60164 Federal Register / Vol. 62, No. 216 / Friday, November 7, 1997 / Rules and Regulations

Clothing Textiles, 16 CFR part 1610, and

the Standard for the Flammability of

Vinyl Plastic Film, 16 CFR part 1611.

After the stay expires, children’s

sleepwear must either pass the

flammability tests described in the

regulations at 16 CFR parts 1615 and

1616 or meet the definition of ‘‘tightfitting garments’’ described in 16 CFR

1615.1(o) and 1616.1(m), or be in infant

sizes 9 months or smaller.

Dated: October 31, 1997.

Sadye E. Dunn,

Secretary, Consumer Product Safety

Commission.

[FR Doc. 97–29306 Filed 11–6–97; 8:45 am]

BILLING CODE 6355–01–P

DEPARTMENT OF THE TREASURY

Customs Service

[T.D. 97–88]

19 CFR Parts 101 and 122

Customs Service Field Organization;

Establishment of Sanford Port of Entry

AGENCY: Customs Service, Treasury.

ACTION: Interim rule; solicitation of

comments.

SUMMARY: This document delays the

effective date for implementation of a

final rule document published in the

Federal Register July 11, 1997, as T.D.

97–64, which would establish a new

port of entry at Orlando-Sanford Airport

in Sanford, Florida effective November

10, 1997. Since publication of the final

rule document, the Airport Operator has

brought to Customs attention that the

date chosen by Customs significantly

impairs its agreements with air carriers

that were signed prior to Customs

announcement of its decision. In

addition, the Airport Operator claims

that cargo and warehousing space

currently available at the airport must

be expanded to accommodate projected

needs. Because of these factors, Customs

is delaying the effective date to May 1,

1998 for the port of entry designation.

The user-fee status of the airport will

continue until the new effective date.

DATES: Effective date of November 10,

1997, of the amendments of

§§ 101.3(b)(1) and 122.15(b), Customs

Regulations, published in the Federal

Register (62 FR 37131) on July 11, 1997,

is delayed until May 1, 1998. Comments

must be received on or before December

8, 1997.

ADDRESSES: Written comments

(preferably in triplicate) may be

addressed to the U.S. Customs Service,

Office of Regulations and Rulings—

ATTN: Regulations Branch, The Ronald

Reagan Building, 1300 Pennsylvania

Avenue, NW., Washington, D.C. 20229.

Comments submitted may be inspected

at the Regulations Branch, Office of

Regulations and Rulings, The Ronald

Reagan Building, 1300 Pennsylvania

Avenue, NW, Suite 3000, Washington,

DC.

FOR FURTHER INFORMATION CONTACT:

Harry Denning, Office of Field

Operations, Resource Management

Division (202) 927–0196.

SUPPLEMENTARY INFORMATION:

Background

On July 11, 1997, Customs published

in the Federal Register (62 FR 37131)

T.D. 97–64 which amended § 101.3(b),

Customs Regulations (19 CFR 101.3), to

establish a new port of entry at OrlandoSanford Airport in Sanford, Florida, and

§ 122.15(b), Customs Regulations (19

CFR 122.15(b)), to remove the Sanford

Regional Airport from the list of user-fee

airports.

That action was taken by Customs

based on analysis of a report prepared

for the Central Florida Regional Airport

Board that manages the airport at

Sanford. The report showed that the

Sanford Regional Airport was becoming

the fastest growing airport for

international passenger clearance

services in Florida. In response to this

growth, the report indicated that the

Airport Board had decided to make

substantial and long term investment in

new international arrival facilities to

serve this growing Central Florida

market. Applying the criteria used by

Customs since 1973 for the

establishment of ports of entry (see

Treasury Decision (T.D.) 82–37 (47 FR

10137), as revised by T.D. 86–14 (51 FR

4559) and T.D. 87–65 (52 FR 16328)), to

the figures projected by the Central

Florida Regional Airport Board,

Customs believed that sufficient

justification existed for redesignating

the airport facility from its user-fee

status to that of a port of entry. Customs

announced this decision on July 11,

1997, and designated November 10,

1997 as the effective date.

