This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

17655

Vol. 60, No. 67

Friday, April 7, 1995

OFFICE OF PERSONNEL

MANAGEMENT

5 CFR Part 316

RIN 3206–AG 62

Bringing Nonpermanent Excepted

Positions Into the Competitive Service

AGENCY: Office of Personnel

Management.

ACTION: Proposed rule.

SUMMARY: The Office of Personnel

Management (OPM) proposes to revise

its regulations governing retention of

employees whose excepted positions are

brought into the competitive service to

permit the employees to receive term

appointments if their excepted

appointments had time limits longer

than 1 year. This would avoid hardship

to the employees, who could otherwise

be retained only as temporary

employees without benefits.

DATES: Comments must be received on

or before June 6, 1995.

ADDRESSES: Send or deliver written

comments to Leonard R. Klein,

Associate Director for Employment,

Office of Personnel Management, Room

6F08, 1900 E Street NW., Washington,

DC 20415.

FOR FURTHER INFORMATION CONTACT:

Tracy E. Spencer, (202) 606–0830, or fax

(202) 606–2329.

SUPPLEMENTARY INFORMATION: Civil

Service Rule III (5 CFR 3.1) authorizes

OPM to prescribe conditions under

which ‘‘a person who occupies a

permanent position when it is placed in

the competitive service * * * or is

otherwise made subject to competitive

examination’’ may acquire a competitive

status. OPM’s regulations implementing

this authority are found in 5 CFR

315.701, 316.701, and 316.702. Those

regulations permit nonpermanent

employees whose positions are brought

into the competitive service to be

retained only under temporary

appointments limited to 1 year or less.

When the regulations were written,

almost all nonpermanent positions

inside and outside the Federal

Government were filled by such

temporary appointments. Giving those

employees temporary appointments in

the competitive service permitted them

to continue serving, with no change in

employment conditions, until they

completed the work for which they were

hired. That is still generally true when

positions are brought into the service

from outside the Federal Government.

In the Federal excepted service,

however, an increasing number of

excepted positions are filled under

appointments with time limits longer

than 1 year (comparable to term

appointments in the competitive

service). Those positions may be

brought into the competitive service by

revocation of a statutory appointing

authority or an exception under

Schedule A, B, or C, or by an OPM

determination that the authority no

longer covers the positions.

Employees whose excepted

appointments have limits longer than 1

year are eligible for within-grade

increases, promotions and

reassignments, and retirement and

insurance benefits that are not available

to temporary employees in the

competitive service. The logical way to

allow those employees to complete their

work with no change in employment

conditions would be to retain them

under term appointments. The proposed

regulations would add provision for

such term appointments. The

regulations would also make editorial

changes and would remove obsolete

references to the Federal Personnel

Manual.

Regulatory Flexibility Act

I certify that these regulations will not

have a significant economic impact on

a substantial number of small entities

(including small businesses, small

organizational units, and small

governmental jurisdictions) because

they apply only to Federal employees.

List of Subjects in 5 CFR Part 316

Government employees.

U.S. Office of Personnel Management.

James B. King,

Director.

Accordingly, OPM proposes to amend

5 CFR part 316 as follows:

PART 316—TEMPORARY AND TERM

EMPLOYMENT

1. The authority citation for part 316

continues to read as follows:

Authority: 5 U.S.C. 3301, 3302, and E.O.

10577 (3 CFR 1954–1958 Comp., p. 218);

§ 316.302 also issued under 5 U.S.C. 3304(c),

38 U.S.C. 2014, and E.O. 12362, as revised by

E.O. 12585; § 316.402 also issued under 5

U.S.C. 3304(c) and 3312, 22 U.S.C. 2506 (93

Stat. 371), E.O. 12137, 38 U.S.C. 2014, and

E.O. 12362, as revised by E.O. 12585 and E.O.

12721.

2. In § 316.701, paragraph (c) is

revised to read as follows:

§ 316.701 Public or private enterprise

taken over by the Government.

* * * * *

(c) An agency may retain an employee

under paragraph (a) of this section in a

position that it determines is

noncontinuing under a temporary

appointment. That appointment may be

made for a period not to exceed 1 year

and will be subject to the time limits set

out in § 316.402.

3. In § 316.702, paragraphs (b)(1) and

(c) are revised and a new paragraph (d)

is added to read as follows:

§ 316.702 Excepted positions brought into

the competitive service.

* * * * *

(b)(1) When an agency retains an

employee under paragraph (a) of this

section who was serving in an excepted

position under an indefinite

appointment or an appointment without

time limit, the agency may convert that

employee’s appointment to career or

career-conditional under § 315.701.

* * * * *

(c) An employee who was serving

under an excepted appointment limited

to 1 year or less may be retained as a

temporary employee under paragraph

(a) of this section until the scheduled

expiration date of the employee’s

excepted appointment. Extension of the

employee’s temporary appointment

beyond that date will be subject to the

provisions of § 316.402.

(d) An employee who was serving

under an excepted appointment with a

definite time limit longer than 1 year

may be retained under a term

appointment. The appointment will be

subject to all conditions generally

applicable to term appointments and

may be extended up to the maximum

limit for term appointments established
17656 Federal Register / Vol. 60, No. 67 / Friday, April 7, 1995 / Proposed Rules

under § 316.301. Service under the

employee’s excepted appointment

counts against the maximum limit for

the term appointment.

* * * * *

[FR Doc. 95–8597 Filed 4–6–95; 8:45 am]

BILLING CODE 6325–01–M

FEDERAL TRADE COMMISSION

16 CFR Part 436

Request for Comments Concerning

Trade Regulation Rule on Disclosure

Requirements and Prohibitions

Concerning Franchising and Business

Opportunity Ventures

AGENCY: Federal Trade Commission.

ACTION: Request for public comments.

SUMMARY: The Federal Trade

Commission (the ‘‘Commission’’) is

requesting public comments on its

Trade Regulation Rule on Disclosure

Requirements and Prohibitions

Concerning Franchising and Business

Opportunity Ventures (‘‘the Franchise

Rule’’ or ‘‘the Rule’’). The Commission

is requesting comments about the

overall costs and benefits of the Rule

and its overall regulatory and economic

impact as a part of its systematic review

of all current Commission regulations

and guides. The Commission also is

requesting comment on whether the

Rule should be modified to: Replace the

Rule’s disclosure requirements with

those set forth in the revised Uniform

Franchise Offering Circular Guidelines,

approved by the Commission on

December 30, 1993; modify the scope of

disclosure requirements for business

opportunity ventures; clarify the

applicability of the Rule to trade show

promoters; and require the disclosure of

earnings information. All interested

persons are hereby given notice of the

opportunity to submit written data,

views, and arguments concerning the

Rule.

DATES: Written comments will be

accepted on or before August 11, 1995.

ADDRESSES: Comments should be

directed to: Secretary, Federal Trade

Commission, Room H–159, Sixth and

Pennsylvania Ave., NW., Washington,

DC 20580. Comments about the

Franchise Rule should be identified as

‘‘16 CFR Part 436—Comment.’’

Notification of interest in the Public

Workshop-Conference should be

submitted in writing to Myra Howard,

Division of Marketing Practices, Federal

Trade Commission, Washington, DC

20580.

FOR FURTHER INFORMATION CONTACT:

Steven Toporoff, (202) 326–3135, or

Myra Howard, (202) 326–2047, Division

of Marketing Practices, Bureau of

Consumer Protection, Federal Trade

Commission, Washington, DC 20580.

SUPPLEMENTARY INFORMATION: The

Commission has determined, as part of

its oversight responsibilities, to review

Rules and guides periodically. These

reviews seek information about the costs

and benefits of the Commission’s Rules

and guides and their regulatory and

economic impact. The information

obtained assists the Commission in

identifying Rules and guides that

warrant modification or rescission.

