Table Of Content

FEDERAL REGISTER Vol. 79 Tuesday, No. 18 January 28, 2014 Pages 4389-4612 OFFICE OF THE FEDERAL REGISTER II Federal Register/Vol. 79, No. 18/Tuesday, January 28, 2014 SUBSCRIPTIONS AND COPIES_ The FEDERAL REGISTER (ISSN 0097-6326) is published daily, Monday through Friday, except official holidays, by the Office PUBLIC of the Federal Register, National Archives and Records Administration, Washington, DC 20408, under the Federal Register Subscriptions: Act (44 U.S.C. Ch. 15) and the regulations of the Administrative Paper or fiche 202-512-1800 Committee of the Federal Register (1 CFR Ch. I). The Assistance with public subscriptions 202-512-1806 Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402 is the exclusive distributor of the official General online information 202-512-1530; 1-888-293-6498 edition. Periodicals postage is paid at Washington, DC. 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Printed on recycled paper. in Contents Federal Register Vol. 79, No. 18 Tuesday, January 28, 2014 Agriculture Department Commodity Futures Trading Commission See Animal and Plant Health Inspection Service NOTICES See Food Safety and Inspection Service Meetings: Global Markets Advisory Committee, 4454 Animal and Plant Health Inspection Service Meetings; Sunshine Act, 4454 PROPOSED RULES Consumer Product Safety Commission Importation of Fresh Bananas From the Philippines into NOTICES Hawaii and U.S. Territories, 4410-4414 Agency Information Collection Activities; Proposals, National Poultry Improvement Plan and Auxiliary Submissions, and Approvals: Provisions, 4538-4567 Consumer Opinion Forum, 4454-4456 Antitrust Division Defense Department NOTICES NOTICES Changes in Membership: Agency Information Collection Activities; Proposals, Advanced Media Workflow Association, Inc., 4492-4493 Submissions, and Approvals, 4456-4457 Cable Television Laboratories, Inc., 4493 Privacy Act; Systems of Records, 4457-4458 Members of SGIP 2.0, 4492 Department of Transportation PXI Systems Alliance, Inc., 4492 Disclosures: See Pipeline and Hazardous Materials Safety ASTM International, 4493 Administration National Council of State Boards of Nursing, 4493 Drug Enforcement Administration PROPOSED RULES Antitrust Schedules of Controlled Substances: See Antitrust Division Temporary Placement of 10 Synthetic Cathinones into Schedule I, 4429-4433 Centers for Medicare & Medicaid Services Education Department NOTICES Privacy Act; Systems of Records, 4473-4474 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Children and Families Administration American Indian Tribally Controlled Colleges and NOTICES Universities Program, 4458 Agency Information Collection Activities; Proposals, Applications for New Awards; Rehabilitation Training: Submissions, and Approvals Rehabilitation Long-Term Training Program—Vocational Community Services Block Grant Program Model Plan Rehabilitation Counseling, 4458-4459 Application, 4474 Employment and Training Administration Civil Rights Commission NOTICES NOTICES Availability of Funds, Requests for Grant Applications: Meetings: Workforce Data Quality Initiative, 4498-4499 Massachusetts Advisory Committee, 4441 Trade Adjustment Assistance; Determinations: Polyone Designed Structures and Solutions LLG, et al., Coast Guard Donora, PA, 4499 Worker Adjustment Assistance; Amended Certifications: RULES Boise White Paper, LLC, et al., Interational Falls, MN, Safety Zones: 4501 BWRC Southwest Showdown Three; Parker, AZ, 4401- Caterpillar Reman Powertrain Services, Inc., et al., 4403 Summerville, SC, 4499-4501 NOTICES Osram Sylvania, Inc., et al., St. Marys and York, PA, 4500 Meetings: Worker Adjustment Assistance; Determinations, 4501-4504 Merchant Marine Personnel Advisory Committee, 4482- Worker Adjustment Assistance; Investigations, 4504-4505 4484 Employment Standards Administration Commerce Department See Wage and Hour Division See Foreign-Trade Zones Board See International Trade Administration Energy Department See National Oceanic and Atmospheric Administration See Federal Energy Regulatory Commission See Patent and Trademark Office NOTICES NOTICES Meetings: Agency Information Collection Activities; Proposals, Environmental Management Site-Specific Advisory Submissions, and Approvals, 4441-4442 Board, Northern New Mexico, 4459-4460 IV Federal Register/Vol. 79, No. 18/Tuesday, January 28, 2014/Contents Environmental Management Site-Specific Advisory Federal Housing Enterprise Oversight Office Board, Oak Ridge Reservation, 4459 RULES Environmental Management Site-Specific Advisory Executive Compensation, 4389-4394 Board, Portsmouth, 4460-4461 Federal Housing Finance Agency Environmental Protection Agency RULES RULES Executive Compensation, 4389-4394 Air Quality State Implementation Plans; Approvals and Golden Parachute Payments, 4394-4401 Promulgations: PROPOSED RULES Alabama; Attainment Plan for the Troy Area 2008 Lead Responsibilities of Boards of Directors: Nonattainment Area, 4407-4409 Corporate Practices and Corporate Governance Matters, Changes to Dispute Procedures, 4403-4407 4414-4429 PROPOSED RULES Air Quality State Implementation Plans; Approvals and Federal Housing Finance Board Promulgations: PROPOSED RULES Louisiana; Interstate Transport of Fine Particulate Matter, Responsibilities of Boards of Directors: 4436-4438 Corporate Practices and Corporate Governance Matters, Standards of Performance for Greenhouse Gas Emissions for 4414-4429 New Stationary Sources: Electric Utility Generating Units, 4439 Federal Motor Carrier Safety Administration NOTICES NOTICES Amended Settlements: Meetings: Georgia-Pacific Hardwood Site, Plymouth, Washington Motor Carrier Safety Advisory Committee and County, NC, 4464-4465 Subcommittee, 4530-4531 Requests for Nominations: Qualification of Drivers; Exemption Applications: Experts to Augment Science Advisory Board Chemical Vision, 4531-^532 Assessment Advisory Committee Review of Benzo[a]pyrene, 4465-4466 Federal Reserve System NOTICES Equal Employment Opportunity Commission Agency Information Collection Activities; Proposals, NOTICES Submissions, and Approvals, 4468-4472 Agency Information Collection Activities; Proposals, Changes in Bank Control: Submissions, and Approvals, 4466-4467 Acquisitions of Shares of a Bank or Bank Holding Company, 4472 Executive Office of the President Formations of. Acquisitions by, and Mergers of Bank See Presidential Documents Holding Companies, 4472-4473 See Trade Representative, Office of United States Fish and Wildlife Service Export-Import Bank NOTICES NOTICES Agency Information Collection Activities; Proposals, Agency Information Collection Activities; Proposals, Submissions, and Approvals: Submissions, and Approvals, 4467 Incidental Take of Marine Mammals; Oil and Gas Industry Activities, 4488-4489 Federal Aviation Administration Injurious Wildlife; Importation Certification for Live Fish NOTICES and Fish Eggs, 4487-4488 Noise Compatibility Programs: Willow Run Airport, Ypsilanti, MI, 4528-4529 Food Safety and Inspection Service Requests to Release Airport Properties, 4529 NOTICES Requests to Release Deed Restrictions Meetings: Yellowstone Airport, West Yellowstone, MT, 4529-4530 Codex Alimentarius Commission; Codex Committee on Fish and Fish Products, 4440-4441 Federal Deposit Insurance Corporation NOTICES Foreign Assets Control Office Agency Information Collection Activities; Proposals, NOTICES Submissions, and Approvals: Designations, Foreign Narcotics Kingpin Designation Act, Guidance on Sound Incentive Compensation Policies, 4535-4536 4467-4468 Foreign-Trade Zones Board Federal Election Commission NOTICES NOTICES Proposed Production Activities: Meetings; Sunshine Act, 4468 Foreign-Trade Zone 49; Western Carriers, Inc., Foreign- Trade Zone 49, North Bergen, NJ, 4442 Federal Energy Regulatory Commission NOTICES Health and Human Services Department Combined Filings, 4461-4463 See Centers for Medicare & Medicaid Services Environmental Assessments; Availability, etc.: See Children and Families Administration Lock Plus Hydro Friends Fund XLII, LLC, 4463 See Health Resources and Services Administration Staff Attendances, 4463-4464 See National Institutes of Health Federal Register/Vol. 79, No. 18/Tuesday, January 28, 2014/Contents V Health Resources and Services Administration Land Management Bureau NOTICES NOTICES Agency Information Collection Activities; Proposals, Meetings: Submissions, and Approvals, 4474-4478 Gateway West Project Subcommittee of the Resource Advisory Council; Boise District, 4489-4490 Homeland Security Department Rio Grande Natural Area Commission, 4489 See Coast Guard Plats of Surveys: See U.S. Customs and Border Protection Wyoming, 4490 NOTICES National Credit Union Administration Meetings: Presidents National Security Telecommunications NOTICES Advisory Committee, 4482 Agency Information Collection Activities; Proposals, Submissions, and Approvals, 4509-4510 Housing and Urban Development Department National Highway Traffic Safety Administration See Federal Housing Enterprise Oversight Office PROPOSED RULES PROPOSED RULES Federal Motor Vehicle Safety Standards: Responsibilities of Boards of Directors: Child Restraint Systems—Side Impact Protection, Corporate Practices and Corporate Governance Matters, Incorporation by Reference, 4570-4608 4414-4429 NOTICES