[ATTACHMENT 4]

INSTRUCTIONS FOR THE PREPARATION OF FORM CLC-22

1. In item 2, Part I, Specific Instructions, a sentence is added to "Other" read as follows:

If the Form CLC-22 is being used as a public disclosure document, e't the words "Public Disclosure Required" and complete the form as required by 6 CFR, Part 102, Subpart F.

2. Part B, General Instructions, is amended to add paragraph 8 to read s follows:

Certification that Public Disclosure Not Required

Any firm as defined in these instructions which has annual sales or reveres of $250 million or more and which has not charged a price for a substantial product which exceed by more than 1.5% the price lawfully in effect for such product on January 10, 1973, or on the date 12 months preceding the end of the quarterly reporting period whichever is later, must submit as a supporting document to any Form CLC-22 filed as a quarterly report two copies of the following certification:

Certification that Public Disclosure Not Required

I certify that as of (a), (b) and all entities which it controls have t at any time since (c) charged a price for a substantial product which e ceeds by more than 1.5% the price lawfully in effect on (d).

Chief Executive Officer (or authorized officer)

The following information is entered in the appropriate blanks of this certification:

(a) the reporting period ending date.

(b) the name of the "parent".

(c) and (d) January 10, 1973, or the date 12 months preceding the re porting period ending date whichever is later.

ATTACHMENTS SUBMITTED BY CLC WITH WRITTEN ANSWERS TO QUESTIONS FROM SENATOR MATHIAS1

[From the Federal Register, July 20, 1973]

TITLE 6-ECONOMIC STABILIZATION

CHAPTER I-COST OF LIVING COUNCIL

PART 140-COST OF LIVING COUNCIL FREEZE REGULATIONS

Exemption of Providers of Health Services

The purpose of this amendment is to add a new § 140.35 to Part 140 of Title & Code of Federal Regulations to exempt institutional and noninstitutional pr viders of health services from the provisions of the Council's freeze regulations and to continue the Phase III mandatory controls applicable to providers health services that are embodied in § 130.61 of Part 130 of this title.

The continuation of Phase III mandatory controls is intended to be at interim measure. New regulations governing providers of health services will developed and issued as a separate subpart of the forthcoming Phase IV reguli tions after extensive consultation with the Health Industry Advisory Committee of the Cost of Living Council and other interested health care providers al

consumers.

Because the purpose of this amendment is to provide immediate guidance an information with respect to the administration of the Economic Stabilization Program, the Council finds that further notice and procedure thereon is impre ticable and that good cause exists for making it effective in less than 30 days Interested persons may submit communications regarding these regulations Communications should be addressed to the Office of General Counsel, Cost of Living Council, Washington, D.C. 20508.

93-28, 87 Stat. 27; E.O. 11730, 38 FR 19345.)

(Economic Stabilization Act of 1970, as amended, Pub. L. 92-210, 85 Stat. 743; Pub. L

1 See page 109 for questions and answers.

In consideration of the foregoing, Subpart D of Part 140 of Chapter 1 of Title of the Code of Federal Regulations is amended as set forth herein, effective ily 1, 1973.

Issued in Washington, D.C., July 18, 1973.

JAMES W. MCLANE, Director, Special Freeze Group.

Section 140.35 is added to Part 140 to read as follows:

140.35 Providers of health services.

Effective July 1, 1973, institutional and noninstitutional providers of health rvices are exempt. Providers of health services continue to be subject to the hase III mandatory controls set forth in § 130.61 of this title.

[F.R. Doc. 73–15025 Filed 7-19-73; 4:30 pm]

PART 150-COST OF LIVING COUNCIL PHASE IV REGULATIONS

The purpose of this amendment is to establish a new Part 150-Cost of Living ouncil Phase IV Regulations and a new Subpart N therein.

Subpart N is a republication of the June 18, 1973, price regulations applicae to the construction industry, 38 FR 15821. Prior to publication on June 18, ere was consultation with numerous contractor's association, user groups, and fected Federal agencies.

