12098 Federal Register / Vol. 62, No. 50 / Friday, March 14, 1997 / Rules and Regulations

transactions are between unrelated

persons, and tax liabilities are

disregarded. * * *

Example 1. * * *

(d) * * * Under section 301(d), P’s basis

in the T stock is $60. Under § 1.1502–13, and

paragraph (b)(2) of this section, S’s $160 gain

from the distribution is deferred and taken

into account in Year 5 as a result of P’s sale

of the T stock. * * *

* * * * *

Example 4. * * *

(b) Analysis. Under paragraph (c)(2) of this

section, S is treated as disposing of each of

its shares of T’s stock immediately before T

becomes a nonmember. * * *

* * * * *

Example 6. * * *

(b) Analysis. Under paragraph (c)(1)(iii)(A)

of this section, P’s excess loss account on

each of its shares of S’s stock ordinarily is

taken into account at the time substantially

all of S’s assets are treated as disposed of,

abandoned, or destroyed for Federal income

tax purposes. * * *

* * * * *

Par. 6. Section 1.1502–20 is amended

as follows:

1. In paragraph (b)(6), Example 5. (iii)

is revised.

2. In paragraph (e)(3), Example 1. (i),

the third sentence is revised.

3. In paragraph (e)(3), Example 1. (ii)

is revised.

The revisions read as follows:

§ 1.1502–20 Disposition or

deconsolidation of subsidiary stock.

* * * * *

(b) * * *

(6) * * *

Example 5. * * *

(iii) T’s issuance of additional shares to the

public results in S’s intercompany loss being

taken into account under the acceleration

rule of § 1.1502–13(d) because there is no

difference between P’s $100 basis in the T

stock and the $100 basis the T stock would

have had if P and S had been divisions of a

single corporation. S’s loss taken into

account is disallowed under paragraph (a)(1)

of this section.

* * * * *

(e) * * *

(3) * * *

Example 1. * * * (i) * * * With the view

described in paragraph (e)(1) of this section,

P transfers land with a value of $100 and a

basis of $100 to T in exchange for preferred

stock with a $200 redemption price and

liquidation preference. * * *

(ii) Under section 305, the redemption

premium is treated as a distribution of

property to which section 301 and § 1.1502–

13(f)(2) apply. Under §§ 1.1502–13 and

1.1502–32, P’s aggregate basis in the

preferred and common stock is unaffected by

the deemed distributions.

* * * * *

Par. 7. Section 1.1502–32 is amended

as follows:

1. In paragraph (b)(3)(ii)(A), the

second sentence is revised.

2. In paragraph (b)(3)(v), the last

sentence is revised.

3. In paragraph (b)(5)(ii), Example 5.

(c), the second sentence is revised.

4. In paragraph (b)(5), Example 6. (b)

is revised.

5. In paragraph (f), a sentence is

added after the second sentence.

The addition and revisions read as

follows:

§ 1.1502–32 Investment adjustments.

* * * * *

(b) * * *

(3) * * *

(ii) * * * (A) * * * For example, S’s

dividend income to which § 1.1502–

13(f)(2)(ii) applies, and its interest

excluded from gross income under

section 103, are treated as tax-exempt

income. * * *

* * * * *

(v) * * * See § 1.1502–13(f)(2)(iv) for

taking into account distributions to

which section 301 applies (but not other

distributions treated as dividends)

under the entitlement rule.

* * * * *

(5) * * *

(ii) * * *

Example 5. * * *

(c) * * * Under § 1.1502–13(f)(2)(iv), S is

treated as making a $70 distribution to P at

the time P becomes entitled to the

distribution. * * *

Example 6. * * *

(b) Analysis. Under section 358, P’s basis

in the S stock is increased by its basis in the

T stock. Under § 1.1502–13(f)(3) the money

received is treated as being taken into

account immediately after the transaction.

Thus, the $10 is treated as a dividend

distribution under section 301 and under

paragraph (b)(3)(v) of this section, the $10 is

a distribution to which paragraph (b)(2)(iv) of

this section applies. Accordingly, P’s basis in

the S stock is $160 immediately after the

merger, which is then decreased by the $10

distribution taken into account immediately

after the transaction, resulting in a basis of

$150.

