Federal Register / Vol. 69, No. 220 / Tuesday, November 16, 2004 / Rules and Regulations 67055

initial eligibility to participate in such 

plan or arrangement (or pursuant to a 

similar arrangement involving a onetime irrevocable election). 

A contribution that is made as a 

condition of employment and that 

reduces an employee’s compensation 

generally constitutes an employee 

contribution includible in wages for 

FICA tax purposes. See section 1015 of 

the Employee Retirement Income 

Security Act of 1974 (Public Law 93–

406 (88 Stat. 829)) relating to amounts 

designated as employee contributions 

under section 414(h) of the Code; see 

also H.R. Rep. No. 93–807, at 145, 93d 

Cong., 2d Sess. (1974) wherein Congress 

stated that ‘‘[u]nder present law, 

contributions which are designated as 

employee contributions are generally 

treated as employee contributions for 

purposes of the Federal tax law.’’ Code 

section 414(h)(1) merely codified the 

existing administrative and judicial 

treatment of amounts designated as 

employee contributions. See, for 

example, Howell v. United States, 775 

F.2d 887 (7th Cir. 1985) holding that 

mandatory contributions to a state 

retirement plan of amounts designated 

as employee contributions and withheld 

from the employee’s salary are 

employee contributions includible in 

the employee’s gross income. Thus, as 

with employer contributions made 

pursuant to cash or deferred elections 

and one-time irrevocable elections, 

employer contributions that are made as 

a condition of employment and in lieu 

of mandatory employee contributions 

and that reduce an employee’s 

compensation are amounts otherwise 

includible in wages for FICA tax 

purposes. 

Whether a contribution that reduces 

an employee’s compensation is required 

by statute, contract, or otherwise, an 

employee implicitly agrees to the 

contribution as a condition of 

employment. The acceptance of 

employment and the subsequent 

performance of services manifests the 

employee’s agreement to the 

contribution. See H.R. Conf. Rep. No. 

98–861, at 1415, 98th Cong., 2d Sess. 

(1984) relating to the amendment of 

section 3121(v)(1)(B), wherein Congress 

stated that ‘‘[t]he conferees intend that 

the term salary reduction agreement also 

includes any salary reduction 

arrangement, regardless of whether 

there is approval or choice of 

participation by individual employees 

or whether such approval or choice is 

mandated by State statute.’’ In Public 

Employees’ Retirement Board v. 

Shalala, 153 F.3rd 1160, at 1166 (10th 

Cir. 1998), the court noted that ‘‘an 

employee’s decision to go to work or 

continue to work * * * constitutes 

conduct manifesting assent to a salary 

reduction.’’ Accordingly, the court held 

that a designated employee contribution 

picked up by an employer with a 

corresponding reduction in the 

employee’s gross salary constitutes a 

contribution made pursuant to a salary 

reduction agreement. Similarly, this 

temporary regulation explicitly provides 

that the term ‘‘salary reduction 

agreement’’ includes a plan or 

arrangement whereby a payment will be 

made if the employee agrees as a 

condition of employment (whether such 

condition is set by statute, contract, or 

otherwise) to make a contribution that 

reduces the employee’s compensation. 

Special Analyses 

It has been determined that this 

Treasury decision is not a significant 

regulatory action as defined in 

Executive Order 12866. Therefore, a 

regulatory assessment is not required. It 

has also been determined that section 

553(b) and (d) of the Administrative 

Procedure Act (5 U.S.C. chapter 5) do 

not apply to this regulation. For the 

applicability of the Regulatory 

Flexibility Act (5 U.S.C. chapter 6), refer 

to the Special Analyses section in the 

preamble to the notice of proposed rule 

making published in the Proposed Rules 

section in this issue of the Federal 

Register. Pursuant to section 7805(f) of 

the Code, this temporary regulation will 

be submitted to the Chief Counsel for 

Advocacy of the Small Business 

Administration for comment on its 

impact on small businesses. 

Drafting Information 

The principal author of this regulation 

is Neil D. Shepherd, Office of Division 

Counsel/Associate Chief Counsel (Tax 

Exempt and Government Entities). 

However, other personnel from the IRS 

and Treasury Department participated 

in its development.

List of Subjects in 26 CFR Part 31

Employment taxes, Income taxes, 

Penalties, Pensions, Railroad retirement, 

Reporting and recordkeeping 

requirements, Social security, 

Unemployment compensation.

Amendments to the Regulations

■ Accordingly, 26 CFR part 31 is 

amended as follows:

PART 31—EMPLOYMENT TAXES

■ Paragraph 1. The authority citation for 

part 31 continues to read in part as 

follows:

Authority: 26 U.S.C. 7805 * * *

■ Par. 2. Section 31.3121(a)(5)–2T is 

added to read as follows:

§ 31.3121(a)(5)–2T Payments under or to 

an annuity contract described in section 

403(b) (temporary). 

(a) Salary reduction agreement 

defined. For purposes of section 

3121(a)(5)(D), the term salary reduction 

agreement means a plan or arrangement 

(whether evidenced by a written 

instrument or otherwise) whereby 

payment will be made by an employer, 

on behalf of an employee or his or her 

beneficiary, under or to an annuity 

contract described in section 403(b)—

(1) If the employee elects to reduce 

his or her compensation pursuant to a 

cash or deferred election as defined at 

§ 1.401(k)–1(a)(3) of this chapter; 

(2) If the employee elects to reduce 

his or her compensation pursuant to a 

one-time irrevocable election made at or 

before the time of initial eligibility to 

participate in such plan or arrangement 

(or pursuant to a similar arrangement 

involving a one-time irrevocable 

election); or 

(3) If the employee agrees as a 

condition of employment (whether such 

condition is set by statute, contract, or 

otherwise) to make a contribution that 

reduces his or her compensation. 

(b) Effective date.

(1) This section is applicable 

November 16, 2004. 

(2) The applicability of this section 

expires on or before November 15, 2007.

Approved: November 1, 2004. 

Nancy Jardini, 

Acting Deputy Commissioner for Services and 

Enforcement.

Gregory Jenner, 

Acting Assistant Secretary of the Treasury.

[FR Doc. 04–25236 Filed 11–15–04; 8:45 am] 

BILLING CODE 4830–01–P

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117

[CGD07–04–136] 

Drawbridge Operation Regulations; 

Broward County Bridges, Atlantic 

Intracoastal Waterway, Broward 

County, FL

AGENCY: Coast Guard, DHS.

ACTION: Notice of temporary deviation 

from regulations; request for comments. 

SUMMARY: The Commander, Seventh 

Coast Guard District, has approved a 

temporary deviation from the 

67056 Federal Register / Vol. 69, No. 220 / Tuesday, November 16, 2004 / Rules and Regulations 

regulations governing the operation of 

the Broward County bridges across the 

Atlantic Intracoastal Waterway, 

Broward County, Florida. This 

temporary deviation allows the Coast 

Guard to test an operating schedule with 

the bridges opening twice an hour. It 

will allow the Coast Guard to gather 

data to determine if this schedule meets 

the reasonable needs of navigation 

while accommodating an increase in 

vehicle traffic throughout the county 

and whether it should be proposed as a 

permanent change.

DATES: This deviation is effective from 

6 a.m. on December 1, 2004, until 8 p.m. 

on February 28, 2005. Comments must 

reach the Coast Guard on or before 

March 15, 2005.

ADDRESSES: You may mail comments 

and related material to Commander 

(obr), Seventh Coast Guard District, 909 

SE. 1st Avenue, Room 432, Miami, FL 

33131. Comments and material received 

from the public, as well as comments 

indicated in this preamble as being 

available in the docket, are part of 

docket [CGD07–04–136] and are 

available for inspection or copying at 

Commander (obr), Seventh Coast Guard 

District, 909 SE. 1st Avenue, Room 432, 

Miami, FL 33131 between 8 a.m. and 4 

p.m., Monday through Friday, except 

Federal holidays.

FOR FURTHER INFORMATION CONTACT: Mr. 

Barry Dragon, Project Manager, Seventh 

Coast Guard District, Bridge Branch at 

(305) 415–6743.

SUPPLEMENTARY INFORMATION:

Request for Comments 

We encourage you to comment on this 

test schedule by submitting comments 

and related material. If you do so, please 

include your name and address, identify 

the docket number for this notice 

[CGD07–04–136], indicate the specific 

section of this document to which each 

comment applies, and give the reason 

for each comment. Please submit all 

comments and related material in an 

unbound format, no larger than 81⁄2 by 

11 inches, suitable for copying. If you 

would like to know they reached us, 

please enclose a stamped, self-addressed 

postcard or envelope. We will consider 

all comments and material received 

during the comment period. 

Discussion of the Test Schedule 

This test schedule has been requested 

by various public officials within the 

County of Broward to ease vehicular 

traffic, which has overburdened 

roadways, and to standardize bridge 

openings for vessel traffic. This test will 

allow the bridges in Broward County to 

operate on a standardized schedule, 

which will meet the reasonable needs of 

navigation and improve the vehicular 

traffic. The schedules will be staggered 

in order to facilitate the movement of 

vessels from bridge to bridge along the 

Atlantic Intracoastal Waterway. 

The existing regulations governing the 

operation of the County bridges are 

published in 33 CFR 117.5 and 117.261. 

This temporary deviation includes all 

bridges across the Atlantic Intracoastal 

Waterway in Broward County. During 

the deviation period, from 6 a.m. on 

December 1, 2004, until 8 p.m. on 

February 28, 2005, the bridges will 

operate as follows: 

Open on the Hour and Half Hour:

Atlantic Boulevard, mile 1056.0, 

Commercial Boulevard, mile 1059.0, 

East Sunrise Boulevard, mile 1062.6, SE. 

17th Street Causeway, mile 1065.9, 

Dania Beach Boulevard, mile 1069.4, 

Hollywood Boulevard, mile 1072.2. 

Open on the Quarter Hour and ThreeQuarter Hour: NE. 14th Street, mile 

1055.0, Oakland Park Boulevard, mile 

1060.5, East Las Olas Boulevard, mile 

1064.0, Sheridan Street, mile 1070.5, 

Hallandale Beach Boulevard, mile 

1074.0. 

If at any time during this test 

deviation it is determined that the test 

schedule poses any safety concerns at 

any location, this test deviation may be 

withdrawn. 

The District Commander has granted 

a test deviation from the operating 

regulations listed in 33 CFR 117.5 and 

117.261 to evaluate the effectiveness of 

these new schedules on vehicular and 

vessel traffic.

Dated: November 4, 2004. 

Greg E. Shapley, 

Chief, Bridge Administration, Seventh Coast 

Guard District.

[FR Doc. 04–25413 Filed 11–15–04; 8:45 am] 

BILLING CODE 4910–15–P

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117

[CGD01–04–096] 

RIN 1625–AA09

Drawbridge Operation Regulations: 

Annisquam River, Danvers River, Fore 

River, and Saugus River, MA

AGENCY: Coast Guard, DHS.

ACTION: Final rule.

SUMMARY: The Coast Guard has changed 

the drawbridge operation regulations 

that govern the operation of four 

Massachusetts Highway Department 

bridges; the Blynman (SR127) Bridge, 

mile 0.0, across the Annisquam River; 

the Kernwood Bridge, mile 1.0, across 

the Danvers River; the Quincy 

Weymouth SR3A Bridge, mile 2.8, 

across the Fore River; and the Fox Hill 

(SR107) Bridge, mile 2.5, across the 

Saugus River, Massachusetts. This final 

rule allows the four bridges to operate 

on an advance notice basis from noon to 

6 p.m. on Thanksgiving Day each year. 

This action is expected to allow the 

draw tenders to spend the holiday with 

their families while still meeting the 

reasonable needs of navigation.

DATES: This rule is effective on 

November 25, 2004.

ADDRESSES: Comments and material 

received from the public, as well as 

documents indicated in this preamble as 

being available in the docket, are part of 

docket (CGD01–04–096) and are 

available for inspection or copying at 

the First Coast Guard District, Bridge 

Branch Office, 408 Atlantic Avenue, 

Boston, Massachusetts 02110, between

7 a.m. and 3 p.m., Monday through 

Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Mr. 

Gary Kassof, Bridge Administrator, First 

Coast Guard District, (212) 668–7165.

SUPPLEMENTARY INFORMATION:

Regulatory Information 

On September 1, 2004, we published 

a notice of proposed rulemaking 

(NPRM) entitled Drawbridge Operation 

Regulations, Annisquam River, Danvers 

River, Fore River, and Saugus River, 

Massachusetts, in the Federal Register

(69 FR 53376). The Coast Guard 

provided a 30-day comment period to 

the public to comment on the proposed 

rule. We received no comments in 

response to the notice of proposed 

rulemaking. No public hearing was 

requested and none was held. 

Under 5 U.S.C. 553(d)(3), the Coast 

Guard finds good cause exists for 

making this rule effective less than 30 

days after publication in the Federal 

Register. The Coast Guard believes 

making this final rule effective less than 

30 days after publication, in time for 

Thanksgiving Day, November 25, 2004, 

is reasonable because there have been 

no requests to open these bridges on 

Thanksgiving Day in past years and any 

mariner requiring a bridge opening 

during the advance notice time period 

on Thanksgiving Day noon to 6 p.m. 

need only provide the one-hour advance 

notice for a bridge opening at any time.