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fective June 1971, to reflect the promotion on that date?

Ruling. Bona fide promotions have never been the subject of regulation under the Economic Stabilization Program. During the initial freeze period, the Cost of Living Council announced that bona fide promotions which constituted an advancement to an established job with greater responsibilities would be permitted.

For the purposes of Phase II of the Economic Stabilization Program, bona fide promotions are excluded from the 5.5 percent general wage and salary standard because the remuneration goes with the job, not the man. That is, they

can be made without regard to the Stabilization Program guidelines.

Therefore, since the bona fide promotions are not limited by the Economic Stabilization Program, the timing of the actual promotions or pay increases which accompany them would likewise not be subject to regulation. This would mean that the employer can grant the increased salary without regard to the Economic Stabilization Regulations controlling retroactivity, back to the actual effective date of the promotion, June 1971.

This ruling has been approved by the General Counsel of the Pay Board. [37 FR. 3995, Feb. 25, 1972]

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Service organizations, other than providers of health services and insurers.

Regulated public utilities. Institutional providers of health services.

Noninstitutional providers of health services. Insurers.

300.16 300.18

300.19

300.20

300.21

300.51

300.52

300.60

Other factors.

300.81

300.101

Securities traded over-the-counter.
Prenotification firms.
Reporting firms.

Seasonal patterns.

Contracts entered into before August 15, 1971.

300.111 Formula determined leases of per

sonal property.

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Sec.

300.403 May 25, 1970, limitation date. 300.405 Sales and leases of personal property and services.

300.407 Sales of real property.

300.409 New property and new services.

Subpart G-Procedure and Administration 300.501 Records. 300.506

Submissions on price increase filings by persons not a party to the filing.

300.511 Delegations to Internal Revenue Service.

300.551 Penalties.

Appendix 1-Institutional and Noninstitutional Providers of Health Services.

AUTHORITY: The provisions of this Part 300 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. 13; Public Law 9215, 85 Stat. 38), Executive Order No. 11627 (36 F.R. 20139, Oct. 16, 1971), and Cost of Living Council Order No. 4 (36 FR. 20202, Oct. 16, 1971).

SOURCE: The provisions of this Part 300 appear at 36 F.R. 23975, Dec. 16, 1971, unless otherwise noted.

Subpart A-General

§ 300.1 Scope.

(a) This part sets forth the regulations applicable to increases in prices after November 13, 1971, for the sale

of real property, the sale or lease of personal property, and the sale or lease of services.

(b) This part does not apply to the sale or lease of any property or service that is exempted by Subpart D of Part 101 of this title.

(c) This part does not apply to transactions for sales, leases, or services occurring outside the United States. For the purposes of this paragraph, a transaction is considered to occur outside the United States if delivery of the property or performance of the service which is the subject matter of the transaction occurs outside the United States. If personal property which is the subject of a lease is used both inside and outside the United States during the period of the lease, the transaction is considered to have occurred exclusively in the United States. Similarly, if services are partially performed in the United States and partially outside the United States, the services are considered to have been performed exclusively in the United States.

[36 F.R. 23975, Dec. 16, 1971, as amended at 36 F.R. 25386, Dec. 30, 1971]

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The following definitions apply in this part:

"Allowable cost" means any cost, direct or indirect, unless disallowed by the Price Commission.

"Base period" means any two, at the option of the person concerned, of that person's last 3 fiscal years ending before August 15, 1971, and in determining a base period for the purpose of computing a profit margin during a base period, a weighted average of its profits during the 2 years chosen shall be used.

"Base price" means the base price determined under Subpart F of this part.

"Class of purchasers" means purchasers to whom a person has charged a comparable price for comparable property or service during the freeze base period pursuant to customary price differentials between those purchasers and other purchasers.

"Controlled group" means a controlled group of corporations, as defined in section 1563 (a) of title 26, United States Code.

