SECTION I: PART A OF THE SUPPORTING STATEMENT 1. IDENTIFICATION OF THE INFORMATION COLLECTION 1( a) TITLE OF THE INFORMATION COLLECTION " CLEAN WATER ACT STATE REVOLVING FUND PROGRAM" ( OMB Control number 2040 0118, EPA ICR No. 1391.06)

1( b) SHORT CHARACTERIZATION ( ABSTRACT)

The information collection activities will occur primarily at the program level through the State " Intended Use Plan" and " Annual Report". The information is needed annually to implement Section 606 of the Clean Water Act ( CWA). The Act requires the information to ensure national accountability, adequate public comment and review, fiscal integrity, and consistent management directed to achieve environmental objectives.

The individual information collections are described as follows:

a. Capitalization Grant Agreement and Application / State Intended Use Plan The capitalization grant agreement and application is the principal instrument by which the State commits to manage its revolving fund program in conformity with the requirements of the CWA. The grant agreement contains or incorporates by reference the IUP, application materials, payment schedule, and required certifications. Information on hardship grants, Disadvantaged Business Enterprise ( DBE), environmental indicators, core measurements, and funding framework can be found in the IUP. The grant agreement is a general instrument to legally commit the State and EPA to execute their responsibilities under the Act.

b. Annual Report The annual report indicates how the State has met the goals and objectives of the previous fiscal year as stated in the IUP and grant agreement. The Report provides information on loan recipients, loan amounts, loan terms, hardship grants, DBE, environmental indicators, core measurements, funding framework, project categories of eligible costs, and similar data on other forms of assistance, and is needed for input into the SRF National Information Management System. The Report also describes the extent to which the existing SRF financial operating policies, alone or in combination with other State financial assistance programs, will provide for the long term fiscal health of the Fund and carry out other provisions specified in the State Clean Water Strategy.

c. State Annual Audit The State annual audit report will contain opinions on the financial statements of the SRF and reports on the internal controls, and whether the SRF program compliance requirements have been met. Separate financial audits may be done in conjunction with the guidelines of the Single Audit Act of 1996.

d. Applications for SRF Financing Assistance Local communities have a responsibility for preparing and submitting applications for SRF assistance to their respective State agency which manages the SRF program. The State has sole responsibility for reviewing the applications, entering into loan and other financing arrangements with applicants, and otherwise managing operations of the SRF.

2. NEED FOR AND USE OF THE COLLECTION 2( a) NEED/ AUTHORITY FOR THE COLLECTION The Clean Water Act, as amended by " The Water Quality Act of 1987" ( 33 U. S. C. 1381 1387 et. seq.), created a Title VI which authorizes grants to States for the establishment of State Water Pollution Control Revolving Funds ( SRF's). The information activities are pursuant to Section 606 of the Act, EPA Initial Guidance for State Revolving Funds ( January 1988), and SRF Interim Final Rule ( March 1990).

The 1987 Act declares that water pollution control revolving loan funds shall be administered by an instrumentality of the State subject to the requirements of the Act. This means that each State has a general responsibility for administering its revolving fund, and must take on certain specific responsibilities in carrying out its administrative duties.

2( b) USE/ USERS OF THE DATA In order for a State to receive a capitalization grant for its revolving fund, it must enter into an agreement ( Capitalization Grant Agreement) with the U. S. Environmental Protection Agency ( EPA). State responsibilities include: a. Contributing 20 Percent Matching Funds; b. Committing Funds Expeditiously; c. Jointly Establishing a Payment Schedule With the Federal Government; d. Ensuring That Enforceable Requirements are Fulfilled Before Assistance is Provided to Recipients for Other Purposes; and e. Monitoring Assistance Recipient Compliance With 2 Program Requirements and Other Federal Crosscutting Authorities During the Period of the Assistance Agreement.

A State, as a federal grant recipient, must also agree to follow generally accepted government accounting standards. A State is expected to have an annual financial audit conducted and must assure that assistance recipients adhere to appropriate accounting and auditing procedures.

The information to be provided to EPA by the States include: a. Capitalization Grant Agreement and Application / Intended Use Plan; b. Annual Report; and c. State Annual Audit.

Upon approval of the capitalization grant application, each State has the responsibility to establish its State Revolving Fund ( SRF) program. Once the SRF is operational, the State will receive and review applications for SRF financing assistance submitted by local communities. The State will review the applications for conformance with the SRF Intended Use Plan, environmental impacts, and financial capability of the applicant. For those projects funded with monies directly made available by the Federal capitalization grant, the State will also review the proposed project for consistency with applicable Title II requirements and other Federal cross cutting authorities as described in the SRF Initial Guidance and other SRF program materials. The specific procedures for preparation and review of application materials will be developed by each State. If an application is acceptable, the State prepares the appropriate loan agreement documents.

Although EPA oversees the general operations of the SRF programs as part of its Annual Review process, the Agency does not have any responsibility for reviewing or approving individual applications for SRF financial assistance.

3. THE RESPONDENTS AND THE INFORMATION REQUESTED 3( a) RESPONDENTS/ SIC CODES State and local governments; local communities and tribes ( SIC Code # 99)

3( b) INFORMATION REQUESTED ( i) Data Items In general, the information collections are required to ensure compliance with Title VI of the Clean Water Act 3 and to ensure that self sufficient SRF programs are established in perpetuity. These information elements also provide the accountability needed to detect and remedy situations of waste, fraud, and abuse of Federal funds.

The individual information collections are described as follows:

a. Capitalization Grant Agreement and Application / State Intended Use Plan The capitalization grant application is made on EPA short form No. 5700 33 ( OMB No. 2030 0020). The minimal increase in State burden associated with use of this form is being handled separately by the Grants Administration Division in their information collection budget request.

The SRF Management Manual includes a model IUP which should improve program efficiency and reduce the burden on States and EPA Regions.

b. Annual Report Section 606 ( d) requires the States to submit an annual report at the end of each fiscal year that identifies how the State has met the goals and objectives of the previous fiscal year as stated in the IUP and grant agreement. The annual report provides information on loan recipients, loan amounts, loan terms, DBE, project categories, and similar data on other forms of assistance. The annual report describes the extent to which the existing SRF financial operating policies, alone or in combination with other State Financial assistance programs, will provide for the long term fiscal health of the Fund and carry out other provisions specified in the grant operation agreement.

To reduce the burden on the States, EPA developed a model annual report, patterned after the model IUP. This model is included in the SRF Management Manual.

c. State Annual Audit Most States have agreed to conduct or to have conducted a separate financial audit of the capitalization grant which will provide opinions on the financial statements, and a report on the internal controls and compliance with program requirements. The remaining States will be covered by audits conducted under the requirements of the Single Audit Act by the EPA Office of Inspector General.

d. Applications for SRF Financing Assistance 4 Local communities and other eligible entities have to prepare and submit applications for SRF assistance to their respective State Agency which manages the SRF program. Title VI outlines eligibilities under the SRF program in terms of potential recipients, types of projects and activities which may receive SRF assistance, and the types of financial assistance which an SRF may provide. The Clean Water Act provides significant flexibility to the States regarding the development of specific procedures for reviewing and approving applications for SRF assistance and for managing the SRF program.

Specific reporting requirements which are statutorily based relate only to the relationship between the State as recipient of the Federal capitalization grant and the Agency as grantor. Similarly, the SRF Initial Guidance, the Interim Final Rule, SRF Management Manual, and other SRF program materials do not provide guidance or direction to the States regarding the development of application materials or specific procedures for the processing and disposition of applications for SRF assistance.

Generally, the applications for SRF assistance require local communities to provide the following information: o Project description; o Project cost estimate; o Estimated construction schedule; o Projected disbursement schedule; o Description of environmental impacts; o Estimation of cost impacts on users; o Identification of repayment source; o Description of community financial capability; and o For certain projects, certifications and demonstrations regarding compliance with applicable Title II requirements and other Federal cross cutting authorities.

( ii) Respondent Activities The respondents ( State and local governments) prepare and submit the following in order to apply for Federal financial assistance: o Capitalization Grant Agreement and Application / Intended Use Plan; o Annual Report; o State Annual Audit; and o Applications for SRF Financing Assistance. 5 4. THE INFORMATION COLLECTED AGENCY ACTIVITIES, COLLECTION METHODOLOGY, AND INFORMATION MANAGEMENT 4( a) AGENCY ACTIVITIES The Agency reviews the submissions from the State and local governments and analyzes the data provided on the Capitalization Grant Agreement and Application / Intended Use Plan in order to base its decisions for approval. The Agency reviews the annual reports and the annual audits from each state to ensure that the intended financial and programmatic objectives of the program are being met.

4( b) COLLECTION METHODOLOGY AND MANAGEMENT The SRF Management Manual includes a model agreement which draws from the existing Construction Grant Agreement. Use of this example is likely to reduce the information burden on States and EPA Regions.

Section 606( c) requires the State to prepare a plan identifying the intended uses of the funds in the SRF and describing how those uses support the goals of the SRF. This Intended Use Plan ( IUP) must be submitted annually, after the State has provided an opportunity for public comment and review. The primary purpose of the IUP is the identification of proposed annual intended uses of the amounts available to the SRF. The secondary purpose of the IUP is the facilitation of the negotiation process for the capitalization grant agreement and schedule of grant payments ( Section 606( b)).

