This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents.

Rules and Regulations Federal Register

2243 

Vol. 86, No. 7 

Tuesday, January 12, 2021 

1 In referring to natural gas in this policy 

statement, DOE refers primarily, but not 

exclusively, to LNG. Several DOE proceedings have 

involved other types of natural gas: Compressed 

natural gas (or CNG) in FE Docket Nos. 13–157– 

CNG and 20–57–CNG, and compressed gas liquid 

(or CGL) in FE Docket Nos. 14–83–CGL, 16–22– 

CGL, and 19–147–CGL. See 15 U.S.C. 717a(5) 

(definition of natural gas); 10 CFR 590.102(i) (same). 

2 15 U.S.C. 717b. The authority to regulate the 

imports and exports of natural gas, including LNG, 

under NGA section 3 has been delegated to the 

Assistant Secretary for FE in Redelegation Order 

No. 00–002.04G, issued on June 4, 2019. 

3 Id. at 15 U.S.C. 717b(c). The United States 

currently has FTAs requiring national treatment for 

trade in natural gas with Australia, Bahrain, 

Canada, Chile, Colombia, Dominican Republic, El 

Salvador, Guatemala, Honduras, Jordan, Mexico, 

Morocco, Nicaragua, Oman, Panama, Peru, Republic 

of Korea, and Singapore. FTAs with Israel and Costa 

Rica do not require national treatment for trade in 

natural gas. 

4 Id. 

5 Id. at 15 U.S.C. 717b(a). 

6See Sierra Club v. U.S. Dep’t of Energy, 867 F.3d 

189, 203 (D.C. Cir. 2017) (‘‘We have construed 

[NGA section 3(a)] as containing a ‘general 

presumption favoring [export] authorization.’ ’’) 

(quoting W. Va. Pub. Serv. Comm’n v. U.S. Dep’t 

of Energy, 681 F.2d 847, 856 (D.C. Cir. 1982)). 

7See id. (‘‘there must be ‘an affirmative showing 

of inconsistency with the public interest’ to deny 

the application’’ under NGA section 3(a)) (quoting 

Panhandle Producers & Royalty Owners Ass’n v. 

Econ. Regulatory Admin., 822 F.2d 1105, 1111 (D.C. 

Cir. 1987)). Additionally, qualifying small-scale 

exports of natural gas to non-FTA countries are 

deemed to be consistent with the public interest 

under NGA section 3(a). See 10 CFR 590.102(p); 10 

CFR 590.208(a); see also U.S. Dep’t of Energy, 

Small-Scale Natural Gas Exports; Final Rule, 83 FR 

35106 (July 25, 2018). 

8 42 U.S.C. 4321 et seq. 

9Typically, the federal agency responsible for 

permitting the export facility—either the Federal 

Energy Regulatory Commission or the U.S. 

Department of Transportation’s Maritime 

Administration—serves as the lead agency in the 

Continued 

DEPARTMENT OF ENERGY 

10 CFR Part 590 

Including Short-Term Export Authority 

in Long-Term Authorizations for the 

Export of Natural Gas on a NonAdditive Basis 

AGENCY: Office of Fossil Energy, 

Department of Energy. 

ACTION: Policy statement. 

SUMMARY: The Department of Energy’s 

(DOE) Office of Fossil Energy (FE) is 

discontinuing its practice of issuing 

separate long-term and short-term 

authorizations for exports of 

domestically produced natural gas from 

the same facility (or facilities). DOE is 

instead establishing a practice that 

certain long-term authorizations to 

export domestically produced natural 

gas—including liquefied natural gas 

(LNG), compressed natural gas, and 

compressed gas liquid—include 

additional authority to export the same 

approved volume pursuant to 

transactions with terms of less than two 

years on a non-additive basis (including 

non-additive commissioning volumes). 

By consolidating this authority in a 

single authorization without any 

increase in total approved export 

volumes, this action will streamline 

DOE’s regulatory process and reduce 

administrative burdens. This policy 

statement affects only future long-term 

export authorizations issued by DOE 

under the Natural Gas Act (NGA). DOE 

is concurrently issuing a blanket order 

amending existing export authorizations 

consistent with this policy statement. 

DATES: This policy statement is effective 

on January 12, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Amy Sweeney, U.S. Department of 

Energy (FE–34), Office of Regulation, 

Analysis, and Engagement, Office of 

Fossil Energy, Forrestal Building, Room 

3E–042, 1000 Independence Avenue 

SW, Washington, DC 20585; (202) 586– 

2627; amy.sweeney@hq.doe.gov; Bill 

Cody, U.S. Department of Energy (GC– 

70), Associate General Counsel, 

Forrestal Building, Room 6B–222, 1000 

Independence Avenue SW, Washington, 

DC 20585; (202) 586–6918; email: 

bill.cody@hq.doe.gov; Cassandra 

Bernstein, U.S. Department of Energy 

(GC–76), Office of the Assistant General 

Counsel for Electricity and Fossil 

Energy, Forrestal Building, Room 6D– 

033, 1000 Independence Avenue SW, 

Washington, DC 20585; (202) 586–9793; 

email: cassandra.bernstein@hq.doe.gov. 

SUPPLEMENTARY INFORMATION: 

Acronyms and Abbreviations. 

Frequently used acronyms and 

abbreviations are set forth below for 

reference. 

DOE U.S. Department of Energy 

EA Environmental Assessment 

EIS Environmental Impact Statement 

FE Office of Fossil Energy 

FTA Free Trade Agreement 

LNG Liquefied Natural Gas 

NEPA National Environmental Policy Act 

of 1969 

NGA Natural Gas Act 

Table of Contents 

I. Statutory Background 

II. Regulatory Background 

A. DOE Regulations Involving Contract 

Terms 

B. Long-Term Export Authority 

C. Short-Term Export Authority 

III. Policy Statement 

IV. Administrative Benefits 

V. Approval of the Office of the Secretary 

I. Statutory Background 

DOE is responsible for authorizing 

exports of domestically produced 

natural gas—including LNG, 

compressed natural gas, and 

compressed gas liquid 1—to foreign 

countries under section 3 of the NGA.2

Under section 3(c) of the NGA, exports 

of natural gas to countries with which 

the United States has entered into a free 

trade agreement (FTA) requiring 

national treatment for trade in natural 

gas (FTA countries) are ‘‘deemed to be 

consistent with the public interest.’’ 3

Therefore, applications authorizing 

exports of natural gas to FTA countries 

must be granted ‘‘without modification 

or delay.’’ 4 Section 3(a) of the NGA 

governs exports to any other country 

with which trade is not prohibited by 

U.S. law or policy (non-FTA countries).5

DOE, as affirmed by the U.S. Court of 

Appeals for the District of Columbia 

Circuit, has consistently interpreted 

NGA section 3(a) as creating a rebuttable 

presumption that a proposed export of 

natural gas is in the public interest.6

Accordingly, DOE will conduct an 

informal adjudication and grant a nonFTA application unless DOE finds that 

the proposed exportation will not be 

consistent with the public interest.7

Before reaching a final decision on a 

non-FTA application, DOE must also 

comply with the National 

Environmental Policy Act of 1969 

(NEPA).8 DOE’s environmental review 

process under NEPA may result in the 

preparation or adoption of an 

environmental impact statement (EIS) or 

environmental assessment (EA) 

describing the potential environmental 

impacts associated with the 

application.9 In other cases, DOE may 


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2244 Federal Register / Vol. 86, No. 7 / Tuesday, January 12, 2021 / Rules and Regulations 

NEPA review process, and DOE serves as a 

cooperating agency. Where no other federal agency 

is responsible for permitting the export facility, 

DOE serves as the lead agency in the NEPA review 

process. 

