Federal Register / Vol. 62, No. 216 / Friday, November 7, 1997 / Proposed Rules 60195

(c) An alternative method of compliance or

adjustment of the compliance time that

provides an acceptable level of safety may be

used if approved by the Manager,

International Branch, ANM–116, FAA,

Transport Airplane Directorate. Operators

shall submit their requests through an

appropriate FAA Principal Maintenance

Inspector, who may add comments and then

send it to the Manager, International Branch,

ANM–116.

Note 2: Information concerning the

existence of approved alternative methods of

compliance with this AD, if any, may be

obtained from the International Branch,

ANM–116.

(d) Special flight permits may be issued in

accordance with sections 21.197 and 21.199

of the Federal Aviation Regulations (14 CFR

21.197 and 21.199) to operate the airplane to

a location where the requirements of this AD

can be accomplished.

Note 3: The subject of this AD is addressed

in French airworthiness directive 96–187–

085(B)R2, dated January 29, 1997.

Issued in Renton, Washington, on October

31, 1997.

Darrell M. Pederson,

Acting Manager, Transport Airplane

Directorate, Aircraft Certification Service.

[FR Doc. 97–29420 Filed 11–6–97; 8:45 am]

BILLING CODE 4910–13–U

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Part 255

[Dockets Nos. OST–97–3014 and OST–97–

2881]

Computer Reservations System (CRS)

Regulations

AGENCY: Office of the Secretary, (DOT).

ACTION: Request for comments, petition

for rulemaking on rules governing

computer reservations systems.

SUMMARY: The Department is inviting

interested persons to comment on a

petition for rulemaking filed by

American West Airlines that requests

two new rules governing computer

reservations systems (CRSs). America

West asks the Department to amend its

CRS rules (14 CFR Part 255) to include

a prohibition against certain CRS

practices that allegedly impose higher

booking fee costs on airlines and enable

travels agents to make transactions that

damage an airline’s ability to control its

inventory. The Department invites

persons wishing to comment on

America West’s proposal to include

those comments in their responses to

the Department’s advance notice of

proposed rulemaking in Docket OST–

97–2881.

DATES: Comments and reply comments

must be submitted on or before

December 9, 1997, and January 23, 1998,

respectively, the due dates for

comments and reply comments in

Docket No. OST–97–2881.

ADDRESSES: Comments must be filed in

Room PL401, Docket OST–97–2881,

U.S. Department of Transportation, 400

7th St., SW., Washington, DC 20590.

Late filed comments will be considered

to the extent possible. To facilitate

consideration of comments, each

commenter should file six copies of its

comments. The comments should state

that they are filed in Docket OST–97–

2881.

FOR FURTHER INFORMATION CONTACT:

Thomas Ray, Office of the General

Counsel, 400 Seventh St., SW.,

Washington, DC 20590, (202) 366–4731.

SUPPLEMENTARY INFORMATION: The

Department adopted its regulations

governing CRSs, 14 CFR Part 255,

because, if CRS firms were unregulated,

they could use the systems to injure

airline competition and deny consumers

and travel agents access to accurate and

complete information on airline

services. We recently began a

proceeding to reexamine our regulations

to see whether they are still necessary

and, if so, whether they should be

changed, by publishing an advance

notice of proposed rulemaking. 62 FR

47606, September 10, 1997. The

comments and reply comments on that

advance notice will be due on December

9, 1997, and January 23, 1998, under the

revised comment schedule established

by us.

We note that the rules will expire on

December 31, 1997, unless we change

the termination date. We are holding an

expedited rulemaking proceeding to

consider amending the rules’ sunset

provision so that the rules will remain

in effect during our overall examination

of them, as we noted in the advance

notice, 62 FR at 47610–47611.

The advance notice summarizes our

findings in earlier proceedings on the

need for CRS rules and lists a number

of issues that parties should address in

their comments. 62 FR at 47607, 47609–

47610. Among other things, the advance

notice describes our past findings that

market forces do not discipline the

prices and quality of service offered by

systems to participating airlines

(participating airlines are the airlines

whose services are sold through a

system). 62 FR at 47608. See also 61 FR

42197, 42198, 42201–42202, August 14,

1996. Whether these findings are still

valid is one of the issues that will be

considered in our reexamination of the

rules.