Under section 606( c)( l), the IUP must contain a list of publicly owned treatment works projects on the State's priority list that are eligible for SRF construction assistance. This IUP list includes: the community name; the permit number or other applicable enforceable requirement; the type of financial assistance; and the projected amount of eligible assistance.

Under section 606( c)( 2), the State must describe long and short term goals and objectives of its water pollution control revolving fund.

Under section 606( c)( 3), the IUP must include information on the types of activities to be supported by the SRF.

Section 606( c)( 4) requires that assurances and specific proposals be contained in the IUP to describe how the State intends to meet the following requirements: 6  Section 602( a) State certification that it will conduct environmental reviews on treatment works projects and submit the specific procedures it will use.

 Section 602( b)( 3) State certification that it will enter into binding commitments. The estimated schedule for the binding commitments is a part of the IUP.

 Section 602( b)( 4)  State certification that all funds in the SRF will be expended in an expeditious and timely manner.

 Section 602( b)( 5) State identification of all projects expected to be funded with " first use" funds to meet the enforceable requirements of the Act. All States have certified compliance with this requirement.

 Section 602( b)( 6) State certification that it will ensure compliance with Title II requirements. In cases where the State will not be following EPA regulations, it will submit a description of its own specific procedures for ensuring that the Title II requirements are met. It is expected that individual State procedures will not differ substantially from procedures already being followed by all the delegated States.

Section 606( c)( 5) requires that the IUP describe the criteria and methods established for the distribution of the SRF funds. The first part describes the distribution of the various types of assistance offered by the State ( e. g., loans, guarantees, insurance, refinancing of existing debt, leveraging). The second part describes the process the State will use to select section 212 POTW construction projects from the project priority list, and projects or programs to be funded as eligible activities for nonpoint source ( NPS) and estuary protection management programs. This section also includes how the State will provide opportunity for public comment and review of the IUP before submitting it in final form to EPA.

Except for the NPS and estuarine management programs under Sections 319 and 320, the procedures for selecting projects from the State priority list and for providing for public participation have already been established under the existing Construction Grant Program. Therefore, the burden connected with this part of the IUP will also be minimal.

Payment Schedule  Based on its projection of binding commitments in its Intended Use Plan, the State must propose a draft payment schedule. The payment schedule and the 7 specific criteria establishing the conditions under which the State may draw cash from its Automated Clearing House ( ACH) system ( which is a portion of the Automated Standard Application for Payments system) must be jointly established by EPA and the State. A schedule of estimated disbursements is also required to allow a forecast of the amount of funds to be drawn from the ACH during the upcoming Federal fiscal year. This forecast is necessary to plan the outlay of Federal funds from the Treasury due to the Title VI program.

In its Annual Report, the State verifies that it has:

 Reviewed all SRF funded section 212 projects in accordance with the approved environmental review procedures ( section 602( a));

 Deposited its matching funds on or before the date on which each EPA quarterly grant payment was made ( section 602( b)( 2));

 Made binding commitments to provide assistance equal to 120 percent of the amount of each grant payment within one year after receiving the grant payment ( section 602( b)( 4));

 Expended all monies in the fund in an expeditious and timely manner ( section 602( b)( 4));

 First used all monies in the fund as a result of capitalization grants to assure maintenance of progress toward compliance with the enforceable requirements of the Act ( section 602( b)( 5)); and  Complied with the Title II and other Federal crosscutting requirements applicable to those eligible treatment works funded in whole or in part before fiscal year 1995 with an amount equivalent to the capitalization grant ( section 602( b)( 6)).

Under section 606( b), at least once a year the Administrator ( through the Office of the Inspector General) will expect the State to independently conduct or to have conducted a financial and compliance audit of the SRF and its operations. The State may designate an independent auditor of the State to carry out the audit or may contractually procure the service. If the State fails to conduct the audit or if the review is unsatisfactory, the Office of Inspector General ( OIG) may arrange for an EPA audit. The OIG is currently developing an audit guide for SRFs, which should reduce the burden on States that wish to conduct their own audits and improve the efficiency of EPA reviews. 8 Title VI outlines eligibilities under the SRF program in terms of potential recipients, types of projects and activities which may receive SRF assistance, and the types of financial assistance which an SRF may provide. The Clean Water Act provides significant flexibility to the States regarding the development of specific procedures for reviewing and approving applications for SRF assistance and for managing the SRF program.

Specific reporting requirements which are statutorily based relate only to the relationship between the State as recipient of the Federal capitalization grant and the Agency as grantor. Similarly, the SRF Initial Guidance, the Interim Final Rule, SRF Management Manual, and other SRF program materials do not provide guidance or direction to the States regarding the development of application materials or specific procedures for the processing and disposition of applications for SRF assistance.

The Initial Guidance and Interim Final Rule on State Revolving Funds impose virtually no requirements on States that go beyond those imposed by the Clean Water Act itself. The guidance and rule were designed to promote flexibility for States in establishing and operating their SRF programs, within the bounds of the Act.

Because the SRF is a dynamic State led program, EPA has undertaken many activities to support the Regions and States with implementation. EPA has prepared model documents relating to intended use plans, capitalization grant agreements, and annual reports. EPA Regional personnel are regularly in contact with their State counterparts and are currently working to determine efficient ways to communicate needed information and reduce the burden. The information collection activities will occur primarily at the program level through the State Intended Use Plan and Annual Report. The information is needed annually to implement Section 606 of the Clean Water Act ( CWA). The Act requires the information to ensure national accountability, adequate public comment and review, fiscal integrity, and consistent management directed to achieve environmental objectives.

4( c) SMALL ENTITY FLEXIBILITY A majority of the reporting burden ( IUP, annual report, annual audit, etc.) is imposed on the States. For those communities/ municipalities desiring financial assistance from the SRF, they will have a smaller reporting burden requirement ( loan applications). For those small or local businesses requiring assistance ( and which may be non point source), they will also prepare loan applications similar to the communities/ municipalities requirement for submittal to 9 the State program office.

4( d) COLLECTION SCHEDULE The information collection activities will occur primarily at the program level through the State Intended Use Plan and Annual Report. The information is needed annually to implement Section 606 of the Clean Water Act ( CWA). The Act requires the information to ensure national accountability, adequate public comment and review, fiscal integrity, and consistent management directed to achieve environmental objectives.

5. NONDUPLICATION, CONSULTATIONS, AND OTHER COLLECTION CRITERIA 5( a) NONDUPLICATION The information collection elements are specific to Title VI, established under the amendments to the Clean Water Act. The information in the Intended Use Plan, Annual Report, and State Audit is unique to each State participating in the SRF program. Therefore, duplication of effort is not experienced. The information activities herein are based upon program specific State sources which are not duplicated anywhere else.

5( b) CONSULTATIONS The information requirements were subjected to the same reviews as the other requirements and procedures contained in the Initial Guidance in the process of development. The Concept Paper, draft Initial Guidance, and draft Interim Final Rule were commented on by members of the Association of State and Interstate Water Pollution Control Administrators ( ASIWPCA), other State officials, representatives of local government, private concerns involved with municipal finance, EPA Regional and Headquarters' offices, and the Office of Management and Budget ( OMB).

Some commentators objected to the level of detail required by the Draft Initial Guidance, particularly the implied need for project by project disbursement schedules. EPA is requiring the proposed payment schedule to be supported by an estimate of cash disbursements from the SRF at a level of detail sufficient to allow negotiations on the payment process. It is crucial that EPA have estimates of cash disbursements from each State in order to accurately project and manage the cash outlays on a national level.

5( c) EFFECTS OF LESS FREQUENT COLLECTION 10 The statute ( Clean Water Act) requires the information to be provided at least annually. EPA is not requesting the information more frequently, although a State may submit it more frequently if it wishes ( e. g., semi annual audit instead of annual audit).

The information is indispensable for prudent administration and sound fiscal management of the State Revolving Fund Program. EPA will use the information to respond to OMB and Congressional requests and requirements for accurate analysis and projection of national budget impacts and needs. It will be relied upon by State managers for key planning decisions and by EPA managers for essential program evaluation and corrective measures.

Local communities are not required to apply for SRF assistance. Preparation of an application is only necessary if the community wishes to receive financial assistance. In view of likely funding availability at the State level, only a limited number of communities will likely receive assistance in a particular year. The impact on communities generally is quite limited.

5( d) GENERAL GUIDELINES The data collections covered by this ICR are in compliance with the OMB General Guidelines for information collections.

5( e) CONFIDENTIALITY AND SENSITIVE QUESTIONS ( i) Confidentiality No confidential data is collected.

( ii) Sensitive Questions No such information is required.

5 ( f) PUBLIC NOTICE REQUIRED PRIOR TO ICR SUBMISSION TO OMB The first Federal Register Notice soliciting public comment on this ICR was published April 3, 2001. A copy of the Notice is attached to the supporting statement.

