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Federal Register / Vol. 71, No.

137 / Tuesday, July 18, 2006 / Rules and Regulations 40643

party’s failure to timely remit payment are necessary from time to time to carry soliciting nominations from and
for the commodity. out the provisions of’’ the Bank Act. 12 providing ballots to the members of the
Signed in Washington, DC, on June 29, U.S.C. 1422b(a)(1). Bank. The proposed rule also would
2006. The primary mandate for the Finance have removed certain provisions of the
Teresa C. Lasseter,
Board is to ‘‘ensure that the Federal regulations that prohibit persons
Home Loan Banks operate in a associated with the Finance Board from
Executive Vice President, Commodity Credit
Corporation.
financially safe and sound manner.’’ 12 being involved in the elections process,
U.S.C. 1422a(a)(3)(A). Within this broad because those provisions dated to a time
[FR Doc. E6–11236 Filed 7–17–06; 8:45 am]
authority, Congress also specifically at which the Finance Board actually
BILLING CODE 3410–05–P
authorized the Finance Board to administered the elections at each of the
‘‘prescribe such rules and regulations as Banks. See Resolution Number 2006–04,
it may deem necessary or appropriate published at 71 FR 19832 (April 18,
FEDERAL HOUSING FINANCE BOARD for the nomination and election of 2006) (available electronically in the
directors of Federal home loan banks.’’ FOIA Reading Room on the Finance
12 CFR Part 915 12 U.S.C. 1427(d). Board Web site at: http://www.fhfb.gov/
[No. 2006–12] The Finance Board has long had in Default.aspx?Page=59). The final rule
place regulations addressing the manner generally amends the various provisions
RIN 3069–AB31 in which persons are nominated and of part 915 as set forth in the proposed
elected to the boards of the Banks. rule.
Federal Home Loan Bank Elective
Effective December 30, 1998, the
Directors II. Analysis of the Public Comments
Finance Board amended various
provisions of its regulations relating to and Final Rule
AGENCY: Federal Housing Finance
Board. director elections to devolve to each The Finance Board received 17
ACTION: Final rule. Bank, through its board of directors, the comments in response to the proposed
responsibility for administering the rule, which addressed the Finance
SUMMARY: The Federal Housing Finance process for electing Bank directors. See Board’s proposal to expand the ability of
Board (Finance Board) is amending its Resolution Number 1998–47, published the Banks to communicate with their
rules relating to the election of Federal at 63 FR 65683 (November 30, 1998) members during the election process
Home Loan Bank (Bank) directors to (available electronically in the FOIA and its proposal to remove prohibitions
allow each Bank greater latitude in Reading Room on the Finance Board on the conduct of persons associated
providing members information about Web site at: http://www.fhfb.gov/ with the Finance Board. The
the range of skills and experience Default.aspx?Page=59). commenters included 6 Banks. Most
among board members the Bank Notwithstanding that devolution of commenters supported the proposal,
believes is best suited to administer its authority to the Banks, the Finance though almost all offered suggested
affairs. The final rule is intended to Board remains responsible for the safety revisions to the rule. Three commenters
enhance the corporate governance of and soundness of the Banks and for opposed the proposal, 2 citing a
each Bank by allowing a Bank to periodically reviewing its regulations to perceived potential for the process to
provide to its members, during the ensure that they continue to carry out further impede the ability of some
election process, information about the their intended purposes in a logical and members to obtain representation on the
expertise the Bank has identified as efficient manner. Bank boards of directors, and 1
appropriate to enhance the board of The Finance Board believes that an expressing a concern about the possible
directors in providing overall board informed and capable board of directors bias in the information to be provided
management of the Bank. The final rule is one of the more important elements to the members as well as the
also revises and reorganizes the in maintaining a safe and sound Bank. perception created by the deletion of
prohibitions on actions during the In recent months, the Finance Board has prohibitions barring the involvement of
election process. received suggestions that the electoral Finance Board employees in the
process could be improved if certain elections process. The comments can be
DATES: Effective Date: The final rule is
provisions of its regulations were divided into 6 substantive areas, which
effective July 18, 2006. revised to permit the Banks to be more are discussed separately below.
