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60214 Federal Register / Vol. 70, No.

199 / Monday, October 17, 2005 / Rules and Regulations

Repetitive Visual Inspection of the Dual- the balanced system for measuring In addition, section 1201 of the Act
Window Temperature Indicators organizational and employee required that the IRS performance
(j) Perform repetitive visual inspections of performance within the IRS. The management system comply with
the dual-window temperature indicators temporary regulations prospectively section 1204, which prohibits the use of
installed in paragraph (f) of this AD within amend the existing final regulations in ‘‘records of tax enforcement results’’
65 hours TIS since-last-inspection. Use 26 CFR part 801 to clarify when (ROTERs) in the evaluation of IRS
paragraph (h) of this AD to inspect the
temperature indicators. quantity measures, which are not tax employees or to suggest or impose
enforcement results, may be used in production goals for such employees.
Requirements for Thermocouple Installation measuring organizational and employee Section 1204, however, does not
for On-Wing Diagnostic Test performance. The portions of this prohibit the use of quantity measures in
(k) The requirements for thermocouple document that are final regulations evaluating organizational and employee
installation are listed in Appendix B of PW provide necessary cross-references to performance. The temporary regulations
ASB No. JT8D A5944, Revision 5, dated the temporary regulations. These in this document amend the existing
October 3, 2005. regulations in part 801 to clarify when
regulations affect internal operations of
On-Wing Diagnostic Test Information the IRS and the systems it employs to quantity measures may be used in
(l) To perform the on-wing diagnostics test, evaluate the performance of measuring organizational and employee
use Appendix C of PW ASB No. JT8D A5944, organizations within the IRS. The text of performance.
Revision 5, dated October 3, 2005. the temporary regulations also serves as Explanation of Provisions
Material Incorporated by Reference the text of proposed regulations set forth
in the Proposed Rules section in this The final regulations provide
(m) You must use Pratt & Whitney Alert guidance and direction for the
Service Bulletin No. JT8D A5944, Revision 5, issue of the Federal Register.
establishment of a balanced
dated October 3, 2005, to perform the DATES: Effective Date: These regulations
inspections and tests required by this AD.
performance measurement system for
are effective on October 17, 2005. the IRS. The three elements of this
The Director of the Federal Register approved
the incorporation by reference of this service Applicability Date: For dates of balanced measurement system are (1)
bulletin in accordance with 5 U.S.C. 552(a) applicability, see §§ 801.7 and 801.8T. customer satisfaction measures, (2)
and 1 CFR part 51. You can get a copy from FOR FURTHER INFORMATION CONTACT: Neil employee satisfaction measures and (3)
Pratt & Whitney, 400 Main St., East Hartford, Worden, (202) 283–7900 (not a toll-free business results measures. These
CT 06108; telephone (860) 565–7700, fax organizational measures may be used to
(860) 565–1605. You can review copies at the
number).
evaluate the performance of, or to
FAA, New England Region, Office of the SUPPLEMENTARY INFORMATION: impose or suggest production goals for,
Regional Counsel, 12 New England Executive
Park, Burlington, MA; or at the National Background any organizational unit.
Archives and Records Administration The temporary regulations contained
This document amends final in this document relate primarily to the
(NARA). For information on the availability
of this material at NARA, call 202–741–6030, regulations in 26 CFR part 801 (the business results measures. Business
or go to: http://www.archives.gov/federal- Final Regulations) that implement the results are measured through quality
register/cfr/ibr-locations.html. Balanced System for Measuring measures and quantity measures.
Organizational and Employee Quality measures are based on reviews
Related Information
Performance within the IRS. The Final of a statistically valid sample of cases
(n) None. Regulations were published in the handled by certain organizational units
Issued in Burlington, Massachusetts, on Federal Register on August 6, 1999 (64 such as examination, collection and
October 3, 2005. FR 42834–42837). The Final Regulations Automated Collection System units. The
Francis A. Favara, emanated from section 1201 of the quality review of other work units is
Acting Manager, Engine and Propeller Internal Revenue Service Restructuring determined according to criteria
Directorate, Aircraft Certification Service. and Reform Act of 1998, Public Law established by the Commissioner or his
[FR Doc. 05–20501 Filed 10–14–05; 8:45 am] 105–206, 112 Stat. 685, 713 (1998) (the delegate.
