Federal Register / Vol. 65, No. 106 / Thursday, June 1, 2000 / Rules and Regulations 34921

Regulatory Flexibility Certification

As required by the Regulatory

Flexibility Act of 1980, 5 U.S.C. 605(b),

the Commission certifies that this final

rule does not have a significant

economic impact on a substantial

number of small entities. This final rule

would affect only the licensing and

operation of nuclear power plants. The

companies that own these plants do not

fall within the definition of ‘‘small

entities’’ found in the Regulatory

Flexibility Act or within the size

standards established by the NRC in 10

CFR 2.810.

Backfit Analysis

The NRC has determined that the

backfit rule in 10 CFR 50.109 does not

apply to this final rule and that a backfit

analysis is not required for this

amendment because the change does

not involve any provisions that impose

backfits as defined in 10 CFR

50.109(a)(1). The final rule establishes

an alternative approach for ECCS

performance evaluations that may be

voluntarily adopted by licensees.

Licensees may continue to comply with

existing requirements in Appendix K.

The final rule does not impose a new

requirement on current licensees and

therefore, does not constitute a backfit

as defined in 10 CFR 50.109(a)(1).

Small Business Regulatory Enforcement

Fairness Act

In accordance with the Small

Business Regulatory Enforcement

Fairness Act of 1996, the NRC has

determined that this action is a major

rule and has verified this determination

with the Office of Information and

Regulatory Affairs of‘OMB.

List of Subjects in 10 CFR Part 50

Antitrust, Classified information,

Criminal penalties, Fire protection,

Intergovernmental relations, Nuclear

power plants and reactors, Radiation

protection, Reactor siting criteria,

Reporting and recordkeeping

requirements.

For the reasons set out in the

preamble and under the authority of the

Atomic Energy Act of 1954, as amended;

the Energy Reorganization Act of 1974,

as amended; and 5 U.S.C. 552 and 553,

the NRC is adopting the following

amendments to 10 CFR part 50.

PART 50—DOMESTIC LICENSING OF

PRODUCTION AND UTILIZATION

FACILITIES

1. The authority citation for part 50

continues to read as follows:

Authority: Sections 102, 103, 104, 105,

161, 182, 183, 186, 189, 68 Stat. 936, 937,

938, 948, 953, 954, 955, 956, as amended,

sec. 234, 83 Stat. 444, as amended (42 U.S.C.

2132, 2133, 2134, 2135, 2201, 2232, 2233,

2236, 2239, 2282); secs. 201, as amended,

202, 206, 88 Stat. 1242, as amended, 1244,

1246 (42 U.S.C. 5841, 5842, 5846).

Section 50.7 also issued under Pub. L. 95–

601, sec. 10, 92 Stat. 2951 (42 U.S.C. 5851).

Section 50.10 also issued under secs. 101,

185, 68 Stat. 955, as amended (42 U.S.C.

2131, 2235), sec. 102, Pub. L. 91–190, 83 Stat.

853 (42 U.S.C. 4332). Sections 50.13,

50.54(dd), and 50.103 also issued under sec.

108, 68 Stat. 939, as amended (42 U.S.C.

2138). Sections 50.23, 50.35, 50.55, and 50.56

also issued under sec. 185, 68 Stat. 955 (42

U.S.C. 2235). Sections 50.33a, 50.55a, and

Appendix Q also issued under sec. 102, Pub.

L. 91–190, 83 Stat. 853 (42 U.S.C. 4332).

Sections 50.34 and 50.54 also issued under

sec. 204, 88 Stat. 1245 (42 U.S.C. 5844).

Sections 50.58, 50.91, and 50.92 also issued

under Pub. L. 97–415, 96 Stat. 2073 (42

U.S.C. 2239). Section 50.78 also issued under

sec. 122, 68 Stat. 939 (42 U.S.C. 2152).

Sections 50.80–50.81 also issued under sec.

184, 68 Stat. 954, as amended (42 U.S.C.

2234). Appendix F also issued under sec.

187, 68 Stat. 955 (42 U.S.C. 2237).

2. Appendix K to part 50 is amended

by revising the introductory paragraph

of I. A., ‘‘Sources of heat during the

LOCA,’’ to read as follows:

Appendix K to Part 50—ECCS

Evaluation Models

I. Required and Acceptable Features of the

Evaluation Models

A. Sources of heat during the LOCA. For

the heat sources listed in paragraphs I.A.1 to

4 of this appendix it must be assumed that

the reactor has been operating continuously

at a power level at least 1.02 times the

licensed power level (to allow for

instrumentation error), with the maximum

peaking factor allowed by the technical

specifications. An assumed power level

lower than the level specified in this

paragraph (but not less than the licensed

power level) may be used provided the

proposed alternative value has been

demonstrated to account for uncertainties

due to power level instrumentation error. A

range of power distribution shapes and

peaking factors representing power

distributions that may occur over the core

lifetime must be studied. The selected

combination of power distribution shape and

peaking factor should be the one that results

in the most severe calculated consequences

for the spectrum of postulated breaks and

single failures that are analyzed.

