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CHAPTER I-COST OF LIVING COUNCIL

Part 101

Coverage, exemptions and classification of economic units. 102 Public access to records.

105 Cost of Living Council procedural regulations.

Rulings Internal Revenue Service/Cost of Living Council.

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101.23

101.25

101.28

101.29

Procedures

Category I pay adjustments; con-
struction pay adjustments; pre-
notification requirements.
Category II pay adjustments; re-
porting requirements.
Category III pay adjustments;
monitoring and spot checks.
Pay adjustments of State and local
government employees.
Reclassification.

Subpart D-Exemptions-Items not Included in
Coverage

101.81 General.

Raw agricultural products, raw seafood products, and raw sugar price adjustments.

Real estate and insurance premiums.

101.33

101.34

Certain price adjustments.

101.35

101.36

Certain pay adjustment.

Miscellaneous.

Subpart E-[Reserved]

Subpart F-Special Provisions

101.101 Special provisions applicable from November 14, 1971 to January 31, 1972.

101.102 Special provisions applicable to retroactive and deferred pay adjustments provided prior to August 15, 1971.

101.103 Pay adjustments required under the Fair Labor Standards Act, wage determinations made by an agency in the executive branch and certain employee incentive plans.

101.104 Pay adjustments to those individuals earning less than $1.90 per hour.

Subpart G-Sanctions

101.201 Sanctions; criminal fine and civil penalty.

101.202 Injunctions and other relief.

AUTHORITY: The provisions of this Part 101 issued under 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 92-15, 85 Stat. 38; Public Law 92-210, 85 Stat. 743; and Executive Order No. 11640.

SOURCE: The provisions of this Part 101 appear at 37 F.R. 1237, Jan. 27, 1972, unless otherwise noted.

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(a) The purpose of this part is to establish the economic units and transactions which are covered by, or are exempt from, the controls, standards, and criteria established for the post-freeze economic stabilization period. The purpose is also to establish categories of economic units which must comply with the prenotification, reporting, and other procedural requirements prescribed by the Cost of Living Council.

(b) This part applies to all price adjustments and to all pay adjustments which occur during the post-freeze economic stabilization period, except those which are specifically exempt under this part.

(c) This part does not apply to economic transactions which are not prices, rents, wages, and salaries within the meaning of the Act as amended. Examples of transactions not within the meaning of the Act are:

(1) State or local income, sales and real estate taxes;

(2) Workmen's compensation payments;

(3) Welfare payments;

(4) Child support payments; and
(5) Alimony payments.

(d) The Cost of Living Council may permit any exceptions, exemptions or reclassifications that it considers appropriate with respect to the coverage, classification, and other procedural requirements prescribed in this part, Requests for exceptions or exemptions from the coverage, classification, and other procedural requirements of this part shall be submitted in accordance with the provisions of Parts 105, 205, 305, and 401 of this title.

(e) This part applies to:

(i) economic units and transactions in the several States and the District of Columbia; and

(ii) sales of goods and services by firms in the several States and the District of Columbia to firms in the Commonwealth of Puerto Rico.

[37 F.R. 1237, Jan. 27, 1972 as amended at 37 F.R. 3913, Feb. 24, 1972]

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most recent fiscal year from whatever source derived.

"Council" means the Cost of Living Council established by Executive Order No. 11615 (3 CFR, 1971 Comp., 36 F.R. 15727) and continued under the provisions of Executive Order No. 11640 (3 CFR, 1972 Comp., 37 F.R. 1213).

"Employer” means a firm which employs one or more persons who receive a wage or salary.

"Exception" means a waiver directed to an individual firm in a particular case which relieves it from the requirements of a rule, regulation, or order issued pursuant to the act.

"Exemption” means a general waiver of the requirements of all rules, regulations, and orders issued pursuant to the act.

"Firm" means any person, corporation, association, estate, trust, partnership, joint-venture, or sole proprietorship or any other entity however organized including charitable, educational, or other eleemosynary institutions, and the Federal and State and local governments.

"Mass transportation system" means a public benefit corporation, with annual sales or revenues in excess of $10 million, which is charged by law or contract with the responsibility of operating a mass transportation facility or facilities which:

(a) Serves a Standard Metropolitan Statistical Area (SMSA); and

(b) Constitutes the sole or a principal means of public transportation for that

area.

A facility or facilities includes a rapid rail transit, subway, elevated, bus system but does not include school buses or other conveyances used primarily for sight-seeing or chartered for private

use.

or

one

"Non-profit organization" which is "not operated for profit" is a firm which is defined as a nonprofit organization in section 501(c) and is exexempt under section 501 (a) of the Internal Revenue Code of 1954, amended.

"Pay adjustment" means a change in wages and salaries which includes all forms of direct or indirect remuneration or inducement to employees by their employers for personal services, which are reasonably subject to valuation, including but not limited to: Vacation and holiday payments; bonus; layoff and severance pay plans; supplemental unemployment benefits; night shift, over

time, production; and incentive pay; employer contributions for insurance plans (but not including public plans, e.g. old age, survivors, health, and disability insurance under the Social Security system, Railroad Retirement Acts, Federal Insurance Contributions Act, Federal Unemployment Tax Acts, Civil Service Retirement Acts and the Carriers and Employees Tax Act); savings, pension, profit sharing, annuity funds, and other deferred compensation and welfare benefits; payments in kind, job perquisites; housing allowances; uniform and other work clothing allowances (but not including employer-required uniforms and work clothing whether or not for safety purposes); cost-of-living allowances; commission rates, stock options, and other fringe benefits; and benefits which result in more pay per hour or other unit of work or production (e.g., by shortening the workday without a proportionate decrease in pay). Notwithstanding the foregoing definition of pay adjustment, contributions by any employer for:

(a) Any pension, profit sharing, or annuity and savings plan which meets the requirements of section 401(a), 404 (a) (2), or 403(b) of the Internal Revenue Code of 1954;

(b) Any group insurance plan; or (c) Any disability and health plan; are not to be included in wages and salaries unless such contributions are determined by the Pay Board to be unreasonably inconsistent with the standards issued pursuant to section 203 (b) of the Act.

"Pay Board" means the Board established pursuant to section 7 of Executive Order No. 11627 (3 CFR, 1971 Comp., 36 F.R. 20139).

"Prenotification" means notice submitted to the Price Commission or Pay Board relating to a proposed price adjustment or pay adjustment.

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

"Price Commission" means the Commission established pursuant to section 8 of Executive Order No. 11627.

"Real estate with improvements" means land upon which there is a structure, dwelling, or other building. It does not mean land on which roads, water, sewer, or drainage facilities have been constructed.

"Retail firm" means a firm whose annual sales or revenues are primarily from the sale of goods to ultimate consumers.

"Security" means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, or, in general, any interest or instrument commonly known as a "security," or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.

"State and local governments" means the several States and the District of Columbia, a municipality or other political subdivision, authority, commission, board, district, public corporation or other agency or instrumentality of the several States and the District of Columbia and any board, commission, agency, or other instrumentality of a local government.

[37 F.R. 1237, Jan. 27, 1972, as amended at 37 F.R. 2678, Feb. 4, 1972; 37 F.R. 3913, Feb. 24, 1972]

Subpart B-Price Adjustments-
Classification and Procedures

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(a) A price category I firm is a firm with annual sales or revenues of $100 million or more, or a firm that operates or controls a mass transportation system the fares of which are not otherwise regulated.

(b) Each price category I firm shall submit a prenotification to the Price Commission of each proposed price adjustment in accordance with regulations issued by the Price Commission.

(c) No proposed price adjustment shall be put into effect by any price category I firm unless such price adjustment has been approved or permitted to take effect in accordance with regulations issued by the Price Commission.

(d) Each price category I firm shall submit quarterly reports to the Price Commission with information on prices, costs, and profits in accordance with regulations issued by the Price Commission.

§ 101.13 Price category II firms; reporting requirements.

(a) A price category II firm is a firm with annual sales or revenues from $50 million to $100 million.

(b) Each price category II firm shall submit quarterly reports to the Price Commission with information on prices, costs, and profits in accordance with regulations issued by the Price Commission.

§ 101.15 Price category III firms; monitoring and spot checks.

(a) A price category III firm is a firm with annual sales or revenues of less than $50 million.

(b) The price adjustments of price category III firms are not subject to prenotification or reporting. However, they are subject to monitoring and spot checks, as are price adjustments by firms in other categories.

§ 101.16 Modification of prenotification

requirements.

Notwithstanding the provisions of § 101.11 the following price adjustments by price category I firms need not be prenotified:

(a) Price adjustments based upon the increased cost of raw or partially processed products subject to the conditions and procedures prescribed in § 300.51 (f) through (i) of this title.

(b) Price adjustments below the base price as determined under Subpart F of chapter III of this title subject to the conditions and procedures prescribed therein.

(c) Price adjustments proposed or established by those utilities subject to the conditions and procedures prescribed in § 300.16 of this title.

(d) Price adjustments with respect to insurance premiums affecting less than $1 million in aggregate annualized premiums under the existing rate or when the annual sales or revenues of the firm are less than $250 million, by those firms subject to the conditions and procedures prescribed in § 300.20 of this title.

(e) Price adjustments for institutional and noninstitutional providers of health services subject to the conditions and procedures prescribed in §§ 300.18 and 300.19 of this title.

(f) Price adjustments by firms leasing or offering to lease any residence or other real property subject to the conditions

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With the advice of the Price Commission, the Director of the Cost of Living Council has authority to reclassify firms from one price category to another when he deems such action necessary or advisable to effectuate the purposes of the Act and regulations issued pursuant thereto. Subpart C-Pay Adjustments— Classification and Procedures § 101.21 Category, I pay adjustments; construction pay adjustments; prenotification requirements.

(a) A category I pay adjustment means a pay adjustment which applies to or affects 5,000 or more employees or which applies to or affects employees who are engaged in construction as defined by section 11 of Executive Order No. 11588 (3 CFR, 1971 Comp., 36 F.R. 6339).

(b) Prenotification of each proposed category I pay adjustment shall be submitted to the Pay Board in accordance with regulations issued by the Pay Board.

(c) No proposed category I pay adjustment shall be put into effect unless such pay adjustment has been approved or permitted to take effect in accordance

with regulations issued by the Pay

Board.

§ 101.23

Category II pay adjustments; reporting requirements.

(a) A category II pay adjustment means a pay adjustment which applies to or affects from 1,000 to 5,000 employees.

(b) Each category II pay adjustment shall be reported to the Pay Board in accordance with regulations issued by the Pay Board.

§ 101.25 Category III pay adjustments; monitoring and spot checks.

(a) A category III pay adjustment means a pay adjustment which applies to or affects less than 1,000 employees.

(b) Category III pay adjustments are not subject to prenotification and reporting. However, they are subject to monitoring and spot checks as are pay adjustments by firms in other categories. § 101.28 Pay adjustments of State and local government employees.

Notwithstanding the provisions of § 101.21, prenotification of category I pay adjustments which affect the employees of State and local governments need not be submitted to the Pay Board in accordance with the provisions of § 101.21. Such pay adjustments are, however, subject to the reporting requirements of § 101.23, except that such pay adjustments and other pay adjustments affecting the employees of State and local governments which would otherwise be subject to § 101.23, need not be submitted to the Pay Board when certification is submitted at the beginning of such government's fiscal year and each six months thereafter to the Pay Board in accordance with regulations issued by the Pay Board that such pay adjustments are not in excess of 5.5 percent. Approval, however, must be granted by the Pay Board for any pay adjustment in excess of 5.5 percent which affects the employees of State and local governments. [37 F.R. 2491, Feb. 2, 1971]

§ 101.29 Reclassification.

With the advice of the Pay Board, the Director of the Cost of Living Council has authority to reclassify pay adjustments from one category to another when he deems such action necessary or advisable to effectuate the purposes of the Act and regulations issued pursuant thereto.

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Price adjustments and pay adjustments with regard to the property, services, wages, and salaries set forth in this subpart are exempt from and not included in the coverage of this title. § 101.32 Raw agricultural products, raw seafood products, and raw sugar price adjustments.

(a) Raw agricultural products. 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. Packaging is not considered a processing activity. Examples:

Exempt

Live cattle, calves, hogs, sheep, and lambs.

Live poultry----

Raw milk.

Shell eggs, pack

aged or loose. Sheared or pulled wool.

Raw honeycomb honey. Mohair.

Hay: Bulk, pel-
leted, cubed, or
baled.
Wheat

Feed grains includ-
ing:
Corn
Sorghum
Barley
Oats
Soybean

Leaf tobacco__.
Baled cotton, cot-
tonseed, cotton
lint.
Fresh potatoes,
packaged or not.
Unmilled rice----
All raw nuts-

shelled and unshelled. Fresh mushrooms.

Fresh mint.
Fresh hops.

Dried beans, peas, and lentils.

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