National Institutes of Health Proposed Changes to the Survey of New Manufactured NOTICES (Mobile) Home Placements Data Collection Agency Information Collection Activities; Proposals, Methodology, 4485-4487 Submissions, and Approvals: Multidisciplinary Treatment Planning within the Interior Department National Cancer Institute Community Cancer Centers See Fish and Wildlife Service Program, 4478-4479 See Land Management Bureau Meetings: Center for Scientific Review, 4479-4482 international Trade Administration NOTICES National Oceanic and Atmospheric Administration Court Decision Not in Harmony with Final Determination NOTICES of Sales at Less Than Fair Value, etc.: Agency Information Collection Activities; Proposals, Polyvinyl Alcohol from Taiwan, 4442-4443 Submissions, and Approvals: Meetings: Alaska Region Crab Permits, 4450-4451 Advisory Committee on Supply Chain Competitiveness, Meetings: 4443 Proposed Heeia Site for a National Estuarine Research Secretarial Energy Business Development Mission to West Reserve in Hawaii, 4451 Africa, 4443-4447 Trade Mission to the Caribbean Region, 4447-4450 Nuclear Regulatory Commission NOTICES International Trade Commission Inspections, Tests, Analyses, and Acceptance Criteria: Vogtle Unit 3 Combined License, 4510-4511 NOTICES Investigations: Meetings; Sunshine Act, 4511 Certain Vision-Based Driver Assistance System Cameras Office of Federai Housing Enterprise Oversight and Components Thereof, 4490-4491 See Federal Housing Enterprise Oversight Office Justice Department Office of United States Trade Representative See Antitrust Division See Trade Representative, Off'ice of United States See Drug Enforcement Administration See Parole Commission Parole Commission NOTICES NOTICES Proposed Consent Decrees under CERCLA, 4491-4492 Meetings; Sunshine Act, 4493-4494 Labor Department Patent and Trademark Office See Employment and Training Administration NOTICES See Veterans Employment and Training Service Agency Information Collection Activities; Proposals, See Wage and Hour Division Submissions, and Approvals, 4451-4452 NOTICES Agency Information Collection Activities; Proposals, Agency Information Collection Activities; Proposals, Submissions, and Approvals: Submissions, and Approvals: Response to Office Action and Voluntary Amendment Current Population Survey—Basic Labor Force, 4498 Forms, 4452-4454 Health Standards for Diesel Particulate Matter Exposure in Underground Coal Mines, 4497-4498 Personnel Management Office Nonmonetary Determination Activity Report, 4496 NOTICES Request; Job Corps Health Questionnaire, 4494 Agency Information Collection Activities; Proposals, Safety Defects — Examination, Correction, and Records, Submissions, and Approvals: 4494-4496 USAJOBS, 4511 VI Federal Register/Vol, 79, No. 18/Tuesday, January 28, 2014/Contents Pipeline and Hazardous Materials Safety Administration Treasury Department NOTICES See Foreign Assets Control Office Improvements in Preparing Oil Spill Facility Response NOTICES Plans, 4532-4534 Agency Information Collection Activities; Proposals, Submissions, and Approvals, 4534-4535 Presidential Documents U.S. Customs and Border Protection ADMINISTRATIVE ORDERS International Atomic Energy Agency, Agreement With U.S.; NOTICES Proposed Third Amendment (Presidential Agency Information Collection Activities; Proposals, Determination) Submissions, and Approvals; No. 2014-07 of January 17, 2014, 4609-4611 Commercial Invoice, 4485 Importer ID Input Record, 4484-4485 Saint Lawrence Seaway Development Corporation U.S.-China Economic and Security Review Commission PROPOSED RULES Seaway Regulations and Rules; Update, 4433-4436 NOTICES Meetings, 4536 Securities and Exchange Commission Veterans Employment and Training Service NOTICES Self-Regulatory Organizations; Proposed Rule Changes; NOTICES International Secmities Exchange, LLC, 4512-4515 Stand Down Grant Requests; FY 2014 through 2016, 4505- NYSE Area, Inc., 4515-4519 4508 Trading Suspension Orders; Advanced Pipe Fitting Technologies Inc., 4519 Wage and Hour Division Jinhao Motor Co., 4519 NOTICES New Dragon Asia Corp., 4519 Proposed Extension of the Information Collection Disclosure to Workers; Social Security Administration Disclosure to Workers Under the Migrant and Seasonal NOTICES Agricultural Worker Protection Act, 4508-4509 Addresses for Service of Process, 4519-4522 State Department Separate Parts In This Issue NOTICES Certain Temporary and Limited Sanctions Relief; Part II Joint Plan of Action of November 24, between the P5 plus Agriculture Department, Animal and Plant Health 1 and the Islamic Republic of Iran, 4522-4524 Inspection Service, 4538-4567 Trade Representative, Office of United States Part III NOTICES Transportation Department, National Highway Traffic Applications; Safety Administration, 4570-4608 Inclusion on the Dispute Settlement Rosters for US - Panama Trade Promotion Agreement, 4524-4526 Part IV Presidential Documents, 4609-4611 Transportation Department See Federal Aviation Administration See Federal Motor Carrier Safety Administration Reader Aids See National Highway Traffic Safety Administration Consult the Reader Aids section at the end of this page for See Pipeline and Hazardous Materials Safety phone numbers, online resources, finding aids, reminders, Administration and notice of recently enacted public laws. See Saint Lawrence Seaway Development Corporation NOTICES To subscribe to the Federal Register Table of Contents Applications for Certificates of Public Convenience and LISTSERV electronic mailing list, go to http;// Necessity and Foreign Air Carrier Permits, 4526-4527 listserv.access.gpo.gov and select Online mailing list Meetings; archives, FEDREGTOC-L, Join or leave the list (or change National Freight Advisory Committee; Webinar, 4527 settings); then follow the instructions. Federal Register/Vol. 79, No. 18/Tuesday, January 28, 2014/Contents VII CFR PARTS AFFECTED IN THIS ISSUE A cumulative list of the parts affected this month can be found in the Reader Aids section at the end of this issue. 3 CFR Administrative Orders: Presidential Determinations: No. 2014-07 of January 17, 2014.4611 7 CFR Proposed Rules: 319.4410 9 CFR Proposed Rules: 56.4538 145 .4538 146 .4538 147 .4538 12 CFR 1230 .4389 1231 .4394 1770.4389 Proposed Rules: 914.4414 917.4414 1236.4414 1239.4414 1710.4414 1720.4414 21 CFR Proposed Rules: 1308.4429 33 CFR 165.4401 Proposed Rules: 401.4433 40 CFR 30 .4403 31 .4403 52.4407 Proposed Rules: 52.4436 63.4439 49 CFR Proposed Rules: 571.4570 4389 Rules and Regulations Federal Register Vol. 79, No. 18 Tuesday, January 28, 2014 This section of the FEDERAL REGISTER [email protected], (not toll- Act, but the total payment or value contains regulatory documents having general free numbers). Federal Housing Finance derived from termination benefits is applicability and legal effect, most of which Agency, Eighth Floor, 400 Seventh included in FHFA’s review of are keyed to and codified in the Code of Street SW., Washington, DC 20024. The compensation provided by the Banks to Federal Regulations, which is published under telephone number for the their executive officers, in order to 50 titles pursuant to 44 U.S.C. 1510. Telecommunications Device for the determine whether the overall Hearing Impaired is (800) 877-8339. compensation is reasonable and The Code of Federal Regulations is sold by the Superintendent of Documents. Prices of SUPPLEMENTARY INFORMATION: comparable. This is because FHFA new books are listed in the first FEDERAL considers the term “compensation” to I. Background REGISTER issue of each week. include benefits to an executive officer FHFA published an interim final rule that are derived from post-employment with request for comments on Executive benefit plans or programs and other FEDERAL HOUSING FINANCE Compensation on May 14, 2013 (74 FR compensatory benefit arrangements AGENCY 28442). The public notice and comment containing termination benefits, which period closed on July 15, 2013. The affect the executive officer individually 12CFR Part 1230 interim final rule superseded the Office or as part of a group. As a result, FHFA of Federal Housing Enterprise Oversight reviews the value of benefits provided DEPARTMENT OF HOUSING AND (OFHEO) Executive Compensation rule, under such plans, programs, and URBAN DEVELOPMENT 12 CFR part 1770.^ This rule finalizes arrangements on an ongoing basis in the interim final rule and responds to exercising its compensation review Office of Federal Housing Enterprise comments received. authority. FHFA aggregates the benefits Oversight This final rule implements section provided under such plans, programs, 1113 of the Housing and Economic and arrangements with all other 12CFR Parti 770 Recovery Act of 2008 (HERA), Public payments of money or any other thing Law 110-289,122 Stat. 2654. Section RIN 2590-AA12 of current or potential value to 1113, which amended section 1318 of determine whether an officer’s overall Executive Compensation the Federal Housing Enterprises compensation is reasonable and Financial Safety and Soundness Act comparable.3 FHFA may also determine AGENCY: Federal Housing Finance (Safety and Soundness Act) (12 U.S.C. that a particular element of Agency; Office of Federal Housing 4518), requires the Director to prohibit compensation is not reasonable or Enterprise Oversight, HUD. and withhold compensation of comparable. For example, incentive ACTION: Final rule. executive officers of the Federal compensation that provides incentives National Mortgage Association, the for unsound risk management could be SUMMARY: The Federal Housing Finance Federal Home Loan Mortgage prohibited on that basis. Agency (FHFA) is issuing a final rule Corporation (collectively, the This final rule, like the interim final that sets forth requirements and Enterprises), and the Federal Home rule, reflects the enactment of the Stop processes with respect to compensation Loan Banks (Banks) (collectively, the Trading on Congressional Knowledge provided to executive officers by the regulated entities). Act (the “STOCK Act”), which followed Federal National Mortgage Association, FHFA issues this final rule also to FHFA’s issuance of the proposed rule.'* the Federal Home Loan Mortgage continue the requirement under the Section 16 of the STOCK Act prohibits Corporation, the Federal Home Loan charter acts of the Enterprises that the senior executives of any Enterprise in Banks, and the Federal Home Loan Bank Director approve any agreements or conservatorship from receiving bonuses System’s Office of Finance, consistent contracts of executive officers that during any period of conservatorship on with the safety and soundness provide compensation in connection or after the date of enactment. Section responsibilities of FHFA under the with termination of employment.^ No 1230.3(a) in the interim final rule and in Federal Housing Enterprises Financial similar prior approval requirement for this final rule includes this statutory Safety and Soundness Act of 1992, as the Director over termination benefits prohibition. On March 9, 2012, FHFA amended by the Housing and Economic for executive officers of the Banks is announced new executive Recovery Act of 2008. This final rule contained in the Federal Home Loan compensation programs for the affirms the establishment of 12 CFR part Bank Act or the Safety and Soundness Enterprises, in its capacity as 1230 and removal of 12 CFR part 1770 conservator. 5 These programs eliminate by the interim final rule that is already ’ FHFA is continuing its work to merge existing bonuses for Enterprise senior executives in effect. regulations of its predecessor agencies (OFHEO and (and other executives) and thus comply the Federal Housing Finance Board), and will DATES: The final rule is effective consider the appropriate disposition of an OFHEO with Section 16 of the STOCK Act. February 27, 2014. For additional corporate governance provision related to Additionally, FHFA is adopting this information see SUPPLEMENTARY compensation of directors, executive officers, and final rule to ensure that the regulated employees (at 12 CFR 1710.13), and the relationship INFORMATION. of that provision to this final rule, in conjunction FOR FURTHER INFORMATION CONTACT: with that project. 3 See 74 FR at 26990 (June 5, 2009). Alfred M. Pollard, General Counsel, 2 See section 309(d)(3)(B) of the Federal National “SeePublic Law 112-105,126 Stat. 291 (April 4, (202) 649-3050, Alfred.Pollard® Mortgage Association Charter Act (12 U.S.C. 1723a 2012) (codified at 12 U.S.C. 4518a). (d)(3)(B)) and section 303(h)(2) of the Federal Home ® See News Release dated March 9, 2012, at fhfa.gov, or Lindsay Simmons, Assistant Loan Mortgage Corporation Act (12 U.S.C. h\tp:/l\vww.fhfa.gov/webfi\es/23438,l General Counsel, (202) 649-3066, 1452(h)(2)). ExecComp3912F.pdf. 4390 Federal Register/Vol. 79, No. 18/Tuesday, January 28, 2014/Rules and Regulations entities and the Office of Finance (OF) Rule’s Effect on Compensation exceed[ing]” compensation at similar comply with processes used by FHFA in institutions, and (iii) designate The Banks made two comments its oversight of executive compensation. particular comparator institutions that regarding FHFA’s review of The processes require the submission of will determine compliance with the compensation that are similar to or relevant information by the regulated rule. continue comments they had made entities and OF on a timely basis, in a FHFA has responded to the Banks’ previously in response to the proposed format deemed appropriate by FHFA, to stated concerns on this subject in this rule. The first is the Banks’ allegation enable FHFA to efficiently carry out its rulemaking, including making changes that the rule in effect prescribes a level executive compensation functions. For to the rule in response to the Banks’ or range of executive compensation. The reasons noted above, as with the previous comments, and must now second is that FHFA’s review “in whole Enterprises, information required to be reject this final comment as being no or in part” should instead be review submitted to FHFA for its review and more persuasive than the previous “taken as a whole.” consideration by the Banks includes Congress provided in 12 U.S.C. comments, to which FHFA has already information relating to compensation for 4518(d) that FHFA is not to prescribe or adequately responded.® The first of the services during employment and to set specific levels or ranges of three provisions the Banks’ find termination benefits for their executive compensation. Congress required, objectionable, in § 1230.3(a), is a officers. however, that FHFA determine whether reasonable implementation of the Congressional mandate in the statute FHFA had adopted the interim final compensation is reasonable and and in no way authorizes FHFA to set rule to provide an opportunity for comparable with compensation for compensation or a range of additional comment in view of certain employment in other similar businesses compensation. revisions to the proposed rule. Further involving similar duties and FHFA defined the term “comparable” details about comments received and responsibilities. Accordingly, FHFA has in the way it deems to be closest to FHFA’s responses can be found below. defined the terms “reasonable” and Congressional intent, true to the FHFA has conducted a separate “comparable” and has implemented the meaning of the word in plain English, rulemaking regarding golden parachute Congressional mandate in § 1230.3(a) as and supported by market usage of the payments. Section 1114 of HERA further follows: “No regulated entity or the term. Comparison with similar positions amended section 1318 of the Safety and Office of Finance shall pay at similar institutions is a common Soundness Act (12 U.S.C. 4518) to compensation to an executive officer practice for setting compensation. It authorize the Director to prohibit or that is not reasonable and comparable appears clear that a statutory limit golden parachute payments and with compensation paid by such similar requirement of comparability would indemnification payments by the businesses involving similar duties and need to operate as a check on Enterprises and the Banks to entity- responsibilities.” compensation that materially exceeds affiliated parties. Pursuant to this The Banks argued that, despite compensation for comparable duties changes FHFA made in the interim final authority, FHFA adopted a final rule on and responsibilities at comparable golden parachute payments in 2009, ® rule in response to comments the Banks institutions. Even so, FHFA avoided setting forth factors to be considered by made on the proposed rule, the interim translating this requirement into the Director of FHFA when exercising final rule allows FHFA to prescribe or specific mandates to create a certain authority to limit golden parachute set a specific level or range of peer group of a certain size, or even use payments that are paid to entity- compensation, contrary to the statute. of a certain process to create the group affiliated parties of a regulated entity or The Banks argue that three provisions in of comparators, which could have OF. Subsequently, FHFA proposed combination create this result. First, as limited the flexibility of the Banks in amendments to the final golden stated above, FHFA implemented the implementing the mandate. FHFA parachute payments rule to address in Congressional mandate in § 1230.3(a) of reviews comparability while also more detail prohibited and permissible the rule to state that regulated entities respecting the Banks’ processes for golden parachute payments.’’ Today, and the OF may not pay compensation setting compensation. This review FHFA also publishes in this issue of the that is not reasonable and comparable results in no specific level of Federal Register a final amendment of according to the statute. Second, the compensation, nor a range, the rule on golden parachute payments. interim final rule defines “comparable” communicated from FHFA to the as “compensation that, taking in whole regulated entities or OF, in practice or FHFA recently adopted a rule setting or in part, does not materially exceed in effect. forth definitions of terms commonly compensation paid at institutions of FHFA continues to believe that the used in its regulations, and has removed similar size and function for similar Farm Credit Banks and the Federal duplicative definitions in this final duties and responsibilities.” Finally, in Reserve Banks are relevant points of rule.® its discussion of the proposed rule and reference in assessing the II. Comments on the Interim Final Rule of the interim final rule, FHFA reasonableness and comparability of identified the Farm Credit Banks and Bank compensation, because they have FHFA received comments from one Federal Reserve Banks as examples that certain points in common with the member of the public, and from the may appropriately be included as points Federal Home Loan Banks: they are twelve Federal Home Loan Banks and of reference in assessing reasonableness government-sponsored financial the Office of Finance. FHFA considered and comparability of compensation at institutions; they have some measure of all of the comments submitted, and the Federal Home Loan Banks. The government backing and therefore a explains its responses below. Banks assert that these provisions in potentially different risk profile than effect (i) prohibit the Banks from paying non-govemment-sponsored institutions; •‘Golden Parachute Payments, 74 FR 5101 compensation that is not “reasonable” and they do not issue publicly traded (January 29, 2009), codified at 12 CFR part 1231. and “comparable” in a manner that stock that can be used as an element of ^ Golden Parachute and Indemnification prescribes or sets a specific level of long-term compensation and therefore Payments Proposed Rule, 74 FR 30975 (June 29, 2009). range of compensation, (ii) impose a “See 12 GFR 1201.1. presumptive cap of “not materially »78 FR 28442, 28444-45 (May 14, 2013). Federal Register/Vol. 79, No. 18/Tuesday, January 28, 2014/Rules and Regulations 4391 must structure their compensation methods that they can use to last filing, who would be NEOs if the differently from publicly traded compensate their executives. For filing occurred today, and those companies. For these reasons it would example, the Banks are unable to offer expected to be NEOs in the future based be wrong to ignore the Farm Credit stock-related executive compensation on current title, duties, or pay. Banks and the Federal Reserve Banks. because they do not have publicly (Consequently, the total number of While the Banks’ comment letters have traded stock. The Banks requested that NEOs at any time may be more than correctly pointed out differences FHFA take these distinguishing factors five.)” between them and the Farm Credit into consideration. In order to address the Banks’ request, Banks and the Federal Reserve Banks, FHFA responded to that earlier FHFA has determined to narrow its there are also key differences between comment that in its ongoing oversight of interpretation described above in the the Federal Home Loan Banks and the an executive’s overall compensation, Supplementary Information to the commercial banks and similar FHFA reviews all components that interim final rule. FHFA will apply the institutions that the Banks have compose the broadly defined term definition more narrowly, in a manner identified as their comparators. The fact “compensation.” If any component’s which is intended to address the is that there are no institutions that are value is determined to be an outlier, it concern expressed by the Banks, and exactly comparable to the Federal Home may still be acceptable given the which is reflective of the plain meaning Loan Banks. compensation taken as a whole. On the of the regulatory text. With respect to FHFA had included these points in its other hand, it may also be deemed the Banks, the definition of “executive previous response to the Banks’ excessive by itself if it creates officer” adopts the language of the SEC’s previous comments and the Banks did questionable incentives, or in other Regulation S-K, 17 CFR 229.402(aK3), not in their most recent comment letter ways draws undue negative attention to and therefore covers a Bank’s most to the interim final rule provide any itself. FHFA will advise the entity if it highly compensated officers (generally additional responsive arguments about finds the aggregate compensation referred to as the “top 5”) who are the appropriateness of comparability package to be excessive. FHFA may designated under SEC disclosure with the Farm Credit Banks and the specifically note that a particular requirements as “Named Executive Federal Reserve Banks. FHFA maintains component appears to be the source of Officers” (NEOs). that suggesting these entities be the problem and should be reassessed It is FHFA’s intent to provide clarity included as points of reference among a by the entity in order to align the total and avoid undue burden on the Banks group of comparators is fully responsive package with the reasonable and by following the definition and practice to its Congressional mandate to comparable standard. For these reasons, of the SEC for identifying NEOs in its determine whether compensation is FHFA has determined to retain the definition for “executive officer.” comparable to that of similar businesses language, which is currently effective in However, this final rule includes with similar duties and responsibilities, the interim final rule, in this final rule requirements that apply to “executive and that doing so does not result in as well. FHFA assures the Banks that it officers” throughout the year, and not setting a specific level or range of does take into account the particular just at the time of securities filings. compensation. circiunstances of the Banks in reviewing Therefore, for purposes of clarification, The unique member-controlled executive compensation. FHFA is well and in response to the request of the cooperative structure of the Federal aware that the Banks do not have Banks, FHFA is now narrowing its Home Loan Bank system was in place as publicly traded stock and pay interpretation that was previously of the time that Congress created the compensation in cash. statute that mandates FHFA’s review for FHFA recognizes that executive provided in the SUPPLEMENTARY reasonableness and comparability of compensation oversight mandated by INFORMATION to the interim final rule as to how the definition of executive compensation, and therefore cannot be HERA has resulted in a new area of officer applies. adduced as a basis for FHFA to abandon regulatory compliance for the Banks. The definition of “executive officer” its role to review as the statute intended, For that reason, in addition to guidance, applies to a person who qualifies as an including for comparability with similar FHFA staff will continue to work “executive officer” as of the time of a institutions, despite the unique directly with the relevant staff, required notice under § 1230.3(d)(l)-(4). structure in place at the Banks. committees, and boards of the Banks to In effect, this means that the “top 5” FHFA received an additional ensure that FHFA’s review process is comment from the Banks, noting that well understood. FHFA guidance and determined for purposes of securities filings^^ will remain the “top 5” for FHFA had rejected the Banks’ previous dialogue between staffs will, among comment that FHFA’s review of other things, address concerns raised by purposes of this regulation until either executive compensation should be the Banks regarding how the provisions (1) one of the “top 5” individuals based on compensation that is “taken as of the rule will operate under specific vacates his or her position, or (2) the a whole” rather than “in whole or in circumstances. next “top 5” are identified the following part.” The Banks had stated their belief year. that if an executive’s compensation Status as an Executive Officer In the case that one of the “top 5” package taken as a whole is reasonable The Banks requested that the term vacates his or her position, this and comparable to compensation at “executive officer” apply only to those regulation is intended to apply in the similar institutions for similar duties, individuals who qualify as executive following manner. If the position of FHFA should not be permitted to reject officers as of the time of a required president or chief financial officer is a discrete element of an executive’s notice regarding such individual’s vacated, the new president or chief compensation as excessive. They have compensation. The SUPPLEMENTARY financial officer will become one of the further requested in response to the INFORMATION to the interim final rule “top 5” immediately when the change is interim final rule that FHFA recognize states that “[a]n executive officer for that the Banks are more restricted than purposes of this regulation would cover ’2 Generally, the “top 5” are determined as of a other large financial institutions in officers who were NEOs at the Bank’s certain date based on current position (for the president or chief financial officer) or the previous 12 months of compensation (for the most highly 10 78 FR 28442, 28444-45 (May 14, 2013). ” 78 FR at 28445. compensated employees).

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FEDERAL REGISTER Vol. 79 Tuesday, No. 18 January 28, 2014 Pages 4389-4612 OFFICE OF THE FEDERAL REGISTER II Federal Register/Vol. 79, No. 18/Tuesday, January 28, 2014 SUBSCRIPTIONS AND COPIES_ The FEDERAL REGISTER (ISSN 0097-6326) is published daily, Monday through Friday, except official holidays, by the Office PUBLIC of the Federal Register, National Archives and Records Administration, Washington, DC 20408, under the Federal Register Subscriptions: Act (44 U.S.C. Ch. 15) and the regulations of the Administrative Paper or fiche 202-512-1800 Committee of the Federal Register (1 CFR Ch. I). The Assistance with public subscriptions 202-512-1806 Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402 is the exclusive distributor of the official General online information 202-512-1530; 1-888-293-6498 edition. Periodicals postage is paid at Washington, DC. 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Remit check or money order, made payable to the Superintendent of Documents, or charge to your GPO Deposit Account, VISA, MasterCard, American Express, or Discover. Mail to: U.S. Government Printing Office—New Orders, P.O. Box 979050, St. Louis, MO 63197-9000; or call toll free 1- 866-512-1800, DC area 202-512-1800; or go to the U.S. Government Online Bookstore site, see bookstore.gpo.gov. There are no restrictions on the republication of material appearing in the Federal Register. How To Cite This Publication: Use the volume number and the page number. Example: 77 FR 12345. Postmaster: Send address changes to the Superintendent of Documents, Federal Register, U.S. Government Printing Office, Washington, DC 20402, along with the entire mailing label from the last issue received. Printed on recycled paper. in Contents Federal Register Vol. 79, No. 18 Tuesday, January 28, 2014 Agriculture Department Commodity Futures Trading Commission See Animal and Plant Health Inspection Service NOTICES See Food Safety and Inspection Service Meetings: Global Markets Advisory Committee, 4454 Animal and Plant Health Inspection Service Meetings; Sunshine Act, 4454 PROPOSED RULES Consumer Product Safety Commission Importation of Fresh Bananas From the Philippines into NOTICES Hawaii and U.S. Territories, 4410-4414 Agency Information Collection Activities; Proposals, National Poultry Improvement Plan and Auxiliary Submissions, and Approvals: Provisions, 4538-4567 Consumer Opinion Forum, 4454-4456 Antitrust Division Defense Department NOTICES NOTICES Changes in Membership: Agency Information Collection Activities; Proposals, Advanced Media Workflow Association, Inc., 4492-4493 Submissions, and Approvals, 4456-4457 Cable Television Laboratories, Inc., 4493 Privacy Act; Systems of Records, 4457-4458 Members of SGIP 2.0, 4492 Department of Transportation PXI Systems Alliance, Inc., 4492 Disclosures: See Pipeline and Hazardous Materials Safety ASTM International, 4493 Administration National Council of State Boards of Nursing, 4493 Drug Enforcement Administration PROPOSED RULES Antitrust Schedules of Controlled Substances: See Antitrust Division Temporary Placement of 10 Synthetic Cathinones into Schedule I, 4429-4433 Centers for Medicare & Medicaid Services Education Department NOTICES Privacy Act; Systems of Records, 4473-4474 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Children and Families Administration American Indian Tribally Controlled Colleges and NOTICES Universities Program, 4458 Agency Information Collection Activities; Proposals, Applications for New Awards; Rehabilitation Training: Submissions, and Approvals Rehabilitation Long-Term Training Program—Vocational Community Services Block Grant Program Model Plan Rehabilitation Counseling, 4458-4459 Application, 4474 Employment and Training Administration Civil Rights Commission NOTICES NOTICES Availability of Funds, Requests for Grant Applications: Meetings: Workforce Data Quality Initiative, 4498-4499 Massachusetts Advisory Committee, 4441 Trade Adjustment Assistance; Determinations: Polyone Designed Structures and Solutions LLG, et al., Coast Guard Donora, PA, 4499 Worker Adjustment Assistance; Amended Certifications: RULES Boise White Paper, LLC, et al., Interational Falls, MN, Safety Zones: 4501 BWRC Southwest Showdown Three; Parker, AZ, 4401- Caterpillar Reman Powertrain Services, Inc., et al., 4403 Summerville, SC, 4499-4501 NOTICES Osram Sylvania, Inc., et al., St. Marys and York, PA, 4500 Meetings: Worker Adjustment Assistance; Determinations, 4501-4504 Merchant Marine Personnel Advisory Committee, 4482- Worker Adjustment Assistance; Investigations, 4504-4505 4484 Employment Standards Administration Commerce Department See Wage and Hour Division See Foreign-Trade Zones Board See International Trade Administration Energy Department See National Oceanic and Atmospheric Administration See Federal Energy Regulatory Commission See Patent and Trademark Office NOTICES NOTICES Meetings: Agency Information Collection Activities; Proposals, Environmental Management Site-Specific Advisory Submissions, and Approvals, 4441-4442 Board, Northern New Mexico, 4459-4460 IV Federal Register/Vol. 79, No. 18/Tuesday, January 28, 2014/Contents Environmental Management Site-Specific Advisory Federal Housing Enterprise Oversight Office Board, Oak Ridge Reservation, 4459 RULES Environmental Management Site-Specific Advisory Executive Compensation, 4389-4394 Board, Portsmouth, 4460-4461 Federal Housing Finance Agency Environmental Protection Agency RULES RULES Executive Compensation, 4389-4394 Air Quality State Implementation Plans; Approvals and Golden Parachute Payments, 4394-4401 Promulgations: PROPOSED RULES Alabama; Attainment Plan for the Troy Area 2008 Lead Responsibilities of Boards of Directors: Nonattainment Area, 4407-4409 Corporate Practices and Corporate Governance Matters, Changes to Dispute Procedures, 4403-4407 4414-4429 PROPOSED RULES Air Quality State Implementation Plans; Approvals and Federal Housing Finance Board Promulgations: PROPOSED RULES Louisiana; Interstate Transport of Fine Particulate Matter, Responsibilities of Boards of Directors: 4436-4438 Corporate Practices and Corporate Governance Matters, Standards of Performance for Greenhouse Gas Emissions for 4414-4429 New Stationary Sources: Electric Utility Generating Units, 4439 Federal Motor Carrier Safety Administration NOTICES NOTICES Amended Settlements: Meetings: Georgia-Pacific Hardwood Site, Plymouth, Washington Motor Carrier Safety Advisory Committee and County, NC, 4464-4465 Subcommittee, 4530-4531 Requests for Nominations: Qualification of Drivers; Exemption Applications: Experts to Augment Science Advisory Board Chemical Vision, 4531-^532 Assessment Advisory Committee Review of Benzo[a]pyrene, 4465-4466 Federal Reserve System NOTICES Equal Employment Opportunity Commission Agency Information Collection Activities; Proposals, NOTICES Submissions, and Approvals, 4468-4472 Agency Information Collection Activities; Proposals, Changes in Bank Control: Submissions, and Approvals, 4466-4467 Acquisitions of Shares of a Bank or Bank Holding Company, 4472 Executive Office of the President Formations of. Acquisitions by, and Mergers of Bank See Presidential Documents Holding Companies, 4472-4473 See Trade Representative, Office of United States Fish and Wildlife Service Export-Import Bank NOTICES NOTICES Agency Information Collection Activities; Proposals, Agency Information Collection Activities; Proposals, Submissions, and Approvals: Submissions, and Approvals, 4467 Incidental Take of Marine Mammals; Oil and Gas Industry Activities, 4488-4489 Federal Aviation Administration Injurious Wildlife; Importation Certification for Live Fish NOTICES and Fish Eggs, 4487-4488 Noise Compatibility Programs: Willow Run Airport, Ypsilanti, MI, 4528-4529 Food Safety and Inspection Service Requests to Release Airport Properties, 4529 NOTICES Requests to Release Deed Restrictions Meetings: Yellowstone Airport, West Yellowstone, MT, 4529-4530 Codex Alimentarius Commission; Codex Committee on Fish and Fish Products, 4440-4441 Federal Deposit Insurance Corporation NOTICES Foreign Assets Control Office Agency Information Collection Activities; Proposals, NOTICES Submissions, and Approvals: Designations, Foreign Narcotics Kingpin Designation Act, Guidance on Sound Incentive Compensation Policies, 4535-4536 4467-4468 Foreign-Trade Zones Board Federal Election Commission NOTICES NOTICES Proposed Production Activities: Meetings; Sunshine Act, 4468 Foreign-Trade Zone 49; Western Carriers, Inc., Foreign- Trade Zone 49, North Bergen, NJ, 4442 Federal Energy Regulatory Commission NOTICES Health and Human Services Department Combined Filings, 4461-4463 See Centers for Medicare & Medicaid Services Environmental Assessments; Availability, etc.: See Children and Families Administration Lock Plus Hydro Friends Fund XLII, LLC, 4463 See Health Resources and Services Administration Staff Attendances, 4463-4464 See National Institutes of Health Federal Register/Vol. 79, No. 18/Tuesday, January 28, 2014/Contents V Health Resources and Services Administration Land Management Bureau NOTICES NOTICES Agency Information Collection Activities; Proposals, Meetings: Submissions, and Approvals, 4474-4478 Gateway West Project Subcommittee of the Resource Advisory Council; Boise District, 4489-4490 Homeland Security Department Rio Grande Natural Area Commission, 4489 See Coast Guard Plats of Surveys: See U.S. Customs and Border Protection Wyoming, 4490 NOTICES National Credit Union Administration Meetings: Presidents National Security Telecommunications NOTICES Advisory Committee, 4482 Agency Information Collection Activities; Proposals, Submissions, and Approvals, 4509-4510 Housing and Urban Development Department National Highway Traffic Safety Administration See Federal Housing Enterprise Oversight Office PROPOSED RULES PROPOSED RULES Federal Motor Vehicle Safety Standards: Responsibilities of Boards of Directors: Child Restraint Systems—Side Impact Protection, Corporate Practices and Corporate Governance Matters, Incorporation by Reference, 4570-4608 4414-4429 NOTICES National Institutes of Health Proposed Changes to the Survey of New Manufactured NOTICES (Mobile) Home Placements Data Collection Agency Information Collection Activities; Proposals, Methodology, 4485-4487 Submissions, and Approvals: Multidisciplinary Treatment Planning within the Interior Department National Cancer Institute Community Cancer Centers See Fish and Wildlife Service Program, 4478-4479 See Land Management Bureau Meetings: Center for Scientific Review, 4479-4482 international Trade Administration NOTICES National Oceanic and Atmospheric Administration Court Decision Not in Harmony with Final Determination NOTICES of Sales at Less Than Fair Value, etc.: Agency Information Collection Activities; Proposals, Polyvinyl Alcohol from Taiwan, 4442-4443 Submissions, and Approvals: Meetings: Alaska Region Crab Permits, 4450-4451 Advisory Committee on Supply Chain Competitiveness, Meetings: 4443 Proposed Heeia Site for a National Estuarine Research Secretarial Energy Business Development Mission to West Reserve in Hawaii, 4451 Africa, 4443-4447 Trade Mission to the Caribbean Region, 4447-4450 Nuclear Regulatory Commission NOTICES International Trade Commission Inspections, Tests, Analyses, and Acceptance Criteria: Vogtle Unit 3 Combined License, 4510-4511 NOTICES Investigations: Meetings; Sunshine Act, 4511 Certain Vision-Based Driver Assistance System Cameras Office of Federai Housing Enterprise Oversight and Components Thereof, 4490-4491 See Federal Housing Enterprise Oversight Office Justice Department Office of United States Trade Representative See Antitrust Division See Trade Representative, Off'ice of United States See Drug Enforcement Administration See Parole Commission Parole Commission NOTICES NOTICES Proposed Consent Decrees under CERCLA, 4491-4492 Meetings; Sunshine Act, 4493-4494 Labor Department Patent and Trademark Office See Employment and Training Administration NOTICES See Veterans Employment and Training Service Agency Information Collection Activities; Proposals, See Wage and Hour Division Submissions, and Approvals, 4451-4452 NOTICES Agency Information Collection Activities; Proposals, Agency Information Collection Activities; Proposals, Submissions, and Approvals: Submissions, and Approvals: Response to Office Action and Voluntary Amendment Current Population Survey—Basic Labor Force, 4498 Forms, 4452-4454 Health Standards for Diesel Particulate Matter Exposure in Underground Coal Mines, 4497-4498 Personnel Management Office Nonmonetary Determination Activity Report, 4496 NOTICES Request; Job Corps Health Questionnaire, 4494 Agency Information Collection Activities; Proposals, Safety Defects — Examination, Correction, and Records, Submissions, and Approvals: 4494-4496 USAJOBS, 4511 VI Federal Register/Vol, 79, No. 18/Tuesday, January 28, 2014/Contents Pipeline and Hazardous Materials Safety Administration Treasury Department NOTICES See Foreign Assets Control Office Improvements in Preparing Oil Spill Facility Response NOTICES Plans, 4532-4534 Agency Information Collection Activities; Proposals, Submissions, and Approvals, 4534-4535 Presidential Documents U.S. Customs and Border Protection ADMINISTRATIVE ORDERS International Atomic Energy Agency, Agreement With U.S.; NOTICES Proposed Third Amendment (Presidential Agency Information Collection Activities; Proposals, Determination) Submissions, and Approvals; No. 2014-07 of January 17, 2014, 4609-4611 Commercial Invoice, 4485 Importer ID Input Record, 4484-4485 Saint Lawrence Seaway Development Corporation U.S.-China Economic and Security Review Commission PROPOSED RULES Seaway Regulations and Rules; Update, 4433-4436 NOTICES Meetings, 4536 Securities and Exchange Commission Veterans Employment and Training Service NOTICES Self-Regulatory Organizations; Proposed Rule Changes; NOTICES International Secmities Exchange, LLC, 4512-4515 Stand Down Grant Requests; FY 2014 through 2016, 4505- NYSE Area, Inc., 4515-4519 4508 Trading Suspension Orders; Advanced Pipe Fitting Technologies Inc., 4519 Wage and Hour Division Jinhao Motor Co., 4519 NOTICES New Dragon Asia Corp., 4519 Proposed Extension of the Information Collection Disclosure to Workers; Social Security Administration Disclosure to Workers Under the Migrant and Seasonal NOTICES Agricultural Worker Protection Act, 4508-4509 Addresses for Service of Process, 4519-4522 State Department Separate Parts In This Issue NOTICES Certain Temporary and Limited Sanctions Relief; Part II Joint Plan of Action of November 24, between the P5 plus Agriculture Department, Animal and Plant Health 1 and the Islamic Republic of Iran, 4522-4524 Inspection Service, 4538-4567 Trade Representative, Office of United States Part III NOTICES Transportation Department, National Highway Traffic Applications; Safety Administration, 4570-4608 Inclusion on the Dispute Settlement Rosters for US - Panama Trade Promotion Agreement, 4524-4526 Part IV Presidential Documents, 4609-4611 Transportation Department See Federal Aviation Administration See Federal Motor Carrier Safety Administration Reader Aids See National Highway Traffic Safety Administration Consult the Reader Aids section at the end of this page for See Pipeline and Hazardous Materials Safety phone numbers, online resources, finding aids, reminders, Administration and notice of recently enacted public laws. See Saint Lawrence Seaway Development Corporation NOTICES To subscribe to the Federal Register Table of Contents Applications for Certificates of Public Convenience and LISTSERV electronic mailing list, go to http;// Necessity and Foreign Air Carrier Permits, 4526-4527 listserv.access.gpo.gov and select Online mailing list Meetings; archives, FEDREGTOC-L, Join or leave the list (or change National Freight Advisory Committee; Webinar, 4527 settings); then follow the instructions. Federal Register/Vol. 79, No. 18/Tuesday, January 28, 2014/Contents VII CFR PARTS AFFECTED IN THIS ISSUE A cumulative list of the parts affected this month can be found in the Reader Aids section at the end of this issue. 3 CFR Administrative Orders: Presidential Determinations: No. 2014-07 of January 17, 2014.4611 7 CFR Proposed Rules: 319.4410 9 CFR Proposed Rules: 56.4538 145 .4538 146 .4538 147 .4538 12 CFR 1230 .4389 1231 .4394 1770.4389 Proposed Rules: 914.4414 917.4414 1236.4414 1239.4414 1710.4414 1720.4414 21 CFR Proposed Rules: 1308.4429 33 CFR 165.4401 Proposed Rules: 401.4433 40 CFR 30 .4403 31 .4403 52.4407 Proposed Rules: 52.4436 63.4439 49 CFR Proposed Rules: 571.4570 4389 Rules and Regulations Federal Register Vol. 79, No. 18 Tuesday, January 28, 2014 This section of the FEDERAL REGISTER [email protected], (not toll- Act, but the total payment or value contains regulatory documents having general free numbers). Federal Housing Finance derived from termination benefits is applicability and legal effect, most of which Agency, Eighth Floor, 400 Seventh included in FHFA’s review of are keyed to and codified in the Code of Street SW., Washington, DC 20024. The compensation provided by the Banks to Federal Regulations, which is published under telephone number for the their executive officers, in order to 50 titles pursuant to 44 U.S.C. 1510. Telecommunications Device for the determine whether the overall Hearing Impaired is (800) 877-8339. compensation is reasonable and The Code of Federal Regulations is sold by the Superintendent of Documents. Prices of SUPPLEMENTARY INFORMATION: comparable. This is because FHFA new books are listed in the first FEDERAL considers the term “compensation” to I. Background REGISTER issue of each week. include benefits to an executive officer FHFA published an interim final rule that are derived from post-employment with request for comments on Executive benefit plans or programs and other FEDERAL HOUSING FINANCE Compensation on May 14, 2013 (74 FR compensatory benefit arrangements AGENCY 28442). The public notice and comment containing termination benefits, which period closed on July 15, 2013. The affect the executive officer individually 12CFR Part 1230 interim final rule superseded the Office or as part of a group. As a result, FHFA of Federal Housing Enterprise Oversight reviews the value of benefits provided DEPARTMENT OF HOUSING AND (OFHEO) Executive Compensation rule, under such plans, programs, and URBAN DEVELOPMENT 12 CFR part 1770.^ This rule finalizes arrangements on an ongoing basis in the interim final rule and responds to exercising its compensation review Office of Federal Housing Enterprise comments received. authority. FHFA aggregates the benefits Oversight This final rule implements section provided under such plans, programs, 1113 of the Housing and Economic and arrangements with all other 12CFR Parti 770 Recovery Act of 2008 (HERA), Public payments of money or any other thing Law 110-289,122 Stat. 2654. Section RIN 2590-AA12 of current or potential value to 1113, which amended section 1318 of determine whether an officer’s overall Executive Compensation the Federal Housing Enterprises compensation is reasonable and Financial Safety and Soundness Act comparable.3 FHFA may also determine AGENCY: Federal Housing Finance (Safety and Soundness Act) (12 U.S.C. that a particular element of Agency; Office of Federal Housing 4518), requires the Director to prohibit compensation is not reasonable or Enterprise Oversight, HUD. and withhold compensation of comparable. For example, incentive ACTION: Final rule. executive officers of the Federal compensation that provides incentives National Mortgage Association, the for unsound risk management could be SUMMARY: The Federal Housing Finance Federal Home Loan Mortgage prohibited on that basis. Agency (FHFA) is issuing a final rule Corporation (collectively, the This final rule, like the interim final that sets forth requirements and Enterprises), and the Federal Home rule, reflects the enactment of the Stop processes with respect to compensation Loan Banks (Banks) (collectively, the Trading on Congressional Knowledge provided to executive officers by the regulated entities). Act (the “STOCK Act”), which followed Federal National Mortgage Association, FHFA issues this final rule also to FHFA’s issuance of the proposed rule.'* the Federal Home Loan Mortgage continue the requirement under the Section 16 of the STOCK Act prohibits Corporation, the Federal Home Loan charter acts of the Enterprises that the senior executives of any Enterprise in Banks, and the Federal Home Loan Bank Director approve any agreements or conservatorship from receiving bonuses System’s Office of Finance, consistent contracts of executive officers that during any period of conservatorship on with the safety and soundness provide compensation in connection or after the date of enactment. Section responsibilities of FHFA under the with termination of employment.^ No 1230.3(a) in the interim final rule and in Federal Housing Enterprises Financial similar prior approval requirement for this final rule includes this statutory Safety and Soundness Act of 1992, as the Director over termination benefits prohibition. On March 9, 2012, FHFA amended by the Housing and Economic for executive officers of the Banks is announced new executive Recovery Act of 2008. This final rule contained in the Federal Home Loan compensation programs for the affirms the establishment of 12 CFR part Bank Act or the Safety and Soundness Enterprises, in its capacity as 1230 and removal of 12 CFR part 1770 conservator. 5 These programs eliminate by the interim final rule that is already ’ FHFA is continuing its work to merge existing bonuses for Enterprise senior executives in effect. regulations of its predecessor agencies (OFHEO and (and other executives) and thus comply the Federal Housing Finance Board), and will DATES: The final rule is effective consider the appropriate disposition of an OFHEO with Section 16 of the STOCK Act. February 27, 2014. For additional corporate governance provision related to Additionally, FHFA is adopting this information see SUPPLEMENTARY compensation of directors, executive officers, and final rule to ensure that the regulated employees (at 12 CFR 1710.13), and the relationship INFORMATION. of that provision to this final rule, in conjunction FOR FURTHER INFORMATION CONTACT: with that project. 3 See 74 FR at 26990 (June 5, 2009). Alfred M. Pollard, General Counsel, 2 See section 309(d)(3)(B) of the Federal National “SeePublic Law 112-105,126 Stat. 291 (April 4, (202) 649-3050, Alfred.Pollard® Mortgage Association Charter Act (12 U.S.C. 1723a 2012) (codified at 12 U.S.C. 4518a). (d)(3)(B)) and section 303(h)(2) of the Federal Home ® See News Release dated March 9, 2012, at fhfa.gov, or Lindsay Simmons, Assistant Loan Mortgage Corporation Act (12 U.S.C. h\tp:/l\vww.fhfa.gov/webfi\es/23438,l General Counsel, (202) 649-3066, 1452(h)(2)). ExecComp3912F.pdf. 4390 Federal Register/Vol. 79, No. 18/Tuesday, January 28, 2014/Rules and Regulations entities and the Office of Finance (OF) Rule’s Effect on Compensation exceed[ing]” compensation at similar comply with processes used by FHFA in institutions, and (iii) designate The Banks made two comments its oversight of executive compensation. particular comparator institutions that regarding FHFA’s review of The processes require the submission of will determine compliance with the compensation that are similar to or relevant information by the regulated rule. continue comments they had made entities and OF on a timely basis, in a FHFA has responded to the Banks’ previously in response to the proposed format deemed appropriate by FHFA, to stated concerns on this subject in this rule. The first is the Banks’ allegation enable FHFA to efficiently carry out its rulemaking, including making changes that the rule in effect prescribes a level executive compensation functions. For to the rule in response to the Banks’ or range of executive compensation. The reasons noted above, as with the previous comments, and must now second is that FHFA’s review “in whole Enterprises, information required to be reject this final comment as being no or in part” should instead be review submitted to FHFA for its review and more persuasive than the previous “taken as a whole.” consideration by the Banks includes Congress provided in 12 U.S.C. comments, to which FHFA has already information relating to compensation for 4518(d) that FHFA is not to prescribe or adequately responded.® The first of the services during employment and to set specific levels or ranges of three provisions the Banks’ find termination benefits for their executive compensation. Congress required, objectionable, in § 1230.3(a), is a officers. however, that FHFA determine whether reasonable implementation of the Congressional mandate in the statute FHFA had adopted the interim final compensation is reasonable and and in no way authorizes FHFA to set rule to provide an opportunity for comparable with compensation for compensation or a range of additional comment in view of certain employment in other similar businesses compensation. revisions to the proposed rule. Further involving similar duties and FHFA defined the term “comparable” details about comments received and responsibilities. Accordingly, FHFA has in the way it deems to be closest to FHFA’s responses can be found below. defined the terms “reasonable” and Congressional intent, true to the FHFA has conducted a separate “comparable” and has implemented the meaning of the word in plain English, rulemaking regarding golden parachute Congressional mandate in § 1230.3(a) as and supported by market usage of the payments. Section 1114 of HERA further follows: “No regulated entity or the term. Comparison with similar positions amended section 1318 of the Safety and Office of Finance shall pay at similar institutions is a common Soundness Act (12 U.S.C. 4518) to compensation to an executive officer practice for setting compensation. It authorize the Director to prohibit or that is not reasonable and comparable appears clear that a statutory limit golden parachute payments and with compensation paid by such similar requirement of comparability would indemnification payments by the businesses involving similar duties and need to operate as a check on Enterprises and the Banks to entity- responsibilities.” compensation that materially exceeds affiliated parties. Pursuant to this The Banks argued that, despite compensation for comparable duties changes FHFA made in the interim final authority, FHFA adopted a final rule on and responsibilities at comparable golden parachute payments in 2009, ® rule in response to comments the Banks institutions. Even so, FHFA avoided setting forth factors to be considered by made on the proposed rule, the interim translating this requirement into the Director of FHFA when exercising final rule allows FHFA to prescribe or specific mandates to create a certain authority to limit golden parachute set a specific level or range of peer group of a certain size, or even use payments that are paid to entity- compensation, contrary to the statute. of a certain process to create the group affiliated parties of a regulated entity or The Banks argue that three provisions in of comparators, which could have OF. Subsequently, FHFA proposed combination create this result. First, as limited the flexibility of the Banks in amendments to the final golden stated above, FHFA implemented the implementing the mandate. FHFA parachute payments rule to address in Congressional mandate in § 1230.3(a) of reviews comparability while also more detail prohibited and permissible the rule to state that regulated entities respecting the Banks’ processes for golden parachute payments.’’ Today, and the OF may not pay compensation setting compensation. This review FHFA also publishes in this issue of the that is not reasonable and comparable results in no specific level of Federal Register a final amendment of according to the statute. Second, the compensation, nor a range, the rule on golden parachute payments. interim final rule defines “comparable” communicated from FHFA to the as “compensation that, taking in whole regulated entities or OF, in practice or FHFA recently adopted a rule setting or in part, does not materially exceed in effect. forth definitions of terms commonly compensation paid at institutions of FHFA continues to believe that the used in its regulations, and has removed similar size and function for similar Farm Credit Banks and the Federal duplicative definitions in this final duties and responsibilities.” Finally, in Reserve Banks are relevant points of rule.® its discussion of the proposed rule and reference in assessing the II. Comments on the Interim Final Rule of the interim final rule, FHFA reasonableness and comparability of identified the Farm Credit Banks and Bank compensation, because they have FHFA received comments from one Federal Reserve Banks as examples that certain points in common with the member of the public, and from the may appropriately be included as points Federal Home Loan Banks: they are twelve Federal Home Loan Banks and of reference in assessing reasonableness government-sponsored financial the Office of Finance. FHFA considered and comparability of compensation at institutions; they have some measure of all of the comments submitted, and the Federal Home Loan Banks. The government backing and therefore a explains its responses below. Banks assert that these provisions in potentially different risk profile than effect (i) prohibit the Banks from paying non-govemment-sponsored institutions; •‘Golden Parachute Payments, 74 FR 5101 compensation that is not “reasonable” and they do not issue publicly traded (January 29, 2009), codified at 12 CFR part 1231. and “comparable” in a manner that stock that can be used as an element of ^ Golden Parachute and Indemnification prescribes or sets a specific level of long-term compensation and therefore Payments Proposed Rule, 74 FR 30975 (June 29, 2009). range of compensation, (ii) impose a “See 12 GFR 1201.1. presumptive cap of “not materially »78 FR 28442, 28444-45 (May 14, 2013). Federal Register/Vol. 79, No. 18/Tuesday, January 28, 2014/Rules and Regulations 4391 must structure their compensation methods that they can use to last filing, who would be NEOs if the differently from publicly traded compensate their executives. For filing occurred today, and those companies. For these reasons it would example, the Banks are unable to offer expected to be NEOs in the future based be wrong to ignore the Farm Credit stock-related executive compensation on current title, duties, or pay. Banks and the Federal Reserve Banks. because they do not have publicly (Consequently, the total number of While the Banks’ comment letters have traded stock. The Banks requested that NEOs at any time may be more than correctly pointed out differences FHFA take these distinguishing factors five.)” between them and the Farm Credit into consideration. In order to address the Banks’ request, Banks and the Federal Reserve Banks, FHFA responded to that earlier FHFA has determined to narrow its there are also key differences between comment that in its ongoing oversight of interpretation described above in the the Federal Home Loan Banks and the an executive’s overall compensation, Supplementary Information to the commercial banks and similar FHFA reviews all components that interim final rule. FHFA will apply the institutions that the Banks have compose the broadly defined term definition more narrowly, in a manner identified as their comparators. The fact “compensation.” If any component’s which is intended to address the is that there are no institutions that are value is determined to be an outlier, it concern expressed by the Banks, and exactly comparable to the Federal Home may still be acceptable given the which is reflective of the plain meaning Loan Banks. compensation taken as a whole. On the of the regulatory text. With respect to FHFA had included these points in its other hand, it may also be deemed the Banks, the definition of “executive previous response to the Banks’ excessive by itself if it creates officer” adopts the language of the SEC’s previous comments and the Banks did questionable incentives, or in other Regulation S-K, 17 CFR 229.402(aK3), not in their most recent comment letter ways draws undue negative attention to and therefore covers a Bank’s most to the interim final rule provide any itself. FHFA will advise the entity if it highly compensated officers (generally additional responsive arguments about finds the aggregate compensation referred to as the “top 5”) who are the appropriateness of comparability package to be excessive. FHFA may designated under SEC disclosure with the Farm Credit Banks and the specifically note that a particular requirements as “Named Executive Federal Reserve Banks. FHFA maintains component appears to be the source of Officers” (NEOs). that suggesting these entities be the problem and should be reassessed It is FHFA’s intent to provide clarity included as points of reference among a by the entity in order to align the total and avoid undue burden on the Banks group of comparators is fully responsive package with the reasonable and by following the definition and practice to its Congressional mandate to comparable standard. For these reasons, of the SEC for identifying NEOs in its determine whether compensation is FHFA has determined to retain the definition for “executive officer.” comparable to that of similar businesses language, which is currently effective in However, this final rule includes with similar duties and responsibilities, the interim final rule, in this final rule requirements that apply to “executive and that doing so does not result in as well. FHFA assures the Banks that it officers” throughout the year, and not setting a specific level or range of does take into account the particular just at the time of securities filings. compensation. circiunstances of the Banks in reviewing Therefore, for purposes of clarification, The unique member-controlled executive compensation. FHFA is well and in response to the request of the cooperative structure of the Federal aware that the Banks do not have Banks, FHFA is now narrowing its Home Loan Bank system was in place as publicly traded stock and pay interpretation that was previously of the time that Congress created the compensation in cash. statute that mandates FHFA’s review for FHFA recognizes that executive provided in the SUPPLEMENTARY reasonableness and comparability of compensation oversight mandated by INFORMATION to the interim final rule as to how the definition of executive compensation, and therefore cannot be HERA has resulted in a new area of officer applies. adduced as a basis for FHFA to abandon regulatory compliance for the Banks. The definition of “executive officer” its role to review as the statute intended, For that reason, in addition to guidance, applies to a person who qualifies as an including for comparability with similar FHFA staff will continue to work “executive officer” as of the time of a institutions, despite the unique directly with the relevant staff, required notice under § 1230.3(d)(l)-(4). structure in place at the Banks. committees, and boards of the Banks to In effect, this means that the “top 5” FHFA received an additional ensure that FHFA’s review process is comment from the Banks, noting that well understood. FHFA guidance and determined for purposes of securities filings^^ will remain the “top 5” for FHFA had rejected the Banks’ previous dialogue between staffs will, among comment that FHFA’s review of other things, address concerns raised by purposes of this regulation until either executive compensation should be the Banks regarding how the provisions (1) one of the “top 5” individuals based on compensation that is “taken as of the rule will operate under specific vacates his or her position, or (2) the a whole” rather than “in whole or in circumstances. next “top 5” are identified the following part.” The Banks had stated their belief year. that if an executive’s compensation Status as an Executive Officer In the case that one of the “top 5” package taken as a whole is reasonable The Banks requested that the term vacates his or her position, this and comparable to compensation at “executive officer” apply only to those regulation is intended to apply in the similar institutions for similar duties, individuals who qualify as executive following manner. If the position of FHFA should not be permitted to reject officers as of the time of a required president or chief financial officer is a discrete element of an executive’s notice regarding such individual’s vacated, the new president or chief compensation as excessive. They have compensation. The SUPPLEMENTARY financial officer will become one of the further requested in response to the INFORMATION to the interim final rule “top 5” immediately when the change is interim final rule that FHFA recognize states that “[a]n executive officer for that the Banks are more restricted than purposes of this regulation would cover ’2 Generally, the “top 5” are determined as of a other large financial institutions in officers who were NEOs at the Bank’s certain date based on current position (for the president or chief financial officer) or the previous 12 months of compensation (for the most highly 10 78 FR 28442, 28444-45 (May 14, 2013). ” 78 FR at 28445. compensated employees).

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