This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

394

Vol. 61, No. 4

Friday, January 5, 1996

OFFICE OF PERSONNEL

MANAGEMENT

5 CFR Parts 731, 732, and 736

RIN 3206–AB92

Suitability, National Security Positions,

and Personnel Investigations

AGENCY: Office of Personnel

Management.

ACTION: Proposed rule.

SUMMARY: The Office of Personnel

Management (OPM) is proposing

changes to rules on personnel

suitability, national security positions,

and personnel investigations which

OPM previously issued as an interim

rule with a request for comments. OPM

has received and considered public

comments and is now publishing for

comment proposed changes. The

proposed rule incorporates many of the

suggestions received, makes additional

changes based on the recent

abolishment of the Federal Personnel

Manual (FPM), and continues the

distinctions in the interim rule between

national security investigations and

investigations to determine suitability

for non-sensitive positions. OPM will

issue a final rule after review of the

comments received on this proposed

rule.

DATES: Comments must be submitted on

or before February 20, 1996.

ADDRESSES: Send written comments to

John J. Lafferty, Deputy Associate

Director for Investigations, Office of

Personnel Management, Post Office Box

886, Washington, DC, 20044–0886.

FOR FURTHER INFORMATION CONTACT:

John J. Lafferty, (202) 376–3800.

SUPPLEMENTARY INFORMATION: OPM

promulgated the current suitability and

personnel security regulations as an

interim rule with a request for

comments in the Federal Register (56

FR 18650–18656, April 23, 1991).

Comments were received from 16

sources, including individuals, Federal

agencies, Federal employee unions, and

public interest organizations. The

following summarizes the principal

comments, suggestions and proposed

actions to be taken, as well as

information added because of the

abolishment of the FPM.

Part 731

Section 731.102 Implementation

Because of the abolishment of the

FPM, a new section has been added to

the regulations outlining OPM’s and

agencies’ responsibilities under the

Computer Security Act of 1987 and

OMB Circular A–130.

Section 731.103 Delegation to

Agencies

The interim regulations provided that

OPM could, in its discretion, delegate to

agencies authority for adjudicating

suitability. In accordance with

recommendations of the National

Performance Review (NPR), the

proposed regulations delegate to

agencies all suitability adjudication

authority, except in cases of material

intentional false statement or deception

or fraud in examination or appointment.

Several commenters on the interim

regulations were concerned that the

provision for delegation to agencies of

suitability determination authority did

not extend all of the same procedural

protections that are applicable in OPMadjudicated cases.

OPM has revised the regulations to

make clear that all procedural rights

applicable in OPM-adjudicated cases

pertain to agency adjudications. This

should alleviate concerns expressed

regarding ‘‘administrative due process’’

for cases involving delegated suitability

determination authority.

Section 731.201 Standard

Section 731.201 has been revised to

clarify that removal is not the only

option that may be pursued for an

employee found unsuitable. The

Director of OPM has authority under

Civil Service Rule 5.3(a)(a) to instruct

agencies ‘‘to separate or take other

action’’ against an employee found

unsuitable (emphasis supplied), and

agencies will have the same authority

under delegated suitability adjudication

authority.

Section 731.202 Criteria

OPM received favorable comments on

the substitution of a more clearly jobrelated criterion for ‘‘alcohol abuse,’’ in

lieu of the prior standard of ‘‘habitual

use of intoxicating beverages to excess.’’

However, a number of negative

comments were received regarding

certain other criteria. One commenter

thought that ‘‘refusal to furnish

testimony as required by § 5.4 of this

chapter’’ was too broad and should be

qualified by language making clear that

the provision was not intended to

require testimony protected by the U.S.

Constitution or the Whistleblower

Protection Act or the Inspector General

Act. No change is proposed in response

to this comment. OPM believes it is selfevident that none of OPM’s regulations

should or would be interpreted or

applied in any manner that would

violate the Constitution or specific

statutory mandates.

Another commenter, while opining

that ‘‘knowing and willful engagement

in acts or activities designed to

overthrow the U.S. Government by

force’’ was ‘‘more stringent’’ than

‘‘current criteria,’’ nevertheless urged

elimination of this criterion altogether

on First Amendment grounds. OPM

does not consider it necessary to adopt

this suggestion because OPM does not

believe that the criterion authorizes

constitutionally forbidden questions

concerning ‘‘political associations’’ or

‘‘broad inquiries into loyalty.’’ The

phrase ‘‘acts or activities designed to

overthrow the U.S. Government by

force’’ properly focuses on illegal acts,

and prevents inquiry into an applicant’s

or employee’s political beliefs or

associations. Mere advocacy of the use

of violence as an avenue of political

reform is not penalized under the

standard.

Other comments were received

concerning the proposed illegal drug

use criterion. One commenter thought

that ‘‘substantial’’ rehabilitation was too

vague, and that ‘‘complete’’

rehabilitation should be required; one

commenter thought that both ‘‘use’’ and

‘‘substantial’’ were too vague, calling for

purely subjective judgments, and that

the entire standard was defective

because not job-related; another

commenter asked how the illegal drug

use criterion could be reconciled with

the Drug Abuse Office and Treatment

Act. OPM does not believe that the

illegal drug use criterion would be

interpreted or applied in a manner that

would contravene the Drug Abuse

Office and Treatment Act, and suggests
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Proposed Rules 395

that ‘‘substantial’’ rehabilitation is a

suitable standard, to be assessed in light

of the evidence in a particular case.

OPM has proposed two additions to

the ‘‘specific factors’’ in subsection (b):

Misconduct or negligence in prior

employment has been broadened to

include current employment as well as

prior employment, and the intentional

false statement factor has been changed

to read ‘‘material intentional false

statement.’’ The latter change accords

with longstanding OPM practice (as

reflected in the former FPM) that a

falsification must be ‘‘material’’ in order

to justify debarment, removal, or other

appropriate action.

Section 731.203 Due Process

OPM has set forth a new and separate

provision governing ‘‘due process’’

protections applicable in suitability

cases, as distinguished from due process

provisions applicable in national

security cases under § 732.301. Based on

objections received from many

commenters regarding the use of

confidential information in suitability

adjudications, and consistent with

judicial precedent, OPM proposes to

ensure that information furnished by

confidential sources may not be used by

agencies in adjudicating suitability.

