Labor Organization Annual Financial Reports: Coverage of Intermediate Bodies

 
CONTENT
Federal Register, Volume 84 Issue 242 (Tuesday, December 17, 2019)
[Federal Register Volume 84, Number 242 (Tuesday, December 17, 2019)]
[Proposed Rules]
[Pages 68842-68858]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-26699]
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DEPARTMENT OF LABOR
Office of Labor-Management Standards
29 CFR Part 401
RIN 1245-AA08
Labor Organization Annual Financial Reports: Coverage of
Intermediate Bodies
AGENCY: Office of Labor-Management Standards, Department of Labor.
ACTION: Proposed rule and request for comments.
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SUMMARY: The Department of Labor (Department) proposes to promulgate a
rule governing intermediate bodies that are wholly composed of public
sector organizations but are subordinate to national or international
labor organizations that are covered by the Labor-Management Reporting
and Disclosure Act of 1959 (LMRDA or Act). Under the proposed rule,
such intermediate bodies would now be covered by the LMRDA, and would
be required to file the Form LM-2 and Form LM-3 annual union financial
reports.
DATES: Submit written comments on or before February 18, 2020.
ADDRESSES: You may submit comments, identified by RIN 1245-AA08, only
by the following method: Electronic Comments: Submit comments through
the Federal eRulemaking Portal http://www.regulations.gov. To locate
the proposed rule, use key words such as ``Labor-Management Standards''
or ``Labor Organization Annual Financial Reports'' to search documents
accepting comments. Follow the instructions for submitting comments.
Please be advised that comments received will be posted without change
to http://www.regulations.gov, including any personal information
provided. All comments must be received by 11:59 p.m. on the date
indicated for consideration in this rulemaking.
FOR FURTHER INFORMATION CONTACT: Andrew Davis, Chief of the Division of
Interpretations and Standards, Office of Labor-Management Standards,
U.S. Department of Labor, 200 Constitution Avenue NW, Room N-5609,
Washington, DC 20210, (202) 693-0123 (this is not a toll-free number),
(800) 877-8339 (TTY/TDD).
SUPPLEMENTARY INFORMATION:
I. Statutory Authority
    The Department of Labor's statutory authority is set forth in
sections 201 and 208 of the LMRDA, 29 U.S.C. 431, 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 he may find
necessary to prevent the circumvention or evasion of the reporting
requirements. 29 U.S.C. 438. Section 201, discussed in more detail
below, sets out the substantive reporting obligations.
    The Secretary has delegated his authority under the LMRDA to the
Director of the Office of Labor-Management Standards and permitted
redelegation of such authority. See Secretary's Order 03-2012 (Oct. 19,
2012), published at 77 FR 69376 (Nov. 16, 2012).
II. Background
A. Introduction
    In October of 2003, the Department of Labor (Department) issued an
interpretation that required certain
[[Page 68843]]
intermediate labor bodies to file reports under the LMRDA. The
Department reversed this interpretation in December 2010. Because the
Department is of the opinion that it was correct in 2003 and incorrect
in 2010, the Department proposes to adopt the 2003 interpretation and
reject the 2010 interpretation.
    On December 27, 2002, the Department proposed revisions to Forms
LM-2, LM-3, and LM-4, which are used by labor organizations to file
annual financial reports required under Title II of the LMRDA with the
Department of Labor's Office of Labor-Management Standards (OLMS). 67
FR 79279 (Dec. 27, 2002). A portion of the proposed rule stated the
Department's intent to revise its interpretation of an aspect of the
definition of ``labor organization . . . deemed to be engaged in an
industry affecting commerce'' under the LMRDA.
    After receiving and considering comments, the Department published
a final rule on October 9, 2003. 68 FR 58374 (Oct. 9, 2003). The
interpretation in the final rule stated that intermediate bodies that
are subordinate to a national or international labor organization that
includes a covered labor organization will be covered by the LMRDA,
even if the intermediate body's constituents are solely public sector
local labor unions not covered by the Act. Before this final rule
issued, an intermediate body was subject to the LMRDA only if one or
more of its constituent local labor unions represented private sector
employees.
    Labor organizations affected by the new interpretation of the LMRDA
challenged the rule in federal district court. The court granted
summary judgment in favor of the labor unions. Alabama Education Ass'n
v. Chao, 2005 WL 736535 (D.D.C. Mar. 31, 2005). On appeal, the U.S.
Court of Appeals for the District of Columbia Circuit reversed the
grant of summary judgment. Alabama Education Ass'n v. Chao, 455 F.3d
386 (D.C. Cir. 2006). The court also concluded, however, that the
Department had failed to provide a ``reasoned analysis supporting its
change of position'' and remanded the rule to the Department to provide
such analysis. Id. at 396-397 (emphasis added).
    The Department issued a ``reasoned analysis'' supporting the change
on January 26, 2007. 72 FR 3735. The analysis in support of expanded
coverage rested on three rationales. First, the policy, it was
asserted, advanced the twin Congressional goals that labor
organizations' financial conditions and operations should be subject to
public disclosure to benefit employees who participate in those
organizations, and that the definition of ``labor organizations''
should be interpreted broadly to advance union democracy, financial
transparency, and integrity. Second, expanded coverage promoted
disclosure of financial disbursements and receipts to and from
structurally related labor organizations, thus enhancing members'
ability to trace their dues money and to identify any potential
financial irregularities. Third, the revised interpretation gave full
meaning to the statute, which focuses on covering intermediate bodies
precisely because they are subordinate to a covered national or
international labor organization, even though they may consist only of
unions that do not bargain with private sector employers.
    Labor organizations challenged the policy interpretation in U.S.
district court. Alabama Education Assn. v. Chao, 539 F. Supp. 2d 378
(D.D.C. 2008), clarified on denial of reconsideration, 595 F. Supp. 2d
93 (D.D.C. 2009). The Court upheld the Secretary's position, concluding
``[o]nce there is more than a single interpretation that is
permissible, the Secretary may select between or among them as long as
she provides a `reasoned explanation' for her choice.'' Id. at 384. The
court found it ``difficult to argue against the proposition--which is
the thrust and congressional purpose behind the statute--that if
detailed financial reports will keep leaders honest and help those they
lead to choose their leaders, the more the merrier.'' Id. The court
also deferred to the Department's position that the broader reporting
requirements allowed a private sector employee to trace his or her
dues, which could be redirected to a public sector intermediate body
after being disbursed by the covered national or international labor
organization, and that this furthered the policies underlying the Act.
The court stated that, ``[w]ith the deference that is due under
Chevron, this Court cannot say that the Secretary has failed to provide
a reasoned explanation for her change of statutory interpretation.''
Id. at 385. The court cited the Secretary's stated objective to further
the congressional goal of financial visibility and allow private sector
dues-paying members to trace dues up to the national union and then
down to the intermediate. The court also referred to the fact that:
``Without doubt, some of the monies the AFT and NEA collect come from
the dues of private sector employees. After that, both AFT and NEA can,
if either chooses, disburse some of that dues money to public sector
intermediate organizations.'' Id.
    In 2009, the Department engaged in notice-and-comment rulemaking to
return to its pre-2003 policy, which interpreted the Act to exclude,
rather than cover, intermediate labor organizations that contain no
local labor organization members representing employees in the private
sector. 75 FR 5456, 5462 (February 2, 2010).
    In support of its return to the pre-2003 interpretation, the
Department first concluded that the preferred interpretation of the
statute was one that comported with the LMRDA's primary regulatory
focus on labor organizations that represent employees in the private
sector. Id. Second, the Department concluded that the coverage of
wholly public sector intermediate bodies would produce little or no
incremental value to union members' understanding of the labor
organization that represents them at the local level. Third, the
Department determined that the pre-2003 interpretation comported with
the statutory language. See 75 FR 74946-47.
B. Statutory and Regulatory Background
    Congress enacted the LMRDA after an extensive investigation of
``the labor and management fields . . . [found] that there ha[d] 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. . . .'' 29 U.S.C.
401(b). Congress intended the Act to ``eliminate or prevent improper
practices'' in labor organizations, to protect the rights and interests
of employees, and to prevent union corruption. 29 U.S.C. 401(b), (c).
    As part of the statutory scheme designed to accomplish these goals,
the Act required labor organizations to file annual financial reports
with the Secretary of Labor. 29 U.S.C. 431(b). Congress sought full and
public disclosure of a labor organization's financial condition and
operations in order to curb embezzlement and other improper financial
activities by union officers and employees. See S. Rep. No. 86-187
(1959), reprinted in 1 NLRB, Legislative History of the Labor-
Management Reporting and Disclosure Act of 1959, at 398-99.
    Pursuant to the Act, labor organizations must file reports
containing information such as assets, liabilities, receipts, salaries,
loans to officers, employees, members or businesses and other
disbursements ``in such detail as may be necessary accurately to
disclose [their] financial condition and operations for [the] preceding
fiscal year.'' 29 U.S.C. 431(b).
[[Page 68844]]
Section 3(i) of the LMRDA, 29 U.S.C. 402(i), defines a ``labor
organization'' as (1) any organization ``engaged in an industry
affecting commerce . . . in which employees participate and which
exists for the purpose, in whole or in part, of dealing with employers
concerning grievances, labor disputes, wages, rates of pay, hours, or
other terms or conditions of employment,'' or (2) ``any conference,
general committee, joint or system board, or joint council so engaged
which is subordinate to a national or international labor organization
other than a State or local central body.'' \1\
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    \1\ A state or local central body differs from an ``intermediate
body'' in that a state or local central body is chartered by a
federation of national or international unions. An intermediate body
is subordinate to a single national or international union. A state
or local central body admits to membership subordinate bodies of
international unions that are affiliated with the chartering
federation within the state or local central body's territory. Its
functions also differ, in that a state or local central body exists
primarily to carry on educational, legislative, and coordinating
activities. See 29 CFR 451.5
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    The first clause of Section 3(i) applies to entities that exist, at
least in part, to deal with employers concerning terms and conditions
of employment. The second clause applies to conferences, general
committees, joint or system boards or joint councils--entities that are
known as ``intermediate'' labor organizations. See 29 CFR 451.4(f).
    The Act defines ``employer'' broadly, but excludes the United
States, States, and local governments. 29 U.S.C. 402(e). Thus, an
organization is not covered under the first clause of Section 3(i),
which requires that the organization deal with a statutory
``employer,'' if it deals only with federal, state or local
governments. However, an ``organization'' covered by the second clause
of the definition (a ``conference, general committee, [etc.]
subordinate to a national or international'') need not deal with
employers at all. 29 U.S.C. 402(i). Instead, such an intermediate labor
body is covered by the Act so long as it is subordinate to a covered
national or international labor organization and is ``engaged in an
industry affecting commerce.'' Id.
