4802 Federal Register / Vol. 70, No. 19 / Monday, January 31, 2005 / Proposed Rules 

1Order Establishing Rules Applicable to Requests 

for Baseline and Functionally Equivalent 

Negotiated Service Agreements, PRC Order No. 

1391, February 11, 2004. The rules applicable to 

Negotiated Service Agreements are incorporated 

into the Commission’s rules at subpart L.

2Request of the United States Postal Service for 

a Recommended Decision on Classifications, Rates 

and Fees to Implement Functionally Equivalent 

Negotiated Service Agreement with Discover 

Financial Services, Inc., June 21, 2004; Request of 

the United States Postal Service for a 

Recommended Decision on Classifications, Rates 

and Fees to Implement Functionally Equivalent 

Negotiated Service Agreement with Bank One 

Corporation, June 21, 2004.

3PRC Op. MC2002–2, May 15, 2003.

4 In both instances, the requests for hearings were 

withdrawn before the hearings occurred.

5PRC Op. MC2004–4, September 30, 2004.

6PRC Op. MC2004–3, December 17, 2004.

7Significantly, the request did not provide for 

adequate protection of mailers not party to the 

agreement (for example, an equivalent to the stoploss cap as recommended in the Capital One docket 

was not proposed even though similar risks were 

apparent). As recommended, after modification, the 

Bank One Negotiated Service Agreement is 

functionally equivalent to the Capital One 

Negotiated Service Agreement.

Association (Ginnie Mae’s) 

Homeownership Information Center, 

which provides a wide array of 

information for homebuyers pertaining 

to the homebuying process, mortgage 

affordability, loan calculators, credit 

counseling, etc. Accordingly, this 

document hereby withdraws the 

proposed rule.

DATES: The proposed rule is withdrawn 

as of January 31, 2005.

FOR FURTHER INFORMATION CONTACT: R.D. 

Finneran, Assistant Director for Loan 

Policy and Valuation (262), Loan 

Guaranty Service, Veterans Benefits 

Administration, Department of Veterans 

Affairs, 810 Vermont Avenue, NW., 

Washington, DC 20420 (202) 273–7368.

Approved: December 17, 2004. 

Anthony J. Principi, 

Secretary of Veterans Affairs.

[FR Doc. 05–1712 Filed 1–28–05; 8:45 am] 

BILLING CODE 8320–01–P

POSTAL RATE COMMISSION

39 CFR Part 3001

[Docket No. RM2005–2; Order No. 1429] 

Solicitation of Comments on First Use 

of Rules Applicable to Negotiated 

Service Agreements

AGENCY: Postal Rate Commission.

ACTION: Notice of proposed rulemaking.

SUMMARY: This document addresses the 

solicitation of comments in a 

proceeding to consider potential 

changes to the Commission rules for 

considering functionally equivalent 

Negotiated Service Agreements. These 

comments will be used to evaluate 

whether improvements should be made 

to the rules to facilitate the 

Commission’s review of future requests 

predicated on functionally equivalent 

Negotiated Service Agreements.

DATES: Initial comments: February 28, 

2005; reply comments: March 28, 2005.

FOR FURTHER INFORMATION CONTACT:

Stephen L. Sharfman, General Counsel, 

202–789–6818.

SUPPLEMENTARY INFORMATION: 

Regulatory History 

68 FR 52552, September 4, 2003. 69 

FR 7574, February 19, 2004. 

On February 11, 2004, the 

Commission promulgated rules 

applicable to the review of Postal 

Service requests predicated on baseline 

and functionally equivalent Negotiated 

Service Agreements.1 The Postal Service 

first invoked the rules applicable to 

functionally equivalent Negotiated 

Service Agreements (39 CFR 3001.196) 

in requests filed on June 21, 2004, for 

proposed Negotiated Service 

Agreements with Discover Financial 

Services, Inc. (Discover) and Bank One 

Corporation (Bank One).2 Both 

agreements were proffered as 

functionally equivalent to the recently 

recommended Negotiated Service 

Agreement with Capital One Services, 

Inc. (Capital One).3 The Postal Service 

has not submitted a request for a new 

baseline agreement. Thus, the rules for 

new baseline Negotiated Service 

Agreements (39 CFR 3001.195) remain 

untested.

PRC Order No. 1391 at 48 explains the 

purpose of the rules applicable to 

functionally equivalent Negotiated 

Service Agreements:

The purpose of § 3001.196 is to provide an 

opportunity to expedite the review of a 

request for a functionally equivalent 

Negotiated Service Agreement by allowing 

the proponents of the agreement to rely on 

relevant record testimony from a previous 

docket. This potentially could expedite the 

proceeding by avoiding the need to re-litigate 

issues that were recently litigated and 

resolved in a previous docket.

Once the Commission determines that 

it is appropriate to proceed under rule 

196, a procedural schedule is 

established to allow for issuing a 

decision within 60 days if no hearing is 

scheduled, or within 120 days if a 

hearing is scheduled. In both the 

Discover and the Bank One dockets, the 

participants requested hearings, the 

hearings were scheduled, and schedules 

were initially established to allow for a 

decision to be issued within 120 days.4

The Commission recommended that 

the Postal Service enter into the 

Negotiated Service Agreement with 

Discover 72 days after making the 

decision to hear the request under the 

rules for functionally equivalent 

Negotiated Service Agreements (101 

days after the filing of the request).5

This was well within the 120 day time 

frame contemplated by the rules. The 

Commission found the Discover 

Negotiated Service Agreement 

functionally equivalent, albeit not 

identical, to the Capital One Negotiated 

Service Agreement, and recommended 

the request only with minor 

modification. Proceeding under the 

rules for functionally equivalent 

Negotiated Service Agreements 

successfully developed a sufficient 

record upon which to issue a decision 

and expedited the procedural schedule 

as envisioned when the rules were first 

developed.

Application of the rules for a 

functionally equivalent Negotiated 

Service Agreement in the Bank One 

docket also was successful. A sufficient 

record upon which to base a decision 

was developed, and the docket was 

expedited through reliance on record 

testimony from the previous Capital 

One docket. However, due to the 

complexity of the specific issues 

involved, procedural issues that arose, 

and more extensive than anticipated 

litigation and negotiation, issuing the 

decision exceeded the 120 day 

procedural schedule by 27 days. The 

Commission recommended that the 

Postal Service enter into the Negotiated 

Service Agreement with Bank One 147 

days after making the decision to hear 

the request under the rules for 

functionally equivalent Negotiated 

Service Agreements (179 days after the 

filing of the request).6

A large number of unusual issues 

delayed a decision on the Bank One 

Negotiated Service Agreement. The 

testimony of Bank One witness Buc was 

filed seven days late, with no indication 

in the initial request that additional 

testimony was forthcoming. Potential 

intervenors were not alerted to 

important differences between the 

baseline and the proffered functionally 

equivalent agreement by less than full 

compliance with rule 196(b)(2). Within 

two weeks of the filing of the request, 

Bank One merged with J. P. Morgan 

Chase, requiring additional discovery 

efforts, and creating uncertainty over 

how to analyze the initial request. The 

Bank One Negotiated Service Agreement 

as proposed was not functionally 

equivalent to the Capital One Negotiated 

Service Agreement.7 Participants 

Federal Register / Vol. 70, No. 19 / Monday, January 31, 2005 / Proposed Rules 4803

8The rules for functionally equivalent Negotiated 

Service Agreements should provide adequate 

expedition without the need to file Stipulations and 

Agreements. Stipulations and Agreements should 

not be used as a procedural mechanism to 

expeditiously conclude a docket. In this docket, the 

Stipulations and Agreements were properly used to 

resolve issues unique to the request.

9An alternative could have been to reject the 

request as submitted, with directions to supplement 

testimony where necessary and refile as a new 

baseline docket. This would have considerably 

added to the length of the procedural schedule.

litigated and negotiated issues that were 

not present in the baseline docket. This 

culminated in the submission of two 

proposed Stipulations and Agreements 

late in the proceeding addressing risks 

identified by the participants.8 Finally, 

the details of the Bank One agreement 

and the specific facts presented in this 

docket were more complex than what 

was presented in the baseline docket. 

The Commission believes it unlikely 

that this many complicating factors are 

likely to be present in future requests for 

functionally equivalent Negotiated 

Service Agreements. Thus, the 

anticipated time for the Commission to 

review a request and render a 

recommendation still appears to be 

realistic.

The Presiding Officer decided to 

proceed under the rules for functionally 

equivalent Negotiated Service 

Agreements to lend structure to the 

Bank One proceeding. He recognized 

that future revelations might require a 

change in direction.9 Although there 

were unanticipated complications in the 

Bank One docket, the rules for 

functionally equivalent Negotiated 

Service Agreements proved flexible and 

sufficient to hear the request and render 

a recommended decision.

The Commission indicated in the 

Discover and the Bank One 

recommendations that it would solicit 

comments on the first use of the new 

rules. The comments will be used to 

evaluate whether improvements should 

be made to the rules to facilitate the 

Commission’s review of future requests 

predicated on functionally equivalent 

Negotiated Service Agreements. 

Comments are welcome of a general 

nature, or that address specific 

procedural or data requirement issues. 

By this order, the Commission hereby 

gives notice that comments from 

interested persons concerning the first 

use of the rules applicable to Negotiated 

Service Agreements are due February 

28, 2005. Reply comments may also be 

filed and are due March 28, 2005. 

In conformance with section 3624(a) 

of title 39, the Commission designates 

Shelley S. Dreifuss, director of the 

Commission’s Office of the Consumer 

Advocate, to represent the interests of 

the general public in this proceeding. 

Pursuant to this designation, Ms. 

Dreifuss will direct the activities of 

Commission personnel assigned to 

assist her and, upon request, will supply 

their names for the record. Neither Ms. 

Dreifuss nor any of the assigned 

personnel will participate in or provide 

advice on any Commission decision in 

this proceeding. 

Ordering Paragraphs 

It is ordered:

1. Docket No. RM2005–2 is 

established to solicit comments on 

possible improvements to the 

Commission’s rules applicable to 

Negotiated Service Agreements. 

2. Interested persons may submit 

comments no later than February 28, 

2005. 

3. Reply comments also may be filed 

and are due March 28, 2005. 

4. Shelley S. Dreifuss, director of the 

Office of the Consumer Advocate, is 

designated to represent the interests of 

the general public in this docket. 

5. The Secretary shall arrange for 

publication of this Notice of Proposed 

Rulemaking in the Federal Register.

Issued: January 25, 2005.

By the Commission. 

Steven W. Williams, 

Secretary.

[FR Doc. 05–1732 Filed 1–28–05; 8:45 am] 

BILLING CODE 7710–FW–P

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Administration for Children and 

Families 

45 CFR Part 1356 

RIN 0970–AC14 

Administrative Costs for Children in 

Title IV–E Foster Care

AGENCY: Administration for Children 

and Families (ACF), Department of 

Health and Human Services (DHHS).

ACTION: Proposed rule.

SUMMARY: The Administration for 

Children and Families (ACF) is 

proposing to amend the regulations for 

Child and Family Services with respect 

to title IV–E administrative costs and 

eligibility determinations and redeterminations for title IV–E foster care 

recipients and foster care ‘‘candidates.’’

This Notice of Proposed Rule Making 

(NPRM) proposes rules to implement 

title IV–E foster care eligibility and 

administrative cost provisions in 

sections 472 and 474 of the Social 

Security Act (the Act) and incorporates 

previously issued policy guidance.

DATES: Consideration will be given to 

written comments received by April 1, 

2005.

ADDRESSES: Interested persons are 

invited to submit comments regarding 

this proposed rule to Kathleen McHugh, 

Director, Division of Policy, Children’s 

Bureau, Administration on Children, 

Youth and Families, Administration for 

Children and Families, 330 C Street, 

SW., Washington, DC 20447. You may 

download an electronic version of the 

rule at http://www.regulations.gov. You 

may also transmit written comments 

electronically via the Internet at:

http://www.regulations.acf.hhs.gov. 

Comments will be available for public 

inspection Monday through Friday 8:30 

a.m. to 5 p.m. at the above address by 

contacting Jan Rothstein, in room 2411.

FOR FURTHER INFORMATION CONTACT:

Kathleen McHugh, Director, Division of 

Policy, Children’s Bureau, 

Administration on Children, Youth and 

Families, (202) 401–5789 or by e-mail at 

kmchugh@acf.hhs.gov. Do not e-mail 

comments on the Notice of Proposed 

Rule Making to this address.

SUPPLEMENTARY INFORMATION: 

I. Statutory Authority 

This proposed regulation is issued 

pursuant to 42 U.S.C. 1302, which 

authorizes the Secretary of Health and 

Human Services (the Secretary) to 

publish regulations that may be 

necessary for the efficient 

administration of the functions for 

which he/she is responsible under the 

Act. 

II. Background 

Section 474(a) in title IV–E of the Act 

entitles a State agency to Federal 

financial participation (FFP) for three 

separate categories of expenditures: title 

IV–E foster care maintenance payments 

for eligible children in licensed or 

approved foster family homes or child 

care institutions; adoption assistance 

payments; and payments for the proper 

and efficient administration of the title 

IV–E State plan. Furthermore, section 

474(a)(3)(E) sets the rate of FFP for 

allowable administrative costs at 50 

percent. Federal regulations at 45 CFR 

1356.60(c) implement the title IV–E 

administrative cost requirements and 

subparagraph (c)(3) lists several 

examples of allowable administrative 

costs necessary for the administration of 

the title IV–E foster care program. As a 

general rule, a State agency may claim 

allowable title IV–E administrative costs 

for a child in title IV–E foster care who 

is eligible for title IV–E foster care