18132 Federal Register / Vol. 74, No. 75 / Tuesday, April 21, 2009 / Rules and Regulations 

24See 18 CFR 284.8(h)(1). 25 18 CFR 284.8(h)(4). 26Some of the parties requesting clarification 

describe an ‘‘agency’’ relationship whereby the 

agent would obtain the released capacity and then 

sell gas to its principal, the retail marketer. See 

National Fuel’s request at 7. This arrangement, as 

well as what we understand as a traditional agency 

arrangement, where the principal would continue 

to hold title to the capacity and the gas, and thus 

there would be no need for a ‘‘resale’’ to the retail 

marketer (principal), are both acceptable to the 

Commission as releases eligible for the exemptions 

from tying and bidding provided the ‘‘agent’’ is 

obligated to serve the retail marketer’s needs as 

described above under the retail access program. 

marketers participating in stateregulated retail access programs apply 

to any release where the marketer 

replacement shipper is obligated to use 

the capacity to provide the gas supply 

requirement of retail consumers in the 

program. Even if the marketer does not 

itself make sales directly to the subject 

retail consumers, this condition can be 

satisfied so long as the marketer has a 

contractual obligation to use the full 

amount of the released capacity to 

supply gas to the retail access marketer 

and the retail access marketer is, in turn, 

obligated to supply that gas to the retail 

consumers pursuant to a state-regulated 

retail access program. 

30. As stated above, in Order Nos. 712 

and 712–A the Commission exempted 

from bidding releases ‘‘to a marketer 

participating in a state-regulated retail 

access program as defined in paragraph 

(h)(4) of this section * * *.’’ 24 In 

section 284.8(h)(4) of the revised 

regulations, the Commission defined 

releases to a ‘‘marketer participating in 

a state-regulated retail access program’’ 

as ‘‘any prearranged capacity release 

that will be utilized by the replacement 

shipper to provide the gas supply 

requirement of retail consumers 

pursuant to a retail access program 

* * *.’’ 25 This definition applies to any 

replacement shipper which is obligated 

to use the released capacity to transport 

gas which will be used to provide the 

gas supply requirement of the retail 

consumers, whether that shipper makes 

the retail sales itself or sells the gas to 

the retail marketer who then resells the 

gas to the retail consumers.26 The 

Commission’s rationale in Order No. 

712 for granting the exemptions from 

the tying prohibition and bidding 

requirements for capacity releases by 

LDCs to implement state-approved retail 

access programs applies equally to the 

situation where an LDC releases 

capacity directly to the retail marketer 

or to another entity which is obligated 

to transport the gas on behalf of the 

retail marketer. The essential 

requirement is that the replacement 

shipper either (1) is itself the retail 

marketer or (2) has a contractual 

relationship with the retail marketer 

and/or the LDC requiring it to use up to 

the full amount of the released capacity 

to satisfy the retail marketer’s 

obligations under the state-approved 

retail access program to provide the gas 

supply requirement of retail consumers. 

31. The Commission rejects the 

argument that granting this clarification 

will allow circumvention of interstate 

pipeline creditworthiness standards. If a 

retail marketer is unable to satisfy these 

standards, the replacement shipper 

supplier will be required to satisfy the 

pipeline’s creditworthiness criteria. If 

no party can meet these standards then 

the pipeline does not have to allow the 

release. 

32. The Commission also grants 

National Grid’s requested clarification 

that an LDC that releases to an asset 

manager can require the asset manager 

to release capacity to marketers serving 

under the retail choice program and that 

such a release will qualify for the 

exemptions from the tying prohibition 

and bidding requirements. This 

condition is one that can be addressed 

in the agreement between the releasing 

shipper and asset manager, and will 

allow LDCs and asset managers to 

operate efficiently to effectuate the goals 

of retail access programs. 

33. The clarifications granted above 

render the various requests for waiver 

moot. 

