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argued that since X sells only custom fitted uniforms the fact that he first makes them in standard sizes is merely an expedient to meet production requirements (That is, making each uniform to individual order from the beginning would be more time consuming) and therefore should not be determinative of his exempt status. The fact that he must make standard sizes and then alter them to meet production, however, is indicative that X is not engaged in the custom making of clothing to individual order.

This ruling has been approved by the General Counsel of the Cost of Living Council.

[37 F.R. 2987, Feb. 10, 1972]

[Cost of Living Council Ruling 1972-11] PROFIT MARGIN COMPUTATION INCLUDES EXEMPT AND NONEXEMPT PRODUCTS

Facts. Prenotification firm has sales of both exempt agricultural products and nonexempt products and makes sales at both the retail and wholesale levels.

Issue. Does the profit margin limitation apply to the total sales and profits per profit and loss statement, or should there be an allocation of income and expenses between exempt and nonexempt sales before application of the limitation?

Ruling. "Profit margin" refers to the ratio that net profits (determined before taxes) bears to gross sales as reported on the person's financial statement prepared in accordance with generally accepted accounting principles consistently applied. (§ 300.5 of the Economic Stabilization Regulations) The net profits and gross sales utilized in the computation of both base period and current period profit margins include profits and sales relating to both exempt and nonexempt products.

This ruling has been approved by the General Counsels of the Price Commission and Cost of Living Council. [37 F.R. 2990, Feb. 10, 1972]

[Cost of Living Council 1972–12] EXEMPTION FOR CHRISTMAS TREES Facts. Retailer R sold Christmas trees during the 1971 holiday season. The trees were obtained from a Maine supplier and were sold untrimmed and untreated in the same state that the supplier had delivered them. Retailer X obtained Christ

mas trees from the same supplier but before selling them trimmed off the lower branches, rounded the trunk to fit in standard tree holders, and sprayed the trees with a "fireproofing" solution.

Issue. Were prices on the trees sold by either of these retailers exempt from the coverage of the Economic Stabilization Program?

Ruling. Economic Stabilization Regulations, 6 CFR 101.32, 37 F.R. 1237 (January 27, 1972), exempts price adjustments on "raw agricultural products" from the coverage of the Economic Stabilization program. Raw agricultural products are defined in § 101.32(a) of the regulations to be, "Agricultural products which retain their original physical form and have not been processed." Processed products are those that have been, "Changed in their physical form."

One raw agricultural product specifically enumerated in the exempt class of products in § 101.32 (a) of the regulations is "Stumpage, or trees cut from the stump." A Christmas tree is a "tree cut from the stump," and is therefore within the exempt class. The operations performed by Retailer X or any other such operations to enhance the beauty or safety of a Christmas tree does not make the tree a "processed" raw agricultural product because the tree retains its same physical form.

This ruling has been approved by the General Counsel of the Cost of Living Council.

[37 F.R. 2987, Feb. 10, 1972]

[Cost of Living Council Ruling 1972-13] SALES BY MILITARY COMMISSARIES

Facts. A military commissary which operates with funds appropriated by Congress wishes to increase its prices.

Issue. Are sales by military commissaries sales of government property and therefore exempt under Economic Stabilization Regulations, 6 CFR 101.34 (f) (2), 37 F.R. 1241 (January 27, 1972).

Ruling. Yes. Sales by military commissaries which operate with appropriated funds are sales by the United States within the meaning of § 101.34(f) (2) of the regulations and are therefore exempt from the Economic Stabilization Program.

This ruling has been approved by the General Counsel of the Cost of Living Council.

137 FR. 3450, Feb. 16, 19721

[Cost of Living Council Ruling 1972-14]

RECONDITIONED PROPERTY

Facts. Corporation A is a dealer in heavy construction equipment. It sells and leases both new and used equpiment. The used equipment is acquired as tradeins on the sale of new equipment or when reacquired at the expiration of a lease. When used equipment is acquired, A reconditions it at a cost in excess of three months rental. The original cost of the equipment runs between $100,000 and $150,000. After reconditioning, the equipment is again sold or leased and is considered to be used equipment by the industry.

Issue. Whether the reconditioned equipment is exempted from the Economic Stabilization Regulations pursuant to § 101.34(e) as used property.

Ruling. Economic Stabilization Regulation § 101.34 (e) (6 CFR 101.34 (e), 37 F.R. 1241, January 27, 1972), exempts from economic controls only such used and damaged property which is not rebuilt. Property which has undergone extensive reconditioning is considered to be rebuilt and as such, any sale or lease affecting such property is not exempt from controls. On the above facts, this property is considered to be rebuilt because of the extensive reconditioning at a substantial cost.

This ruling has been approved by the General Counsel of the Cost of Living Council.

[37 F.R. 3450, Feb. 16, 1972]

[Cost of Living Council Ruling 1972–15]

USED PRODUCTS

Facts. Firm A is in the business of buying and selling used cars. Firm B is in the business of buying and selling used furniture and appliances. Firm C is a junk dealer who buys used goods and sells some of them to consumers and the rest to a scrap dealer. Firm D is a scrap dealer who buys goods from Firms A, B, and C, the general public and scrap from manufacturing plants. Firm D bales the scrap and sells it to manufacturing plants to be used as raw material.

Issue. Which of these firms' transactions, if any, are exempt from economic control?

Ruling. Economic Stabilization Regulations, 6 CFR 101.34(e), 37 F.R. 1241 (January 27, 1972), exempts the sale of all damaged and used products other than products which have been rebuilt,

repackaged, baled, reassembled or otherwise processed. The test to be applied in each transaction then is to determine the form of the products. If the product has been repackaged or processed in some way, its sale is not exempt from the price control, and any price charged above the base price must be determined according to the appropriate regulation. If the product is not repackaged or processed in some way, its sale is exempt from price control.

In the above fact situation Firms A, B, and C are exempt from the price regulations to the extent that they do not substantially improve goods by rebuilding them. The transactions in which Firm D purchases his scrap are likewise exempt. But when Firm D bales or otherwise processes the scrap, any sale of this material is not exempt from, but is controlled by, the Economic Stabilization Regulations.

This ruling has been approved by the General Counsel of the Cost of Living Council.

[37 F.R. 3450, Feb. 16, 1972]

[Cost of Living Council Ruling 1972-16]
DETERMINATION OF BASE PRICE

Facts. On August 16, 1971, a department store offered a large employee's association a 7-percent discount on all merchandise purchased by association members. The department store, a category III firm, wishes to reduce this discount to 5 percent. The department store's costs have not increased.

Issue. May the department store reduce the discount from 7 percent to 5 percent?

Ruling. Yes. Generally, a reduction in the discount given to a group of purchasers is a price increase. If, however, subsequent to August 15, 1971, a retailer who is not a category I firm for reporting purposes has reduced a price below the base price, he may now increase that price up to the base price without cost justification and without regard to the profit margin limitation. Since the 7-percent discount was not in effect prior to August 14, 1971, the department store's base prices for its merchandise are determined without regard to this discount. See Economic Stabilization Regulations, 6 CFR 300.402, 36 F.R. 23979 (December 16, 1971). Accordingly the department store may reduce the discount to 5 percent, because in doing so it is not charging prices in excess of its base prices.

If a retailer is a category I firm for reporting purposes, it does not have to request and receive Price Commission approval before it can make such a price adjustment because the adjustment is below the base price as determined under Subpart F of Chapter III of the regulations. Economic Stabilization Regulations. 6 CFR 101.16(b), 37 F.R. 1239 (January 27, 1972).

This ruling has been approved by the General Counsels of the Price Commission and Cost of Living Council.

[37 F.R. 3451, Feb. 16, 1972]

[Cost of Living Council Ruling 1972-17] STATE FEES FOR TRACTOR-TRAILER OPERATING PERMITS

Facts. Under State law, operators of tractor-trailers are required to obtain permits to operate them on State roads. The law requires a specified sum to be paid at the time the application for the permit is submitted. The amount specified is unrelated to and well in excess of the administrative costs of filing and processing applications, and the proceeds are earmarked for the construction and repair of highways. The State legislature is seeking to increase the amount of the payment.

Issue. Is an increase in the statutory payment subject to the Economic Stabilization Regulations?

Ruling. Economic transactions which are not prices, rents, wages, or salaries are not subject to the Economic Stabilization Act of 1970, as amended, nor to the regulations promulgated thereunder. (Economic Stabilization Regulations 6 CFR 101.1(c), 36 F.R. 21788 (November 13, 1971), republished as 6 CFR 101.(c), 37 F.R. 1237 (February 27, 1972)) The amount and mandatory character of the charge, and the use to which the resulting revenues are put, clearly indicate that the required payment is in the nature of a tax. As such, it is exempt from the provisions of the Economic Stabilization Regulations under § 101.1(c).

Effective January 26, 1972, price adjustments by State and local governments for services, permits, and licenses generally are exempt from price controls pursuant to Economic Stabilization Regulations, 6 CFR 101.34(a)(2), 36 F.R. 1237 (January 27, 1972).

72-578 0-72 3

This ruling has been approved by the General Counsel of the Cost of Living Council.

[37 F.R. 3922, Feb. 24, 1972]

[Cost of Living Council Ruling 1972-18]

GREEN SALTED CATTLE HIDES Facts. A is a meat packer who slaughters cattle. Among the items derived from his operations are cattle hides, which A preserves in salts for sale to a domestic tannery.

Issue. Are salted cattle hides exempt from the Regulations as a "raw agricultural product"?

Ruling. Salted cattle hides are not a "raw agricultural product" and are therefore not exempt from the Economic Stabilization Regulations.

Section 101.32(a) of the Regulations, which exempts "raw agricultural products", defines such products as "agricultural products which retain their original physical form and have not been processed. Processed agricultural products are products which have been canned, frozen, slaughtered, milled, or otherwise changed in their physical form." (Economic Stabilization Regulations 6 CFR 101.32 (a), 37 F.R. 1237 (January 27, 1972))

Since the above facts indicate clearly that cattle hides are derived from the slaughter of cattle, which is specifically listed as a "process" under § 101.32(a), cattle hides are not within the definition of a “raw agricultural product,” and are therefore not exempt.

This ruling has been approved by the General Counsel of the Cost of Living Council.

[37 F.R. 3923, Feb. 24, 1972]

[Cost of Living Council Ruling 1972–19] UNSOLD NEWSPAPERS AND MAGAZINES SOLD AS USED PRODUCTS

Facts. Company A purchases unsold newspapers and magazines from publishers. It sorts these materials as to color and texture and bundles them into commercial lots for sale to paper companies for recycling. It now wants to raise its prices for the sorted materials. Issue. Are sales of unsold materials, sorted and bundled into commercial lots exempt from the Economic Stabilization Regulations as sales of "used products"?

Ruling. Sales of these materials are not exempt as "used products" under the Economic Stabilization Regulations, 6 CFR 101.34 (e), 37 F.R. 1237 (January 27,

1972). When a person carries on the trade or business of making, fabricating or assembling a product by manual labor or machinery sale to other persons he is a "manufacturer" within the definition provided by the Economic Stabilization Regulations, 6 CFR 300.5, 36 F.R. 23974 (December 16, 1971), and his prices are governed by 6 CFR 300.12 36 F.R. 23974 (December 16, 1971).

To the extent that the company has taken unsold newspapers and magazines and sorted them as to color and texture and bundled the sorted materials, the

company has altered that product so as to make a distinctly separate product (i.e., bundles of sorted newspapers and magazines as to color and texture). The company therefore fits the definition of a manufacturer and all such transactions are governed by the Regulations. Accordingly, the sale of the newspapers and magazines as described in the facts do not qualify as used products.

This ruling has been approved by the General Counsel of the Cost of Living Council.

[37 F.R. 3770, Feb. 19, 1972]

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200.26 Requests for reconsideration of nonavailability.

200.27 Final determination of availability. 200.28 Fees.

AUTHORITY: The provisions of this Part 200 are issued under the Economic Stabilization Act of 1970, as amended (Public Law 91-379, 84 Stat. 799; Public Law 91-558, 84 Stat. 1468; Public Law 92-8, 85 Stat. 18; Public Law 92-15, 85 Stat. 38; Public Law 92-210, 85 Stat. 743), Executive Order 11627 (36 F.R. 20139, October 16, 1971), as amended. Cost of Living Council Order No. (36 F.R. 20202, October 16, 1971), and 5 U.S.C. 552.

SOURCE: The provisions of this Part 200 appear at 37 FR. 2479, Feb. 1, 1972, unless otherwise noted.

Subpart A-Organization [Revised]

Subpart B-Public Information

$ 200.20 Availability of records; exceptions.

(a) In general. All documents and exhibits filed by any party with the Pay

Board in the course of its proceedings are part of the records of the Board, available for inspection and copying by members of the public, except to the extent and in the manner specified in this subpart, and except to the extent such information is of the nature specified in 5 U.S.C. 552(b)(1)−(9).

(b) Identifying details omitted; authority to disclose. Information furnished to requesting members of the public may have identifying details omitted to avoid the possibility of violations of 18 U.S.C. 1905. That statute imposes criminal penalties for the disclosure of trade secrets, financial data, and other confidential information. However, the Chairman of the Pay Board, in his discretion, is specifically authorized to divulge or disclose to a complainant, or to an individual with specific knowledge of a complaint, the nature and result of the investigation of said complaint in circumstances where no violation has been found. § 200.21

Index of available material. Pursuant to the requirements of 5 U.S.C. 552 (a) (2), the Board will compile and maintain a current index setting forth in detail the information, records, and other data which will be made available to the public.

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