62058 Federal Register / Vol. 79, No. 200 / Thursday, October 16, 2014 / Proposed Rules 

1Section 611.340(a)(4) requires that a tellers 

committee only consist of voting stockholders who 

are not directors, director-nominees, or members of 

that election cycle’s nominating committee. 

2Public Law 92–181, 85 Stat. 583 (1971), 12 

U.S.C. 2001 et seq. 

3Section 5.17(a)(9) of the Act authorizes the FCA 

to prescribe rules and regulations necessary or 

appropriate for carrying out {the} Act. 

4Section 4.20 of the Act requires that ‘‘[i]n any 

election or merger vote, or other proceeding subject 

to a vote of the stockholders . . . the institution (1) 

may not use signed ballots; and (2) shall implement 

measures to safeguard the voting process for the 

protection of the right of stockholders . . . to a 

secret ballot.’’ 

show the official registration number of 

the production site. * * * 

* * * * * 

(e) * * * Kiwi in any consignment 

may be shipped to the United States, 

and baby kiwi in any consignment may 

be shipped to the continental United 

States, under the conditions of this 

section only if the consignment passes 

inspection as follows: 

* * * * * 

(f) Phytosanitary certificate. Each 

consignment of fresh kiwi and fresh 

baby kiwi must be accompanied by a 

phytosanitary certificate issued by the 

NPPO of Chile that contains an 

additional declaration stating that the 

fruit in the consignment was inspected 

and found free of Brevipalpus chilensis 

and was grown, packed, and shipped in 

accordance with the requirements of 7 

CFR 319.56–53. 

* * * * * 

Done in Washington, DC, this 9th day of 

October 2014. 

Kevin Shea, 

Administrator, Animal and Plant Health 

Inspection Service. 

[FR Doc. 2014–24631 Filed 10–15–14; 8:45 am] 

BILLING CODE 3410–34–P 

FARM CREDIT ADMINISTRATION 

12 CFR Part 611 

RIN 3052–AC85 

Organization; Institution Stockholder 

Voting Procedures 

AGENCY: Farm Credit Administration. 

ACTION: Proposed rule. 

SUMMARY: The Farm Credit 

Administration (FCA, we or our) 

proposes to amend its existing rules 

related to Farm Credit System (Farm 

Credit or System) bank and association 

stockholder voting policies and 

procedures so as to continue to address 

confidentiality and security in voting. 

This rulemaking would amend FCA’s 

regulations to clarify and enhance 

voting procedures for tabulating votes, 

the use of tellers committees, and other 

items as identified. 

DATES: Comments on this proposed rule 

must be submitted on or before 

December 15, 2014. 

ADDRESSES: We offer a variety of 

methods for you to submit your 

comments. For accuracy and efficiency 

reasons, commenters are encouraged to 

submit comments by email or through 

the FCA’s Web site. As facsimiles (faxes) 

are difficult for us to process and 

achieve compliance with section 508 of 

the Rehabilitation Act, we no longer 

accept comments submitted via fax. 

Regardless of the method you use, 

please do not submit your comment 

multiple times via different methods. 

You may submit comments by any of 

the following methods: 

• Email: Send us an email at regcomm@fca.gov. 

• FCA Web site: http://www.fca.gov. 

Select ‘‘Public Commenters,’’ then 

‘‘Public Comments,’’ and follow the 

directions for ‘‘Submitting a Comment.’’ 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Barry F. Mardock, Deputy 

Director, Office of Regulatory Policy, 

Farm Credit Administration, 1501 Farm 

Credit Drive, McLean, VA 22102–5090. 

You may review copies of comments 

we receive at our office in McLean, 

Virginia, or on our Web site at http://

www.fca.gov. Once you are in the Web 

site, select ‘‘Public Commenters,’’ then 

‘‘Public Comments,’’ and follow the 

directions for ‘‘Reading Submitted 

Public Comments.’’ We will show your 

comments as submitted, but for 

technical reasons we may omit items 

such as logos and special characters. 

Identifying information that you 

provide, such as phone numbers and 

addresses, will be publicly available. 

However, we will attempt to remove 

email addresses to help reduce Internet 

spam. 