    Section 3(j) of the LMRDA, 29 U.S.C. 402(j), sets forth the
circumstances under which labor organizations will be ``deemed to be
engaged in an industry affecting commerce'' under the Act. In
particular, Section 3(j)(5) of the Act provides that: An intermediate
labor organization is deemed ``engaged in an industry affecting
commerce'' if it is: ``a conference, general committee, joint or system
board, or joint council, subordinate to a national or international
labor organization, which includes a labor organization engaged in an
industry affecting commerce within the meaning of any of the preceding
paragraphs of this subsection, other than a State or local central
body.'' 29 U.S.C. 402(j)(5).\2\
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    \2\ Section 3(j) of the LMRDA, 29 U.S.C. 402(j), contains four
other provisions, which also set forth the circumstances under which
labor organizations will be ``deemed to be engaged in an industry
affecting commerce'' under the Act: (1) If the intermediate labor
organization is the certified representative of employees under the
provisions of the National Labor Relations Act or the Railway Labor
Act; (2) If a national, international, or local labor organization
is recognized or acting as the representative of employees of an
employer engaged in an industry affecting commerce; (3) If the
organization has chartered a local labor organization which is
representing or actively seeking to represent employees of employers
within the meaning of (1) or (2); or (4) If the organization has
been chartered by a labor organization representing or actively
seeking to represent employees within the meaning of (1) or (2) as
the local or subordinate body through which such employees may enjoy
membership. 29 U.S.C. 402(j)(1)-(4).
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III. Proposed Regulatory Revision and Need for Rulemaking
    The Department proposes to revise its interpretation of Section
3(j)(5). The revised interpretation of the statute would expand the
coverage of intermediate labor bodies subject to the reporting
requirements of the LMRDA. Consistent with the interpretation of
Section 3(j)(5) that the Department adopted in 2003, the Department
proposes to clarify the definition of ``labor organization . . . deemed
to be engaged in an industry affecting commerce,'' by interpreting the
``which includes'' clause of this provision as modifying ``national or
international labor organization.'' \3\ Under this statutory
interpretation, intermediate labor bodies do not have to have private
sector members to be covered under the LMRDA; rather, they need only be
subordinate to a national or international labor organization that
includes a union that represents private sector workers. See Alabama
Education Ass'n v. Chao, 455 F.3d at 394-95 (``In our view, nothing in
Sec.  3, including the definition of `labor organization' in Sec.
3(i), forecloses the possibility that a body without private sector
members may be subject to the LMRDA if it is subordinate to or part of
a larger organization that does have private sector members.'');
Alabama Education Assn. v. Chao, 539 F. Supp. 2d at 384 (``Once there
is more than a single interpretation that is permissible, the Secretary
may select between or among them. . . .''). The Department invites
comment on all aspects of this analysis.
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    \3\ The conflicting approach would have the ``which includes''
clause modify ``a conference, general committee, joint or system
board, or joint council.''
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A. The Ninth Circuit
    The Department's pre-2003 (and current) interpretation of Section
3(j)(5) came into question following the decision in Chao v. Bremerton
Metal Trades Council, 294 F.3d 1114 (9th Cir. 2002). There, the Ninth
Circuit held that the Bremerton Metal Trades Council, a joint council,
met the LMRDA definition of ``labor organization'' because it was
subordinate to the Metal Trades Department, a national or international
labor organization engaged in an industry affecting commerce.
Bremerton, 294 F.3d at 1118. The court reasoned that ``[w]e must decide
not whether the Bremerton Council bargains directly with any private
employers but, instead, whether the Metal Trades Department, the
organization to which the Bremerton Council is subordinate, is engaged
in an industry affecting commerce.'' Id. at 1117. The court held
dispositive whether the union to which the intermediate body was
subordinate was engaged in an industry affecting commerce, rather than
the composition of the intermediate body itself.
    This holding conflicted with the Department's pre-2003, as well as
present, interpretation. Bremerton adopted an analysis under Section
3(j)(5) that looked not to the composition of the intermediate body
itself, but rather to whether the national or international labor union
to which it is subordinate is engaged in an industry affecting
commerce. The Department believes the Ninth Circuit's reading of the
statute is the superior one, and proposes to adopt that interpretation
here.
B. Changes in Public Sector Labor Organizing
    The increase in public sector unionization since Congress enacted
the 1959 LMRDA further supports the Department's proposed
interpretation. The Supreme Court in Janus v. American Federation of
State, County, and Municipal Employees, Council 31 overruled precedent
and ruled that state law requiring nonconsenting public sector
employees to pay collective bargaining fees violated the First
Amendment. 138 S. Ct. 2448, 2483 (2018). The Court in that case
considered changes in public sector unionization as relevant to its
constitutional analysis.
    Even by the late 1970s, public sector unionism was still considered
a relatively new branch of the American labor movement. Id. Collective
bargaining by state and local employees
[[Page 68845]]
with their government employer had not been authorized by any state
until 1959, when Wisconsin became the first to pass a law permitting
the practice. See id. Until the late 1960's and early 1970's, public-
sector union membership had been relatively low. Id.
    However, as the ``spurt'' in membership began in those decades, the
rise of public-sector unions was marked by a parallel increase in state
and local government spending. Id. In 1970, total public expenditures
amounted to about $4,000 per capita in 2014 dollars; by 2014, that
figure had inflated rapidly to more than double the original figure,
approximately $10,238 per capita. Id. While the court did not attribute
the increase entirely to public-sector unions, unionism amongst state
employees ``undoubtedly played a substantial role'' in the ballooning
costs of public-employee wages, benefits, and pensions. Id.
Essentially, the Janus Court considered changed circumstances for
public sector unions as a factor in determining the significance of
compelled speech in the context of agency fee payments.\4\
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    \4\ The Department is not suggesting a constitutional analysis
applies here. Rather, the reasoning of the court supports the policy
reasons for expanded scope of disclosure.
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    From the time the statute was enacted, OLMS' interpretation of the
statute excluded from LMRDA coverage intermediate bodies that
represented no private sector employees and that contained no local
unions that represented private sector employees. 75 FR 74936, 74944.
The LMRDA was enacted in 1959, at which time states seldom permitted
collective bargaining by government employees. Changed circumstances
among public sector unions counsel a change in the reporting regime.
The increased prevalence of public sector unions and their use of
substantial monies affecting matters of great public interest, like
state spending, require union financial reporting to the extent
permissible under the LMRDA. Private sector union members and the
public have an interest in how labor unions, including intermediate
bodies, spend their union member dues. And this interest is no less
great when the money is spent in ways that affect political activities,
state electoral outcomes, and state budgets. Extending LMRDA coverage
to intermediate bodies subordinate to covered international unions
brings transparency to these activities and serves the public interest
in disclosure and financial integrity.
C. Purpose of the LMRDA
    In enacting the LMRDA, Congress intended to ``eliminate or prevent
improper practices'' in labor organizations, protect the rights and
interests of workers, and prevent union corruption. 29 U.S.C. 401(b),
(c). To curb embezzlement and other improper financial activities of
labor organizations, Congress required labor organizations to file
detailed annual financial reports with the Secretary of Labor. 29
U.S.C. 431(b). Additionally, the reporting provisions of the LMRDA were
devised to implement the basic premise of the LMRDA--that the Act was
intended to safeguard democratic procedures within labor organizations
and protect the basic democratic rights of union members. By mandating
that labor organizations disclose their financial operations to
employees they represent, Congress intended to promote union self-
government, which would be advanced by union members receiving
sufficient information to permit them to take effective action in
regulating internal union affairs.
    In particular, Section 501(a) of the LMRDA imposes a fiduciary duty
on all union officers. Noble v. Dunn, 895 F.3d 807, 810 (D.C. Cir.
2018) (in which a union member brought action against the union,
alleging that officers breached their fiduciary duties under LMRDA). A
labor organization's officer, agents, shop steward, and other
representatives occupy positions of trust in relation to the labor
organization and its members as a group. 29 U.S.C. 501(a). It is,
therefore, the duty of each such person, taking into account the
special problems and functions of a labor organization, to hold its
money and property solely for the benefit of the organization and its
members. 29 U.S.C. 501(b); Guidry v. Sheet Metal Workers Nat. Pension
Fund, 493 U.S. 365, 374, (1990) (in which a union official convicted of
embezzling union funds brought action against union to recover
retirement benefits and the Court ruled that the LMRDA did not override
ERISA prohibition on pension benefit alienation). Section 501(b)
provides, under certain conditions, a private right of action ``to
recover damages or secure an accounting or other appropriate relief for
the benefit of the labor organization.'' 29 U.S.C. 501(b). Thus, union
members are empowered by Section 501(b) to take action in the event
that they are confronted with an intransigent or corrupt labor
organization. The LMRDA is a remedial statute, meaning it was enacted
for the purpose of correcting a defect in an existing law, or provide a
remedy where none previously existed. 73 a.m. Jur. 2d Statutes Section
7. The LMRDA was necessary to impose high standards and ethical conduct
in the administration of internal union affairs. Wirtz v. Local 153,
Glass Bottle Blowers Assn., 389 U.S. 463, 469-470 (1968). In addition,
Congress intended the definition of labor organization to be construed
broadly to achieve the Act's purposes. Donovan v. Nat'l Transient Div.,
Int'l Bhd. of Boilermakers, 736 F.2d 618, 621 (10th Cir. 1984), cert.
denied, 469 U.S. 1107 (1985). In order to fully effectuate and serve
the remedial purposes of the Act, the Department seeks to interpret the
definitional sections of the LMRDA broadly ``to include all labor
organizations of any kind other than those clearly shown to be outside
the scope of the Act.'' 29 CFR 451.2.
    The Department's current interpretation of Section 3(j)(5), in
place since 2010, does not fully serve the remedial purposes of the
LMRDA. Union members concerned about payments to and from public sector
intermediate labor organizations subordinate to a covered national or
international labor organization do not have access to the quality and
quantity of information available to members of unions that have
historically filed the Department's annual disclosure forms. Absent
such disclosures, union members know less about the governance of their
unions and cannot fully monitor the spending of their dues monies. They
cannot fully apprise themselves of the financial commitments and
obligations of their union. They are disadvantaged in their ability to
make informed decisions when electing their union officers, and they do
not have detailed information about the funding decisions made by
incumbent officeholders. Similarly, the public does not enjoy the same
transparency as they do with other covered union bodies.
    In contrast, members of unions that file LMRDA financial disclosure
forms, such as the Form LM-2 Labor Organization Annual Report, have a
tool that can help them detect fraud and embezzlement due to the
comprehensive reporting such forms offer. The Form LM-2 is the most
detailed annual financial report filed by labor organizations with
OLMS. The report requires the completion of no less than 21
informational items, 47 financial items, and 20 supporting schedules.
Six functional schedules require itemization, namely for individual
receipts and disbursements of $5,000 or more and total receipts or
disbursements to a single entity or individual that aggregate to $5,000
or
[[Page 68846]]
more. Other information reported includes, but is not limited to,
whether the union has any trust in which the union is interested,
whether the union has a political action committee (PAC), and whether
the union discovered any loss or shortage of funds.
