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Code · REGISTER · 2006-08-30 · PROPOSED RULES · Unknown

Unknown. Final rule

35,839 words·~163 min read·/register/2006/08/30/06-7223

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

--- schema: federal-register doc_type: fedreg source_file: FR-2006-08-30.xml --- 71 168 Wednesday, August 30, 2006 Contents Agriculture Agriculture Department See Animal and Plant Health Inspection Service See Commodity Credit Corporation RULES Organization, functions, and authority delegations: Under Secretary for Farm and Foreign Agricultural Services et al., 51421 E6-14365 NOTICES Agency information collection activities; proposals, submissions, and approvals, 51566-51567 E6-14367 Animal Animal and Plant Health Inspection Service RULES Exportation and importation of animals and animal products:
Spring viremia of carp; import restrictions on certain live fish, fertilized eggs, and gametes, 51429-51437 E6-14478 Interstate transportation of animals and animal products (quarantine): Tuberculosis in cattle and bison— State and zone designations, 51428-51429 E6-14481 Plant-related quarantine, domestic: Emerald ash borer, 51421-51422 E6-14480 Army Army Department NOTICES Agency information collection activities; proposals, submissions, and approvals, 51585-51586 06-7243 06-7244 Census Census Bureau NOTICES Agency information collection activities; proposals, submissions, and approvals, 51571-51572 E6-14358 Centers Centers for Disease Control and Prevention NOTICES Meetings:
Childhood Lead Poisoning Prevention Advisory Committee, 51623 E6-14441 Disease, Disability, and Injury Prevention and Control Special Emphasis Panels; correction, 51623-51624 E6-14418 Savannah River Site Dose Reconstruction Project, 51624 E6-14424 Patent licenses; non-exclusive, exclusive, or partially exclusive: Intercell, 51624-51625 E6-14423 Civil Civil Rights Commission PROPOSED RULES Employee responsibilities and ethical conduct standards; cross reference, 51546-51547 06-7233 Ethical conduct for Commission employees; supplemental standards, 51533-51534 06-7232 NOTICES Meetings;
State advisory committees: Connecticut, 51567-51568 E6-14417 Coast Guard Coast Guard RULES Drawbridge operations: Maryland and Virginia, 51480-51481 E6-14439 PROPOSED RULES Drawbridge operations: Florida, 51540-51542 E6-14432 Commerce Commerce Department See Census Bureau See Foreign-Trade Zones Board See Industry and Security Bureau See International Trade Administration See National Oceanic and Atmospheric Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, E6-14355 51568-51571 E6-14359 E6-14369 Commodity Commodity Credit Corporation RULES Loan and purchase programs:
Cotton marketing assistance loan collateral; storage, handling, and ginning requirements, 51422-51428 E6-14370 Corporation Corporation for National and Community Service NOTICES Reports and guidance documents; availability, etc.: Segal AmeriCorps Education Award; online payment system, 51579 E6-14470 Defense Defense Department See Army Department RULES Personnel Security Program: Personnel security clearance procedures, 51474-51479 E6-14361 NOTICES Agency information collection activities; proposals, submissions, and approvals, 51579-51580 06-7241 06-7242 Memorandums of understanding:
DOD and Fish and Wildlife Service; promotion of migratory birds conservation, 51580-51585 E6-14352 Education Education Department NOTICES Agency information collection activities; proposals, submissions, and approvals, 51586-51587 E6-14437 E6-14438 Special Education and Rehabilitative Services: Individuals with Disabilities Education Act (IDEA)— Correspondence; quarterly list, 51587-51588 E6-14412 Energy Energy Department See Energy Efficiency and Renewable Energy Office See Federal Energy Regulatory Commission NOTICES Meetings:
Environmental Management Site-Specific Advisory Board— Savannah River Site, SC, 51588-51589 E6-14434 Energy Energy Efficiency and Renewable Energy Office NOTICES Meetings: State Energy Advisory Board, 51589 E6-14444 EPA Environmental Protection Agency RULES Air pollution control; new motor vehicles and engines: Heavy-duty diesel engines, 51481-51489 E6-14429 Air quality implementation plans; approval and promulgation; various States; air quality planning purposes; designation of areas:
Indiana, 51489-51500 06-7248 Pesticides; tolerances in food, animal feeds, and raw agricultural commodities: Bifenazate, 51500-51505 E6-14427 Ethofumesate, 51510-51516 E6-14431 S-metolachlor, 51505-51510 E6-14443 PROPOSED RULES Air pollution control; new motor vehicles and engines: Heavy-duty diesel engines, 51542-51545 E6-14428 Air quality implementation plans; approval and promulgation; various States; air quality planning purposes; designation of areas: Indiana, 51546 E6-14425 Montana, 51545-51546 E6-14452 NOTICES Pesticide registration, cancellation, etc.:
Carbofuran, 51610-51612 E6-14213 Triadimefon and triadimenol, 51612-51614 E6-14318 Pesticides; experimental use permits, etc.: Montana Microbial Products, 51614 E6-14445 Solid wastes: Municipal solid waste landfill permit programs— Michigan, 51614-51615 E6-14453 Superfund; response and remedial actions, proposed settlements, etc.: Feldman Barrel and Drum Site, NY, E6-14426 51615-51616 E6-14454 Equal Equal Employment Opportunity Commission NOTICES Meetings; Sunshine Act, 51616 06-7352 Executive Executive Office of the President See Presidential Documents See Trade Representative, Office of United States Export Export-Import Bank NOTICES Meetings:
Advisory Committee, 51616 06-7240 FAA Federal Aviation Administration RULES Airworthiness directives: Empresa Brasileira de Aeronautica S.A. (EMBRAER), 51465-51467 E6-14288 McDonnell Douglas, 51467-51469 E6-14289 Pratt & Whitney, 51459-51465 E6-14238 Airworthiness standards: Special conditions— West Pacific Air LLC; Raytheon Beech Model B-36TC airplane, 51457-51459 E6-14457 IFR altitudes, 51469-51471 E6-14446 NOTICES Airports: Air navigational aids at Antelope NDB, Rock Springs, WY and Vero Beach NDB, FL; monitor status change, 51656-51657 06-7252 FCC Federal Communications Commission RULES Radio stations; table of assignments:
Florida and Georgia, 51516-51517 E6-14156 NOTICES Agency information collection activities; proposals, submissions, and approvals, 51616-51617 E6-14436 Regulatory fees; payment methods and procedures (FY 2006), 51618-51619 E6-14433 *Applications, hearings, determinations, etc.:* Neutral Tandem, 51617-51618 E6-14215 Federal Emergency Federal Emergency Management Agency NOTICES Disaster and emergency areas: Alaska, 51631-51632 E6-14414 New York, 51632 E6-14415 Virginia, 51632 E6-14413 Federal Energy Federal Energy Regulatory Commission NOTICES Agency information collection activities; proposals, submissions, and approvals, 51589-51590 E6-14402 Complaints filed:
Wisconsin Public Service Corp. et al., 51598 E6-14382 Xcel Energy Services Inc., et al., 51598-51599 E6-14381 Electric rate and corporate regulation combined filings, 51599-51603 E6-14388 E6-14396 Environmental statements; notice of intent: SG Resources Mississippi, L.L.C., 51603-51604 E6-14378 Hydroelectric applications, 51604-51608 E6-14372 E6-14384 E6-14392 Meetings: Idaho Power Co., 51608-51609 E6-14395 Midwest Independent Transmission System Operator, Inc., 51609 E6-14401 Pacific Gas and Electric Co.; site visit, 51609-51610 E6-14391 Off-the-record communications, 51610 E6-14385 *Applications, hearings, determinations, etc.:* American Transmission Co.
LLC, 51590-51591 E6-14398 Black Marlin Pipeline Co. et al., 51591-51592 E6-14404 Brush Cogeneration Partners, 51592 E6-14393 Cameron Interstate Pipeline, LLC, 51592-51593 E6-14380 Duke Energy Ohio, Inc., 51593 E6-14374 East Tennessee Natural Gas, LLC, 51593-51594 E6-14399 ETC Katy Pipeline, Ltd., 51594 E6-14403 Golden Pass Pipeline LP, 51594-51595 E6-14373 Gulfstream Natural Gas System L.L.C., 51595 E6-14387 Pedricktown Cogeneration Co., LP, 51595-51596 E6-14383 Perryville Energy Partners, L.L.C., 51596 E6-14390 Rockies Express Pipeline LLC, 51596 E6-14386 SCG Pipeline, Inc., 51596-51597 E6-14379 Southeastern Power Administration, 51597 E6-14400 Transcontinental Gas Pipe Line Corp., 51597-51598 E6-14405 Venice Gathering System, L.L.C., 51598 E6-14394 FMC Federal Maritime Commission NOTICES Agreements filed, etc., 51619 E6-14448 Ocean transportation intermediary licenses:
Benco Shipping International, LLC; et al., 51619 E6-14455 Carotrans International, Inc., 51619-51620 E6-14440 CDC USA, Inc., et al., 51620 E6-14442 Federal Motor Federal Motor Carrier Safety Administration PROPOSED RULES Motor carrier safety standards: Driving of commercial motor vehicles— Railroad-highway grade crossing; safe clearance; meeting, 51547-51548 E6-14462 Federal Railroad Federal Railroad Administration RULES Practice and procedure: Emergency Relief Dockets establishment and emergency safety regulations waiver petitions handling procedures, 51517-51522 06-7292 Federal Reserve Federal Reserve System RULES Electronic fund transfers (Regulation E):
Financial institutions compliance requirements; official staff commentary, 51437-51457 E6-14342 06-7223 NOTICES Banks and bank holding companies: Formations, acquisitions, and mergers, 51620 E6-14447 FTC Federal Trade Commission NOTICES Prohibited trade practices: New Century Health Quality Alliance, Inc., et al, 51620-51623 E6-14360 Fish Fish and Wildlife Service PROPOSED RULES Endangered and threatened species: Critical habitat designations— Bald eagle; Sonoran Desert population, 51549-51565 06-7180 Food Food and Drug Administration NOTICES Meetings:
Special Studies Relating to the Possible Long-Term Health Effects of Phenoxy Herbicides and Contaminants Advisory Committee, 51625 E6-14371 MISSING FOR: Foreign-Trade Zones Board Foreign-Trade Zones Board NOTICES *Applications, hearings, determinations, etc.:* Texas Sherwin Alumina Co.; manufacture of alumina and aluminum hydrate, 51572-51573 E6-14476 Health Health and Human Services Department See Centers for Disease Control and Prevention See Food and Drug Administration See Health Resources and Services Administration See National Institutes of Health Health Health Resources and Services Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 51625-51626 E6-14411 Homeland Homeland Security Department See Coast Guard See Federal Emergency Management Agency Housing Housing and Urban Development Department NOTICES Grants and cooperative agreements; availability, etc.:
Community Development Block Grant Program— Disaster recovery grants provided to States; waivers and alternative requirements, 51678-51681 E6-14349 Industry Industry and Security Bureau NOTICES Meetings: Regulations and Procedures Technical Advisory Committee, 51573 06-7259 Interior Interior Department See Fish and Wildlife Service See National Park Service See Surface Mining Reclamation and Enforcement Office NOTICES Comprehensive conservation plans; availability, etc.: Choctaw National Wildlife Refuge, AL, 51632-51633 06-7245 IRS Internal Revenue Service RULES Income taxes:
Stock held in employee stock ownership plan; dividends paid deduction, 51471-51474 E6-14420 PROPOSED RULES Procedure and administration: Installment agreements; processing user fees, 51538-51540 E6-14421 NOTICES Agency information collection activities; proposals, submissions, and approvals, 51674 E6-14419 International International Trade Administration NOTICES Antidumping and countervailing duties: Administrative review requests, 51573-51575 E6-14475 Labor Labor Department See Mine Safety and Health Administration See Occupational Safety and Health Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 51637-51638 E6-14435 Mine Mine Safety and Health Administration NOTICES Reports and guidance documents; availability, etc.:
Mine Improvement and New Emergency Response Act— Post-accident breathable air for trapped underground miners; emergency response plan requirement; program policy letter, 51638-51639 06-7260 National Highway National Highway Traffic Safety Administration RULES Motor vehicle safety standards: Seat belt assemblies, 51522-51529 E6-14479 NOTICES Motor vehicle safety standards: Nonconforming vehicles; defect and noncompliance decisions; annual list, 51657-51663 E6-14459 Motor vehicle safety standards; exemption petitions, etc.:
Ford Motor Co., 51663-51665 E6-14458 Reports and guidance documents; availability, etc.: Impaired driving records information systems guidelines, 51665-51672 E6-14463 NIH National Institutes of Health NOTICES Agency information collection activities; proposals, submissions, and approvals, 51626-51627 E6-14354 Inventions, Government-owned; availability for licensing, 51627-51628 E6-14353 Meetings: National Cancer Institute, 51628 06-7228 06-7229 National Center on Minority Health and Health Disparities, 51628 06-7227 National Eye Institute, 51628-51629 06-7226 Reports and guidance documents; availability, etc.:
Genome-wide association studies; proposed data sharing policy; comment request, 51629-51631 E6-14416 NOAA National Oceanic and Atmospheric Administration RULES Fishery conservation and management: Alaska; fisheries of Exclusive Economic Zone— Pollock, 51532 06-7261 Atlantic highly migratory species— Atlantic bluefin tuna, 51529-51531 E6-14486 Northeastern United States fisheries— Atlantic bluefish, 51531 E6-14482 Summer flounder, 51531-51532 E6-14474 NOTICES Coastal zone management programs and estuarine sanctuaries:
Elkhorn Slough National Estuarine Research Reserve, CA; management plan, 51575-51576 06-7263 State programs— Intent to evaluate performance, 51576 E6-14366 Waquoit Bay National Estuarine Research Reserve, MA; revised management plan, 51576-51577 E6-14430 Meetings: Atlantic Highly Migratory Species Advisory Panel et al., 51577 06-7262 New England Fishery Management Council, 51577-51578 E6-14461 Western Pacific Fishery Management Council, 51578 E6-14460 National Park National Park Service NOTICES Native American human remains, funerary objects; inventory, repatriation, etc.:
American Museum of Natural History, New York, NY, 51633 E6-14473 Colorado Historical Society, Denver, CO; correction, 51633-51634 E6-14469 Land Management Bureau, Anasazi Heritage Center, CO, and Colorado Historical Society, CO, 51634-51635 E6-14468 Peabody Museum of Archaeology and Ethnology, Harvard University, MA, 51635-51636 E6-14471 Sam Noble Oklahoma Museum of Natural History, University of Oklahoma, Norman, OK; correction, 51636-51637 E6-14472 National Science National Science Foundation NOTICES Agency information collection activities; proposals, submissions, and approvals, 51641-51642 06-7238 Antarctic Conservation Act of 1978; permit applications, etc., 51642-51644 06-7256 Nuclear Nuclear Regulatory Commission PROPOSED RULES Plants and materials; physical protection:
Secure transfer of nuclear materials, 51534-51538 E6-14397 NOTICES Environmental statements; availability, etc.: Rose-Hulman Institute of Technology, 51648-51649 06-7239 *Applications, hearings, determinations, etc.:* Duke Power Co. LLC, et al., 51644-51646 E6-14406 Omaha Public Power Co., 51646-51648 E6-14389 Occupational Occupational Safety and Health Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 51639-51641 06-7254 Meetings:
Maritime Advisory Committee for Occupational Safety and Health, 51641 06-7237 Office of U.S. Trade Office of United States Trade Representative See Trade Representative, Office of United States Pension Pension Benefit Guaranty Corporation NOTICES Agency information collection activities; proposals, submissions, and approvals, 51650-51651 E6-14477 Pension Pension Benefit Guaranty Corporation NOTICES Agency information collection activities; proposals, submissions, and approvals, 51650-51651 E6-14477 Postal Postal Rate Commission NOTICES Domestic rates, fees, and mail classifications:
Stationary, stamped; new mail classification docket, 51651-51652 E6-14408 Presidential Presidential Documents PROCLAMATIONS Special observances: National Alcohol and Drug Addiction Recovery Month (Proc. 8042), 51707-51710 06-7373 National Day of Remembrance of Hurricane Katrina (Proc. 8043), 51711-51712 06-7374 Railroad Railroad Retirement Board NOTICES Reports and guidance documents; availability, etc.: Federal antidiscrimination, whistleblower protection, and retaliation laws;
No FEAR Act notice, 51652-51653 06-7247 SEC Securities and Exchange Commission NOTICES Securities: Suspension of trading— Amanda Co., Inc., et al., 51653-51654 06-7299 SBA Small Business Administration NOTICES Meetings: National Women's Business Council, 51654 E6-14362 E6-14363 06-7230 State State Department NOTICES Culturally significant objects imported for exhibition: Barcelona & Modernity: Picasso, Gaudi, Miro, Dali, 51654-51655 E6-14450 Discovering the Dead Sea Scrolls, 51655 E6-14465 Gilded Splendor:
Treasures of China's Liao Empire, 51655 E6-14456 Of Gold and Grass: Nomads of Kazakhstan, 51655-51656 E6-14466 Meetings: Historical Diplomatic Documentation Advisory Committee, 51656 E6-14464 Surface Surface Mining Reclamation and Enforcement Office RULES Permanent program performance standards: Topsoil replacement and revegetation success standards, 51684-51706 06-7249 Trade Trade Representative, Office of United States NOTICES World Trade Organization: Dispute settlement panel proceedings— Ecuador; shrimp antidumping measure, 51650 E6-14346 Transportation Transportation Department See Federal Aviation Administration See Federal Motor Carrier Safety Administration See Federal Railroad Administration See National Highway Traffic Safety Administration Treasury Treasury Department See Internal Revenue Service NOTICES Agency information collection activities; proposals, submissions, and approvals, E6-14347 51673-51674 E6-14467 Veterans Veterans Affairs Department NOTICES Meetings:
Veterans’ Disability Benefits Commission, 51674-51675 06-7219 Voluntary Service National Advisory Committee, 51675 06-7222 Separate Parts In This Issue Part II Housing and Urban Development Department, 51678-51681 E6-14349 Part III Interior Department, Surface Mining Reclamation and Enforcement Office, 51684-51706 06-7249 Part IV Executive Office of the President, Presidential Documents, 51707-51712 06-7373 06-7374 Reader Aids Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, reminders, and notice of recently enacted public laws.
To subscribe to the Federal Register Table of Contents LISTSERV electronic mailing list, go to http://listserv.access.gpo.gov and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions. 71 168 Wednesday, August 30, 2006 Rules and Regulations DEPARTMENT OF AGRICULTURE Office of the Secretary 7 CFR Part 2 RIN 0560-AH58 Revisions of Delegations of Authority AGENCY: Office of the Secretary, Department of Agriculture (USDA).
ACTION: Final rule. SUMMARY: This document amends the delegations of authority from the Secretary of Agriculture to the Under Secretary for Farm and Foreign Agricultural Services
(FFAS)and to the Administrator, Farm Service Agency (FSA), to implement cooperative agreements for Conservation Programs carried out by FSA and to implement the Grassroots Source Water Protection Programs as authorized by section 1240O of the Food Security Act of 1985 (1985 Act). DATES: This rule is effective August 30, 2006. FOR FURTHER INFORMATION CONTACT: John H. Carter III, Program Manager, Conservation and Environmental Programs Division, Farm Service Agency, USDA/FSA/STOP 0513, 1400 Independence Avenue, SW., Washington, DC 20250-0513,
(202)720-8774. SUPPLEMENTARY INFORMATION: Section 1240O of the 1985 Act, 16 U.S.C 3839bb-2, authorizes the Grassroots Source Water Protection Program. Fiscal Year 2006 funding for this program was appropriated to the Farm Service Agency of USDA; however, the authority to administer the program is delegated to another USDA agency. Therefore, the delegations of authority from the Secretary to the Under Secretary, FFAS, and from the Under Secretary, FFAS, to the Administrator, FSA, are revised to authorize those entities to implement the Grassroots Source Water Protection Program. Consistent with FSA's authority to implement the Grassroots Source Water Protection Program, this rule also includes a delegation of authority to FSA to enter into cooperative agreements to improve that program's coordination and effectiveness in meeting the program's goals. This rule further delegates authority to FSA to enter into cooperative agreements for other conservation programs to improve the coordination and effectiveness of those programs. This rule relates to internal agency management. Therefore, pursuant to 5 U.S.C. 553(a)(2), notice of proposed rulemaking and opportunity for comment are not required, and this rule may be made effective less than 30 days after publication in the **Federal Register** . Further, because this rule relates to internal agency management, it is exempt from the provisions of Executive Order Nos. 12291 and 12866. Finally, this action is not a rule as defined by the Regulatory Flexibility Act, 5 U.S.C. 601 *et seq.* , and is, therefore, exempt from the provisions of that Act. Accordingly, as authorized by section 808 of the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 808, this rule may be made effective upon publication. List of Subjects in 7 CFR Part 2 Administrative practice and procedure, Authority delegations (Government agencies). Accordingly, Title 7 of the Code of Federal Regulations is amended as follows: PART 2—DELEGATIONS OF AUTHORITY BY THE SECRETARY OF AGRICULTURE AND GENERAL OFFICES OF THE DEPARTMENT 1. The authority citation for 7 CFR part 2 continues to read as follows: Authority: 7 U.S.C. 6912(a)(1); 5 U.S.C. 301; Reorganization Plan No. 2 of 1953, 3 CFR parts 1949-1953 Comp., p. 1024. Subpart C—Delegations of Authority to the Deputy Secretary and to the Under Secretaries and Assistant Secretaries 2. Section 2.16 is amended by adding paragraphs (a)(1)(xxvii) and (xxviii) to read as follows: § 2.16 Under Secretary for Farm and Foreign Agricultural Services.
(a)* * *
(1)* * * (xxvii) Formulate and carry out the Grassroots Source Water Protection Program authorized by the Food Security Act of 1985, as amended (16 U.S.C. 3839bb-2). (xxviii) Administer cooperative agreements authorized under 7 U.S.C. 2204b(b)(4) with respect to conservation programs. Subpart F—Delegations of Authority by the Under Secretary for Farm and Foreign Agricultural Services 3. Section 2.42 is amended by adding paragraphs (a)(49) and
(50)to read as follows: § 2.42 Administrator, Farm Service Agency.
(a)* * *
(49)Formulate and carry out the Grassroots Source Water Protection Program, authorized by the Food Security Act of 1985, as amended (16 U.S.C. 3839bb-2).
