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based on favorable earnings, and (vii) ance, upon such terms and conditions restrictions on disbursements, dividends, and for such consideration as he shall debts, salaries, acquisition and disposi- determine to be reasonable; and tion of assets, liens, expenditures and (iv) Acquisition, holding, transfer, reliabilities.

lease or conveyance of any real or per(9) Default provisions. In providing sonal property, or any interest therein, financial assistance, the Secretary may whenever deemed necessary or approrequire in any loans or evidences of in- priate, and execution of all legal docudebtedness such provisions regarding de- ments for such purposes. fault and acceleration upon default as he (2) Any mortgage acquired as secudeems appropriate.

rity under paragraph (c) (8) shall be (10) Termination of assistance and re- recorded under applicable State law. covery of funds in the event of revocation. (3) A financial institution that has Financial assistance provided by the Sec- made a loan in connection with which retary to implement a certified adjust- there has been a guarantee, or with rement proposal shall be subject to his spect to which there is a deferred particright to terminate such assistance and ipation agreement, shall hold the note to recover any funds disbursed thereun- and all security and other agreements der, in the event of revocation of the obtained by it in connection with such certification pursuant to $ 500.34(b): loan, and shall receive all payments of Provided, That recovery of funds dis- principal and interest on such loan until bursed will only be sought in cases where such time as the Secretary may purchase such recovery is deemed appropriate by the guaranteed or deferred participation the Secretary and where revocation share thereof: Provided, That except as was made pursuant to $ 500.34(b) (iii) authorized in writing by the Secretary, or (iv).

such financial institution shall not (i) (11) Other provisions. In providing make or consent to any alteration in the financial assistance, the Secretary may terms of the note or related agreements, require such other terms and conditions (ii) make or consent to any release, subrelevant to commercial agreements as stitution or exchange of collateral, (iii) he deems appropriate, including opinions accelerate the maturity of the note, (iv) of counsel and accountants, and affirma- sell, assign or transfer the note or retive and negative covenants.

lated agreements, (v) sue upon the note (d) Administration of financial assist- or related agreements, (vi) waive or ance. (1) The Secretary will exercise all agree to waive any claim, against the such powers and take all such action as borrower or any guarantor, standby may be necessary or incidental to the ad- creditor or other obligor in connection ministration of financial assistance under with the loan, (vii) charge or receive any this part, including, but not limited to bonus, fee, commission or expense in any the following:

form, directly or indirectly, in connec(i) Assignment or sale at public or tion with the loan, except charges or private sale, or other disposition of, any expenses incurred or earned for services evidence of debt, contract, claim, per- rendered, or (viii) increase the amount sonal property or security assigned to or due on a prior lien. Such financial inheld by him in connection with such stitution shall assign and deliver to the financial assistance, upon such terms Secretary the note and related agreeand conditions and for such considera- ments with respect to such portion of tion as he shall determine to be reason- the loan as may be purchased pursuant able;

to the guarantee or deferred participa(ii) Collection, compromise and defi

tion agreement. ciency judgments with respect to all ob

$ 500.43 Tax assistance. ligations assigned to or held by him in connection with such financial assist

(a) General. Upon certification of a ance until such time as such obligations proposal for adjustment assistance under may be referred to the Attorney Gen

$ 500.32, a firm may apply for tax aseral for suit or collection;

sistance with respect to a net operating (iii) Renovation, improvement, mod

loss alleged to have been sustained by ernization, completion, protection by in

such firm in a taxable year that closed surance, rental, sale or other dealing not more than 24 months prior to the with any real or personal property con- date of such application. Such assistance veyed to or otherwise acquired by him in will permit the firm to carry back a net connection with such financial assist- operating loss to each of the 5 taxable

years preceding the year of the loss, Subpart E-Records and Reports rather than the normal 3-year carryback provided in the Internal Revenue Code

$ 500.50 Records. of 1954, as amended. Tax refunds re- (a) Each firm receiving adjustment ceived by a firm pursuant to a tax assist- assistance under this part shall make or ance certification must be used by such cause to be made by any person under firm in accord with the terms of its cer- the control or direction of such firm, tified adjustment proposal.

original or facsimile records, receipts or (b) Application. An application for documents with respect to all transactax assistance filed pursuant to $ 500.30 tions relating to the receipt, disburseshall satisfy the application requirement ment and utilization of proceeds or other of paragraph (a) of this section, but the forms of such assistance as are received effective date of filing for purposes of that will fully disclose their amount and section 317(a) of the Act shall be the

disposition. Such records, receipts or date on which the firm's adjustment documents shall be in such form and proposal is certified by the Secretary detail as will facilitate effective audit. pursuant to section 500.32 of this part. (b) In any undertaking to provide ad

(c) Certification. Following receipt justment assistance, the Secretary may from the firm of the written notice re- require the firm to keep, or cause to be quired by $ 500.32(e), eligibility for tax kept, such additional records, receipts or assistance will be certified by the Sec- documents as he may deem appropriate. retary if he determines that (1) the net (c) Any records, receipts or docuoperating loss alleged to have been sus- ments required to be kept pursuant to tained by the firm in a taxable year that this section shall be retained for a peclosed not more than 24 months prior to riod of at least 3 years following complethe date of its application under this tion of the adjustment assistance prosection arose predominantly out of the posal certified by the Secretary pursuant carrying on of a trade or business which

to Subpart C of this part or until any was seriously injured during such year loans called for therein have been repaid, by the increased imports found by the

whichever date is later. Tariff Commission to have resulted from

(d) The records, receipts and docuconcessions granted under trade agree- ments referred to in this section shall ments, and (2) tax assistance under this

include, but not by way of limitation, section will materially contribute to the source materials, journals or other books economic adjustment of the firm. A cer

oi original entry, ledgers, financial statetification under this section shall not

ments, work papers regardless of by constitute a determination of the exist

whom prepared, and minute books. ence or amount of any net operating loss

$ 500.51 Reports. for purposes of section 172 of the Internal Revenue Code of 1954, as amended. Each firm receiving adjustment as

(d) Notice to Internal Revenue Serv- sistance under this part, and any person ice. At such time and in such manner as under the control or direction of such may be prescribed pursuant to section firm, shall furnish, in the form of no172(b) (3) (A) (1) of the Internal Reve.

tarized reports or otherwise as required nue Code of 1954, as amended, and reg- by the Secretary, complete information ulations issued thereunder, the firm or relative to any matter involving or pertiother taxpayers involved must file with

nent to the adjustment assistance prothe Secretary of the Treasury or his dele

posal certified pursuant to Subpart C of gate a notice that it or they have applied

this part, and information otherwise for tax assistance and, if such assistance

reasonably related to such proposal or is approved, a copy of the certification

the purposes of the Act or of this part. of eligibility therefor, issued pursuant to

The Secretary may require that such paragraph (c) of this section. (e) Revocation. A tax assistance cer

reports include the production of any tification may be revoked by the Secre

books of account, contracts, letters, or tary at any time upon a finding that the

other papers relevant to adjustment astax refunds made to the firm pursuant to

sistance received by the firm or transsuch certification are not being used in actions related thereto in the custody accord with the terms of the firm's cer- or control of the firm or person required tified adjustment proposal.

to make such reports.

to:

Subpart F-Procedures $ 500.60 Forms.

(a) For the convenience and guidance of interested persons, the following printed forms are available for use in connection with submissions under this part in connection with adjustment assistance to firms:

(1) OTA-1, Application for Certification of Eligibility To Apply for Adjustment Assistance (under section 302(b) (1) of the Act).

(2) OTA-2, Certificate of Eligibility To Apply for Adjustment Assistance.

(3) OTA-3, Application for Adjustment Assistance.

(4) OTA-4, Adjustment Proposal.

(5) OTA-5, Certification of Adjustment Proposal.

(6) OTA-6, Certification of Eligibility for Tax Assistance.

(b) Copies of all necessary forms, and instructions for their preparation and filing, may be obtained upon request from the Office of Trade Adjustment Assistance, Department of Commerce, Washington, D.C. 20230, or from any Field Office of the Department. $ 500.61 Submissions.

(a) Applications. Forms and related material, including communications, with respect thereto, in connection with (1) applications for certification of eligibility to apply for adjustment assistance, (2) applications for adjustment assistance and (3) adjustment proposals under this part, should be submitted, in triplicate, to the Director, Office of Trade Adjustment Assistance, Department of Commerce, Washington, D.C. 20230.

