[Federal Register: November 8, 2005 (Volume 70, Number 215)]
[Rules and Regulations]
[Page 67641-67644]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08no05-1]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
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The Code of Federal Regulations is sold by the Superintendent of Documents.
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[[Page 67641]]
FEDERAL RESERVE SYSTEM
12 CFR Part 268
[Docket No. OP-1239]
Rules Regarding Equal Opportunity
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Interim rule with request for comments.
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SUMMARY: The Board of Governors of the Federal Reserve System (the
Board) is soliciting comments on an interim rule that would amend the
section of its Rules Regarding Equal Opportunity (EEO Rules) which
governs the employment of persons who are not United States citizens
consistent with the Board's requirements for the security of its
information. The amendments would clarify the limitations on access to
sensitive information for non-citizen employees.
The amendment, which concerns the internal management of the Board,
is issued as an immediately effective interim rule, with opportunity
for public comment, to ensure that hiring decisions facing the Board
can be made as soon as possible.
DATES: This interim rule is effective November 8, 2005.
Applicability Date: This interim rule is applicable to all
decisions on access to Sensitive Information of the Board as of
November 8, 2005.
Comment Date: Submit comments on or before January 9, 2006.
ADDRESSES: You may submit comments, identified by Docket No. OP-1239,
by any of the following methods:
Agency Web site: http://www.federalreserve.gov Follow the instructions for submitting comments at http://www.federalreserve.gov/.
.
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
E-mail: regs.comments@federalreserve.gov. Include docket
number in the subject line of the message.
FAX: 202/452-3819 or 202/452-3102.
Mail: Jennifer J. Johnson, Secretary, Board of Governors
of the Federal Reserve System, 20th Street and Constitution Avenue,
NW., Washington, DC 20551.
All public comments are available from the Board's web site at
http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted,
except as necessary for technical reasons. Accordingly, your comments
will not be edited to remove any identifying or contact information.
Public comments may also be viewed electronically or in paper in Room
MP-500 of the Board's Martin Building (20th and C Streets, NW.) between
9 a.m. and 5 p.m. on weekdays.
FOR FURTHER INFORMATION CONTACT: Alicia S. Foster, Senior Counsel (202-
452-5289), Legal Division, Board of Governors of the Federal Reserve
System, 20th Street and Constitution Avenue N.W., Washington, D.C.,
20551. For users of Telecommunications Device for the Deaf (``TDD'')
only, contact 202/263-4869.
SUPPLEMENTARY INFORMATION:
The Board proposes to amend Sec. 268.205 of its Rules Regarding
Equal Opportunity (12 CFR 268.205), governing the employment of persons
who are not United States citizens in accordance with the Board's
security requirements. The amendments are effective immediately,
subject to revision based on public comment.
Currently, Sec. 268.205 permits the employment of non-citizens in
positions that do not require access to sensitive information, subject
to a preference for citizens over equally qualified non-citizens.
Positions that require access to sensitive information currently are
reserved for United States citizens or ``intending citizens'' (that is,
non-citizens seeking U.S. citizenship). Under the existing Sec.
268.205, ``sensitive information'' is defined to mean--(1) Information
of the Federal Open Market Committee (FOMC); (2) national security
classified information; and (3) confidential supervisory information of
the Board.
The framers of the Federal Reserve Act made special provision for
the Board to be free to hire staff independent of other provisions of
law governing the federal government service in order to ensure that
the Board is able to hire the highest possible quality of staff to
obtain the ``special talent'' it needs to carry out its important
responsibilities. See, comments of Senators Owen and Reed, 51 Cong.
