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Code · REGISTER · 2006-07-21 · Office of Governmentwide Policy, General Services Administration (GSA) · Rules and Regulations

Rules and Regulations. Final rule

39,582 words·~180 min read·/register/2006/07/21/06-6330

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

BILLING CODE 4510-29-P GENERAL SERVICES ADMINISTRATION 41 CFR Parts 101-48 and 102-41 [FPMR Amendment 2006-05; FPMR Case 2004-101-1; FMR Case 2004-102-2] RIN 3090-AH11 Federal Property Management Regulations; Disposition of Seized, Forfeited, Voluntarily Abandoned, and Unclaimed Personal Property AGENCY: Office of Governmentwide Policy, General Services Administration (GSA). ACTION: Final rule. SUMMARY: The General Services Administration
(GSA)is amending the Federal Property Management Regulations
(FPMR)by revising coverage on utilization, donation, or disposal of abandoned and forfeited personal property and moving it into the Federal Management Regulation (FMR). A cross-reference is added to the FPMR to direct readers to the coverage in the FMR. The FMR is written in plain language to provide agencies with updated regulatory material that is easy to read and understand. DATES: *Effective Date:* July 21, 2006. FOR FURTHER INFORMATION CONTACT: The Regulatory Secretariat, Room 4035, GS Building, Washington, DC 20405, at
(202)501-4755 for information pertaining to status or publication schedules. For clarification of content, contact Mr. Robert A. Holcombe, Office of Governmentwide Policy, Office of Travel, Transportation, and Asset Management (MT), at
(202)501-3828, or Internet e-mail at *robert.holcombe@gsa.gov* . Please cite FPMR Amendment 2006-05, FPMR case 2004-101-1, FMR case 2004-102-2. SUPPLEMENTARY INFORMATION: A. Background This final rule updates, streamlines, and clarifies FPMR part 101-48 and moves the part into the Federal Management Regulation (FMR). The final rule is written in a plain language question and answer format. This style uses an active voice, shorter sentences, and pronouns. A question and its answer combine to establish a rule. The employee and the agency must follow the language contained in both the question and its answer. A proposed rule was published in the **Federal Register** (70 FR 15792, March 29, 2005). The only activity providing comments was the General Services Administration's Federal Supply Service (FSS). The FSS had 15 comments that are summarized, along with our responses, below: 1. *Title of part 102-41.* Comment to confirm that the title correctly uses the term “disposition,” as the title to FPMR part 101-48 uses the word “disposal”. *Response:* Agreed. The term “disposition” includes disposal and more accurately portrays the scope of the discussion of this part. *2. Section 102-41.5.* Comment that “disposition” should be used instead of “disposal” to be consistent with the title of this part. *Response:* Agreed. This change was made. 3. *Section 102-41.5.* Comment that the text should make clear that GSA does not normally accept responsibility for the disposal of overseas excess property. *Response:* Agreed. Clarifying text has been added. 4. *Section 102-41.20.* Comment that the term “beer” is defined in this part, whereas “malted beverage” was defined in FPMR part 101-48. *Response:* No change. The term “malted beverage” does not appear in this part, and does not need to be defined. 5. *Section 102-41.20.* Comment that the definition for “unclaimed property” should include the provision that the owner may file a claim for up to three years. *Response:* No change. The definition for “unclaimed property” does not need to include this provision. This aspect of the property is discussed in section 102-41.180. 6. *Section 102-41.20.* Comment that the definition for “voluntarily abandoned property” should specify that evidence of voluntary abandonment can be either in writing or circumstantial. *Response:* Agreed. This change has been made. 7. *Section 102-41.30(a).* Comment that the reference to “GSA regional office” be changed to “GSA Region3/NCR” as Region 3/NCR has primary responsibility to file appropriate applications with the Federal district court. *Response:* Agreed. This change has been made. 8. *Section 102-41.30(b)(4).* Comment that this provision should specify the possibility of abandoning or destroying the property, not just destruction. *Response:* Agreed. This change has been made. 9. *Section 102-41.35.* Comment that individual agencies may have their own legislative authorities that may not require these agencies to report personal property to GSA as excess. *Response:* Agreed. A general statement was added that allowed for special authorities outside 40 U.S.C. 10. *Section 102-41.75.* Comment about GSA's ability to retain sales proceeds. *Response:* No change. If an agency has specific legislative authority to retain proceeds from the sale of forfeited property, the agency may retain sales proceeds. This is addressed in the provision. 11. *Section 102-41.80.* Comment regarding “voluntarily abandoned property” and that evidence relating to the abandonment of this property may not always be formally documented. *Response:* Agreed. The definition of “voluntarily abandoned property” has been changed to take into account that evidence of voluntary abandonment can be circumstantial. 12. *Section 102-41.105.* Comment regarding the inclusion of a provision for “abandonment or destruction.” *Response:* Agreed. This provision has been added. 13. *Section 102-41.115.* Comment regarding GSA's ability to retain sales proceeds upon the sale of “voluntarily abandoned property.” *Response:* No change. Similar to the comment and response to comment number 10, an agency that has specific statutory authority to retain proceeds may retain proceeds. 14. *Section 102-41.130(b).* Comment regarding the disposition of unclaimed property and how the owner filing a claim would obtain a reimbursement. *Response:* No change. The provisions of these subparts relating to the disposition of unclaimed property provide for the finding agency to obtain reimbursement for the transfer of this property or set aside sales proceeds to reimburse the owner filing a claim within 3 years. The finding agency is responsible to pay the reimbursement to the owner filing a claim. 15. *Section 102-41.180.* Comment regarding GSA's ability to retain sales proceeds from the sale of unclaimed property on behalf of the finding agency. *Response:* No change. The finding agency must deposit proceeds from the sale of unclaimed personal property in a special account for three years pending a possible claim by the owner. After three years, the ability of an agency to retain the proceeds depends on whether an agency has specific legislative authority to do so. Otherwise, if an agency does not have specific legislative authority, the proceeds are deposited as miscellaneous receipts in the U.S. Treasury. During the final review process with the Office of Management and Budget, additional clarifications were made regarding the use or disposal of voluntarily abandoned personal property and unclaimed personal property. Provisions are added to allow the agency to abandon or destroy property of low value if there is no anticipated use for the property in order to save storage and handling costs. B. Executive Order 12866 GSA has determined that this proposed rule is not a significant regulatory action for the purposes of Executive Order 12866 dated September 30, 1993. C. Regulatory Flexibility Act This final rule is not required to be published in the **Federal Register** for notice and comment; therefore the Regulatory Flexibility Act, 5 U.S.C. 601, *et seq.* , does not apply. D. Paperwork Reduction Act The Paperwork Reduction Act does not apply because this final rule does not impose recordkeeping or information collection requirements, or the collection of information from offerors, contractors, or members of the public which require the approval of the Office of Management and Budget
(OMB)under 44 U.S.C. 3501, *et seq.* E. Small Business Regulatory Enforcement Fairness Act This final rule is exempt from Congressional review prescribed under 5 U.S.C. 801 since it relates solely to agency management and personnel. List of Subjects in 41 CFR Parts 101-48 and 102-41 Government property management. Dated: February 23, 2006. David L. Bibb, Acting Administrator of General Services. For the reasons set forth in the preamble, GSA amends 41 CFR chapters 101 and 102 as set forth below: CHAPTER 101—FEDERAL PROPERTY MANAGEMENT REGULATIONS 1. Part 101-48 is revised to read as follows: PART 101-48—UTILIZATION, DONATION, OR DISPOSAL OF ABANDONED AND FORFEITED PERSONAL PROPERTY Authority: 40 U.S.C. 121(c). § 101-48.000 Cross-reference to the Federal Management Regulation
(FMR)(41 CFR chapter 102, part 102-41). For information on the disposition of seized, forfeited, voluntarily abandoned, and unclaimed personal property, see FMR part 102-41 (41 CFR part 102-41). CHAPTER 102—FEDERAL MANAGEMENT REGULATION 2. Part 102-41 is added to subchapter B of chapter 102 to read as follows: PART 102-41—DISPOSITION OF SEIZED, FORFEITED, VOLUNTARILY ABANDONED, AND UNCLAIMED PERSONAL PROPERTY Subpart A—General Provisions Sec. 102-41.5 What does this part cover? 102-41.10 To whom do “we”, “you”, and their variants refer? 102-41.15 How do we request a deviation from these requirements and who can approve it? Definitions 102-41.20 What definitions apply to this part? Responsibility 102-41.25 Who retains custody and is responsible for the reporting, care, and handling of property covered by this part? 102-41.30 What is GSA's role in the disposition of property covered by this part? 102-41.35 Do we report to GSA all seized personal property subject to judicial forfeiture as well as forfeited, voluntarily abandoned, or unclaimed personal property not retained for official use? Subpart B—Seized or Forfeited Personal Property 102-41.40 How is personal property forfeited? 102-41.45 May we place seized personal property into official use before the forfeiture process is completed? 102-41.50 May we retain forfeited personal property for official use? 102-41.55 Where do we send the reports for seized or forfeited personal property? 102-41.60 Are there special requirements in reporting seized or forfeited personal property to GSA? 102-41.65 What happens to forfeited personal property that is transferred or retained for official use? 102-41.70 Are transfers of forfeited personal property reimbursable? 102-41.75 May we retain the proceeds from the sale of forfeited personal property? Subpart C—Voluntarily Abandoned Personal Property 102-41.80 When is personal property voluntarily abandoned? 102-41.85 What choices do I have for retaining or disposing of voluntarily abandoned personal property? 102-41.90 What happens to voluntarily abandoned personal property retained for official use? 102-41.95 Where do we send the reports for voluntarily abandoned personal property? 102-41.100 What information do we provide when reporting voluntarily abandoned personal property to GSA? 102-41.105 What happens to voluntarily abandoned personal property when reported to GSA? 102-41.110 Are transfers of voluntarily abandoned personal property reimbursable? 102-41.115 May we retain the proceeds received from the sale of voluntarily abandoned personal property? Subpart D—Unclaimed Personal Property 102-41.120 How long must we hold unclaimed personal property before disposition? 102-41.125 What choices do I have for retaining or disposing of unclaimed personal property? 102-41.130 What must we do when we retain unclaimed personal property for official use? 102-41.135 How much reimbursement do we pay the former owner when he or she files a claim for unclaimed personal property that we no longer have? 102-41.140 When do we report to GSA unclaimed personal property not retained for official use? 102-41.145 Where do we send the reports for unclaimed personal property? 102-41.150 What special information do we provide on reports of unclaimed personal property? 102-41.155 Is unclaimed personal property available for transfer to another Federal agency? 102-41.160 May we retain the reimbursement from transfers of unclaimed personal property? 102-41.165 May we require reimbursement for the costs incurred in the transfer of unclaimed personal property? 102-41.170 Is unclaimed personal property available for donation? 102-41.175 May we sell unclaimed personal property? 102-41.180 May we retain the proceeds from the sale of unclaimed personal property? Subpart E—Personal Property Requiring Special Handling 102-41.185 Are there certain types of forfeited, voluntarily abandoned, or unclaimed property that must be handled differently than other property addressed in this part? Firearms 102-41.190 May we retain forfeited, voluntarily abandoned, or unclaimed firearms for official use? 102-41.195 How do we dispose of forfeited, voluntarily abandoned, or unclaimed firearms not retained for official use? 102-41.200 Are there special disposal provisions for firearms that are seized and forfeited for a violation of the National Firearms Act? Forfeited Distilled Spirits, Wine, and Beer 102-41.205 Do we report all forfeited distilled spirits, wine, and beer to GSA for disposal? Drug Paraphernalia 102-41.210 What are some examples of drug paraphernalia? 102-41.215 Do we report to GSA all forfeited, voluntarily abandoned, or unclaimed drug paraphernalia not required for official use? 102-41.220 Is drug paraphernalia forfeited under 21 U.S.C. 863 available for transfer to other Federal agencies or donation through a State agency for surplus property (SASP)? 102-41.225 Are there special provisions to reporting and transferring drug paraphernalia forfeited under 21 U.S.C. 863? 102-41.230 May SASPs pick up or store donated drug paraphernalia in their distribution centers? 102-41.235 May we sell forfeited drug paraphernalia? Authority: 40 U.S.C. 121(c). Subpart A—General Provisions § 102-41.5 What does this part cover?
(a)This part covers the disposition of seized, forfeited, voluntarily abandoned, and unclaimed personal property under the custody of any Federal agency located in the United States, the U.S. Virgin Islands, American Samoa, Guam, the Commonwealth of Puerto Rico, the Northern Mariana Islands, the Federated States of Micronesia, the Marshall Islands, and Palau. Disposition of such personal property located elsewhere must be in accordance with holding agency regulations. Please see § 102-36.380 of this subchapter B regarding the disposal of foreign excess. The General Services Administration
(GSA)does not normally accept responsibility for disposal of property located outside the United States and its territories. Additional guidance on disposition of seized, forfeited, voluntarily abandoned, and unclaimed personal property that requires special handling (e.g., firearms, hazardous materials) is contained in part 101-42 of this title. Additional guidance on the disposition of firearms (as scrap only), distilled spirits, wine, beer, and drug paraphernalia is provided in subpart E of this part.
(b)These regulations do not include disposal of seized, forfeited, voluntarily abandoned, and unclaimed personal property covered under authorities outside of the following statutes:
(1)40 U.S.C. 552, Abandoned or Unclaimed Property on Government Premises.
(2)40 U.S.C. 1306, Disposition of Abandoned or Forfeited Property.
(3)26 U.S.C. 5688, Forfeited Distilled Spirits, Wines, and Beer.
(4)26 U.S.C. 5872, Forfeited Firearms.
(5)21 U.S.C. 863, Drug Paraphernalia. § 102-41.10 To whom do “we”, “you”, and their variants refer? Use of pronouns “we”, “you”, and their variants throughout this part refer to the agency having custody of the personal property. § 102-41.15 How do we request a deviation from these requirements and who can approve it? See §§ 102-2.60 through 102-2.110 of this chapter to request a deviation from the requirements of this part. Definitions § 102-41.20 What definitions apply to this part? The following definitions apply to this part: *Beer* means an alcoholic beverage made from malted cereal grain, flavored with hops, and brewed by slow fermentation. *Distilled spirits* , as defined in the Federal Alcohol Administration Act (27 U.S.C. 211), means ethyl alcohol; hydrated oxide of ethyl; or spirits of wine, whiskey, rum, brandy, gin, and other distilled spirits, including all dilutions and mixtures thereof, for non-industrial use. *Drug paraphernalia* means any equipment, product, or material primarily intended or designed for use in manufacturing, compounding, converting, concealing, processing, preparing, or introducing into the human body a controlled substance in violation of the Controlled Substances Act (see 21 U.S.C. 863). It includes items primarily for use in injecting, ingesting, inhaling, or otherwise introducing marijuana, cocaine, hashish, hashish oil, PCP, or amphetamines into the human body. *Eleemosynary institution* means any nonprofit health or medical institution that is organized and operated for charitable purposes. *Firearms* means any weapon, silencer, or destructive device designed to, or readily convertible to, expel a projectile by the action of an explosive, as defined in the Internal Revenue Code (26 U.S.C. 5845). Excludes antique firearms as defined in 26 U.S.C. 5845(g). *Forfeited property* means personal property that the Government has acquired ownership of through a summary process or court order pursuant to any law of the United States. *Seized property* means personal property that has been confiscated by a Federal agency, and whose care and handling will be the responsibility of the agency until final ownership is determined by the judicial process. *Unclaimed property* means personal property unknowingly abandoned and found on premises owned or leased by the Government, i.e., lost and found property. *Voluntarily abandoned property* means personal property abandoned to any Federal agency in a way that immediately vests title to the property in the Government. There must be written or circumstantial evidence that the property was intentionally and voluntarily abandoned. This evidence should be clear that the property was not simply lost by the owner. *Wine* means the fermented juice of a plant product, as defined in 27 U.S.C. 211. Responsibility § 102-41.25 Who retains custody and is responsible for the reporting, care, and handling of property covered by this part? You, the holding agency, normally retain physical custody of the property and are responsible for its care and handling pending final disposition. With the exception of property listed in § 102-41.35, you must report promptly to the GSA forfeited, voluntarily abandoned, or unclaimed personal property not being retained for official use and seized property on which proceedings for forfeiture by court decree are being started or have begun. In general, the procedures for reporting such property parallel those for reporting excess personal property under part 102-36 of this subchapter B. § 102-41.30 What is GSA's role in the disposition of property covered by this part?
(a)*Seized property subject to court proceedings for forfeiture.*
(1)If the seizing agency files a request for the property for its official use, the GSA Region 3/National Capital Region will apply to the court for an order to turn the property over to the agency should forfeiture be decreed. If no such request has been filed, GSA will determine whether retention of the property for Federal official use is in the Government's best interest, and, if so, will apply to the court to order delivery of the property to—
(i)Any other Federal agency that requests it; or
(ii)The seizing agency to be retained for a reasonable time in case the property may later become necessary to any agency for official use.
(2)In the event that the property is not ordered by competent authority to be forfeited to the United States, it may be returned to the claimant.
(b)*Forfeited, voluntarily abandoned, or unclaimed property.* When forfeited, voluntarily abandoned, or unclaimed property is reported to GSA for disposal, GSA will direct its disposition by—
(1)Transfer to another Federal agency;
(2)Donation to an eligible recipient, if the property is not needed by a Federal agency and there are no requirements for reimbursement to satisfy the claims of owners, lien holders, or other lawful claimants;
(3)Sale; or
(4)Abandonment and destruction in accordance with § 102-36.305 of this subchapter B. § 102-41.35 Do we report to GSA all seized personal property subject to judicial forfeiture as well as forfeited, voluntarily abandoned, or unclaimed personal property not retained for official use? Yes, send GSA reports of excess (see § 102-36.125 of this subchapter B) for all seized personal property subject to judicial forfeiture as well as forfeited, voluntarily abandoned, or unclaimed personal property not required for official use, except the following, whose disposition is covered under other statutes and authorities:
(a)Forfeited firearms or munitions of war seized by the Department of Commerce and transferred to the Department of Defense
(DOD)pursuant to 22 U.S.C. 401.
(b)Forfeited firearms directly transferable to DOD by law.
(c)Seeds, plants, or misbranded packages seized by the Department of Agriculture.
(d)Game animals and equipment (other than vessels, including cargo) seized by the Department of the Interior.
(e)Files of papers and undeliverable mail in the custody of the United States Postal Service.
(f)Articles in the custody of the Department of Commerce Patent and Trademark Office that are in violation of laws governing trademarks or patents.
(g)Unclaimed and voluntarily abandoned personal property subject to laws and regulations of the U.S. Customs and Border Protection, Department of Homeland Security.
(h)Property seized in payment of or as security for debts arising under the internal revenue laws.
(i)Lost, abandoned, or unclaimed personal property the Coast Guard or the military services are authorized to dispose of under 10 U.S.C. 2575.
(j)Property of deceased veterans left on a Government facility subject to 38 U.S.C. 8501.
(k)Controlled substances reportable to the Drug Enforcement Administration, Department of Justice, Washington, DC 20537.
(l)Forfeited, condemned, or voluntarily abandoned tobacco, snuff, cigars, or cigarettes which, if offered for sale, will not bring a price equal to the internal revenue tax due and payable thereon; and which is subject to destruction or delivery without payment of any tax to any hospital maintained by the Federal Government for the use of present or former members of the military.
(m)Property determined appropriate for abandonment/destruction (see § 102-36.305 of this subchapter B).
(n)Personal property where handling and disposal is governed by specific legislative authority notwithstanding Title 40 of the United States Code. Subpart B—Seized or Forfeited Personal Property § 102-41.40 How is personal property forfeited? Personal property that has been seized by a Federal agency may be forfeited through court decree (judicial forfeiture) or administratively forfeited if the agency has specific authority without going through the courts. § 102-41.45 May we place seized personal property into official use before the forfeiture process is completed? No, property under seizure and pending forfeiture cannot be placed into official use until a final determination is made to vest title in the Government. § 102-41.50 May we retain forfeited personal property for official use? Yes, you may retain for official use personal property forfeited to your agency, except for property you are required by law to sell. Retention of large sedans and limousines for official use is only authorized under the provisions of part 102-34 of this subchapter B. Except for the items noted in § 102-41.35, report to GSA all forfeited personal property not being retained for official use. § 102-41.55 Where do we send the reports for seized or forfeited personal property?
(a)Except for the items noted in paragraph
(b)of this section, report seized or forfeited personal property not retained for official use to the General Services Administration, Property Management Branch (3FPD), Washington, DC 20407.
(b)Report aircraft, firearms, and vessels to the regional GSA Property Management Branch office specified in § 102-36.125 of this subchapter B. § 102-41.60 Are there special requirements in reporting seized or forfeited personal property to GSA? Yes, in addition to the information required in § 102-36.235 of this subchapter B for reporting excess, you must indicate—
(a)Whether the property—
(1)Was forfeited in a judicial proceeding or administratively (without going through a court);
(2)Is subject to pending court proceedings for forfeiture, and, if so, the name of the defendant, the place and judicial district of the court from which the decree will be issued, and whether you wish to retain the property for official use;
(b)The report or case number under which the property is listed; and
(c)The existence or probability of a lien, or other accrued or accruing charges, and the amount involved. § 102-41.65 What happens to forfeited personal property that is transferred or retained for official use? Except for drug paraphernalia (see §§ 102-41.210 through 102-41.235), forfeited personal property retained for official use or transferred to another Federal agency under this subpart loses its identity as forfeited property. When no longer required for official use, you must report it to GSA as excess for disposal in accordance with part 102-36 of this subchapter B. You must follow the additional provisions of subpart E of this part and part 101-42 of Chapter 101, Federal Property Management Regulations in this title when disposing of firearms, distilled spirits, wine, beer, and drug paraphernalia. § 102-41.70 Are transfers of forfeited personal property reimbursable? Recipient agencies do not pay for the property. However, you may charge the recipient agency all costs you incurred in storing, packing, loading, preparing for shipment, and transporting the property. If there are commercial charges incident to forfeiture prior to the transfer, the recipient agency must pay these charges when billed by the commercial organization. Any payment due to lien holders or other lawful claimants under a judicial forfeiture must be made in accordance with provisions of the court decree. § 102-41.75 May we retain the proceeds from the sale of forfeited personal property? No, you must deposit the sales proceeds in the U.S. Treasury as miscellaneous receipts, unless otherwise directed by court decree or specifically authorized by statute. Subpart C—Voluntarily Abandoned Personal Property § 102-41.80 When is personal property voluntarily abandoned? Personal property is voluntarily abandoned when the owner of the property intentionally and voluntarily gives up title to such property and title vests in the Government. The receiving agency ordinarily documents receipt of the property to evidence its voluntary relinquishment. Evidence of the voluntary abandonment may be circumstantial. § 102-41.85 What choices do I have for retaining or disposing of voluntarily abandoned personal property? You may either retain or dispose of voluntarily abandoned personal property based on the following circumstances:
(a)If your agency has a need for the property, you may retain it for official use, except for large sedans and limousines which may only be retained for official use as authorized under part 102-34 of this subchapter B. See § 102-41.90 for how retained property must be handled.
(b)If your agency doesn't need the property, you should determine whether it may be abandoned or destroyed in accordance with the provisions at FMR 102-36.305 through 102-36.330. Furthermore, in addition to the circumstances when property may be abandoned or destroyed without public notice at FMR 102-36.330, voluntarily abandoned property may also be abandoned or destroyed without public notice when the estimated resale value of the property is less than $500.
(c)If the property is not retained for official use or abandoned or destroyed, you must report it to GSA as excess in accordance with § 102-41.95. § 102-41.90 What happens to voluntarily abandoned personal property retained for official use? Voluntarily abandoned personal property retained for official use or transferred to another Federal agency under this subpart loses its identity as voluntarily abandoned property. When no longer required for official use, you must report it to GSA as excess, or abandon/destroy the property, in accordance with part 102-36 of this subchapter B. § 102-41.95 Where do we send the reports for voluntarily abandoned personal property? Except for aircraft, firearms, and vessels, report voluntarily abandoned personal property to the regional GSA Property Management Branch office for the region in which the property is located. Report aircraft, firearms, and vessels to the regional GSA Property Management Branch office specified in § 102-36.125 of this subchapter B. § 102-41.100 What information do we provide when reporting voluntarily abandoned personal property to GSA? When reporting voluntarily abandoned personal property to GSA, you must provide a description and location of the property, and annotate that the property was voluntarily abandoned. § 102-41.105 What happens to voluntarily abandoned personal property when reported to GSA? Voluntarily abandoned personal property reported to GSA will be made available for transfer, donation, sale, or abandonment/destruction in accordance with parts 102-36, 102-37, 102-38, and §§ 102-36.305 through 102-36.330 of this subchapter B, respectively. You must follow the additional provisions of §§ 102-41.190 through 102-41.235 and part 101-42 of Chapter 101, Federal Property Management Regulations in this title when disposing of firearms and other property requiring special handling. § 102-41.110 Are transfers of voluntarily abandoned personal property reimbursable? No, all transfers of voluntarily abandoned personal property will be without reimbursement. However, you may charge the recipient agency all costs you incurred in storing, packing, loading, preparing for shipment, and transporting the property. § 102-41.115 May we retain the proceeds received from the sale of voluntarily abandoned personal property? No, you must deposit the sales proceeds in the U.S. Treasury as miscellaneous receipts unless your agency has specific statutory authority to do otherwise. Subpart D—Unclaimed Personal Property § 102-41.120 How long must we hold unclaimed personal property before disposition? You must generally hold unclaimed personal property for 30 calendar days from the date it was found. Unless the previous owner files a claim, title to the property vests in the Government after 30 days, and you may retain or dispose of the property in accordance with this part. However, see the following sections for handling of unclaimed personal property under specific circumstances. § 102-41.125 What choices do I have for retaining or disposing of unclaimed personal property? You may either retain or dispose of unclaimed abandoned personal property based on the following circumstances:
(a)If your agency has a need for the property, you may retain it for official use if you have held the unclaimed property for 30 calendar days and the former owner has not filed a claim. After 30 days, title vests in the Government and you may retain the unclaimed property for official use. Large sedans and limousines which may only be retained for official use as authorized under part 102-34 of this subchapter B. See § 102-41.130 for how retained property must be handled.
