FEDERAL REGISTER
Document Type:
Collection:
Document Number (FOIA) /ESDN (CREST):
CIA-RDP86-00244R000100190026-8
Release Decision:
RIPPUB
Original Classification:
K
Document Page Count:
78
Document Creation Date:
December 9, 2016
Document Release Date:
May 18, 1999
Sequence Number:
26
Case Number:
Publication Date:
July 1, 1972
Content Type:
REGULATION
File:
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Body:
ILLEGIB
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Ulm
I-1
WASH IN
Volume 37 ? Number 128
Pages 13071-13150
PART I
- (Part II begins on page 13147)
1111111111
HIGHLIGHTS OF THIS ISSUE
This listing does not affect the legal status
of any document published in this issue. Detailed
table of contents appears inside.
NATIONAL CAPITAL ENVIRONMENT?Planning
Comm. proposes protective amendments 13135
FALSE PRACTICE UNDER SERVICEMEN'S
GROUP LIFE INS.?VA rules against misleading
reference to SGLI by reinsurers and converters 13091
CABLE TV?FCC notice( of Advisory Committee
open meeting 7-10-72 13127
PRICE COMMISSION/COST OF LIVING COUN-
CIL?IRS issues rulings on rent increases for
extra services; eligibility of public utilities for
small business exemption; new par checking
service charges by banks, and other matters (12
documents) 13113-13116
MAIL RATES?Postal Service adopts changes;
effective 7-6-72 13147
COLOMBIAN COTTONS?Committee for Imple-
mentation of Textile Agreements puts restraints
on some categories , 13123
FOREIGN DIRECT INVESTMENTS?Commerce
Dept liberalizes rules 13086
DISASTER AID?.Office of Emergency Prepared-
ness declares 13 more New York and Maryland
Counties eligible for help following floods (2 docu-
ments) 13135,13136
METHOMYL RESIDUES?EPA establishes in-
secticide tolerance ? 13091
(Continued Inside)
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Just Released
??????????????????=?111?
CODE OF FEDERAL REGULATIONS
(Revised as of June 1, 1972)
Title 7?Agriculture (Parts 700-749)
$2.
00
Title 17?Commodity and Securities Exchanges
2.
75
Title 18?Conservation of Power and, Water Resources
(Part 150-End)
2.
00
[A. Cumulative checklist of CFR issuances for 1972 appears in the first issue
of the Federal Register each month under Title 1]
Order from Superintendent of Documents,
United States Government Printing Office,
Washington, D.C. 20402
FIDE Published daily, Tuesday through Saturday (no publication on Sundays, Mondays, or?
REGISTER' on the day after an official Federal holiday), by the Office of the Federal Register. National
4s. Archives and Records Service, General Services Administration, Washington, D.C. 20408,
Area Code 202 44,:e041- ' Phone 962-8626 pursuant to the authority contained in the Federal Register Act, approved July 28, :.935
(49 Stat. 500, as amended: 44 U.S.C., Ch. 15), under regulations prescribed by the Administrative Committee of the Federal Register, ap-
proved by the President (1 CPR Ch. I). Distribution is made only by. the Superintendent of Documents, U.S. Government Printing Office,
Washington, D.C. 20402.
The FEDERAL REGISTER will be furnished by mail to subscribers, free of postage, for $2.50 per month or $25 per year, payablE in
advance. The charge for individual copies is 20 cents for each issue, 'or 20 cents for each group of pages as actually bound. Remit checl: or
money order, made payable to the Superintendent of Documents, U.S. Government Printing Office, Washington, D.O. 20402.
The regulatory material appearing herein is keyed to the Coos or FEDERAL REGULATIONS, which is published, under 50 titles, pursuant
to section 11 of the Federal Register Act, as amended (44 U.S.C. 1510). The CODE OF FEDERAL REGULATIONS is Bold by the Superintendent
of Documents. Prices of new books are listed in the first FEDERAL REGISTER issue of each month.
There are no restrictions on the republication of material appearing in the FEDERAL REGISTER or the CODE OF FEDERAL REGULATIONS.
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H LIU tiTS?t,onxin
ECONOMIC POLICY?
Federal Reserve System notice of Open Market
Committee directives and actions for current
quarter (2 documents)
Price Commission to publish biweekly list of
State and Federal agencies whose rules on
public utilities comply with guidelines
13134
13136
UNFAIR TRADE PRACTICES?FTC issues cease
and desist orders against Nationwide Safti-
Brake Distributors and Charnita (2 documents)
FLOOD INSURANCE PURCHASE ENCOUR-
AGED?HUD amendments to reduce premiums
and assure agents minimum commissions; effec-
tive 7-10-72
13077,
13080
13098
AGRICULTURAL MARKETING
SERVICE
Rules and Regulations
Cherries grown in certain states;
assessment procedure; correc-
tion 13083
Handling limitations:
Lemons grown in California
and Arizona 13082
Valencia oranges grown in Ari-
zona and designated part of
California 13082
Shipment limitations:
Fresh pears, plums, and peaches
grown in California 13083
Proposed Rule Making
Cherries grown in certain states;
free and restricted percentages
for 1972-73 fiscal period 13109
Handling limitations:
Dried prunes produced in Calif_ 13110
Fresh prunes grown in desig-
nated counties in Idaho and
in Malheur County, Oreg 13108
Onion imports; grade, size, and
maturity requirements 13109
AGRICULTURAL STABILIZATION
AND CONSERVATION
SERVICE
Rules and Regulations
Indemnity payment program; bee-
keeper; correction 13082
AGRICULTURE DEPARTMENT
See Agricultural Marketing Serv-
ice; Agricultural Stabilization
and Conservation Service; Com-
modity Credit Corporation;
Forest Service.
ATOMIC ENERGY COMMISSION
Notices
Arkansas Power & Light Co.; no-
tice and order for hearing on
reception of evidence 13122
Northern Indiana Public Service
Co.; notice an dorder for pre-
hearing conference 13122
Toledo Edison Co. et al.; notice
and order for evidentiary hear-
ing 13123
Trustees of Columbia University,
New York City; extension of
completion date for construc-
tion permit 13123
Contents
COMMERCE DEPARTMENT
See Foreign Direct Investments
Office; Import Programs Office.
COMMITTEE FOR THE
IMPLEMENTATION OF TEXTILE
AGREEMENTS
Notices
Cotton textiles; entry or with-
drawal from warehouse for con-
sumption of products produced
or manufactured in Colombia__ 13123
COMMODITY CREDIT
CORPORATION
Rules and Regulations
Peanuts; 1972 crop farm-stroed
loan and purchase program____ 13084
EMERGENCY PREPAREDNESS
OFFICE
Notices
Major disaster, amendments:
Maryland 13135
New York 13136
ENVIRONMENTAL PROTECTION
AGENCY
Rules and Regulations
Methomyl; establishment of toler-
ances for residues 13091
Notices
Ciba-Geigy Corp.; withdrawal of
petition for food additive 13127
ENVIRONMENTAL QUALITY
COUNCIL
Notices
Environmental impact state-
ments; availability 13124
FEDERAL AVIATION
ADMINISTRATION
Rules and Regulations
Airworthiness directives; certain
Rolls Royce Dart model en-
gines 13084
Transition areas; alteration (2
documents) 13085
FEDERAL COMMUNICATIONS
COMMISSION
Notices
Cable television advisory group;
notice and date of open meet-
ing 13127
FEDERAL INSURANCE
ADMINISTRATION
Rules and Regulations
Flood insurance; premium rate re-
ductions and minimum commis-
sion 13098
Flood insurance program:
Areas eligible for sale of insur-
ance 13098
Identification of special hazard
areas 13099
FEDERAL MARITIME
COMMISSION
Notices
Agreements filed:
City of Long Beach and Na-
tional Molasses Co
Continental North Atlantic
Westbound Freight Confer-
ence
International Passenger Ship
Association
Trans-Pacific Passenger Con-
ference
Victoria Steamship Co., Ltd.,
and Hapag-Lloyd, A.G
Den Norske Amerikalinje A/S;
revocation of certificate of fi-
nancial responsibility 13329
13127
13127
13128
13128
13128
FEDERAL POWER
COMMISSION
Notices
Alaska Power Survey Advisory
Committee; prescribed proce-
dures 13130
Alaska Power Survey Executive
Advisory Committee; designa-
tion of membership and chair-
manship 13130
(Continued on next page)
13073
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CONTENTS
Hearings, etc.:
Luda R. Davies, et al 13129
Natural (las Pipeline Company
of. America, et al 13132
Public Utility District No. 1,
Douglas County, Washington_ 13132
FEDERAL RESERVE SYSTEM
Rules and Regulations
Bank holding companies; non-
banking activities; Celt correc-
tion 13084
Proposed Rule Making
Securities credit transactions;
same-day substitutions; conver-
tible "Hedge" transactions; cor-
rection 13112
Notices
Acquisitions of banks:
Exchange Bancorporation, Inc.. 13133
First United Bancorporation,
Inc 13133
United Bank Corporation of
New York 13134
Federal. Open Market Committee:
Continuing authority directive
with respect to domestic open
market operations 13134
Current economic policy direc-
tive, March 21, 1972 13134
FEDERAL REGISTER
ADMINISTRATIVE
COMMITTEE
CFR checklist 13077
FEDERAL TRADE COMMISSION
Rules and Regulations
Prohibited trade practices; cease
and desist orders:
Charnita, Inc., and Charles G.
1
Rist 3077
Kenrec Sports Inc., et al_ 13079
Leo Payne Pontiac Inc., and Leo
1
Payne 3079
Nationwide Sal ti-Brake Distrib-
utors, Inc., et al 13080
U.S. General Supply Corp.,
et al 13081
FISH AND WILDLIFE SERVICE
Rules and Regulations
Public access, use, and recreation;
Ruby Lake National Wildlife
Refuge, Nev 13097
FOREIGN DIRECT INVEST-
MENTS OFFICE
Rules and Regulations
Foreign direct investments 13086
FOREST SERVICE
Notices
Transfer of national forest lands
to the Mescalero Apache tribe;
availability of final environ-
mental statement 13117
GENERAL SERVICES
ADMINISTRATION
Rules arid Regulations
Cost Accounting Standards Board;
interim policies and procedures_ 13092
Motor vehicle accident; Operator's
reporting on Standard Form 91.. 13096
Notices
Paint, oil alkyd (modified) , exter-
ior, fume resistant, lead free,
ready mixed, white and tints;
industry specification develop-
ment conference
HOUSING AND URBAN
DEVELOPMENT DEPARTMENT
?See Federal Insurance Adminis-
tration; Interstate Land Sales
Office.
13135
IMPORT PROGRAMS OFFICE
Notices
Decisions on applications for
duty-free entry of scientific
articles:
Bluefield State College
Brookhaven National Labora-
tory
George Washington University
Medical School
Research Foundation of State
University of New York, et al_
Pulls University School of
Medicine
University of Chicago
University of Massachusetts
Medical School et al
University of Pittsburgh School
of Medicine et al., correction_
Veterans Administration Hos-
pital, Iowa City, Iowa__
Boston University School of Medi-
cine et al.; applications for
duty-free entry of scientific
articles
13117
13118
13119
13119
13120
13121
13121
13122
13122
13117
INTERIOR DEPARTMENT
See Fish and Wildlife Service;
Land Management Bureau.
INTERNAL REVENUE SERVICE
Proposed Rule Making
Importation of distilled spirits,
wines, and beer; issuance of and
accounting for red strip
stamps 13100
Notices
Cost of Living Council Rulings:
Small business exemption?di-
rector's fees____ 13113
State-owned residential prop-
erty which is leased and sub-
leased 13113
Cost of Living Council and Price
Commission Joint Rulings:
Commodity future transac-
tions . 13115
Decrease in services; rent in-
crease _ . 13114
Rehabilitated dwelling DS a
structure . 13114
Rental increase where property
is devoted to mixed use_____ 13116
Small business exemption for
public utilities_ 13116
Price Commission Rulings:
Additional motel units 131:14
Increase in services; rent de-
crease 131.15
Index pricing.. 131:.13
New charge for par chek 13113
"Transactions''' of sta
tenants 13113
INTERSTATE COMMERCk
COMMISSION
Notices
Feed grains to New England; ek
tablishment of lake-rail route\
and rates 3137
Loss and damage claims; prac-
tices of regulated carriers re- k
garding processing A 139
Mack Transportation Co.; trans-
portation of hardware ii 138
Niagara Frontier Tariff Bureau,
Inc. and Southern Motor Car-
riers; section 5a applications_ 11133
Assignment of hearings 1 14)
Fourth section applications for
relief 1113.)
Motor carriers:
Board transfer proceedings 1 L41)
Temporary authority applica-
tions (2 documents) ___ 13141, 1L43
INTERSTATE LAND SALES
OFFICE
Rules and Regulations
Delegations of basic authority and
functions; amendment 1
LABOR DEPARTMENT
Notices
General Electric Co.; investiga-
tion regarding certification of
eligibility of workers to apply
for adjustment assistance
191
1l 37
LAND MANAGEMENT BURE L)
Rules and Regulations
Partial revocation and reclama-
tion withdrawals:
Arizona 13 07
California 13 36
Oregon 13 36
Idaho; withdrawal for Ririe Dam
and Reservoir Project 13 37
Notices
Colorado; partial termination of
proposed withdrawal and reser-
vation of lands_ 13 .7
NATIONAL CAPITAL
PLANNING COMMISSION
Notices
Policies and procedures; protec-
tion and enhancement of en-
vironmental quality 131j 5
NATIONAL HIGHWAY TRAFFI
SAFETY ADMINISTRATION
Rules and Regulations
Federal motor vehicle safety
standards; glazing materials;
correction 130 r
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Proposed Rule Making
Tire identification and record-
keeping; change in method of
assigning tire size code; correc-
tion 13112
13075
SECURITIES AND EXCHANGE TRANSPORTATION DEPARTMENT
COMMISSION
Notices
Hearings, etc.:
POSTAL SERVICE Ohio Edison Co
Tanger Industries
Topper Corp
Notices
Certain permanent postal rates
and fees; effective date 13148
PRICE COMMISSION
Notices
State of New York Public Service
Commission et al.; certificates
of compliance 13136
See Federal Aviation Administra-
tion; National Highway Traffic
Safety Administration.
13136
13137
13136 TREASURY DEPARTMENT
See Internal Revenue Service.
VETERANS ADMINISTRATION
Rules and Regulations
Servicemen's group life insurance;
improper practice 13091
List of CFR Parts Affected
The following numerical guide is a list of the parts of each title of the Code of Federal Regulations affected by
documents published in today's issue. A cumulative list of parts affected, covering the current month to date,
appears following the Notices section of each issue beginning with the second issue of the month. In the last issue
of the month the cumulative list will appear at the end of the issue.
A cumulative guide is published separately at the end of each month. The guide lists the parts and sections
affected by documents published since January 1, 1972, and specifies how they are affected.
3 CFR
EXECUTIVE ORDER:
5600 (revoked by PLO 5219)
7623 (revoked by PLO 5219)
7 CFR
760
908
910_
917_
930
1421
.13096
_13096
13082
13082
13082
13083
13083
13084
14 CFR
39_
71 (2 documents)
15 CFR
1000
16 CFR
13 (5 documents)
13084
_ 13085
13086
-- 13077, 13079-43081
38 CFR
9
40 CFR
180
41 CFR
1-1
1-3._
1-15
101-39
43 CFR
13091
13091
13092
13092
13094
13096
PROPOSED RULES:
24 CFR
PUBLIC LAND ORDERS:
925_
13108
1700
13097
5219_
13096
930
1133110099
13098
5220
13096
980
11991141?
13098
5221
13097
993
13110
1915
13099
5222
13097
12 CFR
26 CFR
49 CFR
571
13097
225
13084
PROPOSED RULES:
PROPOSED Rum:
PROPOSED RULES:
194
13100
574
13112
207
220
13112
13112
201
250
13100
13100
50 CFR
221
13112
251
13100
28
13097
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Rules and Regulations
Title 1 GENERAL PROVISIONS
Chapter 1-Administrative Committee
of the Federal Register
CFR CHECKLIST
1972 Issuances
This checklist, prepared by the Office
of the Federal Register, is published in
the first issue of each month. It is ar-
ranged in the order of CFR titles, and
shows the issuance date and price of re-
vised volumes of the Code of Federal
Regulations issued to date during 1972.
New units issued during the month are
announced on the inside cover of the
daily FEDERAL REGISTER as they become
available.
Order from Superintendent of Docu-
ments, Government Printing Office,
Washington, D.C. 20402.
CFR unit (Rev, as of Jan. 1, 1972) : -
Title Price
1 $1.00
3 1971 Compilation 1. 25
4 55
5 1.75
6 (Rev. June 1, 1972) 1. 25
7 Parts:
0-45 2. '75
46-51 1. 75
52 3.25
53-209 3. 25
700-749 2. 00
750-899 1.25
900-944 1. 75
945-980 1.00
981-999 1.00
1000-1059 1.75
1060-1119 1.75
1120-1199 1. 50
1200-1499 2.00
1500-end_ 2. 50
8 1.00
9 2.00
10 1.75'
11 [Reserved]
12 Parts:
1-299 3. 00
300-end 2. 75
L3 1. 25
14 Parts:
1-59 3. 00
60-199 2. 75
200-end 3. 25
15 2.00
16 Parts:
0-149 3. 25
150-end 2.00
17 2.75
18 Parts:
1-149 2.00
150-end 2.00
19 2.75
20 Parts 01-399 1. 25
21 Parts:
1-119 1. 75
120-129 1. 50
147-299 1.25
300-end 60
Title Price
22 $1.75
23 55
24 3.25
25 1.75
26 Parts:
1 (?? 1.301-1.400) 1. 00
1 (?? 1.401-1.500) 1.50
1 (?? 1.501-1.640) 1. 25
1 ( ?? 1.641-1.850) 1.75
1 (?? 1.851-1.1200) 2.00
2-29 1.25
30-39 1.50
40-169 2.00
170-299 3.75
300-499 1.50
500-599 1. 75
600-end .60
27 .45
28 1.00
29 Parts:
0-499- 1.75
900-end.. 4. 00
30 2.75
31 2.50
32 Parts:
1-8 3.50
9-39 2. 50
400-589 2. 50
590-699 1. 00
700-799 3. 50
1000-1399 .75
1400-1599 1. 50
-1600-end 1. 00
32A 1.50
33 Parts:
1-199 2.50
200-end 1. 75
34 [Reserved]
36 1.25
37 .70
38 3.50
39 2.00
40 1.75
41 Chapters:
1-2 2. 75
3-5D 2.00
6-17 3.75
19-100 1.25
101-end 2. 75
42 1.75
43 Parts:
1-999 1. 50
1000-end 2.75
44 35
45 Parts:
1-199 2. 00
200-end 2. 00
46 Parts:
66-145 2. '75
146-149 3. 75
150-199 2. 75 ,
200-end 3. 00
47 Parts:
0-19 1.75
20-69 2.50
70-79 1. 75
80-end 2.75
48 [Reserved]
13077
Title Price
49 Parts:
1-99 $0. 60
100-199 3.75
200-999 2. 00
1000-1199 1.25
1200-1299 3. 00
1300-end 1. 25
50 1.25
General Index 1.75
Title 16 COMMERCIAL
PRACTICES
Chapter I-Federal Trade
Commission
[Docket No. 88291
PART 13-PROHIBITED TRADE
PRACTICES
Charnita, Inc., and Charles G. Rist
Subpart-Advertising falsely or mis-
leadingly: ? 13.73 Formal regulatory
and statutory requirements: 13.73-92
Truth in Lending Act; ? 13.155 Prices:
13.155-95 Terms and conditions;
13.155-95 (a) Truth in Lending Act.
Subpart-Misrepresenting oneself and
goods-Goods: ? 13.1623 Formal regu-
latory and statutory requirements:
13.1623-95 Truth in Lending Act;
? 13.1823 Terms and conditions:
13.1823-20 Truth in Lending Act. Sub-
part-Neglecting, unfairly or decep-
tively, to make material disclosure:
? 13.1852 Formal regulatory and stat-
utory requirements: 13.1852-75 Truth
in Lending Act; ? 13.1892 Sales con-
tract, right-to-cancel provision;
? 13.1905 Terms and conditions:
13.1905-60 Truth in Lending Act.
(Sec. 6, 38 Stat. 721; 15 U.S.C. 46. Interpret
or apply sec. 5, 38 Stat. 719, as amended, 82
Stat. 146, 147; 15 U.S.C. 45, 1601-1605)
[Cease and desist order, Charnita, Inc., et al.,
Fairfield, Pa., Docket No. 8829, June 6, 19721
In the Matter of Charnita, Inc., a Cor-
poration, and Charles G. Rist, Indi-
vidually and as an Officer of Said
Corporation.
Order requiring a Fairfield, Pa., real
estate firm to cease violating the Truth
in Lending Act by failing to disclose to
customers the total cash price, the total
downpayment, the unpaid balance of the
cash price, the finance charges, the an-
nual percentage rate, failing to give cus-
tomers notice of their right to rescind
within 3 days, and other disclosures re-
quired by Regulation Z of the said Act.
The order to cease and desist, includ-
ing further order requiring report of
compliance therewith, is as follows:
It is ordered, That respondents Char-
nita, Inc., a corporation, and its officers,
and Charles G. Rist, individually and as
FEDERAL REGISTER, VOL. 37, NO. 128-SATURDAY, JULY 1, 1972
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RULES AND REGULATIONS
an officer of said corporation, and re-
spondents' agents, representatives and
employees, directly or through any cor-
porate or other device, in connection
With any consumer credit sale of real
property or in any advertisement to aid,
.promote, or assist directly or indirectly
any extension of credit, as "credit sale"
and "advertisement" are defined in Reg-
ulation Z (12 CFR Part 226) of the
Truth in Lending Act (Public Law 90-
321, 15 U.S.C. 1601 et seq.), do forthwith
cease and desist from:
1. Failing to use the term "cash price"
to designate the cash price of the prop-
erty which is the subject of the trans.ac-
tons as required by ? 226.8(c) (1) of Reg-
ulation Z.
2. Failing to disclose the amount of
any downpayment in money as the
"cash downpayment," using that term,
as required by ? 226.8(c) (2) of Regula-
tion Z.
3. Failing to disclose the difference
between the cash price and the cash
downpayment using the term "unpaid
balance of cash price," as required by
? 226.8(c) (3) of Regulation Z.
4. Failing to disclose the sum of the
cash price, all charges other than the
cash price which are included in the
amount financed but which are not part
of the finance charge, and the finance
charge, using the term "deferred Pay-
ment price," as required by ? 226.8(c)
(13) (11) of Regulation Z.
5. Failing to identify respondent
Charnita, Inc., as the creditor, as re-
quired by ? 226.8(a) of Regulation Z.
6, Failing, in connection with any
offer of a discount for prompt payment,
to make the separate disclosures re-
quired by ? 226.8(o), as amended, of
Regulation Z, on the invoice or other
evidence of sale, as required thereby.
7. Failing, in connection with any
offer of a discount for prompt payment,
to exclude from the amount of the cash
price the greatest amount of discount
for prompt payment of which the cus-
tomer may avail himself under the
terms of the offer, as required by
? 226.8(c) (1) of Regulation Z.
8. Failing, in connection with any
offer of a discount for prompt payment,
to itemize the amount of the discount as
part of the finance charge, as required
by ?1226.8(c) (8) (i) and 226.8(o), as
amended, of Regulation Z, and to in-
clude that amount in the finance charge
when disclosing the amount of the
finance charge as required by ? 226.8(c)
(8) (1) of Regulation Z and when com-
puting the annual percentage rate, as
required by ?? 126.8(b) (2) and 226.8(o),
as amended, of Regulation Z.
9. Stating in any advertisement the
period of repayment, without stating all
of the following items, in the manner and
form prescribed by ? 226.8 of Regulation
Z, as required by ? 226.10(d) (2) of Regu-
lation Z:
(a) The cash price;
(b) The amount of the downpayment
required;
(c) The number, amount, and due
dates or period of repayments scheduled
to repay the indebtedness;
(d) The amount of finance charge
expressed as an annual percentage rate;
and
(e) The deferred payment price.
10. Failing, in any transaction arising
In the future in which a customer has
the right to rescind as provided in
? 226.9 of Regulation Z, to provide the
customer with the notice of right to
rescind, in the form and manner pro-
vided in that section prior to consum-
mation of the transaction and in con-
nection therewith to provide a question
seeking a statement in writing designat-
ing whether or not said customer expects
to use the lot as his principal place of
residence. ?
11. Failing, in any consumer credit
transaction or advertisement, to make all
disclosures, determined in accordance
with ?? 226.4 and 226.5 of Regulation Z,
In the manner, form, and amount re-
quired by ?? 226.6, 226.8, 226.9, and 226.10
of Regulation Z. -
12. Failing to deliver a copy of this
order to cease and desist to all presents
and future employees or other persons
engaged in the sale of respondents' real
property or in the creation of any ad-
vertisement therefor, and to secure from
each such employee or other person a
signed statement acknowledging receipt
of said order.
It is further ordered, That respondent
Charnita., Inc. shall within thirty (30)
days from the date hereof make a clear
and conspicuous inquiry in writing, in
the manner and form shown on Appen-
dixes A and B attached hereto; via reg-
istered. mail with return receipt required
and with - enclosed self-addressed and
stamped envelope to all customers who
purchased property from respondent on
or after July 1, 1969 and in which re-
spondent has retained or acquired or will
retain or acquire a security interest.
It is further ordered, That within sixty
(60) days from the date hereof, in the
event that all of the questionnaires (Ap-
pendix B)1 have not been completed and
returned to respondent Charnita, Inc.,
respondent shall employ an independent
contractor with interviewing capabilities
which is acceptable to the Federal Trade
Commission to telephone, and if neces-
sary to meet in person, each customer
who fails to return the questionnaire and
to provide him with the information cons
tattled in the letter set forth :in Appendix
A in order to elicit his response to and
signature on the questionnaire.
It is further ordered, That respondent
Charnita?. Inc. shall maintain adequate
records? to be furnished upon the re-
quest of the Federal Trade Commission,
which disclose the dates and manner in
which customers were contacted pur-
suant to the above procedures and the
dates and manner in which customers
responded thereto.
It is further ordered, That respondent
Charnita. Inc. shall cease to remain in
violation of the Truth in Lending Act
1. Copies of Appendixes A and B may be ob-
tained at Federal Trade Commission Build-
ing, Room 130, Sixth and Pennsylvania Ave.
NW.
by delivering, Within ten (10) clays after
receipt by it of notice from its customers
(or from the independent contractor)
regarding their expected use of the prop-
erty in question, notice of the customer's
right to rescind, in the manner and form
set forth in ? 226.9(b) of Regulation Z,
to each customer who purchased real
property from it in any credit transac-
tion consummated on or after July 1,
1969 and in which the customer has or
shall notify respondent pursuant to the
procedures set forth above that he ex-
pected to use that property as his jcrinci-
pal place of residence and in which
respondent has retained or acquired, or
will retain or acquire, a security interest
therein. Provided, however, That this
portion of this order shall not apply to
customers who have previously sold the
property purchased from Charnita, Inc.
It is further ordered, That respondents
Charnita, Inc., a corporation, and its of-
ficers, and Charles G. Rist, individually
and as an officer of said corporation,, and
respondents' agents, representatives and
employees, directly or through any cor-
porate or other device, in connection with
any consumer credit sale of real property
or in any advertisement to aid, promote,
or assist directly or indirectly any ex-
tension of credit, as "credit sale' and
"advertisement" are defined in Regula-
tion Z (12 CFR. Part 226) of the Truth in
Lending Act (Public Law 90- 1. 15
U.S.C. 1601 et seq.) do forthwith ease
and desist from failing to identify tra..etr
security interest as required by ? 226.'8
(b) (5) of Regulation Z together with all
other required, disclosures, as required by
? 226.8(a) of Regulation Z.
It is further ordered. That the enceP-
tions of respondents Charnita, Inc., and
Charles G. Rist to the findings, conclu-
sions, and order of the hearing examiner
be, and they hereby are, denied, and that
the exceptions of counsel supporting the
complaint to said findings, conclusions,
and -order be, and they hereby are,.
granted in part and denied in part.
It is further ordered, That the ex-
aminer's findings, conclusions, and
order, as modified and supplemented
herein, be, and they hereby are, adopted
as the findings, conclusions, and order of
the Commission.
It is further ordered, That respondent
corporation shall forthwith distribute a
copy of this order to each of its operat-
ing subsidiaries and divisions.
It is further ordered, That respondents.
notify, the Commission at least thirty
(30) days prior to any proposed change
in the corporate respondent, such as dis-
solution, assignment or sale resulting in
the emergence of a successor corpora-
tion, the creation or dissolution of sub-
sidiaries which may affect compliance
obligations arising out of the order or .
any other change in the corporation.
which may affect compliance elongations .
arising out of the order.
It is further ordered, That respondents
herein shall, within three (3) months
after service upon them of this order,
file with the Commission a report In
writing setting forth in detail the man-
ner and form in which they are com-
plying with this order and shall, within
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six (6) months thereafter, file a further
report in writing setting forth in detail
the manner and form in which they have
complied therewith.