6. ESTIMATING THE BURDEN AND COST OF THE COLLECTION 6( a) ESTIMATING RESPONDENT BURDEN The respondent burden estimates are based on the incremental effort associated with the information collection activity. As program activity increases at the local and State level the preparation and review of local community applications 11 for SRF assistance will likely increase.

The estimation of State respondents' burden for the four information collections are shown below:

a. Capitalization Grant Agreement and Application / State Intended Use Plan We estimate that States will spend an average of 400 hours each to prepare the Capitalization Grant Agreement and Application / State Intended Use Plan for submission to EPA. The information provided for hardship grants, environmental indicators, core measurements and funding framework is included in the burden hour estimate. The following chart represents the total national burden from the Capitalization Grant Agreement and Application / State Intended Use Plan.

2001: 51 States X 400 hrs = 20,400 burden hours 2002: 51 States X 400 hrs = 20,400 burden hours 2003: 51 States X 400 hrs = 20,400 burden hours b. Annual Report EPA estimates that over the three year period covered by this ICR the States will spend an average of 275 hours to put together their Annual Report on the SRF program. The annual report will include information on hardship grants, DBE, environmental indicators, core measurements, funding framework, and input for the SRF National Information Management System.

2001: 51 States X 275 hrs = 14,025 burden hours 2002: 51 States X 275 hrs = 14,025 burden hours 2003: 51 States X 275 hrs = 14,025 burden hours c. State Annual Audit The estimated average burden for each State Annual Audit was 80 hours per year. It should be noted that all States are expected to have an annual financial audit of their program conducted, including opinions on the financial statements, and reports on internal controls and compliance with program requirements. This estimate is based on the extra increment of effort caused by the federal requirement. Some States will build on the Single Audit Act audits while others will simply have annual financial audits conducted on their program.

2001: 51 States X 80 hrs = 4,080 burden hours 2002: 51 States X 80 hrs = 4,080 burden hours 2003: 51 States X 80 hrs = 4,080 burden hours It is important to note that respondents may use SRF 12 administrative monies to pay for costs resulting from the State Annual Audit. Section 603( d)( 7) of the Act allows money in the SRF to be used for the reasonable costs of administering the Fund, provided that the amount does not exceed four percent of the Federal grant awards received by the State SRF. If the effort required under the State Audit exceeds the requirements under the Single Audit Act, the incremental costs associated with the additional effort may be paid from the administrative monies.

d. SRF Assistance Application Preparation and Review States have total responsibility for reviewing and approving local applications for assistance from the SRF program. We estimate that States will spend an average of 40 hours in reviewing and approving each assistance application. The following chart represents the total national State burden in processing SRF assistance applications.

2001: 51 States X 39 appl. X 40 hrs = 79,560 hours 2002: 51 States X 44 appl. X 40 hrs = 89,760 hours 2003: 51 States X 49 appl. X 40 hrs = 99,960 hours States develop specific procedures and reporting and application materials for SRF assistance applicants. We estimate that local communities and tribes will spend an average of 60 hours in collecting information and preparing their SRF assistance applications. The following chart represents the total national local community burden in preparing SRF assistance applications.

2001: 1,989 Comm. X 60 hrs = 119,340 burden hours 2002: 2,244 Comm. X 60 hrs = 134,640 burden hours 2003: 2,499 Comm. X 60 hrs = 149,940 burden hours Average Annual State Burden Hours ( FY 2001 2003):

Hours Hours ICR per State all States Capitalization Grant Agreement 1,200 61,200 and Application / State Intended Use Plan Annual Report 825 42,075 State Annual Audit 240 12,240 Application Review 5,280 269,280 13 Total Burden Hrs.( FY 2001 2003) 7,545 384,795 Average Annual Burden Hours ( FY 2001 2003) 2,515 128,265 Total Local Community Burden Hours ( FY 2001 2003):

Hours Hours ICR per Comm. all Comm.

Application Preparation 180 403,920 Average Annual Local Community Burden Hours ( FY 2001 2003):

Hours Hours ICR per Comm. all Comm.

Application Preparation 60 134,640 6( b) ESTIMATING RESPONDENT COSTS a. Costs To State Respondents The average annual State Costs for the three year period is estimated to be $ 1,587,460.

It is important to note that costs to the States are grant eligible, and therefore, are indirect Federal costs paid out of the SRF. Under section 603( d)( 7), money in the SRF may be used for the reasonable costs of administering the Fund, provided that the amount does not exceed four percent of all grant awards received by the SRF. SRF administrative monies may be used for all reasonable costs that would be eligible under section 205( g) for delegated program and project management, to the extent those types of costs are incurred for management of the SRF and for projects receiving financial assistance from the SRF. ( If actual State expenditures for administrative costs of managing the SRF exceed the four percent limit, the excess costs must be paid from other State monies.)

A small sample of State respondents were selected for interviews for assessing costs and hourly burden. The respondents provided estimates for the costs associated with the information collection activity. The estimates were averaged for the four individual activities involving information collections that have already been described. The averages were multiplied 14 to reflect participation by all States in the SRF program and by the States' reported FTE ( full time employee) direct labor costs.

FY 2001 ICR # States Hours $/ Hour $ Cost Capitalization Grant Agreement and Application / Intended Use Plan  Initial Plan 51 300 29.00** 443,700  Revised Plan 51 60 29.00** 88,740 Annual Report 51 175 29.00** 258,825 State Audit 51 80 29.00** 118,320 Appl. Review 51 320 29.00** 473,280 Total FY 2001 State Cost $ 1,382,865 ** State salary cost is figured at $ 24.00 per hour to cover technically trained personnel plus an additional ADP cost of $ 5.00 per hour = $ 29.00 total per hour.

FY 2002 ICR # States Hours S/ Hour $ Cost Capitalization Grant Agreement and Application / Intended Use Plan  Initial Plan 51 250 29.00** 369,750  Revised Plan 51 50 29.00** 73,950 Annual Report 51 200 29.00** 295,800 State Audit 51 80 29.00** 118,320 Appl. Review 51 480 29.00** 709,920 Total FY 2002 State Cost $ 1,567,740 FY 2003 ICR # States Hours $/ Hour S Cost Capitalization Grant Agreement and Application / Intended Use Plan  Initial Plan 51 250 29.00** 369,750 15  Revised Plan 51 50 29.00** 73,950 Annual Report 51 250 29.00** 369,750 State Audit 51 75 29.00** 110,925 Appl. Review 51 600 29.00** 887,400 Total FY 2003 State Cost $ 1,811,775 Total State costs ( FY 2001 2003) $ 4,762,380 Average annual cost over 3 year period $ 1,587,460 b. COSTS TO LOCAL RESPONDENTS Local communities may incur costs in identifying and evaluating their water quality problems. Likewise, communities may need to absorb costs related to the development and evaluation of alternative planning and engineering approaches for solving the water quality problems. These planning and design costs may be eligible for SRF assistance at a State's option. For the purpose of this information collection, only the direct costs associated with preparation of the application for SRF financial assistance are reported.

During the period of this information collection activity, the SRF program will experience growth in the number of communities which receive SRF financial assistance. The number of communities in each State will vary significantly according to the funding available, the types of projects to be assisted, the average cost/ size of projects, and other factors. The Agency estimates that the number of local communities to receive SRF assistance during the period of this information collection to be as follows: 2001  39 per State; 2002  44 per State; 2003  49 per State.

Only communities which desire financial assistance from the SRF will prepare applications. Therefore, this information collection will pertain only to a limited number of communities. The specific requirements and complexity of application materials varies widely among the States which are responsible for SRF program implementation and management. The Agency estimates that on average, communities will spend approximately 60 hours in completing their SRF assistance applications.

FY 2001 16 ICR # Communities Hours $/ Hour $ Cost Appl. Prep. 1,989 60 24.00 2,864,160 FY 2002 ICR # Communities Hours $/ Hour $ Cost Appl. Prep. 2,244 60 24.00 3,231,360 FY 2003 ICR # Communities Hours $/ Hour $ Cost Appl. Prep. 2,499 60 24.00 3,598,560 Total Local costs ( FY 2001 2003) $ 9,694,080 Average annual cost over 3 year period $ 3,231,360 17 6( c) ESTIMATING AGENCY BURDEN AND COST Estimation of the direct costs to EPA to implement the SRF Program covers negotiation and analysis of the Intended Use Plan ( including Capitalization Grant Agreement and Application), and assessment of State performance and compliance through the Annual Report and State Audit. Analysis of documents, information, and data includes receipt, validation, verification, and evaluation.

Authorization for the SRF Program currently expires in FY 1994, however, since future appropriations for the program are anticipated, States will continue to submit applications for capitalization grants. Many States are expected to make modifications to their programs. These changes may include new funding approaches ( e. g., leveraging funds, alternative sources for required State matching funds), revised environmental review procedures, and alternative methods to assure compliance with program requirements. Review and approval of these changes will require Regional and, in some cases, Headquarters resources.

The estimates below reflect Agency workloads over the three year period covered by this ICR. The estimate of EPA costs is based on average hourly expenditures, including Regional and Headquarters personnel compensation and benefits. The estimates were based on participation by all States in the SRF Program.

