This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

17625

Vol. 60, No. 67

Friday, April 7, 1995

EXPORT-IMPORT BANK OF THE

UNITED STATES

5 CFR Chapter LII

12 CFR Part 400

RIN 3209–AA15

Supplemental Standards of Ethical

Conduct for Employees of the ExportImport Bank of the United States

AGENCY: Export-Import Bank of the

United States (Eximbank).

ACTION: Interim rule with request for

comments.

SUMMARY: The Export-Import Bank of

the United States, with the concurrence

of the Office of Government Ethics

(OGE), is issuing regulations for

employees of Eximbank that

supplement the Standards of Ethical

Conduct for Employees of the Executive

Branch issued by OGE. The

supplemental rules prohibit certain

Eximbank employees and their spouses

and minor children from owning

securities in any of the entities

designated as having the most

substantial dealings with Eximbank and

require Eximbank employees, other than

special Government employees, to

obtain prior approval to engage in

outside employment.

Eximbank is also repealing its existing

regulations setting forth agency

standards of ethical conduct which have

been substantially superseded by the

executive branch-wide Standards of

Ethical Conduct and by the executive

branch-wide financial disclosure

regulations issued by OGE. In place of

the existing Eximbank regulations in 12

CFR part 400, Eximbank is substituting

a cross-reference to the new executive

branch-wide regulations and to these

supplemental regulations.

DATES: Interim rule effective April 7,

1995. Comments are invited and must

be received on or before May 22, 1995.

ADDRESSES: Send comments to the

Export-Import Bank of the United

States, 811 Vermont Avenue NW.,

Washington, DC 20571, Attention: Mr.

Paul W. Boyer.

FOR FURTHER INFORMATION CONTACT: Mr.

Robert J. McKinsey, Export-Import Bank

of the United States, Office of The

General Counsel, telephone (202) 565–

3452.

SUPPLEMENTARY INFORMATION:

I. Background

On August 7, 1992, OGE published a

final rule entitled ‘‘Standards of Ethical

Conduct for Employees of the Executive

Branch’’ (Standards). See 57 FR 35006–

35067, as corrected at 57 FR 48557 and

57 FR 52583, with additional grace

period extensions at 59 FR 4779–4780

and 60 FR 6390–6391. The Standards,

codified at 5 CFR part 2635 and

effective February 3, 1993, establish

uniform standards of ethical conduct

that are applicable to all executive

branch personnel.

5 CFR 2635.105 authorizes an

executive branch agency to issue, with

OGE’s concurrence, agency-specific

supplemental regulations that are

necessary to implement effectively its

ethics program. Eximbank, with OGE’s

concurrence, has determined that the

following supplemental rules, being

codified in new 5 CFR chapter LII, are

necessary for the successful

implementation of Eximbank’s ethics

program, in light of Eximbank’s

operations.

II. Analysis of the Regulations

Section 6201.101 General

Section 6201.101 explains that the

regulations contained in the interim rule

apply to employees of Eximbank and are

supplemental to the executive branch

standards.

Section 6201.102 Prohibited Financial

Interests

The Standards, at 5 CFR 2635.403(a),

specifically recognize that an individual

agency may find it necessary or

desirable to issue a supplemental

regulation prohibiting or restricting the

acquisition or holding of a financial

interest or a class of financial interests

by its employees, or any category of its

employees, and the spouses and minor

children of those employees, based on

the agency’s determination that the

acquisition or holding of such financial

interests would cause a reasonable

person to question the impartiality and

objectivity with which agency programs

are administered. Eximbank has made

such a determination with respect to

certain holdings by those employees,

other than special Government

employees, who are required to file

public or confidential disclosure

statements. With respect to the spouses

and minor children of these Eximbank

employees, Eximbank has made an

additional determination that there is a

direct and appropriate nexus between

the prohibition on holding certain

financial interests as applied to spouses

and minor children and the efficiency of

the service provided by Eximbank. To

help ensure public confidence in the

integrity of Eximbank’s programs and

operations, this interim rule, for

codification at 5 CFR 6201.102, will

prohibit covered employees of

Eximbank and their spouses and minor

children from owning securities of any

of the entities designated by Eximbank

as having the most substantial dealings

with Eximbank.

Section 6201.103 Prior Approval of

Outside Employment

The Standards, at 5 CFR 2635.803,

also specifically recognize that an

agency may find it necessary or

desirable to issue a supplemental

regulation requiring its employees to

obtain approval before engaging in

outside employment or activities. The

Eximbank standards of conduct

regulations have long required

employees to obtain written permission

prior to engaging in outside

employment. Eximbank has found this

requirement useful in ensuring that the

outside employment activities of

employees conform with all applicable

laws and regulations. In accordance

with 5 CFR 2635.803, Eximbank has

determined that it is necessary to the

administration of its ethics program to

continue to require such prior approval.