Section 731.302 Designation of Public

Trust Positions and Investigative

Requirements [This Section Was

Entitled ‘‘Risk Designation and

Investigative Requirements’’ in the

Interim Regulations]

OPM received a number of comments

questioning the lack of specificity in

paragraphs (a) and (b) of § 731.302.

Commenters were concerned about the

lack of guidance to agencies, especially

with respect to assessing ‘‘risk levels’’ of

positions covered under § 731.302. OPM

has deleted all references to ‘‘risk

levels’’ in the proposed regulation, and

has set forth specific criteria for

determining public trust positions. In

addition, the regulation makes clear that

agency heads, not OPM, are responsible

for the designation of public trust

positions within their agencies.

A number of commenters opposed the

reinvestigation requirement for public

trust positions set forth in § 731.302(c),

pointing out that there is no clear

statutory foundation for imposing a

reinvestigation requirement for current

employees occupying positions not

affecting national security; rather, the

authorities empowering OPM to

conduct suitability investigations speak

solely in terms of ‘‘applicants.’’ Because

of the lack of statutory or other authority

for reinvestigating the character and

fitness of current employees who do not

occupy positions affecting national

security, OPM proposes to delete from

the final regulations the reinvestigation

requirement for public trust positions.

Agencies wishing to conduct

reinvestigations may explore their

enabling legislation to determine

whether they have the authority to

conduct reinvestigations on their own

initiative.

Section 731.303 Actions by OPM and

Other Agencies

OPM received a number of comments

concerning § 731.303(c), which provides

that suitability disqualification actions

are not considered actions under part

752 or §§ 315.804–806 of part 315. The

primary concern seemed to be that by

withdrawing suitability-based removal

actions from the statutory protections

associated with other adverse actions,

employees would be denied the

protection of collective bargaining

agreements and attendant grievance and

arbitration procedures.

OPM does not consider it appropriate

to amend the regulation in question

along the lines suggested for two

reasons. First, the questioned provision

is not new (except to the extent that

removals of probationary employees are

included). Suitability-based removals

have always been exempted from

agency-initiated removal procedures;

see 5 CFR § 731.302(c) (1991). Second,

suitability actions are taken under

authority delegated to OPM by the

President. These actions are taken by

OPM in the exercise of its government

wide function of safeguarding the

appointment process to positions in the

competitive service. They are not

chapter 75 adverse actions at all.

Accordingly, chapter 75 of title 5 does

not apply to suitability actions. Such

actions also are not subject to the

negotiated grievance procedure, which

is limited to disputes between agencies

in their capacity as employers and

employees in recognized bargaining

units.

Section 731.304 Debarment

One commenter thought that the

provision giving OPM discretion to

debar a person found unsuitable from

reapplying for a competitive service

position for up to 3 years was unclear

in failing to clarify whether a new

determination of suitability after

expiration of a debarment period would

trigger the same procedural protections

as are afforded upon an initial

suitability determination. Another

commenter felt that debarment for 3

years was too long, and that debarment

for up to 1 year would be a more

reasonable standard.

OPM applies the same procedural

protections upon subsequent

redeterminations of suitability as it

applies in initial determinations. In

order to make this clear, a clarifying

phrase to this effect has been added to

§ 731.304(b). OPM does not believe it is

necessary to change the permissible

debarment period, since OPM exercises

discretion in each case, giving due

weight to the ‘‘additional factors’’ set

forth in § 731.202(c).

Subpart D—Suitability Actions

Two commenters recommended

extending due process protections

under part 731 to excepted service

employees, since recent amendments to

5 U.S.C. § 7511 grant appeal rights in

adverse action cases to most employees

in the excepted service. This suggestion

cannot be adopted since OPM does not

have authority to extend part 731

requirements to the excepted service.

Commenters also suggested that

§ 731.403 be amended to limit an

agency’s discretion to set the time and

place of an employee’s oral answer, to

require agencies to provide employees

paid time to prepare an answer, and to

require that agencies answering an OPM

proposed action notice also provide it to

the employee. OPM does not believe it

is appropriate to limit the discretion to

set the time and place of oral responses,

in light of the NPR’s recommendation

that agencies by given more latitude in

suitability determinations. Similarly, it

should be up to each agency to

determine whether it wishes to excuse

an individual or class of individuals for

brief periods of time for the purpose of

preparing answers and appeals in

suitability actions.

OPM has, however, assumed an

additional obligation in § 731.402(b):

Copies of notices of proposed actions

must now be sent both to respondents’

residences and to their duty stations, in

order to ensure actual receipt of such

notices by respondents.

Section 731.501 Appeal to the Merit

Systems Protection Board

OPM published a final rule revoking

the section establishing the OPM

Review Panel, concluding, as several

commenters predicted, that the OPM

Review Panel did not serve a useful

independent review function (60 FR

13613) March 14, 1995.

Under OPM’s interim rule that

established the Review Panel,

appellants were retained in a pay status

while their appeals were pending with

the Panel, but if the Panel affirmed

OPM’s decisions, the appellants’

agencies were directed to remove the

appellants within 5 days of receipt of
396 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Proposed Rules

the Panel’s decision by the agency. With

the elimination of the Panel, the

appellants’ employing agencies not have

the option of retaining appellants in a

pay status pending adjudication of their

appeals to the MSPB.

Part 732

Section 732.102 Definition and

Applicability

Several commenters suggested that

the definition of national security

positions be changed by broadening

‘‘activities of the Government’’ to

include ‘‘the conduct of foreign

relations.’’ It was also suggested that the

degree of involvement in national

security activities necessary to support

a national security designation be

spelled out, and that the meaning of

‘‘regular’’ access to classified

information be clarified.

OPM proposes to broaden the

definition of national security positions

to include ‘‘positions primarily

concerned with sensitive diplomatic

relations with other countries,’’

believing that ‘‘conduct of foreign

relations’’ is too broad a phrase and

might, for example, invite national

security position designations for

positions beyond those involved in

trade negotiations, such as those

involving only trade promotion.

OPM has not adopted the suggestion

that the degree of involvement in

national security activities necessary to

support a national security position

designation be spelled out, since OPM

believes that agencies are in the best

position to judge whether particular

positions might have an adverse effect

on national security within the meaning

of E.O. 10450.

OPM proposes to retain the word

‘‘regular’’ in connection with access to

classified national security information,

so that it is clear that irregular,

infrequent, or occasional access to such

information does not justify a national

security position designation.

Section 732.201 Sensitivity Level

Designations and Investigative

Requirements

This section incorporates definitions

of sensitivity levels and related

guidance from the abolished FPM.