The average annual Federal cost of $ 1,433,447 over the three year period was estimated as follows:

FY 2001 ICR Hours $/ Hour $ Cost EPA HQ Review of IUP 1,000 39.82* 39,820 and Agreement Materials ( 20 hrs per State submission)

EPA Regions' Review of IUP 17,500 33.49** 586,079 and Agreement Materials ( 350 hrs per State submission)

EPA HQ Oversight Review 1,080 39.82* 43,006 of Annual Report/ Audit ( 20 hours per State submission) 18 EPA Regions' Oversight 20,000 33.49** 669,800 Review of Annual Report/ Audit ( 400 hours per State submission)

Total FY 2001 Federal Cost $ 1,338,709 * GS 13/ 5, including PC& B ( personnel compensation and benefits). ** GS 12/ 5, including PC& B.

FY 2002 ICR Hours S/ Hour $ Cost EPA HQ Review of IUP 750 39.82* 29,869 and Agreement Materials ( 15 hours per State submission)

EPA Regions' Review of 17,500 33.49** 586,075 IUP and Agreement Materials ( 350 hours per State submission)

EPA HQ Oversight Review 1,500 39.82* 59,730 of Annual Report/ Audit ( 30 hours per State submission)

EPA Regions' Oversight 22,500 33.49** 753,525 Review of Annual Report/ Audit ( 450 hours per State submission)

Total FY 2002 Federal Cost $ 1,429,199 FY 2003 ICR Hours S/ Hour $ Cost EPA HQ Review of IUP 750 39.82* 29,869 and Agreement Materials ( 15 hours per State submission)

EPA Regions' Review of 17,500 33.49** 586,075 IUP and Agreement Materials ( 350 hours 19 per State submission)

EPA HQ Oversight Review 2,000 39.82* 79,240 of Annual Report/ Audit ( 40 hours per State submission)

EPA Regions' Oversight 25,000 33.49** 837,250 Review of Annual Report/ Audit ( 500 hours per State submission)

Total FY 2003 Federal Cost $ 1,532,434 Total Federal costs ( FY 2001 2003) $ 4,300,342 Average annual cost over 3 year period $ 1,433,447 6( d) BOTTOM LINE BURDEN HOURS AND COSTS / BURDEN TABLES ( i) Respondent Burden ( FY 2001 2003)

Total State Burden Hours 384,795 Average Annual State Burden Hours 128,265 Total State Costs $ 4,762,380 Average Annual State Costs $ 1,587,460 Total Local Burden Hours 403,920 Average Annual Local Burden Hours 134,640 Total Local Costs $ 9,694,080 Average Annual Local Costs $ 3,231,360 Total Average Annual Respondents ( State and Local) 2,295 Total Average Annual Respondent ( State and local) Burden Hours 262,905 Total Average Annual Respondent ( State and Local) Cost $ 4,818,820 ( ii) The Agency Tally ( FY 2001 2003) 20 Total Federal Costs $ 4,300,342 Average Annual Federal Costs $ 1,433,447 Total Federal Burden Hours 127,080 Average Annual Federal Burden Hours 42,360 6( e) REASONS FOR CHANGE IN BURDEN The change in the State and local respondent burden of 76,500 hours is attributed to an increased estimate on the number of respondents interested in receiving SRF loans ( adjustment). The previous ICR estimated the number of respondents to be 1,530, while this ICR estimates the number of respondents to be 2,295. More entities will be applying for SRF loans than in previous years.

6( f) BURDEN STATEMENT Average annual State and local burden for this ICR is estimated to be 262,905 hours; and average annual Federal burden is estimated to be 42,360 hours. This includes the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including through the use of automated collection techniques to Susan Auby, U. S. Environmental Protection Agency, Collection Strategies Division ( Mail Code 2822), 1200 Pennsylvania Avenue, N. W., Washington, DC 20460; and to the Office of Information and Regulatory Affairs, Office of Management and Budget ( OMB), 725 17th St., N. W., Washington, DC 20503, marked " Attention: Desk Officer for EPA." Comments are requested within [ Insert date 30 days after publication in the FEDERAL REGISTER]. Include the ICR number in any correspondence.


[Federal Register Volume 87, Number 174 (Friday, September 9, 2022)]
[Notices]
[Pages 55465-55467]
[FR Doc No: 2022-19516]

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DEPARTMENT OF TRANSPORTATION

[Docket No. NHTSA-2022-0074; Notice 1]

Baby Trend, Inc., Receipt of Petition for Decision of
Inconsequential Noncompliance

AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation (DOT).

ACTION: Receipt of petition.

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SUMMARY: Baby Trend, Inc., (BT), has determined that certain BT Hybrid
3-in-1 Combination Booster Seat child restraint systems (CRSs) do not
fully comply with Federal Motor Vehicle Safety Standard (FMVSS) No.
213, Child Restraint Systems. BT filed an original noncompliance report
dated July 6, 2022. BT subsequently petitioned NHTSA on August 1, 2022,
for a decision that the subject noncompliance is inconsequential as it
relates to motor vehicle safety. This document announces receipt of
BT's petition.

DATES: Send comments on or before October 11, 2022.

ADDRESSES: Interested persons are invited to submit written data,
views, and arguments on this petition. Comments must refer to the
docket and notice number cited in the title of this notice and may be
submitted by any of the following methods:
     Mail: Send comments by mail addressed to the U.S.
Department of Transportation, Docket Operations, M-30, West Building
Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC
20590.
     Hand Delivery: Deliver comments by hand to the U.S.
Department of Transportation, Docket Operations, M-30, West Building
Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC
20590. The Docket Section is open on weekdays from 10 a.m. to 5 p.m.
except for Federal Holidays.
     Electronically: Submit comments electronically by logging
onto the Federal Docket Management System (FDMS) website at https://www.regulations.gov/. Follow the online instructions for submitting
comments.
     Comments may also be faxed to<PHONE_NUMBER>.
    Comments must be written in the English language, and be no greater
than 15 pages in length, although there is no limit to the length of
necessary attachments to the comments. If comments are submitted in
hard copy form, please ensure that two copies are provided. If you wish
to receive confirmation that comments you have submitted by mail were
received, please enclose a stamped, self-addressed postcard with the
comments. Note that all comments received will be posted without change
to https://www.regulations.gov, including any personal information
provided.
    All comments and supporting materials received before the close of
business on the closing date indicated above will be filed in the
docket and will be considered. All comments and supporting materials
received after the closing date will also be filed and will be
considered to the fullest extent possible.
    When the petition is granted or denied, notice of the decision will
also be published in the Federal Register pursuant to the authority
indicated at the end of this notice.
    All comments, background documentation, and supporting materials
submitted to the docket may be viewed by anyone at the address and
times given above. The documents may also be viewed on the internet at
https://www.regulations.gov by following the online instructions for
accessing the dockets. The docket ID number for this petition is shown
in the heading of this notice.
    DOT's complete Privacy Act Statement is available for review in a
Federal Register notice published on April 11, 2000 (65 FR 19477-78).

FOR FURTHER INFORMATION CONTACT: Kelley Adams-Campos, Safety Compliance
Engineer, NHTSA, Office of Vehicle Safety Compliance,
[email protected],<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Overview

    BT determined that certain BT Hybrid 3-in-1 Combination Booster
Seat CRSs do not fully comply with paragraph S<IP_ADDRESS>(a) of FMVSS No.
213, Child Restraint Systems (49 CFR 571.213).
    BT filed an original noncompliance report dated July 6, 2022,
pursuant to 49 CFR part 573, Defect and Noncompliance Responsibility
and Reports. BT petitioned NHTSA on August 1, 2022, for an exemption
from the notification and remedy requirements of 49 U.S.C. Chapter 301
on the basis that this noncompliance is inconsequential as it relates
to motor vehicle safety, pursuant to 49 U.S.C. 30118(d) and 30120(h)
and 49 CFR part 556, Exemption for Inconsequential Defect or
Noncompliance.
    This notice of receipt of BT's petition is published under 49
U.S.C. 30118 and 30120 and does not represent any agency decision or
other exercise of judgment concerning the merits of the petition.

II. Child Restraint Systems Involved

    Approximately 101,361 BT Hybrid 3-in-1 Combination Booster Seat
CRSs, manufactured from December 6, 2021, to June 6, 2022,\1\ are
potentially involved:
---------------------------------------------------------------------------

    \1\ As reported in BT's July 6, 2022, Part 573 filing.
---------------------------------------------------------------------------

III. Noncompliance

    BT explains that the lower anchor webbing in the subject CRSs
failed the minimum breaking strength when tested in accordance with
S5.1 of FMVSS No. 209,\2\ referenced in FMVSS No. 213 S<IP_ADDRESS>(a).
Specifically, the breaking \3\ strength of the lower anchor webbing of
the Lower Anchors and Tethers for CHildren (LATCH \4\) system in the
subject CRSs was 13,926 Newtons (N), 13,940 N, and 14,087 N when tested
by NHTSA.
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    \2\ In its petition, BT refers to the test in S5.1 of FMVSS No.
209 as tensile.
    \3\ In its petition, BT refers to breaking as tensile.
    \4\ ``LATCH'' refers to the child restraint anchorage system
that FMVSS 225, ``Child restraint anchorage systems,'' requires to
be installed in motor vehicles. Industry and advocates have
developed the term ``LATCH'' to refer to Standard 225's child
restraint anchorage system.
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IV. Rule Requirements

    Paragraph S<IP_ADDRESS>(a) of FMVSS No. 213 includes the requirements
relevant to this petition. The webbing of belts provided with a child
restraint system and used to attach the system to the vehicle must have
a minimum breaking strength for new webbing of not less than 15,000 N,
including the tether and lower anchorages of a child restraint
anchorage system, when tested in accordance with S5.1 of FMVSS No. 209.
``New webbing'' means webbing that has not been exposed to abrasion,
light or micro-organisms as specified elsewhere in FMVSS No. 213.

V. Summary of BT's Petition

    The following views and arguments presented in this section, ``V.
Summary of BT's Petition,'' are the views and arguments provided by BT.
They have not been evaluated by the Agency and do not reflect the views
of the Agency. BT describes the subject noncompliance and contends that
the noncompliance is inconsequential as it relates to motor vehicle
safety.
    Upon receiving an information request from NHTSA on June 6, 2022,
regarding the subject noncompliance, BT states that production and
distribution of the subject CRSs were halted, and BT began an
investigation. BT states that, as part of its investigation, it
conducted dynamic sled testing, webbing testing and examined internal
processes to determine the root cause of the noncompliance. As a result
of its investigation, BT found that the wrong webbing was installed in
a portion of the subject CRSs, but BT believes, through its analysis of
existing and new test data, that the subject noncompliance is
inconsequential to motor vehicle safety.
    BT claims that FMVSS No. 213 dynamic sled testing ensures the
structural integrity of the subject CRSs and that this is supported by
NHTSA's November 2, 2020, notice of proposed rulemaking \5\ regarding
FMVSS No. 213. In its petition, BT questions ``the utility of
considering the webbing strength tests in isolation rather than the
integrity of the LATCH system as required under FMVSS 213.'' BT
believes the webbing tests specified in FMVSS No. 213 have utility in
safety ``only in the context of maintaining strength of the webbing
with wear and tear of the child restraint following years of use and
asserts that the unabraded webbing strength test is not necessary to
ensure the structural integrity of a CRS.
---------------------------------------------------------------------------

    \5\ Federal Motor Vehicle Safety Standards; Child Restraint
Systems, Incorporation by Reference; 85 FR 69388 (November 2, 2020.)
---------------------------------------------------------------------------

    BT states that it conducts, in addition to the dynamic sled testing
required by FMVSS No. 213, dynamic sled testing through Consumer's
Union (CU), on child restraints produced by each of its factories. BT
contends that if NHTSA previously found the dynamic sled testing at 48
kph to be sufficient to ensure the structural integrity of a CRS, BT's
additional testing is also similarly sufficient.
    The CU dynamic testing, as BT explains, has important differences
from that required by FMVSS No. 213. First, the test is conducted at 56
kph whereas the FMVSS No. 213 test is conducted at 48 kph. Second, the
bench used is derived from a vehicle seat, providing ``a boundary
condition for LATCH attachment and seat cushion-to-CRS interaction.''
Finally, the CU test protocol includes a structure to represent the
seat in front of the CRS seat position, which, BT claims, provides a
``clear tell-tale'' of failure in any way of the LATCH lower anchor
belt in adequately restraining the CRS and its occupant.
    BT also claims that the minimum LATCH lower anchor webbing strength
requirements of FMVSS No. 213 are unrealistic, based on dynamic crash
testing it conducted on the subject CRSs using the same incorrect
webbing used on the noncompliant CRSs that are the subject of this
petition, and without attaching the CRS' tether to the tether anchor.
This testing, as BT explains, was conducted on the test bench proposed
by NHTSA in the 2020 FMVSS No. 213 NPRM. Other test apparatus and
conditions used in its testing were those either specified in FMVSS No.
213, and/or the current NPRM, or ``widely accepted'' as due care tests.
For the tests BT conducted in the frontal direction, sled test speeds
ranging from 57.1 kph to 63.9 kph were used. See the Table \6\ in BT's
petition for the parameters used in its testing. BT states that it is
confident that its frontal sled testing conducted at ``64 kph . . .
encompasses all crashes including the most severe crashes'' and that
``at no time and in no test did the LATCH Lower Anchor webbing or belt
system fail to perform its intended purpose of restraining the CRS.''
BT also found ``that at no time during any of these tests did the LATCH
Lower Anchor webbing load exceed 5000 Newtons and, more importantly,
come even close to the 15,000 Newton minimum threshold'' required by
FMVSS No. 213.
---------------------------------------------------------------------------

    \6\ Section 3 of its petition.
---------------------------------------------------------------------------

    In its petition, BT shares a graphic \7\ to illustrate its beliefs
for the minimum strength of various components in the LATCH system and
points to examples where, ``in the rare instances of failures of the
LATCH system, the failures occurred in . . . the LATCH lower anchor on
the vehicle.'' Thus, BT contends that the webbing is not the weak link
in the LATCH lower anchor system, and that ``any deficiencies with

the strength of the LATCH Lower Anchor webbing would have been revealed
in the dynamic sled tests of FMVSS 213.''
---------------------------------------------------------------------------

    \7\ Section 5 of its petition.
---------------------------------------------------------------------------

    BT states that there is no evidence of webbing failure in any CRS
in the real world, that it has never received a complaint, nor has any
knowledge of, a webbing failure on any of its products in the real
world.
    BT concludes by stating its belief that the subject noncompliance
is inconsequential as it relates to motor vehicle safety and its
petition to be exempted from providing notification of the
noncompliance, as required by 49 U.S.C. 30118, and a remedy for the
noncompliance, as required by 49 U.S.C. 30120, should be granted.
    NHTSA notes that the statutory provisions (49 U.S.C. 30118(d) and
30120(h)) that permit manufacturers to file petitions for a
determination of inconsequentiality allow NHTSA to exempt manufacturers
only from the duties found in sections 30118 and 30120, respectively,
to notify owners, purchasers, and dealers of a defect or noncompliance
and to remedy the defect or noncompliance. Therefore, any decision on
this petition only applies to the subject child restraints that BT no
longer controlled at the time it determined that the noncompliance
existed. However, any decision on this petition does not relieve child
restraint distributors and dealers of the prohibitions on the sale,
offer for sale, or introduction or delivery for introduction into
interstate commerce of the noncompliant child restraints under their
control after BT notified them that the subject noncompliance existed.

(Authority: 49 U.S.C. 30118, 30120: delegations of authority at 49
CFR 1.95 and 501.8)

Otto G. Matheke III,
Director, Office of Vehicle Safety Compliance.
[FR Doc. 2022-19516 Filed 9-8-22; 8:45 am]
BILLING CODE 4910-59-P


[Federal Register Volume 77, Number 25 (Tuesday, February 7, 2012)]
[Notices]
[Pages 6156-6160]
[FR Doc No: 2012-2670]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 29941; 812-13634]

Rand Capital Corporation, et al.; Notice of Application

February 1, 2012.
AGENCY: Securities and Exchange Commission (the ``Commission'').

ACTION: Notice of an application for an order under sections 6(c),
12(d)(1)(J), and 57(c) of the Investment Company Act of 1940 (``Act'')
granting exemptions from sections 12(d)(1)(A) and (C), 18(a),

21(b), 57(a)(1)-(a)(3), and 61(a) of the Act; under section 57(i) of
the Act and rule 17d-1 under the Act to permit certain joint
transactions otherwise prohibited by section 57(a)(4) of the Act; and
under section 12(h) of the Securities Exchange Act of 1934 (``Exchange
Act'') granting an exemption from section 13(a) of the Exchange Act.

-----------------------------------------------------------------------

Applicants: Rand Capital Corporation (``Rand'') and Rand Capital SBIC,
Inc. (``Rand SBIC'').

Summary of Application: Applicants request an order permitting a parent
business development company (``BDC'') and its wholly-owned small
business investment company (``SBIC'') subsidiary and any future
wholly-owned BDC subsidiaries (``Future Subsidiaries'') to engage in
certain transactions that otherwise would be permitted if such parent
BDC and its subsidiaries were one company and to file certain reports
on a consolidated basis, and permitting such parent BDC to adhere to a
modified asset coverage requirement.

DATES: Filing Dates: The application was filed on February 6, 2009 and
amended on August 5, 2009, September 8, 2011 and January 10, 2012.
    Hearing or Notification of Hearing: An order granting the
application will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicants with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 pm on February 27, 2012, and should be accompanied by proof of
service on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street NE., Washington, DC 20549-1090. Applicants, c/o Allen F. Grum,
Rand Capital Corporation, 2200 Rand Building, Buffalo, NY 14203.

FOR FURTHER INFORMATION CONTACT: Keith A. Gregory, Senior Counsel, at
(202) 551-6815, or Mary Kay Frech, Branch Chief, at<PHONE_NUMBER>
(Division of Investment Management, Office of Investment Company
Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or an applicant
using the Company name box, at http://www.sec.gov/search/search.htm or
by calling<PHONE_NUMBER>.

