Federal Register / Vol. 66, No. 105 / Thursday, May 31, 2001 / Rules and Regulations 29471

1Unless otherwise noted, all references to rule 1

will be to 17 CFR 257.1.

2 ‘‘Company’’ or ‘‘companies’’ means a service

company subject to 17 CFR 250.93, or a holding

company subject to 17 CFR 250.26, which is not an

electric utility company or a gas utility company,

and any predecessor or inactive or dissolved

associate company, the records of which are in the

possession or control of such company.

§ 39.13 [Amended]

2. Section 39.13 is amended by

adding the following new airworthiness

directive:

2001–11–01 McDonnell Douglas:

Amendment 39–12242. Docket 2000–

NM–207–AD.

Applicability: Model DC–9–32 series

airplanes modified per Hexcel Supplemental

Type Certificate (STC) SA4371NM, as listed

in Hexcel Service Bulletin 110000–25–001,

dated March 31, 2000; certificated in any

category.

Note 1: This AD applies to each airplane

identified in the preceding applicability

provision, regardless of whether it has been

modified, altered, or repaired in the area

subject to the requirements of this AD. For

airplanes that have been modified, altered, or

repaired so that the performance of the

requirements of this AD is affected, the

owner/operator must request approval for an

alternative method of compliance in

accordance with paragraph (b) of this AD.

The request should include an assessment of

the effect of the modification, alteration, or

repair on the unsafe condition addressed by

this AD; and, if the unsafe condition has not

been eliminated, the request should include

specific proposed actions to address it.

Compliance: Required as indicated, unless

accomplished previously.

To detect improper grounding of a water

heater, which, coupled with an internal short

in the water heater, could result in heat or

smoke damage or a fire on the airplane,

accomplish the following:

Inspection and Corrective Action

(a) Within 18 months after the effective

date of this AD, perform a one-time general

visual inspection to determine if ground

wires are installed between the top of the

water heater and the sink unit and between

the sink unit and the mounting flange of the

toilet flush timer module on each lavatory,

per Hexcel Service Bulletin 110000–25–001,

dated March 31, 2000. If any ground wire is

not installed, before further flight, install a

ground wire assembly per the service

bulletin.

Note 2: For the purposes of this AD, a

general visual inspection is defined as: ‘‘A

visual examination of an interior or exterior

area, installation, or assembly to detect

obvious damage, failure, or irregularity. This

level of inspection is made under normally

available lighting conditions such as

daylight, hangar lighting, flashlight, or droplight, and may require removal or opening of

access panels or doors. Stands, ladders, or

platforms may be required to gain proximity

to the area being checked.’’

Alternative Methods of Compliance

(b) An alternative method of compliance or

adjustment of the compliance time that

provides an acceptable level of safety may be

used if approved by the Manager, Seattle

Aircraft Certification Office (ACO), FAA.

Operators shall submit their requests through

an appropriate FAA Principal Maintenance

Inspector, who may add comments and then

send it to the Manager, Seattle ACO.

Note 3: Information concerning the

existence of approved alternative methods of

compliance with this AD, if any, may be

obtained from the Seattle ACO.

Special Flight Permits

(c) Special flight permits may be issued in

accordance with §§ 21.197 and 21.199 of the

Federal Aviation Regulations (14 CFR 21.197

and 21.199) to operate the airplane to a

location where the requirements of this AD

can be accomplished.

Incorporation by Reference

(d) The actions shall be done in accordance

with Hexcel Service Bulletin 110000–25–001,

dated March 31, 2000. This incorporation by

reference was approved by the Director of the

Federal Register in accordance with 5 U.S.C.

552(a) and 1 CFR part 51. Copies may be

obtained from Hexcel Interiors, 3225 Woburn

Street, Bellingham, Washington 98226; or

Boeing Commercial Aircraft Group, Long

Beach Division, 3855 Lakewood Boulevard,

Long Beach, California 90846, Attention:

Data and Service Management, Dept. C1–L5A

(D800–0024). Copies may be inspected 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.

Effective Date

(e) This amendment becomes effective on

July 5, 2001.