Since publication of the final rule

document, it has come to Customs

attention that agreements currently in

force between the Orlando-Sanford

Airport and the air carriers it serves

effectively requires the Airport to absorb

additional Customs fees through the end

of April 1998. Moreover, the facilities

for cargo processing and warehousing at

Orlando-Sanford Airport need to be

expanded and that construction will not

be completed until late Spring of 1998.

Delayed Effective Date

For the reasons set forth in the above

discussion, Customs has determined

that the effective date for the

establishment of the new port of entry

at Sanford, Florida shall be delayed for

approximately 6 months—until May 1,

1998—to afford the airport facility time

to complete projected facilities. Until

that time, the airport may continue to

operate as a user-fee facility.

Public Comment Requirements

Customs establishes, expands, and

consolidates Customs ports of entry

throughout the United States to

accommodate the volume of Customsrelated activity in various parts of the

country. Because the establishment,

expansion or consolidation of a port of

entry relates to agency management and

organization, a regulatory change

involving such an action is not subject

to the notice and public procedure

requirements of the Administrative

Procedure Act (APA) (5 U.S.C. 553).

In addition, pursuant to 5 U.S.C.

553(b)(B), Customs finds for good cause

in this instance that notice and public

procedure are impracticable,

unnecessary and contrary to public

interest. It would be impracticable for

Customs to issue a proposal in this

instance as the rulemaking process

could not be completed timely.

If a proposal were to be issued, it

would be unlikely that a final decision

could be published before November 10,

causing possible unforeseen

consequences for the airport operator

and other members of the public. Also

the temporary postponement of the

effective date of a rule is a technical

change for which it is unnecessary to

provide notice and comment. The

substantive decision to create a port of

entry at Sanford has already been made;

the only question is when that port of

entry will open.

Notwithstanding the above, Customs

generally provides the public with an

opportunity to comment on the

establishment of ports of entry. Even

though notice and public comment are

not required in this instance pursuant to

5 U.S.C. 553(a)(2) because this is a

matter relating to agency management,

and pursuant to 5 U.S.C. 553(b)(B) for

good cause, Customs is requesting the

public to submit comments regarding

the delayed effective date. If comments

submitted within the next 30 days

demonstrate that there exist sufficient

grounds for not delaying the effective

date of the establishment of a port of

entry in Sanford until May 1, 1998,

Customs will issue another document.

Comments submitted will be available

for public inspection in accordance with
Federal Register / Vol. 62, No. 216 / Friday, November 7, 1997 / Rules and Regulations 60165

1The following are not qualified benefits:

products advertised, marketed, or offered as longterm care insurance; medical savings accounts

under section 106(b); qualified scholarships under

section 117; educational assistance programs under

seciton 127; and fringe benefits under section 132.

2Published as proposed rules at 49 FR 19321

(May 7, 1984) and 54 FR 9460 (March 7, 1989),

respectively.

3See section 9801(f). Similar provisions are set

forth in section 701(f) of the Employee Retirement

Income Security Act of 1974 (ERISA), and section

2701(f) of the Public Health Service Act.

Regulations under these provisions are set forth in

Treas. Reg. § 54.9801–6T; 29 C.F.R. § 2590.701–6;

and 45 C.F.R. § 146.117.

the Freedom of Information Act (5

U.S.C. 552), § 1.4 of the Treasury

Department Regulations (31 CFR 1.4),

and § 103.11(b) of the Customs

Regulations (19 CFR 103.11(b)), on

regular business days between the hours

of 9 a.m. and 4:30 p.m. at the

Regulations Branch, Office of

Regulations and Rulings, U.S. Customs

Service, Suite 3000, The Ronald Reagan

Building, 1300 Pennsylvania Avenue,

N.W., Washington, D.C.

Amendments to the Regulations

For the reasons stated above, the

effective date of final rule document FR

Doc. 97–18206, published in the

Federal Register on July 11, 1997 is

delayed until May 1, 1998.

The Regulatory Flexibility Act, and

Executive Order 12866

Because this document is not subject

to the notice and public procedure

requirements of 5 U.S.C. 553, this

document is not subject to the

provisions of the Regulatory Flexibility

Act (5 U.S.C. 601 et seq.). This

amendment does not meet the criteria

for a ‘‘significant regulatory action’’ as

specified in Executive Order 12866.