* * * * *

Dated at Rockville, Maryland, this 26th day

of May 2000.

For the Nuclear Regulatory Commission.

J. Samuel Walker,

Acting Secretary of the Commission.

[FR Doc. 00–13745 Filed 5–31–00; 8:45 am]

BILLING CODE 7590–01–P

NATIONAL CREDIT UNION

ADMINISTRATION

12 CFR Part 745

Share Insurance and Appendix

AGENCY: National Credit Union

Administration (NCUA).

ACTION: Final rule.

SUMMARY: The NCUA is issuing a final

rule amending its share insurance rules.

The amendments simplify and clarify

these rules and provide parity between

them and the Federal Deposit Insurance

Corporation’s (FDIC) deposit insurance

rules. Specifically, the amendments:

increase available share insurance

coverage on some revocable trust

accounts; simplify the method for

determining the insurance coverage a

member has in one or more joint

accounts; treat a revocable trust account

held in connection with a living trust as

any other revocable trust accounts, if the

living trust meets all requirements

pertaining to revocable trusts; provide

separate insurance coverage for

qualifying joint revocable trust

accounts; treat Roth IRAs as traditional

IRAs and Education IRAs as irrevocable

trusts for insurance purposes; liberalize

insurance coverage for some kinds of

public unit accounts; clarify the degree

of control state or local law has on share

insurance determinations and revise the

substance and format of the Appendix

to part 745.

DATES: This rule is effective July 3,

2000.

ADDRESSES: National Credit Union

Administration, 1775 Duke Street,

Alexandria, VA 22314–3428.

FOR FURTHER INFORMATION CONTACT:

Frank S. Kressman, Staff Attorney,

Division of Operations, Office of

General Counsel, at the above address,

or telephone: (703) 518–6540.

SUPPLEMENTARY INFORMATION:

A. Background

In accordance with NCUA’s

regulatory review process, at year end

1998, NCUA staff identified part 745 as

one of its regulations in need of

updating, clarification and

simplification. On April 15, 1999, the

NCUA Board issued an interim final

rule adopting changes to its share

insurance rules regarding joint accounts

and revocable trust accounts. 64 FR

19685 (April 22, 1999). The FDIC

adopted similar changes to its deposit

insurance rules on March 23, 1999. 64

FR 15653 (April 1, 1999). When issuing

the interim rule, NCUA was aware that

additional changes to part 745 were

necessary and would be forthcoming,

34922 Federal Register / Vol. 65, No. 106 / Thursday, June 1, 2000 / Rules and Regulations

but believed it was important to

implement the interim rule at that time

to maintain parity between NCUA’s and

FDIC’s insurance programs.

Subsequently, NCUA conducted a more

comprehensive review of part 745.

NCUA issued a proposed rule on

November 18, 1999 that suggested

additional amendments as discussed

below. 64 FR 66812 (November 30,

1999).

The interim and proposed rules

solicited comments from the public.

Those comments have been given

careful consideration and are reflected

in the final amendments to the interim

and proposed rules discussed below.

1. Interim Rule

The interim rule amended the share

insurance rules pertaining to revocable

trust accounts and joint accounts.

Revocable trust accounts are accounts

that evidence an intention on the part of

the owner to pass funds onto one or

more beneficiaries upon the owner’s

death. They include payable-on-death

accounts, and tentative or ‘‘Totten’’ trust

accounts. Prior to the interim rule, these

accounts were insured separately from

other accounts of the owner only if the

beneficiary was the owner’s spouse,

child or grandchild. If there were

multiple beneficiaries, and each

beneficiary was either a spouse, child or

grandchild of the owner, then the

account would have been insured up to

$100,000 for each beneficiary. For

example, if an account was held by a

husband ‘‘in trust for’’ his wife and

three children, then the account would

have been insured for up to $400,000.

That coverage was separate from any

insurance the husband, wife or children

may have had on their own accounts.

For these accounts, insurance was

provided on a per beneficiary basis for

the spouse, child or grandchild. If,

however, prior to the interim rule, a

credit union member named a parent or

sibling as a beneficiary, a common

practice particularly for single

individuals, then the account would

have been added to the individual

account of the owner and insured up to

$100,000. There was no separate

coverage for those beneficiaries even

though there was a close familial

relationship.

The interim rule added parents and

siblings to the list of family members

who qualify as beneficiaries for separate

coverage. The interim rule also clarified

that the degree of kinship for named

beneficiaries includes relationships

through blood, adoption or by virtue of

remarriage.

Prior to the interim rule, NCUA’s joint

account regulation did not expressly

refer to a two-step process in

determining insurance coverage for

those accounts, as did the FDIC’s rule.

Insurance coverage was determined,

however, by applying two regulatory

subsections where an individual had

several joint accounts, some with

different joint owners. First, under

§ 745.8(d), joint accounts with the same

combination of owners were added

together and insured up to $100,000.

