66170 Federal Register / Vol. 65, No. 214 / Friday, November 3, 2000 / Rules and Regulations

assessment under Executive Order

13132.

4. The provisions of the

Administrative Procedure Act (5 U.S.C.

553) requiring notice of proposed

rulemaking, the opportunity for public

participation, and a delay in effective

date, are inapplicable because this

regulation involves a military and

foreign affairs function of the United

States (Sec. 5 U.S.C. 553(a)(1)). Further,

no other law requires that a notice of

proposed rulemaking and an

opportunity for public comment be

given for this rule. Accordingly, it is

issued in final form.

List of Subjects

15 CFR Part 740

Administrative practice and

procedure, Exports, Foreign trade,

Reporting and recordkeeping

requirements.

15 CFR Part 774

Exports, Foreign trade.

Accordingly, parts 740 and 774 of the

Export Administration Regulations (15

CFR Parts 730–799) are amended to read

as follows:

1. The authority citation for 15 CFR

part 740 continues to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50

U.S.C. 1701 et seq.; E.O. 12924, 59 FR 43437,

3 CFR, 1994 Comp., p. 917; E.O. 13026, 61

FR 58767, 3 CFR, 1996 Comp., p. 228; Notice

of August 3, 2000 (65 FR 48347, August 8,

2000).

2. The authority citation for 15 CFR

part 774 continues to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50

U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C.

7430(e); 18 U.S.C. 2510 et seq.; 22 U.S.C.

287c, 22 U.S.C. 3201 et seq., 22 U.S.C. 6004;

30 U.S.C. 185(s), 185(u); 42 U.S.C. 2139a; 42

U.S.C. 6212; 43 U.S.C. 1354; 46 U.S.C. app.

466c; 50 U.S.C. app. 5; E.O. 12924, 59 FR

43437, 3 CFR, 1994 Comp., p. 917; E.O.

13026, 61 FR 58767, 3 CFR, 1996 Comp., p.

228; Notice of August 3, 2000 (65 FR 48347,

August 8, 2000).

PART 740—CORRECTED

3. Section 740.7 is amended by

revising the phrase ‘‘As of December 26,

2000’’ in the last sentence of paragraphs

(c)(1) and (d)(1) to read ‘‘As of December

28, 2000’’, and by revising the phrase

‘‘greater that 12,500 MTOPS’’ in

paragraph (d)(4) to read ‘‘greater than

12,500 MTOPS’’.

PART 774—CORRECTED

4. In Supplement No. 1 to part 774

(the Commerce Control List), Category

4—Computers is amended by revising

the License Requirements section of

Export Control Classification Number

(ECCN) 4D002, to read as follows:

4D002 ‘‘Software’’ specially designed

or modified to support ‘‘technology’’

controlled by 4E (except 4E980, 4E992,

and 4E993).

License Requirements

REASON FOR CONTROL: NS, MT, AT, NP, XP

Control(s) Country chart

NS applies to entire entry ........................................................................................ NS Column 1.

MT applies to ‘‘software’’ for equipment controlled by 4E for MT reasons ............ MT Column 1.

AT applies to entire entry ........................................................................................ AT Column 1.

NP applies to ‘‘software’’ for

computers with a CTP greater than

6,500 Mtops, unless a License Exception

is available. See § 742.3(b) of the EAR

for information on applicable licensing

review policies.

XP applies to ‘‘software’’ for

computers with a CTP greater than

6,500 Mtops, unless a License Exception

is available. See § 742.3(b) of the EAR

for information on applicable licensing

review policies.

* * * * *

Dated: October 27, 2000.

Steven C. Goldman,

Acting Assistant Secretary for Export

Administration.

[FR Doc. 00–28307 Filed 11–2–00; 8:45 am]

BILLING CODE 3510–33–P

DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation

and Enforcement

30 CFR Part 938

[PA–126–FOR]

Pennsylvania Regulatory Program

AGENCY: Office of Surface Mining

Reclamation and Enforcement (OSM),

Interior.

ACTION: Final rule; approval of

amendment.

SUMMARY: OSM is approving an

amendment to the Pennsylvania

regulatory program (Pennsylvania

program) under the Surface Mining

Control and Reclamation Act of 1977

(SMCRA), 30 U.S.C. 1201 et seq., as

amended. The amendment revises

certain portions of 25 Pennsylvania

Code Chapter 86, Surface and

Underground Mining: General,

pertaining to ownership and control,

bonding, civil penalties and areas

unsuitable for mining. The amendments

are intended to revise the Pennsylvania

program to be consistent with the

corresponding Federal regulations.

EFFECTIVE DATE: November 3, 2000.

FOR FURTHER INFORMATION CONTACT: Mr.

Robert J. Biggi, Office of Surface Mining

Reclamation and Enforcement,

Harrisburg Field Office, Third Floor,

Suite 3C, Harrisburg Transportation

Center (Amtrack), 415 Market Street,

Harrisburg, Pennsylvania 17101,

Telephone: (717) 782–4036.

SUPPLEMENTARY INFORMATION:

I. Background on the Pennsylvania Program

II. Submission of the Amendment

III. Director’s Findings

IV. Summary and Disposition of Comments

V. Director’s Decision

VI. Procedural Determinations

I. Background on the Pennsylvania

Program

On July 30, 1982, the Secretary of the

Interior conditionally approved the

Pennsylvania program. Background on

the Pennsylvania program, including

the Secretary’s findings and the

disposition of comments can be found

in the July 30, 1982 Federal Register (47

FR 33079). Subsequent actions

concerning the regulatory program

amendments are identified at 30 CFR

938.11, 938.15 and 938.16.

II. Submission of the Amendment

By letter dated November 2, 1999

(Administrative Record No. PA–845.02),

Federal Register / Vol. 65, No. 214 / Friday, November 3, 2000 / Rules and Regulations 66171

the Pennsylvania Department of

Environmental Protection (PADEP)

submitted an amendment to its

approved regulatory program pertaining

to ownership and control, bonding, civil

penalties and areas unsuitable for

mining pursuant to the Federal

regulations at 30 CFR 732.17(b).

Pennsylvania did so as a result of its

Regulatory Basics Initiative (RBI)

intended to revise regulations

considered to be unclear, unnecessary

or more stringent than the

corresponding Federal regulation. The

proposed rulemaking was published in

the November 29, 1999 Federal Register

(64 FR 66595). The public comment

period closed on December 29, 1999. No

one requested an opportunity to speak

at a public hearing, so no hearing was

held.

III. Director’s Findings

Set forth below, pursuant to SMCRA

and the Federal regulations at 30 CFR

732.15 and 732.17, are the Director’s

findings concerning the amendments to

the Pennsylvania permanent regulatory

program. Revisions not specifically

discussed below concern paragraph

notations to reflect organizational

changes resulting from this amendment.

Section 86.1. Definitions

1. Owned or controlled or owns or

controls. PADEP modifies the title to the

definition by substituting the word

‘‘and’’ for the second ‘‘or’’ so it now

reads ‘‘Owned or controlled and owns

or controls.’’ This change renders the

title substantively identical to, and

therefore no less effective than, the title

to the Federal counterpart definition at

30 CFR 773.5. PADEP also modifies

subparagraph (iii)(E) by deleting the

specified percentages (10–50%) of

instruments of ownership of a corporate

entity necessary to establish a

presumption of ownership or control,

and by substituting a reference to

percentages in the corresponding

Federal regulations at 30 CFR

773.5(b)(5). This provision of the

Federal regulations was vacated by the

United States Court of Appeals for the

District of Columbia Circuit in National

Mining Ass’n. v. United States Dep’t. of

the Interior, 177 F.3d 1, 7 (D.C. Cir.

1999). However, while the vacated

Federal regulation cannot be

implemented in a Federal program, the

text of the regulation has not been

deleted from the Code of Federal

Regulations.

Moreover, pursuant to section 505(b)

of SMCRA, 30 U.S.C. 1255(b), any state

law or regulation ‘‘which provides for

more stringent land use and

environmental controls and regulations

of surface coal mining operations than

do the provisions’ of SMCRA ‘‘or any

regulations issued pursuant thereto

shall not be construed to be

inconsistent’’ with SMCRA. As such,

state programs may still choose to

employ this criterion in defining

ownership and control. Therefore, we

are approving subparagraph (iii)(E)

because it provides a basis for

establishing a rebuttable presumption of

ownership and control that is in

addition to those contained in the

Federal regulations.

2. Related party. PADEP is excluding

from this definition persons who are

excluded as owners or controllers based

on a percentage of ownership under the

definition of ‘‘owned or controlled and

owns or controls.’’ The term ‘‘related

party’’ does not exist in the Federal

regulations, but it has previously been

approved by OSM, and remains part of

Pennsylvania’s approved program. We

are approving this change to the

definition because it makes it clear that

the term ‘‘related party’’ is consistent

with the term ‘‘owned or controlled and

owns or controls,’’ and because it does

not render the Pennsylvania program

inconsistent with SMCRA or the Federal

regulations.

3. Willful violation. PADEP is adding

this definition which states that a

willful violation is an act or omission

which violates the acts, this chapter,

Chapter 87, 88, 89, or 90, or a permit

condition required by them, committed

by a person who intends the result

which actually occurs.

The Director finds that this definition

is substantively identical to, and

therefore no less effective than the

definition found in the Federal rules at

30 CFR 701.5.

Section 86.124(a)(6) Areas Unsuitable

for Mining

PADEP is removing current language

and substituting the following

statement:

The Department may determine not to

process any petition for a designation under

§ 86.122 (relating to criteria for designating

lands as unsuitable) insofar as it pertains to

an area for which an administratively

complete surface mining operation permit

application has been filed and the first

newspaper notice has been published. The

Department will provide written notice to the

petitioner with a statement of its findings.

The Director finds that the revised

language is substantively identical to

and therefore no less effective than the

corresponding portion of the Federal

regulation at 30 CFR 764.15(a)(6).

Section 86.152(d) Adjustments (Bond

Amount)

PADEP is adding section (d) to require

notification of proposed adjustments to

bond amounts to the permittee, the

surety and any person with a property

interest in collateral who has requested

such notification. PADEP also adds

language providing the permittee an

opportunity for informal conference on

the adjustment. The Director finds that

the changes described above are

substantively identical to and therefore

no less effective than the Federal

Regulations at 30 CFR 800.15(b).

Section 86.156 Form of the Bond

PADEP is adding, in new subsection

(3), a self bond to the type of bonds the

Department may accept. Existing

subsection (3) is re-numbered as (4) and

modified to state that the Department

will accept ‘‘[a] combination of bonding

instruments as provided in § 86.160

(relating to combination of bonding

instruments) for coal surface mining

activities.’’ Existing subsections (4) and

(5) are re-numbered as (5) and (6),

respectively. The Director finds that the

changes described above are

substantively identical to and therefore

no less effective than the Federal

Regulations at 30 CFR 800.12.

Section 86.160 Combination of

Bonding Instruments

PADEP is changing the title of this

section from ‘‘Surety/collateral

combination bond’’ to ‘‘Combination of

Bonding Instruments,’’ and is further

modifying the section to include self

bonds as part of the combination of

bonds that may be accepted. The

Director finds that the changes

described above are substantively

identical to and therefore no less

effective than the Federal Regulations at

30 CFR 800.12(d).

Section 86.171 Procedures for Seeking

Release of Bond

PADEP is modifying subsection (d) of

this section, which currently requires

the Department to inspect a site that has

applied for bond release within 30 days

of receipt of the complete application,

or as soon thereafter as possible, to

require inspection within 30 days of

receipt of the completed application for

bond release ‘‘or as soon thereafter as

weather conditions permit.’’ The

Director finds that the changes

described above are substantively

identical to and therefore no less

effective than corresponding language in

the Federal Regulations at 30 CFR

800.40(b).

66172 Federal Register / Vol. 65, No. 214 / Friday, November 3, 2000 / Rules and Regulations

Section 86.182 Procedures

PADEP is adding a new subsection (a)

which requires the Department to notify

the permittee and surety of its intent to

forfeit the bond. Existing subsections

regarding bond forfeiture currently

lettered as (a) through (g) are re-lettered

as (b) through (h) without modification.

The Director finds that the changes

described above are substantively

identical to and therefore no less

effective than the Federal Regulations at

30 CFR 800.50(a)(1).

Section 86.193 Assessment of Penalty

PADEP is increasing the threshold for

assessment of a civil penalty from $1000

to $1100 in subsections (b) and (c).

PADEP also eliminates mandatory

penalty amounts for violations of

conducting surface mining activities off

the permitted area by deleting

subsections (d) through (g). The deleted

provisions in subsections (d) through (g)

have no Federal counterparts. The

Department is retaining the

requirement, in subsection 86.193(a),

that it assess a civil penalty for each

violation included as a basis for a

cessation order. The Director notes that

the Pennsylvania provision, as

amended, imposes a lower threshold for

mandatory assessment of a civil penalty

($1,100) than the threshold ($1,210)

prescribed in the Federal regulations at

30 CFR 845.12(b). Otherwise, the

amendments render the Pennsylvania

provision substantively identical to its

Federal counterparts. Therefore, the

Director finds that the changes

described above are consistent with the

civil penalty provisions in the Federal

Regulations at 30 CFR 845.12.

Section 86.194 System for Assessment

of Penalties

PADEP is adding language in

subsection (b)(1)(vi) allowing an

additional civil penalty amount up to

the statutory limit to be assessed in

extraordinary circumstances.

PADEP also specifies $3,000 as the

upper limit to be assessed based on

seriousness in subsection (b)(1).

PADEP also modifies subsection

(b)(2), ‘‘Culpability,’’ by lowering the

maximum limit from $1500 to $1200.

Also, the minimum amount for

violations of willful or reckless conduct

was lowered from $2,000 to $260.

PADEP is also changing the criteria

for credit to be given for speed of

compliance in subsection (b)(3).

PADEP deletes the phrase ‘‘without

limitation’’ in subsection (b)(4),

pertaining to penalties for costs

expended by the Commonwealth as a

result of the violation. The presumed

effect of this deletion is that costs are

now limited to those listed in

subdivisions (i) through (iv) of

subsection (b)(4).

PADEP also reduces the review period

for the history of previous violations

from two years to one in subsection

(b)(6).

PADEP is also adding new subsection

(f) entitled ‘‘Revision of civil penalty.’’

Subsection (1) is added and explains

that the Department may revise a civil

penalty calculated in accordance with

dollar limits included in subsection (b)

and that the basis for revision would be

fully explained and documented. New

subsection (2) is added to explain that

if the Department revises the civil

penalty, the Department will use the

general criteria in subsection (b) and

will give a written explanation of the

basis for the revision to the person to

whom the order was issued.

The Director finds that the changes

described above are consistent with the

Federal regulations at 30 CFR 845.13

and 845.16, except as follows.

Subsection (f) contains language that is

substantively identical to its Federal

counterpart at 30 CFR 845.16(a), but it

is punctuated differently, with the result

that its meaning differs from the Federal

regulation. In order to clarify the

meaning of this provision, so that it can

be interpreted to be no less effective

than its Federal counterpart, the period

after the first sentence, ending with

‘‘subsection (b),’’ must be changed to a

comma, and the comma after the term

‘‘demonstrably unjust’’ must be changed

to a period. Pennsylvania was informed

of this in a teleconference by the

Harrisburg, PA OSM Office, and agreed

to make the change. The change was

published in the Pennsylvania Bulletin

dated September 23, 2000.

(Administrative Record No. Pa. 845.09)

The Director thus finds that the changes

described render this provision

substantively identical to and therefore

consistent with the Federal regulations

at 30 CFR 845.16(a).

Section 86.195(c) Penalties Against

Corporate Officers

PADEP is adding new subsection (c)

which allows a corporate officer to

postpone payment of an individual civil

penalty where the officer or permittee

has agreed in writing on a plan for

abatement of or compliance with a

failure to abate order. The Director finds

that the changes described above are

substantively identical to and therefore

consistent with the Federal Regulations

at 30 CFR 846.18(c).

Section 86.201 Procedures for

Assessment of Civil Penalties

PADEP is adding new subsection (a)

to allow operators to submit information

to the Department and the inspector

concerning violations within 15 days of

service of a notice of violation or order.

Existing subsections (a) through (d) are

re-lettered (b) through (e), respectively.

PADEP is adding new subsection (f) to

bar the use of evidence obtained in an

assessment conference in formal review

proceedings. Existing subsection (f) is

re-lettered as (g). The Director finds that

the changes described above are

substantively identical to and therefore

consistent with the Federal Regulations

at 30 CFR 845.17(a) and 845.18(f).

Section 86.202 Final Action

PADEP is changing the title of this

section from ‘‘Appeal Procedures’’ to

‘‘Final Action.’’ The change is nonsubstantive in nature and does not

render this provision inconsistent with

its Federal counterpart at 30 CFR

845.19.

IV. Summary and Disposition of

Comments

Federal Agency Comments

On November 3, 1999, we asked for

comments from various Federal

agencies who may have an interest in

the Pennsylvania amendment

(Administrative Record Number

845.03). We solicited comments in

accordance with section 503(b) of

SMCRA and 30 CFR 732.17(h)(11)(i) of

the Federal regulations. The Federal

Mine Safety and Health Administration

responded that it did not have any

comments in letters dated November 19,

1999 (Administrative Records Numbers

PA–845.04 and PA–845.05.)

Environmental Protection Agency (EPA)

Pursuant to 30 CFR 732.17(h)(11)(i)

and (ii), OSM is required to solicit

comments and obtain the written

concurrence of the EPA with respect to

those provisions of the proposed

program amendment that relate to air or

water quality standards promulgated

under the authority of the Clean Water

Act (33 U.S.C. 1251 et seq.) or the Clean

Air Act (42 U.S.C. 7401 et seq.). The

Director has determined that this

amendment contains no such provisions

and that EPA concurrence is therefore

unnecessary. However, by letter dated

November 3, 1999, we requested

comments from EPA on the State’s

proposed amendment of November 2,

1999 (Administrative Record Number

845.02), and EPA responded in its letter

dated November 29, 1999

(Administrative Record Number PA–

Federal Register / Vol. 65, No. 214 / Friday, November 3, 2000 / Rules and Regulations 66173

845.07) that it did not have any

comments.

Public Comments

No comments were received in

response to our request for public

comments.

V. Director’s Decision

Based on the above findings, we are

approving the amendments to the

Pennsylvania program. The Federal

regulations at 30 CFR Part 938,

codifying decisions concerning the

Pennsylvania program, are being

amended to implement this decision.

This final rule is being made effective

immediately (November 3, 2000) to

expedite the State program amendment

process and to encourage States to bring

their programs into conformity with the

Federal standards without undue delay.

Consistency of State and Federal

standards is required by SMCRA.

Section 503 of SMCRA provides that

a State may not exercise jurisdiction

under SMCRA unless the State program

is approved by the Secretary. Similarly,

30 CFR 732.17(a) requires that any

alteration of an approved State program

be submitted to OSM for review as a

program amendment. Thus, any changes

to the State program are not enforceable

until approved by OSM. The Federal

regulations at 30 CFR 732.17(g) prohibit

any unilateral changes to approved State

programs. In the oversight of the

Pennsylvania program, we will

recognize only the statutes, regulations,

and other materials approved by OSM,

together with any consistent

implementing policies, directives, and

other materials. We will require that

Pennsylvania enforce only such

provisions.

VI. Procedural Determinations

Executive Order 12866—Regulatory

Planning and Review

This rule is exempted from review by

the Office of Management and Budget

under Executive Order 12866.

Executive Order 12630—Takings

This rule does not have takings

implications. This determination is

based on the analysis performed for the

counterpart federal regulation.

Executive Order 13132—Federalism

This rule does not have federalism

implications. SMCRA delineates the

roles of the federal and State

governments with regard to the

regulation of surface coal mining and

reclamation operations. One of the

purposes of SMCRA is to ‘‘establish a

nationwide program to protect society

and the environment from the adverse

effects of surface coal mining

operations.’’ Section 503(a)(1) of

SMCRA requires that State laws

regulating surface coal mining and

reclamation operations be ‘‘in

accordance with’’ the requirements of

SMCRA, and section 503(a)(7) requires

that State programs contain rules and

regulations ‘‘consistent with’’

regulations issued by the Secretary

pursuant to SMCRA.

Executive Order 12988—Civil Justice

Reform

The Department of the Interior has

conducted the reviews required by

section 3 of Executive Order 12988 and

has determined that, to the extent

allowed by law, this rule meets the

applicable standards of subsections (a)

and (b) of that section. However, these

standards are not applicable to the

actual language of State regulatory

programs and program amendments

since each such program is drafted and

promulgated by a specific State, not by

OSM. Under sections 503 and 505 of

SMCRA (30 U.S.C. 1253 and 1255) and

30 CFR 730.11, 732.15, and

732.17(h)(10), decisions on proposed

State regulatory programs and program

amendments submitted by the States

must be based solely on a determination

of whether the submittal is consistent

with SMCRA and its implementing

federal regulations and whether the

other requirements of 30 CFR parts 730,

731, and 732 have been met.

National Environmental Policy Act

Section 702(d) of SMCRA (30 U.S.C.

1292(d)) provides that a decision on a

proposed State regulatory program

provision does not constitute a major

federal action within the meaning of

section 102(2)(C) of the National

Environmental Policy Act (NEPA) (42

U.S.C. 4332(2)(C)). A determination has

been made that such decisions are

categorically excluded from the NEPA

process (516 DM 8.4.A).

Paperwork Reduction Act

This rule does not contain

information collection requirements that

require approval by the Office of

Management and Budget under the

Paperwork Reduction Act (44 U.S.C.

3507 et seq.).

Regulatory Flexibility Act

The Department of the Interior has

determined that this rule will not have

a significant economic impact on a

substantial number of small entities

under the Regulatory Flexibility Act (5

U.S.C. 601 et seq.). The State submittal

which is the subject of this rule is based

upon counterpart federal regulations for

which an economic analysis was

prepared and certification made that

such regulations would not have a

significant economic effect upon a

substantial number of small entities.

Accordingly, this rule will ensure that

existing requirements previously

promulgated by OSM will be

implemented by the State. In making the

determination as to whether this rule

would have a significant economic

impact, the Department relied upon the

data and assumptions for the

counterpart federal regulation.

Small Business Regulatory Enforcement

Fairness Act

This rule is not a major rule under 5

U.S.C. 804(2), the Small Business

Regulatory Enforcement Fairness Act.

This rule:

a. Does not have an annual effect on

the economy of $100 million.

b. Will not cause a major increase in

costs or prices for consumers,

individual industries, federal, State, or

local government agencies, or

geographic regions.

c. Does not have significant adverse

effects on competition, employment,

investment, productivity, innovation, or

the ability of U.S. based enterprises to

compete with foreign-based enterprises.

This determination is based upon the

fact that the State submittal which is the

subject of this rule is based upon

counterpart federal regulations for

which an analysis was prepared and a

determination made that the federal

regulation was not considered a major

rule.

Unfunded Mandates

This rule will not impose a cost of

$100 million or more in any given year

on any governmental entity or the

private sector.

List of Subjects in 30 CFR Part 938

Intergovernmental relations, Surface

mining, Underground mining.

Dated: October 11, 2000.

Allen D. Klein,

Regional Director, Appalachian Regional

Coordinating Center.

For the reasons set out in the

preamble, Title 30, Chapter VII,

Subchapter T of the Code of Federal

Regulations is amended as set forth

below:

PART 938—PENNSYLVANIA

1. The authority citation for part 938

continues to read as follows:

Authority: 30 U.S.C. 1201 et seq.

2. Section 938.15 is amended in the

table by adding a new entry in

66174 Federal Register / Vol. 65, No. 214 / Friday, November 3, 2000 / Rules and Regulations

1 Includes both fixed-principal and inflationindexed Treasury securities.

2The uniform offering circular was published as

a final rule on January 5, 1993 (58 FR 412). The

circular, as amended, is codified at 31 CFR part 356.

3We use the term ‘‘fixed-principal’’ to distinguish

such securities from Treasury ‘‘inflated-indexed’’

securities, whose principal amounts are adjusted

periodically for inflation.

4 63 FR 35782 (June 30, 1998).

chronological order by ‘‘Date of Final

Publication’’ to read as follows:

§ 938.15 Approval of Pennsylvania

regulatory program amendments.

* * * * *

Original amendment

submission date

Date of final

publication Citation/description

*******

November 2, 1999 ............... November 3, 2000 ............. 25 Pa. Code 86.1, 86.124, 86.152, 86.156, 86.160, 86.171, 86.182, 86.193,

86.194, 86.195, 86.201, and 86.202.

[FR Doc. 00–28268 Filed 11–2–00; 8:45 am]

BILLING CODE 4310–05–P

DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Parts 306 and 356

[Department of the Treasury Circular, Public

Debt Series No. 1–93]

Marketable Book-Entry Treasury Bills,

Notes, and Bonds; Minimum Par

Amounts Required for STRIPS

AGENCY: Bureau of Public Debt, Fiscal

Service, Department of Treasury.

ACTION: Final rule.

SUMMARY: The Department of the

Treasury (‘‘Treasury,’’ ‘‘We,’’ or ‘‘Us’’ is

issuing in final form amendments to 31

CFR part 306 (General Regulations

Governing U.S. Securities) and 31 CFR

part 356 (Uniform Offering Circular for

the Sale and Issue of Marketable BookEntry Treasury Bills, Notes, and Bonds).

The purpose of these amendments is to

simplify and enhance market

participants’ ability to strip Treasury

fixed-principal securities. ‘‘Stripping’’ a

security means to separate it into its

principal and interest components. The

amendment modifies the minimum and

multiple amounts that are required to

strip Treasury fixed-principal securities

by setting them each at $1,000. It also

eliminates the multiple requirement for

the interest components that result from

stripping, in effect making Treasury

fixed-principal securities strippable ‘‘to

the penny.’’ Further, the amendment

eliminates Exhibit C of this part,

‘‘Minimum Par Amounts for FixedPrincipal STRIPS,’’ since this table will

no longer be necessary. Finally, the

amendment provides us the flexibility

to designate a Treasury note or bond as

strippable even if the note or bond was

not originally designated as strippable

by its offering announcement. This

flexibility will allow us to make eligible

for stripping outstanding five-year

Treasury notes issued prior to

September 30, 1997.

EFFECTIVE DATE: March 1, 2001, except

for the amendment of § 356.31(a), which

is effective November 3, 2000.

ADDRESSES: You may download this

final rule from the Bureau of the Public

Debt’s Internet site at the following

address: www.publicdebt.treas.gov. It is

also available for public inspection and

copying at the Treasury Department

Library, Room 1428, Main Treasury

Building, 1500 Pennsylvania Avenue,

NW., Washington, DC, 20220. To visit

the library, call (202) 622–0990 for an

appointment.

FOR FURTHER INFORMATION CONTACT: Lori

Santamorena (Executive Director) or

Chuck Andreatta (Senior Financial

Advisory), Bureau of the Public Debt,

Government Securities Regulations

Staff, (202) 691–3632, or e-mail us at

govsecreg@bpd.treas.gov.

SUPPLEMENTARY INFORMATION: 31 CFR

part 356, also referred to as the uniform

offering circular, sets out the terms and

conditions for the sale and issuance to

the public of marketable Treasury bills,

notes, and bonds.1 The uniform offering

circular, in conjunction with offering

announcements, represents a

comprehensive statement of these terms

and conditions.2 This final rule

modifies § 356.31, which pertains to

STRIPS (Separate Trading of Registered

Interest and Principal of Securities). It

also eliminates Exhibit C (‘‘Minimum

Par Amounts for Fixed-Principal

STRIPS’’). In addition, this rule amends

31 CFR 306.128, which pertains to

Treasury’s discretion to supplement,

amend, or revise regulations governing

U.S. securities.

Stripping Treasury Securities ‘‘To the

Penny’’

The STRIPS program, which began in

January 1985, allows holders of bookentry (electronic) Treasury notes and

bonds to separate those securities into

their separate principal and interest

components. These components can

then be held and traded separately as

zero-coupon securities. The interest

components (‘‘TINTs’’), but not the

principal components, are fungible

(interchangeable). This means that

TINTs with the same maturity date have

the same identifying CUSIP number

regardless of the underlying security

from which they were stripped.

Securities with the same CUSIP number

are considered to be the same security.

Since its implementation, the STRIPS

program has required that the par

amount of a fully constituted Treasury

fixed-principal 3 security to be stripped

must be an amount that, based on the

stated interest rate of the security, will

produce a TINT of $1,000 or a multiples

of $1,000. Any amount greater than this

par amount must be in a multiple of that

amount. Once a book-entry security has

been separated, each interest and

principal component can then be

maintained and transferred in multiples

of $1,000. This $1,0000 minimum and

multiple requirement conforms with the

minimum and multiple requirement of

fully constituted Treasury notes and

bonds.

The $1,000 multiple requirement for

the TINTs, however, results in a wide

disparity in the par amounts of fully

constituted (unstripped) securities with

different interest rates that are needed to

produce TINTs in multiples of $1,000.

For example, a note or bond with an

interest rate of 61⁄8 percent requires a

minimum of $1,600,000 of the fully

constituted security for stripping in

order for the resulting TINTs to be in a

multiple of $1,000. In this example, the

resulting TINTs have payment amounts

of $49,000. By contrast, a note or bond

with an interest rate of 61⁄4 percent

requires only a minimum par amount of

$32,000 to be stripped, with resulting

TINTs of $1,000, which is the minimum

amounts for TINTs.

When we implemented a process to

make TINTs from inflation-indexed

securities fungible on March 31, 1999,4