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Secretary of Labor Hilda L. Solis
     DOL Home > Federal Register > By Agency > OLMS
OLMS Proposed Rules

Labor Organization Officer and Employee Reports   [8/10/2010]
[PDF]
FR Doc 2010-19250
[Federal Register: August 10, 2010 (Volume 75, Number 153)]
[Proposed Rules]               
[Page 48415-48455]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10au10-14]                         


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Part II





Department of Labor





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Office of Labor-Management Standards



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29 CFR Part 404



Labor Organization Officer and Employee Reports; Proposed Rule


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DEPARTMENT OF LABOR

Office of Labor-Management Standards

29 CFR Part 404

RIN 1215-AB74
RIN 1245-AA01

 
Labor Organization Officer and Employee Reports

AGENCY: Office of Labor-Management Standards, Department of Labor.

ACTION: Notice of proposed rulemaking; request for comments.

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SUMMARY: The Office of Labor-Management Standards of the Department of 
Labor (Department) is proposing to revise the Form LM-30 and its 
instructions. The Form LM-30 implements section 202 of the Labor-
Management Reporting and Disclosure Act of 1959 (LMRDA or Act), 29 
U.S.C. 432, the purpose of which is to require officers and employees 
of labor organizations to publicly disclose possible conflicts between 
their personal financial interests and their duty to the labor union 
and its members. The proposed rule would revise the Form LM-30 and its 
instructions, based on an examination of the policy and legal 
justifications for, and utility of, changes enacted in the Form LM-30 
Final Rule (2007 rule), published on July 2, 2007. 72 FR 36105. 
Following promulgation of the 2007 rule, fundamental questions remain 
regarding the complexity of the form and its instructions, as well as 
the scope and extent of the LM-30 reporting obligations. These 
questions include the coverage of union stewards and others 
representing the union in similar positions; the reporting of certain 
loans and union leave and ``no docking'' payments; the reporting of 
payments from certain trusts, unions, and employers in competition with 
employers whose employees are represented by an official's union; and 
the reporting of certain interests held and payments received by higher 
level union officials. The Department proposes revisions to the 2007 
form, its instructions, and the regulatory text concerning such 
reporting obligations. The Department invites general and specific 
comment on any aspect of this proposed rule.

DATES: Comments must be received on or before October 12, 2010.

ADDRESSES: You may submit comments, identified by RIN 1215-AB74 or RIN 
1245-AA01. (The Regulatory Information Number (RIN) identified for this 
rulemaking changed with publication of the Spring Regulatory Agenda due 
to an organizational restructuring. The old RIN (1215-AB74) was 
assigned to the Employment Standards Administration, which no longer 
exists; a new RIN (1245-AB01) has been assigned to the Office of Labor-
Management Standards.) The comments can be submitted only by the 
following methods:
    Internet: Federal eRulemaking Portal. Electronic comments may be 
submitted through http://www.regulations.gov. To locate the proposed 
rule, use the RIN numbers shown above. Follow the instructions for 
submitting comments.
    Delivery: Comments should be sent to: Denise M. Boucher, Director 
of the Office of Policy, Reports and Disclosure, Office of Labor-
Management Standards, U.S. Department of Labor, 200 Constitution 
Avenue, NW., Room N-5609, Washington, DC 20210. Because of security 
precautions the Department continues to experience delays in U.S. mail 
delivery. You should take this into consideration when preparing to 
meet the deadline for submitting comments.
    The Office of Labor-Management Standards (OLMS) recommends that you 
confirm receipt of your delivered comments by contacting (202) 693-0123 
(this is not a toll-free number). Individuals with hearing impairments 
may call (800) 877-8339 (TTY/TDD). Only those comments submitted 
through http://www.regulations.gov, hand-delivered, or mailed will be 
accepted. Comments will be available for public inspection at http://
www.regulations.gov and during normal business hours at the above 
address.
    The Department will post all comments received on http://
www.regulations.gov without making any change to the comments, 
including any personal information provided. The http://
www.regulations.gov Web site is the Federal e-rulemaking portal and all 
comments posted there are available and accessible to the public. The 
Department cautions commenters not to include their personal 
information such as Social Security numbers, personal addresses, 
telephone numbers, and e-mail addresses in their comments as such 
submitted information will become viewable by the public via the http:/
/www.regulations.gov Web site. It is the responsibility of the 
commenter to safeguard his or her information. Comments submitted 
through http://www.regulations.gov will not include the commenter's e-
mail address unless the commenter chooses to include that information 
as part of his or her comment.

FOR FURTHER INFORMATION CONTACT: Denise M. Boucher, Director of the 
Office of Policy, Reports and Disclosure, Office of Labor-Management 
Standards, U.S. Department of Labor, 200 Constitution Avenue, NW., Room 
N-5609, Washington, DC 20210, olms-public@dol.gov, (202) 693-0123 (this 
is not a toll-free number), (800) 877-8339 (TTY/TDD).

SUPPLEMENTARY INFORMATION:

I. Background

A. Introduction

    The proposal to revise the Form LM-30 and its instructions is part 
of the Department's continuing effort to effectively administer the 
reporting requirements of the LMRDA. The LMRDA's various reporting 
provisions are designed to empower labor organizations, their members, 
and the public by providing certain information about the finances of 
labor organizations and union officers and employees. A fair and 
transparent government regulatory regime must consider and balance the 
interests of labor organizations, their members, and the public, 
including the benefits served by disclosure, the burden placed on 
reporting entities, and preserving the independence of unions and their 
officials from unnecessary government regulation.
    The Form LM-30 implements section 202 of the LMRDA, 29 U.S.C. 432. 
Under section 202,\1\ union officers and employees are required to file 
reports if they, or their spouses or minor children, engage in certain 
transactions, or have financial holdings, which may constitute a 
conflict of interest with their union responsibilities. The Act 
requires public disclosure of certain financial interests held, 
transactions engaged in, and income received. Subject to certain 
exclusions, these interests, transactions, and incomes include:
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    \1\ Unless otherwise stated all references to statutory 
provisions, e.g., ``section 202,'' are to provisions in the LMRDA.
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    1. Payments or benefits with monetary value from, or interests in, 
an employer whose employees the filer's union represents or is actively 
seeking to represent;
    2. Transactions involving any stock, bond, security or loan to or 
from, or other interest in, an employer whose employees the filer's 
union represents or is actively seeking to represent;
    3. Business transactions or arrangements with an employer whose 
employees the filer's union represents or is actively seeking to 
represent;

[[Page 48417]]

    4. Income or any other benefit with monetary value from, or other 
interest in, a business a substantial part of which consists of buying 
from, selling or leasing to, or otherwise dealing with an employer 
whose employees the filer's union represents or is actively seeking to 
represent;
    5. Income or any other benefit with monetary value from, or other 
interest in, a business any part of which consists of buying from, or 
selling or leasing directly or indirectly to, or otherwise dealing with 
the filer's union or a trust in which the filer's union is interested; 
and
    6. Payment of money or other thing of value from any employer not 
covered under the above categories, or payment of money or other thing 
of value from a person who acts as a labor relations consultant to an 
employer.
    The Form LM-30 had remained essentially unchanged from 1963 until 
2007. In 2005 the Department published a Notice of Proposed Rulemaking 
(NPRM) that proposed far-reaching changes to the form. 70 FR 51165 
(Aug. 29, 2005). After a notice and comment period, the Department 
issued the 2007 final rule. 72 FR 36105 (July 2, 2007). The 2007 rule 
brought significant changes to the LM-30 and its instructions and 
represented, in some instances, a sharp departure from the Department's 
previous interpretations of section 202. The rule completely revised 
the layout and overall structure of the Form LM-30, lengthening the 
form from two to nine pages with the creation of five schedules, 
continuation pages, and various sections consisting of instructions and 
examples. (The 2007 form and instructions are available at http://
www.dol.gov/olms.) Upon review of the 2007 rule, and input from the 
regulated community, the Department believes that many of the 
objectives sought to be met by the 2007 rule--including simplification 
of the reporting requirements and adherence to the reporting scheme 
intended by Congress--were not accomplished. The 2007 rule left 
unresolved fundamental questions about the reporting obligations of 
union officials, questions raising policy and legal issues warranting 
reexamination by the Department. These fundamental questions regarding 
the Form LM-30 reporting requirements include--the coverage of stewards 
and other union representatives serving in similar positions; the 
reporting of certain loans and union leave and ``no docking'' payments; 
the reporting of payments from certain trusts and unions; the reporting 
of payments from businesses that compete with an employer whose 
employees are represented by an official's union or whose employees the 
union is actively seeking to represent; and reporting by higher level 
union officials about relationships with businesses and employers that 
pose conflicts concerning subordinate affiliates of their union. In 
addition, there are questions as to whether the layout of the 2007 Form 
LM-30 and instructions provides useful and adequate assistance to 
filers.
    As further discussed in later sections of this notice, these 
questions prompted the Department, on March 19, 2009, to issue a non-
enforcement policy regarding the 2007 Form LM-30 reporting 
requirements, allowing filers to use either the pre-2007 or 2007 Form 
LM-30 report. Further, the Department held a stakeholder meeting on 
July 21, 2009 to solicit comments regarding the 2007 Form LM-30 and 
potential revisions to the Form LM-30. The Department invites comment 
on the proposed changes with respect to their benefits, the ease or 
difficulty with which labor organization officers and employees will be 
able to comply with these changes, and whether the changes would better 
implement the LMRDA. Information about specific union provisions 
relating to conflict of interest standards for union officials is also 
invited. Interested parties and the public are invited to draw upon 
their experience with similar conflict and disclosure standards in 
other settings such as government employment, accounting, corporate 
governance, legal and judicial practice, medicine, and journalism. The 
Department invites general and specific comments on any aspect of this 
proposal; it also invites comment on specific points, as noted 
throughout the text of this notice.

B. History of the LMRDA's Reporting Requirements

    In enacting the LMRDA in 1959, a bipartisan Congress expressed the 
conclusion that in the labor and management fields ``there have been a 
number of instances of breach of trust, corruption, disregard of the 
rights of individual employees, and other failures to observe high 
standards of responsibility and ethical conduct which require further 
and supplementary legislation that will afford necessary protection of 
the rights and interests of employees and the public generally as they 
relate to the activities of labor organizations, employers, labor 
relations consultants, and their officers and representatives.'' 
Section 2(b), 29 U.S.C. 401(b).
    The LMRDA was the direct outgrowth of a Congressional investigation 
conducted by the Select Committee on Improper Activities in the Labor 
or Management Field, commonly known as the McClellan Committee. The 
LMRDA addressed various ills through a set of integrated provisions 
aimed at labor-management relations governance and management. These 
provisions include financial reporting and disclosure requirements for 
labor organizations, their officers and employees, employers, labor 
relations consultants, and surety companies. See 29 U.S.C. 431-36, 441.
    To highlight the potential conflicts of interest to which union 
officers and employees could be susceptible, the Senate Committee 
Report presented the following illumination of section 202:

    [This section] requires a union officer or employee to disclose 
any securities or other interest which he has in a business whose 
employees his labor union represents or ``seeks to represent'' in 
collective bargaining. When a prominent union official has an 
interest in the business with which the union is bargaining, he sits 
on both sides of the table. He is under temptation to negotiate a 
soft contract or to refrain from enforcing working rules so as to 
increase the company's profits. This is unfair to both union members 
and competing businesses.

Senate Report No. 187 (1959) (Senate Report) at 15, reprinted in NLRB 
Legislative History of the Labor-Management Reporting and Disclosure 
Act of 1959 (2 volumes) (Leg. History), 1 Leg. History, at 411.

    In explaining the purpose of the disclosure rules for union 
officers and employees, the Senate Report presented ``three reasons for 
relying upon the milder sanction of reporting and disclosure [relative 
to establishing criminal penalties] to eliminate improper conflicts of 
interest,'' which can be summarized as follows:

    Disclosure discourages questionable practices. ``The searchlight 
of publicity is a strong deterrent.'' Disclosure rules should be 
tried before more severe methods are employed.
    Disclosure aids union governance. Reporting and publication will 
enable unions ``to better regulate their own affairs. The members 
may vote out of office any individual whose personal financial 
interests conflict with his duties to the members,'' and reporting 
and disclosure would facilitate legal action by members against 
``officers who violate their duty of loyalty to the members.''
    Disclosure creates a record. The reports will furnish a ``sound 
factual basis for further action in the event that other legislation 
is required.''

Senate Report, at 16, reprinted in 1 Leg. History, at 412.

    The Report further stated:

    The committee bill attacks the problem [of conflicts of 
interest] by requiring union officers and employees to file reports 
with

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the Secretary of Labor disclosing to union members and the general 
public any investments or transactions in which their personal 
financial interests may conflict with their duties to the members. 
The bill requires only the disclosure of conflicts of interest as 
defined therein. The other investments of union officials and their 
other sources of income are left private because they are not 
matters of public concern. No union officer or employee is obliged 
to file a report unless he holds a questionable interest in or has 
engaged in a questionable transaction. The bill is drawn broadly 
enough, however, to require disclosure of any personal gain which an 
officer or employee may be securing at the expense of the union 
members.

Senate Report, at 14-15, reprinted in 1 Leg. History, at 410-11.

    Both the Senate and House Reports recognize that a reportable 
interest is not necessarily an illegal practice. As the House Report 
stated:

    In some instances matters to be reported are not illegal and may 
not be improper but may serve to disclose conflicts of interest. 
Even in such instances disclosure will enable the persons whose 
rights are affected, the public, and the Government, to determine 
whether the arrangements or activities are justifiable, ethical, and 
legal.

House Report No. 741 (House Report), at 4, reprinted in 1 Leg. History, 
at 762. See Senate Report, at 38, reprinted in 1 Leg. History, at 434 
(``By requiring reports * * *, the committee is not to be construed as 
necessarily condemning the matters to be reported if they are not 
specifically declared to be improper or made illegal under other 
provisions of the bill or other laws'').

    Conflict of interest standards, including disclosure obligations of 
individuals and entities occupying positions of trust, are well 
grounded in U.S. law. As stated in the House Report, repeating almost 
verbatim the same point in the Senate Report:

    For centuries the law of fiduciaries has forbidden any person in 
a position of trust subject to such law to hold interests or enter 
into transactions in which self-interest may conflict with complete 
loyalty to those whom he serves. * * * The same principle * * * 
should be equally applicable to union officers and employees 
[quoting the AFL-CIO's ethical practices code]: ``[A] basic ethical 
principle in the conduct of union affairs is that no responsible 
trade union official should have a personal financial interest which 
conflicts with the full performance of his fiduciary duties as a 
worker's representative.''

House Report, at 10-11, reprinted at 1 Leg. History, at 768-69. Senate 
Report, at 14, reprinted in 1 Leg. History, at 410. See generally 
Restatement (Second) of Trusts (1959) Sec. Sec.  170, 173; Restatement 
(Second) of Agency (1958) Sec. Sec.  381, 387-98.

    The reporting provisions of the Act represent, in part, an effort 
to codify various requirements contained in an extensive code of ethics 
voluntarily adopted by the AFL-CIO in 1957 and applied to its 
affiliated unions and officials. See Senate Report, at 12-16, reprinted 
in 1 Leg. History, at 408-12; House Report, at 9-12, reprinted in 1 
Leg. History, at 767-70. See also Archibald Cox, Internal Affairs of 
Labor Unions Under the Labor Reform Act of 1959, 58 Mich. L. Rev. 819, 
824-29 (1960). The following excerpts from this code demonstrate the 
similarities between a union official's fiduciary duty and the 
disclosure requirements of section 202.

    [A] basic ethical principle in the conduct of union affairs is 
that no responsible trade union official should have a personal 
financial interest which conflicts with the full performance of his 
fiduciary duties as a workers' representative.
    [U]nion officers and agents should not be prohibited from 
investing their personal funds in their own way in the American free 
enterprise system so long as they are scrupulously careful to avoid 
any actual or potential conflict of interest.
    In a sense, a trade union official holds a position comparable 
to that of a public servant. Like a public servant, he has a high 
fiduciary duty not only to serve the members of his union honestly 
and faithfully, but also to avoid personal economic interest which 
may conflict or appear to conflict with the full performance of his 
responsibility to those whom he serves.
    There is nothing in the essential ethical principles of the 
trade union movement which should prevent a trade union official, at 
any level, from investing personal funds in the publicly traded 
securities of corporate enterprises unrelated to the industry or 
area in which the official has a particular trade union 
responsibility.
    [These principles] apply not only where the investments are made 
by union officials, but also where third persons are used as blinds 
or covers to conceal the financial interests of union officials.

Ethical Practices Code IV: Investments and Business Interests of Union, 
105 Cong. Rec.*16379 (daily ed. Sept. 3, 1959), reprinted in 2 Leg. 
History, at 1407-08. See also Ethical Practices Code II: Health and 
Welfare Funds, id., 2 Leg. History, at 1406-07.

    The Act was crafted with particular regard for the unique function 
and status of labor unions. Then Senator John F. Kennedy, who was the 
chief sponsor of the Senate bill, S. 505, which served as the 
foundation for the LMRDA, stated that the legislation was ``designed to 
permit responsible unionism to operate without being undermined by 
either racketeering tactics or bureaucratic controls. It is designed to 
strike a balance between the dangers of to [sic] much and too little 
legislation in this field.'' 105 Cong. Rec. S816 (daily ed. Jan. 20, 
1959), reprinted in 1 Leg. History, at 969.
    As noted by Senator Kennedy above, a balance of these interests was 
central to the bipartisan enactment of the LMRDA. Congress sought to 
address legitimate concerns about illegal and undemocratic behaviors 
without permitting that concern to be used as an excuse for undermining 
organized labor. Further, Congress sought to address the importance of 
balancing necessary disclosure and regulation with undue intrusion on 
union operations and the protection of union officer's privacy 
interests. As stated in the Senate Report, ``[t]he committee recognized 
the desirability of minimum interference by Government in the internal 
affairs of any private organization * * * in establishing and enforcing 
statutory standards great care should be taken not to undermine union 
self-government or weaken unions in their role as collective-bargaining 
agents.'' Senate Report, at p. 7, reprinted in 2 Leg. History, at 403. 
Professor Archibald Cox played a pivotal role in drafting the 
legislation that ultimately became the LMRDA. His testimony before the 
Senate subcommittee that was considering this legislation presaged the 
language in the Senate Report, describing the reporting obligation as a 
limited one. He testified: ``The bill is narrowly drawn to meet a 
specific evil. It requires only the disclosure of conflicts of 
interest. The other investments of union officials and their other 
sources of income are left private because they are not matters of 
public concern.'' Hearings on S. 505 before the Subcommittee on Labor 
of the Senate Committee on Labor and Public Welfare (1959) (Senate 
Hearings), at 123; see Senate Report, at 15, reprinted in 1 Leg. 
History, at 411. Professor Cox additionally noted that because the 
reporting requirements were based, in part, upon the Ethical Practices 
Code formulated by the AFL-CIO, union officials who adhered to this 
code would have ``virtually nothing to disclose in his report to the 
public.'' Senate Hearings, at 123.