(50)Administer cooperative agreements under 7 U.S.C. 2204b(b)(4) with respect to conservation programs. For Part 2, Subpart C, Paragraph 2.16(a)(1): Dated: August 23, 2006. Mike Johanns, Secretary of Agriculture. For Part 2, Subpart C, Paragraph 2.42(a): Dated: August 18, 2006. J.B. Penn, Under Secretary for Farm and Foreign Agricultural Services. [FR Doc. E6-14365 Filed 8-29-06; 8:45 am] BILLING CODE 3410-01-P DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 7 CFR Part 301 [Docket No. APHIS-2006-0046] Emerald Ash Borer; Quarantined Areas; Indiana, Michigan, and Ohio AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Affirmation of interim rule as final rule. SUMMARY: We are adopting as a final rule, without change, an interim rule that amended the emerald ash borer regulations by adding areas in Indiana, Michigan, and Ohio to the list of areas quarantined because of emerald ash borer. As a result of the interim rule, the interstate movement of regulated articles from those areas is restricted. The interim rule was necessary to prevent the artificial spread of the emerald ash borer from infested areas in the States of Indiana, Michigan, and Ohio into noninfested areas of the United States. DATES: Effective on August 30, 2006, we are adopting as a final rule the interim rule that became effective on May 18, 2006. FOR FURTHER INFORMATION CONTACT: Ms. Deborah McPartlan, Operations Officer, Pest Detection and Management Programs, PPQ, APHIS, 4700 River Road, Unit 134, Riverdale, MD 20737-1236;
(301)734-4387. SUPPLEMENTARY INFORMATION: Background In an interim rule 1 effective May 18, 2006, and published in the **Federal Register** on May 24, 2006 (71 FR 29762-29766, Docket No. APHIS-2006-0046), we amended the emerald ash borer regulations contained in 7 CFR 301.53-1 through 301.53-9 by adding all or portions of Adams, Hamilton, Huntington, LaGrange, Marion, Randolph, and Steuben Counties, IN; Alcona, Barry, Benzie, Berrien, Charlevoix, Cheboygan, Chippewa, Huron, Ionia, Iosco, Kalamazoo, Kent, Mason, Montcalm, Montmorency, Oceana, Ogemaw, Presque Isle, Roscommon, Sanilac, St. Joseph, and Van Buren Counties, MI; and Defiance, Delaware, Erie, Fulton, Hancock, Henry, Huron, Lorain, Ottawa, Sandusky, Williams, and Wood Counties, OH, to the list of quarantined areas in § 301.53-3(c). The interim rule restricted the interstate movement of regulated articles from these quarantined areas to prevent the artificial spread of emerald ash borer to noninfested areas of the United States. 1 To view the interim rule, go to *http://www.regulations.gov* , click on the “Advanced Search” tab, and select “Docket Search.” In the Docket ID field, enter APHIS-2006-0046, then click on “Submit.” Clicking on the Docket ID link in the search results page will produce a list of all documents in the docket. Comments on the interim rule were required to be received on or before July 24, 2006. We did not receive any comments. Therefore, for the reasons given in the interim rule, we are adopting the interim rule as a final rule. This action also affirms the information contained in the interim rule concerning Executive Order 12866 and the Regulatory Flexibility Act, Executive Orders 12372 and 12988, and the Paperwork Reduction Act. Further, for this action, the Office of Management and Budget has waived its review under Executive Order 12866. List of Subjects in 7 CFR Part 301 Agricultural commodities, Plant diseases and pests, Quarantine, Reporting and recordkeeping requirements, Transportation. PART 301—DOMESTIC QUARANTINE NOTICES Accordingly, we are adopting as a final rule, without change, the interim rule that amended 7 CFR part 301 and that was published at 71 FR 29762-29766 on May 24, 2006. Done in Washington, DC, this 24th day of August 2006. Elizabeth E. Gaston, Acting Administrator, Animal and Plant Health Inspection Service. [FR Doc. E6-14480 Filed 8-29-06; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF AGRICULTURE Commodity Credit Corporation 7 CFR Parts 1421, 1423 and 1427 RIN 0560-AH48 Storage, Handling, and Ginning Requirements for Cotton Marketing Assistance Loan Collateral AGENCY: Commodity Credit Corporation, USDA. ACTION: Final rule. SUMMARY: This rule amends regulations governing the cotton Marketing Assistance Loan Program of the Commodity Credit Corporation (CCC). The changes provide that bales of upland cotton pledged as collateral for CCC loans may be stored outside at warehouses approved by CCC subject to special storage, protection, receipting, and reporting requirements and loss of any applicable storage credits for the period stored outside. Second, the rule provides that producers or their agents may transfer cotton loan collateral to another approved location. Third, the rule provides limits on the amount of storage credits provided to producers when an upland cotton marketing assistance loan is repaid. Fourth, the rule requires ginned cotton to meet the definition of good condition and not be wet cotton in order to be eligible for a CCC loan. Fifth, this rule requires any unpaid warehouse compression charges to be billed to producers on loan cotton collateral that is delivered to CCC in satisfaction of the loan obligation. Sixth, this rule defines a minimum acceptable shipping standard for cotton warehouses. This rule also corrects and clarifies the Marketing Assistance Loan
(MAL)and Loan Deficiency Payment
(LDP)Program regulations of CCC regarding loss of beneficial interest in commodities delivered to certain facilities engaged in storing and handling commodities under those programs. DATES: This rule is effective August 30, 2006. FOR FURTHER INFORMATION CONTACT: Gene Rosera, Cotton Program Manager, Price Support Division, FSA/USDA, Stop 0512, 1400 Independence Ave., SW., Washington, DC 20250-0512; phone
(202)720-8481; *e-mail: gene.rosera@wdc.usda.gov* ; or fax:
(202)690-1536. Persons with disabilities who require alternative means for communication (Braille, large print, audiotape, etc.) should contact the USDA Target Center at
(202)720-2600 (voice and TDD). SUPPLEMENTARY INFORMATION: Discussion of the Final Rule I. Background A. Cotton Stored Outside The revisions established by this final rule to the cotton marketing assistance loan program generally result from changing industry practices and marketing needs over recent years. For both the 2004 and 2005 crops, west Texas cotton storage warehouse capacity has not kept pace with production increases. In response to those shortages, CCC granted authorization to some warehouses to temporarily store cotton loan collateral outside subject to special insurance and storage requirements. The use of such storage was significant for the 2005 crop, topping 435,000 bales. This shortage of traditional cotton storage capacity has occurred at a time when cotton usage is increasingly dependent on export sales. Export use represented about 37 percent of total use for the 1995 through 1999 crops, but is estimated at about 75 percent for the 2006 marketing year. This shift in use has raised merchant concerns about both the quality of U.S. cotton, especially cotton stored outside, and the timeliness of its delivery from storing warehouses to export customers. These concerns may have been aggravated by CCC's temporary approvals of outside storage, a step viewed by some merchants as contributing to an increase in so-called “country damage” (loss of quality due to dust, rain, and packaging damage) and the slowing of cotton flow from warehouses with inventories exceeding their performance abilities. Concurrently, CCC had no process for allowing producers or their agents to move their cotton loan collateral from outside locations to available inside storage in other locations, or from warehouses considered unreliable to meet load-out requests. B. Cotton Moisture Content Additionally, several sectors of the U.S. cotton industry have been concerned about excess moisture in ginned cotton. FSA issued a Notice to the Trade (BCD-121) on February 1, 2006 to alert cotton warehouse operators of the incidence of water-packed cotton in Missouri. After similar problems were observed at a Tennessee warehouse CCC examined cotton from seven other gins for moisture damage. Initial results indicated similar moisture problems. The growing use of direct water spray moisture restoration systems concerns many in the cotton industry. And there is concern that these systems may be the cause of most moisture-damaged cotton. Prior to proposing changes regarding bale moisture, CCC was urged to revise loan eligibility requirements to provide that bales subject to direct water spray would be ineligible as collateral for a CCC loan starting after the 2007 crop year. CCC received other comments in opposition to that proposal. An estimated 200 U.S. gins use some form of direct-spray moisture restoration systems, and that the incidence of moisture problems, according to comments received, does not justify denial of loan eligibility to cotton from all the gins that use such systems. In response to these issues, CCC initially published an advance notice of proposed rulemaking on February 13, 2006 at 71 FR 7445. During the 60-day comment period CCC received forty-three comments. Respondents included four national organizations, eight regional organizations, fifteen cotton storage warehouses, and sixteen individuals or companies. Based on the comments on the advance notice of proposed rulemaking, CCC published a proposed rule on May 26, 2006 at 71 FR 30318. Eighty nine comments were submitted on the proposed rule from six national/state organizations, twenty-four warehouse/warehouse associations, twenty-seven ginners/ginner associations, twelve merchants/merchant organizations, thirteen producers/producer cooperatives/associations, and seven individuals. II. Discussion of Comments on Proposed Rule A. Outside Storage of Cotton Thirty four comments were received regarding CCC's proposal to permit the outside storage of loan cotton and indicate industry support for allowing the outside storage of cotton loan collateral if it is subject to various constraints and conditions. The majority of comments support approval only under special circumstances, although the majority of merchant comments oppose use of outside storage due to the increased risk of country damage. Many comments suggest that if outside storage is permitted it also be subject to denial of storage credit. A recommendation submitted by the National Cotton Council on behalf of all cotton industry sectors was that warehouses subject to the U.S. Warehouse Act or with a Cotton Storage Agreement be required to indicate on the Electronic Warehouse Receipt
(EWR)for such cotton the dates the bale was stored outside. Many comments stress the increased risk to the quality of cotton stored outside, and support its use only if limited to areas having unavoidable circumstances and subject to special storage requirements to assure the protection of the cotton. Some comments suggest that CCC should provide a grace period during which cotton may be stored outside. To constrain the use of outside storage, even when special circumstances occur, the comments also support CCC's proposal to limit the storage credits provided and to impose more stringent receipting, storage, reporting, and insurance requirements as a condition for approval. Therefore, to document the number of days a bale is stored outside, and to calculate the period for which a storage credit will not be provided, this rule also requires that warehouses requesting approval to indicate on the bale EWR the dates of outside storage and to submit weekly reports identifying such bales. As suggested by the comments, this final rule provides that the warehouse must be in an area that has inadequate approved inside capacity to store the current crop. CCC will determine whether a state, a county, or a group of counties within a State is such a cotton storage deficit area based on the most recent cotton production estimate for the area provided by the National Agricultural Statistics Service. The area will be considered a deficit storage area for the crop year if cotton production for the crop year exceeds the combined approved inside storage capacity of warehouses in the area that have entered into a Cotton Storage Agreement with CCC. B. Storage Credits Denial of Credit for Outside Storage CCC proposed to deny storage credit for all bales under a loan if one or more bales were stored outside for any period while under loan. Thirty three comments were received about this proposal. The comments indicate wide support for denying storage credits to cotton stored outside, but only for the period outside, and only if administered on a bale-by-bale basis. Four national organizations favor this proposal. Related comments are that bale receipts or associated records should indicate the dates the bale was stored outside for calculating denied storage credits. CCC proposed to deny storage credits on outside-stored bales as an incentive for gins and producers to seek inside storage rather than to use warehouses where cotton inventory exceeds its inside capacity. CCC originally proposed to deny the storage credits for an entire loan quantity if one or more bales were stored outside. However, based on comments received, CCC understands that the proposal would disadvantage some producers whose loan cotton may be stored at multiple locations. CCC agrees that a more equitable policy is to deny credits on a bale-by-bale basis and this rule provides that, however, warehouses must provide weekly reports to CCC identifying bales stored outside. CCC also considered the suggestion that the credit should be denied only for the period of outside storage and resumed if the cotton is moved inside. CCC agrees that it would be inconsistent to deny storage credits for outside-stored loan cotton that is being transferred to inside storage. Therefore, this rule provides that storage credits are denied only for the period of time the cotton is stored outside. Comments also suggested that CCC more precisely define when a bale is considered as stored outside. CCC agrees. Accordingly, this rule, in section 1427.19, provides that CCC shall not provide storage credits to a bale of upland cotton loan collateral for the period of time the bale is stored outside that exceeds a 15-day period beginning on the day the warehouse was notified that the bale is under loan. Maximum Storage Credit CCC proposed a uniform national rate of the lesser of a warehouse's 2005-crop tariff rate or $2.15/bale/month for calculating any storage credits applicable. This limit was intended to reduce incentives for warehouses to delay load-outs in order to maximize CCC storage payments, and discourage transfer of cotton under loan to maximize storage payments. Sixty-seven comments were received regarding this proposal. Very few support the proposed uniform rate of $2.15 or any other national rate. Some comments state that warehouse tariff rates and storage credits do not influence cotton flow, and that any reduction of rates will be disruptive, hurt producers, or ought to be postponed. Other comments state that the rates used for storage credits need to rise over time to cover operating cost increases. Many comments, including those submitted as the joint industry recommendation, suggest establishing two storage credit rates, each based on the weighted average tariff rates of two regions—California and Arizona comprising one region, and all other states comprising the other. The California and Arizona average would be reduced by an estimated average receiving charge for that area. This would allow the warehouses with tariff rates below the regional averages the opportunity to raise their rates to the average. CCC agrees that the objectives of capped rates may be better achieved by taking into account regional warehousing costs. Accordingly, section 1427.19 is revised to provide that the maximum storage credit rate for the 2006 and subsequent crops of upland cotton shall be the lesser of the 2005-crop tariff rate of a warehouse or $4.37 per bale per month for warehouses located in Arizona and California, and $2.66 per bale per month for warehouses located in all other cotton-producing States. Additionally, section 1427.13 is amended to provide that if producers elect to forfeit the loan collateral to CCC, they shall pay any warehouse storage charges associated with the forfeited cotton that accrued during the period of the loan that are based on a rate exceeding CCC's maximum storage credit rate for the warehouse. This will provide for uniformity of storage credits whether the cotton is redeemed from loan or forfeited to CCC in satisfaction of the loan obligation. C. Cotton Bale Eligibility CCC proposed to amend cotton bale eligibility rules to require that cotton must be ginned by a ginner that, in addition to certifying to using approved bale packaging materials, would certify to not producing bales that are water-packed, false-packed, re-ginned, or re-packed. Thirty-two comments were received regarding this proposal. Although some support this proposal, the majority oppose it either as inadequate to remediate the problem of excessive moisture in cotton, or as an unfair certification to require from ginners. Three major national organizations, including a national ginner association, urge CCC to curtail all ginner use of direct water-spray systems after the 2007 crop, and to impose bale marketing and certification requirements in the meantime for gins that employ direct spray systems. Some ginners expressed an opposing view that CCC should not require moisture certifications for which no measurement protocols exist or dictate equipment specifications. CCC shares the concern of most respondents regarding the use of direct water-spray equipment to increase bale moisture. The predominance of comments received, including the comments from USDA researchers, is that there is an increased risk of damage to cotton that is directly sprayed with water. Comments received from an industry task force, a national ginners association, and those representing the joint industry position urge CCC to prohibit directly sprayed cotton as being eligible to be pledged as loan collateral for marketing assistance loans starting after the 2007 crop. Although, the comments received indicate that this proposal is the majority view of the industry, CCC is aware that direct spray systems are used by about 20 percent of U.S. ginners. These ginners, with a few exceptions, feel that the system can be used without damaging cotton. To the extent practicable, CCC generally supports the use of industry standards in the establishment of CCC cotton loan program regulations, most notably by requiring the use of packaging and ties that conform to industry specifications. However, CCC lacks authority to direct all of the processing requirements of gins based on loan collateral eligibility. Further, the equipment and a process for accurately measuring bale moisture at a gin are not commonly employed, and a moisture certification requirement would impose costs on ginners to comply. Therefore, CCC will not establish any new certification by ginners regarding the production of wet-packed, false-packed, re-ginned, or re-packed cotton. However, CCC agrees with the comments that suggest that the maximum level of moisture before fiber damage would occur, as measured at a gin, wet basis, is 7.5 percent at any point in the bale. Thus, while this rule imposes no new inspection process at the gin or warehouse, in evaluating complaints received about wet or damaged cotton, CCC will impose a maximum moisture level requirement for a bale of cotton. Similarly, to encourage maintenance of the quality of ginned cotton, CCC will incorporate into its bale eligibility requirements the standards established by the Joint Cotton Industry Bale Packaging Committee (“Committee”) publication “A Guide for Cotton Bale Standards.” Accordingly, this rule revises the regulations at 7 CFR 1427.5 to provide that a bale must be in good condition and shall not be wet cotton to be eligible as loan collateral. “Wet cotton” is defined as a bale at a gin that has 7.5 percent or more moisture, wet basis, at any point in the bale. “Good condition” is defined as a bale of cotton determined to be a Grade A or Grade B bale, by comparing the bale with the photographic standards of the Committee. D. Transfer of Cotton Loan Collateral CCC proposed to allow the transfer of loan cotton to other CCC-approved warehouses to provide producers or their agents the means to relocate outside-stored cotton, or to reduce marketing risks by removing cotton from warehouses considered unreliable in meeting load-out requests. CCC received seventy-one comments in response to the proposal. In general, the comments received are favorable to the concept of the relocation of loan cotton, although support is conditional on the imposition of several conditions. Support is stated by ginners, many warehouses, producers, and national organizations. Commonly suggested conditions are that producers must authorize such movement; that relocation costs be paid in full by the requestor; that relocations count against flow standards; and that storage credits be limited in some cases to reduce predatory transfers. Some comments in opposition are that relocations may disadvantage smaller warehouses, stress transportation resources, increase storage outlays, and only benefit larger merchants without improving cotton flow. Based on the comments received, there is industry support to allow producers to move their cotton, and that proposal is adopted in this final rule. Also, CCC has decided to incorporate the recommendation of the joint industry position to limit storage credits applicable to some transferred cotton to 75 days to provide an incentive for timely marketing of transferred cotton. This time period has been determined to be the average required by a cotton merchant from warehouse loadout to final marketing. Accordingly, this rule provides that producers may request the transfer of cotton loan collateral represented by an EWR to another approved cotton warehouse. The loan settlements of transferred cotton will be based on rates applicable at the original storing location, and storage credits may be limited based on the circumstances of the transfer. E. Producer Liability for Unpaid Charges CCC proposed amending section 1427.12 to correct two inconsistencies. First, regulations provide that if there are any liens or encumbrances on cotton provided as collateral for a marketing assistance loan, CCC must obtain waivers that fully protect the interest of CCC before disbursement of the loan even if the liens or encumbrances are satisfied from the loan proceeds. However, section 1427.25 provides for CCC to credit the loan repayment amount by all or a portion of the warehouse storage charges that have accrued during the period the cotton was pledged for loan. Second, over 40 percent of cotton warehouses have tariff charges for compression services that are not actually provided, and that such unpaid charges have followed the bale and were payable on cotton forfeited to CCC in satisfaction of the loan obligation. Accordingly, CCC proposed to establish consistency between these two requirements, and to clarify that CCC shall not be responsible for any charges attached to a bale other than for the storage charges as provided in 7 CFR 1427.19(h). Eight comments were received in response to the proposal that CCC will not be responsible for unpaid charges associated with a loan bale (such as warehouse compression) and will bill a producer for such charges on forfeited cotton. All comments received either did not object, or were in favor of the proposal, thus no change from the proposal is made in the final rule. III. Shipping Standards Comments were received on the proposed rule suggesting significant industry support for regulations defining a minimum acceptable shipping standard for cotton warehouses. Such standards are currently set forth in the CCC Cotton Storage Agreement. CCC agrees that these terms should be clarified and set forth in those regulations governing cotton storage warehouses. Accordingly, this rule makes amendments to the terms and conditions for approval of a warehouse operator by CCC to store and handle CCC interest commodities at 7 CFR part 1423 to provide such a definition and to require mandatory weekly reporting of bales made available for shipment. IV. Clarification This rule amends § 1421.6(h)(1) of 7 CFR part 1421 to clarify the use of contracts with respect to beneficial interest. On June, 6, 2006 the agency published a final rule at 71 FR 32415 that amended regulations governing beneficial interest with respect to eligible commodities delivered to facilities governed by a Federal license, State license or CCC storage agreement. This provision unintentionally restricts a producer's ability to obtain a loan deficiency payment or freely market commodities of which they still maintain control and title in limited cases. This rule clarifies that facilities governed by a Federal license, State license, or CCC storage agreement can be bailees and the producers who deliver commodities may continue to have beneficial interest. Regardless, CCC may still require acceptable documentation from a producer to indicate whether the producer retains title and control of the stored commodity. This rule also corrects the amendments made by the June 6, 2006 rule regarding beneficial interest provisions for cooperative marketing associations by restoring them consistent with that amendment as § 1421.6(j). And, finally, this rule amends 7 CFR 1421.201 to clarify that the loan deficiency payment rate shall be based on the date the commodity is delivered, if the producer elects this option. Executive Order 12866 This rule is issued in conformance with Executive Order 12866, was determined to be significant and has been reviewed by the Office of Management Budget. Regulatory Flexibility Act It has been determined that the Regulatory Flexibility Act is not applicable to this rule because the CCC is not required by 5 U.S.C. 533 or any other law to publish a notice of proposed rulemaking for the subject matter of this rule. Environmental Assessment The environmental impacts of this rule have been considered consistent with the provisions of the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 *et seq.* , the regulations of the Council on Environmental Quality (40 CFR parts 1500-1508), and the FSA regulations for compliance with NEPA, 7 CFR part 799. FSA concluded that the rule requires no further environmental review because it is categorically excluded. No extraordinary circumstances or other unforeseeable factors exist which would require preparation of an environmental assessment or environmental impact statement. Executive Order 12988 This rule has been reviewed in accordance with Executive Order 12988. This rule will preempt State laws that are inconsistent with it. Before any legal action may be brought regarding a determination under this rule, the administrative appeal provisions set forth at 7 CFR parts 11 and 780 must be exhausted. Executive Order 12372 This program is not subject to the provisions of Executive Order 12372, which require intergovernmental consultation with State and local officials. See the notice related to 7 CFR part 3014, subpart V, published at 48 FR 29115 (June 24, 1983). Unfunded Mandates Reform Act of 1995 The rule contains no Federal mandates under the regulatory provisions of Title II of the Unfunded Mandates Reform Act of 1995
(UMRA)for State, local, and tribal governments or the private sector. Thus, this rule is not subject to the requirements of sections 202 and 205 of the UMRA. Paperwork Reduction Act Section 1601(c) of the 2002 Act provides that the promulgation of regulations and the administration of Title I of the 2002 Act shall be made without regard to chapter 5 of title 44 of the United States Code (the Paperwork Reduction Act). Accordingly, these regulations and the forms and other information collection activities needed to administer the program authorized by these regulations are not subject to review by OMB under the Paperwork Reduction Act. Executive Order 12612 This rule does not have sufficient Federalism implications to warrant the preparation of a Federalism Assessment. The provisions contained in this rule will not have substantial direct effect on States or their political subdivisions or on the distribution of power and responsibilities among the various levels of government. Government Paperwork Elimination Act CCC is committed to compliance with the Government Paperwork Elimination Act
(GPEA)and the Freedom to E-File Act, which require Government agencies in general and FSA in particular to provide the public the option of submitting information or transacting business electronically to the maximum extent possible. The forms and other information collection activities required for participation in the program are available electronically through the USDA eForms Web site at *www.sc.egov.usda.gov* for downloading. The regulation is available at FSA's Price Support Division Internet site at *www.fsa.usda.gov/dafp/psd.* Applications may be submitted at the FSA county offices, by mail or by FAX. At this time, electronic submission is not available. Full development of electronic submission is underway. E-Government Act Compliance CCC is committed to complying with the E-Government Act to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes. For information pertinent to E-GOV compliance related to this rule, please contact the person named above under the information contact section. Federal Assistance Programs The title and number of the Federal assistance program found in the Catalog of Federal Domestic Assistance to which this final rule applies are Commodity Loans and Loan Deficiency Payments, 10.051. List of Subjects 7 CFR Part 1421 Agricultural commodities, Feed grains, Grains, Loan programs—agriculture, Oilseeds, Price support programs, Reporting and recordkeeping requirements. 7 CFR Part 1423 Agricultural commodities, Approval of warehouses, Dairy products, Feed grains, oilseeds, Price support programs, Processed commodities, Surplus agricultural commodities. 7 CFR Part 1427 Agricultural commodities, Cotton, Loan programs—agriculture, Price support programs, Reporting and recordkeeping requirements. For the reasons set out in the preamble, 7 CFR parts 1421, 1423, and 1427 are amended as follows: PART 1421—GRAINS AND SIMILARLY HANDLED COMMODITIES—MARKETING ASSISTANCE LOANS AND LOAN DEFICIENCY PAYMENTS FOR THE 2002 THROUGH 2007 CROP YEARS 1. The authority citation for part 1421 continues to read as follows: Authority: 7 U.S.C. 7231-7237 and 7931 *et seq.* ; 15 U.S.C. 714b and 714c. Subpart A—General 2. Amend § 1421.6 by revising paragraphs (h)(1), (h)(2) and adding paragraph
(j)to read as follows: § 1421.6 Beneficial interest.