Section 732.202 Waivers and

Exceptions to Investigative

Requirements

One commenter suggested that

positions covered by § 732.202(b)(1) be

identified as ‘‘non-sensitive’’ and that

this section be moved to part 731. This

suggestion misconstrues the meaning

and purpose of § 732.202(b)(1). The

positions described in that section are

related to national security, and are thus

‘‘sensitive’’ positions; but, because of

their temporary or seasonal nature,

agencies are permitted under E.O. 10450

to request that OPM exempt them from

the investigative requirements of that

order. (Paragraph (b) of § 732.202 has

been revised to clarify that the specified

positions may be exempted from the

investigative requirements of E.O. 10450

only upon request of the head of the

agency concerned.)

OPM also proposes to remove

§ 732.202(b)(2) from the final

regulations, since there is no authority

in E.O. 10450 for this provision as it

appeared in the interim regulations.

Section 732.203 Periodic

Reinvestigations

One commenter suggested that

periodic investigations in national

security cases are unnecessary, on the

ground that competent managers should

make it their business to garner the

same information through personal

inquiries and observations. However,

OPM proposes to retain the requirement

for periodic reinvestigations in national

security cases, since reinvestigations

appear to be authorized under E.O.

10450, have been standard practice at

least since 1965 pursuant to Presidential

directive, and are contemplated by

National Security Directive 63 (October

21, 1991) and E.O. 12968.

Subpart C—Due Process and Reporting

Section 732.301 Due Process

OPM received a number of comments

suggesting that procedural protections

be strengthened for persons seeking

security clearances, as well as a

suggestion that the standards for

granting or continuing security

clearances be made uniform for Federal

Government employees and for Federal

Government contractors. With respect to

the recommendation that OPM establish

uniform governmentwide procedures for

the granting, denial or revocation of

security clearances, general authority in

this area does not belong to OPM but is

vested in individual agencies under E.O.

10450 and E.O. 12958.

Part 736

Part 736 has been revised to make

clear that its requirements apply only to

suitability and national security

investigations conducted under parts

731 and 732 and to national security

investigations of individuals seeking or

holding employment with Federal

contractors. In addition, OPM proposes

to make the following changes in

personnel investigation requirements:

Section 736.104 Timing of

Investigations

Except for Special-Sensitive national

security position, OPM has added a

requirement that investigations for all

positions subject to investigation be

initiated within 14 days of placement in

the position. This section implements

the NPR’s recommendation that

background investigations be conducted

promptly.

Section 736.201 Protecting the Identity

of a Source

Several commenters urged OPM to

eliminate the use of confidential sources

of information or, in the alternative, to

impose tighter controls on the granting

of pledges of confidentiality.

OPM does not believe it is appropriate

to eliminate the use of confidential

sources altogether, since Congress

specifically provided for the granting of

confidentiality in appropriate

circumstances in the Privacy Act of

1974. However, in § 731.203, OPM has

proposed that information furnished by

confidential sources may not be used by

agencies in adjudicating suitability in

non-national security cases, and in

§ 736.201, OPM has added a new

provision that pledges of confidentiality

under either part 731 or part 732 may

be granted ‘‘only in the most compelling

circumstances and only upon specific

request by the source.’’ The latter

requirement conforms to OMB’s Privacy

Act guidelines (40 FR 28949, 28974

(1975)).

Section 736.203 Use of the Polygraph

Chapter 736 of the former FPM

contained limitations upon using

polygraphs in personnel investigations,

based upon a July 29, 1966, interagency

committee report approved by former

President Lyndon B. Johnson. The

restrictions previously contained in the

FPM are carried over in their entirety in

§ 736.203.

Subpart C—Maintenance of Information

This section incorporates OPM

requirements for the maintenance and

handling of OPM investigative files

formerly contained in the FPM.

E.O. 12866, Regulatory Review

This rule has been reviewed by the

Office of Management and Budget in

accordance with E.O. 12866.

Regulatory Flexibility Act

I certify that these regulations will not

have a significant economic impact on

a substantial number of small entities

because they relate to internal personnel

matters within the Federal Government.
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Proposed Rules 397

List of Subjects in 5 CFR Parts 731, 732,

and 736

Administrative practice and

procedure, Government employees,

National defense, Freedom of

information, Investigations, Privacy.

U.S. Office of Personnel Management.

James B. King,

Director.

Accordingly, OPM proposes to amend

5 CFR parts 731, 732, and 736 as

follows:

1. Part 731 is revised to read as

follows:

PART 731—SUITABILITY

Subpart A—Scope

Sec.

731.101 Purpose.

731.102 Implementation.

731.103 Delegation to agencies.

Subpart B—Suitability Determinations

731.201 Standard.

731.202 Criteria.

731.203 Due process.

Subpart C—Suitability Rating Actions

731.301 Jurisdiction.

731.302 Designation of public trust

positions and investigative requirements.

731.303 Actions by OPM and other

agencies.

731.304 Debarment.

Subpart D—Suitability Actions

731.401 Scope.

731.402 Notice of proposed action.

731.403 Answer.

731.404 Decision.

Subpart E—Appeal to the Merit Systems

Protection Board

731.501 Appeal to the Merit Systems

Protection Board.

Subpart F Savings Provision

731.601 Savings provision.

Authority: 5 U.S.C. 1302, 3301, 3302, 7301,

7701; E.O. 10577, 3 CFR 1954–1958 Comp.,

p. 218; E.O. 12731, 3 CFR, 1990 Comp., p.

306.

Subpart A—Scope

§ 731.101 Purpose.

The purpose of this part is to establish

criteria and procedures for making

determinations of suitability for

employment in positions in the

competitive service and for career

appointments in the Senior Executive

Service (hereinafter in this part,

‘‘competitive service’’) pursuant to 5

U.S.C. 3301 and E.O. 10577 (3 CFR,

1954–1958 Comp., p. 218). Section 3301

of title 5, United States Code, directs

consideration of ‘‘age, health, character,

knowledge, and ability for the

employment sought.’’ E.O. 10577 directs

OPM to examine ‘‘suitability’’ for

competitive Federal employment. This

part concerns only determinations of

‘‘suitability’’ based on an individual’s

character or conduct that may impact

the efficiency of the service by

jeopardizing an agency’s

accomplishment of its duties or

responsibilities, or by interfering with or

preventing effective service in the

position applied for or employed in, and

determinations that there is a statutory

or regulatory bar to employment.

Determinations made under this part are

distinct from determinations of

eligibility for assignment to, or retention

in, sensitive national security positions

made under E.O. 10450 (3 CFR, 1949–

1953 Comp., p. 936) or similar

authorities.

§ 731.102 Implementation.

(a) An investigation conducted for the

purpose of determining suitability

under this part may not be used for any

other purpose except as provided in a

Privacy Act system of records notice

published by the agency conducting the

investigation.

(b) Under OMB Circular No. A–130

(effective January 22, 1992), the

Director, OPM, is to maintain personnel

security policies for Federal personnel

associated with the design,

programming, operation, maintenance,

or use of Federal automated information

systems. Agencies are instructed to

establish and manage personnel security

policies and procedures to assure an

adequate level of security for Federal

automated information systems. In

accordance with OMB Circular A–130,

agency policies and procedures for the

security of Federal automated

information systems must conform to

OPM guidance. The Computer Security

Act of 1987 (Public Law 100–235)

provides additional requirements for

Federal automated information systems.

(c) Policies, procedures, criteria, and

guidance for the implementation of this

part shall be set forth in issuances of the

OPM. Agencies exercising authority

under this part by delegation from OPM

shall conform to such policies,

procedures, criteria, and guidance.

§ 731.103 Delegation to agencies.

(a) OPM delegates to the heads of

agencies authority for adjudicating

suitability in all cases involving

applicants for and appointees to

competitive service positions in the

agency, except that OPM retains

jurisdiction in competitive service cases

involving evidence of material,

intentional false statement or deception

or fraud in examination or appointment.

Agencies must refer these cases to OPM

for adjudication, or contact OPM for

prior approval if an agency wants to

take action under its own authority (5

CFR part 315 or 5 CFR part 752).

(b) Agencies exercising authority

under this part by delegation from OPM

must show by policies and records that

reasonable methods are used to ensure

adherence to regulations, standards, and

quality control procedures established

by OPM.

(c) Paragraphs (a) and (b) of this

section notwithstanding, OPM may

exercise its jurisdiction under this part

in any case when deemed necessary.

(d) Any applicant or appointee who is

found unsuitable by any agency having

delegated authority from OPM under

this part for any reason named in

§ 731.202 may appeal to the Merit

Systems Protection Board under the

Board’s regulations.

Subpart B—Suitability Determinations

§ 731.201 Standard.

Subject to subpart C of this part, an

applicant, appointee, or employee may

be denied Federal employment,

removed from a position, or be

subjected to other appropriate action,

only when the action will promote the

efficiency of the service.

§ 731.202 Criteria.

(a) General. In determining whether

its action will promote the efficiency of

the service, OPM or an agency to which

OPM has delegated authority under

§ 731.103 of this chapter, shall make its

determination on the basis of:

(1) Whether the conduct of the

individual may reasonably be expected

to interfere with, or prevent, efficient

service in the position applied for or

employed in; or

(2) Whether the conduct of the

individual may reasonably be expected

to interfere with, or prevent, effective

accomplishment by the employing

agency of its duties or responsibilities;

or

(3) Whether a statutory or regulatory

bar prevents the lawful employment of

the individual in the position in

question. Each agency is responsible for

determining whether a statutory or

regulatory bar prevents employment

with that agency.

(b) Specific factors. When making a

determination under paragraph (a) of

this section, any of the following

reasons may be considered a basis for

finding an individual unsuitable:

(1) Misconduct or negligence in

current or prior employment which

would have a bearing on efficient

service in the position in question, or

would interfere with or prevent effective

accomplishment by the employing

agency of its duties and responsibilities;
398 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Proposed Rules

(2) Criminal or dishonest conduct

related to the duties to be assigned to

the applicant or appointee, or to that

person’s service in the position or the

service of other employees;

(3) Material, intentional false

statement or deception or fraud in

examination or appointment;

(4) Refusal to furnish testimony as

required by § 5.4 of this chapter;

(5) Alcohol abuse of a nature and

duration which suggests that the

applicant or appointee would be

prevented from performing the duties of

the position in question, or would

constitute a direct threat to the property

or safety of others;

(6) Illegal use of narcotics, drugs, or

other controlled substances, without

evidence of substantial rehabilitation;

(7) Knowing and willful engagement

in acts or activities designed to

overthrow the U.S. Government by

force;

(8) Any statutory or regulatory bar

which prevents the lawful employment

of the person involved in the position in

question.

(c) Additional factors. In making a

determination under paragraphs (a) and

(b) of this section, OPM and agencies

shall consider the following additional

factors:

(1) The nature of the position for

which the person is applying or in

which the person is employed,

(2) The nature and seriousness of the

conduct,

(3) The circumstances surrounding

the conduct,

(4) The recency of the conduct,

(5) The age of the person involved at

the time of the conduct,

(6) Contributing societal conditions,

(7) The absence or presence of

rehabilitation or efforts toward

rehabilitation.

§ 731.203 Due process.

When an agency makes an

adjudicative decision under this part

based on an OPM investigation or upon

an investigation conducted pursuant to

OPM-delegated authority, or when an

agency, as a result of information in an

OPM investigation or an investigation

conducted pursuant to OPM-delegated

authority, changes a tentative favorable

placement decision to an unfavorable

decision, the agency must:

(a) Insure that the records used in

making the decision are accurate,

relevant, timely, and complete to the

extent reasonably necessary to assure

fairness to the individual in any

determination;

(b) Insure that all applicable

administrative due process

requirements provided by law, the

regulations in this part, and OPM policy

guidance have been observed;

(c) Consider all available information

in reaching its final decision, except

information furnished by a confidential

source; and

(d) Keep any record of the agency

action required by OPM as published in

its issuances.

Subpart C—Suitability Rating Actions

§ 731.301 Jurisdiction.

(a) Appointments subject to

investigation. (1) In order to establish an

appointee’s suitability for employment

in the competitive service, every

appointment to a position in the

competitive service is subject to

investigation by OPM or an agency

conducting investigations under

delegated authority from OPM, except:

(i) Promotion;

(ii) Demotion;

(iii) Reassignment;

(iv) Conversion from careerconditional to career tenure;

(v) Appointment, or conversion to an

appointment, made by an agency of an

employee of that agency who has been

serving continuously with that agency

for at least 1 year in one or more

positions under an appointment subject

to investigation; and

(vi) Transfer, provided the 1 year,

subject-to-investigation period applied

to the previous appointment has

expired.