Issued: June 6, 1972.
By the Commission.
[SEAL] CHARLES A. TOBIN,
Secretary.
[Fa Doc.72-10066 Filed 6-30-72;8:50 am]
Moolet VC. 0-22261
PART 13?PROHIBITED TRADE
PRACTICE'S
Kenrec Sports Inc., et al.
Subpart?Advertising falsely or mis-
leadingly: ? 13.1'15 Quality of product
fp.. serzfeei ? 13.190 Results; ? 13.195
Safety -13.195-50 - Product; ? 13.265
Tests and investigations. Subpart?Mis-
representing oneself and goods?Goods:
I 13.1715 Quality; ? 13.1730 Results;
13.17.02 Tests, purported. Subpart?
NegleCting, unfairly or deceptively, to
ina.ke friaterial disclosure: ? 13.1886
QUality, grade or type; ?13.1B90 Safety.
(Sec. 6, 38 Stat, 721; 15 `Ii.8-.c. 46. Interprets
or applies see. 5, 38 Stat. 719, as amended;
15 U.Q. -45) [Cease and desist order,
2re.nreo 3 'tots Inc., et al., New York, N.Y.,
or .. 0-2226, May 23, 19721
Zi the Matter of IfenreeSorts Inc., a
Corporation, Dennis Eichler and
Era Waldman; Individually and as
Qficers Or said Corporation.
t order requiring a New York
'Clty seller of a swimming-aid device to
cease misrepreSenting the device as a
Swim Teacher, that the device assures
Ideal body poSition, has been tested and
41Spiroirell by experts in the United States
and abroad, misprepresenting the device
as safe and secure and requiring on any
future packaging and advertising, a
settlegent that the device is not a life
preSe_ er.
?nui .,order to cease and desist, includ-
ing further order requiring report of
compliance therewith, is as follows:
It is ordered, That respondents
Kenrec Sports Inc., a corporation, and
Its officers, and Dennis Eichler and Ezra
Waldman, individually and as officers
and directors of said corporation, and
resPolidents' agents, representatives,
employees, successors and assigns, di-
rectly or through any corporate or other
device, in connection with the advertis-
ing, offering for sale, sale or distribution
of a swimming-aid device designated
"Berne Swim Teacher " or any other de-
vice of similar design; construction or
intended use', in commerce as "com-
merce" is defined in the Federal Trade
Commission Act, do forthwith cease and
desist from representing, directly or by
Implication, that:
1. Such device is a Swim Teacher and
can teach swimming in three easy steps
or any number of steps.
2. Such device assures ideal body
positioning in the water for the swift
development of correct swimming
motions.
No. 128?Pt. 1-2
'4S
Rtiltr`ANDItOUI.ATIONS
3. Such device has been tested and
approved as to any and all aspects, in-
cluding safety, by European and United
States swimming experts, including- Don
Schollantler, unless said device has been
.subjected to practical and effective tests
under controlled conditions.
t. Such device is safe and secure by
the use of such phrases as "Completely
Safe and Dependable," "Designed and
Made with Your Safety gin Mind," "An
--ro-YerCircle of Safety Sports Prod-
not," or any other language of similar
rt.
. Such device can be used with con-
fidence on irifants and children to over-
come their fear of the water and teach
them to swim unless respondents shall
state clearly and conspicuously and in
immediate conjunction with any such
representation that such device Is not a
life preserear, sheuld not he used by non-
swiminers vithout pitter supervision and
should be used only in shallow water.
It is frrther ordered, That on all future
packages, brochures, flyers, or other
pieces of advertising material describ-
ing said device or any other device of
similar dean, construction, or intended
use, respondetts affirmatively disclose in
clear and conspicuous language that said
device is not a life preserver, should not
be used by nonsWimraers without proper
supervision and in all cases should be
TASed only in shallow water.
It is further ordered, That respondents
notify the Commission at least thirty
(30) days prior to any proposed change
in the corporate respondent such as dis-
solution, assignment or sale resulting in
the emergence of a successor corporation,
the creation or dissolution of subsidiaries
or any other change in the corporation
which may affect compliance obligations
arising out of this order.
It is further ordered, That respondents
distribute a copy of this order to all op-
erating divisions and subsidiaries of said
corporation and also distribute a copy
of. this, order to all of respondents' per-
sonnel involved in the formulation and
Implementation of respondents' business
policies and all other personnel engaged
In the advertising, marketing and sale of
respondents' products.
It is further ordered, That respondents
herein shall, within sixty (60) days after
service upon them of this order, file with
the Commission a report in writing set-
ting forth in detail the manner and form
in which they have complied with this
order.
Issued: May 23, 1972.
By the Commission.
[SEAL] CHARLES A. ToBIN,
Secretary.
(PR Doc.72-10042 Filed 6-30-72;8:46 am]
[Docket No. 0-2229]
PART I3?PROHIBITED TRADE
PRACTICES
Leo Payne Pontiac, Inc., and
Leo Payne
Subpart?Advertising falsely or mis-
leadingly: 1 13.73 Formai regulatory
FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY
13079
and statutory requirements: 13.73-92
Truth in Lending Act; ? 13.155 Prices:
13.155-95 Terms and conditions; 13.155-
95(a) Truth in Lending Act. Subpart?
Misrepresenting oneself and goods?
Goods: ? 13.1623 Formal regulatory and
statutory requirements: 13.1623-95
Truth in Lending Act; ? 13.1823 Terms
and conditions: 13.1823-20 Truth in
Lending Act. Subpart?Neglecting, un-
fairly or deceptively, to make material
disclosure: ? 13.1852 Formal regulatory
and statutory requirements: 13.1852-75
Truth in Lending Act; ? 13.1905 Terms
and conditions: 13.1905-60 Truth in
Lending Act.
(Sec. 6, 38 Stat. 721; 15 U.S.C. 46. Interpret
or apply sec. 5, 38 Stat. 719, as amended, 81'
Stat. 146, 147; 15 U.S.C. 45, 1601-1805) [Cease
and desist order, Leo Payne Pontiac, Inc., et
al., Lakewood, Colo., Docket No. 0-2229, June
1, 1972]
In the Matter of Leo Payne Pontiac, inc.,
a Corporation, and Leo Payne, In-
dividually and as an Officer of Said
Corporation.
Consent order requiring a Lakewood,
Colo., dealer and seller of automobiles,
campers and mobile homes to cease vio-
lating the Truth in Lending Act by fail-
ing to list the cash price, the downpay-
ment required, the annual percentage
rate, the deferred payment price, and any
other disclosures required by Regulation
Z of the said Act.
The order to cease and desist, includ-
ing further order requiring report of
compliance therewith, is as follows:
It is ordered, That respondents Leo
Payne Pontiac, Inc., a corporation, and
Leo Payne, individually and as an officer
of said corporation, trading under said
corporate name or under any trade name
or names, their successors and assigns.
and respondents' agents, representatives,
and employees, directly or through any
corporation, subsidiary, division, or other
device, in connection with the arrange-
ment, extension, or advertisement of
consumer credit in connection with
the sale of automobiles, motor homes
campers, travel trailers, or other prod-
ucts or services, as "advertisement" and
"consumer credit" are defined in Regu-
lation Z (12 CFR Part 226) of the Truth
In Lending Act (Public Law 90-321, 15
U.S.C. 1601 et seq.), do forthwith cease
and desist from:
1. Causing to be disseminated to the
public in any manner whatsoever any ad-
vertisement to aid, promote, or assist
directly or indirectly, any extension ot
consumer credit, which advertisement
states the amount of the downpayment
required, or that no downpayment is re-
quired, the amount of any installment
payment, the dollar amount of any fi-
nance charge, the number of installments
or the period of repayment, or that there
is no charge for credit, unless it states all
of the following items in the manner and
form as required by ? 226.10(d) (2) of
Regulation Z:
a. The cash price;
b. The amount of the downpayment
required or that no downpayment is
required, as applicable;
1, 1972
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c. The number, amount, and due dates
or Period of payments scheduled to re-
pay the indebtedness if the credit is
eztended;
d. The amount of the finance charge
expreeeed as an annual percentage rate;
and
e. The deferred payment price or the
sum of the payments, as applicable.
2. Falling to print the term "annual
percentage rate" more conspicuously
th,axi other ?terminology required by
Regulate:an Z, when that termis required
to be used by Regulation Z.
3. Failing, in any consumer credit
traneaetion or , advertisement, to make
all the disclosures, determined In accord-
IAP,17#? Witi)sit24.6.4. and_226.5 of Regula-
In the manner, form, and amount
required by ?? 226.6, 226.7, 226.8, 226.9,
IneiL229,19 of Regulation Z.
4. Failing to deliver a copy of this order
tnenalieseetand. desist to all present and
future personnel of respondents engaged
in any aspect of preparation, creation,
and placing of , advertising, all persons
eagaged in reviewieur the legal sufficiency
of advertising, and all present and future
ageneica engaged In Preparation, crea-
tion, and Placing of adyertising on behalf
of respondents, and failing to secure from
each such person or agency a signed.
statement acknewledging receipt of said
order. ,
It is further ordered, That respondents
shall, within sixty (60) days after serv-
ice upon them ef this order, file, indi-
vidually, with tile Commission, a report
In writing, setting forth in detail the
manner and form in which each of them
has complied with this order.
It is further ordered, That respondents
notify the Commission . at least thirty
(80) days prior to any proposed change
In the corporate respondent such as dis-
solution, assignment, or sale resulting in
the emergence of a successor corpora-
tion, the creation or dissolution of sub-
sidiaries, or any other change in the
corporation which may affect compliance
obligations arising out of the order.
Issued; June 1, 1972.
By the Commission.
fawn CHARLES A. TOBIN,
Secretary.
[PS 1)oc.72-.10043 Filed 6-30-72;8:46 am]
[Docket No. 0-2227]
PART 13?PROHIBITED TRADE
PRACTICES.
Nationwide Safti-Brake
Distributers, Inc., et al.
Subpart?Advertising falsely or mis-
leadingly: ? 13.15 Business status, ad-
vantages, or connections: 13.15-105
Identity; 13,..15-2a5 Personnel or staff;
13.15-270 Size end extent; ? 13.155
Prices: 13.155-5 Additional charges un-
mentioned; 13.155-10 Bait. Subpart?
Misrepresenting ,oneself and goods?
Business status, advantages, or connec-
tions: ? 13.1440, identity; ? 13.1520
Personnel or sta. ? 13.1555 Size, ex-
tent, or equipment; Misrepresenting
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? ..I.E.k4544,MGVIATIONA .
oneself and goods?Goods: ? 13.1685
Nature: 13.1685-15 By misleading trade
or corporate name; Misrepresenting one-
self and goods--Prices: ? 13.1778 Ada-
tionul costs unmentioned; ?13.1770
Bait. Subpart?Neglecting, unfairly or
deceptively, to make material disclosure;
? 13.1855 Identity; ? 13,1882 Prices.
Subpart?Using misleading name?Ven-
dor: ? 13,2385 Identity. .
(Sec. 6. 35 Stat, 721; 15 U.S.C. 46. interprets
or applies sec. S. 38*Stat. 719. as arnerated;
15 U.S.C. 45) [Cease and deciat order, Na-
tionwide Sa/ti-Brake Distributbra. imp., et
al, Rockville, Md., Docket No. C-2227, May
25, 197211
In the Matter of Nationwide .Saftt-Brake
Distributors, Inc., a Corporation;
Gleba etivertising Ca., lam; a Cor-
poration:. Market Tire Co., ef Mary-
land, Inc.., a Corporation, and Allan
iteetnent. Deeii Latelco,
Individii-
a and as officers of Market Tire
co., of Afferylancl, Inc.
Consent order requiring a. Reckville,
Md.., seller and distributor of automabile
parts, including brake parts, and its par-
ent company to cease misrepresenting
prices of particular automotive repair
services, representing that any merchan-
dise or service is for sale when in fact
it is not: using deceptive representations
An, order to obtain prospective customers,
misrepresenting respondent's size and
extent, and using the word "Safti" or any
other similar misrepresentation in re-
spondent's trade name or service mark
within 1 year.
The order to cease and desist, including
further order requiring report of com-
pliance therewith, is as follows:
It is ordered,. That respondents Na-
tionwide Saftt-Brake Distributors, Ince a
corporation, Globe Advertising Co., Ince
a corporation, Market Tire Co. of Mary-
land, Inc., a corporation, their successors
and assigns and their officers, and Allan
Bratman and David Lawson, individually
and as officers of Market Tire Co. of
Maryland, Inc. and each of said respond-
ents trading as Nationwide I3afti-Brake
Centers or under any other trade name
or names, and respondents' agents, rep-
resentatives, and employees directly or
through any corporation, subsidiary, di-
vision, or other device, in connection
with the advertising, offering for sale,
sale or distribution of automobile brake
repair services, 9r any other products
or services, in cenemerce, as "commerce"
is defined in the Federal Trade Commis-
sion Act, do forthwith cease and desist
from:
1. Advertising the price of particular
automotive repair aervices such as relin-
ing brakes? unless in immediate con-
junction therewith disclosure is made,
in a prominent place and in legible type
that additional aharges may be required,
which additional charges are listed
covering usual and customary parts
and/or labor for the repair services ad-
vertised; or in lieu thereof, clearly dis-
closing in Immediate conjunction with
the advertised price, and in the same
type size, the current average total cost
at the time of publication for such Sera-
ices, including the additional parts and
labor normally required.
2. Representing, orally or in writing,
directly or by implication, that any Tier-
chandise or service is offered for sale
when the purpose of the representation
is not to sell such merchandise or serv-
ice in the represented manner; or mis-
representing, in any manner, the nature,
cost, or extent of any such service or re-
lated parts necessary to repair automo-
tive components.
3. Using, in any manner, a sales plan
or procedure wherein false, misleading,
or deceatneazepresentations are made in
order to Obtain prospects for the sabt of
merchandise or services.
4. Failing to disclose in all media ad-
vertising in close conjunction with re-
spondents' trade name and servicenta,rk
"Nationwide Safti-Brake Centers" the
geographic trading area or areas where
respondent in fact does business, or
otherwise misrepresenting apart from
said trade name and servicernark usage
that respondents' business serves a
geographic area larger than is the feet.
5. Using the word "Sant" or any other
word, term or phrase of similar import
or meaning in respondents' trade name
or servicemark; provided, however, that
respondents shall be permitted to phase
out such term: (a) In all media ad-
vertising within 1 month from the date
this order is accepted, (b) in all sta-
tionary, invoices, and other business
forms (and in-store promotional mane-
rial) as the current supply Is exhausted,
but no later than 1 year from the date
this order is accepted, and (el in all
store signs within 1 year from the
date this order is; accepted.
It is further ordered, That respondents
deliver a copy of this order to each of
their operating departments and divi-
sions engaged in the advertising, offering
for sale, sale or distribution to the pub-
lic at retail of automobile brake repair
services or any other products or services
and to the manager and employees of
each present and every future retail out-
let owned and operated by responderes,
and obtain a signed statement acknowl-
edging receipt of said order from each
individual receiving a copy of same.
It is further ordered, That respond-
ents maintain for at least a two (2) year
period, copies of all advertisements, in-
cluding television and radio advertise-
ments, direct mail and in-store solicita-
tion literature, and any other such
promotional material made for the pur-
poses of offering for sale, sale or die-
tribution to the public at retail of
automobile brake repair services or any
other products or services.
It is further ordered, That respond
eats maintain for at least a one (1) year
period, full and adequate records which.
disclose the facts upon which repre-
sentations of the type dealt with in para-
graphs 1 and 2 of this order are based,
and from which the validity of such
claim can be established.
It is further ordered. That respond-
ents notify the Commission at least
thirty (30) days prior to any proposed
change in the corporate respondents
FEDERAL REGISTER, VOL. 37, N. 1211?SATURDAY, A1LY 1, 1972
Niue -
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prime contractor, submit it direct to'the
contracting officer and auditor having
cognizance of the prime contractor's fa-
cility. The contracting officer for the
prime contractor shall furnish copies to
the contracting officer and auditor cog-
nizant of the subcontractor for use in
administration of the Cost Accounting
Standards clause.
(d) Postaward submission of the sub-
contractor's disclosure statement (see
? 1-.3.1203(d)) must be approved by the
contracting officer having cognizance of
the prime contractor.
(e) A determination that it is im-
practicable to secure a subcontractor's
disclosure statement must be made in
accordance with ? 1-3.1203(e).
? 1-3.1207 Contract price adjustments.
(a) Modifications to disclosure state-
mei tts or established practices. Para-
graph (a) (4) of the Cost Accounting
Standards clause (Attachment B) pro-
vides for adjustment of the contract price
due to changes in the disclosure state-
ment. The cognizant contracting officer
Is responsible for obtaining the contrac-
tor's proposal and for the conduct of all
negotiations of such adjustments to all
Government prime contracts. When a
prime contractor is also a subcontractor,
the contracting officer shall advise the
contracting officer having cognizance of
the applicable prime contract of the re-
sults of his negotiations.
(b) Failure to comply with Cost Ac-
counting Standards clause. Paragraph
(a) (5) of the Cost Accounting Stand-
ards clause (Attachment B) provides for
an adjustment of the prime contract
price or cost allowance, as appropriate,
if the contractor or a subcontractor fails
to comply with an applicable cost ac-
counting standard or fails to follow any
disclosed accounting practice and such
failure results in any increased cost paid
by the Government. The cognizant con-
tract auditor shall be responsible for the
conduct of audits as necessary to disclose
such failures. The cognizant contracting
officer shall negotiate all resultant prime
contract adjustments, including appli-
cable interest.
(c) Conduct of negotiations of defense
and nondefense contracts and execution
of supplemental agreements. Negotia-
tions pursuant to (a) and (b) of this
? 1-3.1207 shall be conducted on behalf
of all Government agencies including, but
not limited to, DOD, NASA, AEC, and
GSA. The cognizant contracting officer
shall invite representatives of the Gov-
ernment agencies involved to participate
in negotiations of adjustments when the
price of any of their contracts will be in-
creased or decreased by $10,000 or more.
At the conclusion of negotiations the fol-
lowing actions shall be taken by the ad-
ministrative contracting officer:
(1) Execute supplemental agreements
to DOD contracts. If additional funds are
required, request them from the appro-
priate procurement contracting officer;
and
(2) Advise contracting officers of other
Government agencies of the results of
his negotiations. Such agencies shall ex-
ecute necessary supplemental agreements
in the amounts negotiated.
? 1-3.1208 Contract administration by
other Government agencies.
In some instances the contracting offi-
cer cognizant of a contractor will be the
representative of a Government agency
other than DOD. A list of such assign-
ments will be published from time to
time in DOD Defense Procurement
Circulars and in FPR Bulletins. In such
cases, contracting officers of other Gov-
ernment agencies shall perform for DOD
all functions in ?? 1-3.1205, 1-3.1208, and
1-3.1207 which DOD contracting officers
perform for other Government agencies.
PART 1-15--CONTRACT COST
PRINCIPLES AND PROCEDURES
d. Section 1-15.109 is added, as follows:
? 1-15.109 Definitions.
As used in this Part 1-15 (except for
Subpart 1-15.31, the words and phrases
defined in this parargaph shall have the
meanings set forth below:
(a) "Profit center," the smallest or-
ganizationally independent segment of a
company which has been charged by
management with profit and loss
responsibilities.
(b) "Accumulating costs," the collect-
ing of cost data in an organized manner,
such as through a system of accounts.
(c) "Actual costs," amounts deter-
mined on the basis of costs incurred, as
distinguished from forecasted costs. In-
cludes standard costs properly adjusted
for applicable variance.
(d) "Allocate," to assign ail item of
cost, or a group of items of cost, to one
or more cost objectives. This term in-
cludes both direct assignment of cost and
the reassignment of a share from an in-
direct cost pool.
(e) "Cost objective," a function, orga-
nizational subdivision, contract, or other
work unit for which cost data are desired
and for which provision is made to ac-
cumulate and measure the cost of proc-
esses, products, jobs, capitalized projects,
etc.
(f) "Direct cost," any cost which is
Identified specifically with a particular
final cost objective. Direct costs are not
limited to items which are incorporated
in the end product as material or labor.
Costs identified specifically with a con-
tract are direct costs of that contract.
All costs identified specifically with other
final cost objectives of the contractor are
direct costs of those cost objectives.
(g) "Estimating costs," the process of
forecasting a future result in terms of
cost, based upon information available
at the time.
(h) "Final cost objective," a cost ob-
jective which has allocated to it both
direct and indirect costs, and in the con-
tractor's accmulation system, is one of
the final accumulation points.
(i) "Indirect cost," any cost not di-
rectly identified with a single final cost
objective, but identified with two or more
final cost objectives or with at least one
intermediate cost objective.
(j) "Indirect cost pools," groupings of
incurred costs identified with two or more
cost objectives but not identified specifi-
cally with any final cost objective.
(k) "Pricing," the process of establish-
ing the amount or amounts to be paid
in return for goods or services.
(1) "Proposal," any offer or other sub-
mission used as a basis for pricing a con-
tract, contract modification, or termina-
tion settlement, or for securing payments
thereunder.
(m) "Reporting costs," provision of
cost information to others. The reporting
of costs involves selecting relevant cost
data and presenting it in an intelligible
manner for use by the recipient.
e. Section 1-15.201-2 is revised, as
follows:
? 1-15.201-2 Factors affecting allow-
ability of costs.
Factors to be considered in determin-
ing the allowability of individual items
of cost include (a) reasonableness, (b)
allocability, (c) standards promulgated
by the Cost Accounting Standards Board,
if applicable, otherwise, generally ac-
cepted accounting principles and prac-
tices appropriate to the particular cir-
cumstances, and (d) any limitations or
exclusions set forth in this Subpart
1-15.2 or otherwise included in the con-
tract as to types or amounts of cost
Items. When a contractor has disclosed
his accounting practices in accordance
with Cost Accounting Standards Board
rules, regulations, and standards and any
such practices are inconsistent with any
of the provisions of this Subpart 1-15.2,
costs resulting from such inconsistent
practices shall not be allowed in excess
of the amount that would have resulted
from the use of practices consistent with
this Subpart 1-15.2.
f. Section 1-15.201-4 is revised, as
follows:
? 1-15.201-4 Definition of allocability.
A cost is allocable if it is assignable or
chargeable to one or more cost objectives
(see ? 1-15.109(e) ) in accordance with
the relative benefits received or other
equitable relationship. Subject to the
foregoing, a cost is allocable to a Govern-
ment contract if it:
(a) Is incurred specifically for the
contract;
(b) Benefits both the contract and
other work, or both Government work
and other work, and can be distributed to
them in reasonable proportion to the
benefits received; or
(c) Is necessary to the overall opera-
tion of the business, although a direct
relationship to any particular cost objec-
tive cannot be shown.
g. Section 1-15.202 is revised, as fol-
lows:
? 1-15.202 Direct costs.
(a) A direct cost is any cost which is
Identified specifically with a particular
final cast objective (see ? 1-15.109 (f ) ) . No
final cost objective shall have allocated
to it as a direct cost any cost it other
costs, incurred for the same purpose in
like circumstances, have been included
FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY 1, 1972
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RULES AND REGULATIONS
Standards Board (see 4 CFR Part 331
et seq.) requires the development of cost
accounting standards to be used in con-
nection with negotiated national defense
contracts and disclosure of cost account-
ing practices to be used in such contracts.
Such cost accounting standards and dis-
closure of cost accounting practices shall
also be used in connection with nego-
tiated nondefense contracts.
? 1-3.1202 Definitions.
When used in this subpart, the words
and terms defined in 4 CFR Part 331 et
seq. shall have the meanings set forth
therein. In addition, the words and terms
defined in this paragraph shall have the
meanings set forth below:
(a) "Net awards" means the obligated
Value of negotiated national defense
prime contracts, awarded in the report-
ing period, minus cancellations, termi-
nations, and other credit transactions
relating thereto.
(b) "Company" includes all divisions,
subsidiaries, and affiliates of the con-
'tractor under common control.
,? 1-3.1203 Prime contractor disclosure
statement.
(a) Solicitation notice. The notice en-
titled Disclosure Statement?Cost Ac-
counting Practices and Certification set
forth in Attachment A shall be inserted
in all solicitations which are likely to
result in a negotiated contract exceed-
ing $100,000, except when the price is
(1) based on established catalog or mar-
ket prices of commercial items sold in
substantial quantities to the general pub-
lic, or (2) set by law or regulation.
(b) Preaward submission of disclosure
statements. Each offeror submitting an
offer which could result in a negotiated
contract exceeding $100,000, except when
the price is based on established catalog
or market prices of commercial items
sold in substantial quantities to the gen-
eral public or prices set by law or regu-
lation, shall furnish copies of his
disclosure statements to the offices listed
in ? 1-3.1203(c) concurrently with the
submission of his proposal to the con-
tracting officer. However, the offeror
need not furnish the disclosure state-
ment when he has executed the certifi-
cate of monetary exemption or the
certificate of previously submitted dis-
closure statement (see Attachment A) .
More than one disclosure statement may
be required in connection with the award
of a contract (see 4 CFR 351.4(a) ) .
Award of a contract shall not be made
until a determination has been made by
the contracting officer or his authorized
representative that a disclosure state-
ment is adequate (see ? 1-3.1205(a) ) un-
less, in order to protect the interests of
the Government, the contracting officer
waives this requirement. In this event,
a determination shall be made as soon
after award as possible.
(c) Distribution of disclosure state-
ments. The offeror shall distribute his
Disclosure Statements as follows:
(1) Original and one copy to the cog-
nizant contracting officer;
(2) One copy to the cognizant con-
tract auditor; and
(3) One copy to the Cost Accounting
Standards Board, 441 G Street NW.,
Washington, DC 20548.
(d) Post award submission of disclo-
sure statements. Postaward submission
of disclosure statements may be author-
ized only when the contracting officer
has made a written determination that
such authorization is essential (1) to the
national defense, (2) because of the pub-
lic exigency, or (3) to avoid undue hard-
ship. Each determination shall set forth
facts which clearly support the determi-
nation to authorize postaward submis-
sion, and a copy of the determination
shall be included in the contract file.
Authorization issued pursuant to this
paragraph shall specify the period of
time, not to 'exceed 90 days after con-
tract award, within which disclosure
must be made.
(e) Determination by agency head
that it is impracticable to secure disclo-
sure statements. If the head of the
agency (see ? 1-1.204) determines that
it is impracticable to secure the disclo-
sure statements in accordance with the
clause set forth in Attachment B and
this' subpart., he may authorize award
of such contract without obtaining such
statements. This authority shall not be
delegated. He shall, within 30 days there-
after, submit a report to the Cost Ac-
counting Standards Board, setting forth
all material facts.
(f) Privileged and confidential infor-
mation in disclosure statements. If the
offeror or contractor notifies the con-
tracting officer that the disclosure state-
ment contains trade secrets and com-
mercial or financial information which
Is privileged and confidential, the dis-
closure! statement will be protected and
and will not be released outside the Gov-
ernment (see paragraph (a) (1) of the
Cost Accounting Standards clause set
forth in Attachment B) .
(g) Amendment of disclosure state-
ments. Amendments of a disclosure
statement after contract award shall be
processed in accordance with 4 CFR
351.12 and 1-3.1207. ,
? 1-3.1204 Contract clause.
The Cost Accounting Standards clause
set forth in Attachment 13 shall be in-
serted in all negotiated contracts exceed-
ing $100,000 except when the price is
based on established catalog or market
prices of commercial items sold in sub-
stantial quantities to the general public
or is set by law or regulation.
? 1-3.1205 Review of prime contractor
disclosure statements.
(a) Contracting officer and auditor'
support responsibility. When the Depart-
ment of Defense (DOD) has contract ad-
ministration cognizance of a contractor,
required disclosure statements shall be
reviewed by the cognizant administra-
tive contracting officer and contract au-
ditor for all Government agencies in-
cluding, but not limited to, DOD, NASA,
AEC, and GSA (see ? 1,3.1208 with re-
spect to contract administration by
other Government agencies).
(b) Determination, of adequacy. The
cognizant contract auditor shall perform
12093
an initial review of a disclosure state-
ment to ascertain whether it adequately
describes the offeror's cost accounting
practices. In order to be deemed adequate
the disclosure statement must be cur-
rent, accurate, and complete. Upon com-
pletion of this initial review the results
shall be reported to the contracting offi-
cer. When he determines that adequate
disclosure has not been made, he shall
identify the areas of inadequacy and re-
quest a revised statement from the of-
feror, and so advise the auditor. When
the contracting officer determines that
the disclosure statement is adequate, he
shall notify the offeror in writing with
a copy to the auditor. In addition., the
notice shall state that a disclosed prac-
tice shall not, by virtue of such disclo-
sure, be deemed to be a proper, ap-
proved, or agreed to practice for pricing
proposals or accumulating and reporting
contract perfermance cost data. The con-
tract may be awarded when it is deter-
mined that an adequate disclosure has
been made (see ? 1-3.1203 (b) ) .
(c) Determination of compliance.
Subsequent to the issuance of the above
notification, a more detailed review of
the disclosure statement shall be made
by the auditor to ascertain whether the
disclosed practices are in compliance
with Part 1-15 or ASPR section XV, as
applicable, and the Cost Accoeuating
Standards. The auditor shall advise the
contracting officer of his findings. When
it is determined by the contracting offi-
cer that any disclosed practice is not In
compliance, he shall notify the offeror
or contractor, with a copy to the auditor.