FOR FURTHER INFORMATION CONTACT: John involved in the process of identifying
P. Kennedy, General Counsel, 202–408– qualified and capable individuals to A. Self-Assessments Under § 915.9(a)
2983, kennedyj@fhfb.gov; or Thomas P. serve on the boards. Section 915.9(a) of the proposed rule
Jennings, Senior Attorney Advisor, Accordingly, on April 18, 2006, the would have allowed the board of
Office of General Counsel, 202–408– Finance Board published a proposed directors of each Bank to conduct an
2553, jenningst@fhfb.gov. You can send regulation with a 45-day comment annual assessment of the skills and
mail to the Federal Housing Finance period that would amend part 915—the experience needed on the board of
Board, 1625 Eye Street, NW., provision of its regulations dealing with directors and to inform its members of
Washington, DC 20006. the election of directors—to allow the those identified needs. The final rule
SUPPLEMENTARY INFORMATION: Banks more flexibility in providing adopts this provision substantially as
information to their members during the proposed.
I. Statutory and Regulatory Background election process. Briefly stated, the Section 915.9(a) of the final rule is
Congress has delegated to the Finance proposed rule would have allowed any permissive in nature—it authorizes, but
Board broad authority to fulfill its Bank to assess the skills and experience does not require, a board of directors to
statutory mandates. Section 2B of the of the existing individuals on the board assess how well the skills and
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Federal Home Loan Bank Act (Bank Act) of directors, to determine what skills or experience of the incumbent board
states that the Finance Board has the experience might be useful in enhancing members align with the needs of the
power ‘‘[t]o supervise the Federal Home the capabilities of the board, and to Bank. It also authorizes, but does not
Loan Banks and to promulgate and communicate its assessment of existing require, a board to determine whether it
enforce such regulations and orders as and desired skills to the members when could benefit from the addition of

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40644 Federal Register / Vol. 71, No. 137 / Tuesday, July 18, 2006 / Rules and Regulations

persons with particular skills or person possesses the qualifications the boards. The Finance Board believes
experience and, if so, whether to identified by the assessment. Moreover, that key factors in achieving that result
provide the members with that because all elected directors must either include information as to the needs of
information in advance of the be an officer or a director of a member the Bank’s board and information as to
nominations and voting process. The of the Bank, it is likely that the list of the qualifications of the nominees for
Finance Board believes that the board of nominees will continue to include a the directorships. To the extent that the
directors of a Bank, as the body charged significant number of persons who serve collective skills and experience of a
by Congress to ‘‘administer the affairs of as chief executives of their institution. Bank’s board of directors may not align
the bank fairly and impartially and Other commenters questioned the precisely with the needs of the Bank
without discrimination in favor of or need or usefulness of the rule, despite efforts to achieve that result, the
against any member,’’ 12 U.S.C. 1427(j), contending that there is no need for board of directors still would retain the
is the most appropriate body to oversee such a rule because such assessments authority to hire consultants to advise it
the self-assessment. The final rule does are not barred by statute or regulation, in any areas where the collective skills
not prescribe the process or the it would allow certain members to of the board members may be less than
procedures through which the board of perpetuate their representation on the optimum. The Finance Board believes
directors is to conduct a self-assessment board, or would be unlikely to produce that a Bank should do all that it
of its needs, although it vests ultimate better candidates than are nominated reasonably can to obtain a well-
responsibility for these decisions with under the current structure. performing board of directors, even if
the board. Thus, the rule would allow Although it is correct that there are no those efforts are not guaranteed to
a board of directors to consult with the statutory or regulatory impediments to succeed every time.