C. Statutory Language

    Section 202 provides in its entirety:
    SEC. 202. (a) Every officer of a labor organization and every 
employee of a labor organization (other than an employee performing 
exclusively clerical or custodial services) shall file with the 
Secretary a signed report listing and describing for his preceding 
fiscal year--

[[Page 48419]]

    (1) Any stock, bond, security, or other interest, legal or 
equitable, which he or his spouse or minor child directly or 
indirectly held in, and any income or any other benefit with 
monetary value (including reimbursed expenses) which he or his 
spouse or minor child derived directly or indirectly from, an 
employer whose employees such labor organization represents or is 
actively seeking to represent, except payments and other benefits 
received as a bona fide employee of such employer;
    (2) Any transaction in which he or his spouse or minor child 
engaged, directly or indirectly, involving any stock, bond, 
security, or loan to or from, or other legal or equitable interest 
in the business of an employer whose employees such labor 
organization represents or is actively seeking to represent;
    (3) Any stock, bond, security, or other interest, legal or 
equitable, which he or his spouse or minor child directly or 
indirectly held in, and any income or any other benefit with 
monetary value (including reimbursed expenses) which he or his 
spouse or minor child directly or indirectly derived from, any 
business a substantial part of which consists of buying from, 
selling or leasing to, or otherwise dealing with, the business of an 
employer whose employees such labor organization represents or is 
actively seeking to represent;
    (4) Any stock, bond, security, or other interest, legal or 
equitable, which he or his spouse or minor child directly or 
indirectly held in, and any income or any other benefit with 
monetary value (including reimbursed expenses) which he or his 
spouse or minor child directly or indirectly derived from, a 
business any part of which consists of buying from, or selling or 
leasing directly or indirectly to, or otherwise dealing with such 
labor organization;
    (5) Any direct or indirect business transaction or arrangement 
between him or his spouse or minor child and any employer whose 
employees his organization represents or is actively seeking to 
represent, except work performed and payments and benefits received 
as a bona fide employee of such employer and except purchases and 
sales of goods or services in the regular course of business at 
prices generally available to any employee of such employer; and
    (6) Any payment of money or other thing of value (including 
reimbursed expenses) which he or his spouse or minor child received 
directly or indirectly from any employer or any person who acts as a 
labor relations consultant to an employer, except payments of the 
kinds referred to in section 302(c) of the Labor Management 
Relations Act, 1947, as amended.
    (b) The provisions of paragraphs (1), (2), (3), (4), and (5) of 
subsection (a) shall not be construed to require any such officer or 
employee to report his bona fide investments in securities traded on a 
securities exchange registered as a national securities exchange under 
the Securities Exchange Act of 1934, in shares in an investment company 
registered under the Investment Company Act or in securities of a 
public utility holding company registered under the Public Utility 
Holding Company Act of 1935, or to report any income derived therefrom.
    (c) Nothing contained in this section shall be construed to require 
any officer or employee of a labor organization to file a report under 
subsection (a) unless he or his spouse or minor child holds or has held 
an interest, has received income or any other benefit with monetary 
value or a loan, or has engaged in a transaction described therein. 29 
U.S.C. 432.

D. Rationale for Proposing Rulemaking on Form LM-30

    The Department is proposing modifications to the Form LM-30 for the 
following reasons:
    (1) The 2007 Form LM-30 rule continues to create uncertainty for 
the regulated community, which continues to have questions regarding 
the rule's reporting requirements and has raised strong objections to 
key aspects of the rule, such as the reporting of certain loans, 
including mortgages and student loans, the reporting of union leave and 
``no docking'' payments (i.e., payments made by a represented employer 
to employees engaged in union representational or other activities), 
and reporting by individuals serving as union stewards or in similar 
positions representing the union.
    (2) Upon review, we now believe that the revisions we are proposing 
better balance the disclosure of information and the burden imposed on 
union officials.
    (3) Upon review, we now believe that the revisions we are proposing 
better clarify the form and instructions, and organize the information 
in a useful format.
    The Department fully recognizes and supports the importance of 
union officer and employee reporting and the disclosure of pertinent 
financial information to union members and the public. However, the 
LMRDA requires a balancing of transparency with the need to maintain 
union autonomy and to avoid overburdening unions and their officials 
with unnecessary reporting requirements. Because the 2007 rule did not 
adequately consider this balance, it did not succeed in properly 
implementing the LMRDA.
    Following promulgation of the 2007 Form LM-30, the Department 
received numerous comments from the regulated public regarding the 
difficulty entailed in reading and understanding the 2007 form and 
instructions. Many commenters asserted that the 2007 rule was legally 
flawed and some aspects of the rule have been challenged in a lawsuit, 
AFL-CIO v. Chao, No. 1:08-cv-0069 (CKK) (D.D.C.) (stayed on March 26, 
2009). In the Department's view, the following issues warranted 
particular attention: the reporting of union leave and ``no docking'' 
payments, the coverage of union stewards as officials required to file 
the Form LM-30, and the reporting of loans. In an effort to clarify the 
reporting requirements associated with the 2007 Form LM-30, the 
Department created a Frequently Asked Questions (FAQs) section on its 
Web site (http://www.dol.gov/olms/regs/compliance/RevisedLM30_
FAQ.htm). The confusion about the new reporting requirements also 
prompted the Department to issue written guidance on its Web site, on 
March 19, 2009, announcing a non-enforcement policy under which it will 
accept either the pre-2007 Form LM-30 or the 2007 Form LM-30 (http://
www.dol.gov/olms/regs/compliance/GPEA_Forms/blanklmforms.htm). The 
Department there announced its intention to revise the Form LM-30 in 
order to review questions of policy and law surrounding these reporting 
requirements. The Department explained that the 2007 rule left 
unanswered fundamental questions regarding the scope and extent of the 
reporting obligations and that litigation challenging some aspects of 
the form remained pending. Given these considerations, the Department 
determined that it would not be a good use of resources to bring 
enforcement actions based upon a failure to use a specific form to 
comply with the statutory reporting obligation. Accordingly, the 
Department has refrained from initiating enforcement actions against 
union officers and union employees based solely on the failure to file 
the report prescribed by the 2007 rule, as long as individuals meet 
their statutorily-required filing obligation in some manner. This non-
enforcement posture remains in effect.
    On July 21, 2009, OLMS held a stakeholder meeting to solicit 
comments regarding the 2007 rule. OLMS received a number of comments on 
several significant issues. These comments included the following --
     The Department should revert to the old (pre-2007) Form 
LM-30 and instructions because they were less confusing than the new 
(2007) form and instructions, which are ``overwhelmingly complicated.''
     The current interpretations of ``labor organization 
employee'' and the ``bona fide employee exception,'' which require 
reporting by union stewards and others of ``no docking'' and union 
leave payments, are beyond the Department's

[[Page 48420]]

statutory authority, are overly burdensome, and capture transactions 
that do not pose conflicts of interest; they also discourage union 
members from serving as union stewards.
     The reporting of bona fide loans is not beneficial to the 
public and requiring the reporting of home mortgages is invasive.
     While the reporting of extra-market loans from businesses 
is defensible, the reporting of market-term loans is unreasonable and 
overbearing.
     The Department should not have required union officials to 
report payments and interests from employers or businesses with 
relationships to other levels of the union hierarchy other than the 
official's own. If there is any ``look down'' reporting, it should be 
restricted to officials with oversight authority.
     The Department should retain the $250 de minimis threshold 
for reporting, as well as the related $20 threshold for recordkeeping 
and the ``widely-attended gathering'' exception.
     The Department should not have required officials to 
report payments by trusts, unions, and others; reports should have been 
limited to payments by entities that are organizing targets of the 
official's union.
    The Department has considered the comments received at the 
stakeholder meeting in reviewing the 2007 rule and proposing changes to 
that rule.

II. Authority

A. Legal Authority

    The legal authority for the notice of proposed rulemaking is set 
forth in sections 202 and 208 of the LMRDA, 29 U.S.C. 432, 438. Section 
208 of the LMRDA provides that the Secretary of Labor shall have 
authority to issue, amend, and rescind rules and regulations 
prescribing the form and publication of reports required to be filed 
under Title II of the Act and such other reasonable rules and 
regulations as she may find necessary to prevent the circumvention or 
evasion of the reporting requirements. 29 U.S.C. 438.

B. Departmental Authorization

    Secretary's Order 08-2009, issued November 6, 2009, contains the 
delegation of authority and assignment of responsibility for the 
Secretary's functions under the LMRDA to the Director of the Office of 
Labor-Management Standards and permits re-delegation of such authority. 
See 74 FR 58835 (Nov. 13, 2009).

III. Reasons for Proposed Revisions to the 2007 Form LM-30 Reporting 
Requirements

    The Department proposes changes to five areas of the Form LM-30 
reporting requirements: (1) The reporting of union leave and ``no 
docking'' payments, and, more broadly, the bona fide employee 
exception; (2) the coverage of individuals serving as union stewards or 
in similar positions representing the union, such as a member of a 
safety committee or a bargaining committee; (3) the reporting of bona 
fide loans; (4) the reporting of payments from employers competitive to 
the represented employer, certain trusts, and unions; and (5) the 
reporting by national, international, and intermediate union officers 
and employees.
    First, the Department proposes to return to the historical practice 
whereby union officers and employees were not required to report 
compensation they received under union leave and ``no docking'' 
policies established under collective bargaining agreements or by 
custom and practice of the workplace. The requirement in the 2007 rule 
that union officials must report ``no docking'' and union leave 
payments has been strongly criticized as unduly burdensome. The 
Department agrees that this reporting requirement imposes undue burden 
and may impede individuals from running for union office and otherwise 
serving in important union roles. The 2007 rule was based on the 
premise that such payments are for work performed on the union's 
behalf, rather than the employer's, and thus not payments made under 
the ``bona fide employee'' exception of section 202 of the LMRDA. The 
Department now believes that the term ``bona fide employee,'' as used 
in that section, is most naturally read to distinguish between, on the 
one hand, payments that are made to a union official by virtue of his 
or her employment by the company making the payment, and, on the other 
hand, payments that are made to union officials without regard to such 
employment. This interpretation better accords with the purposes of the 
statute than the interpretation embodied in the 2007 rule that focuses 
on whether the union or the employer making the payment exercises 
primary control over an individual's discrete, temporal activities as a 
union official.
    Second, the Department proposes to return to the historical 
practice of excluding union stewards and similar union representatives 
from Form LM-30 reporting. The Department believes that this practice 
comports with the language of section 202 and better effectuates labor-
management relations than the interpretation embodied in the 2007 rule.
    Third, the Department also proposes an administrative exemption 
whereby union officials generally need only report loans from bona fide 
credit institutions if the terms of such loans are on terms more 
favorable than those available to the public. The 2007 rule required 
more extensive reporting and made distinctions among various 
relationships and credit institutions that were difficult to understand 
and apply. The proposed rule also incorporates the Department's 
clarification, as set forth in Frequently Asked Questions (FAQs), that 
union officials as a general rule are not required to report on savings 
accounts, CD, credit cards, etc. where such instruments contain the 
same terms offered to other customers without regard to an individual's 
status as a union official.
    Fourth, the Department also proposes to limit the reporting 
obligation with respect to interests in and payments from employers 
that compete against employers represented by the official's union or 
that the union actively seeks to represent. It is the Department's view 
that disclosure of such payments is important, but only where an 
official is involved with the organizing, collective bargaining, or 
contract administration activities related to a particular represented 
employer or possesses significant authority or influence over such 
activities. This ensures that meaningful information will be provided 
to union members without imposing undue burden on officials who do not 
occupy positions of influence over the union's organizing, collective 
bargaining, or contract administration activities related to the 
represented employer. Similarly, the Department proposes to modify the 
scope of reporting insofar as payments from certain trusts and unions 
are concerned. The Department proposes to return to its historical 
practice of not requiring officials to report on payments they receive 
from trusts or, as a general rule, from unions. The Department, 
however, will continue to require officials of a staff union to report 
any payments they receive from the union-employer whose employees the 
staff union represents.
    Finally, the Department is proposing to revise and clarify the 
scope of reporting for officials of international, national, and 
intermediate unions. The proposed rule states that officers and 
employees of these higher level unions must look at payments they 
receive from employers and businesses with

[[Page 48421]]

relationships with lower levels of the official's union (e.g., a local 
or other subordinate body), as well as with the official's own level of 
the union, when applying the Form LM-30 reporting requirements. The 
2007 rule excepted employees, as distinct from officers, from this 
``top-down'' reporting obligation. In the Department's view, the LMRDA 
does not support that distinction for LM-30 reporting purposes. 
Officers and employees of the union are held to the same reporting 
obligations under the Act. The 2007 rule also established confusing 
exceptions to the ``top-down'' reporting obligations for officers. 
Payments from businesses that dealt with represented employers were 
exempt, while the instructions did not specify the reportability of 
payments from businesses that dealt with lower level unions. Further, 
union officers were not required to report any payments or other 
financial benefits received by their spouses and minor children from 
employers and businesses involved with a lower level union. The 
Department is proposing to remove these exceptions.
    In developing the proposed changes, the Department has reviewed the 
reporting examples utilized in the 2007 rule and the substantial 
guidance issued after the rule's publication as answers to FAQs in 
order to identify the extent to which, if at all, reporting will be 
changed under the Department's proposals if adopted in a final rule. A 
final rule will supersede any inconsistent interpretation or other 
guidance. The Department identifies in the margin those instances where 
the proposed rule, if adopted, would not change the reporting 
obligations under the examples and FAQs.\2\ As discussed later in the 
text, examples will generally not be included in the proposed 
instructions.
---------------------------------------------------------------------------

    \2\ Most of the examples in the 2007 instructions will continue 
to accurately reflect reporting requirements if the Department's 
proposal is adopted in a final rule. Thus, the following will 
continue to accurately reflect reporting requirements: examples 2-
15, at pp. 3-4 of the instructions; examples 1-5, at p. 6 of the 
instructions; examples 1 and 2, at p. 7 of the instructions; and 
examples 1, 3-15, and 17, at pp. 8-9 of the instructions. Several of 
the FAQs are based on requirements that the Department proposes to 
change. The following FAQs, however, will continue to accurately 
reflect reporting requirements if the Department's proposal is 
adopted in a final rule: 2-10, 12-26, 28, 30-37, 39, 44, 47, 49-50, 
54, 56-69, 72-76, and 79-88. It should be noted, however, that some 
of the comments and FAQs, such as FAQs 49 and 73, while remaining 
accurate, were intended to illustrate issues that are less likely to 
arise under the proposed rule. Others, such as FAQs 1 and 77, while 
largely accurate, contain some statements that are based on or refer 
to interpretations that will be superseded if the Department's 
proposal is adopted in a final rule.
---------------------------------------------------------------------------

A. The Bona Fide Employee Reporting Exception Under Section 202

    Sections 202(a)(1) and (5) of the LMRDA require a labor 
organization officer or employee to report payments that the official, 
his or her spouse, or minor children receive from an employer whose 
employees the labor organization represents or is actively seeking to 
represent, ``except payments and other benefits received as a bona fide 
employee of such employer.'' 29 U.S.C. 432(a)(1) & (5) (Emphasis 
added).
    The 2007 revisions to the Form LM-30 narrowed the Department's 
longstanding reading of this ``bona fide employee'' exception, 
significantly extending the reporting requirements of section 202 
beyond union officers and employees to union stewards and others. The 
2007 rule required them to report compensation paid to them by their 
employers for time spent representing the union on labor-management 
relations matters in accordance with a union leave or ``no docking'' 
policy. Under a union leave policy, the employer continues the pay and 
benefits of an individual who works full time on such matters. Under a 
``no docking'' policy, the employer permits individuals to devote 
portions of their work day or work week to labor-management relations 
business, such as processing grievances, with no loss of pay.
    Until regulatory changes to the Form LM-30 were adopted in 2007, 
the Department's policy, as established in 1963 to implement Form LM-30 
reporting (28 FR 14384 (Dec. 27, 1963)), excepted from reporting 
payments and other benefits received for certain activities other than 
productive work directed by the employer making the payment. 
Specifically, the instructions to the 1963 Form LM-30 stated that the 
following payments and benefits were exempt from Form LM-30 reporting:

    [p]ayments and benefits received as a bona fide employee of the 
employer for past or present services, including wages, payments or 
benefits received under a bona fide health, welfare, pension, 
vacation, training or other benefit plan; and payments for periods 
in which such employee engaged in activities other than productive 
work, if the payments for such period of time are: (a) Required by 
law or a bona-fide collective bargaining agreement, or (b) made 
pursuant to a custom or practice under such collective bargaining 
agreement, or (c) made pursuant to a policy, custom or practice 
which the employer has adopted without regard to any holding by such 
employee of a position with a labor organization.

Pre-2007 Form LM-30 Instructions, Part A (Items 6 and 7) at (iv).

    Thus, before the 2007 rule, persons receiving payments for service 
under a union leave or ``no docking'' policy were not required to 
report such payments. For example, where a union officer was excused 
from his regular work to handle grievances and was paid his regular 
wages while doing so, the payments were exempted from reporting. 
Similarly, union officers or employees who continued to participate in 
employer group insurance and pension plans while they served the union 
were not required to report such benefits. The Department explained the 
basis of the policy in the LMRDA Interpretive Manual: ``the employee 
officer is being paid for work performed of value to the employer who 
is interested in seeing to it that grievances are immediately 
adjusted.'' LMRDA Interpretative Manual, section 248.005. This 
reporting exception was based on the presumption that union leave and 
``no docking'' arrangements operating either pursuant to a collective 
bargaining agreement or in accordance with custom or practice are 
ordinary and transparent, not requiring their reporting under section 
202.
    Based largely on the policy choice, evident in the 2007 rule, to 
promote fuller disclosure to union members and the public, even where 
there might be considerable burden associated with such reporting, the 
Department determined to require union officials, including stewards, 
to report ``no docking'' and union leave payments. As stated in the 
preamble to the rule:

    Payments received by union officials from employers for work 
done on the union's behalf are reportable because such payments are 
not received as a bona fide employee of the employer making the 
payment. The Department explained in its proposal that union 
officials must report any payments for other than ``productive 
work'' for the employer, including union leave and ``no docking'' 
payments.

