Federal Acquisition Regulation; FAR Case 2006-021, Post Retirement Benefits (PRB), FAS 106, 64185-64186 [07-5669]

Download as PDF Federal Register / Vol. 72, No. 220 / Thursday, November 15, 2007 / Proposed Rules additional supporting materials with their tariff filings. These proposals may impose additional reporting or recordkeeping requirements on entities. The Commission seeks comment on the possible burden these requirements would place on small entities. Also, the Commission seeks comment on whether a special approach toward any possible compliance burdens on small entities might be appropriate. Entities, especially small businesses, are encouraged to quantify the costs and benefits of any reporting requirement that may be established in this proceeding. Steps Taken To Minimize Significant Economic Impact on Small Entities, and Significant Alternatives Considered 39. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its proposed approach, which may include (among others) the following four alternatives: (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities. 40. The Commission’s primary objective is to develop a framework for ensuring that rates remain just and reasonable, as required by section 201(b). The Commission seeks comment here on the effect the various proposals described in the Notice will have on small entities, and on what effect alternative rules would have on those entities. The Commission invites comment on ways in which the Commission can achieve its goal of protecting consumers while at the same time imposing minimal burdens on small entities. sroberts on PROD1PC70 with PROPOSALS Federal Rules That May Duplicate, Overlap, or Conflict With the Proposed Rules 41. None. Ordering Clauses 42. Accordingly, It is ordered, pursuant to Sections 4(i), 160, 201–204, and 254(g) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 160, 201–204, and 254(g), that this Notice of Proposed Rulemaking is adopted. 43. It is further ordered that the Commission’s Consumer and Governmental Affairs Bureau, Reference VerDate Aug<31>2005 15:52 Nov 14, 2007 Jkt 214001 Information Center, shall send a copy of this Notice of Proposed Rulemaking, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration. 44. It is further ordered that pursuant to applicable procedures set forth in Sections 1.415 and 1.419 of the Commission’s rules, 47 CFR 1.415, 1.419, interested parties may file comments on this Notice of Proposed Rulemaking on or before December 17, 2007 and reply comments on or before December 31, 2007. Federal Communications Commission. Marlene H. Dortch, Secretary. [FR Doc. E7–22342 Filed 11–14–07; 8:45 am] BILLING CODE 6712–01–P DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Part 31 [FAR Case 2006–021; Docket 2007–0001; Sequence 10] RIN: 9000–AK84 Federal Acquisition Regulation; FAR Case 2006–021, Post Retirement Benefits (PRB), FAS 106 AGENCIES: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Proposed rule. SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) are proposing to amend the Federal Acquisition Regulation (FAR) to permit the contractor to measure accrued PRB costs using either the criteria in Internal Revenue Code (IRC) 419 or the criteria in Financial Accounting Standard (FAS) 106. DATES: Interested parties should submit written comments to the FAR Secretariat on or before January 14, 2008 to be considered in the formulation of a final rule. ADDRESSES: Submit comments identified by FAR case number 2006– 021 by any of the following methods: Federal eRulemaking Portal: https:// www.regulations.gov. • To search for any document, first select under ‘‘Step 1,’’ ‘‘Documents with PO 00000 Frm 00023 Fmt 4702 Sfmt 4702 64185 an Open Comment Period’’ and select under ‘‘Optional Step 2,’’ ‘‘Federal Acquisition Regulation’’ as the agency of choice. Under ‘‘Optional Step 3,’’ select ‘‘Proposed Rules’’. Under ‘‘Optional Step 4,’’ from the drop down list, select ‘‘Document Title’’ and type the FAR Case number ‘‘2006–021’’. Click the ‘‘Submit’’ button. Please include your name and company name (if any) inside the document. You may also search for any document by clicking on the ‘‘Search for Documents’’ tab at the top of the screen. Select from the agency field ‘‘Federal Acquisition Regulation’’, and type ‘‘2006–021’’ in the ‘‘Document Title’’ field. Select the ‘‘Submit’’ button. • Fax: 202–501–4067. • Mail: General Services Administration, Regulatory Secretariat (VIR), 1800 F Street, NW, Room 4035, ATTN: Laurieann Duarte, Washington, DC 20405. Instructions: Please submit comments only and cite FAR case 2006–021 in all correspondence related to this case. All comments received will be posted without change to https:// www.regulations.gov, including any personal and/or business confidential information provided. FOR FURTHER INFORMATION CONTACT: Edward Chambers, Procurement Analyst, at (202) 501–3221, for clarification of content. For information pertaining to status or publication schedules, contact the FAR Secretariat at (202) 501–4755. Please cite FAR case 2006–021. SUPPLEMENTARY INFORMATION: A. Background FAR 31.205–6(o) allows contractors to choose among three different accounting methods for PRB costs: cash basis, terminal funding, and accrual basis. When the accrual basis is used, the FAR currently requires that costs must be measured based on the requirements of FAS 106. However, the tax-deductible amount that is contributed to the retiree benefit trust is determined using IRC 419, which has different measurement criteria than FAS 106. As a result, the FAS 106 amount can often exceed the IRC 419 measured costs, and contractors that choose to accrue PRB costs for Government reimbursement face a dilemma: whether to fund the entire FAS 106 amount to obtain Government reimbursement of the costs, regardless of tax implications, or fund only the tax deductible amount and not be reimbursed for the entire FAS 106 amount under their Government contracts. E:\FR\FM\15NOP1.SGM 15NOP1 64186 Federal Register / Vol. 72, No. 220 / Thursday, November 15, 2007 / Proposed Rules The Councils are proposing to amend FAR 31.205–6(o) to alleviate this dilemma. This amendment would provide the contractor an option of measuring accrued PRB costs using criteria based on IRC 419 rather than FAS 106, thereby permitting the contractor to fund the entire tax deductible amount without having a portion disallowed because it did not meet the FAR’s current measurement criteria. The Councils note that this amendment will not change the total measured PRB costs, i.e., the total measured PRB costs over the life of the PRB plan would be the same whether the contractor chose to apply the criteria in FAS 106 or IRC 419. The Councils note that the proposed rule may result in the Government paying higher PRB costs, since under the current rule some contractors may have chosen to fund the IRC amount rather than the full FAS amount in current and future accounting periods. Absent this proposed revision, the resulting difference will be an unallowable cost. However, the Councils are unable to estimate the specific cost impact because the number of contractors who may choose to use the proposed IRC 419 measurement option is unknown. Moreover, the Councils further note that there may be a cost impact if the rule remains unchanged. For example, in lieu of funding the lower IRC amount, contractors could decide to fund the full FAS amount (and forego the tax benefit), change from accrual to pay-as-you go accounting, or terminate their PRB plans rather than fund amounts that are not tax deductible. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804. B. Regulatory Flexibility Act sroberts on PROD1PC70 with PROPOSALS The Councils do not expect this proposed rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because most small entities do not accrue PRB costs for Government contract costing purposes. C. Paperwork Reduction Act The Paperwork Reduction Act does apply; however, these changes to the FAR do not impose additional information collection requirements to the paperwork burden previously VerDate Aug<31>2005 15:52 Nov 14, 2007 Jkt 214001 approved under OMB Control Number 9000–0013. List of Subjects in 48 CFR Part 31 Government procurement. restricted, so that they cannot be used by the employer for other purposes; and * * * * * [FR Doc. 07–5669 Filed 11–14–07; 8:45 am] BILLING CODE 6820–EP–S Dated: October 24, 2007 Al Matera, Director, Office of Acquisition Policy. Therefore, DoD, GSA, and NASA propose amending 48 CFR part 31 as set forth below: 1. The authority citation for 48 CFR part 31 continues to read as follows: Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c). DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Parts 600 and 635 RIN 0648–AU89 PART 31—CONTRACT COST PRINCIPLES AND PROCEDURES 2. Amend section 31.205–6 by revising paragraphs (o)(2)(iii)(A) and (B) to read as follows: Atlantic Highly Migratory Species; Atlantic Shark Management Measures; Amendment 2 to the Consolidated Highly Migratory Species Fishery Management Plan AGENCY: 31.205–6 Compensation for personal services. * * * * * (o) * * * (2) * * * (iii) * * * (A) Measured and assigned in accordance with— (1) Generally accepted accounting principles. However, the portion of PRB costs attributable to the transition obligation assigned to the current year that is in excess of the amount assignable under the delayed recognition methodology described in paragraphs 112 and 113 of Financial Accounting Standards Board Statement 106 is unallowable. The transition obligation is defined in Statement 106, paragraph 110; or (2) The costs shall— (i) Be measured using reasonable actuarial assumptions, which may include a healthcare inflation assumption; (ii) Be assigned to accounting periods on the basis of the average future working lives of active employees covered by the PRB plan or a 15 year period, whichever period is longer; and (iii) Exclude Federal income taxes, whether incurred by the fund or the contractor (including those taxes associated with any increase in PRB costs), unless the fund holding the plan assets is tax-exempt under the provisions of 26 U.S.C. 501(c); (B) Paid to an insurer or trustee to establish and maintain a fund or reserve for the sole purpose of providing PRB to retirees. The assets shall be segregated in the trust, or otherwise effectively PO 00000 Frm 00024 Fmt 4702 Sfmt 4702 National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Proposed rule; reopening comment period. SUMMARY: NMFS is reopening the comment period to provide additional opportunity for public comment on the draft Amendment 2 to the Consolidated Highly Migratory Species (HMS) Fishery Management Plan (FMP) and its July 27, 2007, proposed rule. More specifically, NMFS is interested in receiving comments on a modification to shark dealer weigh-out slips that would facilitate compliance with measures proposed in the draft Amendment 2 to the HMS FMP, which would require fishermen to land sharks with all fins naturally attached. Additionally, over the course of the comment period, NMFS has received suggestions on ways to modify the proposed measures to minimize impacts to fishermen. NMFS is interested in receiving additional comments regarding those suggestions. Furthermore, as is required under the current regulations and was proposed to be maintained in the July 27, 2007, proposed rule, any overharvests that occur in the 2007 or 2008 commercial shark fishery will be accounted for with the implementation of final Amendment 2 to the Consolidated HMS FMP. Thus, NMFS is reopening the comment period for 30 days to gather further public comment on these issues. The draft Amendment 2 to the Consolidated HMS FMP and its proposed rule also describe a range of other management measures that could impact fishermen and dealers for HMS fisheries. DATES: The public comment period for receiving written comments on the July 27, 2007 (72 FR 41392), proposed rule E:\FR\FM\15NOP1.SGM 15NOP1

Agencies

[Federal Register Volume 72, Number 220 (Thursday, November 15, 2007)]
[Proposed Rules]
[Pages 64185-64186]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 07-5669]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 31

[FAR Case 2006-021; Docket 2007-0001; Sequence 10]
RIN: 9000-AK84


Federal Acquisition Regulation; FAR Case 2006-021, Post 
Retirement Benefits (PRB), FAS 106

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Proposed rule.

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

SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) are proposing to amend the 
Federal Acquisition Regulation (FAR) to permit the contractor to 
measure accrued PRB costs using either the criteria in Internal Revenue 
Code (IRC) 419 or the criteria in Financial Accounting Standard (FAS) 
106.

DATES: Interested parties should submit written comments to the FAR 
Secretariat on or before January 14, 2008 to be considered in the 
formulation of a final rule.

ADDRESSES: Submit comments identified by FAR case number 2006-021 by 
any of the following methods:
    Federal eRulemaking Portal: https://www.regulations.gov.
     To search for any document, first select under ``Step 1,'' 
``Documents with an Open Comment Period'' and select under ``Optional 
Step 2,'' ``Federal Acquisition Regulation'' as the agency of choice. 
Under ``Optional Step 3,'' select ``Proposed Rules''. Under ``Optional 
Step 4,'' from the drop down list, select ``Document Title'' and type 
the FAR Case number ``2006-021''. Click the ``Submit'' button. Please 
include your name and company name (if any) inside the document. You 
may also search for any document by clicking on the ``Search for 
Documents'' tab at the top of the screen. Select from the agency field 
``Federal Acquisition Regulation'', and type ``2006-021'' in the 
``Document Title'' field. Select the ``Submit'' button.
     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (VIR), 1800 F Street, NW, Room 4035, ATTN: Laurieann 
Duarte, Washington, DC 20405.
    Instructions: Please submit comments only and cite FAR case 2006-
021 in all correspondence related to this case. All comments received 
will be posted without change to https://www.regulations.gov, including 
any personal and/or business confidential information provided.

FOR FURTHER INFORMATION CONTACT: Edward Chambers, Procurement Analyst, 
at (202) 501-3221, for clarification of content. For information 
pertaining to status or publication schedules, contact the FAR 
Secretariat at (202) 501-4755. Please cite FAR case 2006-021.

SUPPLEMENTARY INFORMATION:

A. Background

    FAR 31.205-6(o) allows contractors to choose among three different 
accounting methods for PRB costs: cash basis, terminal funding, and 
accrual basis.
    When the accrual basis is used, the FAR currently requires that 
costs must be measured based on the requirements of FAS 106.
    However, the tax-deductible amount that is contributed to the 
retiree benefit trust is determined using IRC 419, which has different 
measurement criteria than FAS 106. As a result, the FAS 106 amount can 
often exceed the IRC 419 measured costs, and contractors that choose to 
accrue PRB costs for Government reimbursement face a dilemma: whether 
to fund the entire FAS 106 amount to obtain Government reimbursement of 
the costs, regardless of tax implications, or fund only the tax 
deductible amount and not be reimbursed for the entire FAS 106 amount 
under their Government contracts.

[[Page 64186]]

    The Councils are proposing to amend FAR 31.205-6(o) to alleviate 
this dilemma. This amendment would provide the contractor an option of 
measuring accrued PRB costs using criteria based on IRC 419 rather than 
FAS 106, thereby permitting the contractor to fund the entire tax 
deductible amount without having a portion disallowed because it did 
not meet the FAR's current measurement criteria. The Councils note that 
this amendment will not change the total measured PRB costs, i.e., the 
total measured PRB costs over the life of the PRB plan would be the 
same whether the contractor chose to apply the criteria in FAS 106 or 
IRC 419.
    The Councils note that the proposed rule may result in the 
Government paying higher PRB costs, since under the current rule some 
contractors may have chosen to fund the IRC amount rather than the full 
FAS amount in current and future accounting periods. Absent this 
proposed revision, the resulting difference will be an unallowable 
cost. However, the Councils are unable to estimate the specific cost 
impact because the number of contractors who may choose to use the 
proposed IRC 419 measurement option is unknown. Moreover, the Councils 
further note that there may be a cost impact if the rule remains 
unchanged. For example, in lieu of funding the lower IRC amount, 
contractors could decide to fund the full FAS amount (and forego the 
tax benefit), change from accrual to pay-as-you go accounting, or 
terminate their PRB plans rather than fund amounts that are not tax 
deductible.
    This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993. This rule is 
not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

    The Councils do not expect this proposed rule to have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., 
because most small entities do not accrue PRB costs for Government 
contract costing purposes.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does apply; however, these changes to 
the FAR do not impose additional information collection requirements to 
the paperwork burden previously approved under OMB Control Number 9000-
0013.

List of Subjects in 48 CFR Part 31

    Government procurement.

    Dated: October 24, 2007
Al Matera,
Director, Office of Acquisition Policy.
    Therefore, DoD, GSA, and NASA propose amending 48 CFR part 31 as 
set forth below:
    1. The authority citation for 48 CFR part 31 continues to read as 
follows:

    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES

    2. Amend section 31.205-6 by revising paragraphs (o)(2)(iii)(A) and 
(B) to read as follows:


31.205-6  Compensation for personal services.

* * * * *
    (o) * * *
    (2) * * *
    (iii) * * *
    (A) Measured and assigned in accordance with--
    (1) Generally accepted accounting principles. However, the portion 
of PRB costs attributable to the transition obligation assigned to the 
current year that is in excess of the amount assignable under the 
delayed recognition methodology described in paragraphs 112 and 113 of 
Financial Accounting Standards Board Statement 106 is unallowable. The 
transition obligation is defined in Statement 106, paragraph 110; or
    (2) The costs shall--
    (i) Be measured using reasonable actuarial assumptions, which may 
include a healthcare inflation assumption;
    (ii) Be assigned to accounting periods on the basis of the average 
future working lives of active employees covered by the PRB plan or a 
15 year period, whichever period is longer; and
    (iii) Exclude Federal income taxes, whether incurred by the fund or 
the contractor (including those taxes associated with any increase in 
PRB costs), unless the fund holding the plan assets is tax-exempt under 
the provisions of 26 U.S.C. 501(c);
    (B) Paid to an insurer or trustee to establish and maintain a fund 
or reserve for the sole purpose of providing PRB to retirees. The 
assets shall be segregated in the trust, or otherwise effectively 
restricted, so that they cannot be used by the employer for other 
purposes; and
* * * * *
[FR Doc. 07-5669 Filed 11-14-07; 8:45 am]
BILLING CODE 6820-EP-S

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