After we published the advance

notice, America West filed a petition for

proposed rulemaking that asks up to

adopt two rules to stop CRS practices

that allegedly impose unreasonable

costs on participating airlines. America

West alleges that each system offers

incentive programs to travel agencies

that encourage travel agents to make

unnecessary and abusive airline

transactions. A travel agency typically

pays a much lower fee (or no fee) for

CRS services if it makes a certain

number of booking transactions each

month. According to America West, a

travel agency may have an incentive to

make illegitimate booking transactions

because doing so will enable it to

receive CRS services at lower cost, even

though the agency’s legitimate

transactions are too few to make the

agency eligible for the discounted fees.

America West asserts that travel

agencies also make illegitimate or

unnecessary books transactions for other

reasons. Whatever the reason, all

booking transactions generally impose a

booking fee liability on a participating

airline.

America West contends that, since

each system uses a transactional

methodology for calculating booking

fees (the fees charged participating

airlines), an airline must pay fees

whenever travel agents conduct

transactions involving its services,

whether or not the transaction benefits

the airline or results in the airline’s

carrying revenue passengers. According

to America West, a participating airline

like itself therefore must pay fees for

many booking transactions that

allegedly provide it no benefit. America

West further asserts that the systems

refuse to make any real effort to stop

illegitimate travel agent transactions

that create booking fee revenue for the

systems. America West additionally

charges that Sabre and Apollo, the two

largest systems, each protects its major

airline affiliate, respectively American

and United, from similar abuses by

denying travel agents the ability to

conduct certain types of transactions

that often lead to illegitimate bookings.

America West alleges that the systems,

however, have been unwilling to

provide similar protection for

participating airlines. Finally, America

West alleges that the Internet has made

matters worse, for the Internet booking

sites created by travel agencies and

other firms use a CRS as the booking

engine.

America West therefore asks us to

adopt rules allowing systems to charge

booking fees only for a transaction

involving actual travel and requiring

each system to deny its travel agency
60196 Federal Register / Vol. 62, No. 216 / Friday, November 7, 1997 / Proposed Rules

1Published as a proposed rule at 49 FR 19321

(May 7, 1984).

2Published as a proposed rule at 54 FR 9460

(March 7, 1989).

users the ability to create a passive

booking on an airline if that airline asks

the system to terminate that capability

(a passive booking is a booking

transaction that is not sent to the

airline’s internal reservations system).

We believe that the issues raised by

America West’s petition warrant further

consideration. We are aware of

complaints from other participating

airlines raising similar concerns. Our

advance notice of proposed rulemaking

in Docket OST–97–2881 therefore

included this among the specific issues

that we asked commenters to address.

62 FR at 47610 (para. 12). We thus

intended to consider this issue in our

overall reexamination of the rules.

To facilitate our consideration of the

issues presented by the America West

petition, commenters should include

their responses to the petition in their

comments and reply comments on our

advance notice of proposed rulemaking.

America West itself is filing its petition

as a response to the advance notice.

Petition at 2, n. 2. Considering America

West’s proposals in that proceeding,

Docket OST–97–2881, will be more

efficient than considering them in a

separate docket. Commenters therefore

should not file comments on the

petition in the docket for America

West’s petition.

Issued in Washington, DC on October 31,

1997, under authority delegated by 49 CFR

§ 1.56a(h)2.

Patrick V. Murphy,

Deputy Assistant Secretary for Aviation and

International Affairs.

[FR Doc. 97–29467 Filed 11–6–97; 8:45 am]

BILLING CODE 4910–62–M

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG–243025–96]

RIN 1545–AU61

Tax Treatment of Cafeteria Plans

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Partial withdrawal of notice of

proposed rulemaking, amendment to

notice of proposed rulemaking, and

notice of proposed rulemaking by cross

reference to temporary regulations.