members or with management in conducting a self-assessment, the final
Other commenters suggested that the
assessing what skills and experience rule responds to concerns expressed by
some parties that the rules be amended Finance Board allow members a greater
would be of most use to the board. role in conducting the self-assessment,
Although the rule includes a list of to state more clearly that such actions
are permissible. Moreover, certain allow Banks to form nominations
skills and experience as part of
provisions of the existing regulations— committees composed of Bank directors
§ 915.9(a), it is intended only as an
§§ 915.6 and 915.8—do regulate the and other representatives from
example of the types of skills that a
content of the notice that the Banks members, and allow management to
Bank might determine it needs on its
provide to their members regarding work with the board in the nominations
board of directors. A board may well
decide that it could benefit from the nominations, which starts the election and election process. As noted
addition of persons with other skills, process, as well as the content of the previously, by statute the board of
and it could include those skills as part ballots. Given both of those facts, the directors of each Bank is charged with
of its assessment. Indeed, because the Finance Board believes that it is responsibility for administering the
business plans of the Banks vary, the appropriate to include these new affairs of the Bank and the Finance
needs of the individual Banks with provisions as part of the rules that Board believes that the board is the
respect to the skill sets of the boards as already address communications with appropriate body to determine what
a whole also will likely vary. The rule the members during the elections skills and experience are most likely to
is intended to allow each Bank adequate process. Moreover, such provisions will enhance its ability to carry out its
flexibility to determine its own ensure—for those Banks that undertake duties. Moreover, the suggestions that
particular needs. the assessment and inform their the final rule allow the establishment of
The commenters addressed several members of the desired skills and nominations committees and the greater
issues relating to the assessment of experience—that members receive the involvement of management in the
director skills and experience. Some information at a time when it can assist nominations process go beyond the
commenters suggested that the rule them in deciding who they may want to scope of the proposed rule. The
include a more expansive list of skills, nominate. proposal was intended to allow an
while others were concerned that As to the concern about a self- opportunity for the Banks to develop
identifying specific skills in the rule perpetuating board, the Finance Board and then provide to the members
might make it more difficult for the notes that all directors not only have a additional information regarding the
chief executive officer of a member— statutory duty to act fairly and needs of the boards and the skills and
who may have a broad range of business impartially to all members, as set forth experience of individual candidates
and financial skills, rather than the in 12 U.S.C. 1427(j), but also a fiduciary seeking election to the board. It was not
individual skills listed—to be duty as representatives of the members. intended to alter the substantive nature
nominated or elected. Because the list of The Finance Board believes that any of the nominations process, which is
skills is intended to be illustrative rather conduct by a director that placed the tied closely to the statutory provisions
than exclusive, the Finance Board does interests of the individual director or that authorize the members, and not the
not believe that the list needs to be the director’s institution above the Bank, to nominate persons to stand for
expanded. In a similar fashion, the interests of the Bank likely would election to the boards of the Banks.
Finance Board believes that the violate both of those duties and would Accordingly, the final rule does not
concerns about chief executive officers be sanctioned accordingly. include provisions addressing the issues
being handicapped in their ability to be The Finance Board acknowledges, as raised by those commenters. As the
nominated or elected are not well- suggested by the comments, that the party responsible for conducting the
founded. The rule does not affect the process of assessing the qualifications of assessment, the board also has the
ability of a member to nominate a the board as a whole and identifying the authority to determine what resources,
person of its choosing, and any member needs of a Bank will not by itself result if any, it needs in order to conduct any
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can nominate its own officers or in the election of a more qualified self-assessment. Clearly, Bank
directors. The rule also does not limit board. The objective of the rule, management works for the board of
the right of a member to vote for however, is to provide both the Banks directors and, if so directed by the
whomever it believes to be the best and their members an avenue through board, can undertake tasks to aid the
qualified, regardless of whether that which they may improve the quality of board in doing the self-assessment.

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Federal Register / Vol. 71, No. 137 / Tuesday, July 18, 2006 / Rules and Regulations 40645

B. Information at the Nominations that any member eligible to vote in an that the committee make
Stage—§ 915.6(a)(3) election may nominate persons for that recommendations to members, but
Proposed § 915.6(a)(3) would have election. Consequently, the Finance allow the members to decide whether to
authorized each Bank to send to the Board does not believe such a revision nominate those persons. These
members, as part of the initial notice for to the final rule is necessary and has not commenters would allow the Banks to
nominations, a brief statement of the adopted that suggestion. endorse particular candidates or to
Some commenters suggested that the provide information in the form of a
skills and experience that the Bank’s
final rule prescribe how a Bank must proxy statement that contains
board of directors has identified. The
describe the identified skills and information about the candidates and
final rule adopts the substance of
experience in any communication sent the Bank’s recommendations or
§ 915.6(a)(3) as proposed with clarifying
to the members, while others sought endorsements of specific individuals.
changes to the language used.
revisions to clearly state that only the The Finance Board is not prepared to
Some commenters raised concerns
board of directors can decide what expand the final rule to incorporate the
about providing the members with such
information to include in the initial recommendations made by these
information at the start of the
notice. Because the current regulations commenters. As an initial matter, the
nominations process, including
at 12 CFR 915.6(a) provide that ‘‘a suggestions relating to nominations
concerns that the information might Bank’’ must provide the notice to the committees and proxy statements go
steer nominations to a preferred members, the Finance Board views the beyond the scope of the changes at the
candidate, or that it might cause persons preparation and sending of the notice as heart of the proposed rule, which were
with other qualifications not to be a ministerial function which is subject intended to allow the Banks to provide
nominated, and suggested that the rule to the oversight of a Bank’s board of greater information to members about
explicitly state that a member can directors, which can determine how the needs of the Banks and the
nominate any eligible person without much, or how little, involvement to experience of the prospective directors.
