Federal Register / Vol. 74, No. 171 / Friday, September 4, 2009 / Proposed Rules 45791 

1Pursuant to Reorganization Plan No. 4 of 1978, 

43 FR 47713 (Oct. 17, 1978), the Department of the 

Treasury has interpretive authority over the 

minimum funding rules of Title I of ERISA, 

including section 305 of ERISA. 

2Pursuant to section 305(b)(3)(D)(iii) of ERISA, 

the Department of Labor issued proposed 29 CFR 

2540.305–1, which includes a model notice for 

plans in critical status. See 73 FR 15688 (Mar. 25, 

2008). However, section 102(b)(1)(C) of the Worker, 

Retiree, and Employer Recovery Act of 2008, Public 

Law 110–458, signed into law on December 23, 

2008, transferred the Secretary of Labor’s obligation 

to prescribe a model notice to the Secretary of the 

Treasury, in consultation with the Secretary of 

Labor. 

Drafting Information 

The principal author of these 

proposed regulations is Mary W. Lyons 

of the Office of Associate Chief Counsel 

(Corporate). However, other personnel 

from the IRS and Treasury Department 

participated in their development. 

List of Subjects in 26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

Proposed Amendments to the 

Regulations 

Accordingly, 26 CFR part 1 is 

proposed to be amended as follows: 

PART 1—INCOME TAXES 

Paragraph 1. The authority citation 

for part 1 continues to read in part as 

follows: 

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

Section 1.1502–13 also issued under 26 

U.S.C. 1502 * * * 

Par. 2. Section 1.1502–13 is amended 

by revising paragraphs (f)(5)(ii)(B) and 

adding paragraph (f)(5)(ii)(F) to read as 

follows: 

§ 1.1502–13 Intercompany transactions. 

* * * * * 

(f) * * * 

(5) * * * 

(ii) * * * 

(B)(1) [The text of the proposed 

amendments to § 1.1502–13(B)(1) is the 

same as the text of § 1.1502–13T(B)(1) 

published elsewhere in this issue of the 

Federal Register. 

(2) [The text of the proposed 

amendments to § 1.1502–13(B)(2) is the 

same as the text of § 1.1502–13T(B)(2) 

published elsewhere in this issue of the 

Federal Register. 

* * * * * 

(F) [The text of the proposed 

amendments to § 1.1502–13(F) is the 

same as the text of § 1.1502–13T(F) 

published elsewhere in this issue of the 

Federal Register. 

* * * * * 

Linda E. Stiff, 

Deputy Commissioner for Services and 

Enforcement. 

[FR Doc. E9–21323 Filed 9–3–09; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

29 CFR Part 2560 

RIN 1210–AB31 

Civil Penalties Under ERISA Section 

502(c)(8) 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Proposed regulation. 

SUMMARY: This document contains a 

proposed regulation that, upon 

adoption, would establish procedures 

relating to the assessment of civil 

penalties by the Department of Labor 

under section 502(c)(8) of the Employee 

Retirement Income Security Act of 1974 

(ERISA or the Act). Under section 

502(c)(8) of ERISA, which was added by 

the Pension Protection Act of 2006, the 

Secretary of Labor is granted authority 

to assess civil penalties not to exceed 

$1,100 per day against any plan sponsor 

of a multiemployer plan for certain 

violations of section 305 of ERISA. The 

regulation would affect multiemployer 

plans that are in either endangered or 

critical status. 

DATES: Written comments on the 

proposed regulation should be received 

by the Department of Labor no later than 

November 3, 2009. 

ADDRESSES: You may submit comments, 

identified by RIN 1210–AB31, by one of 

the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: e-ORI@dol.gov. Include RIN 

1210–AB31 in the subject line of the 

message. 

• Mail: Office of Regulations and 

Interpretations, Employee Benefits 

Security Administration, Room N–5655, 

U.S. Department of Labor, 200 

Constitution Avenue, NW., Washington, 

DC 20210, Attention: Civil Penalties 

Under 502(c)(8). 

Instructions: All submissions received 

must include the agency name and 

Regulatory Information Number (RIN) 

for this rulemaking. Comments received 

will be posted without change to 

http://www.regulations.gov and http:// 

www.dol.gov/ebsa, and made available 

for public inspection at the Public 

Disclosure Room, N–1513, Employee 

Benefits Security Administration, 200 

Constitution Avenue, NW., Washington, 

DC 20210, including any personal 

information provided. Persons 

submitting comments electronically are 

encouraged not to submit paper copies. 

