Labor Organization Annual Financial Reports, 18132-18134 [E9-9182]
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18132
Federal Register / Vol. 74, No. 75 / Tuesday, April 21, 2009 / Rules and Regulations
marketers participating in stateregulated retail access programs apply
to any release where the marketer
replacement shipper is obligated to use
the capacity to provide the gas supply
requirement of retail consumers in the
program. Even if the marketer does not
itself make sales directly to the subject
retail consumers, this condition can be
satisfied so long as the marketer has a
contractual obligation to use the full
amount of the released capacity to
supply gas to the retail access marketer
and the retail access marketer is, in turn,
obligated to supply that gas to the retail
consumers pursuant to a state-regulated
retail access program.
30. As stated above, in Order Nos. 712
and 712–A the Commission exempted
from bidding releases ‘‘to a marketer
participating in a state-regulated retail
access program as defined in paragraph
(h)(4) of this section * * *.’’ 24 In
section 284.8(h)(4) of the revised
regulations, the Commission defined
releases to a ‘‘marketer participating in
a state-regulated retail access program’’
as ‘‘any prearranged capacity release
that will be utilized by the replacement
shipper to provide the gas supply
requirement of retail consumers
pursuant to a retail access program
* * *.’’ 25 This definition applies to any
replacement shipper which is obligated
to use the released capacity to transport
gas which will be used to provide the
gas supply requirement of the retail
consumers, whether that shipper makes
the retail sales itself or sells the gas to
the retail marketer who then resells the
gas to the retail consumers.26 The
Commission’s rationale in Order No.
712 for granting the exemptions from
the tying prohibition and bidding
requirements for capacity releases by
LDCs to implement state-approved retail
access programs applies equally to the
situation where an LDC releases
capacity directly to the retail marketer
or to another entity which is obligated
to transport the gas on behalf of the
retail marketer. The essential
requirement is that the replacement
shipper either (1) is itself the retail
marketer or (2) has a contractual
24 See
18 CFR 284.8(h)(1).
CFR 284.8(h)(4).
26 Some of the parties requesting clarification
describe an ‘‘agency’’ relationship whereby the
agent would obtain the released capacity and then
sell gas to its principal, the retail marketer. See
National Fuel’s request at 7. This arrangement, as
well as what we understand as a traditional agency
arrangement, where the principal would continue
to hold title to the capacity and the gas, and thus
there would be no need for a ‘‘resale’’ to the retail
marketer (principal), are both acceptable to the
Commission as releases eligible for the exemptions
from tying and bidding provided the ‘‘agent’’ is
obligated to serve the retail marketer’s needs as
described above under the retail access program.
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relationship with the retail marketer
and/or the LDC requiring it to use up to
the full amount of the released capacity
to satisfy the retail marketer’s
obligations under the state-approved
retail access program to provide the gas
supply requirement of retail consumers.
31. The Commission rejects the
argument that granting this clarification
will allow circumvention of interstate
pipeline creditworthiness standards. If a
retail marketer is unable to satisfy these
standards, the replacement shipper
supplier will be required to satisfy the
pipeline’s creditworthiness criteria. If
no party can meet these standards then
the pipeline does not have to allow the
release.
32. The Commission also grants
National Grid’s requested clarification
that an LDC that releases to an asset
manager can require the asset manager
to release capacity to marketers serving
under the retail choice program and that
such a release will qualify for the
exemptions from the tying prohibition
and bidding requirements. This
condition is one that can be addressed
in the agreement between the releasing
shipper and asset manager, and will
allow LDCs and asset managers to
operate efficiently to effectuate the goals
of retail access programs.
33. The clarifications granted above
render the various requests for waiver
moot.
Termination of Dockets
34. The Commission initiated Docket
Nos. RM06–21 and RM07–4 to address
a petition filed by Pacific Gas and
Electric Co. and Southwest Gas
Corporation concerning the potential
removal of the maximum rate ceiling on
capacity release transactions and a
petition filed by the Marketer
Petitioners seeking clarification of the
operation of the Commission’s capacity
release rules in the context of asset
management services. The issues raised
in the petitions have been fully
addressed in the instant docket.