(2) Appointments are subject to

investigation to continue OPM’s

jurisdiction to investigate the suitability

of an applicant after appointment and to

authorize OPM or an agency acting

under delegated authority to require

removal or take other appropriate action

when it finds the appointee is

unsuitable for Federal employment. The

subject-to-investigation condition may

not be construed as requiring an

employee to serve a new probationary or

trial period or as extending the

probationary or trial period of an

employee.

(b) Duration of condition. The subjectto-investigation condition expires

automatically at the end of 1 year after

the effective date of appointment,

except in a case involving material,

intentional false statement or deception

or fraud in examination or appointment,

or refusal to furnish testimony.

§ 731.302 Designation of public trust

positions and investigative requirements.

(a) Definition of public trust positions.

Public trust positions include positions

involving policymaking, major program

responsibility, law enforcement duties,

or other duties demanding the highest

degree of public trust; and positions

involving access to or operation or

control of unclassified confidential or

financial records, with a relatively high

risk for causing grave damage or

realizing a significant personal gain.

(b) Designation of public trust

positions. Agency heads shall be

responsible for designating public trust

positions within the agency in

accordance with the criteria set forth in

paragraph (a) of this section.

(c) Investigative requirements. Persons

receiving an appointment made subject

to investigation shall undergo a

background investigation, the minimum

scope and coverage of which shall be

determined by OPM.

§ 731.303 Actions by OPM and other

agencies.

(a) For a period of 1 year after the

effective date of an appointment subject

to investigation under § 731.301, an

appointee may be removed or other

appropriate action may be taken when

OPM or an agency exercising delegated

authority under this part finds that the

appointee is unsuitable for any of the

reasons cited in § 731.202.

(b) Thereafter, OPM may require that

an employee be removed or other

appropriate action be taken on the basis

of either material, intentional false

statement or deception or fraud in

examination or appointment; or refusal

to furnish testimony; or statutory or

regulatory bar.

(c) An action to remove an appointee

or employee under this part is not an

action under part 752, or §§ 315.804

through 315.806 of this chapter.

(d) When OPM instructs an agency to

remove an appointee or employee under

this part it shall notify the agency and

the appointee or employee of its

decision in writing.

(e) Before OPM, or any agency having

delegated authority from OPM under

this part, shall take a final suitability

action against an applicant, eligible,

appointee, or employee under this part,

the person against whom the action is

proposed shall be given notice of the

proposed action (including the

availability for review, upon request, of

the materials relied upon), an

opportunity to answer, notice of the

final decision on the action, and notice

of rights of appeals.

(f) Agencies are required to report to

OPM all unfavorable adjudicative

actions taken under this part, including

all actions based on OPM reports of

investigation.

§ 731.304 Debarment.

(a) When OPM finds a person

unsuitable for any reason named in
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Proposed Rules 399

§ 731.202, OPM, in its discretion, may

deny that person examination for, and

appointment to, a competitive service

position for a period of not more than

3 years from the date of determination

of unsuitability.

(b) On expiration of a period of

debarment, a person who has been

debarred may not be appointed to any

position in the competitive service until

OPM has redetermined that person’s

suitability for appointment, in

accordance with the procedures of this

part.

(c) Any authorities delegated to

agencies by OPM under this part do not

apply to or include OPM’s debarment

authority under paragraphs (a) and (b) of

this section.

(d) Any adjudication by an agency

acting under delegated authority from

OPM which indicates that debarment

may be an appropriate action may be

referred to OPM for its consideration.

Subpart D—Suitability Actions

§ 731.401 Scope.

(a) Coverage. This subpart sets forth

the procedures to be followed when

OPM or an agency having delegated

authority from OPM, acting under

authority of this part, proposes to take

or to instruct an agency to take, a final

suitability ineligibility action, including

removal, against an applicant, appointee

or employee in the competitive service.

(b) Definition. In this subpart, days

means calendar days.

§ 731.402 Notice of proposed action.

(a) OPM or the agency having

delegated authority from OPM under

this part shall notify the applicant,

appointee, or employee (hereinafter, the

‘‘respondent’’) in writing of the

proposed action and of the charges

against the respondent. The notice shall

state the reasons, specifically and in

detail, for the proposed action. The

notice shall also state that the

respondent has the right to answer this

notice in writing. If the respondent is an

employee the notice shall further state

that the employee may also make an

oral answer, as specified in § 731.403(a).

The notice shall further inform the

respondent of the time limits for answer

as well as the address to which such

answer should be made.

(b) OPM shall send a copy of this

notice to the agency, if any, that is

involved. The notice shall be served

upon the respondent by being mailed to

the respondent’s last known residence,

and duty station if an employee, no less

than 30 days prior to the effective date

of the proposed action. If the respondent

is employed in the competitive service

on the date the notice is served, the

respondent shall be entitled to be

retained in pay status during the notice

period.

§ 731.403 Answer.

(a) Respondent’s answer. A

respondent may answer the charges in

writing and furnish documentation and/

or affidavits in support of the response.

A respondent who is an employee may

answer orally. The respondent may be

represented by a representative of the

respondent’s choice, and such

representative shall be designated in

writing. To be timely, a written answer

shall be made no more than 30 days

after the date of the notice of proposed

action. In the event that an employee

requests to make an oral answer, OPM

or the agency having delegated authority

from OPM under this part shall

determine the time and place thereof,

and shall consider any answer that the

respondent makes in reaching a

decision.

(b) Agency’s answer. In actions

proposed by OPM under § 5.3 of this

chapter, the agency may also answer the

notice of proposed action. The time

limit for filing an answer is 30 days

from the date of the notice. OPM shall

consider any answer that the agency

makes in reaching a decision.

§ 731.404 Decision.

The decision shall be in writing,

dated, and inform the respondent of the

reasons for the decision. Removal of

appointees or employees will be

effective 30 days following the date of

the decision. The respondent shall also

be informed that an adverse decision

can be appealed in accordance with

subpart E of this part. OPM shall notify

the respondent and the agency of the

decision.

Subpart E—Appeal to the Merit

Systems Protection Board

§ 731.501 Appeal to the Merit Systems

Protection Board.

(a) Appeal to the Merit Systems

Protection Board. An individual who

has been found unsuitable for

employment may appeal the decision to

the Merit Systems Protection Board (the

Board). An employee or appointee who

appeals a removal directed by OPM

shall notify the employing of the appeal

at the time it is filed.