Even though there was more than one

account, if the owners were the same,

the accounts were treated as one. Then,

under § 745.8(e), a person’s interest in

all joint accounts he or she owned with

different combinations of owners was

added together and insured up to

$100,000. Thus, NCUA followed the

same type of two-step process used by

the FDIC.

The application of this process

resulted in certain inequities. If a person

had ownership interests in several

different joint accounts, each with a

different combination of joint owners,

his or her interest in each of those

accounts would have been added

together and insured to $100,000. The

same would have been done for each of

the other joint owners as well. If

instead, that person had had one or

more joint accounts with the same

combination of joint owners, the

maximum insurance available to all of

those joint owners combined would

have been limited to $100,000. Thus, in

one instance, each joint owner’s interest

could have been insured up to $100,000,

while in the other, total coverage on the

account was limited to $100,000,

notwithstanding the amount of each of

the joint owner’s interest.

The interim rule simplified coverage

on joint accounts. It is no longer

necessary to add together all joint

accounts owned by the same

combination of individuals. Under the

interim rule, each person’s interest in all

qualifying joint accounts will be added

together and insured to a maximum of

$100,000. The interim rule also

eliminated the signature requirement for

share certificates and accounts

maintained by certain fiduciaries for

joint owners as long as the credit

union’s records reflect that there are

joint owners.

2. Proposed Rule

The proposed rule suggested

amendments to the share insurance

rules regarding living trusts, joint

revocable trusts, IRA accounts, public

unit accounts, guardian accounts, the

application of local law to share

insurance determinations and the

substance and format of the Appendix

to part 745.

A living trust is a formal trust that an

owner creates and retains control over

during his or her lifetime. NCUA

proposed to treat a revocable trust

account that is held in connection with

a living trust in the same manner it

treats all other revocable trust accounts,

if the living trust otherwise meets all

requirements pertaining to revocable

trust accounts. Living trusts that include

conditions that could prevent a

beneficiary from acquiring a vested and

non-contingent interest in the account

funds upon the owner’s death, however,

would not qualify for this coverage.

Joint revocable trust accounts are

revocable trust accounts, as described in

§ 745.4 of NCUA’s regulations,

established by more than one owner and

held for the benefit of others. NCUA

proposed to provide separate insurance

coverage for qualifying accounts of this

kind.

NCUA also proposed to clarify the

degree of control that state or local law

has on share insurance determinations

to maintain uniform national rules and

consistent insurance determinations.

When the proposed rule was issued,

§ 745.2(a) provided that, to the extent

local law enters into a share insurance

determination, the law of the

jurisdiction in which the insured credit

union’s principal office is located will

govern. The proposal indicated that this

meant the law of the jurisdiction in

which the insured credit union’s

principal office is located will control

over the law of other jurisdictions where

the insured credit union may have

branch offices or service facilities. It

further clarified that this provision in no

way effects the supremacy of federal

law.

NCUA proposed to include Roth IRAs

and Education IRAs among member

accounts eligible for share insurance.

Federal tax laws first made these

accounts available to consumers on

January 1, 1998. The proposal also

stated that although both are

colloquially known as IRA accounts,

only Roth IRAs would be treated as

traditional IRAs, for share insurance

purposes, under § 745.9–2 of NCUA’s

regulations. Education IRAs would be

treated as irrevocable trust accounts, for

share insurance purposes, under

§ 745.9–1 of NCUA’s regulations.

NCUA proposed to liberalize its share

insurance coverage for some kinds of

public unit accounts. At the time the

proposal was issued, public funds were

generally separately insured up to

$100,000 if invested by an official

custodian of funds of: (1) The United

States; (2) any state of the United States

or any county, municipality, or political

subdivision thereof; (3) the District of

Federal Register / Vol. 65, No. 106 / Thursday, June 1, 2000 / Rules and Regulations 34923

Columbia; (4) specified territories or

possessions of the United States; and (5)

tribal funds of any Indian tribe. NCUA

proposed to distinguish share draft

accounts from share certificate and

regular share accounts in this context.

The result would be to provide separate

insurance coverage up to $100,000 for

share draft accounts, and up to an

additional $100,000 for share certificate

and regular share accounts combined.

This more liberal coverage would only

be available where an official custodian

establishes public unit accounts in an

authorized, federally-insured credit

union that is located within the

jurisdiction from which the custodian’s

authority is derived. Accounts

established outside of that jurisdiction

would be limited to the current

$100,000 limit without regard to

whether the funds are held in share

draft accounts or share certificate and

regular share accounts.

Funds held in the name of a guardian,

custodian or conservator for the benefit

of a ward or minor are insured up to

$100,000 in the aggregate, separately

from any other accounts of the guardian,

custodian, conservator, ward or minor.