Accordingly, the Commission hereby
terminates Docket Nos. RM06–21 and
RM07–4.
The Commission orders:
(A) The requests for rehearing of
Order No. 712–A are denied and the
requests for clarification of Order No.
712–A are granted in part and denied in
part as discussed above.
(B) Docket Nos. RM06–21 and RM07–
4 are hereby terminated.
By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. E9–9111 Filed 4–20–09; 8:45 am]
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DEPARTMENT OF LABOR
Office of Labor-Management
Standards
29 CFR Parts 403 and 408
RIN 1215–AB62
Labor Organization Annual Financial
Reports
AGENCY: Office of Labor-Management
Standards, Employment Standards
Administration, Department of Labor.
ACTION: Final rule; delay of effective
date and applicability date.
SUMMARY: This final rule delays the
effective date and applicability date of
regulations pertaining to the filing by
labor organizations of annual financial
reports required by the LaborManagement Reporting and Disclosure
Act of 1959, as amended (LMRDA) that
were published in the Federal Register
on January 21, 2009. They revised Labor
Organization Annual Report Form LM–
2 and established a procedure whereby
the Department may revoke, when
warranted, a labor organization’s
authorization to file the simplified
Labor Organization Annual Report Form
LM–3. These regulations were to have
gone into effect on February 20, 2009,
but were delayed until April 21, 2009,
by a final rule published on February
20, 2009 (74 FR 7814). This final rule
postpones the effective date of the
regulations from April 21, 2009, until
October 19, 2009, and the applicability
date of the regulations from July 1, 2009,
until January 1, 2010. This will allow
additional time for the agency and the
public to consider a proposal to
withdraw the January 21 regulations
and, meanwhile, to permit unions to
delay costly development and
implementation of any necessary new
accounting and recordkeeping systems
and procedures, pending this further
consideration. At the same time, the
Department has published a Notice of
Proposed Rulemaking elsewhere in this
issue of the Federal Register, seeking
public comment on its proposal to
withdraw the regulations.
DATES: The effective date of the rule
amending 29 CFR Parts 403 and 408,
published January 21, 2009, at 74 FR
3678, is delayed until October 19, 2009,
and its applicability date is delayed
until January 1, 2010.
FOR FURTHER INFORMATION CONTACT:
Denise M. Boucher, Director, Office of
Policy Reports and Disclosure, Office of
Labor-Management Standards,
Employment Standards Administration,
U.S. Department of Labor, 200
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Constitution Avenue, NW., room N–
5609, Washington, DC 20210, (202) 693–
1185. This is not a toll-free number.
SUPPLEMENTARY INFORMATION:
I. Background and Overview
Section 201(b) of the LaborManagement Reporting and Disclosure
Act of 1959, as amended (LMRDA) (Pub.
L. 86–257, 73 Stat. 519), requires each
covered labor organization to file
annually with the Secretary of Labor a
financial report, signed by its president
and treasurer or corresponding principal
officers, containing information in the
detail necessary to disclose accurately
its financial condition and operations
for the preceding fiscal year. The
Secretary of Labor has delegated the
Secretary’s authority under the LMRDA
to the Assistant Secretary for
Employment Standards.
The requirements of LMRDA section
201 apply to all labor organizations in
the private sector including those
representing employees under the
provisions of the National Labor
Relations Act, as amended, and the
Railway Labor Act, as amended. Section
1209(b) of the Postal Reorganization Act
made the LMRDA applicable to labor
organizations representing employees of
the U.S. Postal Service. Section 701 of
the Civil Service Reform Act of 1978
(CSRA) and section 1017 of the Foreign
Service Act of 1980 (FSA), as
implemented by Department of Labor
regulations at 29 CFR parts 457–459,
extended the LMRDA reporting
requirements to labor organizations
representing certain employees of the
Federal government.