This notice shall require the offesar or
contractor to advise the contracting offi-
cer and the auditor of the correctisre ac-
tion taken or to be taken to bring the
practices into compliance. A revised dis-
closure statement may be requited. In
addition, adjustment of the prime! con-
tract price or cost allowance in accord-
ance with ? 1-3.1207(b) may be required.
Noncomplian.ces which cannot be re-
solved by the contracting officer should
be referred to the Government depart-
ment or agency having contract admin-
istration cognizance and, if necessary,
coordinated with any other Government
department or agency concerned. The
contracting officer shall also advise
higher authority of disclosed practices
which are not in compliance and which
would have any effect on the pricing of
contracts under negotiation.
? 1-3.1206 Subcontractor disclosure
- statements.
(a) Disclosure statements furnished by
a subcontractor pursuant to the Cost Ac-
counting Standards clause should, ex-
cept as provided in (b) or (c) of f this
? 1-3.1206, be submitted to the :prime
contractor or higher tier subcontractor.
(b) A subcontractor may satisfy, the
requirement to submit disclosure state-
ments by identifying to the prime con.-
tractor or higher tier subcontractor the
contracting officer to whom hiedisclosure
statement was previously submitted.
(c) When a subcontractor coraiders
that his disclosure statement contatas in-
formation that is privileged and confi-
dential, he may, with the approval of the
FEDERAL REGISTER, VOL. 37, NO. 128--SATURDAY, JULY 1, 1972
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13092 RULES AND REGULATIONS
(Sec. 408(d) (2), 68 Stat, 512; 21 U.S.C. 346a without limitation, the application of the tracts, and, if they do endorse the ex-
(d) (2) ) contract cost principles and procedures tension, whether they favor the appli-
Dated: June 26, 1972. In FPR 1-15 (41 Celt, Part 1-15) for con- cation of the procedures in 11-3.1207(c)
tracts with both commercial (profitmak- to nondefense contracts.
WILLIAM M. UPHOLT, ing) and nonprofit institutions or orga- 7. Explanation of changes.
Deputy Assistant Administrator nizations. This regulation does not apply
for Pesticides Programs, to contracts with educational institutions PART 1-1?GENERAL
[FR Doc.72-10079 Filed 6-30-'72;8:48 am] subject to FPR 1-15.3 (41 (Aoki. 1-15.3). Subpart 1-1.4?Procurement
Any provision of the FPR which is incon-
sistent Responsibility and Authority
with promulgations of the Cost
Title 41?PUBLIC CONTRACTS Accounting Standards Board is super- a. Section 1-1.406 is added, as follows:
seded by the Board's rules to the extent
of the inconsistency. ? 1-1.406 Cost Accounting Standards.
AND PROPERTY MANAGEMENT b. All solicitations (1) issued on or The contracting officer or his author-
after July 1, 1972, which are likely to re-
ized representative shall:
Chapter I?Federal Procurement suit in negotiated defense contracts ex- (a) Determine the adequacy of prime
Regulations
ceeding $100,000, and (2) issued on or contractor's disclosure statements (see atter October 1, 1972, which are likely to ? 1-3.1203(a)) ;
[Federal Procurement Regs.; Temporary result iri nondefense contracts exceeding (b) Determine whether prime con-
Reg. 27] $100,000, shall include the solicitation no- tractor's disclosure statements are in
MISCELLANEOUS AMENDMENTS TO tice set forth in Attachment A and the compliance with Part 1-15 and Cost
CHAPTER contract clause set forth in Attachment Accounting Standards;
B, except when the price is based on (c) Determine contractor compliance
To: Heads of Federal agencies, established catalog or market prices of with Cost Accounting Standards and dis-
Subject: Revision of regulations pur- commercial items sold in substantial closure statements, if applicable; and
suant to Public Law 91-379, as imple- quantities to the general public or prices (d) Negotiate price adjustments and
mented by the Cost Accounting Stand- set by law or regulation. However, agen- execute supplemental agreements pur-
ards Board. cies may make the procedures for the use suant to the Cost Accounting Standards
1. Purpose. This regulation prescribes of the solicitation notice and contract clause set forth in Attachment B.
Interim policies and procedures to im- clause applicable to nondefense contracts b. Section 1-3.809 is amended to add
plement the Cost Accounting Standards on or after July 1, 1972, if they wish to paragraph (c) (4) which reads as
Board (CASB) rules and regulations with do so. follows:
respect to negotiated national defense c. The contract clause set forth in
contracts in excess of $100,000 in ac- Attachment B below shall also be in-
? 1-3.809 Contract audit as a pricing
cordance with the requirements of Public serted in all the negotiated defense con-
aid.
Law 91-379. In the interest of maintain- tracts described in subparagraph b,
*
ing uniform Government-wide procure- above, that are awarded on or after Oc-
(c) *
ment policies and procedures, it also tober 1, 1972, regardless of the solicita-
(4) In accordance with Subpart 1-
adopts such rules and regulations for ne- tion date. Although the solicitation no-
3.12, Cost Accounting Standards, and
gotiated nondefense contracts in excess tice and contract clause are not required Part 1-15, Contract Cost Principles and
of $100,000. in solicitations issued prior to July 1, Procedures, the cognizant contract audi-
2. Effective date. This regulation is ef- 1972, it is recommended that they be in- tor shall be responsible for making tee-
fective upon publication in the FEDERAL eluded when it is contemplated that the ommendations to the contracting officer
REGISTER (7-1-72) except as otherwise contract will be awarded on or after Oc-
as to whether:
provided by paragraph 5. tober 1, 1972. If, in this situation, award (i) A contractor's disclosure state-
3. Expiration date. This regulation will is made prior to October 1, the clause ment (see ? 1-3.1203 (a) ), submitted as
continue in effect until canceled, shall not be included in the contract, a condition of contracting, adequately
4. Background. The initial promulga- d. The regulations of the Cost Ac-
describes the actual or proposed cost
tion of the Cost Accounting Standards counting Standards Board provide that accounting practices as required by Pub-
Board (4 CFR Part 331 et seq.) author- the requirements for filing a disclosure lic Law 91-379, 50 U.S.C. App. 2168, as
ized by Public Law 91-379, 50 U.S.C. App, statement applies only to a company implemented by the Cost Accounting
2:168, appeared in the FEDERAL REGISTER which, together with its subsidiaries, re-
Standards Board;
of February 29, 1972 (37 F.R. 4139). The ceived net awards of negotiated national (ii) A contractor's disclosed cost ac-
regulation prescribes Cost Accounting defense prime contracts totaling more counting practices are in compliance
Standards, rules, and regulations ap- than $30 million during the period with Part 1-15 and applicable Cost Ac-
plicable to the negotiation of national July 1, 1970, through June 30, 1971. After counting Standards;
defense contracts and requires the dis- October 1, 1972, a company shall file a (iii) A contractor's or subcontractor's
closure of cost accounting practices to be disclosure statement where negotiated failure to comply with applicable Cost
usedStandards or to follow con-
used in such contracts. In the interest national defense prime contracts which
of maintaining uniform Government- it has been awarded total more than $30 sistently his disclosed cost accounting
wide procurement policies and pro- million. Contractors or subcontractors practices has resulted or may result in
cedures, this regulation adopts such Cost who did not receive net negotiated na-
any increased cost paid by the Govern-
Accounting Standards for both the nego- tonal defense prime contract awards in ment; and
tiated defense and nondefense contracts that amount during the specified period (iv) A contractor's or subcontractor's
of the civilian executive agencies. It also are not required to file a disclosure state-
proposed price changes, submitted as a
parallels DOD Defense Procurement Cir, ment at this time. Such contractors and result of changes made to previously dis-
cular 99, May 4, 1972. subcontractors shall submit the certifi-
closed or established cost accounting
5. Agency implementation. a. Pending cate of monetary exemption set forth in practices, are fair and reasonable.
the issuance of a permanent amendment Attachment A below.
to the Federal Procurement Regulations 6. Comments by agencies. Agencies PART 1-3?PROCUREMENT BY
(PPR), in carrying out procurement are invited to comment on this regula- NEGOTIATION
operations agencies, with respect to tion during the 60 days following publi-
negotiated defense and nondefense con- cation in the FEDERAL REGISTER. Such Subpart 1-3.12?Cost Accounting
tracts, shall follow the policies and comments will be considered in connec- Standards
procedures set forth in the PPR (41 CFR tion with the codification of the regula- c. Subpart 1-3.12 is added, as follows:
1-1.000 et seq.), except as they may be in- tion in the FPR. In this connection,
consistent with the promulgations of the agencies are specifically requested to ? 1-3.1201 General.
Cost Accounting Standards Board (such indicate whether they endorse extension Public Law 91-379, 50 U.S.C. App. 2168,
as 4 Celt Part 331 et seq.). This includes, of the CASB rules to nondefense con- as implemented by the Cost Accounting
FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY 1, 1972
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RULES AND REGULATIONS
and to the extent of the amount of pro-
ceeds of such borrowing by the overseas
finance subsidiary that have been trans-
ferred by the overseas finance subsidiary
to other affiliated foreign nationals in
such scheduled area pursuant to ? 1000.-
1403(a) (2) and are held by such affiliated
foreign nationals at the time of
assumption,
(3) The amount of such assumption
that exceeds the aggregate amount of
transfers of capital pursuant to sub-
paragraphs (1) and (2) of this para-
graph shall constitute foreign borrow-
ing substituted for borrowing by a direct
investor from its overseas finance sub-
sidiary pursuant to ? 1000.1406(a) to the
extent that proceeds of such borrowing
by the overseas finance subsidiary have
been transferred by the overseas finance
subsidiary to the direct investor in a bor-
rowing that is outstanding at the time of
assumption and would qualify as pro-
ceeeis borrowing under ? 1000.1401(e) if
such borrowing and the underlying bor-
rowing by the overseas finance subsidiary
were continuously outstanding for at
least 12 months.
(4) The amount of such assumption
that exceeds the aggregate amount of
transfers of capital pursuant to subpara-
graphs (1) and (2) and substituted
foreign borrowing pursuant to subpara-
graph (3) of this paragraph shall con-
stitute foreign borrowing made by the
direct investor on the date of assumption.
(c) An assumption under paragraph
(a) or (b) of this section shall be re-
ported on the books and records main-
tained by the direct investor under
?11000.203(b), 1000.601 and 1000.1402
(b).
(Sec. 5, Act of Oct. 6, 1917, 40 Stat. 415, as
amended, 12 U.S.C. 95a; E.O. 11387, Jan. 1,
1968, 33 P.R. 47)
The amendments hereby adopted shall
be effective as of July 1, 1972.
WILLIAM V. HOYT,
Director, Office of
Foreign Direct Investments.
June 26, 1972.
IFR Doc.72-9897 Filed 6-30-72;8:45 am]
Title 38--PENSIONS, BONUSES,
AND VETERANS' RELIEF
Chapter I--Veterans Administration
PART 9?SERVICEMEN'S GROUP LIFE
INSURANCE
Improper Practice
On page 10086 of the FEDERAL REGISTER
of May 19, 1972, there was published a
notice of proposed rule making to issue
a regulation concerning improper prac-
tice under Servicemen's Group Life In-
surance. Interested persons were given
30 days in which to submit comments,
suggestions, or objections regarding the
proposed regulations.
No written objections have been re-
ceived and the proposed regulation is
hereby. adopted without change and is
set forth below.
Effective date. This VA regulation is
effective the date of approval.
Approved; June 26, 1972.
By direction of the Administrator.
[SEAL] FRED B. RHODES,
Deputy Administrator.
Amend ? 9.28 by adding subdivision
(vi) to paragraph (d) (3) to read as
follows:
? 9.28 Criteria for reinsurers and con-
verters.
(d) e *
(3) * *
(vi) The use of written or oral refer-
ences to Servicemen's Group Life Insur-
ance or conversions of Servicemen's
Group Life Insurance in connection with
the attempted sale of an insurance pol-
icy which would not be, in fact, a con-
version policy or a policy issued in lieu
of a conversion, if those references might
lead a person addressed to believe there
Is a connection between the policy being
sold and coverage under Servicemen's
Group Life Insurance or a conversion
of it.
FR Doc.72-10053 Filed 6-30-72; 8:48 am]
Title 40--PROTECTION OF
ENVIRONMENT
Chapter I---Environmental Protection
Agency
SUBCHAPTER E.?PESTICIDES PROGRAMS
PART 180?TOLERANCES AND EX-
EMPTIONS FROM TOLERANCES
FOR PESTICIDE CHEMICALS IN OR
ON RAW AGRICULTURAL COM-
MODITIES
Methomyl
A petition (PP 1P1021) was filed by
E. I. du Pont de Nemours lk Co., Inc.,
Wilmington, Del. 19898, in accordance
with provisions of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 346a),
proposing establishment of tolerances
for residues of the insecticide methonayl
(S-methyl N - 1 (methylearbamoyl)
thioacetinaidate) in or on the raw agri-
cultural commodities vines (forage) of
beans, peas, and soybeans at 10 parts per
million; lettuce, endive (escarole),
Chinese cabbage, and salsify tops at 5
parts per million; and beans, peas, and
soybeans (each in succulent and dry
form) at 2 parts per million.
Subsequently, the petitioner amended
the petition by (a) reducing the pro-
posed tolerance on soybeans from 2 parts
per million to 0.2 part per million; (b)
withdrawing the commodities Chinese
cabbage, peas (with pods), pea vines,
and salsify tops; and (c) changing the
commodities beans and soybeans (each
130)1
in succulent and dry form) to beans
(succulent) and soybeans.
The Fish and Wildlife Service of the
Department of the Interior stated that it
has no objections to the tolerances.
Based on consideration given data
submitted in the petition and other rel-
evant material, it is concluded that:
1. The pesticide is useful for the pur-
pose for which the tolerances are being
established.
2. The proposed usages are not rea-
sonably expected to result in residues of
the insecticide in eggs, meat, milk, or
poultry. The usages are classified in the
category specified in ? 180.6(a) (3) .
3. The tolerances established by this
order will protect the public health.
Therefore, pursuant to provisions of
the Federal Food, Drug, and Cosmetic
Act (sec. 408(d) (2), 68 Stat. 512; 21
U.S.C. 346a(d) (2) ), the authority trans-
ferred to the Administrator of the En-
vironmental Protection Agency (36 P.R.
15623), and the authority delegated by
the Administrator to the Deputy Assist-
ant Administrator for Pesticides Pro-
grams (36 FR. 9038), ? 180.253 is
amended by revising the paragraphs '10
parts per million * * *", "5 parts per
million * * *", and "0.2 part per mil-
lion * * *" and by inserting the new
paragraph "2 parts per million * * 5"
after the paragraph "5 parts per mil-
lion * *" as follows:
? 180.253 Methomyl ; tolerances for
residues.
10 parts per million in or on alfalfa,
bean forage, corn fodder and forage,
and soybean forage.
5 parts per million in or on cabbage,
endive (escarole), and lettuce.
2 parts per million in or on beans
(succulent).
0.2 part per million (negligible roil-
due) in or on the commodity groups
fruiting vegetables, leafy vegetables (ex-
cept cabbage, endive (escarole), SL ed
lettuce), root crop vegetables, and scy-
beans.
Any person who will be adversely af-
fected by the foregoing order may at any
time within 30 days after its date of
publication in the FEDERAL REGISTER file
with the Hearing Clerk, Environmeneal
Protection Agency, Room 3125, South
Agriculture Building, 12th Street and
Independence Avenue SW., Washington,
DC 20460, written objections thereto in
quintuplicate. Objections shall show
wherein the person filing will be adversely
affected by the order and specify with
particularity the provisions of the order
deemed objectionable and the grounds
for the objections. If a hearing is re-
quested, the objections must state the
Issues for the hearing. A hearing will be
granted if the objections are supported
by grounds legally sufficient to justify
the relief sought. Objections may be ac-
companied by a memorandum or brief
in support thereof.
Effective date. This order shall
be-
come effective on its date of publication
in the FEDERAL REGISTER (7-1-72).
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13090 RULES AND REGULATIONS
to this section shall be excluded in calcu-
lating the amount of the net transfer of
capital made by the direct investor to
such affiliated foreign nationals in such
scheduled area during the year 1973.
5. Section 1000.324(d) is amended to
read as follows:
? 1000.324 Long-term foreign borrow-
ing.
* *
(d) "Available proceeds" means pro-
ceeds of long-term foreign borrowing (as
defined in paragraph (c) of this section)
less (1) amounts allocated to positive
direct investment and deducted under
? 1000.306(e), and (2) amounts expended
prior to July 1, 1972 in transfers of cap-
ital to affiliated foreign nationals other
than Canadian affiliates as defined in
? 1000.1101(a) and deducted under
? 1000.313(d) (1).
6. Section 1000.505(c) is amended to
read as follows:
? 1000.505 Transfers between affiliated
foreign nationals.
(c) For purposes hereof, the immedi-
ate parent of a partnership referred to
in ? 1000.304(a) (1) is the direct investor
or affiliated foreign national which is the
partner, the immediate parent of a busi-
ness venture referred to in ? 1000.304
(a) (2) is the direct investor, and the im-
mediate parent of a business venture re-
ferred to in ? 1000.304(a) (3) is the cor-
poration or partnership on whose behalf
the business venture is conducted.
7. Section 1000.1403(b) is amended to
read as follows:
? 1000.1403 Transfers of overseas pro-
ceeds; foreign balances.
(b) Foreign balances. (1) Foreign bal-
ances, as defined in ? 1000.203(a) (1),
held in liquid form by an overseas
finance subsidiary, other than (i) avail-
able overseas proceeds and (ii) funds
contributed to an overseas finance sub-
sidiary as original or additional equity
capital, shall be included in the compu-
tation of liquid foreign balances held
by the direct investor for purposes of
? 1000.203 (c) .
(2) [Revoked]
3. Section 1000.1404(a) (2) is amended
to read as follows:
? 1000.1404 Repayment of overseas bor-
rowing and proceeds borrowing.
(a) * * *
(2) The amount of any repayment
by the direct investor of overseas borrow-
ing or proceeds borrowing that exceeds
the aggregate amount of reduction of
available proceeds pursuant to subpara-
graph (1) of this paragraph shall con-
stitute a transfer of capital to each
scheduled area in proportion to and to
the extent that the direct investor has
expended or allocated to each such
scheduled area available proceeds of
long-term foreign borrowing and has
made a deduction under ? 1000.203(d)
(2), ? 1000.203(d) (3), ? 1000.306(e), or
?1000.313(d) (1). Overseas proceeds so
expended or allocated shall be reduced in
the amount of transfers of capital to
scheduled areas prescribed by this sub-
paragraph.
9. Section 1000.1405(c) is amended to
read as follows:
? 1000.1105 Authorized repayments.
? *
(c) For the purposes of ? 1000.1002 (b)
and (c), the term "transfer of capital"
shall include a transfer of capital attrib-
utable to a repayment of overseas bor-
rowing pursuant to ? 1000.1404(a).
10. Section 1000.1406 is added:
? 1000.1406 Substitution of borrowing.
(a) To the extent that a foreign bor-
rowing (as defined in ? 1000.324(a) (1) ) is
substituted for a proceeds borrowing, as
defined in ? 1000.1401(e), or for other
borrowing by a direct investor from its
overseas finance subsidiary that would
qualify as a proceeds borrowing under
? 1000.1401(e) if such borrowing and the
underlying borrowing by the overseas fi-
nance subsidiary were continuously out-
standing for at least 12 months, such
foreign borrowing shall, for the purposes
of this part, be treated as a continuance
of such proceeds borrowing or other bor-
rowing by the direct investor from its
overseas finance subsidiary: Provided,
That repayment of such foreign bor-
rowing shall reduce proceeds of long-
term foreign borrowing or involve a
transfer of capital, or both, as prescribed
under ?? 1000.324(c) and 1000.312(a) (7).
(b) To the extent that a proceeds bor-
rowing, as defined in ? 1000.1401(e) , or
other borrowing by a direct investor from
its overseas finance subsidiary that would
qualify as a proceeds borrowing under
? 1000.1401(e) if such borrowing and the
underlying borrowing by the overseas
finance subsidiary were continuously out-
standing for at least 12 months, is substi-
tuted for a foreign borrowing (as defined
in ? 1000.324(a) (1) ), such proceeds bor-
rowing or other borrowing by the direct
investor from its overseas finance sub-
sidiary 'shall, for the purposes of this
part, be treated as a continuance of such
foreign borrowing: Provided, That re-
payment of such borrowing from the
overseas finance subsidiary or underlying
foreign borrowing shall have the effect
prescribed under ? 1000.1404.
(c) A substitution under paragraph
(a) or (b) of this section shall be made
on the books and records maintained by
the direct investor under ?? 1000.203 (b) ,
1000.601, and 1000.1402(b).
11. Section 1000.1407 is added:
? 1000.1407 Assumption of debt obliga-
tion incurred by overseas finance
subsidiary.
(a) To the extent that a direct in-
vestor, pursuant to an election under sec-
tion 4912(c) of the Internal Revenue
Code of 1954, as amended, assumes the
obligation to repay overseas borrowing
incurred by an overseas finance sub-
sidiary, such assumption is foreign bor-
rowing as defined in ? 1000.324(a) (1) and
also shall have the effect prescribed by
subparagraphs (1) through (5) of this
paragraph:
(1) To the extent of available overseas
proceeds of such overseas borrowing held
by the overseas finance subsidiary at the
time of assumption, such assumption
shall constitute a transfer of capital by
the direct investor to the overseas fi-
nance subsidiary.
(2) The amount of such assumption
that exceeds the amount of the transfer
of capital pursuant to subparagraph (1)
of this paragraph shall constitute a
transfer of capital by the direct investor
to each scheduled area in proportion to
and to the extent of the amount of over-
seas proceeds of such overseas borrowing
that have been transferred by the over-
seas finance subsidiary to other affiliated
foreign nationals in such scheduled area
pursuant to ? 1000.1403(a) (2) and are
held by such affiliated foreign nationals
at the time of assumption.
(3) The amount of such assumption
that exceeds the aggregate amount of
transfers of capital pursuant to subpara-
graphs (1) and (2) of this paragraph
shall constitute foreign borrowing sub-
stituted for proceeds borrowing pursuant
to ? 1000.1406(a) to the extent that over-
seas proceeds of such overseas borrowing
have been transferred by the overseas
finance subsidiary to the direct investor
in a proceeds borrowing, as defined in
? 1000.1401(e) , that is outstanding at the
time of assumption.
(4) The amount of such assumption
that exceeds the aggregate amount of
transfers of capital pursuant to subpara-
graphs (1) and (2) and substituted for-
eign borrowing pursuant to subpara-
graph (3) of this paragraph shall con-
stitute foreign borrowing made by the
direct investor on the date of the
assumption.
(5) Overseas proceeds of such over-
seas borrowing shall be reduced by the
amount of such assumption or the
amount of such proceeds, whichever is
less.
(b) To the extent that a direct in-
vestor, pursuant to an election under sec-
tion 4912(c) of the Internal Revenue
Code of 1954, as amended, assumes the
obligation to repay borrowing incurred
by an overseas finance subsidiary that
would qualify as overseas borrowing if it
were continuously outstanding for at
least 12 months but at the time of such
assumption has not so qualified, such
assumption is foreign borrowing as de-
fined in ? 1000.324(a) (1) and also shall
have the effect prescribed by subpara-
graphs (1) through (4) of this para-
graph:
(1) To the extent that proceeds of
such borrowing by the overseas finance
subsidiary are held by the overseas fi-
nance subsidiary at the time of assump-
tion, such assumption shall constitute a
transfer of capital by the direct investor
to the overseas finance subsidiary.
(2) The amount of such assumption
that exceeds the amount of the transfer
of capital pursuant to subparagraph (1)
of this paragraph shall constitute a
transfer of capital by the direct investor
to each scheduled area in proportion to
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RULES AND REGULATIONS
corporation or partnership if the busi-
ness venture is conducted within a for-
eign country which is not assigned to the
same scheduled area as the country of
organization.
For purposes of determining whether a
business venture conducted on behalf of
a foreign corporation or partnership is
a separate affiliated foreign national,
Canada shall be deemed to be in a sched-
uled area other than Schedule B.
(b) (1) A corporation or partnership
referred to in paragraph (a) (1) of this
section is an affiliated foreign national in
the scheduled area in which the foreign
country under whose laws it is organized
is located. A business venture referred to
in paragraph (a) (2) or (3) of this
section is an affiliated foreign national in
the scheduled area in which the business
is conducted: Provided, That, if such a
business venture is conducted in more
than one scheduled area during any year,
the scheduled area in which the business
venture is conducted for the greatest
Period of time during such year shall, for
purposes of this section, be deemed the
only scheduled area in which the business
venture is conducted during such year.
(2) The term "10 percent interest,"
when used with respect to any corpora-
tion, partnership or business venture
referred to in paragraph (a) of this sec-
tion, means (i) 10 percent or more of the.
total combined voting power of all out-
standing securities of such corporation
or (ii) 10 percent or more of the profit
interest in such partnership or business
venture. Whether a person within the
United States directly or indirectly owns
a 10 percent interest in a corporation,
partnership or business venture referred
to in paragraph (a) of this section shall
be determined in accordance with the
provisions of ?? 1000.901 and. 1000.902.
(3) For purposes of this part, the term
"incorporated affiliated foreign national"
includes a corporation described in para-
graph (a) (1) of this section and the
term "unincorporated affiliated foreign
national" includes a partnership de-
scribed in paragraph (a) (1) of this sec-
tion and a business venture described in
paragraph (a) (2) or (3) of this section.
(4) Notwithstanding the provisions of
paragraph (a) of this section and the
foregoing provisions of this paragraph
(b) , the Secretary retains full power, with
respect to any person within the United
States, to determine that any person is
an affiliated foreign national of such per-
son within the United States and to
determine the scheduled area in which
such affiliated foreign national is located.
(c) Notwithstanding the provisions of
paragraphs (a) and (b) of this section, a
corporation, partnership or business ven-
ture referied to in paragraph (a) of this
section shall not be considered an affili-
ated foreign national of a person within
the United States if the operations of
such corporation, partnership or busi-
ness venture consist solely of charitable,
educational, religious, scientific, literary
or other similar activities not engaged
In for profit.
(d) Notwithstanding the provisions of
paragraphs (a) and (b) of this section, a
business venture referred to in paragraph
(a) (2) or (3) of this section shall not be
considered an affiliated foreign national
of a person within the United States dur-
ing any year if (1) the business venture
does not have or involve, at any time dur-
ing such year, gross assets of more than
$50,000 (valued at the greatest of cost,
book value, replacement value or market
value) ; or (2) the business venture is
commenced during such year and is not
reasonably expected to be conducted
within one or more foreign countries for
more than 12 consecutive months; or (3)
the business venture is terminated during
such year and was not in fact conducted
within one or more foreign countries for
more than 12 consecutive months.
:3. Section 1000.306(e) is amended to
read as follows:,
? 7[000.305 Positive anti negative direct
investment.
(e) (1) There shall be deducted from
positive direct investment in a scheduled
area during any year, as calculated
under paragraph (a) of this section, an
amount equal to any available proceeds
(as defined in ? 1000.324(d) ) allecated
by the direct investor to such positive
direct investment for such year. Avail-
able proceeds shall be allocated to such
positive direct investment for such year
If (i) an entry is made in the books and
records maintained by the direct investor
under H 1000.203(b) and 1000.601; (ii)
the allocation and deduction is reported
on the next annual report of the direct
investor (Form FDI-102F) filed for the
year for which the deduction is made;
and (iii) the proceeds, as of the end of
the year for which the deduction is made
and thereafter, are not held, directly or
indirectly, in the form of foreign bal-
ances or in the form of securities (in-
cluding debt obligations, equity interests
and any other type of investment con-
tract) of foreign nationals or in the form
of any other foreign property: Provided,
That proceeds so allocated may at any
time be expended in making transfers of
capital to affiliated foreign nationals. In
addition, available proceeds of long-term
foreign borrowing 'nada on or before
February 28, 1973 (including available
proceeds so treated under ? 1000.1403
(a) (1) as the result of proceeds borrow-
ing made on or before February 28, 1973)
shall be allocated to such positive direct
Investment for the year 1972 if book-
keeping entries and a report on Form
FBI-102F for 1972 are made with respect
to such allocation, as required under this
section, and such proceeds, as of Febru-
ary 28, 1973, are not held, directly or
Indirectly, in the foam of foreign bal-
ances or in the form of securities of
foreign nationals or in the form of any
other foreign property: Provided, That
proceeds so allocated may at any time
be expended in making transfers of capi-
tal to affiliated foreign nationals.
(2) [Revoked]
s s
4. Section 1000.313 (d) and (0) are
amended to read as follows:
1:3089
? 1000.313 Net transfer of capital.