Rec. 1138, 1141 (1913). In recent years, the Board, like employers
throughout the United States, has been having greater difficulty
identifying qualified United States citizens, nationals, or ``intending
citizens'' as candidates for positions in a number of important job
families. In particular, the percentage of Ph.D economists graduating
from U.S. universities who are citizens or permanent residents has
declined steadily from 73 percent in 1980, to 54 percent in 1990, to 43
percent in 2001. In order to perform its statutory duties to implement
monetary policy and serve as the lender of last resort (as well as its
other statutory responsibilities), the Board must hire a significant
number of Ph.D economists. The shrinking pool of graduates with Ph.D.'s
in economics and other needed skills who are U.S. citizens, nationals,
or ``intending citizens'' has prompted the Board to reconsider its
hiring policies.
To address the diminishing number of available graduates with Ph.Ds
in economics and other needed skills who are U.S. citizens, the Board
proposes to revise its policy regarding hiring for positions that
require access to sensitive information. This will allow the Board to
hire qualified non-citizens in certain positions of importance to the
Board's duties and for which a growing proportion of qualified
candidates in the applicant pool are non-citizens. Currently, the Board
does not hire individuals who are non-citizens into positions that
require access to certain types of sensitive information unless the
non-citizen intends to obtain and does, in fact, seek U.S. citizenship.
The Board proposes to amend its rule to allow it to hire non-citizens
without intention of becoming U.S. citizens into positions that require
access to sensitive FOMC information in certain circumstances. The
Board does not propose to change its policy governing access to
national security information or confidential supervisory information.
Moreover, while the Board's rule governs hiring,
[[Page 67642]]
access to FOMC information is ultimately limited by the rules of the
FOMC.
The interim rule would retain the Board's preference for U.S.
citizens and U.S. nationals over equally qualified non-citizens. Under
both the current and interim rule, U.S. citizens, U.S. nationals, and
intending citizens \1\ (all of whom are now referred to as ``Protected
Individuals'') may be hired into a position requiring access to
sensitive information. The interim rule focuses only on non-citizens
who do not intend to obtain U.S. citizenship and, in particular, on the
hiring of these non-citizens into positions requiring access to FOMC
information.
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\1\ An intending citizen is an individual who is a lawfully
admitted permanent resident alien, refugee, or asylum grantee and
who has evidenced an intention to become a U.S. citizen.
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For purposes of hiring individuals into positions that require
access to FOMC information, the interim rule would distinguish between
non-citizens from a country on the Country List contained in the annual
federal appropriations laws specifying countries, including a general
category of ``countries allied with the United States in a current
defense effort,'' whose citizens are eligible to be hired as federal
employees using appropriated funds and non-citizens from a country that
is not on the Country List.\2\ Because the Board's funds are not
appropriated, the Board is not subject to this limitation on hiring.
However, Congress periodically affirms that other government agencies
may use appropriated funds to hire non-citizens from countries on the
Country List. The rule uses the term ``Country List'' as a common point
of reference.
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\2\ The appropriations ban that contains the Country List is
codified at 5 U.S.C. 3101 note. Which countries are considered to be
``allied with the U.S. in a current defense effort,'' is a decision
made by the Department of State, Office of the Assistant Legal
Adviser for Treaty Affairs.
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Under the interim rule, the Board may hire into a position that
requires access to Class III or Class II FOMC information a non-citizen
who does not intend to obtain U.S. citizenship and who is from a
country that is on the Country List.\3\ In addition, if he or she meets
three conditions set forth in the rule, that person may be granted
access to Class I FOMC information. Those conditions are: (1) The
employee's Division Director recommends the employee be given access to
Class I FOMC information; (2) the employee has resided in the United
States for at least six years and has been employed for at least two
years with the Board and/or with one or more of the Reserve Banks; and
(3) the employee has passed a background investigation acceptable to
the Board. If the Country List changes so that the employee's country
is no longer on the Country List, the employee's access to Class II
FOMC information would not be affected by the change in the Country
List. Similarly, the employee would continue to be eligible for access
to Class I information and may be granted such access if he or she
meets the remaining conditions outlined above for employees from a
country on the Country List.
