also reduce issuers' need to use costly hedging tools to hedge against fluctuations in the value of their mortgage-servicing rights. As a result of the program, the liquidity of mortgage-servicing rights for Ginnie Mae issuers will increase, resulting in lower costs to issuers and encouraging the origination of government-insured and government-guaranteed loans that back Ginnie Mae mortgage-backed securities. This program will directly benefit low- and moderate-income borrowers and further Ginnie Mae's mission. Overall, the program will generate benefits for investors, lenders, issuers, low- and moderate-income borrowers, and Ginnie Mae. Ginnie Mae will establish appropriate safeguards to mitigate risks involved. Such safeguards will include, among other factors, a review of issuer competence and financial condition prior to allowing issuers to participate in the program. Ongoing monitoring procedures will minimize operational risks. Investor participation will be limited to institutions that meet the requirements to be classified as accredited institutional investors, thus protecting less sophisticated investors from the risks associated with interest-only securities. Commitment and guaranty fees will generate revenue to pay the costs of the program. The September 14, 2005, rule proposed to add a new section (§ 320.8) to HUD's regulations governing the guaranty of mortgage-backed securities. Section 320.8 included a definition of Excess Yield Securities and specified that Ginnie Mae will guarantee the timely payment of interest, as provided by the terms of the security. See the preamble to the September 14, 2005, proposed rule for a description of the Excess Yield Program and related regulatory amendments. II. This Final Rule This final rule follows publication of the September 14, 2005, proposed rule, and takes into consideration the public comment received on the proposed rule. After careful review of the public comment, HUD has decided to adopt the September 14, 2005, rule as final without change. III. Discussion of Public Comments on the September 14, 2005, Proposed Rule The public comment period on the proposed rule closed on November 14, 2005. HUD received one public comment in response to the proposed rule. The comment was received from a subsidiary of a financial services retailer. This section of the preamble presents a summary of the significant issues raised by the public commenter on the September 14, 2005, proposed rule, and Ginnie Mae's response to these issues. *Comment: Support for the Excess Yield Program.* The commenter wrote that the issuance of Excess Yield Securities will make Ginnie Mae securities more attractive in the marketplace, as well as make the underlying loans more affordable to borrowers applying for Federal Housing Administration (FHA)-insured and Veterans Administration (VA)-guaranteed loans. *HUD Response:* HUD agrees with this comment. * Comment: The minimum service fee for Ginnie Mae I mortgage-backed securities should be restructured in order to accommodate the Excess Yield Program. * The commenter advocated expanding the program to include securities backed by excess servicing income earned from loans backing restructured Ginnie Mae I securities. The commenter wrote that this would create a more liquid market for Excess Yield Securities by increasing the potential market size, and generate more revenue for Ginnie Mae. *HUD Response:* The Ginnie Mae I security, as currently structured, has no excess servicing because each loan backing a Ginnie Mae I security is required to have exactly 44 basis points of servicing. This requirement is communicated to, and understood by, investors, and is an important reason why the Ginnie Mae I security trades well in the secondary market. As a result, if Ginnie Mae were to restructure the Ginnie Mae I security to allow for the sale of a portion of that 44 basis points of servicing, the change could only apply prospectively, would require a change to the Bond Market Association's “good delivery guidelines” for trading in the TBA (“to be announced”) market, and might cause a dislocation in the trading of the security. To avoid such dislocation, Ginnie Mae is currently contemplating allowing excess servicing only from Ginnie Mae II securities to back the Excess Yield Securities. *Comment: Ginnie Mae correctly assessed that the Excess Yield Program would directly benefit low- and moderate-income borrowers by lowering the costs of and encouraging the origination of government-backed loans.* The commenter agreed with the assertion in the proposed rule that issuers would experience a reduction in the amount of capital needed to hold the mortgage-servicing asset and the cost to hedge it. The commenter also wrote that Excess Yield Securities would complement other efforts by Ginnie Mae to lower the cost of funds available to low- and moderate-income borrowers. *HUD Response:* HUD agrees with this comment. *Comment: The Excess Yield guaranty fee should be significantly less than six basis points.* The commenter wrote that for Ginnie Mae II pools issued since July 2003, the average amount of excess servicing produced monthly has ranged from approximately 15 to 25 basis points. The commenter reasoned that in relation to the “standard” six basis points Ginnie Mae guaranty fee that covers the full security coupon, the market clearing level for an Excess Yield Security guaranty fee should be significantly less than six basis points. The commenter defined the market clearing level as the level of guaranty fee that induces participants to create Excess Yield Securities rather than retaining those cash flows. *HUD Response:* Ginnie Mae will determine the appropriate guaranty fee to assess for its guaranty of Excess Yield Securities, based upon the risks to Ginnie Mae, and subject to the statutory limit of six basis points. *Comment: It would be beneficial to the marketplace for Ginnie Mae to communicate, as early as possible, the eligibility requirements for participation in the Excess Yield Program.* The commenter wrote that a commitment to transparency would allow issuers to determine their eligibility and how to best conduct their issuance activities in the future. *HUD Response:* Ginnie Mae is committed to being an open and transparent organization, and will provide clear guidance to the market prior to rolling out the Excess Yield Program. IV. Findings and Certifications Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)

(UMRA)establishes requirements for Federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments, and the private sector. This final rule does not impose any federal mandate on any state, local, or tribal government, or the private sector, within the meaning of UMRA. Environmental Impact This final rule does not direct, provide for assistance or loan and mortgage insurance for, or otherwise govern or regulate, real property acquisition, disposition, leasing, rehabilitation, alteration, demolition, or new construction, or establish, revise, or provide for standards for construction or construction materials, manufactured housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this final rule is categorically excluded from environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321). Regulatory Flexibility Act The Secretary has reviewed this rule before publication and, by approving it, certifies, in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), that this rule would not have a significant economic impact on a substantial number of small entities. The final rule affirms and clarifies the authority of Ginnie Mae to guarantee a type of security it had not previously guaranteed and, as such, has no impact on entities in which the size of entities is a relevant consideration. Accordingly, the undersigned certifies that this final rule would not have a significant economic impact on a substantial number of small entities. Executive Order 13132, Federalism Executive Order 13132 (entitled “Federalism”) prohibits, to the extent practicable and permitted by law, an agency from promulgating a regulation that has federalism implications and either imposes substantial direct compliance costs on state and local governments and is not required by statute, or preempts state law, unless the relevant requirements of Section 6 of the executive order are met. This rule does not have federalism implications and does not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the executive order. Executive Order 12866, Regulatory Planning and Review OMB reviewed this rule under Executive Order 12866 (entitled “Regulatory Planning and Review”). OMB determined that this rule is a “significant regulatory action,” as defined in Section 3(f) of the executive order (although not economically significant, as provided in Section 3(f)(1) of the executive order). Any changes made to the rule subsequent to its submission to OMB are identified in the docket file, which is available for public inspection in the Regulations Division, Office of the General Counsel, Department of Housing and Urban Development, 451 Seventh Street, SW., Room 10276, Washington, DC 20410-0500. List of Subjects in 24 CFR Part 320 Mortgages, Securities. Accordingly, HUD amends 24 CFR part 320 as follows: PART 320—GUARANTY OF MORTGAGE-BACKED SECURITIES 1. The authority citation for 24 CFR part 320 continues to read as follows: Authority: 12 U.S.C. 1721(g) and 1723a(a); and 42 U.S.C. 3535(d). 2. Add § 320.8 to read as follows: § 320.8 Excess Yield Securities.

(a)*Definition.* Excess Yield Securities are securities backed by the excess servicing income relating to mortgages underlying previously issued Ginnie Mae mortgage-backed securities.

(b)*GNMA guaranty.* The Association guarantees the timely payment of interest as provided by the terms of the security. Dated: May 23, 2006. Michael J. Frenz, Executive Vice President. [FR Doc. E6-8636 Filed 6-2-06; 8:45 am] BILLING CODE 4210-67-P 71 107 Monday, June 5, 2006 Proposed Rules Part III Department of Housing and Urban Development 24 CFR Parts 203 and 291 Accelerated Claim and Asset Disposition

(ACD)Program; Advance Notice of Proposed Rulemaking; Proposed Rule DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 24 CFR Parts 203 and 291 [Docket No. FR-4887-A-01; HUD-2006-0007] RIN 2502-AI14 Accelerated Claim and Asset Disposition

(ACD)Program; Advance Notice of Proposed Rulemaking AGENCY: Office of the Assistant Secretary for Housing-Federal Housing Commissioner, HUD. ACTION: Advance notice of proposed rulemaking. SUMMARY: This notice solicits comments on HUD's Accelerated Claim and Asset Disposition

(ACD)program before HUD proceeds to issue a proposed rule that will commence the rulemaking process that will result in codification of the requirements for the ACD program, thus making the ACD program a permanent part of HUD's single family mortgage insurance programs. Under the ACD program, HUD will pay claims upon assignment of certain defaulted mortgage loans (“assets”) insured by the Federal Housing Administration (FHA). The purpose of the ACD program is to help FHA maximize the recovery on assets sold by HUD. HUD seeks comments on the ACD Demonstration program, including recommendations of cost-effective, efficient improvements and alternatives that should be made part of the permanent program. DATES: *Comment Due Date:* August 4, 2006. ADDRESSES: Interested persons are invited to submit comments regarding this advance notice of proposed rulemaking to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 Seventh Street, SW., Room 10276, Washington, DC 20410-0500. Interested persons also may submit comments electronically through the Federal eRulemaking Portal at: *http://www.regulations.gov* . Commenters should follow the instructions provided on that site to submit comments electronically. HUD strongly encourages commenters to submit comments electronically in order to make them immediately available to the public. Facsimile

(FAX)comments are not acceptable. In all cases, communications must refer to the docket number and title. All comments and communications submitted will be available, without charge, for public inspection and copying between 8 a.m. and 5 p.m. weekdays at the above address. Due to security measures at the HUD Headquarters building, please schedule an appointment to review the public comments by calling the Regulations Division at

(202)708-3055 (this is not a toll-free number). Persons with hearing or speech impairments may access the above telephone number via TTY (text telephone) by calling the Federal Relay Service at 1(800) 877-8339 (this is a toll-free number). Copies of all comments submitted are available for inspection and downloading at *http://www.regulations.gov* . FOR FURTHER INFORMATION CONTACT: Kathleen S. Malone, Director, Asset Sales Office, Office of Finance and Budget, Department of Housing and Urban Development, 451 Seventh Street SW., Room 3136, Washington, DC 20410-8000; telephone

(202)708-2625 (this is not a toll-free number). Hearing-or speech-impaired individuals may access this number through TTY by calling the toll-free Federal Information Relay Service at

(800)877-8339. SUPPLEMENTARY INFORMATION: I. Background On October 29, 2002 (67 FR 66038), HUD published a notice in the **Federal Register** announcing the establishment of the Accelerated Claim and Asset Disposition

(ACD)Demonstration program. The October 29, 2002, notice followed a February 5, 2002 (67 FR 5418), notice that announced HUD's intent to establish the ACD Demonstration program and solicited public comments on the proposal. The ACD process is authorized under section 601 of the Departments of Veterans Affairs and Housing and Urban Development and Independent Agencies Appropriations Act, 1999 (Pub. L. 105-276, approved October 21, 1998), which amended section 204 of the National Housing Act (12 U.S.C. 1710) to increase recoveries, produce savings, and improve the overall efficiency of the disposition of HUD-acquired single family assets. Under amended section 204(a)(1)(A) of the National Housing Act, the Secretary of HUD is authorized to pay claims upon assignment of certain defaulted FHA-insured mortgage loans. Before implementing the new ACD disposition process on a nationwide basis, HUD has conducted an ACD Demonstration program involving a group of defaulted mortgages. This has allowed HUD to assess the overall effectiveness of this disposition process. HUD believes that improvements can be made to the program to make it more effective. Consequently, before proceeding with the regulatory codification of the ACD program, HUD is soliciting comments from all interested parties, especially those who participated or declined to participate in the Demonstration program, on possible improvements to the program. II. This Advance Notice of Proposed Rulemaking This notice solicits comments on HUD ACD Demonstration program before HUD issues a proposed rule to codify the requirements for the ACD program. When codified, the ACD program will become a permanent part of HUD's single family mortgage insurance programs. Also upon codification, the current regulations in 24 CFR part 203 governing the assignment of mortgages to HUD and related claim procedures will be amended to reflect the new requirements for assignments made pursuant to the ACD program. The proposed rule would also revise 24 CFR part 291, which governs the disposition of HUD-acquired single family property, to incorporate the policies and procedures for the sale of loans assigned to HUD under the ACD program. The ACD program regulations would provide for the ACD payment of claims. An objective of the ACD Program will be to maximize the return to the FHA insurance fund. One way to maximize returns to FHA is to minimize the time an asset is held. Possible components of the ACD program would be as follows: 1. *Mandatory and voluntary components.* HUD is considering establishing two program components:

(1)A mandatory component under which mortgagees that elect to file claims on certain defaulted mortgages (such as vacant homes) would be required to submit the mortgages for assignment and payment of a claim pursuant to the ACD program; and

(2)a voluntary component under which eligible mortgagees would be permitted to submit other types of defaulted mortgages that meet specified eligibility criteria, pursuant to the ACD program, for assignment and payment of a claim. 2. *Disposition alternatives.* To date, sales awarded based on competitive bids under the ACD Demonstration program have been conducted using joint ventures as the vehicle for disposing of defaulted assets. The proposed rule would build upon the experience of the ACD Demonstration program by granting HUD the flexibility to choose from a variety of disposition alternatives, including the joint ventures. In addition to joint ventures, another possible disposition method would be whole loan or bulk sales involving the disposal of a portfolio of assets to the highest bidder. Another possible option would be the packaging of loans into securities that are then sold to investors. Flexibility in the choice of disposition alternatives would increase HUD's ability to respond to changes in both the economy and the financial real estate market. 3. *Asset management alternatives.* The proposed rule would also describe the asset management (“servicing”) requirements applicable to loans assigned under the ACD program. HUD is considering several asset management alternatives for inclusion in the proposed rule. For example, the current FHA servicer may be required to continue servicing the loan on a fee basis until notice by HUD to transfer the loan to the servicer's designee. Another alternative would be for HUD to transfer the servicing of the loan to a servicer who would be responsible for servicing, foreclosing, and selling the assets. Based on the public comments received on this notice, the proposed rule might provide for one or more asset management alternatives, including those outlined above. III. Public Comments HUD is requesting interested members of the public, particularly those who participated in the ACD Demonstration program, to submit comments on the ACD Program and, specifically, on the main program components identified in Section II of this notice and the following issues and questions. In proposing procedural or program recommendations for disposition or asset management alternatives and claim payment, HUD asks commenters to address:

(1)Methods and/or criteria that would assist in identifying loans with high probability of foreclosure and conveyance;

(2)Asset eligibility criteria (“criteria”) that should be considered for the proposed voluntary or mandatory components of the ACD program;

(3)Any procedural and staffing efficiencies that may be anticipated from implementation of such criteria;

(4)Selection of a control group of non-ACD loans for evaluation purposes;

(5)Measures that may assist in assessing the effectiveness of the disposition process; and

(6)Criteria that may be useful to HUD in determining the advantages and disadvantages of claim submission, including timing or reversal of termination of FHA insurance, acquisition, and disposition of loans and properties. Public comments received in response to this notice will be used to develop a proposed rule that will commence the rulemaking process to codify the ACD program. HUD may also seek additional feedback from those entities that participated or have been impacted by the Demonstration program. To assist the public, HUD wishes to share the preliminary evaluation that has been performed on the Demonstration program. This evaluation can be obtained by contacting the contact person listed in this notice, or by visiting *http://www.hud.gov/offices/hsg/hsgrroom.cfm.* IV. Executive Order 12866, Regulatory Planning and Review The Office of Management and Budget

(OMB)reviewed this advance notice of proposed rulemaking under Executive Order 12866 (entitled “Regulatory Planning and Review”). OMB determined that this notice is a “significant regulatory action,” as defined in section 3(f) of the Order (although not economically significant, as provided in section 3(f)(1) of the Order). The docket file is available for public inspection between the hours of 8 a.m. and 5 p.m. in the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 Seventh Street, SW., Room 10276, Washington, DC 20410-0500. Due to security measures at the HUD Headquarters building, please schedule an appointment to review the docket file by calling the Regulations Division at

(202)708-3055 (this is not a toll-free number). Persons with hearing or speech challenges may access the above telephone number via TTY (text telephone) by calling the Federal Relay Service at 1-800-877-8339 (this is a toll free number). Dated: May 23, 2006. Brian D. Montgomery, Assistant Secretary for Housing—Federal Housing Commissioner. [FR Doc. E6-8637 Filed 6-2-06; 8:45 am] BILLING CODE 4210-67-P 71 107 Monday, June 5, 2006 Rules and Regulations Part IV Department of Education 34 CFR Part 304 Service Obligations Under Special Education; Preparation of Leadership Personnel; Combined Priority for Personnel Preparation; Interdisciplinary Training in Analysis of Large-Scale Databases; Final Rule and Notices DEPARTMENT OF EDUCATION 34 CFR Part 304 RIN 1820-AB58 Service Obligations Under Special Education—Personnel Development to Improve Services and Results for Children With Disabilities AGENCY: Office of Special Education and Rehabilitative Services, Department of Education. ACTION: Final regulations. SUMMARY: The Secretary issues final regulations governing specific provisions of the Personnel Development to Improve Services and Results for Children with Disabilities program authorized under part D of the Individuals with Disabilities Education Act, as amended (IDEA or Act). The regulations are needed to implement changes made to IDEA, as amended by the Individuals with Disabilities Education Improvement Act of 2004. DATES: These regulations are effective July 5, 2006. FOR FURTHER INFORMATION CONTACT: Louis C. Danielson, U.S. Department of Education, 400 Maryland Avenue, SW., Potomac Center Plaza, room 4160, Washington, DC 20202-2641. Telephone:

(202)245-7371. If you use a telecommunications device for the deaf (TDD), you may call the Federal Relay System

(FRS)at 1-800-877-8339. Individuals with disabilities may obtain this document in an alternative format ( *e.g.* , Braille, large print, audiotape, or computer diskette) on request to the contact person listed under FOR FURTHER INFORMATION CONTACT . SUPPLEMENTARY INFORMATION: These regulations implement specific provisions of part D of the IDEA. On June 21, 2005, we published a notice of proposed rulemaking

(NPRM)in the **Federal Register** (70 FR 35782)

(NPRM)to amend the regulations governing the Assistance to States for the Education of Children with Disabilities Program; Preschool Grants for Children with Disabilities Program; and Service Obligations under Special Education—Personnel Development to Improve Services and Results for Children with Disabilities. The proposed regulations for Service Obligations under Special Education—Personnel Development to Improve Services and Results for Children with Disabilities in 34 CFR part 304 are described on pages 35817 through 35818 of the preamble to the NPRM. The text of the proposed regulations can be found on pages 35890 through 35892 of the NPRM. In the preamble to the NPRM, the Secretary discussed the major changes proposed in that document to implement the provisions of the Service Obligations under Special Education—Personnel Development to Improve Services and Results for Children with Disabilities program, as specified in section 662(h) of the Act. These included the following: • Clarifying in §§ 304.21 and 304.22 that stipends are not included in the cost of attendance and are not limited by the cap in § 304.22(b). • Clarifying in § 304.30 that the Secretary is responsible for ensuring that scholars comply with the service obligation requirements. • Describing in one section—§ 304.30—all of the requirements a scholar must meet. As more fully explained in the *Analysis of Comments and Changes* section of this notice, these final regulations for part 304 contain several changes from the regulations proposed in the NPRM. Major Changes in the Regulations The following is a summary of the major substantive changes in these final regulations from the regulations proposed in the NPRM: 1. Eligible employment options for scholars have been expanded (§ 304.30(e)(3)). 2. The number of additional years allowed to fulfill a scholar's service obligation has been increased from three to five years (§ 304.30(f)(1)). Analysis of Comments and Changes In response to the Secretary's invitation in the NPRM, five parties submitted comments on the proposed regulations for the Service Obligations Under Special Education—Personnel Development to Improve Services and Results for Children with Disabilities (Personnel Development Program). An analysis of the comments and of the changes in the regulations since publication of the NPRM follows. We discuss substantive issues under the section to which they pertain. References to sections in this analysis are to those contained in the final regulations. The analysis generally does not address minor changes, including technical changes made to the language published in the NPRM, suggested changes the Secretary is not legally authorized to make under applicable statutory authority, or comments that express concerns of a general nature about the Department or other matters that are not directly relevant to these regulations. Assurances that Must be Provided by Grantee (§ 304.23) *Comment:* None. *Discussion:* Upon further review, the Department has determined that, at the time of exit from the program, the grantee should provide the scholar with a list containing all of the scholar's obligations under § 304.30, and the scholar should certify that this list of obligations is correct. We believe that this requirement should be added because it clarifies that the grantees, which have the best access to this information, are responsible for sharing this information with the scholars. *Change:* We have deleted the requirement contained in § 304.23(c) that the grantee must “establish policies and procedures for receiving and maintaining records of written certification from scholars.” We have modified § 304.23(c) by adding new §§ 304.23(c)(1) and (2), which require the grantee to provide information to the scholar and specify that, upon receipt of this information, the scholar must provide written certification to the grantee that this information is correct. Requirements for Scholar (§ 304.30(e)) *Comment:* A few commenters stated that the “majority of children” and the “majority of time” requirements in § 304.30(e)(1) and

(2)cause hardship for some scholars. The commenters stated that scholars who provide direct services in early intervention and adaptive physical education are most impacted by these requirements because early intervention and adaptive physical education positions involve working primarily, or exclusively, in settings in which scholars provide educational services, but not necessarily special education services, to students with the full range of abilities and disabilities in a general education setting. The commenters recommended eliminating the current “majority of children” and the “majority of time” requirements in § 304.30(e)(1) and

(2)and instead requiring only that scholars “provide special education and related services to children with disabilities * * *” consistent with section 662(h)(1) of the Act. *Discussion:* The Department supports the provision of special education and related services and early intervention services in settings with nondisabled children. However, the Department believes that the limited funds available for the Personnel Development Program should be targeted to support and train scholars who, following completion of training, will be employed in positions (other than supervisory, postsecondary faculty, research, policy, technical assistance, program development, or administration) that meet the “majority of time” or the “majority of children” requirements in § 304.30(e)(1) and

(2)to ensure that the need for qualified special education personnel can be met. The Department believes that these majority requirements are necessary to ensure that there are sufficient numbers of qualified personnel to provide the most effective special education, related services, and early intervention services to infants, toddlers, and children with disabilities. *Changes:* None. *Comment:* None. *Discussion:* Upon internal review, the Department has determined that it would be helpful to define more precisely the term “majority,” as it is used in § 304.30(e). *Changes:* We have modified the language in § 304.30(e) to substitute the term “51 percent” for the term “majority” throughout this section. *Comment:* A few commenters stated that the range of employment options to satisfy the service obligation requirements in § 304.30(e)(3) through

(5)is too restrictive and should be expanded. The commenters stated that scholars should be allowed to satisfy their service obligation through work in other areas, such as policy, administration, professional development, technical assistance, and program development related to special education, related services, and early intervention services. *Discussion:* The Department agrees that there may be situations in which an individual can fulfill his or her service obligation in a position that is not described in § 304.30(e), including positions involving policy, technical assistance, program development, or administration, when the individual spends at least 51 percent of his or her time performing work related to the training for which a scholarship was received. *Changes:* We have deleted § 304.30(e)(4) and (5), and modified the language in § 304.30(e)(3) to clarify that, in addition to positions involving supervision, teaching at the postsecondary level, and research, a scholar may fulfill the scholar's service obligation in a position involving policy, technical assistance, program development, or administration when the scholar spends at least 51 percent of his or her time performing work related to the training for which a scholarship was received under section 662 of the Act. *Comment:* A few commenters stated that recent Federal education policy, as articulated in the No Child Left Behind Act of 2001 and the 2004 reauthorization of IDEA, focuses on addressing the needs and performance of children with disabilities within programs, policies, and procedures of the general education system. The commenters recommended that the Department expand the eligible employment options to include, under limited circumstances, employment that addresses the needs of children with disabilities within the broader context of prevention and intervention initiatives in the general education system that are designed to accommodate the needs of a wide range of children. *Discussion:* The purpose of providing scholarships under the Personnel Development Program is to ensure that there are sufficient numbers of qualified personnel to provide special education, related services, and early intervention services to infants, toddlers, and children with disabilities. While scholarships under this program may be used to provide support for training and professional development on topics leading to the identification of children with disabilities ( *e.g.* , progress monitoring and response to intervention), we do not believe scholars should be permitted to satisfy their service obligation in positions that focus primarily on nondisabled students or nondisabled students who may be at risk of having a disability. *Changes:* None. Time Period (§ 304.30(f)) *Comment:* A few commenters suggested changing the length of the service obligation in § 304.30(f)(1) so that scholars who are unable to satisfy the “majority of children” or the “majority of time” requirement in any single year would either automatically be subject to one extra year of service, or, upon request, receive a deferral of up to two years. *Discussion:* Section 304.30(f)(1) requires scholars to complete at least two years of service obligation for every academic year for which assistance was received and to complete their service obligation in not more than the sum of the number of years required plus three additional years. The Department recognizes that some employment circumstances may make it difficult for scholars to fulfill their service obligation, as defined in § 304.30(e), within this time period. While implementing the commenters' recommendations would be too complex and burdensome to administer and monitor, we believe it would be appropriate to expand the number of years that scholars will have to fulfill their service obligation. *Changes:* We have revised § 304.30(f)(1) to allow all scholars five, instead of three, additional years to fulfill their service obligation. *Comment:* A few commenters expressed concern that, when scholars who are qualified service providers before they enter an academic program ( *e.g.* , teachers returning to school for a masters degree) do not complete one academic year of study because of personal or professional reasons, they must repay their scholarship. The commenters stated that these scholars, who are already qualified to provide special education, related services, or early intervention services to children with disabilities, should be permitted to satisfy their obligation through service, rather than repaying the cost of the scholarship, even though they have not accumulated one year of academic credit, as required in § 304.30(f)(2). *Discussion:* The Department believes that scholars are unlikely to make substantial gains in their knowledge and skills in less than one year such that they would be able to provide improved special education, related services, or early intervention services to infants, toddlers, and children with disabilities. *Changes:* None. Executive Order 12866 These final regulations have been reviewed by the Office of Management and Budget

(OMB)as a significant regulatory action in accordance with Executive Order 12866. Under the terms of the order we have assessed the potential costs and benefits of this regulatory action. The potential costs associated with the final regulations are those resulting from statutory requirements and those we have determined to be necessary for administering this program effectively and efficiently. In assessing the potential costs and benefits of these final regulations, we have determined that the benefits of the regulations justify the costs. Summary of Potential Costs and Benefits Service Obligation Tracking Burden The statutory change incorporated in these final regulations, which shifts the burden for ensuring that scholars comply with their service obligation from grantees to the Secretary, was not specifically addressed in the *Summary of potential costs and benefits section* contained in the NPRM because this change does not impose any additional burden on grantees, and will not result in any significant additional costs or benefits. We include additional discussion of potential costs and benefits in the section of this preamble titled *Analysis of Comment and Changes.* Paperwork Reduction Act of 1995 The Paperwork Reduction Act of 1995 does not require you to respond to a collection of information unless it displays a valid OMB control number. The collection of information in these final regulations has been approved by OMB under OMB control number 1820-0622. We also display this OMB control number in these final regulations at the end of the affected sections of the regulations. The clarification of the written certification requirement from the scholar in § 304.23(c)(2) was not discussed in the NPRM but has been added to the final regulations. This imposes a new information collection requirement, however, it does not fall under the Paperwork Reduction Act's definition of “information” as explained in 5 CFR 1320.3(h). Intergovernmental Review This program is subject to the requirements of Executive Order 12372 and the regulations in 34 CFR part 79. The objective of the Executive order is to foster an intergovernmental partnership and a strengthened federalism by relying on processes developed by State and local governments for coordination and review of proposed Federal Financial assistance. In accordance with the order, we intend this document to provide early notification of the Department's specific plans and actions for this program. Assessment of Educational Impact In the NPRM we requested comments on whether the proposed regulations would require transmission of information that any other agency or authority of the United States gathers or makes available. Based on the response to the NPRM and on our review, we have determined that these final regulations do not require transmission of information that any other agency or authority of the United States gathers or makes available. Electronic Access to This Document You may view this document, as well as all other Department of Education documents published in the **Federal Register** , in text or Adobe Portable Document Format

(PDF)on the Internet at the following site: *http://www.ed.gov/news/fedregister.* To use PDF you must have Adobe Acrobat Reader, which is available free at this site. If you have questions about using PDF, call the U.S. Government Printing Office (GPO), toll free, at 1-888-293-6498; or in the Washington, DC area at

(202)512-1530. Note: The official version of the document is the document published in the **Federal Register** . Free Internet access to the official edition of the **Federal Register** and the Code of Federal Regulations is available on GPO Access at: *http://www.gpoaccess.gov/nara/index.html.* (Catalog of Federal Domestic Assistance Number 84.325 Personnel Development to Improve Services and Results for Children with Disabilities). List of Subjects in 34 CFR Part 304 Service obligations under special education—personnel development to improve services and results for children with disabilities. Dated: May 26, 2006. John H. Hager, Assistant Secretary for Special Education and Rehabilitative Services. For the reasons set forth above, the Department revises 34 CFR part 304 to read as follows: PART 304—SERVICE OBLIGATIONS UNDER SPECIAL EDUCATION—PERSONNEL DEVELOPMENT TO IMPROVE SERVICES AND RESULTS FOR CHILDREN WITH DISABILITIES Subpart A—General Sec. 304.1 Purpose. 304.3 Definitions. Subpart B—Conditions That Must Be Met by Grantee 304.21 Allowable costs. 304.22 Requirements for grantees in disbursing scholarships. 304.23 Assurances that must be provided by grantee. Subpart C—Conditions That Must Be Met by Scholar 304.30 Requirements for scholar. 304.31 Requirements for obtaining an exception or deferral to performance or repayment under an agreement. Authority: 20 U.S.C. 1462(h), unless otherwise noted. Subpart A—General § 304.1 Purpose. Individuals who receive scholarship assistance from projects funded under the Special Education—Personnel Development to Improve Services and Results for Children with Disabilities program are required to complete a service obligation, or repay all or part of the costs of such assistance, in accordance with section 662(h) of the Act and the regulations of this part. (Authority: 20 U.S.C. 1462(h)) § 304.3 Definitions. The following definitions apply to this program:

(a)*Academic year* means—

(1)A full-time course of study—

(i)Taken for a period totaling at least nine months; or

(ii)Taken for the equivalent of at least two semesters, two trimesters, or three quarters; or

(2)For a part-time scholar, the accumulation of periods of part-time courses of study that is equivalent to an “academic year” under paragraph (a)(1) of this definition.