(h)* * * j
(1)A provision that allows the producer to select the sales price of the commodity at a time the contract is entered into or at a later date, for example, a contract normally referred to as a deferred-price, forward or price later contract. The following conditions apply:
(i)Producers under a deferred-price, forward, or price later contract will lose beneficial interest in the commodity once the commodity is applied in fulfillment of such a contract.
(ii)Beneficial interest in the commodity is retained by the producer if the contract has no restrictive or contradictory clauses within the contract that may cause the producer to lose beneficial interest in the commodity.
(2)A provision between the producer and a warehouse approved in accordance with § 1421.103(c) for the storage of CCC loan collateral that provides the producer a period of time following the date of physical delivery of the commodity to elect whether the commodity is to be stored and receipted on behalf of the producer or is to be considered transferred to the warehouse.
(j)If marketing assistance loans and loan deficiency payments are made available to producers through an approved cooperative marketing association in accordance with part 1425 of this chapter, the beneficial interest in the commodity must always have been in the producer-member who delivered the commodity to the approved cooperative marketing association or its member approved cooperative marketing association, except as otherwise provided in this section. If the producer-member who delivered the commodity does not retain the right to share in the proceeds from the marketing of the commodity as provided in part 1425 of this chapter, commodities delivered to an approved cooperative marketing association shall not be eligible to be pledged as collateral for a marketing assistance loan or be taken into consideration when a loan deficiency payment is made. Subpart C—Loan Deficiency Payments 3. Section 1421.201 is amended by adding paragraph (b)(3)(iii) to read as follows: § 1421.201 Loan deficiency payment rate.
(b)* * *
(3)* * *
(iii)The commodity is delivered, if the producer elects to receive the LDP rate based on the date of delivery. PART 1423—COMMODITY CREDIT CORPORATION APPROVED WAREHOUSES 4. The authority citation for part 1423 continues to read as follows: Authority: 15 U.S.C. 714b and 714c. 5. Add § 1423.11 to read as follows: § 1423.11 Delivery and shipping standards for cotton warehouses.
(a)Unless prevented from doing so by severe weather conditions, fire, explosion, flood, earthquake, insurrection, riot, strike, labor dispute, acts of civil or military authority, non-availability of transportation facilities or any cause beyond the control of the warehouse operator that renders performance impossible, the warehouse operator will:
(1)Deliver stored cotton without unnecessary delay.
(2)Be considered to have delivered cotton without unnecessary delay if, for the week in question, the warehouse operator has made available for shipment at least 4.5 percent of their applicable storage capacity in effect during the relevant week of shipment.
(b)The warehouse operator shall provide a written report to CCC on a weekly basis. The reporting week shall be the seven day period starting at midnight following the close of business on each Saturday and ending at midnight after close of business of the following Saturday. Before close of business of the first business day of the following week, the warehouse operator will provide following information to CCC:
(1)Bales made available for shipment
(BMAS)during such week. BMAS is defined as any cotton bales that:
(i)Have been delivered, or are scheduled and ready for delivery during such week; and
(ii)Were scheduled and ready for delivery in a previous week, but were not picked up by the shipper and remain available for immediate loading and another shipping date has not been established, or such bales are not subject to a restocking fee as provided in the warehouse operator's public tariff.
(2)Active shipping orders, by week; and
(3)Applicable storage capacity that is the higher of CCC approved capacity or the maximum number of bales stored at any time during the applicable crop year.
(c)The warehouse operator may resolve any claim for noncompliance from any entity other than CCC with the cotton shipping standard in a court of competent jurisdiction or through mutually agreed upon arbitration procedures. In no case will CCC provide assistance or representation to parties involved in arbitration proceedings arising with respect to activities authorized under the Cotton Storage Agreement. PART 1427—COTTON 6. The authority citation for part 1427 continues to read as follows: Authority: 7 U.S.C. 7231-7237 and 7931-7939; and 15 U.S.C. 714b and 714c. Subpart A—Nonrecourse Cotton Loan and Loan Deficiency Payments 7. Amend § 1427.3 by revising the definition of “Reconcentration” and adding definitions for “Cotton storage deficit area”, “Good condition”, “Transfer”, and “Wet cotton” to read as follows: § 1427.3 Definitions. *Cotton storage deficit area* means a State, County, or group of contiguous counties within a State, where the production of cotton for the area based on the most recent estimate from the USDA, National Agricultural Statistics Service exceeds the combined approved inside storage capacity of warehouses that have entered into a Cotton Storage Agreement with CCC. *Good condition* means a bale of cotton that, by comparison with the photographic standards of “A Guide for Cotton Bale Standards” of the Joint Cotton Industry Bale Packaging Committee, is determined to be a Grade A or Grade B bale. *Reconcentration* means the process for moving CCC-owned cotton from one approved warehouse to another CCC-approved warehouse location. *Transfer* means the process for a producer or an authorized agent of the producer to move warehouse-stored loan collateral to another warehouse. *Wet cotton* means a bale of cotton that, at a gin, has 7.5 percent or more moisture, wet basis, at any point in the bale. 8. Amend § 1427.5 by revising paragraphs (b)(2) and (b)(4) to read as follows: § 1427.5 General eligibility requirements.
(b)* * *
(2)Be in existence and good condition, be covered by fire insurance, and at the time of disbursement of the loan proceeds, be stored inside an approved storage warehouse unless, as determined under § 1427.10, CCC has approved the warehouse to use outside storage for cotton loan collateral for the period of the loan.
(4)Not be false-packed, wet cotton, water-packed, mixed-packed, re-ginned, or repacked; 9. Amend § 1427.10 by revising paragraph (b), redesignating paragraphs (c), (d), and
(e)as (d), (e), and (f), respectively, and adding a new paragraph
(c)as follows: § 1427.10 Approved storage.
(b)When the operator of a warehouse receives notice from CCC that a loan has been made by CCC on a bale of cotton, the operator shall, if such cotton is not stored within the warehouse, as directed by CCC place such cotton within such warehouse.
(c)An approved cotton storage warehouse may temporarily store cotton pledged as collateral for a CCC loan outside, subject to the following conditions:
(1)The warehouse submits an application for approval of outside storage on a form prescribed by CCC.
(2)The warehouse is located in a storage deficit area as determined by CCC.
(3)The warehouse complies with all outside storage requirements established by CCC including but not limited to the duration of such outside storage as granted by CCC for the individual application, all-risk insurance for the loan value of the cotton with CCC as loss payee, and use of additional protective coverings and materials that elevate the entire bottom surface of the bale to protect such cotton from damage by water or airborne contaminants.
(4)The electronic warehouse receipt for any bale or bales of cotton pledged as collateral for a CCC loan must include the dates that the bale was initially stored outside, and the date that outside storage stopped.
(5)The warehouse provides CCC a weekly report in a format proscribed by CCC identifying individual bales of cotton pledged as collateral for a CCC loan that are stored outside. 10. Revise § 1427.12 to read as follows: § 1427.12 Liens.
(a)Waivers that fully protect the interest of CCC must be obtained before loan disbursement, notwithstanding provisions in § 1427.19(h), if there are any liens or encumbrances on the cotton tendered as collateral for a loan, even though the liens or encumbrances are satisfied from the loan proceeds.
(b)CCC may elect to accept cotton as loan collateral that has warehouse receiving, compression, or other charges without a lien waiver if the producer at the time of loan application agrees to reimburse CCC for any such charges that CCC may pay on behalf of the producer or that reduce the value of the cotton delivered to CCC. 11. Add paragraph (e)(3) to § 1427.13 to read as follows: § 1427.13 Fees, charges, and interest.
(e)* * *
(3)Any warehouse storage charges associated with the forfeited cotton that accrued during the period of the loan and paid by CCC to the warehouse that exceed such charges calculated based on CCC's maximum storage credit rate for the warehouse established in § 1427.19. 12. Revise § 1427.16 to read as follows: § 1427.16 Movement and protection of warehouse-stored cotton.
(a)CCC may insure or reinsure stored cotton against any risk, or otherwise take an action it deems necessary to protect the interest therein of CCC.
(b)CCC may reconcentrate cotton as defined in § 1427.3 subject to the following:
(1)A loan servicing agent, or CMA shall arrange for reconcentration of cotton under the direction of CCC and CCC shall obtain new warehouse receipts; and
(2)Any charges, fees, costs, or expenses incident to the reconcentration of cotton shall be paid by CCC.
(c)A producer may transfer cotton loan collateral from one CCC-approved cotton storage warehouse to another CCC-approved cotton storage warehouse subject to the following conditions:
(1)The cotton is represented by electronic warehouse receipts;
(2)The request is submitted by a producer or a properly designated agent of the producer;
(3)The transfer is agreed to by the receiving warehouse operator; and
(4)The CCC marketing assistance loan that is secured by such cotton matures at least 30 days after the date on which the request for the transfer is submitted to CCC.
(d)Following written notice by CCC to the producer and warehouse operator, CCC may transfer cotton pledged as collateral for the marketing assistance loan from one CCC-approved warehouse to another if:
(1)CCC determines such loan cotton collateral is improperly warehoused and subject to damage; or
(2)Any term of the producer's loan agreement is violated, or
(3)Carrying charges are substantially in excess of the average of carrying charges available elsewhere and the storing warehouse, after notice, declines to reduce such charges.
(e)Any charges, fees, costs, or expenses incident to the transfer of cotton loan collateral under paragraph
(c)of this section shall be paid by the requestor of the transfer.
(f)CCC shall exclude from the calculation of any storage credits payable under § 1427.19 the following periods:
(1)The period during which the cotton is in transit between warehouses; and
(2)Any period beyond 75 days starting from the date of transfer from the shipping warehouse, unless the shipping warehouse is:
(3)Out of compliance with the terms of its Cotton Storage Agreement;
(4)Storing cotton loan collateral outside, or
(5)Under common ownership with the receiving warehouse. 13. Amend § 1427.19 by revising paragraphs (h)(1) and (h)(2), and adding paragraph
(j)to read as follows: § 1427.19 Repayment of loans.
(h)* * *
(1)Below the national average loan rate for upland cotton, CCC will pay at the time of loan repayment to the producer, agent, or subsequent agent authorized by the producer in the manner prescribed by CCC for the period the cotton was pledged as collateral for such loan:
(i)The warehouse storage charges which have accrued, and
(ii)With respect to the 2006 and subsequent-crops of upland cotton, for each bale of the loan stored inside an approved cotton warehouse during the entire period of the loan, storage charges based on paragraph
(j)of this section, except that CCC shall not credit the loan repayment amount for a bale for any accrued storage charges for any period that the cotton bale was stored outside exceeding a continuous 15-day period beginning on the day the warehouse was notified that the bale is under loan.
(2)Above the national average loan rate by less than the sum of the accrued interest and warehouse storage charges that accrued during the period the cotton was pledged for loan, CCC will pay at the time of loan repayment to the producer, agent, or subsequent agent authorized by the producer in the manner prescribed by CCC, without regard to any warehouse charges that accrued before the cotton was pledged for loan:
(i)That portion of the warehouse storage charges that accrued during the period the cotton was pledged for loan that are determined to be necessary to permit the loan to be repaid at the adjusted world price; and
(ii)With respect to the 2006 and subsequent crops of upland cotton stored inside an approved cotton warehouse during the entire period of the loan, storage charges based on the rates in paragraph
(j)of this section, except that CCC shall not credit the loan repayment amount for a bale for any accrued storage charges for any period that the cotton bale was stored outside exceeding a continuous 15-day period beginning on the day the warehouse was notified that the bale is under loan; or
(j)For the purpose of calculating storage credits that may be applicable under paragraph
(h)of this section to the 2006 and subsequent crops of upland cotton, the warehouse storage rates to be used shall be the lower of;
(1)The tariff storage rate for the warehouse for the 2005-crop, or for any warehouse not in existence in 2005, a CCC-assigned average 2005-crop tariff rate for the county or area; or
(2)For warehouses located in Arizona and California, $4.37 per bale per month; and for warehouses located in all States other than Arizona and California, $2.66 per bale per month. Signed in Washington, DC on August 23, 2006. Thomas B. Hofeller, Acting Executive Vice President, Commodity Credit Corporation. [FR Doc. E6-14370 Filed 8-29-06; 8:45 am] BILLING CODE 3410-05-P DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 9 CFR Part 77 [Docket No. APHIS-2006-0004] Tuberculosis in Cattle and Bison; State and Zone Designations; Minnesota AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Affirmation of interim rule as final rule. SUMMARY: We are adopting as a final rule, without change, an interim rule that amended the bovine tuberculosis regulations regarding State and zone classifications by removing Minnesota from the list of accredited-free States and adding it to the list of modified accredited advanced States. The interim rule was necessary to help prevent the spread of tuberculosis because Minnesota no longer met the requirements for accredited-free State status. DATES: Effective on August 30, 2006, we are adopting as a final rule the interim rule that became effective on January 24, 2006. FOR FURTHER INFORMATION CONTACT: Dr. Michael Dutcher, Senior Staff Veterinarian, National Tuberculosis Eradication Program, Eradication and Surveillance Team, National Center for Animal Health Programs, VS, APHIS, 4700 River Road Unit 43, Riverdale, MD 20737-1231;
(301)734-5467. SUPPLEMENTARY INFORMATION: Background In an interim rule 1 effective January 24, 2006, and published in the **Federal Register** on January 30, 2006 (71 FR 4808-4810, Docket No. APHIS-2006- 0004), we amended the bovine tuberculosis regulations regarding State and zone classifications contained in 9 CFR part 77 by removing Minnesota from the list of accredited-free States in § 77.7 and adding it to the list of modified accredited advanced States in § 77.9. The interim rule was necessary to help prevent the spread of tuberculosis because Minnesota no longer met the requirements for accredited-free State status. 1 To view the interim rule and the comments we received, go to *http://www.regulations.gov* , click on the “Advanced Search” tab, and select “Docket Search.” In the Docket ID field, enter APHIS-2006-0004, then click on “Submit.” Clicking on the Docket ID link in the search results page will produce a list of all documents in the docket. Comments on the interim rule were required to be received on or before March 31, 2006. We received two comments by that date. The comments were from private citizens. One commenter stated that no animals should ever be moved interstate, but did not comment specifically on the reclassification of Minnesota as a modified accredited advanced State. A second commenter, responding to the first, stated support for the interim rule. We are making no changes in response to these comments. Therefore, for the reasons given in the interim rule and in this document, we are adopting the interim rule as a final rule without change. This action also affirms the information contained in the interim rule concerning Executive Order 12866 and the Regulatory Flexibility Act, Executive Orders 12372 and 12988, and the Paperwork Reduction Act. Further, for this action, the Office of Management and Budget has waived its review under Executive Order 12866. List of Subjects in 9 CFR Part 77 Animal diseases, Bison, Cattle, Reporting and recordkeeping requirements, Transportation, Tuberculosis. PART 77—TUBERCULOSIS Accordingly, we are adopting as a final rule, without change, the interim rule that amended 9 CFR part 77 and that was published at 71 FR 4808-4810 on January 30, 2006. Done in Washington, DC, this 24th day of August 2006. Kevin Shea, Acting Administrator, Animal and Plant Health Inspection Service. [FR Doc. E6-14481 Filed 8-29-06; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 9 CFR Part 93 [Docket No. APHIS-2006-0107] Spring Viremia of Carp; Import Restrictions on Certain Live Fish, Fertilized Eggs, and Gametes AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Interim rule and request for comments. SUMMARY: We are establishing regulations to restrict the importation into the United States of live fish, fertilized eggs, and gametes of fish species that are susceptible to spring viremia of carp, a serious contagious viral disease of carp. Cases of spring viremia of carp confirmed in the United States in 2002 and 2004, and since eradicated, have been linked to the unregulated importation of fish infected with the virus. This action is necessary to prevent further introductions of spring viremia of carp into the United States. DATES: This interim rule is effective September 29, 2006. We will consider all comments that we receive on or before October 30, 2006. ADDRESSES: You may submit comments by either of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov* and, in the lower “Search Regulations and Federal Actions” box, select “Animal and Plant Health Inspection Service” from the agency drop-down menu, then click on “Submit.” In the Docket ID column, select APHIS-2006-0107 to submit or view public comments and to view supporting and related materials available electronically. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. • *Postal Mail/Commercial Delivery:* Please send four copies of your comment (an original and three copies) to Docket No. APHIS-2006-0107, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please state that your comment refers to Docket No. APHIS-2006-0107. *Reading Room:* You may read any comments that we receive on this docket in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue, SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call
(202)690-2817 before coming. *Other Information:* Additional information about APHIS and its programs is available on the Internet at *http://www.aphis.usda.gov.* FOR FURTHER INFORMATION CONTACT: Dr. Peter L. Merrill, Aquaculture Specialist, National Center for Import and Export, VS, APHIS, 4700 River Road Unit 39, Riverdale, MD 20737-1231;
(301)734-0649; or Dr. Jill B. Rolland, Fishery Biologist, National Center for Animal Health Programs, VS, APHIS, 4700 River Road Unit 46, Riverdale, MD 20737-1231;
(301)734-7727. SUPPLEMENTARY INFORMATION: Background Spring viremia of carp
(SVC)is a disease of certain species of finfish, caused by an eponymous rhabdovirus. The following species are considered susceptible to SVC: Common carp, including koi ( *Cyprinus carpio* ), grass carp ( *Ctenopharyngodon idellus* ), silver carp ( *Hypophthalmichthys molitrix* ), bighead carp ( *Aristichthys nobilis* ), Crucian carp ( *Carassius carassius* ), goldfish ( *Carassius auratus* ), tench ( *Tinca tinca* ), and sheatfish ( *Silurus glanis* ). SVC was first reported in Yugoslavia in 1969 and has since spread to other European countries as well as Asia. SVC is considered extremely contagious, and there are currently no U.S.-approved vaccines or treatments for the virus. In the United States, SVC is not known to exist in farm-raised fish. The disease is considered a foreign animal disease and is reportable to the Animal and Plant Health Inspection Service (APHIS). SVC is also a listed as a notifiable disease by the World Organization for Animal Health (OIE). Characteristics of OIE-notifiable aquatic animal diseases such as SVC include the following: 1. The disease has been shown to cause significant production losses due to morbidity or mortality at a national or multinational level where it occurs; 2. The disease has been shown to, or is strongly suspected to, negatively affect wild aquatic animal populations that are shown to be an asset worth protecting; or 3. The disease has the potential for international spread, including via live animals, their bodily fluids and waste, and inanimate objects. If SVC is discovered in an OIE member country, the affected country must report the discovery to OIE, which will notify the other member countries. Transmission of SVC virus
(SVCV)1 may occur through water contaminated with feces, urine, or mucus from infected fish and by parasites such as leeches. SVCV can survive for long periods of time in water and mud, increasing the possibility of transmission between sites by contaminated equipment. In addition, piscivorous birds that prey on SVC-susceptible species often travel over very large areas and can transmit the disease between sites. The presence of SVCV in ovarian fluid also suggests that the disease may be transmitted from parent to offspring. Morbidity and mortality vary considerably by several factors including temperature, fish species, and other factors, but may be substantial. Some fish that recover from SVC can become non-clinical carriers of the virus. Non-clinical carriers of the virus can transmit the virus to other susceptible species, but do not show signs of SVC. 1 SVC refers to actual clinical expression of the disease in susceptible species caused by the pathogen. SVCV refers to the actual pathogen regardless of its expression in the host species. Although other factors, such as age, can determine how severely the disease will affect a population, the temperature at which fish become infected, temperature fluctuations during the infective period, and the ability of the fish to mount a timely immune response seem to be the most important components for SVC. Generally, the disease flourishes in the spring as water temperatures increase, but maximum mortality occurs when temperatures are below 64 °F. As temperatures rise, disease expression varies as the immune resistance of carp also rises. Temperatures at or above 68 °F are optimal for immune function of susceptible species, where fish may not exhibit symptoms of the disease. Once the disease is detected in host species, total depopulation of exposed susceptible species is necessary given the contagious nature of the pathogen and the possibility of non-clinical carriers that may not exhibit symptoms. Clinical signs of SVC may be nonspecific and include darkening of the skin, exophthalmia (pop-eye), ascites (dropsy), pale gills, hemorrhages in the gills, skin, and eyes, and a protruding vent with a thick mucoid fecal cast. Pinpoint hemorrhages may occur in many organs and are considered an important indicator for SVC. Other internal signs include edema, inflammation of the intestine, and enlargement of the spleen. Concurrent infections often occur and may complicate the diagnosis. Mortality can be up to 70 percent in yearlings, while older age groups generally experience lower mortality rates. As stated previously, SVC does not exist in farm-raised fish populations in the United States. During two routine tests of wild fish populations in 1989 and 1993, test results showed that some fish had been exposed to the European strain of SVCV. Because of the low number of positive tests compared with all of the tests that were conducted, we consider the European strain of SVC to exist at very low prevalence levels in wild fish populations in the United States. In April 2002, a koi farm in North Carolina experienced an outbreak of SVC. The outbreak occurred shortly after the facility spawned koi that had been imported from a production facility in an Asian country where the SVC-status is unconfirmed. At the North Carolina farm, incoming fish had not been pre-screened for SVC and, apart from new stock importation, the U.S. farm did not have any known risks for SVCV exposure. The farm sent a sample of the diseased koi to the Fish Disease Diagnostic Laboratories of the University of Arkansas at Pine Bluff, an APHIS-approved diagnostic laboratory. After a tentative positive diagnosis for SVC, the Arkansas laboratory forwarded the sample to the OIE reference laboratory for SVC in Weymouth, England. The OIE laboratory confirmed the tentative diagnosis of SVC on June 25, 2002. The confirmed case was reported to APHIS on July 3, 2002. The affected koi farm operated sites for hatching and resale in North Carolina and Virginia. Due to multiple transfers of fish between sites, both of the farm's sites were considered exposed to SVCV. Two additional cases of SVC were confirmed in the summer of 2004, in Missouri and Washington. In the Missouri outbreak, a shipment of fish to the facility preceded the SVC outbreak by 2 weeks. These fish came from a U.S. facility where a disease with symptoms similar to SVC had been previously encountered in the spring of each of the 2 prior years. This U.S. facility where the fish originated had also imported fish from Asian countries prior to the onset of its disease problems, but had ceased importations afterwards. In the Washington outbreak, a hobbyist had acquired fish from a U.S. distributor who had obtained SVC-susceptible fish from a pet store supplied by Asian sources. In both situations, the imported fish had not been screened for SVC prior to importation. An APHIS review of the details in both of these cases concluded that domestic U.S. populations of SVC-susceptible fish were not considered to have been at prior risk from SVCV exposure other than from fish of direct or indirect Asian origin brought onto their premises. After SVC outbreaks were reported, the site in Washington, owned by a backyard hobbyist, and the site in Missouri, a commercial operation, were completely depopulated, cleaned and disinfected, and restocked with SVC-negative fish. Tracebacks conducted at the affected facilities in North Carolina, Washington, and Missouri indicated that all three of the outbreaks in commercial facilities followed the introduction of imported fish from countries where SVC was known to exist or where the SVC status is unconfirmed. Furthermore, subsequent genetic identification of the viral strain involved in all U.S. farmed fish outbreaks of SVC determined that the virus was of Asian, rather than European, genotype, which is the only genotype of SVC that has been identified in previous testing of wild fish populations in the United States. As the Asian strain of SVC had not been previously detected or reported in the United States, or in the Western hemisphere, APHIS concluded that the SVC outbreaks in U.S. farmed fish were linked to the importation of SVC-infected fish. Currently, there are no Federal regulations that restrict the importation of SVC-susceptible species of fish to prevent the introduction of SVC. Based on our review of the 2002 and 2004 cases of SVC in the United States, we have determined it is necessary to restrict the importation of live fish, fertilized eggs, and gametes of SVC-susceptible species to ensure they are free of SVC. Accordingly, we are amending the animal import regulations in 9 CFR part 93 by adding a new subpart I, “Aquatic Animal Species” (§§ 93.900 through 93.907, referred to below as the regulations). The regulations will restrict the importation of live fish, fertilized eggs, and gametes of SVC-susceptible species. In addition, the importation of live cultures of SVCV, preserved SVCV viral RNA or DNA, tissue samples containing viable SVCV, or other specimens intended for diagnostic or research purposes and which contain viable SVCV may be imported only under permit in accordance with 9 CFR part 122, “Organisms and Vectors.” The regulations in new subpart I are explained below, by section. Definitions (§ 93.900) Section 93.900 contains definitions of the following terms: *Administrator, Animal and Plant Health Inspection Service, APHIS representative, certifying official, communicable disease, competent authority, container, Department, fertilized egg, gamete, inspector, person, port veterinarian, region, spring viremia of carp (SVC), SVC-susceptible species,* and *United States.* The following definitions are standard and found throughout part 93: *Administrator, Animal and Plant Health Inspection Service, APHIS representative, communicable disease, Department, inspector, person, port veterinarian, region,* and *United States.* These terms and their definitions are set out in the regulatory text at the end of this document. Some additional terms that are being added to the regulations will be new to part 93 and their applicability is specific to aquatic animal species. Also, some of the terms have not been discussed previously in this document. These terms are *certifying official, competent authority,* and *container.* These terms will be defined as follows: *Certifying official.* An individual authorized by the competent authority of a country to sign health certificates for aquatic animals. *Competent authority.* The national veterinary services or other authority of a country, having the responsibility and competence for ensuring or supervising the implementation of aquatic animal health measures. *Container.* A transport receptacle that is specially constructed to facilitate transportation of aquatic animals or aquatic animal products by one or several means of transport. General Restrictions; Exceptions (§ 93.901) Paragraph
(a)of § 93.901 provides that no live fish, fertilized eggs, or gametes of SVC-susceptible species may be imported into the United States except in accordance with subpart I. This paragraph further provides that no such live fish, fertilized eggs, or gametes may be moved from the port of entry after arrival until released by the port veterinarian. In addition, this paragraph specifies that the Administrator may, upon request in specific cases, allow the importation of SVC-susceptible live fish, fertilized eggs, or gametes into the United States under conditions other than those specifically set forth in this subpart when he or she determines that such movement will not result in the introduction of SVC into the United States. Paragraph
(b)of this section provides that other provisions of part 93 relating to the importation of live fish, fertilized eggs, and gametes shall not apply to shipments of live fish, fertilized eggs, or gametes in transit through the United States if an import permit has been obtained under § 93.903 and all conditions of the permit are observed, and if the live fish, fertilized eggs, and gametes are handled as follows: • They are maintained under continuous confinement while in transit through the United States aboard an aircraft, ocean vessel, or other means of conveyance; or • They are unloaded, in the course of such transit, into a holding facility that is provided by the carrier or its agent and has been approved by the Administrator as adequate to prevent the spread within the United States of any finfish disease; they are maintained there under continuous confinement until loaded aboard a means of conveyance for transportation from the United States; and they are maintained under continuous confinement aboard such means of conveyance until it leaves the United States. • They are moved in accordance with any additional conditions prescribed in the permit and determined by the Administrator to be necessary to ensure that the live fish, fertilized eggs, or gametes do not introduce SVC into the United States. • For a holding facility to be approved by the Administrator, the following conditions must be met: • The holding facility must be sufficiently isolated to prevent direct or indirect contact of the live fish, fertilized eggs, or gametes it contains with any other SVC-susceptible species in the United States. • The holding facility must be constructed to provide adequate protection against environmental conditions and so that it can be adequately cleaned, washed and disinfected. • Provision must be made for disposal of fish carcasses, shipping water, waste, and any associated shipping materials in a manner that will prevent dissemination of disease. • Provision must be made for adequate sources of feed and water and for attendants for the care and feeding of fish, fertilized eggs, or gametes in the facility. • The holding facility must comply with all applicable local, State and Federal requirements for environmental quality. • The holding facility must comply with any additional requirements that may be imposed by the Administrator for a particular shipment if necessary to prevent the dissemination of disease. Ports Designated for the Importation of Live Fish, Fertilized Eggs, and Gametes (§ 93.902) Section 93.902 designates ports through which live fish, fertilized eggs, and gametes of SVC-susceptible species may be imported into the United States. We consider these ports to have adequate facilities and inspectors to perform the necessary inspections of shipments of live fish, fertilized eggs, and gametes. Air and ocean ports listed are Los Angeles and San Francisco, CA; Miami and Tampa, FL; Atlanta, GA; Honolulu, HI; Chicago, IL; Boston, MA; Newark, NJ; New York, NY; Portland, OR; Dallas-Ft. Worth, TX; and San Juan, PR. Land border ports listed are Detroit, MI; Buffalo-Niagara, NY; Seattle and Sumas, WA; and Otay Mesa, CA. This section also provides for other ports to be designated by the Administrator in special instances with the concurrence of the Secretary of the Department of Homeland Security. Import Permits for Live Fish, Fertilized Eggs, and Gametes (§ 93.903) Paragraph
(a)of § 93.903 requires that live fish, fertilized eggs, or gametes of SVC-susceptible species must be accompanied by an import permit issued by APHIS and must be imported within 30 days of the proposed arrival date stated in the import permit. Paragraph
(b)of this section provides the address from which prospective importers may request import permit applications and to which completed applications should be sent. An application for an import permit must be submitted for each shipment of live fish, fertilized eggs, and gametes of SVC-susceptible species. Paragraph
(c)specifies the information that must be included on an import permit application. It states that the application must include the name and address of the exporter; the proposed date of shipment; the name and address of the importer; the species and number of live fish, fertilized eggs, or gametes to be imported into the United States; the purpose of the importation; the ports of embarkation; the mode of transportation (airplane, boat, car, etc.) to be used to ship the live fish, fertilized eggs, or gametes to the United States; the route of travel, including all carrier stops en route; the port of entry; the proposed date of arrival; and the name and address of the person to whom the shipment of live fish, fertilized eggs, or gametes will be delivered in the United States. APHIS needs this information to determine whether the live fish, fertilized eggs, or gametes are eligible for importation, to respond to an applicant, to identify the shipment at the port of entry, to ensure that inspectors and facilities are available for inspection in the United States, and to contact appropriate persons if any questions arise concerning the importation. Paragraph
(d)explains what happens after we receive and review the application for an import permit. This paragraph provides that if, following our review, we determine that the live fish, fertilized eggs, or gametes are eligible to be imported, we will issue an import permit. This paragraph also specifies that an import permit does not guarantee that any live fish, fertilized eggs, or gametes will be allowed entry into the United States; the fish, fertilized eggs, or gametes will be allowed to enter the United States only if they meet all applicable requirements of the regulations. Health Certificate for Live Fish, Fertilized Eggs, and Gametes (§ 93.904) Paragraph
(a)of § 93.904 requires that SVC-susceptible species of live fish, fertilized eggs, and gametes that are imported into the United States from any part of the world be accompanied to the port of entry in the United States by a health certificate. The health certificate must be in English or contain an English translation and must be issued by a full-time salaried veterinarian of the national government of the exporting region, or issued by a certifying official and endorsed by the competent authority of the exporting region. The health certificate will be valid for 30 days from the date of issuance. In addition, the health certificate must state that the shipment was inspected by the veterinarian or certifying official who issued the certificate and found to be free of any clinical signs of disease consistent with SVC within 72 hours prior to the shipment being exported from the region of origin and that the live fish, fertilized eggs, or gametes covered by the health certificate meet the requirements of paragraph
(b)of this section. Paragraph
(b)of this section requires the live fish, fertilized eggs, or gametes to meet the following conditions to be eligible for importation into the United States: • The live fish, fertilized eggs, or gametes must be under the supervision of the competent authority and must participate in a health surveillance program for SVC. • The region or establishment from which the live fish, fertilized eggs, or gametes originate must demonstrate freedom from SVC through a minimum of 2-years' continuous health history, supported by laboratory testing by a pathogen detection facility approved for SVC viral assays by the competent authority. • SVC-susceptible fish populations in the region or establishment must be tested at least twice annually, with at least 3 months between the tests and at times or under environmental conditions that would facilitate the detection of SVCV if it were present. Sampling procedures must utilize an assumed pathogen prevalence of 2 percent, with a corresponding confidence level of 95 percent. Samples must be collected and submitted by a certifying official or veterinarian recognized by the competent authority. The standard screening method for SVC must include isolation of SVCV in cell culture, using either the epithelioma papulosum cyprini
(EPC)or fathead minnow
(FHM)cell lines. However, the Administrator may authorize other assays for SVCV detection in lieu of virus isolation through cell culture, if the Administrator determines that such assays are robust enough to provide equal assurances of the SVC status of an exporting region or establishment. All viral testing results must be negative. These requirements will ensure that SVC-susceptible species of live fish, fertilized eggs, or gametes imported into the United States are not infected with SVCV. Paragraph
(c)of § 93.904 requires that the live fish, fertilized eggs, or gametes be shipped to the United States in new containers or containers that have been cleaned and disinfected to neutralize any SVCV to which the shipping containers may have been exposed. Cleaning and disinfection must take place under the supervision of the official who issues the health certificate. Acceptable disinfection procedures include individual or combination treatments with: Solutions having a pH of 12 or higher or 3 or lower with a contact time of at least 10 minutes; heat at or above 56 °C for at least 15 minutes; chlorine solutions having a concentration of at least 500 ppm with a contact time of at least 10 minutes; iodine solutions having a concentration of at least 100 ppm with a contact time of at least 10 min; ultraviolet exposure (254 nm; minimum exposure of 10,000 microwatt seconds/cm 2 ); or other disinfectants such as Virkon used according to the manufacturer's directions. Other procedures may be used if determined adequate by the Administrator to neutralize the SVCV. Cleaning and disinfection protocols must be referenced in the health certificate or in a separate cleaning and disinfection certificate accompanying the shipment. The requirements described above are consistent with OIE's guidelines for trade in SVC-susceptible live fish, fertilized eggs, and gametes (Article 2.1.4.6 of the OIE Aquatic Code). Declaration and Other Documents for Live Fish, Fertilized Eggs, and Gametes (§ 93.905) Section 93.905 requires the importer or his or her agent to submit the following documents to the collector of customs for use by the port veterinarians: • All permits, certificates, or other documentation required by this part; and • Two copies of a declaration that lists the port of entry, the name and address of the importer; the name and address of the broker; the origin of the live fish, fertilized eggs, or gametes; the number, species, and the purpose of the importation; the name of the person to whom the fish will be delivered; and the location of the place to which such delivery will be made. Inspection at the Port of Entry (§ 93.906) Section 93.906 sets forth requirements for port of entry inspections of shipments of SVC-susceptible species of live fish, fertilized eggs, or gametes. Paragraph
(a)provides that the shipments must be presented for inspection at a port of entry designated under § 93.902. This paragraph also requires that the port veterinarian be notified at least 72 hours in advance of the arrival of the shipment in the United States. It also provides that any shipment of live SVC-susceptible fish species that the port veterinarian determines to exhibit clinical signs consistent with SVCV infection or disease, or any shipments of live fish, fertilized eggs, and gametes of SVC-susceptible species that otherwise do not meet the requirements of this subpart will be refused entry. Paragraph
(b)states that shipments refused entry must be exported within a time fixed in each case by the Administrator, and in accordance with other provisions he or she may require in each case for their handling, or will be disposed of as the Administrator may direct. User Fees APHIS user fees for processing permit applications and for inspecting animals at the port of entry will apply. The user fees are set forth in 9 CFR part 130. User fees for processing applications for permits to import certain animals and animal products are listed in the table in § 130.4. User fees for inspection at the port of entry and laboratory and facility inspections are the hourly fees set forth in § 130.30. Processed Products of SVC-Susceptible Species Currently, we do not know the extent of imports to the United States of products of SVC-susceptible species. Such products could include muscle fillets (imported whole or for further processing), fresh or frozen whole uneviscerated fish, or tissues of SVC-susceptible species intended for use as bait, or other materials. Available scientific literature indicates that there is a perceived low risk of SVC transmission associated with products of SVC-susceptible species intended for human consumption or for further processing. Also, the importation of products from SVC-susceptible species has not been linked to outbreaks of SVC in the United States. Therefore, we are not restricting the importation of such products at this time. Fresh or frozen whole uneviscerated fish or tissues of SVC-susceptible species for use as bait may be determined to present additional risks. We will continue to seek more information regarding those risks and may impose restrictions on such materials at a later date. We welcome comment on this issue as well as on any aspect of this rule. Immediate Action Immediate action is necessary to prevent further introductions of SVC into the United States. SVC is not currently present in farm-raised populations of fish in the United States. Each time SVC has been discovered in commercial fish sites, the disease has been eradicated. Tracebacks conducted at the affected facilities in North Carolina, Washington, and Missouri indicated that all three of the outbreaks in commercial facilities followed the introduction of imported fish from countries where SVC was known to exist or where the SVC status was unknown, and genetic identification of the viral strain involved in all U.S. farmed fish outbreaks of SVC determined that the virus was of Asian, rather than European, genotype, which is the only genotype of SVC that has been identified in previous testing of wild fish populations in the United States. The facilities did not have any known risks of SVCV exposure other than through such imports. Despite its current SVC-free status, the United States remains unprotected from continuing introductions of infected fish, since there are a number of known or suspected SVC-positive countries that export fish to the United States, and pre-testing of imported SVC-susceptible fish is not currently required. Therefore, it is necessary to implement regulations that will restrict such imports in as timely a manner as possible. Under these circumstances, the Administrator has found that notice and public procedures with respect to this action are contrary to the public interest and that there is good cause under 5 U.S.C. 553 for issuing this rule as an interim rule, rather than publishing a proposed rule. This rule will take effect 30 days after the date of publication to prevent detrimental effects to live fish, fertilized eggs, and gametes that were in transit to the United States prior to the publication date. We will consider comments we receive during the comment period for this interim rule (see DATES above). After the comment period closes, we will publish another document in the **Federal Register** . The document will include a discussion of any comments we receive and any amendments we are making to the rule. Executive Order 12866 and Regulatory Flexibility Act This rule has been reviewed under Executive Order 12866. The rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget. We are amending the regulations to establish restrictions on the importation into the United States of live fish, fertilized eggs, and gametes of fish species that are susceptible to SVC. We are also restricting the importation of diagnostic specimens and research materials containing viable SVCV. These actions are necessary to prevent the introduction of SVC into the United States. In accordance with 5 U.S.C. 603, we have performed an initial regulatory flexibility analysis, which is set out below, regarding the economic effects of this rule on small entities. The total value of SVC-susceptible species in the United States industry was approximately $23.2 million in 1998. 2 The small business size standards for animal aquaculture, as identified by the Small Business Administration (SBA), based upon the North American Industry Classification System (NAICS) code 112511, is $750,000 or less in annual receipts. While the available data do not provide the number of U.S. farms producing SVC-susceptible species according to size, it is reasonable to assume that the majority of the operations are small businesses by SBA standards because of the value of sales compared to the total number of farms. 3 In 1998, a total of 76 carp farms accounted for approximately $3.2 million in farm sales; 34 feeder goldfish farms accounted for approximately $9.3 million in sales; 115 koi farms accounted for approximately $3.9 million in sales; and 65 ornamental goldfish farms accounted for approximately $6.7 million in sales. The data above do not reveal the number of separate U.S. farms that produced the susceptible species in 1998, since some farms produced more than one species. APHIS welcomes information that would enable us to more precisely identify the number of small entities that may be affected by this rule. 2 NASS/USDA, *1998 Census of Aquaculture* . Note: 1998 is the most recent year in which census data for aquaculture are available. 3 Based upon 2002 Census of Agriculture—State Data. Existing data suggest that domestic producers of SVC-susceptible ornamental fish species ( *i.e.* , koi, Crucian carp, and goldfish) will benefit from this interim rule. The United States is a net importer of live ornamental fish. In 1998, the United States imported $45.1 million in live ornamental fish, with approximately 57 percent of that arriving primarily from Asia. In that same year, U.S. exports of live ornamental fish were $10.6 million, less than one-fourth the value of imports. 4 This rule will ensure SVC-susceptible live fish, fertilized eggs, and gametes imported by these producers are free of SVC. 4 Global Trade Atlas, 1998. The United States is a net exporter of live carp ( *i.e.* , common carp (excluding koi), grass carp, silver carp, bighead carp, tench, and sheatfish). In 1998, the United States exported approximately $1.7 million in live carp, while importing roughly $0.2 million. Approximately 98 percent of U.S. exports of live carp are sent to Canada. U.S. producers who export live carp will also benefit from this interim rule because it will help to provide continued assurance of the SVC-free status of U.S. exports. U.S. imports of live carp come primarily from Japan, Hong Kong, and Israel, 5 which are considered to be potential sources of SVCV-infected fish. Japan accounted for 87 percent of the U.S. live carp import market in 2003, and Hong Kong and Israel accounted for about 7 and 6 percent, respectively. 6 SVC-susceptible fish imported from these and other regions of the world will have to be certified as being from a region or establishment determined to be free of SVC. 5 Global Trade Atlas, 2003. 6 Global Trade Atlas, 2003. Importers of SVC-susceptible species will be affected by the user fees that will be charged for processing applications for import permits and for conducting inspections at the port of entry under APHIS' regulations in §§ 130.4 (processing import permit applications) and 130.30 (hourly rates for services). The user fee for processing an initial import permit application is $94. In the beginning, import compliance assistance ($70) might be necessary, which would raise the cost to $164 for each shipment, but we estimate that most importers will not need import compliance assistance. The user fee rate is $84 per hour ($21 per quarter hour) for inspection services, including travel time, during normal business hours. At other times, the user fees are $100 per hour ($25 per quarter hour) Monday through Saturday and on holidays. The user fees are $112 per hour ($28 per quarter hour) on Sundays. According to APHIS' Veterinary Services, the average inspection takes an estimated 4 1/2 hours, including inspectors' travel time to the port. Therefore, the total cost of inspecting a shipment can range from $378 to $504, depending on whether the inspection is done during normal business hours. 