The regulations establish several rules applicable to prices charged for conruction operations, reaffirm profit margin limitations for construction operaons, prescribe reporting requirements for sales, costs, and profits by a firm in e construction industry, and provide a procedure for renegotiation of fixed price onstruction contracts where wages have been reduced.

Because the purpose of this amendment is to provide immediate guidance ad information with respect to the administration of the Economic Stabilizaon Program, the Council finds that further notice and procedure thereon is practicable and that good cause exists for making it effective in less than 30

ays.

In consideration of the foregoing, Title 6 of the Code of Federal Regulations is mended by establishing a new Part 150 and adding a new Subpart N therein s set forth below, effective August 12, 1973. Issued in Washington, D.C., July 19, 1973.

AUTHORITY: Economic Stabilization Act of 1970, as amended; Pub. L. 92-210, 85 Stat. 13; Pub. L. 93-28, 87 Stat. 27; EO 11730, 38 FR 19345.)

150.451 Scope.

SUBPART N-CONSTRUCTION INDUSTRY

This subpart establishes special rules applicable to prices charged for conruction operations in the construction industry. This subpart does not apply o the prices charged by any firm in the construction industry which derives both ess than 20 percent of its annual sales of revenues from construction operations nd less than $50 million of annual sales or revenues from construction operations. 150.452 Definitions.

For purposes of this subpart, the terms

(a) "Annual sales or revenues" means the total gross receipts of a firm in the onstruction industry during its most recent fiscal year, except that it does not clude gross receipts or from a foreign branch or division of such a firm, or he gross receipts of or from a wholly or partially owned foreign entity such as corporation, partnership, joint venture, association, trust, or subsidiary, if the

28-511-74-27

gross receipts of such foreign entity, branch, or division are derived primarily from transactions with other foreign firms. A foreign entity, branch, or division is one located outside the several States and the District of Columbia. HoweETER gross receipts of domestic entities from U.S. export sales and from sales to firus in the Commonwealth of Puerto Rico are included in the determination of a nual sales or revenues. For purposes of this subpart annual sales or reveDIS shall also include the firm's pro rata share of annual sales and revenues derived from the construction operations of any joint venture of which it is a per (b) "Base period" means any one, at the option of the firm concerned, of the following fiscal years: That firm's last three fiscal years ending before August 1 1971, and any fiscal year, other than the fiscal year for which compliance 2 being measured, completed on or after that date.

(c) "Construction industry” means every firm engaged in our undertaking any construction operations, and every employee employed by such firm.

(d) "Construction operations" means all work relating to the erecting, c struction, altering, remodeling, painting, or decorating of installations such as buildings, bridges, highways, and the like when performed on a contract basis, but shall not include maintenance work performed by workers employed on a permanent basis in a particular plant or facility for the purpose of keeps: such plant or facility in efficient operating condition. The term also means the transporting of materials and supplies to or from a particular building or project by the workers of the contractor or subcontractor performing the constructie or the manufacturing of materials, supplies, or equipment on the site of a project by such workers. In addition, the term means all other work classified as costruction in 29 CFR 5.2 (g).

§ 150.453 Prices: Redetermination of contracts in excess of $500,000.

(a) The contract price for each construction contract in excess of $500,000 all or part of which is performed by construction workers whose wages and salaries are subject to review by the Construction Industry Stabilization Comittee (CISC) or the Cost of Living Council (CLC), shall be redetermined prior to final payment if the wage and salary level of those construction workers is reduced as a result of CISC or CLC action. The amount by which the contract price is reduced as a result of the redetermination must fairly reflect the results of the CISC or CLC action, including any cost increases directly resulting from the CISC or CLC action.

(b) Redetermination of any Federal Government fixed-price prime construe tion contract in excess of $500,000 affected by CISC or CLC action shall be con ducted in the manner provided in the Federal Procurement Regulations and applicable regulations of the Department of Defense.