This interim rule, for codification at 5

CFR 6201.103, will require employees of

Eximbank, other than special

Government employees, who desire to

engage in outside employment to obtain

prior approval of such employment

from their immediate supervisor and

from Eximbank’s Designated Agency

Ethics Official.
17626 Federal Register / Vol. 60, No. 67 / Friday, April 7, 1995 / Rules and Regulations

Repeal of Eximbank Standards of

Conduct

Eximbank is repealing its existing

standards of ethical conduct regulations

codified at 12 CFR part 400 which have

been largely superseded by the

executive branch-wide Standards at 5

CFR part 2635 or the executive branch

financial disclosure regulations at 5 CFR

part 2634. In place of its old standards

at 12 CFR part 400, Eximbank is issuing

a residual cross-reference provision at

new 12 CFR 400.101 to refer both to the

executive branch-wide Standards and

financial disclosure regulations and to

Eximbank’s new supplemental

standards regulations.

II. Matters of Regulatory Procedure

Administrative Procedure Act

As General Counsel of Eximbank, I

have found good cause pursuant to 5

U.S.C. 553(b) and (d)(3) for waiving, as

unnecessary and contrary to the public

interest, the general notice of proposed

rulemaking and the 30-day delay in

effectiveness as to these interim rules

and repeals. The reason for this

determination is that it is important to

a smooth transition from Eximbank’s

prior ethics rules to the new executive

branch-wide Standards and financial

disclosure regulations that these

rulemaking actions become effective as

soon as possible. Furthermore, this

rulemaking is related to Eximbank

organization, procedure and practice.

Nonetheless, this is an interim

rulemaking, with provision for a 45-day

public comment period. The ExportImport Bank of the United States will

review all comments received during

the comment period and will consider

any modifications that appear

appropriate in adopting these rules as

final, with the concurrence of the Office

of Government Ethics.

Regulatory Flexibility Act

As General Counsel of Eximbank, I

have determined under the Regulatory

Flexibility Act (5 U.S.C. chapter 6) that

these regulations will not have a

significant impact on small business

entities because they affect only

Eximbank employees and their

immediate families.

Paperwork Reduction Act

As General Counsel of Eximbank, I

have determined that the Paperwork

Reduction Act (44 U.S.C. chapter 35)

does not apply because these

regulations do not contain any

information collection requirements that

require the approval of the Office of

Management and Budget.

List of Subjects

5 CFR Part 6201

Conflict of interests, Government

employees.

12 CFR Part 400

Conflict of interests, Government

employees.

Dated: March 1, 1995.

Carol F. Lee,

General Counsel, Export-Import Bank of the

United States.

Approved: March 15, 1995.

Stephen D. Potts,

Director, Office of Government Ethics.

For the reasons set forth in the

preamble, the Export-Import Bank of the

United States, in concurrence with the

Office of Government Ethics, is

amending title 5 of the Code of Federal

Regulations and title 12, chapter IV, of

the Code of Federal Regulations as

follows:

1. A new Chapter LII, consisting of

part 6201, is added to title 5 of the Code

of Federal Regulations to read as

follows:

5 CFR CHAPTER LII—EXPORT-IMPORT

BANK OF THE UNITED STATES

PART 6201—SUPPLEMENTAL

STANDARDS OF ETHICAL CONDUCT

FOR EMPLOYEES OF THE EXPORTIMPORT BANK OF THE UNITED

STATES

Sec.

6201.101 General.

6201.102 Prohibited financial interests.

6201.103 Prior approval for outside

employment.

Authority: 5 U.S.C. 7301; 5 U.S.C. App.

(Ethics in Government Act of 1978); E.O.

12674, 54 FR 15159, 3 CFR, 1989 Comp., p.

215, as modified by E.O. 12731, 55 FR 42547,

3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105,

2635.403(a), 2635.803.

§ 6201.101 General.

In accordance with 5 CFR 2635.105,

the regulations in this part apply to

employees of the Export-Import Bank of

the United States (Bank) and

supplement the Standards of Ethical

Conduct for Employees of the Executive

Branch contained in 5 CFR part 2635. In

addition to the standards in 5 CFR part

2635 and this part, employees of the

Bank are subject to the executive branch

financial disclosure regulations

contained in 5 CFR part 2634.

§ 6201.102 Prohibited financial interests.

(a) Prohibition. Except as provided in

paragraph (f) of this section, no covered

employee or covered family member

shall own securities issued by an

exporter or lending institution

appearing on the List of Designated

Entities under paragraph (b) of this

section.

(b) List of Designated Entities—(1)

Compilation of list of designated

entities. Once each fiscal year, the

designated agency ethics official

(DAEO) shall compile a List of

Designated Entities based upon the

following criteria:

(i) All exporters that, during the

preceding two fiscal years, exported an

aggregate dollar volume of goods and

services supported by the Bank in

excess of four hundred million dollars

($400,000,000);

(ii) All exporters that, during the

preceding two fiscal years, had seven (7)

or more aggregate export transactions

supported by the Bank;

(iii) All lending institutions that,

during the preceding two fiscal years,

financed an aggregate dollar volume of

export transactions supported by the

Bank in excess of one hundred fifty

million dollars ($150,000,000); and

(iv) All lending institutions that,

during the preceding two fiscal years,

financed twenty (20) or more aggregate

export transactions supported by the

Bank.

(2) Distribution of list of designated

entities. The DAEO shall distribute the

List of Designated Entities to all covered

employees promptly after it is compiled,

and shall ensure that each new covered

employee receives a copy of the current

List of Designated Entities promptly

after becoming a covered employee.

(c) Definitions. For purposes of this

section:

(1) Covered employee means an

employee of the Bank, other than a

special Government employee, who is

required to file a public or a confidential

financial disclosure report (Form SF 278

or SF 450) under 5 CFR part 2634.

(2) Covered family member means the

spouse or minor child of a covered

employee.

(3) Securities means all financial

interests evidenced by debt or equity

instruments. The term includes, without

limitation, bonds, debentures, notes,

securitized assets and commercial

paper, as well as all types of preferred

and common stock. The term

encompasses both present and

contingent ownership interests,

including any beneficial or legal interest

derived from a trust. It extends to any

right to acquire or dispose of any long

or short position in such securities and

includes, without limitation, interests

convertible into such securities, as well

as options, rights, warrants, puts, calls,

and straddles with respect thereto. It

does not include:
Federal Register / Vol. 60, No. 67 / Friday, April 7, 1995 / Rules and Regulations 17627

(i) An investment in a publicly traded

or publicly available mutual fund or

other collective investment fund or in a

widely held pension or similar fund,

provided that the fund does not invest

more than ten percent (10%) of the

value of its portfolio in securities of any

one entity on the List of Designated

Entities and the covered employee or

covered family member neither

exercises control over nor has the ability

to exercise control over the financial

interests held in the fund; or

(ii) Certificates of deposit, checking

accounts, savings accounts and other

deposit accounts.

(4) Support by the Bank means:

(i) Direct loans made by the Bank;

(ii) Guarantees by the Bank of loans

from lending institutions; or

(iii) Insurance policies issued by the

Bank under any of its insurance

programs.

(d) Restrictions arising from third

party relationships. If a covered

employee has knowledge that any of the

entities described in paragraphs (d)(1)

through (d)(6) of this section own any

security that a covered employee or

covered family member would be

prohibited from owning by paragraph

(a) of this section, the covered employee

shall promptly report such interests to

the DAEO. The DAEO may require the

covered employee to terminate the third

party relationship, undertake an

appropriate disqualification, or take

other appropriate action necessary,

under the particular circumstances, to

avoid a statutory violation or a violation

of part 2635 of this title or of this part,

including an appearance of misuse of

position or loss of impartiality. This

paragraph applies to any:

(1) Partnership in which the covered

employee or covered family member is

a general partner;

(2) Partnership in which the covered

employee and/or covered family

member(s) in the aggregate holds more

than a ten percent limited partnership

interest;

(3) Closely held corporation in which

the covered employee and/or covered

family member(s) in the aggregate holds

more than a ten percent (10%) equity

interest;

(4) Trust in which the covered

employee or covered family member has

a legal or beneficial interest;

(5) Investment club or similar

informal investment arrangement

between the covered employee or

covered family member and others; or

(6) Other entity if the covered

employee and/or covered family

member(s) in the aggregate holds more

than a ten percent (10%) equity interest.

(e) Period to Divest. Unless a waiver

is granted pursuant to paragraph (f) of

this section, a covered employee or

covered family member who owns

securities of a designated entity as of the

date that the initial List of Designated

Entities is circulated to covered

employees, the date that a revised List

of Designated Entities is circulated to

covered employees, or the first day that

an individual becomes a covered

employee, shall divest the securities

within six (6) months of such date. The

DAEO may, in certain cases of unusual

hardship, grant a written extension of

up to an additional six (6) months

within which a covered employee or

covered family member must divest

securities of a designated entity.

Notwithstanding the grant of an

extension, a covered employee remains

subject to the disqualification

requirements of 5 CFR 2635.402 and

2635.502. A covered employee or

covered family member who must

divest securities pursuant to this section

should refer to section 1043 of the

Internal Revenue Code and to the

regulations of subpart J of 5 CFR part

2634 under which the covered

employee or covered family member

may be eligible to defer the recognition

of taxable gain on the sale or other

divestiture.

(f) Waivers. The DAEO may grant a

written waiver from the securities

prohibition contained in this section

based on a determination that the

waiver is not inconsistent with 5 CFR

part 2635 or otherwise prohibited by

law and that, under the particular

circumstances, application of the

prohibition is not necessary to avoid the

appearance of misuse of position or loss

of impartiality, or otherwise to ensure

confidence in the impartiality and

objectivity with which Bank programs

are administered. A waiver under this

paragraph may be accompanied by

appropriate conditions, such as

requiring execution of a written

statement of disqualification.

Notwithstanding the grant of any

waiver, a covered employee remains

subject to the disqualification

requirements of 5 CFR 2635.402 and

2635.502.

(g) Agency determinations of

substantial conflict. Nothing in this

section prevents the Bank from

prohibiting or restricting an individual

Bank employee from acquiring or

holding a financial interest or a class of

financial interests based upon the

Bank’s determination of substantial

conflict pursuant to 5 CFR 2635.403(b).

§ 6201.103 Prior approval for outside

employment.

(a) Prior approval requirement. Before

engaging in any outside employment,

whether or not for compensation, an

employee, other than a special

Government employee, must obtain the

written approval of the employee’s

immediate supervisor and the DAEO.

Requests for approval shall be

forwarded through normal supervisory

channels to the DAEO and shall include

the name of the person, group, or

organization for whom the work is to be

performed; the type of work to be

performed; and the proposed hours of

work and approximate dates of

employment.

(b) Standard for approval. Approval

shall be granted only upon a

determination that the outside

employment is not expected to involve

conduct prohibited by statute or Federal

regulation (including 5 CFR part 2635).

In the case of an employee who wishes

to practice a profession involving a

fiduciary relationship, as defined in 5

CFR 2636.305(b), approval will be

granted only for each individual matter

in the course of practicing such

profession.

(c) Definition of employment. For

purposes of this section, ‘‘employment’’

means any form of non-Federal

employment or business relationship

involving the provision of personal

services by the employee. It includes

but is not limited to personal services as

an officer, director, employee, agent,

attorney, consultant, contractor, general

partner, trustee or teacher. It also

includes writing when done under an

arrangement with another person for

production or publication of the written

product. It does not, however, include

participation in the activities of a

nonprofit charitable, religious,

professional, social, fraternal,

educational, recreational, public service

or civic organization, unless such

activities involve the provision of

professional services or advice or are for

compensation other than reimbursement

of expenses.

12 CFR CHAPTER IV—EXPORT-IMPORT

BANK OF THE UNITED STATES

2. Part 400 of 12 CFR chapter IV is

revised to read as follows:
17628 Federal Register / Vol. 60, No. 67 / Friday, April 7, 1995 / Rules and Regulations

PART 400—EMPLOYEE FINANCIAL

DISCLOSURE AND ETHICAL

CONDUCT STANDARDS

REGULATIONS

§ 400.101 Cross-reference to employee

financial disclosure and ethical conduct

standards regulations.

Employees of the Export-Import Bank

of the United States (Bank) should refer

to:

(a) The executive branch-wide

financial disclosure regulations at 5 CFR

part 2634;

(b) The executive branch-wide

Standards of Ethical Conduct at 5 CFR

part 2635; and

(c) The Bank regulations at 5 CFR part

6201 which supplement the executive

branch-wide standards.

Authority: 5 U.S.C. 7301.

[FR Doc. 95–8593 Filed 4–6–95; 8:45 am]

BILLING CODE 6690–01–P

DEPARTMENT OF AGRICULTURE

Food and Consumer Service

7 CFR Parts 272 and 273

[Amendment No. 359]

RIN 0584–AB78

Food Stamp Program: Medical

Expense Deduction

AGENCY: Food and Consumer Service,

USDA.

ACTION: Final rule.

SUMMARY: This rule finalizes an interim

rulemaking published on October 3,

1994. The interim rulemaking amended

food stamp regulations to simplify the

means by which households with

elderly and disabled members claim

deductions from income for verified,

prospective, non-reimbursed medical

expenses.

DATES: The amendments to

§ 272.1(g)(138), § 273.10(d)(4), and

§ 273.21(f)(2)(iv), § 273.21(i) and

§ 273.21(j)(3)(ii)(C) are effective May 8,

1995 and must be implemented no later

than September 5, 1995. The remaining

provisions of the interim rule which are

being adopted as final without change,

were effective October 1, 1994.

FOR FURTHER INFORMATION CONTACT:

Eligibility and Certification Rulemaking

Section, Certification Policy Branch,

Program Development Division, Food

and Consumer Service, USDA, 3101

Park Center Drive, Alexandria, Virginia,

22302, (703) 305–2496.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule has been determined to be

significant and was reviewed by the

Office of Management and Budget under

Executive Order 12866.

Executive Order 12372

The Food Stamp Program is listed in

the Catalog of Federal Domestic

Assistance under No. 10.551. For the

reasons set forth in the final rule in 7

CFR 3015, Subpart V and related Notice

(48 FR 29115), this Program is excluded

from the scope of Executive Order

12372 which requires intergovernmental

consultation with State and local

officials.

Regulatory Flexibility Act

This rule has been reviewed with

regard to the requirements of the

Regulatory Flexibility Act of 1980 (5

U.S.C. 601–612). Ellen Haas, the Under

Secretary for Food, Nutrition, and

Consumer Services, has certified that

this interim rule will not have a

significant economic impact on a

substantial number of small entities.

State and local welfare agencies will be

the most affected to the extent that they

administer the Program.

Paperwork Reduction Act

This rule does not contain reporting

or recordkeeping requirements subject

to approval by the Office of

Management and Budget (OMB) under

the Paperwork Reduction Act of 1980

(44 U.S.C. 3507).

Executive Order 12778

This rule has been reviewed under

Executive Order 12778, Civil Justice

Reform. This rule is intended to have

preemptive effect with respect to any

State or local laws, regulations or

policies which conflict with its

provisions or which would otherwise

impede its full implementation. This

rule is not intended to have retroactive

effect unless so specified in the

EFFECTIVE DATE paragraph of this

preamble. Prior to any judicial challenge

to the provisions of this rule or the

application of its provisions, all

applicable administrative procedures

must be exhausted. In the Food Stamp

Program the administrative procedures

are as follows: (1) For Program benefit

recipients—State administrative

procedures issued pursuant to 7 U.S.C.

2020(e)(1) and 7 CFR 273.15; (2) for

State agencies—administrative

procedures issued pursuant to 7 U.S.C.

2023 set out at 7 CFR 276.7 (for rules

related to non-quality control (QC)

liabilities) or Part 284 (for rules related

to QC liabilities); (3) for Program

retailers and wholesalers—

administrative procedures issued

pursuant to 7 U.S.C. 2023 set out at 7

CFR 278.8.

Background

On October 3, 1994, the Department

published an interim rule at 59 FR

50153 (interim regulation) amending the

food stamp regulations to simplify the

means by which households with

elderly and disabled members claim

deductions from income for verified,

prospective, non-reimbursed medical

expenses. Comments were solicited on

the provisions of the interim rule

through December 2, 1994. This final

action addresses the commenters’

concerns. Readers are referred to the

interim rule for a more complete

understanding of this final action.

The Department received 5 comments

on the interim rule. Two of the

commenters supported the interim rule,

believing that it benefitted households

and State agencies alike by eliminating

unnecessary reporting requirements.

Four of the five commenters raised

issues which are addressed below.

Budgeting of Medical Expenses

A commenter noted that, although the

interim regulations require State

agencies to allow households to

estimate, prospectively, recurring

medical expenses, they do not explicitly

prohibit retrospective budgeting of those

expenses. Such retrospective budgeting

is prohibited by section 5(e) of the Food

Stamp Act of 1977, as amended, 7 USC

2014(e) (Act). Since only households in

which all members are elderly or

disabled with no earned income are

amongst those groups of households

exempt from retrospective budgeting,

the interim rule’s failure to explicitly

prohibit the retrospective budgeting of

medical expenses leaves open the

possibility that some households’

medical expenses would be budgeted in

that manner.

The Department agrees with the

commenter that the interim regulations

failed to explicitly prohibit the

retrospective budgeting of medical

expenses. Therefore, the Department is

amending current regulations at 7 CFR

273.21(f)(2)(iv) to require that State

agencies prospectively budget recurring

medical expenses.

Verification of Medical Expenses

The same commenter requested

clarification of the procedures for State

agency action on a household’s

voluntary report of a change in medical

expenses. Although reporting of changes

in medical expenses during the