(b)If your agency doesn't need the property, you should determine whether it may be immediately abandoned or destroyed in accordance with the provisions at FMR 102-36.305 through 102-36.330. You are not required to hold unclaimed property for 30 days, if you decide to abandon or destroy it. Title to the property immediately vests in the Government in these circumstances. In addition to the circumstances when property may be abandoned or destroyed without public notice at FMR 102-36.330, unclaimed personal property may also be abandoned or destroyed without public notice when the estimated resale value of the property is less than $500. See § 102-41.135 for procedures to be followed if a claim is filed.
(c)If the property is not retained for official use or abandoned or destroyed, you must report it to GSA as excess in accordance with § 102-41.140. § 102-41.130 What must we do when we retain unclaimed personal property for official use?
(a)You must maintain records of unclaimed personal property retained for official use for 3 years after title vests in the Government to permit identification of the property should the former owner file a claim for the property. You must also deposit funds received from disposal of such property in a special account to cover any valid claim filed within this 3-year period.
(b)When you no longer need the unclaimed property which you have placed in official use, report it as excess in the same manner as other excess property under part 102-36 of this subchapter B. § 102-41.135 How much reimbursement do we pay the former owner when he or she files a claim for unclaimed personal property that we no longer have? If the property was sold, reimbursement of the property to the former owner must not exceed any proceeds from the disposal of such property, less the costs of the Government's care and handling of the property. If the property was abandoned or destroyed in accordance with § 102-41.125, or otherwise used or transferred, reimbursement of the property to the former owner must not exceed the estimated resale value of the property at the time of the vesting of the property with the Government, less costs incident to the care and handling of the property, as determined by the General Services Administration, Office of Travel, Transportation, and Asset Management (MT), Washington DC, 20405. § 102-41.140 When do we report to GSA unclaimed personal property not retained for official use? After you have held the property for 30 calendar days and no one has filed a claim for it, the title to the property vests in the Government. If you decide not to retain the property for official use, report it as excess to GSA in accordance with part 102-36 of this subchapter B. § 102-41.145 Where do we send the reports for unclaimed personal property? Except for the items noted in § 102-36.125 of this subchapter B, report unclaimed personal property to the regional GSA Property Management Branch office for the region in which the property is located. § 102-41.150 What special information do we provide on reports of unclaimed personal property? On reports of unclaimed personal property, you must provide the report or case number assigned by your agency, property description and location, and indicate the property as unclaimed and the estimated fair market value. § 102-41.155 Is unclaimed personal property available for transfer to another Federal agency? Yes, unclaimed personal property is available for transfer to another Federal agency, but only after 30 calendar days from the date of finding such property and no claim has been filed by the former owner, and with fair market value reimbursement from the recipient agency. The transferred property then loses its identity as unclaimed property and becomes property of the Government, and when no longer needed it must be reported excess in accordance with part 102-36 of this subchapter B. § 102-41.160 May we retain the reimbursement from transfers of unclaimed personal property? No, you must deposit the reimbursement from transfers of unclaimed personal property in a special account for a period of 3 years pending a claim from the former owner. After 3 years, you must deposit these funds into miscellaneous receipts of the U.S. Treasury unless your agency has statutory authority to do otherwise. § 102-41.165 May we require reimbursement for the costs incurred in the transfer of unclaimed personal property? Yes, you may require reimbursement from the recipient agency of any direct costs you incur in the transfer of the unclaimed property (e.g., storage, packing, preparation for shipping, loading, and transportation). § 102-41.170 Is unclaimed personal property available for donation? No, unclaimed personal property is not available for donation because reimbursement at fair market value is required. § 102-41.175 May we sell unclaimed personal property? Yes, you may sell unclaimed personal property after title vests in the Government (as provided for in § 102-41.120) and when there is no Federal interest. You may sell unclaimed personal property subject to the same terms and conditions as applicable to surplus personal property and in accordance with part 102-38 of this subchapter B. § 102-41.180 May we retain the proceeds from the sale of unclaimed personal property? No, you must deposit proceeds from the sale of unclaimed personal property in a special account to be maintained for a period of 3 years pending a possible claim by the former owner. After the 3-year period, you must deposit the funds in the U.S. Treasury as miscellaneous receipts or in such other agency accounts when specifically authorized by statute. Subpart E—Personal Property Requiring Special Handling § 102-41.185 Are there certain types of forfeited, voluntarily abandoned, or unclaimed property that must be handled differently than other property addressed in this part? Yes, you must comply with the additional provisions in this subpart when disposing of the types of property listed here. Firearms § 102-41.190 May we retain forfeited, voluntarily abandoned, or unclaimed firearms for official use? Generally, no; you may retain forfeited, voluntarily abandoned, or unclaimed firearms only when you are statutorily authorized to use firearms for official purposes. § 102-41.195 How do we dispose of forfeited, voluntarily abandoned, or unclaimed firearms not retained for official use? Report forfeited, voluntarily abandoned, or unclaimed firearms not retained for official use to the General Services Administration, Property Management Branch (7FP-8), Denver, CO 80225-0506 for disposal in accordance with § 101-42.1102-10 of the Federal Property Management Regulations in this title. § 102-41.200 Are there special disposal provisions for firearms that are seized and forfeited for a violation of the National Firearms Act? Yes, firearms seized and forfeited for a violation of the National Firearms Act (26 U.S.C. 5801—5872) are subject to the disposal provisions of 26 U.S.C. 5872(b). When there is no contrary judgment or action under such forfeiture, GSA will direct the disposition of the firearms. GSA may—
(a)Authorize retention for official use by the Treasury Department;
(b)Transfer to an executive agency for use by it; or
(c)Order the firearms destroyed. Forfeited Distilled Spirits, Wine, and Beer § 102-41.205 Do we report all forfeited distilled spirits, wine, and beer to GSA for disposal?
(a)Yes, except do not report distilled spirits, wine, and beer not fit for human consumption or for medicinal, scientific, or mechanical purposes. When reporting, indicate quantities and kinds, proof rating, and condition for shipping. GSA
(3FPD)may transfer such property to another Federal agency for official purposes, or donate it to eligible eleemosynary institutions for medicinal purposes only.
(b)Forfeited distilled spirits, wine, and beer that are not retained for official use by the seizing agency or transferred or donated to eligible recipients by GSA must be destroyed. You must document the destruction with a record of the time and location, property description, and quantities destroyed. Drug Paraphernalia § 102-41.210 What are some examples of drug paraphernalia? Some examples of drug paraphernalia are—
(a)Metal, wooden, acrylic, glass, stone, plastic or ceramic pipes with or without screens, permanent screens, hashish heads, or punctured metal bowls;
(b)Water pipes;
(c)Carburetion tubes and devices;
(d)Smoking and carburetion masks;
(e)Roach clips (objects used to hold burning material, such as a marijuana cigarette, that has become too small or too short to be held in the hand);
(f)Miniature spoons with level capacities of one-tenth cubic centimeter or less;
(g)Chamber pipes;
(h)Carburetor pipes;
(i)Electric pipes;
(j)Air-driven pipes;
(k)Chillums;
(l)Bongs;
(m)Ice pipes or chillers;
(n)Wired cigarette papers; or
(o)Cocaine freebase kits. § 102-41.215 Do we report to GSA all forfeited, voluntarily abandoned, or unclaimed drug paraphernalia not required for official use? No, only report drug paraphernalia that has been seized and forfeited for a violation of 21 U.S.C. 863. Unless statutorily authorized to do otherwise, destroy all other forfeited, voluntarily abandoned, or unclaimed drug paraphernalia. You must ensure the destruction is performed in the presence of two witnesses (employees of your agency), and retain in your records a signed certification of destruction. § 102-41.220 Is drug paraphernalia forfeited under 21 U.S.C. 863 available for transfer to other Federal agencies or donation through a State Agency for Surplus Property (SASP)? Yes, but GSA will only transfer or donate forfeited drug paraphernalia for law enforcement or educational purposes and only for use by Federal, State, or local authorities. Federal or State Agencies for Surplus Property
(SASP)requests for such items must be processed through the General Services Administration, Property Management Branch (3FPD), Washington, DC 20407. The recipient must certify on the transfer document that the drug paraphernalia will be used for law enforcement or educational purposes only. § 102-41.225 Are there special provisions to reporting and transferring drug paraphernalia forfeited under 21 U.S.C. 863? Yes, you must ensure that such drug paraphernalia does not lose its identity as forfeited property. Reports of excess and transfer documents for such drug paraphernalia must include the annotation that the property was seized and forfeited under 21 U.S.C. 863. § 102-41.230 May SASPs pick up or store donated drug paraphernalia in their distribution centers? No, you must release donated drug paraphernalia directly to the donee as designated on the transfer document. § 102-41.235 May we sell forfeited drug paraphernalia? No, you must destroy any forfeited drug paraphernalia not needed for transfer or donation and document the destruction as specified in § 102-41.215. [FR Doc. E6-11584 Filed 7-20-06; 8:45 am] BILLING CODE 6820-14-S 71 140 Friday, July 21, 2006 Proposed Rules OFFICE OF PERSONNEL MANAGEMENT 5 CFR Part 553 RIN 3206-AI32 Reemployment of Civilian Retirees To Meet Exceptional Employment Needs AGENCY: Office of Personnel Management. ACTION: Proposed rule. SUMMARY: The Office of Personnel Management
(OPM)is issuing proposed regulations to amend the criteria under which OPM may grant dual compensation (salary off-set) waivers on a case-by-case basis, or delegate waiver authority to agencies. This amendment clarifies that OPM may grant or delegate to agencies the authority to grant such waivers in situations resulting from emergencies posing an immediate and direct threat to life or property or situations resulting from unusual circumstances that do not involve an emergency. The proposed changes will make it easier for agencies to reemploy needed individuals when faced with unusual circumstances. In addition, we are proposing to amend the section headings to avoid redundancy. This amendment is also removing information concerning military employees. DATES: We will consider comments received on or before September 19, 2006. ADDRESSES: You may submit comments, which are identified by RIN 3206-AI32, by any of the following methods: • Federal eRulemaking Portal: *http://www.regulations.gov* . Follow the instructions for submitting comments. • E-mail: *employ@opm.gov* . Include “RIN 3206-AI32, Reemployment of Military and Civilian Retirees to Meet Exceptional Employment Needs” in the subject line of the message. • Fax:
(202)606-2329. • Mail: Nancy H. Kichak, Associate Director for Strategic Human Resources Policy, U.S. Office of Personnel Management, Room 6551. 1900 E Street, NW., Washington, DC 20415-9700. • Hand Delivery/Courier: U.S. Office of Personnel Management, Room 6551. 1900 E Street, NW., Washington, DC 20415-9700. FOR FURTHER INFORMATION CONTACT: Janice Warren, 202-606-2367, FAX: 202-606-2329, by TDD: 202-418-3134, or e-mail: *janice.warren@opm.gov* . SUPPLEMENTARY INFORMATION: The current regulations provide OPM the authority to grant dual compensation (salary off-set) waivers on a case-by-case basis or delegate waiver authority to agencies in order to meet emergencies posing immediate and direct threat to life or property or emergencies resulting from other unusual circumstances. Under this proposed rule, OPM may grant a waiver or delegate waiver authority for unusual circumstances, which do not cause or create an emergency. Unusual circumstances may include, but are not limited to, the need to conform to a congressional or other mandate to meet new or expanded mission requirements by a particular date, as well as other unforeseen developments that will adversely impact an agency's ability to carry out its mission. To effectuate this change for individual waivers, we are removing the reference to “other unusual circumstances” in § 553.201(c) and adding a new paragraph, “Requests based on other unusual circumstances,” at § 553.201(f). Similarly, for agency requests for delegated authority, we are modifying section 553.202(b)(1) to separate unusual circumstances from emergency situations. These changes will more closely align the regulations to the authorizing statutes at 5 U.S.C. 8344(i)(1)(B) and 8468(f)(1)(B), which distinguish between emergencies and other unusual circumstances. We are amending the titles of § 553.201 and 202 to make clear these provisions include termination of annuity. Consequently, we are removing § 553.201(b)(4) because this subsection is no longer needed with the change in the section titles. In addition, we are removing any references to “military employees” in the title of this regulation and eliminating § 553.203(b), because it is no longer needed. The Federal Employees Pay Comparability Act of 1990 (FEPCA) permitted OPM to authorize exceptions to the reduction in pay and retirement benefits normally required for either civilian or military retirees reemployed in the Federal Government. On October 5, 1999, President Clinton signed the National Defense Authorization Act for Fiscal Year 2000 (Pub. L. 106-65). Section 651 of this law repeals section 5532 of title 5, United States Code. This action ended the reductions in retired or retainer pay previously required of retired members of a uniformed service who are employed in a civilian office or position of the U.S. Government. As a result, we are deleting all information concerning military employees from this subpart. Regulatory Flexibility Act I certify that this regulation will not have a significant economic impact on a substantial number of small entities because it affects only certain potential applicants and Federal employees. Executive Order 12866, Regulatory Review This rule has been reviewed by the Office of Management and Budget in accordance with Executive Order 12866. List of Subjects in 5 CFR Part 553 Administrative practice and procedure, Government employees, Military personnel, Retirement, and Wages. Office of Personnel Management. Linda M. Springer, Director. Accordingly, OPM is proposing to amend 5 CFR part 553 subpart B, as follows: PART 553—REEMPLOYMENT OF CIVILIAN RETIREES TO MEET EXCEPTIONAL EMPLOYMENT NEEDS 1. The authority for part 553 continues to read as follows: Authority: 5 U.S.C. 8344, 8468, Sec. 651, Pub. L. 106-65 (113 Stat. 664). 2. The heading for part 553 is revised as set forth above. Subpart B—Special Provisions for Reemployment Without Penalty To Meet Exceptional Recruiting or Retention Needs 3. Section 553.201 is amended by revising the section heading; paragraphs (a), (b)(2) and
(c)introductory text; removing paragraph (b)(4); redesignating paragraph
(f)as paragraph (g); and adding a new paragraph
(f)to read as follows: § 553.201 Requesting OPM approval for reemployment without reduction or termination of annuity in individual cases.
(a)*Request by agency head.* The head of an agency may request OPM to approve individual exceptions on a case-by-case basis to meet temporary hiring needs based on an emergency or other unusual circumstances or when the agency has encountered exceptional difficulty in recruiting or retaining a qualified candidate for a particular position. Authority to submit such a request may not be redelegated to an official below the agency's headquarters level.
(b)* * *
(2)The request must be submitted in accordance with the criteria set out in paragraphs (c), (d), (e), or
(f)of this section.
(c)*Requests based on an emergency hiring need.* An agency may request reemployment without penalty for an individual whose services are needed on a temporary basis to respond to an emergency involving a direct threat to life or property. Requests submitted on that basis must meet the following criteria:
(f)*Requests based on other unusual circumstances.* An agency may request reemployment without penalty for an individual whose services are needed on a temporary basis due to unusual circumstances. Agencies must provide justification describing the unusual circumstances. 4. Section 553.202 is amended by revising the section heading, and paragraph (b)(1) to read as follows: § 553.202 Request for delegation of authority to approve reemployment without reduction or termination of annuity in emergencies or other unusual circumstances.
(b)* * *
(1)Description of the situations for which authority is requested. The situation must result from emergencies posing immediate and direct threat to life or property or from other unusual circumstances. 5. Section 553.203 is revised to read as follows: § 553.203 Status of individuals serving without reduction. *Reemployed civilian annuitants.* Annuitants reemployed with full salary and annuity under an exception granted in accordance with this part are not considered employees for purposes of subchapter III of chapter 83 or chapter 84 of title 5, United States Code. They may not elect to have retirement contributions withheld from their pay; they may not use any employment for which an exception is granted as a basis for a supplemental or recomputed annuity; and they may not participate in the Thrift Savings Plan. [FR Doc. E6-11618 Filed 7-20-06; 8:45 am] BILLING CODE 6325-39-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 301 [REG-153037-01] RIN 1545-BA31 Suspension of Statutes of Limitations in Third-Party and John Doe Summons Disputes and Expansion of Taxpayers' Rights To Receive Notice and Seek Judicial Review of Third-Party Summonses AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking. SUMMARY: This document contains proposed amendments to the regulations relating to third-party and John Doe summonses. These proposed regulations reflect amendments to sections 7603 and 7609 of the Internal Revenue Code of 1986 made by the Internal Revenue Service Restructuring and Reform Act of 1998, the Omnibus Budget Reconciliation Act of 1990, the Technical and Miscellaneous Revenue Act of 1988, and the Tax Reform Act of 1986, which were enacted subsequent to adoption of the current regulations. These proposed regulations provide guidance relating to the manner in which summonses may be served on third-party recordkeepers, the expanded class of third-party summonses subject to notice requirements and other procedures, and the suspension of periods of limitations if a court proceeding is brought involving a challenge to a third-party summons, or if a third party's response to a summons is not finally resolved within six months after service. These proposed regulations affect third parties who are served with a summons, taxpayers identified in a third-party summons, and other persons entitled to notice of a third-party summons. DATES: Written comments and requests for a public hearing must be received by October 19, 2006. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-153037-01), room 5203, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. Alternatively, submissions may be hand delivered between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-153037-01), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC. Comments may also be submitted electronically to *http://www.irs.gov/regs* or the Federal eRulemaking Portal at *http://www.regulations.gov* (IRS-REG-153037-01). FOR FURTHER INFORMATION CONTACT: Elizabeth Rawlins at
(202)622-3630 (not a toll-free number). SUPPLEMENTARY INFORMATION: Background This document contains proposed regulations amending the Procedure and Administration Regulations (26 CFR part 301) under sections 7603 and 7609 of the Internal Revenue Code of 1986 (Code). The proposed regulations reflect amendments to sections 7603 and 7609 enacted in the Internal Revenue Service Restructuring and Reform Act of 1998 (Pub. L. 105-206, 112 Stat. 685) (RRA 1998), the Technical and Miscellaneous Revenue Act of 1988 (Pub. L. 100-647, 102 Stat. 3343) (TAMRA 1988), and the Tax Reform Act of 1986 (Pub. L. 99-514, 100 Stat. 2085) (TRA 1986). The proposed regulations also reflect changes made to section 6503(j) in the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508, 104 Stat. 1388) (OBRA 1990). Explanation of Provisions In general, section 7609 provides that if a summons is served on a third party requiring the third party to give testimony or produce records relating to a taxpayer or other person identified in the summons, the Internal Revenue Service
(IRS)must provide notice of the summons to the taxpayer and to any other person identified in the description of summoned records and testimony within three days of the date on which the summons was served, but no later than 23 days prior to the date fixed in the summons as the day on which the examination of the summoned person or materials is scheduled. Persons entitled to notice of a third-party summons are entitled to bring a proceeding to quash the summons by filing a petition in district court within 20 days after notice is given. Persons entitled to notice also may intervene in any proceeding to enforce the summons. During the pendency of a proceeding to quash a summons brought by the taxpayer, or during the pendency of a proceeding to enforce a summons in which the taxpayer has intervened, the periods of limitations on assessment and criminal prosecution are suspended. These periods of limitations are also suspended if the third-party's response to the summons remains unresolved six months after the summons is served, regardless of whether a proceeding has been brought with respect to the summons. These proposed regulations amend prior regulations relating to third-party summonses to reflect the statutory changes to sections 7603 and 7609 described below. Notice of Third-Party Summonses Section 7609(a) requires the IRS to provide notice of a third-party summons to the taxpayer being investigated and every person identified in the description of summoned records and testimony unless the summons is excepted from the notice requirements under section 7609(c)(2). Prior to RRA 1998, the IRS was required to provide notice of a third-party summons only if the summons was served on a third-party recordkeeper and the summons required the production of records made or kept of another person's business transactions or affairs (or testimony about such records). RRA 1998 expanded the types of third-party summonses to which the notice, intervention, and proceeding to quash procedures apply by removing the prior specifically-defined third-party recordkeeper limitation. The proposed regulations reflect the expansion of the notice procedures to all third-party summonses not excepted by section 7609(c)(2). Exceptions To Notice, Intervention, and Proceeding To Quash Procedures Section 7609(c)(2) provides that certain summonses, including summonses served on the person with respect to whose liability the summons was issued, third-party summonses issued to confirm or deny the existence of records, and summonses that require court approval before service, are excepted from the notice, intervention, and proceeding to quash provisions of subsections 7609(a) and (b). Two additional exceptions, relating to third-party summonses issued in aid of collection under section 7609(c)(2)(D) and summonses issued by a criminal investigator under section 7602(c)(2)(E), were the subject of recent statutory changes. Prior to RRA 1998, former section 7609(c)(2)(B) broadly excepted from the notice requirements and other procedural rules a summons issued in aid of the collection of any person's liability. RRA 1998 narrowed the collection exception, now found in section 7609(c)(2)(D), to except only summonses issued in aid of the collection of either:
(i)An assessment or judgment against the person with respect to whose liability the summons is issued, or
(ii)the liability of a transferee or fiduciary of the liable person. Under section 7609(c)(2)(D), as amended, the IRS now must give notice of a third-party summons issued in aid of the collection of a person's potential liability for an unassessed tax. For example, the IRS must provide notice of a third-party summons to a potentially responsible person if the purpose of the third-party summons is to determine whether the person is liable for the trust fund recovery penalty under section 6672. The exception from notice, intervention, and proceeding to quash procedures for summonses issued by a criminal investigator under section 7609(c)(2)(E) was added by RRA 1998. Section 7609(c)(2)(E) excepts third-party summonses issued by criminal investigators if the summoned third party is not a third-party recordkeeper, as that term is defined under new section 7603(b). Third-Party Recordkeepers Section 7603(b)(1) provides that third-party recordkeeper summonses may be served by certified or registered mail to the last known address of the third-party recordkeeper. Section 7603(b)(2) enumerates classes of persons that are third-party recordkeepers, including banks, credit card issuers, attorneys, accountants, and enrolled agents. 1. When Third-Party Recordkeeper Status Arises Prior to RRA 1998, third-party recordkeeper summonses were defined under former section 7609(a)(1) as summonses that were served on a third-party recordkeeper, *i.e.* , a person belonging to one of several enumerated classes of business occupations, for the production of records made or kept of another person's business transactions or affairs. Based on these requirements, existing § 301.7609-2(b) provides that “[a] person is a ‘third-party recordkeeper' with respect to a given set of records only if the person made or kept the records in the person's capacity as a third-party recordkeeper.” RRA 1998 amended section 7603, relating to service of summonses, by adding to new subsection
(b)the enumerated classes of third-party recordkeepers, but did not incorporate the requirement of former section 7609(a)(1)(B) that the records of the business transactions or affairs be made or kept by the third-party recordkeeper in its capacity as such. There is no indication in the legislative history to RRA 1998 that Congress intended to alter the requirement under § 301.7609-2(b) that the records of a third-party recordkeeper be made or kept in the third-party recordkeeper's capacity as such. Accordingly, the proposed regulations maintain the requirement under existing § 301.7609-2(b). 2. Owners or Developers of Computer Software Source Code RRA 1998 added owners or developers of computer software source code to the enumerated classes of third-party recordkeepers under section 7603(b)(2). The proposed regulations define owners or developers of computer software source code as third-party recordkeepers if they are summoned to produce the source code or the programs and data to which the source code relates, whether or not they make or keep records of another person's business transactions or affairs. Suspension of Periods of Limitations 1. Suspension Under Section 7609(e)(1) Section 7609(e)(1) provides that the periods of limitations under section 6501 (relating to assessment and collection) and section 6531 (relating to criminal prosecution) are suspended if any person with respect to whose liability a third-party summons was issued (or the agent, nominee, or other person acting under the direction and control of such person), pursuant to section 7609(b), intervenes in a judicial proceeding to enforce a third-party summons or brings a proceeding to quash a third-party summons. The suspension continues for the period during which the proceeding, including appeals, is pending. 2. Suspension Under Section 7609(e)(2) Section 7609(e)(2) provides that the periods of limitations under section 6501 and section 6531, are suspended if there is no final resolution of the third party's response to the summons within six months after service of such summons, regardless of whether the person with respect to whose liability the summons was issued has intervened in an enforcement proceeding or brought a proceeding to quash. Suspension of the periods of limitations under section 7609(e)(2) begins six months after the summons is served and ends upon the final resolution of the summoned party's response. The proposed regulations describe the types of summonses to which the suspension of periods of limitations under section 7609(e)(2) apply and define final resolution. a. Summonses to Which Suspension Under Section 7609(e)(2) May Apply Prior to RRA 1998, former section 7609(e)(2) suspended a taxpayer's periods of limitations if either a third-party recordkeeper's response to a summons, for which the taxpayer was entitled to receive notice under section 7609(a), or if a summoned person's response to a John Doe summons was not finally resolved within six months after the summons was served. Nothing in the legislative history to RRA 1998 suggests that Congress intended to expand the basic statutory structure of section 7609(e)(2) to encompass any summonses other than John Doe summonses and third-party summonses subject to the notice requirement of section 7609(a). Therefore, the proposed regulations provide that the periods of limitations are suspended under section 7609(e)(2) only with respect to third-party summonses to which the notice requirements of section 7609(a) apply, or to John Doe summonses for which taxpayers are entitled to notice of any statute suspension pursuant to section 7609(i)(4). b. Final Resolution of a Third Party's Response to a Summons Section 7609(e)(2) provides that suspension of the periods of limitations ends on the date of final resolution of the third party's response to the summons. The purpose of section 7609(e)(2) is to suspend the periods of limitations if an investigation is delayed by a summoned person's failure to produce all of the summoned information within six months. Although final resolution is not defined in section 7609, nor is it elaborated on in the legislative history of that statute, the same term is found in section 6503(j), which suspends the period of limitations on assessment during a judicial enforcement period relating to designated and related summonses. Like section 7609(e)(2), section 6503(j) provides that the suspension period will not end until there is final resolution of the summoned person's response to the summons. The legislative history of section 6503(j) indicated that the term *final resolution* means, in cases in which a court proceeding is brought, that no court proceeding remains pending and the summoned party has complied with the summons to the extent the court required. Therefore, the proposed regulations define final resolution as occurring when the summoned person fully complies with the production required by the summons. If the summons is the subject of litigation, full compliance occurs when any order enforcing any part of the summons is fully complied with and all appeals are either disposed of or the period in which an appeal may be taken or a request for further review may be made has expired. The IRS will administratively create procedures by which taxpayers can inquire about the suspension of their periods of limitations under section 7609(e)(2). Protections for and Duties of Summoned Third Parties Section 7609(i)(3) provides that any summoned party who produces records or gives testimony in good faith reliance on an IRS certificate or court order is not liable to a customer or other person for disclosure of records or testimony in response to a third-party summons. RRA 1998 modified these provisions by extending protection to all recipients of third-party summonses subject to the notice requirements of section 7609(a) and by expanding the protection from liability to include the giving of testimony by a third party, in addition to the production of records. The proposed regulations reflect these statutory changes. Notification Requirement for John Doe Summonses Under Section 7609(i)(4) Section 7609(i)(4) requires the recipient of a John Doe summons to notify the unnamed taxpayers to which the summons applies if those taxpayers' periods of limitations are suspended by operation of section 7609(e)(2), relating to the absence of a resolution to the summoned party's response six months after service of the summons. The proposed regulations specify the time and the manner for providing the notice required under section 7609(i)(4). Notice must be given as soon as possible after the suspension of the periods of limitations and must be made in writing. The written notification may be hand delivered, sent to the address of the taxpayer last known by the summoned person to be valid, or transmitted by any electronic means. Failure by the summoned party to comply with the notice requirements of section 7609(i)(4) will not preclude the suspension of the periods of limitations pursuant to section 7609(e)(2). Use of Informal Procedures Not Precluded by Section 7609 Section 7609(j) provides that nothing in section 7609 shall be construed to limit the IRS's ability to obtain information through formal or informal procedures authorized by sections 7601 and 7602. The proposed regulations provide that section 7609 does not require the IRS to issue a third-party summons before conducting an informal inquiry of a third party or examining a third party's books, papers, records, or other data during an investigation. Proposed Effective Dates These amendments are proposed to be applicable on the date the final regulations are filed with the **Federal Register** . Special Analyses It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations and, because these regulations do not impose a collection of information under the Paperwork Reduction Act (44 U.S.C. 3501), the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply to these regulations. Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. Comments and Requests for a Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments (preferably a signed original and eight
(8)copies) that are submitted timely to the IRS. The IRS and the Treasury Department specifically request comments on the clarity of the proposed rule and how it may be made easier to understand. All comments will be available for public inspection and copying. A public hearing may be scheduled if requested in writing by a person who timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the hearing will be published in the **Federal Register** . Drafting Information The principal author of these regulations is Elizabeth Rawlins of the Office of the Associate Chief Counsel, Procedure and Administration (Collection, Bankruptcy and Summonses Division), Internal Revenue Service. List of Subjects in 26 CFR Part 301 Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements. Proposed Amendment to the Regulations Accordingly, 26 CFR part 301 is proposed to be amended as follows: PART 301—PROCEDURE AND ADMINISTRATION **Paragraph 1.** The authority citation for part 301 continues to read, in part, as follows: Authority: 26 U.S.C. 7805 * * * **Par. 2.** Section 301.7603-1 is revised to read as follows: § 301.7603-1 Service of summons.