72 FR at 36109. To achieve this result, the Department utilized a new 
definition of ``bona fide employee,'' a term not defined in the pre-
2007 Form LM-30 or its instructions. This new definition is 
incorporated in the 2007 Form LM-30 Instructions (Definition D4, page 
10).\3\ 72 FR at 36125.
---------------------------------------------------------------------------

    \3\ The instructions provide:
    Bona fide employee is an individual who performs work for, and 
subject to the control of, the employer.
    Note: A payment received as a bona fide employee includes wages 
and employment benefits received for work performed for, and subject 
to the control of, the employer making the payment, as well as 
compensation for work previously performed, such as earned or 
accrued wages, payments or benefits received under a bona fide 
health, welfare, pension, vacation, training or other benefit plan, 
leave for jury duty, and all payments required by law.
    Compensation received under a ``union-leave,'' or ``no-docking'' 
policy is not received as a bona fide employee of the employer 
making the payment. Under a union-leave policy, the employer 
continues the pay and benefits of an individual who works full time 
for a union. Under a no-docking policy, the employer permits 
individuals to devote portions of their day or workweek to union 
business, such as processing grievances, with no loss of pay. Such 
payments are received as an employee of the union and thus, such 
payment must be reported by the union officer or employee unless 
they (1) totaled 250 or fewer hours during the filer's fiscal year 
and (2) were paid pursuant to a bona fide collective bargaining 
agreement. If a filer must report payments for union-leave or no-
docking arrangements, the filer must enter the actual amount of 
compensation received for each hour of union work. If union-leave/
no-docking payments are received from multiple employers, each such 
payment is to be considered separately to determine if the 250 hour 
threshold has been met. For purposes of Form LM-30, stewards 
receiving union-leave/no-docking payments from an employer or lost 
time payments from a labor organization are considered employees of 
the labor organization.

---------------------------------------------------------------------------

[[Page 48422]]

    The Department justified this new reporting requirement upon its 
reading of section 202(a)(1). 72 FR at 36126. This section establishes 
a general obligation to report payments received by a union officer or 
employee whose employees are represented by the official's union or the 
union actively seeks to represent. This section, however, also excepts 
from this requirement ``payments received as a bona fide employee of 
such employer.'' In the 2007 rule, the Department interpreted this 
exception to apply only where the payment was made for time expended 
solely on the employer's behalf. 72 FR at 36109, 36124, 36126. Thus, 
under the reasoning of the 2007 rule, where a union official serving as 
an officer or as a steward was performing work on behalf of the union, 
he or she was not being paid for services rendered as a ``bona fide 
employee'' of the employer making the payment. Because the individual 
was acting on behalf of the union and thus subject to its control while 
performing these union-related activities, the Department reasoned that 
the official was not a bona fide employee of the employer during the 
time for which such remuneration was paid. See 72 FR at 36126; see also 
70 FR at 51183 (proposed rule).
    The Department proposes to return to its longstanding 
interpretation of the ``bona fide employee'' reporting exception. Under 
this prior interpretation, payments made by an employer under a union 
leave or ``no docking'' policy to a union official are payments 
received as a ``bona fide employee'' of the employer and, as such, not 
required to be reported on Form LM-30. We are proposing this change for 
several reasons. First, the approach taken in the 2007 rule does not 
comport with what the Department considers to be the best reading of 
the language of section 202. Second, it creates substantial burden for 
union officials on matters unlikely to pose conflicts of interest, thus 
unduly interfering with the internal workings of labor unions and 
labor-management relations. Third, as a matter of policy, there is no 
persuasive reason why union officials must report such payments, while 
employers making such payments are under no similar obligation.
    Section 202 applies to ``every officer * * * and every employee of 
a labor organization,'' requiring as a general rule the reporting of 
any payments received from a represented employer ``except payments and 
other benefits received as a bona fide employee of such employer,'' 
emphasis added. An individual's status as an employee is based on the 
various factors articulated in the common law. See Nationwide Mutual 
Ins. v. Darden, 503 U.S. 318 (1992). ``Bona fide'' is synonymous with 
``good faith'' or ``genuine,'' i.e., without fraud or deceit.\4\ Thus, 
section 202(a)(1) is most naturally read to except from reporting 
payments to a current or former employee of the company making the 
payment unless made under the guise of employment, such as where 
payment was for a no show job with the company, in an amount that 
unreasonably exceeds the value or amount of the work performed, or the 
payment is made on terms inconsistent with the parties' negotiated 
agreement or the workplace custom and practice. Where a payment made to 
an individual working on behalf of the union by his current or past 
employer is sanctioned by a collective bargaining agreement or custom 
or practice of the workplace, the legitimacy or ``bona fides'' of the 
payment is established.
---------------------------------------------------------------------------

    \4\ See Black's Law Dictionary (8th ed. 2004), which defines the 
term as: ``1. Made in good faith; without fraud or deceit. 2. 
sincere; genuine''; The Random House Dictionary of the English 
Language, Unabridged (2d ed. 1987), which defines the term as: ``1. 
made, presented, etc. in good faith; without deception or fraud. * * 
* 2. genuine.--syn. 1. honest, sincere, lawful, legal. 2. genuine.--
ant. spurious, deceitful, false.'' See also Black's ``bona fide 
operation,'' defined as ``[a] real, ongoing business''; and ``bona 
fides,'' defined as ``1. Good faith. 2. Roman law. The standard of 
conduct expected of a reasonable person, esp. in making contracts 
ands similar actions; acting without fraudulent intent or malice.''
---------------------------------------------------------------------------

    Further, as noted in the 2007 rule, union leave and ``no docking'' 
payments were common at the time the LMRDA was enacted. 72 FR at 36126. 
Yet, the Department is unaware of any concerns about conflicts of 
interest presented by such payments, unlike other payments such as for 
no show work, featherbedding, or similar practices, raised in the 
hearings before the McClellan Committee or in any of the legislative 
materials relating to the LMRDA. As noted in the 2007 rule, the 
legislative history does not shed light on whether Congress had a 
specific intention to require or not the reporting of such payments by 
union officials. See 72 FR at 36126. While, as noted in the 2007 rule, 
legislative silence is not generally a conclusive guide to interpreting 
statutory text, it is notable that Congress did not identify union 
leave or ``no docking'' payments as requiring disclosure to union 
members and the public as a matter of course. See 72 FR at 36126. 
Equally significant, such payments were not in any way proscribed by 
the AFL-CIO codes of ethics that strongly influenced the reporting 
provisions of the LMRDA. See 72 FR at 36112-13. Employers have 
historically agreed to compensate stewards, safety and health committee 
representatives and others for such work because they see it as adding 
value to their organization. A number of States such as Oregon and 
Washington require the establishment of joint labor-management safety 
and health committees. See http://www.cbs.state.or.us/external/osha/
pdf/rules/division_1/437-001-0765.pdf; http://www.lni.wa.gov/wisha/
rules/corerules/HTML/296-800-130.htm. See also Emily A. Spieler, 
Perpetuating Risk? Workers' Compensation and the Persistence of 
Occupational Injuries, 31 Hous. L. Rev. 119, n. 505, 514, 518, 520 
(1994) (identifying States requiring such committees). Having employees 
serve on employee assistance programs and wellness committees is also 
seen as a cost effective business decision by many employers. See 
Edward Cohen-Rosenthal and Cynthia E. Burton, Mutual Gains: A Guide to 
Union-Management Cooperation 80-83 (1993) (Mutual Gains).
    Moreover, such payments, where established by a collective 
bargaining agreement or custom or practice of the workplace, do not 
present the sort of conflict of interests presented by other payments 
to union officers and employees. Rather, they serve the mutual goals of 
employers and unions. They help ensure that individuals with first-hand 
knowledge of an employer's workplace will be able to take a position 
with the union, a benefit not only to the union and employer but also 
the represented employees. Such payments are voluntary; without the 
assent of both

[[Page 48423]]

management and labor, the payments cannot be made. They are not kept 
secret from employees; they must be in writing or reflect the custom 
and practices in the workplace. Additionally, these payments are 
usually made under the terms of a collective bargaining agreement and 
tied to the same rate of pay that the union official would have 
received under the agreement for time worked at his or her trade. 
Further, a potential consequence of requiring the reporting of payments 
received under union leave or ``no docking'' policies is that union 
members will be discouraged from running for union office and others 
from serving as stewards or in other voluntary positions--an 
unnecessary yet significant increase in burden. As a matter of policy, 
the Department believes that its historical position to except union 
leave and ``no docking'' payments from reporting promotes the purposes 
of the LMRDA and is consistent with the Congressional plan that the 
government avoid unnecessary intrusion into internal union affairs. Cf. 
Wirtz v. Local 153, Glass Bottle Blowers Assn., 389 U.S. 463, 470-71 
(1968).
    Finally, the Department proposes to modify the interpretation of 
``bona fide employee'' with respect to its application to union leave 
and ``no docking'' payments because it creates a significant 
inconsistency between the application of reporting exceptions and the 
reporting burden on union officers and employees compared with the 
corresponding exceptions and burden on employers through the Form LM-
10, which effectuates the reporting requirements under section 203.
    Section 203(a)(1) requires the reporting of certain payments, 
transactions, arrangements, and agreements with officers, agents, shop 
stewards, other representatives, and employees of labor organizations. 
This section exempts from employer reporting, ``payments of the kind 
referred to in section 302(c) of the Labor Management Relations Act 
[LMRA],'' which includes any payment of money or other thing of value 
from an employer to, ``any representative of his employees, or to any 
officer or employee of a labor organization, who is also an employee or 
former employee of such employer, as compensation for, or by reason of, 
his service as an employee of such employer.'' LMRA Section 302(c)(1), 
29 U.S.C. 186(c)(1).
    Courts have held that ``no docking'' and union leave payments meet 
the requirements of the section 302(c)(1) exemption.\5\ Thus, the 
Department has historically exempted such payments from Form LM-10 
reporting. See Exception (c) to Item 8.a. of the Form LM-10 
Instructions; LMRDA Interpretative Manual, at sections 253.305, 
253.320, 253.321, 253.322, and 253.323. The 2007 rule requires union 
officials to report union leave and ``no docking'' payments on the Form 
LM-30, but employers are not similarly required to report such payments 
to their employees on a corresponding Form LM-10 report. The Department 
has reexamined the policy underlying the current requirement and has 
concluded it is unreasonable to impose these reporting requirements on 
union officers and employees, while employers, due to a statutory 
exemption (by reference to LMRA section 302), are not required to 
report such payments on the Form LM-10.\6\
---------------------------------------------------------------------------

    \5\ See Caterpillar v. UAW, 107 F.3d 1052, 1055 (3d Cir. 1997), 
citing NLRB v. BASF Wyandotte Corp., 798 F.2d 849, 854-56 (5th Cir. 
1986); BASF Wyandotte Corp. v. Local 227, 791 F.2d 1046 (2d Cir. 
1986); Herrera v. International Union, UAW, 73 F.3d 1056 (10th Cir. 
1996), aff'g 858 F.Supp. 1529, 1546 (D. Kan. 1994); Communications 
Workers v. Bell Atlantic Network Servs., Inc., 670 F.Supp. 416, 423-
24 (D.D.C. 1987); Employees' Independent Union v. Wyman Gordon Co., 
314 F.Supp. 458, 461 (N.D. Ill. 1970).
    \6\ See LMRDA Interpretative Manual, at section 241.600. This 
section states that the reporting exceptions in section 203 do not 
affect the reporting by union officers and employees in section 202, 
``where the applicable provision of section 202 does not provide a 
pertinent exception.'' (Emphasis added.) Section 202, however, 
contains a pertinent exception: the bona fide employee exception, 
which, as noted in the text, has historically been interpreted as 
applying the regular wage exception of LMRA section 302(c) to 
various subsections of section 202. See LMRDA Interpretative Manual, 
section 248.005.
---------------------------------------------------------------------------

    For the foregoing reasons, the Department proposes to rescind the 
2007 requirement to report union leave and ``no docking'' payments on 
the Form LM-30 and invites comment on this proposal.

B. Form LM-30 Reporting by Union Stewards

    The 2007 rule extended the union officer and employee reporting 
obligation to union stewards, treating them as employees of the union 
by virtue of their receipt of ``no docking,'' union leave, or ``lost 
time'' payments. The Department now proposes to return to its 
longstanding position that union stewards are not covered by the Form 
LM-30 reporting requirements. The Department articulated this position 
in the Form LM-30 instructions issued in 1963, and this position had 
remained essentially unchanged for over 40 years. The 1963 regulation, 
28 FR 14384 (Dec. 27, 1963), establishing the pre-2007 form and 
instructions did not anywhere suggest that union stewards were union 
employees.\7\ See pre-2007 Form LM-30 Instructions.
---------------------------------------------------------------------------

    \7\ In the unusual situations where the position of steward is a 
constitutional office in the union, or an individual, although 
serving as a steward, is an employee of the union under 
circumstances distinct from his or her status as steward, or is an 
employee of the union because the steward position is a paid union 
position, such individuals, both historically and under the 
Department's proposal, are subject to the reporting requirements of 
the Form LM-30.
---------------------------------------------------------------------------

    In extending the union officer and employee reporting obligation to 
union stewards in the 2007 rule, the Department determined that a union 
steward receiving ``no docking,'' union leave or ``lost time'' payments 
would be considered to be a labor organization employee within the 
meaning of the Form LM-30. As stated in the preamble to that rule: ``An 
individual who is paid by an employer to perform union work is an 
employee of the union if he or she is under the control of the union, 
while so engaged.'' 72 FR at 36109. Stewards were deemed to be ``labor 
organization employees'' by virtue of their receiving either ``lost 
time payments'' from the union or union leave or ``no docking'' 
payments from an employer. (See the definition of ``bona fide 
employee'' and ``labor organization employee'' in sections D4 and D11, 
respectively, of the LM-30 instructions, see 72 FR at 36178, 36180.)
    Generally, a union steward is responsible for informing employees 
of their rights under the collective bargaining agreement and 
applicable law, investigating grievances filed by union members, 
representing union members in presenting those grievances to 
management, and otherwise enforcing the collective bargaining 
agreement. See generally Herman Erickson, The Steward's Role in the 
Union 29-54 (1971). Often, these individuals continue to receive pay 
from their employers while performing these functions for the union, in 
the form of union leave or ``no docking'' pay. In other instances, the 
stewards perform these functions on their own time (e.g., breaks, meal 
periods, and before or after working hours). As a general rule, 
stewards continue to perform their regular jobs for an employer while 
serving in this role. As a need arises, consistent with a collective 
bargaining agreement or custom and practice, they will temporarily 
interrupt their work at their trade to help resolve grievances that 
arise in the workplace. Union members who volunteer on safety 
committees and the like engage in similar functions, often receiving 
payments from their employer while

[[Page 48424]]

they are engaged in such duties. These individuals likewise interrupt 
their usual jobs on an as needed basis to perform tasks that advance 
the mutual interests of labor and management.
    Upon review, the Department believes that the 2007 rulemaking did 
not satisfactorily address or adequately support the expansion of the 
Form LM-30 reporting requirements to include stewards. Rather, the rule 
focused on the ``bona fide employee'' exception of section 202, which, 
as mentioned, was revised to require the reporting of ``no docking'' 
and union leave payments.\8\ (See the discussion above concerning this 
change to the ``bona fide employee exception.'') The rule also 
provided, almost in passing, that stewards as well as union officers 
and employees needed to report such payments. The Department justified 
this new requirement by stating that the ``correct issue'' is whether 
or not the official is a bona fide employee of the payer-employer 
during the time for which payment was made. 72 FR 36124. (Emphasis 
added). Having so defined the question, the Department answered it in 
the negative. Thus, the Department reasoned that stewards who received 
their regular compensation from the employer during time spent on union 
work did not receive this compensation as a ``bona fide employee of the 
employer,'' and the compensation was therefore reportable. As stated in 
the preamble to the 2007 rule: ``In general, where a union steward 
receives union-leave/no-docking payments from an employer or lost time 
payments from the union, the steward will be regarded as an employee of 
the labor organization as the individual has received compensation for 
performances of services for the union.'' 72 FR 36144.\9\
---------------------------------------------------------------------------

    \8\ Definition 11 of the 2007 Form LM-30 instructions reads:
    Labor organization employee means any individual (other than an 
individual performing exclusively custodial or clerical services) 
employed by a labor organization within the meaning of any law of 
the United States relating to the employment of employees.
    Note: An individual who is paid by the employer to perform union 
work, either under a ``union-leave'' or ``no-docking'' policy, is an 
employee of the union for reporting purposes if the individual 
performs services for, and under the control of, the union.
    For purposes of Form LM-30, stewards receiving union-leave/no-
docking payments from an employer or lost time payments from a labor 
organization are considered employees of the labor organization.
    72 FR at 36180.
    \9\ The estimates in the 2007 rule do not appear to reflect 
fully the burden imposed on stewards by its new reporting 
requirements. See 72 FR at 36155. The baseline burden estimates were 
derived from the number of LM-30 forms that had been filed by union 
officials, a number that necessarily failed to account for stewards 
because they had never been required to file such reports. In the 
final rule, the Department added to the baseline by estimating the 
number of stewards and others receiving ``no docking'' and union 
leave payments based on a 1980 study of collective bargaining 
agreements. Id. Because the study was limited to provisions in 
selected collective bargaining agreements, it contained no estimate 
of the number of stewards who received union leave or ``no docking'' 
payments by virtue of custom or practice in their workplace. 
Moreover, although only a few unions attempted to quantify the 
number of stewards in their comments on the 2005 NPRM, the number is 
obviously greater than the total number of filers (6,916; union 
officers, stewards, and non-steward union employees) estimated by 
the Department in the 2007 rule. See 72 FR at 36153. Although the 
Department attempted to take into account that some stewards would 
be filing reports, it is unclear from the burden analysis how it 
derived this estimate. It appears that the Department assumed, 
without so stating, that most stewards would not have to report ``no 
docking'' or union leave payments because of the 250-hour threshold 
and further assumed, even though it is not apparent from the rule, 
that this would exempt stewards that did not meet the threshold from 
having to report other interests or payments covered by section 202. 
See 72 FR at 36154-55.
---------------------------------------------------------------------------