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\3\ FOMC information is classified as Class III, II, and I
information, in increasing order of sensitivity.
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Under the interim rule, the Board may hire into a position that
requires access to Class III FOMC information a person who is a non-
citizen without intention of becoming a U.S. citizen and who is from a
country that is not on the Country List. Upon meeting the three
conditions discussed above, a non-citizen from such a country may also
be granted access to Class II information. However, the Board would not
provide access to Class I information to a non-citizen from a country
that is not on the Country List.
The interim rule does not change access by a non-citizen to
confidential supervisory information or classified information. As
result, the existing limitations on who may have access to this
information would be continued.
Beyond the changes discussed above, the interim rule includes a
more comprehensive definition of ``FOMC information'' that contains a
description of the three internal security designations that apply to
this information. The interim rule also replaces the citation to
Executive Order 11356 with the citation to Executive Order 12958
entitled, ``Classified National Security Information,'' as this
executive order, and its amendments, control what information is
considered classified. The definition of ``confidential supervisory
information'' remains unchanged.
The interim rule also separately addresses what access is
applicable to each of the three types of sensitive information, i.e.,
FOMC information, classified information, and confidential supervisory
information. For example, as discussed above, the interim rule provides
new parameters for access that are applicable only to FOMC information.
The rule would also change the present language on access to classified
information to provide that access is determined by the applicable
executive orders and amendments. This more general reference
incorporates the current rule's exception for hiring a non-citizen for
a position requiring access to classified information if he or she is
able to obtain a security clearance. Further, with respect to
confidential supervisory information, the interim rule would specify
that access to this information is limited to Protected Individuals
(formerly citizens, nationals and intending citizens) with a need to
know employed by the Board or by a Federal Reserve Bank.
The interim rule would also update some of the terminology used in
the current rule. In this respect, the interim rule would substitute
the term ``Protected Individual'' for ``U.S. citizens and intending
citizens.'' The term ``Protected Individual'' covers U.S. citizens,
U.S. nationals, and aliens meeting the requirements of 8 U.S.C.
1324(a)(3)(B) who have filed a declaration of intention to become a
citizen of the United States. This more inclusive term is consistent
with existing immigration law, which no longer uses the term
``intending citizen'' but uses instead the term ``Protected
Individual.''
Further, where the current rule refers only to ``U.S. citizens,''
the interim rule would add the term ``national'' to make clear that
both U.S. citizens and U.S. nationals are, in fact, similarly treated.
The term ``national'' refers to certain individuals who are not
citizens of the U.S. and typically are born in or are descendants of
individuals in the outlying possessions of the U.S. Thus, the interim
rule provides that the hiring preference is a preference for U.S.
citizens and U.S. nationals over equally qualified non-citizens.
The Board also proposes to add a definition of ``employee'' to
clarify the coverage of the rule and a definition of ``national.'' The
interim rule includes a revised definition of ``non-citizen'' that more
accurately reflects its meaning.
This rule relates solely to matters of agency management or
personnel, and, therefore, is not subject to the public notice and
comment provisions of the Administrative Procedures Act, 5 U.S.C.
553(a)(2). However, the Board has in the past found public comment on
this matter to be helpful and invites comment on this rule. While
allowing comment, the Board has determined that it is unnecessary, and
would be impracticable, to defer the effective date of this action
until after notice and after public comments have been received and
considered (5 U.S.C. 553(d)(3)). Issuance of this rule as an interim
rule is appropriate, in any event, because the rule concerns only the
internal management and personnel of the Board and is not subject to
statutory delay. In addition, the Board is facing immediate hiring
decisions that would be subject to this rule. The Board believes that
[[Page 67643]]
issuance of the regulation as an interim rule is necessary for the
Board to conduct its internal management in an expeditious and
efficient manner. The Board will consider all public comments received
and make changes in its procedures based on those comments where
appropriate. On these bases, the Board has determined that good cause
exists to make this action effective immediately. As this rule concerns
only agency management or personnel, it is not a rule subject to the
Congressional Review Act (CRA), 5 U.S.C. 804(3)(B), and therefore an
analysis under the CRA is not required.
Regulatory Flexibility Act Analysis
Pursuant to section 605(b) of the Regulatory Flexibility Act (Pub.
L. 96-354, 5 U.S.C. 601 et seq.), the Board believes that this rule
will not have a significant economic impact on a substantial number of
small entities. This rule governs the Board's dealings with its
employees and applicants for employment, and would not affect small
entities as defined for purposes of the Regulatory Flexibility Act.
Accordingly, a regulatory flexibility analysis is not required.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
ch. 3506; 5 CFR 1320 Appendix A.1), the Board reviewed the proposal
under the authority delegated to the Board by the Office of Management
and Budget. No collections of information pursuant to the Paperwork
Reduction Act are contained in this proposal.
Plain Language
Section 722 of the Gramm-Leach-Bliley Act requires each federal
banking agency to use plain language in all rules published after
January 1, 2000. In light of this requirement, the Board has sought to
present the interim rule in a simple and straightforward manner. The
Board invites comment on whether the Board could take additional steps
to make the rule easier to understand.
List of Subjects in 12 CFR Part 268
Administrative practice and procedure, Aged, Civil rights, Equal
employment opportunity, Federal buildings and facilities, Federal
Reserve System, Government employees, Individuals with disabilities,
Religious discrimination, Sex discrimination, Wages.
Authority and Issuance
0
For the reasons set out in the preamble, the Board amends 12 CFR part
268 as follows:
PART 268--RULES REGARDING EQUAL OPPORTUNITY
0
1. The authority citation for part 268 continues to read as follows:
Authority: 12 U.S.C. 244 and 248 (i), (k), and (l).
0
2. Revise 268.205 to read as follows
Sec. 268.205 Employment of aliens; Access to sensitive information
(a) Definitions. The definitions contained in this paragraph (a)
apply only to this section:
(1) Classified Information means information that is classified for
national security purposes under Executive Order No. 12958, entitled
``Classified National Security Information,'' including any amendments
or superseding orders that the President of the United States may issue
from time to time.
(2) Confidential Supervisory Information means confidential
supervisory information of the Board, as defined in 12 CFR 261.2(c).
(3) Country List refers to the list contained in the annual federal
appropriations laws of specific countries, including a general category
of ``countries allied with the United States in a current defense
effort,'' and the particular Non-Citizens from those countries who are
eligible to be hired as Federal employees in the excepted service or in
the senior executive service and be paid by appropriated funds. The
appropriation ban is codified at 5 U.S.C. 3101 note. The list of
eligible countries and Non-Citizens is subject to legislative and other
change.
(4) Employee means an individual who works full-time or part-time
and is appointed into Board service for a period of more than 90 days.
The term ``employee'' does not include members of the Board.
(5) FOMC Information means confidential information of the Federal
Open Market Committee (FOMC) regardless of the form or format in which
it is created, conveyed, or maintained. FOMC information includes
information derived from confidential FOMC materials. Three internal
security designations, which are subject to change by the FOMC, apply
to FOMC Information as follows:
(i) Class I FOMC generally applies to materials containing
policymaker input, such as that related to monetary policy decisions at
meetings, views expressed by policy makers on future policy, and
identification of meeting participants who express particular views.
Examples of Class I FOMC Information include, but are not limited to,
the ``Bluebook,'' drafts of meeting minutes, unreleased meeting
transcripts, documents reflecting the preparation of semi-annual
forecasts and related testimony, and certain sensitive internal
memorandums and reports.
(ii) Class II FOMC covers information that is less sensitive than
Class I FOMC. This designation generally applies to staff forecasts
prepared for the FOMC and to information about open market operations.
