65656 Federal Register / Vol. 69, No. 219 / Monday, November 15, 2004 / Notices 

recalculated prior to the next time the state 

calculates rates for all employers, states have 

latitude in this matter. 

1–7. Question: The answer to Q&A 9 in 

UIPL 30–04, says that where ‘‘[a]n employee 

of one legal entity is moved to another legal 

entity,’’ no transfer of experience is required. 

(Emphasis added.) However, the answer to 

Q&A 13 in that UIPL says the SUTA 

Dumping amendment applies to ‘‘all 

transfers, large and small.’’ What is the 

distinction between the two? 

Answer: Q&A 13 applies to cases where 

there is a transfer of trade or business. (Q&As 

5 and 14 in UIPL 30–04 and 1–2 in this UIPL 

also apply to situations where trade or 

business is transferred.) 

The answer to Q&A 9 applies to cases 

where an employee is ‘‘moved’’ from one 

legal entity to another, but where there is no 

transfer of trade or business. For example, an 

owner of two separate legal entities ‘‘moves’’

an individual from head of widget making for 

Entity A to head of graphic design for Entity 

B, but does not transfer any of the widgetmaking trade/business to Entity B. In this 

case, no trade or business is transferred and 

the ‘‘move’’ of the individual is in the nature 

of a reassignment. 

In cases where no trade or business has 

been transferred, experience may not be 

transferred. Therefore, when an employee’s 

‘‘move’’ is merely in the nature of a 

reassignment, the state may not transfer 

experience. 

1–8. Question: State law allows employers 

to voluntarily combine their experience 

rating histories into joint accounts under 

certain conditions. Does the SUTA dumping 

legislation affect this? 

Answer: No. Joint accounts may continue 

to be established in accordance with state 

law. 

The SSA’s mandatory transfer provisions 

affect joint accounts in the same way they 

affect individual employer accounts. That is, 

if an employer participating in a joint 

account transfers trade or business to another 

employer and a transfer of experience is 

required under provisions of state law 

implementing the SSA’s mandatory transfer 

provisions, then any subsequent calculation 

of the experience rate of the joint account 

must take into account this transfer. 

1–9. Question: Do the amendments 

mandating a transfer of experience affect 

what constitute taxable wages? 

Answer: The amendments address the 

transfer of experience and of rates based on 

that experience. They do not affect 

determinations of what constitute taxable 

wages under the state’s law. As a result, after 

trade and business is transferred, the state 

may either give effect to taxable wages paid 

by the predecessor in determining whether 

the taxable wage base is met, or ‘‘restart’’ the 

taxable wage base for the individual at zero. 

1–10. Question: Do the mandatory transfer 

provisions for SUTA Dumping apply when 

an employer is ‘‘reorganized?’’

Answer: The keys under section 

303(k)(1)(A), SSA, are whether there is a 

transfer of trade or business and whether 

there is substantially common ownership, 

management, or control. Thus, the answer 

depends on whether the reorganization 

involves a transfer of trade or business 

between entities under substantially common 

ownership, management or control. 

As used in bankruptcy law, a 

reorganization is a ‘‘financial restructuring of 

a corporation, esp. in the repayment of debts, 

under a plan created by a trustee and 

approved by a court.’’ (Black’s Law 

Dictionary (8th edition, 2004).) Thus, if a 

single employer simply ‘‘financially 

restructures’’ itself, without transferring trade 

or business, then the mandatory transfer 

provisions do not apply. 

In other cases, reorganizations are mergers 

of corporations which involve a transfer of 

trade or business. For example, a 

reorganization may be a ‘‘restructuring of a 

corporation, as by a merger or 

recapitalization, in order to improve its tax 

treatment under the Internal Revenue Code.’’

(Black’s Law Dictionary (8th edition, 2004).) 

When there is a merger, the mandatory 

transfer provisions will apply if there is 

substantially common ownership, 

management, or control at the time of the 

transfer of trade or business. 

Note the mandatory transfer provision of 

Section 303(k)(1)(A), SSA, does not speak in 

terms of ‘‘acquisitions.’’ In many 

reorganizations, there may be mergers 

involving stock swaps or stock-for-asset 

exchanges, and it may be argued that no 

‘‘acquisition’’ has occurred, even though 

workforce has been moved to another legal 

entity within a corporate umbrella. For 

purposes of the mandatory SUTA dumping 

amendments, whether there has been an 

‘‘acquisition’’ is immaterial. What is 

significant is whether trade or business was 

transferred when, at the time of the transfer, 

there is substantially common ownership, 

management, or control. If this occurs, then 

the experience must also be transferred. 

Required Penalties—Section 303(k)(1)(D), 

SSA 

1–11. Question: The draft legislative 

language attached to UIPL 30–04 provides 

that, in addition to any civil penalty, ‘‘any 

violation of this section may be prosecuted 

as a’’ criminal offense. (Emphasis added.) 

Does this mean that inclusion of criminal 

penalties is optional on the part of the state? 

Answer: No, section 303(k)(1)(D), SSA, 

clearly requires that state law must provide 

that ‘‘meaningful civil and criminal 

penalties’’ are imposed under certain 

circumstances. (See Q&A 19 in UIPL 30–04.) 

The draft legislative language quoted in the 

question merely indicates that the state has 

discretion to apply criminal penalties as 

appropriate. As noted in Q&A 20 in UIPL 30–

04, ‘‘States will take into account the 

amounts at issue and the likelihood of 

successful prosecution in determining which 

cases will result in criminal prosecutions.’’

1–12. Question: State law must provide for 

the imposition of penalties for persons who 

‘‘knowingly’’ violate or attempt to violate 

those provisions of state law that implement 

section 303(k), SSA, and for those who 

‘‘knowingly’’ advise another person to violate 

such provisions. Since it is often difficult to 

prove that an action is done ‘‘knowingly,’’

may state law provide that penalties may be 

imposed using a lower level of proof? 

Answer: Yes. The ‘‘knowingly’’ test is the 

minimum standard that state law must 

contain to meet the requirements of Section 

303(k)(1)(D), SSA. States must assure that 

any such test is at least as encompassing as 

the ‘‘knowingly’’ standard. 

Statute of Limitations 

1–13. Question: Assume a ‘‘SUTA dump’’

occurred five years before the state identified 

it. The state’s statute of limitations prevents 

the state from assessing contributions more 

than three years prior to the date of detection. 

Does this statute of limitations conflict with 

the SUTA dumping amendments? 

Answer: No. Nothing in the SUTA 

dumping legislation overrides a state’s statute 

of limitations. As a result, in the above 

example, the state may limit its assessment 

of contributions to the three-year period 

provided in its statute of limitations. 

Draft Legislative Language 

1–14. Question: Subsection (c)(1) of the 

draft legislative language attached to UIPL 

30–4 provides for civil penalties for persons 

knowingly violating or attempting to violate 

‘‘subsections (a) and (b) or any other 

provision of this Chapter related to 

determining the assignment of a contribution 

rate? (Emphasis added.) Should the ‘‘and’’ be 

an ‘‘or’’? 

Answer: Yes. The word ‘‘and’’ could be 

read to mean that the person must have 

violated, or attempted to violate, both the 

mandatory transfer provision and the 

prohibited transfer provision. Therefore the 

draft legislative language should be corrected 

by changing ‘‘and’’ to ‘‘or’’. 

Also, note there is a typo in subsection 

(e)(2) of the draft legislative language. ‘‘Trade 

of business’’ should be corrected to ‘‘Trade or

business.’’ (Emphasis added.) 

1–15. Question: Subsection (c)(4) of the 

draft legislative language attached to UIPL 

30–4 provides that ‘‘In addition to the 

penalty imposed by paragraph (1), any 

violation of this section may be 

prosecuted.* * *’’ May ‘‘section’’ be 

changed to ‘‘Chapter’’? 

Answer: Yes. Using the word ‘‘chapter’’

will have the effect of making the criminal 

penalties applicable to any other provision of 

the state’s UC law related to determining the 

assignment of a contribution rate. Note that 

states are not required to apply the penalties 

they develop for SUTA dumping to other 

violations of state law. (See Q&A 24 in UIPL 

30–04.)

[FR Doc. E4–3162 Filed 11–12–04; 8:45 am] 

BILLING CODE 4510–30–P

MISSISSIPPI RIVER COMMISSION

Sunshine Act Meetings

AGENCY HOLDING THE MEETING:

Mississippi River Commission.

TIME AND DATE: 1 p.m., December 15, 

2004.

PLACE: Mississippi River Commission 

Headquarters Building, 1400 Walnut 

Street, Vicksburg, MS.

Federal Register / Vol. 69, No. 219 / Monday, November 15, 2004 / Notices 65657

STATUS: Open to the public for 

observation, but not for participation.

MATTERS TO BE CONSIDERED: The 

Commission will consider the Louisiana 

Coastal Area Ecosystem Restoration 

Study, Final Report and Environmental 

Impact Statement.

CONTACT PERSON FOR MORE INFORMATION:

Mr. Stephen Gambrell, telephone (601) 

634–5766.

Brenda S. Bowen, 

Army Federal Register Liaison Officer.

[FR Doc. 04–25391 Filed 11–10–04; 11:22 am] 

BILLING CODE 3710–GX–M

NUCLEAR REGULATORY 

COMMISSION 

[NUREG–1600] 

NRC Enforcement Policy

AGENCY: Nuclear Regulatory 

Commission.

ACTION: Policy statement: revision.

SUMMARY: The Nuclear Regulatory 

Commission (NRC) is revising its 

General Statement of Policy and 

Procedure for NRC Enforcement Actions 

(NUREG–1600) (Enforcement Policy or 

Policy) to include an administrative 

change that provides that the 

appropriate Regional Administrator will 

issue all Notices of Enforcement 

Discretion (NOEDs) for power reactors.

DATES: This revision is effective 

November 15, 2004. Comments on this 

revision to the Enforcement Policy may 

be submitted on or before December 15, 

2004.

ADDRESSES: Submit written comments 

to: Michael T. Lesar, Chief, Rules and 

Directives Branch, Division of 

Administrative Services, Office of 

Administration, Mail Stop: T6D59, U.S. 

Nuclear Regulatory Commission, 

Washington, DC 20555–0001. Hand 

deliver comments to: 11555 Rockville 

Pike, Rockville, Maryland, between 7:30 

a.m. and 4:15 p.m., Federal workdays. 

Copies of comments received may be 

examined at the NRC Public Document 

Room, Room O1F21, 11555 Rockville 

Pike, Rockville, MD. You may also

e-mail comments to nrcrep@nrc.gov. 

The NRC maintains the current 

Enforcement Policy on its Web site at 

http://www.nrc.gov, select What We Do, 

Enforcement, then Enforcement Policy.

FOR FURTHER INFORMATION CONTACT:

Herbert N. Berkow, Office of Nuclear 

Reactor Regulation, U.S. Nuclear 

Regulatory Commission, Washington, 

DC 20555–0001, (301) 415–1395, e-mail 

(HNB@nrc.gov) or Rene ́e Pedersen, 

Office of Enforcement, U.S. Nuclear 

Regulatory Commission, Washington, 

DC 20555–0001, (301) 415–2742, e-mail 

(RMP@nrc.gov).

SUPPLEMENTARY INFORMATION: Section 

VII.C of the Enforcement Policy 

describes the circumstances when the 

staff may exercise enforcement 

discretion in the form of a NOED for 

power reactors. 

On occasion, circumstances may arise 

where a licensee’s compliance with a 

Technical Specification (TS) Limiting 

Condition for Operation (LCO) or other 

license condition would involve: (1) An 

unnecessary plant transient; (2) 

performance of testing, inspection, or 

system realignment that is inappropriate 

with the specific plant conditions; or, 

(3) unnecessary delays in plant startup 

without a corresponding health and 

safety benefit. The staff may also grant 

enforcement discretion in cases 

involving severe weather or other 

natural phenomena. This decision is 

based upon balancing the public health 

and safety or common defense and 

security of not operating against the 

potential radiological or other hazards 

associated with continued operation, 

resulting in a determination that safety 

will not be impacted unacceptably by 

exercising this discretion. The 

Commission is to be informed 

expeditiously following the granting of 

a NOED in such situations. 

In these circumstances, the NRC staff 

may choose to not enforce the 

applicable TS or other license 

condition. This enforcement discretion, 

designated as a NOED, is only exercised 

if the NRC staff is clearly satisfied that 

the action is consistent with protecting 

the public health and safety. NRC 

guidance for implementing the NOED 

policy for power reactors is provided in 

the NRC Inspection Manual Part 9900 

guidance. 

The Enforcement Policy and 

implementing guidance have 

historically recognized the distinction 

between: (1) Those instances where a 

noncompliance is temporary and 

nonrecurring when an amendment is 

not practical, and (2) those instances 

where a noncompliance will occur 

during the brief period of time required 

for the NRC staff to process an 

emergency or exigent license 

amendment under the provisions of 10 

CFR 50.91(a)(5) or (6). In the first 

situation, the Regional Administrator 

has issued the NOED and subsequently 

documented the decision for granting 

the NOED. In the second situation, the 

Director, Office of Nuclear Reactor 

Regulation (NRR) has issued the NOED 

and subsequently documented the 

decision for granting the NOED. In other 

words, the current distinction between 

region-issued and NRR-issued NOEDs 

for power reactors is based on the 

duration of the NOED and whether or 

not a follow-up license amendment is 

appropriate. 

This revision of the Enforcement 

Policy eliminates the distinction 

between region-issued and NRR-issued 

NOEDs for power reactors. Although 

historically most NOEDs have been 

issued and documented by the 

cognizant regions without follow-up 

license amendments, all NOED requests 

have been evaluated and decisions 

made jointly by the regional and NRR 

staffs. Thus, the distinction is 

unnecessary. 

The Enforcement Policy revision 

specifies that the associated regional 

and headquarters staff will together 

determine the appropriateness of 

granting a requested NOED. If the NOED 

is determined to be appropriate, 

regional staff will complete the 

documentation process associated with 

granting the NOED. 

The revision provides that, for all 

power reactor NOED determinations, 

the Regional Administrator, or his or her 

designee, may issue a NOED after 

consultation with headquarters and 

therefore eliminates the need to 

categorize NOEDs as regional- or 

headquarters-lead. This clarification 

will provide a more predictable, clear, 

and consistent process for licensees 

when requesting NRC to consider 

granting a NOED. 

This policy revision, as well as other 

NOED process improvements, was 

discussed with representatives of the 

Nuclear Energy Institute (NEI) and other 

stakeholders at a public meeting with 

the NRC staff on July 14, 2004. The NRC 

plans on completely revising and 

reissuing its Part 9900 guidance later in 

the year. In addition to the Enforcement 

Policy revision, other process 

improvements include emphasizing that 

the license amendment process should 

be used in preference to NOEDs 

whenever possible and developing 

improved guidance to address the 

NOED request requirement to 

demonstrate no net increase in 

radiological risk. In addition, other 

concurrent improvements to the NOED 

process will result in most NOEDs 

having follow-up license amendments 

regardless of the NOED duration.

The revision to the Enforcement 

Policy is strictly administrative in 

nature and will support simplification 

of the NOED process by providing a 

clear understanding of the roles and 

responsibilities of NRC regional and 

headquarters staff associated with 

issuance of NOEDs.