    Upon review, the Department believes that the Form LM-30 reporting 
requirements should not be expanded to include stewards. The issue as 
to whether union stewards may be regarded as employees of a labor 
organization required to file reports under section 202 of the LMRDA, 
solely on the basis of having received union leave, ``no docking,'' or 
``lost time'' payments, raises legal and practical concerns. An 
examination of the text of the relevant provisions of Title II of the 
LMRDA suggests that Congress did not intend that stewards be considered 
to be union employees. Section 202 of the LMRDA requires reporting from 
``every officer of a labor organization and every employee of a labor 
organization (other than an employee performing exclusively clerical or 
custodial services).'' Separately, Congress, in section 203, mandated 
that employers report certain payments to unions and certain categories 
of individuals with a relationship to unions. Section 203(a)(1) 
requires an employer to report direct or indirect payments or loans 
``to any labor organization or officer, agent, shop steward, or other 
representative of a labor organization, or employee of any labor 
organization.'' (Emphasis added). Section 203 thus refers to 
``officer'' and ``employee'' as well as ``agent, shop steward, or other 
representative of a labor organization.'' The absence of similar 
language in section 202 is a strong indication of Congressional intent 
to exclude agents, stewards, and similar representatives from the 
prescribed reporting requirements. Additional support for this position 
can be gleaned from the LMRDA's legislative history. An early version 
of the bill that became the LMRDA, H.R. 4473, included a section 208, 
``Individual Reports of Officers, Agents, Shop Stewards, and 
Representatives of a Labor Organization.'' 1 Leg. History 166, 227-30. 
As evidenced by the title of that section, the bill would have imposed 
a plain reporting requirement on union officers, employees, and 
stewards and representatives. However, the final language of section 
202 includes only union officers and employees.
    The foregoing demonstrates the reasonableness of the Department's 
view that Congress made deliberate decisions as to when it would and 
would not include shop stewards within a regulated class. Congress, 
revealingly, did not include the term ``stewards'' in describing the 
regulated class established by section 202, despite inserting the term 
in other LMRDA sections, thus indicating that those members who serve 
as ``shop stewards'' are of a different category than ``labor 
organization employees.'' When Congress wanted financial payments made 
to stewards to be reported, it knew how to do so. Section 203 requires 
employers to report payments made to stewards. Had Congress wanted 
stewards to be covered under section 202, it could have likewise 
inserted the phrase ``shop stewards'' in that section.
    Additionally, the 2007 rule created uncertainty regarding the 
reporting obligation of union members, other than stewards, who 
volunteer to serve on various committees in the workplace, e.g., those 
who serve on health and safety committees. As discussed above, 
employers have historically agreed to compensate stewards and union 
members who work on these committees because they see it as adding 
value to their company and several States require the establishment of 
joint labor-management safety and health committees. The Department 
believes that union members who perform functions similar to those 
performed by stewards should not be required to file a Form LM-30. As 
support for this proposition, the Department notes, as discussed above, 
that section 202, in addition to not including the term ``steward,'' 
does not reference ``representative'' of a union.
    Imposing obligations on union stewards and other volunteers may 
also intrude in internal union affairs. Union stewards and other 
representatives perform valuable tasks and extending onerous reporting 
requirements to them would ``chill'' future offers to serve. Imposing 
reporting burdens on such individuals clearly will temper the 
willingness of individuals to volunteer

[[Page 48425]]

to serve in such positions--a loss to the union, the employer, and 
these individuals' fellow employees. Discouraging union representatives 
from taking time during the workday to attend to such matters can only 
have a deleterious effect on the labor relations system's capacity to 
resolve disputes at the workplace fairly and expeditiously. This could 
impede labor-management relations in the workplace as members are 
deterred from volunteering to serve in such important roles.
    The practical problems faced by stewards and other representatives 
in maintaining records necessary to meet the reporting burden placed on 
them were not fully considered in the 2007 rule. Unless the employer 
has a payroll reporting system that allows the union stewards to clock 
in and out every time they have to perform union work, the stewards 
would have to keep their own records. A member's work on behalf of the 
union is not always performed during a series of discrete intervals 
where it is easy to determine when union work begins and ends. 
Sometimes, such representatives will briefly engage in union work when 
a co-worker comes and speaks to the on-duty steward. Sometimes the 
conversation occurs when the representative is on the way to the break 
room or at lunch. Sometimes union work occurs during a work-related 
conversation with a supervisor or manager and a grievance question 
comes up. Thus, the amount of time required to perform steward and 
similar functions may vary significantly from day-to-day and week-to-
week and is therefore not easy to predict. For example, in the building 
and construction trades, with its very mobile workforce and short-term 
employment on construction projects, stewards will change from job to 
job, not just from week to week.
    For the foregoing reasons, the Department proposes to rescind the 
definition of ``labor organization employee'' in the 2007 Form LM-30 
and to insert the following language in the revised Form LM-30 
Instructions in Section II, Who Must File:

    For purposes of the Form LM-30, an individual who serves the 
union exclusively as a union steward or as a similar union 
representative, such as a member of a safety committee or a 
bargaining committee, is not considered to be an employee of the 
union.

    The Department seeks comment on the definition of ``labor 
organization employee,'' and the addition of the above language in 
Section II of the revised Form LM-30 Instructions, including its 
treatment of shop stewards and others in similar positions voluntarily 
serving on behalf of the union.

C. Reporting of Loans Under Sections 202(a)(3) and (4)

    The Department proposes to amend the Form LM-30 to exempt from 
reporting under sections 202(a)(3) and (4) of the LMRDA marketplace 
transactions with bona fide credit institutions, including loans, 
interest, dividends, and payments and credit extended through credit 
card transactions, provided that they are arms length transactions in 
accordance with usual business practice. In so doing, the Department 
establishes the balance between privacy and disclosure intended under 
the LMRDA--to disclose only an official's actual or potential conflicts 
of interests, while keeping private his or her bona fide investments 
``because they are not matters of public concern.'' Senate Report, at 
15, reprinted in 1 Leg. History, at 411.
    The Act requires union officers and employees to disclose ``any 
stock, bond, security, or other interest, legal or equitable, which he 
or his spouse or minor child directly or indirectly held in, and any 
income or any other benefit with monetary value (including reimbursed 
expenses) which [they] directly or indirectly derived from, any 
business a substantial part of which consists of buying from, selling 
or leasing to, or otherwise dealing with, the business of an employer 
whose employees the official's labor organization represents or is 
actively seeking to represent'' (section 202(a)(3)) and ``a business 
any part of which consists of buying from, or selling or leasing 
directly or indirectly to, or otherwise dealing with such labor 
organization'' (section 202(a)(4)).
    The 2007 rule established the general requirement that union 
officials report the details of any loan received from any employer, 
business, or trust with which the official's union had dealings or any 
employer whose employees are represented by the official's union (or 
whose employees the union actively seeks to represent). 72 FR at 36133-
38.
    Under the proposal, union officials as a general rule will not be 
required to report loans or other marketplace transactions with bona 
fide credit institutions, such as interest, dividends, and payments and 
credit extended through credit card transactions, provided that they 
are arms length transactions in accordance with usual business 
practice. The 2007 rule engendered strong protests from union 
officials, and some segments of the financial services industry, as 
intrusive and complicated. Shortly after the rule was published, the 
Department had to issue guidance, identifying several kinds of payments 
from credit institutions that did not need to be reported, such as 
savings and checking accounts, and certificates of deposit, but also 
explaining that credit card arrangements would not have to be reported 
by union officials.\10\
---------------------------------------------------------------------------

    \10\ The Department issued a series of Form LM-30 FAQs 
pertaining to the 2007 form, of which FAQs 70-73 deal with issues 
surrounding payments from credit institutions. In particular, FAQ 70 
stated, in part, that union officials do not need to report ``credit 
card transactions (including unpaid balances) and interest and 
dividends paid on savings accounts, checking accounts or 
certificates of deposit if the payments and transactions are based 
upon the credit institution's own criteria and are made on terms 
unrelated to the official's status in the labor organization.'' FAQs 
71 and 72 outlined the obligations of union officials regarding home 
loans, which clarified that such loans must be reported if received 
from a trust in which the official's union is interested, a business 
that deals with the official's union or a trust in which the union 
has an interest, or a business, a substantial part of which deals 
with an employer the official's union represents or is actively 
seeking to represent. Finally, FAQ 73 affirmed that the de minimis 
exemption applies to transactions, interests, and dividends from a 
financial institution, even if it had dealings with the official's 
union.
---------------------------------------------------------------------------

    Upon review of this issue, the Department notes that the 2007 rule 
reflected a basic policy choice that the disclosure of information, 
even where the risks of a conflict of interest were not apparent, was a 
paramount interest that generally outweighed the privacy interests of 
union officials and the reporting burden on union officials. In making 
this choice, the Department, as evidenced by its treatment of loans, 
may not have given sufficient weight to Congress's concern that the 
LMRDA should not unnecessarily regulate unions and their officials. The 
Department now believes that the better policy is to require the 
reporting of loans from a credit institution, as a general rule, only 
where the loan is on other than market terms. Loans made on market 
terms are of little or no interest to union members, yet they disclose 
to members and the general public matters about which union officials, 
no less than other individuals, have a legitimate expectation of 
privacy.
    Furthermore, by establishing a routine business transaction 
exemption to loan reporting under sections 202(a)(3) and (a)(4), the 
Department would prevent the submission of superfluous reports that 
would overwhelm the public with unnecessary information, thus 
inhibiting the discovery of true conflict of interest payments. At the 
same time, the Department would prevent unnecessary burdens on union 
officers and employees and avoid interference with the privacy of such 
officials.

[[Page 48426]]

    Without such exception, a union official would have to report each 
mortgage or other bank loan received from any credit institution that 
deals with his union, section 3(l) trust, or, in substantial part, with 
his or her represented employer. In the Department's view, the burden 
would outweigh the value of the additional information disclosed. The 
Department concurs with its reasoning in the 2007 rule to except from 
reporting under section 202(a)(6) loans, interest, and dividends earned 
during the regular course of business with a bona fide credit 
institution, because of the burden associated with reporting what ``are 
among the most common financial transactions undertaken by 
individuals.'' 72 FR 36118. The Department believes that this reasoning 
applies as well to bona fide loans received from a credit institution 
covered under sections 202(a)(3) and (4).
    As such, the Department proposes the following exemption for income 
and other benefits of monetary value received from a business and 
otherwise reportable by the union official on Part B of the proposed 
LM-30:

    Bona fide loans. Do not report bona fide loans, including 
mortgages, received from national or State banks, credit unions, 
savings or loan associations, insurance companies, or other bona 
fide credit institutions, if the loans are based upon the credit 
institution's own criteria and made on terms unrelated to the 
official's status in the labor organization. Additionally, do not 
report other marketplace transactions with such bona fide credit 
institutions, such as credit card transactions (including unpaid 
balances) and interest and dividends paid on savings accounts, 
checking accounts or certificates of deposit if the payments and 
transactions are based upon the credit institution's own criteria 
and are made on terms unrelated to the official's status in the 
labor organization.

    This exemption is limited to bona fide loans from legitimate 
financial institutions. The Department does not propose to alter other 
longstanding interpretations of section 202 that require union officers 
and employees to report other payments from vendors, service providers, 
financial institutions, and other businesses, that deal in substantial 
part with the represented employer or in any part with either the 
official's union or any trust in which the official's union is 
interested.
    The Department does not believe arms length loan transactions with 
a bona fide credit institution (other than where its employees are 
represented by an official's union or whose employees the union 
actively seeks to represent) present an actual or potential conflict of 
interest with the official's duties to his or her labor organization, 
because these loans, particularly mortgage loans, are usual 
transactions. The monetary value of bona fide loans obtained at market 
rates from credit institutions does not create the conflict of interest 
that arises with respect to other kinds of income from or interest in a 
business that deals with a represented employer, union, or section 3(l) 
trust. In contrast, a non-bona fide loan, gift, or other benefit 
derived from a transaction other than at arms length provides the union 
official with a net monetary gain, and consequently a potential desire 
to deal with a business in some way contrary to the interests of the 
union.\11\
---------------------------------------------------------------------------

    \11\ The proposed modification does not relax the obligation to 
report on loans or other financial transactions (including credit 
card arrangements and interest bearing accounts) where a union 
official receives terms more favorable than the market allows, or 
payments on the loan are extended or forgiven because of 
preferential treatment as a union official.
    However, loans received from employers or businesses that are 
not financial institutions will have to be reported as will any 
loans on other than market terms from employers or businesses that 
have a relationship with the official's union, and, pursuant to 
section 202(a)(1) and (a)(2), any loans from an employer represented 
by the official's union (or whose employees it actively seeks to 
represent).
---------------------------------------------------------------------------

    Therefore, for the foregoing reasons, the Department proposes an 
administrative exemption under section 202(a)(3) and (4) for reporting 
bona fide loans made on market terms.

D. Scope of Reporting Requirements Under Section 202(a)(6)

    Sections 202(a)(1)-(5) of the LMRDA establish conflict of interest 
reporting requirements concerning payments received by union officers 
and employees from two sets of entities: (1) Employers that a union 
represents or is actively seeking to represent; and (2) businesses, 
such as vendors and service providers, that buy or sell to the 
represented and potentially represented employers, the union official's 
union, or trusts in which the official's union is interested. In each 
case, the reporting obligation is triggered by the particular 
relationship that exists between an official's union and the entity 
from which the official holds an interest in or receives a payment.
    By contrast, section 202(a)(6) does not specify any relationship 
between an entity and an official's union, nor does it enunciate when 
payments must be reported. Rather, it more broadly requires union 
officials to report any payment of money or other thing of value from 
``any employer or any person who acts as a labor relations consultant 
to an employer'' (except payments of the kinds referred to in section 
302(c) of the LMRA).
    In addressing the scope of reporting required under section 
202(a)(6) of the LMRDA, the Department, in its 2007 rule, attempted to 
clarify that section 202(a)(6) covers payments not captured in section 
202(a)(1)-(5) that otherwise would create or pose a potential conflict 
between the financial interests of the union official and the interests 
of his or her union. 72 FR at 36128-29. As cited in the 2007 rule, the 
Department has long accepted this position, as LMRDA Interpretative 
Manual section 248.005 states, in part: ``[Section] 202(a)(6) is 
designed for those situations which pose conflict of interest problems 
which are not covered in the previous five sections of 202.'' 72 FR at 
36129. Further, the 2007 rule made clear that section 202(a)(6) is not 
restricted to matters that directly involve labor-management 
activities, but can be read to encompass any employer who makes a 
payment that could present a financial conflict of interest for the 
union official. Id.
    The Department retains the view that section 202(a)(6) was intended 
to be a ``catch-all'' provision, requiring reporting under 
circumstances that were not set forth in the first five provision of 
section 202(a). Although it would be impractical to delineate all 
possible circumstances that would trigger a reporting obligation under 
section 202(a)(6), the Department proposes a return to the guiding 
principles of the LMRDA Interpretative Manual. Only payments that 
present a conflict of interest or the reasonable potential for a 
conflict of interest should be reported. Those that do not present an 
actual or potential conflict of interest should not be reported. See 
LMRDA Interpretative Manual section 248.005.
    In applying this principle, the Department proposes to retain, in 
Part C of the proposed form, the requirement to report five types of 
payments outlined in the 2007 rule, regardless of the relationship the 
employer has with the filer's union. These payments to a union official 
(or the official's spouse or minor child) from any employer or labor 
relations consultant to an employer, are for the following purposes: 
(1) Not to organize employees; (2) to influence employees in any way 
with respect to their rights to organize; (3) to take any action with 
respect to the status of employees or others as members of a labor 
organization; (4) to take any action with respect to bargaining or 
dealing with employer whose employees the filer's organization 
represents or whose employees the union is actively seeking to 
represent; and (5) to influence the

[[Page 48427]]

outcome of an internal union election. 72 FR at 36128, 36173. These 
payments create an actual or potential conflict between the filer's 
financial interests and his or her duties to the labor organization.
    The Department also proposes to retain the general requirement that 
officials report payments from employers and labor relations 
consultants, from whom a payment would create an actual or potential 
conflict between the filer's personal financial interests and the 
interests of the filer's labor organization (or duties to the labor 
organization). The instructions for the proposed Form LM-30 list 
examples of such actual or potential conflicts of interest; however, 
the list should not be considered exhaustive. The examples include, as 
did the 2007 rule, payments from business competitors to the employer 
whose employees the union official's union represents or whose 
employees the union is actively seeking to represent, although, as 
explained below, a qualification has been added to this example to 
ensure that only actual or potential conflict of interest payments are 
reported; and payments from an employer that is a not-for-profit 
organization that receives or is actively and directly soliciting 
(other than by mass mail, telephone bank, or mass media) money, 
donations, or contributions, from the official's labor organization.
    As discussed below, the Department proposes to narrow the scope of 
reporting required under section 202(a)(6) with respect to (1) payments 
from business competitors to the employer whose employees the union 
official's union represents or whose employees the union actively seeks 
to represent; (2) payments received from trusts; and (3) payments from 
unions.
1. Obligation To Report Payments From Business Competitors to the 
Employer Whose Employees the Union Official's Union Represents or Whose 
Employees the Union Is Actively Seeking To Represent
    The 2007 rule requires a union official to report payments from an 
employer or a labor relations consultant to an employer that ``is in 
competition with an employer whose employees your labor organization 
represents or is actively seeking to represent.'' 72 FR at 36173. On 
review, the Department proposes to modify this requirement to avoid 
undue burden on union officials by requiring reporting only of actual 
or potential conflict of interest payments.
    Under the 2007 rule, all union officers and employees were required 
to report all payments from all competitors to the represented 
employer. To do so, they are required to undertake research in order to 
discover whether they, their spouses, or their minor children, hold any 
interests in or received any payments from competitors to their union's 
represented employers. Union officials must track each gift, loan, or 
payment received. Union officials with a side business, such as 
catering, IT services, printing, or landscaping, would have to review 
each business receipt. They would then have to review the source of 
each gift, loan or payment, and determine which of these individuals or 
entities constitute ``competitors'' to the employer of the union 
members. Then they would have to perform the same analysis for their 
spouses and minor children. Only then could they make the determination 
of whether a report was owed.
    In contrast, the reporting requirement in the proposed rule focuses 
on payments that represent an actual or potential conflict of interest. 
Such payments would include those from an employer in competition with 
an employer whose employee's the official's labor organization 
represents or is actively seeking to represent if the official is 
involved with the organizing, collective bargaining, or contract 
administration or is actively engaged in the organizing activities 
related to a particular represented employer or possesses significant 
authority or influence over such activities. The proposed instructions 
state:

    Complete Part C if you, your spouse, or your minor child 
received, directly or indirectly, any payment of money or other 
thing of value (including reimbursed expenses) from any employer 
(other than a Represented Employer under Part A or Business covered 
under Part B above) from whom a payment would create an actual or 
potential conflict between your financial interests and the interest 
of your labor organization or your duties to your labor 
organization. Such employers include, but are not limited to, an 
employer in competition with an employer whose employees your labor 
organization represents or whose employees your union is actively 
seeking to represent, if you are involved with the organizing, 
collective bargaining, or contract administration activities or 
possess significant authority or influence over such activities. You 
are deemed to have such authority and influence if you possess 
authority by virtue of your position, even if you did not become 
involved in these activities.