7 The projected average cost of inspection to an importer with four or more shipments annually is between $2700 and $3650. 8 The average cost of import permits, based upon an average of 7 shipments per annum per importer, will be $685. 9 A small number of entities currently import more than 40 shipments of SVC-susceptible species annually. Permit and inspection costs for these importers are expected to range between $15,000 and $20,000. The projected total annual cost to importers of live SVC-susceptible species is between $237,384 and $316,512 for inspections, and about $59,032 for import permits. 10 7 Total cost of an average inspection during normal business hours is derived as follows: ($84*4) + $42 = $378. Total cost of an average inspection on Sundays is derived as follows: ($112*4) + $56 = $504. 8 Based upon 2004 SVC-susceptible species import records of 628 shipments from the Automated Target System Inbound Production Web Server. 9 The estimated total average cost for import permits does not include the import compliance assistance fee of $70, which is only incurred until the application process becomes familiar to the importer. 10 The projected total annual cost to importers for inspections during normal business hours is derived as follows: $378 per inspection*628 shipments = $237,684 for inspections. The projected total annual cost to importers for inspections on Sundays is derived as follows: $504 per inspection*628 shipments = $316,512. The total annual cost for permits is derived as follows: $94 per permit*628 shipments = $59,032. Import permit and inspection expenditures by entities will be roughly proportional to the number of shipments imported. We do not have data on the average value of shipments of SVC-susceptible species by importers, or the range or distribution of shipment values. Imports of SVC-susceptible species are often a mixture of the less expensive ornamental fish and the more expensive koi. APHIS invites comment on the average revenues and operating costs, and average number of shipments per year, of small-entity importers that may be impacted by this interim rule. The user fees set forth in this interim rule are financial targets, with the goal of recovering the cost of agency operations. Profit margins of some importers could decline due to the user fees, depending upon the extent to which they are unable to pass these costs on to their buyers. One possible response of buyers of imported SVC-susceptible species to price increases may be to shift to domestic sources for ornamental fish, and limit imports to the more expensive species, such as koi. Given their limited domestic availability, price changes that may occur because of the user fees incurred by importers should not have a large effect on the quantities imported. APHIS welcomes information from the public as to the domestic wholesale supply of the various SVC-susceptible species, compared to quantities imported. While it is anticipated that the permit and inspection costs may have a discernable impact on prices of SVC-susceptible species, we believe the benefits of preventing future introduction of SVC into the United States, in terms of forgone depopulation and cleaning and disinfecting expenditures, will exceed any negative price effects. APHIS considered several alternatives to the import requirements for SVC-susceptible species set forth in this final rule. One alternative was to list regions where SVC is known to exist in our regulations and to only impose import restrictions on SVC-susceptible species imported from those regions. This approach would allow for regions maintaining SVC-free status to export SVC-susceptible species without the added import permit and health certificate requirements. However, it was determined that due to the complex epidemiology of SVC, and the present inability of APHIS to monitor or assess the veterinary infrastructure of countries maintaining SVC freedom, that the establishment of a list of SVC-free regions could not be done with any reliable assurance of initial or ongoing validity. A second alternative APHIS considered was to exempt SVC-susceptible species intended to remain in private aquaria from the restrictions set forth in this rule; however, it was determined that we could not assure that allowing such an exemption would mitigate the risk of spreading the pathogen or disease via accidental or purposeful release into waterways with wild SVC-susceptible populations. APHIS also considered exempting a limited number of imported SVC-susceptible fish brought into the United States as personal baggage, since many goldfish ( *Carassius auratus* ) and possibly other SVC-susceptible species are brought into the United States in this fashion by international travelers. It was determined that we could not adequately ensure that such practices would not result in accidental or purposeful release into waterways where other populations of fish, including farmed fish species, could be affected. APHIS invites comment on any additional information that will enable us to better assess the financial burden that the rule may place on small-entity importers of SVC-susceptible species. This rule contains certain reporting and recordkeeping requirements (see “Paperwork Reduction Act” below). Executive Order 12988 This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule:
(1)Preempts all State and local laws and regulations that are in conflict with this rule;
(2)has no retroactive effect; and
(3)does not require administrative proceedings before parties may file suit in court challenging this rule. Paperwork Reduction Act In accordance with section 3507(j) of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ), the information collection and recordkeeping requirements included in this interim rule have been submitted for emergency approval to the Office of Management and Budget (OMB). OMB has assigned control number 0579-0301 to the information collection and recordkeeping requirements. We plan to request continuation of that approval for 3 years. Please send written comments on the 3-year approval request to the following addresses:
(1)Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for APHIS, Washington, DC 20503; and
(2)Docket No. APHIS-2006-0107, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please state that your comments refer to Docket No. APHIS-2006-0107 and send your comments within 60 days of publication of this rule. This interim rule establishes regulations to restrict the importation of live fish, fertilized eggs, and gametes of SVC-susceptible species into the United States. It also restricts the importation of diagnostic specimens or research materials containing viable SVCV. Live fish, fertilized eggs, and gametes of SVC-susceptible species that are imported into the United States will have to be accompanied by a health certificate. Importers of SVC-susceptible species will be required to obtain an import permit, and provide a declaration at the port of entry. Importers of live cultures of SVCV, preserved SVC viral RNA or DNA, tissue samples containing viable SVCV, or other specimens for diagnostic or research purposes will also have to obtain an import permit. We are soliciting comments from the public (as well as affected agencies) concerning our information collection and recordkeeping requirements. These comments will help us:
(1)Evaluate whether the information collection is necessary for the proper performance of our agency's functions, including whether the information will have practical utility;
(2)Evaluate the accuracy of our estimate of the burden of the information collection, including the validity of the methodology and assumptions used;
(3)Enhance the quality, utility, and clarity of the information to be collected; and
(4)Minimize the burden of the information collection on those who are to respond (such as through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology; *e.g.* , permitting electronic submission of responses). *Estimate of burden:* Public reporting burden for this collection of information is estimated to average .40090834 hours per response. *Respondents:* Importers of SVC-susceptible live fish, fertilized eggs, and gametes, and cultures/diagnostic specimens containing SVCV. *Estimated annual number of respondents:* 12,010. *Estimated annual number of responses per respondent:* 1. *Estimated annual number of responses:* 36,010. *Estimated total annual burden on respondents:* 5,969 hours. (Due to averaging, the total annual burden hours may not equal the product of the annual number of responses multiplied by the reporting burden per response.) Copies of this information collection can be obtained from Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at
(301)734-7477. E-Government Act Compliance The Animal and Plant Health Inspection Service is committed to compliance with the E-Government Act to promote the use of the Internet and other information technologies, to provide increased opportunities for citizen access to Government information and services, and for other purposes. For information pertinent to E-Government Act compliance related to this interim rule, please contact Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at
(301)734-7477. List of Subjects in 9 CFR Part 93 Animal diseases, Imports, Livestock, Poultry and poultry products, Quarantine, Reporting and recordkeeping requirements. Accordingly, we are amending 9 CFR part 93 as follows: PART 93—IMPORTATION OF CERTAIN ANIMALS, BIRDS, FISH, AND POULTRY, AND CERTAIN ANIMAL, BIRD, AND POULTRY PRODUCTS; REQUIREMENTS FOR MEANS OF CONVEYANCE AND SHIPPING CONTAINERS 1. The authority citation for part 93 continues to read as follows: Authority: 7 U.S.C. 1622 and 8301-8317; 21 U.S.C. 136 and 136a; 31 U.S.C. 9701; 7 CFR 2.22, 2.80, and 371.4. 2. The heading for part 93 is revised to read as set forth above. 3. Part 93 is amended by adding a new Subpart I—Aquatic Animal Species, §§ 93.900 through 93.907, to read as follows: Subpart I—Aquatic Animal Species Sec. 93.900 Definitions. 93.901 General restrictions; exceptions. 93.902 Ports designated for the importation of live fish, fertilized eggs, and gametes. 93.903 Import permits for live fish, fertilized eggs, and gametes. 93.904 Health certificate for live fish, fertilized eggs, and gametes. 93.905 Declaration and other documents for live fish, fertilized eggs, and gametes. 93.906 Inspection at the port of entry. Subpart I—Aquatic Animal Species § 93.900 Definitions. Wherever in this subpart the following terms are used, unless the context otherwise requires, they shall be construed, respectively, to mean: *Administrator* . The Administrator, Animal and Plant Health Inspection Service, or any person authorized to act for the Administrator. *Animal and Plant Health Inspection Service* . The Animal and Plant Health Inspection Service of the United States Department of Agriculture (APHIS). *APHIS representative* . A veterinarian or other individual employed by the Animal and Plant Health Inspection Service, United States Department of Agriculture, who is authorized to perform the services required by this part. *Certifying official* . An individual authorized by the competent authority of a country to sign health certificates for aquatic animals. *Competent authority* . The national veterinary services or other authority of a country, having the responsibility and competence for ensuring or supervising the implementation of aquatic animal health measures. *Container* . A transport receptacle that is specially constructed to facilitate transportation of aquatic animals or aquatic animal products by one or several means of transport. *Department* . The United States Department of Agriculture (USDA). *Fertilized egg* . A viable fertilized ovum of an aquatic animal. *Gamete* . The sperm or unfertilized egg of aquatic animals that is held or transported separately. *Inspector* . An employee of the Animal and Plant Health Inspection Service authorized to perform duties required under this subpart. *Person* . Any individual, corporation, company, association, firm, partnership, society or joint stock company. *Port veterinarian* . A veterinarian employed by the Animal and Plant Health Inspection Service to perform duties required under this subpart at a port of entry. *Region* . Any defined geographic land area identifiable by geological, political, or surveyed boundaries. A region may consist of any of the following:
(1)A national entity (country);
(2)Part of a national entity (zone, county, department, municipality, parish, Province, State, etc.);
(3)Parts of several national entities combined into an area; or
(4)A group of national entities (countries) combined into a single area. *Spring viremia of carp (SVC)* . A disease caused by infection with spring viremia of carp virus, a rhabodivrus capable of infecting several carp species, in addition to some other cyprinid and ictalurid fish species. *SVC-susceptible species* . Common carp ( *Cyprinus carpio* ), grass carp ( *Ctenopharyngodon idellus* ), silver carp ( *Hypophthalmichthys molitrix* ), bighead carp ( *Aristichthys nobilis* ), Crucian carp ( *Carassius carassius* ), goldfish ( *Carassius auratus* ), tench ( *Tinca tinca* ), and sheatfish ( *Silurus glanis* ). *United States* . All of the States of the United States, the District of Columbia, Guam, Northern Mariana Islands, Puerto Rico, the Virgin Islands of the United States, and all other territories and possessions of the United States. § 93.901 General restrictions; exceptions.
(a)No live fish, fertilized eggs, or gametes of SVC-susceptible species may be imported into the United States except in accordance with this subpart, 11 nor shall any such live fish, fertilized eggs, or gametes be moved from the port of entry after arrival until released by the port veterinarian; provided that the Administrator may, upon request in specific cases, allow the importation of SVC-susceptible live fish, fertilized eggs, or gametes under conditions other than those set forth in this subpart when the Administrator determines that such movement will not result in the introduction of SVC into the United States. 11 The importation of live cultures of SVC virus, preserved SVC virus viral RNA or DNA, tissue samples containing viable SVC virus, or other specimens intended for diagnostic or research purposes and which contain viable SVC virus may be imported only under permit in accordance with 9 CFR part 122.
(b)Other provisions of this subpart relating to the importation of live fish, fertilized eggs, and gametes shall not apply to shipments of SVC-susceptible species of live fish, fertilized eggs, or gametes in transit through the United States if an import permit has been obtained under § 93.903 and all conditions of the permit are observed; and if the live fish, fertilized eggs, and gametes are handled as follows:
(1)They are maintained under continuous confinement while in transit through the United States aboard an aircraft, ocean vessel, or other means of conveyance; or
(2)They are unloaded, in the course of such transit, into a holding facility 12 that is provided by the carrier or its agent and has been approved by the Administrator in accordance with paragraph (b)(4) of this section as adequate to prevent the spread within the United States of any finfish disease; they are maintained there under continuous confinement until loaded aboard a means of conveyance for transportation from the United States; and are maintained under continuous confinement aboard such means of conveyance until it leaves the United States. 12 Requests for approval of such facilities should be made to the Animal and Plant Health Inspection Service at the address provided in § 93.903 for permit applications.
(3)They are moved in accordance with any additional conditions prescribed in the permit and determined by the Administrator to be necessary to ensure not introduce SVC into the United States.
(4)For a holding facility to be approved by the Administrator:
(i)The holding facility must be sufficiently isolated to prevent direct or indirect contact of the live fish, fertilized eggs, or gametes it contains with any other SVC-susceptible species in the United States;
(ii)The holding facility must be constructed to provide adequate protection against environmental conditions and so that it can be adequately cleaned, washed and disinfected;
(iii)Provision must be made for disposal of fish carcasses, shipping water, waste and any associated shipping materials in a manner that will prevent dissemination of disease;
(iv)Provision must be made for adequate sources of feed and water and for attendants for the care and feeding of live fish, fertilized eggs, or gametes in the facility;
(v)The holding facility must comply with all applicable local, State and Federal requirements for environmental quality.
(vi)The holding facility must comply with any additional requirements that may be imposed by the Administrator for a particular shipment if necessary to prevent the dissemination of disease. (Approved by the Office of Management and Budget under control number 0579-0301) § 93.902 Ports designated for the importation of live fish, fertilized eggs, and gametes.
(a)The following ports are designated as ports of entry for live fish, fertilized eggs, and gametes of SVC-susceptible species imported under this subpart:
(1)*Air and ocean ports* . Los Angeles and San Francisco, CA; Miami and Tampa, FL; Atlanta, GA; Honolulu, HI; Chicago, IL; Boston, MA; Newark, NJ; New York, NY; Portland, OR; Dallas-Ft. Worth, TX; and San Juan, PR.
(2)*Canadian border ports* . Detroit, MI; Buffalo-Niagara, NY; and Blaine and Seattle, WA.
(3)*Mexican border ports* . Otay Mesa, CA.
(b)*Designation of other ports* . Other ports may be designated by the Administrator in specific cases with the concurrence of the Secretary of the Department of Homeland Security. § 93.903 Import permits for live fish, fertilized eggs, and gametes.
(a)Live fish, fertilized eggs, or gametes of SVC-susceptible species imported into the United States must be accompanied by an import permit issued by APHIS and must be imported within 30 days after the proposed date of arrival stated in the import permit.
(b)An application for an import permit must be submitted for each shipment of live fish, fertilized eggs, or gametes of SVC-susceptible species to the Animal and Plant Health Inspection Service, Veterinary Services, National Center for Import and Export, 4700 River Road Unit 38, Riverdale, MD 20737-1231. Application forms for import permits may be obtained from this address.
(c)A completed application shall include the following information:
(1)The name and address of the person intending to export live fish, fertilized eggs, or gametes of SVC-susceptible species to the United States;
(2)The proposed date of shipment to the United States;
(3)The name and address of the person intending to import live fish, fertilized eggs, or gametes of SVC-susceptible species into the United States;
(4)The species and number of live fish, fertilized eggs, or gametes of SVC-susceptible species to be imported into the United States;
(5)The purpose of the importation;
(6)The port of embarkation;
(7)The mode of transportation;
(8)The route of travel, including all carrier stops en route;
(9)The port of entry in the United States;
(10)The proposed date of arrival in the United States; and
(11)The name and address of the person to whom the live fish, fertilized eggs, or gametes of SVC-susceptible species will be delivered in the United States.
(d)If APHIS determines that the live fish, fertilized eggs, or gametes are eligible for importation, APHIS will issue an import permit indicating the applicable conditions for importation. An import permit does not guarantee that any live fish, fertilized eggs, or gametes will be allowed entry into the United States; the fish, fertilized eggs, or gametes will be allowed to enter the United States only if they meet all applicable requirements of the permit and regulations. (Approved by the Office of Management and Budget under control number 0579-0301) § 93.904 Health certificate for live fish, fertilized eggs, and gametes.
(a)*General* . All live fish, fertilized eggs, and gametes of SVC-susceptible species that are imported from any region of the world must be accompanied by a health certificate issued by a full-time salaried veterinarian of the national government of the exporting region, or issued by a certifying official and endorsed by the competent authority of that country. The health certificate must be written in English or contain an English translation. The health certificate will be valid for 30 days from the date of issuance. The health certificate for the live fish, fertilized eggs, or gametes must state that:
(1)The live fish, fertilized eggs, or gametes were inspected by the veterinarian or certifying official who issued the certificate within 72 hours prior to shipment, and were found to be free of any clinical signs of disease consistent with SVC; and
(2)The live fish, fertilized eggs, or gametes covered by the health certificate meet the requirements of this section.
(b)*Surveillance* . The live fish, fertilized eggs, or gametes must meet the following conditions to be eligible for importation into the United States:
(1)The live fish, fertilized eggs, or gametes must originate in a region or establishment which conducts a surveillance program for SVC under the supervision of the competent authority.
(2)The region or establishment must demonstrate freedom from SVC through a minimum of 2-years' continuous health history, supported by laboratory testing by a pathogen detection facility approved for SVC viral assays by the competent authority.
(3)SVC-susceptible fish populations in the region or establishment must be tested at least twice annually, with at least 3 months between the tests and at times or under environmental conditions that would facilitate the detection of SVCV if it were present. Sampling procedures must utilize an assumed pathogen prevalence of 2 percent, with a corresponding confidence level of 95 percent. Samples must be collected and submitted by a certifying official or veterinarian recognized by the competent authority. The standard screening method for SVC must include isolation of SVCV in cell culture, using either the epithelioma papulosum cyprini
(EPC)or fathead minnow
(FHM)cell lines. However, the Administrator may authorize other assays for SVCV detection in lieu of virus isolation through cell culture, if the Administrator determines that such assays provide equivalent assurance of the SVC status of an exporting region or establishment. All viral testing results must be negative.
(c)*Shipping containers* . All live fish, fertilized eggs, and gametes must be shipped to the United States in new containers or in used containers that have been cleaned and disinfected in accordance with this section.
(1)Cleaning and disinfection of shipping containers must take place under the supervision of the veterinarian or certifying official who issues the health certificate.
(2)Cleaning and disinfection must be sufficient to neutralize any SVC virus to which shipping containers may have been exposed. Acceptable disinfection procedures include individual or combination treatments with: Solutions having a pH of 12 or higher or 3 or lower with a contact time of at least 10 minutes; heat at or above 56° C for at least 15 minutes; chlorine solutions having a concentration of at least 500 ppm with a contact time of at least 10 minutes; iodine solutions having a concentration of at least 100 ppm with a contact time of at least 10 minutes; ultraviolet exposure (254 nm; min exposure of 10,000 microwatt seconds/cm 2 ); or other disinfectants such as Virkon used according to the manufacturer's directions. The Administrator may authorize other procedures if the Administrator determines they are adequate to neutralize the SVC virus.
(3)Cleaning and disinfection protocols must be referenced in the health certificate or in a separate cleaning and disinfection certificate accompanying the shipment to the U.S. port of entry. (Approved by the Office of Management and Budget under control number 0579-0301) § 93.905 Declaration and other documents for live fish, fertilized eggs, and gametes.
(a)For all live fish, fertilized eggs, and gametes offered for importation under this subpart, the importer or his or her agent must submit the following documents to the collector of customs for use by the port veterinarian:
(1)All permits, certificates, or other documentation required by this subpart; and
(2)Two copies of a declaration that lists the port of entry, the name and address of the importer, the name and address of the broker, the origin of the live fish, fertilized eggs, or gametes, the number, species, and the purpose of the importation, the name of the person to whom the fish will be delivered, and the location of the place to which such delivery will be made.
(b)[Reserved] (Approved by the Office of Management and Budget under control number 0579-0301) § 93.906 Inspection at the port of entry.
(a)All live fish, fertilized eggs, and gametes of SVC-susceptible species imported from any part of the world must be presented for inspection at a port of entry designated under § 93.902. The APHIS port veterinarian must be notified at least 72 hours in advance of the arrival in the United States of a shipment of live fish, fertilized eggs, or gametes of SVC-susceptible species. Any shipment of live SVC-susceptible fish species that the port veterinarian determines to exhibit clinical signs consistent with SVCV infection or disease, or any shipments of live fish, fertilized eggs, and gametes of SVC-susceptible species that otherwise do not meet the requirements of this subpart, shall be refused entry.