FOR FURTHER INFORMATION CONTACT: 

Michael Del Conte, Office of Regulations 

and Interpretations, Employee Benefits 

Security Administration, (202) 693– 

8500. This is not a toll-free number. 

SUPPLEMENTARY INFORMATION: 

A. Background 

Section 202 and section 212 of the 

Pension Protection Act of 2006 (PPA), 

Public Law 109–280, respectively, 

amended ERISA by adding section 305 

and amended the Internal Revenue Code 

(Code) by adding section 432, to provide 

additional rules for multiemployer 

defined benefit pension plans in 

endangered status or critical status. All 

references in this document to section 

305 of ERISA should be read to include 

section 432 of the Code.1

In general, section 305(b)(3)(A) of 

ERISA provides that not later than the 

90th day of each plan year, the actuary 

of a multiemployer defined benefit 

pension plan shall certify to the 

Secretary of the Treasury and to the 

plan sponsor—(i) Whether or not the 

plan is in endangered status for such 

plan year and whether or not the plan 

is or will be in critical status for such 

plan year, and (ii) in the case of a plan 

which is in a funding improvement or 

rehabilitation period, whether or not the 

plan is making the scheduled progress 

in meeting the requirements of its 

funding improvement or rehabilitation 

plan. 

Section 305(b)(3)(D)(i) of ERISA 

provides that, in any case in which it is 

certified under section 305(b)(3)(A) that 

a multiemployer plan is or will be in 

endangered or critical status for a plan 

year, the plan sponsor shall, not later 

than 30 days after the date of the 

certification, provide notification of the 

endangered or critical status to 

participants and beneficiaries, the 

bargaining parties, the Pension Benefit 

Guaranty Corporation, and the Secretary 

of Labor.2

Section 305(c)(1)(A) and section 

305(e)(1)(A) provide that in the first year 

that a plan is certified to be in 

endangered or critical status, the plan 

sponsor generally has a 240-day period 


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3The Worker, Retiree, and Employer Recovery 

Act of 2008, Public Law 110–458 (WRERA), permits 

multiemployer plans to delay temporarily their 

endangered or critical status under section 305 of 

ERISA. Section 204 of WRERA provides that a 

multiemployer plan may, for its first plan year 

beginning during the period from October 1, 2008, 

through September 30, 2009, elect to keep its status 

for the plan year preceding such plan year for 

purposes of section 305 of ERISA and section 432 

of the Code. For example, a plan that was not in 

endangered status for 2008 may elect to keep that 

non-endangered status for 2009 even if it is in fact 

in endangered status. On March 27, 2009, the 

Internal Revenue Service issued Notice 2009–31, 

2009–16 I.R.B. 856, providing guidance to 

multiemployer plans relating to such elections, and 

on April 30, 2009, issued Notice 2009–42, 2009–20 

I.R.B. 1011, modifying Notice 2009–31 to provide 

an extension of the election period and relief for 

plans needing arbitration on the election. 4An excise tax under Code section 4971(g)(4) 

generally applies, in addition to any penalty under 

ERISA section 502(c)(8), in the case of a failure to 

adopt a rehabilitation plan with respect to a 

multiemployer plan in critical status. 5An excise tax under Code section 4971(g)(3) 

generally applies in the case of a failure by a 

multiemployer plan in seriously endangered status 

to meet the applicable benchmarks by the end of the 

funding improvement period or a failure of a plan 

in critical status to meet the requirements 

applicable to such plans under section 432(e) of the 

Code. 

6The Federal Civil Penalties Inflation Adjustment 

Act of 1990 (the 1990 Act), Public Law 101–410, 

104 Stat. 890, as amended by the Debt Collection 

Improvement Act of 1996 (the 1996 Act), Public 

Law 104–134, 110 Stat. 1321–373, generally 

provides that Federal agencies adjust certain civil 

monetary penalties for inflation no later than 180 

days after the enactment of the 1996 Act, and at 

least once every four years thereafter, in accordance 

with the guidelines specified in the 1990 Act. The 

1996 Act specifies that any such increase in a civil 

monetary penalty shall apply only to violations that 

occur after the date the increase takes effect. 

from the required date of the 

certification to adopt a funding 

improvement plan (in the case of a plan 

that is in endangered status) or a 

rehabilitation plan (in the case of a plan 

that is in critical status).3 Section 

305(c)(1) also requires multiemployer 

plans in endangered status to meet 

‘‘applicable benchmarks’’ as defined 

under ERISA section 305(c)(3), as 

modified by ERISA section 305(c)(5). 