(d) In calculating the amount of the
net transfer of capital made by a direct
investor to a scheduled area during any
period (including the years 1965 and
1966) pursuant to paragraph (c) of this
section:
(1) [Revoked] '
(2) There shall be included all trans-
fers of funds or other property as a re-
sult of which the direct investor became
a direct investor in any affiliated foreign
national and all transfers of funds or
other property to or on behalf of or for.
the benefit of such affiliated foreign na-
tional made by or on behalf of or for the.
benefit of such direct investor within 12
months (whether or not during the pe-
riod for which the calculation is being.
made) prior to the date of the transfer
by which it became a direct investor in
such affiliated foreign national, te the
same extent as if the direct investor had
been a direct investor in such affiliated
foreign national during such 12-month
period.
(e) (1) In calculating the a.mourit of
the net transfer of capital made t17 a
direct investor to all affiliated foreign
nationals in any scheduled area during
the year 1972, the direct investor may
Include transfers of capital by incorpo-
rated affiliated foreign nationals and
decreases in net assets of unincorporated
affiliated foreign nationals in such sched-
uled area that are recognized upon re-
payments of debt obligations outstand-
ing as of December 31, 1972, by such
affiliated foreign nationals to the direct
investor during January 1973 or, as al-
ternatively elected by the direct investor,:
during January and February 1973: Pro-.
vided, That the direct investor has trade.
a worldwide negative net transfer of.
capital during the period elected under
this section: And provided further, That.
the aggregate amount of such transfera
of capital and decreases in net assets in-
cluded in calculating the amounts of the
net transfers of capital made by the di-
rect investor during the year 1972 does
not exceed the amount of such worldwide
negative net transfer of capital.
(2) The worldwide net transfer of capi-
tal by a direct investor during the period
elected by the direct investor under this
section means the algebraic sum of the
net transfers of capital by the direct In-
vestor to all incorporated and unincorpo-
rated affiliated foreign nationals hi all
scheduled areas during such period.
(3) Any transfer of capital or decrease.
in net assets that is included in calcu-
lating the amount of a net transfea of;
capital made by a direct investor to all,
affiliated foreign nationals in any sched-
uled area during the year 1972 pursuant!
1A11 references to ? 1000.313(d) (1) refer
to that section prior to its revocation a na-
tive July 1, 1972. Former ? 1000.313(cl (1)
read as follows:
"(1) There shall be deducted an amount
equal to the proceeds of long-term fontgn
borrowing actually expended in making
transfers of capital to affiliated foreign na-
tionals in such scheduled area during Fitch
period."
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borrowing will reduce proceeds as pro-
vided under section 324(c) or involve a
transfer of capital under section 312
(a) (7) . Similarly, a proceeds borrowing
that is substituted for foreign borrowing
may qualify the foreign borrowing as a
long-term foreign borrowing under sec-
tion 324(a) (2), but the repayment of the
proceeds borrowing will have the effect
provided under section 1404.
9. Assumption by a DI of borrowing by
its OFS. Under new section 1407, a DI
making an election under IRC section
4912(c) may assume an obligation of its
OFS to repay overseas borrowing or bor-
rowing that would qualify as overseas
borrowing if it were continuously out-
standing for at least 12 months. The
effect of an assumption of overseas bor-
rowing will be determined by serial ap-
plication of the following rules:
(1) To the extent of available overseas
proceeds held by the OFS at the time of
the assumption, the DI will be charged
with a transfer of capital to the OFS.
At the same time, however, the assump-
tion will constitute a foreign borrowing
by the DI in an amount equal to the DI's
transfer of capital to the OFS. If such
borrowing qualifies as long-term foreign
borrowing under section 324(a) (2),
available proceeds thereof may be de-
ducted from positive direct investment
by allocation under section 306(e) .
(ii) In proportion to and to the extent
of overseas proceeds that have been
transferred by the OFS under section
1403(a) (2) to other AFNs of the DI and
are held by such AFNs at the time of
assumption, the DI will be charged with
transfers of capital to such AFNs. The
assumption will also constitute a foreign
borrowing by the DI in an amount equal
to the total transfers of capital to such
AFNs. If such borrowing qualifies as
long-term foreign borrowing under sec-
tion 324(a) (2), available proceeds there-
of may be deducted from positive direct
investment by allocation under section
306 (e) .
(Ili) To the extent of overseas pro-
ceeds which have been transferred to the
DI in proceeds borrowing under section
1403(a) (1) that is outstanding at the
time of assumption, the DI will not be
charged with a transfer of capital. The
assumption will constitute a foreign bor-
rowing by the DI that has been substi-
tuted for proceeds borrowing under sec-
tion 1406. The foreign borrowing involved
in the assumption will be treated as rl
continuance of the borrowing by the DI
from its OFS that is repaid (without
effect under the regulations) in connec-
tion with the assumption.
(iv) Any additional amount of as-
sinned obligation that is not covered
Under paragraphs (i) through (iii) will
constitute foreign borrowing by the DI,
but not a transfer of capital. Such
amount should correspond to the dif-
ference between the aggregate principal
amount of the obligation that was as-
sumed and the amount of funds or other
property received by the OFS after the
Initial offering expenses were deducted.
Finally, an assumption will reduce
overseas proceeds of the overseas bor-
rowing which the DI has obligated itself
to repay by the amount of the assumed
obligation or the amount of such over-
seas proceeds, whichever is less.
The above rules, appropriately ad-
justed, apply also to assumption of bor-
rowing that would qualify as overseas
borrowing if outstanding for at least 12
months.
Any assumption of an OFS's debt obli-
gation under section 1407 must be re-
corded by the DI in the books and records
required to be maintained under sec-
tions 203(b) and 1402(b). The DI should
identify the specific borrowing it has be-
come obligated to repay and reflect its
application of the rules of sections 1406
and 1407 to the assumption.
No provision has been added to the
regulations relating to a DI's assumption
of debt obligations of an international
finance subsidiary (IFS), as defined in
section 323(a). A DI and its IFS are
considered a single person under section
323(b). Any assumption of an IFS's ob-
ligation, if made pursuant to an election
under IRC section 4912(c), would not
bring about any change in a DI's foreign
borrowing under section 324.
10. Effect on 1970 General Bulletin and
Supplement No. 1. The "1970 General
Bulletin" and "Supplement No. 1" thereto
interpret the regulations as in effect for
1971 and will continue to do so for 1972
to the extent not affected by these or
any subsequent amendments. Material in
these documents relating to the holding,
allocation and expenditure of available
proceeds of long-term foreign borrow-
ing, and to OFSs, should be used care-
fully in view of these amendments.
The amended sections are as follows:
1. Section 1000.203 is amended to read
as follows:
? 1000.203 Liquid foreign balances.
(c) Each direct investor is hereby re-
quired to limit the amount of liquid for-
eign balances held at the end of any
month (other than Canadian foreign
balances, as defined in ? 1000.1105(a) ) to
the sum of (1) the amount of available
proceeds (as defined in ? 1000.324(d) ) of
such direct investor at the end of such
month, plus (2) the greater of (i) the
average end-of-month amount of such
balances (other than available proceeds
In the form of such balances, and
Canadian foreign balances) held by such
direct investor during 1965 and 1966
(whether or not a direct investor at that
time) or (ii) $100,000.
(d) (1) [Revoked]
(2) A direct investor which, during
1968 or any succeeding year, expended
proceeds of long-term foreign borrowing
and made a deduction from net transfer
of capital to a scheduled area under
? 1000.313(d) (1) may thereafter deduct,
during 1969 or any succeeding year, from
positive direct investment in a different
scheduled area, an amount equal to all
or a part of such expended proceeds as
are allocated pursuant to this subpara-
graph. Proceeds shall be allocated in a
different scheduled area pursuant to this
subparagraph if (1) an entry is made in
the books and records maintained by the
direct investor under paragraph (b) of
this section and ? 1000.601; (ii) the al-
location and the deduction from positive
direct investment in a different scheduled
area are reported on the next annual re-
port of the direct investor (Form FDI-
102F) flied for the year for which the
deduction is made; and (iii) the proceeds
with respect to which such deduction is
made, as of the end of the year for which
the deduction is made and thereafter, are
not held, directly or indirectly, in the
form of foreign balances or in the form
of securities (including debt obligations,
equity interests and any other type of
investment contract) of foreign nationals
or in the form of any other foreign prop-
erty: Provided, That such proceeds may
remain expended in an affiliated foreign
national or again be expended at any
time in making transfers of capital to
affiliated foreign nationals. The direct in-
vestor shall be deemed at the time of such
deduction from positive direct invest-
ment in a different scheduled area to
have made a transfer of capital equal
to the amount of such deduction to the
scheduled area in which the deduction
from net transfer of capital under
? 1000.313(d) (1) was previously made.
The direct investor may thereafter con-
tinue to change the scheduled area in
which a deduction from positive direct
investment is made, up to the amount of
proceeds of long-term foreign borrowing
expended in making the original transfer
of capital for which a deduction under
? 1000.313(d) (1) was made: Provided,
That each time such change occurs, the
direct investor shall be deemed to have
made a transfer of capital to the im-
mediately previous scheduled area in the
amount of the deduction from positive
direct investment in the subsequent
scheduled area.
2. Section 1000.304 is amended to read
as follows:
? 1000.304 Affiliated foreign national.
(a) Except as provided in paragraphs
(b) (4), (c), and (d) of this section, the
term "affiliated foreign national" of a
person within the United States includes
each of the following in which such per-
son owns, directly or indirectly, a 10-
percent interest:
(1) A corporation or partnership or-
ganized under the laws of a foreign coun-
try (including all business ventures con-
ducted by employees or partners of such
corporation or partnership on behalf of
such corporation or partnership within
any foreign countries assigned to the
same scheduled area as the country of
organization) ;
(2) A business venture conducted
within a foreign country on behalf of
such person within the United States by
such person or by employees or partners
of such person; and
(3) A business venture conducted on
behalf of a corporation or partnership
organized under the laws of a foreign
country by employees or partners of such
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RULES AND REGULATIONS
In the AFNto which the transfer of capi-
tal was made by the DI. Except for pro-
ceeds that are expended in making a
transfer of capital, however, the prohibi-
tion against holding allocated proceeds
in any form of foreign property remains
in effect.
DIs are cautioned that deductions un-
der section 313(d) (1) must be made for
all transfers of capital made with avail-
able proceeds prior to July 1, 1972. Avail-
able proceeds that were so expended
prior to such date may not be allocated to
positive direct investment under amended
section 306(e) (1) . Also, the repayment of
long-term foreign borrowing at any time
will continue to involve a transfer of
capital under section 312(a) (7) or sec-
tion 1404(a) (2) to the extent that a de-
duction for expenditure of available
proceeds of such borrowing was made
Under section 313(d) (1) . Amended sec-
tion 203(d) (2) provides for allocation
where a deduction for expenditure of
available proceeds previously was made
Under section 313(d) (1) . Amended sec-
tion 324(d) reduces available proceeds
Where such proceeds were expended
prior to July 1, 1972. Amended section
1404(a) (2) provides for the recognition
of a transfer of capital upon repayment
of an overseas borrowing where a deduc-
tion for expenditure of available proceeds
previously was made under section
313(d) (1).
5. AtIocation to 1972 positive direct in-
vestment. The amendment to section
306(e) (1) permits a DI to deduct from
positive direct investment made during
1972 an amount equal to any available
proceeds of long-term foreign borrowing
(or proceeds borrowing from the DI's
overseas finance subsidiary) made on or
before February 28, 1973, that are allo-
cated to such positive direct investment,
provided (1) the DI makes the appro-
priate bookkeeping entries for allocation,
(2) the allocation and deduction are re-
ported on the DI's Form. FDI-102F for
1972, and (3) the proceeds, as of Febru-
ary 28, 1973, are not held, directly or in-
directly, in any form of foreign property.
However, such proceeds may be ex-
pended by the DI in making a transfer
of capital to an "AFN at any time on or
after July 1, 1972.
Thus, a DI may reduce positive direct
investment made during 1972 by allo-
cating available proceeds of any long-
term foreign borrowing that is outstand-
ing on February 28, 1973. Such borrow-
ing may be made during January or
February 1973, or may have been made
by the DI during 1972 or a prior year.
The 12-month maturity test for long-
term foreign borrowing will, of course,
apply to any borrowing of which avail-
able proceeds are allocated, i.e., the bor-
rowing, as refinanced, must be continu-
ously outstanding for at least 12 months.
It should be noted by DI's that they
may allocate to positive direct invest-
ment made during 1972 any proceeds
that are available for allocation on De-
cember 31, 1972, notwithstanding the re-
payment of the underlying long-term
foreign borrowing during January or
February 1973. Such repayment will in-
volve a transfer of capital during 1973.
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6. Repayment of debt by AFN to DI:
prior-year treatment. The amendment to
secion 313(e) permits a DI, in calculating
a net transfer of capital made during
1972, to treat as repaid during 1972 any
debt obligation or other credit of an AFN
that was outstanding on December 31,
1972, and is in fact repaid by the AFN to
the DI during January or February 1973.
The aggregate amount of repayments re-
ceiving this prior-year treatment may not
exceed the worldwide negative net trans-
fer of capital to all non-Canadian AFNs
that is made by the DI during such 2-
month period. If the DI makes a positive
net transfer of capital to all non-Ca-
nadian AFNs during such period, prior-
year treatment of repayments is not
available.
Alternatively, a DI may treat as re-
paid during 1972 any debt obligation or
other credit of an AFN that was out-
standing on December 31, 1972, and is
in fact repaid by the AM to the DI on
or before January 31, 1973. If the DI
elects this 1-month period, the aggregate
amount of repayments receiving prior-
Year treatment may not exceed the
worldwide negative net transfer of capi-
tal to all non-Canadian AFNs that is
made by the DI during January 1973.
Prior-year treatment is not available un-
der this alternative if the DI makes a
positive net transfer of capital to all
non-Canadian AFNs during January.
In calculating the net transfer of capi-
tal to determine whether prior-year
treatment of repayments is available, the
aggregate of all transfers of capital made
during the relevant 1- or 2-month period
by all non-Canadian incorporated AFNs
to the DI is subtracted from the aggre-
gate of all transfers of capital made
during such period by the DI to its non-
Canadian incorporated AFNs, and the
result is added to the net transfer of
capital made by the DI to all of its non-
Canadian unincorporated AFNs during
such period. This calculation is made on
a worldwide basis by all Dls, without re-
gard to the election of worldwide or
schedular allowables for 1972. Transfers
of capital resulting from the repayment
of long-term foreign borrowing during
the 1- or 2-month period must be in-
cluded. A DI shall exclude from this cal-
culation any transfers of capital that are
deemed to occur as the result of condi-
tions imposed by specific authorization or
compliance settlement.
If a DI makes a, negative net transfer
of capital, calculated as described above,
repayments of qualifying debt obliga-
tions or other credits by AFNs to the DI
during the 1- or 2-month period in 1973
that is elected for such purpose may be
treated as having been made from their
respective scheduled. areas during 1972.
The aggregate amount of repayments se-
lected by the DI to receive such prior-
year treatment may not exceed the
worldwide negative net transfer of capi-
tal. However, such repayments are not
required to be made from a particular
scheduled area in which there is a nega-
tive net transfer of capital.
The effect of prior-year treatment of
repayments is to reduce direct invest-
1O87
ment made by the DI during 1972 for all
purposes, including compliance and the
calculation of amounts specifically au-
thorized. For example, prior-year treat-
ment may reduce the amount 4)f mer-
chandise export credit relief available
under a specific authorization issued for
1972. It should be noted that repayments
during 1973 that are treated as having
occurred during 1972 will be excluded
from the calculation of direct investment
made during 1973, which will increase
correspondingly.
7. Authorized repayment of overseas
borrowing. Amended section 1405(c)
clarifies the inclusion of repayraent of
overseas borrowing within the meaning
of the term. "transfer of capital" as used
in section 1002 (b) and (c).
8. Interchange of borrowing by DI and
OFS. Under section 1406, a DI
may substitute foreign borrow:mg for
borrowing by the DI from its OFS, or vice
versa, and treat the later borrowing as
a continuance of the borrowing for
which it was substituted. The two types
of borrowing that may be interchanged
under section 1406 are (i) foreign bor-
rowing, as defined in section 324(a) (1) ,
and (ii) proceeds borrowing as defined
in section 1401(e), or borrowing by a DI
from its OFS that would qualify as
proceeds borrowing under section 1401
(e) if such borrowing and the underlying
borrowing by the OFS were continuously
outstanding for at least 12 months. All
or a portion of a borrowing of cue type
may be substituted for an equal amount
of the other type of borrowing. A bor-
rowing that is substituted for an earlier
borrowing must be made on or before the
date of repayment of the earlier torrOw-
ing. The DI must record a substitution
on the books and records required under
sections 203 (b) , 601 and 1402 (b) .
The original and substitute borrowings
are tacked together for the purpose of
determining the period during which the
original borrowing is treated as having
been outstanding. Substitution .may be
used to qualify a foreign borrowing as
long-term foreign borrowing under sec-
tion 324(a) (2), or to qualify a borrowing
by a DI from its OFS as proceeds bor-
rowing under section 1401(e) . The bor-
rowing for which another borrowing has
been substituted may be repaid to the
extent of the substitution witholt any
reduction of available proceeds or charge
for a transfer of capital. A borrowing by
an OFS underlying a borrowing by the
DI from the OFS may likewise be repaid
without any reduction of available pro-
ceeds or charge for a transfer of capital,
to the extent that foreign borrowing is
substituted for the borrowing by .[;:he DI
from the OFS.
Although a substitute borrowing is
treated as a continuance of the earlier
borrowing, the repayment of the substi-
tute borrowing will have the effect pro-
vided under the regulations for ::?epay-
ment of the substitute type of borrDwin.g.
Thus, foreign borrowing that is substi-
tuted for borrowing by the DI from its
OFS may qualify the earlier bon owing
as proceeds borrowing under section
1401(e), but the repayment of the foreign
FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY 1, 1972
13086 R?`I
Approved or eleanuni1/ACInia&NR6-00244R000100190026-8
Title 15?COMMERCE AND
FOREIGN TRADE
Chapter X?Office of Foreign Direct
Investments, Department of Com-
merce
PART 1000?FOREIGN DIRECT
INVESTMENT REGULATIONS
Miscellaneous Amendments
EOITORTAL Nan : The Foreign Direct Invest-
ment Regulations appear in Title 15, Chap-
ter X, Part 1000 of the Code of Federal Regu-
lations (CFR). All sections of the Foreign
Direct Investment Regulations contained in
CFR are preceded by the designation "1000"
(e.g. t 1000.312). The "1000" prefix has, for
convenience, been eliminated from the sec-
tion references contained in the explanatory
material below. The abbreviations "DI" and
"APR" are used to refer to "direct investor"
and "affiliated foreign national."
On May 20, 1972, a notice of proposed
rule making was published in the FEDERAL
REGISTER (37 P.R. 10380) with respect to
certain amendments to the Foreign Di-
rect Investment Regulations (the "regu-
lations") proposed by the Office of For-
eign Direct Investments (the "Office") .
After consideration of all comments
and suggestions presented by interested
persons with respect to the proposed
amendments, such amendments, with
certain modifications and conforming
amendments which do not involve any
material substantive changes, are hereby
adopted, effective July 1, 1972, as set
forth below. These amendments relieve
restrictions or are editorial in nature.
The amendments (i) permit substitu-
tion of foreign borrowing by a DI for
borrowing by the DI from its overseas
finance subsidiary (OFS), and vice versa,
(ii) provide for the assumption by a DI
of obligations incurred by its OFS,
provide greater flexibility for holding and
allocation of available proceeds of long-
term foreign borrowing, and (iv) extend
the period for DIs to engage in transac-
tions in order to comply with the regula-
tions during 1972. In addition, corrections
and other editorial changes are made.
The amendments are described below.
Prior to allocating available proceeds
of long-term foreign borrowing under
section 306(e), many DIs have used
such proceeds for domestic purposes.
'Thereafter, proceeds that were not
specifically distinguishable could not be
held in the form of liquid foreign bal-
ances under the section 203(c) exemp-
tion for available proceeds, although the
amount of such proceeds remained
available for allocation. Under the
amendment to section 203(c), the exemp-
tion for available proceeds corresponds
to the amount that is available for
allocation.
Many DIs have expended available
proceeds of long-term foreign borrowing
In making transfers of capital, although
their allowables were sufficient to au-
thorize positive direct investment with-
out the deduction for expenditure of
available proceeds that has been required
under section 313(d) (1). In cases where
the DI elected the historical or earn-
ings allowables under section 504, the
unneeded deduction for the expendi-
ture of available proceeds was remedied
by the carryforward allowable which it
generated. A DI which elected the min-
imum allowable under section 503 or
section 507, however, has been unable to
carry forward unused allowable. The
revocation of section 313(d) (1) removes
this barrier to the free use of funds for
transfers of capital that are within a
DIs allowables. Proceeds of long-term
foreign borrowing that are expended in
making transfers of capital on or after
July 1, 1972 remain available for alloca-
tion under section 306(e) when required
for compliance. Correspondingly, an
amendment to section 306(e) permits
expenditure of available proceeds in
making transfers of capital to AFNs,
without deduction, at any time before or
after the allocation of such proceeds.
The revocation for 1971 of the prohibi-
tion against a positive net transfer of
capital under section 203(d) (1) is to be
made permanent. The 2-month alloca-
tion and negative transfer of capital pro-
visions that applied only to the 1971
compliance year are retained in sub-
stantially the same form for the 1972
compliance year in sections 306(e) (1)
and 313(e) , respectively. Under the
amendment to section 306(e) (1), a DI
is permitted to deduct from positive
direct investment made during 1972 an
amount equal to available proceeds of
long-term foreign borrowing (or proceeds
borrowing from its OFS) made on or
before February 28, 1973. Under the
amendment to section 313(e), a DI is
permitted to treat as repaid during 1972
any debt obligations or other credits of
AFNs that are outstanding on Decem-
ber 31, 1972, and are in fact repaid by
the AFNs to the DI during the month of
January 1973 or, as alternatively elected
by the DI, during January and February
1973. The aggregate amount of repay-
ments receiving this prior-year treat-
ment may not exceed the worldwide
negative net transfer of capital to all
non-Canadian AFNs that is made by
the DI during the period elected.
Under section 3(a) of the Interest
Equalization Tax Extension Act of 1971
(the "Act"), a U.S. person may assume
certain debt obligations incurred by a
finance subsidiary and elect under sec-
tion 4912(c) of the Internal Revenue
Code of 1954, as amended (IRC), to have
such obligations treated as obligations of
a foreign obligor. The acquisition by U.S.
persons of such obligations is subject to
the Interest Equalization Tax. The elec-
tion is also available with respect to
certain debt obligations issued by U.S.
corporations and partnerships. Under
this procedure, interest payments to non-
resident aliens and foreign corporations
are not subject to withholding of U.S.
income tax at source. It is recognized
that a substantial U.S. balance of pay-
ments benefit will be realized upon return
of OFS equity capital to the United
States following assumption by U.S. per-
sons of indebtedness incurred by the
OFSs. In order to further this objective,
various legislative proposals are at pres-
ent under consideration to supplement
the provisions of the Act. H.R. 9040 would
accommodate U.S. estate tax provisions
to the section 4912(c) election procedure.
The present amendments to the regu-
lations facilitate the assumption by a
DI of obligations incurred by its OFS
(section 1407) and permit the inter-
change of DI and OFS borrowing (section
1406).
Additional changes in the regulations
(i) correct the numbering of paragraphs
and citations contained in sections 304
and 505(c), (ii) reflect the revocation of
sections 203(d) (1) and 313(d) (1), and
(iii) clarify the meaning of section
1405 (c ) .
The amendments are described in
greater detail as follows:
1. Liquid foreign balance exemption
for available proceeds. Amended section
203(c) provides that a DI must limit the
amount of non-Canadian liquid foreign
balances held at the end of any month
to an amount determined by adding to-
gether (1) the amount of the DI's avail-
able proceeds of long-term foreign bor-
rowing, calculated at the end of such
month under section 324, plus (2) a
minimum amount of $100,000 or, if
greater, the average end-of-month
amount of non-Canadian liquid foreign
balances (excluding available proceeds)
that were held by the direct investor
during 1965 and 1966.
Under amended section 203(c) the
average amount of historical liquid for-
eign balances of the DI is calculated in
the same manner as the calculation un-
der the former section 203(c), i.e., both
Canadian foreign balances and available
proceeds are excluded from the calcula-
tion of the historical amount. Conse-
quently, DIs will not be required to re-
calculate this amount as reported on
Forms FDI-102 previously filed with the
Office.
2. Revocation of prohibition against
positive net transfer of capital. Section
203(d) (1) has prohibited a DI electing
historical or earnings allowables from
making a positive net transfer of capital
during a year at the end of which the DI
holds available proceeds in the form of
foreign property. This section, which was
revoked for compliance year 1971, is now
permanently revoked. Amended section
1403(b) reflects the revocation of sec-
tion 203(d) (1)
3. Definition of affiliated foreign na-
tional. Sections 304 and 505(c) are
amended to correct numbering and cita-
tion errors within the sections.
4. Allocation and expenditure of avail-
able proceeds. Section 313(d) (1) is re-
voked, thereby removing from the regu-
lations the mandatory deduction for
expenditure of available proceeds of
long-term foreign borrowing. Instead,
available proceeds that are expended by
a DI in making a transfer of capital on
or after July 1, 1972 remain available for
allocation and may be allocated as re-
quired by the DI to achieve compliance
with the regulations. A corresponding
amendment to section 306(e) permits
proceeds that are so expended and sub-
sequently allocated to remain expended
FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY 1, 1972
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oll
Approved For- Release 2001/08/09 : C1A-RDP86-00244R0001400190026-8
RULES AND REGULATIONS
requires replacement or incorporation of
Modification 1455 on first stage (low
pressure) impellers that are not so
modified before the accumulation of
11,000 flights on an impeller and the re-
placement of impellers incorporating
Modification 1455 before the accumula-
tion of 11,000 flights after the incorpo-
ration of that modification.
Since it was found that immediate cor-
rective action was required, notice and
Mtblic procedure thereon was imprac-
ticable and contrary to the public interest
and good cause existed for making the
May 31, 1972, airworthiness directives
effective immediately as to all known U.S.
operators of aircraft equipped with Rolls
Royce Dart Model 542-4, -4K, -10, -10J,
and --10K engines by telegram dated
May 31, 1972. These conditions still exist
and their airworthiness directive adopted
May 31, 1972, is hereby published in the
FEDERAL REGISTER as an amendment to
? 39.13 of Part 39 of the Federal Aviation
Regulations to make it effective as to all
persons.
Rotas RoYCE, Applies to series Dart Model
542-4, -41C, -10, -103, and -10K engines.
These engines are installed on but not
necessarily limited to those Convair
Model 840/440 airplanes (commonly
known as Convair 600 and 640) which
have the subject engines installed as a
result of modification and NAMC Y5-11
airplanes.
Compliance is required as indicated.
To prevent possible fatigue failure of first
stage (low pressure) impellers, accomplish
the following:
.(a) For first stage (low pressure) im-
peller that does not incorporate Rolls Royce
Dart Modification 1455, within the next 109
flights after the effective date of this Al) or
before the accumulation of 11,000 flights on
that impeller, whichever occurs later, comply
with subparagraph (c) (1) or (e) (2) and
thereafter comply with paragraph (d) or
(e) as applicable.
(b) For a first stage (low pressure) im-
peller that incorporates Rolls Royce Dart
Modification 1455, within the next 100 flights
after the effective date of this AD or before
the accumulation of 11,000 Sights after the
Incorporation of Rolls Royce Dart Modifica-
tion 1455, whichever occurs later, comply
with subparagraph (c) (1) or .(o)(2) and
comply with paragraph (d) or (e) as
applicable.
(c) Comply with subparagraph (1) or (2)
of this paragraph as prescribed in paragraphs
(a), (b), (d), and (e).
(1) Remove the first stage (low pressure)
impeller from service and replace it with-
(i) A first stage (low pressure) impeller
that does not incorporate Rolls Royce Dart
Modification 1455 and which has accumu-
lated less than 11,000 flights in service; or
(11) A first stage (low pressure) impeller
that incorporates Rolls Royce Dart Modifica-
tion 1455 and which has accumulated less
than 11,000 flights in service since the in-
corporation of that modification.
(2) For an impeller that does not have
Rolls Royce Dart Modification 1455 incor-
porated, incorporate that modification.
(d) For an impeller that has been installed
in compliance with subparagraph (c) (1) (1),
before the accumulation of 11,000 flights on
that taapeller comply with subparagraph (c)
(1) or (c) (2).
(e) For an impeller that has been installed
In compliance with subparagraph (c) (1) (II)
Or modified. in accordance with subparagraph
(c) (2) , before the accumulation of 11,000
flights since the incorporation of Rolls Royce
Dart Modification 1455 on that impeller
comply with subparagraph (0) (1).
(f) For the purpose of complying with
this AD, a flight shall consist of an engine
operating sequence consisting of an engine
start, takeoff operation, landing, and engine
shutdown. The number of flights may be de-
termined by actual count or, subject to ac-
ceptance by the assigned FAA Maintenance
Inspector, may be calculated by dividing the
compressor section's time in service by the
operator's fleet average time per flight for
airplanes equipped with the subject type
engines.
This AD supersedes the telegraphic AD on
the same subject issued on April 13, 1972.