(b) Appeal procedures. The

procedures for filing an appeal with the

Board are found at part 1201 of title 5,

Code of Federal Regulations.

(c) Pay status pending appeal. When

an employee or appointee who has been

found unsuitable for employment by

OPM files an appeal to the Board, the

employing agency may, at its option,

retain the employee or appointee in an

active duty status for the period, in

which event the agency shall so notify

the employee or appointee. If the agency

elects to proceed with a suspension or

removal ordered by OPM, part 752 of

this chapter shall not apply.

Subpart F—Savings Provision

§ 731.601 Savings provision.

No provision of the regulations in this

part shall be applied in such a way as

to affect any administrative proceeding

pending on [THE EFFECTIVE DATE OF

THE FINAL RULE]. An administrative

proceeding is deemed to be pending

from the date of the ‘‘notice of proposed

action’’ described in § 731.402.

2. Part 732 is revised to read as

follows:

PART 732—NATIONAL SECURITY

POSITIONS

Subpart A—Scope

Sec.

731.101 Purpose.

732.102 Definition and applicability.

Subpart B—Designation and Investigative

Requirements

732.201 Sensitivity level designations and

investigative requirements.

732.202 Waivers and exceptions to

investigative requirements.

732.203 Periodic reinvestigation

requirements.

Subpart C—Due Process and Reporting

732.301 Due process.

732.302 Reporting to OPM.

Authority: 5 U.S.C. 3301, 3302, 7312; E.O.

10450, 3 CFR, 1949–1953 Comp., p. 936.

Subpart A—Scope

§ 732.101 Purpose.

This part sets forth certain

requirements and procedures which

each agency shall observe in

investigations for national security

positions pursuant to Executive Order

10450—Security Requirements for

Government Employment (3 CFR 1949–

1953 Comp., p. 936), as amended.

§ 732.102 Definition and applicability.

(a) For purposes of this part, the term

national security position includes:

(1) Those positions that involve

activities of the Government that are

concerned with the protection of the

nation from foreign aggression or

espionage, including development of

defense plans or policies, intelligence or

counterintelligence activities, and

related activities concerned with the

preservation of the military strength of

the United States;
400 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Proposed Rules

(2) Positions that are primarily

concerned with sensitive diplomatic

relations with other countries; and

(3) Positions that require regular use

of, or access to, classified national

security information.

(b) The requirements of this part

apply to competitive service positions

and to Senior Executive Service

positions filled by career appointment

within the Executive Branch. Nothing in

this part prohibits agencies from

applying these provisions, in their

discretion, to excepted service positions

within the Executive Branch.

Subpart B—Designation and

Investigative Requirements

§ 732.201 Sensitivity level designations

and investigative requirements.

(a) For purposes of this part, the head

of each agency shall designate, or cause

to be designated, any position within

the department or agency the occupant

of which could bring about, by virtue of

the nature of the position, a material

adverse effect on the national security,

as a sensitive position at one of three

sensitivity levels: Special-Sensitive,

Critical-Sensitive, or NoncriticalSensitive.

(b) Definitions of sensitivity levels. For

the purposes of this part: (1) A SpecialSensitive position is a position which

the head of the agency determines to be

in a level higher than Critical-Sensitive

because of special requirements under

authority other than E.O. 10450.

(2) A Critical-Sensitive position is any

position with potential for exceptionally

grave damage to the national security.

(3) A Noncritical-Sensitive position is

any position with potential for some

damage to serious damage to the

national security.

(c) National Security Directive 63.

Standards for single scope background

investigations are established by

National Security Directive (NSD) 63,

‘‘Single Scope Background

Investigations,’’ dated October 21, 1991.

These investigations are used as the

minimum investigative standard by all

executive branch departments and

agencies for granting individuals access

to Top Secret (TS) national security

information and Sensitive

Compartmented Information (SCI).

(d) Director of Central Intelligence

Directive 1/14. The standards set for

single scope background investigations

established by NSD 63 are further

defined for SCI access in DCID 1/14,

‘‘Personnel Security Standards and

Procedures Governing Eligibility for

Access to Sensitive Compartmented

Information (SCI),’’ effective January 22,

1992, and as subsequently amended.

(e) Investigative requirements for each

sensitivity level are provided in OPM

issuances.

§ 732.202 Waivers and exceptions to

investigative requirements.

(a) Waivers.—(1) General. A waiver of

the preappointment investigative

requirement contained in section 3(b) of

Executive Order 10450 for employment

in a sensitive national security position

may be made only for a limited period

and only under the following

conditions:

(i) In case of emergency if the head of

the department or agency concerned

finds that such action is necessary in the

national interest; and

(ii) When such finding is made a part

of the records of the department or

agency.

(2) Specific waiver requirements. (i)

The preappointment investigative

requirement may not be waived for

appointment to positions designated

Special-Sensitive under this part.

(ii) For positions designated CriticalSensitive under this part, the records of

the department or agency required by

§ 732.202(a)(1), shall show what

decision was made on obtaining

prewaiver checks, as follows:

(A) The nature of the emergency

precluded obtaining prewaiver checks;

or

(B) Checks were initiated but not all

responses were received within 5 days.

The records shall also include a listing

of all checks made and favorably

completed.

(iii) When waiver is authorized, the

required investigation must be initiated

within 14 days of placement of the

individual in the position.

(b) Exceptions to investigative

requirements. Pursuant to section 3(a) of

E.O. 10450, the head of an agency may

request that the following positions be

exempted from the investigative

requirements of E.O. 10450, providing

that the employing agency conducts

such checks as it deems appropriate to

insure that the employment or retention

of individuals in these positions is

clearly consistent with the interests of

the national security:

(1) Positions that are intermittent,

seasonal, per diem, or temporary, not to

exceed an aggregate of 180 days in

either a single continuous appointment

or series of appointments; or

(2) Positions filled by aliens employed

outside the United States.

§ 732.203 Periodic reinvestigation

requirements.

The incumbent of each position

designated Special-Sensitive or CriticalSensitive under this part shall be subject

to periodic reinvestigation of a scope

prescribed by OPM 5 years after

placement, and at least once each

succeeding 5 years. The employing

agency will use the results of such

periodic reinvestigation to determine

whether the continued employment of

the individual in a sensitive position is

clearly consistent with the interests of

the national security.

Subpart C—Due Process and

Reporting

§ 732.301 Due process.

When an agency makes an

adjudicative decision under this part

based on an OPM investigation or upon

an investigation conducted pursuant to

OPM-delegated authority, or when an

agency, as a result of information in an

OPM investigation or an investigation

conducted pursuant to OPM-delegated

authority, changes a tentative favorable

placement or clearance decision to an

unfavorable decision, the agency must:

(a) Insure that the records used in

making the decision are accurate,

relevant, timely, and complete to the

extent reasonably necessary to assure

fairness to the individual in any

determination;

(b) Insure that all applicable

administrative due process

requirements provided by law, the

regulations in this part, and OPM policy

guidance have been observed;

(c) Consider all available information

in reaching its final decision;

(d) Keep any record of the agency

action required by OPM as published in

its issuances; and

(e) At a minimum, provide the

individual concerned:

(1) Notice of the specific reason(s) for

the decision;

(2) An opportunity to respond; and

(3) Notice of appeal rights, if any.

§ 732.302 Reporting to OPM.

(a) In accordance with section 9(a) of

E.O. 10450, each agency conducting an

investigation under E.O. 10450 is

required to notify OPM when the

investigation is initiated.

(b) In accordance with section 14(c) of

E.O. 10450, agencies shall report to

OPM the action taken with respect to

individuals investigated pursuant to

E.O. 10450 as soon as possible and in

no event later than 90 days after receipt

of the final report of investigation.

3. Part 736 is revised to read as

follows:
Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Proposed Rules 401

PART 736—PERSONNEL

INVESTIGATIONS

Subpart A—General Provisions

Sec.

736.101 Purpose.

736.102 Scope.

736.103 Responsibilities of OPM and other

Federal agencies.

736.104 Timing of investigations.

Subpart B—Collection of Information

736.201 Protecting the identity of a source.

736.202 Notice to investigative sources.

736.208 Use of the polygraph.

Subpart C—Maintenance of Information

736.301 Maintenance of investigative files.

736.302 Handling of OPM investigative

files.

Authority: Pub. L. 93–579; (5 U.S.C. 552a).

Subpart A—General Provisions

§ 736.101 Purpose.

The purpose of this part is to specify

certain requirements for personnel

investigations conducted by OPM, for

investigations conducted under

delegated authority from OPM, and for

use of OPM investigative records.

§ 736.102 Scope.

(a) The requirements of this part

apply to suitability and national

security investigations conducted under

parts 731 and 732 of this chapter and to

national security investigations of

individuals seeking or holding

employment with Federal Contractors.

(b) For purposes of this part, Agency

means any authority of the Government

of the United States, whether or not it

is within or subject to review by another

agency, and includes any executive

department, military department,

Government corporation, Governmentcontrolled corporation, or other

establishment in the executive branch of

the Government, or any independent

regulatory agency.

§ 736.103 Responsibilities of OPM and

other Federal agencies.

(a) Unless provided otherwise by law,

the investigation of persons entering or

employed in the competitive service, or

by career appointment in the Senior

Executive Service, is the responsibility

of OPM.

(b) Requests for delegated

investigating authority. Agencies may

request delegated authority from OPM

to conduct or contract out investigations

of persons entering or employed in the

competitive service or by career

appointment in the Senior Executive

Service. Such requests shall be made in

writing by agency heads, or designees,

and must specify the reason(s) and

justification for the request and must

include a complete cost analysis of all

factors spelled out in OPM guidance.

Background investigations for these

positions may not be conducted or

contracted out unless expressly

authorized by OPM special agreement.

(c) OPM Security Program Appraisals.

Under E.O. 10450 (3 CFR, 1949–1953

Comp., p. 936), OPM is required to

conduct a continuing study of each

agency’s personnel security program.

The purpose of the appraisal is to

identify any deficiencies in security

programs established under E.O. 10450

which are inconsistent with the

interests of, or directly or indirectly

weaken, the national security, and to

identify tendencies in such programs to

deny to individual employees fair,

impartial, and equitable treatment or

rights under the Constitution and laws

of the United States.

(d) OPM Suitability Program

Appraisals. Under its statutory authority

to delegate personnel management

functions to agencies (5 U.S.C. 1104),

OPM conducts a continuing appraisal of

agency compliance with personnel

suitability program requirements under

5 CFR part 731. In addition, OPM

conducts a continuing appraisal of the

Computer/ADP requirements set forth in

OMB Circular A–130.

§ 736.104 Timing of investigations.

Investigations required for all

positions subject to investigation must

be initiated within 14 days of placement

in the position except for positions

designated Special-Sensitive under part

732 of this chapter, for which the

preappointment investigative

requirement may not be waived.

Subpart B—Collection of Information

§ 736.201 Protecting the identity of a

source.

(a) The interviewing agent may grant

a pledge to keep confidential the

identity of an information source only

in the most compelling circumstances

and only upon specific request by the

source. Although the interviewing agent

may not ordinarily suggest that the

source request confidentiality, the agent

may offer a pledge of confidentiality

where the agent believes that the source

would not otherwise be willing to

provide needed information.

(b) A pledge of confidentiality may

not be assumed by the source.

(c) A pledge of confidentiality, if

granted, extends only to the identity of

the source and to any information

furnished by the source that would

reveal the identity of the source.

(d) When a source is granted a

promise that the source’s identity will

be kept confidential, the investigating

agency and all other agencies that

receive information obtained under the

promise are required to take all

reasonable precautions to protect the

source’s identity. Each agency will

prepare implementing instructions

consistent with this part.

§ 736.202 Notice to investigative sources.

(a) The investigating agent must notify

sources:

(1) Of the purpose of the request for

information,

(2) Of the uses that may be made of

the information, and

(3) That all information provided,

including the record source’s identity,

may be disclosed to the subject of the

investigation upon the subject’s request.

(b) Where information is requested by

written inquiry, the form, instructions,

or correspondence used by an agency

must include, in addition to the

requirements listed in paragraph (a) of

this section:

(1) Space for the source to request a

pledge that the source’s identity will not

be disclosed to the subject of the

investigation, and

(2) An offer to make special

arrangements to obtain significant

information which the source feels

unable to furnish without a promise that

the source’s identity will be kept

confidential.

§ 736.203 Use of the polygraph.

(a) An executive branch agency which

has a highly sensitive intelligence or

counterintelligence mission directly

affecting the national security (e.g., a

mission approaching the sensitivity of

that of the Central Intelligence Agency)

may use the polygraph for employment

screening and personnel investigations

of applicants and appointees only after

complying with the requirements in

paragraphs (c) and (d) of this section.

(b) All other executive branch

departments and agencies are prohibited

from initiating a polygraph examination

for employment screening purposes for

applicants or appointees to the

competitive service.

(c) If an agency desires to determine

whether the agency mission meets the

criteria to be allowed to use the

polygraph, the agency must submit to

the Director, OPM a statement of the

nature of its mission and a copy of its

current or proposed regulations and

directives governing use of the

polygraph (or a citation to them if there

has been no change since they were

previously submitted and approved).

The Director shall then determine

whether the agency has an intelligence

or counter-intelligence mission directly
402 Federal Register / Vol. 61, No. 4 / Friday, January 5, 1996 / Proposed Rules

affecting the national security and

whether the regulations and directives

meet current approval requirements.

(d) The agency shall prepare

regulations and directives governing use

of the polygraph in employment

screening and personnel investigations

which must be reviewed and approved

by the Director, OPM. These shall

contain at a minimum:

(1) Specific purposes for which the

polygraph may be used, and details

concerning the types of positions or

organizational entities in which it will

be used, and the officials authorized to

approve these examinations;

(2) A provision that a person to be

examined must be informed as far in

advance as possible of the intent to use

the polygraph, and of

(i) Other devices or aids to the

examination which may be used

simultaneously with the polygraph,

such as voice recordings,

(ii) The effect of the polygraph

examination, or his/her refusal to take

this examination, on eligibility for

employment, and that refusal to consent

to a polygraph examination will not be

made a part of the personnel file, and

(iii) The characteristics and nature of

the polygraph machine and

examination, including an explanation

of the physical operation of the

machine, the procedures to be followed

during the examination, and the

disposition of information developed;

(3) A provision that no polygraph

examination will be given unless the

person to be examined has voluntarily

consented in writing to be examined

after having been informed of the

provisions in paragraph (d)(2) of this

section;

(4) A provision that questions to be

asked during a polygraph examination

must have relevance to the subject of the

particular inquiry;

(5) Adequate standards for the

selection and training of examiners,

keeping in mind the Government’s

objective of insuring protection for the

subject of an examination and the

accuracy of polygraph results;

(6) A provision for adequate

monitoring of polygraph operations to

prevent abuses or unwarranted

invasions of privacy; and

(7) A provision for adequate

safeguarding of files, charts, and other

relevant data developed through

polygraph examinations to avoid

unwarranted invasions of privacy.

(e) Approval to use the polygraph for

employment selection screening for

positions in the competitive service will

be granted only for a 12-month period,

and is conditioned upon prior approval

of the agency’s regulations and

directives as provided in paragraph (d)

of this section. An agency given

approval to use the polygraph for

competitive service positions will be

required to recertify annually to the

Director, OPM, that the conditions

which led to the original certification

still exist in the agency. Nothing

contained in this section shall be

applicable to polygraph examinations

for purposes other than employment

selection screening.

(f) The basic requirements of National

Security Decision Directive Number 84

(NSDD–84), subject to and as affected by

any restrictions in force, approved by

former President Ronald W. Reagan on

March 11, 1983, include the use of the

polygraph in certain instances. Agencies

that originate or handle classified

national security information should

review the current requirements of

NSDD–84.

Subpart C—Maintenance of

Information

§ 736.301 Maintenance of Investigative

Files.

(a) Investigative files are records

subject to the Privacy Act and the

Freedom of Information Act and are

maintained in accordance with the

provisions of those Acts.

(b) Investigative information,

including investigative reports and

other materials, is highly personal and

is properly restricted to agency officials

who have an official need for it in

performance of their duties. All

investigative information shall be

maintained in confidence. Notices of

systems of records published to fulfill

Privacy Act requirements must show

full consideration for the highly

personal nature of this information.

(c) When not in use, personnel

investigations must be stored in a

combination-locked cabinet or safe, or

in an equally secure area. Access to case

files should be limited only to the

Security Officer and approved staff, who

shall not have access to their own files.

§ 736.302 Handling of OPM Investigative

Files.

(a) The agency security office must

maintain a record of each disclosure of

OPM investigative material within the

agency, including at a minimum:

(1) The name and title of the person

to whom disclosure was made;

(2) The type of background

investigation conducted on the person

to whom the material was disclosed;

(3) The date(s) of disclosure; and

(4) The reason(s) for the disclosure.

(b) An agency may disseminate OPM

investigative files, in whole or in part,

outside the agency only when the

agency obtains prior OPM approval.

Agency security officers are responsible

for controlling files within their

agencies.

(c) Privacy Act and Freedom of

Information Act requests for OPM

investigative records are to be submitted

to the Office of Personnel Management,

Federal Investigations Processing

Center, FOI/P, P.O. Box 618, Boyers,

Pennsylvania 16018–0618.

[FR Doc. 96–116 Filed 1–4–96; 8:45 am]

BILLING CODE 6325–01–M

DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 356

[Department of the Treasury Circular, Public

Debt Series No. 1–93]

Sale and Issue of Marketable BookEntry Treasury Bills, Notes, and Bonds

AGENCY: Bureau of the Public Debt,

Fiscal Service, Department of the

Treasury.

ACTION: Proposed rule.

SUMMARY: The Department of the

Treasury (‘‘Department’’) is proposing,

for comment, an amendment to 31 CFR

Part 356 (Uniform Offering Circular for

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

The proposed amendment defines the

term ‘‘investment adviser’’ and contains

a new section on bidding through

investment advisers. The amendment

also makes certain clarifying changes.

DATES: Comments must be submitted on

or before March 5, 1996. The

Department is particularly interested in

receiving comments regarding

alternative methods for obtaining, in the

least burdensome manner possible, the

information needed to ensure that no

person or entity receive a

disproportionate share of the auction.

ADDRESSES: Comments should be sent

to: Government Securities Regulations

Staff, Bureau of the Public Debt, Room

515, E Street Building, Washington, D.C.

20239–0001. Comments received will be

available for public inspection and

copying at the Treasury Department

Library, FOIA Collection, Room 5030,

Main Treasury Building, 1500

Pennsylvania Avenue, N.W.,

Washington, D.C. 20220. Persons

wishing to visit the library should call

(202) 622–0990 for an appointment.

FOR FURTHER INFORMATION CONTACT:

Michael W. Sunner, Deputy Assistant

Commissioner, Office of Financing,