    Examples may help illustrate the difference between the existing 
Form LM-30 and the narrower reporting requirement proposed here. An 
individual employed part-time by a union to handle computer problems 
works full time for a technology company that is a competitor to a 
company whose employees are represented by the union. Under the 2007 
rule, the individual would have to file a Form LM-30 to report the 
payments he receives from his full-time job. Under the proposed rule, 
he would not have to report these payments. In a contrasting example, 
an individual employed by a union as an organizer also works part-time 
for a technology company that is a competitor to a company whose 
employees the union is actively attempting to organize. Under the 
proposed rule and the 2007 rule, the individual would have to file a 
Form LM-30 to report payments he receives from the technology company.
    Restricting this reporting requirement to those officials involved 
with organizing, collective bargaining, or contract administration 
activities related to a particular represented employer or who 
possesses significant authority or influence over such activities, will 
relieve unnecessary burden on filers and ensure that Form LM-30 reports 
contain useful information for the employees of the represented 
employer, the employees of the competitor, and the public. Individuals 
elected to a union's governing body and employees of a union, such as a 
director of organizing, who possess such authority by virtue of their 
positions, would be required to report interests held in and payments 
received from competitors with a represented employer.
2. Obligation To Report Payments Received From Trusts
    The Department believes that the Department's historical position 
that union officials were not required to file reports from ``an 
employer that is a trust in which your labor organization is interested 
as defined in section 3(l) of the LMRDA'' reflects a better policy 
choice than the position taken in the 2007 rule to require such 
reporting. See Form LM-30 Instructions, p. 5. Such a trust is defined 
as a ``trust or other fund or organization (1) which was created or 
established by a labor organization, or one or more of the trustees or 
one or more members of the governing body of which is selected or 
appointed by a labor organization, and (2) a primary purpose of which 
is to provide benefits for the members of such labor organization or 
their beneficiaries.'' See Form LM-30 Instructions, p. 13.
    In the preamble to the 2007 rule, the Department explained its view 
that loans and other payments from a section 3(l) trust to a union 
official pose a conflict of interest between the official's

[[Page 48428]]

personal financial interests and his or her duty to the union. The 
Department took the position that the interests of the trust and the 
union are not always congruent. 72 FR at 36136. It stated that the 
money that ``a participating union pays into a trust'' is money that 
otherwise ``would be maintained in the union's own account.'' Id. The 
union's own money would be reported on its Form LM-2 annual financial 
disclosure report. ``[W]ithout requiring a union official to report 
payments he or she receives from a trust, an official would be able to 
circumvent and evade the disclosure that would have occurred if the 
funds had remained in the union's coffer.'' Id. In other words, trust 
money was deemed to be union money. After further consideration of this 
issue, the Department believes that the position taken in the 2007 rule 
was not well founded.
    Prior to the 2007 rule, payments from trusts to union officers and 
employees were not reportable by union officials. The Department's 
longstanding view is reflected in an opinion, which is dated December 
20, 1967 and signed by the head of OLMS's predecessor agency, Frank M. 
Kleiler, and the Department's Solicitor, Charles Donahue. Indeed, for 
40 years, this was written policy. The opinion letter responds to an 
inquiry from several union officials concerning whether reporting is 
required of union officers who receive payments from the union and from 
employer-established pension and welfare plans. The letter concluded 
that no report was required because none of the trusts were businesses 
or employers and because the information sought was obtainable under a 
statute that predated ERISA. Kleiler-Donahue Ltr., p. 2. The letter 
also determined that trusts were not businesses, because they were not 
engaged in commercial activities. Id., p. 3. The letter also concluded 
that there was no conflict of interest between the union officer's 
loyalty to the union and his service to the trust. Id., p. 4. In 
addition, the letter considered whether trust funds constituted 
employers under the LMRDA. The letter stated: ``Even assuming that such 
trust funds may be recognized as `employers' for some purposes, we must 
reject the notion that Congress intended to treat such employers as 
employers under'' the LMRDA's union officer and employee reporting 
provisions. Id. As there stated:

    Congress was concerned with arrangements with the primary 
employer, that is, the one whose employees the union represents or 
seeks to represent, which might impair the union officer's loyalty 
as a representative of that organization [vis-[agrave]-vis] the 
employer. Even assuming that a trust fund could successfully be 
characterized as a primary employer, which we doubt, we fail to 
perceive the existence of a conflict where a union official received 
payments from a trust fund for which he also works, even if this 
arrangement is approved by employer representatives on the trust. 
The employer representatives are acting in their role as trustees 
and thus no conflict of interest situation with which Congress was 
concerned arises.

    Id., p. 4-5. The opinion letter noted that even under the provision 
of the LMRDA that requires reporting from employers other than the 
``primary employer,'' the absence of a conflict of interest indicates 
that the payments are not reportable. The letter noted that ``most, if 
not all'' of these payments would be exempted as ordinary compensation, 
and would not be reportable under the LMRDA, anyway. Id. Finally, the 
letter noted that the transactions involved were already required to be 
reported under a statute predating ERISA. Id., p. 5. The Kleiler-
Donahue opinion letter was simply noted without any substantive 
discussion in the 2007 rulemaking. 72 FR at 36154.
    The Department has now reconsidered its basis for the policy shift. 
Upon review of the policy enunciated in the Kleiler-Donahue letter, the 
Department is convinced of its significance and its persuasive value. 
As the letter notes, payments from trusts to union officers and 
employees--wages to employees or reimbursed expenses--are payments 
reported elsewhere and, more importantly, pose ``no conflict with which 
Congress was concerned.'' Kleiler-Donahue Ltr., p. 5.
    On these foregoing bases, the Department proposes to return to the 
40-year understanding of the Form LM-30, and exempt from reporting 
payments from trusts to union officers and employees.
3. Obligation To Report Payments From Unions
    The Department has reconsidered the general requirement in the 2007 
rule that union officials report must payments received from a labor 
union. The Department's position was based on the conclusion that 
payments from a labor union (to the extent it has any employees and 
thus is an employer) should not be treated differently from payments 
from any other employer in situations that arguably pose the 
possibility of a conflict of interest. 72 FR at 36140-41. The 
Department believes that its proposed approach better takes into 
account the LMRDA's distinctions between labor organizations and 
employers. For this reason, the Department proposes to modify this 
reporting requirement.
    The 2007 rule requires union officials to report payments where the 
employer is a labor union that:
    a. Has employees the official's union represents or is actively 
seeking to represent;
    b. Has employees in the same occupation as those represented by 
the official's union;
    c. Claims jurisdiction over work that is also claimed by the 
official's union;
    d. Is a party to or will be affected by any proceeding in which 
the official has voting authority or other ability to influence the 
outcome of the proceeding; or
    e. Has made a payment to the official for the purpose of 
influencing the outcome of an internal union election.

    Item A.5 on Schedule 3 of the 2007 Form, 72 FR at 36163. The 
Department proposes to remove this provision. However, this proposal 
will not affect a staff union official's obligation to report payments 
he or she receives from a union-employer whose employees the official's 
union represents. Any such payments would be reportable under Part A of 
the proposed form and previously had been reportable under Part A of 
the pre-2007 form as payments from an employer whose employees the 
official's labor organization represents (or actively seeks to 
represent). There is no need to require their reporting under section 
202(a)(6). Compare 29 U.S.C. 432(a)(1), (a)(2), and (a)(5) to 29 U.S.C. 
432(a)(6). This ``staff union'' scenario represents an obvious 
archetypal conflict of interest: a non-wage payment from an employer to 
a union officer. In this instance, the labor union is acting in the 
capacity of an employer in a labor-management situation and making a 
payment that poses an obvious conflict. However, the Department 
believes that Congress simply did not intend labor unions, apart from 
this instance, to be treated as employers for purposes of Form LM-30 
reporting.
    As the statutory analysis, below, explains, Title II of the LMRDA 
provides a reticulated reporting regime, setting forth distinct but 
interrelated reporting requirements. Section 201 contains reporting 
rules for labor organizations, section 202 requires reports from union 
officers and employees, and section 203 requires reports from employers 
and labor consultants. Under section 201, the assets, liabilities, 
receipts and disbursement of labor unions are reported on the 
Department's Form LM-2, Form LM-3, and Form LM-4. These forms require 
all covered labor organizations to account for disbursements, including 
those to officers and employees of other unions. Depending on the 
dollar amount, some of the payments may be individually

[[Page 48429]]

itemized on the Form LM-2, and some may be aggregated with other 
information. But, in either case, they are incorporated in the Form LM-
2. Pursuant to section 201(c), moreover, labor organization members can 
view the union's underlying records to learn the exact amount and 
recipient of each disbursement. Consequently, additional reporting on 
Form LM-30 would be inconsistent with the statutory scheme, unduly 
burdensome, and unnecessarily duplicative of other reporting 
requirement.
    Moreover, the Department, in reconsidering this question, has 
concluded that a preferred reading of the LMRDA would not consider 
labor unions or trusts as employers, as each of these entities is 
treated separately under the Act. In drafting the LMRDA reporting and 
disclosure requirements, Congress mandated separate requirements for 
the discrete statutory actors: ``labor organizations,'' ``labor 
organization officers'' and ``labor organization employees,'' 
``employers,'' ``labor relations consultants,'' and ``trusts in which a 
labor organization is interested.'' (While there are no reporting 
requirements for section 3(l) trusts, section 208 authorizes the 
Secretary to establish such requirements for labor organizations 
concerning such entities.) Further, the statute separately defined five 
of these six terms. See sections 3(e), 3(i), 3(l), 3(m), and 3(n) of 
the LMRDA. The 2007 rule, in contrast, characterized ``labor 
organizations'' as employers, pursuant to section 202(a)(6).
    Section 201 requires ``labor organizations'' to disclose, among 
other financial transactions and information, disbursements to many 
individuals and entities, including employers, businesses, their own 
officers and employees and, potentially, those of other labor 
organizations. Section 203 requires ``employers'' to file certain 
reports. As applied to section 202, ``labor organization'' officers and 
employees must report payments from ``employers'' and ``businesses'' 
that have certain relationships to the official's ``labor 
organization.'' The statute thus sets out employers and labor 
organizations as distinct and separate entities. There is nothing in 
the statute that indicates that Congress intended that the category of 
employers also would include labor organizations, or that Congress 
meant for officers and employees to report transactions with labor 
organizations. It seems apparent that, if Congress had intended that 
transactions with labor organizations be included in reporting under 
section 202, it would have explicitly included labor organizations in 
that section.\12\
---------------------------------------------------------------------------

    \12\ This reasoning is consistent with LMRDA Interpretative 
Manual section 260.005. This section provides that no report is 
required for activities performed by an attorney on behalf of a 
union (distinct from activities performed for an employer), even 
though the attorney meets the definition of ``labor relations 
consultants'' under section 3(m), because the only section of the 
Act which requires reports from labor relations consultants is 
section 203(b), which provides for reports from every person who has 
an agreement with an employer for certain purposes.
---------------------------------------------------------------------------

    Additionally, the Department believes that this reading of the 
statute better implements the labor union and labor-management 
reporting requirements of the LMRDA. First, as stated previously, 
conflict of interest payments from labor organization-employers 
represented by staff unions are reportable on Form LM-30 pursuant to 
sections 202(a)(1), (2), and (5). Second, the Form LM-2, LM-3, and LM-4 
Labor Organization Annual Disclosure Reports require all covered labor 
organizations to disclose any disbursement, including those to officers 
and employees of other unions, pursuant to section 201. Such 
disbursements include those addressed in provisions 5(b)-(e), quoted 
above, all of which constitute payments from labor organizations in 
their capacity as the representative of employees, not as an employer 
of employees. A member or other viewer of LM reports would naturally 
look to the labor organization's annual financial disclosure report, 
and not the Form LM-30 reports, to view disbursements from their labor 
organization. Further, pursuant to section 201(c), union members can 
view the underlying records of their union's reports to ascertain 
further information related to the payments to third party union 
officials.

E. Scope of Form LM-30 Reporting by National, International, and 
Intermediate Body Union Officials

    The Department proposes to remove the definition of ``labor 
organization'' (Part III, D10, of the 2007 instructions), which 
addresses the reporting obligation of national, international and 
intermediate body officials under section 202 of the LMRDA. In its 
place, the Department will rely on the statutory definition of ``labor 
organization'' under section 3(i) and (j) of the LMRDA, and proposes 
the inclusion of the following language to clarify the top-down 
reporting obligation of national, international, and intermediate body 
officials:

    When applying the Form LM-30 reporting requirements, a national, 
international, or intermediate union officer or employee must look 
at employers and businesses with requisite relationships with lower 
levels of the official's union (e.g., a local or other subordinate 
body), as well as the official's own level of the union.

    The Department's proposal will require union employees to report 
the same interests and payments that union officers are required to 
report. Further, the Department proposes to restore the obligation that 
these officers and employees report any interests in or payments 
received from businesses that deal with employers whose employees are 
represented by subordinate affiliates of their union (and any employers 
such affiliates are actively seeking to represent), as well as 
businesses that deal with the official's union or such subordinate 
affiliates of their union, including their section 3(l) trusts, and to 
require that union officials report interest and payments or other 
financial benefits received by their spouses and minor children from 
such employers. The 2007 rule removed the obligation to report on these 
interests and payments.
    Section 202 requires union officers and employees to report certain 
payments and interests from employers and businesses that have 
specified relationships with the official's labor organization in order 
to disclose potential conflicts of interest. The Department has long 
recognized that such potential conflicts could be related to a national 
or international union official's responsibility to either the 
immediate union that he or she serves or some other union within the 
labor organization's hierarchy. For example, in section 241.100 of the 
LMRDA Interpretative Manual, the Department addressed the reporting 
standards for international union officers, as follows:

    Section 202(a)(3) of the Act requires reports from ``every 
officer of a labor organization'' of income derived from ``any 
business a substantial part of which consists of buying from, 
selling or leasing to, or otherwise dealing with, the business of an 
employer whose employees such labor organization represents or is 
actively seeking to represent.'' An international union officer must 
report his income from such a business even though he is not an 
officer of the local which represents the employees of the business, 
and even though his duties as an international officer do not 
include representation activities.

    Recognizing that the pre-2007 Form LM-30 Instructions did not 
expressly address this type of issue, and seeking to ensure proper 
disclosure of conflict of interest payments under section 202 of the 
Act, the 2007 rule defined ``labor organization'' in a way that reached 
such payments. 72 FR at 36121-24. This definition of ``labor 
organization'' and the related reporting instructions

[[Page 48430]]

prescribed a ``top-down'' approach to disclosure, which requires 
national, international, and intermediate body officers to ``look-
down'' to lower levels of the union hierarchy in determining the full 
scope of their section 202 reporting responsibilities. The reporting 
standard is significantly narrower than that set forth in the 2005 
NPRM, which had proposed to require officials to also report conflict 
of interest payments and interests involving any higher-level affiliate 
of the official's union--a ``look-up'' approach to complement the 
``look-down'' approach. 70 FR at 51182-83. The 2007 rule also differs 
from the 2005 proposal in that the rule narrowed the ``top-down '' 
reporting obligation to union officers, excepting employees from this 
obligation. 72 FR at 36123-24, emphasis added. Further, under the 2007 
rule, the officers of intermediate, national, or international unions 
are not required to report payments from or interests in businesses 
that deal with employers represented by, or actively being organized 
by, any lower level of the officer's labor organization. They also are 
not required to report payments and other financial benefits received 
by their spouses or minor children as bona fide employees of a business 
or employer involved with a lower level of the officer's labor 
organization.
    Upon review, the Department believes that the approach taken in the 
2007 Form LM-30 instructions, at Part III, D10, does not achieve the 
policy choice that best comports with the purposes served by section 
202. First, the 2007 rule requires only officers (and not employees) of 
national, international, and intermediate unions to report payments 
from and interests in entities that deal with lower levels of the 
officers' labor organizations. 72 FR at 36123-24. As recognized under 
the LMRDA statutory scheme, union employees, not solely union officers, 
can hold positions of considerable authority and influence in all 
levels of a union hierarchy. Such employees include key administrative 
personnel such as business agents, heads of departments or major units, 
attorneys, and organizers who exercise substantial independent 
authority. See section 3(q), 29 U.S.C. 402(q). Moreover, union 
employees, like union officers, may also have interests in or receive 
payments from the same entities that pose the same actual or potential 
conflict with the interests of their union or their duties to their 
union. For example, an international union organizer may have a 
business interest in an employer that a subordinate local is trying to 
organize. Under the 2007 rule, this interest would not be reported. 
Maintaining the same reporting rules for officers and employees 
throughout all sections of the Form LM-30 increases the clarity and 
consistency of the LM-30 reporting requirements.
    Secondly, Part III, D10, of the 2007 Form LM-30 instructions exempt 
the reporting of ``payments from or interests in businesses that deal 
with employers represented by, or actively being organized by, any 
lower level of the officer's labor organization.'' 72 FR at 36122. The 
exception does not adequately consider longstanding policy of the 
Department, cited above. It also creates the possibility of unreported 
conflicts of interest. For example, an employee of an international 
union may have a side business selling information technology services. 
The business may contract with a grocery market organized by an 
affiliated local union to maintain the market's payroll system. Under 
the 2007 rule, the international union employee would not have to 
report his or her IT business and its relationship with the employer 
represented by the affiliated local.
    Further under the 2007 rule, a national/international or 
intermediate officer is not required to report payments and other 
financial benefits received by the spouse or by a minor child as a bona 
fide employee of a business or employer involved with a lower level of 
the officer's organization. For example, the Secretary Treasurer of an 
international union has a spouse that is the head of purchasing for an 
auto parts manufacturer that deals with an employer of the union 
members. Under the 2007 rule, the Secretary Treasurer would not have to 
report the position and income of the spouse. Such payments must be 
reported under the proposed rule, as they were prior to the 2007 rule.
    Additionally, the existing instructions, at Part III, D10, are 
potentially confusing to Form LM-30 filers because of these 
inconsistencies with the overall LM-30 reporting scheme. In addition, 
the Department finds, on review, that the instructions explaining the 
``top-down'' reporting requirements are vague and often difficult to 
follow. For example, the 2007 LM-30 Instructions list various 
exceptions noting what is not required to be reported (with respect to 
top-down reporting), yet fail to clearly delineate what top-down 
scenarios must be reported. See 2007 LM-30 Instructions, D10 at p. 11-
12.
    For the foregoing reasons, the Department has determined to apply 
the principles of longstanding policy articulated in section 241.100 of 
the LMRDA Interpretative Manual to officers and employees of national, 
international, and intermediate unions. When applying the Form LM-30 
reporting requirements, a national, international, or intermediate 
union officer or employee must look at employers and businesses with 
requisite relationships with lower levels of the official's union 
(e.g., a local or other subordinate body), as well as the official's 
own level of the union.

IV. Proposed Revisions to the Regulations, Form, and Instructions

    The Department is proposing changes to the Form LM-30 to simplify 
its use by filers, chiefly by reducing the length of the form (from 
nine pages to two pages) and its instructions (from 22 pages to 13 
pages) and eliminating or modifying some burdensome and unnecessarily 
intrusive reporting requirements. The 2007 rule established a lengthy, 
complicated form and instructions. Although the length of these 
documents was due, in part, to the inclusion of numerous examples, many 
of these examples provided little practical assistance to filers and, 
in their entirety, the examples created a perception among filers that 
they were required to make extensive and complex legal and accounting 
determinations. The proposed instructions contain only a few examples. 
While particular filers may have questions about whether certain 
matters should be reported, the Department believes that these 
questions are better addressed through compliance assistance than by 
imposing a burden on all filers to read about complex issues that 
concern a very small number of filers. The Department also is proposing 
to revise the format of the instructions to define key terms as they 
first appear in the instructions, rather than to collect the 
definitions in the middle of the instructions, the approach taken in 
the 2007 rule.
    The discussion that follows describes the Department's proposal to 
revise its regulations implementing section 202(a) of the LMRDA, 29 CFR 
404.4, and the Form LM-30 and its accompanying instructions, which are 
incorporated into the regulations by reference. 29 CFR 404.3.