Nora: Rolls Royce Dart Alert Service Bulle-
tin No. DA 72-391 Revision 1, dated May 1,
1972 refers to this matter.
This amendment is effective upon pub-
lication in the FEDERAL REGISTER (7-1-72)
as to all persons except those persons
to whom it was made immediately effec-
tive by the telegram dated May 31, 1972,
which contained. this amendment.
(Secs. 313(a), 601, 603, Federal Aviation Act
of 1958, 49 U.S.C. 1354(a), 1421, 1423; sec.
6(0),, Department of Transportation Act, 49
U.S.C. 1655(c) )
Issued in 'Washington, D.C., on June 21,
1972.
J. A. FERRA:RESE,
Acting Director,
Flight Standards Service.
[ER Doc.72-10027 Filed 6-30-72;8:50 am]
[ Airspace Docket No. 72-NE-6]
PART 71-DESIGNATION OF FEDERAL
AIRWAYS, AREA LOW ROUTES,
CONTROLLED AIRSPACE AND RE-
PORTING POINTS
Alteration of Transition Area
The Federal Aviation Administration
is amending ? 71.181 of Part 71 of the
Federal Aviation Regulations so as to
alter the North Conway, N.H., Transition
Area (37 FR. 2253).
On March 16, 1972, the Federal Avia-
tion Administration published an amend-
ment, on Page 5488 of the FEDERAL REGIS-
TER (37 P.R. 5488) which altered the de-
scription of the Whitefield, N.H., 1,200-
foot Transition Area, Included in this
alteration was a deletion of the refer-
ence to the Whitened RBN and a sub-
stitution in its place of a reference to
the Dalton, N.H.,. REM. Action is taken
herein to make a similar change to the
description of the North Conway, N.H.,
1,200-foot Transition Area so as to make
its description consistent with that of
the Whitened, N.H., 1,200-foot Transi-
tion Area. The alteration to the bound-
ary of the North Conway 1,200-foot
Transition Area resulting from this
change will be minor in nature.
Since the amendment is minor in na-
ture and is one in which members of
the public are not particularly interested,
notice and public procedure thereon are
unnecessary and good cause exists for
making this -amendment effective in less
than thirty (30) days.
In view of the following, the Federal
Aviation Administration, having coni-
13085
pleted review of the airspace require-
ments in the terminal airspace of ?,;:he
aforementioned location, amends Part
71 of the Federal Aviation Regulations
as follows effective upon publication in
the FEDERAL REGISTER (7-1-72) :
1. Amend ? 71.181 of Part 71 of he
Federal Aviation Regulations by deleang
the phrase "Whitefield, N.H., REN
(44?21'58" N., 7133'00" W.)" and in-
serting in lieu thereof the phrase "Dal-
ton, N.H., RBN (44?21'43" N., 71?41'08"
W.)."
(Sec. 307(a), Federal Aviation Act of 1658,
49 U.S.C. 1848(a).; sec. 6(c), Department; of
Transportation Act, 49 U.S.C. 1655(c))
Issued in Burlington, Mass., on June 21,
1972.
FERRIS J. HOWLAND,
Director, New England Region,
LFR Doc.72-10028 Filed 8-30-72;8:45 am:
[Airspace Docket No. 72-GL-31]
PART 71-DESIGNATION OF FEDERAL
AIRWAYS, AREA LOW ROUTES,
CONTROLLED AIRSPACE, AND R
PORTING POINTS
POINTS
Alteration of Transition Area
The purpose of this amendment to
Part 71 of the Federal Aviation Regula-
tions is to alter the Peoria, Ill., transition
area.
The instrument approach procedure to
the Ingersoll Airport, Canton, fli., his
been revised. The revision has changed
the airspace requirement by decreasing
the amount required to protect the pro-
cedure. This airspace is combined with
Peoria, Ill., under the Peoria designation.
This alteration imposes no additional
burden on any person, therefore, notine
and public procedure hereon al)e
unnecessary.
In consideration of the foregoing,
Part 71 of the Federal Aviation Regula-
tions is amended effective 0901 G.M.1:.,
August 17, 1972, as hereinafter set forte.:
In ? 71.181 (37 P.R. 2143), the follow-
ing transition area is amended to read:
PEORIA, ILL.
That airspace extending upward from 710
feet above the surface within a 9-mile radics
of the Greater Peoria Airport (latitude 40?-
39'47" N., longitude 89?41'22" W.); within a,
7 mile radius of the Ingersoll Airport (let:,
tude 40'34'10" N., longitude 90'04'24" W.):
within 9.5 miles south and 4.5 miles north cf
the Peoria VORTAC 279' radial, extending
from the VORTAC to 18.5 miles west of the
VORTAC; within 9.5 miles southwest and 4.5
miles northeast of the Greater Peoria Air-
port ILS localizer northwest course, extend-
ing from 8.5 miles northwest of the airport
to 22 miles northwest of the airport; and
within 6.5 miles northwest and 5 miles
southeast of the Peoria VORTAC 052* radial,
extending from the VORTAC to 12 milo3
northeast of the VORTAC.
(Sec. 307(a), Federal Aviation Act of 195B,
49 U.S.C. 1348(a); sec. 6(c), Department of
Transportation Act, 49 U.S.C. 1655(c))
Issued in Des Plaines, Ill., on June 5,
1972.
LYLE-K. BROWN,
Director, Great Lakes Region.
[FR Doc.72-10029 Filed 6-30-72;8:45 am]
FEDERAL REGISTER, VOL. 37, NO. 128-SATURDAY, JULY 1, 1972
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13084 RULES AND REGULATIONS
handled. Each handler shall pay inter-
est of 1 percent per month on any un-
paid balance beginning 30 days after
date of billing.
Dated: June 27, 1972.
ARTHUR E. BROWNE,
Acting Director, Fruit and Vege-
table Division, Agricultural
Marketing Service.
[FR Doc.72-10075 Filed 6-30-72;8:50 am]
Chapter XIV-Commodity Credit Cor-
poration, Department of Agriculture
SUBCHAPTER B-LOANS, PURCHASES, AND
OTHER OPERATIONS
NCO Grain Price Support Regs., 1972 Crop
Peanut Farm-Stored Loan and Purchase
Supp.]
PART 1421-GRAIN AND SIMILARLY
HANDLED COMMODITIES
Peanut Loan and Purchase Program
On page 2844 of the FEDERAL REGISTER
of February 8, 1972, there was pub-
lished a notice of proposed rule making
relating to a loan and purchase pro-
gram for 1972 crop peanuts.
Interested persons were given 30 days
In which to submit written comments,
suggestions, or objections regarding the
proposed program. None of the written
comments, suggestions or objections re-
ceived pertained to the aspects of the
loan and purchase program covered by
this subpart.
The General Regulations Governing
Price Support for the 1970 and Subse-
quent Crops of Grain and Similarly Han-
dled Commodities (35 F.R. 7363) and any
amendments thereto (hereinafter re-
ferred to as "the general regulations")
and the 1970 and Subsequent Crops
Peanut Farm-Stored Loan and Pur-
chase Supplement (35 F.R. 12706) and
any amendments thereto (hereinafter
referred to as "the continuing supple-
ment"), which contain regulations of
a general nature with respect to loan
and purchase operations, are further
supplemented by revising ?? 1421.291-
1421.294 to read as follows, effective as
to the 1972 crop of peanuts. The mate-
rial previously appearing in these sec-
tions remains in full force and effect as
to the crops to which it was applicable.
Subpart-1972 Crop Farm-Stored
Peanut Loan and Purchase Program
Sec.
1421.291 Purpose.
1421.292 Availability.
1421.293 Maturity of loans.
1421.294 Loan and purchase rates.
AVTHOMAT: The provisions of this sub-
part issued under 82 Stat. 1070, as amended,
15 U.S.C. 714 (b) and (c); 63 Stat. 1051, as
amended, 7 1441, 1421, 1423, 1425.
? 1421.291 Purpose.
This supplement, together with the ap-
plicable provisions of the general regu-
lations and the provisions of the contin-
uing supplement, apply to farm-stored
loans and purchases for the 1972 crop
of peanuts.
? 1421.292 Availability.
(a) Farm-stored loans. Producers must
request a loan on 1972 crop eligible pea-
nuts on or before March 31, 1973.
(b) Purchases. Producers desiring to
offer eligible peanuts not under loan
for purchase must execute and deliver to
the appropriate county ASCS office, on
or before April 30, 1973, a Purchase
Agreement (Form CCC-614) indicating
the approximate quantity of 1972 crop
peanuts he may sell to CCC.
? 1421.293 Maturity of loans.
Unless demand is made earlier, farm-
stored loans on farmers' stock peanuts
will mature on April 30, 1973.
? 1421.294 Loan and purchase rates.
(a) Loan rate. Subject to the dis-
counts specified in paragraph (b) of
this section, the loan rates for farmers'
stock peanuts placed under farm-stored
loan shall be the following rates by
types per ton:
Dollars 1
Type: per ton
Virginia 286
Runner 281
Southeast Spanish 274
Southwest Spanish 270
Valencia (suitable for cleaning and
roasting in southwest) a 286
1 These rates may be increased. The in-
crease, if any, will be made by an amend-
ment to this section issued shortly after
August 1, 1972.
2 The price for all Valencia-type peanuts In
the Southeast and Virginia-Carolina areas
and for those Valencia-type peanuts in the
Southwest area which are not suitable for
cleaning and roasting will be the same as for
Spanish-type peanuts in the same area.
(b) Location adjustments to support
prices. The loan rates specified in para-
graph (a) of this section shall be subject
to the following discounts for farmers'
stock peanuts placed under a f arm-
stored loan in the States specified where
peanuts are not customarily shelled or
crushed:
State:
Arizona
Arkansas
California 33
Louisiana 7
Mississippi 10
Missouri 10
Tennessee 25
Dollars
per ton
25
10
(c) Settlement values. The support
prices, premiums, and discounts for use
in computing the settlement value, under
? 1421.289(b) (2) of the continuing sup-
plement, of peanuts acquired by CCC
under loan or purchase shall be those
specified in ? 1446.44 of the 1972 crop
peanut warehouse storage loan and shel-
ler purchase supplement, including the
location adjustments specified therein
for peanuts delivered to CCC in States
where peanuts are not customarily
shelled or crushed.
Effective date. These regulations shall
be effective upon publication in the FED-
ERAL REGISTER (7-1-72).
KENNETH E. FRICK,
Executive Vice President,
Commodity Credit Corporation.
JUNE 26, 1972.
[FR Doc.72-10114 Filed 6-30-72;8:52 am]
Title 12 BANKS AND
BANKING
Chapter II-Federal Reserve System
PART 225-BANK HOLDING
COMPANIES
CFR Correction
The heading for ? 225.4 appearing on
page 542 of title 12, parts 1 to 299, revised
as of January 1, 1972 is in error. As
corrected, the heading reads as folows:
? 225.4 Nonbanking activities.
Title 14-AERONAUTICS AND
SPACE
Chapter I-Federal Aviation Adminis-
tration, Department of Transportation
[Docket No. 12032; Amdt. 39-1179]
PART 39-AIRWORTHINESS
DIRECTIVES
Rolls Royce Dart Model 542-4, -4K,
-10, -10J, and -10K Engines
Pursuant to the authority delegated
to me by the Administrator (14 CFR
? 11.89) , an airworthiness directive was
adopted April 13, 1972, and made effec-
tive immediately, by telegram, to all
known operators of airplanes equipped
with Rolls Royce Dart Model 542-4, -4K,
-10, -10J, and -10K engines incorpo-
rating Rolls Royce Dart Modification
1455 because of a recent in-flight failure
of a first stage (low pressure) impeller
which resulted in destruction of an en-
gine and other damage to the airplane.
The directive established a service life
of 13,000 flights after the incorporation
of Modification 1455 for first stage (low
pressure) impellers so modified. Based
on further examination of failed and
high time impellers and information ob-
tained from spin testing, the FAA de-
termined that safety required the
service lives of those impellers to be
reduced to 11,000 flights after the in-
corporation of Modification 1455. The
FAA also determined that that service
life also applied to impellers that do not
incorporate Modification 1455. There-
fore, the airworthiness directive adopted
April 13, 1972, was superseded by a tele-
graphic AD adopted May 31, 1972, that
FEDERAL REGISTER, VOL. 37, NO. 128-SATURDAY, JULY 1,t 1972
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RULES AND REGULATIONS
the committee, and information concern-
ing* such provisions and effective time
has been disseminated among handlers
of such lemons; it is necessary, in order
to effectuate the declared policy of the
act, to make this section. effective during
the period herein specified; and compli-
ance with this section will not require
any special preparation on the part of
persons subject hereto which cannot be
completed on or before the effective date
hereof. Such committee meeting was held
on June 27,, 1972.
(b) Order. (1) The quantity of lemons
grown in California and Arizona which
may be handled during the period July 2,
1972, through July 8, 1972, is hereby
fixed at 250,000 cartons.
(2) As used in this section "handled"
and "carton(s)" have the same meaning
as when used In the said amended mar-
keting agreement and order.
(Secs. f-19, 48 Stat. 31, as amended; 7 U.S.C.
601474)
Dated: June 29, 1972.
PAUL A. NICHOLSON,
Deputy Director, Fruit and Veg-
etable Division, Agricultural
' Marketing Service.
[FR Doc.72-10158 Filed 6-30-72;8:54 am]
[Fear Reg. 1]
PART 917-FRESH PEARS, PLUMS,
AND PEACHES GROWN IN CALI-
FORNIA
Limitation of Shipments
Findings. (1) Pursuant to the market-
ing agreement, as amended, and Order
No. 917, as amended (7 CFR Part 917),
regulating the handling of fresh pears,
plums, and peaches grown in California,
effective under the applicable provisions
of the Agricultural Marketing Agree-
ment Act of 1937, as amended (7 U.S.C.
601-674), and upon the basis of the rec-
ommendations of the Pear Commodity
Committee, established under the afore-
said amended marketing agreement and
order, and upon other available infor-
mation, it is hereby found that the limi-
tation of shipments of pears, as herein-
after provided, will tend to effectuate
the declared policy of the act.
(2) This action reflects the Depart-
ment's appraisal of the need for regula-
tio:n, and of the crop and current and
prospective market conditions. Ship-
ments of pears from the production area
are expected to begin on or about July 2,
1972. The grade and size requirements
provided herein are designed to prevent
the handling, on and after July 2, 1972,
of any pears which do not comply with
such requirements, so as to provide con-
sumers with good quality fruit, consis-
tent with the overall quality of the crop,
while improving returns to producers
pursuant to the declared policy of the
act.. The container marking require-
ments, included herein, are necessary to
assure that containers are properly
marked as to variety for inspection iden-
tification.
(3) It is hereby further found that it
Is impracticable, unnecessary, and con-
trary to the public interest to give pre-
liminary notice, engage in public
rule-making procedure, and postpone
the effective date of this regulation until
30 days after publication thereof in the
FEDERAL REGISTER (5 U.S.C. 553) in that,
as hereinafter set forth, the time inter-
vening between the date when informa-
tion upon which this regulation is based
became available and the time when this
regulation must become effective in
order to effectuate the declared policy of
the act is insufficient; a reasonable time
is permitted, under the circumstances,
for preparation for such effective time;
and good cause exists for making the
provisions hereof effective not later than
July 2, 1972. A reasonable determination
as to the supply of, and the demand for,
such pears must await the development
of the crop thereof, and adequate infor-
mation thereon was not available to the
Pear Commodity Committee until June
21, 1972, on which date an open meeting
was held, after giving due notice thereof,
to consider the need for, and the extent
of, regulation of shipments of such
pears. Interested persons were afforded
an opportunity to submit information
and views at this meeting; the recom-
mendation and supporting information
and regulation during the period speci-
fied herein were promptly submitted to
the Department after such meeting was
held; shipments of the current crop of
such pears are expected to begin on or
about the effective date hereof; this
regulation should be applicable to all
such shipments in order to effectuate the
declared. policy of the act; the provisions
of this regulation are identical with the
aforesaid recommendation of the com-
mittee; information concerning such
provisions and effective time has been
disseminated among handlers of such
pears; and compliance with the pro-
visions of this regulation will not require
of handlers any preparation therefor
which cannot be completed by the effec-
tive time hereof.
? 917.428 Pear Regulation 1.
(a) Order. During the period July 2,
1972, through August 2, 1972, no handler
shall ship:
(1) Bartlett, Max-Red (Max-Red
Bartlettt. Red Bartlett), or Rosired
(Rosired Bartlett) varieties of pears
which do not grade at least U.S. Combi-
nation, with not less than 80 percent, by
count, of the pears grading at least U.S.
No. 1;
(2) Any box or container of Bartlett,
Max-Red (Max-Red Bartlett, Red Bart-
lett), or Rosired (Rosired Bartlett)
varieties of pears unless such pears are
of a size not smaller than the size known
commercially as size 165: Provided, That
a handler may ship, during any day from
any shipping point, a quantity of such
pears which are smaller than the size
known commercially as size 165 if (i)
such smaller pears are not smaller than
the size known commercially as size 180,
and. (ii) the quantity of such smaller
pears shipped from such shipping point
13083
does not, at the end of any day during
the aforesaid period, exceed 5.20.3 per-
cent of such handler's total shipments
of such pears, shipped from the same
shipping point, which are not smaller
than the size known commercially as
size 165; or
(3) Any box or container of pears of
any variety unless such box or container
is stamped or otherwise marked, in. plain
sight and in plain letters, on one Outside
end with the name of the variety, if
known, or when the variety is not known,
the words "unknown variety."
(b) Definitions. (1) Terms used in the
amended marketing agreement and
order shall, when used herein, have the
same meaning as is given to the respec-
tive term in said amended marketing
agreement and order.
(2) "Size known commercially as size
165" means a size of pear that will pack
a standard pear box, packed in accord-
ance with the specifications of a saand-
ard pack, with 165 pears and with the 22
smallest pears weighing not less than
5% pounds.
(3) "Size known commercially E6i size
180" means a size of pear that will pack
a standard pear box, packed in accord-
ance with the specifications of a stand-
ard pack, with five tiers, each tier having
six rows with six pears in each row: and
with the 21 smallest pears weighing not
less than 5 pounds.
(4) "Standard pear box" means the
container so designated in section 93599
of the Agricultural Code of California,.
(5) "U.S. No. 1," "U.S. Combinatnn,"
and "standard pack" shall have the same
meaning as when used in the U.S. Stand-
ards for Pears (Summer and Fall), 7
CFR 51.1260-51.1280.
(Secs. 1-19, 48 Stat. 31, as amended; 7 U.S.C.
601-674)
Dated: June 29, 1972.
PAUL A. NICHOLSON,
Deputy Director, Fruit a rd
Vegetable Division, Agricul-
tural Marketing Service.
[FR Doc.72-10159 Filed 6-30-72;8:54 am]
PART 930-CHERRIES GROWN IN
MICHIGAN, NEW YORK, WISCON-
SIN, PENNSYLVANIA, OHIO, VIR-
GINIA, WEST VIRGINIA, AND
MARYLAND
Subpart-Rules and Regulations
ASSESSMENT PROCEDURE; CORRECTION
In the FEDERAL REGISTER Issue Of Jan-
uary 5, 1972, ? 930.107 of Subpart-Roles
and Regulations (37 P.R. 273), ? 930.:t06
was incorrectly referenced as ? 930.:.04
and is hereby corrected to read as
follows:
? 930.107 Assessment procedure.
Upon receipt of pack completion re-
port as required by ? 930.106, each han-
dler shall be assessed an amount per ton
as determined by the board and ap-
proved by the Secretary, on all cherries
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(o) Misrepresenting, directly or by
implication, that there is a limited supply
of mail order catalogs available.
(p) Misrepresenting, directly or by
implication, the amount of savings avail-
able to purchasers of respondents' mer-
chandise.
(q) Failing to maintain adequate rec-
ords which disclose the facts upon which
all representations as to wholesale and
retail prices of merchandise, claims of
savings afforded to purchasers, and rep-
resentations of similar import and mean-
ing are based, and from which the valid-
ity of any such claims can be established.
It is further ordered, That the corpo-
rate respondent maintain a business tele-
phone and list such number in the offi-
cial telephone directory for its location
and in all of its mail order catalogs.
It is further ordered, That respondents
shall maintain full and adequate records
of purchaser's orders and shipments of
merchandise so that requests for re-
? funds, claims or adjustments may be
made for nondelivered merchandise or
for any other reason.
It is further ordered, That respond-
ents notify the Commission at least 30
days prior to any proposed changes in
the corporate respondent such as dis-
solution, assignment or sale resulting in
the emergence of a successor corpora-
tion, the creation or dissolution of sub-
sidiaries or any other changes in the
corporation which may affect compli-
ance obligations arising out of the order.
It is further ordered, That respond-
ents deliver a copy of this order to cease
and desist to all personnel of respondents
responsible for the preparation, creation,
production or publication of the adver-
tising of all products covered by this
order.
It is further ordered, That respond-
ents herein shall, within sixty (60) days
after service upon them of this order,
file with the Commission a report in
writing setting forth in detail the man-
ner in which they have complied with
this order: Provided, however, That with
respect to those portions of the order
which require changes to be made in
respondents' mail order catalog which
is published semiannually in January
and August, a second such report shall
be filed within sixty (60) days after
June 1, 1972, the date upon which all
changes in respondents' catalog required
by the terms of this order shall take
effect.
Issued: May 23, 1972.
By the Commission.
[MIA CHARLES A. ToBIN,
Secretary.
[29M D08.72-10045 Plied 6-80-72;8:46 gm]
Title 7?AGRICULTURE
Chapter VII?Agricultural Stabiliza-
tion and Conservation Service
(Agricultural Adjustment), Depart-
ment of Agriculture
SUBCHAPTER C?SPECIAL PROGRAMS
[Rev. 1]
PART 760?INDEMNITY PAYMENT
PROGRAMS
Subpart--Beekeeper Indemnity
Payment Program
Correction
In F.R. Doc. 72-8793, appearing at page
11670, in the issue of Saturday, June 10,
1972, the word "without" in the second
line of ? 760.113(b) (2) , should read
"withhold".
Chapter IX?Agricultural Marketing
Service (Marketing Agreements
and Orders; Fruits, Vegetables,
Nuts), Department of Agriculture
[Valencia Orange Reg. 397, Amdt. 1]
PART 908?VALENCIA ORANGES
GROWN IN ARIZONA AND DESIG-
NATED PART. OF CALIFORNIA
Limitation of Handling
(a) Findings. (1) Pursuant to the mar-
keting agreement, as amended, and Or-
der No. 908, as amended (7 CFR Part
908) , regulating the handling of Valencia
oranges grown in Arizona and designated
part of California, effective under the
applicable provisions of the Agricultural
Marketing Agreement Act of 1937, as
amended (7 U.S.C. 601-674) , and upon
the basis of the recommendation and in-
formation submitted by the Valencia
Orange Administrative Committee, es-
tablished under the said amended mar-
keting agreement and order, and upon
other available information, it is hereby
found that the limitation of handling
of such Valencia oranges, as hereinafter
provided, will tend to effectuate the de-
clared policy of the act.
(2) It is hereby further found that it
is impracticable and contrary to the pub-
lic interest to give preliminary notice,
engage in public rule-making procedure,
and postpone the effective date of this
amendment until 30 days after publica-
tion thereof in the FEDERAL REGISTER (5
U.S.C. 553) because the time intervening
between the date when information upon
which this amendment is based became
available and the time when this amend-
ment must become effective in order to
effectuate the declared policy of the act
is insufficient; and this amendment re-
lieves restriction on the handling of Va-
lencia oranges grown in Arizona and des-
ignated part of California.
(b) Order, as amended. The provisions
in paragraphs (b) (1) (i), (ii), and (iii)
of ? 908.697 (Valencia Reg. 397, 37 F.R.
12306) during the period June 23,
through June 29, 1972, are hereby
amended to read as follows:
? 908.697 Valencia Orange Regulation
397.
(b) Order. (1) 5 "
(1) District 1: 259,600 cartons;
(ii) District 2: 308,000 cartons;
(iii) District 3:133,000 cartons.
?
(Secs. 1-19, 48 Stat. 31, as amended; 7 U.S.C.
601-674)
Dated: June 28, 1972.
ARTHUR E. BROWNE,
Acting Director, Fruit and Vege-
table Division, Agricultural
Marketing Service.
[FR Doc.72-10102 Filed 6-30-72;8:51 am]
[Lemon Reg. 540]
PART 910?LEMONS GROWN IN
CALIFORNIA AND ARIZONA
Limitation of Handling
? 910.840 Lemon Regulation 540.
(a) Findings. (1) Pursuant to the
marketing agreement, as amended, and
Order No. 910, as amended (7 CFR Part
910; 36 F.R. 9061) , regulating the han-
dling of lemons grown in California and
Arizona, effective under the applicable
provisions of the Agricultural Market-
ing Agreement Act of 1937, as amended
(7 U.S.C. 601-674), and upon- the basis
of the recommendations and informa-
tion submitted by the Lemon Adminis-
trative Committee, established under the
said amended marketing agreement and
order, and upon other available infor-
mation, it is hereby found that the lim-
itation of handling of such lemons, as
hereinafter provided, will tend to ef-
fectuate the declared policy of the act.
(2) It is hereby further found that it
is impracticable and contrary to the
public interest to give preliminary notice,
engage in public rule-making procedure,
and postpone the effective date of this
section until 30 days after publication
hereof in the FEDERAL REGISTER (5 U.S.C.
553) because the time intervening be-
tween the date when information upon
which this section is based became avail-
able and the time when this section must
became effective in order to effectuate
the declared policy of the act is insuffi-
cient, and a reasonable time is permitted,
under the circumstances, for preparation
for such effective time; and good cause
exists for making the provisions hereof
effective as hereinafter set forth. The
committee held an open meeting during
the current week, after giving due notice
thereof, to consider supply and market
conditions for lemons and the need for
regulation; interested persons were af-
forded an opportunity to submit infor-
mation and views at this meeting; the
recommendation and supporting infor-
mation for regulation during the period
specified herein were promptly submitted
to the Department after such meeting
was held; the provisions of this section,
including its effective time, are identical
with the aforesaid recommendation of
FEDERAL REGISTER, VOL 37, NO. 128?SATURDAY, JUtY 1, 1972
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ne5 AND REGULATIONS
such as dissolution, assignment or sale
resulting in the emergence of a succes-
sor corporation, the creation or dissolu-
tion of subsidiaries or any other change
in the corporation which may affect
compliance obligations arising out of the
order.
It is further ordered, That respond-
ents herein shall, within sixty (60) days
after service upon them of this order,
file with the Commission a report in
writing setting forth in detail the man-
ner and form in which they have com-
plied with this order.
Issued: May 23, 1072.
By the Commission.
tsnael CHARLES A. TOBIN,
Secretary.
[FR Doc.72-10044 Filed 6-30-72;8:46 am)
[Docket No. C-2225]
PART 13?PROHIBITED TRADE
PRACTICES
U.S. General Supply Corp. et al.
Subpart?Advertising falsely or mis-
leadingly: ? 13.15 Business status, ad-
vantages, or, connections: 13.15-185
Mall order house advantage; ? 13.70
Fictitious or misleading guarantees;
? 13.155 Prices: 13.155-5 Additional
charges unmentioned; 13.155-40 Exag-
gerated as regular and customary;
18.155-80 Retail as cost, wholesale, dis-
counted, etc.; ? 13.180 Quantity: 13.180-
30 In stock; ? 13.185 Refunds, repairs,
and replacements; ? 13.260 Terms and
conditions. 8ubpart?Misrepresenting
oneself and goods?Goods: ? 13.1647
Guarantees; ? 13.1720 Quantity; ? 13.-
1725 Refunds; ? 13.1760 Terms and con-
ditions; Misrepresenting oneself and
goods--Prices: ? 13.1778 Additional costs
unmentioned; ? 13.1805 Exaggerated as
regular and customary; ? 13.1820 Retail
as cost, wholesale, etc., or discounted.
Subpart?Neglecting, unfairly or decep-
tively, to make material disclosure;
? /3.1882 Prices:
(Sec. 6,38 Stat. 721; 15 CSC. 46. Interprets
or applies sec. 5,38 Stat. 719, as amended; 15
U.S.C. 45 [Cease and desist order, U.S. Gen-
eral Supply Corp. et al., Jericho, N.Y. Docket
No. C-2225, May 23, 19721
In the Matter of U.S. General Supply
Corp., a Corporation, and Harold
Rashbaum and Murray Harrow In-
dividually and as Officers of Said
Corporation.
Consent order requiring a Jericho,
N.Y., mail order firm to cease failing to
make shipments within specified time
limits, failing to disclose that not all
items advertised are kept in stock, but
are drop-shipped by the manufacturer,
failing to make complete refunds within
specified time limits, misrepresenting
that all items shipped are insured, re-
gardless of purchase price, failing to in-
dicate fee for respondent's catalog, using
comparative inflated prices, and keeping
Inadequate records of purchase orders.
Corporate respondent is further required
to maintain a business telephone and to
list the number in the official telephone
directory for its location and in all of its
mail order catalogs.
The order to cease and desist, includ-
ing further order requiring report of
compliance therewith, is as follows:
It is ordered, That respondent 'U.S.
General Supply Corp., a corporation, its
subsidiary and affiliated corporations, its
successors and assigns, arid respondents
Harold Rashbaum and Murray Harrow.
individually, and as officers of said cor-
porate respondent, and respondents'
agents, representatives, officers and em-
ployees, directly of through any corpo-
rate or other device or under any other
name or names, in respondents' adver-
tisements, catalogs, or in any other ad-
vertising mateiral, in connection with
the offering for sale, sale, and distribu-
tion of tools, hardware, home appliances,
office equipment, auto supplies, garden
equipment and any other article of mer-
chandise, in commerce, as "commerce"
is defined in the Federal Trade Commis-
sion Act? to forthwith cease and desist
from:
(a) Failing to make shipments of ad-
vertised merchandise within the time
period specified in respondents' adver-
tisements, catalogs or in any other ad-
vertising material when payment for
such goods has been received, or if no
time is specified, within a reasonable
time not to exceed 21 days, and if ship-
ment is not made within said period, to
offer in writing to promptly refund the
full purchase price therefor to the pur-
chaser, except as hereinafter provided in
paragraphs (b), (c), and (d) for drop-
shipped merchandise. Upon request for
said refund, the return of the full pur-
chase price shall be made within 15 days
from the date of the receipt of said writ-
ten request.
(b) Failing to clearly and conspicu-
ously disclose in its catalog* and in all
other advertising materials, where spe-
cific items of merchandise are mentioned,
all of those items which are not stocked
in respondents' warehouse but are drop-
shipped at respondents' request directly
to their customers by any manufacturer
or supplier.
(c) Failing, in its catalog and in all
other advertising materials, to ade-
quately inform all purchasers of drop-
shipped merchandise, ordered and paid
for, that refunds are available within 15
days from the date of receipt of any
written request therefor, if the mer-
chandise has not been received within
the time specified in respondents' cata-
log or hi any other advertising material,
or within 21 days where no time period
has been specified.
(d) Failing to make refunds of all
monies paid by purchasers of drop-
shi:pped merchandise within 15 days
from the date of receipt of any written
request therefor made in accordance
with the conditions set forth in para-
graph (c) above.
(e) Failing to disclose in its mail order
catalog, when representations are made
that merchandise is insured, that only
parcels of merchandise in excess of a
i13081
given dollar amount are insured by re-
spondents or that parcels below such
dollar amount are not insured.
(f) Representing, directly or by Impli-
cation, that delivery of all merchandise
is guaranteed or assured unless tOi the
terms and conditions relating to respond.-
ents' replacement of any merchandise
not received by purchasers is clearly and
conspicuously stated.
(g) Failing when requested, punsaant
to a guarantee of satisfaction money
back guarantee, or a full refund guaran-
tee, to refund either by cash or by check,
the full purchase price of merchandise,
together with all charges paid by the
purchasers in connection with such pur-
chase, voluntarily, and within the time
specified in respondents' advertisements,
or if no time is specified, within a rea-
sonable time not to exceed 15 class, or
failing to make any other refunds to
which a purchaser is entitled within 15
days from the date of the receipt of the
written request for such refund.
(h) Misrepresenting, directly sc by
implication, the dollar amount or quan-
tity of merchandise which is in stock in
respondents' warehouse at any elven
time or that any specific item of mer-
chandise is in stock in said warehouse
when in fact said merchandise may be
shipped directly to the purchaser by sup-
pliers other than respondents.
(i) Representing, directly or by im-
plication, that respondents are whole-
salers unless they in fact: (1) Make a
substantial arid significant number of
sales to retailers, and (2) sell items which
they offer at wholesale prices, at psices
which do not exceed those usually and
customarily paid by retailers for such
merchandise to any source of supply,
(j) Representing, directly or by impli-
cation, that respondents offer merchan-
dise for sale at wholesale prices, at the
lowest wholesale prices, or at prices which
do not exceed the prices usnallyand cus-
tomarily paid by retailers for such mer-
chandise to any source of supply 'unless
they, in fact, sell items which they offer
at wholesale prices, at prices which do not
exceed those usually and customarily
paid by retailers for such merchandise.
(k) Failing to disclose in all advertis-
ing offering its mail order catalog for sale
that a fee of $1, or any amount, is re-
quired on all orders under a certain dcllar
amount.
(1) Failing to disclose, clearly and con-
spicuously, that charges for postage, in-
surance, or any other fee or charge in ?
connection with the return of mercha,n-
dise, or of the catalog itself, shall be berm
by the purchaser.
(m) Representing, directly or by .
cation, that any products are guaranteed,
unless the nature and extent of the guar-
antee, the identity of the guarantor, The
obligations, if any, of the consumer who :
purchases said guaranteed product, coed
the manner in which said guarantor will
perform thereunder are clearly and con-
spicuously disclosed.
(n) Utilizing comparative retail prises
which are inflated above the usual and
customary current selling prices for such
products in retail stores throughout the
country.
FEDERAL REGISTER, VOL. 37? NO. 128?SATURDAY, JULY 1, 1972
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RULES AND REGULATIONS 13095
in any indirect cost pool to be allocated
to that or any other final cost objective.
Costs identified specifically with the con-
tract are direct costs of the contract and
are to be charged directly thereto. Costs
identified specifically with other final
cost objectives of the contractor are di-
rect costs of those cost objectives and
are not to be charged to the contract
directly or indirectly.
(b) Any direct cost of minor dollar
amount may be treated as an indirect
cost for reasons of practicality where the
accounting treatment for such cost is
consistently applied to all final Cost ob-
jectives, provided that such treatment
produces results which are substantially
the same as the results which would have
been obtained if such costs had been
treated as a direct cost.
h. Section 1-15.203 (a) and (d) is
amended, as follows:
1-15.203 Indirect costs.
(a) An indirect cost (see ? 1-15.109 (i) )
is one which, because of its incurrence
for common or joint objectives, is not
readily subject to treatment as a direct
cost. Any direct cost of minor dollar
amount may be treated as an indirect
cost for reasons of practicality under the
circumstances set forth in ? 1-15.202(b).
After direct costs have been determined
and charged directly to the contract or
other work as appropriate, indirect costs
are those remaining to be allocated to
the several cost objectives. No final cost
objective shall have allocated to it as an
indirect cost any cost if other costs, in-
curred for the same purpose in like cir-
cumstances, have been included as a di-
rect cost of that or any other final cost
objective.
?
(d) The method of alloca? tion of in-
direct costs must be based on the par-
ticular circumstances involved. The
method shall be in accordance with
standards promulgated by the Cost Ac-
counting Standards Board, if applicable
to the contract. Otherwise, the method
shall be in accordance with generally ac-
cepted accounting principles. When Cost
Accounting Standards Board standards
are not applicable to the contract, the
contractor's established practices, if in
accordance with generally acceptable ac-
counting principles, shall generally be
acceptable. However, the method used by
the contractor may require examination
when:
*
ROD KREGER,
Acting Administrator
of General Services.
311NE 29, 1972.
ATTACHMENT A
DISCLOSURE STATEMENT?COST ACCOUNTING
PRACTICES AND CERTIFICATION
Any contract in excess of $100,000 result-
ing from this solicitatiqn, except when the
price negotiated is based on: (a) Established
catalog or market prices of commercial items
sold in substantial quantities to the general
public, or (b) prices set by law or regulation,
shall be subject to the requirements of the
Cost Accounting Standards Board. Any
No. 128?Pt. I-4
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offeror submitting a proposal which, if ac-
cepted, will result in a contract subject to
the requirements of the Cost Accounting
Standards Board must, as a condition of con-
tracting, submit a Disclosure Statement as
required by regulations of the Board. The
Disclosure Statement muErtsbe submitted as
a part of the offeror's proposal under this
solicitation (see 1, below) unless (1) the
offeror, together with all divisions, sub-
sidiaries, and affiliates under common con-
trol, did not receive net awards of negotiated
defense prime contracts during the period
July 1, 1970, through June 30, 1971, totaling
more than $30 million (see 2, below), (11)
the offeror has already submitted a Disclosure
Statement disclosing the practices used in
connection with the pricing of this proposal
(see 3, below), or (111) postawarcl submission
has been authorized by the Contracting
Officer.
CAUTION A practice disclosed in a Dis-
closure Statement shall not, by virtue of
such disclosure, be deemed to be a proper,
approved, or agreed to practice for pricing
proposals or accumulating and reporting
contract performance cost data.
Check the appropriate box below:
o 1. Certificate of Concurrent Submission
of Disclosure Statements
The offeror hereby certifies that he has
submitted, as a part of his proposal under
this solicitation, copies of the Disclosure
Statements as follows: (1) Original and one
copy to the cognizant Contracting officer:
(it) one copy to the cognizant contract audi-
tor; and OW one copy to the Cost Account-
ing Standards Board, 441 G Street NW.,
Washington, DC 20548.
(Date of Disclosure Statement.)
(Name and address of cognizant Contract-
ing Officers where filed.)
The offeror further certifies that practices
used in estimating costs in pricing this pro-
posal are consistent with the cost account-
ing practices disclosed in the Disclosure
Statements.
ID 2. Certificate of Monetary Exemption
The offeror hereby certifies that, together
with all divisions, subsidiaries, and affiliates
under common control, he did not receive net
awards of negotiated national defense prime
contracts during July 1, 1970, through
June 30, 1971, totaling more than $30
million.
D 3. Certificate of Previously Submitted Dis-
closure Statements
The offeror hereby certifies that the Dis-
closure Statements were filed, as follows:
(Date of Disclosure Statement.)
(Name and address of cognizant Contract-
ing Officers where filed.)
The offeror further certifies that practices
used in estimating costs in pricing this pro-
posal are consistent with the dost account-
ing practices disclosed in this Disclosure
Statement.
ATTACHMENT B
COST ACCOUNTING STANDARDS
(a) Unless the Cost Accounting Standards
Board has prescribed rules or regulations
exempting the Contractor or this contract
from standards, rules, and regulations pro-
mulgated pursuant to 50 U.S.C. App. 2168
(Public Law 91-379, August 15, 1970), the
Contractor, in connection with this contract
shall:
(1) By submission of a Disclosure State-
ment, disclose in writing his cost account-
ing practices as required by regulations of
the Cost Accounting Standards Board. The
required disclosures must be made prior to
contract award unless the Contracting Offi-
cer provides a written notice to the Con-
tractor authorizing postaward submission in
accordance with regulations of the Cost
Accounting Standards Board. The practices
disclosed for this contract shall be the same
as the practices currently disclosed and ap-
plied on all other contracts and subcontracts
being performed by the Contractor and which
contain this Cost Accounting Standards
clause. If the Contractor has marked the Dis-
closure Statement to indicate that it con-
tains trade secrets and commercial or finan-
cial information which is privileged and ccin-
fidential, the Disclosure Statement will be
protected and will not be released outside
of the Government.
(2) Follow consistently the cost account-
ing practices disclosed pursuant to (1)
above, in accumulating-and reporting con-
tract performance cost data concerning this
contract. If any change in disclosed prac-
tices is- made for the purposes of any con-
tract or subcontract subject to Cost Ac-
counting Standards Board requirements, the
change must be applied prospectively to this
contract, and the Disclosure Statement must
be amended accordingly. If the contract
price or cost allowance of this contract is
affected by such changes, adjustment shall
be made in accordance with subparagraph
(a) (4) or (a) (5), below as appropriate.
. (3) Comply with all Cost Accounting
standards in effect on the date of award
of this contract or if the Contractor has
submitted cost or pricing data, on the date
of final agreement on price as shown on
the Contractor's signed certificate of current
cost or pricing data. The Contractor shall
also comply with any Cost Accounting
Standard which hereafter becomes applicable
to a contract or subcontract of the Con-
tractor. Such compliance shall be required
prospectively from the date of applicability
to such contract or subcontract.
(4) (A) Agree to an equitable adjustment
as provided in the Changes clause of this
contract if the contract cost is affected by
a Disclosure Statement change which the
Contractor is required to make pursuant to
(3), above. If the Contractor has not been
required to file a Disclosure Statement but
is required pursuant to (a) (3), above, to
change an established practice, then an
equitable adjustment shall similarly be
agreed to.
(B) Negotiate with the Contracting Officer
to determine the terms and conditions under
which any Disclosure Statement change
other than changes under (4) (A) , above,
may be made. A change to a Disclosure
Statement may be proposed by either the
Government or the Contractor: Provided,
however, That no agreement may be made
under this provision that will increase costs
paid by the United States under this
contract.
(5) Agree to an adjustment of the contract
price or cost allowance, as appropriate, if
he or a subcontractor fails to comply with
an applicable Cost Accounting Standard or
to follow any practice disclosed pursuant to
subparagraphs (a) (1) and (a) (2), above,
and such failure results in any increased
costs paid by the United States. Such ad-
justment shall provide for recovery of the
increased costs to the United States to-
gether with interest thereon computed at
the rate determined by the Secretary of the
Treasury pursuant to Public Law 92-41, 85
Stat. 97, or 7 percent per annum, whichever
is less, from the time the payment by the
United States was made to the time the
adjustment is effected.
(b) If the parties fail to agree whether the
Contractor or subcontractor has complied
with an applicable Cost Accounting Stana-
ard, rule, or regulation of the Cost Account-
ing Standards Board and as to any cost ad-
justment demanded by the United States,
such failure to agree shall be a dispute con-
cerning a question of fact within the mean-
ing of the Disputes clause of this contract.
FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY 1, 1972
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13096 RULES AND REGULAnONS
(c) The Contractor shall permit any au-
. thorized representatives of the head of the
agency, the Cost Accounting Standards
Board, or the Comptroller General of the
United States to examine and make copies
of any documents, papers, or records relat-
ing to compliance with the requirements of
this clause.
(d) The Contractor shall include in all
negotiated subcontracts which he enters
into the substance of this clause except para-
graph (b), and shall require such inclusion
In ell, other subcontracts of any tier, except
that this requirement shall apply only to
negotiated subcontracts in excess of $100,000
where the price negotiated is not based on:
(I) Established catalog or market prices of
commercial items sold in substantial quan-
tities to the general public; or
(ii) Prices set by law or regulation.
Noss: 1. Subcontractors shall be required
to submit their Disclosure Statements to the
Contractor. However, if a subcontractor has
previously submitted his Disclosure State-
ment to a Government Contracting Officer
he may satisfy that requirement by certifying
to the Contractor the date of such State-
ment and the address of the Contracting
Officer.
2. In any case where a subcontractor deter-
mines that the Disclosure Statement "in-
formation is privileged and confidential and
declines to provide it to his Contractor or
higher tier subeontractor, the Contractor
may authorize direct submission of that sub-
contractor's Disclosure Statement to the same
Government offices to which the Contractor
was required to make submission of his Dis-
closure Statement. Such authorization shall
in no way relieve the Contractor of liability
as provided in paragraph (a) (5) of this
clause. In view of the foregoing and since
the contract may be subject to adjustment
under this clause by reason of any failure to
comply with rules, regulations, and Stand-
ards of the Cost Accounting Standards Board
In connection with covered subcontracts, it
is expected that the Contractor may wish to
Include a clause in each such subcontract
requiring the subcontractor to appropriately
indemnify the Contractor. However, the in-
clusion of such a clause and the terms there-
of are matters for negotiation arid agreement
between the Contractor and the subcon-
tractor, provided that they do not conflict
with the duties of the Contractor under its
contract with the-Government. It is also ex-
pected that any subcontractor subject to'
such indemnification will generally require
substantially similar indemnification to be
submitted by his subcontractors.
(e) The terms defined in section 331.2 of
Part 3:31 of Title 4, Code of Federal Regula-
tions (4 CFR 331.2) shall have the same
meanings herein. As there defined, "nego-
tiated subcontract" means "any subcontract
except a firm fixed-price subcontract made
by a Contractor or subcontractor after re-
ceiving offers from at least two firms not asso-
ciated with each other or such Contractor or
subcontractor, providing (1) the solicitation
to all competing firms,is identical, (2) price
Is the only consideration in selecting the sub-
contractor from among the competing firms
solicited, arid (3) the lowest offer received in
compliance with the solicitation from among
those solicited is accepted."
[FR Doc.72-10157 Filed 8-30-72;8:53 am]
Chapter 101?Federal Property
Management Regulations
SUBCHAPTER 0?TRANSPORTATION AND MOTOR
VEHICLES
PART 101-39?INTERAGENCY
MOTOR VEHICLE POOLS
Subpart 1011-39.49?Forms and
Reports
OpERATOR'S REPORT OF MOTOR VEHICLE
ACCIDENT
This amendment illustrates the revised
June 1971 edition of Standard Form 91,
Operator's Report of Motor Vehicle
Accident. ?
Section 101-39.4903 is revised to illus-
trate the June 1971 edition of Standard
Form 91.
? 101-39.1903 Standard Form 91, Op-
erator's Report of Motor-Vehicle
Accident.
NOTE: 'Standard Form 91, as illustrated in
? 101-39.4903, is filed as part of the original
document.
(Sec. 205(c) , 63 Stat. 390; 40 U.S.C. 486(c) )
1r4ective date. This amendment is ef-
fective upon publication in the FEDERAL
REGISTER (7-1-72).
Dated: June 26, 1972. .
G. C. GARDNER, Jr.,
Acting Administrator.
[FR Doc72-10067 Filed 6-30-72;8:49 am]
Title 43--PUBLIC LANDS:
INTERIOR
Chapter II?Bureau of Land Manage-
ment, Department of the Interior
APPENDIX--PUBLIC LAND ORDERS
[Public Land Order 52191
[Oregon 8764, 90401
OREGON
Revocation of Executive Orders Nos.
5600 and 7623; Partial Revocation
of Reclamation Project Withdrawal
By virtue of the authority vested in
the President, and pursuant to Execu-
tive Order No. 10355 of May 26, 1952 (17
P.R. 4831), and by virtue of the author-
ity contained in section 3 of the Act of
June 17, 1902, as amended and supple-
mented, 43 U.S.C. 416 (1970), it is
ordered as follows:
1. The Executive Orders No. 5600 of
April 5600 of April 16, 1931, and No. 7623
of May 29, 1937, withdrawing lands for
an agricultural field station in aid of
programs of the Department of Agricul-
ture, are hereby revoked as to the fol-
lowing described lands:
[Oregon 87641
WILLAMETTE MERIDIAN
T.4N.;11.28E.,
Sec. 14, SysSE%SW%;
See. 22, SW% , SEYsNW1/4, SiiiNE%;
Sec. 23, NW.
The land described contains 460 acres.
2. The Secretary's Order of August 16,
1905, withdrawing lands for the Urca-
tilla Reclamation Project, is hereby re-
voked as to the following descrited
lands:
[Oregon 90401
WILLAMETTE MERIDIAN
T. 4 N., R. 28 E.,
Sec. 15, SI/2SE%;
Sec. 22, 30/2/4112.
The land described contains 240 acres.
The total of the areas described ag-
gregates 700 acres in Umatilla County.
All of the lands described are
patented. The title to the lands de-
scribed in paragraph 1 was transferred
to the State of Oregon pursuant to the
Act of September 23, 1950, 64 Stat. 81,
a portion of which it is contempla;ed
will be reconveyed to the United States
by the State.
Inquiries concerning the lands should
be addressed to the Chief, Branch. of
Lands and Minerals Operations, Bureau
of Land Management, Portland, Oreg.
97208.
HARRISON LOESCH,
Assistant Secretarysof the Interior'.
JUNE 27, 1972.
[PR Doc.72-10046 Filed 6-30-72;8:46 am]
[Public Land Order 52201
[Sacramento 5095]
CALIFORNIA
Partial Revocation of Reclamation
Project Withdrawal
By virtue of the authority contained
in section 3 of the Act of June 17, 190:, as
amended and supplemented, 43 U.S.C.
416 (1970), it is ordered as follows:
1. The departmental order of NON'em-
ber 4, 1913, 'withdrawing lands for the
Iron Canyon Project, is hereby revcked
so far as it affects the following described
land:
MOUNT DIABLO MERIDIAN
T, 29 N., R. 3 W..
Sec. 32, NW1/4NE 1/4.
The area described aggregates 40 acres
in Tehama County.
2. This revocation is made in furtier-
ance of an exchange under section 8 of
the Act of June 28, 1934, as amended, 43
U.S.C. 315g (1970), by which the offered
lands will benefit a Federal land pro-
gram. Accordingly, the land describEd in
this order is hereby classified, pursuant
to section 7 of said Act, 43 U.S.C. 315f
(1970), as suitable for such exchange.
The land, therefore, will not be subject
to other use or disposition under the
public land laws in the absence IA a
modification or revocation of such classi-
fication (43 CFR 2440.4).
HARRISON LOESCE,
Assistant Secretary of the Interior.
JUNE 27, 1972.
(FB Doo.72-10047 Filed 6-30-72;8:46 am]
FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY to- 1972
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RULES AND REGULATIONS
[Public Land Order 5221]
[Idaho 20191
IDAHO
Withdrawal for Ririe Dam and
Reservoir Project
By virtue of the authority vested in the
President an pursuant to Executive
Order No. 10355 of May 26, 1952 (17 P.R.
4831) , it is ordered as follows:
Subject to valid existing rights, the
following described public lands are here-
by withdrawn from all forms of appro-
priation under the public land laws, in-
cluding the mining laws (30 U.S.C., ch.
2), but not from leasing under the min-
eral leasing laws, and reserved for use by
the Corps of Engineers, Department of
the Army, in connection with the opera-
tion and maintenanoe of the Ririe Dam
and Reservoir Project:
BOISE MERIDIAN
T. 6 N., R. 39 E.,
Sec. 30, lots 15,17,18,19.
The area described aggregates 43.93
acres in Madison County.
HARRISON LO-ESCH,
Assistant Secretary of the Interior.
JUNE 27, 1972.
[FR Doc.72-10048 Filed 6-30-'72;8:46 am]
[Public Land Order 5222]
[Arizona 5393]
ARIZONA
Partial Revocation of Reclamation
Withdrawal
By virtue of the authority contained in
section 3 of the Act of June 17, 1902, as
amended and suppleinented, 43 U.S.C.
416 (1970), it is ordered as follows:
1. Public Land Order_No. 3835 of Sep-
tember 27, 1965, withdrawing lands for
the proposed Buttes Dam and Reservoir,
Middle Gila River Project, is hereby re-
voked so far as it affects the following
described land:
GILA AND SALT RIVER MERIDIAN
T. 4 S., R.. 14 E.,
Sec. 8, NE1/4SWV4 , SIASW1/4.
The areas described aggregate 120
acres in Pinal County.
2. This revocation is made in further-
ance of an exchange under section 8 of
the Act of June 28, 1934, as amended, 43
U.S.C. 315g (1970), by which the offered
lands will benefit a Federal land pro-
gram. Accordingly, the land described in
this order is hereby classified, pursuant
to section 7 of said Act, 43 U.S.C. 315f
(1970), as suitable for such exchange.
The lands, therefore, will not be subject
to other use or disposition under the pub-
lic land laws in the absence of a modifi-
cation or revocation of such classification
(43 CFR 2440.4).
HARRISON LOESCH,
Assistant Secretary of the Interior.
JUNE 27, 1972.
[FR Doc,72-10049 Filed 6-30-72;8:46 am]
Title 49 TRANSPORTATION
Chapter V?National Highway Traffic
Safety Administration
[Docket No. 71-1; Notice 31
PART 57]?FEDERAL MOTOR
VEHICLE SAFETY STANDARDS
Glazing Materials
Correction ?
In F.R. Doc. 72-9283 appearing at page
12237 of the issue for Wednesday,
June 21, 1972, the following corrections
are made in ? 571.205:
1. In paragraph 55.1.2 the line
"85.1.2.2 may be used in the locations
of" should be inserted between the third
and fourth lines.
2. In paragraph 85.1.2.3, line 4, the ref-
erence to "55.2.1" should read "S5.1.2.1".
Title 50?WILDLIFE AND
FISHERIES
Chapter I?Bureau of Sport Fisheries
and Wildlife, Fish and Wildlife
Service, Department of the Interior
PART 28?PUBLIC ACCESS, USE, AND
RECREATION
Ruby Lake National Wildlife Refuge,
Nev.
The following special regulation is is-
sued and is effective on date of publica-
tion-In the FEDERAL. REGISTER (7-1-72).
? 28.28 Special regulations; public ac-
cess, use, and recreation for individ-
ual wildlife refuge areas.
NEVADA
RUBY LAKE- NATIONAL WILDLIFE REFUGE
Boating is permitted in the South
Sump with conventional hull boats and
canoes, exclusive of amphibious, all-
terrain, or any other type of craft ca-
pable of cross-country travel on or im-
mediately over land, water, sand, marsh,
swampland, or other natural terrain.
Boats with motors are restricted to
the area posted for powerboating dur-
ing the waterfowl nesting season. The
powerboating area is posted and de-
lineated on maps available at refuge
headquarters.
The provisions of this special regula-
tion supplement the regulations which
govern recreation on wildlife refuge
areas generally, which are set forth in
13097
Title 50, Code of Federal Regulations,
Part 28, and are effective through De-
cember 31, 1972.
JOHN D. FINDLAY,
Regional Director, Bureau of
Sport Fisheries and Wildlife.
JUNE 20, 1972.
[FR Doc.72-10069 Filed 6-30--72;8 :49 alnl
Title 24?HOUSING AND
URBAN DEVELOPMENT
Chapter IX?Office of Interstate Land
Sales Registration, Department of
Housing and Urban Development
[Docket No. R-72-199]
PART 1700?INTRODUCTION
Subpart B?Delegations of Basic
Authority and Functions
ACT/NG ADMINISTRATOR
The delegations of authorities and re-
sponsibilities to the Director of the Ex-
amination Division and the Director of
the Administrative Proceedings Division
are delegated, and the designation for
Acting Administrator is amended to de-
lete from the order of succession the
Director of the Examination Division
and the Director of the Administrative
Proceedings Division, and to provide that
the Assistant Deputy Administrator be
designated after the Deputy Adminis-
trator as Acting Administrator.
This amendment relates to agency
management, and therefore notice of
proposed rule making and postponement
of the effective date are unnecessary.
Accordingly, 24 CFR Part 1700, Sub-
part B?Delegations of Basic Authority
and Functions, is amended as follows:
? 1700.80 [Deleted]
? 1700.85 [Deleted]
A. Delete ?? 1700.80 and 1700.85 and
their headings from the table of
contents.
B. Delete ?? 1700.80 and 1710.85.
C. Change ? 1700.90 to read as follows:
? 1700.90 'Acting Administrator.
The Deputy Administrator and the
Assistant Deputy Administrator in the
order named, are designated by the Ad-
ministrator to act in his place and stead
in the event of his absence or inability
to act, having the title of "Acting Ad-
ministrator" with the powers, duties, and
rights delegated by the Secretary's Dele-
gation of Authority published in the
FEDERAL REGISTER on March 9, 1972, 37
P.R. 5071.
Effective date. This amendment is ef-
fective on June 28, 1972.
GEORGE K. BERNSTEIN,
Interstate Land
Sales Administrator.
[FR Doc.72-10163 Filed 6-30-72;8:51 am]
FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY 1, 1972
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13098,
[Docket No. 11-72-2001
PART 1911?INSURANCE
COVERAGE AND RATES
Flood Insurance; Premium Rate Re-
ductions ancl Minimum Commissions
Section 1308 of the National Flood In-
surance Act of 1968 (42 U.S.C. 4015) di-
rects the Secretary to prescribe by regu-
lation the premium rates to be charged
for flood insurance under the program,
"consistent with the objective of making
flood insurance available where neces-
sary at reasonable rates so as to encour-
age prospective insureds to purchase
such insurance" and with the purposes
of the Act. Daring the current calendar
year, particularly as a result of recent
flood disaster, it has become evident that
many persons have refrained from the
purchase of Federal flood Insurance be-
cause they believe the applicable premi-
ums are uneconomic, despite the high
susceptibility of their properties to loss
or damage in the event of flooding.
An additional result of this low level
consumer interest in the purchase of
flood insurance has been that communi-
ties have been slow to adopt adequate
local ordinances to regulate new con-
struction in their flood-prone areas in
order to reduce or avoid future losses,
which ordinances are required in order
to retain their eligibility for the sale of
flood insurance. In some instances, local
officials have actually considered with-
drawing from the flood insurance pro-
gram rather than attempting to meet
the required land use standards.
RULES AND REGULATIONS
On the basis of these cumulative indi-
cations that existing premium rates do
not sufficiently encourage the purchase
of flood insurance to fully carry out the
objectives of the Act, the Federal In-
surance Administrator has determined
that a reduction in chargeable rates is
required, and the new premium rates
are promulgated in the following regu-
lation. In addition, in an effort to en-
courage insurance agents and brokers to
make a greater effort to make the avail-
ability of flood insurance known to their
customers, the Administrator has deter-
mined that a :minimum commission of
$10 per policy will be paid.
Because of the immediate threat of
the hurricane season and the corre
sponding need for more widespread flood
Insurance in Gulf and Atlantic coastal
communities, and inasmuch as these
changes confer only a public benefit and
involve no detriment it has been deter-
mined that notice and public procedure
thereon are impractical, and that good
cause exists to make them effective at
an early date.