FOR FURTHER INFORMATION CONTACT: 

Thomas R. Risdal, Senior Policy 

Analyst, Office of Regulatory Policy, 

Farm Credit Administration, 1501 

Farm Credit Drive, McLean, VA, (703) 

883–4257, TTY (703) 883–4056; or 

Nancy Tunis, Senior Attorney, Office of 

General Counsel, Farm Credit 

Administration, McLean, VA 22102– 

5090, (703) 883–4061, TTY (703) 883– 

4056. 

SUPPLEMENTARY INFORMATION: 

I. Objectives 

The primary objective of this 

proposed rule is to clarify § 611.340 of 

our regulations regarding confidentiality 

and security in stockholder voting 

procedures and facilitate their safe and 

sound implementation by System 

institutions. Specifically, this proposed 

rule would clarify that: 

• A System bank or association may 

use a tellers committee 1 to tabulate 

ballots and still maintain confidentiality 

and security of the voting process; and 

• A small number of administrative 

employees of a bank or association may 

assist a tellers committee in verifying a 

stockholder’s eligibility to vote. 

II. Background 

The Farm Credit Act of 1971, as 

amended (Act) 2, authorizes the FCA to 

issue regulations implementing the 

Act’s provisions.3 Our regulations are 

intended to ensure the safe and sound 

operations of System institutions. In 

order to fulfill our responsibility to 

maintain the safety and soundness of 

System institutions, the FCA’s 

regulations provide that banks and 

associations must ensure the 

confidentiality and security of 

stockholder voting, while maintaining 

cooperative principles.4

Section 611.340 of the FCA’s 

regulations requires that the board of 

directors of each System bank and 

association adopt policies and 

procedures to ensure the confidentiality 

and security of all records and materials 

related to a stockholder vote including, 

but not limited to, ballots, proxy ballots, 

and other related materials. Also, this 

section requires that System bank and 

association policies and procedures 

ensure that ballots and proxy ballots are 

provided only to stockholders who are 

eligible to vote as of the record date set 

for the stockholder vote. Banks and 

associations must ensure the 

confidentiality of all information and 

materials regarding how or whether an 

individual stockholder has voted, 

including protecting the information 

from disclosure to anyone except vote 

tabulators and the FCA. 

III. Analysis 

We request any interested person to 

submit comments on this proposed rule 

and ask that you support your 

comments with relevant data or 

examples. The FCA proposes the 

following changes to § 611.340: 

A. Section 611.340(a) 

In order to facilitate stockholders 

participation in their bank’s or 

association’s voting process and 

potentially reduce the cost of tabulating 

votes, the FCA seeks to clarify the 

language of § 611.340(a)(3) and 

§ 611.340(a)(4) regarding the use of a 

tellers committee. Existing 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

Federal Register / Vol. 79, No. 200 / Thursday, October 16, 2014 / Proposed Rules 62059 

§ 611.340(a)(3) requires that each 

System bank and association ensure that 

all information and materials regarding 

how or whether an individual 

stockholder has voted remain 

confidential, including protecting the 

information from disclosure to the 

institution’s directors, stockholders, or 

employees, or any other person. 

However, the information may be 

disclosed to an independent third party 

tabulating the vote or the FCA. 

The use of a tellers committee, 

consisting of voting stockholders as 

provided for in § 611.340(a)(4), could be 

interpreted to be in conflict with the 

confidentiality provision in 

§ 611.340(a)(3) that information and 

materials regarding how or whether an 

individual stockholder voted be 

protected from other bank or association 

stockholders. One means of reconciling 

the language in the related provisions 

would be to require that stockholder 

votes at System banks and associations 

be tabulated only by an independent 

third party. 

Based on questions to the FCA 

regarding this regulation, we considered 

whether System banks and associations 

should be required to use only 

independent third party tabulators for 

System elections. That approach would 

accomplish the result of maintaining 

confidentiality and security in voting, 

but the cost of using an independent 

third party in all situations could be 

burdensome, particularly to small 

associations. We considered whether 

using a tellers committee to tabulate 

votes could be a confidential and secure 

method. A tellers committee could be 

significantly more cost effective and 

could enhance participation of 

stockholders in the affairs of their 

institution, which is one of the guiding 

cooperative principles. 

After considering the alternatives, the 

FCA proposes this rule amendment to 

clarify and affirm the ability of System 

banks and associations to utilize a 

tellers committee for tabulating votes. 

Accordingly, we propose adding the 

tellers committee as an additional 

exception in § 611.340(a)(3) to the vote 

tabulating process. If a tellers committee 

is added, the current requirements of 

§ 611.340(a)(3) related to bank and 

association policies and procedures on 

confidentiality of the vote and 

protecting voting information from 

disclosure would apply equally to each 

member of the tellers committee as it 

does to an independent third party 

tabulator. Policies and procedures 

would need to ensure that information 

shared with a tellers committee remains 

confidential, similar to confidentiality 

clauses contained in an independent 

third party contract. If a tellers 

committee is used, the FCA proposes 

that only a small number of specifically 

authorized administrative employees of 

the bank or association be allowed to 

assist in the verification of stockholder 

eligibility to vote. Such employees 

could not be part of management or 

principally involved in the loan making, 

pricing or servicing functions. Such 

employees would also be subject to the 

policies and procedures on 

confidentiality in the same manner as 

the independent third party and 

members of the tellers committee. 

The FCA proposes the following 

revisions to § 611.340(a): 

1. Make existing paragraph (a)(4) 

paragraph (a)(3) and revise it to add 

‘‘employees’’ in the list of stockholders 

prohibited from serving on a tellers 

committee. While in some instances, an 

institution employee may also be a 

stockholder, the FCA does not believe 

that it would be appropriate in any 

instance for an employee to serve on a 

tellers committee. 

2. Add a new paragraph (a)(4) to: 

• Require that a list of eligible voting 

stockholders as of the voting record date 

be provided to the vote tabulation 

group, either a tellers committee or an 

independent third party, to ensure the 

validity of votes cast; and 

• Allow for a small number of 

specifically authorized administrative 

employees of the institution to assist the 

tellers committee solely in the 

verification of eligible ballots cast. In 

order to preserve confidentiality and 

security in voting when using a tellers 

committee, the FCA would require that 

verifying eligibility of votes cast be 

conducted separately from tabulating 

the votes. Therefore, in the event of 

ballots received by mail, if stockholder 

eligibility is verified by the tellers 

committee members, such verification 

would be required to occur separate and 

apart from vote tabulation. 

3. Re-designate existing paragraph 

(a)(3) as paragraph (a)(5) and add 

paragraph (a)(5)(i) to provide that the 

information could be disclosed to a duly 

appointed tellers committee and add 

paragraph (a)(5)(ii) to provide that the 

information could be disclosed to a 

small number of administrative staff 

supporting the tellers committee solely 

for the purpose of validating voter 

eligibility. Existing paragraphs (a)(3)(i) 

and (ii) would become (a)(5)(iii) and 

(iv), respectively. 

B. Section 611.340(b) 

Existing § 611.340(b) discusses 

balloting procedures, such as the use of 

an identity code ‘‘on the ballot.’’ 

However, in common practice, when 

identity codes are used in the vote 

validation and tabulation process, the 

codes are not ‘‘on the ballot.’’ The 

identity code is usually printed on a 

sealed envelope containing the ballot, 

thereby identifying that a valid ballot 

has been cast, but not linking a specific 

ballot with an identifiable identity code. 

Accordingly, we propose to delete the 

terms ‘‘on the ballot’’ and ‘‘how or’’ 

from the second sentence of 

§ 611.340(b). 

To maintain consistency with the 

proposed changes to § 611.340(a) 

discussed above regarding the use of 

tellers committees, we propose to delete 

the phrase ‘‘has voted only if the votes 

are tabulated by an independent third 

party’’ from the second sentence of 

paragraph (b). The requirement for use 

of an independent third party tabulator 

for ‘‘weighted voting’’ would be 

retained. 

In addition, we propose to move the 

last sentence of paragraph (b) to a new 

§ 611.340(c) and include ‘‘or each 

member of the tellers committee’’ after 

‘‘[a]n independent third party’’ as well 

as adding ‘‘and any administrative 

employees assisting the tellers 

committee in verifying eligibility to 

vote’’ to reflect the addition of a duly 

appointed tellers committee and small 

number of administrative staff as an 

exception at new § 611.340(a)(5)(i) and 

(ii). 

The proposed new § 611.340(c) would 

emphasize that anyone involved in the 

tabulation of votes or verification of 

voter eligibility must acknowledge the 

importance of maintaining secrecy by 

signing a written certification declaring 

that the individual will protect the 

confidentiality of the voting process. 

C. Sections 611.340(c)–(e) 

Existing §§ 611.340(c)–(e) would be 

redesignated as § 611.340(d)–(f), 

respectively, without change to content. 

IV. Regulatory Flexibility Act 

Pursuant to section 605(b) of the 

Regulatory Flexibility Act (5 U.S.C. 601 

et seq.), the FCA hereby certifies that the 

proposed rule would not have a 

significant economic impact on a 

substantial number of small entities. 

Each of the banks in the Farm Credit 

System, considered together with its 

affiliated associations, has assets and 

annual income in excess of the amounts 

that would qualify them as small 

entities. Therefore, Farm Credit System 

institutions are not ‘‘small entities’’ as 

defined in the Regulatory Flexibility 

Act. 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

62060 Federal Register / Vol. 79, No. 200 / Thursday, October 16, 2014 / Proposed Rules 

List of Subjects in 12 CFR Part 611 

Agriculture, Banks, banking, Rural 

areas. 

For the reasons stated in the 

preamble, part 611 of chapter VI, title 12 

of the Code of Federal Regulations is 

proposed to be amended as follows: 

PART 611—ORGANIZATION 

■ 1. The authority citation for part 611 

continues to read as follows: 

Authority: Secs. 1.2, 1.3, 1.4, 1.5, 1.12, 

1.13, 2.0, 2.1, 2.2, 2.10, 2.11, 2.12, 3.0, 3.1, 

3.2, 3.3, 3.7, 3.8, 3.9, 3.21, 4.3A, 4.12, 4.12A, 

4.15, 4.20, 4.21, 4.25, 4.26, 4.27, 4.28A, 5.9, 

5.17, 5.25, 7.0–7.13, 8.5(e) of the Farm Credit 

Act (12 U.S.C. 2002, 2011, 2012, 2013, 2020, 

2021, 2071, 2072, 2073, 2091, 2092, 2093, 

2121, 2122, 2123, 2124, 2128, 2129, 2130, 

2142, 2154a, 2183, 2184, 2203, 2208, 2209, 

2211, 2212, 2213, 2214, 2243, 2252, 2261, 

2279a–2279f–1, 2279aa–5(e)); secs. 411 and 

412 of Pub. L. 100–233, 101 Stat. 1568, 1638; 

sec. 414 of Pub. L. 100–399, 102 Stat. 989, 

1004. 

■ 2. Section 611.340 is revised to read 

as follows: 

§ 611.340 Confidentiality and security in 

voting. 

(a) Each Farm Credit bank and 

association’s board of directors must 

adopt policies and procedures that: 

(1) Ensure the security of all records 

and materials related to a stockholder 

vote including, but not limited to, 

ballots, proxy ballots, and other related 

materials. 

(2) Ensure that ballots and proxy 

ballots are provided only to 

stockholders who are eligible to vote as 

of the record date set for the stockholder 

vote. 

(3) Provide for the establishment of a 

tellers committee or an independent 

third party who will be responsible for 

validating ballots and proxies and 

tabulating voting results. A tellers 

committee may only consist of voting 

stockholders who are not employees, 

directors, director-nominees, or 

members of that election cycle’s 

nominating committee. 

(4) Ensure that a list of eligible voting 

stockholders (or identity codes of 

eligible voting stockholders) as of the 

voting record date is provided to the 

tellers committee or independent third 

party that will be tabulating the vote to 

ensure the validity of the votes cast. A 

small number of specifically authorized 

administrative employees of the 

institution may assist the tellers 

committee in such verifications, 

provided the institution implements 

procedures to ensure the confidentiality 

and security of the information made 

available to the employees. If an 

institution is using a tellers committee, 

verification of voter eligibility must be 

done separate and apart from the 

opening and tabulating of the actual 

ballots. 

(5) Ensure that all information and 

materials regarding how or whether an 

individual stockholder has voted remain 

confidential, including protecting the 

information from disclosure to the 

institution’s directors, stockholders, or 

employees, or any other person except: 

(i) A duly appointed tellers 

committee; 

(ii) A small number of specifically 

authorized administrative employees 

assisting the tellers committee by 

validating stockholders’ eligibility to 

vote; 

(iii) An independent third party 

tabulating the vote; or 

(iv) The Farm Credit Administration. 

(b) No Farm Credit bank or 

association may use signed ballots in 

stockholder votes. A bank or association 

may use balloting procedures, such as 

an identity code, that can be used to 

identify whether an individual 

stockholder is eligible to vote or has 

previously submitted a vote. In 

weighted voting, the votes must be 

tabulated by an independent third party. 

(c) An independent third party or 

each member of the tellers committee 

that tabulates the votes, and any 

administrative employees assisting the 

tellers committee in verifying 

stockholder eligibility to vote, must sign 

a certificate declaring that such party, 

member, or employee will not disclose 

to any person (including the institution, 

its directors, stockholders, or 

employees) any information about how 

or whether an individual stockholder 

has voted, except that the information 

must be disclosed to the Farm Credit 

Administration, if requested. 

(d) Once a Farm Credit bank or 

association receives a ballot, the vote of 

that stockholder is final, except that a 

stockholder may withdraw a proxy 

ballot before balloting begins at a 

stockholders’ meeting. A Farm Credit 

bank or association may give a 

stockholder voting by proxy an 

opportunity to give voting discretion to 

the proxy of the stockholder’s choice, 

provided that the proxy is also a 

stockholder eligible to vote. 

(e) Ballots and proxy ballots must be 

safeguarded before the time of 

distribution or mailing to voting 

stockholders and after the time of 

receipt by the bank or association until 

disposal. When stockholder meetings 

are held for the purpose of conducting 

elections or other votes, only proxy 

ballots may be accepted prior to any or 

all sessions of the stockholders’ meeting 

and mail ballots may only be distributed 

after the conclusion of the meeting. In 

an election of directors, ballots, proxy 

ballots, and election records must be 

retained at least until the end of the 

term of office of the director. In other 

stockholder votes, ballots, proxy ballots, 

and records must be retained for at least 

3 years after the vote. 

(f) An institution and its officers, 

directors, and employees may not make 

any public announcement of the results 

of a stockholder vote before the tellers 

committee or independent third party 

has validated the results of the vote. 

Dated: October 10, 2014. 

Dale L. Aultman, 

Secretary, Farm Credit Administration Board. 

[FR Doc. 2014–24643 Filed 10–15–14; 8:45 am] 

BILLING CODE 6705–01–P 

SMALL BUSINESS ADMINISTRATION 

2 CFR Part 2700 

13 CFR Parts 103, 124 and 134 

RIN 3245–AG40 

Agent Revocation and Suspension 

Procedures 

AGENCY: Small Business Administration. 

ACTION: Proposed rule. 

SUMMARY: This rule proposes detailed 

procedures for the suspension and 

revocation of an Agent’s privilege to do 

business with the United States Small 

Business Administration (SBA) within a 

single Part of the Code of Federal 

Regulations; remove 8(a) program 

specific procedures for Agent 

suspension and revocation; clarify 

existing and related regulations as to 

suspension, revocation, and debarment; 

and remove Office of Hearings and 

Appeals jurisdiction over Agent 

suspensions and revocations and 

government-wide debarment and 

suspension actions. This proposed rule 

would also conform SBA suspension 

and revocation procedures for Agents 

with general government-wide nonprocurement suspension and debarment 

procedures. 

DATES: Comments must be received on 

or December 15, 2014. 

ADDRESSES: You may submit comments, 

identified by RIN: 3245–AG40 by any of 

the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail/Hand Delivery/Courier: Debra 

L. Mayer, Chief, Supervision and 

Enforcement, Office of Credit Risk 

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