* * * * *

(f) * * * For example, if T merges

into S, S is treated, as the context may

require, as a successor to T and as

becoming a member of the group. * * *

* * * * *

Par. 8. Section 1.1502–43 is amended

by revising paragraph (a)(3)(iii) to read

as follows:

§ 1.1502–43 Consolidated accumulated

earnings tax.

(a) * * *

(3) * * *

(iii) Earnings and profits resulting

from the disposition of a member’s stock

are determined without regard to the

stock basis adjustments under

§§ 1.1502–32 and 1.1502–33(c)(1).

* * * * *

Par. 9. Section 1.1502–76 is amended

by revising paragraph (b)(4), Example 1.

(a) and the first sentence of Example 1.

(c) to read as follows:

§ 1.1502–76 Taxable year of members of

group.

* * * * *

(b) * * *

(4) * * *

Example 1. Items allocated between

consolidated and separate returns. (a) Facts.

P and S are the only members of the P group.

P sells all of S’s stock to individual A on June

30, and therefore S becomes a nonmember on

July 1 of Year 2.

* * * * *

(c) Acquisition of another subsidiary before

end of tax year. The facts are the same as in

paragraph (a) of this Example 1, except that

on July 31 P acquires all the stock of T

(which filed a separate return for its year

ending on November 30 of Year 1) and T

therefore becomes a member on August 1 of

Year 2. * * *

* * * * *

Par. 10. Section 1.1502–80 is

amended as follows:

1. Paragraph (b) is revised.

2. In paragraph (d)(1), a sentence is

added to the end of the paragraph.

The addition and revision reads as

follows:

§ 1.1502–80 Applicability of other

provisions of law.

* * * * *

(b) Non-applicability of section 304.

Section 304 does not apply to any

acquisition of stock of a corporation in

an intercompany transaction or to any

intercompany item from such

transaction occurring on or after July 24,

1991.

* * * * *

(d) * * * (1) * * * For purposes of

this paragraph (d), any reference to a

transferor or transferee includes, as the

context may require, a reference to a

successor or predecessor.

* * * * *

Cynthia E. Grigsby,

Chief, Regulations Unit, Assistant Chief

Counsel (Corporate).

[FR Doc. 97–6068 Filed 3–13–97; 8:45 am]

BILLING CODE 4830–01–P

PENSION BENEFIT GUARANTY

CORPORATION

29 CFR Part 4044

Allocation of Assets in SingleEmployer Plans; Interest Assumptions

for Valuing Benefits

AGENCY: Pension Benefit Guaranty

Corporation.

ACTION: Final rule.
Federal Register / Vol. 62, No. 50 / Friday, March 14, 1997 / Rules and Regulations 12099

SUMMARY: The Pension Benefit Guaranty

Corporation’s regulation on Allocation

of Assets in Single-Employer Plans

prescribes interest assumptions for

valuing benefits under terminating

single-employer plans. This final rule

amends the regulation to adopt interest

assumptions for plans with valuation

dates in April 1997.

EFFECTIVE DATE: April 1, 1997.

FOR FURTHER INFORMATION CONTACT:

Harold J. Ashner, Assistant General

Counsel, Office of the General Counsel,

Pension Benefit Guaranty Corporation,

1200 K Street, NW., Washington, DC

20005, 202–326–4024 (202–326–4179

for TTY and TDD).

SUPPLEMENTARY INFORMATION: The

PBGC’s regulation on Allocation of

Assets in Single-Employer Plans (29

CFR part 4044) prescribes actuarial

assumptions for valuing plan benefits of

terminating single-employer plans

covered by title IV of the Employee

Retirement Income Security Act of 1974.

Among the actuarial assumptions

prescribed in part 4044 are interest

assumptions. These interest

assumptions are intended to reflect

current conditions in the financial and

annuity markets.

Two sets of interest assumptions are

prescribed, one set for the valuation of

benefits to be paid as annuities and one

set for the valuation of benefits to be

paid as lump sums. This amendment

adds to appendix B to part 4044 the

annuity and lump sum interest

assumptions for valuing benefits in

plans with valuation dates during April

1997.

For annuity benefits, the interest

assumptions will be 6.10 percent for the

first 25 years following the valuation

date and 5.00 percent thereafter. The

annuity interest assumptions represent a

decrease (from those in effect for March

1997) of 0.10 percent for the first 25

years following the valuation date and

are otherwise unchanged. For benefits to

be paid as lump sums, the interest

assumptions to be used by the PBGC

will be 4.75 percent for the period

during which a benefit is in pay status

and 4.00 percent during any years

preceding the benefit’s placement in pay

status. The lump sum interest

assumptions represent a decrease (from

those in effect for March 1997) of 0.25

percent for the period during which a

benefit is in pay status and for the seven

years directly preceding that period;

they are otherwise unchanged.