Authority: The following amendments
to Subchapter B issued under the Na-
tional Flood Insurance Act of 1968, 42
U.S.0 4001-4127.
Subchapter B of Chapter X of Title 24
is amended as follows:
1. The table in paragraph (a) of
? 1911.9 of Part 1.911 is revised to read
as .follows:
? 1911.9 Establishment of rhargeablo
rates.
(a)
RATES TOR NEW AND RENEWAL POLICIES
Type of
structure
Value of strueture
Rate Rate
per year per year
per $100 per $100
coverage eoverag)
on strue- on eon-
tun:. tents
(1) Single
family rest-
dential.
(2) All other
residential.
(3) All non-
residential
(including
hotels and
motels with
normal oc-
cupancy of
less than 6
months in
duration).
$17,500 and under.
$0.25
$0.21
17,501-35,000
.30
.41.
35,001 and over
.35
.41
30,000 and under ....
.25
.21.
30,001-60,000?
.30
.41.
60,001 and oven....
.35
.45.
30,000 and under.
.90
.7/
30,001-60,000
.50
.11
60,001 and over
.60
. if
2. The table of sections under Subpart
A of Part 1912 is amended by adding at
the end thereof a new ? 1912.4, to read as
follows:
Sec.
1912,4 Minimum commissions.
3. Subpart A of Part 1912 is amended
by adding a new ? 1912.4, to read as
follows:
?1912.4 Minimum commissions.
The annual commission which shall be
paid to any licensed agent or broker with
respect to each policy he duly procures
for an eligible purchaser shall not be
less than $10.
Effective date. These regulations shall
be effective July 10, 1972.
GEORGE K. BERNSTEIN,
Federal Insurance Administrator.
[PR Doe.72-10164 Filed 6-30-72;8:54 am]
Chapter X?Federal Insurance Administration, Department of Housing and Urban Development
SUBCHAPTER B?NATIONAL FLOOD INSURANCE PROGRAM
PART 1914?AREAS ELIGIBLE FOR THE SALE OF INSURANCE
List of Eligi131e. Communities
Section 1914.4 is amended by adding in alphabetical sequence a new entry to the table. This entry differs from prior entries
to the table in that a complete chronology of effective dates appears for each listed community. Each date appearing in the
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RULES AND REGULATIONS 13099
last column of the table is followed by a designation which indicates whether the date signifies the effective date of the au-
thorization of the sale of flood insurance in the area under the emergency or under the regular flood insurance program. The
entry reads as follows:
? 1914.4 List of eligible communities.
? ?
?
?
Effective date of
State County Location Map No. State map repository Local map repository authorization of
sale of flood
Insurance for area
? * * ? ? ? ? ? ? ? ? ? * 5 ? ? ? ? ? ? ?
Louisiana Acadia Crowley I 22 001 0520 01 State Department of Public Works, City Hall, Corner of Avenue F and Aug. 28, 1971.
through Post Office Box 44155, Capitol Fifth St., Crowley, La. 70526. Emergency.
I 22 001 0520 04 Station, Baton Rouge, LA. 70804. Tune 30, 1972.
Louisiana Insurance Department, Regular.
Box 44214, Capitol Station, Baton
Rouge, LA 70804.
Missouri St. Charles St. Peters June 30, 1972.
Emergency.
New Jersey Essex Nutley Do.
New York Nassau Long Beach I 36 059 3360 02_ ..... New York State Department of En- City Hall, 1 West Chester St., Long March 6, 1071.
vironmental Conservation, Division Beach, NY 11561. Emergency.
of Resources Management Services, Juno 30, 1972.
Bureau of Water Management, Regular.
Albany, N.Y. 12201.
New York State Insurance Depart-
ment, 123 William St., New York,
NY 10038, and 324 State St., Albany,
NY 12201.
Do Suffolk Westhampton I 36 103 6610 02 _do Village Office, Municipal Bldg., Stm- Feb. 26,1971.
Beach. set Ave., Westhampton Beach, N.Y. Emergency.
11978. June 30, 1972.
Regular.
Pennsylvania... Delaware Glenolden June 30, 1972.
Borough. Emergel 1 c,:s .
Do Berks Kutztown Do.
Borough.
Do ...... _ _ Lyeoming Muncy Borough Do.
Do Allegheny Reserve Do.
Township.
(National Flood Insurance Act of 1968 (title XIII of the Housing and Urban Development Act of 1968), effective Jan. 28, 1960 (33 F.R.
17804, Nov. 28, 1968), as amended (secs. 408-410, Public Law 91-152, Dec. 24, 1969), 42 U.S.C. 4001-4127; and Secretary's delegation of
authority to Federal Insurance Administrator, 34 F.R. 2680, Feb. 27, 1969)
Issued: June 23, 1972.
[FR Doc.72-9986 Filed 6 30-72;8:45 am]
GEORGE K. BERNsTEIN,
Federal Insurance Administrator.
PART 1915?IDENTIFICATION OF SPECIAL HAZARD AREAS
List of Communities With Special Hazard Areas
Section 1915.3 is amended by adding in alphabetical sequence a new entry to the table, which entry reads as follows:
? 1915.3 List of communities with special hazard areas.
? a a a ?
Effective date of
Identification of
State County Location Map No. State map repository Local map repository areas which have
special flood
hazards
? ? ? ? ? ? ? ? ? * ? * ? * ? ? ? ? * ? ?
Louisiana Acadia Crowley H 22 001 0520 01 State Department of Public Works, City Hall, Corner of Avenue F and Aug. 28, 1971.
through Post Office Box 44155, Capitol Sta- Fifth St., Crowley, La. 70526.
tion., Baton Rouge, LA 70804.
H 22 001 0520 04 Louisiana Insurance Department,
Boz 44214, Capitol Station, Baton
Rouge, LA 70804.
Missouri St. Charles St. Peters June 30, 1972.
New Jersey Essex Nutley Do.
New York Nassau Long Beach H 36 059 3360 02_ New York State Department of En- City Hall, 1 West Chester St., Long Mar. 6, 1971.
vironmental Conservation, Division Beach, NY 11561.
of Resources Management Services,
Bureau of Water Management,
Albany, N.Y. 12201.
New York State Insurance Depart-
ment, 123 William St., New York,
NY 10038, and 824 State St., Albany,
NY 12210.
Do Suffolk Westhampton 11 86 103 6610 02 do Village Office, Municipal Bldg., Sun- Feb. 26, 1971.
? Beach. set Ave., Westhampton Beach, N.Y.
11978.
Pennsylvania._ Delaware Glenolden June 80, 1972.
Borough.
Do Berks Kutztown Do.
Borough.
Do Lycoming ... _ . ___ Muncy Borough Do.
Do Allegheny Reserve Town- Do.
ship.
(National Flood Insurance Act of 1968 (title XIII of the Housing and Urban Development Act of 1968), effective Jan. 28, 1969 (38 P.R.
17804, Nov. 28, 1968), as amended (secs. 408-410. Public Law 91-152, Dec. 24, 1969), 42 U.S.C. 4001-4127; and Secretary's delegation of au-
thority to Federal Insurance Administrator, 84 F.R. 2680, Feb. 27, 1969)
Issued: June 23, 1972. GEORGE K. BERNSTEIN,
Federal Insurance Administrator.
[FR Doc.72-9987 Filed 6-30-72;8:45 am]
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Proposed Rule Making
DEPARTMENT OF THE
TREASURY
!Internal Revenue Service
[ 26 CIFR Parts 194, 201, 250, 251
IMPORTATION OF DISTILLED SPIRITS,
WINES, AND BEER
Issuance of and Accounting for
Red Strip Stamps
Notice is hereby given that the regu-
lations set forth in tentative form are
proposed to be prescribed by the Com-
missioner of Internal Revenue and the
Commissioner of Customs, with the ap-
proval of the Secretary of the Treasury
or his delegate. Prior to final adoption
of such regulations, consideration will
be given to any data, views, or arguments
pertaining thereto which are submitted
in writing, in duplicate, to the Director,
Alcohol, Tobacco and Firearms Division,
Internal Revenue Service, Washington,
D.C. 20224, within the period of 30 days
from the date of publication of this no-
tice in the FEDERAL REGISTER. Any writ-
ten comments or suggestions not specifi-
cally designated as confidential in ac-
cordance with .26 CFR 601.601(b) may
be inspected by any person upon written
request. Any person submitting written
comments or suggestions who desires an
opportunity to comment orally at a pub-
lic hearing on these proposed regulations
should submit his request, in writing, to
the Director, Alcohol, Tobacco and Fire-
arms Division, within the 30-day period.
In such a case, a public hearing will be
held and notice of the time, place, and
date will be published in a subsequent
issue of the FEDERAL REGISTER, unless
the person or persons who have re-
quested a hearing withdraw their re-
quests for a hearing before notice of
hearing has been filed with the Office of
the Federal Register. The proposed reg-
ulations are to be issued under the au-
thority contained in section '7805 of the
Internal Revenue Code of 1954 (68A
Stat. 917; 26 U.S.C. 7805) .
[SEAL] JOHNNIE M. WALTERS,
Commissioner of Internal Revenue.
EDWIN P. RAINS,
Acting Commissioner of Customs.
In order to (1) prescribe new pro-
cedures to be followed by importers for
strip stamp accounting, records, and re-
ports; (2) provide for the issuance of
strip stamps by assistant regional com-
missioners, alcohol, tobacco and fire-
arms; (S) recognize the change in name
of the Alcohol, Tobacco and Firearms
function and the change in the organi-
zational structure of the Bureau of Cus-
toms; and (4) make miscellaneous con-
forming and editorial changes, the reg-
ulations in 26 CPR Parts 194, 201, 250
and 251 are amended as follows::
PARAGRAPH A. 26 CFR Part 194 is
amended as follows:
Section 194.254 is amended by (1) de-
leting the word "obtain" from the next
to the last sentence; and (2) making an
editorial change. As amended, ? 194.254
reads as follows:
? 194.254 Replacement of strip stamps
found by dealer to be mutilated or
missing.
Containers requiring restamping, as
described in ? 194.253, shall be set aside
by the dealer and application for neces-
sary stamps submitted with Form 428,
in duplicate, to the assistant regional
commissioner. Copies of Form 428 may
be obtained from the assistant regional
commissioner. In every case the applica-
tion shall state the cause of mutilation
or absence of stamps and submit evidence
that the spirits are eligible for stamping
under section 5205(e), I.R.C. Such evi-
dence may consist of invoices covering
purchase of the spirits, in addition to
other available documents. Such applica-
tion shall be signed by the dealer or his
authorized agent under the penalties of
perjury immediately below a declaration,
worded as follows:
I declare under the penalties of perjury
that I have examined this application and
to the best of my knowledge and belief it is
true and correct.
If the assistant regional commissioner
is satisfied from the evidence submitted
that the mutilation or absence of the
stamps has been satisfactorily explained,
he will approve the requisition for
stamps, Form 428, and deliver the stamps
to the applicant by mail with instructions
in regard to affixing them to the con-
tainers, or by a representative of his
office. If an overprinted stamp is to be re-
Placed by the dealer, the word "Re-
stamped," the name of the dealer, and
the date of restamping shall be im-
printed, or written in ink, in lieu of over-
printing the replacement stamp.
(72 Stat. 1358; 26 U.S.C. 5205)
PAR. B. 26 CFR Part 201 is amended as
follows:
1. Section 20:1.11 is amended by chang-
ing the definition of "Director of Cus-
toms" to reflect recent changes in the
organizational structure of the Bureau
of Customs. As amended, ? 201,11 reads
as follows:
? 201.11 Meaning of terms.
* *
Director of customs. The officer who
has jurisdiction over all customs activi-
ties of a customs district, including dis-
trict directors of customs at headquarters
ports of the district (except the district
of New York, N.Y.) ; the area directors of
customs in the district of New York,
N.Y.; the regional commissioner, of cus-
toms, and, as applicable, port directors
at ports not designated as headquarters
ports.
2. Section 201.543 is amended to
provide for: (1) Strip stamps to be
obtained from assistant regional commis-
sioners instead of from district direc-
tors; and (2) strip stamps being de-
livered by an alternate method to be
shipped directly to the proprietor instead
of being shipped to the assigned officer.
As amended, ? 201.543 reads as follows:
? 201.543 Procurement of strip stamps.
(a) General. Strip stamps may be ob-
tained, without charge, by the proprie-
tor, in reasonable anticipation of
current needs, from the assistant re-
gional commissioner of the region in
which the plant is located, by requisi-
tion on Form 428 approved by the as-
signed officer. Such stamps may not be
procured by one proprietor from an-
other or transferred to another plant
operated by the same proprietor, except
on authorization by the assistant re-
gional commissioner. Requisition shall
be for full sheets of such stamps. On
receipt of the stamps the proprietor
shall verify the quantity received and
acknowledge receipt thereof, noting any
discrepancies, on both copies of Form
428 returned by the assistant regional
commissioner, forward one copy of the
Form 428 to the assistant regional com-
missioner, and retain one copy in his
files.
(b) Alternative method. When the as-
sistant regional commissioner determines
that the interests of the Government will
be best served thereby, the stamps may
be shipped directly to the proprietor
from a location other than the office of
the assistant regional commissioner. In
such case, the assistant regional com-
missioner shall notify the proprietor that
the strip stamps will be delivered by an
alternative method and inform him of
the minimum quantity, if any, of each
size stamp which may be requisitioned
on any particular Form 428. Upon
approval of Form 128, two copies of
the form shall be returned to the pro-
prietor. Upon receipt, of the stamps, the
proprietor shall: (1) Indicate the serial
numbers (if any) of the stamps re-
ceived and acknowledge receipt thereof,
noting any discrepancies, on both copies
of Form 428, and (2) return one copy
to the assistant regional commissioner,
and retain one copy in his files.
(72 Stat. 1358; 26 U.S.C. 5205)
PAR. C. 26 CPR Part 250 is amended
as follows:
1. Section 250.11 is amended by chang-
ing the definitions of "Assistant re-
gional commissioner" and "Director of
customs." As amended, ? 250.11 reads as
follows:
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PROPOSED RULE MAKING 13101
? 250.11 Meaning of terms.
Assistant regional commissioner. An
assistant regional commissioner (alco-
hol, tobacco and firearms) who is re-
sponsible to, and functions under the di-
rection and supervision of, a regional
commissioner of internal revenue.
Director of Customs. The officer who
has jurisdiction over all customs activi-
ties of a customs district, including dis-
trict directors of customs at headquar-
ters ports of the district (except the
district of New York, N.Y.) ; the area di-
rectors of customs in the district of New
York, N.Y.; the regional commissioner of
customs, and, as applicable, port directors
at ports not designated as headquarters
ports.
2. Section 250.41 is amended by adding
a proviso at the end thereof. As amended,
? 250.41 reads as follows:
? 250.41 Destruction of marks and
brands.
The marks, brands, and serial num-
bers required by this part to be placed
on barrels, casks, or similar containers,
or cases, shall not be removed, or ob-
scured or obliterated, before the contents
thereof have been removed; but when
barrels, casks, or similar containers (ex-
cept for beer and wine) are emptied, all
such marks, brands, and serial numbers
shall be effaced and obliterated by the
person removing the contents: Provided,
That, the marks, brands, and serial num-
bers on such containers emptied on the
premises of a distilled spirits plant quali-
fied under the provisions of Part 201 of
this chapter need not be effaced or oblit-
erated.
(72 Stat. 1368; 26 U.S.C. 5205)
3. Section 250.62 is amended by: (1)
Making a clarifying change; and (2) de-
leting obsolete provisions relating to
powers of attorney. As amended, ? 250.62
reads as follows:
? 250.62 Corporate surety.
Surety bonds may be given only with
corporate sureties holding certificates of
authority from, and subject to the limita-
tions prescribed by, the Secretary of the
Treasury of the United States, as set
forth in the current revision of U.S.
Treasury Department Circular 570.
(61 Stat. 648;6 U.S.C. 6, 7)
4. Two new sections, ?? 250.62a and
250.62b, are added to prescribe require-
ments relating to filing of powers of at-
torney and execution of powers of attor-
ney, respectively. As added, new
?? 250.62a and 250.62b read as follows:
? 250.62a Filing of powers of attorney.
Each bond, and each consent to
changes in the terms of a bond, shall
be accompanied by a power of attorney
authorizing the agent or officer who exec-
uted the bond or consent to so act on be-
half of the surety. The Officer-in-Charge
who is authorized to approve the bond
may, when he deems it necessary, re-
quire additional evidence of the author-
ity of the agent or officer to execute the
bond or consent.
(61 Stat. 648; 6 U.S.C. 6,7)
? 250.6211 Execution of powers of attor-
ney.
The power of attorney shall be pre-
pared on a form provided by the surety
company and executed under the cor-
porate seal of the company. If the power
of attorney submitted is other than a
manually signed original, it shall be ac-
companied by certification of its validity.
(61 Stat. 648; 6 U.S.C. 6,7)
? 250.75 [Amended]
5. Section 250.75 is amended by de-
leting the words "Alcohol and Tobacco
Tax." immediately following the words
"Assistant Regional Commissioner," and
Inserting instead the words "Alcohol,
Tobacco and Firearms."
6. Section 250.138 is amended to: (1)
Provide that the Director may authorize
labels to be affixed so as to partially ob-
scure strip stamps; and (2) make an edi-
torial change. As amended, ? 250.138
reads as follows:
? 250.138 Affixing strip stamps.
Strip stamps shall be securely affixed
to the containers with a strong adhesive,
and shall be affixed in such a manner
that on opening the container the stamp
will be broken and a portion thereof, suf-
ficient to identify the kind of stamp
placed thereon, will remain attached to
the container or to a cap or seal which is
permanently affixed thereto. Strip
stamps affixed to containers shall not be
concealed or obscured in any manner ex-
cept that: (a) The Director, Alcohol,
Tobacco and Firearms Division, may
authorize labels to be affixed so as to
partially obscure strip stamps, if he finds
that a need therefor exists, and if he
finds that the manner of affixing such
labels does not obscure essential infor-
mation on the strip stamps which is not
clearly shown on the bottle or on the
labels affixed to the bottle, and (b) any
such stamp may be covered by a cup,
cap, seal, carton, wrapping, or other de-
vice which can be readily removed with-
out injury to the stamp or which is suf-
ficiently transparent to permit all data
on the stamp to be read. If a cup, cap, or
seal is placed over a stamp, a portion of
the stamp must remain plainly visible. If
containers are enclosed in sealed opaque
cartons, such cartons and wrappings on
such cartons must bear the words, "This
package may be opened for examination
by Internal Revenue Officers." Internal
revenue and customs officers have the
right to open such cartons or wrappings
and examine the container. If there is
doubt as to the propriety of the use of
any cup, cap, or seal, the closure and
container should be submitted to the Di-
rector, Alcohol, Tobacco and Firearms
Division, for approval.
(72 Stat. 1358; 26 U.S.C. 5205)
7. Section 250.163 is amended to pro-
vide that persons responsible for release
of liquors from customs custody who do
not take physical possession of the
liquors shall keep commercial records
which reflect the release of the liquors.
As amended, ? 250.163 reads as follows:
? 250.163 General requirements.
Except as provided in ? 250.164, every
person, other than a tourist, bringing
liquor into the United States from Puerto
Rico shall keep records and render re-
ports of the physical receipt and dispo-
sition of such liquors in accordance with
Part 194 ("Liquor Dealers") of this
chapter: Provided, That if the person
who is responsible for release of the
liquors from customs custody does not
take physical possession of the liquors,
he shall keep commercial records re-
flecting such release; such records shall
identify the kind and quantity of the
liquors released, the name and ad-
dress of the person receiving the liq-
uors from customs custody, and shall
be filed chronologically by release dates.
Records and reports will not be required
under this part with respect of liquors
while in customs custody.
(72 Stat. 1342, 1395; 26 U.S.C. 5114, 5555)
8. Section 250.207 is amended by
adding a proviso at the end thereof. As
amended, ? 250.207 reads as follows:
? 250.207 Destruction of marks and
brands.
The marks, brands, and serial num-
bers required by this part to be placed
on barrels, casks, or similar containers,
or cases, shall not be removed, or ob-
scured or obliterated, before the con-
tents thereof have been removed; but
when barrels, casks, or similar contain-
ers (except for beer and wine) are
emptied, all such marks, brands, and
serial numbers shall be effaced and ob-
literated by the person removing the
contents: Provided, That, the marks,
brands and serial numbers on such con-
tainers emptied on the premises of a
distilled spirits plant qualified under the
provisions of Part 201 of this chapter
need not be effaced or obliterated.
(72 Stat. 1358; 26 U.S.C. 5205)
9. Section 250.233 is amended to (1)
provide that the Director may authorize
labels to be affixed so as to partially ob-
scure strip stamps; and (2) make an
editorial change. As amended, ? 250.233
reads as follows:
? 2541.233 Affixing strip stamps.
Strip stamps shall be securely affixed
to the container with a strong adhesive,
and shall be affixed in such manner that
on opening the container the stamp will
be broken and a portion thereof, suf-
ficient to identify the kind of stamp
placed thereon, will remain attached to
the container or to a cap or seal which
is permanently affixed thereto. Strip
stamps affixed to containers shall not be
concealed or obscured in any manner ex-
cept that (a) the Director, Alcohol, To-
bacco and Firearms Division, may au-
thorize labels to be so affixed as to par-
tially obscure strip stamps, if he finds
that a need therefor exists, and if he
finds that the manner of affixing such
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13102 PROPOSED RULE MAKING
labels does not obscure essential infor-
mation on the strip stamp which is not
clearly shown on the bottle or on the
labels affixed to the bottle, and (b) any
such stamp may be covered by a cup,
cap, seal, carton, wrapping, or other de-
vice which can be readily removed with-
out injury to the stamp or which is suffi-
ciently transparent to permit all data
on the stamp to be read. If a cup, cap,
or seal is placed over a stamp, a portion
of the stamp must remain plainly visible.
If containers are enclosed in sealed
opaque cartons, such cartons and wrap-
pings on such cartons must bear the
words, "This package may be opened for
examination by Internal Revenue Offi-
cers." Internal revenue and customs offi-
cers have the right to open such cartons
or wrappings and examine the container.
If there is doubt as to the propriety of the
use of any cup, cap, or seal, the closure
and container should be submitted to
the Director, Alcohol, Tobacco and Fire-
arms Division, for approval.
(72 Stat. 1358; 26 U.S.C. 5205)
10. Sections 250.234, 250.235, 250.236,
and 250.237 are amended In their entire-
ty. As amended, ?? 250.234, 250.235,
250.236, and 250.237 read as follows:
? 250.234 Power of attorney.
If an importer gives power of attor-
ney to another person to sign Form 96
or Form 428, such power of attorney
shall be executed on Form 1534 and, in
the case of Forms 96, filed with the as-
sistant regional commissioner of the re-
gion in which the importer's business is
located or, in the case of Forms 428, the
assistant regional commissioner with
whom the requisition will be filed.
When either of the above forms is signed
by an agent, the name of the importer
shall be given, followed by the signature
of the agent and the words "Attorney in
Fact".
? 250.235 Breach of regulations, or
failure to properly account for strip
stamps.
The assistant regional commissioner
shall refuse to approve any further req-
uisitions, Form 428, when he has knowl-
edge that the importer has failed to fur-
nish a satisfactory accounting for strip
stamps, as prescribed in this part, or has
failed to comply with any of the provi-
sions of this part. The assistant regional
commissioner may require of the im-
porter, at a specified time and place, an
immediate accounting of all strip stamps
outstanding in the name of the importer
as a means of determining whether, there
has been unlawful diversion or use of
strip stamps and may also require that
all unused strip stamps be recalled and
delivered so they may be counted. If the
assistant regional commissioner has evi-
dence that any of the provisions of this
part have been willfully violated, he shall
take appropriate action. He shall also
refuse to approve any further requisi-
tions when he has knowledge that the
importer has failed to furnish a satis-
factory accounting for strip stamps in
any other region.
(72 Stat. 1358; 26 U.S.C. 5205)
? 27,0.236 Conditions.
Red strip stamps, requisitioned by,
and issued to, an importer or his agent
as provided in this subpart, may be sent
to a bottler or exporter in the Virgin Is-
lands to be affixed to containers of dis-
tilled spirits.
(72 Stat. 1358; 26 U.S.C. 5205)
? 250.237 Requisition, Form 428.
Requisition on Form 428 for red strip
stamps shall be made by the importer,
or by his agent pursuant to filing a Form
1534 as provided in ? 250.234, or by the
subsequent purchaser of the distilled
spirits as provided in ? 250.256. The
name, address, and permit number of the
Importer (or subsequent purchaser)
shall be shown, and if the requisition is
prepared by an agent located at an ad-
dress other than that of the importer,
the address. of the agent shall be shown.
The requisition shall be serially num-
bered by the importer, and if one or
more agents at locations other than that
of the importer also place requisitions,
each agent shall maintain a separate se-
ries of serial numbers prefixed by a let-
ter designation assigned by the importer,
e.g., A-1, A-.2. The Form 428 shall be
submitted to the assistant regional com-
missioner of the region in which the
place of business of the importer, or of
his agent, or of the subsequent pur-
chaser, as the case may be, is located. A
certified, photostatic or similar type of
reproduced copy of the importer's per-
mit issued pursuant to the Federal
Alcohol Administration Act and regula-
tions issued thereunder shall be fur-
nished to the assistant regional com-
missioner of a region other than the re-
gion in which the importer's place of
business is located either before or at the
time the first requisition is presented for
approval. All strip stamps issued on
Form 428 shall, for each location at
which an accounting of stamps is re-
quired by ? 250.2701, be accounted for on
a first-in- first-out basis.
(72 Stat. 1358; 26 U.S.C. 5205)
?? 250.238 and 250.239 [Revoked]
11. Sections 250.238 and 25(1.239 are
revoked.
12. Section 250.240 and its heading are
amended to provide that requisitions for
strip stamps will be approved, and the
stamps issued, by the assistant regional
commissioner, As amended, ? 250.240
reads as follows:
? 250.240 Approval of requisition and
issuance of stamps.
The assistant regional commissioner
will approve Form 428 and issue the
stamps if he--
(a) Is satisfied:
(1) That the importer is the holder
of an importer's permit issued under
the Federal Alcohol Administration Act
and the regulations in 27 CFR Part 1 and
(2) That the quantity requisitioned is
reasonable and necessary; and
(b) Has no information on which a
denial of requisition should be made un-
der the provisions of ? 250.235.
When satisfied that Form 428 may te
approved, the assistant regional corn-
missioner shall enter the serial numbers
of the stamps issued and the date or
Issue and approve all copies of the form.
He shall then deliver the stamps to the
applicant, and, if the stamps are mailed,
or are delivered to anyone other than thE
applicant, two copies of the Form 42E
shall accompany the stamps. Upon re-
ceipt of the stamps, the applicant shall
acknowledge receipt on both copies of
Form 428 and return one copy to thE
assistant regional commissioner whe
issued the stamps and, if an agent, one
copy to the importer. In each instancE
when the assistant regional commis-
sioner approves a requisition which has
been submitted by an agent of an im-
porter, the assistant regional commis-
sioner shall immediately forward a copy
of Form 428 to the importer, and, if the
importer's place of business is located in
another region, the assistant regional
commissioner shall forward a copy to the
assistant regional commissioner of the
region in which the importer's place of
business is located. If a requisition is
disapproved for any reason, the assist-
ant regional commissioner shall return
a copy of Form 428 marked "disap-
proved" to the applicant.
(72 Stat. 1358; 26 U.S.C. 5205)
13. A new section, ? 250.240a, is added
to prescribe requirements relating to
issuance of stamps by an alternative'
method. As added, new ? 250.240a reads
as follows:
? 250.240a Alternative method for issu-
ance of stamps.
(a) Action by assistant regional com-
missioner. When the assistant regional
commissioner determines that the inter-
est of the Government will be best served
thereby, strip stamps may be shipped
directly to the applicant, as shown on
Form 428, from a location other than
the office of the assistant regional com-
missioner. In such case, the assistant
regional commissioner shall notify the
applicant that strip stamps will be de-
livered by an alternative method and
inform him of the minimum quantity, if
any, of each size of stamp which may
be requisitioned on any particular Form
428. Upon approval of Form 428, two
copies of the form shall be returned to
the applicant, and, if the Form 428 was
prepared by an agent of an importer, a
copy of the form shall be forwarded to
the importer and, if applicable, to the
assistant regional commissioner of the
region in which the importer's place of
business is located.
(b) Action by applicant. Upon receipt
of the stamps, the applicant shall (1)
indicate the serial numbers (if any) of
the stamps received and acknowledge re-
ceipt of the stamps on both copies of
Form 428, and (2) return one copy to
the assistant regional commissioner to
whom the Form 428 was submitted for
approval and, if an agent, one copy to
the importer.
(72 Stat. 1358; 26 U.S.C. 5205)
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PROPOSED RULE MAKING
? 250.241 [Revoked]
14. Section 250.241 is revoked.
15. Section 250.242 is amended by (1)
deleting the requirement that the over-
printing of stamps be verified by the di-
rector of customs; and (2) making an
, editorial change. As amended, ? 250.242
reads as follows:
? 250.242 Overprinting of red strip
stamps.