A. Regulations

    Only one proposed change involves the regulatory text. 29 CFR 
404.1(f). In section 404.1(f), the Department proposes to remove the 
definition of ``labor organization,'' which had been added in the 2007 
rule to establish the scope of reporting required of higher level union 
officers. Paragraphs (g) through (j) of section 404.1 also will be

[[Page 48431]]

re-designated as (f) through (i), respectively. As discussed below, the 
term ``labor organization'' is separately defined in the LMRDA, and 
language regarding the scope of reporting for national, international, 
and intermediate union officers and employees has been added to the 
proposed instructions.

B. Proposed Form

    In this notice, the Department proposes the implementation of a new 
Form LM-30, entitled ``Labor Organization Officer and Employee Annual 
Report,'' which will feature a revised, simplified format. The 
Department believes its proposed form will better facilitate filers' 
compliance with LM-30 reporting requirements than earlier forms and 
increase the form's utility to the public.
    With respect to layout, the proposed form more closely resembles 
the pre-2007 form than the lengthier 2007 form. The proposed form, 
which is two pages in length, contains four sections: a section that 
contains basic identifying information on the filer and labor 
organization, and Parts A through C. Parts A, B, and C are designed to 
capture reportable transactions with a represented employer, a business 
that has dealings with the official's union, a trust in which the union 
has an interest, or has substantial dealings with a represented 
employer, and other employers or labor relations consultant, 
respectively. The form has been simplified by removing numerous 
schedules, checklists, and examples. While the inclusion of this 
information in the 2007 form was intended to assist filers, it is the 
Department's present view that these additions made the form more 
confusing and difficult to complete.
    The proposed form does not contain the summary schedule that was on 
the first page (Item 5) of the 2007 form. The Department doubts the 
utility of the summary schedule. The Department does not believe that 
requiring the reporting of ``total reported income or other payments'' 
and ``total reported assets'' is useful information, by itself, and may 
be misleading. Without knowing the context to the reportable 
transaction or transactions, a viewer does not have a basis to assess 
the actual or potential conflict of interest and the impact such a 
conflict would have on the official's duties to the labor organization. 
For a filer with multiple payments, a summed total on the front page of 
the form is misleading, even if the totals are separated by assets and 
other payments, since a viewer of the form can only judge a conflict of 
interest by looking at the monetary value of the payment or interest 
along with its source and other pertinent circumstances. A sum of money 
or other payment or asset, in of itself, has no meaning, and can lead 
to confusion for the viewer and reflect unfairly on the filer. Further, 
presenting a figure for ``total reported income or other payments'' 
gives the impression that this total represents income and payments 
received by the filer, when in fact, this figure might also include 
items such as interest in personal or real property, insurance, or 
share holdings.
    The proposed form does not contain sections on Employer and 
Business Relationships (Items 6 and 7, respectively, on the 2007 form). 
The Department does not believe that this general information adds to 
the usefulness of the form, because this information is reported on 
each schedule. A bulleted checklist for the relationships has also been 
eliminated.
    The proposed form's contact information sections in Parts A, B, and 
C generally collect the same information requested in Schedule 1 of the 
2007 form, except that the proposed form will not ask whether the 
filer, filer's spouse, or minor child had a relationship with the 
employer, business, or labor relations consultant at the end of the 
reporting period, as this information does not aid the viewer of the 
form in assessing any conflict of interest for the fiscal year in 
question. The proposed form also eliminates the requirement that a 
filer provide the Web site address of the employer, business, or labor 
relations consultant in which the filer holds an interest or receives a 
payment. The Department does not believe that the Web site address is 
necessary, since viewers of the form can independently locate this 
information.
    In place of the separate Additional Information Schedule, which was 
included in the 2007 form, the proposed instructions simply provide 
guidance on how to provide additional information. Filers who choose to 
file a paper copy of the form are instructed to attach a separate 
letter-size page, with identifying information. Filers who choose to 
file electronically will be able to add additional information as 
needed.
    A section-by-section discussion of the proposed form follows:
First Section--Basic Identifying Information (Items 1-5)
    The first section of the proposed form gathers basic information 
about the filer and his or her labor organization. Item 1 requests the 
LM-30 file number, and Item 2 calls for the fiscal year covered in the 
report. Item 3 provides a box to identify the form as an amended 
report. Filers must provide their contact information in Item 4, which 
includes lines for their name and street address (both required), and 
an e-mail address (optional). In Item 5, they must provide identifying 
information about their labor organization, indicate whether they are 
an officer or employee, and note their officer position or job title. 
If the filer serves as an officer or employee in more than one labor 
organization, this information is captured on an Item 5 Continuation 
Page.
    Below the first section, the proposed form states, ``Complete Part 
A, B, or C if, during the past fiscal year, you or your spouse or minor 
child directly or indirectly had a reportable interest in, transaction 
or arrangement with, or received income, payment, or benefit from the 
entities described below.''
Part A--Represented Employer (Items 6 and 7)
    In the proposed form, ``Represented Employer'' is defined as ``an 
employer whose employees your labor organization represents or whose 
employees it is actively seeking to represent.'' If the filer had a 
reportable interest, transaction, benefit, arrangement, income, or loan 
from his/her ``Represented Employer,'' he or she must provide in Item 6 
the employer's contact information, including the name and telephone 
number of a contact person. In Item 7a, the filer must provide the 
nature of the interest, transaction, benefit, arrangement, income, or 
loan, and in Item 7b, he or she must provide the amount or value. As 
stated above, the Department has removed the requirement that filers 
report the Web site address for the employer.
    As will be explained in the Proposed Instructions section below, 
the filer must complete a separate Part A for each ``Represented 
Employer'' or transaction reported. A Continuation Button is located 
below Part A if the filer needs to complete one or more additional Part 
As.
Part B--Business (Items 8-12)
    The proposed form provides that the filer must complete Part B if 
he or she had a reportable interest in, transaction or arrangement 
with, or received income, payment, or benefit from ``[a] business, such 
as a vendor or service provider, (1) a substantial part of which 
consists of buying from, selling or leasing to, or otherwise dealing 
with the business of a Represented Employer described in Part A or (2) 
any part of which consists of buying from or selling or leasing 
directly or indirectly to, or

[[Page 48432]]

otherwise dealing with your labor organization or with a trust in which 
your labor organization is interested.''
    If the filer has reportable activity with such a business, he or 
she must provide in Item 8 the contact information for the business, 
including the name and telephone number of a contact person. In Item 9, 
the filer must indicate the entity the business deals with by checking 
the box for (a) labor organization, (b) trust, or (c) employer. If the 
filer checks the box for trust or employer, he or she must provide the 
trust or employer's name and contact information in Item 10. The filer 
must provide the nature of the dealings in Item 11a, and the value of 
the dealings in Item 11b. Additionally, the filer must provide in Item 
12a the nature of the interest, benefit, arrangement, or income. Item 
12b calls for the amount or value of the interest, benefit, 
arrangement, or income. As stated above, the Department has removed the 
requirement that filers report the Web site address for the business. 
As will be explained in the Proposed Instructions section below, the 
filer must complete a separate Part B for each business or transaction 
reported. A Continuation Button is located below Part B if the filer 
needs to complete one or more additional Part Bs.
Part C--Other Employer or Labor Relations Consultant (Items 13 and 14)
    The proposed form provides that the filer must complete Part C if 
he or she had a reportable interest in, transaction or arrangement 
with, or received income, payment, or benefit from ``an employer (other 
than a Represented Employer or Business covered under Parts A and B 
above) from whom a payment would create an actual or potential conflict 
between your personal financial interests and the interests of your 
labor organization (or your duties to your labor organization); or a 
labor relations consultant to such an employer or to the Represented 
Employer listed in Part A.''
    If the filer has reportable activity with such an employer or labor 
relations consultant, he or she must provide in Item 13a the contact 
information for the employer or labor relations consultant. In Item 
13b, the filer must indicate whether the entity is an employer or 
consultant. The filer must provide the nature of the payment in Item 
14a, and the amount or value of the payment in Item 14b. As stated 
above, the Department has removed the requirement that filers report 
the Web site address for the employer or labor relations consultant.
    As will be explained in the Proposed Instructions section below, 
the filer must complete a separate Part C if reporting more than one 
employer, labor relations consultant, or transaction. A Continuation 
Button is located below Part C if the filer needs to complete one or 
more additional Part Cs.
Signature and Verification (Item 15)
    The filer must provide his or her signature, date, and telephone 
number in Item 15, which is located on the bottom of the first page. As 
explained in the instructions, filers are instructed to view the OLMS 
Web site for further information on how to electronically sign and 
submit the Form LM-30. The signature line on the proposed form is 
identical to that on the 2007 form, except for the fact that the 
proposed form assigns the heading ``Signature and Verification'' to 
Item 15. The signature line on the 2007 form did not include a heading.

C. Proposed Instructions

1. General
    The proposed instructions reflect significant changes in both 
layout and content from the 2007 form. The content has been changed to 
reflect the specific changes discussed in the preceding sections of the 
notice. Other changes have been made to add clarity and eliminate 
unnecessary repetition. The discussion immediately below highlights 
significant changes between the proposed and 2007 instructions.
    As noted above, the proposed form and instructions reinstate the 
general ``Parts A, B, and C'' format featured in the pre-2007 form and 
instructions instead of the multiple-schedule format introduced in the 
2007 form and instructions. The Department believes that the proposed 
format is clearer and more streamlined and will make the form much 
easier for filers to understand and complete, without affecting the 
usefulness of the information disclosed.
    The proposed instructions do not include a separate ``Definitions'' 
section, which was included in the 2007 instructions. The proposed 
instructions instead present definitions and clarifications of key 
terms in the context of the sections in which they appear in the 
document. When a definition follows a section of the instructions, the 
term to be defined is italicized. Further, if a defined term is used in 
multiple places, the later references refer back to the section in 
which the term is first used and defined. The Department believes that 
this approach will help filers understand key terms as they read 
through the instructions, and will eliminate the need for filers to 
frequently refer to a separate ``Definitions'' section to determine 
what must be reported and how it must be reported.
    The Department also proposes to remove the examples that are 
dispersed throughout the 2007 instructions. The numerous examples in 
the 2007 instructions, many of which involved situations confronted by 
a very small number of filers, made the form unnecessarily complex and 
difficult to complete, without meeting the intended goal of providing 
helpful guidance. Following the publication of a revised Form LM-30, 
the Department intends to provide compliance assistance support to Form 
LM-30 filers.
    Additionally, the Department proposes to modify the definitions of 
some key terms that are found in the 2007 Form LM-30 Instructions. 
First, the Department proposes to remove the definition of ``bona fide 
employee'' as used in the 2007 rule and add the bona fide employee 
exemption found in the instructions for the pre-2007 form. The language 
to be added reads:

    Payments and benefits received as a bona fide employee of the 
employer for past or present services, including wages, payments or 
benefits received under a bona fide health, welfare, pension, 
vacation, training or other benefit plan; and payments for periods 
in which such employee engaged in activities other than productive 
work, if the payments for such period of time are: (a) Required by 
law or a bona-fide collective bargaining agreement, or (b) made 
pursuant to a custom or practice under such collective bargaining 
agreement, or (c) made pursuant to a policy, custom or practice 
which the employer has adopted without regard to any holding by such 
employee of a position with a labor organization.

    Emphasis added. Second, the Department proposes to modify the 
definition of ``labor organization employee.'' As a result, the 
Department proposes the following language for insertion into the 
revised Form LM-30 Instructions in Section II, Who Must File: ``For 
purposes of the Form LM-30, an individual who serves the union 
exclusively as a union steward or as a similar union representative, 
such as a member of a safety committee or a bargaining committee, is 
not considered to be an employee of the union.''
    Third, the Department proposes to remove the definition of ``labor 
organization'' (Part III, D10), which had been added to the 2007 rule 
in order to describe the reporting obligation of national, 
international and intermediate body officers under section 202 of the 
LMRDA. As explained earlier in the notice, the term ``labor 
organization'' is

[[Page 48433]]

separately defined in the LMRDA, and language regarding the scope of 
reporting for national, international, and intermediate union officers 
and employees has been added to the proposed instructions. The proposed 
text removes language that excepted employees of international, 
national, and intermediate unions from reporting about conflicts of 
interest involving subordinate affiliates of their union.
    The reasons for these changes are discussed in detail in section 
III, parts A and B, of this notice.
2. Particular Sections and Parts
    Section I, Why File: This section presents general information 
about the reporting requirements of section 202. This information is 
identical to that presented in the 2007 instructions, except that it 
has been simplified to refer to the individual completing the form as 
``you,'' instead of ``filer.''
    Section II, Who Must File: The 2007 instructions presented a 
lengthy Section II, Who Must File and What Must Be Reported (located on 
pages 1-9). The proposed instructions have divided this into two 
separate, concise sections, Section II, Who Must File and Section III, 
What Must Be Reported. The Department believes that this change will 
enable filers to more easily understand this basic information. This 
section states that ``(a)ny officer or employee of a labor organization 
(other than an employee performing clerical or custodial services 
exclusively), as defined by the LMRDA, must file Form LM-30 if, during 
the past fiscal year, the officer or employee, or his/her spouse, or 
minor child, either directly or indirectly, held any legal or equitable 
interest, received any payments, or engaged in any transactions 
(including loans) of the types described in these instructions.'' 
``Labor organization employee'' is defined as ``any individual (other 
than an individual performing exclusively clerical or custodial 
services) employed by a labor organization within the meaning of any 
law of the United States relating to the employment of employees.'' It 
also provides: ``For purposes of the Form LM-30, an individual who 
serves the union exclusively as a union steward or as a similar union 
representative, such as a member of a safety committee or bargaining 
committee, is not considered to be an employee of the union.'' The term 
``minor child'' is also defined as someone younger than 21 years of 
age.
    The reporting exceptions for insubstantial payments and gifts, 
including attendance at widely attended gatherings, are unchanged from 
the 2007 instructions, but their discussion has been moved to Section 
X, Completing Form LM-30.
    Section III, What Must Be Reported: This proposed section simply 
refers filers to Parts A, B, and C of the instructions for information 
about financial transactions and interests that must be reported.
    Section IV, Who Must Sign the Report: This section specifies that 
the labor organization officer or employee is required to sign the 
completed Form LM-30.
    Section V, When to File: The information in this section is 
substantively identical to the information in Section IV, When to File 
in the 2007 instructions.
    Section VI, How to File: The proposal provides for submission of 
the For LM-30 in paper format or electronically. Filers will be able to 
choose between the two options. Proposed Section VI provides 
information regarding these filing options, including how to obtain the 
form, and instructions on submitting it, from the OLMS Web site.
    The Department plans significant improvements to electronic 
submission processes that will simplify the electronic signature 
procedure and eliminate the associated costs to filers. Specifically, 
the Department will implement a simplified electronic signature that 
only requires the filer to acquire a Personal Identification Number 
(PIN) and password, which the Department will provide at no cost to the 
filer. The Department believes that electronic reporting is, generally, 
easier for filers, and that it will enable the Department to better 
incorporate submitted forms into its Electronic Labor Organization 
Reporting System (e.LORS), ensuring easy access to information for the 
public.
    Section VII, Public Disclosure: With the exception of a slight 
change in wording, this section is unchanged from the Public Disclosure 
section in the 2007 instructions.
    Section VIII, Officer and Employee Responsibilities and Penalties: 
With the exception of a slight change in wording in the first sentence 
(changed ``required to file'' to ``required to sign''), this section of 
the proposed instructions is identical to the information in the 
Section VII, Officer or Employee Responsibilities and Penalties in the 
2007 instructions.
    Section IX, Recordkeeping: This section contains information 
identical to that in the Recordkeeping section of the 2007 
instructions.
    Section X, Completing Form LM-30: This section presents detailed 
instructions on completing all of the information items in the Form LM-
30. The Department believes that the placement of this section on page 
3 of the proposed instructions represents a significant improvement 
over the 2007 instructions, which does not begin to instruct filers on 
completing the form until page 14.
    This section begins with an introduction that includes information 
on electronic completion of the form. The 2007 instructions did not 
provide this information. The Department believes that most filers will 
submit the form electronically, which justifies instructions geared 
towards this method. Additionally, the Department will provide 
compliance assistance support for both paper format and electronic 
filing.
    This section provides information on completing Information Items 1 
through 5, which gather basic identifying information about the filer 
and his or her labor organization. With the exception of minor changes 
in wording, these ``basic identifying'' information items are the same 
as in the 2007 instructions.
    Next, the proposed instructions feature the heading, ``Information 
Items--Parts A, B, and C.'' The proposed form features the simpler 
``Parts A through C'' approach, as opposed to the multiple-schedule 
format introduced in the 2007 form, the proposed instructions differ 
from the 2007 instructions, especially in format, but also in content.
    First, the subsection ``General Instructions for Reportable 
Transactions and Interests'' begins with: ``You must report only if, 
during the past fiscal year he/she, or his/her spouse or minor child, 
directly or indirectly: (1) Held an interest; (2) engaged in a 
transaction; or (3) received income, payment or other economic benefit 
with monetary value covered by the Act.''
    Next, the instructions provide information on the scope of filing 
for national, international, and intermediate union officers and 
employees, which (as explained above in section III, part E, of this 
notice) operates to require union employees, to report the same top-
down information now required of union officers. This change is 
discussed in greater detail in section III, part E, of this notice.
    The definition of ``directly or indirectly'' is presented directly 
below this introductory language. This definition, including its two 
examples, is unchanged from the 2007 rule.
    The proposed subsection, General Exclusions, describes the general 
reporting exemptions, ``insubstantial payments and gifts'' and 
``widely-attended gatherings,'' both of which are

[[Page 48434]]

unchanged from the 2007 rule. Next, the definition for ``trust in which 
a labor organization is interested'' is provided. This definition is 
unchanged from the 2007 rule.
    Filers are also instructed to complete a separate Part A, B, and/or 
C if they are reporting more than one entity or transaction. The 
instructions explain that additional Parts A, B, and C are available by 
clicking the Continuation Button on the electronic form or attaching a 
separate Part A, B, or C, if using a paper format.
Part A (Items 6 and 7): Represented Employer
    The proposed instructions for Part A present information on how to 
complete Items 6 and 7, which pertain to the Represented Employer. 
Specifically, the instructions state: ``Complete Part A if you (1) held 
an interest in, (2) engaged in transactions (including loans) or 
arrangements with, or (3) derived income or other economic benefit of 
monetary value from, an employer whose employees your labor 
organization represents or is actively seeking to represent.'' The 
instructions state that payments received as ``director's fees'' must 
be reported. This requirement was contained in the 2007 instructions.
    Next, the definition for ``actively seeking to represent'' is 
provided. This definition is unchanged from the 2007 rule.
    The subsection Part A Exclusions lists items that do not need to be 
reported in Part A. The first three exclusions--(i), (ii), and (iii)--
are substantively unchanged from the 2007 instructions These relate, 
respectively, to de minimis payments or other financial benefits; 
holdings, transactions and income from bona fide investments in 
securities traded on a national securities exchange and other 
designated securities; and holdings--of $1,000 or less--or income of 
$1,000 or less--from bona fide investments in other securities. The 
fourth exclusion, ``Payments and benefits received as a bona fide 
employee,'' emphasis added, has been modified to incorporate the 
historical interpretation given payments received by union officials 
under union leave and ``no docking'' policies established by collective 
bargaining agreements or workplace custom or practice.
    Since the first Part A Exclusion refers to ``bona fide 
investments,'' this term is defined in this section. The definition for 
``bona fide investment'' is unchanged from the 2007 rule.
    The instructions here advise that filers should not report on the 
form bank account numbers, policy numbers, social security numbers, or 
similar information.
    In the proposed instructions, the following definitions are 
presented in connection with Information Item 7: ``arrangement,'' 
``benefit with monetary value,'' ``income,'' and ``legal or equitable 
interest.'' All of these definitions are unchanged from the 2007 rule. 
The note to item 7 has been revised to eliminate an example which does 
not appear helpful. Additionally, specific instructions are provided on 
how to complete Items 6 and 7, which are described in the above 
subsection, Proposed Form.
Part B (Items 8-12): Business
    In the proposed instructions, the filer is instructed:

    Complete Part B if you held an interest in or derived income or 
other benefit with monetary value, including reimbursed expenses, 
from a business (1) a substantial part of which consists of buying 
from, selling or leasing to, or otherwise dealing with the business 
of an employer whose employees your labor organization represents or 
is actively seeking to represent, or (2) any part of which consists 
of buying from or selling or leasing directly or indirectly to, or 
otherwise dealing with your labor organization or with a trust in 
which your labor organization is interested. Report payments 
received as director's fees, including reimbursed expenses. Complete 
a separate Part B for each such business and for each such interest 
or item of income connected with that business.