Termination of Dockets 

34. The Commission initiated Docket 

Nos. RM06–21 and RM07–4 to address 

a petition filed by Pacific Gas and 

Electric Co. and Southwest Gas 

Corporation concerning the potential 

removal of the maximum rate ceiling on 

capacity release transactions and a 

petition filed by the Marketer 

Petitioners seeking clarification of the 

operation of the Commission’s capacity 

release rules in the context of asset 

management services. The issues raised 

in the petitions have been fully 

addressed in the instant docket. 

Accordingly, the Commission hereby 

terminates Docket Nos. RM06–21 and 

RM07–4. 

The Commission orders: 

(A) The requests for rehearing of 

Order No. 712–A are denied and the 

requests for clarification of Order No. 

712–A are granted in part and denied in 

part as discussed above. 

(B) Docket Nos. RM06–21 and RM07– 

4 are hereby terminated. 

By the Commission. 

Nathaniel J. Davis, Sr., 

Deputy Secretary. 

[FR Doc. E9–9111 Filed 4–20–09; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF LABOR 

Office of Labor-Management 

Standards 

29 CFR Parts 403 and 408 

RIN 1215–AB62 

Labor Organization Annual Financial 

Reports 

AGENCY: Office of Labor-Management 

Standards, Employment Standards 

Administration, Department of Labor. 

ACTION: Final rule; delay of effective 

date and applicability date. 

SUMMARY: This final rule delays the 

effective date and applicability date of 

regulations pertaining to the filing by 

labor organizations of annual financial 

reports required by the LaborManagement Reporting and Disclosure 

Act of 1959, as amended (LMRDA) that 

were published in the Federal Register 

on January 21, 2009. They revised Labor 

Organization Annual Report Form LM– 

2 and established a procedure whereby 

the Department may revoke, when 

warranted, a labor organization’s 

authorization to file the simplified 

Labor Organization Annual Report Form 

LM–3. These regulations were to have 

gone into effect on February 20, 2009, 

but were delayed until April 21, 2009, 

by a final rule published on February 

20, 2009 (74 FR 7814). This final rule 

postpones the effective date of the 

regulations from April 21, 2009, until 

October 19, 2009, and the applicability 

date of the regulations from July 1, 2009, 

until January 1, 2010. This will allow 

additional time for the agency and the 

public to consider a proposal to 

withdraw the January 21 regulations 

and, meanwhile, to permit unions to 

delay costly development and 

implementation of any necessary new 

accounting and recordkeeping systems 

and procedures, pending this further 

consideration. At the same time, the 

Department has published a Notice of 

Proposed Rulemaking elsewhere in this 

issue of the Federal Register, seeking 

public comment on its proposal to 

withdraw the regulations. 

DATES: The effective date of the rule 

amending 29 CFR Parts 403 and 408, 

published January 21, 2009, at 74 FR 

3678, is delayed until October 19, 2009, 

and its applicability date is delayed 

until January 1, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Denise M. Boucher, Director, Office of 

Policy Reports and Disclosure, Office of 

Labor-Management Standards, 

Employment Standards Administration, 

U.S. Department of Labor, 200 

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Federal Register / Vol. 74, No. 75 / Tuesday, April 21, 2009 / Rules and Regulations 18133 

Constitution Avenue, NW., room N– 

5609, Washington, DC 20210, (202) 693– 

1185. This is not a toll-free number. 

SUPPLEMENTARY INFORMATION: 

I. Background and Overview 

Section 201(b) of the LaborManagement Reporting and Disclosure 

Act of 1959, as amended (LMRDA) (Pub. 

L. 86–257, 73 Stat. 519), requires each 

covered labor organization to file 

annually with the Secretary of Labor a 

financial report, signed by its president 

and treasurer or corresponding principal 

officers, containing information in the 

detail necessary to disclose accurately 

its financial condition and operations 

for the preceding fiscal year. The 

Secretary of Labor has delegated the 

Secretary’s authority under the LMRDA 

to the Assistant Secretary for 

Employment Standards. 

The requirements of LMRDA section 

201 apply to all labor organizations in 

the private sector including those 

representing employees under the 

provisions of the National Labor 

Relations Act, as amended, and the 

Railway Labor Act, as amended. Section 

1209(b) of the Postal Reorganization Act 

made the LMRDA applicable to labor 

organizations representing employees of 

the U.S. Postal Service. Section 701 of 

the Civil Service Reform Act of 1978 

(CSRA) and section 1017 of the Foreign 

Service Act of 1980 (FSA), as 

implemented by Department of Labor 

regulations at 29 CFR parts 457–459, 

extended the LMRDA reporting 

requirements to labor organizations 

representing certain employees of the 

Federal government. 

Section 208 of the LMRDA authorizes 

the Secretary to issue rules prescribing 

the form and publication of the annual 

financial reports required by section 

201, and to provide a simplified report 

for labor organizations for which the 

Secretary finds that by virtue of their 

size a detailed report would be unduly 

burdensome. Under regulations issued 

pursuant to section 208, the Secretary 

has prescribed Form LM–2 for labor 

organizations with total annual receipts 

of $250,000 or more, and the simplified 

Form LM–3 for labor organizations with 

total annual receipts of $10,000 or more, 

but less than $250,000. 

On January 21, 2009, the Department 

of Labor’s Office of Labor-Management 

Standards (OLMS) published in the 

Federal Register (74 FR 3677) 

regulations making revisions to the 

Form LM–2 (used by the largest labor 

organizations to file their annual 

financial reports). The regulations, 

when effective, will require labor 

unions to report additional information 

on Schedules 3 (Sale of Investments and 

Fixed Assets), 4 (Purchase of 

Investments and Fixed Assets), 11 (All 

Officers and Disbursements to Officers) 

and 12 (Disbursement to Employees). 

The regulations also would add 

itemization schedules corresponding to 

categories of receipts, and establish a 

procedure and standards by which the 

Secretary of Labor may revoke a 

particular labor organization’s 

authorization to file the simplified 

annual report, Form LM–3, where 

appropriate, after investigation, due 

notice, and opportunity for a hearing. 

Consistent with the memorandum of 

January 20, 2009, from the Assistant to 

the President and Chief of Staff, entitled 

‘‘Regulatory Review’’ and the 

memorandum of January 21, 2009, from 

the Director of the Office of 

Management and Budget (OMB), 

entitled ‘‘Implementation of 

Memorandum Concerning Regulatory 

Review,’’ on February 3, 2009, OLMS 

published in the Federal Register a 

notice seeking comment on a proposed 

60-day extension of the effective date 

and requesting comment on legal and 

policy questions relating to the 

regulations, including on the merits of 

rescinding or retaining the regulations. 

The notice was available for public 

inspection at the Federal Register on 

January 29, 2009 and was published on 

February 3, 2009 (74 FR 5899). 

Public comment on the proposed 

extension was invited, with the 

comment period ending on February 13, 

2009. The Department received 24 

comments on the proposal to extend the 

effective date for 60 days. Public 

comment was also invited generally on 

the regulations, including the merits of 

rescinding or retaining them, with this 

comment period ending on March 5, 

2009. The Department published a final 

rule on February 20, 2009, which 

postponed for 60 days the effective date 

of the regulations published on January 

21, 2009 until April 21, 2009, for 

additional public comment and agency 

review of questions of law and policy 

(74 FR 7814). 

On March 19, 2009, OLMS published 

a notice seeking public comment on a 

proposal to delay for an additional 180 

days the April 21, 2009, effective date 

of the regulations published on January 

21, 2009. This notice proposed to 

further delay the effective date until 

October 19, 2009. Additionally, this 

notice proposed to delay the 

applicability date of the regulations 

(establishing the start of the fiscal year 

for which the new reporting 

requirements would apply) set for July 

1, 2009, until January 1, 2010. As 

discussed in that notice, the Department 

indicated that it would not able to 

complete its final review of the issues 

raised by the January 21 rule before 

April 21, 2009, the current effective date 

of the rule. Since that time, however, 

the Department has determined that the 

January 21 rule was promulgated 

without adequate review of experience 

under the Department’s 2003 Form LM– 

2 rule, including the burden of reporting 

requirements and whether the 

requirements reflect a proper balance of 

the need for transparency and union 

autonomy. Thus, in a separate 

document published in this issue of the 

Federal Register, the Department is now 

proposing to withdraw the January 21 

rule. Without further extension of the 

effective and applicability dates of the 

rule, those unions with fiscal years 

beginning on or after July 1, 2009, 

would have to begin immediate 

preparations to comply with the rule, 

preparations that may entail significant 

burden and expense, but which may 

prove unnecessary. Furthermore, the 

Department itself would have to expend 

substantial financial and compliance 

resources to prepare for the rule, 

resources that could be directed to other 

purposes if the rule is subsequently 

withdrawn. Therefore, the Department 

has decided to postpone, for 180 days, 

the effective date of the regulations 

published on January 21, 2009, until 

October 19, 2009, and delay the 

applicability date from July 1, 2009, 

until January 1, 2010, in order to review 

the comments on the proposal to 

withdraw the regulations and, 

meanwhile, to permit unions to delay 

costly development and implementation 

of any necessary new accounting and 

recordkeeping systems and procedures 

pending this further consideration. 

II. Comments on the Proposal and the 

Department’s Responses and Decision 

The Department received comments 

from 27 individuals or associations on 

its proposal to postpone the effective 

date and applicability date of the new 

Form LM–2/LM–3 regulations. Five 

union commenters supported the 

extension as appropriate, arguing that it 

would enable effective review of the 

rule while avoiding the unnecessary 

burden on union resources in the event 

that the Department does rescind the 

regulations. One international union 

also offered additional comments on the 

merits of the regulations, and urged 

their rescission. Five commenters 

expressed general support for union 

transparency and the January 21 

regulations, and they opposed any delay 

in their effective or applicability dates. 

Additionally, 17 commenters submitted 

form letters generally supporting the 

greater public disclosure of pay and 

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18134 Federal Register / Vol. 74, No. 75 / Tuesday, April 21, 2009 / Rules and Regulations 

benefits to union officers and employees 

afforded under the January 21 

regulations and urging implementation 

of the new reporting requirements 

without further delay. 

Two Congressmen expressed concern 

that continued delay suggests political 

favoritism to a select constituency rather 

than regulatory integrity. They noted, as 

did two other commenters, that 

President Obama has emphasized the 

importance of public disclosure and 

financial accountability and that such 

accountability is no less needed for 

labor organizations than for the business 

sector. 

The Department rejects the contention 

that a delay of the effective and 

applicability dates of the regulations 

suggests ‘‘political favoritism.’’ Rather, 

the Department proposed the initial 60 

day delay of the effective date of the 

regulations and commenced a review of 

their merits in consideration of 

guidance from the Assistant to the 

President and Chief of Staff and the 

Office of Management and Budget 

(OMB) that was directed to all Executive 

branch agencies, without regard to 

particular agencies or program areas, to 

determine whether it might be 

appropriate to delay the effective date of 

regulations to permit their review for 

matters of law and policy before taking 

effect. Most commenters opposing the 

extension recognized that the 

Department’s actions were triggered by 

this OMB guidance, and one association 

acknowledged that this review was 

necessary to provide the new 

Administration an opportunity to 

review rules issued during the waning 

days of the Bush Administration in 

order to prevent agencies from 

publishing rules that fail to meet the 

regulatory standards that OMB 

articulated in its guidance. The proposal 

to withdraw the regulations, and the 

decision made in this rulemaking to 

extend the effective and applicability 

dates derive from this review of the 

merits of the regulations, consistent 

with the OMB guidance. The 

Department has engaged in this process 

in a fully transparent manner, and the 

instant rulemaking has been, and will 

continue to be, undertaken in full 

compliance with the requirements of the 

Administrative Procedure Act. 

One public policy organization argued 

that there is no justification for the 

extensions that outweigh the benefits to 

union members from the disclosure 

provided by the January 21 rule and 

asserted that a delay would 

‘‘immediately’’ allow unions to avoid 

increased disclosure. However, even if 

the reporting revisions published on 

January 21, 2009, had not been 

postponed, there would have been no 

immediate changes in how unions 

report their finances. Rather, the initial 

applicability date for the regulations 

was July 1, 2009, and the first reports 

would not have been due until 

September 30, 2010. Notwithstanding 

the postponement of the effective date 

of the January 21 rule, an existing and 

effective labor organization reporting 

regime remains in place. 

The Department reiterates the 

justification it offered in the notice 

proposing to extend the effective and 

applicability dates, namely that this 

additional time will enable the 

Department to complete a review of the 

issues raised by the January 21 rule, 

which the Department now proposes to 

withdraw, without exposing affected 

unions to undue burdens. Without the 

further extension, those unions with 

fiscal years beginning on or after July 1, 

2009, would have to begin immediate 

preparations to comply with the rule, 

preparations that may entail significant 

burden and expense, but which may 

prove unnecessary. Further, since a 

decision has been made to propose 

withdrawal of the regulations, and if 

such proposal ultimately is effectuated, 

these expenses will have been incurred 

unnecessarily. While the Department 

strongly supports the need for union 

financial transparency, it also believes 

that preventing unions and the 

Department from incurring potentially 

unnecessary expenses and burdens 

outweighs any benefit gained from 

implementing the regulations a few 

months sooner. 

A trade association defended union 

transparency and the January 21 

regulations, and it argued against any 

delay or rescission of them by stressing 

the Administration’s support of 

transparency, citing evidence that some 

individuals continue to abuse their 

union office by misappropriating and 

misusing members’ money, and 

presenting an argument in support of 

the reporting of union payments made 

towards job targeting. The commenter 

also asserted that the Department’s 

proposed extension upholds its 

prediction that the initial 60 day delay 

would be used by the regulations’ 

opponents to justify an even further 

delay as a result of added administrative 

burdens required to implement the 

mandated changes, and it contended 

that an additional delay would only 

enable the labor community to have 

additional time to submit comments 

favorable to rescission. Additionally, the 

trade association stated its belief that, 

while the initial extension was 

understandable in light of the 

Administration directives, no further 

delay was warranted. 

The Department disagrees with these 

contentions. As noted above, the 

Department has now proposed 

withdrawal of the January 21 rule. 

Delaying the implementation of the 

January 21 rule enables the Department 

to review comments on its proposal, 

while simultaneously preventing unions 

and the Department from incurring 

unnecessary costs and burdens in the 

event the regulations are withdrawn. 

Moreover, the proposed rescission is 

based on reasons that are consistent 

with the OMB guidance regarding 

regulatory review, in that the final rule 

did not reflect proper consideration of 

all relevant facts and was not based on 

reasonable judgment about the legally 

relevant policy considerations. As stated 

in the Department’s proposal, the 

withdrawal of the January 21 rule is 

warranted because: 

* * * the rule was issued without an 

adequate review of the Department’s 

experience under the relatively recent 

revisions to Form LM–2 in 2003 and because 

the comments indicate that Department may 

have underestimated the increased burden 

that would be placed on reporting labor 

organizations by the January 21 rule. Finally, 

the Department has concluded, based on the 

comments received, that the provisions 

related to the revocation of a small union’s 

authorization to file a simpler form because 

it has been delinquent or deficient in filing 

that form are not based upon realistic 

assessments of such a union’s ability to file 

the more complex form and are unlikely to 

achieve the intended goals of greater 

transparency and disclosure. 

In light of the Department’s decision to 

propose the withdrawal of the January 

21 rule and the additional reasons stated 

above, the Department has decided to 

postpone, for 180 days, the effective 

date of the January 21, 2009, rule, until 

October 19, 2009, and delay the 

applicability date from July 1, 2009, 

until January 1, 2010. 

Signed in Washington, DC, this 16th day of 

April 2009, 

Shelby Hallmark, 

Acting Assistant Secretary for Employment 

Standards. 

Andrew D. Auerbach, 

Deputy Director, Office of Labor-Management 

Standards. 

[FR Doc. E9–9182 Filed 4–20–09; 8:45 am] 

BILLING CODE 4510–CP–P 

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