(b)Shipments refused entry, unless exported within a time fixed in each case by the Administrator, and in accordance with other provisions he or she may require in each case for their handling, shall be disposed of as the Administrator may direct. (Approved by the Office of Management and Budget under control number 0579-0301) Done in Washington, DC, this 24th day of August 2006. Kevin Shea, Acting Administrator, Animal and Plant Health Inspection Service. [FR Doc. E6-14478 Filed 8-29-06; 8:45 am] BILLING CODE 3410-34-P FEDERAL RESERVE SYSTEM 12 CFR Part 205 [Regulation E; Docket No. R-1247] Electronic Fund Transfers AGENCY: Board of Governors of the Federal Reserve System. ACTION: Final rule. SUMMARY: The Board is amending Regulation E, which implements the Electronic Fund Transfer Act, and the official staff commentary to the regulation, which interprets the requirements of Regulation E. The final rule provides that Regulation E covers payroll card accounts that are established directly or indirectly through an employer, and to which transfers of the consumer's salary, wages, or other employee compensation are made on a recurring basis. The final rule also provides financial institutions with an alternative to providing periodic statements for payroll card accounts if they make account information available to consumers by specified means. DATES: This final rule is effective July 1, 2007. FOR FURTHER INFORMATION CONTACT: Ky Tran-Trong, Senior Attorney, or David A. Stein or John C. Wood, Counsels, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, Washington, DC 20551, at
(202)452-2412 or
(202)452-3667. For users of Telecommunications Device for the Deaf
(TDD)only, contact
(202)263-4869. SUPPLEMENTARY INFORMATION: I. Statutory Background The Electronic Fund Transfer Act (15 U.S.C. 1693 *et seq.* ) (EFTA or Act), enacted in 1978, provides a basic framework establishing the rights, liabilities, and responsibilities of participants in electronic fund transfer
(EFT)systems. The EFTA is implemented by the Board's Regulation E (12 CFR part 205). Examples of types of transfers covered by the Act and regulation include transfers initiated through an automated teller machine (ATM), point-of-sale
(POS)terminal, automated clearinghouse (ACH), telephone bill-payment plan, or remote banking service. The Act and regulation provide for disclosure of terms and conditions of an EFT service, documentation of EFTs by means of terminal receipts and periodic account activity statements, limitations on consumer liability for unauthorized transfers, procedures for error resolution, and certain rights related to preauthorized EFTs. The Act and regulation also restrict the unsolicited issuance of ATM cards and other access devices. The official staff commentary (12 CFR part 205 (Supp. I)), which interprets the requirements of Regulation E, is designed to facilitate compliance and provide protection from liability under Sections 915 and 916 of the EFTA for financial institutions and other persons subject to the Act. 15 U.S.C. 1693m(d)(1). The commentary is updated periodically to address significant questions that arise. II. Background and Overview of Comments Received Payroll cards have become increasingly popular with some employers, financial institutions, and payroll service providers as a means of providing a consumer's wages or other recurring compensation payments—assets that the consumer is able to access and spend through an access device that provides functionality comparable to a debit card. Typically, an employer will arrange with a bank or a third-party service provider to make available to its employees a magnetic stripe-backed card; this card accesses an account (or subaccount) assigned to the individual employee. Each payday, the employer credits this account for the amount of the employee's compensation instead of providing the employee with a paper check or making a direct deposit of salary to the employee's checking or deposit account. The employee then can use the payroll card to withdraw the funds at an ATM and to make purchases at POS (and possibly get cash back). Some payroll cards may offer features such as convenience checks and electronic bill payment. Payroll cards are often marketed to employers as a cost-effective means of providing wages to employees who lack a traditional banking relationship. For “unbanked” consumers, payroll card products can serve as substitutes for traditional transaction accounts at a financial institution. On September 17, 2004, the Board published a notice of proposed rulemaking in the **Federal Register** (69 FR 55,996) (September 2004 proposal) to provide, among other things, that the term “account” under Regulation E includes payroll card accounts established by an employer for the purpose of providing an employee's compensation on a recurring basis. Under the September 2004 proposal, a payroll card account would be subject to the regulation whether it is operated or managed by the employer, a third-party payroll processor, or a depository institution. The Board received nearly 50 comment letters on the proposed revisions addressing payroll card accounts. Both industry and consumer group commenters generally reacted favorably to the September 2004 proposal, agreeing that coverage of payroll card accounts under Regulation E was appropriate. Consumer groups further urged the Board to expand the scope of the proposal to cover any stored-value card product that is marketed or used as an account substitute, or that is used to receive payments of significant household funds, such as workers' compensation or unemployment benefits. Most industry commenters urged the Board to grant financial institutions relief from the requirement to provide paper periodic statements. These commenters cited various reasons, including that other means of accessing balance and transaction information, such as by telephone or through the Internet, provided more useful and timely information to consumers at less cost to financial institutions. On January 10, 2006, the Board published an interim final rule in the **Federal Register** (71 FR 1,473) (interim rule), that adopted the proposed treatment of payroll card accounts as “accounts” for purposes of coverage under Regulation E. In response to commenters' suggestions, the interim rule included a new § 205.18 which granted financial institutions an alternative means to provide account transaction information to payroll card users instead of providing periodic statements. Specifically, a financial institution could provide account information by:
(1)Making balance information available to the consumer through a readily available telephone line;
(2)making available to the consumer an electronic history of the consumer's account transactions, such as through an Internet Web site, covering a period of at least 60 days; *and*
(3)providing promptly upon the consumer's request, a written history of the consumer's account transactions covering a period of at least 60 days prior to the request. The interim rule included additional revisions regarding initial disclosures, error resolution rights, and other consumer protections. To give interested parties an opportunity to comment on these modifications, particularly the alternative means of providing account information, the Board requested additional comment on the interim rule. The Board received approximately 30 comment letters on the interim rule. A variety of business entities, including banks, credit unions, payroll services providers, and industry trade associations, provided comments. Consumer groups and a state attorney general also provided comments. This section provides a brief overview of the comments received. The section-by-section analysis discusses specific comments, and sets forth the Board's analysis of those comments, in more detail. Many commenters addressed the scope of the interim rule. Industry commenters generally continued to support the Board's coverage of payroll card accounts under Regulation E. Several industry commenters urged the Board not to extend the scope of the rule to cover additional stored-value, or prepaid, products, as this could discourage the continued evolution of such products. However, other industry commenters recommended that the interim rule's definition of “payroll card account” be extended to cover other card products to which a consumer might elect to add his or her salary by direct deposit and which are not necessarily “established by an employer.” A few industry commenters also expressed concern about the proposal to treat employers who make payroll cards available to their employees as financial institutions subject to the regulation. Consumer groups urged the Board to engage immediately in a separate rulemaking to provide specifically that Regulation E covers any card product that is marketed or used as an account substitute, or to any card product used to receive payments of significant household funds, such as workers' compensation or unemployment benefits. Commenters also addressed the appropriateness of the interim rule's alternative to providing paper periodic statements. Most industry commenters commended the Board's grant of relief from the requirement to provide paper periodic statements if account information is available through alternative means, but many asked for clarification or proposed specific changes regarding the alternative methods of delivery. A few industry commenters asked the Board to provide similar relief for other types of card accounts, such as accounts to which government benefits are deposited on a recurring basis. In contrast, consumer groups asserted that full Regulation E protections should apply to payroll card accounts, including the requirement to provide paper periodic statements. These groups stated that paper periodic statements would enable consumers to track their balances and transactions more effectively. III. Summary of the Final Rule The Board is revising Regulation E substantially as published in the January 2006 interim rule, with one significant revision regarding the scope of entities that are subject to the regulation with respect to payroll card accounts and a few additional clarifying modifications. Under the final rule, payroll card accounts specifically are included in the definition of “account” for purposes of Regulation E. A “payroll card account” is defined as an account directly or indirectly established through an employer to which transfers of the consumer's wages or other compensation are made on a recurring basis. Section 205.18 of the final rule grants financial institutions flexibility in providing certain account information to payroll card users. In particular, a financial institution need not provide periodic statements under § 205.9 if the institution:
(1)Makes available balance information to the consumer through a readily available telephone line;
(2)makes available to the consumer an electronic history, such as through an Internet Web site, of the consumer's account transactions covering a period of at least 60 days preceding the date the consumer electronically accesses the account; and
(3)upon the consumer's oral or written request, promptly provides a written history of the consumer's account transactions covering a period of at least 60 days prior to the request. The history of account transactions provided electronically or upon request must set forth the same type of information required on periodic statements under Regulation E, including information about any fees for EFTs imposed during the 60-day period. Unlike the approach set forth in the interim final rule, the final rule would generally not cover employers and third-party service providers as “financial institutions” under the regulation because they typically do not hold payroll card accounts, or issue payroll cards and agree to provide EFT services to payroll card holders. However, if an employer or a service provider were to undertake either of these functions, it would become a financial institution subject to the rule. In addition, the final rule clarifies how financial institutions that do not provide periodic statements under § 205.9 can comply with the error resolution procedures in § 205.11 of Regulation E. As provided in the interim rule, a consumer's 60-day period to report errors begins on the earlier of the date the consumer electronically accesses the account (provided that information about the alleged error is made available to the consumer) or the date the financial institution sends a written history including that transaction. To assist institutions that may not, or are unable to, track when consumers electronically access their accounts, the final rule also provides that institutions can comply with the error resolution provisions if they allow a consumer to report an error up to 120 days after the date the transaction allegedly in error was credited or debited to the consumer's account. As explained in more detail in the section-by-section analysis, this approach allows an institution to comply with the regulation without tracking when consumers electronically access their account information and, at the same time, ensures that consumers will have at least 60 days from the date of every transaction listed in the electronic or written statement to report an error. A similar clarification is provided with respect to the liability provisions in § 205.6. The effective date of the final rule with respect to the payroll card provisions is July 1, 2007. IV. Section-by-Section Analysis Section 205.2 Definitions 2(b) Account The EFTA and Regulation E apply to any EFT that authorizes a financial institution to debit or credit a consumer's asset account. Under the final rule, the term “account” in § 205.2(b) is revised to include a “payroll card account,” which is defined as an account directly or indirectly established through an employer to which transfers of the consumer's wages, salary, or other employee compensation are made on a recurring basis. A payroll card account is an account subject to the regulation whether the account is operated or managed by the employer, a third-party payroll processor, or a depository institution. Many industry commenters agreed that the scope of the rule was appropriately limited to payroll card accounts as defined in the interim rule, and stated that a rule with broader coverage could stifle the development of other stored-value, or prepaid, card products. One such commenter urged the Board to state expressly in the commentary that other card products offered by third parties that may be used by consumers to access their salary are not covered by the regulation. Several industry commenters, however, asserted that the final rule should be revised, or interpreted, to cover other card products that may also be used primarily to access recurring deposits of salary, even if they are established by a consumer without the involvement of an employer. In this regard, a few commenters noted that some depository institutions offer payroll card products directly to consumers who may not want to manage, or who may not qualify for, a traditional deposit account and whose employers may not offer a payroll card option. These commenters observed that, like the payroll card accounts covered by the interim rule, these products may permit only electronic deposits of salary and wages and allow access to funds only by means of a card. A few industry commenters urged the Board to extend the rule to also cover general spending cards that permit a consumer to add value through a variety of means, including through direct deposits of salary. Some industry commenters asked the Board to clarify the status of Regulation E coverage for other card products, such as cards used to deliver health benefits or to deliver government-managed or directed consumer payments, such as child support, unemployment insurance, and workers' compensation. Consumer groups supported coverage of payroll card accounts, but stated that consumer protection could be strengthened by also covering card products used to receive one-time payments of wages, salary, and other compensation, which, in their view, should be similarly protected from unauthorized use under Regulation E. Consumer groups also urged the Board to initiate a separate rulemaking to cover additional cards used to deliver important household funds, such as emergency benefit payments, income tax refunds, or loan proceeds, as well as other cards marketed or used as deposit account substitutes. By express definition, the coverage of EFT services under the EFTA and Regulation E depends upon whether a transaction involves an EFT to or from a consumer's account. Section 903(2) of the EFTA defines an “account” as a “demand deposit, savings deposit, or other asset account * * * as described in regulations of the Board, established primarily for personal, family, or household purposes.” As explained in the interim rule, in light of the characteristics of payroll cards, the Board believes it is appropriate to exercise its authority under Sections 903(2) and 904(d) of the EFTA to classify payroll card accounts as “accounts” for purposes of Regulation E. 1 Payroll card accounts are assigned to an identifiable consumer and represent a recurring stream of payments that is likely the primary source of the consumer's income. They are replenished on a recurring basis and designed for ongoing use at multiple locations and for multiple purposes. Payroll card accounts utilize the same kinds of access devices, electronic terminals, and networks as do other EFT services historically covered by the EFTA. 1 Under Section 904(d) of the EFTA, “[i]f EFT services are made available to consumers by a person other than a financial institution holding a consumer's account, the Board shall by regulation assure that the disclosures, protections, responsibilities, and remedies created by [the EFTA] are made applicable to such persons and services.” Section 205.2(b)(2) is generally adopted as set forth in the interim rule and provides that the term “account” includes a “payroll card account,” which is an account that is directly or indirectly established through an employer, and to which EFTs of the consumer's wages, salary, or other employee compensation are made on a recurring basis. (Former § 205.2(b)(2) was previously redesignated under the interim final rule as § 205.2(b)(3).) The definition generally includes a payroll card account that represents the means by which an employer regularly pays the employee's wages, salary, or other form of employee compensation and would include, for example, card accounts for seasonal workers or employees that are paid on a commission basis. Coverage under Regulation E applies whether the account is operated or managed by an employer, a third-party payroll processor, or a depository institution. However, as further discussed below under § 205.18(a), the fact an employee is paid by payroll card account through the employment relationship would not make the employer a financial institution subject to the regulation unless the employer holds payroll card funds, or issues the payroll card and agrees with the employee to provide EFT services. The definition has been revised to refer to accounts established “through” an employer, rather than “by” an employer as in the interim rule to clarify what a payroll card account is, regardless of which entities are covered as financial institutions with respect to the account. In addition, the reference in the definition to a payroll card account that is established “on behalf of a consumer” has been deleted as unnecessary. A few industry commenters observed that an employer may elect to provide bonuses or other incentive-based payments on a non-recurring basis more than once during a year on a card used only for that purpose. Thus, these commenters urged that the Board clarify that the term “payroll card account” does not include cards used to disburse such “isolated or limited” payments. The Board agrees with commenters' suggestions and has revised comment 2(b)-2 to clarify that the term “payroll card account” generally does not include a card used solely to disburse bonuses or other incentive-based payments because such payments are unlikely to be the consumer's primary source of salary or compensation. In contrast, the term would include card accounts that receive deposits of commission-based payments paid to an employee, even if not made on regular intervals (for example, if based on sales), because such payments are typically the primary means by which that employee receives his salary or other compensation. *See also* § 205.2(b)(2). Comment 2(b)-2 further clarifies that cards exclusively used to disburse payments other than compensation, such as petty cash or travel expenses, are not “payroll card accounts.” Nevertheless, to the extent bonuses or other incentive-based payments, payments to reimburse travel expenses, or any other deposits of funds (for example, if a consumer is permitted to add his or her funds) are transferred to an account that otherwise meets the definition of a payroll card account, such transfers are EFTs covered by the regulation. The fact that an employee only remains in the employer's hire for a short time, for example, a few pay cycles, does not negate coverage, so long as the employer intended to make recurring payments to the payroll card account. However, if the employer only transmits funds to an account accessible by a card in isolated instances—for example, in final-payment situations, or in emergency situations when other payment methods are unavailable, such a card “account” would not fall within the definition of a payroll card account. *See also* comment 2(b)-2. In these cases, the Board believes that the costs of applying Regulation E's protections and providing disclosures for a card serving a one-time or limited use would outweigh any incremental benefit to consumers. As noted in the supplemental information to the interim rule, a payroll card account is covered under the final rule whether the underlying funds are held in individual employee accounts or in a pooled account with some form of “subaccounting” maintained by a depository institution (or by a third party) to enable a determination of the amounts of money owed or attributed to particular employees. *See* 71 FR at 1,475. This approach assures uniform application and minimizes potential circumvention of the rule. The Board's final rule limits the scope of the payroll card account definition to payroll card accounts established directly or indirectly through an employer. Thus, the term “payroll card account” does not include accounts directly established by a consumer at a depository institution without the involvement of an employer, even if the depository institution limits the account to receiving direct deposits of recurring payments of salary or other compensation. The requirement that a payroll card account be established through a consumer's employer creates a bright-line test for determining which accounts are subject to special rules regarding payroll card accounts. Moreover, it would be difficult for financial institutions and others to distinguish an account directly established by a consumer to receive deposits of salary (without the involvement of an employer) from a “traditional” deposit account opened by a consumer. As a result, the definition of a payroll card account is limited as explained above. Accounts established directly by a consumer at a depository institution are fully covered by Regulation E because they fall within the existing definition of “account” in § 205.2(b)(1). Gift cards issued by merchants that can be used to purchase items in the merchant's store are not covered by Regulation E. The regulation also does not cover general spending cards to which a consumer *might* transfer by direct deposit some portion of the consumer's wages. Although consumers might choose to send some or all of their salary or other compensation by direct deposit into a general spending card account, the consumer also may use these products for other purposes or for limited periods of time, like gift cards or other stored-value, or prepaid, cards. Consumers would derive little benefit from receiving full Regulation E protections for cards that may only be used for limited purposes or on a short-term basis, and which may hold minimal funds, while the issuer's costs of compliance with Regulation E might be significant. In contrast, for payroll card accounts that are established through an employer, there is a greater likelihood that the account will serve as a consumer's principal transaction account and hold significant funds for an extended period of time. In addition, cards used solely for health-related expenses—such as cards linked to flexible spending accounts, health savings accounts or health reimbursement arrangements—are not covered by the regulation, whether funded by the employer or the employee. The Board will continue to monitor the development of the prepaid card market and could reconsider whether the current treatment of these products under Regulation E remains appropriate over time. *But see* 62 FR 43,467, 43,468 (August 14, 1997) (stating that accounts established by a government agency for distributing state or local employment-related benefits, such as unemployment benefits, are electronic benefit transfer
(EBT)accounts covered by § 205.15). Former comment 2(b)-2, which addresses examples of accounts not covered by Regulation E, was previously redesignated under the interim rule as comment 2(b)-3. Section 205.18 Requirements for Financial Institutions Offering Payroll Card Accounts In the interim rule, the Board proposed to grant financial institutions relief from the requirement to provide periodic statements for payroll card accounts, provided that the financial institution makes account information available to the consumer through certain alternative means. The final rule adopts the approach set forth in the interim rule substantially as proposed, with a few clarifying changes to address commenters' concerns. In addition, the final rule applies the general definition of “financial institution” to describe the entities subject to the payroll card requirements. Thus, unlike the approach in the interim rule, employers and third-party service providers will generally not be covered as financial institutions under the regulation because they typically do not hold payroll card accounts, or issue payroll cards and agree with a consumer to provide EFT services. Financial institutions covered under the rule are not required to provide periodic statements for payroll card accounts if they provide specified account information by telephone, electronically, and, upon the consumer's request, in writing. Section 205.18 of the final rule further addresses the requirements governing initial disclosures, the issuance of access devices, error resolution, and limitations on liability under the modified approach. 18(a) Coverage The final rule adopts the existing definition of “financial institution” in § 205.2(i) to identify the entities that are subject to the regulation with respect to a payroll card account. *See* § 205.2(i). Thus, unlike the interim rule, employers and service providers typically would be excluded from the scope of the regulation because they are unlikely to either hold payroll card accounts or issue payroll cards and agree to provide EFT services to payroll card account holders. Except as modified by § 205.18, all provisions of Regulation E apply to financial institutions with respect to payroll card accounts in the same manner and to the same extent that they apply with respect to other accounts subject to the regulation. Under one typical payroll card model, an employer contracts with a depository institution to provide payroll cards to its employees. In many cases, the depository institution may use a third-party service provider to perform some or a substantial proportion of the compliance duties ( *e.g.* , in a turnkey arrangement), including mailing account terms and conditions and providing error resolution services. Or, the depository institution may elect to perform all of the compliance duties in-house. Under another payroll card model, the employer may contract directly with the third-party service provider for the payroll card program. Under both arrangements, a depository institution's participation in the payroll card program will be necessary both to hold the underlying funds as well as to issue the payroll card itself. In addition, the account relationship will generally be between the issuing bank and the employee, regardless of whether it is the bank or a service provider that is ultimately responsible for performing a particular compliance obligation. An employer's involvement in a particular payroll card program is likely to be limited to providing initial payroll card account disclosures on behalf of the depository institution or service provider. Under the interim rule, an entity would have been treated as a financial institution if it directly or indirectly held a payroll card account or directly or indirectly issued a payroll card. Thus, employers that provided payroll cards to their employees would have been subject to the regulation because the scope of coverage did not require a person issuing an access device for a payroll card account to also agree with a consumer to provide EFT services. Similarly, a service provider would have been treated as a financial institution if it indirectly issued payroll cards through a bank. *See* 71 FR at 1,477. Two commenters, one representing card issuers and a second representing specialists in corporate treasury functions, observed that most employers will not have expertise in complying with the regulation, and thus requested that the Board exclude employers from coverage under § 205.18(a) entirely. In particular, these commenters asserted that the compliance burden could be a disincentive for some employers to offer payroll cards as a payment option for their employees. In this regard, a few commenters asserted that even if employers shift compliance duties to a third-party service provider by contract, the employer might still be liable for that party's failure to comply. In contrast, consumer groups agreed with the interim rule's treatment of all entities participating in card distribution, card processing, or transfer of payroll card funds as financial institutions. Upon further consideration and analysis of the issue, the Board is revising § 205.18(a) to use the same definition of “financial institution” with respect to payroll card accounts that applies to other types of accounts to determine which entities providing payroll card services are covered under the rule. *See* § 205.2(i). Thus, an entity would be deemed a “financial institution” with respect to a payroll card account if it holds the payroll card account or if it issues a payroll card and agrees with the consumer to provide EFT services. Accordingly, the depository institution holding the funds will always be treated as a financial institution under the rule, but employers and service providers typically will not be covered because they generally do not hold payroll card accounts or issue payroll cards and agree with a consumer to provide EFT services. Because payroll card account holders will, at a minimum, be able to assert their Regulation E rights against the depository institution holding their account in all cases, the Board believes that there would be little, if any, benefit of also covering employers under Regulation E. Under the interim rule's approach, employer coverage might lead employers who are generally unfamiliar with Regulation E's requirements to incur additional compliance costs and risk. The Board believes the imposition of such costs and risks on employers who neither hold payroll card accounts nor issue payroll cards could deter some employers from adopting payroll cards. Accordingly, under the final rule, if an employer arranges or contracts with a depository institution or third-party payroll services provider to pay its employees by payroll card account, the employer would not be a “financial institution” subject to the regulation. Similarly, based upon the Board's understanding of how payroll card programs are structured, while a third-party service provider may perform some, most, or even all of the compliance duties for a particular payroll card program, it will neither hold payroll card accounts nor issue the payroll card itself. Thus, a third-party service provider typically would not be deemed a financial institution subject to the regulation. New comment 18(a)-2 sets forth the preceding discussion of how the final rule applies to employers and service providers. The comment also states that to the extent that an employer or a service provider undertakes to hold payroll card accounts or issue payroll cards and agree with a consumer to provide EFT services, it would become a financial institution subject to the regulation. To the extent that more than one party ( *e.g.* , a depository institution and a third-party service provider) each qualify as a financial institution with respect to the same payroll card account, those parties may contract among themselves to ensure compliance with the final rule. *See also* § 205.4(e) (stating that institutions providing EFT services jointly may contract among themselves to allocate requirements under the regulation). Thus, for example, disclosure obligations satisfied by one party, such as a service provider, would satisfy the disclosure obligations for any other financial institution with respect to that payroll card account. However, if the party that has contractually agreed to satisfy a compliance obligation fails to do so, each of the parties would be accountable under the EFTA and the final rule. These parties could also allocate among themselves the financial obligation for any liability resulting from the failure. The final rule includes comment 18(a)-1 as proposed to clarify that a financial institution may issue an access device for a payroll card account only in response to an oral or written request for the device, or as a renewal or substitute of an accepted access device. *See* § 205.5(a). The comment further clarifies that a consumer is deemed to request an access device when the consumer chooses to receive his or her compensation through a payroll card account. The compulsory use prohibition in § 205.10(e) would not be violated as long as a job applicant is not required to establish a payroll card account as a condition of employment. One commenter asked the Board to clarify whether an employer may include an unactivated payroll card with materials provided to employees about the terms and conditions of the payroll card account. Such a procedure would not violate Regulation E, provided that the terms and conditions for issuing an *unsolicited* access device as provided under § 205.5(b) are satisfied and the consumer retained the option to receive compensation by means other than the payroll card account. 18(b) Alternative to Periodic Statement General Provisions In the September 2004 proposal, the Board proposed that all provisions of Regulation E should apply to payroll card accounts in the same manner that they apply to other accounts, including the requirement to provide periodic statements. Most industry commenters urged the Board to permit entities offering payroll cards an alternative means of providing account information similar to the rules in § 205.15 of Regulation E for accounts established for the electronic transfer of government benefits (EBT accounts). The January 2006 interim rule granted relief from the requirement to provide periodic statements under § 205.9(b), provided that financial institutions make account information available by telephone, electronically, and, upon the consumer's request, in writing. The final rule adopts this approach. Some modifications have been made to clarify certain issues raised by commenters. Industry commenters strongly supported the Board's decision to provide relief from the periodic statement requirement for payroll card accounts. Many stated that the alternative set forth in the interim rule strikes an appropriate balance between the needs of consumers and the costs to employers and institutions. A few industry commenters urged the Board to provide similar relief for other types of accounts that receive recurring payments, including accounts established by consumers at depository institutions without the involvement of an employer that only receive deposits of employee compensation and accounts funded solely by government benefit payments. One commenter recommended that the Board grant relief from the periodic statement requirements for all retail payment cards, including general spending cards, to the extent such cards may be covered under Regulation E. Another commenter suggested that the Board consider the adoption of a similar approach for the delivery of information for accounts generally under Regulation E, as well as for accounts and other banking products under other consumer financial services regulations ( *e.g.* , Regulations Z and DD). In contrast, consumer group commenters asserted that payroll card accounts should be given the same protections as are provided for other consumer accounts under the EFTA, including the right to paper periodic statements. Consumer group commenters noted that periodic statements assist consumers in tracking their account balances and transactions and discovering unauthorized transfers or other errors involving their accounts. One state attorney general recognized that some employees are transient but recommended that the Board require periodic statements for any consumer that can provide a mailing address to the employer. When the Board addressed EBT programs in 1994, it recognized that periodic statements are a central component of Regulation E's disclosure scheme. However, the Board granted EBT providers relief from the periodic statement requirement in light of the limited types of transactions involved, the availability of other means to obtain account information for benefit recipients, and the expense of routinely mailing monthly statements to all recipients. *See* 59 FR 10,678, 10,681 (March 7, 1994). Similarly, the Board is exercising its authority under Section 904(c) of the EFTA to grant financial institutions flexibility in connection with the periodic statement requirement for payroll card accounts. In addition to the comments received on the September 2004 proposal and the January 2006 interim rule, the Board considered data it collected during focus group testing of payroll card holders during the fall of 2005. As described in more detail in the supplemental information for the interim rule, the majority of focus group participants regularly checked their balances over the telephone or checked balance and transaction information on-line; some checked their accounts through these methods multiple times per week. Most focus group participants who received paper periodic statements stated that they generally kept their statements as a record of account activity but otherwise rarely used them to track transactions or look for errors. Participants generally attributed their lack of statement use to the fact that they monitored their account information frequently during the month by the telephone or on-line. While a few participants wanted to receive paper statements, most indicated a clear preference for using alternative means of monitoring account activity, in particular by phone and on-line. *See* 71 FR at 1,476. As with EBT products, the Board is persuaded that the alternative methods of providing account transaction information currently used by many payroll card providers are comparable to, and in some respects, better than, paper periodic statements. Information available by telephone or on-line is updated routinely, in contrast to periodic statements which only provide information as of the end of each statement cycle. Thus, consumers using telephone and on-line methods often have access to more timely information, which may assist consumers in more effectively tracking transactions to avoid overdrawing their accounts. The Board also has weighed the potential burden and benefits of requiring financial institutions to provide periodic statements. Such a requirement could impose considerable one-time implementation costs, as well as ongoing costs for mailing such statements, on financial institutions currently offering such accounts and could discourage other financial institutions from offering them in the future. Weighing these considerations along with the alternative methods available to consumers for obtaining account information and consumers' actual account-monitoring practices, the Board concludes that granting relief from the periodic statement requirement for payroll card accounts is appropriate. Section 205.18(b) of the final rule provides financial institutions flexibility either to provide periodic statements under § 205.9 as they would for other accounts or, as an alternative, to:
(1)Make balance information available through a readily available telephone line;
(2)make available an electronic history of the consumer's account transactions, such as through an Internet web site, that covers at least 60 days preceding the date the consumer electronically accesses the account; *and*
(3)provide promptly upon request a written history of the consumer's account transactions, covering at least 60 days preceding the date the institution receives the consumer's request. As further explained below in the discussion about the error resolution and liability limit time frames, a consumer “electronically accesses” an account once the consumer enters a user identification code or a password or otherwise complies with a security procedure used by an institution to verify the consumer's identity. The final rule does not provide relief from the requirement to provide paper periodic statements for other types of accounts. However, the Board will continue to monitor this issue and may reassess whether it would be appropriate to propose such relief in the future. Readily Available Telephone Line The Board stated in the supplementary information for the interim rule that a readily available telephone line for providing balance information must be a local or toll-free line that, at a minimum, is available during standard business hours. Consumer groups and the state attorney general that commented suggested that the telephone line should be operable beyond standard business hours in each time zone so that employees have sufficient time to access their account information when they are not at work. Consumer groups also urged the Board to require institutions to provide transaction information by telephone. As in the interim rule, the final rule requires that institutions, at a minimum, make available a local or toll-free line for consumers to obtain their available balance during standard business hours. The Board expects that, in most cases, institutions will provide 24-hour access to balance information through an automated line, which would ensure that employees can access balance information at their convenience. Because the Board believes it may be operationally difficult for some institutions to include 60 days' worth of transactions through a telephone system, the final rule does not require institutions to provide information about specific transactions by telephone. In addition, the Board's focus group testing indicated that while limited transaction information was available through the telephone, most consumers chose not to access transaction information in that manner. *See* 71 FR at 1,476. Model Form A-7(a), discussed below, contains a model clause that institutions may use to inform consumers at account-opening about how to access their account information, including a reference to the telephone number that consumers may call to obtain this information. Consumer groups urged the Board to also require that institutions print the telephone number on each payroll card as a reminder for consumers. The Board is aware that many payroll cards already display the telephone number for obtaining account information on the back of the card and, therefore, the Board has chosen not to impose such a requirement in the final rule. If the Board learns in the future, however, that consumers are unaware of the ability to obtain account information by telephone, the Board will consider whether additional protections are needed. Electronic History For transaction histories provided electronically, institutions are not limited to using an Internet Web site to comply with the rule. However, because electronic histories are disclosures under Regulation E, they must be provided in a form that the consumer may keep, as is required for disclosures generally under § 205.4(a)(1). A new comment 18(b)-2 explains that financial institutions satisfy this requirement if the electronic history is available in a format that is capable of being retained by the consumer. For example, an institution would satisfy the requirement if it provides a history at an Internet Web site in a format that is capable of being printed or downloaded using an Internet web browser. A few industry commenters asked the Board to clarify that ATM access to a transaction history constitutes an acceptable means of providing an electronic history of transactions. Although the Board is unaware of any ATMs that currently offer the option of printing transaction histories of at least 60 days, institutions would be able to provide an electronic history at an ATM if consumers were able to print a copy of all the required information at the ATM. Written History Upon Consumer's Request The Board solicited comment on whether the requirement to provide a written history of transactions upon the consumer's oral or written request was a necessary or appropriate protection. Consumer groups and most industry commenters stated that the option to obtain a written history of transactions was both necessary and appropriate because some consumers may not be able to access the information electronically. However, a few industry commenters believed that institutions should be given flexibility in the manner in which they provide transaction information and that, accordingly, the rule should not require institutions to provide both an electronic *and* a written history. The final rule retains the requirement that a financial institution mails or delivers a written history of account transactions promptly upon the consumer's oral or written request to address the possibility that some consumers may have limited on-line access. An institution would not satisfy the requirement to provide a written history by making a printed history available at an ATM because it does not ensure that a consumer is able to obtain a written history in all cases (for example, if the ATM is located in an inconvenient location). The Board anticipates that, in general, written histories will be sent the next business day or soon after the institution receives the consumer's oral or written request. Institutions also may designate a specific telephone number for consumers to call and a specific address for consumers to write to request a written copy of account transactions. A few industry commenters asked whether a financial institution could charge a fee if a consumer makes frequent or multiple requests for copies of account statements within a short time frame. Although the final rule does not address the issue, the Board believes that charging fees to consumers who make occasional requests for written histories could have a chilling effect on consumers' ability to obtain information about transactions and thus, to exercise their error resolution rights. Sixty-Day Transaction History Most industry commenters stated that the requirement to provide 60 days of transactions was appropriate regardless of the means by which the account history is provided. Some industry commenters observed that many institutions provide up to 12 months of transactions on their Internet Web sites. However, a trade association representing community banks noted that some of its members currently can only provide a 30-day or a 45-day account history and expressed concern that these members would not be able to take advantage of the alternative to providing periodic account statements. A few industry commenters stated that providing a rolling 60-day transaction history might pose operational difficulties for those institutions that have developed systems that provide transaction histories only for specific statement cycles. One commenter asked the Board to clarify whether account histories must include transactions that have not yet posted to the account. The final rule requires institutions to provide 60 days of transaction information, as proposed. Thus, if the consumer electronically accesses his or her account, the history must cover at least the preceding 60 days. Similarly, if the consumer requests a written history of transactions, the written history must cover at least 60 days preceding the date of the institution's receipt of that request. The Board believes the 60-day requirement is appropriate for payroll card account holders because these consumers will not automatically be sent a statement that sets forth transaction information for each transfer occurring during a monthly cycle as they would for most other accounts covered by Regulation E. For those payroll card holders who do not access or request a copy of their transaction history at least on a monthly basis, the 60-day requirement is intended to help them avoid inadvertently losing their right to assert an error under § 205.11. New comment 18(b)-1 clarifies that a financial institution must include a transaction in the account history only if the transaction has posted to the payroll card account. Section 205.18(b)(2) of the final rule requires that the account history provided under this section, whether provided electronically or in writing, contain the same type of account information that would be provided in a periodic statement under § 205.9(b)(1)-(6), including information about fees, account balances, and an address and telephone number for inquiries. Although a few commenters expressed concern that requiring all the information typically included on periodic statements could impose significant and costly systems changes, the Board believes such a requirement is necessary to ensure that consumers receive comparable account information regardless of whether they receive periodic statements or transaction histories under the alternative procedures in this final rule. The Board also believes that requiring that the same information be provided for payroll card accounts as for other accounts should facilitate institutions' ability to use the same systems for delivering account information and minimize the need to construct new systems. 18(c) Modified Requirements Initial Disclosures and Annual Error-Resolution Notice For financial institutions that do not furnish periodic statements, § 205.18(c) sets forth provisions clarifying the requirements relating to disclosures, liability limits, and error resolution procedures under Regulation E. Section 205.18(c)(1) generally sets forth modified disclosures that a financial institution must provide in addition to or in lieu of required initial disclosures under § 205.7(b). Commenters did not address this provision, and the Board has adopted § 205.18(c)(1) of the interim rule with minor revisions for clarity. Section 205.18(c)(1)(i) requires the initial disclosures for payroll card accounts to disclose the means by which consumers can access information about their account, including the telephone number that may be used to obtain the account balance, and information about how an electronic history of account transactions can be obtained, such as the address of an Internet Web site. The initial disclosures also must include a summary of the consumer's right to obtain a written history of account transactions upon request, including a telephone number to call to request a written history, in place of the summary of the consumer's right to receive periodic statements pursuant to § 205.7(b)(6). Under § 205.18(c)(1)(ii), the initial disclosures must contain a notice explaining the error resolution rights associated with payroll card accounts in place of the error resolution notice required by § 205.7(b)(10). In addition to these disclosures, institutions must also provide the other required disclosures set forth in § 205.7, including the disclosures explaining the consumer's liability for unauthorized EFTs and the fees imposed for EFTs or for the right to make transfers. The final rule provides Model Clauses that financial institutions may use to facilitate compliance with the initial disclosure requirements, located in section A-7 of Appendix A to Part 205. Institutions choosing to utilize model clauses for initial disclosures will also have to modify paragraph
(a)in section A-2 of Appendix A to Part 205 as appropriate to explain the consumer liability provisions if they opt not to provide periodic statements under this rule. Section 205.18(c)(2) of the interim rule required financial institutions to provide an annual notice describing error-resolution rights substantially similar to the notice contained in section A-7(b) in Appendix A in place of the notice required by § 205.8(b). Several industry commenters urged the Board to give financial institutions the option to provide an abbreviated notice on a regular basis, as is currently permitted on periodic statements under § 205.8(b). These commenters believed an abbreviated notice could be provided when providing balance information by telephone, or when providing an account history electronically or in writing. In particular, some industry commenters noted that it was difficult to provide error resolution notices by mail to transient employees. The Board agrees that the approach suggested by these commenters is likely to provide payroll card users with information about their error resolution rights on a more timely basis, that is, when consumers are reviewing their history of account transactions. Accordingly, the final rule is revised to permit institutions to provide a notice similar to the abbreviated notice provided in Appendix A-3(b). Institutions must modify this notice to reflect the error resolution time frames and procedures set forth in this final rule. The abbreviated notice would have to be provided on each history of transactions, whether provided electronically or in writing upon the consumer's request, in lieu of the annual error resolution notice. The Board does not believe that it would be appropriate to permit the abbreviated notice to be provided exclusively through a telephone line because consumers would not be able to retain a copy of the notice. Limitations on Liability and Error Resolution Sections 205.18(c)(3) and
(4)of the final rule are substantively similar to the interim rule and explain the limitations on liability and error resolution procedures for payroll card accounts when a financial institution does not provide periodic statements but instead follows the modified requirements. To address the concerns of some commenters about potential operational difficulties in determining when the liability limit and error resolution time frames begin to run, the final rule has been revised to provide a safe harbor that will satisfy the timing requirements in all instances. As proposed in the interim rule, the final rule contains two different triggers for beginning the 60-day period for limiting liability for unauthorized EFTs in § 205.18(c)(3), depending on when and how the consumer has obtained a history of his or her account transactions. If the consumer obtains transaction information electronically under § 205.18(b)(1)(ii), the 60-day period begins on the date the account is electronically accessed by the consumer. If the consumer has requested a written history of his or her account transactions under § 205.18(b)(1)(iii), the 60-day period begins on the date the institution sends the written history. In either case, in order for the 60-day period to begin running, the alleged unauthorized transaction must be reflected in the electronic history or on the written history provided to the consumer. If a consumer accesses an electronic history and also requests a written history, both of which reflect information about the disputed transaction, the applicable 60-day period for reporting an unauthorized EFT begins on the earlier of these two events. A similar rule is established in § 205.18(c)(4) for determining when the 60-day period begins for reporting an error under the procedures set forth in § 205.11. Thus, if a consumer obtains transaction information electronically under § 205.18(b)(1)(ii), the 60-day period for reporting an error begins on the date the account is electronically accessed by the consumer. If the consumer requests a written history of transactions under § 205.18(b)(1)(iii), the 60-day period begins on the date the institution sends the written history. Again, in either case, in order for the 60-day period to begin running, the alleged error must be reflected on the electronic history or on the written history provided to the consumer. Also, if the consumer both accesses an account electronically and requests a written history, the applicable 60-day period for reporting an alleged error begins on the earlier of these two events. Transactions that have not yet posted to the account do not trigger either the liability limit or the error resolution time frames. Several industry commenters suggested alternate triggers for determining when the liability limit and error resolution time frames begin to run. For example, some industry commenters asserted that the 60-day period should begin running at the time information about a specific transfer is posted and becomes available to the consumer, regardless of when the consumer actually obtains the information. A few industry commenters suggested that the 60-day period should begin on the date of the transaction. Others stated that the 60-day period should begin when the consumer accesses an account balance by telephone. One industry commenter noted that the rule should provide certainty to financial institutions and merchants so that their systems need only retain information for a set period of time. In this regard, some industry commenters suggested that the Board clarify that a consumer's error resolution rights do not apply to a transaction more than 120 days old. Safe Harbor As proposed, the final rule provides that consumers' 60-day period to report an error with respect to a particular transaction begins on the date the consumer accesses the electronic history reflecting the alleged error or the date the institution sends a written history that includes that error, whichever is earlier. In response to comments received, the Board has revised the final rule to clarify institutions' options for compliance. A few industry commenters noted that some institutions may prefer to develop compliance systems that do not track consumers' access to their electronic history or when a written history is sent. The final rule provides a safe harbor to clarify that these institutions would comply with the error resolution provisions as long as they treat a notice of error as timely when it is received from the consumer within 120 days after the transaction allegedly in error was credited or debited to the consumer's account. *See* § 205.18(c)(4)(ii). Providing consumers 120 days after the date a transaction has posted to a consumer's account to report an error ensures that the consumer will have at least 60 days to report an error even if the consumer first accesses the information on the last day that the transaction is required to be included in the account history. Institutions choosing to follow this practice would in most cases be affording consumers more than the minimum time period required by the regulation. A similar safe harbor is provided for reporting unauthorized transactions under § 205.18(c)(3)(ii). New comment 18(c)-1 provides that institutions that choose to determine the consumers' reporting period in this way may still disclose the time period required by the regulation (as set forth in the Model Form in Appendix A-7). For example, an institution may disclose to payroll card account holders that the institution will investigate a notice of error provided within 60 days after the date the consumer electronically accesses an account or the date the institution sends a written history of transactions even if the institution actually provides a longer period of time for the consumer to report an error ( *i.e.* , up to 120 days following the date a transaction has posted). Comment 18(c)-1 further states that an institution's summary of the consumer's liability (as required under § 205.7(b)(1)) may disclose that liability is based on the consumer providing notice of error within 60 days of the consumer electronically accessing an account or receiving a written history reflecting the error even if the institution may allow a consumer to assert a notice of error up to 120 days from the date of the posting of the alleged error. Example As discussed above, the history of account transactions provided under § 205.18(b)(1), whether provided electronically or in writing, must cover at least 60 days preceding the date that the information is made available or provided to the consumer. Thus, if a consumer accesses a payroll card account electronically, or is sent a written history, on June 1, then the history of transactions must cover a period of at least 60 days prior to June 1 and include any EFTs posted from April 2 through May 31. Assuming that the consumer did not previously access or receive account information reflecting transactions during April or May, the consumer must have at least 60 days, or until July 31, to assert any unauthorized EFTs or other errors occurring between April 2 and May 31 to preserve his or her rights under §§ 205.6 and 205.11 with respect to those transfers. In the example, suppose the consumer electronically accesses his or her account on June 1 and discovers an error resulting from a transaction that posted on May 10. In this case, under § 205.18(c)(4)(i), the consumer must provide notice of that error to the institution no later than July 31 to trigger the institution's obligation to investigate the error. If the consumer provides a notice of the May 10 error after July 31, the institution would not be required to comply with the procedures and time limits in § 205.11 for investigating the error. Nevertheless, if the error involves an unauthorized EFT, liability for the unauthorized transfer may not be imposed on the consumer unless the institution satisfies the requirements of § 205.6. *See* comment 18(c)-3, discussed below. For an institution electing to apply the error resolution time frame set forth in § 205.18(c)(4)(ii), the institution would comply with the regulation if it treats a notice of error as timely if received within 120 days after the date of the May 10 transfer to report the alleged error, or by September 7. Electronic Access With respect to electronic access, the Board stated in the supplementary information to the interim rule that the 60-day periods for liability limits and error resolution would not begin running if the consumer merely visited an Internet Web site where account information and other information could be retrieved. Rather, the 60-day period would begin once the consumer entered a user identification code or a password or otherwise complied with a security procedure used by an institution to verify the consumer's identity before granting access to account information. The interim rule did not require institutions to determine whether the consumer has in fact accessed information about specific transactions before triggering the 60-day period for liability limits and error resolution rights. Consumer groups and the state attorney general that commented urged the Board to revise the rule so that the liability limit and error resolution provisions are not triggered with respect to a transaction unless a consumer actually accesses information about that specific transaction. In contrast, the vast majority of industry commenters stated that such a requirement was impractical, and would require significant expense to implement the necessary system changes. Accordingly, many industry commenters urged the Board to retain the proposed interpretation clarifying that “electronic access” to an account means that the consumer has logged onto a secure portion of an institution's Web site. The final rule follows the interim rule for purposes of determining when a consumer has electronically accessed an account. A rule requiring an institution to determine if a consumer has reviewed specific transactions would be operationally burdensome and costly to implement. In addition, such an approach could require institutions to establish more complicated and cumbersome procedures for consumers to use to access account information. Thus, as in the interim rule, a consumer is deemed to have accessed his or her account electronically once the consumer enters a user identification code or a password or otherwise complies with a security procedure used by an institution to verify the consumer's identity. Comment 18(c)-2 has been added to provide this interpretation. Under the final rule, the liability and error resolution provisions are not triggered when consumers obtain balance information by the telephone because many institutions may not make available specific transaction information available by telephone, and because, unlike written or electronic histories, a consumer will not be able to retain a copy of transactions to review. In addition, the final rule would not require institutions to track whether a consumer accessed an account electronically if they provide consumers at least 120 days after a transfer is credited or debited to the consumer's account to report an error. Untimely Notice of Error Industry commenters also requested clarification on the effect of providing account histories that include more than 60 days of transaction information. These commenters noted that many institutions commonly provide up to 12 months of transaction information on their Internet Web sites. Several industry commenters further urged the Board to clarify that the limits on consumers' liability for unauthorized transactions applies only to transfers occurring in the 60-day period before the consumer electronically accesses an account. Some of these commenters noted that researching unauthorized EFTs becomes more complicated and time-consuming for transactions older than 60 days, because documents such as receipts and ATM security tapes or videos are often archived or destroyed after 60 days. The Board has added new comment 18(c)-3 to address the circumstance in which a financial institution makes available more than 60 days of transaction information either electronically or in writing. The new comment provides that institutions generally will not be required to comply with the error resolution provisions set forth in § 205.11 with respect to a transaction that occurred more than 60 days prior to the date the consumer electronically accesses the payroll card account or the date a written history was sent, whichever is earlier (assuming information about the alleged error is available to the consumer). An institution that does not track when a consumer accesses an account or is sent a written history also may choose not to follow the procedures in § 205.11 for any notice of error received more than 120 days after the transfer allegedly in error is credited or debited to the consumer's account. In either case, however, if the consumer's assertion of error involves an unauthorized transfer, the institution is required to comply with § 205.6, which specifically addresses consumer liability for unauthorized transfers, before it may impose any liability on the consumer for the transfer. See also comment 11(b)(1)-7; EFTA § 909; 15 U.S.C. 1693g. Some institutions asked the Board to clarify that the limits on consumers' liability for unauthorized transfers only apply to transactions occurring during the 60 days preceding the date the consumer electronically accesses his or her account. However, such a rule would not be consistent with the EFTA, which does not contain a time limitation for asserting an unauthorized EFT claim. *See* EFTA § 909; 15 U.S.C. 1693g. Additional Issues Several commenters were concerned that explicitly stating that payroll card accounts were covered under Regulation E might affect whether they are also “accounts” for purposes of coverage under other laws, such as for customer identification procedures under the Bank Secrecy Act, for reserve requirements under the Board's Regulation D, for Truth in Savings Act purposes, and possibly for other purposes under state laws. As stated in the supplementary information for the interim rule, the definition of “account” as amended by the final rule does not affect the treatment of payroll card accounts under other laws. This final rule is intended only to address coverage issues under Regulation E. Compliance Date The interim rule established an effective date of July 1, 2007. Consumer groups commented that the effective date should be earlier in light of the projected growth of payroll card accounts. Industry commenters, however, asserted that financial institutions and employers will need at least 12 months following the adoption of a final rule to implement necessary changes, and one industry commenter suggested that mandatory compliance be delayed until 2008. The final rule retains a mandatory compliance date of July 1, 2007, for the revisions addressing payroll card accounts, to provide institutions sufficient time to implement necessary changes, but institutions may begin complying with the final rule beginning 30 days after the date of publication in the **Federal Register** . A-7—Model Clauses for Financial Institutions Offering Payroll Card Accounts Model Form A-7 provides model clauses consistent with the provisions in § 205.18 that apply to financial institutions that offer payroll card accounts but do not provide periodic statements under § 205.9(b). These clauses, which are modeled after similar clauses provided under Appendix A-5 for EBT accounts, are intended to assist financial institutions in disclosing to payroll card holders how to obtain account balances and account histories, as well as error resolution procedures. (The model clauses do not include language about the 120-day safe harbor under the liability limit and error resolution provisions because the safe harbor goes beyond the literal requirements of the final rule. *See* comment 18(c)-1.) Comment 2 for Appendix A is revised to clarify that the use of such clauses in making these disclosures in connection with payroll card accounts will protect a financial institution from liability under Sections 915 and 916 of the EFTA if the clauses accurately reflect the institution's EFT services. The final rule also includes nonsubstantive changes to the model clauses to correct a cross reference to § 205.15 of the regulation. V. Final Regulatory Flexibility Analysis The Board prepared a regulatory flexibility analysis as required by the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* )
(RFA)in connection with the January 2006 interim rule. The Board received no comments on its regulatory flexibility analysis. Under Section 605(b) of the RFA, 5 U.S.C. 605(b), the regulatory flexibility analysis otherwise required under Section 604 of the RFA is not required if an agency certifies, along with a statement providing the factual basis for such certification, that the rule will not have a significant economic impact on a substantial number of small entities. Based on its analysis and for the reasons stated below, the Board certifies that the rule will not have a significant economic impact on a substantial number of small entities. 1. *Statement of the need for, and objectives of, the final rule.* The EFTA was enacted to provide a basic framework establishing the rights, liabilities, and responsibilities of participants in electronic fund transfer systems. The primary objective of the EFTA is the provision of individual consumer rights with regard to electronic fund transfers. 15 U.S.C. 1693(b). The EFTA authorizes the Board to prescribe regulations to carry out the purpose and provisions of the statute. 15 U.S.C. 1693b(a). The EFTA expressly states that the Board's regulations may contain “such classifications, differentiations, or other provisions, * * * as, in the judgment of the Board, are necessary or proper to effectuate the purposes of [the EFTA], to prevent circumvention or evasion [of the EFTA], or to facilitate compliance [with the EFTA].” 15 U.S.C. 1693b(c). The EFTA also states that “[i]f electronic fund transfer services are made available to consumers by a person other than a financial institution holding a consumer's account, the Board shall by regulation assure that the disclosures, protections, responsibilities, and remedies created by [the EFTA] are made applicable to such persons and services.” 15 U.S.C. 1693b(d). The Board is revising Regulation E to provide that payroll card accounts directly or indirectly established through an employer, and to which EFTs of the consumer's wages, salary, or other employee compensation are made on a recurring basis are “accounts” subject to Regulation E. The Board believes that the revisions to Regulation E as discussed in the Supplementary Information are within Congress' broad grant of authority to the Board to adopt provisions that carry out the purposes of the statute. 2. *Issues raised by comments in response to the initial regulatory flexibility analysis.* In accordance with Section 3(a) of the RFA, the Board conducted an initial regulatory flexibility analysis in connection with the proposed rule. The Board did not receive any comments on its initial regulatory flexibility analysis with respect to the portions relating to payroll card accounts. The Board also did not receive any comments on its regulatory flexibility analysis in the interim rule. 3. *Small entities affected by the final rule.* Entities are required to comply with the final rule to the extent that they qualify as financial institutions with respect to a payroll card account. Specifically, an entity must either directly or indirectly hold a payroll card account or issue an access device ( *i.e.* , the payroll card) and agree with the consumer to provide EFT services. The Board does not currently believe that there are any employers or service providers that would qualify as financial institutions with respect to their payroll card programs. Based on available information, the final rule will, at the time of its adoption, apply to approximately 60 depository institutions that are offering payroll card programs. The Board is unaware of any such institutions which could be considered a small institution with assets less than $150 million. All small entities that are engaged in providing payroll card accounts are affected by the requirements established by this final rule, including initial disclosures, error resolution procedures, and the provision of account information. 4. *Recordkeeping, reporting, and compliance requirements.* Institutions must provide an initial disclosure to payroll card account holders regarding the means by which the holder may obtain account information and the means by which the holder may resolve errors. In order to comply with the amendments to Regulation E, institutions must review their account-opening disclosures to ensure compliance with the regulation; and some institutions may be required to revise their disclosures. The rule provides model disclosures to facilitate the revision of the disclosures and to ensure compliance. In addition, if the institution elects not to provide periodic statements, the institution must establish systems for delivering account information electronically, upon the consumer's request, and by telephone. Institutions also will be required to implement error resolution provisions under the final rule to the extent that they do not currently have such procedures. The Board understands that many depository institutions and payroll card services providers that provide such products are currently providing account-opening disclosures for payroll card accounts, and generally have in place error resolution procedures. In addition, the Board understands that many, if not all, institutions providing payroll cards make information regarding those payroll card accounts available to the holders through telephone and electronic access. Because the final rule codifies the current practices and procedures of many payroll card providers and provides an alternative to periodic statements, the Board concludes that the final rule will not have a significant economic impact on a substantial number of small entities. 5. *Other Federal rules.* To the Board's knowledge, no Federal rules duplicate, overlap, or conflict with the final revisions to Regulation E. 6. *Steps taken to minimize the economic impact on small entities.* The Board solicited comment about potential ways to reduce regulatory burden. Commenters urged the Board to provide relief from the periodic statement requirement, asserting that other more cost-effective methods of providing transaction information could provide consumers with the information necessary to enable consumers to manage their payroll card accounts. In the final rule, financial institutions engaged in providing payroll card accounts may elect not to provide periodic statements if they make available balance information to consumers through a readily-available telephone line and make available account transaction information electronically, such as through an Internet web site. These financial institutions will also be required to provide a written history of account transactions upon the consumer's request. The final rule would also in most cases exclude employers from the scope of entities subject to the regulation to the extent that such employers arrange or contract with a bank or third-party service provider to provide payroll cards. Commenters on the interim rule had urged the Board to exclude employers from the scope of the rule entirely, stating that the additional compliance burden may make some employers unwilling to establish payroll card programs. Generally, under the final rule, consumers' 60-day period to report an error with respect to a transaction begins on the date the consumer electronically accesses an account for which information about the transaction is made available or the date the institution sends a written history reflecting the transaction, whichever is earlier. The final rule provides a safe harbor for financial institutions that may have operational difficulties in tracking when consumers electronically access their accounts or are sent a written history of transactions. To ease compliance, under the final rule, institutions can comply with the regulation if they allow a consumer up to 120 days after a transaction has posted to report any errors involving the transaction. A similar rule applies with respect to the provisions affecting consumer liability for unauthorized transactions. VI. Paperwork Reduction Act In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3506; 5 CFR 1320 Appendix A.1) (PRA), the Board reviewed the rule under the authority delegated to the Board by the Office of Management and Budget (OMB). The final rule contains requirements subject to the PRA. The collection of information that is required by this rule is found in 12 CFR 205.2(b)(2) and 205.18. The Federal Reserve may not conduct or sponsor, and an organization is not required to respond to, this information collection unless the information collection displays a currently valid OMB control number. The OMB control number is 7100-0200. This information is required to provide benefits to consumers and is mandatory (15 U.S.C. 1693 *et seq.* ). The respondents/recordkeepers are for-profit financial institutions, including small businesses. Institutions are required to retain records for 24 months. All entities involved in providing payroll card accounts that qualify as financial institutions under the regulation, of which there presently are approximately 60, potentially are affected by this collection of information because these institutions will be required to provide initial disclosures, account transaction histories, error resolution procedures, and other consumer protections, to consumers who receive their salaries through payroll card accounts as defined in § 205.2(b)(2). The following estimates represent an average across all respondents and reflect variations among institutions based on their size, complexity, and practices. The other Federal agencies are responsible for estimating and reporting to OMB the total paperwork burden for the institutions for which they have administrative enforcement authority. They may, but are not required to, use the Federal Reserve's burden estimate methodology. The final rule provides disclosure obligations with respect to payroll card accounts. Financial institutions are required to fully comply with Regulation E, as amended by this final rule, and provide disclosure of basic terms, costs, and rights relating to electronic fund transfer services in connection with the payroll card account. Certain information must be disclosed to consumers, including: Initial and updated EFT terms; transaction information; the consumer's potential liability for unauthorized transfers; and error resolution rights and procedures. The Federal Reserve estimates that of the 1,289 respondents regulated by the Federal Reserve that are required to comply with Regulation E, approximately 5 participate in payroll card programs. These institutions should already have systems in place to comply with the Regulation E requirements for accounts generally. The Federal Reserve estimates that each respondent will take, on average, 8 hours (one business day) to reprogram and update their systems to provide initial disclosures to payroll card account holders. The Federal Reserve also estimates that each respondent will take, on average, 7 hours to reprogram and update systems to provide periodic statements, or to provide account information by other means. Finally, the Federal Reserve estimates that each respondent will take, on average, 8 hours (one business day) to develop error resolution procedures. The total annual burden for respondents regulated by the Federal Reserve for all of these disclosures is estimated to be 115 hours. Using the Federal Reserve's methodology, the total annual burden for all other institutions offering payroll cards, including respondents not regulated by the Federal Reserve, is approximately 1,265 hours. The disclosures are standardized and machine-generated and do not substantively change from one individual account to another; thus, the average time for providing the disclosure to all consumers should be small. The Federal Reserve's current annual burden for Regulation E disclosures is estimated to be 83,751 hours for respondents regulated by the Federal Reserve. The final rule would increase the total burden under Regulation E for all respondents regulated by the Federal Reserve by 115 hours, from 83,751 to 83,866 hours. The Board did not receive any comments on the burden estimates provided in the interim final rule. Because the records would be maintained by the institution and the notices are not provided to the Federal Reserve, no issue of confidentiality arises under the Freedom of Information Act. Text of Final Revisions Comments are numbered to comply with **Federal Register** publication rules. List of Subjects in 12 CFR Part 205 Consumer protection, Electronic fund transfers, Federal Reserve System, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, the interim rule amending 12 CFR part 205 and the Official Staff Commentary which was published at 71 FR 1473 on January 10, 2006, is adopted as a final rule with the following changes: PART 205—ELECTRONIC FUND TRANSFERS (REGULATION E) 1. The authority citation for part 205 continues to read as follows: Authority: 15 U.S.C. 1693b. 2. Section 205.2 is amended by revising paragraph (b)(2) as follows: § 205.2 Definitions.
(b)* * *
(2)The term includes a “payroll card account” which is an account that is directly or indirectly established through an employer and to which electronic fund transfers of the consumer's wages, salary, or other employee compensation (such as commissions), are made on a recurring basis, whether the account is operated or managed by the employer, a third-party payroll processor, a depository institution or any other person. For rules governing payroll card accounts, see § 205.18. 3. Section 205.18 is revised to read as follows: § 205.18 Requirements for Financial Institutions Offering Payroll Card Accounts.
(a)*Coverage.* A financial institution shall comply with all applicable requirements of the act and this part with respect to payroll card accounts except as provided in this section.
(b)*Alternative to periodic statements.*
(1)A financial institution need not furnish periodic statements required by § 205.9(b) if the institution makes available to the consumer—
(i)The consumer's account balance, through a readily available telephone line;
(ii)An electronic history of the consumer's account transactions, such as through an Internet Web site, that covers at least 60 days preceding the date the consumer electronically accesses the account; and
(iii)A written history of the consumer's account transactions that is provided promptly in response to an oral or written request and that covers at least 60 days preceding the date the financial institution receives the consumer's request.
(2)The history of account transactions provided under paragraphs (b)(1)(ii) and
(iii)of this section must include the information set forth in § 205.9(b).
(c)*Modified requirements.* A financial institution that provides information under paragraph
(b)of this section, shall comply with the following:
(1)*Initial disclosures.* The financial institution shall modify the disclosures under § 205.7(b) by disclosing—
(i)*Account information.* A telephone number that the consumer may call to obtain the account balance, the means by which the consumer can obtain an electronic account history, such as the address of an Internet Web site, and a summary of the consumer's right to receive a written account history upon request (in place of the summary of the right to receive a periodic statement required by § 205.7(b)(6)), including a telephone number to call to request a history. The disclosure required by this paragraph (c)(1)(i) may be made by providing a notice substantially similar to the notice contained in paragraph A-7(a) in appendix A of this part.
(ii)*Error resolution.* A notice concerning error resolution that is substantially similar to the notice contained in paragraph A-7(b) in appendix A of this part, in place of the notice required by § 205.7(b)(10).
(2)*Annual error resolution notice.* The financial institution shall provide an annual notice concerning error resolution that is substantially similar to the notice contained in paragraph A-7(b) in appendix A of this part, in place of the notice required by § 205.8(b). Alternatively, a financial institution may include on or with each electronic and written history provided in accordance with § 205.18(b)(1), a notice substantially similar to the abbreviated notice for periodic statements contained in paragraph A-3(b) in appendix A of this part, modified as necessary to reflect the error resolution provisions set forth in this section.
(3)*Limitations on liability.*
(i)For purposes of § 205.6(b)(3), the 60-day period for reporting any unauthorized transfer shall begin on the earlier of:
(A)The date the consumer electronically accesses the consumer's account under paragraph (b)(1)(ii) of this section, provided that the electronic history made available to the consumer reflects the transfer; or
(B)The date the financial institution sends a written history of the consumer's account transactions requested by the consumer under paragraph (b)(1)(iii) of this section in which the unauthorized transfer is first reflected.
(ii)A financial institution may comply with paragraph (c)(3)(i) of this section by limiting the consumer's liability for an unauthorized transfer as provided under § 205.6(b)(3) for any transfer reported by the consumer within 120 days after the transfer was credited or debited to the consumer's account.
(4)*Error resolution.*
(i)The financial institution shall comply with the requirements of § 205.11 in response to an oral or written notice of an error from the consumer that is received by the earlier of—
(A)Sixty days after the date the consumer electronically accesses the consumer's account under paragraph (b)(1)(ii) of this section, provided that the electronic history made available to the consumer reflects the alleged error; or
(B)Sixty days after the date the financial institution sends a written history of the consumer's account transactions requested by the consumer under paragraph (b)(1)(iii) of this section in which the alleged error is first reflected.
(ii)In lieu of following the procedures in paragraph (c)(4)(i) of this section, a financial institution complies with the requirements for resolving errors in § 205.11 if it investigates any oral or written notice of an error from the consumer that is received by the institution within 120 days after the transfer allegedly in error was credited or debited to the consumer's account. 4. In Appendix A to Part 205, Appendix A-7—Model Clauses for Financial Institutions Offering Payroll Card Accounts (§ 205.18(c)) is revised to read as follows: Appendix A to Part 205—Model Disclosure Clauses and Forms A-7—Model Clauses for Financial Institutions Offering Payroll Card Accounts (§ 205.18(c))
(a)*Disclosure by financial institutions of information about obtaining account information for payroll card accounts. § 205.18(c)(1).* You may obtain information about the amount of money you have remaining in your payroll card account by calling [telephone number]. This information, along with a 60-day history of account transactions, is also available on-line at [Internet address]. You also have the right to obtain a 60-day written history of account transactions by calling [telephone number], or by writing us at [address].
(b)*Disclosure of error-resolution procedures for financial institutions that provide alternative means of obtaining payroll card account information (§ 205.18(c)(1)(ii) and (c)(2)).* In Case of Errors or Questions About Your Payroll Card Account Telephone us at [telephone number] or Write us at [address] [or E-mail us at [electronic mail address]] as soon as you can, if you think an error has occurred in your payroll card account. We must allow you to report an error until 60 days after the earlier of the date you electronically access your account, if the error could be viewed in your electronic history, or the date we sent the FIRST written history on which the error appeared. You may request a written history of your transactions at any time by calling us at [telephone number] or writing us at [address]. You will need to tell us: Your name and [payroll card account] number. Why you believe there is an error, and the dollar amount involved. Approximately when the error took place. If you tell us orally, we may require that you send us your complaint or question in writing within 10 business days. We will determine whether an error occurred within 10 business days after we hear from you and will correct any error promptly. If we need more time, however, we may take up to 45 days to investigate your complaint or question. If we decide to do this, we will credit your account within 10 business days for the amount you think is in error, so that you will have the money during the time it takes us to complete our investigation. If we ask you to put your complaint or question in writing and we do not receive it within 10 business days, we may not credit your account. For errors involving new accounts, point-of-sale, or foreign-initiated transactions, we may take up to 90 days to investigate your complaint or question. For new accounts, we may take up to 20 business days to credit your account for the amount you think is in error. We will tell you the results within three business days after completing our investigation. If we decide that there was no error, we will send you a written explanation. You may ask for copies of the documents that we used in our investigation. If you need more information about our error-resolution procedures, call us at [telephone number] [the telephone number shown above] [or visit [Internet address]]. 5. In Supplement I to part 205, the following amendments are made: a. Under *§ 205.2—Definitions* , under *2(b) Account* , paragraph 2. is revised; b. Under *§ 205.18—Requirements for Financial Institutions Offering Payroll Card Accounts* , under *18(a) Coverage* , paragraph 1. is republished, and paragraph 2. is added; c. Under *§ 205.18—Requirements for Financial Institutions Offering Payroll Card Accounts* , a new heading “18(b) Alternative to Periodic Statements” is added, and paragraphs 1. and 2. are added; d. Under *§ 205.18—Requirements for Financial Institutions Offering Payroll Card Accounts* , a new heading “18(c) Modified Requirements” is added, and paragraphs 1., 2., and 3. are added; e. Under *Appendix A—Model Disclosure Clauses and Forms* , paragraph 2. is republished. Supplement I to Part 205—Official Staff Interpretations § 205.2 Definitions. *2(a)* * * * *2(b) Account* 1. * * * 2. *Certain employment-related cards not covered* . The term “payroll card account” does not include a card used solely to disburse incentive-based payments (other than commissions which can represent the primary means through which a consumer is paid), such as bonuses, which are unlikely to be a consumer's primary source of salary or other compensation. The term also does not include a card used solely to make disbursements unrelated to compensation, such as petty cash reimbursements or travel per diem payments. Similarly, a payroll card account does not include a card that is used in isolated instances to which an employer typically does not make recurring payments, such as when providing final payments or in emergency situations when other payment methods are unavailable. However, all transactions involving the transfer of funds to or from a payroll card account are covered by the regulation, even if a particular transaction involves payment of a bonus, other incentive-based payment, or reimbursement, or the transaction does not represent a transfer of wages, salary, or other employee compensation. § 205.18 Requirements for Financial Institutions Offering Payroll Card Accounts. 18(a) Coverage 1. *Issuance of access device* . Consistent with § 205.5(a), a financial institution may issue an access device only in response to an oral or written request for the device, or as a renewal or substitute for an accepted access device. A consumer is deemed to request an access device for a payroll card account when the consumer chooses to receive salary or other compensation through a payroll card account. 2. *Application to employers and service providers* . Typically, employers and third-party service providers do not meet the definition of a “financial institution” subject to the regulation because they neither hold payroll card accounts nor issue payroll cards and agree with consumers to provide EFT services in connection with payroll card accounts. However, to the extent an employer or a service provider undertakes either of these functions, it would be deemed a financial institution under the regulation. 18(b) Alternative to Periodic Statements 1. *Posted transactions* . A history of transactions provided under §§ 205.18(b)(1)(ii) and
(iii)shall reflect transfers once they have been posted to the account. Thus, an institution does not need to include transactions that have been authorized, but that have not yet posted to the account. 2. *Electronic history* . The electronic history required under § 205.18(b)(1)(ii) must be provided in a form that the consumer may keep, as required under § 205.4(a)(1). Financial institutions may satisfy this requirement if they make the electronic history available in a format that is capable of being retained. For example, an institution satisfies the requirement if it provides a history at an Internet Web site in a format that is capable of being printed or stored electronically using an Internet web browser. 18(c) Modified Requirements 1. *Error resolution safe harbor provision* . Institutions that choose to investigate notices of error provided up to 120 days from the date a transaction has posted to a consumer's account may still disclose the error resolution time period required by the regulation (as set forth in the Model Form in Appendix A-7). Specifically, an institution may disclose to payroll card account holders that the institution will investigate any notice of error provided within 60 days of the consumer electronically accessing an account or receiving a written history upon request that reflects the error, even if, for some or all transactions, the institution investigates any notice of error provided up to 120 days from the date that the transaction alleged to be in error has posted to the consumer's account. Similarly, an institution's summary of the consumer's liability (as required under § 205.7(b)(1)) may disclose that liability is based on the consumer providing notice of error within 60 days of the consumer electronically accessing an account or receiving a written history reflecting the error, even if, for some or all transactions, the institution allows a consumer to assert a notice of error up to 120 days from the date of posting of the alleged error. 2. *Electronic access* . A consumer is deemed to have accessed a payroll card account electronically when the consumer enters a user identification code or password or otherwise complies with a security procedure used by an institution to verify the consumer's identity. An institution is not required to determine whether a consumer has in fact accessed information about specific transactions to trigger the beginning of the 60-day periods for liability limits and error resolution under §§ 205.6 and 205.11. 3. *Untimely notice of error* . An institution that provides a transaction history under § 205.18(b)(1) is not required to comply with the requirements of § 205.11 for any notice of error from the consumer pertaining to a transfer that occurred more than 60 days prior to the earlier of the date the consumer electronically accesses the account or the date the financial institution sends a written history upon the consumer's request. (Alternatively, as provided in § 205.18(c)(4)(ii), an institution need not comply with the requirements of § 205.11 with respect to any notice of error received from the consumer more than 120 days after the date of posting of the transfer allegedly in error.) Where the consumer's assertion of error involves an unauthorized EFT, however, the institution must comply with § 205.6 before it may impose any liability on the consumer. Appendix A—Model Disclosure Clauses and Forms 1. * * * 2. *Use of forms.* The appendix contains model disclosure clauses for optional use by financial institutions to facilitate compliance with the disclosure requirements of sections 205.5(b)(2) and (b)(3), 205.6(a), 205.7, 205.8(b), 205.14(b)(1)(ii), 205.15(d)(1) and (d)(2), and 205.18(c)(1) and (c)(2). The use of appropriate clauses in making disclosures will protect a financial institution from liability under sections 915 and 916 of the act provided the clauses accurately reflect the institution's EFT services. By order of the Board of Governors of the Federal Reserve System, August 24, 2006. Jennifer J. Johnson, Secretary of the Board. [FR Doc. 06-7223 Filed 8-29-06; 8:45 am]
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  • 7 CFR 2
  • 7 CFR 301
  • 7 CFR 301.53-1
  • 7 CFR 1427.5
  • 7 CFR 1427.19(h)
  • 7 CFR 1423
  • 7 CFR 1421
  • 7 CFR 1421.201
  • 5 USC 533
  • 7 CFR 799
  • 7 CFR 3014
  • 7 CFR 1427
  • 7 USC 7231-7237
  • 9 CFR 77
  • 9 CFR 93
  • 9 CFR 122
  • 9 CFR 130
  • 7 CFR 2.22
  • 12 CFR 205
  • 5 CFR 1320
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Final rule
U.S.C.§ 3839bb–2
U.S.C.§ 553
U.S.C.§ 601
U.S.C.§ 808
U.S.C.§ 6912
U.S.C.§ 301
U.S.C.§ 2204b
Fed. Reg.Notices
U.S.C.§ 4321
Cite7 CFR 2
Cite7 CFR 301
Cite7 CFR 301.53-1
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