The Commission is currently seeking

comment on several issues specific to

the Franchise Rule. The Commission

recognizes that there have been changes

in the franchise industry since the Rule

was promulgated in 1978. Among these

changes is the modification of the

Uniform Franchise Offering Circular

(‘‘UFOC’’) Guidelines by the North

American Securities Administrators

Association (‘‘NASAA’’). In 1986,

NASAA revised Item 19 of the

Guidelines to require franchisors who

make earnings claims to have a

reasonable basis for such claims. On

April 25, 1993, NASAA revised the

entire UFOC Guidelines. The

Commission approved the revised

UFOC Guidelines on December 30,

1993. The Commission now seeks

comment on the desirability of replacing

the current Rule disclosure

requirements with those set forth in the

revised UFOC Guidelines. The

Commission also seeks comment on the

desirability of modifying the scope of

the Rule as it pertains to the sale of

business opportunities. In addition, the

Commission seeks comment on whether

it should revoke the current conditional

exemption for trade show promoters

and whether it should modify the Rule

to add specific disclosure requirements

or prohibitions concerning trade show

promoters. Finally, there has been

considerable discussion in the franchise

industry and among franchise regulators

about requiring the disclosure of

earnings information to prospective

investors. The Commission solicits

comment on the desirability of

modifying the Rule to require the

disclosure of earnings information, and

if so, what form those disclosures

should take.

A. Background

The Franchise Rule was promulgated

by the Commission on December 21,

1978. 43 Fed. Reg. 59,614. The Rule

makes it an unfair or deceptive act or

practice for franchisors and franchise

brokers to fail to disclose to prospective

franchisees specific information about

the franchisor, franchise business, and

terms of the franchise agreement.

Franchisors and franchise brokers must

disclose additional information if they

make any claim about actual or

potential earnings to prospective

franchisees or to the media. The Rule

sets forth both the form and content of

the required disclosures. Franchisors

must provide prospective franchisees

with the required disclosures before any

sale is made.

B. Issues for Comment

1. The Revised UFOC

The Franchise Rule sets forth the

content and form of the required

disclosures. 16 CFR 436.1(a)–(e). In lieu

of the Rule’s format, the Commission

has accepted the UFOC Guidelines

originally adopted by the Midwest

Securities Commissioners Association

on September 5, 1975. 44 FR 49,966,

49,970, and as subsequently amended

by NASAA on November 27, 1986. 52

FR 22,686. Most recently, NASAA

petitioned the Commission to approve

new amendments to the UFOC

Guidelines, which NASAA adopted on

April 25, 1993. See Extra Edition, Bus.

Fran. Guide (CCH), Rpt. No. 161 (May

25, 1993). The Commission approved

the use of the new UFOC on December

30, 1993. 58 FR 69,224. The new

amendments are the product of a

comprehensive revision of the UFOC

Guidelines. The Commission is

concerned about costs and other

potential disadvantages to franchisors

and franchisees that may result from a

lack of uniformity between federal and

state regulations. Accordingly, the

Commission solicits comments on

whether it is desirable to revise the Rule

by replacing the current Rule disclosure

requirements with those set forth in the

revised UFOC Guidelines.

2. The Application of the Franchise

Rule to Business Opportunities

The Franchise Rule applies to both

franchises and business opportunities.

The Rule currently does not provide a

specific definition of the term ‘‘business

opportunity.’’ Rather, the Rule’s

definition of the term ‘‘franchise’’

includes some forms of business

opportunities. Specifically, if the

following three conditions are met, a

business opportunity will be deemed a

franchise:

(A) A person (hereinafter

‘‘franchisee’’) offers, sells, or distributes

to any person other than a ‘‘franchisor’’

(as hereinafter defined), goods,

commodities, or services which are: