Unknown. Final rule

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--- schema: federal-register doc_type: fedreg source_file: FR-2011-01-10.xml --- 76 6 Monday, January 10, 2011 Contents Agriculture Agriculture Department See Animal and Plant Health Inspection Service See Forest Service NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 1400-1402 2011-224 2011-226 Air Force Air Force Department NOTICES Privacy Act; Systems of Records, 1411-1412 2011-234 Animal Animal and Plant Health Inspection Service RULES Asian Longhorned Beetle:

Additions to Quarantined Areas in Massachusetts and New York, 1337-1338 2011-238 Emerald Ash Borer; Quarantined Areas: Maryland, Michigan, Minnesota, Missouri, Pennsylvania, Virginia, West Virginia, and Wisconsin, 1338-1339 2011-227 Pine Shoot Beetle; Additions to Quarantined Areas, 1339 2011-230 Antitrust Division Antitrust Division NOTICES National Cooperative Research and Production Act of 1993: ASTM International, 1459-1460 2011-76 DVD Control Association, 1460 2011-77 INS Global Learning Consortium, Inc., 1460 2011-78 Arts and Humanities, National Foundation See National Foundation on the Arts and the Humanities Centers Disease Centers for Disease Control and Prevention NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 1433-1434 2011-280 Information Requests: 2,3-pentanedione and Other alpha-diketones Used as Diacetyl Substitutes, 1434-1435 2011-274 Centers Medicare Centers for Medicare & Medicaid Services RULES Medicare Programs: Amendment to Payment Policies under Physician Fee Schedule and Other Revisions to Part B for CY 2011, 1366-1367 2011-164 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 1435-1436 2011-243 Children Children and Families Administration NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Tracking of Participants in Early Head Start Research and Evaluation Project, 1436-1437 2011-207 Issuance of Final Policy Directive, 1437-1440 2011-285 Revised Child Outcomes Framework, 1440 2011-195 Civil Rights Civil Rights Commission NOTICES Meetings; Sunshine Act; Cancellation, 1402 2011-306 Coast Guard Coast Guard RULES Drawbridge Operation Regulations: Atlantic Intracoastal Waterway, Wrightsville Beach, NC, 1359 2011-167 Vermillion River, Lafayette Parish, LA, 1359-1360 2011-168 Regulated Navigation Areas:

Reporting Requirements for Barges Loaded With Certain Dangerous Cargoes, Inland Rivers, Eighth Coast Guard District; Stay, 1360-1362 2011-185 Safety Zones: Ice Conditions for Baltimore Captain of Port Zone, 1362-1365 2011-171 PROPOSED RULES Safety Zones: Centennial of Naval Aviation Kickoff, San Diego Bay, San Diego, CA, 1386-1389 2011-175 Special Local Regulations for Marine Events: Potomac River, Charles County, MD, 1381-1383 2011-174 Special Local Regulations: Olympia Harbor Days Tug Boat Races, Budd Inlet, WA, 1384-1386 2011-184 NOTICES Random Drug Testing Rate for Covered Crewmembers, 1448 2011-170 Commerce Commerce Department See International Trade Administration See National Oceanic and Atmospheric Administration Defense Department Defense Department See Air Force Department See Navy Department NOTICES DoDEA FY 2011 Grant Program, 1405-1408 2011-236 Meetings:

Federal Advisory Committee, 1408-1409 2011-233 National Defense University Board of Visitors, 1408 2011-232 Privacy Act; Systems of Records, 1409-1411 2011-231 2011-235 Department of Transportation See Pipeline and Hazardous Materials Safety Administration Education Education Department NOTICES Investing in Innovation Fund, 1412-1415 2011-269 Energy Department Energy Department See Federal Energy Regulatory Commission See Western Area Power Administration NOTICES Meetings: Environmental Management Site-Specific Advisory Board, Oak Ridge Reservation;