    Definitions for ``substantial part'' and ``dealing'' are provided. 
These definitions are unchanged from the 2007 rule.
    The subsection Part B Exclusions lists items that do not need to be 
reported in Part B. Two of the Part B exclusions are retained from the 
2007 rule (relating to holdings, transactions and income from bona fide 
investments in securities traded on a national securities exchange and 
other designated securities; and holdings--of $1,000 or less--or income 
of $1,000 or less--from bona fide investments in other securities). 
These two Part B exclusions are the same as the exclusions set forth in 
(i) and (ii) in Part A. However, the proposed rule proposes to provide 
an exception regarding market place transactions from bona fide credit 
institutions, as explained in greater detail in section III, part C, of 
this notice.
    The Department also proposes to exempt union officials from 
reporting certain interests in or payments received from businesses, 
``a substantial part of which * * * deals with the business of an 
employer whose employees the labor organization represents or is 
actively seeking to represent,'' section 202(a)(3), or ``from a 
business * * * dealing with [the official's] labor organization,'' 
section 202(a)(4). Specifically, the proposed instructions read:

    Bona fide loans. Do not report bona fide loans, including 
mortgages, received from national or State banks, credit unions, 
savings or loan associations, insurance companies, or other bona 
fide credit institutions, if the loans are based upon the credit 
institution's own criteria and made on terms unrelated to the 
official's status in the labor organization. Additionally, do not 
report other marketplace transactions with such bona fide credit 
institutions, such as credit card transactions (including unpaid 
balances) and interest and dividends paid on savings accounts, 
checking accounts or certificates of deposit if the payments and 
transactions are based upon the credit institution's own criteria 
and are made on terms unrelated to the official's status in the 
labor organization.

    Additionally, specific instructions are provided on how to complete 
Items 8 through 12, which are described in the above subsection, 
Proposed Form.
Part C (Items 13 and 14): Other Employer or Labor Relations Consultant
    In the proposed instructions, the filer is instructed:

    Complete Part C if you, your spouse, or your minor child 
received, directly or indirectly, any payment of money or other 
thing of value (including reimbursed expenses), from any employer 
(other than a Represented Employer under Part A or Business covered 
under Part B above), from whom a payment would create an actual or 
potential conflict between your financial interests and the interest 
of your labor organization or your duties to your labor 
organization. Such employers include, but are not limited to, an 
employer in competition with an employer whose employee's your labor 
organization represents or whose employees your union is actively 
seeking to represent, if you are involved with the organizing, 
collective bargaining, or contract administration or is actively 
engaged in the organizing activities related to a particular 
represented employer or possesses significant authority or influence 
over such activities. You are deemed to have such authority and 
influence if you possess authority by virtue of your position, even 
if you did not become involved in these activities. Additionally, 
complete Part C if you received a payment of money or other thing of 
value from a labor relations consultant to a Represented Employer or 
Part C employer.

    The italicized portion represents a change from the 2007 
instructions, as explained in section III, part D, of this notice. The 
Department removed ``labor organizations'' and ``trusts in which your 
labor organization is interested'' from the scope of section 202(a)(6) 
and Part C, as explained in section III, part D, of this notice.

[[Page 48435]]

    The subsection Part C Exclusions lists items that do not need to be 
reported in Part C. The first administrative exemption in Part C--
relating to payments of the kind referred to in section 302(c) of the 
Labor Management Relations Act, 1947, as Amended (LMRA)--remains 
substantially the same as that in the 2007 instructions; the only 
change is that LMRA section 302(c) is not quoted in the instructions 
(instead, the reader is directed to a later part of the instructions 
where this section is set forth in full).
    The second administrative exemption in Part C--relating to bona 
fide loans interests or dividends from a bona fide credit institution--
is modified slightly from the 2007 rule; specifically, the following 
sentence, present in the 2007 instructions, is not included in the 
proposed instructions: ``This exception does not apply to national or 
State banks, credit unions, savings or loan associations, insurance 
companies, or other bona fide credit institutions that constitute a 
`trust in which your labor organization is interested.' '' Accordingly, 
the proposed rule excepts from reporting under Part C:

    (ii) Bona fide loans (including mortgages), interest or 
dividends from national or State banks, credit unions, savings or 
loan associations, insurance companies, or other bona fide credit 
institutions, if such loans, interest or dividends are based upon 
the credit institution's own criteria and made on terms unrelated to 
your status in a labor organization. Additionally, do not report 
other marketplace transactions with such bona fide credit 
institutions, such as credit card transactions (including unpaid 
balances) and interest and dividends paid on savings accounts, 
checking accounts or certificates of deposit if the payments and 
transactions are based upon the credit institution's own criteria 
and are made on terms unrelated to your status in the labor 
organization.

    The third administrative exemption in Part C returns to the 
Department's historical interpretation, exempting:

    (iii) Interest on bonds or dividends on stock, provided such 
interest or dividends are received, and such bonds or stock have 
been acquired, under circumstances and terms unrelated to your 
status in a labor organization and the issuer of such securities is 
not an enterprise in competition with the employer whose employees 
your labor organization represents or actively seeks to represent.

    The Department believes that the 2007 rule did not adequately 
justify the removal of this exemption. Further, interest on bonds or 
dividends on stock are routine business transactions, which do not 
ordinarily raise conflict of interest questions. Their inclusion would 
increase the burden on union officials, without any apparent benefit to 
the public. Indeed, the reporting of non-conflict of interest payments 
could hide from scrutiny those payments that are in need of 
transparency. Finally, in order to ensure that actual or potential 
conflict of interest payments are reported, the Department has provided 
two qualifications on this exemption: the payments must be received 
under circumstances and terms unrelated to the recipient's status in a 
labor organization and the issuer of such securities is not an 
enterprise in competition with the represented employer.
    Additionally, specific instructions are provided on how to complete 
Items 13 and 14, which are described in the above subsection, Proposed 
Form.
    The Department has also retained the section 202(a)(6) requirements 
that an official report:

     Any payment of money or other thing of value from a 
labor relations consultant to a Part C employer;
     Payments from an employer that is a not-for-profit 
organization that receives or is actively and directly soliciting 
(other than by mass mail, telephone bank, or mass media) money, 
donations, or contributions, from the official's union; and
     Any payments from an employer (not covered by Parts A 
or B), or from any labor relations consultant to an employer, for 
the following purposes:
    (1) Not to organize employees;
    (2) To influence employees in any way with respect to their 
rights to organize;
    (3) To take any action with respect to the status of employees 
or others as members of a labor organization;
    (4) To take any action with respect to bargaining or dealing 
with employers whose employees your organization represents or seeks 
to represent; and
    (5) To influence the outcome of an internal union election.

    See 72 FR at 36128, 36130, 36173.
Remainder of Instructions
    The instruction for Item 15, Signature and Verification, states 
that the completed Form LM-30 must be signed by the officer or employee 
and that forms submitted electronically must use digital signatures. 
The instructions indicate that the filer must enter the telephone 
number used by the filer to conduct official business, and note that 
the filer does not need to report a private, unlisted telephone number.
    The proposed instructions then feature: ``Selected Definitions from 
the Labor-Management Reporting and Disclosure Act of 1959, as Amended 
(LMRDA)'' [LMRDA section 3]; ``Related Provisions of the Labor-
Management Reporting and Disclosure Act of 1959, as Amended (LMRDA)--
Report of Officers and Employees of Labor Organizations'' [LMRDA 
section 202]; Section 302(c) of the Labor Management Relations Act, 
1947, as Amended [Sec. 8(c) of the National Labor Relations Act, as 
Amended]; and an ``If You Need Assistance'' section, which includes a 
list of OLMS field offices and explains the information available on 
the OLMS Web site. This information is only slightly changed from the 
2007 instructions.

V. Regulatory Procedures

Executive Order 12866

    This proposed rule has been drafted and reviewed in accordance with 
Executive Order 12866, section 1(b), Principles of Regulation. This 
rule is a ``significant regulatory action'' under Executive Order 
12866, section 3(f), Regulatory Planning and Review. It is not 
``economically significant'' as defined in section 3(f)(1) of Executive 
Order 12866. Specifically, in the Paperwork Reduction Act (PRA) 
analysis below, the Department estimates that the proposed rule will 
result in a total burden on labor union officers and employees of 
$138,621, which is significantly less than the $100,000,000 threshold 
that triggers an economic analysis.

Unfunded Mandates Reform

    This proposed rule will not include any Federal mandate that may 
result in increased expenditures by State, local, and Tribal 
governments, in the aggregate, of $100 million or more, or in increased 
expenditures by the private sector of $100 million or more.

Small Business Regulatory Enforcement Fairness Act of 1996

    This proposed rule is not a major rule as defined by section 804 of 
the Small Business Regulatory Enforcement Fairness Act of 1996. This 
rule will not result in an annual effect on the economy of $100,000,000 
or more; a major increase in costs or prices; or significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or on the ability of the United States-based companies to 
compete with foreign-based companies in domestic and export markets.

Executive Order 13132 (Federalism)

    The Department has reviewed this proposed rule in accordance with 
Executive Order 13132 regarding federalism and has determined that the 
proposed rule does not have federalism implications. Because the 
economic effects under the rule will not be substantial for the reasons 
noted above and because the rule has no direct effect

[[Page 48436]]

on States or their relationship to the Federal government, the rule 
does not have ``substantial direct effects on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.''

Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, requires 
agencies to prepare regulatory flexibility analyses, and to develop 
alternatives wherever possible, in drafting regulations that will have 
a significant impact on a substantial number of small entities, 
including ``small businesses,'' ``small organizations,'' and ``small 
governmental jurisdictions.'' Today's proposed rule revises the 
reporting obligations of union officers and employees, who, as 
individuals, do not constitute small business entities. Accordingly, 
the final rule will not have a significant economic impact on a 
substantial number of small business entities. Therefore, under the 
Regulatory Flexibility Act, 5 U.S.C. 605(b), a regulatory flexibility 
analysis is not required.

Paperwork Reduction Act

    This statement is prepared in accordance with the Paperwork 
Reduction Act of 1995 (PRA), 44 U.S.C. 3501. As part of its continuing 
effort to reduce paperwork and respondent burden, the Department 
conducts a preclearance consultation program to provide the general 
public and Federal agencies with an opportunity to comment on proposed, 
continuing, and revised collections of information in accordance with 
the Paperwork PRA (44 U.S.C. 3506(c)(2)(A)). This helps to ensure that 
the public understands the Department's collection instructions; 
respondents can provide the requested data in the desired format, 
reporting burden (time and financial resources) is minimized, 
collection instruments are clearly understood, and the Department can 
properly assess the impact of collection requirements on respondents.

A. Summary of the Proposed Rule: Need and Economic Impact

    The following is a summary of the need for and objectives of the 
proposed rule. A more complete discussion of various aspects of the 
proposal is found in the notice.
    The Labor-Management Reporting and Disclosure Act (LMRDA or Act) 
was enacted to protect the rights and interests of employees, labor 
organizations and the public generally as they relate to the activities 
of labor organizations, employers, labor relations consultants, and 
labor organization officers, employees, and representatives. Provisions 
of the LMRDA include financial reporting and disclosure requirements 
for labor organizations and others as set forth in Title II of the Act. 
See 29 U.S.C. 431-36, 441. The Department has developed several forms 
to implement the union annual reporting requirements of the LMRDA. 
Under section 202 of the Act, 29 U.S.C. 432, union officers and 
employees are required to file reports if they, or their spouses or 
minor children, engage in certain transactions or have financial 
holdings that may constitute a conflict of interest. The Department has 
developed the Form LM-30, Labor Organization Officer and Employee 
Report, to implement section 202.
    This proposed rule modifies the financial disclosure report that 
section 202 requires to be filed by labor organization officers and 
employees. The revised paperwork requirements are necessary, because 
the proposed rule reduces the burden associated with completing the 
form. As discussed above, the form, as proposed, has been simplified 
and will no longer have to be filed by certain individuals, notably 
stewards, and certain interests and transactions, including most bona 
fide loans, will not have to be reported. The proposed rule also 
signals the Department's efforts to achieve the goals of greater 
transparency and disclosure, while mitigating burden on labor 
organization officers and employees by eliminating reporting on matters 
without demonstrated utility.
    The proposed Form LM-30 will provide transparency of the financial 
practices of union officers and employees, which the Act requires to be 
public information. These reports will allow union members to view the 
information needed by them to monitor their union's affairs and to make 
informed choices about the leadership of their union and its direction. 
Accurate disclosure and increased transparency promote the unions' own 
interests as democratic institutions and the interests of the public 
and the government. Financial disclosure deters fraud and self-dealing, 
and facilitates the discovery of such misconduct when it does occur.
    The proposed financial disclosure form will promote increased 
compliance with the statute by clarifying the form and instructions, 
organizing the information in a more useful format, and modifying it to 
better meet the requirements of the LMRDA and the Department's policy 
judgments consistent with its discretion under the Act.
    Published at the end of this notice are the proposed Form LM-30 and 
instructions. Electronic versions of the pre-2007 and 2007 Form LM-30s 
and instructions are available for download from the Department's Web 
site at http://www.olms.dol.gov. The proposed Form LM-30 and 
instructions also will be made available via the Internet. The 
information collection requirements contained in this Notice of 
Proposed Rulemaking have been submitted to OMB for approval.

B. Overview of the Proposed Form LM-30 and Its Instructions

    The proposed Form LM-30 largely returns to the format of the pre-
2007 Form, which has two pages and four parts: (1) An introductory 
section (Items 1-5); (2) Part A; (3) Part B; and (4) Part C. The layout 
of the forms (pre-2007 and proposed) are largely identical, with 
several minor changes, the most important of which are highlighted 
below. One modification relates to the introductory section (Items 1-5) 
and the descriptions of Part A, B, and C, which were made more user-
friendly by the use of descriptions that paraphrase the statutory 
language rather than repeating it verbatim. (All of the changes 
described below are addressed in greater detail in previous sections in 
this notice.)
    Items 1-5 require reporting of basic information, including the 
filer's LM number and fiscal year, an indication of whether or not the 
form is amended, as well as contact information for the filer and 
union, the latter of which will have a continuation page for a filer 
with an affiliation with more than one union.
    Part A (Items 6, 7a, and 7b) requires reporting of the interest, 
income, benefit, transaction or arrangement from an employer whose 
employees the filer's labor organization represents or is actively 
seeking to represent. Item 6 requires reporting of the contact 
information for such an employer.
    Part B comprises Items 8, 9, 10, 11a, 11b, 12a, and 12b, which 
requires reporting of income and other benefits derived from a business 
that deals in substantial part with an employer described in Part B, 
the filer's union, or a trust in which the filer's union is interested. 
Item 8 requires reporting of the contact information for such business, 
and Items 9-11 require the filer to identify the entity with which such 
business deals, and the nature and value of the dealings. In Item 12, 
the filer is to report the nature and value of the income or other 
benefit derived from such business.

[[Page 48437]]

    Part C comprises Items 13a, 13b, 14a, and 14b, and requires 
reporting of payments from an employer (other than one required to be 
included in the Part A or B report) from whom a payment would 
constitute a conflict between the filer's financial interest and the 
interests of his or her labor organization or duties to such 
organization. It also requires reporting of payments from a labor 
relations consultant to a represented employer or a Part C employer. 
Item 13 requires reporting of the contact information for such employer 
or labor relations consultant, and in Item 14 the filer is to detail 
the nature and amount or value of the payment(s) from the employer or 
labor relations consultant.
    Item 15 captures the signature and verification information for the 
form. The filer must sign the form, include date and telephone number, 
and verify its authenticity.
    The instructions to the proposed Form LM-30 are a hybrid between 
the pre-2007 and 2007 versions. Several changes are proposed to make 
them more user-friendly. Like the pre-2007 form, the instructions 
consist of ten sections, with the first nine consisting of: Section I, 
Why File; Section II, Who Must File; Section III, What Must be 
Reported; Section IV, Who Must Sign the Report; Section V, When to 
File; Section VI, How to File; Section VII, Public Disclosure; Section 
VIII, Officer and Employee Responsibilities; and Section IX, 
Recordkeeping. Section X, Completing Form LM-30, provides most of the 
information assisting filers on how to complete each item in the form, 
and what data must be included in each part.
    As a general matter, the definitions in the 2007 instructions were 
largely retained, although they were distributed to the appropriate 
section of the proposed instructions. The definition of ``labor 
organization employee'' has been retained; however, the addition of a 
note exempts from the reporting requirements those individuals who 
serve as stewards or as representatives of the union in similar 
positions. Additionally, the Department proposes to remove the 
regulatory definition of ``labor organization'' as confusing and 
unnecessary in light of other changes and proposes the inclusion of 
language to clarify the top-down reporting obligation of national, 
intermediate, and intermediate body officials. The examples from the 
2007 version were not retained, as the Department believes they added 
unnecessary length and complexity to the form without providing 
practical assistance to most filers.
    The instructions also include an excerpt of statutory sections, 
including section 3 of the LMRDA, which includes definitions of the key 
terms used in the Act, section 202 of the LMRDA, and section 302 of the 
Labor Management Relations Act.
    Further description of the proposed Form LM-30 and instructions can 
be found in section IV (Proposed Revisions to the Regulations, Form, 
and Instructions) of this notice.