The importer, or his agent, or the sub-
sequent purchaser of the distilled spirits,
as the case may be, shall have the red
a
strip stamps indelibly and legibly over-
printed, at his own expense, with the
permit number of the importer in whose
name the stamps were requisitioned:
Provided, That if the importer is an
agency of a State or a political subdi-
vision thereof, or the District of Colum-
bia, the stamps will be overprinted with
the name of the State or with "District
of Columbia," or with a recognized
abbreviation thereof.
(72 Stat. 1358; 26 U.S.C. 5205)
? 250.244 [Revoked]
16. Section 250.244 is revoked.
17. Sections 250.245 and 250.246, and
their headings, are amended by chang-
ing the requirements relating to the tak-
ing of credit for red strip stamps used.
As amended, ?? 250.245 and 250.246 read
as follows:
? 250.245 Credit for red strip stamps on
distilled spirits deposited in a foreign-
trade zone.
When red strip stamps are affixed in
the Virgin Islands to containers of dis-
tilled spirits and, on arrival in the United
States, the spirits are deposited in a
foreign-trade zone, Form 1627 shall be
prepared and distributed in accordance
with the instructions on the form, and
credit shall be taken for the stamps on
the importer's daily record of strip
stamps in the manner provided in
? 250.246. In addition, and as a condition
of obtaining approval froni the director
of customs for admission of the spirits
to the zone, the importer or his agent
and the zone grantee shall state on the
zone application that if such spirits are
subsequently exported from the zone the
red strip stamps will be effectively de-
stroyed or voided under customs super-
vision prior to exportation. The director
of customs will not approve such expor-
tation and will not execute a permit of
delivery until the red strip stamps have
been effectively destroyed or voided as
provided in ? 250.252a.
(48 Stat. 999, as amended, 72 Stat. 1358;
19 U.S.C. 81c, 26 U.S.C. 5205)
? 250.246 Credit for red strip stamps on
arrival of distilled spirits.
On arrival of a shipment of spirits, the
importer who requisitioned the stamps,
the importer filing the customs entry
papers, or the agent of either shall pre-
pare Part 1 of Form 1627. Form 1627
Shall be furnished to customs officials
with the entry papers for execution of
Part 11 or 111 by the appropriate cus-
toms official. If Form 1627 is prepared
by anyone other than the importer who
requisitioned the stamps, a copy of the
form shall be forwarded to such im-
porter at the time the original and
one copy are furnished to customs
such importer at the time the original
and one copy are furnished to customs
officials. On receipt of Form 1627 prop-
erly executed as to Part 11 or 111, the
importer who requisitioned the stamps,
or in whose name the stamps were req-
uisitioned, may take credit for the stamps
on his daily record of strip stamps.
(72 Stat. 1358; 26 U.S.C. 5205)
?? 250.247 and 250.248 [Revoked]
18. Seetions 250.247 and 250.248 are
revoked.
19. Section 250.249 is amended to pro-
vide for discrepancies in shipments to be
recorded on Form 1627 by the customs
officer. As amended, ? 250.249 reads as
follows:
? 250.249 Irregularities or discrepan-
cies in shipments.
In case any irregularities or discrep-
ancies are found, the director of customs
at the port of entry will make demand
for redelivery of unexamined packages,
and will not release examined or rede-
livered packages until satisfactory ex-
planation and/or proper corrections
have been made. The customs officer will
enter any discrepancies as to red strip
stamps on Form 1627.
(72 Stat. 1358; 26 U.S.C. 5205)
?? 250.250 and 250.251 [Revoked]
20. Sections 250.250 and 250.251 are
revoked.
21. Section 250.252 and its heading are
amended to apply only to the destruc-
tion of strip stamps in the Virgin Is-
lands and to change the requirements
relative thereto. As amended, ? 250.252
reads as follows:
? 250.252 Destruction of red strip
stamps in the Virgin Islands.
When for any reason a Virgin Islands
bottler or exporter has on hand a quan-
tity of red strip stamps which are not
to be affixed to containers for shipment
to the United States, and it is imprac-
tical to return such stamps to the im-
porter from whom they were received or
to transfer them to another bottler or
exporter conducting operations for the
Importer, the assistant regional com-
missioner of the region in which the im-
porter's place of business is located may,
on application, in triplicate, by the
importer, authorize the destruction of
the stamps in the Virgin Islands. The
application shall show the size, quan-
tity, and serial numbers of the stamps,
the name and address of the Virgin Is-
lands bottler or exporter who has pos-
session of the stamps, and the reasons
why destruction in the Virgin Islands
is requested. If the assistant regional
commissioner approves the application
for destruction he will return two copies,
marked "approved," to the importer who
will forward both copies, together with
Form 1627, in duplicate, with the perti-
nent entries in Part 1 completed, to the
13103
Virgin Islands bottler or exporter. On
receipt of the approved application, the
stamps may be destroyed provided such
destruction is under the supervision of
an authorized representative of the Gov-
ernor of the Virgin Islands (including
an officer of the Board of Control of
Alcoholic Beverages). Upon destruction
of the stamps, the Virgin Islands bot-
tler or exporter and the representative
shall complete the applicable portions
of Part IV of Form 1627. The original
Form 1627 and one copy of the approved
application shall be returned to the im-
porter who filed the application. Such
importer may then take credit for the
stamps on his strip stamp record and
on Form 96.
(72 Stat. 1358; 26 U.S.C. 5205)
22. Two new sections, ?? 250.252a and
250.252b, are added to prescribe re-
quirements relating to the destruction of
? red strip stamps on containers in cus-
toms custody which are diverted for ex-
portation or withdrawn free of tax, re-
spectively. As added, new ?? 250.252a and
250.252(b), read as follows:
? 250.252a Destruction of red strip
stamps on containers in customs
custody.
When containers of distilled spirits to
which red strip stamps were affixed prior
to arrival in the United States are di-
verted for exportation, including return
to the Virgin Islands bottler or exporter,
by the importer, the strip stamps shall
be effectively destroyed by the importer
or his representative under customs su-
pervision, prior to exportation: Provided,
That the director of customs may au-
thorize the importer to void, rather than
destroy, such stamps under customs su-
pervision. When voiding of red strip
stamps has been authorized, they shall
be voided by legibly stamping thereon,
with indelible ink and in boldface capi-
tal letters no smaller than 10-point type,
the word "Voided" or the word
"cancelled".
(72 Stat. 1358; 26 U.S.C. 5205)
? 250.252b Destruction of red strip
stamps; spirits withdrawn free of
tax.
When distilled spirits imported from
the Virgin Islands are to be withdrawn
from customs custody free of tax for
entry into the United States, the red
strip stamps affixed to the containers
shall be effectively destroyed by the im-
porter or his representative, under cus-
toms supervision, prior to such with-
drawal.
(72 Stat. 1358; 26 U.S.C. 5205)
?? 250.253 and 250.254 [Revoked]
23. Sections 250.253 and 250.254 are
revoked.
24. Section 250.255 is amended by
deleting the requirement that strip
stamps be placed in customs custody. As
amended, ? 250.255 reads as follows:
? 250.255 Conditions.
Distilled spirits in containers coming
Into the United States from the Virgin
Islands without having red strip stamps
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attached may not be released from cus-
toms custody until a stamp has been
affixed to each container, under the
supervision of a customs officer.
(72 Stat. 1358; 26 U.S.C. 5205)
25. Section 250.256 is amended by (1)
making a conforming change; and (2)
including a cross-reference to new
? 250.240a. As amended, ? 250.256 reads
as follows:
? 250.256 Requisition, Form 428.
Requisition for red strip stamps shall
be made by the original importer, or his
agent: Provided, That if the importer
has gone out of business the requisition
shall lie made by the person having title
to the distilled spirits. The requisition
-hall be submitted in accordance with
250.237. Approval of the requisition
shall be subject to the provisions of
? 250.290 or ? 250.240a, as the case may
be.
(72 Stat. 1358; 26 U.S.C. 5205)
? 250.257 [Revoked]
26. Section 250.257 is revoked.
27. Section 250.270 is amended to pre-
scribe new requirements relating to the
daily record of strip stamps. As amended,
? 250.270 reads as follows:
e 250.270 Daily record of stiip stamps.
(a) For each day during which a
transaction in red strip stamps occurs,
the importer shall maintain a daily rec-
ord accounting for all strip stamps pro-
cured by him and by his agents. The rec-
ord shall show by size (small or stand-
ard) the number received, used, lost,
mutilated, destroyed, or otherwise dis-
posed of, and outstanding at the begin-
ning and end of the day. Each entry
showing stamps received shall be sup-
ported by the related Form 428, which
shall be identified on the record by date
and, serial number. The record shall also
show the number and size of bottles to
which the stamps were affixed, except
that bottles of less than 1/2-pint capacity
shall be recorded as one item. Each
credit taken on the record shall be sup-
ported by Form 1627, which shall be
identified on the record by date and se-
rial number as the authority for such
credit. The stamp record shall also be
supported by customs forms covering
spirits which have been diverted for ex-
portation, destroyed while in a foreign-
trade zone, or returned to the bottler or
ex:porter in the Virgin Islands. If the im-
porter has more than one place of busi-
ness from which he requisitions stamps,
'a daily record shall be maintained on the
premises of each place of business. Each
daily record of strip stamps shall be sup-
plemented by an accounting of strip
stamps showing, for each separate loca-
tion at which there are stamps for which
the importer is accountable, (1) the
name and address of the business and
(2) the quantity of stamps outstanding
at the beginning of the day, the quanti-
ties received, used, transferred to other
locations, lost, mutilated, destroyed, or
otherwise disposed of, and the quantity
outstanding at the end of the day.
PROPOSED RULE MAKING
(72 Stat. 1358; 26 U.S.C. 5205) ,
28. Section 250.271 is amended to pro-
vide that the report of strip stamps shall
be filed quarterly, instead of annually,
and shall be filed with the assistant re-
gional commissioner. As amended,
? 250.271 reads as follows:
e 250.271 Report of strip stamps, Form
96.
The imposter shall prepare on Form
96, in duplicate, a quarterly report for
the periods ending March 31, June 30,
September 30, and December 31 of each
year. The report shall account for all
strip stamps procured (including stamps
procured by his agents at locations other
than that of the business of the im-
porter) , used, lost, mutilated, destroyed,
or otherwise disposed of during the pe-
riod, and shall show the number of
stamps outstanding at the beginning and
end of the period. If the importer has
more than one iplace of business froni
which he requisitions stamps, he shall
prepare a separate report on Form 96 for
each such place of business. The assist-
ant regional commissioner may require
the importer to supplement each report
with such information as he deems nec-
essary. The original of Form 96 shall be
submitted to the assistant regional com-
missioner of the region in Which the im-
porter's place of business is located not
later than the 10th day of the month
next succeeding the period for which
rendered. The copy of Form 96 shall be
retained by the importer and filed with
the records required by ? 250.270.
(72 Stat. 1358; 26 U.S.C. 5205)
29. Section 250.272 is amended to pro-
vide that persons responsible for release
of 1:iquors from customs custody who do
not take physical possession of the liquors
shall keep comthercial records which re-
flect the release of the liquors. As
amended, ? 250.272 reads as follows:
? 250.272 General requirements.
Except as provided in ? 250.273, every
person, other than a tourist, bringing
liquors into the United States from the
Virgin Islands shall keep such records
and render reports of the physical re-
ceipt and disposition of such liquors as
are required to be kept by a wholesale or
retail dealer, as applicable, under the
provisions of Part 194 of this chapter.
Any importer who is responsible for re-
lease of the liquors from customs cus-
tody and who does not take physical pos-
session of the liquors shall keep commer-
cial records reflecting such release; such
records shall identify the kind and quan-
tity of the liquors released, the name and
address of the person receiving the
liquors from customs custody, and shall
be filed chronologically by release dates.
Records and reports will not be required
under this part With respect of liquors
while in customs custody.
(72 Stat. 1342, 1345; 28 U.S.C. 5114, 5124)
30. Section 250.275 is amended by (1)
deleting the reference to the director of
customs; and (2) making conforming
changes. As amended, ? 250.275 reads as
follows:
? 250.275 Filing.
If the importer maintains loose-leaf
records of receipt or disposition, one legi-
ble copy of each such record shall be
marked or stamped "Government File
Copy", and shall be filed not later than
the close of the business day next sue-
ceeding that on which the transaction
occurred. All records required by this
part, and legible copies of all reports re-
quired by this part to be submitted to
the assistant regional commissioner shall
be filed separately, chronologically, and
in numerical sequence within each date,
at the importer's place of business tc
which they relate: Provided. That on ap-
plication, in duplicate, the assistant
regional commissioner may authorize the
files, or any individual file, to be maintaied at other premises under control
of the importer, if he finds that such
maintenance will not delay the timely
filing of any document, or cause undue
inconvenience to internal revenue or Cus-
toms officers desiring to examine such
files. Supporting documents, such as con-
signors' invoices, delivery receipts, bills
of lading, etc., or exact copies thereof,
may be filed in accordance with the 1m
porter's customary practice.
(72 Stat. 1342, 1391; 26 U.S.C. 5114, 5505)
31. Section 250.277 is amended to (1)
Provide that unused stamps shall be sub-
mitted to the assistant regional commis-
sioner; and (2) make related changss.
As amended, ? 250.277 reads as follows:
? 250.277 Procedure.
The importer who discontinues or
sells his business shall recall from his
agents, and his bottlers or exporters in
the Virgin Islands, all unused stamps in
their custody. He shall submit his entre
stock of unused stamps, accompanied by
a report, in duplicate, of inventory, by
size and quantity, to the assistant re-
gional commissioner. The same proce-
dure may be followed by an importer
who has unused stamps for which he has
no further use for any reason. The as-
sistant regional commissioner shall then
destroy the stamps and, after such ,le-
struction, note the action taken on both
copies of the inventory. He shall retain
the original and return the copy of the
Inventory to the importer. In the case of
discontinuance or sale of the business,
the importer shall, within 5 days of
the receipt of the returned copy of the
inventory, note the disposition of the
stamps on Form 96, mark the report
"Final", and submit it to the assistant
regional commissioner.
(72 Stat. 1358; 26 U.S.C. 5205)
32. A new subpart, Subpart Q, is stded
to provide for the application for and
approval of alternate methods and :pro-
cedures. As added, new Subpart Q reads
as follows:
Subpart 0?Miscellaneous Provisions
? 250.331 Alternate methods or p roee-
dures.
(a) Application. A person bringing li-
quors into the United States from Puerto
Rico or the Virgin Islands who desires to
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PROPOSED RULE MAKING
use an alternate method or procedure
In lieu of a method or procedure pre-
scribed by this part shall file application,
In triplicate, with the assistant regional
commissioner of the region in which his
place of business is located. If such per-
son has several places of business at
which he desires to use such alternate
method or procedure, a separate appli-
cation shall be submitted for each. Each
application shall:
(1) Specify the name, address, and
permit number of the person to which it
relates;
(2) State the purpose for which filed;
and
(3) Specifically describe the alternate
method or procedure and set forth the
reasons therefor.
No alternate method or procedure re-
lating to the assessment, payment, or
collection of tax shall be authorized
under this paragraph.
(b) Approval. When an application
for use of an alternate method or proce-
dure i4 received, the assistant regional
commissioner shall determine whether
the approval thereof would unduly hin-
der the effective administration of this
part or would result in Jeopardy to the
revenue. The assistant regional com-
missioner shall forward two copies of the
application to the Director. Alcohol, To-
bacco and Firearms Division, together
with a report of his findings and his rec-
ommendation. The Director, Alcohol, To-
bacco and Firearms Division, may ap-
prove the alternate method or procedure
If he finds that:
(1) Good cause has been shown for
the use of the alternate method or
procedure;
(2) The alternate method or proce-
dure is within the purpose of, and con-
sistent with the effect intended by, the
specifically prescribed method or proce-
dure, and affords equivalent security to
the revenue; and
(3) The alternate method or proce-
dure will not be contrary to any provi-
sion of law, and will not result in any
Increase in cost to the Government or
hinder the effective administration of
this part.
No alternate method or procedure shall
be used until approval has been received
from the Director, Alcohol, Tobacco and
Firearms Division. Authorization for the
alternate method or procedure may be
withdrawn whenever in the judgment of
the Director, Alcohol, Tobacco and Fire-
arms Division, the revenue is jeopardized
or the effective administration of this
part is hindered by the continuation of
such authorization.
(Sec. 7805, Internal Revenue Code, 68A Stat.
917; 26 U.S.C. 7805)
PAR. D. 26 CFR Part 251 is amended
as follows:
1. Section 251.11 is amended by (1)
changing the definitions of "Assistant
regional commissioner" and "Director of
customs." As amended, ? 251.11 reads as
follows:
? 251.11 Meaning of terms.
? ? ?
Assistant regional commissioner. An
assistant regional commissioner (alcohol,
tobacco, and firearms) who is responsi-
ble to and functions under the direction
and supervision of, a regional commis-
sioner of internal revenue.
Director of customs. The officer who
has Jurisdiction over all customs activ-
ities of a customs district, including dis-
trict directors of customs at headquarters
ports of the district (except the district
of New York, N.Y.) ; the area directors
of customs in the district of New York,
N.Y.; the regional commissioner of cus-
toms, and, as applicable, port directors
at ports not designated as headquarters
Ports.
? 251.49 [Amended]
2. The statutory citation at the end of
? 251.49 is corrected to read "(76 Stat. 72,
as amended; 19 U.S.C. 1202)."
3. Section 251.64 is amended to pre-
scribe revised requirements relating to
the procurement and issuance of strip
stamps. As amended, ? 251.64 reads as
follows:
? 251.64 Requisition, Form 428.
Requisition on Form 428 for red strip
stamps shall be made by the importer, or
by his agent pursuant to filing a Form
1534 as provided in ? 251.64a, or by the
subsequent purchaser of the distilled
spirits as provided in ?251.111. The
name, address, and permit number of the
importer (or subsequent purchaser)
shall be shown, and if the requisition is
prepared by an agent located at an ad-
dress other than that of the importer,
the address of the agent shall be shown.,
The requisition shall be serially num-
bered by the importer, and if one or more
agents at locations other than that of the
importer also place requisitions, each
agent shall maintain a separate series
of serial numbers prefixed by a letter
designation assigned by the importer,
e.g., A-1, A-2. The Form 428 shall be
submitted to the assistant regional com-
missioner of the region in which the
place of business of the importer, or of his
agent, or of the subsequent purchaser,
as the case may be, is located. A certi-
fied, photostatic or similar type of repro-
duced copy of the importer's permit
Issued pursuant to the Federal Alcohol
Administration Act and regulations
Issued thereunder shall be furnished to
the assistant regional commissioner of
a region other than the region in which
the importer's place of business is lo-
cated either before or at the time the
first requisition is presented for approval.
Notwithstanding the provisions of Part
250 of this chapter, an importer or his
agent procuring spirits from abroad and
from the Virgin Islands may include
stamps for both purposes on one requisi-
tion. All strip stamps issued on Form 428
shall, for each location at which an
accounting of stamps is required by
? 251.130, be accounted for on a first-in
first-out basis.
(72 Stat. 1358; 26 U.S.C. 5205)
4. Section 251.64a is amended to: (1)
Provide that powers of attorney shall be
filed with the assistant regional commis-
13105
sioner; and (2) make a number of related
changes. As amended, ? 251.64a reads as
follows:
? 251.64a Power of attorney.
If an importer gives power of attorney
to another person to sign Form 96 or
Form 428, such power of attorney shall
be executed on Form 1534 and, in the
case of Form 96, filed with the assistant
regional commissioner of the region in
which the importer's business is located
or, in the case of Form 428, the assistant
regional commissioner with whom the
requisition will be filed. When either of
the above forms is signed by an agent,
the name of the importer shall be given,
followed by the signature of the agent
and the words "Attorney in Fact."
?? 251.65 and 251.65a [Revoked I
5. Sections 251.65 and 251.65a are
revoked.
6. Section 251.66 and its heading are
amended to provide that requisitions for
strip stamps will be approved, and the
stamps issued, by the assistant regional
commissioner. As amended, ? 251.66 reads
as follows:
? 251.66 Approval of requisition and
issuance of stamps.
The assistant regional commissioner
will approve Form 428 and issue the
stamps if he?
(a) Is satisfied:
(1) That the importer is the holder of
importer's permit issued under the Fed-
eral Alcohol Administration Act and the
regulations in 27 CFR- Part 1 and
(2) That the quantity requisitioned is
reasonable and necessary; and
(b) Has no information on which a
denial of a requisition should be made
under the provisions of ? 251.92.
When satisfied that Form 428 may be
approved, the assistant regional com-
missioner shall enter the serial numbers
of the stamps issued and the date of
Issue and approve all copies of the farm.
He shall then deliver the stamps to the
applicant, and, if the stamps are mailed,
or are delivered to anyone other than the
applicant, two copies of the Form 428
shall accompany the stamps. Upon re-
ceipt of the stamps, the applicant shall
acknowledge receipt on both copies of
Form 428 and return one copy to the as-
sistant regional commissioner who
Issued the stamps and, if an agent, one
copy to the importer. In each instance
when the assistant regional commis-
sioner approves a requisition which has
been submitted by an agent of an im-
porter, the assistant regional commis-
sioner shall immediately forward a COPY
of Form 428 to the importer, and, if the
Importer's place of business is located in
another region, the assistant regional
commissioner shall forward a copy to the
assistant regional commissioner of the
region in which the importer's place of
business is located. If a requisition is dis-
approved for any reason, the assistant
regional commissioner shall return a
copy of Form 428 marked "disapproved"
to the applicant.
(72 Stat. 1358; 26 U.S.C. 5205)
FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY 1, 1972
Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8
Approved Fookelease 2001/08/09 : CIA-RDP86-00240P000100190026-8
13106
7. A new section, ? 251.66a, is added to
prescribe requirements relating to is-
suance of stamps by an alternative
method. As added, new ? 251.66a reads
as follows:
? 251.66a Alternative method for issu-
ance Of stamps.
(a) Action be assistant regional com-
missioner. When the assistant regional
commissioner determines that the inter-
est of the Government will be best served
thereby, strip stamps may be shipped
directly to the applicant, as shown on
Form 428, from a location other than the
office of the assistant regional commis-
sioner. In such case, the assistant re-
gional commissioner shall notify the
applicant that strip stamps will be de-
livered by an alternative method and in-
form him. of the minimum quantity, if
any, of each size of stamp which may be
requisitioned on any particular Form
428. Upon approval of Form 428, two
copies of the form shall be returned to
the applicant, and, if the Form 428 was
prepared by an agent of an importer, a
copy of the form shall be forwarded to
the importer and, if applicable, to the
assistant regional commisskmer of the
region in which the importer's place of
business is located.
(b) Action by applicant. Upon receipt
of the stamps, the applicant shall (1)
indicate the serial numbers (if any) of
the stamps received and adknowledge re-
ceipt of the stamps on both copies of
Form 428, and (2) return one copy to the
assistant regional commissioner to
whom the Form 428 was submitted for
approval and, if an( agent, one copy to
the importer.
(72 Stat. 1358; 26 U.S.C. 5205)
? 251.67 [Revoked]
? 8. Section 251.67 is revoked.
O. Election 251.68 is amended to (1)
delete) the requirement that the over-
printing of stamps be verified by the di-
rector of customs; and (2) make an edi-
torial change. As amended, ? 251.68
reads as follows;
? 251.68 Overprinting of red strip
stamps.
The importer, or his agent, or the sub-
sequent purchaser of the distilled spirits,
as the case may be, shall have the red
strip stamps indelibly and legibly over-
printed, at his own expense, with the per-
mit number of the importer in whose
name the stamps were requisitioned;
Provided, That if the importer is an
agency- of a State or a political sub-
division thereof, or the District of Colum-
bia, the stamps will be -overprinted with
the name of the State or with "District
of Columbia." or with a recognized ab-
breviation thereof.
(72 Stat. 1358; 26 U.S.C. 5205)
10. Section 251.69 is amended to (1)
provide that the Director may authorize
labels to be affixed so as to partially ob-
scure strip stamps; and (2) make an
editorial change. As amended, ? 251.69
reads as follows:
PROPOSED RULE MAKING
? 251.69 Affixing strip stamps.
Strip stamps shall be securely affixed
to the container with a strong adhesive,
and shall be affixed in such a manner that
on opening the container the stamp will
be broken and a portion thereof, suffi-
cient to identify the kind of stamp placed
thereon, will remain attached to the con-
tainer or to a cap or seal which is perma-
nently affixed thereto. Strip ? stamps
affixed to containers shall not be con-
cealed or obscured in any manner except
that (a) the Director, Alcohol, Tobacco
and Firearms Division, may authorize
labels to be so affixed as to partially ob-
scure strip stamps, if he finds that a need
therefor exists, and if he finds that the
manner of affixing such labels does not
obscure essential information on the strip
stamps which is not clearly shown on the
bottle or on the labels affixed to the
bottle, and (b) any such stamp may be
covered by a cup, cap, seal, carton,
wrapping, or other device which can be
readily removed without injury to the
stamp or which is sufficiently trans-
parent to permit all data on the stamp
to be read. If a cup, cap, or seal is placed
over a stamp, a portion of the stamp
must remain plainly visible. If contain-
ers are enclosed in sealed opaque cartons,
such cartons or wrappings on such car-
tons must bear the words, "This package
may be opened for examination by
Internal Revenue Officers." internal
revenue and customs officers have the
right to open such cartons or wrappings
and examine the container. If there is
doubt as to the propriety of the use of
any cup, can or seal, the closure and con-
tainer should be submitted to the Direc-
tor, Alc,obea, Tobacco and Firearms
Division, for approval.
(72 Stat. 1358; 26 13.13.C. 5205)
11. Section 251.72 is amended to make
its provisions applicable to spirits which
are returned to a foreign bottler or ex-
porter. As amended, ? 251.72 reads as
follows:
? 251.72 Exportation of imported dis-
tilled spirits; red strip stamps.
When imported distilled spirits to
which red strip stamps were affixed prior
to arrival in the United States are di-
verted for exportation purposes, includ-
ing return to the foreign bottler or ex-
porter, by the importer, the strip stamps
shall be effectively destroyed by the im-
porter or his representative under cus-
toms supervision, prior to exportation:
Provided, That the director of customs
may authorize the importer to void,
rather than destroy, such strip stamps
under customs supervision. When void-
ing of red strip stamps has been author-
ized, they shall be voided by legibly
stamping thereon, with indelible ink and
in boldface capital letters no smaller
than 10-point type, the word "Voided"
or the word "'Cancelled." Red strip
stamps affixed to distilled spirits origi-
nating in the United States, evidencing
the tax or indicating compliance with
the provisions of chapter 51, I?R.C., shall
not be removed, at or prior to the time
of exportation.
(72 Stat. 1358; 26 U.S.C. 5205)
12. Section 251.80 is amended to delete
the requirement that stamps to be sent
to a foreign bottler or exporter be requi-
sitioned specifically for that purpose. As
amended, ? 251.80 reads as follows;
? 251.80 Conditions.
Red strip stamps, requisitioned by, and
issued to, an importer or his agent as
provided in this part, may be sent to a
bottler or exporter in a foreign country
to be affixed to containers of distilled
spirits.
(72 Stat. 1358; 26 U.S.C. 5205)
?? 251.81, 251.82, 251.83, and 251.85
[Revoked]
13. Sections 251.81, 251.82, 251.83, and
251.85 are revoked.
14. Sections 251.85a and 251.86 and
their headings are amended by changing
the requirements relating to the taking
of credit for red strip stamps used, and
? 251.85a is further amended by provid-
ing for stamps to be voided. As amended,
?? 251.85a and 251.86 read as follows:
? 251.85a Credit for red strip stamps on
distilled spirits deposited in a foreign.
trade zone.
When red strip stamps are affixed
abroad to containers of imported distilled
spirits and, on arrival in the United
States, the spirits are deposited in a for-
eign-trade zone, Form 1627 shall be pre-
pared and distributed in accordance with
the instructions on the form, and credit
shall be taken for the stamps on the ha.
porter's daily record of strip stamps in
the manner provided in ? 251.86. In addi-
tion, and as a condition of obtaining ap-
proval from the director of customs for
admission of the spirits to the zone, the
importer or his agent and the zone gran-
tee shall state on the zone application
that if such spirits are subsequently ex-
ported from the zone the red strip stamps
will be effectively destroyed or voided
under customs supervision prior to ex-
portation. The director of customs will
not approve such exportation and will
not execute a permit of delivery until the
red strip stamps have been effectively
destroyed or voided as provided in
? 251.72.
(48 Stat: 999, as amended, 72 Stat. 1358; 19
U.S.C. 81e, 26 U.S.C. 5205)
? 251.86 Credit for red strip stamps os
arrival of distilled spirits.
On arrival of a shipment of imported
spirits, the importer who requisitioned
the stamps, the importer filing the =-
toms entry papers, or the agent of either
shall prepare Part 1 of Form 1627. Form
1627 shall be furnished to customs offi-
cials with the entry papers for execution
of Part 11 or 111 by the appropriate cus-
toms official. If Form 1627 is prepared by
anyone other than the importer who
requisitioned the stamps, a copy of the
form shall be forwarded to such Ira-
porter at the time the original and