(b)*Act* means the Individuals with Disabilities Education Act, as amended, 20 U.S.C. 1400 *et seq.*

(c)*Early intervention services* means early intervention services as defined in section 632(4) of the Act and includes early intervention services to infants and toddlers with disabilities, and as applicable, to infants and toddlers at risk for disabilities under sections 632(1) and 632(5)(b) of the Act.

(d)*Full-time,* for purposes of determining whether an individual is employed full-time in accordance with § 304.30 means a full-time position as defined by the individual's employer or by the agencies served by the individual.

(e)*Related services* means related services as defined in section 602(26) of the Act.

(f)*Repayment* means monetary reimbursement of scholarship assistance in lieu of completion of a service obligation.

(g)*Scholar* means an individual who is pursuing a degree, license, endorsement, or certification related to special education, related services, or early intervention services and who receives scholarship assistance under section 662 of the Act.

(h)*Scholarship* means financial assistance to a scholar for training under the program and includes all disbursements or credits for tuition, fees, stipends, books, and travel in conjunction with training assignments.

(i)*Service obligation* means a scholar's employment obligation, as described in section 662(h) of the Act and § 304.30.

(j)*Special education* means special education as defined in section 602(29) of the Act. (Authority: 20 U.S.C. 1462(h)) Subpart B—Conditions That Must be Met by Grantee § 304.21 Allowable costs. In addition to the allowable costs established in the Education Department General Administrative Regulations in 34 CFR 75.530 through 75.562, the following items are allowable expenditures by projects funded under the program:

(a)Cost of attendance, as defined in Title IV of the Higher Education Act of 1965, as amended, 20 U.S.C. 1087 *ll* (HEA), including the following:

(1)Tuition and fees.

(2)An allowance for books, supplies, transportation, and miscellaneous personal expenses.

(3)An allowance for room and board.

(b)Stipends.

(c)Travel in conjunction with training assignments. (Authority: 20 U.S.C. 1462(h)) § 304.22 Requirements for grantees in disbursing scholarships. Before disbursement of scholarship assistance to an individual, a grantee must—

(a)Ensure that the scholar—

(1)Is a citizen or national of the United States;

(2)Is a permanent resident of—

(i)Puerto Rico, the United States Virgin Islands, Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands; or

(ii)The Republic of the Marshall Islands, the Federated States of Micronesia, or the Republic of Palau during the period in which these entities are eligible to receive an award under the Personnel Development to Improve Services and Results for Children with Disabilities program; or

(3)Provides evidence from the U.S. Department of Homeland Security that the individual is—

(i)A lawful permanent resident of the United States; or

(ii)In the United States for other than a temporary purpose with the intention of becoming a citizen or permanent resident;

(b)Limit the cost of attendance portion of the scholarship assistance (as discussed in § 304.21(a)) to the amount by which the individual's cost of attendance at the institution exceeds the amount of grant assistance the scholar is to receive for the same academic year under title IV of the HEA; and

(c)Obtain a Certification of Eligibility for Federal Assistance from each scholar, as prescribed in 34 CFR 75.60, 75.61, and 75.62. (Authority: 20 U.S.C. 1462(h)) § 304.23 Assurances that must be provided by grantee. Before receiving an award, a grantee that intends to grant scholarships under the program must include in its application an assurance that the following requirements will be satisfied:

(a)*Requirement for agreement.* Prior to granting a scholarship, the grantee will require each scholar to enter into a written agreement in which the scholar agrees to the terms and conditions set forth in § 304.30. This agreement must explain the Secretary's authority to grant deferrals and exceptions to the service obligation pursuant to § 304.31 and include the current Department address for purposes of the scholar's compliance with § 304.30(i), or any other purpose under this part.

(b)*Standards for satisfactory progress.* The grantee must establish, notify scholars of, and apply reasonable standards for measuring whether a scholar is maintaining satisfactory progress in the scholar's course of study.

(c)*Exit certification.*

(1)At the time of exit from the program, the grantee must provide the following information to the scholar:

(i)The number of years the scholar needs to work to satisfy the work requirements in § 304.30(d);

(ii)The total amount of scholarship assistance received subject to § 304.30;

(iii)The time period, consistent with § 304.30(f)(1), during which the scholar must satisfy the work requirements; and

(iv)As applicable, all other obligations of the scholar under § 304.30.

(2)Upon receipt of this information from the grantee, the scholar must provide written certification to the grantee that the information is correct.

(d)*Information.* The grantee must forward the information and written certification required in paragraph

(c)of this section to the Secretary, as well as any other information that is necessary to carry out the Secretary's functions under section 662 of the Act and this part.