10See 10 CFR part 1021, subpart D, appendix B 

(listing of categorical exclusions from preparation of 

either an EA or EIS under NEPA). 

11 10 CFR 590.201(a). For purposes of this policy 

statement, DOE uses the terms ‘‘authorization’’ and 

‘‘order’’ interchangeably. 

12 Id. at 10 CFR 590.202(c). 

13 Id. at 10 CFR 590.202(b)(2). 

14This policy statement does not apply to longterm export authorizations involving modes of 

transport other than by marine vessel, including but 

not limited to orders authorizing exports of natural 

gas by pipeline. 

15Effective August 25, 2020, DOE discontinued 

its practice of granting a standard 20-year export 

term for long-term authorizations to export 

domestically produced natural gas from the lower48 states to non-FTA countries. DOE adopted a term 

through December 31, 2050, as the standard export 

term for long-term non-FTA authorizations, unless 

a shorter term is requested by the applicant. See 

U.S. Dep’t of Energy, Extending Natural Gas Export 

Authorizations to Non-Free Trade Agreement 

Countries Through the Year 2050, Notice of Final 

Policy Statement and Response to Comments, 85 FR 

52237 (Aug. 25, 2020) [hereinafter Term Extension 

Policy Statement]. 

16See, e.g., Epcilon LNG LLC, DOE/FE Order No. 

4629, FE Docket No. 20–31–LNG, Opinion and 

Order Granting Long-Term Authorization to Export 

Natural Gas to Mexico for Liquefaction, and to ReExport U.S.-Sourced Natural Gas in the Form of 

Liquefied Natural Gas from Mexico to Free Trade 

Agreement and Non-Free Trade Agreement Nations, 

at 55 (Dec. 8, 2020) (Ordering Para. A). 

17Sabine Pass Liquefaction, LLC, FE Docket No. 

15–171–LNG, Application for Blanket 

Authorization to Export Liquefied Natural Gas 

(Nov. 6, 2015). 

18 Id. at 2–3. 

19 Id. at 4. 

20 Id. at 6. 

21Sabine Pass Liquefaction, LLC, DOE/FE Order 

No. 3767, FE Docket No. 15–171–LNG, Order 

Granting Blanket Authorization to Export Liquefied 

Natural Gas by Vessel from the Sabine Pass LNG 

Terminal Located in Cameron Parish, Louisiana, at 

2 (Jan. 13, 2016). 

22 Id. at 9. 

23 Id. at 9–10 (emphasis added). 

24 Id. at 10. 

25 Id. at 13 (Ordering Para. A). 

26 Id. at 13–14 (Ordering Para. B). 

27See U.S. Dep’t of Energy, Office of Fossil 

Energy, ‘‘How to Obtain Authorization to Import 

and/or Export Natural Gas and LNG—Types of 

Authorizations and Requests,’’ available at: https:// 

www.energy.gov/fe/services/natural-gas-regulation/ 

how-obtain-authorization-import-andor-exportnatural-gas-and-lng. 

determine that an application is eligible 

for a categorical exclusion from the 

preparation or adoption of an EIS or EA, 

pursuant to DOE’s regulations 

implementing NEPA.10

II. Regulatory Background 

A. DOE Regulations Involving Contract 

Terms 

DOE’s regulations implementing 

section 3 of the NGA are codified in 10 

CFR part 590. In relevant part, any 

person applying to export natural gas 

from the United States or to amend an 

existing export authorization 11 is 

required to provide DOE with ‘‘a copy 

of all relevant contracts and purchase 

agreements’’ 12 and to identify any 

‘‘contract volumes’’ related to the 

supply of natural gas to be exported.13

DOE’s regulations, however, do not 

address the terms of contracts for the 

supply or export of natural gas, or 

distinguish between types of export 

authorizations based on the contract 

term. 