Issued in Renton, Washington, on May 18,

2001.

Vi L. Lipski,

Manager, Transport Airplane Directorate,

Aircraft Certification Service.

[FR Doc. 01–13181 Filed 5–30–01; 8:45 am]

BILLING CODE 4910–13–P

SECURITIES AND EXCHANGE

COMMISSION

17 CFR 257

[Release No. 35–27404; File No. S7–07–01]

RIN 3235–AI12

Electronic Recordkeeping by Public

Utility Holding Companies

AGENCY: Securities and Exchange

Commission.

ACTION: Final rule.

SUMMARY: The Securities and Exchange

Commission is adopting amendments to

revise rules under the Public Utility

Holding Company Act of 1935 regarding

recordkeeping requirements for

registered public utility holding

companies and their mutual or

subsidiary service companies. The

current rules were most recently

updated in 1984 and allow regulated

companies to preserve records using

storage media such as paper, magnetic

tape, and microfilm. The amendments

will expand the approved recordkeeping

methods to allow the use of modern

information technology resources. The

Commission is adopting these rule

amendments in response to the passage

of the Electronic Signatures in Global

and National Commerce Act, which

encourages federal agencies to

accommodate electronic recordkeeping.

EFFECTIVE DATE: May 31, 2001.

FOR FURTHER INFORMATION CONTACT:

Catherine A. Fisher, Assistant Director,

Robert P. Wason, Chief Financial

Analyst, or Victoria J. Adraktas,

Attorney-Advisor, Office of Public

Utility Regulation, (202) 942–0545,

Division of Investment Management,

Securities and Exchange Commission,

450 5th Street, NW., Washington, DC

20549–0503.

SUPPLEMENTARY INFORMATION: The

Securities and Exchange Commission

(‘‘Commission’’) today is adopting

amendments to rule 1 [17 CFR 257.1],1

regarding the preservation and

destruction of records of registered

public utility holding companies and of

mutual and subsidiary service

companies, under the Public Utility

Holding Company Act of 1935 [15

U.S.C. 79] (‘‘Holding Company Act’’).

Executive Summary

Federal law requires registered public

utility holding companies and their

mutual or subsidiary service companies

to make and keep books and records.2

The recordkeeping requirements are a

key part of the Commission’s public

utility holding company regulatory

program because they allow us to

monitor the operations of companies

and to evaluate their compliance with

federal law. The recordkeeping rule

currently permits records to be

preserved and maintained using storage

media such as paper, magnetic tape, and

microfilm. In light of the advances in

information technology since the rule

was promulgated in 1984 and in

particular the rapid changes in

technology in recent years, we believe

that we should revise the standards for

permissible recordkeeping media to

allow the use of current electronic

recordkeeping and storage resources in

29472 Federal Register / Vol. 66, No. 105 / Thursday, May 31, 2001 / Rules and Regulations

3We recognize that the standards for electronic

recordkeeping we are adopting for registered public

utility holding companies are different from rules

we have adopted for broker-dealers, which require

brokerage records to be preserved in a nonrewritable, non-erasable (the ‘‘write-once, read

many’’ or ‘‘WORM’’) format. There are, however,

significant differences between the industries. In

addition, we have not experienced any significant

problems with registered holding companies

altering stored records. In light of these factors, the

costs of requiring registered public utility holding

companies to invest in new electronic

recordkeeping technologies may not be justified.

4Electronic Signatures in Global and National

Commerce Act, Pub. L. 106–229 (see Preamble).

5See Electronic Recordkeeping by Public Utility

Holding Companies, Holding Company Act Release

No. 25357 (Mar. 19, 2001) [66 FR 16158 (Mar. 23,

2001)] (‘‘Proposing Release’’) at section I.B.

6The comment letters are available for public

inspection and copying in the Commission’s Public

Reference Room, 450 Fifth Street, NW.,

Washington, DC (File No. S7–07–01).

7Rule 1. One commenter expressed concern that

the restriction on access to records required to be

maintained would restrict companies from allowing

access to records by properly authorized employees.

We note that ‘‘authorized personnel’’ in the text of

the rule is intended to permit companies to allow

access to required records to any person the

company chooses to provide access. The objective

of this restriction is to ensure that companies

adequately safeguard records from unauthorized

access.

8Rule 1(e)(2).

9See proposed rule 1(e)(2)(ii).

10ESIGN section 101(d)(1).

11Under the Electronic Signatures Act, a federal

regulatory agency (like the Commission) that is

responsible for rulemaking under any other statute

(such as the Public Utility Holding Company Act)

‘‘may interpret section 101 [of the Electronic

Signatures Act] with respect to such statute through

the issuance of regulations pursuant to a statute; or

to the extent such agency is authorized by statute

to issue orders or guidance, the issuance of orders

or guidance of general applicability that are

publicly available and published (in the Federal

Register in the case of an order or guidance issued

by a Federal regulatory agency).’’ ESIGN section

104(b).

12ESIGN section 104(b)(2)(A) and (B).

13ESIGN section 104(b)(2)(C).

14ESIGN section 104(b)(3). Such performance

standards may be specified in a manner that

imposes a requirement in violation of the general

prohibition against selecting methods that require

or accord greater legal status or effect to the

implementation or application of a specific

maintaining required records.3

Moreover, because the proposed

amendments do not specify the use of

any particular technologies, they allow

for the adoption of new technologies in

the future. Finally, we are also

interpreting rule 1 to be the exclusive

means by which companies can comply

with the recordkeeping provisions of the

Electronic Signatures in Global and

National Commerce Act (‘‘Electronic

Signatures Act,’’ ‘‘Act,’’ or ‘‘ESIGN’’).

Last year, Congress passed the Act to

facilitate the use of electronic records

and signatures in interstate and foreign

commerce.4 Consistent with the purpose

and goals of the Electronic Signatures

Act, we are amending the Holding

Company Act rules to expand the

circumstances under which companies

may keep their records on electronic

storage media. We are also updating our

recordkeeping rules and amending them

for clarification. The amendments are

designed to update rule 1 to reflect and

accommodate companies’ use of modern

information technology resources to

maintain and index records.

I. Discussion

A. Amendments to Rule 1

The Commission is amending rule 1

to permit companies to keep their

records in an electronic format. We also

proposed to clarify the obligation of

companies to provide copies of their

records to Commission examiners, and

to incorporate terminology used in

electronic recordkeeping rules under the

Securities Exchange Act of 1934 into

rule 1.5 We received six comment letters

addressing the proposal.6 Commenters

supported the proposed amendments,

and we are adopting them substantially

as proposed, with a few changes in

response to concerns expressed by

commenters.

We are expanding the variety of

formats that companies may use to

maintain required records to include

electronic and micrographic storage

media. Under the revised rule 1,

companies are permitted to maintain

records electronically if they establish

and maintain procedures: (i) To

safeguard the records from loss,

alteration, or destruction, (ii) to limit

access to the records to authorized

personnel, the Commission, and

directors of the company, and (iii) to

ensure that electronic copies of nonelectronic originals are complete, true,

and legible.7

We are also amending the rules to

clarify the obligation of companies to

provide copies of their records to

Commission examiners. The

amendments make clear that companies

may be requested to promptly provide

(i) legible, true, and complete copies of

records in the medium and format in

which they are stored, and printouts of

such records; and (ii) means to access,

view, and print the records.8

We are not adopting a proposed

amendment that would have stated that

records are to be provided in no case

more than one business day after a

request.9 Some commenters were

concerned that such an amendment

could preclude companies from

agreeing to a schedule of record

production with the examination staff to

produce certain documents immediately

and other documents, that are not

immediately accessible, on a delayed

basis. We agree that such arrangements

when entered into and performed in

good faith by the examined entity can

facilitate the examination process.

While the ‘‘promptly’’ standard imposes

no specific time limit, we expect that a

company would be permitted to delay

furnishing electronically stored records

for more than 24 hours only in unusual

circumstances. At the same time, we

believe that in many cases companies

could, and therefore will be required to,

furnish records immediately or within a

few hours of request.

In addition, commenters raised

concerns that the amendment requires

companies to maintain duplicate copies

of records. We wish to clarify that this

requirement only applies to records

stored on electronic or micrographic

media. It is not a requirement for

records kept in any other type of media.

These duplicates may be maintained in

any media form.

B. Electronic Signatures Act

Under the Electronic Signatures Act,

an agency’s recordkeeping requirements

may be met by retaining electronic

records that accurately reflect the

information set forth in the record, and

remain accessible to all persons who are

entitled to access, in a format that can

be accurately reproduced.10 The Act

allows us to interpret this provision

pursuant to our authority under the

Holding Company Act.11 Our

interpretation of the Electronic

Signatures Act must be consistent with

the Act and not add to its

requirements.12 The interpretation must

be based on findings that (i) our

interpreting regulations are substantially

justified; (ii) the methods selected to

carry out our purposes are substantially

equivalent to the requirements imposed

on records that are not electronic

records and will not impose

unreasonable costs on the acceptance

and use of electronic records; and (iii)

the methods selected to carry out our

purposes do not require, or accord

greater legal status or effect to, the

implementation or application of a

specific technology or technical

specification for performing the

functions of creating, storing,

generating, receiving, communicating,

or authenticating electronic records or

electronic signatures.13 The Electronic

Signatures Act explicitly authorizes

agencies to interpret the Act’s electronic

recordkeeping provisions to specify

performance standards to assure

accuracy, record integrity, and

accessibility of electronically retained

records.14

Federal Register / Vol. 66, No. 105 / Thursday, May 31, 2001 / Rules and Regulations 29473

technology or technical specification for performing

the functions of creating, storing, generating,

receiving, communicating, or authenticating

electronic records or electronic signatures if the

requirement (i) serves an important governmental

objective; and (ii) is substantially related to the

achievement of that objective. ESIGN section

104(b)(3).

15See Proposing Release, supra at note 5.

16ESIGN section 101(d)(1).

17The rules’ general requirements that companies

have procedures to protect electronic records from

alteration, loss, or destruction, to limit

unauthorized access, and verify the integrity of

electronic copies of hard copy originals ensure that

an electronic record is accurate from the outset, and

limit the possibility that an electronic record will

be corrupted during its retention period. The rule’s

requirements regarding indexing, and the obligation

of companies to provide records to examiners and

directors foster the accessibility of electronic

records.

18See rule 1(e)(2)(ii) (requiring procedures to

ensure the quality of electronic copies of nonelectronic records); rule 1(e)(2)(iii) (requiring that

companies separately store duplicates of electronic

records); rule 1(e)(3)(ii) (requiring companies to

limit access to electronic records); and rule 1(e)(3)(i)

(requiring companies to adopt procedures to

maintain and preserve electronic records, so as to

reasonably safeguard them from loss, alteration, or

destruction).

19See rule 1(e)(2)(ii)(A) (requiring companies to

provide promptly a legible, true, and complete copy

of an electronically stored record upon request from

the Commission or other parties entitled to access

the records); rule 1(e)(2)(i) (requiring companies to

arrange and index their electronic and micrographic

records in a way that permits easy location and

retrieval); and rule 1(e)(2)(ii)(C) (requiring

companies to provide means to access, view, and

print electronic records).

20For example, the requirement that companies

that keep micrographic or electronic records

provide promptly (i) a legible, true, and complete

copy of the record in the medium and format in

which it is stored, (ii) a legible, true, and complete

printout of the record, and (iii) means to access,

view, and print the records is unnecessary for paper

records, which require no special treatment to make

them readable and reproducible.

21Rule 1(e)(3)(i).

22Rule 1(e)(3)(ii).

23Rule 1(e)(3)(iii).

24ESIGN section 104(b)(3)(A).

25ESIGN section 104(b)(3)(A).

We interpret the Electronic Signatures

Act with respect to the Holding

Company Act to require companies to

comply with the requirements of rule 1

when they keep required records on

electronic storage media. Companies,

therefore, can comply with the

requirements of the Electronic

Signatures Act only by complying with

the requirements of amended rule 1. In

the proposing release, we asked for

comment on whether these

interpretations were consistent with the

Electronic Signatures Act’s

requirements.15 Commenters generally

agreed that our interpretation of the

Electronic Signatures Act was

reasonable. As discussed below, our

rules and interpretation satisfy all the

requirements of the Electronic

Signatures Act.

1. Consistency With Electronic

Signatures Act

Rule 1 is consistent with the

Electronic Signatures Act. The Act

permits federally required records to be

retained in an electronic format, and we

are amending rule 1 to permit

companies to maintain all required

records electronically.

2. No Additional Requirements

Rule 1 imposes no requirements in

addition to those imposed by the Act.

The Electronic Signatures Act requires

electronic records to be stored in a

manner that ensures that they are

accurate, accessible, and capable of

being accurately reproduced for later

reference.16 The rule requires

companies that maintain their records

electronically to comply with certain

conditions that are consistent with the

requirements of the Act and that are

designed to bring about companies’

compliance with the Act’s

requirements.17

3. Substantial Justification

Our rule requires companies to

maintain a wide variety of documents

that we use to verify compliance with

the Holding Company Act. The value of

these records is entirely dependent on

their integrity and accessibility. If

companies are not required to protect

their records from inadvertent or

intentional alteration or destruction 18

and provide examiners with meaningful

access to all required records,19 then the

records become unreliable, and the

examination process moot. Therefore,

we find that our interpretation of the

Electronic Signatures Act, that

companies must comply with rule 1, is

substantially justified.

4. Requirements Equivalent to

Requirements for Other Record Formats

Rule 1 subjects electronic records to

conditions that are substantially

equivalent to conditions under which

companies keep paper and micrographic

records. These conditions are designed

to ensure that the records exist in a form

that is legible, authentic, complete, and

accessible. While rule 1 stipulates that

all records, regardless of format, must

comply with certain conditions, other

requirements, which would be

superfluous for paper records, apply

only to electronic and micrographic

records.20

Companies that maintain records in

an electronic format must comply with

several requirements that have no

micrographic or paper equivalent. For

example, companies must have

procedures to reasonably protect

electronic records from loss, alteration,

or destruction,21 to limit access to

electronic records,22 and to reasonably

ensure that electronic records that are

created from hard copy are complete,

true, and legible.23 We believe that these

additional requirements are necessary

because of the unique vulnerability of

unprotected electronic records to

undetectable alteration and falsification.

5. No Unreasonable Costs on

Acceptance and Use of Electronic

Records

Rule 1 provides significant flexibility

for companies subject to the Act’s

recordkeeping requirements. In

particular, it permits the use of any

electronic storage media. We conclude

that rule 1 will not impose unreasonable

costs on the acceptance and use of

electronic recordkeeping.

6. Specific Technology or Technical

Specification

The Electronic Signatures Act

generally prohibits us from requiring or

according greater legal status or effect to

the implementation or application of a

specific technology or technical

specification. However, the Act does

permit us to specify performance

standards to assure the accuracy,

integrity, and accessibility of required

records, even if our standards require

companies to implement or apply a

specific technology or technical

specification to their storage system.24

Rule 1 has been deliberately crafted to

be technologically neutral, leaving

companies free to adopt any

combination of technological and

manual protocols that meet the

requirements of the rule. In any event,

even if the rule was interpreted to favor

a specific technology or technical

specification, it would nonetheless be a

valid exercise of our interpretive

authority, as it serves the important

governmental objective of assisting us to

oversee company compliance with the

Holding Company Act, and are

substantially related to the achievement

of that objective.25 The continuing

accessibility and integrity of company

records are critical to the fulfillment of

our oversight responsibilities.

C. Effective Date

The effective date for these

amendments is May 31, 2001. In most

cases, the Administrative Procedures

Act (‘‘APA’’) requires that a rule

amendment be published in the Federal

Register at least 30 days prior to its

effective date unless the promulgating

29474 Federal Register / Vol. 66, No. 105 / Thursday, May 31, 2001 / Rules and Regulations

26 5 U.S.C. 553(d)(3).

27ESIGN section 101(d)(1).

28 5 U.S.C. 553(d)(1).

29Commenters’ submissions discussed the

potential costs of keeping duplicates of all records

required to be maintained regardless of their

original format, which, as we clarify above, is not

the intent of the amendment. In addition,

commenters discussed the cost of the proposing

release’s inclusion of a 24 hour turn around period

for document requests, which has been dropped

from the amendment.

agency can show good cause for

shortening this interim period.26 The

Electronic Signatures Act becomes

effective on June 1, 2001, at which point

companies may opt to store required

records electronically, so long as the

records are accessible and accurate.27 As

described above, the Electronic

Signatures Act authorizes the

Commission to interpret these terms. A

gap between the effective dates of the

Electronic Signatures Act and our rule

amendments would needlessly create

confusion about the appropriate

standards for electronic recordkeeping.

During the period between the effective

dates, companies would be forced to

choose between maintaining their

electronic records in accordance with

the Act’s general, but operative

standards, or relying instead on the

more specific but as yet not effective

standards set in rule 1. We find that

there is good cause for these

amendments to become effective on

May 31, 2001.

The APA also authorizes acceleration

of the effective date of a rule that

‘‘relieves a restriction.’’ 28 The

amendments to rule 1 allow companies

to store all of their required records

electronically, remove restrictions on

the type of electronic storage media that

may be used, and effectively eliminate

most of the conditions previously

placed on the ability of companies to

convert paper records to an electronic

format.

II. Cost-Benefit Analysis

In proposing the amendments to rule

1, we considered the costs and benefits

that the amendments would generate.

Although we encouraged commenters to

address the proposal’s costs and benefits

and to submit their own estimates of

what they might be, we received no

comment specifically addressing this

issue.29

We believe the amendments will

impose few if any costs on companies

that are not already required. As

described above, the amended rules

allow companies to choose to maintain

required records on electronic storage

media. Electronic storage remains

optional with the adoption of these

amendments. We assume that

companies will not select the electronic

storage option provided for in the

amended rule unless doing so is less

expensive (or otherwise more efficient

and, therefore, supported by business

considerations). It remains our belief

that the amended rule will allow

companies greater flexibility to make

business decisions about recordkeeping

and, when appropriate, opt for

electronic storage with potential cost

savings and other benefits.

In addition, we are adopting minor

amendments to clarify the obligation of

companies to provide records to our

examination staff and minor technical

amendments to conform the language of

rule 1 to the recordkeeping rules under

the Securities Exchange Act of 1934. We

anticipate few if any costs to companies

as a result of these amendments.

III. Regulatory Flexibility Act

Certification

Pursuant to section 605(b) of the

Regulatory Flexibility Act [U.S.C.

605(b)], the Acting Chairman of the

Commission certified that the

amendments will not have a significant

economic impact on a substantial

number of small entities. The certificate

was published in the Federal Register

with the proposal. We received no

comments on the certificate.

IV. Paperwork Reduction Act

The amendments do not require a

new collection of information. They

affect only the manner in which,

pursuant to rule 1, registrants can store

the information that must be collected

under rule 26 [17 CFR 250.26]. In

connection with rule 26, the

Commission previously submitted to the

Office of Management and Budget,

pursuant to the Paperwork Reduction

Act, a request for approval and received

an OMB control number for the rule,

OMB Control No. 3235–0183.

V. Statutory Authority

The Commission is adopting

amendments to rule 1 of the Holding

Company Act pursuant to authority set

forth in sections 15 and 20(a) of the

Holding Company Act [15 U.S.C. 79(o)

and 15 U.S.C. 79(t)].

List of Subjects in 17 CFR Part 257

Holding companies, Reporting and

recordkeeping requirements.

Text of Rule Amendments

For reasons set forth in the preamble,

Title 17, Chapter II of the Code of

Federal Regulations is amended as

follows:

PART 257—PRESERVATION AND

DESTRUCTION OF RECORDS OF

REGISTERED PUBLIC UTILITY

HOLDING COMPANIES AND OF

MUTUAL AND SUBSIDIARY SERVICE

COMPANIES

1. The authority citation for Part 257

is added to read as follows:

Authority: 15 U.S.C. 79(o) and 79(t), unless

otherwise noted.

2. The authority citations following

§§ 257.1 and 257.2 are removed.

3. Section 257.1 is amended by:

a. Removing paragraphs (e) through

(h);

b. Adding new paragraph (e); and

c. Redesignating paragraphs (i)

through (m), as paragraphs (f) through

(j).

The addition reads as follows:

§ 257.1 General instructions.

* * * * *

(e)(1) Micrographic and electronic

storage permitted. The records required

to be maintained and preserved under

§ 250.26 of this chapter may be

maintained and preserved for the

required time by, or on behalf of, a

company on, among other formats:

(i) Micrographic media, including

microfilm, microfiche, or any similar

medium; or

(ii) Electronic storage media,

including any digital storage medium or

system that meets the terms of this

section.

(2) General requirements. The

company, or person that maintains and

preserves records on its behalf, must:

(i) Arrange and index the records in

a way that permits easy location, access,

and retrieval of any particular record;

(ii) Provide promptly any of the

following that the Commission (by its

examiners or other representatives) or

the directors of the company may

request:

(A) A legible, true, and complete copy

of the record in the medium and format

in which it is stored;

(B) A legible, true, and complete

printout of the record; and

(C) Means to access, view, and print

the records; and

(iii) Separately store, for the time

required for preservation of the original

record, a duplicate copy of a record that

is stored on micrographic or electronic

storage media.

(3) Special requirements for electronic

storage media. In the case of records on

electronic storage media, the company,

or person that maintains and preserves

records on its behalf, must establish and

maintain procedures:

(i) To maintain and preserve the

records, so as to reasonably safeguard

Federal Register / Vol. 66, No. 105 / Thursday, May 31, 2001 / Rules and Regulations 29475

them from loss, alteration, or

destruction;

(ii) To limit access to the records to

properly authorized personnel, the

directors of the company, and the

Commission (including its examiners

and other representatives); and

(iii) To reasonably ensure that any

reproduction of a non-electronic

original record on electronic storage

media is complete and true, and legible

when retrieved.

* * * * *

Dated: May 24, 2001.

By the Commission.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–13586 Filed 5–30–01; 8:45 am]

BILLING CODE 8010–01–P

RAILROAD RETIREMENT BOARD

20 CFR Part 369

RIN 3220–AB49

Use of the Seal of the Railroad

Retirement Board

AGENCY: Railroad Retirement Board.

ACTION: Final rule.

SUMMARY: The Railroad Retirement

Board (Board) amends its regulations to

add a part explaining when use of the

Board’s seal is permitted. Federal law

prohibits the use of an agency seal

except as authorized by regulation. The

Board previously had no such

regulation.

EFFECTIVE DATE: This rule is effective

May 31, 2001.

FOR FURTHER INFORMATION CONTACT:

Marguerite P. Dadabo, Assistant General

Counsel, Railroad Retirement Board,

(312) 751–4945, TDD (312) 751–4701.

SUPPLEMENTARY INFORMATION: The

Railroad Retirement Board is an

independent agency in the executive

branch of the United States Government

which is charged with the

administration of the Railroad

Retirement Act (45 U.S.C. 231 et seq.)

and the Railroad Unemployment

Insurance Act (45 U.S.C. 351 et seq.).

Use of agency seals is governed by 18

U.S.C. 701 which prohibits the use of

agency seals except as authorized under

regulations made pursuant to law. This

proscription is intended to protect the

public against the use of a recognizable

assertion of authority with intent to

deceive (U.S. v. Goeltz, 513 F.2d 193

(C.A. Utah 1975), cert. den. 423 U.S.

830). The regulations of the Railroad

Retirement Board previously did not

include provisions for the authorization

of use of the Agency’s seal. The Board

is adding Part 369 to its regulations to

explain when use of the Board’s seal is

permitted.

The Board published this rule as a

proposed rule on January 3, 2001 (66 FR

314–315) and invited comments by

March 5, 2001. No comments were

received. Accordingly, the proposed

rule is adopted as a final rule without

change.

In order to comply with the

President’s June 1, 1998 memorandum

directing the use of plain language for

all proposed and final rulemaking, the

regulatory paragraphs introduced by the

above rule changes have been written in

plain language.

This rule concerns agency

management and is not a regulation as

defined in Executive Order 12866.

Therefore, no regulatory impact analysis

is required. There are no information

collections associated with this rule.

List of Subjects in 20 CFR Part 369

Railroad retirement, Seals and

insignia.

For the reasons set out in the

preamble, the Railroad Retirement

Board adds Part 369 to title 20, chapter

II, subchapter F of the Code of Federal

Regulations as follows:

PART 369—USE OF THE SEAL OF THE

RAILROAD RETIREMENT BOARD

Sec.

369.1 Unofficial use of the seal of the

Railroad Retirement Board.

369.2 Authority to grant written permission

for use of the seal.

369.3 Procedures for obtaining permission

to use the seal.

369.4 Inappropriate use of the seal.

369.5 Penalty for misuse of the seal.

Authority: 18 U.S.C. 701; 45 U.S.C. 231f.

§ 369.1 Unofficial use of the seal of the

Railroad Retirement Board.

Use of the seal of the Railroad

Retirement Board for non-Agency

business is prohibited unless

permission for use of the seal has been

obtained in accordance with this part.

§ 369.2 Authority to grant written

permission for use of the seal.

The Board hereby delegates authority

to grant written permission for the use

of the seal of the Railroad Retirement

Board to the Director of Administration.

§ 369.3 Procedures for obtaining

permission to use the seal.

Requests for written permission to use

the seal of the Railroad Retirement

Board shall be in writing and shall be

directed to the Director of

Administration of the Railroad

Retirement Board. The request should,

at a minimum, contain the following

information:

(a) Name and address of the requester.

(b) A description of the type of

activity in which the requester is

engaged or proposes to engage.

(c) A statement of whether the

requester considers the proposed use or

imitation to be commercial or noncommercial, and why.

(d) A brief description and illustration

or sample of the proposed use, as well

as a description of the product or

service in connection with which it will

be used. This description will provide

sufficient detail to enable the Director of

Administration to determine whether

the intended use of the seal is consistent

with the interests of the government.

(e) In the case of a non-commercial

use, a description of the requesting

organization’s function and purpose

shall be provided.

§ 369.4 Inappropriate use of the Seal.

The Railroad Retirement Board shall

not grant permission for use of the seal

in those instances where use of the seal

will give the unintended appearance of

Agency endorsement or authentication.

Situations where use of the seal of the

Railroad Retirement Board would be

inappropriate include, but are not

limited to, the following examples:

(a) A consulting firm makes

arrangements with a railroad to conduct

a retirement planning seminar for its

employees. Included in the material

distributed to the seminar attendees is a

booklet, prepared by the consulting

firm, which displays the seal of the

Railroad Retirement Board on the cover

and contains information regarding

benefits payable under the Railroad

Retirement Act.

(b) A former employee of the Railroad

Retirement Board owns a coffee and

donut shop, frequented by present and

past railroad workers. Many of the

shop’s customers know of the owner’s

prior employment with the Board and

frequently ask him questions related to

benefits payable under the Railroad

Unemployment Insurance and Railroad

Retirement Acts. The shop owner

prepares and distributes to his

customers a monthly flyer listing benefit

questions presented to him during the

month, as well as his answers to the

questions. The flyer displays the seal of

the Board.

(c) A retired railroad employee works

part-time in a train hobby shop. The

shop owner, at the former railroad

worker’s suggestion, develops and sells

items such as coffee mugs and computer

mouse pads with text relevant to

benefits paid by the Railroad Retirement

Board. The text is taken from