Authority will take action upon the application.

(i) Necessity Certificates. Upon approval of an application, a Necessity Certificate will be forwarded to the Commissioner of Internal Revenue and will constitute conclusive evidence of certification by the Certifying Authority that the facilities therein described are necessary in the interest of national defense and of the portion of the adjusted basis upon which the amortization deduction under section 168(a) shall be computed. The Certifying Authority will not certify the accuracy of the cost of any facilities nor of any date relative to the construction, reconstruction, erection, installation or acquisition thereof. It will be incumbent upon taxpayers electing to take the amortization deduction to establish to the satisfaction of the Commissioner of Internal Revenue the identities of the facilities, the costs thereof, and the dates relative thereto.

(j) Further description after certification. (1) Where the actual description or cost of a certified facility varies or will vary so materially from the description or cost in the application for a Necessity Certificate as to put in question the identity of the facility, the taxpayer may request an amendment of the certificate by filing a statement with the Certifying Authority setting forth the revised description or cost.

(2) It is to be considered that there is not so material a variation as to put in question the identity of the facility and therefore that the varied description or cost is within the scope of the original certification and no amendment is necessary in the following cases:

(i) Where the facility acquired or constructed is the same as that certified even though the actual cost exceeds the cost of the facility as estimated in the certificate.

(ii) Where the facility acquired or constructed varies from the facility certified and the actual cost exceeds by not more than 15 percent the cost estimated in the certificate. It is not intended that the certificate is to be considered as a dollar-amount authorization which may be exceeded by not more than 15 percent so as to include any additional facilities. For the purpose of the 15 percent limitation the word "facility" as employed above contemplates

consideration separately of each item as listed in Appendix A (of the standard form of application for a Necessity Certificate.

(3) The statement should consist of four copies of an amended Appendix A setting forth all of the emergency facilities certified with their revised descriptions or costs in the same order in which such emergency facilities were listed on the original Appendix A. However, where the original Appendix A is lengthy and only a few variations or changes are involved, the four copies of the amended Appendix A may list only the facilities changed. In all instances, the amended descriptions or costs should be identified, by item and page number, with the descriptions or costs contained in the original Appendix A and should be accompanied by a letter explaining all changes with the reason therefor.

(4) If the Certifying Authority is of the opinion that the varied or changed costs or descriptions are within the scope of the original certification, the amended Appendix A will be forwarded by the Certifying Authority to the Commissioner of Internal Revenue for substitution for the original Appendix A attached to the original certificate to have the effect of an amendment thereof. A copy of the amendment will be transmitted to the taxpayer.

(5) Although reasonable substitutions for facilities previously certified may be determined to be within the scope of the original certification, additional facilities, as a general rule, will not be considered to be within the scope of the original certification and will require a separate new application which will be subject to the provisions of section 168 (e) (2) of the Internal Revenue Code of 1954. The Certifying Authority may, however, afford a filing date for such separate application which will correspond to the date on which the application for amendment was filed for the facilities found to be outside the scope of the original certification.

(k) Cancellation or amendment of Necessity Certificate. The Certifying Authority may (1) cancel any Necessity Certificate where it has been obtained by fraud or misrepresentation or has been issued through error or inadvertence, or (2) amend any Necessity Certificate for sufficient cause.

(1) Time extensions. Applications for time extensions on outstanding Necessity Certificates may be considered only if a request for such extension is filed with the Certifying Authority prior to the termination date of the Certificate. Time extensions on Necessity Certificates which have expired by their terms prior to the filing of a request for such time extension may be considered only if the proposed expansion can satisfy the requirements of section 168 (e) (2) of the Internal Revenue Code of 1954.

Sec. 5. Exercise of powers of Certifying Authority.

(a) Any actions taken in exercise of the powers and authority conferred by section 168 (c) of the Internal Revenue Code of 1954 and vested in the Director of the Office of Emergency Planning by Executive Order 10480, as amended, may be taken in the name of the Office of Emergency Planning by the Director's authorized representative.

(b) The Director may for good and sufficient reason in the interest of national defense make exceptions to the requirements for filing in section 4(d) (2). However, in no event may an application be filed later than 6 months after the beginning of such construction, reconstruction, erection or installation, or the date of such acquisition.

equipment or any part thereof the construction, reconstruction, erection, installation or acquisition of which was completed after December 31, 1949, and with respect to which a Necessity Certificate under section 124A (e) of the Internal Revenue Code has been made (b) "Certifying Authority" means the Certifying Authority designated by the President for purposes of section 124A (g) of the Internal Revenue Code.

(c) "Contracting Agency" means that agency or department of the United States Government which authorizes payment by the United States for the unamortized cost of an Emergency Facility.