(e)*Notification to the Secretary.* If the grantee is aware that the scholar has chosen not to fulfill or will be unable to fulfill the obligation under § 304.30(d), the grantee must notify the Secretary when the scholar exits the program. (Approved by the Office of Management and Budget under control number 1820-0622) (Authority: 20 U.S.C. 1462(h)) Subpart C—Conditions That Must Be Met by Scholar § 304.30 Requirements for scholar. Individuals who receive scholarship assistance from grantees funded under section 662 of the Act must—

(a)*Training.* Receive the training at the educational institution or agency designated in the scholarship;

(b)*Educational allowances.* Not accept payment of educational allowances from any other entity if that allowance conflicts with the scholar's obligation under section 662 of the Act and this part;

(c)*Satisfactory progress.* Maintain satisfactory progress toward the degree, certificate, endorsement, or license as determined by the grantee;

(d)*Service obligation.* Upon exiting the training program under paragraph

(a)of this section, subsequently maintain employment—

(1)On a full-time or full-time equivalent basis; and

(2)For a period of at least two years for every academic year for which assistance was received;

(e)*Eligible employment.* In order to meet the requirements of paragraph

(d)of this section for any project funded under section 662 of the Act, be employed in a position in which—

(1)At least 51 percent of the infants, toddlers, and children to whom the individual provides services are receiving special education, related services, or early intervention services from the individual;

(2)The individual spends at least 51 percent of his or her time providing special education, related services, or early intervention services to infants, toddlers, and children with disabilities; or

(3)If the position involves supervision (including in the capacity of a principal), teaching at the postsecondary level, research, policy, technical assistance, program development, or administration, the individual spends at least 51 percent of his or her time performing work related to the training for which a scholarship was received under section 662 of the Act.

(f)*Time period.* Meet the service obligation under paragraph

(d)of this section as follows:

(1)A scholar must complete the service obligation within the period ending not more than the sum of the number of years required in paragraph (d)(2) of this section, as appropriate, plus five additional years, from the date the scholar completes the training for which the scholarship assistance was awarded.

(2)A scholar may begin eligible employment subsequent to the completion of one academic year of the training for which the scholarship assistance was received that otherwise meets the requirements of paragraph (1);

(g)*Part-time scholars.* If the scholar is pursuing coursework on a part-time basis, meet the service obligation in this section based on the accumulated academic years of training for which the scholarship is received;

(h)*Information upon exit.* Provide the grantee all requested information necessary for the grantee to meet the exit certification requirements under § 304.23(c);

(i)*Information after exit.* Within 60 days after exiting the program, and as necessary thereafter for any changes, provide the Department, via U.S. mail, all information that the Secretary needs to monitor the scholar's service obligation under this section, including social security number, address, employment setting, and employment status;

(j)*Repayment.* If not fulfilling the requirements in this section, subject to the provisions in § 304.31 regarding an exception or deferral, repay any scholarship received, plus interest, in an amount proportional to the service obligation not completed as follows:

(1)The Secretary charges the scholar interest on the unpaid balance owed in accordance with the Debt Collection Act of 1982, as amended, 31 U.S.C. 3717. (2)(i) Interest on the unpaid balance accrues from the date the scholar is determined to have entered repayment status under paragraph

(4)of this section.

(ii)Any accrued interest is capitalized at the time the scholar's repayment schedule is established.

(iii)No interest is charged for the period of time during which repayment has been deferred under § 304.31.

(3)Under the authority of the Debt Collection Act of 1982, as amended, the Secretary may impose reasonable collection costs.

(4)A scholar enters repayment status on the first day of the first calendar month after the earliest of the following dates, as applicable:

(i)The date the scholar informs the grantee or the Secretary that the scholar does not plan to fulfill the service obligation under the agreement.

(ii)Any date when the scholar's failure to begin or maintain employment makes it impossible for that individual to complete the service obligation within the number of years required in § 304.30(f).

(iii)Any date on which the scholar discontinues enrollment in the course of study under § 304.30(a).

(5)The scholar must make payments to the Secretary that cover principal, interest, and collection costs according to a schedule established by the Secretary.

(6)Any amount of the scholarship that has not been repaid pursuant to paragraphs (j)(1) through (j)(5) of this section will constitute a debt owed to the United States that may be collected by the Secretary in accordance with 34 CFR part 30. (Approved by the Office of Management and Budget under control number 1820-0622) (Authority: 20 U.S.C. 1462(h)) § 304.31 Requirements for obtaining an exception or deferral to performance or repayment under an agreement.

(a)Based upon sufficient evidence to substantiate the grounds, the Secretary may grant an exception to the repayment requirement in § 304.30(j), in whole or part, if the scholar—

(1)Is unable to continue the course of study in § 304.30 or perform the service obligation because of a permanent disability; or

(2)Has died.

(b)Based upon sufficient evidence to substantiate the grounds, the Secretary may grant a deferral of the repayment requirement in § 304.30(j) during the time the scholar—

(1)Is engaging in a full-time course of study at an institution of higher education;

(2)Is serving on active duty as a member of the armed services of the United States;

(3)Is serving as a volunteer under the Peace Corps Act; or

(4)Is serving as a full-time volunteer under title I of the Domestic Volunteer Service Act of 1973. (Authority: 20 U.S.C. 1462(h)) [FR Doc. 06-5111 Filed 6-2-06; 8:45 am]

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U.S. Code