Section 208 of the LMRDA authorizes
the Secretary to issue rules prescribing
the form and publication of the annual
financial reports required by section
201, and to provide a simplified report
for labor organizations for which the
Secretary finds that by virtue of their
size a detailed report would be unduly
burdensome. Under regulations issued
pursuant to section 208, the Secretary
has prescribed Form LM–2 for labor
organizations with total annual receipts
of $250,000 or more, and the simplified
Form LM–3 for labor organizations with
total annual receipts of $10,000 or more,
but less than $250,000.
On January 21, 2009, the Department
of Labor’s Office of Labor-Management
Standards (OLMS) published in the
Federal Register (74 FR 3677)
regulations making revisions to the
Form LM–2 (used by the largest labor
organizations to file their annual
financial reports). The regulations,
when effective, will require labor
unions to report additional information
on Schedules 3 (Sale of Investments and
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Fixed Assets), 4 (Purchase of
Investments and Fixed Assets), 11 (All
Officers and Disbursements to Officers)
and 12 (Disbursement to Employees).
The regulations also would add
itemization schedules corresponding to
categories of receipts, and establish a
procedure and standards by which the
Secretary of Labor may revoke a
particular labor organization’s
authorization to file the simplified
annual report, Form LM–3, where
appropriate, after investigation, due
notice, and opportunity for a hearing.
Consistent with the memorandum of
January 20, 2009, from the Assistant to
the President and Chief of Staff, entitled
‘‘Regulatory Review’’ and the
memorandum of January 21, 2009, from
the Director of the Office of
Management and Budget (OMB),
entitled ‘‘Implementation of
Memorandum Concerning Regulatory
Review,’’ on February 3, 2009, OLMS
published in the Federal Register a
notice seeking comment on a proposed
60-day extension of the effective date
and requesting comment on legal and
policy questions relating to the
regulations, including on the merits of
rescinding or retaining the regulations.
The notice was available for public
inspection at the Federal Register on
January 29, 2009 and was published on
February 3, 2009 (74 FR 5899).
Public comment on the proposed
extension was invited, with the
comment period ending on February 13,
2009. The Department received 24
comments on the proposal to extend the
effective date for 60 days. Public
comment was also invited generally on
the regulations, including the merits of
rescinding or retaining them, with this
comment period ending on March 5,
2009. The Department published a final
rule on February 20, 2009, which
postponed for 60 days the effective date
of the regulations published on January
21, 2009 until April 21, 2009, for
additional public comment and agency
review of questions of law and policy
(74 FR 7814).
On March 19, 2009, OLMS published
a notice seeking public comment on a
proposal to delay for an additional 180
days the April 21, 2009, effective date
of the regulations published on January
21, 2009. This notice proposed to
further delay the effective date until
October 19, 2009. Additionally, this
notice proposed to delay the
applicability date of the regulations
(establishing the start of the fiscal year
for which the new reporting
requirements would apply) set for July
1, 2009, until January 1, 2010. As
discussed in that notice, the Department
indicated that it would not able to
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18133
complete its final review of the issues
raised by the January 21 rule before
April 21, 2009, the current effective date
of the rule. Since that time, however,
the Department has determined that the
January 21 rule was promulgated
without adequate review of experience
under the Department’s 2003 Form LM–
2 rule, including the burden of reporting
requirements and whether the
requirements reflect a proper balance of
the need for transparency and union
autonomy. Thus, in a separate
document published in this issue of the
Federal Register, the Department is now
proposing to withdraw the January 21
rule. Without further extension of the
effective and applicability dates of the
rule, those unions with fiscal years
beginning on or after July 1, 2009,
would have to begin immediate
preparations to comply with the rule,
preparations that may entail significant
burden and expense, but which may
prove unnecessary. Furthermore, the
Department itself would have to expend
substantial financial and compliance
resources to prepare for the rule,
resources that could be directed to other
purposes if the rule is subsequently
withdrawn. Therefore, the Department
has decided to postpone, for 180 days,
the effective date of the regulations
published on January 21, 2009, until
October 19, 2009, and delay the
applicability date from July 1, 2009,
until January 1, 2010, in order to review
the comments on the proposal to
withdraw the regulations and,
meanwhile, to permit unions to delay
costly development and implementation
of any necessary new accounting and
recordkeeping systems and procedures
pending this further consideration.