Cancellation, 1415-1416 2011-339 Environmental Protection Environmental Protection Agency PROPOSED RULES Outer Continental Shelf Air Regulations: Consistency Update for California, 1389-1391 2011-242 NOTICES Meetings: National Advisory Council for Environmental Policy and Technology, 1431 2011-220 Public Water System Supervision Program Revision: State of New Mexico, 1431 2011-244 Executive Office of the President See Presidential Documents Federal Aviation Federal Aviation Administration RULES Airworthiness Directives:

Airbus Model A300, A300-600, A310, A318, A319, A320, A321, A330-300, A340-200, A340-300, A340-500, etc. Airplanes, 1346-1349 2010-33318 Boeing Co. Model 727, 727C, 727-100, 727-100C, 727-200, and 727-200F Series Airplanes, 1339-1342 2011-188 Boeing Co. Model 757-200, -200CB, and -300 Series Airplanes, 1351-1354 2011-51 Cessna Aircraft Co. Models LC41-550FG and LC42-550FG Airplanes, 1349-1351 2010-33336 GROB-WERKE GMBH and CO KG Models G102 ASTIR CS, G102 CLUB ASTIR III, G102 CLUB ASTIR IIIb, and G102 STANDARD ASTIR III Gliders, 1342-1346 2010-32753 Standard Instrument Approach Procedures, and Takeoff Minimums and Obstacle Departure Procedures:

Miscellaneous Amendments, 1354-1357 2010-33219 2010-33224 PROPOSED RULES Amendment of Class E Airspace: Kokomo, IN, 1378-1379 2011-210 Mosby, MO, 1377-1378 2011-212 Establishment of Class E Airspace: Creighton, NE, 1380-1381 2011-213 Federal Energy Federal Energy Regulatory Commission RULES Supplemental Standards of Ethical Conduct for Employees of Federal Energy Regulatory Commission, 1335-1337 2011-267 NOTICES Applications for Transfer of License, and Soliciting Comments and Motions to Intervene:

HDI Associates V; Sprague Hydro LLC, 1416 2011-181 Combined Filings, 1416-1427 2011-179 2011-198 2011-199 Complaints and Shortening Date for Filing Answers to Motion for Stay: AES Wind Generation, Inc. v. California Independent System Operator Corp., 1427 2011-187 Filing Priority for Preliminary Permit Applications: Lock Plus Hydro Friends Fund XLVIII; FFP Missouri 15, LLC, 1427-1428 2011-176 Filings: Empire Pipeline, Inc., 1428 2011-178 Hemphill, Stuart R., 1428 2011-186 Records Governing Off-the-Record Communications, 1428-1429 2011-177 Requests under Blanket Authorizations:

Florida Gas Transmission Co., LLC, 1429 2011-180 Federal Highway Federal Highway Administration NOTICES Final Federal Agency Actions on Proposed Highway in Minnesota, 1492-1493 2011-158 Federal Motor Federal Motor Carrier Safety Administration NOTICES Qualifications of Drivers; Exemption Applications: Diabetes Mellitus, 1495-1499 2011-247 2011-250 Vision, 1493-1495 2011-245 Vision; Final Disposition, 1499-1501 2011-240 Federal Transit Federal Transit Administration NOTICES Environmental Impact Statements;

Availability, etc.: Transit Improvements in US 90A/Southwest Rail Corridor in Metropolitan Houston, TX, 1501-1504 2011-149 Forest Forest Service NOTICES Meetings: Eleven Point Resource Advisory Committee, 1402 2011-196 Health and Human Health and Human Services Department See Centers for Disease Control and Prevention See Centers for Medicare & Medicaid Services See Children and Families Administration See Health Resources and Services Administration See National Institutes of Health See Substance Abuse and Mental Health Services Administration NOTICES Meetings:

HIT Policy Committee's Workgroup, 1432 2011-189 HIT Standards Committee's Workgroup, 1432-1433 2011-190 2011-194 Health Resources Health Resources and Services Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 1440-1441 2011-144 Health Center Program, 1441 2011-282 Homeland Homeland Security Department See Coast Guard Housing Housing and Urban Development Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals:

Housing Discrimination Information Form, 1449-1450 2011-289 Survey of Market Absorption of New Multifamily Units, 1448-1449 2011-291 Funding Awards for Fiscal Year 2010: Housing Choice Voucher Program, 1450-1457 2011-261 Homeless Families Demonstration Small Grant Research Program: Public Interest for Fiscal Year 2010 Transformation Initiative; Availability, 1457-1458 2011-266 Sustainable Communities Research Grant Program: Public Interest for Fiscal Year 2010 Transformation Initiative;

Availability, 1458 2011-263 Interior Interior Department See National Park Service International Trade Adm International Trade Administration NOTICES Allocations of Tariff Rate Quotas for Calendar Year 2011: Import of Certain Worsted Wool Fabrics, 1402-1403 2011-272 Extensions of Time Limits for Preliminary Results of Antidumping Duty Administrative Reviews: Pure Magnesium from People's Republic of China, 1403-1404 2011-273 Rescissions of Changed Circumstances Reviews: Pure Magnesium in Granular Form from People's Republic of China, 1404 2011-276 Justice Department Justice Department See Antitrust Division NOTICES Lodging of Consent Decrees under CERCLA:

United States of America v. Domtar Paper Company LLC, 1459 2011-147 Labor Department Labor Department See Occupational Safety and Health Administration NASA National Aeronautics and Space Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 1461 2011-265 National Credit National Credit Union Administration NOTICES Meetings; Sunshine Act, 1461 2011-357 National Foundation National Foundation on the Arts and the Humanities NOTICES Meetings:

Humanities Panel, 1462 2011-206 National Highway National Highway Traffic Safety Administration RULES Petitions for Approval of Alternate Odometer Disclosure Requirements, 1367-1375 2011-148 National Institute National Institutes of Health NOTICES Meetings: Center for Scientific Review, 1442-1446 2011-256 2011-257 Center for Scientific Review; Amendment, 1446 2011-255 National Cancer Institute, 1446 2011-253 National Heart, Lung, and Blood Institute, 1441-1442 2011-254 National Institute of Allergy and Infectious Diseases, 1443 2011-258 2011-262 National Institute of Dental and Craniofacial Research, 1444 2011-259 National Institute of Diabetes and Digestive and Kidney Diseases, 1444 2011-264 National Oceanic National Oceanic and Atmospheric Administration PROPOSED RULES Endangered and Threatened Species:

Designation of Critical Habitat for Threatened Lower Columbia River Coho Salmon and Puget Sound Steelhead, 1392-1399 2011-283 NOTICES Permits: Endangered Species; File No. 15112, 1405 2011-284 National Park National Park Service NOTICES Meetings: Acadia National Park Advisory Commission, 1459 2011-154 Alaska Region Subsistence Resource Commission Program, 1458-1459 2011-153 Navy Navy Department NOTICES Intents to Grant Partially Exclusive Patent Licenses: Lumedyne Technologies, Inc., 1412 2011-288 Nuclear Regulatory Nuclear Regulatory Commission PROPOSED RULES Physical Protection of Irradiated Reactor Fuel in Transit, 1376-1377 2011-214 NOTICES Applications and Amendments to Facility Operating Licenses, etc., 1462-1469 2011-215 Environmental Assessments;

Availability, etc.: Calvert Cliffs Nuclear Power Plant, LLC Unit Nos. 1 and 2, 1469-1470 2011-216 Occupational Safety Health Adm Occupational Safety and Health Administration NOTICES Committee Reestablishments: Maritime Advisory Committee for Occupational Safety and Health, 1460-1461 2011-166 Overseas Overseas Private Investment Corporation NOTICES Meetings; Sunshine Act, 1470-1471 2011-323 Pipeline Pipeline and Hazardous Materials Safety Administration NOTICES Pipeline Safety:

Establishing Maximum Allowable Operating Pressure, etc., 1504-1507 2011-208 Postal Regulatory Postal Regulatory Commission RULES Product List Update, 1357-1359 2011-248 NOTICES FY 2010 Annual Compliance Report; Comment Request, 1471-1472 2011-157 Presidential Documents Presidential Documents ADMINISTRATIVE ORDERS Jerusalem Embassy Act; Suspension of Limitations (Presidential Determination): No. 2011-6 of November 29, 2010, 1333 2011-380 Recovery Recovery Accountability and Transparency Board NOTICES Meetings:

Recovery Independent Advisory Panel, 1472-1473 2011-152 Securities Securities and Exchange Commission NOTICES Meetings; Sunshine Act, 1473 2011-369 Self-Regulatory Organizations; Proposed Rule Changes: Boston Stock Clearing Corp., 1473-1475 2011-159 International Securities Exchange, LLC, 1488-1489 2011-163 National Securities Clearing Corp., 1475-1476 2011-160 NYSE Arca, Inc., 1477-1487, 1489-1491 2011-161 2011-162 Small Business Small Business Administration NOTICES Exemption Requests under Section 312 of Small Business Investment Act, Conflicts of Interest:

Emergence Capital Partners SBIC, LP, 1491 2010-33273 Substance Substance Abuse and Mental Health Services Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 1446-1448 2011-209 Surface Transportation Surface Transportation Board NOTICES Release of Waybill Data, 1507 2011-155 Susquehanna Susquehanna River Basin Commission NOTICES Actions Taken at December 16, 2010 Meeting, 1492 2011-151 Transportation Department Transportation Department See Federal Aviation Administration See Federal Highway Administration See Federal Motor Carrier Safety Administration See Federal Transit Administration See National Highway Traffic Safety Administration See Pipeline and Hazardous Materials Safety Administration See Surface Transportation Board Treasury Treasury Department NOTICES Privacy Act;

Systems of Records, 1507-1509 2011-217 Western Western Area Power Administration NOTICES Loveland Area Projects\Western Area Colorado Missouri Balancing Authority: Rate Order No. WAPA-154, 1429-1431 2011-211 Reader Aids Consult the Reader Aids section at the end of this page 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. 76 6 Monday, January 10, 2011 Rules and Regulations DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 5 CFR Part 3401 [Docket No.

RM11-3-000; Order No. 744] Supplemental Standards of Ethical Conduct for Employees of the Federal Energy Regulatory Commission January 4, 2011. AGENCY: Federal Energy Regulatory Commission, Energy. ACTION: Final rule. SUMMARY: The Federal Energy Regulatory Commission (FERC or Commission), with the concurrence of the Office of Government Ethics (OGE), is amending the Supplemental Standards of Ethical Conduct for Employees of the Federal Energy Regulatory Commission (FERC Supplemental Standards).

The final rule expands existing FERC Supplemental Standards involving prohibited financial interests and clarifies an exception to the general prohibition. The rule codifies existing reporting, divestiture, and disqualification requirements related to prohibited financial interests and clarifies that an employee may be eligible to defer the tax consequences of divestiture under subpart J of 5 CFR part 2634. The amendments codify the current agency practice regarding disqualification and waivers. *See* 5 CFR 2635.403(a).

Additionally, the amendment makes minor revisions to the definitions. DATES: Effective January 10, 2011. FOR FURTHER INFORMATION CONTACT: Jeffrey Kaplan, Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426,

(202)502-8788, *Jeffrey.kaplan@ferc.gov.* SUPPLEMENTARY INFORMATION: Before Commissioners: Jon Wellinghoff, Chairman; Marc Spitzer, Philip D. Moeller, John R. Norris, and Cheryl A. LaFleur. I. Background 1. The Office of Government Ethics