B. Long-Term Export Authority 

Because of the time, complexity, and 

expense of commercializing, financing, 

and constructing LNG export terminals, 

authorization holders typically apply to 

DOE for long-term authority to export 

LNG (or other types of natural gas) from 

their export facility to FTA and nonFTA countries.14 Since 2010, DOE has 

issued more than 100 long-term 

authorizations approving the export of 

natural gas in the form of LNG, 

compressed natural gas, or compressed 

gas liquid to either FTA countries, nonFTA countries, or both under 

consolidated FTA and non-FTA orders. 

These long-term authorizations—which 

originally ranged in duration from 20 to 

30 years (depending on the type of 

order) and which now may extend 

through the year 2050 15—are supported 

by the authorization holders’ natural gas 

supply and sales contracts that often 

have similarly lengthy terms. In the 

long-term orders issued to date, DOE 

specifies that the authorization holder is 

authorized to export the natural gas 

‘‘pursuant to one or more long-term 

contracts (a contract greater than two 

years).’’ 16

C. Short-Term Export Authority 

In 2015, DOE received the first 

application requesting short-term (or 

‘‘blanket’’) authorization to export 

domestically produced LNG over a twoyear period to both FTA and non-FTA 

countries under NGA section 3.17 In the 

application, filed by Sabine Pass 

Liquefaction, LLC (Sabine Pass), Sabine 

Pass noted that it held (at that time) two 

long-term FTA orders and one long-term 

non-FTA order authorizing it to export 

domestically produced LNG from the 

Sabine Pass Liquefaction Project, then 

under construction in Cameron Parish, 

Louisiana.18 Sabine Pass requested to 

export a subset of its total export 

volume approved under its long-term 

authorizations for the two-year period. 

Sabine Pass explained that, in 

anticipation of the start of liquefaction 

operations at the Liquefaction Project, it 

sought ‘‘to engage in short-term exports 

of LNG produced both prior to 

commercial operations as well as 

subsequent to commercial operations if 

and when appropriate market 

opportunities arise.’’ 19 Sabine Pass 

further stated that the requested shortterm authorization would provide it 

with ‘‘enhanced operational flexibility 

and the ability to export produced LNG 

cargoes that may be rejected by 

customers under one or more long-term 

contracts.’’ 20

In January 2016, in DOE/FE Order No. 

3767, DOE granted Sabine Pass’s 

application to export LNG by vessel ‘‘on 

a short-term or spot market basis’’ from 

the Sabine Pass Liquefaction Project.21

In evaluating the non-FTA portion of 

the application, DOE stated that it 

already had ‘‘conducted a full public 

interest review under NGA section 3(a)’’ 

for Sabine Pass’s long-term non-FTA 

authorization.22 Next, DOE noted that 

Sabine Pass was seeking only to export 

a non-additive portion of its total export 

volume over the two-year period. DOE 

found: 

Provided that the volumes proposed for 

export . . . when added to any volumes 

exported under Sabine Pass’ long-term export 

authorization, do not exceed [the approved 

long-term export volume] on an annual (i.e., 

consecutive 12 month) basis, the public 

interest impacts of the total exports will not 

increase as a consequence of our approval of 

the Application in this proceeding.23

On this basis, DOE concluded that ‘‘no 

additional public interest review 

beyond that conducted in the earlier 

non-FTA export proceedings is 

warranted.’’ 24

In the ordering paragraphs for Sabine 

Pass’s short-term order, DOE specified 

that Sabine Pass was authorized to 

export the requested LNG ‘‘pursuant to 

transactions that have terms of no longer 

than two years.’’ 25 DOE also required 

that ‘‘[t]he volume of LNG authorized 

for export to non-FTA countries in this 

Order, when combined with the volume 

of LNG approved for export in [Sabine 

Pass’s long-term non-FTA order] shall 

not exceed [the total approved non-FTA 

volume] during any consecutive 12- 

month period.’’ 26

Under this framework, DOE has 

issued 13 additional short-term 

authorizations to supplement one or 

more existing long-term authorizations 

for the same facility (or facilities) and 

authorization holder. To maintain this 

export authority, authorization holders 

are required to apply for new short-term 

orders—and DOE is required to process 

and review those applications—every 

two years.27 Five of these short-term 

orders are currently active, including 

Sabine Pass’s most recent short-term 


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Federal Register / Vol. 86, No. 7 / Tuesday, January 12, 2021 / Rules and Regulations 2245 