II. Comments on the Proposal and the
Department’s Responses and Decision
The Department received comments
from 27 individuals or associations on
its proposal to postpone the effective
date and applicability date of the new
Form LM–2/LM–3 regulations. Five
union commenters supported the
extension as appropriate, arguing that it
would enable effective review of the
rule while avoiding the unnecessary
burden on union resources in the event
that the Department does rescind the
regulations. One international union
also offered additional comments on the
merits of the regulations, and urged
their rescission. Five commenters
expressed general support for union
transparency and the January 21
regulations, and they opposed any delay
in their effective or applicability dates.
Additionally, 17 commenters submitted
form letters generally supporting the
greater public disclosure of pay and
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18134
Federal Register / Vol. 74, No. 75 / Tuesday, April 21, 2009 / Rules and Regulations
benefits to union officers and employees
afforded under the January 21
regulations and urging implementation
of the new reporting requirements
without further delay.
Two Congressmen expressed concern
that continued delay suggests political
favoritism to a select constituency rather
than regulatory integrity. They noted, as
did two other commenters, that
President Obama has emphasized the
importance of public disclosure and
financial accountability and that such
accountability is no less needed for
labor organizations than for the business
sector.
The Department rejects the contention
that a delay of the effective and
applicability dates of the regulations
suggests ‘‘political favoritism.’’ Rather,
the Department proposed the initial 60
day delay of the effective date of the
regulations and commenced a review of
their merits in consideration of
guidance from the Assistant to the
President and Chief of Staff and the
Office of Management and Budget
(OMB) that was directed to all Executive
branch agencies, without regard to
particular agencies or program areas, to
determine whether it might be
appropriate to delay the effective date of
regulations to permit their review for
matters of law and policy before taking
effect. Most commenters opposing the
extension recognized that the
Department’s actions were triggered by
this OMB guidance, and one association
acknowledged that this review was
necessary to provide the new
Administration an opportunity to
review rules issued during the waning
days of the Bush Administration in
order to prevent agencies from
publishing rules that fail to meet the
regulatory standards that OMB
articulated in its guidance. The proposal
to withdraw the regulations, and the
decision made in this rulemaking to
extend the effective and applicability
dates derive from this review of the
merits of the regulations, consistent
with the OMB guidance. The
Department has engaged in this process
in a fully transparent manner, and the
instant rulemaking has been, and will
continue to be, undertaken in full
compliance with the requirements of the
Administrative Procedure Act.
One public policy organization argued
that there is no justification for the
extensions that outweigh the benefits to
union members from the disclosure
provided by the January 21 rule and
asserted that a delay would
‘‘immediately’’ allow unions to avoid
increased disclosure. However, even if
the reporting revisions published on
January 21, 2009, had not been
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17:57 Apr 20, 2009
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postponed, there would have been no
immediate changes in how unions
report their finances. Rather, the initial
applicability date for the regulations
was July 1, 2009, and the first reports
would not have been due until
September 30, 2010. Notwithstanding
the postponement of the effective date
of the January 21 rule, an existing and
effective labor organization reporting
regime remains in place.
The Department reiterates the
justification it offered in the notice
proposing to extend the effective and
applicability dates, namely that this
additional time will enable the
Department to complete a review of the
issues raised by the January 21 rule,
which the Department now proposes to
withdraw, without exposing affected
unions to undue burdens. Without the
further extension, those unions with
fiscal years beginning on or after July 1,
2009, would have to begin immediate
preparations to comply with the rule,
preparations that may entail significant
burden and expense, but which may
prove unnecessary. Further, since a
decision has been made to propose
withdrawal of the regulations, and if
such proposal ultimately is effectuated,
these expenses will have been incurred
unnecessarily. While the Department
strongly supports the need for union
financial transparency, it also believes
that preventing unions and the
Department from incurring potentially
unnecessary expenses and burdens
outweighs any benefit gained from
implementing the regulations a few
months sooner.