(c) Redetermination of fixed-price prime construction contracts in excess of $500,000 other than those referred to in paragraph (b) of this section shall be conducted in the following manner:

(1) Upon notification of a reduction in the wages and salaries of constructio workers subject to CISC or CLC review each subcontractor performing wo under the prime contract, whose construction workers have had a reduction of wages and salaries as a result of CISC of CLC action, shall promptly notify the prime contractor of any such reduction, notwithstanding the dollar value of the subcontract.

(2) In the absence of a contract clause relating to redetermination of the contract price, and after notification by his subcontractors of a reduction in the wages and salaries of construction workers as a result of CISC or CLC action the prime contractor shall offer in writing to redetermine the contract priv with the owner or user prior to final payment, and furnish the owner or ner with a statement of the estimated number of employees affected by the CISC or CLC action.

(3) The owner or user shall notify the contractor of his intention to jointly redetermine the contract price within 90 days after receipt of the offer re ferred to in paragraph (c) (2) of this section.

(d) (1) In complying with this section, the prime contractor may require each subcontractor, regardless of tier, to submit to him a statement of the estimated number of employees affected by the results of the CISC or CLC action. The final payment due the subcontractor engaged to perform the subcontracted work shall be jointly redetermined to reflect fairly the results of the CISC or CV action, including any cost increases directly resulting from such action.

(2) Pending notification by the owner or user of his intent to redetermine the contract price, the prime contractor may place in escrow an amount which fairly

reflects the CISC or CLC action. The prime contractor shall refund to the subcontractor the amount placed in escrow if the owner or user does not indicate to the prime contractor his intention to jointly redetermine the contract price within the 90-day period specified, or if the owner or user does notify the prime contractor during that time period that he will not redetermine the contract price.

§ 150.454 Reporting of sales, costs, and profits.

A firm in the construction industry with annual sales or revenues of $50 million or more from construction operations shall report anually information as to sales, costs, and profits in accordance with forms and instructions issued by the Council. A firm required to report quarterly under § 150.151 shall not include within the quarterly report sales, costs, and profits information relating to construction operations if the firm is required to report such information annually under the provisions of this section.

§ 150.455 Prices: Passthrough of allowable costs.

A firm in the construction industry may charge prices for construction operations to reflect any allowable costs which it has incurred and continues to incur to the extent that such prices do not result in an increase in its profits margin over that which prevailed during the base period. For purposes of this section, the term "allowable costs" includes the full amount of any pay adjustment contained in a collective-bargaining agreement entered into after November 8, 1971, to the extent such pay adjustment has been approved by CISC or CLC. The full amount of any pay adjustment contained in a collective-bargaining agreement entered into after November 8, 1971, which was approved by the CISC or CLC and passed through prior to June 13, 1973, shall also be considered to be an allowable cost as of the date such pay adjustment was passed through.

§ 150.456 Profit margin measurement.

(a) For purposes of § 150.455 to the extent possible and consistent with the accouting principles customarily used in preparation of the contractor's financial statements, profit margin or construction operations shall be separately determined from profit margin on nonconstruction operations. To the extent that the annual sales or revenues from nonconstruction operations cannot be separated from construction operations for purposes of profit margin determination, those annual sales or revenues from nonconstruction operations are subject to the mandatory profit margin rule of this subpart.

(b) Where annual sales or revenues from nonconstruction operations cannot be separated from the annual sales or revenues from construction operations, the base period to be used in calculating the profit margin shall be the base period defined in § 150.21 and not the base period defined in § 150.452.

(c) No firm in the construction industry may exceed its base period profit margin unless the excess results from factors such as variation in the profit margin caused by the accounting method used on multiyear projects, the manner of accruing losses on multiyear projects, or other factors which are unique to the construction industry and which would distort the comparison of a firm's current profit margin with that which prevailed in its base period.

(d) Any justification for a profit margin exceeding the base period profit margin by a firm subject to § 150.454 which is based on paragraph (c) of this section, shall be reported and be subject to review by the Council.

