This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

38791

Vol. 65, No. 121

Thursday, June 22, 2000

OFFICE OF PERSONNEL

MANAGEMENT

5 CFR Part 537

RIN 3206–AJ12

Repayment of Student Loans

AGENCY: Office of Personnel

Management.

ACTION: Proposed rulemaking.

SUMMARY: The Office of Personnel

Management (OPM) is proposing

regulations to implement provisions

authorizing Federal agencies to repay

federally insured student loans when

necessary to recruit or retain highly

qualified professional, technical, or

administrative personnel.

DATES: Written comments will be

considered if received no later than

August 21, 2000.

ADDRESSES: Send or deliver written

comments to Carol J. Okin, Associate

Director for Employment, Office of

Personnel Management, Room 6500,

1900 E Street, NW., Washington, DC

20415.

FOR FURTHER INFORMATION CONTACT:

Michael J. Mahoney, (202) 606–0830

(FAX 202–606–0390).

SUPPLEMENTARY INFORMATION: Public

Law 101–510 (National Defense

Authorization Act for Fiscal Year 1991),

section 1206, amends subchapter VII of

5 U.S.C. chapter 53, by adding a new

section 5379. This section authorizes

agencies to establish a program under

which they may agree to repay all or

part of an outstanding federally insured

student loan to facilitate the recruitment

or retention of highly qualified

employees. The repayment authority is one of

several flexibilities made available to

agencies when trying to attract

individuals to the Federal service, or

retain those for whom the Government

has a special need. The Federal

Employees Pay Comparability Act of

1990 authorized agencies to pay

recruitment and relocation bonuses,

retention allowances, and to set pay

above the minimum step of the grade for

individuals with superior qualifications.

Under Public Law 101–510, agencies

may also pay for academic training

leading to a degree. (Final regulations

were published on May 7, 1992, at 57

FR 19515.) When considering monetary

incentives as a recruitment or retention

tool, agencies should carefully weigh

the relative advantages and

disadvantages of each of these pay

authorities.

The student loan repayment law

specifies that OPM prescribe regulations

containing standards and requirements

which would assure uniformity among

agency programs.

The proposed regulations require the

head of each agency to establish an

internal plan that designates agency

officials with authority to review and

approve payments. This plan must also

establish (1) agency criteria for

authorizing payments and determining

the amount of the payment, (2)

procedures for making payments to the

lender (or holder of the loan), (3) a

system for selecting employees to

receive loan repayment benefits that

takes into account merit system

principles, particularly the principle to

treat employees and applicants fairly

and equitably, (4) requirements for

service agreements, and (5)

documentation and recordkeeping

requirements to support effective

internal accountability and external

oversight to ensure that merit principles

have been followed. Outlined below are

the key elements of the student loan

repayment law and OPM

implementation requirements.

Loans Qualifying for Repayment

The repayment authority is limited to

student loans authorized by the Higher

Education Act of 1965 and the Public

Health Service Act. These are federally

insured loans made by educational

institutions or banks and other private

lenders. The Higher Education Act

covers guaranteed student loan

programs such as Stafford Loans,

Supplemental Loans for Students, PLUS

loans and Consolidation Loans, as well

as Perkins Loans (formerly called the

National Direct Student Loan Program).

Loans covered under the Public Health

Service Act include the Nursing Student

Loan Program, the Health Profession

Student Loan Program, and the Health

Education Assistance Loan Program.

Employees Covered

Student loan repayment benefits may

be offered to candidates to whom an

offer of employment has been made, or

to current employees of the agency.

However, employees who are, or will

be, occupying positions outside the

General Schedule are excluded from

receiving repayment benefits, as are

those in positions excepted from the

competitive service because of their

confidential, policy-determining,

policy-making, or policy-advocating

character. (These are generally referred

to as Schedule C positions, and

positions to which individuals are

appointed by the President.)

Payment Limitations

Repayments from an agency to an

individual employee may not exceed

$6,000 in a calendar year, with an

overall lifetime maximum of $40,000

per employee. Each agency will make

direct lump sum payments on behalf of

the employee to the holder of the loan.

The agency will notify the holder, on

behalf of the employee, that the lump

sum payment is to be applied to the

unpaid balance. Loan payments may not

be considered as part of basic pay.

Agencies may not reimburse employees

for payments the employees made prior

to entering into an agreement with the

agency. Loan repayments are

discontinued if the terms of the service

agreement are not met. OPM has

received a ruling from the Internal

Revenue Service (IRS) addressing the

employee’s tax liability for the loan

payments. According to the IRS, loan

payments must be reported as taxable

income and applicable taxes withheld at

the time each or any payment is made.