regard to whether that person has the have. Moreover, § 915.3(a) of the They were not intended to alter the
experience identified by the Bank. Finance Board regulations requires the nature of the nominations process,
As to the timing concern, the purpose disinterested directors, or a committee which each of those suggestions would
of the rule is to allow both the Bank and thereof, to provide the oversight with do to some degree. Those suggestions
its members to be better informed about respect to the election of directors. The also raise questions as to the legal limits
the needs of the Bank at the board level Finance Board views this provision as on what type of changes to the
and the qualifications that prospective requiring that the disinterested directors nominations and election process would
nominees might bring to the board. If a carry out the details of providing the be permissible under the Bank Act,
Bank opts to undertake the self- information to the members. Proposed which the Finance Board has not
assessment, the Finance Board believes § 915.6(a)(3) would require that the addressed in the proposed rule.
that it is better for the members to statement of skills be brief and that it be Moreover, since 1989, Finance Board
receive the information at the beginning a statement of the skills identified rules have prohibited Bank personnel
of the election process, before pursuant to § 915.9, which are the skills (other than incumbents acting in their
nominations are due. Accordingly, the identified by the board of directors. personal capacity) from communicating
final rule retains the provision allowing Prescriptive regulation should not be that the Bank endorses specific
the information to be made available to necessary in order to assure that the individuals. In light of that history and
the members prior to the submission of skills identified by the boards of the policy reasons underlying it, the
nominations. directors are indeed described Finance Board declines to go beyond
With respect to the concern about accurately and briefly, if at all, in the authorizing the disclosures set forth in
steering nominations, the Finance Board initial notice to members. the final rule.
does not believe that the risks of that Two commenters requested that the
occurring are significant. As an initial C. Information Accompanying the final rule prevent a Bank from altering
matter, the information provided to the Ballots—§ 915.8(b). the statement that it provides to its
members will relate only to the needs of Proposed § 915.8(b) would have members between the initial
the Bank; it will not be specific to any allowed each Bank to send with the distribution with the nominations
individuals and should not cause any ballots a brief statement of the skills and announcement and the subsequent
member to fail to nominate an experience that the Bank’s board of distribution of the ballots. Those
individual the member believes is an directors has identified as needed on the persons were concerned that in the
appropriate candidate. Moreover, each board. The Finance Board has retained absence of such a provision a Bank
member has a legal right to nominate that provision in the final rule with would be free to change its directorship
any eligible person, without regard to some clarifying changes. needs assessment for the purpose of
whether the person possesses the skills The Finance Board received directing votes to particular candidates.
or experience identified by the Bank. comments similar to those made with In the preamble to the proposed rule,
Having directors who meet the respect to the initial notice under the Finance Board stated that the two
eligibility requirements is a minimum proposed § 915.6(a)(3). The Finance statements are not required to be the
standard, while having directors with Board believes that its response to the same. See 71 FR at 19834.
the skills and experience identified by comments on the initial notice are Although the Finance Board believes
the Banks is a goal to which the Banks equally applicable to the similar that in most situations there would be
would aspire. comments on proposed § 915.8(b). The no reason to change the information
Commenters suggested that the rule Finance Board also received comments from one communication to the next, it
require a Bank to include with the raising other issues, including a request is possible that events could occur after
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statement identifying the needed skills that the final rule authorize the Banks the initial distribution that could cause
and experience a statement that a to form a nominations committee. One the initial communication to no longer
member may nominate any otherwise commenter recommended that the be full, complete, or accurate. For
eligible persons. Existing Finance Board committee be permitted to make example, directors could resign or
rules already include a provision stating nominations, while the other suggested become ineligible to serve between the

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40646 Federal Register / Vol. 71, No. 137 / Tuesday, July 18, 2006 / Rules and Regulations

time of nominations and the election, The Finance Board believes that the responsibility to the individual Banks.