(a)*In general* —(1) *Hand delivery or delivery to place of abode* . Except as otherwise provided in paragraph (a)(2) of this section, a summons issued under section 6420(e)(2), 6421(g)(2), 6427(j)(2), or 7602 shall be served by an attested copy delivered in hand to the person to whom it is directed, or left at such person's last and usual place of abode.
(2)*Summonses issued to third-party recordkeepers.* A summons issued under section 6420(e)(2), 6421(g)(2), 6427(j)(2), or 7602 for the production of records (or testimony about such records) by a third-party recordkeeper, as described in section 7603(b)(2) and § 301.7603-2, may also be served by certified or registered mail to the third-party recordkeeper's last known address, as defined in § 301.6212-2. If service to a third-party recordkeeper is made by certified or registered mail, the date of service is the date on which the summons is mailed.
(b)*Persons who may serve a summons.* The officers and employees of the Internal Revenue Service whom the Commissioner has designated to carry out the authority described in § 301.7602-1(b) to issue a summons are authorized to serve a summons issued under section 6420(e)(2), 6421(g)(2), 6427(j)(2), or 7602.
(c)*Effect of certificate of service.* The certificate of service signed by the person serving the summons shall be evidence of the facts it states on the hearing of an application for the enforcement of the summons.
(d)*Sufficiency of description of summoned records.* When a summons requires the production of records, it shall be sufficient if such records are described with reasonable certainty.
(e)*Records.* For purposes of this section and § 301.7603-2, the term *records* includes books, papers, or other data.
(f)*Effective date.* This section is applicable on the date final regulations are published in the **Federal Register** . **Par. 3.** Section 301.7603-2 is added to read as follows: § 301.7603-2 Third-party recordkeepers.
(a)*Definitions* —(1) *Accountant.* A person is an accountant under section 7603(b)(2)(F) for purposes of determining whether that person is a third-party recordkeeper if, on the date the records described in the summons were created, the person was registered, licensed, or certified as an accountant under the authority of any state, commonwealth, territory, or possession of the United States, or of the District of Columbia.
(2)*Attorney.* A person is an attorney under section 7603(b)(2)(E) for purposes of determining whether that person is a third-party recordkeeper if, on the date the records described in the summons were created, the person was registered, licensed, or certified as an attorney under the authority of any state, commonwealth, territory, or possession of the United States, or of the District of Columbia.
(3)*Credit cards* —(i) *Person extending credit through credit cards.* The term *person extending credit through the use of credit cards or similar devices* under section 7603(b)(2)(C) generally includes any person who issues a credit card. The term does not include a seller of goods or services who honors credit cards issued by other parties but who does not extend credit through the use of credit cards or similar devices.
(ii)*Devices similar to credit cards.* An object is a device similar to a credit card under section 7603(b)(2)(C) only if it is physical in nature, such as a charge plate or similar device that may be tendered to obtain an extension of credit. Thus, a person who extends credit by requiring customers to sign sales slips without requiring the use of, or reference to, a physical object issued by that person is not a third-party recordkeeper under section 7603(b)(2)(C).
(iii)*Debit cards.* A debit card is not a credit card or similar device because a debit card is not tendered to obtain an extension of credit.
(4)*Enrolled agent.* A person is an enrolled agent under section 7603(b)(2)(I) for purposes of determining whether that person is a third-party recordkeeper if the person is enrolled as an agent authorized to practice before the Internal Revenue Service pursuant to Circular 230, 31 CFR part 10.
(5)*Owner or developer of certain computer code and data.* An owner or developer of computer software source code under section 7603(b)(2)(J) is a third-party recordkeeper when summoned to produce a computer software source code (as defined in section 7612(d)(2)), or an executable code and associated data described in section 7612(b)(1)(A)(ii), even if that person did not make or keep records of another person's business transactions or affairs.
(b)*When third-party recordkeeper status arises* —(1) *In general.* Except as provided in paragraph (a)(5) of this section, a person listed in section 7603(b)(2) is a third-party recordkeeper for purposes of section 7609(c)(2)(E) and § 301.7603-1 only if the summons served on that person seeks records (or testimony regarding such records) of a third party's business transactions or affairs and such recordkeeper made or kept the records in the capacity of a third-party recordkeeper. For instance, an accountant is not a third-party recordkeeper (by reason of being an accountant) with respect to the accountant's records of a sale of property by the accountant to another person. Similarly, a credit card issuer is not a third-party recordkeeper (by reason of being a person extending credit through the use of credit cards or similar devices) with respect to—
(i)Records relating to non-credit card transactions, such as a cash sale by the issuer to a holder of the issuer's credit card; or
(ii)Records relating to transactions involving the use of another issuer's credit card.
(2)*Examples.* The rules of paragraph (b)(1) of this section are illustrated by the following examples: Example 1. V issues a credit card (the V card) that is honored by R, a retailer. When using the V card, C, a customer, signs a sales slip in triplicate. C, R, and V each retain one copy. Only the copy held by V is held by a third-party recordkeeper under section 7603(b)(2), even though R may issue its own credit card. Example 2. R, a retailer, issues its own credit card (the R card) to C, a customer. When C makes a credit purchase from R using the R card, C signs a sales slip in duplicate. C and R each retain one copy. Because R keeps the copy in its capacity as credit card issuer, as well as in its capacity as a retailer, it is a third-party recordkeeper under section 7603(b)(2) with respect to its copy of the sales slip.
(c)*Effective date.* This section is applicable on the date the final regulations are published in the **Federal Register** . **Par. 4.** Sections 301.7609-1 through 301.7609-5 are revised to read as follows: § 301.7609-1 Special procedures for third-party summonses.
(a)*In general* —(1) Section 7609 requires the Internal Revenue Service
(IRS)to follow special procedures when summoning a third party's testimony, records, or computer software source code. Except as provided in § 301.7609-2(b), the IRS must provide notice of a third-party summons to any person identified in the summons, other than the person summoned. A person entitled to notice of a third-party summons may intervene in any proceeding brought to enforce the summons or may bring a proceeding to quash the summons, regardless of whether they receive notice of the summons from the IRS pursuant to section 7609(a) and § 301.7609-2.
(2)Neither section 7609 nor § 301.7603-1, § 301.7603-2, or §§ 301.7609-1 through 301.7609-5 limit the IRS's ability to obtain information, other than by summons, through formal or informal procedures authorized by sections 7601 and 7602.
(b)*Cross references.* See § 301.7609-2 for rules relating to persons who must be notified of a third-party summons and exceptions to the notification requirements. See § 301.7609-3 for rules relating to the rights and duties of summoned parties. See § 301.7609-4 for rules relating to actions to quash a summons or to intervene in a summons enforcement proceeding. See § 301.7609-5 for rules relating to the suspension of periods of limitations.
(c)*Records.* For purposes of §§ 301.7609-1 through 301.7609-5, the term “records” includes books, papers, or other data.
(d)*Effective date.* This section is applicable on the date the final regulations are published in the **Federal Register** . § 301.7609-2 Notification of persons identified in third-party summonses.
(a)*In general* —(1) *Persons entitled to notice.* Except as provided in § 301.7609-2(b), the Internal Revenue Service
(IRS)shall give notice of a third-party summons to any person, other than the person summoned, who is identified in the summons. The only persons so identified are the person with respect to whose liability the summons is issued and any other person identified in the description of summoned records or testimony. For example, if the IRS issues a summons to a bank with respect to the liability of C that requires the production of account records of A and B, both of whom are named in the summons, the IRS must notify A, B and C of the summons.
(2)*Time for providing notice.* If notice is required by paragraph (a)(2) of this section, such notice must be given within three days of the date on which the summons is served on the third party, but no later than 23 days prior to the date fixed in the summons as the date on which the examination of the summoned person or records is scheduled.
(3)*Methods for serving notice.* Notice may be served by hand delivery to any person entitled to notice or by leaving notice at such person's last and usual place of abode. Notice also may be served by certified or registered mail to the person's last known address, as defined in § 301.6212-2. If service to a person entitled to notice is made by certified or registered mail, the date of service is the date on which the notice is mailed.
(4)*Content of the notice.* Notice required to be given to any person entitled to notice must be accompanied by a copy of the summons that has been served and must include an explanation of the right to bring a proceeding to quash the summons. The copy of the summons accompanying the notice is not required to contain the attestation that appears pursuant to section 7603 on the copy of the summons served on the summoned person.
(b)*Exceptions.* The IRS is not required to provide notice to persons identified in the following third-party summonses:
(1)*Summons served on the taxpayer.* The IRS is not required to provide notice of a summons served on the person with respect to whose liability the summons was issued, or any officer or employee of such person.
(2)*Existence of records.* The IRS is not required to provide notice in the case of a summons issued to determine whether or not records of the business transactions or affairs of a person identified in the summons have been made or kept.
(3)*Numbered account or similar arrangement.* The IRS is not required to provide notice in the case of a summons issued solely to determine the identity of a person having a numbered account or similar arrangement with a bank or other institution. An account is a numbered account or similar arrangement within the meaning of this paragraph (b)(3) if it is an account through which a person may authorize transactions solely through the use of a number, symbol, code name, or other device not involving the disclosure of the person's identity. The term *person having a numbered account or similar arrangement* includes the person who opened the account and any person authorized to access the account or to receive records or statements concerning it.
(4)*Summonses in aid of the collection of liabilities* —(i) *In general* . The IRS is not required to provide notice in the case of a summons issued in aid of the collection of liabilities. A summons is in aid of the collection of liabilities within the meaning of this paragraph if it is issued in connection with the collection of—
(A)An assessment or judgment against the person with respect to whose liability the summons is issued; or
(B)The liability determined at law or in equity of any transferee or fiduciary of a person described in paragraph (b)(4)(i)(A) of this section.
(ii)*Examples.* The rules of paragraph (b)(4) of this section are illustrated by the following examples: Example 1. A third-party summons is issued to a bank to determine the amount held in an account in the name of A, against whom unpaid income taxes have been assessed. Notice of the summons is not required to be given to A or any other persons identified in the summons because the summons is issued in connection with the collection of taxes that have been assessed. Example 2. A third-party summons is issued to determine whether assessments should be made against A, who is potentially liable for a trust fund recovery penalty under section 6672 with respect to the assessed but unpaid withholding tax liability of employer E. The summons is captioned: In the matter of A. Notice of the summons must be provided to A and to any other persons identified in the summons because the summons was issued with respect to A's potential, unassessed liability under section 6672.
(5)*Summonses issued by a criminal investigator* . The IRS is not required to provide notice in the case of a summons issued by a criminal investigator to a person other than a third-party recordkeeper, as defined in section 7603(b). For purposes of section 7609(c)(2)(E), a summons issued by a criminal investigator is any summons issued as part of a criminal investigation by an IRS officer or employee having authority to conduct a criminal investigation and to issue a summons.
(6)*John Doe summons.* The IRS is not required to provide notice in the case of a John Doe summons issued under section 7609(f).
(7)*Summons issued pursuant to a court order to prevent spoliation of evidence.* The IRS is not required to provide notice in the case of a summons for which a court determines there is reasonable cause to believe the giving of notice may lead to attempts to conceal, destroy, or alter records relevant to the examination, to prevent communication of information from other persons through intimidation, bribery, or collusion, or to flee to avoid prosecution, testifying, or production of records.
(c)*Effective date.* This section is applicable on date the final regulations are published in the **Federal Register** . § 301.7609-3 Duty of and protection for the summoned party.
(a)*Duty of the summoned party.* Upon receipt of a summons, the summoned party must begin to assemble the summoned records. The summoned party must be prepared to produce the summoned records on the date on which the summons states that they are to be examined, regardless of the institution or anticipated institution of a proceeding to quash or the summoned party's intervention in a proceeding to quash, as allowed under section 7609(b)(2)(C).
(b)*Disclosing summoned party not liable* —(1) *In general* . A summoned party, or an agent or employee thereof, who makes a disclosure of records or gives testimony as required by a summons in good faith reliance on the certificate of the Secretary (as defined in paragraph (b)(2) of this section) or an order of a court requiring production of records or giving of testimony, will not be liable for any claim arising from such disclosure brought by any customer, any party with respect to whose tax liability the summons was issued, or any other person.
(2)*Certificate of the Secretary* . The Secretary may issue to the summoned party a certificate if the person with respect to whose liability the summons was issued expressly consents to the examination of the records summoned and the taking of testimony. The Secretary also may issue to the summoned party a certificate stating that—
(i)The 20-day period within which a person entitled to notice of the summons may institute a proceeding to quash the summons has expired; and
(ii)No proceeding has been instituted within that period.
(c)*Reimbursement of costs* . Summoned third parties may be entitled to reimbursement of their costs of assembling and preparing to produce summoned records, to the extent allowed by section 7610 and § 301.7610-1.
(d)*Notification of suspension of periods of limitations in connection with a John Doe summons* —(1) *Requirement of notification.* If any periods of limitations are suspended under section 7609(e)(2) and § 301.7609-5(d) with respect to a John Doe summons described in section 7609(f), the summoned party is required under section 7609(i)(4) to provide notice of such suspension to all persons with respect to whose liability the summons was issued.
(2)*Content of notification.* A summoned party required to notify a person of the suspension of the periods of limitations shall provide the following information to such person—
(i)A John Doe summons was served on the summoned party seeking records that may be relevant to the person's tax liability;
(ii)The date on which the summons was served;
(iii)The tax period(s) to which the summons relates;
(iv)Six months has passed since service of the summons and the summoned party's response to the summons has not been finally resolved;
(v)The periods of limitations under section 6501 (relating to assessment and collection) and section 6531 (relating to criminal prosecution), have been suspended; and
(vi)The date on which suspension of the periods of limitations under sections 6501 and 6531 began.
(3)*Time and manner of notification* . The notification must be made in writing and may be delivered in person, by mail sent to the address last known by the summoned party, or by use of any electronic means of transmission. Notification should be made as soon as possible after the suspension of the periods of limitations begins. Failure by a summoned party to give notice of the suspension of periods of limitations as required by section 7609(i)(4) does not prevent the suspension of the periods of limitations under section 7609(e)(2).
(e)*Effective date* . This section is applicable on the date the final regulations are published in the **Federal Register** . § 301.7609-4 Right to intervene; right to institute a proceeding to quash.
(a)*Intervention in proceeding with respect to enforcement of a summons* . Under section 7609(b)(1), a person entitled to notice of a summons under section 7609(a) and § 301.7609-2 is entitled to intervene in any proceeding brought under section 7604 with respect to the enforcement of that summons.
(b)*Right to institute a proceeding to quash* —(1) *In general* . Under section 7609(b), a person entitled to notice of a summons under section 7609(a) and § 301.7609-2 may institute a proceeding to quash the summons in the United States district court for the district in which the summoned person resides or is found.
(2)*Requirements for a proceeding to quash* . To institute a proceeding to quash a summons, a person entitled to notice of the summons must, not later than the 20th day following the day the notice of the summons was served on or mailed to such person—
(i)File a petition to quash a summons in the name of the person entitled to notice of the summons in the proper district court;
(ii)Notify the Internal Revenue Service
(IRS)by sending a copy of that petition to quash by registered or certified mail to the IRS employee and office designated in the notice of summons to receive the copy; and
(iii)Notify the summoned person by sending by registered or certified mail a copy of the petition to quash to the summoned person.
(3)*Failure to give timely notice* . If a person entitled to notice of the summons fails to give proper and timely notice to either the summoned person or the IRS in the manner described in paragraph (b)(2) of this section, that person has failed to institute a proceeding to quash and the district court lacks jurisdiction to hear the proceeding. For example, if the person entitled to notice mails a copy of the petition to the summoned person, but fails to mail a copy of the petition to the designated IRS employee and office, the person entitled to notice has failed to institute a proceeding to quash. Similarly, if the person entitled to notice mails a copy of such petition to the summoned person but, instead of sending a copy of the petition by registered or certified mail to the designated IRS employee and office, the person entitled to notice provides the designated IRS employee and office the petition by some other means, the person entitled to notice has failed to institute a proceeding to quash.
(4)*Failure to institute a proceeding to quash* . If a person entitled to notice fails to institute a proceeding to quash within 20 days following the day the notice of the summons was served on or mailed to such person, the IRS may examine the summoned records and take summoned testimony following the 23rd day after notice of the summons was served on or mailed to the person entitled to notice.
(c)*Presumption no notice has been mailed* . Section 7609(b)(2)(B) permits a person entitled to notice to institute a proceeding to quash by filing a petition in district court and notifying both the IRS and the summoned person. Unless the person entitled to notice has notified both the IRS and the summoned person in the appropriate manner, the person entitled to notice has failed to institute a proceeding to quash. For the purpose of permitting the IRS to examine the summoned witnesses and records, it is presumed that the notification was not timely mailed if the copy of the petition was not delivered to the summoned person or to the person and office designated to receive the notice on behalf of the IRS within three days after the close of the 20-day period allowed for instituting a proceeding to quash.
(d)*Effective date* . This section is applicable on the date the final regulations are published in the **Federal Register** . § 301.7609-5 Suspension of periods of limitations.
(a)*In general* . Except in the case of a summons that is a designated or related summons described in section 6503(j), the following rules relating to the suspension of certain periods of limitations apply to all third-party summonses subject to the notice requirements of section 7609(a) and to all John Doe summonses subject to the requirements of section 7609(f).
(b)*Intervention in an action to enforce the summons* —(1) *In general* . If a person entitled to notice of a summons under section 7609(a) and § 301.7609-2 with respect to whose liability the summons was issued, or such person's agent, nominee, or other person acting under the direction or control of the person entitled to notice, takes any action to intervene in a proceeding with respect to enforcement of such summons brought pursuant to section 7604, that person's periods of limitations under sections 6501 (relating to assessment and collection) and 6531 (relating to criminal prosecutions) for the tax period or periods that are the subject of the summons are suspended for the period during which such proceeding is pending.
(2)*Action to intervene* . A person entitled to notice takes any action to intervene in a proceeding to enforce a summons within the meaning of § 301.7609-4(a) on the date when a motion to intervene is filed with the court.
(c)*Institution of a proceeding to quash a summons* —(1) *In general* . If a person entitled to notice of a summons under section 7609(a) and § 301.7609-2 with respect to whose liability the summons was issued, or such person's agent, nominee, or other person acting under the direction or control of such person, takes any action described in § 301.7609-4(b) to institute a proceeding to quash such summons, that person's periods of limitations under sections 6501 and 6531 for the tax period or periods that are the subject of the summons are suspended for the period during which such proceeding is pending.
(2)*Action to institute a proceeding to quash a summons* . A person entitled to notice takes any action to institute a proceeding to quash if he or she files a petition to quash the summons in any district court, regardless of whether the timely filing requirements of section 7609(b)(2)(A) or the notice requirements of section 7609(b)(2)(B) are satisfied. For example, a person entitled to notice takes an action to institute a proceeding to quash a summons for purposes of this section if that person files a petition to quash the summons in district court and notifies the summoned person by sending a copy of the petition by registered or certified mail, but fails to mail a copy of that notice to the appropriate Internal Revenue Service
(IRS)person and office.
(d)*Summoned party's failure to finally resolve the response to a summons after six months from service* —(1) *In general* . If a third party's response to a summons for which the IRS was required to provide notice to persons identified in the summons, or to a John Doe summons described in section 7609(f), is not finally resolved within six months after the date of service of the summons, the periods of limitations are suspended under sections 6501 and 6531, for the person with respect to whose liability the summons was issued and for any person whose identity is sought to be obtained by a John Doe summons, for the tax period or periods that are the subject of the summons. The suspension shall begin on the date which is six months after the service of the summons and shall end on the date on which there is a final resolution of the summoned party's response to the summons.
(2)*Example* . The rules of paragraph (d)(1) of this section are illustrated by the following example: Example. A John Doe summons is issued on April 1, 2000, to the promoter of a tax shelter and seeks the names of all participants in the shelter in order to investigate the participants' income tax liabilities for 1997 and 1998. The district court approves service of the summons on April 30, 2000, and the summons is served on the promoter on May 1, 2000. The promoter does not provide the names of the participants. The periods of limitations for the participants' income tax liabilities and criminal prosecution for 1997 and 1998 are suspended under section 7609(e)(2) beginning on November 1, 2000, the date which is six months after the date the John Doe summons was served until the date on which the promoter's response to the summons is finally resolved.
(e)*Definitions* —(1) *Agent, nominee, etc* . A person is the agent, nominee, or other person of a person entitled to notice under section 7609(a) and § 301.7609-2, and is acting under the direction or control of the person entitled to notice for purposes of section 7609(e)(1), if the person entitled to notice has the ability in fact or at law to cause the agent, nominee or other person, to take the actions permitted under section 7609(b).
(2)*Period during which a proceeding is pending—*
(i)*Intervention in an enforcement proceeding.* The period during which the periods of limitations under sections 6501 and 6531 are suspended under section 7609(e)(1) begins on the date any person described in paragraph
(b)of this section intervenes in an action to enforce the summons. The periods of limitations remain suspended until all appeals are disposed of, or until the expiration of the period during which an appeal may be taken or a request for further review may be made. The periods of limitations remain suspended for the period during which a proceeding is pending, regardless of compliance (or partial compliance) with the summons during that period. If, following issuance of an order to enforce a third-party summons, a collateral proceeding is brought challenging whether production made by the summoned party fully satisfied the court order and whether sanctions should be imposed against the summoned party for a failure to satisfy that order, the periods of limitations remain suspended until all appeals of the collateral proceeding are disposed of, or until the expiration of the period during which an appeal may be taken or a request for further review of the collateral proceeding may be made. Any collateral proceeding to the original proceeding shall be considered to be a continuation of the original proceeding.
(ii)*Proceeding to quash a summons* . The period during which the periods of limitations under sections 6501 and 6531 are suspended under section 7609(e)(1) begins on the date any person described in paragraph
(c)of this section files a petition to quash the summons in district court. The periods of limitations remain suspended until all appeals are disposed of, or until expiration of the period in which an appeal may be taken or a request for further review may be made. The periods of limitations remain suspended for the period during which a proceeding is pending, regardless of compliance (or partial compliance) with the summons during that period.
(iii)*Examples.* The rules of paragraph (e)(2) are illustrated by the following examples: Example 1. A revenue agent issues a summons to A, an accountant for B, requiring production of records relating to B's income tax liabilities for 1998. The summons is served on A on March 1, 2000. B files a petition to quash the summons in district court on March 15, 2000. The district court dismisses B's petition on July 1, 2000. B fails to appeal this decision by filing a notice of appeal within 60 days from the date of the district court's order of dismissal. The revenue agent notifies A that B did not appeal the district court's order. A turns over all of the records requested in the summons. The periods of limitations applicable to B for 1998 under sections 6501 and 6531 are suspended under section 7609(e)(1) from March 15, 2000, the date B filed a petition to quash, until August 30, 2000, the last day on which B could have filed a notice of appeal. Example 2. A revenue agent issues a summons to A, an accountant for B, requiring production of records relating to B's income tax liabilities for 1999. The summons is served on A on June 1, 2001. B files an untimely petition to quash the summons in district court on June 30, 2001. The district court dismisses B's petition on July 31, 2001. B does not file an appeal of the district court's order. The periods of limitations applicable to B for 1999 under sections 6501 and 6531 are suspended under section 7609(e)(1) from June 30, 2001, the date B filed an untimely petition to quash, until September 29, 2001, the last day on which B could have filed a notice of appeal.
(3)*Final resolution of the summoned third party's response to a summons* . For purposes of section 7609(e)(2)(B), final resolution with respect to a summoned party's response to a third-party summons occurs when the summons or any order enforcing any part of the summons is fully complied with and all appeals are disposed of or the period in which an appeal may be taken or a request for further review may be made has expired. The determination of whether there has been full compliance will be made within a reasonable time, given the volume and complexity of the records produced, after the later of the giving of all testimony or the production of all records requested by the summons. If, following an enforcement order, collateral proceedings are brought challenging whether the production made by the summoned party fully satisfied the court order and whether sanctions should be imposed against the summoned party for a failing to do so, the suspension of the periods of limitations shall continue until the summons or any order enforcing any part of the summons is fully complied with and the decision in the collateral proceeding becomes final. A decision in a collateral proceeding becomes final when all appeals are disposed of or when the period in which an appeal may be taken or a request for further review may be made has expired.
(f)*Effective date* . This section is applicable on the date the final regulations are published in the **Federal Register** . Mark E. Matthews, Deputy Commissioner for Services and Enforcement. [FR Doc. E6-11543 Filed 7-20-06; 8:45 am] BILLING CODE 4830-01-P OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION 29 CFR Part 2201 Regulations Implementing the Freedom of Information Act AGENCY: Occupational Safety and Health Review Commission. ACTION: Notice of proposed rulemaking. SUMMARY: The Occupational Safety and Health Review Commission (OSHRC) is proposing to revise its regulations implementing the Freedom of Information Act (FOIA), 5 U.S.C. 552, as amended. The proposed regulations contain new provisions to comply with Executive Order 13392. In addition, the proposed regulations have been updated to reflect changes in OSHRC's policies and procedures. As a result of these proposed amendments, the public will have a clearer understanding of OSHRC's policies and procedures implementing the FOIA. DATES: Submit comments on or before August 21, 2006. ADDRESSES: You may submit comments by any of the following methods: • E-mail: *regsdocket@oshrc.gov.* Include “FOIA PROPOSED RULEMAKING” in the subject line of the message. • Fax:
(202)606-5417. • Mail: 1120 20th Street, NW., Ninth Floor, Washington, DC 20036-3457. • Hand Delivery/Courier: Same as mailing address. *Instructions:* All submissions must include your name, return address and e-mail address, if applicable. Please clearly label submissions as “FOIA PROPOSED RULEMAKING.” If you submit comments by e-mail, you will receive an automatic confirmation e-mail from the system indicating that we have received your submission. If, in response to your comments submitted via e-mail, you do not receive a confirmation e-mail within five working days, please contact us directly at
(202)606-5410. FOR FURTHER INFORMATION CONTACT: Jin H. Kim, Attorney-Advisor, Office of the General Counsel, via telephone:
(202)606-5410, or via e-mail: *jkim@oshrc.gov* . SUPPLEMENTARY INFORMATION: I. Background The Occupational Safety and Health Review Commission (OSHRC) proposes several substantive and technical revisions governing its regulations implementing the Freedom of Information Act (FOIA), 5 U.S.C. 552, as amended. OSHRC proposes revising its FOIA regulations, including the addition of new provisions and the modification of existing provisions, to comply with Executive Order 13392 (E.O. 13392), 70 FR 75373, December 19, 2005. In E.O. 13392, the President directs each agency to ensure that its FOIA operations treat FOIA requesters courteously and appropriately and to provide requesters with prompt information regarding the status of their FOIA requests, as well as appropriate information regarding the agency's response. In addition, each agency is to provide FOIA requesters and the public in general with “citizen-centered” ways to learn about the agency's FOIA process and how to receive agency records that are publicly available. By ensuring that its FOIA operations are “citizen-centered” and “results-oriented,” each agency will improve service and performance, thereby strengthening compliance with the FOIA. In order to achieve these goals, E.O. 13392 requires each agency head to designate a Chief FOIA Officer, who has agency-wide responsibility for the efficient and appropriate compliance with the FOIA. As part of his or her duties under E.O. 13392, the Chief FOIA Officer must review the agency's FOIA operations and identify any areas for improvement. In addition, E.O. 13392 requires agencies to establish FOIA Requester Service Centers to enable any FOIA requester to seek information concerning the status of his or her FOIA request as well as appropriate information about the agency's FOIA response. As part of the FOIA Requester Service Center, E.O. 13392 further requires an agency to designate its own FOIA Public Liaison(s) to serve as the supervisory official(s) to whom a FOIA requester can raise concerns about the service the FOIA requester has received from the FOIA Requester Service Center, following an initial response to the FOIA request. Based upon these new requirements, OSHRC therefore proposes to revise its regulations implementing the FOIA to comply fully with E.O. 13392. Further, as a result of the Chief FOIA Officer's review of OSHRC's FOIA operations, OSHRC proposes to amend its rules to reflect recent changes in OSHRC's policies and procedures as they relate to the processing of FOIA requests. At the beginning of this fiscal year, OSHRC moved all FOIA processing from its Office of Administration to the Office of the General Counsel, where paralegals and attorneys have received training in the handling of FOIA requests. Moreover, OSHRC has identified several areas for improvement in its processing of FOIA requests that are addressed by these proposed rules, such as establishing a recordkeeping log, standardizing forms for processing FOIA requests, adding definitions to clarify the use of terms, and establishing a streamlined appeals process that covers fee waiver denials. These changes in OSHRC's policies and procedures will make the processing of FOIA requests more efficient and responsive. Lastly, OSHRC proposes several minor revisions that are purely technical or clarifying in nature which relate to changes in phrasing and nomenclature. Accordingly, OSHRC proposes to revise its regulations implementing the FOIA and put them out for public comment pursuant to 5 U.S.C. 552(a)(4)(A)(i), (a)(6)(B)(iv), (a)(6)(D)(i), and (a)(6)(E)(i). For the convenience of the reader, OSHRC reproduces proposed 29 CFR part 2201 in its entirety. The specific amendments that OSHRC proposes to each section of 29 CFR part 2201 are discussed hereafter in regulatory sequence. II. Proposed Regulatory Revisions The President's issuance of E.O. 13392 on December 14, 2005 created new requirements and duties for improving agency disclosure of information under the FOIA which are implemented in these proposed rules. Consequently, OSHRC proposes to amend the authority citation in 29 CFR part 2201 to add a reference to E.O. 13392. In 29 CFR 2201.1, OSHRC would make changes to correct a grammatical error in the section heading and to add abbreviations for “Occupational Safety and Health Review Commission” and “Freedom of Information Act” to the regulatory text. Accordingly, the proposed rules in part 2201 are revised throughout to refer to the “Occupational Safety and Health Review Commission” as “OSHRC” or “Commission,” and the “Freedom of Information Act” as “FOIA.” In § 2201.2, OSHRC proposes adding a sentence to the end of the section that provides additional details about the designation of one of the Commissioners as the Chairman and his responsibilities for the administrative operations of the Commission, consistent with section 12(e) of the Occupational Safety and Health Act of 1970, 29 U.S.C. 661(e). Also, to conform to the abbreviations noted above in § 2201.1, OSHRC would substitute “OSHRC” in place of “The Occupational Safety and Health Review Commission (OSHRC or Commission)” in new § 2201.2. In § 2201.3, OSHRC proposes revising the delegation of FOIA-related duties to reflect the changes required by E.O. 13392 and break them out into new paragraphs
(a)through (d). In order to comport with E.O. 13392, OSHRC would eliminate the current language regarding the Chairman's delegation of authority to the Freedom of Information Act Officer. In its place, OSHRC proposes adding a delegation of authority to the Chief FOIA Officer under new paragraph (a). In addition, OSHRC would eliminate the alternate designation of another OSHRC officer or employee, such as the General Counsel or the Executive Secretary, by the Chairman or the Executive Director in the absence of the Freedom of Information Act Officer. Instead, under new paragraph
(b)of proposed § 2201.3, the Chief FOIA Officer would designate the agency's FOIA Disclosure Officer(s) to process all FOIA requests. Under paragraph (c), the Chief FOIA Officer would designate the FOIA Public Liaison(s) to address any concerns about the service a FOIA requester has received following an initial response by the agency. Under new paragraph (d), OSHRC's proposal identifies the FOIA Disclosure Officer(s) and FOIA Public Liaison(s) as serving in the agency's FOIA Requester Service Center and provides the address and telephone number to contact the FOIA Requester Service Center. This new language reflects changes in the delegation of authority and designation of personnel in compliance with E.O. 13392. Indeed, in order to ensure appropriate communication with FOIA requesters, E.O. 13392 requires agencies to “establish one or more FOIA Requester Service Centers” to receive and respond to inquiries from FOIA requesters. To comply with this requirement, OSHRC proposes to establish a FOIA Requester Service Center at its national office in Washington, DC OSHRC's FOIA Requester Service Center, which will handle all FOIA requests and inquiries about FOIA requests, will consist of FOIA Disclosure Officer(s) and FOIA Public Liaison(s). Under OSHRC's new procedures, the FOIA Disclosure Officer(s) will handle all initial responses to FOIA requests. The FOIA Public Liaison(s) will ensure appropriate communication between FOIA requesters and FOIA Disclosure Officer(s) and will be supervisory employee(s). This change will help ensure that OSHRC's FOIA operations are “citizen-centered” and “results-oriented” as directed in E.O. 13392. OSHRC also would update references to the FOIA Officer and Information Office throughout 29 CFR part 2201 to reflect this change. OSHRC proposes to eliminate the second to last sentence of current § 2201.3 that refers to the handling of requests for copies of individual decisions because copies of Commission decisions have been placed on OSHRC's Web site for the public's convenience, pursuant to the Electronic Freedom of Information Act Amendments of 1996, Public Law 104-231, 110 Stat. 3048 (codified as amended in 5 U.S.C. 552) (e-FOIA). OSHRC would further eliminate the last sentence of current § 2201.3 which refers to the handling of “all other information requests” because this information will be covered under new § 2201.5(a) of the regulations; thus, its inclusion in § 2201.3 is redundant. In § 2201.4, OSHRC first proposes to change the heading to include the phrase “and definitions.” Second, OSHRC would update regulatory cross-references and make minor nomenclature changes throughout the section, such as deleting “Review” from “Review Commission” and replacing “Freedom of Information Act Officer” with “FOIA Disclosure Officer.” Third, OSHRC would make other minor changes in phrasing to paragraph
(a)by combining the last two sentences of the existing regulations for clarity without changing the meaning of the provision. Fourth, in paragraph (c), OSHRC would edit the paragraph heading to update the nomenclature, as well as the introductory text to describe more precisely the location of the reading room. Fifth, OSHRC would also add new paragraphs (c)(3) and (c)(4) to reflect the language of the FOIA, and renumber current paragraphs (c)(3) and (c)(4) as new paragraphs (c)(5) and (c)(6). Sixth, in paragraph (d), OSHRC would add a new paragraph heading noting record availability at the OSHRC e-FOIA reading room, as well as language clarifying the availability of electronic records. Finally, OSHRC would add a new paragraph
(e)to § 2201.4 to provide definitions relevant to 29 CFR part 2201 that are consistent with other agencies' FOIA regulations. These nine definitions clarify certain FOIA terminology but in no way change how OSHRC processes FOIA requests. The terms include: “commercial use request,” “direct costs,” “duplication,” “education institution,” “noncommercial scientific institution,” “representative of the news media, or media requester,” “review,” “search,” and “working day.” The terms have been defined using standard language consistent with the statute, including the incorporation of minor technical modifications from the FOIA regulations of several other government agencies, including the Department of Justice (28 CFR part 16) and the Office of Management and Budget
(OMB)(5 CFR part 1303). OSHRC proposes to define “working day,” which is not defined in other government agencies” FOIA regulations, in order to clarify the FOIA's calculation of time. OSHRC would remove current § 2201.5 altogether because it is no longer necessary. OSHRC had a policy of providing a hard copy of a single decision before the advent of the Internet and e-FOIA. Pursuant to e-FOIA, OSHRC has placed Commission decisions on OSHRC's Web site, *http://www.oshrc.gov* , for the public's convenience. Therefore, OSHRC proposes to remove § 2201.5 in its entirety and renumber subsequent sections accordingly. OSHRC then proposes to redesignate current § 2201.6 as new § 2201.5. In new § 2201.5 (old § 2201.6), OSHRC would eliminate paragraph
(a)of the current regulations in its entirety. Pursuant to e-FOIA, OSHRC has placed most of this information on its Web site for the public's convenience. OSHRC also proposes to make minor technical changes throughout this section to update cross-references and to reflect changes made to other sections in part 2201, as well as to clarify language which would not change the meaning of the provision. For example, OSHRC would remove “Review” from “Review Commission,” replace “Freedom of Information Act Officer” with “FOIA Disclosure Officer” and change references to other provisions. Further, OSHRC would redesignate the old paragraph
(b)as paragraph
(a)with a new paragraph heading, “Requests for information” and modify the language within new paragraph
(a)to clearly delineate the procedures for making FOIA requests. The new paragraph
(a)provides that requests for information must be made in writing with “Freedom of Information Act Request” printed on the request's envelope or cover as well as the request itself, and addressed to the FOIA Disclosure Officer. In addition, FOIA requests must describe the record requested to the fullest extent possible and specify the preferred form or format of the response. The new language states that OSHRC shall try to accommodate requesters as to form or format when possible, and if no form or format is specified, OSHRC shall respond in the form or format that is most accessible to OSHRC. This new language is easier to understand and clarifies the procedures for requesting records. Further, OSHRC would redesignate current paragraph
(c)as new paragraph (b), and would rephrase new paragraph
(b)for clarity regarding the date of receipt of a FOIA request. OSHRC would also delete paragraph
(d)(Specificity required) (old § 2201.6) because the information requested in paragraph
(d)is now incorporated in new paragraph
(a)of proposed § 2201.5. OSHRC proposes to redesignate current § 2201.7 as new § 2201.6. In new § 2201.6 (old § 2201.7), OSHRC would first update cross-references to other sections changed in part 2201 and then make minor technical and grammatical changes throughout this section. For example, OSHRC would remove “Review” from “Review Commission” and replace “Freedom of Information Act Officer” with “FOIA Disclosure Officer” throughout this section. OSHRC also proposes to rephrase paragraph
(b)for clarity without changing the meaning of the provision by directly stating that the FOIA Disclosure Officer(s) shall notify the requester in writing about extensions of time. Also in the introductory text to paragraph (b), OSHRC would delete the phrase “telephonic notice” when discussing “extensions of response time in usual circumstances” beyond the allowable time, because the FOIA requires written notice under 5 U.S.C. 552(a)(6)(B). Further, OSHRC would modify the language of paragraph (b)(1) to reflect in a more precise manner the location of OSHRC records. OSHRC records are currently located in OSHRC's national office, regional offices and an off-site storage location. In paragraph (b)(3), OSHRC would delete the phrase “or among two or more components within the Commission having substantial subject-matter interest in the request” because this phrase is unnecessary to OSHRC's FOIA operations. For consistency purposes, OSHRC proposes requiring written notice in paragraph
(c)for additional extensions of time, as well as in paragraph (d)(3) for when the estimated time to process a FOIA request substantially changes. By providing written notice to requesters for these circumstances, OSHRC believes that it would improve OSHRC's communication with requesters. In paragraph
(d)of § 2201.6 (old § 2201.7), OSHRC would rename the heading from “multitrack processing” to “two-track processing” to describe more accurately OSHRC's processing of FOIA requests. Further, in order to streamline the FOIA rules and make them more user friendly, OSHRC proposes deleting paragraph (e)(4), as well as paragraph
(g)of current § 2201.7 and incorporate that information in new § 2201.9 (Appeal of denials). New § 2201.9 will apply to all appeals of denials related to FOIA requests ( *i.e.* , requests for records, requests for expedited processing, and/or requests for fee waiver). In paragraph (f), OSHRC proposes to consolidate all denials related to FOIA requests ( *i.e.* , requests for records, requests for expedited processing, and/or requests for fee waiver) to streamline the rules and make them more user friendly. Finally, OSHRC would further revise the language in paragraph
(f)to closely track the language of the FOIA, 5 U.S.C. 552(a)(6)(C)(i) and (F), by requiring the FOIA Disclosure Officer(s) to provide the reason for a denial, a reasonable estimate of the volume of matter denied (unless doing so would harm an interest protected by the exemption(s) under which the request was denied), the name and title or position of the person responsible for the denial of the request, and also notify the requester of the right to appeal the determination in the written notice of denial. Due to the movement of paragraph
(g)to new § 2201.9 (Appeal of denials), OSHRC proposes redesignating paragraph
(h)as new paragraph (g). OSHRC would edit the language in new paragraph
(g)to require written justification for deletions within a record, because the FOIA states that “the justification for the deletion shall be explained fully in writing” as required under 5 U.S.C. 552(a). OSHRC proposes to redesignate current § 2201.8 as new § 2201.7. In new § 2201.7 (old § 2201.8), OSHRC would revise this section to reflect changes in OSHRC's calculation of fees, and create an appendix that reflects OSHRC's fee schedule. In paragraph (a), OSHRC proposes to make several nomenclature changes and update a cross-reference to the section on fee waivers. In addition, OSHRC proposes eliminating the specified dollar amount ($10) and changing it to “the threshold amount as provided in OSHRC's schedule of fees.” Further, in new § 2201.7 (old § 2201.8), OSHRC proposes deleting paragraphs (a)(2) and (a)(3) and incorporating that definitional information in paragraph § 2201.4(e). In addition, the procedural information in paragraph (a)(3) is duplicated in new § 2201.8(a) discussed below. In paragraph (b), OSHRC proposes revising the copying, searching and reviewing fees so they are based on the direct costs of these services as provided in the FOIA under 5 U.S.C. 552(a)(4)(A)(iv). The FOIA provides that the Director of OMB shall promulgate guidelines for a uniform schedule of fees for all agencies under 5 U.S.C. 552(a)(4)(A)(i). OSHRC calculates its fees in accordance with OMB's “Uniform Freedom of Information Act Fee Schedule and Guidelines,” 52 FR 10012, March 27, 1987. Under OMB's guidelines, these fees are to be based on the average hourly salary (base plus DC locality payment) of employees performing the services plus 16 percent for benefits. In addition, the fees for clerical employees are to be based on an average of all employees at the GS-9 level and below; the fees for professional employees are to be based on all employees at the GS-10 through GS-14 level; and the fees for managerial employees are to be based on an average of all employees at the GS-15 level and above. OSHRC's Office of Administration has calculated and updated the fees, which appear in the attached Appendix A. The FOIA Requester Service Center also will provide a hard copy of the schedule of fees upon request. OSHRC proposes to revise the language in paragraphs (b)(1), (b)(2) and (b)(3) of new § 2201.7 (old § 2201.8) to reflect the new calculation of fees. OSHRC proposes to add a new paragraph
(c)in new § 2201.7 (old § 2201.8) requiring the FOIA Disclosure Officer to provide requesters an itemized invoice for fees related to FOIA requests. Although the FOIA does not require an itemized invoice, OSHRC would provide an itemized invoice for the convenience of the requester as part of OSHRC's effort to be citizen-centered pursuant to E.O. 13392. OSHRC would also redesignate old paragraph
(c)as new paragraph
(d)to reflect the addition of the new paragraph (c). New paragraph
(d)will be updated to include changes in nomenclature. OSHRC also would delete the current paragraph
(d)(Certification or authentication), and include such certification or authentication service in a new paragraph
(g)(Fees for services not required by the Freedom of Information Act), which is more inclusive of other services, such as express mail. Paragraph
(e)will remain essentially the same, except that OSHRC would make changes in wording that are technical in nature, such as replacing “Freedom of Information Act Officer” with “FOIA Disclosure Officer” and using gender neutral language. OSHRC would also change “copying or search” to “the total fee” to reflect the true cost of satisfying the request. OSHRC in this proposal has left in place the $25 total fee threshold, above which the agency is required to contact the requester about cost. OSHRC is considering, however, whether to raise that threshold amount. OSHRC requests comments specifically on whether, and by how much, this threshold should be raised. In paragraph
(f)of new § 2201.7 (old § 2201.8), OSHRC would make some changes in nomenclature to insert the term “FOIA Disclosure Officer” and insert gender neutral language. OSHRC would also modify the language in the third sentence to require full payment when a requester has previously failed to pay within 30 days. This revision is more consistent with the other sentences in the paragraph addressing advance payment. As noted above, OSHRC proposes to create a new paragraph
(g)on fees for services not required by the FOIA. This new paragraph is more inclusive of the types of services, such as express mail, that is not in OSHRC's current regulation. OSHRC also would revise the language in paragraph (h), as well as paragraph (i), to reflect changes in OSHRC's procedures for transferring the bill collection responsibilities related to FOIA requests to OSHRC's Office of Administration. OSHRC believes that this change in bill collection procedures will improve efficiency because the FOIA Requester Service Center will not have to devote resources to bill collection and can focus on responding to FOIA requests. In paragraph (i), OSHRC would further revise the language to more precisely reflect the statutory provisions relating to the Federal government's collection of debts under the Debt Collection Act of 1982 and its administrative procedures. OSHRC proposes to redesignate current § 2201.9 as new § 2201.8. In new § 2201.8 (old § 2201.9), OSHRC would make several minor changes that are technical in nature, such as replacing references to the “Freedom of Information Act Officer” with “FOIA Disclosure Officer” and using gender neutral language. As mentioned in the discussion of new § 2201.7 (old § 2201.8), OSHRC would include some of the procedural language from paragraph (a)(3) of old § 2201.8 in paragraph
(a)of new § 2201.8 (old § 2201.9). As previously mentioned, OSHRC proposes adding a new section, § 2201.9 (Appeal of denials), to consolidate all appeals in one section. This change is intended to make the FOIA rules more user friendly. OSHRC would also change the time the requester may appeal a denial from 30 working days after the requester receives notice of the appeal to 20 working days. This change is based on a survey of various smaller agencies, including the Federal Mine Safety and Health Review Commission (20 working days). In addition, OSHRC would add appeals of denial of fee waivers in this section because OSHRC's current rule does not specifically provide for appeals of denial of fee waivers. In § 2201.10, OSHRC would make minor technical changes, such as replacing “Freedom of Information Act Officer” with “FOIA Disclosure Officer.” Finally, OSHRC would update the cross-references to the various sections and paragraphs throughout the rules in 29 CFR part 2201 to reflect changes in section numbers and paragraphs due to the reorganization of these proposed regulations. Executive Order 12866 The Commission is an independent regulatory agency, and as such, is not subject to the requirements of E.O. 12866. Paperwork Reduction Act The Commission has determined that the Paperwork Reduction Act, 44 U.S.C. 3501 *et seq.* , does not apply because these rules do not contain any information collection requirements that require the approval of OMB. Executive Order 13132 The Commission is an independent regulatory agency, and as such, is not subject to the requirements of E.O. 13132. Regulatory Flexibility Act The Commission has determined under the Regulatory Flexibility Act, 5 U.S.C. 606(b), that these rules, if adopted, would not have a significant economic impact on a substantial number of small entities. Therefore, a Regulatory Flexibility Statement and Analysis has not been prepared. Unfunded Mandates Reform Act of 1995 The Commission is an independent regulatory agency, and, as such, is not subject to the Unfunded Mandates Reform Act, 2 U.S.C. 1501 *et seq.* Small Business Regulatory Enforcement Fairness Act of 1996 This proposed rule is not a major rule under the Small Business Regulatory Enforcement Fairness Act, 5 U.S.C. 804(2). The proposed rule will not result in an annual effect on the economy of more than $100 million per year; a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of U.S.-based enterprises to compete with foreign-based companies in domestic and export markets. List of Subjects in 29 CFR Part 2201 Freedom of Information. Signed at Washington, DC, on July 17, 2006. W. Scott Railton, Chairman. For the reasons set forth in the preamble, the Commission proposes that Chapter XX, part 2201 of Title 29, Code of Federal Regulations, be revised as follows: PART 2201—REGULATIONS IMPLEMENTING THE FREEDOM OF INFORMATION ACT Sec. 2201.1 Purpose and scope. 2201.2 Description of agency. 2201.3 Delegation of authority and responsibilities. 2201.4 General policy and definitions. 2201.5 Procedure for requesting records. 2201.6 Responses to requests. 2201.7 Fees for copying, searching, and review. 2201.8 Waiver of fees. 2201.9 Appeal of denials. 2201.10 Maintenance of statistics. Appendix A to Part 2201—Schedule of Fees Authority: 29 U.S.C. 661(g); 5 U.S.C. 552; E.O. 13392, 70 FR 75373, 3 CFR, 2005 Comp., p. 216. § 2201.1 Purpose and scope. This part prescribes procedures to obtain information and records of the Occupational Safety and Health Review Commission (OSHRC or Commission) under the Freedom of Information Act (FOIA), 5 U.S.C. 552. It applies only to records or information of the Commission or in the Commission's custody. This part does not affect discovery in adversary proceedings before the Commission. Discovery is governed by the Commission's Rules of Procedure in 29 CFR part 2200, subpart D. § 2201.2 Description of agency. OSHRC adjudicates contested enforcement actions under the Occupational Safety and Health Act of 1970, 29 U.S.C. 651-678. The Commission decides cases after the parties are given an opportunity for a hearing. All hearings are open to the public and are conducted at a place convenient to the parties by an Administrative Law Judge. Any Commissioner may direct that a decision of a Judge be reviewed by the full Commission. The President designates one of the Commissioners as Chairman, who is responsible on behalf of the Commission for the administrative operations of the Commission. § 2201.3 Delegation of authority and responsibilities.