Applicants' Representations

    1. Rand, a New York corporation, is an internally managed, non-
diversified, closed-end investment company that has elected to be
regulated as a BDC under the Act.\1\ Rand's principal business is to
make venture capital investments in small, early-stage and developing
enterprises. Rand's principal objective is long-term capital
appreciation. Rand typically invests in debt securities and
concurrently acquires equity interests in the form of stock, warrants
or stock options or the right to convert debt securities into stock.
Rand has a six member board of directors (``Rand Board''), five of whom
are not ``interested persons'' of Rand within the meaning of section
2(a)(19) of the Act. The Rand Board appoints Rand's president and chief
executive officer and its executive vice president and chief financial
officer (collectively, the ``Principal Officers''). Subject to the
oversight of the Rand Board, the Principal Officers make all investment
decisions for Rand.
---------------------------------------------------------------------------

    \1\ Section 2(a)(48) of the Act defines a BDC to be any closed-
end investment company that operates for the purpose of making
investments in securities described in sections 55(a)(1) through
55(a)(3) of the Act and makes available significant managerial
assistance with respect to the issuers of such securities.
---------------------------------------------------------------------------

    2. Rand SBIC, a New York corporation, is an SBIC licensed by the
Small Business Administration (``SBA'') to operate under the Small
Business Investment Act of 1958 (``SBA Act''). Rand SBIC is registered
as an investment company under the Act and will elect to be regulated
as a BDC prior to relying on the requested order. Rand SBIC has the
same investment purposes and will invest in the same kinds of
securities as Rand.
    3. Rand SBIC is a wholly-owned subsidiary of Rand, which owns all
of its outstanding voting stock. The Rand Board annually elects the
same persons who comprise the Rand Board to serve on the board of
directors of Rand SBIC. Pursuant to a by-law provision required by the
SBA, Rand SBIC is required to maintain an investment committee
consisting of the Principal Officers that has responsibility for all
investment decisions by Rand SBIC. Rand SBIC's operations have been and
will be consolidated with those of Rand for financial reporting and tax
purposes.
    4. Rand may in the future create wholly-owned Future Subsidiaries
each of which (i) will be a BDC, and (ii) may be licensed by the SBA to
operate as an SBIC (collectively with Rand SBIC, the ``SBIC
Subsidiaries'') or may not be an SBIC.\2\ Any future SBIC Subsidiary
will be operated in the same manner as Rand SBIC and will be subject to
the requirements of the SBA Act and the SBA regulations. Rand SBIC, the
SBIC Subsidiaries and the Future Subsidiaries are collectively referred
to as the ``Subsidiaries.''
---------------------------------------------------------------------------

    \2\ All existing entities that currently intend to rely on the
order have been named as applicants. Any other existing or future
entity that subsequently relies on the order will comply with the
terms [and conditions] of the application.
---------------------------------------------------------------------------

Applicants' Legal Analysis

    1. Applicants request an order under sections 6(c), 12(d)(1)(J),
57(c) and 57(i) of the Act and rule 17d-1 under the Act granting
exemptions from sections 12(d)(1), 18(a), 21(b), 57(a)(1), 57(a)(2),
57(a)(3), 57(a)(4), and 61(a) of the Act to permit Rand, Rand SBIC and
any Future Subsidiary to engage in certain transactions that otherwise
would be permitted if Rand and its Subsidiaries were one company and to
permit Rand to adhere to a modified asset coverage requirement.
Applicants also request an exemption under section 12(h) of the
Exchange Act for an exemption from section 13(a) of the Exchange Act.
    2. Section 12(d)(1)(A) of the Act, made applicable to BDCs by
section 60 of the Act, limits the amount of securities a registered
investment company or BDC may hold of other investment companies.
Section 12(d)(1)(C) of the Act limits the amount of securities of a
closed-end investment company that may be acquired by an investment
company. Rule 60a-1 exempts a BDC's acquisition of the securities of a
wholly-owned SBIC subsidiary from sections 12(d)(1)(A) and (C).
Accordingly, the acquisition of Rand SBIC securities by Rand will be
exempt from the provisions of sections 12(d)(1)(A) and 12(d)(1)(C) by
virtue of rule 60a-1.
    3. Applicants state that section 12(d)(1) would prohibit the
acquisition by Rand of the debt or equity securities of, or the making
of loans by Rand to, Future Subsidiaries that are not SBICs. Applicants
state that section 12(d)(1) would also prohibit the acquisition of debt
securities of Rand by any such Future Subsidiary since they would each
be a BDC and an entity controlled by a BDC. Thus, the making of loans
or advances by Rand SBIC or a Future Subsidiary to Rand might be deemed
to violate section 12(d)(1) if the loans or

advances are construed as purchases by the Subsidiary of the securities
of Rand.
    4. Applicants request an exemption under section 12(d)(1)(J) from
section 12(d)(1) to permit: (1) The purchase of debt or equity
securities of, or a contribution to capital to, a Future Subsidiary
that is not an SBIC by Rand, (ii) the making of loans or advances by
any Subsidiary to Rand or to any other Subsidiary, and (iii) the
acquisition by the Subsidiaries of any securities of Rand representing
indebtedness or any securities representing indebtedness issued by any
of the other Subsidiaries. Section 12(d)(1)(J) of the Act provides that
the Commission may exempt persons or transactions from any provision of
section 12(d)(1) if and to the extent such exception is consistent with
the public interest and the protection of investors. Applicants state
that the requested relief meets this standard because the Subsidiaries
are wholly-owned and this status and the consolidated financial
reporting with Rand will eliminate the possibility of overreaching and
prevent confusion as to the financial status of Rand to Rand's
shareholders, who are the investors that the Act is intended to
protect.
    5. Section 18(a) prohibits a registered closed-end investment
company from issuing any class of senior security or selling any such
security of which it is the issuer unless the company complies with the
asset coverage requirements set forth in that section. Section 61(a) of
the Act makes section 18 applicable to BDCs, with certain
modifications. Section 18(k) exempts an investment company operating as
an SBIC from the asset coverage requirements of section 18(a)(1)(A) and
(B) (with respect to senior securities representing indebtedness).
    6. Applicants state that a question exists as to whether Rand must
comply with the asset coverage requirements of section 18(a) (as
modified by section 61(a)) on a consolidated basis because Rand may be
deemed to be an indirect issuer of any class of senior security
representing indebtedness issued by any Subsidiary. For Rand to comply
with these asset coverage requirements would mean that, with certain
exceptions, Rand would treat as its own all assets held directly by
Rand and the Subsidiaries and any liabilities of the Subsidiaries,
including liabilities of the Subsidiaries with respect to senior
securities as to which any of the Subsidiaries is exempt from the asset
coverage requirements of section 18(a)(1)(A) and (B) by virtue of
section 18(k). Accordingly, applicants request relief under section
6(c) of the Act from sections 18(a) and 61(a) to permit Rand to exclude
from its consolidated asset coverage ratio any SBA preferred stock
interest in any of the Subsidiaries (if applicable) and any senior
security representing indebtedness issued by any Subsidiary.
    7. Section 6(c) of the Act, in relevant part, permits the
Commission to exempt any transaction or class of transactions from any
provision of the Act if, and to the extent that, such exemption is
necessary or appropriate in the public interest and consistent with the
protection of investors and the purposes fairly intended by the policy
and provisions of the Act. Applicants state that the requested relief
satisfies the section 6(c) standards. Applicants state that, without
the requested relief from sections 18(a) and 61(a), the ability of an
SBIC Subsidiary to obtain the kind of financing that would be available
to Rand if it were to conduct the SBIC operations itself would be
restricted. Moreover, the exclusion by Rand from its consolidated asset
coverage ratio of any senior security representing indebtedness that is
issued by an SBIC Subsidiary would not harm the public interest because
the SBA regulates the leverage and capital structure of the SBIC
Subsidiaries.
    8. Sections 57(a)(1) and (2) of the Act generally prohibit, with
certain exceptions, sales or purchases of any security or other
property between BDCs and certain of their affiliates as described in
section 57(b) of the Act. Section 57(b) includes a person, directly or
indirectly, either controlling, controlled by or under common control
with the BDC. Applicants state that Rand directly owns all of each
Subsidiary's outstanding voting stock. Applicants further state that
each of the Subsidiaries and Rand may be deemed to be under the common
control of the Rand Board and the Principal Officers. Accordingly, Rand
and the Subsidiaries are related to each other in the manner described
in section 57(b). In addition, each Subsidiary would also be a person
related to each other Subsidiary in a manner described in section 57(b)
as long as they remain under the common control of Rand.
    9. Applicants state that there may be circumstances when it is in
the interest of Rand and its shareholders that one or more of the
Subsidiaries invest in securities of an issuer that may be deemed to be
a controlled portfolio affiliate of Rand or another Subsidiary or that
Rand invest in securities of an issuer that may be deemed to be a
controlled portfolio affiliate of a Subsidiary. Applicants therefore
request an exemption from sections 57(a)(1) and 57(a)(2) of the Act to
permit any transaction between Rand and any Subsidiary, and any
transaction between a Subsidiary and any other Subsidiary, with respect
to the purchase or sale of securities or other property. Applicants
also seek an exemption from these provisions to allow any purchase or
sale transaction between Rand and a controlled portfolio affiliate of
any Subsidiary, and a purchase or sale transaction between a Subsidiary
and a controlled portfolio affiliate of Rand or another Subsidiary.
Applicants state that the requested relief is intended only to permit
Rand and the Subsidiaries to do that which they otherwise would be
permitted to do if they were one company.
    10. Section 57(c) provides that the Commission will exempt a
proposed transaction from the provisions of section 57(a)(1) and (2) of
the Act if the terms of the proposed transaction, including the
consideration to be paid or received, are reasonable and fair and do
not involve overreaching of any person concerned, and the proposed
transaction is consistent with the policy of the BDC concerned and the
general purposes of the Act.
    11. Applicants submit that the requested relief from section
57(a)(1) and (2) meets this standard. Applicants represent that the
proposed operations as one company will enhance efficient operations of
Rand and its wholly owned Subsidiaries, and allow them to deal with
portfolio companies as if Rand and such Subsidiaries were one company.
Applicants contend that the terms of the proposed transactions are
reasonable and fair and do not involve overreaching of Rand or its
stockholders or its stockholders by any person, and that the requested
order would permit Rand and the Subsidiaries to carry out more
effectively their purposes and objectives of investing primarily in
small business concerns. Finally, applicants note that the proposed
transactions are consistent with the policies of Rand and Rand SBIC as
specified in filings with the Commission and Rand's reports to
shareholders, as well as consistent with the policies and provisions of
the Act.
    12. Section 57(a)(3) of the Act makes it unlawful for certain
affiliated persons of a BDC, and certain affiliated persons of those
persons, to borrow money or other property from such BDC or from any
company controlled by the BDC, except as permitted by section 21(b) or
section 62. Section 21(b) of the Act (made applicable to BDCs by
section 62) provides that it shall be unlawful for a BDC to lend any
money or property, directly or indirectly, to any person that controls
or is under common control

with the BDC, except for loans to any company that owns all of the
outstanding securities of the BDC (other than directors' qualifying
shares).
    13. Rand is an affiliated person of each of the Subsidiaries by
reason of its direct ownership of all of the outstanding voting capital
stock of the Subsidiaries. Each of the Subsidiaries is an affiliated
person of Rand because they are deemed to be under the control of Rand.
Each of the Subsidiaries is an affiliated person of each other
Subsidiary because they are deemed to be under the common control of
Rand. In addition, each of the directors and Principal Officers of Rand
are also or will be the directors and principal officers of Rand SBIC
and the Future Subsidiaries, so that Rand and the Subsidiaries may be
deemed to be under common control.
    14. Applicants state that there may be instances when it would be
in the best interests of Rand and its shareholders for Rand to make
loans to one of more of the Subsidiaries or for the Subsidiaries to
make loans to Rand or each other. Applicants note that, in the case of
loans from Rand to the Subsidiaries or loans from the Subsidiaries to
each other, the loans may be prohibited by section 21(b) because Rand
and the Subsidiaries may be deemed to be under common control.
Applicants state that in the case of loans from a Subsidiary to Rand,
the loans would be prohibited by section 21(b) and section 57(a)(3)
because the borrower controls the lender and the lender may have
outstanding securities not owned by the borrower.
    15. Accordingly, applicants request an order under section 6(c) to
exempt from the provisions of section 21(b) the lending of money or
other property by Rand to the Subsidiaries and by the Subsidiaries to
Rand or another Subsidiary. Applicants argue that because these
transactions are solely between Rand and its wholly-owned Subsidiaries,
they will have no substantive economic effect and there will be no
basis for overreaching or harm to the public interest. Applicants also
request an order under section 57(c) to exempt the borrowing of money
or other property by Rand or a Subsidiary from any other Subsidiary
from the provisions of section 57(a)(3). Applicants submit that the
requested relief meets the standards of section 6(c) and 57(c).
    16. Applicants also request relief from section 21(b) under section
6(c) to exempt any lending of money or other property by Rand or a
Subsidiary to portfolio companies of any Subsidiary controlled by the
Subsidiary or portfolio companies of Rand controlled by Rand. The
requested exemption is intended to permit Rand and the Subsidiaries to
do that which they otherwise would be permitted to do if they were one
company, as opposed to each of the Subsidiaries being a wholly-owned
Subsidiary of Rand.
    17. Section 17(d) of the Act and rule 17d-1 under the Act (made
applicable to BDCs by section 57(i)) prohibit affiliated persons of a
registered investment company, or an affiliated person of such person,
acting as principal, from participating in any joint transaction or
arrangement in which the registered company or a company it controls is
a participant, unless the Commission has issued an order authorizing
the arrangement. Section 57(a)(4) of the Act imposes substantially the
same prohibitions on joint transactions involving any BDC and an
affiliated person of such BDC, or an affiliated person of such
affiliated person, as specified in section 57(b) of the Act. Section
57(i) of the Act provides that rules and regulations under section
17(d) of the Act will apply to transactions subject to section 57(a)(4)
in the absence of rules under that section. The Commission has not
adopted rules under section 57(a)(4) with respect to joint transactions
and, accordingly, the standards set forth in rule 17d-1 govern
applicants' request for relief.
    18. Applicants request relief under section 57(i) and rule 17d-1 to
permit any joint transaction that would otherwise be prohibited by
section 57(a)(4), in which a Subsidiary and Rand or another Subsidiary
participate, but only to the extent that the transaction would not be
prohibited if the Subsidiaries were deemed to be a part of Rand and not
separate companies.
    19. In determining whether to grant an order under section 57(i)
and rule 17d-1, the Commission considers whether the participation of
the BDC in the joint transaction is consistent with the provisions,
policies, and purposes of the Act, and the extent to which such
participation is on a basis different from or less advantageous than
that of other participants. Applicants note that the proposed
transactions are consistent with the policy and provisions of the Act
and will enhance the interests of Rand and its stockholders while
retaining the important protections afforded by the Act. In addition,
because the joint participants will conduct their operations as though
they comprise one company, the participation of one will not be on a
basis different from or less advantageous than the others. Accordingly,
applicants believe that the standard for relief under section 57(i) and
rule 17d-1 is satisfied.
    20. Section 54 of the Act provides that a closed-end company may
elect BDC treatment under the Act if the company has either a class of
equity securities registered under section 12 of the Exchange Act or
has filed a registration statement pursuant to section 12 of the
Exchange Act for a class of its equity securities. Section 12(g) of the
Exchange Act requires issuers with specified assets and a specified
number of security holders to register under the Exchange Act. Rand has
elected to be regulated as a BDC and its common stock is deemed
registered under section 12(g)(1) of the Exchange Act. Rand SBIC will
elect to be regulated as a BDC under the Act prior to relying on the
order, and such election will cause Rand SBIC's common stock to be
registered under the Exchange Act by operation of rule 12g-2 under the
Exchange Act.
    21. By filing a registration statement under section 12 of the
Exchange Act, absent an exemption, Rand SBIC and each Future Subsidiary
would be required by section 13(a) of the Exchange Act to file
periodically with the Commission, even though their sole shareholder
will be Rand. Accordingly, applicants request an order under section
12(h) of the Exchange Act exempting Rand SBIC and each Future
Subsidiary from the reporting requirements of section 13(a) of the
Exchange Act to permit the filing of consolidated reports with Rand.
    22. Section 12(h) of the Exchange Act provides that the Commission
may exempt an issuer from section 13 of the Exchange Act if the
Commission finds that by reason of the number of public investors,
amount of trading interest in the securities, the nature and extent of
the activities of the issuer, income or assets of the issuer, or
otherwise, that such action is not inconsistent with the public
interest or the protection of investors. Each of the Subsidiaries will
have only one investor, which is itself a reporting company, and no
public investors. There will be no trading in the Subsidiaries
securities, so no public interest or investor protective purpose will
be served by separate Subsidiary reporting. Further, applicants state
that the nature and extent of the Subsidiaries' activities are such
that their activities will be fully reported through consolidated
reporting in accordance with normal accounting rules. Accordingly,
applicants believe that the requested exemption meets the standards of
section 12(h) of the Exchange Act.