Section 202(b)(3) of the PPA added 

section 502(c)(8)(A) to ERISA which 

gives the Secretary of Labor the 

authority to assess a civil penalty of not 

more than $1,100 a day against the plan 

sponsor for each violation by such 

sponsor of the requirement under 

section 305 to adopt by the deadline 

established in that section a funding 

improvement plan or rehabilitation plan 

with respect to a multiemployer plan 

which is in endangered or critical 

status.4 Section 502(c)(8)(B) of ERISA 

provides the Secretary of Labor with the 

authority to assess a civil penalty of not 

more than $1,100 a day against the plan 

sponsor of a plan in endangered status, 

which is not in seriously endangered 

status, that fails to meet the applicable 

benchmarks under section 305 by the 

end of the funding improvement period 

with respect to the plan.5 These 

provisions added by the PPA section 

202(b)(3) are effective for plan years 

beginning on or after January 1, 2008. 

B. Overview of Proposed 29 CFR 

2560.502c–8 

In general, this proposed regulation 

sets forth how the maximum penalty 

amounts are computed, identifies the 

circumstances under which a penalty 

may be assessed, sets forth certain 

procedural rules for service by the 

Department and filing by a plan 

sponsor, and provides a plan sponsor a 

means to contest an assessment by the 

Department by requesting an 

administrative hearing. 

Paragraph (a) of the regulation 

addresses the general application of 

section 502(c)(8) of ERISA, under which 

the plan sponsor of an eligible plan 

shall be liable for civil penalties 

assessed by the Secretary of Labor in 

each case in which there are certain 

violations of section 305 of ERISA. 

Paragraph (b) of the regulation sets 

forth the amount of penalties that may 

be assessed under section 502(c)(8) of 

ERISA and provides that the penalty 

assessed under section 502(c)(8) for 

each separate violation is to be 

determined by the Department, taking 

into consideration the degree or 

willfulness of the violation. Paragraph 

(b) provides that the maximum amount 

assessed for each violation shall not 

exceed $1,100 a day per violation or 

such other maximum amount as may be 

established by regulation pursuant to 

the Federal Civil Penalties Inflation 

Adjustment Act of 1990.6

Paragraph (c) of the regulation 

provides that, prior to assessing a 

penalty under ERISA section 502(c)(8), 

the Department shall provide the plan 

sponsor with written notice of the 

Department’s intent to assess a penalty, 

the amount of such penalty, the period 

to which the penalty applies, and the 

reason(s) for the penalty. The notice 

would indicate the specific provision 

violated. The notice is to be served in 

accordance with paragraph (i) of the 

regulation (service of notice provision). 

Paragraph (d) of the regulation 

provides that the Department may 

decide not to assess a penalty, or to 

waive all or part of the penalty to be 

assessed, under ERISA section 502(c)(8), 

upon a showing by the plan sponsor, 

under paragraph (e) of the regulation, of 

compliance with section 305 of ERISA 

or that there were mitigating 

circumstances for noncompliance. 

Under paragraph (e) of the regulation, 

the plan sponsor has 30 days from the 

date of service of the notice issued 

under paragraph (c) of the regulation 

within which to file a statement making 

such a showing. When the Department 

serves the notice under paragraph (c) by 

certified mail, service is complete upon 

mailing but five (5) days are added to 

the time allowed for the filing of the 

statement (see § 2560.502c–8(i)(2)). 

Paragraph (f) of the regulation 

provides that a failure to file a timely 

statement under paragraph (e) shall be 

deemed to be a waiver of the right to 

appear and contest the facts alleged in 

the Department’s notice of intent to 

assess a penalty for purposes of any 

adjudicatory proceeding involving the 

assessment of the penalty under section 

502(c)(8) of ERISA, and to be an 

admission of the facts alleged in the 

notice of intent to assess. Such notice 

then becomes a final order of the 

Secretary 45 days from the date of 

service of the notice. 

Paragraph (g)(1) of the regulation 

provides that, following a review of the 

facts alleged in the statement under 

paragraph (e), the Department shall 

notify the plan sponsor of its 

determination to waive the penalty, in 

whole or in part, and/or assess a 

penalty. If it is the determination of the 

Department to assess a penalty, the 

notice shall indicate the amount of the 

penalty. Under paragraph (g)(2) of the 

regulation, this notice becomes a final 

order 45 days after the date of service of 

the notice, except as provided in 

paragraph (h). 

Paragraph (h) of the regulation 

provides that the notice described in 

paragraph (g) will become a final order 

of the Department unless, within 30 

days of the date of service of the notice, 

the plan sponsor or representative files 

a request for a hearing to contest the 

assessment in administrative 

proceedings set forth in regulations 

issued under part 2570 of title 29 of the 

Code of Federal Regulations and files an 

answer, in writing, opposing the 

sanction. When the Department serves 

the notice under paragraph (g) by 

certified mail, service is complete upon 

mailing but five (5) days are added to 

the time allowed for the filing of the 

request for hearing and answer (see 

§ 2560.502c–8(i)(2)). 

Paragraph (i)(1) of the regulation 

describes the rules relating to service of 

the Department’s notice of penalty 

assessment (§ 2560.502c–8(c)) and the 

Department’s notice of determination on 

a statement of reasonable cause 

(§ 2560.502c–8(g)). Paragraph (i)(1) 

provides that service by the Department 

shall be made by delivering a copy to 


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Federal Register / Vol. 74, No. 171 / Friday, September 4, 2009 / Proposed Rules 45793 

the plan sponsor or representative 

thereof; by leaving a copy at the 

principal office, place of business, or 

residence of the plan sponsor or 

representative thereof; or by mailing a 

copy to the last known address of the 

plan sponsor or representative thereof. 

As noted above, paragraph (i)(2) of this 

section provides that when service of a 

notice under paragraph (c) or (g) is by 

certified mail, service is complete upon 

mailing, but five days are added to the 

time allowed for the filing of a statement 

or a request for hearing and answer, as 

applicable. Service by regular mail is 

complete upon receipt by the addressee. 

Paragraph (i)(3) of the regulation, 

which relates to the filing of statements 

of reasonable cause, provides that a 

statement of reasonable cause shall be 

considered filed (i) upon mailing if 

accomplished using United States Postal 

Service certified mail or express mail, 

(ii) upon receipt by the delivery service 

if accomplished using a ‘‘designated 

private delivery service’’ within the 

meaning of 26 U.S.C. 7502(f), (iii) upon 

transmittal if transmitted in a manner 

specified in the notice of intent to assess 

a penalty as a method of transmittal to 

be accorded such special treatment, or 

(iv) in the case of any other method of 

filing, upon receipt by the Department 

at the address provided in the notice. 

This provision does not apply to the 

filing of requests for hearing and 

answers with the Office of the 

Administrative Law Judge (OALJ) which 

are governed by the Department’s OALJ 

rules in 29 CFR 18.4. 

Paragraph (j) of the regulation clarifies 

the liability of the parties for penalties 

assessed under section 502(c)(8) of 

ERISA. Paragraph (j)(1) provides that, if 

more than one person is responsible as 

plan sponsor for the failure to adopt a 

funding improvement or rehabilitation 

plan, or to meet the applicable 

benchmarks, as required by section 305 

of ERISA, all such persons shall be 

jointly and severally liable for such 

failure. Thus, the entire joint board of 

trustees would be jointly and severally 

liable for any such failure. Paragraph 

(j)(2) provides that any person against 

whom a penalty is assessed under 

section 502(c)(8) of ERISA, pursuant to 

a final order, is personally liable for the 

payment of such penalty, and that such 

liability is not a liability of the plan. It 

is the Department’s view that payment 

of penalties assessed under ERISA 

section 502(c) from plan assets would 

not constitute a reasonable expense of 

administering a plan for purposes of 

sections 403 and 404 of ERISA. 

Paragraph (k) of the regulation 

establishes procedures for hearings 

before an Administrative Law Judge 

(ALJ) with respect to assessment by the 

Department of a civil penalty under 

ERISA section 502(c)(8), and for 

appealing an ALJ decision to the 

Secretary or her delegate. The 

procedures are the same procedures as 

would apply in the case of a civil 

penalty assessment under section 

502(c)(7) of ERISA. 

C. Effective Date 

The Department proposes to make 

this regulation effective 60 days after the 

date of publication of the final rule in 

the Federal Register. 

D. Regulatory Impact Analysis 

Executive Order 12866 

Under Executive Order 12866 (58 FR 

51735), the Department must determine 

whether a regulatory action is 

‘‘significant’’ and therefore subject to 

review by the Office of Management and 

Budget (OMB). Section 3(f) of the 

Executive Order defines a ‘‘significant 

regulatory action’’ as an action that is 

likely to result in a rule (1) having an 

annual effect on the economy of $100 

million or more, or adversely and 

materially affecting a sector of the 

economy, productivity, competition, 

jobs, the environment, public health or 

safety, or State, local or Tribal 

governments or communities (also 

referred to as ‘‘economically 

significant’’); (2) creating serious 

inconsistency or otherwise interfering 

with an action taken or planned by 

another agency; (3) materially altering 

the budgetary impacts of entitlement 

grants, user fees, or loan programs or the 

rights and obligations of recipients 

thereof; or (4) raising novel legal or 

policy issues arising out of legal 

mandates, the President’s priorities, or 

the principles set forth in the Executive 

Order. It has been determined that this 

proposed rule relating to the assessment 

of civil monetary penalties under 

section 502(c)(8) of the Act is not 

significant under section 3(f)(4) of the 

Executive Order; and, therefore, it is not 

subject to OMB review. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) (RFA) imposes 

certain requirements with respect to 

Federal rules that are subject to the 

notice and comment requirements of 

section 553(b) of the Administrative 

Procedure Act (5 U.S.C. 551 et seq.) and 

that are likely to have a significant 

economic impact on a substantial 

number of small entities. Unless an 

agency certifies that a rule is not likely 

to have a significant economic impact 

on a substantial number of small 

entities, section 603 of RFA requires 

that the agency present a regulatory 

flexibility analysis at the time of the 

publication of the final rule describing 

the impact of the rule on small entities 

and seeking public comment on such 

impact. Small entities include small 

businesses, organizations and 

governmental jurisdictions. 

For purposes of its analyses under the 

RFA, EBSA continues to consider a 

small entity to be an employee benefit 

plan with fewer than 100 participants. 

The basis of this definition is found in 

section 104(a)(2) of ERISA, which 

permits the Secretary of Labor to 

prescribe simplified annual reporting 

for pension plans that cover fewer than 

100 participants. By this standard, data 

from the EBSA Private Pension Bulletin 

for 2006 show that only 46 

multiemployer defined benefit pension 

plans or 3% of all multiemployer 

defined benefit pension plans are small 

entities. This number represents .1% of 

all small defined benefit pension plans. 

The Department does not consider this 

to be a substantial number of small 

entities. Therefore, pursuant to section 

605(b) of RFA, the Department hereby 

certifies that the rule is not likely to 

have a significant economic impact on 

a substantial number of small entities. 

The terms of the statute pertaining to 

the assessment of civil penalties under 

section 502(c)(8) of ERISA do not vary 

relative to plan or plan sponsor size. 

The opportunity for a plan sponsor to 

present facts and circumstances related 

to a failure or refusal to comply with 

section 305 of the Act that may be taken 

into consideration by the Department in 

reducing or not assessing penalties 

under ERISA section 502(c)(8) may offer 

some degree of flexibility to small 

entities subject to penalty assessments. 

Penalty assessments will have no direct 

impact on small plans, because the plan 

sponsor assessed a civil penalty is 

personally liable for the payment of that 

penalty pursuant to § 2560.502c–8(j)(2). 

The Department invites interested 

persons to submit comments on the 

impact of this proposed rule on small 

entities and on any alternative 

approaches that may serve to minimize 

the impact on small plans or other 

entities while accomplishing the 

objectives of the statutory provisions. 

Paperwork Reduction Act 

The proposal is not subject to the 

requirements of the Paperwork 

Reduction Act of 1995 (PRA 95) (44 

U.S.C. 3501 et seq.), because it does not 

contain a collection of information as 

defined in 44 U.S.C. 3502(3). 

Information otherwise provided to the 

Secretary in connection with the 


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45794 Federal Register / Vol. 74, No. 171 / Friday, September 4, 2009 / Proposed Rules 

administrative and procedural 

requirements of this proposed rule is 

excepted from coverage by PRA 95 

pursuant to 44 U.S.C. 3518(c)(1)(B), and 

related regulations at 5 CFR 1320.4(a)(2) 

and (c). These provisions generally 

except information provided as a result 

of an agency’s civil or administrative 

action, investigation, or audit. 

Congressional Review Act 

This proposed rule is subject to the 

Congressional Review Act provisions of 

the Small Business Regulatory 

Enforcement Fairness Act of 1996 (5 

U.S.C. 801 et seq.) and, upon 

finalization, will be transmitted to the 

Congress and the Comptroller General 

for review. 

Unfunded Mandates Reform Act 

For purposes of the Unfunded 

Mandates Reform Act of 1995 (Pub. L. 

104–4), as well as Executive Order 

12875, this rule does not include any 

Federal mandate that may result in 

expenditures by State, local, or Tribal 

governments, and does not impose an 

annual burden exceeding $100 million, 

as adjusted for inflation, on the private 

sector. 

Federalism Statement 

Executive Order 13132 (August 4, 

1999) outlines fundamental principles 

of federalism and requires the 

adherence to specific criteria by Federal 

agencies in the process of their 

formulation and implementation of 

policies that have substantial direct 

effects on the States, on the relationship 

between the national government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government. This 

proposed rule does not have federalism 

implications because it has no 

substantial direct effect on the States, on 

the relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. Section 514 of 

ERISA provides, with certain exceptions 

specifically enumerated, that the 

provisions of Titles I and IV of ERISA 

supersede any and all laws of the States 

as they relate to any employee benefit 

plan covered under ERISA. The 

requirements implemented in this 

proposed rule do not alter the 

fundamental reporting and disclosure, 

or administration and enforcement 

provisions of the statute with respect to 

employee benefit plans, and as such 

have no implications for the States or 

the relationship or distribution of power 

between the national government and 

the States. 

List of Subjects in 29 CFR 2560 

Employee benefit plans, Employee 

Retirement Income Security Act, Law 

enforcement, Pensions. 

Accordingly, 29 CFR part 2560 is 

proposed to be amended as follows: 

PART 2560—RULES AND 

REGULATIONS FOR ADMINISTRATION 

AND ENFORCEMENT 

1. The authority citation for part 2560 

is revised to read as follows: 

Authority: 29 U.S.C. 1132, 1135, and 

Secretary of Labor’s Order 1–2003, 68 FR 

5374 (Feb. 3, 2003). Sec. 2560.503–1 also 

issued under 29 U.S.C. 1133. Sec. 2560.502c– 

7 also issued under 29 U.S.C 1132(c)(7). Sec. 

2560.502c–4 also issued under 29 U.S.C. 

1132(c)(4). Sec. 2560.502c–8 also issued 

under 29 U.S.C. 1132(c)(8). 

2. Add § 2560.502c–8 to read as 

follows: 

§ 2560.502c–8 Civil penalties under 

section 502(c)(8). 

(a) In general. (1) Pursuant to the 

authority granted the Secretary under 

section 502(c)(8) of the Employee 

Retirement Income Security Act of 1974, 

as amended (the Act), the plan sponsor 

(within the meaning of section 

3(16)(B)(iii) of the Act) shall be liable for 

civil penalties assessed by the Secretary 

under section 502(c)(8) of the Act, for: 

(i) Each violation by such sponsor of 

the requirement under section 305 of 

the Act to adopt by the deadline 

established in that section a funding 

improvement plan or rehabilitation plan 

with respect to a multiemployer plan 

which is in endangered or critical 

status; or 

(ii) In the case of a plan in endangered 

status which is not in seriously 

endangered status, a failure by the plan 

to meet the applicable benchmarks 

under section 305 by the end of the 

funding improvement period with 

respect to the plan. 

(2) For purposes of this section, 

violations or failures referred to in 

paragraph (a)(1) of this section shall 

mean a failure or refusal, in whole or in 

part, to adopt a funding improvement or 

rehabilitation plan, or to meet the 

applicable benchmarks, at the relevant 

times and manners prescribed in section 

305 of the Act. 

(b) Amount assessed. The amount 

assessed under section 502(c)(8) of the 

Act for each separate violation shall be 

determined by the Department of Labor, 

taking into consideration the degree or 

willfulness of the failure or refusal to 

comply with the specific requirements 

referred to in paragraph (a) of this 

section. However, the amount assessed 

for each violation under section 

502(c)(8) of the Act shall not exceed 

$1,100 a day (or such other maximum 

amount as may be established by 

regulation pursuant to the Federal Civil 

Penalties Inflation Adjustment Act of 

1990, as amended), computed from the 

date of the plan sponsor’s failure or 

refusal to comply with the specific 

requirements referred to in paragraph (a) 

of this section. 

(c) Notice of intent to assess a penalty. 

Prior to the assessment of any penalty 

under section 502(c)(8) of the Act, the 

Department shall provide to the plan 

sponsor of the plan a written notice 

indicating the Department’s intent to 

assess a penalty under section 502(c)(8) 

of the Act, the amount of such penalty, 

the period to which the penalty applies, 

and the reason(s) for the penalty. 