(a)The Chairman delegates to the Chief FOIA Officer the authority to act upon all requests for agency records.
(b)The Chief FOIA Officer shall designate the FOIA Disclosure Officer(s), who shall be responsible for processing FOIA requests.
(c)The Chief FOIA Officer shall designate the FOIA Public Liaison(s), who shall serve as the supervisory official(s) to whom a FOIA requester can raise concerns about the service the FOIA requester has received following an initial response.
(d)OSHRC establishes a FOIA Requester Service Center that shall be staffed by the FOIA Disclosure Officer(s) and FOIA Public Liaison(s). The address and telephone number of the FOIA Requester Service Center is 1120 20th Street, NW., Washington, DC 20036-3457,
(202)606-5410. § 2201.4 General policy and definitions.
(a)*Non-exempt records available to public.* Except for records and information exempted from disclosure by 5 U.S.C. 552(b) or published in the **Federal Register** under 5 U.S.C. 552(a)(1), all records of the Commission or in its custody are available to any person who requests them in accordance with § 2201.5(a). Records include any information that would be a record subject to the requirements of 5 U.S.C. 552 when maintained by the Commission in any format, including electronic format. In response to FOIA requests, the Commission will search for records manually or by automated means, except when an automated search would significantly interfere with the operation of the Commission's automated information system.
(b)*Examination of records in cases appealed to courts.* A final order of the Commission may be appealed to a United States Court of Appeals. When this occurs, the Commission may send part or all of the official case file to the court and may retain other parts of the file. Thus, a document in a case may not be available from the Commission but only from the court of appeals. In such a case, the FOIA Disclosure Officer may inform the requester that the request for a particular document should be directed to the court.
(c)*Record availability at the OSHRC on-site FOIA Reading Room.* The records of Commission activities are publicly available for inspection and copying at the OSHRC on-site FOIA Reading Room, 1120 20th St., NW., Ninth Floor, Washington, DC 20036-3457. These records include:
(1)Final decisions including concurring and dissenting opinions as well as orders issued as a result of adjudication of cases;
(2)OSHRC Rules of Procedure and Guides to those procedures;
(3)Specific agency policy statements adopted by OSHRC and not published in the **Federal Register** ;
(4)Administrative staff manuals that affect a member of the public;
(5)Copies of records that have been released to a person under the FOIA that, because of the subject matter, the Commission determines that the records have become or are likely to become the subject of subsequent requests for substantially the same records; and
(6)A general index of records referred to under paragraph (c)(3) of this section.
(d)*Record availability at the OSHRC e-FOIA Reading Room.* Materials created on or after November 1, 1996 under paragraphs (c)(1), (2),
(3)and
(4)of this section may also be accessed electronically through the Commission's Web site at *http://www.oshrc.gov.*
(e)*Definitions.* For purposes of this part: *Commercial use request* means a request from or on behalf of a person who seeks information for a use or purpose that furthers his or her commercial, trade, or profit interests, which can include furthering those interests through litigation. The FOIA Disclosure Officer shall determine, whenever reasonably possible, the use to which a requester will put the requested records. When it appears that the requester will put the records to a commercial use, either because of the nature of the request itself or because the FOIA Disclosure Officer has reasonable cause to doubt a requester's stated use, the FOIA Disclosure Officer shall provide the requester a reasonable opportunity to submit further clarification. *Direct costs* means those expenses that the Commission actually incurs in searching for and duplicating (and, in the case of commercial use requests, reviewing) records to respond to a FOIA request. Direct costs include, for example, the salary of the employee performing the work (the basic rate of pay for the employee, plus 16 percent of that rate to cover benefits) and the cost of operating duplication machinery. Not included in direct costs are overhead expenses such as the costs of space and heating or lighting of the facility in which the records are kept. *Duplication* means the making of a copy of a record, or of the information contained in it, necessary to respond to a FOIA request. Copies can take the form of paper, microform, audiovisual materials, or electronic records (for example, magnetic tape or disk), among others. The FOIA Disclosure Officer shall honor a requester's specified preference of form or format of disclosure if the record is readily reproducible with reasonable efforts in the requested form or format. *Educational institution* means a preschool, a public or private elementary or secondary school, an institution of undergraduate higher education, an institution of graduate higher education, an institution of professional education, or an institution of vocational education, that operates a program of scholarly research. To be in this category, a requester must show that the request is authorized by and is made under the auspices of a qualifying institution and that the records are not sought for a commercial use but are sought to further scholarly research. *Noncommercial scientific institution* means an institution that is not operated on a “commercial” basis, as that term is defined in this paragraph, and that is operated solely for the purpose of conducting scientific research the results of which are not intended to promote any particular product or industry. To be in this category, a requester must show that the request is authorized by and is made under the auspices of a qualifying institution and that the records are not sought for a commercial use but are sought to further scientific research. *Representative of the news media, or news media requester* is any person actively gathering news for an entity that is organized and operated to publish or broadcast news to the public. For purposes of this definition, the term “news” means information that is about current events or that would be of current interest to the public. Examples of news media entities include television or radio stations broadcasting to the public at large and publishers of periodicals (but only in those instances where they can qualify as disseminators of “news”) who make their products available for purchase or subscription by the general public. For “freelance” journalists to be regarded as working for a news organization, they must demonstrate a solid basis for expecting publication through that organization. A publication contract would be the clearest proof, but the FOIA Disclosure Officer shall also look to the past publication record of a requester in making this determination. To be in this category, a requester must not be seeking the requested records for a commercial use. However, a request for records supporting the news-dissemination function of the requester shall not be considered to be for a commercial use. *Review* means the examination of a record located in response to a request in order to determine whether any portion of it is exempt from disclosure. It also includes processing any record for disclosure—for example, doing all that is necessary to redact it and prepare it for disclosure. Review costs are recoverable even if a record ultimately is not disclosed. Review time does not include time spent resolving general legal or policy issues regarding the application of exemptions. *Search* means the process of looking for and retrieving records or information responsive to a request. It includes page-by-page or line-by-line identification of information within records and also includes reasonable efforts to locate and retrieve information from records maintained in electronic form or format. The FOIA Disclosure Officer shall ensure that searches are done in the most efficient and least expensive manner reasonably possible. For example, the FOIA Disclosure Officer shall not search line-by-line where duplicating an entire document would be quicker and less expensive. *Working day* means a regular Federal working day. It does not include Saturdays, Sundays, or Federal legal public holidays. § 2201.5 Procedure for requesting records.
(a)*Requests for information.* All requests for information must be made in writing and must be mailed or delivered to the FOIA Disclosure Officer at the address in § 2201.3(d). The words “Freedom of Information Act Request” must be printed on the face of the request's envelope or covering as well as the request itself. Requests for information must describe the particular record requested to the fullest extent possible and specify the preferred form or format (including electronic formats) of the response. The Commission shall accommodate requesters as to form or format if the record is readily reproducible in the requested form or format. When requesters do not specify the preferred form or format of the response, the Commission shall respond in the form or format in which the record is most accessible to the Commission.
(b)*Date of receipt.* A request that complies with paragraph
(a)of this section is deemed received on the actual date it is received by the Commission. A request that does not comply with paragraph
(a)of this section is deemed received when it is actually received by the FOIA Disclosure Officer. For requests that are expected to result in fees exceeding $250, the request shall not be deemed to have been received until the requester is advised of the anticipated costs and the Commission has received full payment or satisfactory assurance of full payment as provided under § 2201.7(f). § 2201.6 Responses to requests.
(a)*Responses within 20 working days.* The FOIA Disclosure Officer will either grant or deny a request for records within 20 working days after receiving the request.
(b)*Extensions of response time in unusual circumstances.* In unusual circumstances, the Commission may extend the time limit prescribed in paragraph
(a)of this section by not more than 10 working days. The FOIA Disclosure Officer shall notify the requester in writing of the extension, the reasons for the extension and the date on which a determination is expected. “Unusual circumstances” exists, but only to the extent reasonably necessary to the proper processing of the particular request, when there is a need to:
(1)Search for and collect the requested records from one of OSHRC's regional offices or off-site storage facilities;
(2)Search for, collect, and appropriately examine a voluminous amount of separate and distinct records that are demanded in a single request; or
(3)Consult, with all practicable speed, with another agency having a substantial interest in the determination of the request.
(c)*Additional extension.* The FOIA Disclosure Officer shall notify the requester in writing when it appears that a request cannot be completed within the allowable time (20 working days plus a 10 working day extension). In such instances, the requester will be provided an opportunity to limit the scope of the request so that it may be processed in the time limit, or to agree to a reasonable alternative time frame for processing.
(d)*Two-track processing.* To ensure the most equitable treatment possible for all requesters, the Commission will process requests on a first-in, first-out basis using a two-track processing system based upon the estimated time it will take to process the request.
(1)The first track is for requests of simple to moderate complexity that are expected to be completed within 20 working days.
(2)The second track is for requests involving “unusual circumstances” that are expected to take between 21 to 30 working days to complete and those that, because of their unusual volume or other complexity, are expected to take more than 30 working days to complete.
(3)Requesters should assume, unless otherwise notified by the Commission, that their request is in the first track. The Commission will notify requesters when their request is placed in the second track for processing and that notification will include the estimated time for completion. Should subsequent information substantially change the estimated time to process a request, the requester will be notified in writing. In the case of a request expected to take more than 30 working days for action, a requester may modify the request to allow it to be processed faster or to reduce the cost of processing. Partial responses may be sent to requesters as documents are obtained by the FOIA Disclosure Officer from the supplying offices.
(e)*Expedited processing.*
(1)The Commission may place a person's request at the front of the queue for the appropriate track for that request upon receipt of a written request that clearly demonstrates a compelling need for expedited processing. Requesters must provide detailed explanations to support their expedited requests. For purposes of determining expedited processing, the term *compelling need* means:
(i)That a failure to obtain requested records on an expedited basis could reasonably be expected to pose an imminent threat to the life or physical safety of any individual; or
(ii)That a request is made by a person primarily engaged in disseminating information, and that person establishes that there is an urgency to inform the public concerning actual or alleged Federal Government activity.
(2)A person requesting expedited processing must include a statement certifying the compelling need given to be true and correct to the best of his or her knowledge and belief. The certification requirement may be waived by the Commission as a matter of agency discretion.
(3)The FOIA Disclosure Officer will make the initial determination whether to grant or deny a request for expedited processing and will notify a requester within 10 calendar days after receiving the request whether processing will be expedited.
(f)*Content of denial.* When the FOIA Disclosure Officer denies a request for records, either in whole or in part, a request for expedited processing, and/or a request for fee waivers (see § 2201.8), the written notice of the denial shall state the reason for denial, give a reasonable estimate of the volume of matter denied (unless doing so would harm an interest protected by the exemption(s) under which the request was denied), set forth the name and title or position of the person responsible for the denial of the request, and notify the requester of the right to appeal the determination as specified in § 2201.9. A refusal by the FOIA Disclosure Officer to process the request because the requester has not made advance payment or given a satisfactory assurance of full payment required under § 2201.7(f) may be treated as a denial of the request and appealed under § 2201.9.
(g)*Deletions.* The FOIA Disclosure Officer shall provide to the requester in writing a justification for deletions within records. The amount of information deleted from records shall be indicated on the released portion of the record, unless including that indication would harm an interest protected by the exemption under which the deletion is made. If technically feasible, the place in the record where the deletion is made shall be marked. § 2201.7 Fees for copying, searching, and review.
(a)*Fees required unless waived.* The FOIA Disclosure Officer shall charge the fees in paragraph
(b)of this section unless the fees for a request are less than the threshold amount as provided in OSHRC's fee schedule, in which case no fees shall be charged. The FOIA Disclosure Officer shall, however, waive the fees in the circumstances stated in § 2201.8.
(b)*Calculation of fees.* Fees for copying, searching and reviewing will be based on the direct costs of these services, including the average hourly salary (base plus DC locality payment), plus 16 percent for benefits, of the following three categories of employees involved in responding to FOIA requests: clerical—based on an average of all employees at GS-9 and below; professional—based on an average of all employees at GS-10 through GS-14; and managerial—based on an average of all employees at GS-15 and above. OSHRC will calculate a schedule of fees based on these direct costs. The schedule of fees under this section appears in Appendix A to this Part 2201. A copy of the schedule of fees may also be obtained at no charge from the FOIA Disclosure Officer. See § 2201.3(d).
(1)*Copying fee.* The fee per copy of each page shall be calculated in accordance with the per-page amount established in OSHRC's fee schedule. For other forms of duplication, direct costs of producing the copy, including operator time, shall be calculated and assessed. Copying fees shall not be charged for the first 100 pages of copies unless the copies are requested for a commercial use.
(2)*Search fee.* Search fees shall be calculated in accordance with the amounts established in OSHRC's fee schedule. Commercial requesters shall be charged for all search time. Search fees shall be charged even if the responsive documents are not located or if they are located but withheld on the basis of an exemption. However, search fees shall be limited or not charged as follows:
(i)*Easily identifiable decisions.* Search fees shall not be charged for searching for decisions that the requester identifies by name and date, or by docket number, or that are otherwise easily identifiable.
(ii)*Educational, scientific or news media requests.* No fee shall be charged if the request is not for a commercial use and is by an educational or scientific institution, whose purpose is scholarly or scientific research, or by a representative of the news media.
(iii)*Other non-commercial requests.* No fee shall be charged for the first two hours of searching if the request is not for a commercial use and is not by an educational or scientific institution, or a representative of the news media.
(iv)*Requests for records about self.* No fee shall be charged to search for records filed in the Commission's systems of records if the requester is the subject of the requested records. See the Privacy Act of 1974, 5 U.S.C. 552a(f)(5) (fees to be charged only for copying).
(3)*Review fee.* A review fee shall be charged only for commercial requests. Review fees shall be calculated in accordance with the amounts established in OSHRC's schedule of fees. A review fee shall be charged for the initial examination of documents located in response to a request to determine if it may be withheld from disclosure, and for the excision of withholdable portions. However, a review fee shall not be charged for review by the Chairman under § 2201.9 (Appeal of denials).
(c)*Invoices.* The FOIA Disclosure Officer shall provide the requester with an invoice containing an itemization of assessed fees.
(d)*Aggregation of requests.* When the FOIA Disclosure Officer reasonably believes that a requester, or a group of requesters acting in concert, is attempting to break a request into a series of requests for the purpose of evading the assessment of fees, the FOIA Disclosure Officer may aggregate any such requests and charge accordingly.
(e)*Fees likely to exceed $25.* If the total fee charges are likely to exceed $25, the FOIA Disclosure Officer shall notify the requester of the estimated amount of the charges. The notification shall offer the requester an opportunity to confer with the FOIA Disclosure Officer to reformulate the request to meet the requester's needs at a lower cost.
(f)*Advance payments.* Advance payment of fees will generally not be required. If, however, charges are likely to exceed $250, the FOIA Disclosure Officer shall notify the requester of the likely cost and: If the requester has a history of prompt payment of FOIA charges, obtain satisfactory assurance of full payment; or if the requester has no history of payment, require an advance payment of an amount up to the full estimated charge. If the requester has previously failed to pay a fee within 30 days of the date of billing, the FOIA Disclosure Officer shall require the requester to pay the full amount owed plus any interest owed as provided in paragraph
(h)of this section or demonstrate that he or she has, in fact, paid the fee, and to make an advance payment of the full amount of the estimated charges before the FOIA Disclosure Officer begins to process the new request or a pending request from that requester.
(g)*Fees for services not required by the Freedom of Information Act.* The Commission has discretion regarding its response to requests for services not required by the FOIA. For example, the FOIA does not require agencies to certify or authenticate responsive documents, nor does it require responsive documents to be sent by express mail. If these services are requested, the FOIA Disclosure Officer shall assess the direct costs of such services.
(h)*Interest on unpaid bills.* The Commission's Office of Administration shall begin assessing interest charges on unpaid bills starting on the thirty-first day after the date the bill was sent. Interest will accrue from the date of billing until the Commission receives full payment. Interest will be at the rate described in 31 U.S.C. 3717.
(i)*Debt collection procedures.* If bills are unpaid 60 days after the mailing of a written notice to the requester, the Commission's Office of Administration may resort to the debt collection procedures set out in the Debt Collection Act of 1982 (Pub. L. 97-365, 96 Stat. 1749), as amended, and its administrative procedures, including the use of consumer reporting agencies, collection agencies, and offset. § 2201.8 Waiver of fees.
(a)*General.* The FOIA Disclosure Officer shall waive part or all of the fees assessed under § 2201.7(b) if two conditions are satisfied: Disclosure of the information is in the public interest because it is likely to contribute significantly to public understanding of the operations or activities of the government; and disclosure is not primarily in the commercial interest of the requester. Where the FOIA Disclosure Officer has reasonable cause to doubt the use to which a requester will put the records sought, or where that use is not clear from the request itself, the FOIA Disclosure Officer may seek clarification from the requester before assigning the request to a specific category for fee assessment purposes. The FOIA Disclosure Officer shall afford the requester the opportunity to show that the requester comes within these two conditions. The following factors may be considered in determining whether the two conditions are satisfied:
(1)Whether the subject of the requested records concerns the operations or activities of the government;
(2)Whether the disclosure is likely to contribute significantly to public understanding of government operations or activities;
(3)Whether the requester has a commercial interest that would be furthered by the requested disclosure; and, if so, whether the magnitude of the identified commercial interest of the requester is sufficiently large, in comparison with the public interest in disclosure, that disclosure is primarily in the commercial interest of the requester.
(b)*Partial waiver of fees.* If the two conditions stated in paragraph
(a)of this section are met, the FOIA Disclosure Officer will ordinarily waive all fees. In exceptional cases, however, only a partial waiver may be granted if the request for records would impose an exceptional burden or require an exceptional expenditure of Commission resources, and the request for a waiver minimally satisfies the “public interest” requirement in paragraph
(a)of this section. § 2201.9 Appeal of denials. A denial of a request for records, either in whole or in part, a request for expedited processing, or a request for fee waivers, may be appealed in writing to the Chairman of the Commission within 20 working days of the date of the letter denying an initial request. The Chairman shall act on the appeal under 5 U.S.C. 552(a)(6)(A)(ii) within 20 working days after the receipt of the appeal. If the Chairman wholly or partially upholds the denial of the request, the Chairman shall notify the requesting person that the requester may obtain judicial review of the Chairman's action under 5 U.S.C. 552(a)(4)(B)-(G). § 2201.10 Maintenance of statistics.
(a)The FOIA Disclosure Officer shall maintain records of:
(1)The number of determinations made by the agency not to comply with the requests for records made to the agency and the reasons for those determinations;
(2)The number of appeals made by persons, the results of those appeals, and the reason for the action upon each appeal that results in a denial of information;
(3)A complete list of all statutes that the agency used to authorize the withholding of information under 5 U.S.C. 552(b)(3), which exempts information that is specifically exempted from disclosure by other statutes;
(4)A description of whether a court has upheld the decision of the agency to withhold information under each of those statutes cited, and a concise description of the scope of any information upheld;
(5)The number of requests for records pending before the agency as of September 30 of the preceding year and the median number of days that these requests had been pending before the agency as of that date;
(6)The number of requests for records received by the agency and the number of requests the agency processed;
(7)The median number of days taken by the agency to process different types of requests;
(8)The total amount of fees collected by the agency for processing requests;
(9)The average amount of time that the agency estimates as necessary, based on the past experience of the agency, to comply with different types of requests;
(10)The number of full-time staff of the agency devoted to the processing of requests for records under this section; and
(11)The total amount expended by the agency for processing these requests.
(b)The FOIA Disclosure Officer shall annually, on or before February 1 of each year, prepare and submit to the Attorney General an annual report covering each of the categories of records to be maintained in accordance with paragraph
(a)of this section, for the previous fiscal year. A copy of the report will be available for public inspection and copying at the OSHRC FOIA Reading Room, and a copy will be accessible through OSHRC's Web site at *http://www.oshrc.gov* . Appendix A to Part 2201.—Schedule of Fees Type of fee Amount of fee Threshold Amount (Amount below which fees will not be assessed) $10. Search and Review Hourly Fees: Clerical (GS-9 and below) $23. Professional (GS-10 through GS 14) $46. Managerial (GS-15 and above) $76. Duplication cost per page $0.25. Computer printout copying fee $0.40. Searches of computerized records Actual cost to the Commission, but shall not exceed $300 per hour, including machine time and the cost of the operator and clerical personnel. Certification Fee $35 per authenticating affidavit or declaration. (Note: Search and review charges may be assessed in accordance with the rates listed above.) [FR Doc. E6-11574 Filed 7-20-06; 8:45 am] BILLING CODE 7600-01-P DEPARTMENT OF LABOR Employee Benefits Security Administration 29 CFR Part 2520 RIN 1210-AB06 Annual Reporting and Disclosure AGENCY: Employee Benefits Security Administration, Labor. ACTION: Proposed rule. SUMMARY: This document contains proposed amendments to Department of Labor (Department) regulations relating to annual reporting and disclosure requirements under Part 1 of Subtitle B of Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA or Act). The proposed amendments contained in this document are necessary to conform the annual reporting and disclosure regulations to proposed revisions to the Form 5500 Annual Return/Report of Employee Benefit Plan forms and instructions. The proposed changes to the Form 5500 and implementing regulatory amendments are intended to facilitate the transition to an electronic filing system, separately proposed at 70 FR 51542 (August 30, 2005), reduce and streamline annual reporting burdens, especially for small businesses, and update the annual reporting forms to reflect current issues and agency priorities. The regulatory amendments thus would, upon adoption, apply for the reporting year for which the electronic filing requirement is implemented. The proposed regulatory amendments will affect the financial and other information required to be reported and disclosed by employee benefit plans filing the Form 5500 Annual Return/Report of Employee Benefit Plan under Part 1 of Subtitle B of Title I of ERISA. DATES: Written comments must be received by the Department of Labor on or before September 19, 2006. ADDRESSES: Comments should be addressed to the Office of Regulations and Interpretations, Employee Benefits Security Administration (EBSA), Room N-5669, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210. Attn: Form 5500 Regulation Revisions (RIN 1210-AB06). Comments also may be submitted electronically to *e-ori@dol.gov* or by using the Federal eRulingmaking Portal *http://www.regulations.gov* (follow instructions for submission of comments). EBSA will make all comments available to the public on its Web site at *http://www.dol.gov/ebsa* . The comments also will be available for public inspection at the Public Disclosure Room, N-1513, EBSA, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210. FOR FURTHER INFORMATION CONTACT: Elizabeth A. Goodman or Michael Baird, Office of Regulations and Interpretations, Employee Benefits Security Administration, U.S. Department of Labor,
(202)693-8523 (not a toll-free number). SUPPLEMENTARY INFORMATION: A. Background Under Titles I and IV of ERISA, and the Internal Revenue Code (Code), as amended, pension and other employee benefit plans are generally required to file annual returns/reports concerning, among other things, the financial condition and operations of the plan. Filing the Form 5500 “Annual Return/Report of Employee Benefit Plan,” together with any required attachments and schedules (Form 5500 Annual Return/Report) generally satisfies these annual reporting requirements. The Form 5500 Annual Return/Report is the primary source of information concerning the operation, funding, assets, and investments of pension and other employee benefit plans. In addition to being an important disclosure document for plan participants and beneficiaries, the Form 5500 Annual Return/Report is a compliance and research tool for the Department and a source of information and data for use by other federal agencies, Congress, and the private sector in assessing employee benefit, tax, and economic trends and policies. B. Discussion of the Proposed Revisions to Part 2520 1. Section 2520.103-1 The Department of Labor (Department) annual reporting regulations, including § 2520.103-1, are promulgated under the provisions of ERISA that authorize the creation of limited exemptions and simplified reporting and disclosure for welfare plans under ERISA section 104(a)(3), simplified annual reports under ERISA section 104(a)(2)(A) for pension plans that cover fewer than 100 participants, and alternative methods of compliance for all pension plans under ERISA section 110(a). Various changes are being proposed to the Form 5500 Annual Return/Report and its instructions in a Notice of Proposed Form Revisions published today in the **Federal Register** . To accommodate those form and instruction changes, the regulatory amendments to 29 CFR 2520.103-1 are being proposed to update the references to the annual report to reflect the new structure and components of the Form 5500 Annual Return/Report. The following subsections outline major changes to the Form 5500. A more comprehensive discussion of the form and instructions changes is in the above-referenced Notice of Proposed Forms Revisions. Facsimiles of the proposed form revisions and proposed form instructions can be viewed on the EBSA's Web site at *http://www.dol.gov/ebsa.* 1 To avoid unnecessary duplication, only a general summary of the form and instruction changes is included in this notice as background for the required cost/benefit and regulatory analysis discussions. For a comprehensive discussion of form and instruction changes, see the Notice of Proposed Forms Revisions published concurrently in today's **Federal Register** . 1 Paper copies of the proposed form revisions and proposed instructions may be obtained by telephoning 1-866-444-EBSA
(3272)(this is a toll-free number).
(a)Short Form 5500 (Eligible Small Plan Filers) A new two-page Form 5500 Annual Return/Report of Employee Benefit Plan—the Form 5500-SF (Short Form 5500)—is being proposed in an effort to streamline the reporting requirements for certain small pension and welfare plans (generally, plans with fewer than 100 participants) that have investment portfolios in which their assets are held by regulated financial institutions and the investments have a readily determinable fair market value as described in the proposed regulation at § 2520.103-1(c)(2)(iii). A detailed description of the proposed Form 5500-SF and a facsimile of the form is in the Notice of Proposed Forms Revisions being published concurrently in today's **Federal Register** . Substantially all of the information required to be reported by employee benefit plans on the proposed Short Form 5500 currently is included in that information required to be reported as part of the Form 5500 Annual Return/Report under the simplified reporting options presently available to small plans. The proposal would not eliminate the existing simplified reporting options for small plans but, rather, would add the Short Form 5500 as another simplified reporting option for eligible small plans. The Internal Revenue Service
(IRS)has advised the Department that, although there are no mandatory electronic filing requirements for the Form 5500 under the Code or the regulations issued thereunder, to ease the burdens on plans that are not subject to Title I of ERISA but that file the Form 5500-EZ to satisfy the annual reporting and filing obligations imposed by the Code, the IRS is proposing to permit certain Form 5500-EZ filers to satisfy the requirement to file the Form 5500-EZ with the IRS by filing the proposed Short Form 5500 electronically through the EFAST processing system. Therefore, under the IRS' proposal, certain Form 5500-EZ filers will be provided both electronic and paper filing options. The electronic option will allow 5500-EZ filers to complete and electronically file with EFAST selected information on the Short Form 5500. 5500-EZ filers will also be able to choose instead to file a Form 5500-EZ on paper with the IRS. 2 2 Under the voluntary electronic filing option, 5500-EZ filers filing an amended return for a plan year must file the amended return electronically using the Form 5500-SF if they initially filed electronically for the plan year and must file with the IRS using the paper Form 5500-EZ if they filed for plan year with the IRS on a paper Form 5500-EZ.
(b)Removal of Internal Revenue Service-Only Schedules From the Form 5500 Annual Return/Report Under the proposal the Form 5500 Annual Return/Report will no longer include any of the schedules from the current Form 5500 Annual Return/Report that are required only for the IRS. This will effectuate the adoption of a wholly electronic filing requirement for the Form 5500 Annual Return/Report given the current limitations on the IRS's authority to mandate electronic filing of certain tax returns. Accordingly, under the proposal, the following schedules will no longer be required to be filed as part of the Form 5500 Annual Return/Report: Schedule E (ESOP Annual Information), Schedule P (Annual Return of Fiduciary of Employee Benefit Trust), and Schedule SSA (Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits). The IRS, however, has advised the Department that it intends that plan administrators, employers, and certain other entities that are subject to filing and reporting requirements under the Code will have to continue to satisfy any applicable requirements in accordance with IRS revenue procedures, regulations, publications, forms, and instructions. In that regard, the IRS has independently eliminated the Schedule P from the 2006 Form 5500 in anticipation of the transition to a wholly electronic filing environment. Further, as described elsewhere in this document, the Department is proposing to move to the Schedule R three questions on ESOP information formerly reported on the Schedule E, and the IRS has advised the Department that it does not anticipate requiring separate filings by ESOPs on the remaining questions from the Schedule E. The IRS is evaluating the information collected on Schedule SSA, and considering whether other existing information collections could be used in place of the Form 5500 Annual Return/Report.
(c)Schedule A (Insurance Information) Schedule A must be attached to the Form 5500 Annual Return/Report for an ERISA-covered plan if any pension or welfare benefits under the plan are provided by, or if the plan holds any investment contracts with, an insurance company or other similar organization. Although the proposal would retain most of the Schedule A data substantially unchanged, the Department is proposing to add a line item to give administrators a specific space on the Schedule A to report the failure by an insurance carrier to provide necessary information. Certain other technical changes are being proposed to the Schedule A form and instructions to improve Schedule A as a tool for disclosure of insurance fees and commissions.
(d)Schedule B (Actuarial Information) Schedule B is required for defined benefit pension plans subject to the minimum funding standards (see Code section 412 and Part 3 of Title I of ERISA). The Pension Benefit Guaranty Corporation
(PBGC)proposes adding questions to the Schedule B designed to obtain a “look-through” allocation of plan investments in certain pooled investment funds for certain very large defined benefit plans. Under the proposal, defined benefits plans with more than 1,000 participants would be required to breakout the percentage of total plan assets held as “stock,” “debt,” “real estate,” and “other.” The underlying investments in master trusts, common or collective trusts, pooled separate accounts, and other pooled investment vehicles, would be required to be broken out and could not be treated merely as “other,” regardless of how they are listed on Schedule H. For investments in “debt,” plans would be required to provide the “Macaulay duration” and break out the percentages held as government debt, investment-grade corporate debt, and high-yield corporate debt.
(e)Schedule C (Service Provider Information) Schedule C must be attached to the Form 5500 Annual Return/Report filed by large plan filers to report any person who rendered services to the plan that received directly or indirectly $5,000 or more in compensation from the plan during the plan year, and to report terminated accountants or actuaries. Consistent with recommendations of the ERISA Advisory Council Working Groups and the Government Accountability Office (GAO), EBSA has concluded that more information should be disclosed on the Form 5500 Annual Return/Report regarding plan fees and expenses. *See ERISA Advisory Council Report of the Working Group on Plan Fees and Reporting on Form 5500* (November 10, 2004) (available on the Internet at: *http://www.dol.gov/ebsa/publications* ) and the Government Accountability Office ( *See Private Pensions: Government Actions Could Improve the Timeliness and Content of Form 5500 Pension Information,* GAO-05-491) (available on the Internet at: *http://www.gao.gov* ). EBSA's proposal would continue to limit Schedule C reporting to large plan filers and would retain the $5,000 reporting threshold, but would revise the Schedule C and accompanying instructions to clarify the requirements regarding reporting of direct and indirect compensation ( *i.e.* , money or anything else of value) received during the plan year in connection with services rendered to the plan or the person's position with the plan. Also, a new section would be added requiring that the source and nature of compensation in excess of $1,000 received from parties other than the plan or the plan sponsor be disclosed for certain key service providers, including, among others, investment managers, consultants, brokers, and trustees, as well as all other fiduciaries.
(f)Schedule R (Retirement Plan Information) In light of the proposed removal of the Schedule E (ESOP Annual Information), certain questions from the Schedule E are being incorporated into the Schedule R in order to continue to collect certain information regarding ESOPs as part of the Form 5500 Annual Return/Report. In addition, multiemployer defined benefit pension plans would have to provide a list identifying each employer contributing an annual amount equal to or greater than five percent of all annual contributions to the plan (measured in dollars) and setting forth
(1)the name of the contributing employer;
(2)employer's employer identification number (EIN);
(3)dollar amount contributed;
(4)contribution rate;
(5)whether the contribution base unit measure was hourly, weekly, unit of product, or other; and
(6)expiration date for the collective bargaining agreement pursuant to which contributions are required to be made to the plan.
(g)Technical and Conforming Changes for Forms and Instructions Various other technical and conforming changes are being proposed as part of the restructuring of the Form 5500 Annual Return/Report. Several of the more significant changes include:
(1)Revision of the instructions for the Form 5500 Annual Return/Report and development of instructions for the Short Form 5500 to reflect the new structure of the reports and electronic filing requirements;
(2)addition of questions regarding compliance with the Department's blackout notice regulation in 29 CFR 2510.101-3;
(3)addition of a compliance question on whether the plan failed to pay benefits when due under the plan;
(4)expansion of the use of codes to report plan feature information on pension and welfare benefit plans;
(5)elimination of the optional entry of the name and the EIN of the preparer;
(6)requiring administrative expenses to be reported separately from other expenses on the Schedule I;
(7)addition of a question on whether any minimum funding amount reported for a pension plan will be met by the funding deadline; and
(8)adoption of a standard format for use in connection with an independent qualified public accountant
(IQPA)rendering an opinion on the supplemental schedule information on Line 4a of Schedule H and I relating to delinquent participant contributions. 2. Section 2520.104-44 Section 2520.104-44 and the current Form 5500 Annual Return/Report instructions provide for limited reporting for pension plans exclusively using a tax deferred annuity arrangement under Code section 403(b)(1), custodial accounts for regulated investment company stock under Code section 403(b)(7), or a combination of both. Under the proposal, the exemption in § 2520.104-44(b)(3) would be eliminated, with the result that Code section 403(b) pension plans subject to Title I would be treated the same as any other Title I pension plan for purposes of the annual reporting requirements under Title I of ERISA. With the growth in the size and number of Code section 403(b) arrangements, and the advent of Code section 401(k) plans, the Code 403(b) arrangements have become more like Code section 401(k) plans. In this regard, the IRS has undertaken to update certain of its regulations. *See* 69 FR 67075, 67076 (November 16, 2004). For those section 403(b) plans that are subject to Title I of ERISA, the Department has detected violations in a high percentage of its investigations of Code section 403(b) plans. The predominant issue has been improper handling of employee contributions. The Department believes that these developments warrant amending the annual reporting requirements to put Code section 403(b) plans on par with other ERISA-covered pension plans. Small Code section 403(b) plans generally would be 100 percent invested in eligible assets for purposes of filing the proposed Short Form 5500. 3. Section 2520.104-46 In accordance with the Department's authority under section 104(a)(2)(A) and 104(a)(3) of ERISA, the Department has adopted, at 29 CFR 2520.104-41, simplified annual reporting requirements for pension and welfare benefit plans with fewer than 100 participants. In addition, the Department, at 29 CFR 2520.104-46, has prescribed for such small plans a waiver from the requirements of section 103(a)(3)(A) to engage an IQPA and to include the opinion of the accountant as part of the plan's annual report. The waiver of the IQPA requirements for pension plans was conditioned, among other requirements, on enhanced disclosure in the Summary Annual Report
(SAR)provided to participants and beneficiaries. In that regard, the Department prepared a model notice that plans could use to satisfy the enhanced SAR disclosure conditions. That model notice has been available at the EBSA's Web site at *http://www.dol.gov/ebsa.* In order to provide plan administrators with additional access to the model notice and facilitate compliance with the audit waiver and Short Form 5500 eligibility conditions, the Department is proposing to add the model notice as an appendix to § 2520.104-46. 4. Section 2520.104b-10 Section 104(b)(3) of ERISA provides in part that, each year, administrators must furnish to participants and beneficiaries receiving benefits under a plan materials that fairly summarize the plan's annual report. Section 2520.104b-10 sets forth the requirements for the SAR and prescribes formats for such reports. The amendments being proposed do not include any change to the SAR requirements. However, in order to facilitate compliance with the SAR requirement for Short Form 5500 filers, the Department is updating its cross-reference guide to correspond to the line items of the SAR to the relevant line items on the Short Form 5500. The cross-reference guide, as before, would continue to be an appendix to § 2520.104b-10. C. Findings on the Revised Form 5500 Annual Return/Report (including Short Form 5500) as a Limited Exemption and Alternative Method of Compliance Section 104(a)(2)(A) of the Act authorizes the Secretary of Labor (Secretary) to prescribe by regulation simplified reporting for pension plans that cover fewer than 100 participants. Section 104(a)(3) authorizes the Secretary to exempt any welfare plan from all or part of the reporting and disclosure requirements of Title I of ERISA or to provide simplified reporting and disclosure if the Secretary finds that such requirements are inappropriate as applied to such plans. Section 110 permits the Secretary to prescribe for pension plans alternative methods of complying with any of the reporting and disclosure requirements if the Secretary finds that:
(1)The use of the alternative method is consistent with the purposes of Title I of ERISA, provides adequate disclosure to plan participants and beneficiaries, and provides adequate reporting to the Secretary;
(2)application of the statutory reporting and disclosure requirements would increase costs to the plan or impose unreasonable administrative burdens with respect to the operation of the plan; and
(3)the application of the statutory reporting and disclosure requirements would be adverse to the interests of plan participants in the aggregate. For purposes of Title I of ERISA, the filing of a completed Form 5500 Return/Report, including the filing of the proposed Short Form 5500, in accordance with the instructions and related regulations, generally would constitute compliance with the limited exemption and alternative method of compliance in 29 CFR 2520.103-1(b). The findings required under ERISA sections 104(a)(3) and 110 relating to the use of the proposed revised Form 5500 Annual Return/Report, including the proposed Short Form 5500, as alternative methods of compliance, simplified report, and limited exemption from the reporting and disclosure requirements of part 1 of Title I of ERISA are set forth below. In proposing revisions to the Form 5500 Annual Return/Report and the amendments in this proposed rulemaking, the Department has attempted to balance the needs of participants, beneficiaries, and of the Department to obtain information necessary to protect ERISA rights and interests with the needs of administrators to minimize costs attendant with the reporting of information to the federal government. The Department makes the following findings under sections 104(a)(3) and 110 of the Act with regard to the use of the revised Form 5500 Annual Return/Report as a simplified report, alternative method of compliance, and limited exemption pursuant to 29 CFR 2520.103-1(b). The use of the proposed revised Form 5500 Annual Return/Report, including the proposed Short Form 5500, is consistent with the purposes of Title I of ERISA and provides adequate disclosure to participants and beneficiaries and adequate reporting to the Secretary. While the information that would be required to be reported on or in connection with the revised Form 5500 Annual Return/Report and the proposed Short Form 5500 deviates, as before, in some respects, from that delineated in section 103 of the Act, the information essential to ensuring adequate disclosure and reporting under Title I is required to be included on or as part of the Form 5500 Annual Return/Report, as proposed to be revised, and the proposed Short Form 5500. The use of Form 5500 Annual Return/Report, as revised, or the proposed Short Form 5500 will relieve plans subject to the annual reporting requirements from increased costs and unreasonable administrative burdens by providing a standardized format that facilitates reporting, eliminates duplicative reporting requirements, and simplifies the content of the annual report in general. The Form 5500 Annual Return/Report, under the proposed revision, including the proposed Short Form, is intended to further reduce the administrative burdens and costs attributable to compliance with the annual reporting requirements. Taking into account the above, the Department has determined that application of the statutory annual reporting and disclosure requirements without the availability of the Form 5500 Annual Return/Report, including the proposed Short Form 5500, would be adverse to the interests of participants in the aggregate. The proposed revised Form 5500 Annual Return/Report provides for the reporting and disclosure of basic financial and other plan information described in section 103 of ERISA in a uniform, efficient, and understandable manner, thereby facilitating the disclosure of such information to plan participants and beneficiaries. Finally, the Department has determined under section 104(a)(3) of ERISA that a strict application of the statutory reporting requirements, without taking into account the proposed revisions to the Form 5500 Annual Return/Report and the proposed Short Form 5500, would be inappropriate in the context of welfare plans for the same reasons discussed above (i.e., the streamlined form reduces filing burdens without impairing enforcement, research, and policy needs, while at the same time providing adequate disclosure to participants and beneficiaries). D. Regulatory Impact Analysis Executive Order 12866 Statement Under Executive Order 12866, the Department must determine whether the regulatory action is “significant” and therefore subject to the requirements of the Executive Order and subject to review by the Office of Management and Budget (OMB). Under section 3(f) of Executive Order 12866, the order defines a “significant regulatory action” as an action that is likely to result in a rule
(1)having an annual effect on the economy of $100 million or more, or adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or tribal governments or communities (also referred to as “economically significant”);
(2)creating serious inconsistency or otherwise interfering with an action taken or planned by another agency;
(3)materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or
(4)raising novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. Pursuant to the terms of the Executive Order, it has been determined that this regulatory action will have an annual effect on the economy of more than $100 million. Therefore, this action is “economically significant” and subject to OMB review under section 3(f)(4) of Executive Order 12866. The Department accordingly has undertaken to assess the costs and benefits of this regulatory action in satisfaction of the applicable requirements of the Executive Order. In accordance with OMB Circular A-4 (available at *http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf* ), Table 1 below depicts an accounting statement showing the net annual cost reduction associated with the provisions of this proposed rule. The Department believes that some employee benefit plans will see a decrease in costs and others might see an increase in costs due to this proposed rule. Further information about the amount of increase and decrease in costs for particular plan types is displayed in the cost section later on in this document. On aggregate, the Department estimates a cost reduction of up to $174 million in the first year. Table 1.—Accounting Statement: Estimated Cost Reduction From the Current Reporting Requirements to the Proposed 2008 Reporting Requirements [In millions] Category Net cost reduction Annualized Monetized Benefit $174 Need for Regulatory Action The annual reporting regulations for which amendments are being proposed provide specific limited exceptions, for certain types of welfare benefit plans, from the statutory reporting requirements; simplified reporting and disclosure requirements for other types of small plans; and an alternative method of compliance in general for all pension plans. In providing these special rules, the Department and the other Agencies intend to reduce the overall burden of the statutory reporting requirements without sacrificing the quality of the information collected. As described in the preamble to the Department's proposal to require electronic filing of the Form 5500 (70 FR 51542) (E-Filing Proposal), the Department is in the process of creating a fully electronic filing system to receive the annual reports filed by employee benefit plans. In addition, as noted above, the Department has received reports from the GAO and the ERISA Advisory Council that suggest the need for some substantive changes to the annual reporting forms and the reporting regulations. The Department, in coordination with the IRS, and the PBGC (Agencies), also conducted a thorough review of the content requirements for the Form 5500. The Agencies believe the proposed regulatory and form changes, in conjunction with adoption of the electronic filing system, will substantially reduce plan administrators' reporting compliance burdens and also enhance the utility and accessibility of reported information to the government, participants and beneficiaries, and others. The Form 5500 Annual Return/Report serves as the primary source of information concerning the operation, funding, assets, and investments of pension and other employee benefit plans. The Form 5500 Annual Return/Report is an important disclosure document for participants and beneficiaries, an enforcement and research tool for the Department, and a source of information and data for use by other federal agencies, Congress, and the private sector in assessing employee benefit, tax, and economic trends and policies. The Department in this proposal has attempted to balance the interests of participants, beneficiaries, and the Department in the protection of ERISA rights, as well as the public's interest in the availability of information on benefit plans, with plan administrators' and sponsors' interest in minimizing costs attendant with the reporting of information to the federal government. The Department believes that the proposed regulations' benefits justify the costs. The basis for this conclusion is explained below. As stated in this preamble, the Department has determined that the use of the revised Form 5500 Annual Return/Report, including the proposed new Short Form 5500, would relieve plans subject to the annual reporting requirements from increased costs and administrative burdens by providing a standardized format that facilitates reporting, eliminates duplicative reporting requirements, and simplifies the content of the annual report in general. Moreover, the Department believes that the revisions to the Form 5500 Annual Return/Report implemented by these proposed regulations, as compared to the existing form and schedules, will both reduce the cost of reporting, on aggregate and for a large majority of affected plans, and enhance the protection of ERISA rights. Regulatory Alternatives Executive Order 12866 directs Federal Agencies promulgating regulations to evaluate regulatory alternatives. The Department has concluded that, in connection with its proposal to move to a wholly electronic filing environment for employee benefit plan annual reports, form revisions and implementing regulatory changes should be made to facilitate the transition to an electronic filing system, reduce and streamline annual reporting burdens, especially for small businesses, and update the annual reporting forms to reflect current issues and agency priorities. In developing the forms revisions and implementing regulatory changes, the Department was informed by recommendations made by GAO and the ERISA Advisory Council and conducted a thorough-going review of the current regulations and the scope of information collected, which included consideration of alternative methods of reaching its goals. The Department's consideration included, for example, different approaches to eligibility for the Short Form 5500, ( *see* discussion in preamble to the Notice of Proposed Forms Revisions under the heading “Short Form 5500 as New Simplified Report for Certain Small Plans”), different approaches to reporting for welfare plans ( *see id* . under the heading “F. Other Welfare Plan Issues”), and different approaches to improving the reporting of direct and indirect compensation paid to service providers ( *see id.* under the heading “Schedule C: Compensation received by plan service providers”). Similarly, the Notice of Proposed Forms Revision discusses the assessments on how to balance the need for information to help the PBGC evaluate the financial solvency of multiemployer plans and the potential burden on administrators of multiemployer plans ( *see id.