Labor Organization Annual Financial Reports

SUMMARY: This final rule makes several minor and technical revisions to

the annual financial reporting forms which labor organizations are

required to file under the Labor-Management Reporting and Disclosure

Act of 1959, as amended (LMRDA). It also makes several technical

amendments to the Department of Labor's regulations in which those

reporting forms are prescribed. These changes are being made in order

to enable the Department to optically scan the reports and make them

available on its Internet Web site, and to make the reports more

uniform.

EFFECTIVE DATE: January 1, 2000.

FOR FURTHER INFORMATION CONTACT: Kay H. Oshel, Chief, Division of

Interpretations and Standards, Office of Labor-Management Standards,

Employment Standards Administration, U.S. Department of Labor, Room N-

5605, Washington, DC 20210, (202) 693-0123 (this is not a toll-free

number).

SUPPLEMENTARY INFORMATION: Section 201(b) of the Labor-Management

Reporting and Disclosure Act of 1959, as amended (LMRDA), 29 U.S.C.

431(b), requires that each covered labor organization file an annual

report with the Secretary of Labor disclosing its financial condition

and operations. The requirements of LMRDA section 201(b) apply to all

labor organizations in the private sector. In addition, section 1209(b)

of the Postal Reorganization Act, 39 U.S.C. 1209(b), makes the LMRDA

applicable to labor organizations which represent employees of the U.S.

Postal Service. Finally, the Department's regulations, at 29 CFR 458.3,

which implement the provisions of the Civil Service Reform Act of 1978

and the Foreign Service Act of 1980 relating to standards of conduct

for federal sector labor organizations, 5 U.S.C. 7120 and 22 U.S.C.

1017, respectively, apply the LMRDA reporting requirements to labor

organizations which represent certain employees of the federal

government.

Section 208 of the LMRDA authorizes the Secretary to issue, amend,

and rescind rules prescribing the form and publication of the

information and annual financial reports required by sections 201(a)

and 201(b), and to provide simplified reports for labor organizations

for whom the Secretary finds that by virtue of their size a detailed

report would be unduly burdensome. Part 403 of title 29 of the Code of

Federal Regulations contains the regulations implementing these

reporting requirements and prescribing the reporting forms. The

Secretary of Labor has delegated authority under the LMRDA to the

Assistant Secretary for Employment Standards. See Secretary's Order No.

5-96 (62 FR 107, January 2, 1997).

The regulations, at 29 CFR 403.3 and 403.4(a), prescribe Form LM-2

for labor organizations with total annual receipts of $200,000 or more,

simplified Form LM-3 for labor organizations with total annual receipts

of less than $200,000, and simplified Form LM-4 for labor organizations

with total annual receipts of less than $10,000. The regulations at 29

CFR 403.4(b) also provide a simplified reporting format which a parent

national or international labor organization may submit on behalf of a

subordinate local labor organization which has no assets, liabilities,

receipts, or disbursements.

The Department has redesigned Forms LM-2/3/4 so that they can be

optically scanned and made available on the Internet. The major changes

to the forms are in their appearance. The most important of these

changes are (1) the reporting forms are now landscape rather than

portrait orientation, (2) they have pre-printed green boxes for

entering information for most of the items, and (3) the spaces for

entering information are larger and, consequently, the forms have more

pages (twelve pages instead of six for Form LM-2, eight pages instead

of four for Form LM-3, and two pages instead of one for Form LM-4). In

addition, labor organizations will have to file only one copy of the

report rather than the two that are now required.

The only change in the content of Forms LM-2/3/4 is that item 3 has

been expanded. Currently, labor organizations are asked in item 3 to

indicate whether the report is a terminal report. In the revised Forms

LM-2 and LM-3, labor organizations are also asked to indicate whether

the report is an amended report or a separate report for a subsidiary

organization; in the revised Form LM-4, labor organizations are also

asked to indicate whether the report is an amended report. This

information will facilitate the processing and scanning of the reports.

The changes made in this final rule to Forms LM-2/3/4, prescribed

in the regulations at 29 CFR 403.3 and 403.4(a), do not require any

change in the text of the regulations.

This final rule also makes several changes to the regulations at 29

CFR 403.4(b). That regulation provides that a parent body may fulfill

the reporting obligation of any of its subordinate local labor

organizations which have no assets, liabilities, receipts, or

disbursements, and which meet certain other conditions. It also sets

out a simplified format for the parent body to follow in reporting the

required information.

This final rule makes several changes to the information required

to be reported by a parent national or international labor organization

to fulfill the reporting obligations of its local labor organizations.

First, this rule eliminates the requirement to report the location in

which the local labor organization is chartered to operate. The

requirement to report this information in Forms LM-2/3/4 was eliminated

when those forms were revised on December 21, 1993 (58 FR 67594). This

change will therefore make the reporting requirement for the simplified

format the same as the requirement for Forms LM-2/3/4 with regard to

the reporting of charter location.

In addition, this rule eliminates the requirement that the

simplified reporting format be submitted in duplicate. This change will

also make the report filing requirement uniform with Forms LM-2/3/4.

This rule also eliminates the requirement to report the names and

titles of all officers of the local labor organizations for which the

parent body files reports under 29 CFR 403.4(b). Only the names and

titles of the president and treasurer, or corresponding principal

officers, will have to be reported. This will make the simplified

format reporting requirement the same as the requirements for Form LM-4

with regard to the reporting of officers.

Finally, this rule changes the regulations so that the information

reported by parent national and international unions on behalf of their

local labor organizations will have to be submitted on letter-size

paper. Forms LM-2/3/4 are letter-size, and the instructions for those

forms provide that any attached additional sheets should be letter-

size. This change will, therefore, make the simplified format reports

the same size as Forms LM-2/3/4, and will facilitate the processing and

scanning of the reports.

[[Page 71623]]

The changes made by this rule will be effective January 1, 2000.

Thus, labor organizations will file the new reporting forms and format

for fiscal years beginning on and after January 1, 2000.

Publication in Final

The undersigned has determined that this rulemaking need not be

published as a proposed rule, as generally required by the

Administrative Procedure Act (APA), 5 U.S.C. 553. This rulemaking makes

technical and nonsubstantive amendments to facilitate wider

availability of public information, and imposes no additional burden on

the public. Consequently, there is good cause for finding that notice

and public procedure is unnecessary and contrary to the public

interest, pursuant to section 553(b)(B) of the APA.

Effective Date

The undersigned has determined that good cause exists for waiving

the customary requirement for delay in the effective date of a final

rule for 30 days following its publication since this rule is technical

and nonsubstantive. Therefore, these amendments shall be effective

January 1, 2000. See 5 U.S.C. 553(d).

Administrative Requirements

A. Executive Order 12866

The Department of Labor has determined that this rule is not a

significant regulatory action as defined in section 3(f) of Executive

Order 12866 in that it will not (1) have an annual effect on the

economy of $100 million or more, or adversely affect in a material way

the economy, a sector of the economy, productivity, competition, jobs,

the environment, public health or safety, or State, local, or tribal

governments or communities, (2) create a serious inconsistency or

otherwise interfere with an action taken or planned by another agency,

(3) materially alter the budgetary impact of entitlements, grants, user

fees, or loan programs or the rights and obligations of recipients

thereof, or (4) raise novel legal or policy issues arising out of legal

mandates, the President's priorities, or the principles set forth in

Executive Order 12866.

B. Regulatory Flexibility Act

Because a notice of proposed rulemaking is not required for this

rule under 5 U.S.C. 553(b), the requirements of the Regulatory

Flexibility Act, 5 U.S.C. 601 et seq., pertaining to regulatory

flexibility analysis do not apply. See 5 U.S.C. 601(2). Therefore, a

regulatory flexibility analysis is not required.

C. Paperwork Reduction Act

This rule contains no additional information collection

requirements. The information collection requirements in the

regulations to which this rule makes technical amendments have been

approved by the Office of Management and Budget (OMB control number

1215-0188).

D. Small Business Regulatory Enforcement Fairness Act

The Department has determined that this final rule is not a ``major

rule'' requiring prior approval by the Congress and the President

pursuant to the Small Business Regulatory Enforcement Fairness Act of

1996 (5 U.S.C. 804), because it is not likely to result in (1) an

annual effect on the economy of $100 million or more, (2) a major

increase in costs or prices for consumers, individual industries,

Federal, State, or local government agencies, or geographic regions, or

(3) significant adverse effects on competition, employment, investment,

productivity, innovation, or the ability of United States-based

enterprises to compete with foreign-based enterprises in domestic and

export markets.

Further, since the Department has determined, for good cause, that

publication of a proposed rule and solicitation of comments on this

rule is not necessary, under 5 U.S.C. 808(2), this final rule is

effective immediately upon publication as stated previously in this

notice.

E. Unfunded Mandates Reform Act

For purposes of section 2 of the Unfunded Mandates Reform Act of

1995, 2 U.S.C. 1532, as well as Executive Order 12875 (58 FR 58093,

October 28, 1993), this rule does not include any federal mandate that

may result in increased expenditures by State, local and tribal

governments, or increased expenditures by the private sector of more

than $100 million.

F. Federalism

The Department has reviewed this rule in accordance with Executive

Order 13132 regarding federalism, and has determined that it does not

have ``federalism implications.'' The rule does not ``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.''

List of Subjects in 29 CFR Part 403

Labor unions, Reporting and recordkeeping requirements.

Adoption of Amendments of Regulations

In consideration of the foregoing, the Office of Labor-Management

Standards, Employment Standards Administration, Department of Labor

hereby amends Chapter IV of title 29 of the Code of Federal Regulations

as follows.

CHAPTER IV--OFFICE OF LABOR-MANAGEMENT STANDARDS, DEPARTMENT OF LABOR

PART 403--LABOR ORGANIZATION ANNUAL FINANCIAL REPORTS

1. The authority citation for part 403 continues to read as

follows:

Authority: Secs. 201, 207, 208, 301, 73 Stat. 524, 529, 530 (29

U.S.C. 431, 437, 438, 461); Secretary's Order No. 5-96 (62 FR 107,

January 2, 1997).

2. Section 403.4(b) is revised to read as follows:

Sec. 403.4 Simplified annual reports for smaller labor organizations.

* * * * *

(b) A local labor organization not in trusteeship, which has no

assets, no liabilities, no receipts and no disbursements during the

period covered by the annual report of the national organization with

which it is affiliated need not file the annual report required by

Sec. 403.2 if the following conditions are met:

(1) It is governed by a uniform constitution and bylaws filed on

its behalf pursuant to Sec. 402.3(b) of this chapter, and does not have

governing rules of its own;

(2) Its members are subject to uniform fees and dues applicable to

all members of the local labor organizations for which such simplified

reports are submitted;

(3) The national organization with which it is affiliated assumes

responsibility for the accuracy of, and submits with its annual report,

a separate letter-size sheet for each local labor organization

containing the following information with respect to each local

organization in the format illustrated below as part of this

regulation:

(i) The name and designation number or other identifying

information;

(ii) The file number which the Office of Labor-Management Standards

has assigned to it;

(iii) The mailing address;

(iv) The beginning and ending date of the reporting period which

must be the same as that of the report for the national organization;

(v) The names and titles of the president and treasurer or

[[Page 71624]]

corresponding principal officers as of the end of the reporting period;

(4) At least thirty days prior to first submitting simplified

annual reports in accordance with this section, the national

organization notifies the Office of Labor-Management Standards in

writing of its intent to begin submitting simplified annual reports for

affiliated local labor organizations;

(5) The national organization files the terminal report required by

29 CFR 403.5(a) on Form LM-3 or LM-4, as may be appropriate, clearly

labeled on the form as a terminal report, for any local labor

organization which has lost its identity through merger, consolidation,

or otherwise if the national organization filed a simplified annual

report on behalf of the local labor organization for its last reporting

period; and

(6) The national organization with which it is affiliated assumes

responsibility for the accuracy of, and submits with its annual report

and the simplified annual reports for the affiliated local labor

organizations, the following certification properly completed and

signed by the president and treasurer of the national organization:

Certification

We, the undersigned, duly authorized officers of [name of

national organization], hereby certify that the local labor

organizations individually listed on the attached documents come

within the purview of 29 CFR 403.4(b) for the reporting period from

[beginning date of national organization's fiscal year] through

[ending date of national organization's fiscal year], namely:

(1) they are local labor organizations; (2) they are not in

trusteeship; (3) they have no assets, liabilities, receipts, or

disbursements; (4) they are governed by a uniform constitution and

bylaws, and fifty copies of the most recent uniform constitution and

bylaws have been filed with the Office of Labor-Management

Standards; (5) they have no governing rules of their own; and (6)

they are subject to the following uniform schedule of fees and dues:

[specify schedule for dues, initiation fees, fees required from

transfer members, and work permit fees, as applicable].

Each document attached contains the specific information called

for in 29 CFR 403.4(b)(3)(i)-(vi), namely: (i) the local labor

organization's name and designation number; (ii) the file number

assigned the organization by the Office of Labor-Management

Standards; (iii) the local labor organization's mailing address;

(iv) the beginning and ending date of the reporting period; (v) the

names and titles of the president and treasurer or corresponding

principal officers of the local labor organization as of [the ending

date of the national organization's fiscal year].

Furthermore, we certify that the terminal reports required by 29

CFR 403.4(b)(5) and 29 CFR 403.5(a) have been filed for any local

labor organizations which have lost their identity through merger,

consolidation, or otherwise on whose behalf a simplified annual

report was filed for the last reporting period.

(Format for Simplified Annual Reporting)

SIMPLIFIED ANNUAL REPORT

Affiliation name:

----------------------------------------------------------------------

Designation name and number:

----------------------------------------------------------------------

Unit name:

----------------------------------------------------------------------

Mailing address:

----------------------------------------------------------------------

Name of person:

----------------------------------------------------------------------

Number and street:

----------------------------------------------------------------------

City, State and zip:

----------------------------------------------------------------------

File number:

----------------------------------------------------------------------

Period covered:

----------------------------------------------------------------------

From Through

----------------------------------------------------------------------

Names and Titles of president and treasurer or corresponding

principal officers

----------------------------------------------------------------------

For certification see NHQ file folder file number:

President--------------------------------------------------------------

Where signed-----------------------------------------------------------

Date-------------------------------------------------------------------

Treasurer--------------------------------------------------------------

Where signed-----------------------------------------------------------

Date-------------------------------------------------------------------

Signed in Washington, D.C. this 15th day of December, 1999.

Bernard E. Anderson,

Assistant Secretary for Employment Standards.

[FR Doc. 99-33044 Filed 12-20-99; 8:45 am]

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