(b) Petitions for reconsideration and appeals. See $ 500.62(b) (2) and (c) (4), respectively.

(c) Other communications. In order to expedite attention to inquiries or other correspondence concerning matters relevant to or arising in connection with the provisions of this part, persons initiating such communications are urged to direct them in the first instance to OTAA.

(d) Due date. (1) Applications for certification of eligibility to apply for adjustment assistance under section 302(b) (1) of the Act, and applications for adjustment assistance under section 311 of the Act are subject to statutory filing deadlines. The Secretary may, in appropriate circumstances, condition accept

ance of other submissions upon timely filing on or before a specified date. (2) Except as provided in $$ 500.43(b) and 500.62 (a) (3), submissions received by mail are deemed filed on the date postmarked on the envelope in which they are mailed. Submissions delivered directly are deemed filed when received.

(e) Extensions of time. With respect to any submission, other than a petition for reconsideration or an appeal under $ 500.62, concerning which a date has been established for receipt by the Secretary or his delegate and submission on or before such date is a condition precedent to its acceptance as timely filed, application for extension of time may be made to OTAA. Such application must be received by OTAA prior to the time such submission is due, and must contain a statement of reason for inability to comply with the required filing date. An extension of time will be given for good cause shown. 8 500.62 Reconsideration and appeals.

This section sets forth the procedures applicable Petitions for reconsideration of administrative actions and appeals to the Secretary from certain delegated administrative actions and from decisions on petitions for reconsideration.

(a) General provisions. (1) The term “administrative action” means with respect to any person, (i) a decision with respect to certification of eligibility to apply for adjustment assistance, or (11) a decision upon an application for adjustment assistance, or (iii) any action taken specifically with respect to such person pursuant to the exercise of a discretionary power by the Secretary or his delegate in accordance with any provision of this part. The term "administrative action” does not include an opinion or ruling interpreting these regulations, or a decision upon a petition for reconsideration or upon an appeal.

(2) Notice of an administrative action or of a decision upon a petition for reconsideration or upon an appeal shall be deemed to have been given on the date when mailed or delivered directly to the petitioner or appellant: Provided, That notice of an administrative action taken prior to the effective date of this section shall be deemed to have been given on such effective date.

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(3) A petition for reconsideration or an appeal shall be deemed filed on the date received by the addressee.

(4) Any person may withdraw a petition for reconsideration or an appeal at any time prior to the date a decision is rendered thereon.

(b) Petition for reconsideration. Any person may petition the official who has taken an administrative action under this part with respect to such person for reconsideration of such action unless such person has previously appealed the same or a related administrative action to the Secretary and such appeal is then pending or a decision has been rendered thereon. The filing of a petition for reconsideration shall not suspend or stay the effect of the administrative action of which reconsideration is sought unless the Secretary, in his discretion, so orders.

(1) Form of petitions. An original and five copies of the petition for reconsideration and all supporting documents shall be submitted. The petition shall enclose a copy of the administrative action of which reconsideration is asked, and shall state the grounds upon which the petition is based and the relief requested. All facts and argument in support of the petition shall be separately identified and set forth in detail.

(2) Filing. A petition for reconsideration of an administrative action shall be filed not later than 20 days after notice of the administrative action is given to the petitioner. It shall be addressed to the official who took the action of which reconsideration is sought, in care of the U.S. Department of Commerce, Washington, D.C. 20230. If a petition is withdrawn, the time which has elapsed since notice of the administrative action was given to the petitioner shall not be counted as part of the time allowed for appeal. Requests for extension of time within which to file petitions for reconsideration may be granted in the discretion of the official who took the action of which reconsideration is to be sought.

(3) Decisions. The official who took the action of which reconsideration is sought may dismiss the petition or may grant or deny the petition in whole or in part, or may modify all or part of the administrative action under reconsideration. Written notice of the decision shall be given to the petitioner.

(c) Appeals. Any person may appeal in writing to the Secretary with respect to a decision by another official

of the Department on the ground that the administrative action (including & decision on a petition for reconsideration) with respect to such person was based on legal or factual error or was arbitrary. An appeal may not be filed if such person has previously filed a petition for reconsideration respecting the same or a related administrative action and no decision has been rendered thereon and the petition has not been withdrawn. The filing of an appeal shall not suspend or stay the effect of the administrative action or decision on the petition for reconsideration under appeal unless the Secretary, in his discretion, so orders.

(1) Form of appeals. An original and three copies of the appeal and all supporting documents shall be submitted. If the submission of three copies of all accompanying documents or exhibits would place an undue burden on the petitioner, waiver of this rule may be requested at the time the appeal is filed. The appeal shall enclose a copy of the administrative action or decision on the petition for reconsideration from which appeal is made, and shall state the particulars upon which the appeal is based and the relief requested. All facts and arguments in support of the appeal shall be separately identified and set forth in detail. The appellant may request the Director, in writing, to transmit to the Secretary the documentation originally submitted to OTAA.

(2) Filing. Appeals shall be filed with the Secretary not later than 30 days after notice of the administrative action or decision on the petition for reconsideration has been given to the appellant. Requests for extensions of time within which to file appeals may be granted in the discretion of the Secretary. Appeals shall be addressed to the Secretary, U.S. Department of Commerce, Washington, D.C. 20230.

(3) Oral presentations. The Secretary may, in his discretion, request an appellant to make an oral presentation at a time and place designated.

(4) Decisions. The Secretary may dismiss, grant or deny the appeal in whole or in part or modify all or part of the administrative action or decision on the petition for reconsideration under appeal. Written notice of the Secretary's decision shall be furnished to the appellant and shall constitute final Departmental action.

$ 500.63 Public access to information.

Completed Forms OTA-1, OTA-3, OTA-4, or any other completed forms filed with OTAA, applications and requests from applicants, petitions for reconsideration, appeals, materials submitted therewith, and decisions thereon are considered to be matters covered by 5 U.S.C. 552(b). Other information, records, and material in the possession of OTAA, if required by 5 U.S.C. 552 to be made available to the public, shall be available in accordance with the provisions of Part 4, Subtitle A of this title. Subpart 6-Investigation and Audit;

Penalties $ 500.70 Investigation and audit.

(a) The Secretary may, through any person or agency, investigate any matter relevant to or any violation of the provisions of this part, regardless of whether any report has been required or filed in connection therewith.

(b) The Secretary, through any person or agency, shall have access for the purpose of audit and examination to any records, receipts and documents (as defined in $ 500.50(d)) in the possession of a firm that is receiving or has received adjustment assistance under this part, or in the possession of any other person or firm, pertaining to or relevant to such adjustment assistance. $ 500.71 Penalties.

(a) Attention is directed to 19 U.S.C. section 1919, which provides in connection with adjustment assistance to firms that:

Whoever makes a false statement of a material fact knowing it to be false, or knowingly fails to disclose a material fact, or whoever willfully overvalues any security, for the purpose of influencing in any way the action of the Secretary of Commerce * *, or for the purpose of obtaining money, property, anything of value

shall be fined not more than $5,000 or imprisoned for not more than 2 years, or both.

(b) Attention is also directed to 18 U.S.C. section 1001, which provides that:

Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals, or covers up by any trick, scheme or device a material fact, or makes any false, fictitious, or fraudulent statements, or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined not more than $10,000 or imprisoned not more than 5 years or both.

(c) Failure by a firm to maintain or cause to be maintained records or make reports required under Subpart E of this Part shall be grounds for suspension or termination of adjustment assistance. This provision shall constitute an integral part of any certification by the Secretary of an adjustment proposal, whether or not expressly incorporated therein. § 500.72 Effect on lenders.

Any person who in good faith lends money or extends credit to a firm that is receiving or has received adjustment assistance under this part and who does not have actual knowledge, when such loan is made or credit extended (or when a commitment is given to make the loan or extend the credit), that the use of the proceeds thereof, the repayment thereof or any other transaction in connection therewith will involve or constitute a violation by the firm of any provision of this part or of any license, ruling, regulation, order, direction, or instruction issued by or pursuant to the authorization or direction of the Secretary pursuant to this part or otherwise under $ 500.71, may receive payment thereof (together with all interest and other fees and charges) and may otherwise participate in any other transaction in connection therewith, and such person's rights against the firm in connection with such loan or extension of credit shall not in any way be affected or impaired by reasons of the provisions of this part.

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