* under the heading “Schedule R: Contributors to Multiemployer Pension Plans”). Inasmuch as the regulatory amendments contained in this Notice are intended to implement the forms revisions contained in the Notice of Proposed Forms Revisions, the discussions in the Notice of Proposed Forms Revisions are directly relevant to the Department's analysis under Executive Order 12866 and should be read as part of the Department's compliance with the requirements of the Executive Order. The Department therefore incorporates those discussions by this reference. The public is invited to comment specifically on the decision points for the several categories of proposed revisions, and on the adequacy of the models, assumptions, and data developed in order to evaluate regulatory burden. In considering these alternatives, the Department weighted the objective of reduced regulatory burden against the need for adequate reporting and disclosure to insure the protection of plan participants, quantifying impacts where possible. For example: • *Establishment of a Short Form 5500 for certain small plans:* In considering criteria of eligibility for filing the Short Form 5500 the Department evaluated both less stringent and more stringent criteria. If, for example, the Department had relied solely on the conditions for a waiver of the audit requirements for small plans, the Department believes that as many as 95 percent of small plans (612,000 plans) would meet the Short Form 5500 requirements. Because of concern about the need to limit eligibility to small plans with easy to value investment portfolios, however, the Department added the requirements of small plans that invest in secure assets that are held or issued by regulated financial institutions and that have a fair market value that is easily determined. In so doing, the Department estimates that approximately 90 percent of small plans (571,000 plans) that formerly were able to file under the simplified requirements would qualify as eligible to file the Short Form 5500. An additional 9,000 small Code section 403(b) plans would also qualify. • *Addition of certain asset allocation and duration information to Schedule B:* Schedule B is filed by defined benefit pension plans subject to the minimum funding standards. As noted below, this revision will increase reporting costs for affected plans. The Agencies, however, believe that these costs are justified by the need to better monitor plan funding. In developing this proposed revision, the PBGC considered the approach that could balance the need for better monitoring of plan funding and the increased burden that would be incurred to provide additional information on the breakdown of assets and duration of debt instruments held by defined benefit plans. While the PBGC initially considered the application of the additional requirements to all large defined benefit plans (15,000 plans), it subsequently determined that additional information for the largest plans, i.e., those with more than 1,000 participants (5,000 plans), on the level and types of assets in the plan and the sensitivity of these assets to changes in market conditions would suffice for the desired improvement in the monitoring of plan funding. Benefits and Costs *Benefits* —These regulations and the Form 5500 Annual Return/Report and Short Form 5500 that the regulations implement will provide a standardized, streamlined alternative means of compliance with applicable statutory reporting requirements. In so doing, they will both ease plan administrators' compliance with reporting requirements and greatly enhance the utility and accessibility of information reported to the government, participants and beneficiaries, and others. In particular, the regulations and forms, together with the Department's planned program for assisting filers in the preparation and electronic submission of filings, will give plan administrators clear guidance and a supportive, routine mechanism for satisfying their reporting obligations. They also will make it possible to efficiently capture and assemble the information into an electronic data system. The data can then be processed and analyzed in the service of many beneficial activities. These include monitoring compliance with ERISA's reporting and other requirements, targeting, and carrying out prompt and effective enforcement actions; informing participants and beneficiaries of the characteristics, operations, and financial status of their benefit plans; producing statistics on the employee benefit system and monitoring trends therein and informing the public; and assembling information and conducting research that advances knowledge and fosters the formulation of sound public policies toward employee benefits. The Department believes that the benefits of the proposed regulations justify the costs. The Department further believes that the revisions to the existing reporting requirements contained in the proposed regulations will both reduce aggregate reporting costs and enhance protection of ERISA rights. The former anticipated effect is quantified in the discussion of costs below. With respect to the latter, the Department developed each of the revisions contained in the proposed regulations either to enhance protections, or to reduce costs in ways that do not compromise protections. The revisions are considered separately below. *Removal of the IRS-only schedules:* As explained in the Notice of Proposed Forms Revisions published simultaneously with these proposed regulations, this change is intended partly to facilitate a change to mandatory electronic filing—a change which is expected to yield substantial benefits. As also explained therein, to the extent that some Title I information may have been collected in these schedules, these proposed regulations provide for the ongoing collection of that information in other parts of the Annual Return/Report. In addition, it is the Department's understanding that some of the IRS-only information that will no longer be collected as part of the annual return/report may be collected in the future via other Treasury or IRS vehicles. The Department expects this revision to preserve protections of ERISA rights, while reducing Form 5500 Return/Report filing reporting costs as estimated below. From a broader societal perspective, the reduction in reporting costs may be less than what has been assumed here if IRS elects to collect some of this information through other channels. *Establishment of a Short Form 5500 for certain small plans:* The Short Form 5500 is being developed with the specific intent of reducing reporting costs (as estimated below) while continuing to collect sufficient information to preserve ERISA protections, satisfying the enforcement, research, and regulatory needs of the Department and the other Agencies, and the disclosure needs of participants and beneficiaries. The Agencies determined that less information is needed in the case of small plans that invest in secure assets that are held or issued by regulated financial institutions and that have a fair market value that is easily determined. The Agencies believe that the eligibility conditions for Short Form 5500 filers, including the requirements relating to security and valuation of the plan's investments, ensure that the Short Form 5500 will provide adequate disclosure to the participants and beneficiaries in the plan and adequate annual reporting to the Agencies. The Notice of Proposed Forms Revisions published simultaneously with these proposed regulations details the content of the Short Form 5500 and elaborates on its adequacy for its intended purpose. Small plans that are not eligible to file the Short Form 5500 would continue to be able to file simplified reports as under the current system. *Elimination of the special reporting rules for Code section 403(b) plans:* As noted below, this revision is expected to increase reporting costs for affected plans. However, the Department believes these added costs are justified by the need to enhance ERISA protections in connection with these plans the Department believes that developments with respect to Code section 403(b) plans, described above in connection with the proposed amendment to 2520.104-44, warrant amending the annual reporting requirements to put Code section 403(b) plans on par with other ERISA-covered pension plans. Small Code section 403(b) plans generally would be 100 percent invested in eligible assets for purposes of filing the proposed Short Form 5500. This would result in only a modest increase in the annual reporting burden on small Code section 403(b) plan filers. *Addition of certain asset allocation and duration information to Schedule B:* As noted below, this revision will increase reporting costs for affected plans. The Agencies, however, believe that these costs are justified by the need to better monitor plan funding. The PBGC has found that it needs more information on the breakdown of assets and duration of debt instruments held by defined benefit plans. A plan's funded status is highly dependent on the level and types of assets in the plan and the sensitivity of these assets to changes in market conditions. Thus, the additional information required by this revision will improve the PBGC's ability to estimate the impact of economic changes on the financial status of the plans it insures, and by extension, on the future financial status of the PBGC. Much of the information newly required by this revision is typically in the immediate possession of the committee or authority that oversees the investments of plans sponsored by privately held companies, and generally is already required to be provided to the United States Securities and Exchange Commission by public company sponsors of defined benefit plans. *Adding Multiemployer Plan Contributing Employer Information:* The Form 5500 Annual Return/Report currently does not require plans to state the number or identities of employers participating in a multiemployer plan. Multiemployer plans are, however, currently required to keep a list of participating employers on file and to make such information available to participants on request. Accordingly, requiring multiemployer plans to provide the number of participating employers will not create any new recordkeeping requirements. This information will be useful to various governmental and private firms that use the Form 5500 Annual Return/Report data for policy and research purposes. The Form 5500 Annual Return/Report also currently lacks information that shows a multiemployer plan's basis for employer contributions. This information is particularly important with respect to multiemployer defined benefit pension plans, as this information is needed by the PBGC in order for it to assess the financial risk posed to the plan by the financial collapse or withdrawal of one or more contributing employers. Over the past several years, the financial condition of many multiemployer plans has been deteriorating. The PBGC believes it is prudent to begin monitoring those companies that are major contributors to the multiemployer plans. To do so, the PBGC must be able to identify these companies. Because multiemployer plans are most at risk when a major contributing sponsor encounters financial difficulties, this proposed revision would require identification only of major contributors. *Other Improvements and Clarifications of Existing Form 5500 Reporting Requirements:* Some of the revisions that come under this heading are technical clarifications or conforming changes to more substantive proposed revisions. These entail no material benefits or costs. Other revisions make small adjustments to the instructions or reporting requirements to reflect changing market or compliance trends. Some of these entail small increases in reporting costs that are justified by the need to stay current. These include, for example, the addition of feature codes to identify plans with certain default features, compliance questions directed at the provision of blackout notices, and fuller instruction on the reporting of certain indirect plan expenses. Others, such as the elimination of the requirement for self-insured health benefit plans to separately report certain payments to individual health care providers, may reduce reporting costs without compromising protections. These revisions and their respective intents are detailed in the Notice of Proposed Forms Revisions published simultaneously with these proposed regulations. Costs Although the costs to plans of satisfying their annual reporting obligations will be lower under these proposed regulations than they would be under existing regulations, they will still be substantial. 3 As shown in Table 2 below, the aggregate cost of such reporting under the existing regulations is estimated to be $1,062 million annually, shared across the 833,000 filers subject to the filing requirement. The Department estimates that the proposed regulations, however, impose an annual cost burden on the 833,000 filers of only $888 million. 4 3 The Department believes, however, that the annual cost burden on filers would be higher still in the absence of the existing regulations, because the filers would then be required to comply with the statutory filing requirements without the benefit of any regulatory exceptions, simplified reporting, or alternative methods of compliance. 4 More detail about the cost estimates can be found in the section “Assumptions, Methodology, and Uncertainty”. Table 2.—Summary of Costs: Current Requirements vs. Proposed Requirements Total costs (in millions) Total burden hours (in millions) Current Reporting Requirements $1,062 13.51 Change due to Revisions for 2008 174 2.26 Proposed Reporting Requirement, 2008 888 11.25 Note: Number of affected plans: 833,000. Because these proposed regulations make substantial revisions to the existing reporting requirements, they will entail some one-time transition costs. The Department examined such transition costs in connection with the last major revision to the Form 5500 Annual Return/Report, which revised the Annual Return/Report for plan years beginning in 1999. *See* 65 FR 5026 (Feb. 2, 2000). Based on information provided by plan service providers and Form 5500 Annual Return/Report software developers at that time, the Department concluded that such costs are generally loaded into the prices paid by plans for affected services and products, spread both across plans and across the expected life of the service and product changes. The Department's estimates provided here are therefore intended to reflect such spreading and loading of these transition costs. That is, the gradual defrayal of the transition costs is included in the annual cost estimates here. In addition to estimating the total impact of the proposed revisions on aggregate costs, the Department has broken down the change in cost by individual revisions. This apportioning of costs to individual revisions could be potentially done in several ways, as some types of plans are affected by more than one revision and therefore sequencing of the changes becomes important for the calculations. For example, large and small Code section 403(b) plans are affected by the elimination of the special reporting rules, but small Code section 403(b) plans are affected also by the introduction of the Short Form 5500. For the purpose of quantifying the impact of the individual law changes, the Department carried out the calculations in the following way: 1. Removal of the IRS-only schedules: Under the proposed regulations some of the information formerly collected in these schedules will be collected by the Department elsewhere in the Form 5500 Annual Return/Report filing. On net, however, this revision will substantially reduce the amount of information collected. Relative to the current filing requirement, this revision will reduce the total annual burden hours for 740,000 affected filers by 1.2 million hours. Applying an hourly labor rate of $84 for service providers and $59 for plan sponsors, the Department estimates that this will lower the aggregate annual reporting cost by an estimated $90 million. 5 5 A discussion on the appropriateness of the labor rates used in the calculations as well as on other assumptions can be found in the Technical Appendix. 2. Establishment of a Short Form 5500 for certain small plans: A large majority of small plans, or 580,000 of the 640,000 total small plan filers, are estimated to be eligible to use the Short Form 5500, thereby saving an estimated $154 million (1.9 million hours) annually. This estimate includes about 9,000 small Code section 403(b) plans that under the proposed rule would be subjected to increased filing requirements. 3. Addition of certain asset allocation and duration information to Schedule B: The provision of this information, and its certification by an actuary, will entail estimated additional annual costs of $1.5 million (19,000 hours) for 5,000 affected defined benefit pension plans with more than 1,000 participants. 4. Revision of Schedule C (Service Provider Information): This revision intends to clarify the reporting requirements and improve the information plan officials receive regarding amounts being received by plan service providers. This is anticipated to add an estimated $3 million (41,000 hours) for 79,000 affected plans to annual reporting costs. 5. Addition of requirements for certain multi-employer plans to report certain information about contributing employers: This is anticipated to add an estimated $300,000 (3,500 hours) to annual reporting costs for 10,000 multiemployer plans. 6. Adoption of various technical revisions and other miscellaneous revisions to the Form 5500 Annual Return/Report to improve and clarify existing reporting requirements: Together these are estimated to add an estimated $12 million (154,000 hours) to annual reporting costs and affect approximately 250,000 plans. 7. Elimination of the special reporting rules for Code section 403(b) plans: Approximately eighteen thousand Code section 403(b) plans are subject to the annual reporting requirements. It is anticipated that all 9,000 small Code section 403(b) plans will be eligible to use the new Short Form and will be eligible for waiver of the audit requirement. The impact of the proposed changes on the small Code section 403(b) plans is quantified above. Nine thousand large Code section 403(b) plans will be newly subject to the audit requirement and required to file a Form 5500 Annual Return/Report similar to those filed by similar Code section 401(k) plans. This revision will increase annual reporting costs for large Code section 403(b) plans by an estimated $54 million (or 690,000 hours). A summary of the changes in costs and burden hours that were allocated to the groups of proposed changes as outlined above, as well as the number of affected employee benefit plans, can be found in Table 3 below. Table 3.—Summary of Proposed Changes to the Reporting Requirements: Cost, Burden, and Affected Plans Revisions for 2008 Change in costs (in millions) Change in burden hours Number of affected plans IRS-only Schedules, Short Form and small −$90.1 −1,226,000 739,000 Code Section 403(b) plans −154.3 −1,938,000 580,000 Schedule B 1.5 19,000 5,000 Schedule C 3.2 41,000 79,000 Multi-employer plans 0.3 3,500 10,000 Technical and Miscellaneous Revisions 11.9 154,000 253,000 Large Code Section 403(b) plans 53.9 689,000 9,000 Total −173.6 (2,258.30) 833,000 Note: The displayed numbers might not sum up to the totals due to rounding. The proposed regulation otherwise generally does not alter reporting costs. Plans currently exempt from annual reporting requirements (such as certain small unfunded or fully insured welfare plans and certain Simplified Employer Pensions) will remain exempt. Also, except for Code section 403(b) plans, plans eligible for limited reporting options (such as certain IRA-based pension plans) will continue to be eligible for that annual reporting relief. The revisions continue the Form 5500 Annual Return/Report structure that is familiar to individual and corporate taxpayers—a simple two-page main form with basic information necessary to identify the plan for which the report is filed, along with a checklist of the schedules being filed that are applicable to the filer's plan type. The structure is designed to aid filers by allowing them to assemble and file a return customized to their plan. Assumptions, Methodology, and Uncertainty The cost and burden associated with the annual reporting requirement for any given plan will vary according to a variety of factors, including the plan's characteristics, practices, and operations, which in turn determine what information must be provided. A small, single-employer defined contribution pension plan filing a new Short Form 5500 generally will incur far lower costs than a large, multiemployer defined benefit pension plan that holds multiple insurance contracts, engages in numerous reportable transactions, and pays large fees to a number of service providers. Therefore, in arriving at its aggregate cost estimates, the Department separately considered the cost to different types of plans of providing different types of information. The basis for the Department's estimates is elaborated below. *Assumptions Underlying this Analysis* —The Department's analysis of the costs and benefits of these proposed amendments assumes that all benefits and costs will be realized in the first year of the reporting cycle to which the amendments apply and within each year thereafter. This assumption is based on the nature of the statutory reporting provisions, which require that each plan complete a filing within a yearly period. The Department has used a “status quo” baseline for this analysis, assuming that the world absent the regulations will resemble the present. 6 6 Further detail can be found in the Technical Appendix. *Methodology* —The underlying cost data was developed by Mathematica Policy Research, Inc. (MPR), and has been used by the Agencies in various burden estimates related to the Form 5500 Annual Return/Report during recent years. *See,* 65 FR 21068, 21077-78 (April 19, 2000); Borden, William S., “Estimates of the Burden for Filing Form 5500: The Change in Burden from the 1997 to the 1999 Forms,” Mathematica Policy Research, submitted to U.S. Dept. of Labor May 25, 1999. 7 It is grounded in surveys of filers and their service providers, which measured the unit cost burden of providing various types of information. Aggregate estimates were produced by interacting these unit cost measures with historical counts of Form 5500 Annual Return/Report filers. 7 The Mathematica report can be accessed at the Department's Web site at *http://www.dol.gov/ebsa.* A new burden estimating model, based on the Form 5500 Burden Model that MPR most recently used for estimating burdens in October 2004, was assembled by Actuarial Research Corporation (ARC). ARC assembled a simplified model, drawing on implied burdens associated with subsets of filer groups represented in the MPR model. The model used the level of detail consistent with reflecting burden differences associated with the various proposed forms revisions. In the following, the ARC model is described in broad terms. Further details about the model are explained in the Technical Appendix that can be accessed at the Department's Web site at *http://www.dol.gov/ebsa* . To estimate aggregate burdens, the types of plans that have similar reporting requirements were grouped together. Thus, calculations were prepared for different subsets of types of plans as appropriate based on the specifics of the revisions to the reporting requirements. Table 4 below shows the particular types of plans considered, the number of plans affected by the proposed revisions, as well as the aggregate costs under current and proposed requirements. As can be seen from the Total line in Table 4, aggregate cost under current and proposed regulations add up to $1,062 million and $888 million, respectively. The universe of filers was divided into three basic plan types: Defined benefit pension plans, defined contribution pension plans, and welfare plans, and each of these major plan types was further subdivided into multiemployer and single-employer plans. Defined contribution Code section 403(b) plans were treated separately from other defined contribution plans. Since the filing requirements differ substantially for small and large plans, the plan types were also divided by plan size. For large plans (100 or more participants), the defined benefit plans were further divided between very large (1000 or more participants) and other large plans (at least 100 participants, but less than 1000 participants). For each of these sets of respondents, burden hours per respondent were estimated for the Form 5500 Annual Return/Report itself and for up to eight schedules. Table 4.—Number of Affected Filers and Cost Under Current vs. Proposed Requirements Type of plan Number affected Aggregate cost under current requirements (in millions) Aggregate cost under proposed requirements (in millions) 5500 Large Plans (> = 100 participants)—189,000: DB, ME, 100-1,000 participants 800 7.6 7.2 DB, ME, > 1,000 participants 1,100 13.3 13.2 DB, SE, 100-1,000 participants 8,900 80.2 74.2 DB, SE, > 1,000 participants 4,200 38.8 39.2 DC, ME, non-403(b) 2,300 14.4 13.7 DC, ME, 403(b) 400 0.016 2.4 DC, SE, non-403(b) 70,000 437.1 401.3 DC, SE, 403(b) 8,600 0.350 51.9 Welfare, ME 5,700 14.3 14.8 Welfare, SE 86,600 124.3 127.9 5500 Small Short Form Eligible—580,000: DB 30,800 30.3 21.2 DC, non-403(b) 533,000 263.9 87.8 DC, 403(b) 8,800 0.36 1.4 Welfare 7,000 3.4 1.2 5500 Small Short Form Ineligible—64,000: DB 4,000 3.8 3.7 DC, non-403(b) 60,200 29.3 26.9 DC, 403(b) Welfare 100 0.079 0.080 Total 832,500 1,061.5 888.08 Note: The displayed numbers might not sum up to the totals due to rounding. DB—defined benefit plans. SE—single-employer plans. Large plans—100 participants or more. DC—defined contribution plans ME—multi employer plans. Small plans—less than 100 participants. In addition to separating plans by type and size, costs were estimated separately for the form and for each schedule. When items on a Form 5500 Annual Return/Report schedule are required by more than one Agency, the estimated burden associated with that schedule is allocated among the Agencies. This allocation is based on whether only a single item on a schedule is required by more than one agency or whether several or all of the items are required by more than one agency. Filers must read not only the instructions for particular items but also instructions pertaining to the general filing requirements, and the burden associated with reading the instructions is tallied and allocated accordingly. A plan's reporting burden is estimated in light of the specific items and schedules it must complete as well as its size, funding method, and investment structures. For example, the annual report for a large fully insured welfare plan generally would consist of only a few questions on the Form 5500 and the Schedule A (Insurance Information). The requirement that this plan provide very limited information on the Form 5500 Annual Return/Report is reflected in the estimates of reporting burden time. By contrast, a large defined benefit pension plan that is intended to be tax-qualified and that uses a trust fund and invests in insurance contracts would be required to submit an annual report completing almost all the line items of the Form 5500, plus Schedule A (Insurance Information), Schedule B (Actuarial Information), Schedule C (Service Provider Information), Schedule D (DFE/Participating Plan Information), Schedule H (Financial Information), and Schedule R (Retirement Plan Information), and would be required to submit an IQPA's report and opinion. The Agencies' methodology attempts to capture, through its categorization, these different reporting burdens, thereby providing meaningful estimates of significant differences in the burdens placed on different categories of filers. Burden estimates for each schedule were adjusted for the proposed revisions, reflecting the numbers of items added or deleted in each schedule or moved from one schedule to another, and the average burden currently attributable to items on each of the corresponding current schedules. The burden for the proposed Short Form 5500 was built from the estimated current burden associated with the various line items included in it. The Department has not attributed a recordkeeping burden to the Form 5500 Annual Return/Report either here or in its Paperwork Reduction Act analysis because it believes that plan administrators' practice of keeping financial records necessary to complete the Form 5500 Annual Return/Report arises from usual and customary management practices that would be used by any financial entity, and does not result from ERISA or Code annual reporting and filing requirements. The aggregate baseline burden is the sum of the burden per form and schedule filed multiplied by the estimated aggregate number of forms and schedules. The simplified model draws on Form 5500 Annual Return/Report data representing each plan's filing for plan year 2002 (the most recent year for which complete data is available), both for estimating the impact of changes in the numbers of filings associated with the introduction of the Short Form 5500 for most small filers as well as for estimating the impact of changes in filing obligations associated with other schedules. In summary, the model estimates that due to $174 million in cost reductions the proposed revisions would lead to aggregate costs of $888 million. While there is a net reduction in costs, the Department estimates that some large plans might experience cost increases, while small plans will experience cost reductions. The total burden estimates, as well as the burden broken out by type of plan can be found in Table 4 above. *Uncertainty within Estimates* —The Department acknowledges that there are several areas of uncertainty that might affect the estimates, in particular the unit cost estimates. While the Department has a good sense for the filing universe and for the number of filers that file the different schedules of the Form 5500, the unit costs under the current requirements as well as the way they would change due to the proposed revisions are more uncertain. The Department has no direct measure for the unit costs, but rather uses a proxy adapted from the existing MPR model, which was developed in the late 1990s. Additional uncertainty is added due to the proposed revisions. Some of the revisions delete items or move them from certain schedules to others. The impact of these changes can be estimated more accurately than the impact of the revisions that require the reporting of new items like fees. Consequently, the unit cost estimates would benefit from updated information and the Department welcomes comments that would provide information on this matter. Peer Review In December 2004, the Office of Management and Budget
(OMB)issued a Final Information Quality Bulletin for Peer Review, 70 FR 2664 (January 14, 2005) (Peer Review Bulletin), establishing that important scientific information shall be peer reviewed before it is disseminated by the Federal government. The Peer Review Bulletin applies to original data and formal analytic models used by agencies in Regulatory Impact Analyses. The Department determined that the data and methods employed in its regulatory analysis of this proposal constitutes “influential scientific information” as defined in the Peer Review Bulletin. Accordingly, a peer review was conducted under Section II of the Bulletin. The peer review report concluded that the methodology and data generally were sound and produced plausible estimates, which supports the Department's conclusion that the proposed form changes should reduce the aggregate burden relative to the previous forms. The Peer Review Report can be accessed at the Department's Web site at *http://www.dol.gov/ebsa* . Regulatory Flexibility Act The Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* )
(RFA)imposes certain requirements with respect to Federal rules that are subject to the notice and comment requirements of section 553(b) of the Administrative Procedure Act (5 U.S.C. 551 *et seq.* ) and that are likely to have a significant economic impact on a substantial number of small entities. Unless an agency certifies that a proposed rule will not, if promulgated, have a significant economic impact on a substantial number of small entities, section 603 of the RFA requires that the agency present an initial regulatory flexibility analysis at the time of the publication of the notice of proposed rulemaking describing the impact of the rule on small entities and seeking public comment on such impact. Small entities include small businesses, organizations, and governmental jurisdictions. For purposes of analysis under the RFA, EBSA proposes to continue to consider a small entity to be an employee benefit plan with fewer than 100 participants. The basis of this definition is found in section 104(a)(2) of ERISA, which permits the Secretary to prescribe simplified annual reports for pension plans that cover fewer than 100 participants. Under ERISA section 104(a)(3), the Secretary may also provide for exemptions or for simplified reporting and disclosure for welfare benefit plans. Pursuant to the authority of ERISA section 104(a)(3), the Department has previously issued at 29 CFR 2520.104-20, 2520.104-21, 2520.104-41, 2520.104-46, and 2520.104b-10 certain simplified reporting provisions and limited exemptions from reporting and disclosure requirements for small plans, including unfunded or insured welfare plans, that cover fewer than 100 participants and satisfy certain other requirements. Further, while some large employers may have small plans, in general small employers maintain most small plans. Thus, EBSA believes that assessing the impact of these proposed rules on small plans is an appropriate substitute for evaluating the effect on small entities. The definition of small entity considered appropriate for this purpose differs, however, from a definition of small business that is based on size standards promulgated by the Small Business Administration
(SBA)(13 CFR 121.201) pursuant to the Small Business Act (15 U.S.C. 631 et seq.). EBSA therefore requests comments on the appropriateness of the size standard used in evaluating the impact of these proposed rules on small entities. EBSA has consulted with the SBA Office of Advocacy concerning use of this participant count standard for RFA purposes. *See* 13 CFR 121.902(b)(4). The following seven subsections address specific requirements of the RFA.