(d) "Payment" means an amount received by a contractor or subcontractor, directly or indirectly from the United States, as compensation for the unamortized cost of an Emergency Facility because (1) a contract with the United States or subcontracts thereunder involving the use of the Emergency Facility have been terminated by the terms thereof or by cancellation, or (2) the taxpayer had reasonable ground (either from provisions of a contract with the United States or subcontracts thereunder involving the use of the Emergency Facility, or from written or orai representations made under the authority of the United States) for anticipating future contracts involving the use of the facility, which future contracts have not been made.

(e) "Payment Certificate" means a certificate made pursuant to section 124A (g) of the Internal Revenue Code certifying that a payment made by the United States to a taxpayer is compensation for the unamortized cost of an Emergency Facility.

Sec. 2. Application for Payment Certifi

cate.

An application for a Payment Certificate shall conform with the standard form approved by the Certifying Authority and shall be executed in the manner and by the person prescribed by the form. Such form may be obtained from and filed with the Contracting Agency within such time as shall be prescribed.

Sec. 3. Responsibility of Certifying Authority.

The Certifying Authority shall direct and control the activities of the Con

tracting Agency and other agencies under section 124A (g) of the Internal Revenue Code and this regulation. The Certifying Authority or his delegate shall make the findings provided for by sections 124A (g) (1) (A) or (B) and 124A(g) (2) of the Internal Revenue Code and by section 1(d) of this regulation and shall certify to the Commissioner of Internal Revenue pursuant thereto. Such certification shall set forth the payment made for each separate Emergency Facility.

Sec. 4. Conclusiveness of Payment Certificate.

A Payment Certificate shall be binding upon the Commissioner of Internal Revenue as to the fact of payment. The treatment of amounts received and the amount of the amortization or depreciation deduction allowable by reason of such amounts shall be governed by the applicable provisions of the Internal Revenue Code.

SECTION 1. Any record relating to compliance with wage and salary regulations issued by the Wage Stabilization Board, the Salary Stabilization Board, the Railroad and Airline Wage Board, and the Construction Industry Stabilization Commission under Title IV of the Defense Production Act of 1950, as amended, need not be preserved after April 30, 1955, or an earlier date when previously specified by general regulation.

SEC. 2. This shall not apply to records required to be kept by persons currently in litigation or who are still under investigation for violation of stabilization regulations.

(Sec. 705, 64 Stat. 816, as amended; 50 U. S. C. App. 2155, E. O. 10494, 18 F. R. 6585, 3 CFR, 1953 Supp.)

[ODM Reg. 3, 21 F. R. 2940, May 3, 1956]

as

2. Cancellation. Defense Mobilization Order I-21 (revised) dated May 19, 1958 (23 F.R. 3529), is hereby cancelled. 3. Authorities. Section 710(e) of the Defense Production Act of 1950, amended; Executive Order 10660, of February 15, 1956, as amended, establishing a National Defense Executive Reserve; and Section 305 of Executive Order 11051 of September 27, 1962.

4. Objective. To provide for an effective reserve of executive talent by identifying, recruiting, and training in advance of such an emergency, an adequate number of executives for utilization within the government in the event of a national emergency.

5. Organization and administration. a. The Director of the Office of Emergency Planning, under the direction of the President, is responsible for developing the over-all policies and plans for the Executive Reserve Program of the Federal Government. Departments and agencies of the Executive Branch having

emergency responsibilities are authorized, subsequent to appropriate consultation with the Director, Office of Emergency Planning, to establish and maintain national and field units of the Executive Reserve, select and designate members of such units, and institute programs for their training and readiness. Each unit of the Executive Reserve shall be under the supervision of the head of the department or agency or a ranking official designated by him for the conduct of the program.

b. In order to assure maximum survivability. members of the Executive Reserve Units should be drawn, as appropriate, from all geographical areas, and from all segments of the economy. Executive Reservists shall be persons with broad experience and qualified to carry out executive responsibilities in time of national emergency. The numbers of such reservists shall be sufficient to meet the projected emergency executive manpower requirements of the agency, but should not exceed the number for which there is a demonstrable need.

c. Each department and agency shall be responsible for maintaining up-todate records and files on its Executive Reservists. To assist the departments and agencies in this responsibility, a central register of Reserve members will be maintained by the Civil Service Commission. To avoid duplicate invitations, or excessive demands on a single employer, no department or agency shall contact a prospective Executive Reservist until having first checked with the Civil Service Commission to determine whether the individual is (1) an Executive Reservist already, or (2) is being contacted by another agency to become a Reservist. Each department and agency shall notify the Civil Service Commission of persons designated as members of the Reserve.

6. Security clearance. The degree of security clearance necessary for each Reservist will be determined by the department or agency involved, in accordance with existing security standards. The official designation of Executive Reservists will be withheld until such security clearance is obtained.

7. Conflict of interest. With respect to training activities, Executive Reservists who are not officers or employees of the Executive Branch of the United

States Government are exempt from the operation of sections 203, 205, 207, 208, and 209 of Title 18, United States Code. (Public Law 87-849, 87th Congress). Executive Reservist training within the meaning of this section does not include advising, consulting or acting on any matter pending before any department or agency. Executive Reservists to be engaged in these latter activities shall be appointed by the agency involved as consultants under appropriate statutory authority. Such Federal employees, on a full or parttime basis, are subject with respect to such employment to the conflict of interest statutes and the provisions of the President's memorandum of May 2, 1963.

8. Interagency Committee. There shall be established and maintained an Interagency National Defense Executive Reserve Committee to advise the Director of the Office of Emergency Planning and the heads of departments and agencies on the coordination of the program of the several Executive Reserve Units. Members of the committee shall be designated by the heads of departments and agencies which have Executive Reserve Units. The Director of the Office of Emergency Planning shall name the Chairman.

[28 F.R. 8402, Aug. 16, 1963]

OEP REG. 4-REGULATIONS UNDER SECTION 232 OF THE TRADE EXPANSION ACT OF 1962

Sec.

1. Authority.

2. Definitions. 3. General.

4. Criteria for determining effects of imports on national security.

5. Applications for investigation.
6. Confidential information.
7. Conduct of investigation.
8. Emergency action.

9. Report of Director.

AUTHORITY: Sections 1-9 issued under sec. 232, 76 Stat. 877, 19 U.S.C. 1862.

SOURCE: Sections 1 to 9 contained in OEP Reg. 4, 28 F.R. 122, Jan. 4, 1963, unless otherwise noted.

Section 1. Authority.

These regulations are promulgated pursuant to section 232 of the Trade Expansion Act of 1962, Public Law 87794, October 11, 1962.

Sec. 2. Definitions.

As used herein "Director" means the Director of the Office of Emergency Planning.

Sec. 3. General.

Upon request of the head of any Government department or agency, upon application of an interested party, or upon his own motion, the Director shall set in motion an immediate investigation to determine the effects on the national security of imports of any article.

Sec. 4. Criteria for determining effects of imports on national security.

(a) In determining the effect on the national security of imports of the article which is the subject of the investigation, the Director is required to take into consideration the following:

(1) Domestic production needed for projected national defense requirements including restoration and rehabilitation.

(2) The capacity of domestic industries to meet such projected requirements, including existing and anticipated availabilities of:

(i) Human resources
(ii) Products

(iii) Raw materials

(iv) Production equipment and facilities

(v) Other supplies and services essential to the national defense.

(3) The requirement of growth of such industries and such supplies and services including the investment, exploration and development necessary to assure capacity to meet projected defense requirements.

(4) The effect which the quantities, availabilities, character and uses of imported goods have or will have on such industries and the capacity of the United States to meet national security requirements.

(5) The economic welfare of the Nation as it is related to our national security, including the impact of foreign competition on the economic welfare of individual domestic industries. In determining whether such impact may impair the national security, any substantial unemployment, decrease in revenues of government, loss of skills or investment, or other serious effects shall be considered.

(b) The Director shall also consider other relevant factors in determining whether the national security is affected by imports of the article.

Sec. 5. Applications for investigation.

(a) Applications are required to be in writing. Twenty-five copies shall be filed by mail with the Director, Office of Emergency Planning, Washington 25, D.C.

(b) Applications shall describe how the quantities or circumstances of imports of the particular article affect the national security and shall contain the following information:

or

(1) Identification of the person, partnership, association, corporation, other entity on whose behalf the application is filed.

(2) A precise description of the article. (3) Description of the applicant and the domestic industry concerned, including pertinent information regarding companies and their plants, locations, capacity and current output of the domestic industry concerned with the article in question.

(4) Pertinent statistics showing the quantities and values of both imports and production in the United States.

(5) Nature, sources, and degree of the competition created by imports of the article in question.

(6) The effect, if any, of imports of the article in question upon the restoration of domestic production capacity in an emergency.

(7) Employment and special skills involved in the domestic production of the article.

(8) Extent to which investment and specialized productive capacity is or will be adversely affected.

(9) Revenues of Federal, State, or local Governments which are or may be affected by the volume or circumstances of imports of the article.

(10) Defense or defense supporting uses of the article including data on defense contracts or sub-contracts, both past and current.

(c) Statistical material presented should be on a calendar-year basis for sufficient periods of time to indicate trends and afford the greatest possible assistance to the Director. Monthly or quarterly data for the latest complete years should be included as well as any