A trade association defended union
transparency and the January 21
regulations, and it argued against any
delay or rescission of them by stressing
the Administration’s support of
transparency, citing evidence that some
individuals continue to abuse their
union office by misappropriating and
misusing members’ money, and
presenting an argument in support of
the reporting of union payments made
towards job targeting. The commenter
also asserted that the Department’s
proposed extension upholds its
prediction that the initial 60 day delay
would be used by the regulations’
opponents to justify an even further
delay as a result of added administrative
burdens required to implement the
mandated changes, and it contended
that an additional delay would only
enable the labor community to have
additional time to submit comments
favorable to rescission. Additionally, the
trade association stated its belief that,
while the initial extension was
understandable in light of the
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Administration directives, no further
delay was warranted.
The Department disagrees with these
contentions. As noted above, the
Department has now proposed
withdrawal of the January 21 rule.
Delaying the implementation of the
January 21 rule enables the Department
to review comments on its proposal,
while simultaneously preventing unions
and the Department from incurring
unnecessary costs and burdens in the
event the regulations are withdrawn.
Moreover, the proposed rescission is
based on reasons that are consistent
with the OMB guidance regarding
regulatory review, in that the final rule
did not reflect proper consideration of
all relevant facts and was not based on
reasonable judgment about the legally
relevant policy considerations. As stated
in the Department’s proposal, the
withdrawal of the January 21 rule is
warranted because:
* * * the rule was issued without an
adequate review of the Department’s
experience under the relatively recent
revisions to Form LM–2 in 2003 and because
the comments indicate that Department may
have underestimated the increased burden
that would be placed on reporting labor
organizations by the January 21 rule. Finally,
the Department has concluded, based on the
comments received, that the provisions
related to the revocation of a small union’s
authorization to file a simpler form because
it has been delinquent or deficient in filing
that form are not based upon realistic
assessments of such a union’s ability to file
the more complex form and are unlikely to
achieve the intended goals of greater
transparency and disclosure.
In light of the Department’s decision to
propose the withdrawal of the January
21 rule and the additional reasons stated
above, the Department has decided to
postpone, for 180 days, the effective
date of the January 21, 2009, rule, until
October 19, 2009, and delay the
applicability date from July 1, 2009,
until January 1, 2010.
Signed in Washington, DC, this 16th day of
April 2009,
Shelby Hallmark,
Acting Assistant Secretary for Employment
Standards.
Andrew D. Auerbach,
Deputy Director, Office of Labor-Management
Standards.
[FR Doc. E9–9182 Filed 4–20–09; 8:45 am]
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]]>Agencies
[Federal Register Volume 74, Number 75 (Tuesday, April 21, 2009)]
[Rules and Regulations]
[Pages 18132-18134]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-9182]
=======================================================================
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DEPARTMENT OF LABOR
Office of Labor-Management Standards
29 CFR Parts 403 and 408
RIN 1215-AB62
Labor Organization Annual Financial Reports
AGENCY: Office of Labor-Management Standards, Employment Standards
Administration, Department of Labor.
ACTION: Final rule; delay of effective date and applicability date.
-----------------------------------------------------------------------
SUMMARY: This final rule delays the effective date and applicability
date of regulations pertaining to the filing by labor organizations of
annual financial reports required by the Labor-Management Reporting and
Disclosure Act of 1959, as amended (LMRDA) that were published in the
Federal Register on January 21, 2009. They revised Labor Organization
Annual Report Form LM-2 and established a procedure whereby the
Department may revoke, when warranted, a labor organization's
authorization to file the simplified Labor Organization Annual Report
Form LM-3. These regulations were to have gone into effect on February
20, 2009, but were delayed until April 21, 2009, by a final rule
published on February 20, 2009 (74 FR 7814). This final rule postpones
the effective date of the regulations from April 21, 2009, until
October 19, 2009, and the applicability date of the regulations from
July 1, 2009, until January 1, 2010. This will allow additional time
for the agency and the public to consider a proposal to withdraw the
January 21 regulations and, meanwhile, to permit unions to delay costly
development and implementation of any necessary new accounting and
recordkeeping systems and procedures, pending this further
consideration. At the same time, the Department has published a Notice
of Proposed Rulemaking elsewhere in this issue of the Federal Register,
seeking public comment on its proposal to withdraw the regulations.
DATES: The effective date of the rule amending 29 CFR Parts 403 and
408, published January 21, 2009, at 74 FR 3678, is delayed until
October 19, 2009, and its applicability date is delayed until January
1, 2010.
FOR FURTHER INFORMATION CONTACT: Denise M. Boucher, Director, Office of
Policy Reports and Disclosure, Office of Labor-Management Standards,
Employment Standards Administration, U.S. Department of Labor, 200
[[Page 18133]]
Constitution Avenue, NW., room N-5609, Washington, DC 20210, (202) 693-
1185. This is not a toll-free number.
SUPPLEMENTARY INFORMATION:
I. Background and Overview
Section 201(b) of the Labor-Management Reporting and Disclosure Act
of 1959, as amended (LMRDA) (Pub. L. 86-257, 73 Stat. 519), requires
each covered labor organization to file annually with the Secretary of
Labor a financial report, signed by its president and treasurer or
corresponding principal officers, containing information in the detail
necessary to disclose accurately its financial condition and operations
for the preceding fiscal year. The Secretary of Labor has delegated the
Secretary's authority under the LMRDA to the Assistant Secretary for
Employment Standards.
The requirements of LMRDA section 201 apply to all labor
organizations in the private sector including those representing
employees under the provisions of the National Labor Relations Act, as
amended, and the Railway Labor Act, as amended. Section 1209(b) of the
Postal Reorganization Act made the LMRDA applicable to labor
organizations representing employees of the U.S. Postal Service.
Section 701 of the Civil Service Reform Act of 1978 (CSRA) and section
1017 of the Foreign Service Act of 1980 (FSA), as implemented by
Department of Labor regulations at 29 CFR parts 457-459, extended the
LMRDA reporting requirements to labor organizations representing
certain employees of the Federal government.
Section 208 of the LMRDA authorizes the Secretary to issue rules
prescribing the form and publication of the annual financial reports
required by section 201, and to provide a simplified report for labor
organizations for which the Secretary finds that by virtue of their
size a detailed report would be unduly burdensome. Under regulations
issued pursuant to section 208, the Secretary has prescribed Form LM-2
for labor organizations with total annual receipts of $250,000 or more,
and the simplified Form LM-3 for labor organizations with total annual
receipts of $10,000 or more, but less than $250,000.
On January 21, 2009, the Department of Labor's Office of Labor-
Management Standards (OLMS) published in the Federal Register (74 FR
3677) regulations making revisions to the Form LM-2 (used by the
largest labor organizations to file their annual financial reports).
The regulations, when effective, will require labor unions to report
additional information on Schedules 3 (Sale of Investments and Fixed
Assets), 4 (Purchase of Investments and Fixed Assets), 11 (All Officers
and Disbursements to Officers) and 12 (Disbursement to Employees). The
regulations also would add itemization schedules corresponding to
categories of receipts, and establish a procedure and standards by
which the Secretary of Labor may revoke a particular labor
organization's authorization to file the simplified annual report, Form
LM-3, where appropriate, after investigation, due notice, and
opportunity for a hearing.
Consistent with the memorandum of January 20, 2009, from the
Assistant to the President and Chief of Staff, entitled ``Regulatory
Review'' and the memorandum of January 21, 2009, from the Director of
the Office of Management and Budget (OMB), entitled ``Implementation of
Memorandum Concerning Regulatory Review,'' on February 3, 2009, OLMS
published in the Federal Register a notice seeking comment on a
proposed 60-day extension of the effective date and requesting comment
on legal and policy questions relating to the regulations, including on
the merits of rescinding or retaining the regulations. The notice was
available for public inspection at the Federal Register on January 29,
2009 and was published on February 3, 2009 (74 FR 5899).
Public comment on the proposed extension was invited, with the
comment period ending on February 13, 2009. The Department received 24
comments on the proposal to extend the effective date for 60 days.
Public comment was also invited generally on the regulations, including
the merits of rescinding or retaining them, with this comment period
ending on March 5, 2009. The Department published a final rule on
February 20, 2009, which postponed for 60 days the effective date of
the regulations published on January 21, 2009 until April 21, 2009, for
additional public comment and agency review of questions of law and
policy (74 FR 7814).
On March 19, 2009, OLMS published a notice seeking public comment
on a proposal to delay for an additional 180 days the April 21, 2009,
effective date of the regulations published on January 21, 2009. This
notice proposed to further delay the effective date until October 19,
2009. Additionally, this notice proposed to delay the applicability
date of the regulations (establishing the start of the fiscal year for
which the new reporting requirements would apply) set for July 1, 2009,
until January 1, 2010. As discussed in that notice, the Department
indicated that it would not able to complete its final review of the
issues raised by the January 21 rule before April 21, 2009, the current
effective date of the rule. Since that time, however, the Department
has determined that the January 21 rule was promulgated without
adequate review of experience under the Department's 2003 Form LM-2
rule, including the burden of reporting requirements and whether the
requirements reflect a proper balance of the need for transparency and
union autonomy. Thus, in a separate document published in this issue of
the Federal Register, the Department is now proposing to withdraw the
January 21 rule. Without further extension of the effective and
applicability dates of the rule, those unions with fiscal years
beginning on or after July 1, 2009, would have to begin immediate
preparations to comply with the rule, preparations that may entail
significant burden and expense, but which may prove unnecessary.
Furthermore, the Department itself would have to expend substantial
financial and compliance resources to prepare for the rule, resources
that could be directed to other purposes if the rule is subsequently
withdrawn. Therefore, the Department has decided to postpone, for 180
days, the effective date of the regulations published on January 21,
2009, until October 19, 2009, and delay the applicability date from
July 1, 2009, until January 1, 2010, in order to review the comments on
the proposal to withdraw the regulations and, meanwhile, to permit
unions to delay costly development and implementation of any necessary
new accounting and recordkeeping systems and procedures pending this
further consideration.
II. Comments on the Proposal and the Department's Responses and
Decision
The Department received comments from 27 individuals or
associations on its proposal to postpone the effective date and
applicability date of the new Form LM-2/LM-3 regulations. Five union
commenters supported the extension as appropriate, arguing that it
would enable effective review of the rule while avoiding the
unnecessary burden on union resources in the event that the Department
does rescind the regulations. One international union also offered
additional comments on the merits of the regulations, and urged their
rescission. Five commenters expressed general support for union
transparency and the January 21 regulations, and they opposed any delay
in their effective or applicability dates. Additionally, 17 commenters
submitted form letters generally supporting the greater public
disclosure of pay and
[[Page 18134]]
benefits to union officers and employees afforded under the January 21
regulations and urging implementation of the new reporting requirements
without further delay.
Two Congressmen expressed concern that continued delay suggests
political favoritism to a select constituency rather than regulatory
integrity. They noted, as did two other commenters, that President
Obama has emphasized the importance of public disclosure and financial
accountability and that such accountability is no less needed for labor
organizations than for the business sector.
The Department rejects the contention that a delay of the effective
and applicability dates of the regulations suggests ``political
favoritism.'' Rather, the Department proposed the initial 60 day delay
of the effective date of the regulations and commenced a review of
their merits in consideration of guidance from the Assistant to the
President and Chief of Staff and the Office of Management and Budget
(OMB) that was directed to all Executive branch agencies, without
regard to particular agencies or program areas, to determine whether it
might be appropriate to delay the effective date of regulations to
permit their review for matters of law and policy before taking effect.
Most commenters opposing the extension recognized that the Department's
actions were triggered by this OMB guidance, and one association
acknowledged that this review was necessary to provide the new
Administration an opportunity to review rules issued during the waning
days of the Bush Administration in order to prevent agencies from
publishing rules that fail to meet the regulatory standards that OMB
articulated in its guidance. The proposal to withdraw the regulations,
and the decision made in this rulemaking to extend the effective and
applicability dates derive from this review of the merits of the
regulations, consistent with the OMB guidance. The Department has
engaged in this process in a fully transparent manner, and the instant
rulemaking has been, and will continue to be, undertaken in full
compliance with the requirements of the Administrative Procedure Act.