FDIC, however, treats these accounts as

agency or nominee accounts and does

not provide separate insurance

coverage. Rather, FDIC adds the

guardian account together with the

individual accounts of the beneficiary of

the guardian account and insures that

aggregate up to $100,000. NCUA

proposed to treat these accounts in a

manner consistent with FDIC’s

treatment. This would have resulted in

a reduction in insurance coverage.

The Appendix to part 745 provides

examples that illustrate the application

of share insurance coverage. The

Appendix is not expected to answer

every share insurance question that

could conceivably be asked. Rather, its

function is to address and clarify the

most common insurance coverage issues

in a simple and manageable format.

NCUA proposed to enhance the

usefulness of the Appendix by

incorporating additional information

and examples and putting it into an easy

to read question-and-answer format.

B. Summary of Comments

1. Interim Rule

NCUA received twelve comment

letters regarding the interim rule. Four

from credit union trade associations,

three from federal credit unions, two

from banking trade associations, one

from a state chartered credit union, one

from an association of state credit union

supervisors and one from a law firm. All

of the commenters generally supported

the interim rule. The commenters also

raised other points.

Eight commenters offered their

opinions whether examples illustrating

insurance coverage should be moved to

the body of the regulations or kept in

their present location in the Appendix

to the regulations. There was an even

split of opinion among the commenters.

The examples will remain in the

Appendix where they are easily

accessible and cannot be confused as

part of the regulatory language.

Three commenters expressed concern

over NCUA’s use of the term ‘‘revocable

trust account.’’ They noted that there are

many different terms used to describe

this kind of account and that this might

cause confusion among some credit

unions. NCUA believes the language

used in § 745.4 of NCUA’s rules will

minimize any confusion in this context.

Additionally, ‘‘revocable trust account’’

is the term used in the FDIC’s deposit

insurance rules and its use in NCUA’s

rules should avoid confusion for the

public when comparing coverage.

Several general comments pertaining

to livings trusts and joint revocable

trusts were also received in connection

with the interim rule. Those comments

have been considered in conjunction

with the comments to the proposed rule

as discussed below.

2. Proposed Rule

NCUA received seventeen comment

letters regarding the proposed rule.

Eight from credit union trade

associations, seven from federal credit

unions, one from an association of state

credit union supervisors and one from

a banking trade association. All of the

commenters generally supported the

proposed rule. The commenters also

raised other points.

Three commenters expressed concern

over the proposal to exclude from

revocable trust insurance coverage any

living trust that includes conditions that

could prevent a beneficiary from

acquiring a vested and non-contingent

interest in the account funds upon the

owner’s death. Specifically, they noted

that credit unions might have difficulty

determining whether a living trust

contains such a defeating contingency.

NCUA does not intend for credit unions

to make this kind of determination. The

burden is on the member to create a

living trust that qualifies for insurance

coverage. Credit unions may choose to

advise members to have their living

trusts reviewed by private counsel for

legal and regulatory sufficiency prior to

account opening.

Two commenters asked NCUA to

clarify how a one-owner living trust

account or other revocable trust account

would be insured if there were

qualifying and non-qualifying

beneficiaries. Assuming the living trust

is treated as any other revocable trust

account and eligible for coverage, shares

in the account attributable to the

qualifying beneficiaries would be

insured up to $100,000 for each

qualifying beneficiary. Shares in the

account attributable to the nonqualifying beneficiaries would be added

to any individual accounts of the owner

and insured up to $100,000.

Two commenters questioned whether

the Education IRA should be insured as

an irrevocable trust because, under

some circumstances, the beneficiary of

an Education IRA could be changed to

a member of the designated

beneficiary’s family. The structure and

exclusive purpose of Education IRAs,

and the restrictions imposed on them by

the Internal Revenue Service,

demonstrate that these trusts are

irrevocable in nature. We do not believe

a limited ability to change beneficiaries

diminishes the irrevocable nature of

these trusts or warrants treating them as

anything other than irrevocable. The

FDIC also insures Education IRAs as

irrevocable trusts.

Nine commenters strongly opposed

the proposal to eliminate separate

insurance coverage for guardian

accounts. They contended that separate

insurance for guardian accounts poses

no threat to the National Credit Union

Share Insurance Fund and that

eliminating separate coverage would

create more confusion and problems for

credit union members than achieve

good. They also noted that, while parity

between NCUA’s and FDIC’s insurance

is generally desirable, the two programs

need not be identical especially to the

detriment of credit union members. We

find these arguments persuasive.

Accordingly, NCUA has determined not

to take action to eliminate the existing

separate coverage for custodial accounts

at this time.

C. Regulatory Procedures

Regulatory Flexibility Act

The Regulatory Flexibility Act

requires NCUA to prepare an analysis to

describe any significant economic

impact any final regulation may have on

a substantial number of small entities.

For purposes of this analysis, credit

unions under $1 million in assets will

be considered small entities. As of June

30, 1999, there were 1,690 such entities

with a total of $807.3 million in assets,

with an average asset size of $0.5

million. These small entities make up

15.6 percent of all credit unions, but

34924 Federal Register / Vol. 65, No. 106 / Thursday, June 1, 2000 / Rules and Regulations

only 0.2 percent of all credit union

assets.