(d) Reconsideration or waiver of 

penalty to be assessed. The Department 

may determine that all or part of the 

penalty amount in the notice of intent 

to assess a penalty shall not be assessed 

on a showing that the plan sponsor 

complied with the requirements of 

section 305 of the Act, or on a showing 

by the plan sponsor of mitigating 

circumstances regarding the degree or 

willfulness of the noncompliance. 

(e) Showing of reasonable cause. 

Upon issuance by the Department of a 

notice of intent to assess a penalty, the 

plan sponsor shall have thirty (30) days 

from the date of service of the notice, as 

described in paragraph (i) of this 

section, to file a statement of reasonable 

cause explaining why the penalty, as 

calculated, should be reduced, or not be 

assessed, for the reasons set forth in 

paragraph (d) of this section. Such 

statement must be made in writing and 

set forth all the facts alleged as 

reasonable cause for the reduction or 

nonassessment of the penalty. The 

statement must contain a declaration by 

the plan sponsor that the statement is 

made under the penalties of perjury. 

(f) Failure to file a statement of 

reasonable cause. Failure to file a 

statement of reasonable cause within the 

thirty (30) day period described in 

paragraph (e) of this section shall be 

deemed to constitute a waiver of the 

right to appear and contest the facts 

alleged in the notice of intent, and such 

failure shall be deemed an admission of 

the facts alleged in the notice for 

purposes of any proceeding involving 

the assessment of a civil penalty under 

section 502(c)(8) of the Act. Such notice 

shall then become a final order of the 

Secretary, within the meaning of 

§ 2570.131(g) of this chapter, forty-five 

(45) days from the date of service of the 

notice. 

(g) Notice of determination on 

statement of reasonable cause. (1) The 


pwalker on DSK8KYBLC1PROD with PROPOSALS
Federal Register / Vol. 74, No. 171 / Friday, September 4, 2009 / Proposed Rules 45795 

Department, following a review of all of 

the facts in a statement of reasonable 

cause alleged in support of 

nonassessment or a complete or partial 

waiver of the penalty, shall notify the 

plan sponsor, in writing, of its 

determination on the statement of 

reasonable cause and its determination 

whether to waive the penalty in whole 

or in part, and/or assess a penalty. If it 

is the determination of the Department 

to assess a penalty, the notice shall 

indicate the amount of the penalty 

assessment, not to exceed the amount 

described in paragraph (c) of this 

section. This notice is a ‘‘pleading’’ for 

purposes of § 2570.131(m) of this 

chapter. 

(2) Except as provided in paragraph 

(h) of this section, a notice issued 

pursuant to paragraph (g)(1) of this 

section, indicating the Department’s 

determination to assess a penalty, shall 

become a final order, within the 

meaning of § 2570.131(g) of this chapter, 

forty-five (45) days from the date of 

service of the notice. 

(h) Administrative hearing. A notice 

issued pursuant to paragraph (g) of this 

section will not become a final order, 

within the meaning of § 2570.131(g) of 

this chapter, if, within thirty (30) days 

from the date of the service of the 

notice, the plan sponsor or a 

representative thereof files a request for 

a hearing under §§ 2570.130 through 

2570.141 of this chapter, and files an 

answer to the notice. The request for 

hearing and answer must be filed in 

accordance with § 2570.132 of this 

chapter and § 18.4 of this title. The 

answer opposing the proposed sanction 

shall be in writing, and supported by 

reference to specific circumstances or 

facts surrounding the notice of 

determination issued pursuant to 

paragraph (g) of this section. 

(i) Service of notices and filing of 

statements. (1) Service of a notice for 

purposes of paragraphs (c) and (g) of 

this section shall be made: 

(i) By delivering a copy to the plan 

sponsor or representative thereof; 

(ii) By leaving a copy at the principal 

office, place of business, or residence of 

the plan sponsor or representative 

thereof; or 

(iii) By mailing a copy to the last 

known address of the plan sponsor or 

representative thereof. 

(2) If service is accomplished by 

certified mail, service is complete upon 

mailing. If service is by regular mail, 

service is complete upon receipt by the 

addressee. When service of a notice 

under paragraph (c) or (g) of this section 

is by certified mail, five days shall be 

added to the time allowed by these rules 

for the filing of a statement or a request 

for hearing and answer, as applicable. 