One public policy organization argued that there is no
justification for the extensions that outweigh the benefits to union
members from the disclosure provided by the January 21 rule and
asserted that a delay would ``immediately'' allow unions to avoid
increased disclosure. However, even if the reporting revisions
published on January 21, 2009, had not been postponed, there would have
been no immediate changes in how unions report their finances. Rather,
the initial applicability date for the regulations was July 1, 2009,
and the first reports would not have been due until September 30, 2010.
Notwithstanding the postponement of the effective date of the January
21 rule, an existing and effective labor organization reporting regime
remains in place.
The Department reiterates the justification it offered in the
notice proposing to extend the effective and applicability dates,
namely that this additional time will enable the Department to complete
a review of the issues raised by the January 21 rule, which the
Department now proposes to withdraw, without exposing affected unions
to undue burdens. Without the further extension, those unions with
fiscal years beginning on or after July 1, 2009, would have to begin
immediate preparations to comply with the rule, preparations that may
entail significant burden and expense, but which may prove unnecessary.
Further, since a decision has been made to propose withdrawal of the
regulations, and if such proposal ultimately is effectuated, these
expenses will have been incurred unnecessarily. While the Department
strongly supports the need for union financial transparency, it also
believes that preventing unions and the Department from incurring
potentially unnecessary expenses and burdens outweighs any benefit
gained from implementing the regulations a few months sooner.
A trade association defended union transparency and the January 21
regulations, and it argued against any delay or rescission of them by
stressing the Administration's support of transparency, citing evidence
that some individuals continue to abuse their union office by
misappropriating and misusing members' money, and presenting an
argument in support of the reporting of union payments made towards job
targeting. The commenter also asserted that the Department's proposed
extension upholds its prediction that the initial 60 day delay would be
used by the regulations' opponents to justify an even further delay as
a result of added administrative burdens required to implement the
mandated changes, and it contended that an additional delay would only
enable the labor community to have additional time to submit comments
favorable to rescission. Additionally, the trade association stated its
belief that, while the initial extension was understandable in light of
the Administration directives, no further delay was warranted.
The Department disagrees with these contentions. As noted above,
the Department has now proposed withdrawal of the January 21 rule.
Delaying the implementation of the January 21 rule enables the
Department to review comments on its proposal, while simultaneously
preventing unions and the Department from incurring unnecessary costs
and burdens in the event the regulations are withdrawn. Moreover, the
proposed rescission is based on reasons that are consistent with the
OMB guidance regarding regulatory review, in that the final rule did
not reflect proper consideration of all relevant facts and was not
based on reasonable judgment about the legally relevant policy
considerations. As stated in the Department's proposal, the withdrawal
of the January 21 rule is warranted because:
* * * the rule was issued without an adequate review of the
Department's experience under the relatively recent revisions to
Form LM-2 in 2003 and because the comments indicate that Department
may have underestimated the increased burden that would be placed on
reporting labor organizations by the January 21 rule. Finally, the
Department has concluded, based on the comments received, that the
provisions related to the revocation of a small union's
authorization to file a simpler form because it has been delinquent
or deficient in filing that form are not based upon realistic
assessments of such a union's ability to file the more complex form
and are unlikely to achieve the intended goals of greater
transparency and disclosure.
In light of the Department's decision to propose the withdrawal of the
January 21 rule and the additional reasons stated above, the Department
has decided to postpone, for 180 days, the effective date of the
January 21, 2009, rule, until October 19, 2009, and delay the
applicability date from July 1, 2009, until January 1, 2010.
Signed in Washington, DC, this 16th day of April 2009,
Shelby Hallmark,
Acting Assistant Secretary for Employment Standards.
Andrew D. Auerbach,
Deputy Director, Office of Labor-Management Standards.
[FR Doc. E9-9182 Filed 4-20-09; 8:45 am]
BILLING CODE 4510-CP-P