    With LM-2 reporting, a unions' financial transactions are recorded,
reported, and made publicly available on the internet for review. Such
disclosure deters union officers and employees from committing
financial fraud. Union members concerned about the expenditures of
intermediate bodies that do not report as the result of the
Department's policy are denied the benefits of increased transparency
as well as the ability to sue for damages on the union's behalf. These
benefits also include more effective member participation in union
decision-making, more informed voters in union officer elections, and
the deterrence and detection of fraud. Members of the public also are
deprived of insight into how union money might be used to affect
government spending or other issues. Unless all intermediate bodies
subordinate to LMRDA-covered labor organizations are themselves subject
to annual financial reporting, union financial integrity and democracy
suffer.
    In addition to financial reporting, LMRDA coverage brings with it a
number of other benefits to union transparency, integrity, and
democracy. First, the LMRDA provides union members with a ``Bill of
Rights,'' which gives individual members protections, and the right to
file suit to legally enforce them, against the union (e.g., freedom of
speech, right to participate in elections, and right to attend
meetings). 29 U.S.C. 411-14. Members are also protected by provisions
that limit when and how a union can take disciplinary action against
its members. 29 U.S.C. 411(a)(5). Second, the elections of the union
are held to minimum standards that ensure they are fair, including
requirements for secret ballots, maximums for terms between regularly
scheduled elections, and equal treatment of candidates. 29 U.S.C. 481-
83. Third, various union officials are held subject to a fiduciary duty
to the union and its members and must have sufficient surety bonds
protecting the union from any malfeasance on their part. 29 U.S.C. 501-
02. Fourth, a portion of the LMRDA is specifically directed to
preventing union abuse of the trusteeship power, by which subordinate
labor organizations temporarily lose their autonomy to a parent union.
29 U.S.C. 461-66. Fifth, the LMRDA also sets out requirements for
unions to maintain adequate financial and election records so that the
Department can investigate and ensure LMRDA compliance. 29 U.S.C. 436,
481(e)-(f).
    Moreover, the LMRDA provides full investigatory authority to the
Secretary of Labor. 29 U.S.C. 521. OLMS is the front line agency
responsible for enforcing the LMRDA through its criminal and civil
investigations. OLMS criminal investigations may address embezzlement,
deprivation of rights by violence, willful failure to file reports,
filing false reports, and prohibited union office holding or employment
of convicted persons. Civil investigations may include violations of
union election procedures, financial disclosure requirements, and
trusteeship standards. OLMS also conducts audits of union finances.
OLMS investigations have previously discovered both civil and criminal
violations in intermediate bodies. OLMS analyzed all 1,001 criminal
cases it closed during the most recent five-year period, FY15-19. Of
these cases, 57 of these unions constituted intermediate unions, which
equals 5.7%. The 1,230 union audit cases closed during the same five-
year period (FY15-19) were also reviewed, 65 of which involved
intermediate unions. Of these, in nine cases OLMS closed the audit and
opened a criminal investigation because the investigation revealed
indications of fraud or embezzlement. These nine cases, out of a total
of 65 intermediate union audits, means a criminal fallout rate for
intermediate unions of 13.8%.\5\ The enforcement of both civil and
criminal law is of paramount public importance.
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    \5\ As part of the effort to protect and safeguard union funds
and assets, OLMS investigates possible embezzlement from unions and
other violations of criminal laws. OLMS also conducts audits of
labor unions to detect embezzlements and ensure and promote
compliance with the LMRDA. Compliance audit closing letters are
located on the OLMS website. Because it is not feasible for OLMS to
audit every union, OLMS developed a methodology to direct its
auditing resources to unions where criminal activity is more likely
to be found. The effectiveness of this methodology is measured by
the percent of audits resulting in the opening of a ``fallout''
criminal case.
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D. Structural and Financial Complexity of Labor Organizations
    In a unionized workplace, employees may be members of a local labor
organization, which represents employees with respect to terms and
conditions of employment at that particular workplace. That local union
is typically chartered by a national union, which in turn may be
affiliated with a national federation of unions. In addition, there are
city and state federations of labor organizations, international
federations of labor, joint and district councils, and departments
within a national federation of unions, among others.
    The interrelatedness, and resulting structural complexity, of labor
organizations has a number of causes. The need for collaboration among
and between labor organizations with shared interests, the necessity of
labor organization cohesion, the need for large-scale reform regarding
certain issues, such as nation-wide wages and hours reform, the rise in
multi-city or national corporations, and the growth of a global
economy, have all contributed to the increase in labor organization
affiliation within local, central, and national labor organizations.
    Union structure, the level at which bargaining takes place and
decision-making authority is held, tends to be highly centralized in
most developed economies, with collective bargaining occurring at the
level of an entire industry or sector. U.S. labor has traditionally
been considered extremely decentralized in its structure, with most
negotiations and decision-making happening at the firm level; U.S.
union locals must deal with immediate market risks in the context of
their company, which means keeping the jobs of their employee members
at a particular company rather than effecting broader change.
Complexity has emerged in union structure as the result of
traditionally local-focused labor organizations attempting to scale
their impact. Locals organizing as a part of a national union, locals
affiliating with other locals not traditionally in the same industry,
and national unions organizing into federations have been the means by
which the traditionally firm-level U.S. labor movement has scaled its
influence to achieve larger political or economic impact. Such changes
could only otherwise have been or be achieved by fundamentally altering
U.S. union structure to occur at a higher level, namely across an
entire industry or sector (i.e., organizing of a ``labor organization''
would happen for workers across multiple companies in a single industry
simultaneously), something that has yet to occur in earnest. See
generally Matthew Dimick, Productive Unionism, 4 UC Irvine L. Rev. 679,
680-721 (2014).
    This structural complexity pales in comparison to the financial
complexity created by these relationships. Dues and fees are collected
from members at the local level, and that money is sent on to other
related organizations in the form of per capita assessments to support
an increasingly complicated, sophisticated, and coordinated set of
expenditures by
[[Page 68847]]
related labor organizations, including education, organizing, political
action at all levels of government, strike funds, public relations,
research, legal representation, and so on.
    A local union member interested in ascertaining the end-point of
his or her dues collected by the local but cast into the stream of
affiliate expenditures must obtain the financial reports of the local
and each affiliated labor organization-- the national or international,
the state level organization, the national federation, and any other
labor organizations affiliated directly or indirectly with the local
union. Of course, this opportunity to study and analyze one's own local
union expenditures is lost if, within the chain of affiliations, one of
the affiliates has not filed an annual financial report.
    Given the increased complexity of union structures and finances,
the ability of union members to benefit from the transparency afforded
by the LMRDA should not be diminished by a labor organization's
relationship to an intermediate body that does not presently file
annual financial reports. Such a circumstance is akin to a parent
corporation disguising its assets and expenditures by lodging them with
an undisclosed subsidiary. To avoid this scenario in the context of
labor organizations, the LMRDA should be interpreted, to the extent
permitted by the statute's terms, so that union members have the
ability to lift the cloak of structural and financial complexity, and
fully understand the activities and expenditures of their local unions,
their local's national affiliates, and the national organization's
subordinate labor organizations.
    OLMS reporting data indicates that financial transfers take place
among LMRDA-covered local unions and international unions, and non-
covered intermediate bodies. As explained below, private-sector members
contribute an estimated maximum of $2,806,200 in per capita dues
payments to their national union, which may, ultimately, make their way
to non-covered intermediate unions.\6\ Appendix Table 1 sets forth per
capita tax distributions for four labor organizations: American
Federation of Teachers (AFT), Fraternal Order of Police (FOP), National
Education Association (NEA), and International Association of Fire
Fighters (IAFF).\7\ The data are derived from their affiliates' fiscal
year 2018 annual financial disclosure reports, and details per capita
fees paid to the national by members of those covered affiliates.\8\ Of
the 143 AFT reporting affiliates, 111 reported paying per capita fees
to the AFT, in a total amount of $118,421,366. Of the twelve FOP
reporting affiliates, seven reported per capita fees in a total amount
of $70,284. Of the 63 IAFF reporting affiliates, 51 reported per capita
fees in a total amount of $1,047,528. For the 34 NEA reporting
affiliates, 18 reported per capita fees paid in a total amount of
$1,030,246. (See Appendix Table 1).
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    \6\ While this figure represents the maximum private-sector dues
contributed to non-covered intermediate bodies, those newly-covered
bodies would still be required to report on all receipts under the
proposed rule.
    \7\ The Department has identified just these unions, but it
invites comment on whether the proposed rule would affect others.
    \8\ The Department notes that the per capita payments reported
in Form LM-2, Item 56, and Form LM-3, Item 47, may over represent
the portion that the parent national union ultimately receives,
since a portion may, instead, go to the AFL-CIO or other entities.
Further, some of the local affiliates may constitute ``mixed''
private-sector and public-sector member unions. Thus, not all of
their per capita payments derive from private-sector members.
However, the Department views these totals a valid estimate for the
maximum private-sector per capita dues sent to the parent national
union.
---------------------------------------------------------------------------
    The AFT, FOP, NEA, and IAFF disburse funds to their non-covered
intermediate bodies, in the form of direct and indirect disbursements
reported by the national or international union on Form LM-2 Schedules
15 (Representational Activities), 16 (Political Activities and
Lobbying), 17 (Contributions, Gifts, and Grants), 18 (General
Overhead), and 19 (Administration).\9\
---------------------------------------------------------------------------
    \9\ The Department presumes that the state affiliates' non-
filing status is due to their wholly public sector composition of
their constituent locals and not due to any other exception or
exemption under the LMRDA.
---------------------------------------------------------------------------
    The Department identified 12 AFT intermediate bodies that do not
submit LM reports. Of these, 8 receive disbursements from the AFT.
Reported disbursements for Schedule 15 totaled $1,180,103, Schedule 16
totaled $566,131, and Schedule 17, 18, and 19 reported a total of $0.
This results in a total of $1,746,234 in disbursements from the AFT to
its non-filing intermediate bodies.
    The Department has identified 46 FOP intermediate bodies that do
not submit LM reports. A review of the FOP's FY 18 Form LM-2 report
indicated that it did not disburse funds to any of its non-covered
intermediates.
    The Department has identified 42 NEA intermediate bodies that do
not submit LM reports. Reported disbursements for Schedule 15 totaled
$14,465,776, Schedule 16 totaled $7,210,996, Schedule 17 totaled
$52,066,677, Schedule 18 totaled $0, and Schedule 19 reported a total
of $656,646 in disbursements. This results in a total of $74,471,218 in
disbursements from the NEA to its non-filing intermediate bodies. See
Appendix Table 2.
    The Department has identified 39 IAFF intermediate bodies that do
not currently submit LM reports. A review of the IAFF's FY 18 Form LM-2
report indicated that it disbursed funds to two of its non-covered
intermediates, as identified in Schedules 15, 16, 17, 18, and 19.
IAFF's Illinois and Rhode Island intermediates only received Schedule
19 disbursements totaling $29,720.
    To estimate the maximum amount of private-sector dues traced to the
wholly public-sector intermediate body, the Department assumes that the
amount of money being traced for any given union is equal to the total
disbursements being made to non-covered intermediates of that union,
unless the total amount of per capita fees collected from its LMRDA-
covered locals is less than the disbursement amount, in which case the
per capita fee total represents the maximum amount of money being
traced. This assumption is reasonable because funds disbursed in excess
of the per capita fee would no longer derive, at least potentially,
from LMRDA-covered local funds.
    For IAFF, FOP, and AFT, per capita fee totals exceed disbursement
totals, and therefore, these three unions' disbursements to their
respective non-covered intermediates is the maximum amount of
potentially private-sector money that could be traced for each of them.
The sum of these three figures is $1,775,954 [$29,720 + $0 + $1,746,234
= $1,775,954]. NEA, however, disbursed funds far in excess of the per
capita fees; while the NEA disbursed $74,471,218 to its non-covered
intermediates, it collected only $1,030,246 in per capita fees.
Therefore, the amount of traceable funds is limited to the $1,030,246
in private-sector funds collected. Thus, the final total of all
traceable funds is $2,806,200 [$1,775,954 + $1,030,246 = $2,806,200].
As discussed above, union members and the public at large all have an
interest in disclosure regarding the flow and use of those monies.
E. Alternatives
    The Department requests comments onalternative approaches,
including continuing to exclude all wholly public-sector intermediate
labor organizations from coverage and any approaches that could lessen
the costs imposed by the proposed rulemaking. As discussed more fully
below, the Department also
[[Page 68848]]
requests comment on whether to raise the threshold for filing a LM-2
form from $250,000 in annual receipts for intermediate bodies covered
by this rule and, if so, what the threshold should be.
IV. Analysis Conducted in Accordance With Executive Order 12866,
Regulatory Planning and Review, and Executive Order 13563, Improving
Regulation and Regulatory Review
    Under Executive Order (E.O.) 12866, the Office of Management and
Budget (OMB)'s Office of Information and Regulatory Affairs determines
whether a regulatory action is significant and, therefore, subject to
the requirements of the E.O. and review by OMB. 58 FR 51735. Sec. 3(f)
of E.O. 12866 defines a ``significant regulatory action'' as an action
that is likely to result in a rule that (1) has an annual effect on the
economy of $100 million or more, or adversely affects in a material way
a sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local or tribal
governments or communities (also referred to as economically
significant); (2) creates serious inconsistency or otherwise interferes
with an action taken or planned by another agency; (3) materially
alters the budgetary impacts of entitlement grants, user fees, or loan
programs, or the rights and obligations of recipients thereof; or (4)
raises novel legal or policy issues arising out of legal mandates, the
President's priorities, or the principles set forth in the E.O. Id. OMB
has determined that this proposed rule is a significant regulatory
action under Sec. 3(f) of E.O. 12866, but is not economically
significant.
    E.O. 13563 directs agencies to propose or adopt a regulation only
upon a reasoned determination that its benefits justify its costs; the
regulation is tailored to impose the least burden on society,
consistent with achieving the regulatory objectives; and in choosing
among alternative regulatory approaches, the agency has selected those
approaches that maximize net benefits. E.O. 13563 recognizes that some
benefits are difficult to quantify and provides that, where appropriate
and permitted by law, agencies may consider and discuss qualitatively
values that are difficult or impossible to quantify, including equity,
human dignity, fairness, and distributive impacts.
    This proposed rule is expected to be an E.O. 13771 regulatory
action. We estimate that it would impose $4,422,042 in annualized costs
at a 7% discount rate, discounted to a 2016 equivalent, over a
perpetual time horizon. The Department requests comment on all aspects
of its analysis, including whether there are additional benefits or
costs and whether there are any approaches that could lessen the costs
imposed by the proposed rulemaking.
A. Costs for Intermediate Bodies
    As stated in the preamble, intermediate bodies are labor
organizations that are subordinate to a covered national or
international labor organization that includes a union that represents
private sector workers. Using data from the websites of the most likely
national/international unions affected by this proposed rule (the
American Federation of Teachers (AFT), Fraternal Order of Police (FOP),
International Association of Firefighters (IAFF), and the National
Education Association (NEA)), the Department estimates that there would
be 139 total intermediate bodies affected by this rule (i.e., the
intermediate bodies identified on those four national unions' websites,
subtracting those that already file with OLMS). Out of these, 115 have
annual receipts above $250,000, and would presumably need to file the
LM-2 report annually. The other 24 intermediate bodies have annual
receipts below $250,000, and presumably would be required to fill out
the LM-3 report annually. As estimated in the most recently approved
Information Collection Request (ICR), pursuant to the Paperwork
Reduction Act (PRA), the average form LM-2 filer spend approximately
530 hours on average each year to fill out the report.\10\ It is
assumed that employees responsible for filling out the Form LM-2 report
would be an accountant spending 90 percent of 530 hours, a bookkeeper
or clerk spending 5 percent of 530 hours, a secretary or treasurer
spending 4 percent of 530 hours, and the president of an intermediate
body spending 1 percent of 530 hours. Based on current filings, the
average hourly wage for an accountant of LM-2 filers is $35.42, $17.37
for a bookkeeper or clerk, $21.54 for a secretary or treasurer, and
$26.10 for the president, respectively. The weighted average hourly
wage for Form LM-2 filers is $33.87. To account for fringe benefits and
overhead costs, the average hourly wage has been doubled, so the fully
loaded hourly wage is $67.74 (= $33.87 x 2). Therefore, the total cost
for the 115 new filers to complete the Form LM-2 is estimated to be
$4,128,753 (= $67.74 x 115 filers x 530 hours) and $35,902.20 per
filer.
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    \10\ See the PRA statement on page one of the Form LM-2
Instructions: https://www.dol.gov/olms/regs/compliance/GPEA_Forms/2016/efile/LM-2_Instructions_Revised2016.pdf.
---------------------------------------------------------------------------
    As estimated in the most recently approved ICR, pursuant to the
PRA, the average form LM-3 filer spends approximately 103 hours on
average to fill out the report.\11\ It is assumed that employees
responsible for filling out this LM-3 report would be an accountant
spending 22 percent of 103 hours, a bookkeeper or clerk spending 28
percent of 103 hours, a secretary or treasurer spending 48 percent of
103 hours, and the president of an intermediate body spending 2 percent
of 103 hours. Based on current filings, the average hourly wage for an
accountant of LM-3 filers is $35.42, $17.37 for a bookkeeper or clerk,
$23.45 for a secretary or treasurer, and $23.45 for the president,
respectively. The weighted average hourly wage for LM-3 filers is
$24.38. To account for fringe benefits and overhead costs, the average
hourly wage has been doubled, so the fully loaded hourly wage is $48.76
(= $24.38 x 2). The total cost for the 24 new filers to complete the
LM-3 is estimated to be $120,534.72 (= $48.76 x 24 filers x 103 hours)
and $5,022.28 per filer.
---------------------------------------------------------------------------
    \11\ See the PRA statement on page one of the Form LM-3
Instructions: https://www.dol.gov/olms/regs/compliance/GPEA_Forms/2016/efile/LM-3_InstructionsRevised2016.pdf.
---------------------------------------------------------------------------
    In addition to filling out either the LM-2 form or the LM-3 form,
each of these 139 intermediate labor organizations would be responsible
for filing a Form LM-1 Labor Organization Information Report. Each
intermediate body would incur a one-time, first-year Form LM-1 cost.
The most recent Information Collection Request (ICR) estimated that
Form LM-1 filers would spend approximately 55 minutes on average per
report. It is assumed that employees responsible for filling out this
Form LM-1 report would be a secretary or treasurer spending 50 percent
of 0.917 hours and the president of an intermediate body spending the
other 50 percent of 0.917 hours. The weighted average hourly wage for
LM-1 filers is $23.45. To account for fringe benefits and overhead
costs, the average hourly wage has been doubled, so the fully loaded
hourly wage is $46.90 (= $23.45 x 2). The total cost for the 139 filers
to complete the Form LM-1 is estimated to be $5,978.01 (= $46.90 x 139
filers x 0.917 hours) and $43.01 per filer.
    Regulatory familiarization costs represent direct costs to
intermediate bodies associated with reviewing the new regulation. The
Department calculated this cost by multiplying the estimated time to
review the rule by the hourly compensation of the president of an
intermediate body. Using the same
[[Page 68849]]
fringe benefit and overhead costs rationale as above, the fully loaded
hourly wage for the president of an intermediate body is $46.90 ($23.45
x 2). The Department estimates that the president of an intermediate
body would spend 10 minutes to review the rule. Therefore, the one-time
familiarization cost for all 139 intermediate bodies is estimated to be
$1,108.25 (= $46.90 x 139 x 0.17 hours) in the first year.
    The Department emphasizes that the estimated costs are averages.
The Department expects that the costs for intermediate bodies with
higher total receipts will be greater and the costs for intermediate
bodies with smaller total receipts will be less. The Department
requests comment on its cost estimates, including what it costs unions
of varying sizes to complete the LM-2 and LM-3 forms and whether those
costs are less for unions with smaller total receipts.
    Finally, the proposed rule would also subject these public sector
intermediate bodies to other provisions of the LMRDA, as noted above.
While the Department believes application of these other LMRDA
provisions is beneficial, the Department does not anticipate that
making those provisions applicable to the public sector intermediate
bodies affected by this rule will materially increase costs. The
Department invites comment on whether application on all aspects of its
cost analysis, including whether application of non-Title II provisions
of the LMRDA will result in material costs.
B. Summary of Costs
    For all 139 intermediate bodies, the expected first-year costs
would be $4,256,373.98 (= $4,128,753 + $120,534.72 + $5,978.01 +
$1,108.25). In the subsequent years, the total cost would be
$4,249,287.72 (= $4,128,753 + $120,534.72). The 10-year annualized cost
is expected to be $4,250,094 at a 3 percent discount rate and
$4,250,231 at a 7 percent discount rate. The annualized perpetual costs
at a 7 percent discount rate are expected to be $4,422,042.
C. Benefits
    As explained more fully above, the Department proposes this
rulemaking in order to more fully implement Congress' goals, in passing
the LMRDA, to ``eliminate or prevent improper practices'' in labor
organizations, protect the rights and interests of workers, and prevent
union corruption. 29 U.S.C. 401(b), (c). To curb embezzlement and other
improper financial activities of labor organizations, Congress required
labor organizations to file detailed annual financial reports with the
Secretary of Labor. 29 U.S.C. 431(b). The reporting provisions of the
LMRDA were devised to implement the basic premise of the LMRDA--that
the Act was intended to safeguard democratic procedures within labor
organizations and protect the basic democratic rights of union members.