The NCUA Board has determined and

certifies that this final rule will not have

a significant economic impact on a

substantial number of small entities.

The reason for this determination is that

the final rule clarifies and simplifies the

share insurance regulations. It does not

impose any additional costs or

significant regulatory requirements on

small entities. Accordingly, the NCUA

has determined that a Regulatory

Flexibility Analysis is not required.

Paperwork Reduction Act

NCUA has determined that the final

amendments do not increase paperwork

requirements under the Paperwork

Reduction Act of 1995 and regulations

of the Office of Management and

Budget.

Executive Order 13132

Executive Order 13132 encourages

independent regulatory agencies to

consider the impact of their regulatory

actions on state and local interests. In

adherence to fundamental federalism

principles, NCUA, an independent

regulatory agency as defined in 44

U.S.C. 3502(5), voluntarily complies

with the executive order. This rule will

apply to all federally-insured credit

unions, but it will not have substantial

direct effect on the states, on the

relationship between the national

government and the states, or on the

distribution of power and

responsibilities among the various

levels of government. NCUA has

determined that this rule does not

constitute a policy that has federalism

implications for purposes of the

executive order.

Assessment of Federal Regulations and

Policies on Families

NCUA has determined that this rule

will not affect family well-being within

the meaning of Section 654 of the

Treasury and General Government

Appropriations Act, 1999, Pub. L. 105–

277, 112 Stat. 2681 (1998).

Small Business Regulatory Enforcement

Fairness Act

The Small Business Regulatory

Enforcement Fairness Act of 1996 (Pub.

L. 104–121) provides generally for

congressional review of agency rules. A

reporting requirement is triggered in

instances where NCUA issues a final

rule as defined by Section 551 of the

Administrative Procedure Act. 5 U.S.C.

551. The Office of Management and

Budget has determined that this rule is

not a major rule for purposes of the

Small Business Regulatory Enforcement

Fairness Act of 1996.

List of Subjects

12 CFR Part 745

Credit unions, Pension plans, Share

insurance, Trustee.

By the National Credit Union

Administration Board, this 24th day of May

2000.

Becky Baker,

Secretary of the Board.

For the reasons stated above, the

interim final rule amending 12 CFR part

745 that was published at 64 FR 19685

on April 22, 1999 is adopted as a final

rule without change. NCUA also

amends 12 CFR part 745 as follows:

PART 745—SHARE INSURANCE AND

APPENDIX

1. The authority citation for part 745

continues to read as follows:

Authority: 12 U.S.C. 1752(5), 1757, 1765,

1766, 1781, 1782, 1787, 1789.

2. Section 745.2(a) is amended by

revising the last sentence to read as

follows:

§ 745.2 General principles applicable in

determining insurance of accounts.

(a) * * * While the provisions of this

part govern in determining share

insurance coverage, to the extent local

law enters into a share insurance

determination, the local law of the

jurisdiction in which the insured credit

union’s principal office is located will

control over the local law of other

jurisdictions where the insured credit

union has offices or service facilities.

* * * * *

3. Section 745.4 is amended by

adding paragraphs (e) and (f) to read as

follows:

§ 745.4 Revocable trust accounts.

* * * * *

(e) Living trusts. Insurance treatment

under this section also applies to

revocable trust accounts held in

connection with a so-called ‘‘living

trust,’’ meaning a formal trust that an

owner creates and retains control over

during his or her lifetime. If a named

beneficiary in a living trust is a

qualifying beneficiary under this

section, then the share account held in

connection with the living trust may be

eligible for share insurance under this

section, assuming compliance with all

the provisions of this part. If the living

trust includes a defeating contingency

that relates to a beneficiary’s interest in

the trust assets, then insurance coverage

under this section will not be provided.

For purposes of this section, a defeating

contingency is defined as a condition

that would prevent the beneficiary from

acquiring a vested and non-contingent

interest in the funds in the share

account upon the owner’s death.

(f) Joint revocable trust accounts.

Where an account described in

paragraph (a) of this section is

established by more than one owner and

held for the benefit of others, some or

all of whom are within the qualifying

degree of kinship, the respective

interests of each owner held for the

benefit of each qualifying beneficiary

will be separately insured up to

$100,000. The interest of each co-owner

will be deemed equal unless otherwise

stated in the share account records of

the federally-insured credit union.

Interests held for non-qualifying

beneficiaries will be added to the

individual accounts of the owners.

Where a husband and a wife establish

a revocable trust account naming

themselves as the sole beneficiaries, the

account will not be insured according to

the provisions of this section, but will

instead be insured in accordance with

the joint account provisions of § 745.8.

4. Section 745.9–1 is amended by

adding paragraph (c) to read as follows:

§ 745.9–1 Trust accounts.

* * * * *

(c) This section applies to trust

interests created in Education IRAs

established in connection with section

530 of the Internal Revenue Code (26

U.S.C. 530).

5. Section 745.9–2(a) is revised to

read as follows:

§ 745.9–2 IRA/Keogh accounts.

(a) The present vested ascertainable

interest of a participant or designated

beneficiary in a trust or custodial

account maintained pursuant to a

pension or profit-sharing plan described

under section 401(d) (Keogh account),

section 408(a) (IRA) and section 408A

(Roth IRA) of the Internal Revenue Code

(26 U.S.C. 401(d), 408(a) and 408A) will

be insured up to $100,000 separately

from other accounts of the participant or

designated beneficiary. For insurance

purposes, IRA and Roth IRA accounts

will be combined together and insured

in the aggregate up to $100,000. A

Keogh account will be separately

insured from an IRA account, Roth IRA

account or, where applicable, aggregated

IRA and Roth IRA accounts.

* * * * *

6. Section 745.10 is amended by

revising paragraphs (a)(1) through (a)(5)

and (b) and adding a second sentence to

paragraph (c) to read as follows:

Federal Register / Vol. 65, No. 106 / Thursday, June 1, 2000 / Rules and Regulations 34925

§ 745.10 Public unit accounts.

(a) * * *

(1) Each official custodian of funds of

the United States lawfully investing the

same in a federally-insured credit union

will be separately insured in the amount

of:

(i) Up to $100,000 in the aggregate for

all share draft accounts; and

(ii) Up to $100,000 in the aggregate for

all share certificate and regular share

accounts;

(2) Each official custodian of funds of

any state of the United States or any

county, municipality, or political

subdivision thereof lawfully investing

the same in a federally-insured credit

union in the same state will be

separately insured in the amount of:

(i) Up to $100,000 in the aggregate for

all share draft accounts; and

(ii) Up to $100,000 in the aggregate for

all share certificate and regular share

accounts;

(3) Each official custodian of funds of

the District of Columbia lawfully

investing the same in a federallyinsured credit union in the District of

Columbia will be separately insured in

the amount of:

(i) Up to $100,000 in the aggregate for

all share draft accounts; and

(ii) Up to $100,000 in the aggregate for

all share certificate and regular share

accounts;

(4) Each official custodian of funds of

the Commonwealth of Puerto Rico, the

Panama Canal Zone, or any territory or

possession of the United States, or any

county, municipality, or political

subdivision thereof lawfully investing

the same in a federally-insured credit

union in Puerto Rico, the Panama Canal

Zone, or any such territory or

possession, respectively, will be

separately insured in the amount of:

(i) Up to $100,000 in the aggregate for

all share draft accounts; and

(ii) Up to $100,000 in the aggregate for

all share certificate and regular share

accounts;

(5) Each official custodian of tribal

funds of any Indian tribe (as defined in

section 3(c) of the Indian Financing Act

of 1974) or agency thereof lawfully

investing the same in a federallyinsured credit union will be separately

insured in the amount of:

(i) Up to $100,000 in the aggregate for

all share draft accounts; and

(ii) Up to $100,000 in the aggregate for

all share certificate and regular share

accounts;

(b) Each official custodian referred to

in paragraphs (a)(2), (3), and (4) of this

section lawfully investing such funds in

share accounts in a federally-insured

credit union outside of their respective

jurisdictions shall be separately insured

up to $100,000 in the aggregate for all

such accounts regardless of whether

they are share draft, share certificate or

regular share accounts.

(c) * * * Where an officer, agent or

employee of a public unit has custody

of certain funds which by law or under

a bond indenture are required to be set

aside to discharge a debt owed to the

holders of notes or bonds issued by the

public unit, any investment of such

funds in an account in a federallyinsured credit union will be deemed to

be a share account established by a

trustee of trust funds of which the

noteholders or bondholders are pro rata

beneficiaries, and the beneficial interest

of each noteholder or bondholder in the

share account will be separately insured

up to $100,000.

* * * * *

7. The appendix to part 745 is

amended by:

A. Adding a heading to the

introductory text;

B. Revising the heading of Part A;

C. Revising the heading of Part B and

adding Example 4;

D. Revising the heading of Part C;

E. Revising the heading of Part D;

F. Revising the heading of Part E, the

first introductory paragraph and

Examples 4 through 7, and adding new

Example 9;

G. Revising the heading of Part F; and

H. Revising the heading of Part G and

the second sentence of the seventh

introductory paragraph.

The additions and revisions read as

follows:

Appendix to Part 745—Examples of

Insurance Coverage Afforded Accounts

in Credit Unions Insured by the

National Credit Union Share Insurance

Fund

What Is the Purpose of This Appendix?

* * * * *

A. How Are Single Ownership Accounts

Insured?

* * * * *

B. How Are Revocable Trust Accounts

Insured?

* * * * *

Example 4

Question: Member H invests $200,000 in a

revocable trust account held in connection

with a living trust with his son, S, and his

daughter, D, as named beneficiaries. What is

the insurance coverage?

Answer: Since S and D are children of H,

the owner of the account, the funds would

normally be insured under the rules

governing revocable trust accounts up to

$100,000 as to each beneficiary (§ 745.4(b)).

However, because this account is held in

connection with a living trust whose named

beneficiaries are qualifying beneficiaries

under § 745.4, it must be scrutinized to

determine whether the account complies

with all other provisions of this part and

whether the living trust contains any

defeating contingencies. Assuming there are

no defeating contingencies and that the

account complies with all other requirements

of this part, then it will be treated as any

other revocable trust. In this instance, it will

be insured up to $100,000 as to each

beneficiary (§ 745.4(e)). Assuming that S and

D have equal beneficial interests ($100,000

each), H is fully insured for this account.

C. How Are Accounts Held by Executors or

Administrators Insured?

* * * * *

D. How Are Accounts Held by a Corporation,

Partnership or Unincorporated Association

Insured?

* * * * *

E. How Are Public Unit Accounts Insured?

For insurance purposes, the official

custodian of funds belonging to a public unit,

rather than the public unit itself, is insured

as the account holder. All funds belonging to

a public unit and invested by the same

custodian in a federally-insured credit union

are categorized as either share draft accounts

or share certificate and regular share

accounts. If these accounts are invested in a

federally-insured credit union located in the

jurisdiction from which the official custodian

derives his authority, then the share draft

accounts will be insured separately from the

share certificate and regular share accounts.

Under this circumstance, all share draft

accounts are added together and insured to

the $100,000 maximum and all share

certificate and regular share accounts are also

added together and separately insured up to

the $100,000 maximum. If, however, these

accounts are invested in a federally-insured

credit union located outside of the

jurisdiction from which the official custodian

derives his authority, then insurance

coverage is limited to $100,000 for all

accounts regardless of whether they are share

draft, share certificate or regular share

accounts. If there is more than one official

custodian for the same public unit, the funds

invested by each custodian are separately

insured. If the same person is custodian of

funds for more than one public unit, he is

separately insured with respect to the funds

of each unit held by him in properly

designated accounts.

* * * * *

Example 4

Question: A city treasurer invests city

funds in each of the following accounts:

‘‘General Operating Account,’’ ‘‘School

Transportation Fund,’’ ‘‘Local Maintenance

Fund,’’ and ‘‘Payroll Fund.’’ Each account is

available to the custodian upon demand. By

administrative direction, the city treasurer

has allocated the funds for the use of and

control by separate departments of the city.

What is the insurance coverage?

Answer: All of the accounts are added

together and insured in the aggregate to

$100,000. Because the allocation of the city’s

34926 Federal Register / Vol. 65, No. 106 / Thursday, June 1, 2000 / Rules and Regulations

funds is not by statute or ordinance for the

specific use of and control by separate

departments of the city, separate insurance

coverage to the maximum of $100,000 is not

afforded to each account (§§ 745.1(d) and

745.10(a)(2)).

Example 5

Question: A, the custodian of retirement

funds of a military exchange, invests

$1,000,000 in an account in an insured credit

union. The military exchange, a nonappropriated fund instrumentally of the

United States, is deemed to be a public unit.

The employees of the exchange are the

beneficiaries of the retirement funds but are

not members of the credit union. What is the

insurance coverage?

Answer: Because A invested the funds on

behalf of a public unit, in his capacity as

custodian, those funds qualify for $100,000

share insurance even though A and the

public unit are not within the credit union’s

field of membership. Since the beneficiaries

are neither public units nor members of the

credit union they are not entitled to separate

share insurance. Therefore, $900,000 is

uninsured (§ 745.10(a)(1)).

Example 6

Question: A is the custodian of the

County’s employee retirement funds. He

deposits $1,000,000 in retirement funds in an

account in an insured credit union. The

‘‘beneficiaries’’ of the retirement fund are not

themselves public units nor are they within

the credit union’s field of membership. What

is the insurance coverage?

Answer: Because A invested the funds on

behalf of a public unit, in his capacity as

custodian, those funds qualify for $100,000

share insurance even though A and the

public unit are not within the credit union’s

field of membership. Since the beneficiaries

are neither public units nor members of the

credit union they are not entitled to separate

share insurance. Therefore, $900,000 is

uninsured (§ 745.10(a)(2)).

Example 7

Question: A county treasurer establishes

the following share draft accounts in an

insured credit union each with $100,000:

‘‘General Operating Fund’’

‘‘County Roads Department Fund’’

‘‘County Water District Fund’’

‘‘County Public Improvement District

Fund’’

‘‘County Emergency Fund’’

What is the insurance coverage?

Answer: The ‘‘County Roads Department,’’

‘‘County Water District’’ and ‘‘County Public

Improvement District’’ accounts would each

be separately insured to $100,000 if the funds

in each such account have been allocated by

law for the exclusive use of a separate county

department or subdivision expressly

authorized by State statute. Funds in the

‘‘General Operating’’ and ‘‘Emergency Fund’’

accounts would be added together and

insured in the aggregate to $100,000, if such

funds are for countywide use and not for the

exclusive use of any subdivision or principal

department of the county, expressly

authorized by State statute (§§ 745.1(d) and

745.10(a)(2)).

* * * * *

Example 9

Question: A, an official custodian of funds

of a state of the United States, lawfully

invests $250,000 of state funds in a federallyinsured credit union located in the state from

which he derives his authority as an official

custodian. What is the insurance coverage?

Answer: If A invested the entire $250,000

in a share draft account, then $100,000

would be insured and $150,000 would be

uninsured. If A invested $125,000 in share

draft accounts and another $125,000 in share

certificate and regular share accounts, then A

would be insured for $100,000 for the share

draft accounts and $100,000 for the share

certificate and regular share accounts leaving

$50,000 uninsured (§ 745.10(a)(2)). If A had

invested the $250,000 in a federally-insured

credit union located outside the state from

which he derives his authority as an official

custodian, then $100,000 would be insured

for all accounts regardless of whether they

were share draft, share certificate or regular

share accounts, leaving $150,000 uninsured

(§ 745.10(b)).

F. How Are Joint Accounts Insured?

* * * * *

G. How Are Trust Accounts and Retirement

Accounts Insured?

* * * * *

* * * Although credit unions may serve as

trustees or custodians for self-directed IRA,

Roth IRA and Keogh accounts, once the

funds in those accounts are taken out of the

credit union, they are no longer insured.

* * * * *

[FR Doc. 00–13510 Filed 5–31–00; 8:45 am]

BILLING CODE 7535–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 2000–NM–109–AD; Amendment

39–11751; AD 2000–11–03]

RIN 2120–AA64

Airworthiness Directives; Dassault

Model Falcon 2000, Mystere-Falcon

900, Falcon 900EX, Fan Jet Falcon,

Mystere-Falcon 50, Mystere-Falcon 20,

and Mystere-Falcon 200 Series

Airplanes

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Final rule; request for

comments.

SUMMARY: This amendment adopts a

new airworthiness directive (AD) that is

applicable to all Dassault Model Falcon

2000, Mystere-Falcon 900, Falcon

900EX, Fan Jet Falcon, Mystere-Falcon

50, Mystere-Falcon 20, and MystereFalcon 200 series airplanes. This action

requires revising the Airplane Flight

Manual to include speed limitations in

the event of failure indications of the

pitch feel system. These limitations are

intended to mitigate severe pitch

oscillations of the airplane.

DATES: Effective June 16, 2000.

The incorporation by reference of

certain publications listed in the

regulations is approved by the Director

of the Federal Register as of June 16,

2000.

Comments for inclusion in the Rules

Docket must be received on or before

July 3, 2000.

ADDRESSES: Submit comments in

triplicate to the Federal Aviation

Administration (FAA), Transport

Airplane Directorate, ANM–114,

Attention: Rules Docket No. 2000–NM–

109–AD, 1601 Lind Avenue, SW.,

Renton, Washington 98055–4056.

Comments may be inspected at this

location between 9 a.m. and 3 p.m.,

Monday through Friday, except Federal

holidays. Comments may also be sent

via the Internet using the following

address: 9-anm-iarcomment@faa.gov.

Comments sent via the Internet must

contain ‘‘Docket No. 2000–NM–109–

AD’’ in the subject line and need not be

submitted in triplicate.

The service information referenced in

this AD may be obtained from Dassault

Falcon Jet, P.O. Box 2000, South

Hackensack, New Jersey 07606. This

information may be examined at the

FAA, Transport Airplane Directorate,

1601 Lind Avenue, SW., Renton,

Washington; or at the Office of the

Federal Register, 800 North Capitol

Street, NW., suite 700, Washington, DC.

FOR FURTHER INFORMATION CONTACT:

Norman B. Martenson, Manager,

International Branch, ANM–116, FAA,

Transport Airplane Directorate, 1601

Lind Avenue, SW., Renton, Washington

98055–4056; telephone (425) 227–2110;

fax (425) 227–1149.

SUPPLEMENTARY INFORMATION: The

Direction Ge ́ne ́rale de l’Aviation Civile

(DGAC), which is the airworthiness

authority for France, recently notified

the FAA that an unsafe condition may

exist on all Dassault Model MystereFalcon 900, Falcon 900EX, Fan Jet

Falcon, Mystere-Falcon 50, MystereFalcon 20, and Mystere-Falcon 200

series airplanes. The DGAC advises that

two Mystere-Falcon 900 series airplanes

have experienced severe pitch

oscillations during descent.

The exact cause of the pitch

oscillation is unknown at this time, and

is still under investigation. However, in

one case, it was considered that failure

of the pitch feel system may have

contributed to the severity of the pitch

oscillations. Since this system is similar