thus creating a need that was not Banks, under the oversight of their Nevertheless, because some commenters
apparent when the Bank distributed the disinterested directors and through the believe that removal of the prohibition
results of the assessment to its members use of resources available to them, have would allow or encourage Finance
at the nominations stage of the process. the capability to obtain information on Board involvement in the election of
If such an event were to occur, the each candidate’s skills and experience directors, the Finance Board has
Finance Board believes that the board of and to prepare a brief statement of such accepted their suggestion that the
directors should be able to provide its skills and experience, should they prohibitions on the conduct of Finance
members with a revised statement of the choose to do so. The intent of the Board directors, officers, attorneys,
most current skills assessment by the proposed and final rule is to afford the employees, and agents not be removed.
board, and the Finance Board is revising Banks the opportunity to provide The final rule revises proposed
the rule accordingly. The Finance Board certain information to the members at § 915.9(c) to make the prohibition
also is revising the final rule to require various stages of the electoral process, applicable to both Bank and Finance
each Bank to explain to its voting but not to require that they do so. Given Board directors, officers, attorneys,
members why any changes to the that the rule is not mandatory, and that employees, and agents.
statement are warranted. the disinterested directors of the Banks
The Finance Board recognizes that, F. Adequate Representation.
already administer the elections, the
for purposes of the elections occurring Finance Board does not believe that it Four commenters, 2 representing
this year, it is likely that the Banks will is necessary for the final rule to impose community banks and 2 representing
not have included the results of a self- the level of detail that these comments credit unions, expressed concern that
assessment with the nominations notice suggest. The Finance Board, therefore, is the proposed rule might adversely affect
previously sent to the members. If any adopting the language in § 915.8(a) the ability of smaller members to have
Bank has conducted a self-assessment substantially as proposed, but is adding an adequate voice on the boards of
prior to the distribution of the ballots, a new sentence to clarify that even directors of the Banks. In general, these
the Finance Board believes that the though other provisions on the ballots commenters expressed a desire that the
Bank and its members should be able to are mandatory, the inclusion of the Finance Board take action that would
benefit from that effort. Accordingly, the candidates’ skills and experience is at enable more ‘‘minority’’ members to be
Finance Board will permit any such the discretion of each Bank’s represented on the boards of directors of
Banks to include the results of their disinterested directors. the Banks, and expressed the view that
assessment with the ballots that it the rule is likely to hinder the ability of
provides to its members. We anticipate E. Finance Board Involvement in the such members to be represented on the
that in subsequent years the Banks that Election Process—§ 915.9(b) and (c) boards.
choose to conduct a self-assessment and Proposed § 915.9 would have As an initial matter, adding
inform their members of that action will reorganized the prohibitions in current provisions to the final rule to address
do so sufficiently in advance of the start § 915.9 and authorized the board of the type of issues raised by these
of the nominations process to allow the directors of a Bank to assess its current commenters, i.e., whether the interests
inclusion of those materials with the and needed skills. Part of this of all members are equally represented
nominations materials as well as with reorganization would delete the on the boards of directors of the Banks,
the ballots. prohibitions in current § 915.9(a)(1), would go well beyond the scope of the
which bar persons associated with the proposed rule. The purpose of the
D. Ballot Information About the Finance Board from being involved in proposed rule was to authorize a
Nominees—§ 915.8(a). the elections process. As explained in process through which the Banks could
Proposed § 915.8(a)(1) would have the preamble to the proposed rule (see take certain actions to provide members
authorized the Banks to include on the 71 FR at 19834), the Finance Board with additional information to allow
ballots a brief description of each believes that these prohibitions are no them to improve the quality of their
nominee’s skills and experience. Like longer necessary, because the Finance boards of directors, if they so choose.
the authorizations in proposed Board no longer administers the The purpose was not to allocate
§§ 915.6(a) and 915.8(b) with respect to elections, as it did when these representation on the boards of the
information that could be included in prohibitions were implemented. Banks to particular segments of the
the initial notice and with the ballots, Several comments expressed concern membership base.
such information would be permitted, that removing the prohibitions would Moreover, the Finance Board is not
but is not required to be on the ballots. allow the Finance Board to become persuaded that the proposed rule, in
Several commenters suggested more involved in the election process. and of itself, will have the effect
revisions to the provisions addressing Other commenters expressed a similar perceived by those commenters, who
the information that may be provided on concern that removal of the prohibition have not offered any factual basis to
the ballots. Some suggested that the reflected a desire by the Finance Board support their concerns. The board
final rule prescribe how such to become more involved in the election structure of the Banks is set by statute,
information would be obtained and process. On the other hand, another as are the voting rights of the members,
displayed on the ballots; others commenter suggested that the Finance which in certain respects already favor
suggested that only the board of Board remove all the prohibitions that the smaller members. For example, the
directors be permitted to decide how to limit the ability of other persons and Bank Act limits the number of votes that
describe a nominee’s skills and entities to become involved in the each member may cast in an election to
experience, while others would allow elections process. the average number of shares of stock
each nominee to describe his or her As noted above, the prohibition on required to be held by all members
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skills and experience. Three involvement by Finance Board located in that state. 12 U.S.C. 1227(b).
commenters opposed any such personnel in the elections process The effect of that provision is to
statement on the ballots, believing that ceased to have any significant effect on disenfranchise the largest members of a
it could not be done in a purely neutral the administration of elections when the Bank; to the extent that they own shares
fashion. Finance Board devolved that in excess of the average, those shares

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Federal Register / Vol. 71, No. 137 / Tuesday, July 18, 2006 / Rules and Regulations 40647

have no voting rights. Smaller members a significant economic impact on a member each nominee serves, the
are not affected by that limitation. While substantial number of small entities. nominee’s title or position with the
it may be true that at some Banks certain member, and the number of elective
List of Subjects in 12 CFR Part 915
segments of the membership base do not directorships to be filled by members in
have representatives from their industry Banks, Banking, Conflict of interests, that voting state in the election;
on the boards of the Banks, that result Elections, Federal home loan banks, (ii) A statement that write-in
reflects the fact that the Banks are Reporting and recordkeeping candidates are not permitted; and
cooperatives and operate with a board requirements. (iii) A confidentiality statement
structure and voting rights that have ■ For the reasons stated in the preamble, prohibiting the Banks from disclosing
been set by statute. If, as the Finance the Finance Board hereby amends 12 how a member voted.
Board hopes, the final rule will facilitate CFR part 915, as follows: (2) At the election of the Bank, a
a process wherein the members can ballot also may include, in the body or
nominate and vote for candidates who PART 915—BANK DIRECTOR as an attachment, a brief description of
possess skills and experience needed by ELIGIBILITY, APPOINTMENT AND the skills and experience of each
the Bank to carry out its housing finance ELECTIONS individual nominee.
mission in a safe and sound manner, (b) Statement on skills and
then the interests of all members should ■ 1. The authority citation for part 915 experience. If a Bank has conducted an
benefit. continues to read as follows: annual assessment permitted by § 915.9
Authority: 12 U.S.C. 1422a(a)(3), 1422b(a), and has included the results of the
III. Effective Date 1426, 1427, and 1432. assessment as part of the notice to
Pursuant to 5 U.S.C. 553(d)(3), the members required by § 915.6(a), it may
Finance Board has found that ‘‘good ■ 2. Amend § 915.6, by redesignating
paragraphs (a)(3) and (a)(4) as include with each ballot a statement
cause’’ exists to have the final rule take regarding the types of skills and
effect immediately upon publication in paragraphs (a)(4) and (a)(5),
respectively, adding a new paragraph experience the Bank has determined are
the Federal Register. First, the rule most likely to add strength to the board
requires no mandatory actions on the (a)(3), and revising redesignated
paragraph (a)(4) to read as follows: of directors. If the statement differs from
part of the Banks. The rule authorizes the statement provided under
the Banks to take actions during the § 915.6 Elective director nominations. § 915.6(a)(3), the Bank also shall include
election process, but it does not require (a) * * * an explanation of why the statements
that those actions be taken. Thus, no (3) A brief statement describing the differ.
Banks are required to take any steps to skills and experience the Bank believes * * * * *
prepare for the effective date of the final are most likely to add strength to the
rule. ■ 4. Revise § 915.9 to read as follows:
board of directors, provided that the
Second, now is the time when most Bank previously has conducted the § 915.9 Actions affecting director
Banks begin their yearly election annual assessment permitted by § 915.9 elections.