(OGE)has issued rules setting out the Standards of Ethical Conduct for Employees of the Executive Branch at 5 CFR part 2635 (Standards). The FERC Supplemental Standards at 5 CFR part 3401 were issued to provide an additional degree of assurance that agency decisions are not influenced by non-merit considerations and to protect the integrity of the Commission's programs and processes. These rules were designed to prevent Commission employees from taking actions that violate, or may appear to violate, conflict of interest laws or certain criminal statutes, or may create an appearance of a loss of impartiality. 2. The Commission has reexamined its prohibition on ownership of securities and is making several revisions to the FERC Supplemental Standards pursuant to its rulemaking authority under 5 CFR Part 2635. The Commission has determined, with OGE's concurrence, that certain amendments to its existing regulations are needed. II. Analysis of the Rule Changes Section 3401.102—Prohibited financial interests Section 3401.102(a)—Prohibited Financial Interests; General Prohibition 3. The FERC Supplemental Standards generally prohibit employees from acquiring or holding securities of entities regulated by the Commission. 5 CFR 3401.102(a). The Commission has determined that the general prohibition does not cover all entities that may be affected by Commission regulation. The Energy Policy Act of 2005 (EPAct 2005), Public Law 109-58, 119 Stat. 594 (2005), which amended section 3 of the Natural Gas Act (NGA), 1 gives the Commission exclusive authority to approve an application for siting, construction, expansion, or operation of a liquefied natural gas

(LNG)terminal under section 3 of the NGA. EPAct 2005 defines an LNG terminal as including “all natural gas facilities located onshore or in State waters that are used to receive, unload, store, transport, gasify, liquefy, or process natural gas that is imported to the United States from a foreign country, exported to a foreign country from the United States, or transported in interstate commerce by waterborne vessel.” 15 U.S.C. 717a(11). The acquisition or ownership of securities in an LNG terminal is not prohibited, however, by existing FERC Supplemental Standards. 1 15 U.S.C. 717b. 4. Also, the Commission's Supplemental Standards currently prohibit only the acquisition or holding of any securities of “any electric utility engaged in the wholesale sale or transmission of electricity or having obtained an interconnection or wheeling order under Part II of the Federal Power Act.” However, the Supplemental Standards do not expressly apply to ownership of securities of a “transmitting utility,” an entity redefined in EPAct to mean “an entity (including an entity described in section 201 (f)) that owns, operates, or controls facilities used for the transmission of electric energy—(A) in interstate commerce;

(B)for the sale of electric energy at wholesale.” 16 U.S.C. 796(23). 5. The Commission recognizes that the existing general prohibition is not broad enough to expressly give the Commission the flexibility to prohibit the acquisition or holding of securities in all FERC regulated entities. To close the gap and to protect the integrity of the Commission's programs and processes, the Commission amends the general prohibition by prohibiting an employee, and the spouse or minor children of an employee, from owning securities of a “transmitting utility” and a liquefied natural gas terminal as defined by section 3 of the Natural Gas Act. 6. The amendment also provides flexibility to the Designated Agency Ethics Official

(DAEO)to amend the list of entities whose securities an employee, or spouse or minor child of an employee, may not acquire or hold due to changes in legislation or regulation. The regulation codifies the Office of General Counsel's practice of maintaining a prohibited securities list that bars Commission employees from acquiring or holding securities of a company found on the list. Section 3401.102(b)—Prohibited Financial Interests; Prohibited Securities List 7. The Final Rule codifies current practice that a prohibited securities list shall be maintained by the Office of General Counsel's General and Administrative Law section, updated annually or on a more frequent basis, and published and distributed on the Commission's Intranet Web site. The regulation also gives the DAEO discretion to determine whether the securities of an entity otherwise prohibited by paragraph

(a)may be omitted from the prohibited securities list because the entity does not present concerns of impartiality and further allows the DAEO to determine whether the securities of an entity not included in paragraph

(a)should, nevertheless, be deemed prohibited because the acquisition or holding of securities of such a particular entity presents concerns of impartiality. The discretion is appropriate because the types of entities currently prohibited may change over time due to corporate restructuring, mergers, legislation and regulation. Section 3401.102(c)—Prohibited Financial Interests; Exception 8. The amendment clarifies the Commission's longstanding exception to the general prohibition of paragraph 3401.102(a) for interests in mutual funds that do not have a stated objective of concentrating their investments in prohibited securities. The exception was previously included in the definition of the term “securities,” but caused confusion. The rule continues to prohibit holdings in a mutual fund if the stated objective is to concentrate the fund's investments in securities prohibited by paragraph 3401.102(a). Section 3401.102(d)—Prohibited Financial Interests; Reporting and Divestiture 9. The amendment codifies the current reporting and disqualification requirements for interests in prohibited securities. 10. Paragraph 3401.102(d)(1), *Reporting of prohibited securities,* requires written notification to the DAEO of any interest prohibited under paragraph 3401.102(a). A new employee must report a prohibited financial interest within 30 days of the commencement of employment. If a prohibited security is acquired without specific intent after employment begins, such as through gift, inheritance, or marriage, the acquisition must be reported within 30 days of the acquisition of such interest. 11. Paragraph 3401.102(d)(2), *Divestiture of prohibited securities,* requires that, except in the case where a waiver has been granted pursuant to paragraph 3401.102(e), prohibited financial interests must be divested within 90 days from the date divestiture is directed by the DAEO. This provision is consistent with 5 CFR 2635.403(d). 12. Paragraph 3401.102(d)(3), *Disqualification pending divestiture,* codifies the current agency practice of requiring that an employee disqualify himself or herself pending the divestiture discussed above from participating in particular matters which, as a result of continued ownership of prohibited securities, would affect the financial interests of the employee, or those of the spouse or minor child of the employee. The amendment continues to allow waiver from the disqualification rule where 5 CFR 2635.402(d) (pertaining to waiver of or exemptions from disqualification under 18 U.S.C. 208) applies. 13. Finally, paragraph 3401.102(d)(4), *Special tax treatment of gain on divested securities,* clarifies that an employee may be eligible to defer paying capital gains tax on investments sold to comply with the conflict of interest requirements under 26 U.S.C. 1043 and subpart J of 5 CFR part 2634. Section 3401.102(e)—Prohibited Financial Interests; Waiver 14. The waiver section is substantially the same as the existing waiver provision. The rule adds a minor revision by explicitly requiring that waivers granted by the DAEO be in writing. The writing requirement is consistent with 5 CFR 2635.402(d)(2)(ii). Section 3401.102(f)—Prohibited Financial Interests; Definitions 15. The term *securities* is revised to eliminate the portion of the definition related to mutual funds. III. Regulatory Findings A. *Administrative Procedure Act* 16. Pursuant to 5 U.S.C. 553(a)(2), notice of proposed rulemaking, opportunity for public comment, and a 30-day delayed effective date are not applicable to this final rule because this rule is limited to agency organization, management, or personnel matters and is exempt from the provisions of Executive Order Nos. 12866 and 12988. B. Regulatory Flexibility Act Analysis 17. Because no notice of proposed rulemaking is required, the provisions of the Regulatory Flexibility Act (5 U.S.C. chapter 6) do not apply. C. Paperwork Reduction Act 18. The Paperwork Reduction Act, 44 U.S.C. chapter 35, does not apply because this rulemaking does not contain information collection requirements subject to the approval of the Office of Management and Budget. Effective Date This regulation includes rules relating to agency management or personnel; it also includes rules of agency organization, procedure or practice that do not substantially affect the rights or obligations of nonagency parties. As such, pursuant to 5 U.S.C. 804, this regulation is effective January 10, 2011. List of Subjects in 5 CFR Part 3401 Conflicts of interest, Government employees. Submitted: October 18, 2010. By the Commission. Kimberly Bose, Secretary, Federal Energy Regulatory Commission. Approved: October 21, 2010. Robert I. Cusick, Director, Office of Government Ethics. For the reasons set forth in the preamble, the Commission, with the concurrence of OGE, amends Part 3401 of Title 5, Code of Federal Regulations, as follows: PART 3401—SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE FEDERAL ENERGY REGULATORY COMMISSION 1. The authority citation for part 3401 continues to read as follows: Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 1978); 42 U.S.C. 7171, 7172; E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 2635.402(c), 2635.403, 2635.502(e), 2635.604, 2635.803. 2. Section 3401.102 is revised to read as follows: § 3401.102 Prohibited financial interests.