[FR Doc. 73-15026 Filed 7-19-73; 4:30 pm]

COST OF LIVING COUNCIL

[6 CFR Parts 130, and 150]

PHASE IV REGULATIONS

NOTICE OF PROPOSED RULEMAKING

Pursuant to Executive Order 11730, the Cost of Living Council is considering the adoption of the regulations set forth in this notice effective August 12, 1973. In its initial action in implementing Executive Order 11730, the Council on July 18, 1973, issued a series of amendments to the Freeze regulations providing for Stage A of the transition of the Food industry from the Freeze to Phase IV (38 FR 19462).

Elsewhere in this edition of the FEDERAL REGISTER are amendments to the Economic Stabilization Regulations which provide for returning providers of health services to Phase III controls pending development of Phase IV lations (38 FR 19462) and providing for the direct transition of the construe tion industry from the freeze into Phase IV. (38 FR 19462).

In issuing this notice of proposed rulemaking the Council is inviting peblie price control rules contemplated for Phase IV. Special rules are included dealing with the petroleum and insurance industries. Also included are several technical amendments to existing Phase III Wage Stabilization regulations to adjust them for Phase IV and to accommodate the establishment of separate Price Stabilization regulations.

In the near future, the Council will be issuing procedural regulations corering appeals, requests for exceptions, exemptions and reclassification, hearing procedures, and the disclosure of economic stabilization information. It will also be issuing additional regulations providing for Stage B of the transition of the food industry into Phase IV as well as a recodification of the Phase III wage stablization regulations, which continue in effect.

Interested persons are invited to participate in the rulemaking by submitting written data, views or arguments with respect to the proposed regulaions set forth in this notice, to the Executive Secretariat, Cost of Living Council, 2000 M Street, NW., Washington, D.C. 20508. Comments should be identified with the designation "Proposed "Phase IV Docket" and should be organized so that those dealings with a particular subpart of the proposed regulations are separate from those dealing with other subparts (i.e. on separate pages). At least ten copies should be submitted. All communications received before July 31, 1973, will be considered by the Council before taking final action on the proposed regulations. The proposed regulations contained in this notice may be changed in the light of comments received. All comments received in response to this notice will be available for examination and copying by interested persons at the Cost of Living Council, 2000 M Street NW., Washington, D.C. during the hours of 9:00 a.m. to 5:00 p.m., Monday through Friday. Submissions will be available both be fore and after the closing date for comments.

SUBPART A-GENERAL

Subpart A provides the scope of the new Part 150. It specifies which of the prior regulations are superseded and which temporarily remain in effect. Subpart A also provides that reports due under the Phase III regulations continue to be required even though Phase III has ended for most firms.

Subpart A also reiterates the Phase III rule that contract renegotiation provisions which depend for their operation upon the modification or termination of the Economic Stabilization Program are inoperative as inconsistent with the goals of that program.

SUBPART B-DEFINITIONS

Subpart B contains the definitions of general applicability to this part. Defi nitions which are applicable only to one subpart are placed at the beginning of that Subpart.

SUBPART C-CLASSIFICATIONS

Subpart C classifies all firms as price category I, II or III, based upon the firm's annual sales or revenues. Specifically, a price category I firm is a firm with annual sales or revenues of $100 million or more. A price category II firm is one with annual sales or revenues of at least $50 million but less than $100 million. All others are price category III firms. The terms "firm" and "annual sales or revenues" are carried forward from Phase II and III. Therefore, as in Phase II, for purposes of determining the appropriate price category, a firm must include the annual sales or revenues from the most recently completed fiscal year of each entity it controls, directly or indirectly, as well as its own annual sales or revenues from its most recently completed fiscal year.

SUBPART D-EXEMPTIONS

The purpose of Subpart D is to set forth a list of the items, transactions, and firms exempt from various provisions of the Economic Stabilization Program. The exemptions are the same as those that prevailed during Phase II and III with certain exceptions and modifications as follows: