65662 Federal Register / Vol. 66, No. 245 / Thursday, December 20, 2001 / Proposed Rules

voluntary alternatives to current fire

protection regulations.

This draft rule language is

preliminary and may be incomplete in

one or more respects. This draft rule

language has been released to inform

stakeholders of the current status of the

contemplated 10 CFR 50.48 rule change

and to provide stakeholders with an

opportunity to comment on a draft

version. Comments received prior to

publishing the proposed rule revision

will be considered in the development

of the proposed rule revision. As

appropriate, the Statements of

Consideration for the proposed rule will

briefly discuss substantive changes

made to the rule language as a result of

comments received. Comments may be

provided through the rulemaking Web

site at http://ruleforum.llnl.gov or by

mail as indicated under the ADDRESSES

heading. The NRC may post updates

periodically on the rulemaking web site

that may be of interest to stakeholders.

Dated at Rockville, Maryland, this 12th day

of December 2001.

For the Nuclear Regulatory Commission.

John N. Hannon,

Chief, Plant Systems Branch, Division of

Systems Safety and Analysis, Office of

Nuclear Reactor Regulation.

[FR Doc. 01–31217 Filed 12–19–01; 8:45 am]

BILLING CODE 7590–01–P

NATIONAL CREDIT UNION

ADMINISTRATION

12 CFR Part 701

Organization and Operations of

Federal Credit Unions

AGENCY: National Credit Union

Administration (NCUA).

ACTION: Proposed rule with request for

comments.

SUMMARY: NCUA proposes to amend its

rule that permits a federal credit union

to provide reasonable retirement

benefits to its employees and officers.

The amendments clarify the scope of the

rule.

DATES: Comments must be received on

or before February 19, 2002.

ADDRESSES: Direct comments to Becky

Baker, Secretary of the Board. Mail or

hand-deliver comments to: National

Credit Union Administration, 1775

Duke Street, Alexandria, Virginia

22314–3428. You are encouraged to fax

comments to (703) 518–6319 or e-mail

comments to regcomments@ncua.gov

instead of mailing or hand-delivering

them. Whatever method you choose,

please send comments by one method

only.

FOR FURTHER INFORMATION CONTACT:

Frank Kressman, Staff Attorney, Office

of General Counsel, at the above address

or telephone: (703) 518–6540.

SUPPLEMENTARY INFORMATION: Section

701.19(a) states that a federal credit

union (FCU) may provide reasonable

retirement benefits for it employees and

officers. 12 CFR 701.19(a). NCUA

wishes to clarify that the scope of

§ 701.19(a) is not limited only to

retirement benefits, but is more broadly

applicable to other employee benefit

plans.

As competition to attract and retain

highly qualified employees has

increased and the employee benefits

marketplace has become more

sophisticated, FCUs are increasingly

providing more diverse and less

traditional forms of employee benefits

including, for example, deferred

compensation plans and stock option

plans. As a result, FCUs need flexibility

to use safe, reasonable and efficient

methods to fund their employee benefit

obligations. In addition to providing this

flexibility, the proposed rule updates

the regulatory language to reflect current

employee benefits terminology

including renaming the rule ‘‘Benefits

for Employees of Federal Credit

Unions.’’

An FCU investing on its own behalf

is subject to the investment provisions

of the Federal Credit Union Act (Act)

and NCUA regulations. 12 U.S.C.

1757(7), (8), (15); 12 CFR part 703. In

legal opinion letters, the NCUA’s Office

of General Counsel has stated that these

investment provisions do not apply

when an FCU is acting under its

authority to provide and fund

retirement or other employee benefits.

12 U.S.C. 1761b(12); 12 CFR 701.19.

NCUA’s long-standing position is that

an FCU may purchase an otherwise

impermissible investment to fund an

employee benefit obligation as long as

there is a direct connection between the

investment and the employee benefit

obligation it serves to fund. In that

context, NCUA has also stated that once

the obligation ceases to exist, the FCU

must divest itself of the impermissible

investment.

For example, an FCU is generally not

permitted to purchase equity

investments when investing for its own

account. An FCU that is obligated under

an employee benefit plan to provide an

employee with 100 shares of XYZ

Corporation stock on a specific date,

however, may purchase and hold 100

shares of that stock for that purpose. It

may not, however, purchase 100 shares

of ABC Corporation stock. In that

instance, there would not be a sufficient

connection between the investment and

the obligation to be funded.

NCUA is aware that it is not

uncommon for for-profit corporations to

provide employee benefits that contain

investment options the employee may

exercise after he or she has separated or

retired from the employer. For example,

an employer may grant an employee the

option to purchase a fixed number of

shares in a mutual fund for a fixed price

on a specific date after the employee

separates or retires from the employer.

These post-separation or postretirement options would require a

prudent FCU to buy and hold shares in

that mutual fund to fund the potential

obligation it faces after its employee has

separated or retired. In legal opinion

letters, the NCUA’s Office of General

Counsel has also taken the position that

an FCU may hold an impermissible

investment to fund an ongoing

employee benefit obligation after the

employee separates or retires provided

the investment option period is

reasonable. Upon the exercise or

expiration of the option, the FCU must

divest itself of the impermissible

investment. The proposed regulation

incorporates the positions taken by the

Office of General Counsel in these legal

opinion letters.

An FCU must comply with safety and

soundness standards by ensuring that

the kind and value of employee benefits

it offers are reasonable given its size and

financial condition. Furthermore, an

FCU’s authority to offer and fund an

employee benefit plan does not

guarantee the permissibility of the plan

under other laws, such as the Employee

Retirement Income Security Act (ERISA)

or the Internal Revenue Code. 29 U.S.C.

1001; 26 U.S.C. 1.

Additionally, FCUs with assets over

$10 million are reminded that they are

required to account for their employee

benefit plans in accordance with

generally accepted accounting

principles (GAAP). FCUs with assets

under $10 million are not required to

follow GAAP, but are encouraged to do

so in this context. All FCUs are

encouraged to seek the advice of an

independent accountant if they have

questions regarding the proper

accounting for these benefit plans.

Finally, § 701.19(b) provides that an

FCU acting as a fiduciary, as defined in

ERISA, must obtain appropriate liability

coverage as provided in 410(b) of

ERISA. NCUA wishes to clarify that

410(b) of ERISA describes certain kinds

of insurance coverage and permits

certain parties to purchase that

insurance, but does not require any

party to purchase insurance. 29 U.S.C.

1110.

Federal Register / Vol. 66, No. 245 / Thursday, December 20, 2001 / Proposed Rules 65663

Regulatory Procedures

Regulatory Flexibility Act

The Regulatory Flexibility Act

requires NCUA to prepare an analysis to

describe any significant economic

impact a proposed rule may have on a

substantial number of small credit

unions (those under one million dollars

in assets). The proposed rule only

clarifies that credit unions have

additional options and flexibility to

manage their employee benefit

obligations without imposing any

regulatory burden. The proposed rule

would not have a significant economic

impact on a substantial number of small

credit unions, and therefore, a

regulatory flexibility analysis is not

required.

Paperwork Reduction Act

NCUA has determined that the

proposed rule would not increase

paperwork requirements under the

Paperwork Reduction Act of 1995 and

regulations of the Office of Management

and Budget.

Executive Order 13132

Executive Order 13132 encourages

independent regulatory agencies to

consider the impact of their actions on

state and local interests. In adherence to

fundamental federalism principles,

NCUA, an independent regulatory

agency as defined in 44 U.S.C. 3502(5),

voluntarily complies with the executive

order. The proposed rule would not

have substantial direct effects on the

states, on the connection between the

national government and the states, or

on the distribution of power and

responsibilities among the various

levels of government. NCUA has

determined that this proposed rule does

not constitute a policy that has

federalism implications for purposes of

the executive order.

The Treasury and General Government

Appropriations Act, 1999—Assessment

of Federal Regulations and Policies on

Families

The NCUA has determined that this

proposed rule would not affect family

well-being within the meaning of

section 654 of the Treasury and General

Government Appropriations Act, 1999,

Pub. L. 105–277, 112 Stat. 2681 (1998).

Agency Regulatory Goal

NCUA’s goal is to promulgate clear

and understandable regulations that

impose minimal regulatory burden. We

request your comments on whether the

proposed rule is understandable and

minimally intrusive.

List of Subjects in 12 CFR Part 701

Credit unions.

By the National Credit Union

Administration Board on December 13, 2001.

Becky Baker,

Secretary of the Board.

Accordingly, NCUA proposes to

amend 12 CFR part 701 as follows:

PART 701—ORGANIZATION AND

OPERATIONS OF FEDERAL CREDIT

UNIONS

1. The authority citation for part 701

continues to read as follows:

Authority: 12 U.S.C. 1752(5), 1755, 1756,

1757, 1759, 1761a, 1761b, 1766, 1767, 1782,

1784, 1787, 1789. Section 701.6 is also

authorized by 15 U.S.C. 3717. Section 701.31

is also authorized by 15 U.S.C. 1601 et seq.;

42 U.S.C. 1981 and 3601–3610. Section

701.35 is also authorized by 42 U.S.C. 4311–

4312.

2. Revise § 701.19 to read as follows:

§ 701.19 Benefits for employees of Federal

credit unions.

(a) General authority. A federal credit

union may provide employee benefits,

including retirement benefits, to its

employees and officers who are

compensated in conformance with the

Act and the bylaws, individually or

collectively with other credit unions.

The kind and value of these benefits

must be reasonable given the federal

credit union’s size and financial

condition. Where a federal credit union

is the benefit plan trustee or custodian,

the plan must be authorized and

maintained in accordance with the

provisions of part 724 of this chapter.

Where the benefit plan trustee or

custodian is a party other than a federal

credit union, the benefit plan must be

maintained in accordance with

applicable laws governing employee

benefit plans, including any applicable

rules and regulations issued by the

Secretary of Labor, the Secretary of the

Treasury, or any other federal or state

authority exercising jurisdiction over

the plan.

(b) Investments. A federal credit

union investing to fund an employee

benefit plan obligation is not subject to

the investment provisions of the Act

and part 703 of this chapter and may

purchase an investment that would

otherwise be impermissible if:

(1) The investment is directly related

to the federal credit union’s obligation

or potential obligation under the

employee benefit plan; and

(2) The federal credit union holds the

investment only for as long as it has an

actual or potential obligation under the

employee benefit plan.

(c) Liability insurance. No federal

credit union may occupy the position of

a fiduciary, as defined in the Employee

Retirement Income Security Act of 1974

and the rules and regulations issued by

the Secretary of Labor, unless it has

obtained appropriate liability insurance

as described and permitted by section

410(b) of the Employee Retirement

Income Security Act of 1974.

[FR Doc. 01–31287 Filed 12–19–01; 8:45 am]

BILLING CODE 7535–01–U

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 2001–CE–17–AD]

RIN 2120–AA64

Airworthiness Directives; Fairchild

Aircraft Incorporated SA226 and SA227

Series Airplanes

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Supplemental notice of

proposed rulemaking (NPRM);

Reopening of the comment period.

SUMMARY: This document proposes to

revise an earlier proposed airworthiness

directive (AD) that would apply to

certain Fairchild Aircraft Incorporated

(Fairchild Aircraft) SA226 and SA227

series airplanes equipped with

Skidmore-Wilheim Manufacturing Co.

(Skidmore-Wilheim) (formerly

Hydromotive) Model V1–15–1000 brake

master cylinders. The earlier NPRM

would have required you replace these

brake master cylinders with new or

overhauled units of the same design.

The earlier NPRM resulted from reports

of dragging brakes during taxi

operations. Additional airplane models

have been identified on which the

unsafe condition exists or could

develop. Since these actions impose an

additional burden over that proposed in

the NPRM, we are reopening the

comment period to allow the public the

chance to comment on these additional

actions.

DATES: The Federal Aviation

Administration (FAA) must receive any

comments on this proposed rule on or

before February 22, 2002.

ADDRESSES: Submit comments to FAA,

Central Region, Office of the Regional

Counsel, Attention: Rules Docket No.

2001–CE–17–AD, 901 Locust, Room

506, Kansas City, Missouri 64106. You

may view any comments at this location

between 8 a.m. and 4 p.m., Monday

through Friday, except Federal holidays.

You may get service information that

applies to this proposed AD from