These withholdings could have a

significant impact on an employee’s

paycheck during the pay period in

which the loan repayment is made.

Agencies should make employees aware

of their tax obligation at the outset.

Agencies are required to report the

amount of the loan repayments, as well

as any FICA related taxes or income

taxes that have been withheld, on a

Form W–2. Agencies should contact the

IRS, Assistant Chief Counsel for Income

Tax and Accounting for more specifics

regarding the tax implications of loan

payments. OPM will be working with

IRS to develop further guidance relating

to the implementation of student loan

repayments prior to the approval of the

final regulations.

38792 Federal Register / Vol. 65, No. 121 / Thursday, June 22, 2000 / Proposed Rules

Employee Service Requirement

An employee selected to receive

repayment benefits must agree in

writing to remain with the agency for a

specified period, not less than 3 years,

unless involuntarily separated. If used

as a recruitment incentive, the specified

period for service requirement begins

when the employee enters on duty. If

used for retention purposes, the agency

must specify when the period is to

begin. In either case, the service

requirement must be stated in the

service agreement. If the involuntary

separation is for misconduct, or the

employee leaves voluntarily prior to

satisfying the service agreement, the

employee must repay the agency which

had been paying the benefit the amount

of any benefits received. The law further

stipulates how this money will be

recovered when the employee fails to

repay the required amount and how

agencies will credit the money to their

appropriation accounts. Repayment by

the employee may not be required if the

employee leaves voluntarily to enter

into the service of another agency,

unless the losing agency informs the

employee that payments must be

returned. The agency may also waive its

right of recovery in the interest of

equity.

Selection Procedures

Agencies must select employees to

receive benefits in accordance with

merit principles.

E.O. 12866, Regulatory Review

This rule has been reviewed by the

Office of Management and Budget in

accordance with Executive Order 12866.

Regulatory Flexibility Act

I certify that this regulation will not

have a significant economic impact on

a substantial number of small entities

because it affects only certain Federal

employees.

List of Subjects in 5 CFR Part 537

Administrative practice and

procedure, Government employees,

Wages.

Office of Personnel Management.

Janice R. Lachance,

Director.

Accordingly, OPM proposes to add

part 537 to Title 5, Code of Federal

Regulations, as follows:

PART 537—REPAYMENT OF STUDENT

LOANS

Sec.

537.101 Purpose.

537.102 Definitions.

537.103 Agency loan repayment plans;

higher level review and approval.

537.104 Employee eligibility.

537.105 Criteria for payment.

537.106 Procedures for making loan

payments.

537.107 Service agreements.

537.108 Loss of eligibility for loan payment

benefits.

537.109 Employee reimbursements to the

Government.

537.110 Records.

Authority: 5 U.S.C. 5379

§ 537.101 Purpose.

This part provides regulations to

implement 5 U.S.C. 5379, which

authorizes agencies to establish a

program under which they may agree to

repay all or part of any outstanding

federally insured student loan or loans

previously taken out by a candidate to

whom an offer of employment has been

made, or a current employee of the

agency, in order to recruit or retain

highly qualified professional, technical,

or administrative personnel.

§ 537.102 Definitions.

In this part:

Agency has the meaning given that

term in 5 U.S.C. 4101(l) subparagraph

(A), (B), (C), (D), or (E).

Employee has the meaning given that

term in 5 U.S.C. 2105, except it does not

include an employee occupying a

position which—

(a) Is excepted from the competitive

service because of its confidential,

policy-determining, policy-making, or

policy advocating character; or

(b) Is not subject to the General

Schedule established under 5 U.S.C.

chapter 53, subchapter III.

Head of agency means the head of an

agency or an official who has been

delegated the authority to act for the

head of the agency in the matter

concerned.

Rate of basic pay means the rate of

pay fixed by law for the position to

which the employee will be newly

appointed, or is currently holding (or in

the case of an employee entitled to

grade or pay retention, the employee’s

retained rate of pay), before deductions

and exclusive of additional pay of any

kind, such as locality-based

comparability payments under 5 U.S.C.

5304 or law enforcement geographic

adjustments under section 404 of the

Federal Employees Pay Comparability

Act of 1990 (Pub. L. 101–509).

Service agreement means a written

agreement between an agency and an

employee under which the employee

agrees to a specified period of

employment with the agency of not less

than 3 years, in return for payments

toward a student loan previously taken

out by the employee.