Applicants' Conditions

    Applicants agree that the requested order will be subject to the
following conditions:
    1. Rand will at all times own and hold, beneficially and of record,
all of the outstanding voting capital stock of each of the
Subsidiaries.
    2. The Subsidiaries will have investment policies not inconsistent
with those of Rand, as set forth in Rand's registration statement.
    3. No person shall serve as investment adviser or principal
underwriter to Rand SBIC or any Subsidiary unless the Rand Board and
the shareholders of Rand shall have taken the same action with respect
thereto also required to be taken by the board of directors and the
sole shareholder of such Subsidiary.
    4. Rand will not itself issue or sell any senior security, and Rand
will not cause or permit any Subsidiary to issue or sell any senior
security of which Rand or such Subsidiary is the issuer except to the
extent permitted by section 18 (as modified for BDCs by section 61) of
the Act; provided that immediately after the issuance or sale of any
such senior security by either Rand or any Subsidiary, Rand and its
Subsidiaries on a consolidated basis, and Rand individually, shall have
the asset coverage required by section 18(a) (as modified for BDCs by
section 61(a)), except that, in determining whether Rand and its
Subsidiaries on a consolidated basis have the asset coverage required
by section 61(a), any SBA preferred stock interest in any SBIC
Subsidiary and any borrowings by any SBIC Subsidiary shall not be
considered senior securities and, for purposes of the definition of
``asset coverage'' in section 18(h), shall be treated as indebtedness
not represented by senior securities.
    5. No person shall serve as a member of any board of directors of
any Subsidiary unless such person shall also serve as a member of the
Rand Board. The board of directors of any Subsidiary will be elected by
Rand as the sole shareholder of such Subsidiary.
    6. Rand and any Subsidiary will acquire securities representing
indebtedness of Rand SBIC or any SBIC Subsidiary only if, in each case,
the prior approval of the SBA has been obtained. In addition, the SBIC
Subsidiaries, on the one hand, and Rand or any other Subsidiary on the
other hand, will purchase and sell portfolio securities between
themselves only if, in each case, the prior approval of the SBA has
been obtained.

    For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-2670 Filed 2-6-12; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: July 18, 2007 (Volume 72, Number 137)]
[Notices]
[Page 39410-39412]
[DOCID:fr18jy07-63]

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ENVIRONMENTAL PROTECTION AGENCY

[FRL-8440-7]

Proposed Consent Decree, Clean Air Act Citizen Suit

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of Proposed Consent Decree; Request for Public Comment

-----------------------------------------------------------------------

SUMMARY: In accordance with section 113(g) of the Clean Air Act, as
amended (``CAA'' or ``Act''), 42 U.S.C. 7413(g), notice is hereby given
of a proposed consent decree, to address a lawsuit filed by People of
the State of Illinois ex rel. Lisa Madigan, Attorney General of the
State of Illinois (``Plaintiff'') in the U.S. District Court for the
Northern District of Illinois Eastern Division: People of the State of
Illinois ex rel. Lisa Madigan v. Johnson, No. 1:06cv06909 (N.D. IL).
Plaintiff filed a deadline suit to compel the Administrator to respond
to an administrative petition dated November 28, 2005 seeking EPA's
objection to CAA Title V operating permits proposed by the Illinois
Environmental Protection Agency for five (5) electrical generating
stations in the State of Illinois known as the Fisk Generating Station,
the Crawford Generating Station, the Joliet Generating Station, the
Will County Generating Station and the Powerton Generating Station.
Under the terms of the proposed consent decree, EPA has

agreed to respond to Plaintiff's petition within five (5) business days
after the entry of this decree, and the Plaintiff has agreed to dismiss
the suit with prejudice. In addition, EPA has agreed to pay Plaintiff a
specified amount in settlement for attorneys' fees and litigation costs
in this matter. EPA responded to the petition on June 20, 2007.

DATES: Written comments on the proposed consent decree must be received
by August 17, 2007.

ADDRESSES: Submit your comments, identified by Docket ID number EPA-HQ-
OGC-2007-0552, online at http://www.regulations.gov (EPA's preferred method); by e-mail to<EMAIL_ADDRESS>mailed to EPA Docket Center,

Environmental Protection Agency, Mailcode: 2822T, 1200 Pennsylvania
Ave., NW., Washington, DC 20460-0001; or by hand delivery or courier to
EPA Docket Center, EPA West, Room 3334, 1301 Constitution Ave., NW.,
Washington, DC, between 8:30 a.m. and 4:30 p.m. Monday through Friday,
excluding legal holidays. Comments on a disk or CD-ROM should be
formatted in Word or ASCII file, avoiding the use of special characters
and any form of encryption, and may be mailed to the mailing address
above.

FOR FURTHER INFORMATION CONTACT: Paul Versace, Air and Radiation Law
Office (2344A), Office of General Counsel, U.S. Environmental
Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460;
telephone:<PHONE_NUMBER>; fax number<PHONE_NUMBER>; e-mail address:
<EMAIL_ADDRESS>

SUPPLEMENTARY INFORMATION:

I. Additional Information About the Proposed Consent Decree

    This proposed consent decree would resolve a lawsuit seeking a
response to an administrative petition dated November 28, 2005 to
object to CAA Title V permits proposed by the Illinois Environmental
Protection Agency for five (5) electrical generating stations in the
State of Illinois known as the Fisk Generating Station, the Crawford
Generating Station, the Joliet Generating Station, the Will County
Generating Station and the Powerton Generating Station. Under the
proposed consent decree, EPA has agreed to respond to the Plaintiff's
petition within five (5) business days after the entry of this decree
and to pay a specified amount in settlement of Plaintiff's claims for
attorneys' fees and other litigation costs. The consent decree becomes
an order of the Court upon entry, and, consistent with the terms of the
consent decree, the case shall be dismissed with prejudice after EPA
takes final action on Plaintiff's petition and resolves Plaintiff's
claims for litigation costs. On June 20, 2007, EPA took final action on
Plaintiffs' CAA Title V petition regarding permits for five (5)
electrical generating stations in the State of Illinois known as the
Fisk Generating Station, the Crawford Generating Station, the Joliet
Generating Station, the Will County Generating Station and the Powerton
Generating Station.
    For a period of thirty (30) days following the date of publication
of this notice, the Agency will receive written comments relating to
the proposed consent decree from persons who were not named as parties
or intervenors to the litigation in question. EPA or the Department of
Justice may withdraw or withhold consent to the proposed consent decree
if the comments disclose facts or considerations that indicate that
such consent is inappropriate, improper, inadequate, or inconsistent
with the requirements of the Act. Unless EPA or the Department of
Justice determines, based on any comment which may be submitted, that
consent to the consent decree should be withdrawn, the terms of the
decree will be affirmed.

II. Additional Information About Commenting on the Proposed Consent
Decree

A. How Can I Get a Copy of the Consent Decree?

    The official public docket for this action (identified by Docket ID
No. EPA-HQ-OGC-2007-0552) contains a copy of the proposed consent
decree. The official public docket is available for public viewing at
the Office of Environmental Information (OEI) Docket in the EPA Docket
Center, EPA West, Room 3334, 1301 Constitution Ave., NW., Washington,
DC. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to
4:30 p.m., Monday through Friday, excluding legal holidays. The
telephone number for the Public Reading Room is<PHONE_NUMBER>, and the
telephone number for the OEI Docket is<PHONE_NUMBER>.
    An electronic version of the public docket is available through
http://www.regulations.gov. You may use the www.regulations.gov to submit or

view public comments, access the index listing of the contents of the
official public docket, and to access those documents in the public
docket that are available electronically. Once in the system, select
``search,'' then key in the appropriate docket identification number.
    It is important to note that EPA's policy is that public comments,
whether submitted electronically or in paper, will be made available
for public viewing online at http://www.regulations.gov without change, unless

the comment contains copyrighted material, CBI, or other information
whose disclosure is restricted by statute. Information claimed as CBI
and other information whose disclosure is restricted by statute is not
included in the official public docket or in the electronic public
docket. EPA's policy is that copyrighted material, including
copyrighted material contained in a public comment, will not be placed
in EPA's electronic public docket but will be available only in
printed, paper form in the official public docket. Although not all
docket materials may be available electronically, you may still access
any of the publicly available docket materials through the EPA Docket
Center.

B. How and To Whom Do I Submit Comments?

    You may submit comments as provided in the ADDRESSES section.
Please ensure that your comments are submitted within the specified
comment period. Comments received after the close of the comment period
will be marked ``late.'' EPA is not required to consider these late
comments.
    If you submit an electronic comment, EPA recommends that you
include your name, mailing address, and an e-mail address or other
contact information in the body of your comment and with any disk or CD
ROM you submit. This ensures that you can be identified as the
submitter of the comment and allows EPA to contact you in case EPA
cannot read your comment due to technical difficulties or needs further
information on the substance of your comment. Any identifying or
contact information provided in the body of a comment will be included
as part of the comment that is placed in the official public docket,
and made available in EPA's electronic public docket. If EPA cannot
read your comment due to technical difficulties and cannot contact you
for clarification, EPA may not be able to consider your comment.
    Use of the http://www.regulations.gov Web site to submit comments to EPA

electronically is EPA's preferred method for receiving comments. The
electronic public docket system is an ``anonymous access'' system,
which means EPA will not know your identity, e-mail address, or other
contact information unless you provide it in the body of your comment.
In contrast to EPA's electronic public docket, EPA's electronic mail
(e-mail)

system is not an ``anonymous access'' system. If you send an e-mail
comment directly to the Docket without going through
http://www.regulations.gov, your e-mail address is automatically captured and

included as part of the comment that is placed in the official public
docket, and made available in EPA's electronic public docket.

    Dated: July 11, 2007.
Richard B. Ossias,
Associate General Counsel.
 [FR Doc. E7-13901 Filed 7-17-07; 8:45 am]

BILLING CODE 6560-50-P