(1)The Department is proposing to amend the regulations relating to the annual reporting and disclosure requirements of section 103 of ERISA to conform existing regulations to proposed revisions to the Form 5500 Annual Return/Report forms that are included in the Notice of Proposed Forms Revisions published simultaneously with these regulations. The Department continually strives to tailor reporting requirements to minimize reporting costs while ensuring that the information necessary to secure ERISA rights is adequately available. The optimal design for reporting requirements to satisfy these objectives changes over time. Benefit plan designs and practices evolve over time in response to market trends, including trends in labor markets, financial markets, health care and insurance markets, and markets for various services used by plans. Partly as a result, the nature and mix of compliance issues and risks to ERISA rights change over time. Frequent amendments to ERISA, the Code, and to associated regulations also change the parameters of ERISA rights and the methods needed to protect those rights. In addition, the technologies available to manage and transmit information continually advance. It is incumbent on the Department to revise its reporting requirements from time to time to keep pace with such changes. The Department is proposing these regulations and associated forms revisions to readjust its reporting requirements to take into account certain recent changes in markets, the law, and technology, many of which are referenced above in this preamble and/or in the Notice of Proposed Forms Revision published simultaneously with these regulations.
(2)Section 103 of ERISA requires every employee benefit plan covered under part 1 of Subtitle B of Title I of ERISA to publish and file an annual report concerning, among other things, the financial conditions and operations of the plan. Section 109 of ERISA authorizes the Secretary to prescribe forms for the reporting of information that is required to be included in the annual report. Section 104(a)(2)(A) of ERISA authorizes the Secretary to prescribe by regulation simplified annual reporting for pension plans that cover fewer than 100 participants. Section 104(a)(3) of ERISA authorizes the Secretary to exempt any welfare plan from all or part of the reporting and disclosure requirements of Title I of ERISA or to provide simplified reporting and disclosure if the Secretary finds that such requirements are inappropriate as applied to such plans. Section 110 of ERISA permits the Secretary to prescribe for pension plans alternative methods of complying with any of the reporting and disclosure requirements if the Secretary finds that:
(1)The use of the alternative method is consistent with the purposes of Title I of ERISA, and it provides adequate disclosure to plan participants and beneficiaries and adequate reporting to the Secretary;
(2)application of the statutory reporting and disclosure requirements would increase costs to the plan or impose unreasonable administrative burdens with respect to the operation of the plan; and
(3)the application of the statutory reporting and disclosure requirements would be adverse to the interests of plan participants in the aggregate. The Department proposes to find that use of the Form 5500 Annual Return/Report, as revised, along with the proposed Short Form 5500, constitutes an alternative method of compliance, an exemption, and/or a simplified report, as applicable, consistent with these conditions. Generally, the Department believes that use of the revised Form 5500 Annual Return/Report and the proposed Short Form 5500 would relieve plans of all sizes of increased costs and burdens by providing a standard format that facilitates reporting required by the statute, eliminating duplicative reporting requirements, and streamlining the content of the annual return/report. The objectives of these proposed, amended regulations and the associated proposed forms revisions are to streamline reporting and reduce aggregate reporting costs, particularly for small plans, while preserving and enhancing protection of ERISA rights. These purposes are detailed above in this preamble and in the Notice of Proposed Forms Revisions published simultaneously with these regulations.
(3)These proposed regulatory amendments do not alter the number of small plans required to comply with the annual reporting requirements, but do implement a new Short Form 5500, which is designed specifically to further streamline the limited reporting requirements presently applicable to small plans. The Department estimates that more than six million small, private-sector employee pension and welfare benefit plans are covered under Title I of ERISA. However, a large majority of these are fully insured or unfunded welfare benefit plans, which currently are exempt from annual reporting requirements and will continue to be exempt under these proposed regulations and the associated forms revisions. Approximately 644,000 small plans, including small pension plans and small funded welfare plans, currently are required to file annual reports and will continue to be so required under these proposed regulations and the associated forms revisions. Of these, an estimated 580,000 will be eligible to use the proposed new Short Form 5500. Use of the Short Form 5500 is expected to reduce these plans' reporting costs while preserving or enhancing the protection of their participants' ERISA rights. Among small plans, perhaps the most acutely affected will be the approximately 9,000 small Code section 403(b) plans. As explained above, such plans are currently subject only to limited annual reporting requirements. These proposed regulations and associated forms revisions, which will subject these plans to the same requirements as other covered small plans, will increase these plans' reporting costs. As discussed above, the Department believes these added costs are justified by the need to strengthen protections for affected participants' ERISA rights. The numbers and types of small plans affected by these proposed regulations and the magnitude and nature of the proposed regulations' effects are further elaborated below.
(4)The proposed regulations' reporting requirements applicable to small plans are detailed above and in the associated Notice of Proposed Forms Revisions. For a large majority of the 644,000 small plans subject to annual reporting requirements, or an estimated 549,000 plans, submission of the Short Form 5500 alone will fully satisfy their annual reporting requirements. All of these plans are eligible for the waiver of audit requirements, and none are defined benefit pension plans. Therefore, for such plans satisfaction of their applicable annual reporting requirements is not expected to require the services of an IQPA or auditor, but will require the use of a mix of clerical and professional administrative skills. For an additional 31,000 small defined benefit pension plans that would be eligible to use the streamlined Short Form 5500, satisfaction of the reporting requirements also will require services of an actuary and submission of Schedule B. The remaining 64,000 small plans will not be eligible to use the Short Form 5500 and will continue to be required to file the Form 5500 Annual Return/Report. Of these, 4,000 are defined benefit plans that must use an actuary and file Schedule B, and 32,000 are ineligible for waiver of the audit requirement and are required to employ an IQPA and submit an IQPA's report. All will require a mix of clerical and professional administrative skills to satisfy their reporting requirements. Satisfaction of annual reporting requirements under these proposed regulations is not expected to require any additional recordkeeping that would not otherwise be part of normal business practices. Table 5 below compares the Department's estimates of small plans' reporting costs under the current requirements with those under the proposed requirements for various classes of affected plans. As shown, costs under the proposed requirements will be lower on aggregate and for most classes of plans. These estimates take account of the quantity and mix of clerical and professional skills required to satisfy the reporting requirements for various classes of plans. Table 5.—Small Plan Reporting Costs Under Current vs. Proposed Requirements Class of plan Number affected Aggregate cost under current requirements (In millions) Aggregate cost under proposed requirements (In millions) Defined Benefit Pension, Short Form eligible 31,000 $30.34 $21.24 Defined Benefit Pension, Short Form ineligible 4,000 3.77 3.67 Code Section 403(b) All of 9,000 0.36 1.45 Other Defined Contribution, Short Form eligible 533,000 263.94 87.84 Other Defined Contribution Pension, Short Form ineligible 60,000 29.32 26.92 Funded Welfare All of 7,000 3.52 1.24 Other Welfare None of approximately 6 million Total for All Affected Small Plans 644,000 331.26 142.35 The Department notes that the estimated reporting costs amount to $221 on average for each of the 644,000 small plans subject to annual reporting requirements, or just $22 if averaged across all of the approximately 6.6 million small plans covered by Title I of ERISA. This compares with roughly $4,000 on average for each of the 189,000 affected large filers.
(5)The Department is unaware of any relevant federal rules for small plans that duplicate, overlap, or conflict with these proposed regulations.
(6)In developing these proposed regulations and the associated forms revisions, the Department considered a number of alternative provisions directed at small plans. For example, as discussed in the Notice of Proposed Forms Revisions published simultaneously with these regulations, the ERISA Advisory Council suggested that the Department consider exempting welfare plans from reporting requirements, or, alternatively, subjecting all welfare plans to new, separately designed reporting requirements. The Department opted instead to retain both the requirement that small funded welfare plans submit annual reports and the exception from annual reporting requirements for other small welfare plans. Annual reporting by the relatively small number of small funded welfare plans is necessary, in the Department's view, to protect ERISA rights in connection with the assets that they hold. A requirement that the remaining approximately six million small welfare plans report annually is not justified insofar as these plans have no assets to protect and insofar as the vast majority of these plans are fully insured and therefore separately protected by State oversight of the insurance contracts they hold and the insurers that issue them. The Department also considered both narrower and broader eligibility criteria for use of the Short Form 5500, settling on criteria that limit eligibility to plans holding relatively safe and protected assets, which nonetheless includes a large majority of small plans. The Department also considered the inclusion of more or fewer of the items of information formerly collected from small plans in the Form 5500 Annual Return/Report, retaining only those items it believes to be necessary and adequate to the protection of small plan participants' ERISA rights.
(7)The Department invites interested persons to submit comments regarding the impact on small plans of these proposed regulations and the associated forms revisions, and on the Department's assessment thereof. The Department also requests comments on the alternatives it considered and its conclusions regarding those alternatives; on any additional alternatives it should have considered; on what, if any, special problems small plans might encounter if the proposal were to be adopted; and what changes, if any, could be made to minimize those problems. To avoid duplication of comments, comments submitted in response to the Notice of Proposed Form Revisions published simultaneously with these proposed regulations will be treated as comments on this proposed rulemaking. Paperwork Reduction Act Statement The Department, as part of its continuing efforts to reduce paperwork and respondent burden, invites the general public and Federal agencies to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act of 1995
(PRA)(44 U.S.C. 3506(c)(2)(A)). This helps to ensure that requested data are provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents is properly assessed. The Department solicits comments on the information collection request
(ICR)included in this proposed regulatory action, as well as the Notice of Proposed Forms Revisions published simultaneously with this Notice. In order to avoid unnecessary duplication of public comments, the PRA information published in the associated Notice of Proposed Forms Revisions is incorporated herein by this reference in its entirety, and comments submitted in response to these **Federal Register** publications will be treated as comments on these proposed rules. A copy of the ICR may be obtained by contacting the office listed under the heading “PRA Addressee.” The Department has submitted a copy of the proposed information collection to OMB, in accordance with 44 U.S.C. 3507(d), for its review of the information collection. The Department is particularly interested in comments that: • Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the Agencies, including whether the information will have practical utility; • Evaluate the accuracy of the Agencies' estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; • Enhance the quality, utility, and clarity of the information to be collected; and • Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, *e.g.* , permitting electronic submission of responses. Comments should be sent to the Office of Information and Regulatory Affairs, OMB, Room 10235, New Executive Office Building, Washington, DC 20503; Attention: Desk Officer for the Employee Benefits Security Administration, Department of Labor. Although comments may be submitted through September 19, 2006, OMB requests that comments be received within 30 days of publication of these proposed regulations to ensure their consideration. PRA Addressee: Written comments regarding only PRA and the ICR should be sent to Gerald B. Lindrew, U.S. Department of Labor, EBSA/OPR, Room N-5718, 200 Constitution Avenue, NW., Washington, DC 20210, Telephone:
(202)693-8410; Fax:
(202)219-4745. These are not toll-free numbers. Written comments must be submitted on or before September 19, 2006 to be assured of consideration. Congressional Review Act The notice of proposed rulemaking being issued here is subject to the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 *et seq.* ) and, if finalized, will be transmitted to the Congress and the Comptroller General for review. Unfunded Mandates Reform Act For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), as well as Executive Order 12875, the proposed rules do not include any Federal mandate that may result in expenditures by state, local, or tribal governments in the aggregate of more than $100 million, or increased expenditures by the private sector of more than $100 million. Federalism Statement Executive Order 13132 (August 4, 1999) outlines fundamental principles of federalism and requires adherence to specific criteria by federal agencies in the process of their formulation and implementation of policies that have substantial direct effects on the States, the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. These proposed rules do not have federalism implications because they would have no substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Section 514 of ERISA provides, with certain exceptions specifically enumerated, that the provisions of Titles I and IV of ERISA supersede any and all laws of the States as they relate to any employee benefit plan covered under ERISA. The requirements implemented in these proposed rules do not alter the fundamental provisions of the statute with respect to employee benefit plans, and as such would have no implications for the States or the relationship or distribution of power between the national government and the States. List of Subjects in 29 CFR Part 2520 Accountants, Disclosure requirements, Employee benefit plans, Employee Retirement Income Security Act, Pension plans, Pension and welfare plans, Reporting and recordkeeping requirements, and Welfare benefit plans. In view of the foregoing, the Department of Labor proposes to amend 29 CFR part 2520 as set forth below: PART 2520—RULES AND REGULATIONS FOR REPORTING AND DISCLOSURE 1. The authority citation for part 2520 continues to read as follows: Authority: 29 U.S.C. 1021-1025, 1027, 1029-31, 1059, 1134, and 1135; Secretary of Labor's Order 1-2003, 68 FR 5374 (February 3, 2003). Sec. 2520.101-2 also issued under 29 U.S.C. 1132, 1181-1183, 1181 note, 1185, 1185a-b, 1191, and 1191a-c. Secs. 2520.102-3, 2520.104b-1, and 2520.104b-3 also issued under 29 U.S.C. 1003, 1181-1183, 1181 note, 1185, 1185a-b, 1191, and 1191a-c. Secs. 2520.104b-1 and 2520.107 also issued under 26 U.S.C. 401 note, 111 Stat. 788. 2. In § 2520.103-1, revise paragraphs (a)(2) and
(c)to read as follows: § 2520.103-1 Contents of the annual report.
(a)* * *
(2)Under the authority of subsections 104(a)(2), 104(a)(3) and 110 of the Act, a simplified report, limited exemption or alternative method of compliance is prescribed for employee welfare and pension benefit plans, as applicable. A plan filing a simplified report or electing the limited exemption or alternative method of compliance shall file an annual report containing the information prescribed in paragraph
(b)or paragraph
(c)of this section, as applicable, and shall furnish a summary annual report as prescribed in § 2520.104b-10.
(c)*Contents of the annual report for plans with fewer than 100 participants.*
(1)Except as provided in paragraph (c)(2) of this section and in paragraph
(d)of this section, and in §§ 2520.104-43 and 2520.104a-6, the annual report of an employee benefit plan that covers fewer than 100 participants at the beginning of the plan year shall include a Form 5500 “Annual Return/Report of Employee Benefit Plan” and any statements or schedules required to be attached to the form, completed in accordance with the instructions for the form, including Schedule A (Insurance Information), Schedule B (Actuarial Information), Schedule D (DFE/Participating Plan Information), Schedule I (Financial Information—Small Plan), and Schedule R (Retirement Plan Information). See the instructions for this form. (2)(i) The annual report of an employee benefit plan that covers fewer than 100 participants at the beginning of the plan year and that meets the conditions in paragraph (c)(2)(ii) of this section with respect to a plan year may, as an alternative to the requirements of paragraph (c)(1) of this section, meet its annual reporting requirements by filing the Form 5500-SF “Short Form 5500 Annual Return/Report of Employee Benefit Plan” and any statements or schedules required to be attached to the form, including Schedule B (Actuarial Information), completed in accordance with the instructions for the form. See the instructions for this form.
(ii)A plan meets the conditions in this paragraph (c)(2)(ii) with respect to the year if the plan:
(A)Does not hold any employer securities at any time during the year;
(B)Satisfies the audit waiver conditions in §§ 2520.104-46(b)(1)(i)(A)( *1* ) and 2520.104-46(b)(1)(i)(B) and (b)(1)(i)(C); and
(iii)Had at all times during the plan year 100 percent of the plan's assets held for investment purposes invested in assets that have a readily ascertainable fair market value. For purposes of this section, the following shall be treated as assets that have a readily ascertainable fair market value: Shares issued by an investment company registered under the Investment Company Act of 1940; investment and annuity contracts issued by any insurance company, qualified to do business under the laws of a State, that provides valuation information at least annually to the plan administrator; bank investment contracts issued by a bank or similar financial institution, as defined in § 2550.408b-4(c) of this chapter, that provides valuation information at least annually to the plan administrator; securities (except employer securities) traded on a public exchange; government securities issued by the United States or by a State; cash or cash equivalents held by a bank or similar financial institution, as defined in § 2550.408b-4(c) of this chapter; by an insurance company, qualified to do business under the law of a State; by an organization registered as a broker-dealer under the Securities Exchange Act of 1934; or by any other organization authorized to act as a trustee for individual retirement accounts under section 408 of the Internal Revenue Code; and any loan meeting the requirements of section 408(b)(1) of the Act and the regulations issued thereunder. 3. In § 2520.104-44, remove paragraph (b)(3). 4. In § 2520.104-46, add a new paragraph
(e)and a new appendix to the section to read as follows: § 2520.104-46 Waiver of examination and report of an independent qualified public accountant for employee benefits plans with fewer than 100 participants.
(e)*Model notice.* The appendix to this section contains model language for inclusion in the summary annual report to assist plan administrators in complying with the requirements of paragraph (b)(1)(i)(B) of this section to avail themselves of the waiver of examination and report of the independent qualified public accountant for employee benefit plans with fewer than 100 participants. Use of the model language is not mandatory. In order to use the model language in the plan's summary annual report, administrators must, in addition to any other information required to be in the summary annual report, select among alternative language and add relevant information where appropriate in the model language. Items of information that are not applicable to a particular plan may be deleted. Use of the model language, appropriately modified and supplemented, will be deemed to satisfy the notice content requirements of paragraph (b)(1)(i)(B) of this section. Appendix to § 2520.104-46—Model Summary Annual Report Notice (Plan Administrators Will Need To Modify the Model To Omit Information That Is Not Applicable to the Plan) The U.S. Department of Labor's regulations require that an independent qualified public accountant audit the plan's financial statements unless certain conditions are met for the audit requirement to be waived. This plan met the audit waiver conditions for the plan year beginning (insert year) and therefore has not had an audit performed. Instead, the following information is provided to assist you in verifying that the assets reported on the (Form 5500 or Form 5500-SF—select as applicable) were actually held by the plan. At the end of the (insert year) plan year, the plan had (include separate entries for each regulated financial institution holding or issuing qualifying plan assets): [Set forth amounts and names of institutions as applicable where indicated] [(insert $ amount) in assets held by (insert name of bank)], [(insert $ amount) in securities held by (insert name of registered broker-dealer)], [(insert $ amount) in shares issued by (insert name of registered investment company)], [(insert $ amount) in investment or annuity contract issued by (insert name of insurance company)]. The plan receives year-end statements from these regulated financial institutions that confirm the above information. [Insert as applicable—The remainder of the plan's assets were
(1)qualifying employer securities,
(2)loans to participants,
(3)held in individual participant accounts with investments directed by participants and beneficiaries and with account statements from regulated financial institutions furnished to the participant or beneficiary at least annually, or
(4)other assets covered by a fidelity bond at least equal to the value of the assets and issued by an approved surety company.] Plan participants and beneficiaries have a right, on request and free of charge, to get copies of the financial institution year-end statements and evidence of the fidelity bond. If you want to examine or get copies of the financial institution year-end statements or evidence of the fidelity bond, please contact [insert mailing address and any other available way to request copies such as e-mail and phone number]. If you are unable to obtain or examine copies of the regulated financial institution statements or evidence of the fidelity bond, you may contact the regional office of the U.S. Department of Labor's Employee Benefits Security Administration
(EBSA)for assistance by calling toll-free 1.866.444.EBSA (3272). A listing of EBSA regional offices can be found at *http://www.dol.gov/ebsa* . General information regarding the audit waiver conditions applicable to the plan can be found on the U.S. Department of Labor Web site at *http://www.dol.gov/ebsa* under the heading “Frequently Asked Questions.” 5. Revise the Appendix to § 2520.104b-10 to read as follows: § 2520.104b-10 Summary Annual Report. Appendix to § 2520.104 b -10.—The Summary Annual Report
(SAR)Under ERISA: A Cross-Reference to the Annual Report SAR item Form 5500—large plan filer line items Form 5500—small plan filer line items Form 5500-SF—filer line items A. Pension Plan: 1. Funding arrangement Form 5500-9a Same Not applicable. 2. Total plan expenses Sch. H—2j Sch. I—2j Line 8h. 3. Administrative expenses Sch. H—2i(5) Sch. I—2h Line 8f. 4. Benefits paid Sch. H—2e(4) Sch. I—2e Line 8d. 5. Other expenses Sch. H—Subtract the sum of 2e(4) & 2i(5) from 2j Sch. I—2i Line 8g. 6. Total participants Form 5500—6f Same Line 5b. 7. Value of plan assets (net): a. End of plan year Sch. H—1l [Col. (b)] Sch. I—1c [Col. (b)] Line 7a [Col. (b)]. b. Beginning of plan year Sch. H—1l [Col. (a)] Sch. I—1c [Col. (a)] Line 7a [Col. (a)]. 8. Change in net assets Sch. H—Subtract 1l [Col. (a)] from 1l [Col. (b)] Sch. I—Subtract 1c [Col. (a)] from 1c [Col. (b)] Line 7c—Subtract Col.
(a)from Col. (b). 9. Total income Sch. H—2d Sch. I—2d Line 8c. a. Employer contributions Sch. H—2a(1)(A) & 2a(2)—if applicable Sch. I—2a(1) & 2b if applicable Line 8a(1) if applicable. b. Employee contributions Sch. H—2a(1)(B) & 2a(2) if applicable Sch. I—2a(2) & 2b if applicable Line 8a(2) if applicable. c. Gains (losses) from sale of assets Sch. H—2b(4)(C) Not applicable Not applicable. d. Earnings from investments Sch. H—Subtract the sum of 2a(3), 2b(4)(C) and 2c from 2d Sch. I—2c Line 8b. 10. Total insurance premiums Total of all Schs.A—5b Total of all Schs.A—5b Not applicable. 11. Funding deficiency: a. Defined benefit plans Sch. B—10 Same Same. b. Defined contribution plans Sch. R—6c, if more than zero Same Line 12c. B. Welfare Plan: 1. Name of insurance carrier All Schs. A—1(a) Same Not applicable. 2. Total (experience rated and non-experienced rated) insurance premiums All Schs. A—Sum of 8a(4) and 9(a) Same Not applicable. 3. Experience rated premiums All Schs. A—8a(4) Same Not applicable. 4. Experience rated claims All Schs. A—8b(4) Same Not applicable. 5. Value of plan assets (net): a. End of plan year Sch. H—1l [Col. (b)] Sch. I—1c [Col. (b)] Line 7c—[Col. (b)]. b. Beginning of plan year Sch. H—1l [Col. (a)] Sch. I—1c [Col. (a)] Line 7c—[Col. (a)]. 6. Change in net assets Sch. H—Subtract 1l [Col. (a)] from 1l [Col. (b)] Sch. I—Subtract 1c [Col. (a)] from 1c [Col. (b)] Line 7c—Subtract [Col. (a)] from [Col. (b)]. 7. Total income Sch. H—2d Sch. I—2d Line 8c. a. Employer contributions Sch. H—2a(1)(A) & 2a(2) if applicable Sch. I—2a(1) & 2b if applicable Line 8a(1) if applicable. b. Employee contributions Sch. H—2a(1)(B) & 2a(2) if applicable Sch. I—2a(2) & 2b if applicable Line 8a(2) if applicable. c. Gains (losses) from sale of assets Sch. H—2b(4)(C) Not applicable Not applicable. d. Earnings from investments Sch. H—Subtract the sum of 2a(3), 2b(4)(C) and 2c from 2d Sch. I—2c Line 8b. 8. Total plan expenses Sch. H—2j Sch. I—2j Line 8h. 9. Administrative expenses Sch. H—2i(5) Sch. I, line 2h Line 8f. 10. Benefits paid Sch. H—2e(4) Sch. I—2e Line 8d. 11. Other expenses Sch. H—Subtract the sum of 2e(4) & 2i(5) from 2j Sch. I—2i Line 8g. Signed at Washington, DC, this 13th day of July 2006. Ann C. Combs, Assistant Secretary, Employee Benefits Security Administration, U.S. Department of Labor. [FR Doc. 06-6330 Filed 7-20-06; 8:45 am]
Connectionstraces to 45
Traces to 45 documents
U.S. Code
26 references not yet in our index
  • 41 CFR 102
  • 5 CFR 553
  • Pub. L. 106-65
  • 113 Stat. 664
  • 26 CFR 301
  • Pub. L. 105-206
  • Pub. L. 100-647
  • 102 Stat. 3343
  • Pub. L. 99-514
  • 100 Stat. 2085
  • Pub. L. 101-508
  • 104 Stat. 1388
  • 31 CFR 10
  • 29 CFR 2201
  • Pub. L. 104-231
  • 28 CFR 16
  • 5 CFR 1303
  • 29 CFR 2200
  • 29 USC 651-678
  • Pub. L. 97-365
  • 96 Stat. 1749
  • 29 CFR 2520
  • 29 CFR 2510.101-3
  • Pub. L. 104-4
  • 29 USC 1021-1025
  • 111 Stat. 788
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cites case law
Rules and Regulations
Final rule
U.S.C.§ 10
Fed. Reg.Notices
U.S.C.§ 601
U.S.C.§ 3501
U.S.C.§ 801
U.S.C.§ 121
U.S.C.§ 863
U.S.C.§ 552
U.S.C.§ 1306
Cite41 CFR 102
Cite5 CFR 553
Pub. L.Pub. L. 106-65
Cites 71 · showing 12Cited by 0 across 0 sources
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Don't Tread on Me
E Pluribus Unum — out of many, one

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