(3) For purposes of this section, a 

statement of reasonable cause shall be 

considered filed: 

(i) Upon mailing, if accomplished 

using United States Postal Service 

certified mail or express mail; 

(ii) Upon receipt by the delivery 

service, if accomplished using a 

‘‘designated private delivery service’’ 

within the meaning of 26 U.S.C. 7502(f); 

(iii) Upon transmittal, if transmitted 

in a manner specified in the notice of 

intent to assess a penalty as a method 

of transmittal to be accorded such 

special treatment; or 

(iv) In the case of any other method 

of filing, upon receipt by the 

Department at the address provided in 

the notice of intent to assess a penalty. 

(j) Liability. (1) If more than one 

person is responsible as plan sponsor 

for violations referred to in paragraph 

(a) of this section, all such persons shall 

be jointly and severally liable for such 

violations. 

(2) Any person, or persons under 

paragraph (j)(1) of this section, against 

whom a civil penalty has been assessed 

under section 502(c)(8) of the Act, 

pursuant to a final order within the 

meaning of § 2570.131(g) of this chapter, 

shall be personally liable for the 

payment of such penalty. 

(k) Cross-references. (1) The 

procedural rules in §§ 2570.130 through 

2570.141 of this chapter apply to 

administrative hearings under section 

502(c)(8) of the Act. 

(2) When applying procedural rules in 

§§ 2570.130 through 2570.140: 

(i) Wherever the term ‘‘502(c)(7)’’ 

appears, such term shall mean 

‘‘502(c)(8)’’; 

(ii) Reference to § 2560.502c–7(g) in 

2570.131(c) shall be construed as 

reference to § 2560.502c–8(g) of this 

chapter; 

(iii) Reference to § 2560.502c–7(e) in 

§ 2570.131(g) shall be construed as 

reference to § 2560.502c–8(e) of this 

chapter; 

(iv) Reference to § 2560.502c–7(g) in 

§ 2570.131(m) shall be construed as 

reference to § 2560.502c–8(g); and 

(v) Reference to §§ 2560.502c–7(g) and 

2560.502c–7(h) in § 2570.134 shall be 

construed as reference to §§ 2560.502c– 

8(g) and 2560.502c–8(h), respectively. 

Signed at Washington, DC, this 28th day of 

August 2009. 

Phyllis C. Borzi, 

Assistant Secretary, Employee Benefits 

Security Administration, Department of 

Labor. 

[FR Doc. E9–21343 Filed 9–3–09; 8:45 am] 

BILLING CODE 4510–29–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R03–OAR–2009–0520; FRL–8953–2] 

Approval and Promulgation of Air 

Quality Implementation Plans; Virginia; 

Opacity Variance for Rocket Testing 

Operations Atlantic Research 

Corporation’s Orange County Facility 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: EPA proposes to approve the 

State Implementation Plan (SIP) 

revision submitted by the 

Commonwealth of Virginia for the 

purpose of adding 9 VAC 5 Chapter 220, 

‘‘Variance for Rocket Motor Test 

Operations at Atlantic Research 

Corporation Orange County Facility’’ 

which includes an opacity variance for 

the rocket motor test operations at 

Aerojet Corporation’s Orange County 

Facility, in lieu of opacity limits 

established in the Virginia SIP. In the 

Final Rules section of this Federal 

Register, EPA is approving the State’s 

SIP submittal as a direct final rule 

without prior proposal because the 

Agency views this as a noncontroversial 

submittal and anticipates no adverse 

comments. A more detailed description 

of the Commonwealth’s submittal and 

EPA’s evaluation are included in a 

Technical Support Document (TSD) 

prepared in support of this rulemaking 

action. A copy of the TSD is available, 

upon request, from the EPA Regional 

Office listed in the ADDRESSES section of 

this document. If no adverse comments 

are received in response to this action, 

no further activity is contemplated. If 

EPA receives adverse comments, the 

direct final rule will be withdrawn and 

all public comments received will be 

addressed in a subsequent final rule 

based on this proposed rule. EPA will 

not institute a second comment period. 

Any parties interested in commenting 

on this action should do so at this time. 

DATES: Comments must be received in 

writing by October 5, 2009. 

ADDRESSES: Submit your comments, 

identified by Docket ID Number EPA– 

R03–OAR–2009–0520 by one of the 

following methods: 

A. http://www.regulations.gov. Follow 

the on-line instructions for submitting 

comments. 

B. E-mail: 

fernandez.cristina@epa.gov. 

C. Mail: EPA–R03–OAR–2009–0520, 

Cristina Fernandez, Chief, Air Quality 

Planning Branch, Mailcode 3AP21, U.S. 


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