Student loan means—

(a) A loan made, insured, or

guaranteed under parts B and E of title

IV of the Higher Education Act of 1965;

or

(b) A health education assistance loan

made or insured under part C of title VII

of the Public Health Service Act, or

under part B of title VIII of that Act.

§ 537.103 Agency loan repayment plans;

higher level review and approval.

(a) Agency loan repayment plans.

Before repaying any student loans under

this part, the head of an agency must

establish a student loan repayment plan.

This plan must include the following

elements:

(1) The designation of officials with

authority to review and approve student

loan repayments;

(2) The situations in which the loan

repayment authority may be used;

(3) Criteria that must be met or

considered in authorizing loan

repayments, including criteria for

determining the size of a payment;

(4) Procedures for making loan

payments;

(5) A system for selecting employees

to receive repayment benefits that

ensures fair and equitable treatment;

(6) Requirements for service

agreements (including a basis for

determining the length of service to be

required if greater than the statutory

minimum) and provisions for recovering

any amount outstanding from an

employee who fails to complete the

period of employment established under

a service agreement and for waiving

such amount; and

(7) Documentation and recordkeeping

requirements sufficient to allow

reconstruction of the action taken in

each case.

(b) Higher level review and approval.

(1) Except as provided in paragraph

(b)(2) of this section, each determination

to repay all or part of a student loan,

including the amount to be paid, must

be reviewed and approved by an official

of the agency who is at a higher level

than the official who made the initial

decision, unless there is no official at a

higher level in the agency.

(2) When necessary to make a timely

offer of employment, a higher level

official may establish criteria in advance

based on identification of qualifications

typically possessed by high quality

candidates for a specific position or

other similar positions, and authorize

the recommending official to offer loan

repayment benefits (in an amount

within a pre-established range) to any

high quality candidate without further

review or approval.

Federal Register / Vol. 65, No. 121 / Thursday, June 22, 2000 / Proposed Rules 38793

§ 537.104 Employee eligibility.

In accordance with the other

provisions of this part and 5 U.S.C.

5379, an agency may authorize loan

repayments to recruit or retain—

(a) Temporary employees who are

serving on appointments leading to

conversion to term or permanent

appointments; or

(b) Term employees with at least 3

years left on their appointment ; or

(c) Permanent employees.

§ 537.105 Criteria for payment.

(a) Written determination. Loan

payments made under this part must be

based on a written determination that,

in the absence of such payments, the

agency would encounter difficulty

either in filling the position with a

highly qualified candidate, or retaining

a highly qualified employee in that

position. All determinations must be

made on a case-by-case basis.

(b) Determination for recruitment.

Each determination for recruitment

purposes (including the amount to be

paid) must be made before the employee

actually enters on duty in the position

for which he or she was recruited.

(c) Determination for retention.

Payments authorized in order to retain

an employee must be based upon a

written determination that the high or

unique qualifications of the employee or

special need of the agency for the

employee’s services makes it essential to

retain the employee, and that, in the

absence of such payments, the employee

would be likely to leave for employment

outside the Federal service. This

determination must be based on a

written description of the extent to

which the employee’s departure would

affect the agency’s ability to carry out an

activity or perform a function that is

deemed essential to the agency’s

mission.

(d) Factors to be considered. In

determining whether student loan

repayments should be authorized, and

in determining the amount of such

payments, an agency must consider the

following factors, as applicable in the

case at hand:

(1) The success of recent efforts to

recruit high quality candidates for

similar positions (or those with

qualifications similar to the ones

possessed by the employee), including

indicators such as offer acceptance

rates, the proportion of positions filled,

and the length of time required to fill

similar positions;

(2) Labor market factors that may

affect the ability of the agency to recruit

high quality candidates for similar

positions now or in the future;

(3) Special qualifications or education

needed for the position;

(4) The cost of training already given

the employee and of training that would

be needed by a new employee; and

(5) The practicality of using other

recruitment and retention incentives

such as the superior qualifications

appointment authority provided by

§ 531.203(b) of this chapter, the

authority to pay a recruitment bonus

under part 575, subpart A of this

chapter, or retention allowances under

part 575, subpart C of this chapter.

(e) Selecting employees. When

selecting employees to receive loan

repayment benefits, agencies must

adhere to merit system principles and

take into consideration the need to

maintain a balanced workforce in which

women and members of racial and

ethnic minority groups are

appropriately represented in

Government service.

§ 537.106 Procedures for making loan

payments.

(a) Conditions for payments.

Payments will be at the discretion of the

agency and are subject to such terms,

limitations, or conditions as may be

mutually agreed to by the agency and

employee concerned. Payments may be

applied only to the indebtedness

outstanding at the time the agency and

the employee enter into an agreement,

and may not begin before the employee

enters on duty with the agency.

Repayment benefits must be in addition

to basic pay and any other form of

compensation otherwise payable to the

employee involved.

(b) Loans to be repaid. Before

authorizing loan payments, an agency

must verify with the holder of the loan

that the employee has an outstanding

student loan that qualifies for

repayment under this part. An agency

may repay more than one loan as long

as the loan payments do not exceed the

limits set forth in paragraph (c) of this

section.

(c) Size of payments. In determining

the size of the loan payments, an agency

should take into consideration the value

the employee has to the agency, and

how far in advance the agency can

commit funds. If budgetary

considerations are an issue, agencies

may pay a specified amount for the first

year, with the option of renewing this

commitment in subsequent years, funds

permitting. This type of arrangement

should be part of the initial agreement

with the employee. The amount paid by

the agency is subject to all the following

maximum limits:

(1) $6,000 per employee per calendar

year; and

(2) A lifetime aggregate of $40,000 per

employee.

(d) Employee responsibility. The

employee will be responsible for making

loan payments on the portion of the

loan(s) that continues to be the

responsibility of the employee. The

employee will also be responsible for

any income tax obligations resulting

from the loan payments.

§ 537.107 Service agreements.

(a) Before any loan payments may be

made, an agency must require that the

employee sign a written agreement to

complete a specified period of

employment with the agency and to

repay loan benefits as required by

§ 537.109. This agreement may also

specify any other conditions of

employment the agency feels is

appropriate, such as, but not limited to,

the employee’s position and the duties

they are expected to perform, work

schedule, or level of performance.

(b) The minimum period of

employment to be established under a

service agreement must be 3 years,

regardless of the amount of loan

repayment authorized.

§ 537.108 Loss of eligibility for loan

payment benefits.

(a) An employee receiving loan

payment benefits from an agency will be

ineligible for continued benefits from

that agency if the employee:

(1) Separates from the agency; or

(2) Does not maintain an acceptable

level of performance, as determined

under standards and procedures

prescribed by the head of the agency; or

(3) Violates any of the conditions of

the service agreement.

(b) For the purpose of applying

paragraph (a) of this section in the case

of an employee covered by an appraisal

system established under part 430,

subpart B, of this chapter, the

employee’s most recent rating of record

must be at least level 3 (‘‘Fully

Successful’’).

§ 537.109 Employee reimbursements to

the Government.

(a) Except as provided in paragraph

(d) of this section, an employee who

fails to complete the period of

employment established under a service

agreement will be indebted to the

Federal Government and must repay the

amount of any student loan repayment

benefits the employee received from the

agency.

(b) Failure to complete the period of

employment established under a service

agreement occurs when the employee’s

service with the agency terminates

before the employee completes the

38794 Federal Register / Vol. 65, No. 121 / Thursday, June 22, 2000 / Proposed Rules

period of employment specified in the

service agreement because:

(1) The employee is separated

involuntarily on account of misconduct;

or

(2) The employee leaves the agency

voluntarily.

(c) If an employee fails to reimburse

the agency for the amount owed under

paragraph (a) of this section, a sum

equal to the amount outstanding must

be recovered from the employee under

the agency’s regulations for collection

by offset from an indebted Government

employee under 5 U.S.C. 5514 and

Subpart K of part 550 of this chapter, or

through the appropriate provisions

governing debt collection if the

individual is no longer a Federal

employee.

(d) Paragraph (a) of this section does

not apply when the employee fails to

complete a period of employment

established under a service agreement

because:

(1) The employee is involuntarily

separated for reasons other than

misconduct; or

(2) The employee leaves the agency

voluntarily to enter into the service of

any other agency, unless repayment is

otherwise specified in the service

agreement.

(e) The head of an agency may waive,

in whole or in part, a right of recovery

of an employee’s debt if he or she

determines that recovery would be

against equity and good conscience or

against the public interest.

(f) Any amount repaid, or recovered

from, an employee under this section

will be credited to the appropriation

account from which the amount

involved was originally paid. Any

amount so credited will be merged with

other sums in such account and will be

available for the same purposes and

period, and subject to the same

limitations (if any), as the sums with

which merged.

§ 537.110 Records.

Each agency must keep a record of

each determination made under this

part and make such records available for

review upon request from OPM. These

records may be destroyed after 3 years

or after the program has been formally

evaluated by OPM (whichever comes

first).

[FR Doc. 00–15842 Filed 6–21–00; 8:45 am]

BILLING CODE 6325–01–P

NUCLEAR REGULATORY

COMMISSION

10 CFR Part 72

RIN 3150–AG34

List of Approved Spent Fuel Storage

Casks: Standardized NUHOMS–24

and NUHOMS–52B Revision

AGENCY: Nuclear Regulatory

Commission.

ACTION: Proposed rule.

SUMMARY: The Nuclear Regulatory

Commission (NRC) is proposing to

amend its regulations revising the

Transnuclear West (TN West), Inc.,

Standardized NUHOMS–24P and –52B

cask system (NUHOMS storage system)

listing within the ‘‘List of approved

spent fuel storage casks’’ to include

Amendment No. 2 to Certificate of

Compliance (CoC), No. 1004.

Amendment No. 2 will make two main

changes: it will update the Technical

Specifications’ fuel qualification tables

to reflect additional fuel parameters;

and it will allow storage of burnable

poison rod assemblies (BPRAs) in model

24P of the NUHOMS storage system,

along with the spent fuel. Amendment

No. 2 will also revise and renumber

several of the conditions in the CoC to

reflect the NRC’s new standard format

for CoCs. However, no technical

changes to the CoC’s conditions will be

made by this amendment. This

amendment will allow holders of power

reactor operating licenses to store spent

fuel in the TN West NUHOMS storage

system, as amended, under a general

license.

DATES: Comments on the proposed rule

must be received on or before July 24,

2000.

ADDRESSES: Submit comments to:

Secretary, U.S. Nuclear Regulatory

Commission, Washington, DC 20555–

0001, Attn: Rulemakings and

Adjudications Staff. Deliver comments

to 11555 Rockville Pike, Rockville, MD,

between 7:30 am and 4:15 pm on

Federal workdays.

You may also provide comments via

the NRC’s interactive rulemaking

website (http://ruleforum.llnl.gov). This

site provides the capability to upload

comments as files (any format) if your

web browser supports that function. For

information about the interactive

rulemaking site, contact Ms. Carol

Gallagher (301) 415–5905; e-mail

CAG@nrc.gov.

Certain documents related to this rule,

including comments received, may be

examined at the NRC Public Document

Room, 2120 L Street NW. (Lower Level),

Washington, DC. These same documents

may also be viewed and downloaded

electronically via the rulemaking

website.

Documents created or received at the

NRC after April 1, 2000 are also

available electronically at the NRC

Public Electronic Reading Room on the

Internet at http://www.nrc.gov/NRC/

ADAMS/index.html. From this site, the

public can gain entry into the NRC’s

Agency wide Document Access and

Management System (ADAMS), which

provides text and image files of NRC’s

public documents. For more

information, contact the NRC’s Public

Document Room reference Staff at (202)

634–3273 or toll free at 1–800–397–

4209, or by e-mail at pdr@nrc.gov.

FOR FURTHER INFORMATION CONTACT:

Stephanie P. Bush-Goddard, Ph.D.,

telephone (301) 415–6257, e-mail,

SPB@nrc.gov, of the Office of Nuclear

Material Safety and Safeguards, U.S.

Nuclear Regulatory Commission,

Washington, DC 20555–0001.

SUPPLEMENTARY INFORMATION: For

additional information see the Direct

Final Rule published in the final rules

section of this Federal Register.

Procedural Background

Because the NRC considers this action

noncontroversial and routine, we are

publishing this proposed rule

concurrently as a direct final rule. The

direct final rule will become effective on

September 5, 2000. However, if the NRC

receives significant adverse comments

on the direct final rule by July 24, 2000,

then the NRC will publish a withdrawal

of the direct final rule. If the direct final

rule is withdrawn, the NRC will address

the comments received in response to

the proposed revisions in a subsequent

final rule. Absent significant

modifications to the proposed revisions

requiring republication, the NRC will

not initiate a second comment period

for this action if the direct final rule is

withdrawn.

List of Subjects in 10 CFR Part 72

Criminal penalties, Manpower

training programs, Nuclear materials,

Occupational safety and health,

Reporting and recordkeeping

requirements, Security measures, Spent

fuel.

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. 553; the NRC

is proposing to adopt the following

amendments to 10 CFR part 72.