[59 F.R. 1900 (January 13. 1994)]
FR FOIA Amendment Adoption:
FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL
12 CFR part 1102
[Docket No. AS94-1]
APPRAISAL SUBCOMMITTEE; APPRAISER REGULATION; FREEDOM OF INFORMATION ACT IMPLEMENTATION
AGENCY: Appraisal Subcommittee, Federal Financial Institutions Examination Council.
ACTION: Final rules.
SUMMARY: The Appraisal Subcommittee ("ASC") of the Federal Financial Institutions Examination Council is adopting amendments to the portion of its regulations regarding the availability of information to enable interested persons: To obtain copies of ASC final opinions and orders in adjudications, statements of general policy not published in the Federal Register, interpretive, no-action requests and responses and certain other correspondence related to ASC field reviews; to request confidential treatment of information subject to a Freedom of Information Act ("FOIA") request; and to petition for the issuance, amendment or repeal of an ASC rule.
EFFECTIVE DATE: [Insert date 30 days after publication in the FEDERAL REGISTER].
FOR FURTHER INFORMATION CONTACT: Edwin W. Baker, Executive Director, or Marc L. Weinberg, General Counsel, at (202) 634-6520, Appraisal Subcommittee, 2100 Pennsylvania Avenue, N.W., Suite 200, Washington, D.C. 20037.
I. Background and authority
FOIA, 5 U.S.C. 552, generally requires each Federal agency to make available to the public information regarding its organization, operation, rules of procedure, substantive rules and interpretations of general applicability and statements of general policy. 5 U.S.C. 552(a)(1). In addition, each agency, in accordance with published rules, must "make available for public inspection and copying -- (A) final opinions, . . . as well as orders, made in the adjudication of cases; (B) those statements of policy and interpretations which have been adopted by the agency and are not published in the Federal Register; and (C) administrative staff manuals and instructions to staff that affect a member of the public . . . ." 5 U.S.C. 552(a)(2). Certain documents and portions thereof, however, can be withheld from disclosure under one or more statutory exemptions set out in FOIA, 5 U.S.C. 552(b), or the Privacy Act of 1974, 5 U.S.C. 552a.
Executive Order No. ("EO") 12600, 52 FR 23781 (June 23, 1987), generally requires each agency subject to FOIA to establish procedures to notify submitters of records containing confidential commercial information when those records are requested under FOIA and the agency determines that the information may be required to disclose that information.
Paragraph (e) of 5 U.S.C. 553 requires each agency to give an interested person the right to petition for the issuance, amendment or repeal of a rule.
On October 13, 1993, the ASC proposed for comment several amendments to its related regulations in 12 CFR part 1102, subpart D (1993), to implement these authorities. The comment period closed on December 9, 1993, and no written comments were received. The ASC, however, received and incorporated into the final version of the amendments oral comments of a technical nature from the Office of Management and Budget ("OMB").
II. Description of the final amendments
The ASC is adopting technical amendments to subpart D -- new sections 1102.305, .306 and .307 -- to implement the provisions summarized above. In that regard, new §1102.305 clarifies that certain written communications, such as the ASC's annual report to Congress; all final opinions and orders made in the adjudication of cases; all statements of general policy not published in the Federal Register; and incoming and outgoing correspondence concerning interpretive, no-action and State review matters, shall be made publicly available on a routine basis no sooner than ten business days after the ASC or its staff sends or gives the item of correspondence to the affected person or persons.
Next, the ASC is adopting § 1102.306, consistent with EO 12600, to provide predisclosure notification procedures for confidential commercial information. Under paragraph (a) of the new section, a submitter of written information to the ASC who wants some or all of that information to be treated as confidential information under 5 U.S.C. 552(b)(4) may file a request for confidential treatment with the ASC at the time the information is submitted to the ASC or soon thereafter. Confidential information means "trade secrets and commercial or financial information obtained from a person and privileged or confidential," as stated in § 552(b)(4).
New paragraphs (b) and (c) of § 1102.306 deal with the form of the request. They require the submitter to include in reasonable detail the facts and arguments supporting the request and its legal justification, to designate clearly all information considered confidential and to separate clearly such information from other non-confidential information, whenever possible.
Paragraph (d) of the section notes that a request for confidential treatment will be considered by the ASC only in connection with a FOIA request for access to the claimed confidential information under FOIA. That is, the ASC will not determine whether the request for confidential treatment should be granted or denied, in whole or in part, when the request is received by the ASC. The ASC, however, will process the request upon receipt to ensure that it is complete and would place it with the related information submission. If a FOIA request were made respecting that information, the ASC then will be required to send written notices to the submitter and the FOIA requester. The submitter will have no longer than ten business days to file written objections to the ASC's disclosure of the information. The ASC may provide a submitter with a notice even if the submitter did not request confidential treatment of the requested information. These notice requirements will not have to be followed under certain stated circumstances, such as if the ASC determines under this subpart that the information should not be disclosed. The ASC must carefully consider the issues involved and, if disclosure of the requested information is warranted, a written notice containing a brief description of why the submitter's objections were not sustained must be forwarded to the submitter within ten business days. The time for response may be extended up to ten additional business days, as provided in 5 U.S.C. 552(a)(6)(B), or for other periods by agreement between the requester and the ASC. This notice shall be provided to the submitter at least five business days prior to release of the requested information. Last, the ASC will be required to notify a submitter promptly of any filing of any suit against the ASC pursuant to 5 U.S.C. 552 to compel disclosure of documents or information covered by the submitter's request for confidential treatment, and conversely, will be required to notify the requester of the documents or information of any suit filed by the submitter against the ASC to enjoin disclosure.
Finally, § 1102.307 would provide an interested person with the right to petition the ASC for the issuance, amendment or repeal of a rule, thus implementing 5 U.S.C. 553(e).
For the reasons stated above, the ASC has determined to adopt the amendments to subpart D of part 1102 to implement 5 U.S.C. 552 and 553(e) and EO 12600.
IV. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1980, 44 U.S.C. 35, forms, reporting and recordkeeping requirements included in 12 CFR part 1102, subpart D, §§1102.305, 1102.306 and 1102.307 were submitted for review and approval to OMB. See 58 FR 54153 (October 20, 1993). OMB approved these sections, as revised by this final rule, until December 31, 1996, and assigned them control number 3139-0006. The public reporting burden for the collection of information requirements contained in these sections are estimated to include the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed and completing and reviewing the collection of information. The sections would enhance the ASC's FOIA program, would conform the ASC's rules and regulations to EO 12600, and would specifically provide for the public's petition rights under 5 U.S.C. 553(e). The estimated number of respondents each year is 100 for § 1102.305, two for §1102.306 and one for § 1102.307, with an estimated average reporting burden of .5 hours per response and an estimated annual total reporting burden of 51.5 hours.
V. Regulatory Flexibility Act Statement
Pursuant to § 605(b) of the Regulatory Flexibility Act, the ASC certifies that §§ 1102.305, 1102.306 and 1102.307 are not expected to have a significant economic impact on a substantial number of small entities. The rules will fully implement FOIA, EO 12600 and 5 U.S.C. 553(e). None of these authorities addresses business or corporate entities. Accordingly, a regulatory flexibility analysis is not required.
VI. EO 12866 Statement
These rules were reviewed by the Office of Information and Regulatory Affairs of OMB.
List of Subjects in 12 CFR part 1102
Administrative practice and procedure, Appraisers, Banks, banking, Freedom of information, Mortgages, Reporting and recordkeeping requirements.
Text of the Rule
Chapter XI, title 12, part 1102, subpart D of the Code of Federal Regulations is amended as set forth below:
PART 1102 -- APPRAISER REGULATION
Subpart D -- Description of Office, Procedures, Public information.
1. The authority citation for subpart D is revised to read as follows:
Authority: 5 U.S.C. 552, 553(e); and Executive Order 12600, 52 FR 23781 (3 CFR, 1987 Comp., p. 235).
2. New sections 1102.305, 1102.306 and 1102.307 are added to read as follows:
§ 1102.305 Availability of interpretive, no-action and other written communications.
(a) In general. Subject to the provisions of § 1102.304 and subpart C of this part, certain types of ASC written communications shall be made publicly available upon request.
(b) Types of written communications. The following types of written communications shall be subject to paragraph (a) of this section:
(1) The ASC's annual report to Congress;
(2) All final opinions and orders made in the adjudication of cases;
(3) All statements of general policy not published in the Federal Register;
(4) Requests for the ASC or its staff to provide interpretive advice with respect to the meaning or application of any statute administered by the ASC or any rule or regulation adopted thereunder and any ASC responses thereto;
(5) Requests for a statement that, on the basis of the facts presented in such a request, the ASC would not take any enforcement action pertaining to the facts as represented and any ASC responses thereto; and
(6) Correspondence between the ASC and a State appraiser regulatory agency arising out of the ASC's field review of the State agency's appraiser regulatory program.
(c) Embargo period. Unless the ASC determines otherwise, the written communications in paragraph (b) of this section shall be made publicly available no sooner than ten business days after a written response has been sent or given to the affected person or persons.
§ 1102.306 Confidential treatment procedures.
(a) In general. Any submitter of written information to the ASC who desires that some or all of his or her submission be afforded confidential treatment under 5 U.S.C. 552(b)(4) (i.e., trade secrets and commercial or financial information obtained from a person and privileged or confidential) shall file a request for confidential treatment with the Executive Director of the ASC at the time the written information is submitted to the ASC or within ten business days thereafter. Nothing in this section limits the authority of the ASC and its staff to make determinations regarding access to documents under this subpart.
(b) Form of request. A request for confidential treatment shall be submitted in a separate letter or memorandum conspicuously entitled, "Request for Confidential Treatment." Each request shall state in reasonable detail the facts and arguments supporting the request and its legal justification. If the submitter had been required by the ASC to provide the particular information, conclusory statements that the information would be useful to competitors or would impair sales or similar statements generally will not be considered sufficient to justify confidential treatment. When the submitter had voluntarily provided the particular information to the ASC, the submitter must specifically identify the documents or information which are of a kind the submitter would not customarily make available to the public.
(c) Designation and separation of confidential material. Submitters shall clearly designate all information considered confidential and shall clearly separate such information from other non-confidential information, whenever possible.
(d) ASC action on request. A request for confidential treatment of information will be considered only in connection with a request for access to the information under FOIA as implemented by this subpart. Upon the receipt of a request for access, the Executive Director or his or her designee ("ASC Officer") as soon as possible shall provide the submitter with a written notice describing the request and shall provide the submitter with a reasonable opportunity, no longer than ten business days, to submit written objections to disclosure of the information. Notice may be given orally, and such notice shall be promptly confirmed in writing. The ASC Officer may provide a submitter with a notice if the submitter did not request confidential treatment of the requested information. If the ASC required the submitter to provide the requested information, the ASC Officer would need substantial reason to believe that disclosure of the requested information would result in substantial competitive harm to the submitter. If the submitter provided the information voluntarily to the ASC, the ASC officer would need to believe that the information is of a kind the submitter would not customarily make available to the public. The ASC Officer similarly shall notify the person seeking disclosure of the information under FOIA of the existence of a request for confidential treatment. These notice requirements need not be followed if the ASC Officer determines under this subpart that the information should not be disclosed; the information has been published or has been officially made available to the public; disclosure of the information is required by law (other than FOIA); or the submitter's request for confidential treatment appears obviously frivolous, in such instance the submitter shall be given written notice of the determination to disclose the information at least five business days prior to release. The ASC Officer shall carefully consider the issues involved, and if disclosure of the requested information is warranted, a written notice, containing a brief description of why the submitter's objections were not sustained, must be forwarded to the submitter within ten business days. The time for response may be extended up to ten additional business days, as provided in 5 U.S.C. 552(a)(6)(B), or for other periods by agreement between the requester and the ASC Officer. This notice shall be provided to the submitter at least five business days prior to release of the requested information.
(e) Notice of lawsuit. The ASC Officer shall notify a submitter of any filing of any suit against the ASC pursuant to 5 U.S.C. 552 to compel disclosure of documents or information covered by the submitter's request for confidential treatment within ten business days of service of the suit. The ASC Officer also shall notify the requester of the documents or information of any suit filed by the submitter against the ASC to enjoin their disclosure within ten business days of service of the suit.
§ 1102.307 Right to petition for issuance, amendment and repeal of rules of general application.
Any person desiring the issuance, amendment or repeal of a rule of general application may file a petition for those purposes with the Executive Director of the ASC. The petition shall include a statement setting forth the text or substance of any proposed rule or amendment desired or shall specify the rule for which repeal is desired. The petitioner also shall state the nature of his or her interest and the reasons for seeking ASC action. The Executive Director shall acknowledge receipt of the petition within ten business days of receipt. As soon as reasonably practicable, the ASC shall consider the petition and related staff recommendations and shall take such action as it
deems appropriate. The Executive Director shall notify the petitioner in writing of the ASC action
within ten business days of the action.
By the Appraisal Subcommittee of the Federal Financial Institutions Examination Council,
_________________________________Fred D. Finke, Chairperson