By mandating that labor organizations disclose their financial
operations to the public and the employees they represent, Congress
intended to promote union self- government, which would be advanced by
union members receiving sufficient information to permit them to take
effective action in regulating internal union affairs. The Department
is considering this rule in order to expand the benefits of such labor
union financial transparency to members of public-sector intermediate
labor unions.
    Additionally, the Department proposes such expanded labor
organization coverage now, as the Department believes that the
increased prevalence of public sector unions and the potential for
corruption within those unions justifies requiring union financial
reporting to the maximum extent permissible under the LMRDA. The LMRDA
was enacted in 1959, at which time states seldom permitted collective
bargaining by government employees. Changed circumstances among public
sector unions counsel a change in the reporting regime. The increased
prevalence of public sector unions and their use of substantial monies
affecting matters of great public interest, like state spending,
require union financial reporting to the extent permissible under the
LMRDA. Private sector union members and the public have an interest in
how labor unions, including intermediate bodies, spend their union
member dues. And this interest is no less great--and possibly greater--
when the money is spent in ways that affect political activities, state
electoral outcomes, and state budgets. Extending LMRDA coverage to
intermediate bodies subordinate to covered international unions brings
transparency to these activities and serves the public interest in
disclosure and financial integrity. As mentioned above, 5.7% of all
criminal cases in the past five years involved intermediate bodies.
Similarly, 13.8% of audits of intermediate bodies revealed evidence of
criminal activity, requiring the opening of a criminal investigation.
    The Department believes that the benefits of the proposed rule
outweigh the costs, although the benefits resist quantification. The
Department requests comment on its analysis, including whether any of
the benefits can be quantified and whether other approaches might lower
the costs imposed by the rule.
V. Initial Regulatory Flexibility Analysis (IRFA)
    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601 et seq.,
establishes ``as a principle of regulatory issuance that agencies shall
endeavor, consistent with the objectives of the rule and of applicable
statutes, to fit regulatory and informational requirements to the scale
of the business, organizations, and governmental jurisdictions subject
to regulation.'' Public Law 96-354. To achieve that objective, the Act
requires agencies promulgating final rules to prepare a certification
and a statement of the factual basis supporting the certification, when
drafting regulations that will not have a significant economic impact
on a substantial number of small entities. The Act requires the
consideration of the impact of a regulation on a wide range of small
entities, including small businesses, not-for-profit organizations, and
small governmental jurisdictions.
    Agencies must perform a review to determine whether a proposed or
final rule would have a significant economic impact on a substantial
number of small entities. See 5 U.S.C. 603. If the determination is
that it would, the agency must prepare a regulatory flexibility
analysis as described in the RFA. Id. However, if an agency determines
that a proposed or final rule is not expected to have a significant
economic impact on a substantial number of small entities, section
605(b) of the RFA provides that the head of the agency may so certify
and a regulatory flexibility analysis is not required. See 5 U.S.C.
605. The certification must include a statement providing the factual
basis for this determination, and the reasoning should be clear.
    The Department conducted this initial regulatory flexibility
analysis to aid stakeholders in understanding the small entity impacts
of the proposed rule and to obtain additional information on the small
entity impacts. The Department invites interested persons to submit
comments on the number of small entities affected by the proposed
rule's requirements, the compliance cost estimates, and whether
alternatives exist that would reduce the burden on small entities.
A. Why the Department Is Considering Action
    As explained more fully in the preamble, the Department is
considering this rule in order to more fully
[[Page 68850]]
implement Congress' goals, in passing the LMRDA, to ``eliminate or
prevent improper practices'' in labor organizations, protect the rights
and interests of workers, and prevent union corruption. 29 U.S.C.
401(b), (c). To curb embezzlement and other improper financial
activities of labor organizations, Congress required labor
organizations to file detailed annual financial reports with the
Secretary of Labor. 29 U.S.C. 431(b). The reporting provisions of the
LMRDA were devised to implement the basic premise of the LMRDA--that
the Act was intended to safeguard democratic procedures within labor
organizations and protect the basic democratic rights of union members.
By mandating that labor organizations disclose their financial
operations to employees they represent, Congress intended to promote
union self-government, which would be advanced by union members
receiving sufficient information to permit them to take effective
action in regulating internal union affairs. The Department is
considering this rule in order to expand the benefits of such labor
union financial transparency to the members of public-sector
intermediate labor unions.
    Additionally, the Department proposes such expanded labor
organization coverage, now, as the Department believes that the
increased prevalence of public sector unions and the potential for
corruption within those unions justifies requiring union financial
reporting to the maximum extent permissible under the LMRDA. The LMRDA
was enacted in 1959, at which time states seldom permitted collective
bargaining by government employees. Changed circumstances among public
sector unions counsel a change in the reporting regime. The increased
prevalence of public sector unions and their use of substantial monies
affecting matters of great public interest, like state spending,
require union financial reporting to the extent permissible under the
LMRDA. Private sector union members and the public have an interest in
how labor unions, including intermediate bodies, spend their union
member dues. And this interest is no less great--and possibly greater--
when the money is spent in ways that affect political activities, state
electoral outcomes, and state budgets. Extending LMRDA coverage to
intermediate bodies subordinate to covered international unions brings
transparency to these activities and serves the public interest in
disclosure and financial integrity. As mentioned above, OLMS finds
civil and criminal violations in all tiers of labor unions, including
intermediate bodies. During the immediate five-year period, 5.7% of
OLMS criminal investigations concerned intermediate unions. Further,
the criminal fallout rate for intermediate bodies during this same
period was 13.8%.
B. Objectives of and Legal Basis for the Proposed Rule
    Congress enacted the LMRDA after an extensive investigation of
``the labor and management fields . . . [found] that there ha[d] 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. . . .'' 29 U.S.C.
401(b). Congress intended the Act to ``eliminate or prevent improper
practices'' in labor organizations, to protect the rights and interests
of employees, and to prevent union corruption. 29 U.S.C. 401(b), (c).
    As part of the statutory scheme designed to accomplish these goals,
the Act required labor organizations to file annual financial reports
with the Secretary of Labor. 29 U.S.C. 431(b). Congress sought full and
public disclosure of a labor organization's financial condition and
operations in order to curb embezzlement and other improper financial
activities by union officers and employees. See S. Rep. No. 86-187
(1959), reprinted in 1 NLRB, Legislative History of the Labor-
Management Reporting and Disclosure Act of 1959, at 398-99.
    Pursuant to the Act, labor organizations must file reports
containing information such as assets, liabilities, receipts, salaries,
loans to officers, employees, members or businesses and other
disbursements ``in such detail as may be necessary accurately to
disclose [their] financial condition and operations for [the] preceding
fiscal year.'' 29 U.S.C. 431(b). The Department of Labor's statutory
authority is set forth in sections 201 and 208 of the LMRDA, 29 U.S.C.
431, 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 he may find necessary to prevent the circumvention or
evasion of the reporting requirements. 29 U.S.C. 438. Section 201 sets
out the substantive reporting obligations.
    This proposed rule would expand the Department's interpretation
concerning the scope of labor organization coverage under the LMRDA,
pursuant to Sections 3(i) and (j) of the Act, 201 29 U.S.C. 402. Under
the revised statutory interpretation, covered intermediate labor bodies
would not have to have private sector members to be covered under the
LMRDA; rather, they would need only to be subordinate to a national or
international labor organization that includes a union that represents
private sector workers. See Alabama Education Ass'n v. Chao, 455 F.3d
at 394-95 (``In our view, nothing in Sec.  3, including the definition
of `labor organization' in Sec.  3(i), forecloses the possibility that
a body without private sector members may be subject to the LMRDA if it
is subordinate to or part of a larger organization that does have
private sector members.''); Alabama Education Assn. v. Chao, 539 F.
Supp. 2d at 384 (``Once there is more than a single interpretation that
is permissible, the Secretary may select between or among them. . .
.'').
C. Estimating the Number of Small Businesses Affected by the Rulemaking
    As stated in the Regulatory Impact Analysis (RIA), this rule would
impact 139 intermediate bodies of labor unions, which are labor
organizations that are subordinate to a national or international labor
organization that represents private sector workers (NAICS 813930).
According to the Small Business Administration (SBA), organizations
under NAICS 813930 are considered small entities if they have average
annual receipts of less than $7.5 million.\12\ Based on this threshold
and the most recent revenue receipts from these intermediate bodies, 88
out of 139 intermediate bodies qualify as small entities,\13\ or
roughly 63% of these organizations.\14\
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    \12\ https://www.sba.gov/document/support--table-size-standards.
    \13\ The Department was unable to find IRS Form 990s, and thus
revenue, for 26 of the 139 intermediate bodies affected by this
rulemaking. Since it is impossible to determine whether there would
be a significant impact on them without revenue data, these entities
are not considered small entities for the purpose of this IRFA. The
thresholds for filing LM-2 and LM-3 forms are set by total annual
receipts. Form 990s, however, report total annual revenues. The
Department believes that the differences across intermediate bodies
between receipts and revenues would not materially affect the
estimates of the cost of this rulemaking. The Department requests
comment on its use of Form 990 revenue data to estimate the number
of organizations that would have to file the LM-2 and LM-3 forms.
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D. Compliance Requirements of the Proposed Rule, Including Reporting
and Recordkeeping
    This proposed rule would require the intermediate bodies affected
to file the Form LM-1 in the first year. In addition,
[[Page 68851]]
such intermediate bodies with annual receipts of at least $250,000
would be required to fill out the Form LM-2 report annually, while
intermediate bodies with annual receipts below $250,000 would be
required to fill out the Form LM-3 report annually.
    Regulatory familiarization costs represent direct costs to
intermediate bodies associated with reviewing the new regulation. The
Department calculated this cost by multiplying the estimated time to
review the rule by the hourly compensation of $46.90 for the president
of an intermediate body. The Department estimates that the president of
an intermediate body would spend 10 minutes to review the rule.
Therefore, the one-time familiarization cost for all 139 intermediate
bodies is estimated to be $1,108.25 (= $46.90 x 139 x 0.17 hours) or
$7.97 per small entity in the first year.
    It takes approximately 55 minutes on average to fill out a Form LM-
1 report and 530 hours on average to fill out a Form LM-2 report, and
103 hours on average to fill out an LM-3 report. The Department
estimated a fully loaded hourly wage of $46.90 for filing LM-1 report
and $67.74 for filing a Form LM-2 report, and $48.76 for filing LM-3
report.
    Using the average hour estimates for LM-3 filers, the costs in Year
1 for the intermediate bodies with annual receipts below $250,000 is
estimated to be $43.01 (= $46.90 x 0.917 hours) for LM-1 report,
$5,022.28 (= $48.76 x 103 hours) for LM-3 report, and $7.97 for
regulatory familiarization. Therefore, the total cost in Year 1 for
intermediate bodies with annual receipts below $250,000 is $5,073.26
($43.01 + $5,022.28 + $7.97) on average per filer. The total cost in
the subsequent years is $5,022.28 per filer per year on average. Out of
88 small business filers, there are 24 filers with revenue below
$250,000. For 15 of these 24 small business entities, their first year
cost is assumed to be higher than 3 percent of their annual revenue.
    Using the average hour estimates for LM-2 filers, the costs in Year
1 for the intermediate bodies with annual receipts between $250,000 and
$7.5 million is estimated to be $43.01 on average (= $46.90 x 0.917
hours) for the LM-1 report, $35,902.20 (= $67.74 x 530 hours) on
average for the LM-2 report, and $7.97 for regulatory familiarization.
Therefore, the total cost in Year 1 for the intermediate bodies with
annual receipts between $250,000 and $7.5 million is $35,943.18 on
average ($43.01 + $35,902.20 + $7.97). The total cost in the subsequent
years is $35,902.20 on average per year. Out of 88 small business
filers, there are 64 filers with annual revenue between $250,000 and
$7.5 million. For 37 of out 64 small business filers, the first year
cost is assumed to be more than 3 percent of their annual revenue.
    A threshold of 3 percent of revenues has been used in prior
rulemakings for the definition of significant economic impact. See,
e.g., 79 FR 60634 (October 7, 2014, Establishing a Minimum Wage for
Contractors) and 81 FR 39108 (June 15, 2016, Discrimination on the
Basis of Sex). This threshold is also consistent with that sometimes
used by other agencies. See, e.g., 79 FR 27106 (May 12, 2014,
Department of Health and Human Services rule stating that under its
agency guidelines for conducting regulatory flexibility analyses,
actions that do not negatively affect costs or revenues by more than
three percent annually are not economically significant). The
Department believes that its use of a three percent of revenues
significance criterion is appropriate.
    Therefore, out of the 88 small entities, the small entities
affected by a significant impact of more 3% are the 15 out of 24 LM-3
filers and 37 out of 64 LM-2 filers, for a total of 52 filers. This
constitutes 59.09% of the 88 filers [52/88 x 100 = 59.09%], which falls
above the 20% substantiality threshold being used for this NPRM.
    The following chart further breaks down the expected burden on
small entities, by revenue:
----------------------------------------------------------------------------------------------------------------
                                                                                     Number of      % of Small
                                     Number of     Average I.B.     % of small     small unions       unions
       Size  (by revenue)          small unions     rule burden       unions        subject to      subject to
                                     affected        per union       affected       significant     significant
                                                                                     impact *        impact **
----------------------------------------------------------------------------------------------------------------
$5M-$7.5M.......................               7         $35,943            7.95               0  ..............
$2.5M-$4.99M....................               9          35,943           10.23               0  ..............
$1M-$2.49M......................              12          35,943           13.64               1  ..............
$500K-$999,999..................              21          35,943           23.86              21  ..............
$250K-$499,999..................              15          35,943           17.05              15  ..............
$100K-$249,999..................              15           5,073           17.05               6  ..............
$10K-$99,999....................               9           5,073           10.23               9  ..............
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
    Total.......................              88  ..............         *** 100           52/88           59.09
----------------------------------------------------------------------------------------------------------------
E. Relevant Federal Rules Duplicating, Overlapping, or Conflicting With
the Rule
    The Department is not aware of any relevant Federal rules that
conflict with this NPRM.
F. Alternatives to the Proposed Rule
    The Department believes that qualitative benefits for union members
and the public associated with greater transparency for certain public-
sector intermediate labor organizations--and the benefits from
application of the rest of the LMRDA--outweighs the marginal burden
imposed on such organizations. However, the Department will consider
continuing to exclude all wholly public-sector intermediate labor
organizations from coverage. That option would impose no changes and
thus maintain the status quo of no disclosure by these entities. The
Department seeks public feedback on that and any other alternatives,
including any approaches that could lessen the costs imposed by the
proposed rulemaking.
    In particular, the Department seeks comment on whether to raise the
threshold for filing the LM-2 form from $250,000 in annual receipts for
intermediate bodies covered by the proposed rulemaking.\15\ The
Department anticipates that the ratio of (a) costs from completing the
LM-2 form to (b) annual receipts--i.e., (a)/(b)--could increase as
annual receipts decrease, even though costs also likely tend to
decrease. That is, the Department expects that the relative burden of
completing the LM-2 form could be greater for newly-covered entities
with
[[Page 68852]]
smaller annual receipts. Therefore, raising the threshold for filing
the LM-2 form for intermediate bodies covered by this rule could
decrease the relative burden on some of these intermediate bodies by
allowing them to file the LM-3 form instead. The Department requests
comment on its assumptions with respect to the relative burden of
completing the LM-2 form and seeks input as to whether public sector
intermediate bodies covered by this rule would be uniquely burdened by
the requirement to file a form LM-2 at the current receipt threshold.
The Department also requests comment on related questions. Would
raising the threshold for only the organizations affected by this
rulemaking be consistent with Section 208 of the LMRDA, 29 U.S.C. 438,
which authorizes the Secretary of Labor to allow, by general rule, for
the filing of ``simplified reports for labor organizations or employers
for whom he finds that by virtue of their size a detailed report would
be unduly burdensome''? If so, how should the new threshold be set?
Should the threshold be set by adjusting for inflation from the
effective date of the previous increase in the receipt threshold to
$250,000? Should the threshold be set higher or lower than an
inflation-adjusted amount, and why? Should the threshold be set through
some other method or analysis? Would raising the threshold materially
lower costs? Would raising the threshold materially decrease benefits?
Considering all appropriate factors, would raising the threshold for
filing the LM-2 form for only intermediate bodies covered by the
proposed rulemaking be justified?
---------------------------------------------------------------------------
    \15\ Although the data in this proposed rule is based on
revenues currently reported on IRS Form 990s, the Department would
continue to base the various reporting requirements under this
proposed rule on the labor organization's annual receipts.
---------------------------------------------------------------------------
G. Differing Compliance and Reporting Requirements for Small Entities
    This NPRM provides for no differing compliance requirements and
reporting requirements for small entities, other than the simplified
Form LM-3 report for those unions with fewer than $250,000 in total
annual receipts.
H. Clarification, Consolidation, and Simplification of Compliance and
Reporting Requirements for Small Entities
    This NPRM was drafted to clearly state the compliance and reporting
requirements for all small entities subject to this proposed rule.
VI. 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.
VII. Paperwork Reduction Act
    The Department estimates that 139 intermediate unions would become
subject to the LMRDA as a result of the proposed rule and will be
required to file annual financial disclosure reports. The Department
derives this estimate from a review of the non-filing intermediate
bodies associated with the four national/international labor
organizations likely affected by this rule: The American Federation of
Teachers (AFT), Fraternal Order of Police (FOP), International
Association of Firefighters (IAFF), and the National Education
Association (NEA).
    Initially, each of these 139 intermediate labor organizations would
be responsible to file a Form LM-1 Labor Organization Information
Report. The most recent ICR estimated that Form LM-1 filers would spend
approximately 55 minutes per report (see Form LM-1 Instructions), which
results in a total increase of 7,645 additional Form LM-1 burden
minutes (139 * 55 minutes) or approximately 127 additional burden
hours. The additional 139 Form LM-1 filing intermediate bodies would
result in a total of 352 Form LM-1 reports filed (139 + 213), as a
result of the proposed rule.
    Additionally, OLMS has determined that 24 of these newly-filing
intermediate bodies would file an annual Form LM-3 Labor Organization
Annual Report, as, based upon their most recent IRS Form 990 report,
they would not exceed the $250,000 filing threshold for the more
detailed Form LM-2 report. The previous ICR estimated that Form LM-3
filers would spend approximately 103 hours per report (see Form LM-3
Instructions), which results in a total increase of 2,472 additional
Form LM-3 burden hours (24 * 103). The additional 24 Form LM-3 filing
intermediate unions would result in a total of 12,063 Form LM-3 reports
filed (24 + 12,039).
    Based upon the most recent Form 990 data, the Department determined
that the remaining 115 entities would exceed the $250,000 filing
threshold and thus be required to file the Form LM-2 annual financial
disclosure report. (Note: For the 20 entities in which the Department
could not locate their most recent IRS Form 990, the Department assumes
that each would file the more detailed Form LM-2 report.) The previous
ICR estimated that Form LM-2 filers would spend approximately 530 hours
per report (see Form LM-2 Instructions), which results in a total
increase of 60,950 additional Form LM-2 burden hours (115 * 530), and
the additional 115 Form LM-2 filing intermediate unions would result in
a total of 6,188 Form LM-2 reports filed (115 + 6,073).
    As the proposed rule requires an information collection, the
Department is submitting, contemporaneous with the publication of this
notice, an information collection request (ICR) to revise the Paperwork
Reduction Act (PRA) clearance to address the clearance term. The ICR
includes updated Forms LM-1, LM-2, LM-3, and LM-4, which the Department
revised to make clear that wholly public-sector intermediate unions
must complete and submit such forms, consistent with this proposed
rule. A copy of this ICR, with applicable supporting documentation,
including among other items a description of the likely respondents,
proposed frequency of response, and estimated total burden may be
obtained free of charge from the RegInfo.gov website at http://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201907-1245-001 (this link
will only become active on the day following publication of this
document) or from the Department by contacting Andrew Davis on 202-693-
0123 (this is not a toll-free number)/email: [email protected].
    Type of Review: Revision of a currently approved collection.
    Agency: Office of Labor-Management Standards.
    Title: Labor Organization and Auxiliary Reports.
    OMB Number: 1245-0003.
    Affected Public: Private Sector--labor organizations.
    Total Estimated Number of Responses: 31,686.
    Frequency of Response: Varies.
    Estimated Total Annual Burden Hours: 4,643,596.
    Estimated Total Annual Other Burden Cost: $0.
Small Business Regulatory Enforcement Fairness Act of 1996
[[Page 68853]]
    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.
List of Subjects in 29 CFR Part 401
    Labor management relations.
    Accordingly, for the reasons provided above, the Department
proposes to amend part 401 of title 29, chapter IV of the Code of
Federal Regulations as set forth below:
PART 401--MEANING OF TERMS USED IN THIS SUBCHAPTER
0
1. The authority citation for part 401 continues to read as follows:
    Authority: Secs. 3, 208, 301, 401, 402, 73 Stat. 520, 529, 530,
532, 534 (29 U.S.C. 402, 438, 461, 481, 482); Secretary's Order No.
03-2012, 77 FR 69376, November 16, 2012; Sec.  401.4 also issued
under sec. 320 of Title III of the Bankruptcy Reform Act of 1978,
Pub. L. 95-598, 92 Stat. 2678.
0
2. Amend Sec.  401.9 by adding paragraphs (a) through (c) to read as
follows:
Sec.  401.9  Labor organization.
* * * * *
    (a) Any organization that exclusively represents public sector
employees, is composed solely of labor unions that exclusively
represent public sector employees, or is a conference, general
committee, joint or system board, or joint council subordinate to a
national or international union that is composed solely of public
sector labor unions is not a `labor organization' covered by the Labor-
Management Reporting and Disclosure Act of 1959 (LMRDA).
    (b) Any national or international union or any conference, general
committee, joint or system board, or joint council that includes one or
more local unions that are ``labor organizations engaged in an industry
affecting commerce' is a `labor organization' covered by the LMRDA.
    (c) Any conference, general committee, joint or system board, or
joint council that is subordinate to a national or international labor
organization that is a labor organization `engaged in an industry
affecting commerce' is a `labor organization' covered by the LMRDA.
Arthur F. Rosenfeld,
Director, Office of Labor-Management Standards.
    Note:  The following appendix will not appear in the Code of
Federal Regulations.
Appendix: Labor Organization Annual Financial Reports: Coverage of
Intermediate Bodies
   Table 1--Fiscal Year 2018 Per Capita Tax Disbursements From LMRDA-
                          Covered Local Unions
------------------------------------------------------------------------

------------------------------------------------------------------------
         Locals Affiliated With American Federation of Teachers
------------------------------------------------------------------------
ACADEMY TEACHER'S ASSOCIATION........................            $34,221
ADJUNCT FACULTY AT PACE..............................             84,726
ADJUNCTS UNITED, NYSUT, AFT..........................             40,962
AFT--LU 5105.........................................                  0
AFT--NEW HAMPSHIRE...................................                  0
AFT HEALTH PROFESSIONALS AND ALLIED EMPLOYEES........                  0
AFT NEW JERSEY.......................................                  0
ALASKA NURSES ASSOCIATION............................            231,873
ALASKA PUBLIC EMPLOYEES ASSOCIATION..................            811,084
ALLIANCE OF CHARTER SCHOOL EMPLOYEES AFT PA..........             57,781
AMERICAN SCHOOL FOR THE DEAF FEDERATION OF TEACHER...             31,600
ASN FOR RETARDED CITIZENS EMPLOYEES..................                  0
ASSOCIATION OF BUILDING TRADES INSTRUCTORS...........             24,868
ASSOCIATION OF CATHOLIC TEACHERS.....................             62,956
BACKUS FEDERATION OF NURSES AFT CONNECTICUT..........            178,511
BAKER HALL UNITED TEACHERS...........................             38,500
BARRACK HEBREW ACADEMY FACULTY ASSOCIATION...........             18,604
BAY AREA FRENCH-AMERICAN FEDERATION OF TEACHERS......            191,519
BERKLEE FEDERATION OF TEACHERS.......................            262,649
BRECK FEDERATION OF TEACHERS.........................             10,580
BRYANT FACULTY FEDERATION............................             40,953
BUCKLEY FACULTY ASSOCIATION..........................                  0
CW POST COLLEGIAL FEDERATION.........................            150,251
CALIFORNIA...........................................                  0
CAMBRIDGE COLLEGE EMPLOYEES FEDERATION...............             35,937
CAMPUS EDUCATION ASSOCIATION.........................             15,552
CANTALICIAN CENTER PROF STAFF ASSOCIATION............             68,549
CHICAGO ALLIANCE OF CHARTER TEACHERS AND STAFF.......                  0
CHICAGO TEACHERS UNION...............................          6,292,448
CLEVELAND ACTS.......................................             42,159
CONNECTICUT STATE....................................                  0
COOPER UNION FED COLLEGE TEACHERS....................              6,869
DANBURY & NEW MILFORD FED OF HEALTHCARE TECHNICAL....             72,531
DANBURY HOSP PROF NURSES ASN.........................                  0
DE SOTO COUNTY EDUCATORS ASSOCIATION.................            124,734
EARLY CHILDHOOD FEDERATION...........................            103,673
FACULTY--U OF CHICAGO LAB SCHOOLS....................            100,297
FANWOOD TEACHERS ASSOCIATION.........................             37,597
FEDERATION OF CREDIT UNION EMPLS.....................              7,032
FEDERATION OF INDIAN SERVICE EMPLOYEES...............            119,717
FEDERATION OF NURSES & HEALTH PROS...................             55,277
[[Page 68854]]

GEORGIA FEDERATION OF TEACHERS.......................             65,192
GREEN TREE FEDERATION OF TEACHERS....................             26,232
GROVE STREET ACADEMY FACULTY--NYSUT..................             11,307
GUAM FEDERATION OF TEACHERS..........................            361,047
HALLEN TEACHERS ASSOCIATION..........................             47,758
HEALTH CARE PROS, DOWNEAST FED OF....................             11,931
HEALTH PROFESSIONALS & ALLIED EMPLOYEES..............          2,135,146
HEALTH PROFESSIONALS AND ALLIED EMPLOYEES (LU--5621).                  0
HEALTH PROFESSIONALS AND ALLIED EMPLOYEES AFT (LU--                    0
 5058)...............................................
HEALTH PROFESSIONALS ASSN EMPLOYEES..................                  0
HEALTHCARE--PSEA/PSEA/AFT............................                  0
HENRY VISCARDI SCHOOL FACULTY ASSN...................             62,827
HOUSTON FEDERATION OF TEACHERS.......................          2,207,515
HPAE LOCAL 5186......................................                  0
HPAE SOUTH JERSEY HEALTHCARE.........................                  0
HPAE/PALISADES MEDICAL CENTER........................                  0
HPAE--COOPER HOSPITAL................................                  0
HRDF--HRDE WORKERS UNION.............................             22,512
ILLINOIS.............................................                  0
JOB CORPS EMPLOYEES FEDERATION.......................             23,188
JOHNSON MEMORIAL REGISTERED NURSES...................             40,637
L & M HEALTHCARE WORKERS UNION.......................            278,928
LA SALLE INSTITUTE FACULTY ASSOCIAT..................             11,629
LAWRENCE & MEM HOSPITALS REG NURSES..................            240,554
LAWRENCE & MEMORIAL FEDERATION OF TECHNOLOGISTS......             94,947
LEWIS & CLARK COLLEGE SUPORT STAFF...................             68,968
LINCOLN TECHNICAL INSTITUTE..........................              3,223
LONG ISLAND UNIVERSITY FACULTY FEDERATION............            158,375
LONGY FACULTY UNION..................................             13,232
MANCHESTER MEM HOSPITAL PROF NURSE...................             97,999
MASSACHUSETTS........................................                  0
MEA-MFT \16\.........................................            190,158
MICHIGAN.............................................              4,828
MILL NECK MANOR EDUCATIONAL ASSN.....................             31,369
MISSOURI.............................................                  0
MITCHELL COLLEGE FACULTY FEDERATION..................             11,417
MOORE COLLEGE OF ART & DESIGN........................             10,241
N RHODE ISLAND COLLABORATIVE EMPLS...................             24,094
NY STATE PUBLIC EMPLOYEES FED PEF....................          9,874,302
NATCHAUG FED OF REGISTERED NURSES....................             47,095
NEW HAVEN FEDERATION OF TEACHERS.....................            778,410
NEW MEXICO...........................................             57,950
NEW MILFORD HOSPITAL FED. OF REGIST..................             31,934
NEW YORK CITY TEACHERS...............................         72,483,652
NEW YORK STATE UNITED TEACHERS (LU--0)...............          3,512,767
NEW YORK STATE UNITED TEACHERS (LU--6420)............            118,597
NORTH CAROLINA.......................................              1,615
NORTH JERSEY SKILLS FOR TECHNOLOGY...................              1,516
NORTHCOAST EARLY CHILDHOOD WORKERS...................             12,966
NURSES & HEALTH PROS, FAIRVIEW.......................             33,844
NURSES & HEALTH PROS, VISITING.......................             82,972
NURSES, BRATTLEBORO FEDERATION OF....................             42,893
OAKWOOD..............................................             50,856
OKLAHOMA FEDERATION OF TEACHERS......................              6,667
OREGON...............................................                720
OREGON FED OF NURSES--KAISER.........................            908,194
OREGON NURSES ASSOCIATION............................                  0
OVERSEAS FEDERATION..................................            126,218
PACIFIC NORTHWEST HOSPITAL MEDICINE ASSOCIATION......                  0
PALOMAR FACULTY FEDERATION...........................            401,919
PARK COLLEGE FACULTY, FEDERATION OF..................             22,617
PENNSYLVANIA.........................................                  0
PENNSYLVANIA SCHOOL FOR THE DEAF UNITED..............             12,555
PORTER FEDERATION OF NURSES & HEALTH PROFESSIONALS...             41,254
PROFESSIONAL STAFF CONGRESS/CUNY.....................         10,982,000
RHODE ISLAND.........................................              1,744
RINDGE FACULTY FEDERATION............................             32,055
RIVERHEAD FREE LIBRARY STAFF ASSOCIATION.............             12,807
ROCH. SCH./DEAF UNITED FACULTY ASSO..................             21,058
SAN FRANCISCO ARCHDIOCESAN FEDERATION OF TEACHERS....            112,752
SSMEU LOCAL 5121.....................................             86,674
ST MARYS SCHOOL FOR DEAF.............................                  0
ST. DOMINIC'S SCHOOL STAFF ASSOCIAT..................             13,157
STATE FEDERATION.....................................                  0
[[Page 68855]]

TEMPLE UNIVERSITY....................................            279,389
TENNESSEE............................................                  0
TEXAS................................................                  0
TROCAIRE FACULTY ASSOCIATION--NYSUT 37-975...........             18,990
TUGSA................................................             19,556
UCATS................................................            556,271
UNITED CENTER EMPLOYEES ASSN.........................             62,723
UNITED CEREBRAL PALSY................................            183,635
UNITED FEDERATION OF COLLEGE TEACHERS................            111,960
UNITED TEACHERS OF NEW ORLEANS--UTNO.................            163,459
UNIVERSITY OF SAN FRANCISCO FACULTY ASSOCIATION......            251,821
VERMONT NURSES AND HEALTH PROFESSON..................                  0
VETERANS ADMN STAFF NURSES COUNCIL...................            117,601
VISTING NURSES.......................................              2,533
WASHINGTON...........................................            211,309
WENTWORTH FACULTY FEDERATION.........................             50,614
WEST HARTFORD DORMITORY SUPERVISORS..................             44,010
WEST VIRGINIA........................................            384,371
WESTCHESTER FEDERATION OF VISITING NURSES, NYSUT.....                  0
WESTERN PENN SCHOOL FOR BLIND CHILD..................             16,402
WESTERN STATES CHIROPRACTIC FACULTY..................             19,325
WILLAMETTE VALLEY CHILD CARE FED.....................             15,542
WINDHAM COMMUNITY MEM HOSP EMPLS.....................            106,854
WINDHAM HOSPITAL REGISTERED NURSES...................             42,755
WOODHAVEN FED OF HUMAN SERV PROF.....................              9,064
LU--5071.............................................                  0
LU--5091.............................................                  0
LU--5000.............................................            230,158
                                                      ------------------
    Total............................................        118,421,366
------------------------------------------------------------------------
            Locals Affiliated With Fraternal Order of Police
------------------------------------------------------------------------
AMTRAK POLICE COMMITTEE..............................                  0
BEP POLICE LABOR COMMITTEE...........................              4,850
DC #1................................................                  0
DOD POLICE FORT DIX NEW JERSEY.......................              4,086
FIRST FEDERAL LODGE F1 PENNSYLVANIA..................              2,276
LODGE 12.............................................              7,057
NIH POLICE LC COMMITTEE..............................                  0
NJ LABOR COUNCIL.....................................                  0
PRINCETON FOP LODGE 75...............................              1,961
US CAPITOL POLICE LABOR COMMITTEE....................             47,221
UNIVERSITY OF PA POLICE..............................              2,833
WRAMC/DOD POLICE LABOR COMMITTEE.....................                  0
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
    Total............................................             70,284
------------------------------------------------------------------------
          Locals Affiliated With National Education Association
------------------------------------------------------------------------
ADRIAN COLLEGE ASN OF PROFESSORS.....................             76,749
AGORA CYBER EDUCATION ASSOCIATION....................                  0
BAKER COLLEGE EDUCATION ASSOCIATION..................             14,079
CAMBRIA HEIGHTS EDUCATIONAL SUPPORT PROFESSIONAL.....             14,749
EDUCATION MINNESOTA..................................                  0
ENDICOTT COLLEGE FACULTY ASN.........................             17,460
FEA--PACIFIC AREA COUNCIL............................                  0
FEA--STATESIDE REGION................................                  0
FEA-EUROPE AREA COUNCIL..............................                  0
FLORIDA EDUCATION ASN................................                  0
GRAND RAPIDS EDUCATIONAL SUPPORT.....................             60,772
ILLINOIS EDUCATION ASSOCIATION.......................                  0
LAVELLE SCHOOL PROFESSIONAL STAFF ASSN...............             35,874
MAINE EDUCATION ASSOCIATION..........................                  0
MICHIGAN EDUCATION ASSOCIATION.......................                  0
MILTON HERSHEY EDUCATION ASN.........................                  0
OHIO EDUCATION ASSOCIATION...........................                  0
PART TIME FACULTY ASSOCIATION........................             63,713
PENNSYLVANIA.........................................                  0
PENNSYLVANIA VIRTUAL CHARTER EDUCATION ASSOCIATION...             77,451
PSEA RIVERSIDE EDUCATIONAL SUPPORT PERSONNEL.........             17,000
PSEA VIRTUAL CLASSROOM TEACHERS......................             93,858
R I SCHOOL OF DESIGN FACULTY.........................            115,108
R WMS COLL ASN CLERICALS/TECHNICALS..................             42,193
RHODE ISLAND NATIONAL EDUCATION ASN..................                  0
[[Page 68856]]

RISD TECHNICAL ASSOCIATION...........................                  0
ROGER WILLIAMS UNIVERSITY FACULTY....................            144,178
UNITED EDUCATIONAL SUPPORT PERSONNEL ASSOCIATION.....             12,630
UNITED FACULTY OF FLORIDA............................                  0
UNIV OF DETROIT PROFESSORS' UNION....................            177,004
UNIVERSITY OF DETROIT SUPPORT STAFF..................             36,163
VERMONT--NATIONAL EDUCATION ASN......................                  0
YOUNG SCHOLARS OF CENTRAL PA EDUCATION ASSOCIATION...             31,265
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
    Total............................................          1,030,246
------------------------------------------------------------------------
    Locals Affiliated With International Association of Fire Fighters
------------------------------------------------------------------------
BOEING FIRE FIGHTERS/INDUSTRIAL......................             60,607
CALIFORNIA PROFESSIONAL FIREFIGHTERS.................                  0
CAMP PARKS PROFESSIONAL FIREFIGHTERS.................              6,965
CAMP PENDLETON LOCAL.................................             35,138
CUMBERLAND VALLEY....................................              2,679
DOBBINS AFB LOCAL....................................              4,098
FIVE CITIES FIREFIGHTERS.............................                  0
FORT LEE FIRE & EMERGENCY SERVICES...................              6,921
GRAND FORKS SAFEGUARD FIREFIGHTERS ASSOCIATION.......              5,723
GREEN BAY AREA.......................................             83,374
HANFORD FIREFIGHTERS/BCFD#2..........................             67,227
HANSCOM AIRFORCE BASE FIRE DEPT......................              8,956
IOWA PROF FIRE FIGHTERS A-00-14......................                  0
KAPL PROFESSIONAL FIREFIGHTER ASSOCIATION............              2,957
LEXINGTON BLUE GRASS ARMY DEPOT......................              4,840
LOCAL UNION 108......................................              6,487
LOCAL UNION 1117.....................................             11,066
LOCAL UNION 123......................................              5,867
LOCAL UNION 14.......................................             10,215
LOCAL UNION 17.......................................              4,456
LOCAL UNION 170......................................              4,665
LOCAL UNION 191......................................              6,924
LOCAL UNION 211......................................             10,554
LOCAL UNION 263......................................             37,235
LOCAL UNION 267......................................              8,004
LOCAL UNION 281......................................              8,785
LOCAL UNION 282......................................             53,090
LOCAL UNION 283......................................             45,880
LOCAL UNION 33.......................................             48,987
LOCAL UNION 37.......................................              7,771
LOCAL UNION 68.......................................              7,590
LOCAL UNION 154......................................              6,701
LOCAL UNION 100......................................              3,601
LOCAL UNION 102......................................              9,614
LOCAL UNION 105......................................              6,640
LOCAL UNION 116......................................             13,371
LOCAL UNION 147......................................              3,903
LOCAL UNION 25.......................................             36,954
LOCAL UNION 88.......................................             13,488
LOCAL UNION 89.......................................             19,230
MISSOURI STATE COUNCIL OF FIRE FIGHTERS..............                  0
MOFFETT FIELD FIRE FIGHTERS ASSOCIATION..............                  0
MUSCATINE FIREFIGHTERS ASSOCIATION...................                  0
NATIONAL CAPITAL FEDERAL FIRE FIGHTERS...............             30,476
NAVAL AIR STATION LOCAL..............................              6,825
NIH PROFFESSIONAL FIREFIGHTERS.......................              4,401
PENNSYLVANIA PROFESSIONAL FIRE FIGHTERS..............                  0
PROFESSIONAL FIRE FIGHTERS ASN, NY...................                  0
PROFESSIONAL FIRE FIGHTERS OF OKLAHOMA...............                254
PROFESSIONAL FIRE FIGHTERS OF WISCONSIN..............                  0
ROBINS AIR FORCE BASE................................              5,502
ROCK ISLAND ARSENAL..................................              4,561
SAN MATEO COUNTY FIREFIGHTERS........................            166,315
STATE ASSOCIATION 45.................................                  0
TAG 914..............................................              5,937
TEXAS STATE ASSOCIATION OF FIRE FIGHTERS.............                  0
UNIFORMED PROFESSIONAL OF CONNECTICUTT...............                  0
UNITED EMERGENCY MEDICAL PROFESSION..................             68,560
UNITED MARICOPA COUNTY FIREFIGHTERS..................             47,003
WALTER REED AMC......................................              6,447
WHITE SANDS MISSILE RANGE FD.........................             11,046
[[Page 68857]]

X-10 INDUSTRIAL FIREFIGHTERS.........................              6,590
YAKIMA TRAINING CENTER FD UNION......................              3,048
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
    Total............................................          1,047,528
------------------------------------------------------------------------

---------------------------------------------------------------------------
    \16\ Identified as a state association but submits LM reports as
a local organization.
    \17\ Included in these totals were the following ancillary
organizations and funds that had the same mailing addresses as the
intermediate labor organization: The AFT Maryland Solidarity Fund,
The Louisiana Federation of Teacher's F of T/AFT Peg fund, the
Georgia Federation of Teacher's ``Cope'' project, the Florida Joint
Organizing Project, AFT Pennsylvania's Solidarity Fund, and
Vermont's Solidarity Fund.
   Table 2--Fiscal Year 2018 Disbursements to Intermediate State-Level
                           Labor Organizations
------------------------------------------------------------------------

------------------------------------------------------------------------
                  American Federation of Teachers \17\
------------------------------------------------------------------------
AFT ALABAMA..........................................            $61,621
AFT INDIANA..........................................             44,127
AFT KANSAS...........................................             60,524
AFT MARYLAND.........................................            280,230
AFT MISSISSIPPI......................................             89,409
AFT PENNSYLVANIA.....................................            338,161
FLORIDA EDUCATION ASSOCIATION........................            693,461
NORTH DAKOTA.........................................            178,701
                                                      ------------------
    Total............................................          1,746,234
------------------------------------------------------------------------
               International Association of Fire Fighters
------------------------------------------------------------------------
ILLINOIS.............................................             18,620
RHODE ISLAND.........................................             11,100
                                                      ------------------
    Total............................................             29,720
------------------------------------------------------------------------
                     National Education Association
------------------------------------------------------------------------
ALABAMA..............................................          3,114,390
ALASKA...............................................          1,931,082
ARIZONA..............................................          2,101,734
ARKANSAS.............................................            635,161
COLORADO.............................................          2,291,781
CONNECTICUT..........................................          1,609,485
DELAWARE.............................................            994,853
FLORIDA..............................................          3,435,500
GEORGIA..............................................          1,050,613
HAWAII...............................................            948,354
IDAHO................................................            779,714
IOWA.................................................          1,166,944
INDIANA..............................................          1,473,773
KANSAS...............................................            879,254
KENTUCKY.............................................          1,505,270
LOUISIANA............................................          1,655,376
MARYLAND.............................................          3,194,106
MASSACHUSETTS........................................          3,679,465
MISSISSIPPI..........................................            588,430
MISSOURI.............................................          1,153,029
MONTANA..............................................                  0
NEBRASKA.............................................          1,395,713
NEVADA...............................................          1,187,793
NEW HAMPSHIRE........................................            961,472
NEW JERSEY...........................................          6,858,117
NEW MEXICO...........................................          1,100,735
NEW YORK.............................................          2,343,591
NORTH DAKOTA.........................................          1,189,615
OKLAHOMA.............................................          1,468,118
OREGON...............................................          2,071,153
PENNSYLVANIA.........................................          6,105,353
SOUTH CAROLINA.......................................            749,964
SOUTH DAKOTA.........................................            733,007
TENNESSEE............................................          1,732,573
TEXAS................................................          2,100,400
UTAH.................................................            703,996
VIRGINIA.............................................          2,579,663
[[Page 68858]]

WASHINGTON...........................................          3,446,409
WEST VIRGINIA........................................            805,839
WISCONSIN............................................          1,938,230
WYOMING..............................................            811,163
                                                      ------------------
    Total............................................         74,471,218
------------------------------------------------------------------------
[FR Doc. 2019-26699 Filed 12-16-19; 8:45 am]
 BILLING CODE 4510-86-P