process. Some Banks already may have and the Bank has elected to provide the (a) Banks. Each Bank, acting through
started the process by sending their first results of the assessment to the its board of directors, may conduct an
notice to the members. Having an members; annual assessment of the skills and
effective date immediately upon (4) An attachment indicating the experience possessed by the members of
publication in the Federal Register will name, location, and FHFB ID number of its board of directors as a whole and
give the Banks more of an opportunity every member in the member’s voting may determine whether the capabilities
to use the provisions of the final rule in state, and the number of votes each such of the board would be enhanced through
this year’s election process than they member may cast for each directorship the addition of persons with particular
otherwise would have. to be filled in the election, as
Third, § 915.9(b) and (c) removes skills and experience. If the board of
determined in accordance with § 915.5; directors determines that the Bank
prohibitions on certain conduct. This
and could benefit by the addition to the
rule will not require any preparation
efforts on the part of the Banks in order * * * * * board of directors of persons with
to adjust to the rule being in effect. ■ 3. Amend § 915.8, by revising particular qualifications, such as in
paragraph (a), redesignating paragraphs financial management, accounting,
IV. Paperwork Reduction Act (b), (c), (d), and (e) as paragraphs (c), (d), hedging, risk management, capital
The final rule will have no (e), and (f), respectively, and adding a markets, securities laws, or housing
substantive effect on any collection of new paragraph (b) to read as follows: finance, it may identify those
information covered by the Paperwork qualifications and so inform the
Reduction Act of 1995 (PRA). See 44 § 915.8 Election process. members as part of the announcement of
U.S.C. 3501 et seq. Therefore, the (a) Ballots. Promptly after verifying elections.
Finance Board has not submitted this the eligibility of all nominees in (b) Incumbent Bank directors. A Bank
rule to the Office of Management and accordance with § 915.7(a), a Bank shall director acting in his or her personal
Budget for review. prepare a ballot for each voting State for capacity may support the nomination or
which an elective directorship is to be election of any person for an elective
V. Regulatory Flexibility Act filled and shall mail the ballot to all directorship, provided that no such
The final rule will apply only to the members within that State that were director may purport to represent the
Banks, which do not come within the members as of the record date. views of the Bank or its board of
meaning of ‘‘small entities’’ as defined (1) A ballot shall include at least the directors in doing so.
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in the Regulatory Flexibility Act (RFA). following provisions: (c) Prohibition. Except as provided in
See 5 U.S.C. 601(6). Thus, in accordance (i) An alphabetical listing of the paragraphs (a) and (b) of this section, no
with section 605(b) of the RFA, 5 U.S.C. names of each nominee for the director, officer, attorney, employee, or
605(b), the Finance Board hereby member’s voting state, the name, agent of a Bank or the Finance Board
certifies that the final rule will not have location, and FHFB ID number of the may:

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40648 Federal Register / Vol. 71, No. 137 / Tuesday, July 18, 2006 / Rules and Regulations

(1) Communicate in any manner that ADDRESSES: You must mail two copies addressed, stamped postcard on which
a director, officer, attorney, employee, of your comments to: Federal Aviation the docket number appears. We will
or agent of a Bank, directly or indirectly, Administration, Transport Airplane stamp the date on the postcard and mail
supports the nomination or election of Directorate, Attn: Rules Docket (ANM– it back to you.
a particular person for an elective 113), Docket No. NM349, 1601 Lind
Background
directorship; or Avenue, SW., Renton, Washington
(2) Take any other action to influence 98055–4056. You may deliver two On August 18, 2004, Dassault
votes for a directorship. copies to the Transport Airplane Aviation applied for an amendment to
Directorate at the above address. You the type design for the installation and
§ 915.16 [Amended] operation of an infrared enhanced flight
must mark your comments: Docket No.
■ 5. Amend the last sentence of NM349. Comments may be inspected in visibility system (EFVS) on Model
§ 915.16(e) by revising the reference the Rules Docket weekdays, except Falcon 900EX airplanes with
‘‘§ 915.8(e)’’ to read ‘‘§ 915.8(f)’’. Federal holidays, between 7:30 a.m. and modification M3083 installed, and
4 p.m. Model Falcon 2000EX airplanes with
§ 915.17 [Amended] modification M1691 installed.