28Sabine Pass Liquefaction, LLC, DOE/FE Order 

No. 4487, FE Docket No. 19–133–LNG, Order 

Granting Blanket Authorization to Export Liquefied 

Natural Gas to Free Trade Agreement and Non-Free 

Trade Agreement Nations, at 14–15 (Jan. 15, 2020) 

(Ordering Paras. A, B). 

29See, e.g., id. at 12. 

30See, e.g., id. at 12–13. 

31See, e.g., id. at 12–13, 14 (Findings Para. (3)). 

32 10 CFR part 1021, Subpt. D, App. B, Categorical 

Exclusion B5.7) (providing a categorical exclusion 

where approvals or disapprovals of authorizations 

to import or export natural gas under NGA section 

3 involve minor operational changes, but not new 

construction). DOE notes that, on January 4, 2021, 

an amended form of this B5.7 categorical exclusion 

will take effect. See U.S. Dep’t of Energy, National 

Environmental Policy Act Implementing 

Procedures; Final Rule, 85 FR 78197 (Dec. 4, 2020) 

(effective date of Jan. 4, 2021). 

33See supra note 21. 

34Cf. U.S. Dep’t of Energy, Office of Fossil 

Energy, LNG Monthly, at 38 (Nov. 2020), available 

at: https://www.energy.gov/sites/prod/files/2020/ 

11/f80/LNG%20Monthly%202020_4.pdf (defining 

‘‘commissioning cargoes’’ as ‘‘pre-commercial 

cargos loaded while export facility operations are 

still undergoing final testing and inspection,’’ and 

stating that ‘‘[c]ommissioning cargos may occur 

multiple times for the same facility as individual 

LNG trains enter service’’). 

35See supra § II.A (discussing DOE’s regulations 

implementing NGA section 3 at 10 CFR part 590). 

36 Indeed, after four years exporting at marketbased levels, the United States has become one of 

the top three LNG exporters in the world. See Term 

Extension Policy Statement, 85 FR 52244 (Aug. 25, 

2020). 

37 DOE recently discussed the benefits associated 

with increasing operational flexibility for U.S. 

exporters, including but not limited to providing 

economic benefits and improving energy security 

for the United States and its allies. See id. at 85 FR 

52244 (Aug. 25, 2020). 

38As noted, this policy statement does not apply 

to long-term export authorizations involving modes 

of transport other than by marine vessel, including 

but not limited to orders authorizing exports of 

natural gas by pipeline. 

39See U.S. Dep’t of Energy, DOE/FE Order No. 

4641, FE Docket Nos. 10–85–LNG, et al., Order 

Amending Long-Term Authorizations for the Export 

of Natural Gas to Include Short-Term Export 

Authority on a Non-Additive Basis, and Vacating 

Related Short-Term Authority in Separate Orders 

(Dec. 18, 2020). 

order issued in January 2020.28 As 

indicated, each of these orders approves 

the requested short-term exports on a 

non-additive basis to the previously 

approved long-term exports for each 

authorization holder—meaning without 

any increase in the total export volume 

for the respective facility (or facilities). 

Additionally, in every short-term 

order issued for non-FTA exports under 

NGA section 3(a), DOE has evaluated its 

obligations under NEPA. In each order, 

DOE determined that the approval of the 

application ‘‘will not result in any 

incremental environmental impacts as 

compared to the environmental impacts 

previously reviewed’’ for the 

corresponding long-term 

authorization(s).29 DOE also found that 

approval of each application would not 

require additional construction or 

modification to the previously approved 

facilities.30 Accordingly, in every shortterm order for non-FTA exports to date, 

DOE has granted the non-FTA portion of 

the application, in part, based on a 

categorical exclusion from the 

preparation of an EA or EIS under 

NEPA 31 (specifically, categorical 

exclusion B5.7 under DOE’s regulations 

at 10 CFR part 1021, subpart D, 

appendix B).32

III. Policy Statement 

Nearly five years ago, in January 2016, 

DOE issued its first short-term LNG 

export authorization to Sabine Pass to 

supplement its existing long-term LNG 

export authorizations.33 Since that time, 

the U.S. market for natural gas—and, in 

particular, the LNG export market—has 

matured, as has DOE’s understanding of 

the administrative burdens associated 

with implementing its regulatory 

program under NGA section 3. Upon 

review, DOE has determined that it is no 

longer necessary to issue separate longterm and short-term authorizations to 

export natural gas from the same facility 

(or facilities) for the same authorization 

holder. If an authorization holder has a 

long-term export order tied to contracts 

of two years or longer, but wishes to 

export a subset of that approved volume 

on a short-term or spot market basis 

under transactions with terms of less 

than two years (including 

commissioning volumes prior to the 

start of a facility’s commercial 

operations 34), DOE finds that it is 

beneficial to provide both types of 

authority in a single consolidated order 

going forward. 

As an initial matter, DOE’s regulations 

implementing NGA section 3 do not 

address the terms of an applicant’s 

natural gas supply or sales contracts, 

nor do they distinguish between types 

of export authority on this basis.35

Therefore, there is no legal requirement 

for DOE to continue issuing separate 

short-term and long-term authorizations 

on a non-additive basis from the same 

facility. 

DOE also finds that there are no 

practical benefits to continuing to 

separate these types of authorizations. 

DOE developed this approach in 2016 

during a rapidly evolving regulatory 

period for exports of LNG and other 

forms of natural gas. At this point, 

however, DOE’s regulatory practice is 

well established, U.S. companies have 

been exporting domestically produced 

LNG from the lower 48-states around 

the globe for nearly five years,36 and the 

need for U.S. exporters to have 

operational flexibility to compete in the 

global marketplace is greater than 

ever.37 Based on its analysis of the U.S. 

natural gas market, DOE/FE believes 

this action is in the public interest 

under NGA section 3. 

Accordingly, under this policy 

statement, DOE is establishing that 

certain long-term authorizations to 

export domestically produced natural 

gas—including LNG, compressed 

natural gas, and compressed gas 

liquid—will include authority to export 

the same approved volume pursuant to 

transactions with terms of less than two 

years on a non-additive basis (including 

non-additive commissioning volumes to 

be exported prior to the start of a 

facility’s commercial operations). 

This policy statement applies only to 

future long-term authorizations to 

export natural gas.38 Concurrently with 

this policy statement, DOE is issuing a 

blanket order that (i) amends existing 

long-term export authorizations to 

include short-term export authority 

under NGA section 3(a) and (c), and (ii) 

vacates DOE’s existing short-term orders 

(and short-term export authority granted 

in other orders) in light of DOE’s action 

to consolidate this authority in each 

corresponding long-term 

authorization.39 DOE has included a list 

of the affected export authorizations in 

that order. 

IV. Administrative Benefits 

In this policy statement, DOE is not 

proposing any new requirements for 

applicants or authorization holders 

under 10 CFR part 590. Rather, DOE’s 

objective to streamline DOE’s 

administrative process and to minimize 

administrative burdens and uncertainty 

on the U.S. natural gas industry by 

conserving resources that would be 

utilized to apply for and process shortterm export authorizations, respectively, 

without any incremental benefit to the 

public. 

V. Approval of the Office of the 

Secretary 

The Secretary of Energy has approved 

publication of this policy statement. 

Signing Authority 

This document of the Department of 

Energy was signed on December 18, 

2020, by Steven Winberg, Assistant 

Secretary, Office of Fossil Energy, 

pursuant to delegated authority from the 

Secretary of Energy. That document 

with the original signature and date is 

maintained by DOE. For administrative 

purposes only, and in compliance with 

requirements of the Office of the Federal 

Register, the undersigned DOE Federal 

Register Liaison Officer has been 

authorized to sign and submit the 


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2246 Federal Register / Vol. 86, No. 7 / Tuesday, January 12, 2021 / Rules and Regulations 

1 5 U.S.C. 801(a)(1)(A). 

2 5 U.S.C. 804(3). 

document in electronic format for 

publication, as an official document of 

the Department of Energy. This 

administrative process in no way alters 

the legal effect of this document upon 

publication in the Federal Register. 

Signed in Washington, DC, on December 

21, 2020. 

Treena V. Garrett, 

Federal Register Liaison Officer, U.S. 

Department of Energy. 

[FR Doc. 2020–28599 Filed 1–11–21; 8:45 am] 

BILLING CODE 6450–01–P 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Part 308 

RIN 3064–AF69 

FDIC Rules of Practice and Procedure; 

Technical Revisions 

AGENCY: Federal Deposit Insurance 

Corporation. 

ACTION: Final rule. 

SUMMARY: The Federal Deposit 

Insurance Corporation (FDIC) is 

amending its rules of practice and 

procedure to codify the agency’s 

longstanding practice of having certain 

adjudicative functions performed by an 

inferior officer of the United States 

appointed by the FDIC’s Board of 

Directors (Board). Additionally, the 

FDIC is making other technical edits to 

its rules of practice and procedure to 

update references to certain positions 

within the FDIC Legal Division whose 

titles are outdated. 

DATES: The final rule is effective on 

January 12, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Romulus A. Johnson, Counsel, Legal 

Division, (202) 898–3820, romjohnson@

fdic.gov; Josephine M. Bahn, Senior 

Attorney, Legal Division, (202) 898– 

6576, jbahn@fdic.gov; or Nicholas S. 

Kazmerski, Counsel, Legal Division, 

(202) 898–3524, nkazmerski@fdic.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Administrative enforcement 

proceedings brought by the FDIC are 

subject to the Administrative Procedure 

Act (APA), 5 U.S.C. 551 et seq., and the 

FDIC Rules of Practice and Procedure, 

12 CFR part 308. Under part 308, 

evidentiary hearings and related 

proceedings are generally presided over 

by an Administrative Law Judge (ALJ). 

See generally, 5 U.S.C. 556; 12 CFR 

308.5, and 308.3. Additionally, part 308 

provides that certain procedural and 

adjudicative functions are reserved to 

the Executive Secretary of the FDIC. 

These functions include but are not 

limited to: (1) Serving in place of an ALJ 

when no ALJ has jurisdiction over an 

administrative proceeding; (2) issuing 

rulings in certain administrative 

proceedings; and (3) serving as the 

custodian of records for administrative 

proceedings. See generally, 12 CFR 

308.102(b) and 308.105. 

On June 21, 2018, the U.S. Supreme 

Court held that the ALJs employed by 

the U.S. Securities and Exchange 

Commission (SEC) were ‘‘inferior 

officers’’ of the United States under the 

Appointments Clause of the United 

States Constitution because these ALJs 

hold a continuing office established by 

law, and they exercise ‘‘significant 

discretion’’ in connection with certain 

‘‘important functions’’ when presiding 

over administrative hearings. Lucia v. 

SEC, 138 S. Ct. 2044, 2053–2054 (2018) 

(Lucia). As inferior officers, the 

Supreme Court held that the SEC’s ALJs 

are ‘‘subject to the Appointments Clause 

and as such, can only be appointed by 

the President, ‘‘Courts of Law’’ or 

‘‘Heads of Departments.’’ See, Lucia, 

138 S. Ct. 2044, 2046. 

Although the Lucia decision did not 

directly affect the FDIC or the ALJs for 

the FDIC, the Board nevertheless elected 

to formally appoint the ALJs that 

preside over FDIC enforcement 

proceedings. The ALJs who were 

serving at the time of the Lucia decision 

were appointed by the Board on July 19, 

2018. See FDIC Board Resolution 

085152. Since that time, the Board has 

appointed all ALJs that preside over 

FDIC enforcement proceedings. 

Since the Lucia decision, the FDIC has 

received questions regarding whether 

the FDIC’s Executive Secretary was also 

appointed in a manner consistent with 

the Supreme Court’s ruling in Lucia. In 

fact, the Board duly appointed the 

FDIC’s current Executive Secretary as an 

inferior officer on June 22, 1997, 

pursuant to Article II of the United 

States Constitution and 12 U.S.C. 

1819(a) (Fifth) (allowing the FDIC to 

‘‘appoint by its Board of Directors such 

officers and employees as are not 

otherwise provided for in this chapter’’). 

Nonetheless, in the interest of 

transparency and to assuage any 

outstanding concerns about this issue, 

we are amending part 308 to clarify and 

to expressly provide that such 

adjudicative functions will continue to 

be performed by an inferior officer of 

the United States (Administrative 

Officer) that has been duly appointed by 

the Board. 

In addition to clarifying that these 

adjudicative functions are performed by 

an Administrative Officer that is duly 

appointed by the Board, the FDIC is 

making technical changes to part 308 to 

update outdated references to certain 

position titles. 

II. Exemption From Public Notice and 

Comment 

Section 553 of the Administrative 

Procedure Act (APA) (5 U.S.C. 553) sets 

forth requirements for providing the 

general public notice of, and the 

opportunity to comment on, proposed 

agency rules. However, unless notice or 

hearing is required by statute, those 

requirements do not apply to 

interpretive rules, general statements of 

policy, or rules of agency organization, 

procedure, or practice. See 5 U.S.C. 

553(b)(A). 

The FDIC is updating part 308, its 

rules of practice and procedure, to 

substitute the Administrative Officer for 

the Executive Secretary in multiple 

places. Since the changes relate to 

agency organization, procedure, or 

practice, the rules are being published 

in final form without public notice and 

comment. 

III. Regulatory Analysis 

A. Congressional Review Act 

Under the Congressional Review Act 

(CRA), ‘‘[b]efore a rule can take effect, 

the Federal agency promulgating such 

rule shall submit to each House of the 

Congress and to the Comptroller General 

a report containing—(i) a copy of the 

rule; (ii) a concise general statement 

relating to the rule, including whether it 

is a major rule; and (iii) the proposed 

effective date of the rule.’’ 1 The CRA 

further defines the term ‘‘rule’’ as 

having ‘‘the meaning given such term in 

section 551, except that such term does 

not include—(A) any rule of particular 

applicability . . . ; (B) any rule relating 

to agency management or personnel; or 

(C) any rule of agency organization, 

procedure, or practice that does not 

substantially affect the rights or 

obligations of non-agency parties.’’ 2

The FDIC is updating part 308, its 

rules of practice and procedure, to 

clarify that certain adjudicative 

functions, specified in part 308 as being 

performed by the FDIC’s Executive 

Secretary or Assistant Executive 

Secretary, will be performed by an 

‘‘Administrative Officer’’ or ‘‘Assistant 

Administrative Officer’’ who has been 

duly appointed by the Board. 

Additionally, the FDIC is updating 

outdated references to certain position 

titles in part 308. These amendments do 

not constitute substantive changes, but 

merely conform the titles in the 


khammond on DSKJM1Z7X2PROD with RULES