Examples of Class II FOMC Information include, but are not limited to,
Part I of the ``Greenbook,'' reports of the Manager on domestic and
foreign open market operations, and other materials on economic and
financial developments.
(iii) Class III FOMC covers information that is less sensitive than
either Class II or Class I. This designation generally applies to
background information supporting policy discussions and includes, but
is not limited to, Part II of the Greenbook.
(6) National refers to any individual who meets the requirements
described in 8 U.S.C. 1408.
(7) Non-Citizen refers to any individual who is not a citizen (by
birth or naturalization) of the United States.
(8) Protected Individual means--
(i) A citizen or National of the United States, or
(ii) An alien who:
(A) Meets the conditions set forth in 8 U.S.C. 1324b(a)(3)(B), as
amended, and
(B) Has filed with the Board or the appropriate Federal Reserve
Bank a declaration of intention to become a citizen of the United
States.
(9) Sensitive Information means FOMC Information; Classified
Information; and Confidential Supervisory Information.
(b) Hiring.
(1) Prohibition against hiring unauthorized aliens. An individual
is eligible for employment with the Board only if he or she satisfies
the requirements of Section 101 of the Immigration Reform and Control
Act of 1986, 8 U.S.C. 1324a.
(2) Preference. Consistent with applicable law, where two
applicants for employment at the Board are equally qualified for a
position, the Board shall prefer the citizen or National of the United
States over the equally qualified Non-Citizen.
(3) Protected Individuals access to Sensitive Information. The
Board may hire a person to a position that requires access to Sensitive
Information if the person is a Protected Individual.
(4) Non-Citizens access to Sensitive Information. The Board shall
not hire a Non-Citizen, other than a Protected
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Individual, into a position that requires access to Sensitive
Information except in accordance with paragraph (c) below.
(c) Access to Sensitive Information.
(1) Generally. The Board will grant access to Sensitive Information
only in accordance with the Board's rules and policies regarding access
to Sensitive Information and, if applicable, the rules and policies of
the FOMC.
(2) FOMC Information.
(i) Access by a Non-Citizen from a country on the Country List. An
Employee, other than a Protected Individual, who is a Non-Citizen from
a country that is on the Country List on the date the Employee begins
employment with the Federal Reserve System shall be granted access to
Class I FOMC Information only upon the recommendation of the Employee's
Division Director after six years of residence in the United States, at
least two of which include satisfactory employment by the Board and/or
one or more of the Federal Reserve Banks, and a background
investigation acceptable to the Board. If the Employee's country is
deleted from the Country List after the date the Employee begins
employment with the Federal Reserve System, the Employee's access to
Class II FOMC information will not be affected by the change in the
Country List. Similarly, the Employee would continue to be eligible for
access to Class I information and may be granted such access if he or
she meets the remaining conditions outlined above for employees from a
country on the Country List.
(ii) Access by a Non-Citizen from a country not on the Country
List. An Employee, other than a Protected Individual, who, on the date
the Employee begins employment with the Federal Reserve System, is a
Non-Citizen from a country that is not on the Country List: (A) Shall
not be granted access to Class I FOMC Information, and (B) shall be
granted access to Class II FOMC Information only upon the
recommendation of the Employee's Division Director after six years of
residence in the United States, at least two of which include
satisfactory employment by the Board and/or one or more of the Federal
Reserve Banks, and a background investigation acceptable to the Board.
(3) Classified Information. Access to Classified Information is
limited to those persons who are permitted access to Classified
Information pursuant to the applicable executive orders and any
subsequent amendments or superseding orders that the President of the
United States may issue from time to time.
(4) Confidential Supervisory Information. Access to Confidential
Supervisory Information is limited to Protected Individuals with a need
to know employed by the Board or by a Federal Reserve Bank.
By order of the Board of Governors of the Federal Reserve
System.
Dated: November 2, 2005.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 05-22223 Filed 11-7-05; 8:45 am]
BILLING CODE 6210-01-P