SUMMARY: This document withdraws

portions of the notice of proposed

rulemaking published in the Federal

Register (54 FR 9460) on March 7, 1989

and amends proposed regulations

relating to changes in family status. In

the Rules and Regulations section of this

issue of the Federal Register, the IRS is

issuing temporary regulations that

provide guidance on the circumstances

under which a cafeteria plan participant

may revoke an existing election and

make a new election during a period of

coverage. The text of those temporary

regulations also serves as the text of

these proposed regulations.

DATES: Written comments and requests

for a public hearing must be received by

February 5, 1998.

ADDRESSES: Send submissions to:

CC:DOM:CORP:R (REG–243025–96),

room 5226, Internal Revenue Service,

POB 7604, Ben Franklin Station,

Washington, DC 20044. Submissions

may be hand delivered between the

hours of 8 a.m. and 5 p.m. to:

CC:DOM:CORP:R (REG-243025–96),

Courier’s Desk, Internal Revenue

Service, 1111 Constitution Avenue NW,

Washington, DC. Alternatively,

taxpayers may submit comments

electronically via the internet by

selecting the ‘‘Tax Regs’’ option on the

IRS Home Page, or by submitting

comments directly to the IRS internet

site at http://www.irs.ustreas.gov/prod/

tax regs/comments.html.

FOR FURTHER INFORMATION CONTACT:

Concerning the regulations, Sharon

Cohen, (202) 622–6080; concerning

submissions or to request a public

hearing, Evangelista Lee, (202) 622–

7190 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

Q&A–8 of § 1.125–1 1 and Q&A–6(c)

and (d) of § 1.125–2 2 provide that a

participant may make benefit election

changes pursuant to changes in family

status and separation from service. The

temporary regulations set forth the

standards under which a cafeteria plan

can allow an employee to change his or

her health coverage election during a

period of coverage to conform with the

special enrollment rights under the

Health Insurance Portability and

Accountability Act of 1996, and to

change his or her health coverage or

group-term life insurance coverage in a

variety of other ‘‘change in status’’

situations. Thus, these proposed

regulations modify Q&A–8 of § 1.125–1

and Q&A–6(c) and (d) of § 1.125–2, and

clarify that the ‘‘change in family status

rules’’ in the existing proposed

regulations continue to apply to

qualified benefits (including dependent

care assistance under section 129 and

adoption assistance under section 137)

other than accident or health coverage

and group-term life insurance coverage.

Election changes continue to be

permitted where there has been a

significant change in the health

coverage of the employee or spouse

attributable to the spouses’s

employment.

In addition, the temporary regulations

provide that the rules of section 401(k)

and (m), rather than the rules in the

temporary regulations that apply to

other qualified benefits, govern election

changes under a qualified cash or

deferred arrangement (within the

meaning of section 401(k)) or with

respect to employee contributions under

section 401(m). Therefore, the proposed

regulations withdraw Q&A–6(f) of

§ 1.125–2.

Temporary regulations in the Rules

and Regulations section of this issue of

the Federal Register amend the Income

Tax Regulations (26 CFR part 1) relating

to section 125. The temporary

regulations contain rules relating to the

circumstances under which a cafeteria

plan participant may revoke an existing

election and make a new election during

a period of coverage.

The text of those temporary

regulations also serves as the text of

these proposed regulations. The

preamble to the temporary regulations

explains the temporary regulations.

Special Analyses

It has been determined that this

Treasury Decision is not a significant

regulatory action as defined in EO

12866. Therefore, a regulatory

assessment is not required. It also has

been determined that section 553(b) of

the Administrative Procedure Act (5

U.S.C. chapter 5) do not apply to these

regulations, and because the regulations

do not impose a collection of

information on small entities, the

Regulatory Flexibility Act (5 U.S.C.

chapter 6) does not apply. Pursuant to

section 7805(f) of the Internal Revenue

Code, proposed regulations will be

submitted to the Chief Counsel for

Advocacy of the Small Business

Administration for comment on their

impact on small business.

Comments and Public Hearing

Before these proposed regulations are

adopted as final regulations,

consideration will be given to any

written comments (a signed original and

eight (8) copies) that are submitted

timely to the IRS. All comments will be

available for public inspection and

copying. A public hearing may be

scheduled if requested in writing by any