"Customary initial percentage markup" means the markup applied to the cost (purchase price actually paid by the selling person and transportation charges to be allocated to the merchandise) of

merchandise when first offered for sale, determined on an item, product line, department, store, or other pricing unit basis, according to the person's customary pricing practice.

"Customary price differential” includes a price distinction based on a discount, allowance, add-on, premium, and an extra based on a difference in volume, grade, quality, or location or type of purchaser, or a term or condition of sale or delivery.

"Department" means the organizational unit customarily treated by the seller as a department.

"Freeze base period" means either—

(a) The period beginning on July 16, 1971, and ending on August 14, 1971; or (b) For a person who had no transactions during the period stated in paragraph (a) of this section, the nearest preceding 30-day period in which he had a transaction.

"Highest price in a substantial number of transactions" means the highest price at or above which at least 10 percent of the units were priced in transactions with any class of purchasers.

"Including" means including but not limited to.

"Lease" means a contract whereby a person having a legal estate in any personal property conveys a part of his interest to another person in consideration of rent or other compensation, but does not include a license.

"Manufacturer" means a person who carries on the trade or business of making, fabricating, or assembling a product or commodity by manual labor or machinery for sale to another person, and wherever the Price Commission considers it appropriate, also includes any manufacturing subsidiary, division, affiliate, or similar entity that is a part of, or is directly or indirectly controlled by, another person.

"Person" includes any individual, trust, estate, partnership, association, company, firm, or corporation, a government, and any agency or instrumentality of a government, but does not include a foreign government, or any international organization established by treaty or agreement between participating governments.

"Prenotification firm" means a firm subject to § 101.11 of Part 101 of this title.

"Price" means any compensation for the sale or lease of any property or serv

ices and includes rent, commissions, dues, fees, margins, rates, charges, tariffs, fares, or premiums, regardless of form.

"Price increase" means an increase in the unit price of a property or service or a decrease in the quality of substantially the same property or services.

"Product" means an item of tangible personal property offered for sale to another person.

"Product line" means an aggregation of products of the same manufacturer or different manufacturers, substantially similar as to intended function, usage, and structure, which are offered for sale simultaneously, or within the same commercial season, by a person.

"Profit margin" means the ratio that operating income (net sales less cost of sales and less normal and generally recurring costs of business operations, determined before non-operating items, extraordinary items, and income taxes) bears to net sales as reported on the person's financial statement prepared in accordance with generally accepted accounting principles consistently applied. "Reporting firm" means a firm subject to § 101.13 of Part 101 of this title.

"Rent" means any price for the use of personal property of any description, including any charge no matter how identified in a lease or other agreement, for the use of any property or for any service in connection with the use of leased property.

"Retailer" means a person who carries on the trade or business of purchasing property and, without substantially changing the form of that property, reselling it to ultimate consumers, and, whenever the Price Commission considers it appropriate, includes any retailing subsidiary, division, affiliate, or similar entity that is a part of, or is directly or indirectly controlled by, another person.

"Sale" includes exchange, transfer, or other disposition.

"Service" includes any service performed by a person for another person, other than in an employment relationship, and also includes professional services of any kind and services performed by membership organizations for which dues are charged, and the leasing or licensing of property to another person.

"Service organization” means a person who carries on the trade or business of selling or making available services, including nonprofit organizations, gov

ernments, and government agencies or instrumentalities which carry on those activities, and a person who provides professional services; and, whenever the Price Commission considers it appropriate, also including any service organization subsidiary, division, affiliate, or similar entity that is part of, or is directly or indirectly controlled by, another person.

"Transaction" means an arms-length transaction between unrelated persons which are not members of a controlled group, and is considered to occur at the time and place a binding contract is entered into between the parties.

"United States" means the several States and the District of Columbia.

"Unrelated person" means a person other than a person described in section 267(b) of title 26, United States Code.

"Wholesaler" means a person who carries on the trade or business of purchasing property and, without substantially changing the form of that property, reselling it to retailers for resale or to industrial, commercial, institutional, or professional business users. It also includes, whenever the Price Commission considers it appropriate, any wholesaling subsidiary, division, affiliate, or similar entity that is a part of, or is directly or indirectly controlled by, another

person.

[36 F.R. 23975, Dec. 16, 1971, as amended at 36 F.R. 25386, Dec. 30, 1971; 37 F.R. 3914, Feb. 24, 1972]

§ 300.11 General rule.

(a) No person may charge a price with respect to any sale or lease of an item of property or a service after November 13, 1971, which exceeds the base price (or other price authorized under this part) for that item of property or that service.

(b) No person may knowingly pay a price with respect to any sale or lease of an item of property or a service for use in his trade or business which exceeds the base price (or other price authorized under this part) for that item of property or that service. However, this paragraph (b) does not apply to the sale or lease of an item of property or a service to any person under circumstances of economic or other coercion in which the buyer or lessee, because of his need for that property or service, had no reasonable alternative but to pay the illegal price, and he reports the sale or lease to the Internal Revenue Service for in

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A manufacturer may charge a price in excess of the base price only to reflect increases in allowable costs that it incurred since the last price increase in the item concerned, or that it incurred after January 1, 1971, whichever was later, and that it is continuing to incur, reduced to reflect productivity gains, and only to the extent that the increased price does not result in an increase in its profit margin over that which prevailed during the base period.

[37 F.R. 775, Jan. 19, 1972]

§ 300.13 Retailers and wholesalers.

(a) General. A retailer or wholesaler may charge a price in excess of the base price whenever

(1) Its customary initial percentage markup after November 13, 1971, with respect to the property sold is equal to or less than its last customary initial percentage markup before November 14, 1971, or, at its option, its customary initial percentage markup during its last fiscal year ending before August 15, 1971.

(2) The aggregate effect of all of its price changes is not to increase its profit margin over that which prevailed during the base period.

(b) Posting requirements—(1) General. Before January 2, 1972, each retailer shall display prominently in its place of sale, base prices with respect to—

(i) All of its food products; and (ii) Those 40 items in each department which had the highest dollar sales volume during its last fiscal year, or those items which accounted for at least 50 percent of its total dollar sales in each department during that fiscal year, whichever is less.

(2) Posting guidelines—(i) Retail food stores. The base prices which a retail food store is required to post under subparagraph (1) of this paragraph are considered to be displayed prominently if they are available for inspection at a convenient central location in the store, to which the public has access without having to obtain the permission or assistance of a store employee, and if a sign is prominently posted in each department clearly indicating the location of the central base price list.

(ii) Sellers of prescription drugs. The base prices of drugs which are sold by a

retailer only upon the presentation of a prescription or other authorization, and which are required to be posted under subparagraph (1) of this paragraph, are considered to be displayed prominently if the retailer has available, in a convenient location in the retail drug section of his store to which the public has access without having to obtain the permission or assistance of a store employee, a standard compilation of wholesale prescription drug prices plus its professional fee or customary initial percentage markup on the drug product or product line, and a sign (minimum size 22'' x 28'') indicating the location of that information.

(iii) Other retail stores. In the case of any other retail store, base prices which are required to be posted under subparagraph (1) of this paragraph must be prominently posted within the department in which they are sold. However, a retail food store or seller of prescriptiontype drugs may use the procedure set forth in this subdivision in place of the procedure in subdivision (i) or (ii) of this subparagraph.

(c) Base price information. After January 1, 1972, each retailer shall use the following procedure with respect to base prices not posted under paragraph (b) of this section:

(1) Post on each floor of its establishment at least one sign (minimum of 22" x 28''), as specified below, announcing availability of base price information:

BASE PRICE INFORMATION

Information regarding the lawful base price for any item sold by this store not posted may be obtained by filling in a Base Price Information Request Form available at (specify location) and by handing it to (fill in). You will receive a prompt answer by mail.

(2) Make available in at least one location on each selling floor of its establishment, Base Price Information Request Forms, as follows:

BASE PRICE INFORMATION REQUEST FORMS Please furnish me with your base price for the following item sold in your store: Item

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