FOR FURTHER INFORMATION CONTACT: Dale
■ 6. Amend the last sentence of Commercially, these airplanes are
Dunford, FAA, Transport Standards
§ 915.17(b)(1) by revising the reference identified as the Falcon 900EX EASy
Staff, ANM–111, Transport Airplane
‘‘§ 915.8(b)’’ to read ‘‘§ 915.8(c)’’. and the Falcon 2000EX EASy. In this
Directorate, Aircraft Certification
document, all references to Falcon
Dated: July 12, 2006. Service, 1601 Lind Avenue, SW.,
900EX EASy and Falcon 2000EX EASy
By the Board of Directors of the Federal Renton, Washington 98055–4056;
airplanes mean airplanes with the
Housing Finance Board. telephone (425) 227–2239; fax (425)
applicable modification installed. The
Ronald A. Rosenfeld, 227–1320; e-mail:
original type certificate for the Model
Chairman. dale.dunford@faa.gov.
Falcon 900EX airplane is A46EU,
[FR Doc. E6–11306 Filed 7–17–06; 8:45 am] SUPPLEMENTARY INFORMATION: The FAA revision 13, dated February 27, 2006.
BILLING CODE 6725–01–P has determined that the substance of The original type certificate for the
these special conditions has previously Model Falcon 2000EX airplane is
been subject to the public comment A50NM revision 3, dated September 21,
DEPARTMENT OF TRANSPORTATION process. These particular special 2004.
conditions were recently issued and The Dassault Aviation Model Falcon
Federal Aviation Administration only three non-substantive comments 900EX and Falcon 2000EX are transport
were received during the public category airplanes that operate with a
14 CFR Part 25 comment period. The FAA therefore crew of two. The Model Falcon 900EX
finds that good cause exists for making has a wing span of 63 feet 5 inches, a
[Docket No. NM349; Special Conditions No.
25–319–SC] these special conditions effective upon length of 66 feet 4 inches, a maximum
issuance. takeoff gross weight of 48,300 pounds,
Special Conditions: Dassault Aviation is powered by three Allied Signal
Comments Invited Engines TFE 731–60–1C turbofan
Model Falcon 900EX and Falcon
2000EX Airplanes; Enhanced Flight We invite interested people to take engines, and has a maximum range of
Visibility System (EFVS) part in this rulemaking by sending 4,500 nautical miles. The Model Falcon
written comments, data, or views. The 2000EX airplane has a wing span of 63
AGENCY: Federal Aviation most helpful comments reference a feet 5 inches, a length of 66 feet 4
Administration (FAA), DOT. specific portion of the special inches, a maximum takeoff gross weight
ACTION: Final special conditions; request conditions, explain the reason for any of 41,300 pounds, is powered by two
for comments. recommended change, and include Pratt & Whitney Canada Model PW308C
supporting data. We ask that you send turbofan engines, and has a maximum
SUMMARY: These special conditions are us two copies of written comments. range of 3,800 nautical miles.
issued for certain Dassault Aviation We will file in the docket all The electronic infrared image
Model Falcon 900EX and Falcon comments we receive, as well as a displayed between the pilot and the
2000EX airplanes. These airplanes will report summarizing each substantive forward windshield represents a novel
have an advanced enhanced flight public contact with FAA personnel or unusual design feature in the context
visibility system (EFVS). The EFVS is a about these special conditions. You can of 14 CFR 25.773. Section 25.773 was
novel or unusual design feature which inspect the docket before and after the not written in anticipation of such
consists of a head up display (HUD) comment closing date. If you wish to technology. The electronic image has
system modified to display forward- review the docket in person, go to the the potential to enhance the pilot’s
looking infrared (FLIR) imagery. The address in the ADDRESSES section of this awareness of the terrain, hazards and
applicable airworthiness regulations do preamble between 9 a.m. and 5 p.m., airport features. At the same time, the
not contain adequate or appropriate Monday through Friday, except Federal image may partially obscure the pilot’s
safety standards for this design feature. holidays. direct outside compartment view.
These special conditions contain the We will consider all comments we Therefore, the FAA needs adequate
additional safety standards that the receive by the closing date for safety standards to evaluate the EFVS to
Administrator considers necessary to comments. We will consider comments determine that the imagery provides the
establish a level of safety equivalent to filed late if it is possible to do so intended visual enhancements without
that established by the existing without incurring expense or delay. We undue interference with the pilot’s
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airworthiness standards. may change these special conditions outside compartment view. The FAA
DATES: The effective date of these based on the comments we receive. intent is that the pilot will be able to use
special conditions is July 7, 2006. We If you want us to let you know we a combination of the information seen
must receive your comments by received your comments on these in the image and the natural view of the
September 1, 2006. special conditions, send us a pre- outside scene seen through the image, as

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