C. Methodology for the Burden Estimates

    The Department first estimated the number of Form LM-30 filers that 
will submit the revised form. Then, it proposed the estimated number of 
minutes that each filer will need to meet the reporting and 
recordkeeping burden imposed by the proposed form, as well as the total 
burden hours. The Department then estimated the cost to each filer for 
meeting those burden hours, as well as the total cost to filers. The 
Department has also estimated the Federal costs associated with the 
proposed rule. Please note that some of the burden numbers included in 
this PRA analysis will not add perfectly due to rounding.
1. Number of Proposed Form LM-30 Filers
    The Department estimates that 1,932 union officers and employees 
will submit the proposed Form LM-30. This figure represents the total 
pre-2007 and 2007 Form LM-30 reports submitted during Fiscal Year (FY) 
2009. (In FY 2009 the Department established an enforcement policy that 
enabled union officers and employees to use either the pre-2007 form or 
the more complex 2007 version in satisfying their reporting obligation 
under section 202 of the LMRDA.)
2. Hours To Complete and File Proposed Form LM-30: Reporting and 
Recordkeeping
    The Department has estimated the number of minutes that each Form 
LM-30 filer will need for completing and filing the proposed form 
(reporting burden), as well as the minutes needed to track and maintain 
records necessary to complete the form (recordkeeping burden). The 
estimates are included in Table 1, which describes the information 
sought by the proposed form and instructions, where on each form the 
particular information is to be reported, if applicable, and the amount 
of time estimated for completion of each item of information. The 
proposed reporting regime more closely resembles the pre-2007 Form LM-
30, in both form and content, than the 2007 form.
    In proposing these estimates, the Department is aware that not all 
union officers and employees will be required to file the Form LM-30, 
as well as the fact that not all of those who file will need to 
complete each Part of the form. However, for purposes of assessing an 
average burden per filer, the Department assumes that the average filer 
serves as an officer or employee for one labor organization, and that 
the filer receives reportable payments or interests for a single entity 
on Parts A, B, and C, respectively.
    Additionally, the below estimates are for all filers, including 
first-time filers and subsequent filers. While the Department 
considered separately estimating burdens for first-time and subsequent 
filers, the nature of Form LM-30 reporting militates against such a 
decision. Union officers may serve for relatively short periods of time 
and reportable transactions may not go on into subsequent years for a 
variety of reasons. Where the Department has reduced burden estimates 
for subsequent year filings, it generally did so with regard to annual 
reports, specifically labor organization annual reports, Forms LM-2, 
LM-3, and LM-4. In contrast, the Form LM-30 is only required for union 
officers and employees in years that they engage in reportable 
transactions. Further, these officials do not have the same benefit of 
the ``institutional memory,'' particularly those officials only 
recently elected or hired. See 72 FR at 36157, n. 4. As such, the 
burden estimates assume that the union officer or employee has never 
before filed a Form LM-30.
    Recordkeeping Burden. The recordkeeping estimate of 15 minutes per 
filer represents a 5-minute change from the 20-minute estimate for the 
2007 Form LM-30. 72 FR at 36157. This estimate reflects new exemptions 
to reporting of union leave and ``no docking'' payments, and mortgages 
and other loans, as well as the decision to eliminate reporting from 
trusts and unions under section 202(a)(6), which reduces the complexity 
of the recordkeeping requirements. Additionally, most of the financial 
books and records needed to complete the form are maintained in the 
filer's normal course of business, both union and personal. Finally, 
the 15 minutes accounts for the 5-year retention period required by 
statute. See section 206, 29 U.S.C. 436.
    Reporting Burden. The reporting burden of 75 minutes addressed in 
Table 1 reflects the time required to read the Form LM-30 instructions 
to

[[Page 48438]]

discover whether or not a report is owed and determine the correct 
manner to report the necessary information. The Department estimates 
that the average filer will need 30 minutes to read the instructions, 
which is substantially less than the 55 minutes estimated in the 2007 
Form LM-30. 72 FR at 36157.\13\ This reduction is due in part to the 
reduced scope of required reporting. In particular, the Department 
proposes to eliminate the requirement to report union leave and ``no 
docking'' payments, bona fide loans, and payments from trusts and 
unions pursuant to section 202(a)(6). Further, the creation of a more 
concise and consolidated form and instructions, with definitions and 
other explanations placed in a more readily accessible format, will 
enable filers to more quickly ascertain the necessary reporting 
requirements.
---------------------------------------------------------------------------

    \13\ Additionally, the Department estimates that those union 
officers and employees who are not required to file will spend ten 
minutes reading the instructions. This burden is not included in the 
total reporting burden, since these officials do not file and are 
thus not respondents.
---------------------------------------------------------------------------

    The Department believes that the simple data entry required by 
Items 1-3 will only require 30 seconds each. The Department believes 
that a filer will be able to enter his or her own contact information 
in only two minutes, in Item 4. Generally, filers will only need three 
minutes to enter contact information, such as for their labor 
organization in Item 5, as well as the contact information for the 
trust or employer with which the business deals, in Item 10. The 
Department believes, however, that filers will need five minutes, 
respectively, to enter the contact information for the represented 
employer in Item 6, the business that deals with a labor organization, 
trust, or employer in Item 8, and the ``other employer'' or labor 
relations consultant in Item 13. The Department believes that filers 
will need one minute to complete Item 9, which asks filers to indicate 
whether the business identified deals with a labor organization, trust, 
or employer.
    Additionally, the Department estimates that filers will need 3 
minutes to enter the financial data required in Items 7, 12, and 14, 
and 3.5 minutes to report the nature and value of the dealings in Item 
11. Finally, the Department estimates that a filer will utilize five 
minutes to check responses and review the completed report, and will 
require two minutes to sign and verify the report in Item 15. The 
Department will introduce in calendar year 2010 a cost-free and simple 
electronic filing and signing protocol. For this reason, the burden 
estimate remains constant whether the form is electronically signed, or 
signed by hand.
    As a result, the Department estimates that a filer of the proposed 
revised Form LM-30 will incur 90 minutes in reporting and recordkeeping 
burden to file a complete form. This compares with the 2007 estimate of 
120 minutes per filer.

        Table 1--Reporting and Recordkeeping Burden (In Minutes)
------------------------------------------------------------------------
                                    Section of        Recurring burden
       Burden description          proposed form           hours
------------------------------------------------------------------------
Maintaining and gathering        Recordkeeping     15 minutes.
 records.                         Burden.
Reading of the instructions to   Reporting Burden  30 minutes.
 determine applicability of the
 form and how to complete it.
Reporting LM-30 file number....  Item 1..........  30 seconds.
Reporting covered fiscal year..  Item 2..........  30 seconds.
Identifying if report is         Item 3..........  30 seconds.
 amended.
Reporting filer's contact        Item 4..........  2 minutes.
 information.
Reporting labor organization     Item 5..........  3 minutes.
 contact information.
Part A: Reporting name and       Item 6..........  5 minutes.
 contact information for
 employer in Part A of form.
Part A: Reporting the nature of  Items 7a and 7b.  3 minutes.
 the interest, transaction,
 arrangement, benefit, or
 income, as well as the amount,
 received from the employer
 identified in Part A.
Part B: Reporting contact        Item 8..........  5 minutes.
 information for business.
Part B: Identifying if the       Item 9..........  1 minute.
 business deals with a labor
 organization, trust, or
 employer.
Part B: Reporting the contact    Item 10.........  3 minutes.
 information for the trust or
 employer with which the
 business deals.
Part B: Reporting the nature     Items 11a and     3\1/2\ minutes.
 and value of the dealings        11b.
 between the business and
 employer, union, or trust.
Part B: Reporting the nature     Items 12a and     3 minutes.
 and amount of interest held or   12b.
 income received from the
 business.
Part C: Reporting the contact    Items 13a and     5 minutes.
 information for the employer     13b.
 or labor relations consultant,
 and identifying the entity as
 an employer or labor relations
 consultant.
Part C: Reporting the nature     Items 14a and     3 minutes.
 and amount of payment from the   14b.
 employer or labor relations
 consultant.
Checking responses.............  N/A.............  5 minutes.
Signature and verification.....  Item 15.........  2 minutes.
Total Recordkeeping Burden Hour  ................  15 minutes.
 Estimate per File.
Total Reporting Burden Hour      ................  75 minutes.
 Estimate per File.
Total Burden Hour Estimate per   ................  90 minutes.
 Filer.
------------------------------------------------------------------------

    Total Reporting and Recordkeeping Burden. As stated, the Department 
estimates that there are 1,932 union officers and employees that will 
be annually filing the Form LM-30. Thus, the estimated recordkeeping 
burden for all filers is 28,980 minutes (15 x 1,932 = 28,980 minutes) 
or 483 hours (28,980/60 = 483). The total estimated reporting burden 
for all filers is 144,900 minutes (75 x 1,932 = 144,900 minutes) or 
approximately 2,415 hours (144,900/60 = 2,415 hours). The total 
estimated burden for all filers is, therefore, 173,880 minutes or 
approximately 2,898 hours. See Table 2 below.

     Table 2--Total Reporting and Recordkeeping Burden for All 1,932
                            Estimated Filers
------------------------------------------------------------------------
                                                                 Hours
------------------------------------------------------------------------
Total Recordkeeping Burden...................................        483
Total Reporting Burden.......................................      2,415
Total Burden.................................................      2,898
------------------------------------------------------------------------


[[Page 48439]]

3. Calculation of Total Costs for Labor Organization Officers and 
Employees to Complete the Proposed Form LM-30
    The Department estimates the dollar cost to filers to complete the 
Form LM-30 by using fiscal year (FY) 2009 data derived from Form LM-2, 
Labor Organization Annual Reports, filed with the Department pursuant 
to section 201 of the LMRDA. The Form LM-2 is the annual financial 
disclosure report filed by the largest labor organizations, those with 
$250,000 or more in total annual receipts. The Department notes that 
many Form LM-30 reports are filed by lower level labor organization 
officers and employees, whose labor organizations file the less 
detailed Form LM-3 and Form LM-4 Labor Organization Annual Reports, and 
who are often part-time officials earning lower salaries than parent 
body labor organizations that file the more comprehensive Form LM-2. 
However, because only part-time annual salaries are reported by part-
time officers on the Form LM-3 (and individual salaries are not 
reported on the LM-4), but not the hours upon which those part-time 
annual salaries are based, it is impractical to calculate an average 
hourly wage for union officers from the Form LM-3, whereas we can 
assume that the annual salaries for officers of larger locals are 
primarily for full-time employees, which makes it possible to determine 
average hourly wages. Therefore, the Form LM-2 provides the Department 
with more comprehensive data by which to ascertain a reasonable 
estimate of union officer and employee salaries.
    The Department also assumes, as it did for burden estimates under 
the pre-2007 Form LM-30, that one-third of the forms will be filed by 
union presidents, secretary-treasurers, and international 
representatives (the last designation as a proxy for union employees), 
respectively. The Department derived the average hourly wage for each 
of these categories by utilizing data from FY 2009 Form LM-2 reports.
    With respect to the international representatives analysis, the 
salary data derived from the Department's Electronic Labor Organization 
Reporting System (e.LORS) included only international or national 
unions and only those employee titles and gross salary data from Form 
LM-2, Schedule 12 of those international/national unions that included 
words like ``national'' or ``international'' and ``representative. The 
next step was to eliminate blank salary entries (either nothing was 
listed in the Form LM-2 or a zero was listed). The inclusion of blank 
entries in the calculation of the average would impact the average 
calculation, and there are a variety of reasons why the salary can be 
blank or zero. Finally, the Department calculated the average hourly 
wage by dividing the average annual salary by 2080 hours (40 hours per 
week times 52 weeks per year). Next, the Department increased these 
figures by 43.0% to account for total compensation.\14\
---------------------------------------------------------------------------

    \14\ See Employer Costs for Employee Compensation Summary, from 
the Bureau of Labor Statistics (BLS), at http://www.bls.gov/
news.release/ecec.nr0.htm. The Department increased the average 
hourly wage rate for employees ($20.49 in 2008) by the percentage 
total of the average hourly compensation figure ($8.90 in 2008) over 
the average hourly wage.
---------------------------------------------------------------------------

    The methodology and assumptions are somewhat similar for the 
president and secretary-treasurers averages. Here, the Department had 
data from FY 2009 for all Form LM-2 filers with $800,000 or more in 
annual receipts. The $800,000 figure was selected because it represents 
roughly the average of all Form LM-2 filers, and we hypothesized that 
larger than average Form LM-2 filers are more likely to have presidents 
and secretary-treasurers who file Form LM-30.
    As a result, the Department estimates that union presidents earn an 
average hourly wage of $34.65 ($49.55 after adjusting by 43.00% for 
total compensation); union secretary-treasurers, $31.87 ($45.57 after 
adjusting by 43.00% for total compensation); and international 
representatives, $33.83 ($48.38 after adjusting by 43.00% for total 
compensation). The Department also estimated that each of these 
categories of union officials accounted for one-third of the Form LM-30 
reports submitted and thus one-third of the total burden hours (2,898 
hours divided by three equals 966). Therefore, the total cost was 
$138,621 (966 x $49.55 = $47,865.30; 966 x $45.57 = $44,020.62; and 966 
x $48.38 = $46,735.08). The estimated cost per filer is approximately 
$71.75 ($47,865.30 + $44,020.62 + $46,735.08 = $13,621; $13,621/1932 = 
$71.75).
    Finally, in its recent submission for revision of OMB 
1215-0188, which contains all LMRDA forms (except the pre-2007 
Form LM-30, which was approved under OMB 1215-0205), the 
Department estimates that its costs associated with the LMRDA forms are 
$2,710,726 for the OLMS national office and $3,779,778 for the OLMS 
field offices, for a total Federal cost of $6,490,504. Federal 
estimated costs include costs for contractors and operational expenses 
such as equipment, overhead, and printing as well as salaries and 
benefits for the OLMS staff in the National Office and field offices 
who are involved with reporting and disclosure activities. These 
estimates include time devoted to: (a) Receipt and processing of 
reports; (b) disclosing reports to the public; (c) obtaining delinquent 
reports; (d) reviewing reports, (e) obtaining amended reports if 
reports are determined to be deficient; and (f) providing compliance 
assistance training on recordkeeping and reporting requirements.
Request for Public Comment
    Currently, the Department is soliciting comments concerning the 
information collection request (``ICR'') for the information collection 
requirements included in this proposed regulation at section 403.2, 
Annual financial report, of title 29, Code of Federal Regulations, 
which, when implemented will revise the existing OMB control number 
1245-0002 (formerly, OMB Control Number 1215-0205). A copy of this ICR, 
with applicable supporting documentation; including among other things 
a description of the likely respondents, proposed frequency of 
response, and estimated total burden may be obtained from the 
RegInfo.gov Web site at http://www.reginfo.gov/public/do/PRAMain or by 
contacting Linda Watts-Thomas at (202) 693-4223 (this is not a toll-
free number)/e-mail: DOL_PRA_PUBLIC@dol.gov. Please note that 
comments submitted in response to this notice will be made a matter of 
public record.
    The Department hereby announces that it has submitted a copy of the 
proposed regulation to OMB in accordance with 44 U.S.C. 3507(d) for 
review of its information collections. The Department and OMB are 
particularly interested in comments that:
     Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
     Evaluate the accuracy of the agency's estimate of the 
burden of the collection of information, including the validity of the 
methodology and assumptions used;
     Enhance the quality, utility, and clarity of the 
information to be collected; and
     Minimize the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or

[[Page 48440]]

other forms of information technology, e.g., by permitting electronic 
submission of responses.
    Comments on the ICR should be sent to the Office of Information and 
Regulatory Affairs, Office of Management and Budget, Room 10235, New 
Executive Office Building, Washington, DC 20503; Attention: Desk 
Officer for the Office of Labor Management Standards. Comments on the 
ICR may be submitted by using the Federal Rulemaking Portal at http://
www.regulations.gov, or by e-mail to OIRA_submission@omb.eop.gov, or 
by fax to (202) 395-5806. Comments may also be submitted by mail. To 
ensure proper consideration, OMB requests that comments be received 
within 30 days of publication of the Notice of Proposed Rulemaking and 
that the OMB Control Number is referenced (see below). Please note that 
comments submitted to OMB are a matter of public record.
    Type of Review: Request for new information collection.
    Agency: Office of Labor-Management Standards.
    Title: Labor Organization Officer and Employee Report.
    OMB Control Number: 1245-0New.
    Affected Public: Private Sector: labor organization officers and 
employees.
    Estimated Number of Respondents: 1,932.
    Estimated Number of Annual Responses: 1,932.
    Frequency of Response: Annual.
    Estimated Total Annual Burden Hours: 2,898 hours.
    Estimated Total Annual Burden Cost: $138,621.
    Potential respondents are hereby duly notified that, 
notwithstanding any other provision of law, individuals are not 
required to respond to a collection of information or revision thereof 
unless approved by OMB under the PRA and it displays a currently valid 
OMB control number. 35 U.S.C. 3506(c)(1)(B)(iii)(V). In accordance with 
5 CFR 1320.11(k), the Department will publish a notice in the Federal 
Register informing the public of OMB's decision with respect to the ICR 
submitted thereto under the PRA.

List of Subjects in 29 CFR Part 404

    Labor union officers and employees; Reporting and recordkeeping 
requirements.

Text of Proposed Rule

    Accordingly, the Department proposes to amend part 404 of 29 CFR 
Chapter IV as set forth below:

PART 404--LABOR ORGANIZATION OFFICER AND EMPLOYEE REPORTS

    1. The authority citation for part 404 is revised to read as 
follows:

    Authority: Labor-Management Reporting and Disclosure Act Secs. 
202, 207, 208, 73 Stat. 525, 529 (29 U.S.C. 432, 437, 438); 
Secretary's Order No. 08-2009, Nov. 6, 2009, 74 FR 58835 (Nov. 13, 
2009).

    2. In Sec.  404.1, paragraph (f) is removed and paragraphs (g) 
through (j) are redesignated as (f) through (i), respectively.

    Signed in Washington, DC this 29th day of July, 2010.
John Lund,
Director, Office of Labor-Management Standards.

    Note: The following appendix will not appear in the Code of 
Federal Regulations.

VI. Appendix: Proposed Form and Instructions

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[FR Doc. 2010-19250 Filed 8-9-10; 8:45 am]
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