BILLING CODE 4910–13–P Act), which required the IRS to establish The IRS and Treasury Department
a performance management system for have determined that the provisions of
those employees covered by 5 U.S.C. the existing part 801 regulations that
DEPARTMENT OF THE TREASURY 4302 that, among other things, limit the use of quantity measures in
establishes ‘‘goals or objectives for evaluating organizational units and
Internal Revenue Service individual, group, or organizational imposing or suggesting production goals
performance (or any combination for employees restrict the IRS’ ability to
26 CFR Part 801 thereof), consistent with the IRS’ monitor program performance and track
performance planning procedures, effectiveness of operations, and have
[TD 9227]
including those established under the caused confusion as to what types of
RIN 1545–BE46 Government Performance and Results data or measures may be discussed
Act of 1993, division E of the Clinger- between managers and employees and
Balanced System for Measuring Cohen Act of 1966 * * *, Revenue reflected in manager and employee
Organizational and Employee Procedure 64–22 * * *, and taxpayer goals. These temporary regulations
Performance Within the Internal service surveys.’’ Section 1201 further remove the limitations on the use of
Revenue Service required the IRS to use ‘‘such goals and quantity measures in evaluating the
AGENCY: Internal Revenue Service (IRS), objectives to make performance performance of, or imposing or
Treasury. distinctions among employees or groups suggesting goals for organizational units.
ACTION: Final and temporary of employees,’’ and to use ‘‘performance These temporary regulations also
regulations. assessments as a basis for granting remove the limitations on the use of
employee awards, adjusting an quantity measures to impose or suggest
SUMMARY: This document contains final employee’s rate of basic pay, and other goals for employees. The regulations
and temporary regulations relating to appropriate personnel actions * * *.’’ continue to provide that performance

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Federal Register / Vol. 70, No. 199 / Monday, October 17, 2005 / Rules and Regulations 60215

measures based on quantity measures § 801.7 Effective dates. results (including quality and quantity
will not be used to evaluate the The provisions of §§ 801.1 through measures as described in § 801.6T) may
performance of such employees. The 801.6 apply before October 17, 2005. For be used to evaluate the performance of
temporary regulations do not affect the the applicable provisions on or after or to impose or suggest production goals
continuing prohibition on the use of October 17, 2005, see §§ 801.1T through for, any organizational unit.
ROTERS to evaluate employee 801.7T.
performance or to impose or suggest § 801.3T Measuring employee
■ Par. 4. Sections 801.1T through
performance (temporary).
production quotas or goals for any 801.8T and a new center heading are
employee. added to read as follows: (a) In general. All employees of the
IRS will be evaluated according to the
Special Analyses Regulations Applicable On or After critical elements and standards or such
It has been determined that this is not October 17, 2005 other performance criteria as may be
a significant regulatory action as defined established for their positions. In
§ 801.1T Balanced performance
in Executive Order 12866. Therefore, a measurement system; in general accordance with the requirements of 5
regulatory assessment is not required. It (temporary). U.S.C. 4312, 4313, and 9508 and section
also has been determined that section (a) In general. (1) The regulations in 1201 of the Act, the performance criteria
553(b) of the Administrative Procedure this part 801 implement the provisions for each position as are appropriate to
Act (5 U.S.C. chapter 5) does not apply of sections 1201 and 1204 of the Internal that position, will be composed of
to these regulations. For applicability of Revenue Service Restructuring and elements that support the organizational
the Regulatory Flexibility Act, please Reform Act of 1998 (Pub. L. 105–106, measures of Customer Satisfaction,
refer to the cross-reference notice of 112 Stat. 685, 715–716, 722) (the Act) Employee Satisfaction, and Business
proposed rulemaking published and provide rules relating to the Results; however, such organizational
elsewhere in this Federal Register. establishment by the Internal Revenue measures will not directly determine the
Pursuant to section 7805(f) of the Service (IRS) of a balanced performance evaluation of individual employees.