Approved: October 9, 1997.

Samuel H. Banks,

Acting Commissioner of Customs.

John P. Simpson,

Deputy Assistant Secretary of the Treasury.

[FR Doc. 97–29599 Filed 11–5–97; 2:01 pm]

BILLING CODE 4820–02–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 8738]

RIN 1545–AV43

Tax Treatment of Cafeteria Plans

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Temporary regulations.

SUMMARY: This document contains

temporary regulations that clarify the

circumstances under which an

employer may permit a cafeteria plan

participant to revoke an existing

election and make a new election during

a period of coverage. The text of these

temporary regulations also serves as the

text of the proposed regulations set forth

in the notice of proposed rulemaking on

this subject in the proposed rules

section of this issue of the Federal

Register.

DATES: These regulations are effective

on December 31, 1998.

FOR FURTHER INFORMATION CONTACT:

Sharon Cohen, (202) 622–6080 (not a

toll-free number).

SUPPLEMENTARY INFORMATION:

Background

This document contains amendments

to the Income Tax Regulations (26 CFR

part 1) under section 125. These

temporary regulations provide guidance

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.

Explanation of Provisions

A ‘‘cafeteria plan’’ under section 125

allows an employee to choose between

cash and certain nontaxable benefits,

such as accident or health coverage.

Section 125 generally permits the

employee to choose the nontaxable

benefit (rather than the available cash)

without the employee having to include

the available cash in gross income. The

temporary regulations:

• Permit a cafeteria plan to allow an

employee, during a plan year, to change

his or her health coverage election to

conform with the new special

enrollment rights provided under the

Health Insurance Portability and

Accountability Act of 1996 (HIPAA),

and

• Permit a cafeteria plan to allow a

change in coverage election for a variety

of other changes in status.

These regulations are designed to

provide clear, administrable guidelines

for determining when changes can be

made in cafeteria plan elections during

a plan year.

These regulations are effective for

plan years beginning after December 31,

1998. However, taxpayers may rely on

the guidance in the temporary

regulations (or on the existing proposed

regulations) for prior periods.

Summary

Section 125 generally provides that an

employee in a cafeteria plan will not

have an amount included in gross

income solely because the employee

may choose among two or more benefits

consisting of cash and ‘‘qualified

benefits.’’ A qualified benefit generally

is any benefit that is excludable from

gross income because of an express

provision of the Code, including

coverage under an employer-provided

accident or health plan under sections

105 and 106, group-term life insurance

under section 79, elective contributions

under a qualified cash or deferred

arrangement within the meaning of

section 401(k), dependent care

assistance under section 129, and

adoption assistance under section 137.1

Under §§ 1.125–1 and 1.125–2 of the

existing proposed regulations,2 an

employee is permitted to make an

election between cash and qualified

benefits before the beginning of the

period of coverage (which generally is

the plan year of the cafeteria plan);

changes in the election during the plan

year are permitted only in limited

circumstances.

The temporary regulations clarify the

circumstances under which a cafeteria

plan may permit an employee to change

his or her cafeteria plan election with

respect to accident or health coverage or

group-term life insurance coverage

during the plan year. Proposed

regulations are also being published that

cross-reference these temporary

regulations, and that replace the change

in family status provisions in Q&A–6 of

proposed § 1.125–2 with respect to

accident or health plans and group-term

life insurance.

HIPAA Special Enrollment Rules

The temporary regulations conform

the cafeteria plan rules to the new

special enrollment rights provided

under HIPAA (which generally require

group health plans to permit individuals

to be enrolled for coverage following the

loss of other health coverage, or if a

person becomes the spouse or

dependent of an employee through

birth, marriage, adoption, or placement

for adoption).3 Under the regulations, if

an employee has a right to enroll in an

employer’s group health plan or to add

coverage for a family member under

HIPAA, the employee can make a

conforming election under the cafeteria

plan. This allows required contributions

for such health coverage to be paid on

a pre-tax basis.

Changes in Status

The temporary regulations include

rules for other events, called ‘‘changes

in status,’’ under which a cafeteria plan

may allow an employee to change his or