(a)*General prohibition.* No employee, and no spouse or minor child of an employee, shall acquire or hold any securities issued by an entity on the prohibited securities list described in paragraph

(b)of this section. The list shall include, but not be limited to the following:

(1)Natural gas companies;

(2)Interstate oil pipelines;

(3)Hydroelectric licensees or exemptees;

(4)Public utilities;

(5)Transmitting utilities or electric utilities engaged in the wholesale sale or transmission of electricity or having obtained an interconnection or wheeling order under part II of the Federal Power Act;

(6)Liquefied natural gas terminals as defined by section 3 of the Natural Gas Act; or

(7)Parent companies of an entity identified in paragraphs (a)(1) through (a)(6) of this section.

(b)*Prohibited securities list.* A prohibited securities list shall be maintained, published, and distributed by the Office of the General Counsel's General and Administrative Law section, updated annually or on a more frequent basis to include entities that meet the criteria in paragraph

(a)or are otherwise subject to the Commission's jurisdiction and to remove entities that do not raise impartiality concerns after considering the above criteria.

(c)*Exception.* Nothing in this section prohibits an employee, or the spouse or minor child of an employee, from acquiring or holding an interest in a publicly traded or publicly available mutual fund or other collective investment fund, or in a widely held pension or mutual fund, provided:

(1)That the employee neither exercises control nor has the ability to exercise control over the financial interests held in the fund; or

(2)that the fund's prospectus or practice does not indicate the stated objective of concentrating its investments in entities identified in paragraphs (a)(1) through (a)(7) of this section.

(d)*Reporting and divestiture—*

(1)*Reporting of prohibited securities.* An employee must promptly report in writing to the DAEO any acquired interest prohibited under paragraphs

(a)and

(b)of this section. New employees must report in writing to the DAEO prohibited financial interests within 30 days of commencement of employment. Prohibited financial interests acquired after employment commences and without specific intent, such as through gift, inheritance, or marriage, must be reported in writing to the DAEO within 30 days of acquisition of such interest.

(2)*Divestiture of prohibited securities.* A prohibited financial interest must be divested within 90 days from the date divestiture is ordered by the DAEO unless the employee obtains a written waiver from the DAEO in accordance with this section.

(3)*Disqualification pending divestiture.* Pending divestiture of prohibited securities, an employee must disqualify himself or herself, in accordance with 5 CFR 2635.402 and 3401.103, from participating in particular matters which, as a result of continued ownership of prohibited securities, could affect the financial interests of the employee or those of the spouse or minor child of the employee. Disqualification is not required where a waiver described in § 2635.402(d) applies.

(4)*Tax treatment of gain on divested securities.* Where divestiture is required by this section, the employee or the spouse or minor child of an employee may be eligible to defer the tax consequences of divestiture by obtaining a Certificate of Divestiture from the Director of the Office of Government Ethics before selling the securities in accordance with subpart J of 5 CFR part 2634.

(e)*Waiver.* The DAEO may grant a written waiver from this section based on a determination that the waiver is not inconsistent with 5 CFR part 2635 of this title or otherwise prohibited by law and that, under the particular circumstances, application of the prohibition is not necessary to avoid the appearance of an employee's misuse of position or loss of impartiality, or to otherwise ensure confidence in the impartiality and objectivity with which the Commission's programs are administered, or in the case of a special Government employee, divestiture would result in substantial financial hardship. A waiver under this paragraph must be in writing and may impose appropriate conditions, such as requiring execution of a written disqualification.

(f)*Definitions.* For the purposes of this section:

(1)The term *securities* includes an interest in debt or equity instruments. The term includes, without limitation, secured and unsecured bonds, debentures, notes, securitized assets, and commercial paper, as well as all types of preferred and common stock. The term encompasses both current and contingent ownership interests, including any beneficial or legal interest derived from a trust. It extends to any right to acquire or dispose of any long or short position in such securities and includes, without limitation, interests convertible into such securities, as well as options, rights, warrants, puts, calls, and straddles with respect thereto.

(2)The term *parent* means a company that possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of an entity identified in paragraphs (a)(1) through (a)(6) of this section. [FR Doc. 2011-267 Filed 1-7-11; 8:45 am]

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