Internal Revenue Code, these temporary measurement system. (b) Fair and equitable treatment of
regulations will be submitted to the (2) Modern management practice and taxpayers. In addition to all other
Chief Counsel for Advocacy of the Small various statutory and regulatory criteria required to be used in the
Business Administration for comment provisions require the IRS to set evaluation of employee performance, all
on its impact on small business. performance goals for organizational employees of the IRS will be evaluated
units and to measure the results on whether they provided fair and
Drafting Information achieved by those units with respect to equitable treatment to taxpayers.
The principal author of these those goals. To fulfill these (c) Senior Executive Service and
regulations is Karen F. Keller, Office of requirements, the IRS has established a special positions. Employees in the
Associate Chief Counsel (General Legal balanced performance measurement Senior Executive Service will be rated
Services). However, other personnel system, composed of three elements: in accordance with the requirements of
from the IRS participated in their Customer Satisfaction Measures; 5 U.S.C. 4312 and 4313 and employees
development. Employee Satisfaction Measures; and selected to fill positions under 5 U.S.C.
Business Results Measures. The IRS is 9503 will be evaluated pursuant to
List of Subjects in 26 CFR Part 801 workplans, employment agreements,
likewise required to establish a
Government employees, Organization performance evaluation system for performance agreements, or similar
and functions (Government agencies). individual employees. documents entered into between the IRS
(b) [Reserved] and the employee.
Amendments to the Regulations (d) General workforce. The
§ 801.2T Measuring organizational performance evaluation system for all
■Accordingly, 26 CFR part 801 is performance (temporary).
amended as follows: other employees will—
The performance measures that (1) Establish one or more retention
PART 801—BALANCED SYSTEM FOR comprise the balanced measurement standards for each employee related to
MEASURING ORGANIZATIONAL AND system will, to the maximum extent the work of the employee and expressed
INDIVIDUAL PERFORMANCE WITHIN possible, be stated in objective, in terms of individual performance;
THE INTERNAL REVENUE SERVICE quantifiable, and measurable terms and (2) Require periodic determinations of
will be used to measure the overall whether each employee meets or does
■ Paragraph 1. The authority citation performance of various operational not meet the employee’s established
for part 801 continues to read in part as units within the IRS. In addition to retention standards;
follows: implementing the requirements of the (3) Require that action be taken in
Authority: 5 U.S.C. 9501 * * *. Act, the measures described here will, accordance with applicable laws and
where appropriate, be used in regulations, with respect to employees
■ Par. 2. Section 801.1 is amended by: establishing performance goals and whose performance does not meet the
■ 1. Adding the new center heading. making performance evaluations established retention standards;
■ 2. Removing and reserving paragraph established, inter alia, under Division E, (4) Establish goals or objectives for
(b). National Defense Authorization Act for individual performance consistent with
The addition reads as follows: Fiscal Year 1996 (the Clinger-Cohen Act the IRS’s performance planning
Regulations Applicable Before October of 1996) (Pub. L. 104–106, 110 Stat. 186, procedures;
17, 2005 679); the Government Performance and (5) Use such goals and objectives to
Results Act of 1993 (Pub. L. 103–62, 107 make performance distinctions among
§ 801.1 Balanced performance Stat. 285); and the Chief Financial employees or groups of employees; and
measurement system; in general. Officers Act of 1990 (Pub. L. 101–576, (6) Use performance assessments as a
* * * * * 108 Stat. 2838). Thus, organizational basis for granting employee awards,
■ Par. 3. Section 801.7 is added to read measures of customer satisfaction, adjusting an employee’s rate of basic
as follows: employee satisfaction, and business pay, and other appropriate personnel

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60216 Federal Register / Vol. 70, No. 199 / Monday, October 17, 2005 / Rules and Regulations

actions, in accordance with applicable information requested for these prescribed by the Commissioner or his
laws and regulations. purposes under conditions that delegate.
(e) Limitations. (1) No employee of the guarantee them anonymity. For (c) Quantity measures. Quantity
IRS may use records of tax enforcement purposes of this section, customers may measures will consist of outcome-
results (as described in § 801.6T) to include individual taxpayers, neutral production and resource data
evaluate any other employee or to organizational units, or employees that does not contain information
impose or suggest production quotas or within the IRS and external groups regarding the tax enforcement result
goals for any employee. affected by the services performed by reached in any case that involves
(i) For purposes of the limitation the IRS operating unit. particular taxpayers. Examples of
contained in this paragraph (e), quantity measures include, but are not
employee has the meaning as defined in § 801.5T Employee satisfaction measures
(temporary).
limited to—
5 U.S.C. 2105(a). (1) Cases started;
(ii) For purposes of the limitation The employee satisfaction numerical (2) Cases closed;
contained in this paragraph (e), evaluate ratings to be given operating units
(3) Work items completed;
includes any process used to appraise or within the IRS will be determined on
measure an employee’s performance for the basis of information gathered (4) Customer education, assistance,
purposes of providing the following: through various methods. For example, and outreach efforts completed;
(A) Any required or requested questionnaires, surveys, and other (5) Time per case;
performance rating. information gathering mechanisms may (6) Direct examination time/out of
(B) A recommendation for an award be employed to gather data regarding office time;
covered by Chapter 45 of Title 5; 5 satisfaction. The information gathered (7) Cycle time;
U.S.C. 5384; or section 1201(a) of the will be used to measure, among other (8) Number or percentage of overage
Act. factors bearing upon employee cases;
(C) An assessment of an employee’s satisfaction, the quality of supervision (9) Inventory information;
qualifications for promotion, and the adequacy of training and (10) Toll-free level of access; and
reassignment, or other change in duties. support services. All employees of an (11) Talk time.
(D) An assessment of an employee’s operating unit will have an opportunity (d) Definitions—(1) Tax enforcement
eligibility for incentives, allowances, or to provide information regarding results. A tax enforcement result is the
bonuses. employee satisfaction within the outcome produced by an IRS
(E) Ranking of employees for release/ operating unit under conditions that employee’s exercise of judgment in
recall and reductions in force. guarantee them anonymity. recommending or determining whether
(2) Employees who are responsible for
§ 801.6T Business results measures or how the IRS should pursue
exercising judgment with respect to tax
(temporary). enforcement of the tax laws. Examples
enforcement results in cases concerning
of tax enforcement results include a lien
one or more taxpayers may be evaluated (a) In general. The business results filed, a levy served, a seizure executed,
on work done on such cases only in the measures will consist of numerical the amount assessed, the amount
context of their critical elements and scores determined under the quality collected, and a fraud referral. Examples
standards. measures and the quantity measures
(3) Performance measures based in of data that are not tax enforcement
described elsewhere in this section. results include a quantity measure and
whole or in part on quantity measures (b) Quality measures. Quality
(as described in § 801.6T) will not be data derived from a quality review or
measures will be determined on the from a review of an employee’s or a
used to evaluate the performance of any basis of a review by a specially
non-supervisory employee who is work unit’s work on a case, such as the
dedicated staff within the IRS of a number or percentage of cases in which
responsible for exercising judgment statistically valid sample of work items
with respect to tax enforcement results correct examination adjustments were
handled by certain functions or proposed or appropriate lien
(as described in § 801.6T). organizational units determined by the determinations were made.
§ 801.4T Customer satisfaction measures Commissioner or his delegate such as (2) Records of tax enforcement results.
(temporary). the following: Records of tax enforcement results are
The customer satisfaction goals and (1) Examination and collection units data, statistics, compilations of
accomplishments of operating units and Automated Collection System Units information or other numerical or
within the IRS will be determined on (ACS). The quality review of the quantitative recordations of the tax
the basis of information gathered handling of cases involving particular enforcement results reached in one or
through various methods. For example, taxpayers will focus on such factors as more cases. Such records may be used
questionnaires, surveys and other types whether IRS personnel devoted an for purposes such as forecasting,
of information gathering mechanisms appropriate amount of time to a matter, financial planning, resource
may be employed to gather data properly analyzed the facts, and management, and the formulation of
regarding customer satisfaction. complied with statutory, regulatory, and case selection criteria. Records of tax
Information to measure customer IRS procedures, including timeliness, enforcement results may be used to
satisfaction for a particular work unit adequacy of notifications, and required develop methodologies and algorithms
will be gathered from a statistically contacts with taxpayers. for use in selecting tax returns to audit.
valid sample of the customers served by (2) Toll-free telephone sites. The Records of tax enforcement results do
that operating unit and will be used to quality review of telephone services will not include tax enforcement results of
measure, among other things, whether focus on such factors as whether IRS individual cases when used to
those customers believe that they personnel provided accurate tax law determine whether an employee
received courteous, timely, and and account information. exercised appropriate judgment in
professional treatment by the IRS (3) Other work units. The quality pursuing enforcement of the tax laws
personnel with whom they dealt. review of other work units will be based upon a review of the employee’s
Customers will be permitted to provide determined according to criteria work on that individual case.

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Federal Register / Vol. 70, No. 199 / Monday, October 17, 2005 / Rules and Regulations 60217

§ 801.7T Examples (temporary). time expended, issues raised, and Control Act (TSCA) section 8(a)
(a) The rules of § 801.3T are enforcement outcomes reached should be Inventory Update Reporting (IUR)
illustrated by the following examples: considered and discussed with the employee regulations by adding 1,2,3-propanetriol
and used in evaluating the employee.
Example 1. (i) Each year Division A’s (CASRN 56–81–5) to the list of chemical
Example 3. When assigning a case, a
Examination and Collection functions supervisor is permitted to discuss with the substances in 40 CFR 710.46(b)(2)(iv)
develop detailed workplans that set goals for employee the merits, issues, and which are exempt from reporting
specific activities (e.g., number of audits or development of techniques of the case based processing and use information required
accounts closed) and for other quantity upon a review of the case file. by 40 CFR 710.52(c)(4). EPA has
measures such as cases started, cycle time, Example 4. A supervisor is not permitted determined that the IUR processing and
overage cases, and direct examination time. to establish a goal for proposed adjustments use information for this chemical is of
These quantity measure goals are developed in a future examination. low current interest. Manufacturers and
nationally and by Area Office based on
budget allocations, available resources, (b) [Reserved]. importers of the chemicals listed in 40
historical experience, and planned CFR 710.46(b)(2)(iv) must continue to
§ 801.8T Effective dates (temporary). report manufacturing information.
improvements. These plans also include
information on measures of quality, customer (a) The provisions of §§ 801.1T DATES: This direct final rule is effective
satisfaction, and employee satisfaction. through 801.7T apply on or after on December 16, 2005 without further
Results are updated monthly to reflect how October 17, 2005. notice, unless EPA receives adverse
each organizational unit is progressing (b) The applicability of §§ 801.1T
comment by November 16, 2005. If,
against its workplan, and this information is through 801.7T expires on or before
however, EPA receives adverse
shared with all levels of management. October 14, 2008.
(ii) Although specific workplans are not comment, EPA will publish a Federal
developed at the Territory level, Mark E. Matthews, Register document to withdraw the
Headquarters management expects the Area Deputy Commissioner for Services and direct final rule before the effective date.
Directors to use the information in the Area Enforcement. ADDRESSES: Submit your comments,
plans to guide the activity in their Territories. Approved: October 3, 2005. identified by docket identification (ID)
For 2005, Area Office 1’s workplan has a goal Eric Solomon, number OPPT–2005–0001, by one of the
to close 1,000 examinations of small business
Acting Deputy Assistant Secretary (Tax following methods:
corporations and 120,000 taxpayer
delinquent accounts (TDAs), and there are 10
Policy). • Federal eRulemaking portal:http://
Exam Territories and 12 Collection [FR Doc. 05–20439 Filed 10–14–05; 8:45 am] www.regulations.gov/. Follow the on-
Territories in Area Office 1. While taking into BILLING CODE 4830–01–P line instructions for submitting
account the mix and priority of workload, comments.
and available staffing and grade levels, the • Agency website:http://
Examination Area Director communicates to ENVIRONMENTAL PROTECTION www.epa.gov/edocket/. EDOCKET,
the Territory Managers the expectation that, EPA’s electronic public docket and
on average, each Territory should plan to
AGENCY
comment system, is EPA’s preferred
close about 100 cases. The Collection Area method for receiving comments. Follow
Director similarly communicates to each
40 CFR Part 261
Territory the expectation that, on average,
the on-line instructions for submitting
they will close about 10,000 TDAs, subject to
Identification and Listing of Hazardous comments.
similar factors of workload mix and staffing. Waste • E-mail: oppt.ncic@epa.gov.
(iii) Similar communications then occur at • Mail: Document Control Office
CFR Correction
the next level of management between (7407M), Office of Pollution Prevention
Territory Managers and their Group In Title 40 of the Code of Federal and Toxics (OPPT), Environmental
Managers, and between Group Managers and Regulations, Parts 260 to 265, revised as Protection Agency, 1200 Pennsylvania
their employees. These communications will of July 1, 2005, in Appendix IX to Part Ave., NW., Washington, DC 20460–
emphasize the overall goals of the 261, on pages 129 and 130, in the 0001.
organization and each employee’s role in second column under ‘‘Address’’, • Hand delivery: OPPT Document
meeting those goals. The communications transfer entries 2 and 3 to the third
will include expectations regarding the Control Office (DCO), EPA East Bldg.,
average number of case closures that would
column under ‘‘Waste description’’. Rm. 6428, 1201 Constitution Ave., NW.,
have to occur to reach those goals, taking into [FR Doc. 05–55515 Filed 10–14–05; 8:45 am] Washington, DC. Attention: Docket ID
account the fact that each employee’s actual BILLING CODE 1505–01–D
number OPPT–2003–0075. The DCO is
closures will vary based upon the facts and open from 8 a.m. to 4 p.m., Monday
circumstances of specific cases. through Friday, excluding legal
(iv) Setting these quantity measure goals, holidays. The telephone number for the
ENVIRONMENTAL PROTECTION
and the communication of those goals, is DCO is (202) 564–8930. Such deliveries
permissible because case closures are a AGENCY
are only accepted during the Docket’s
quantity measure. Case closures are an
example of outcome-neutral production data 40 CFR Part 710 normal hours of operation, and special
that does not specify the outcome of any arrangements should be made for
[OPPT–2003–0075; FRL–7715–2]
specific case such as the amount assessed or deliveries of boxed information.
collected. RIN–2070 AC61 • Instructions: Direct your comments
Example 2. In conducting a performance to docket ID number OPPT–2005–0001.
evaluation, a supervisor is permitted to take TSCA Inventory Update Reporting EPA’s policy is that all comments
into consideration information the supervisor Partially Exempted Chemicals List; received will be included in the public
has developed showing that the employee Addition of 1,2,3-Propanetriol docket without change and may be
failed to propose an appropriate adjustment made available online at http://
to tax liability in one of the cases the AGENCY: Environmental Protection
employee examined, provided that Agency (EPA). www.epa.gov/edocket/, including any
information is derived from a review of the ACTION: Direct final rule. personal information provided, unless
work done on the case. All information the comment includes information
derived from such a review of individual SUMMARY: EPA is taking direct final claimed to be Confidential Business
cases handled by the employee, including action to amend the Toxic Substances Information (CBI) or other information

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