The PBGC has determined that notice

and public comment on this amendment

are impracticable and contrary to the

public interest. This finding is based on

the need to determine and issue new

interest assumptions promptly so that

the assumptions can reflect, as

accurately as possible, current market

conditions.

Because of the need to provide

immediate guidance for the valuation of

benefits in plans with valuation dates

during April 1997, the PBGC finds that

good cause exists for making the

assumptions set forth in this

amendment effective less than 30 days

after publication.

The PBGC has determined that this

action is not a ‘‘significant regulatory

action’’ under the criteria set forth in

Executive Order 12866.

Because no general notice of proposed

rulemaking is required for this

amendment, the Regulatory Flexibility

Act of 1980 does not apply. See 5 U.S.C.

601(2).

List of Subjects in 29 CFR Part 4044

Pension insurance, Pensions.

In consideration of the foregoing, 29

CFR part 4044 is amended as follows:

PART 4044—[AMENDED]

1. The authority citation for part 4044

continues to read as follows:

Authority: 29 U.S.C. 1301(a), 1302(b)(3),

1341, 1344, 1362.

2. In appendix B, a new entry is

added to Table I, and Rate Set 42 is

added to Table II, as set forth below.

The introductory text of each table is

republished for the convenience of the

reader and remains unchanged.

Appendix B to Part 4044—Interest Rates Used to Value Annuities and Lump Sums

TABLE I.—ANNUITY VALUATIONS

[This table sets forth, for each indicated calendar month, the interest rates (denoted by i1, i2, . . . , and referred to generally as it) assumed to be

in effect between specified anniversaries of a valuation date that occurs within that calendar month; those anniversaries are specified in the

columns adjacent to the rates. The last listed rate is assumed to be in effect after the last listed anniversary date.]

For valuation dates occurring in the month—

The values of it are:

it for t = it for t = it for t =

* * * * * * *

April 1997 ........................................................................................................................... .0610 1–25 .0500 >25 N/A N/A

TABLE II.—LUMP SUM VALUATIONS

[In using this table: (1) For benefits for which the participant or beneficiary is entitled to be in pay status on the valuation date, the immediate annuity rate shall apply; (2) For benefits for which the deferral period is y years (where y is an integer and 0 < y ≤ n1), interest rate i1 shall

apply from the valuation date for a period of y years, and thereafter the immediate annuity rate shall apply; (3) For benefits for which the deferral period is y years (where y is an integer and n1< y ≤ n1 + n2), interest rate i2 shall apply from the valuation date for a period of y¥n1

years, interest rate i1 shall apply for the following n1 years, and thereafter the immediate annuity rate shall apply; (4) For benefits for which

the deferral period is y years (where y is an integer and y > n1 + n2), interest rate i3 shall apply from the valuation date for a period of

y¥n1¥n2 years, interest rate i2 shall apply for the following n2 years, interest rate i1 shall apply for the following n1 years, and thereafter the

immediate annuity rate shall apply.]

Rate set

For plans with a valuation dateImmediate

annuity

rate (percent)

Deferred annuities (percent)

On or after Before i1 i2 i3 n1 n2

* * * * * * *

42 .......................................................................................................... 04–1–97 05–1–97 4.75 4.00 4.00 4.00 7 8
12100 Federal Register / Vol. 62, No. 50 / Friday, March 14, 1997 / Rules and Regulations

Issued in Washington, D.C., on this 10th

day of March 1997.

John Seal,

Acting Executive Director, Pension Benefit

Guaranty Corporation.

[FR Doc. 97–6487 Filed 3–13–97; 8:45 am]

BILLING CODE 7708–01–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 271

[FRL–5691–8]

Oklahoma: Final Authorization of State

Hazardous Waste Management

Program Revisions

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Review of immediate final rule

technical corrections.

SUMMARY: The State of Oklahoma has

applied for Final authorization to revise

its hazardous waste program under the

Resource Conservation and Recovery

Act (RCRA). The EPA has reviewed

Oklahoma’s application and decided

that its hazardous waste program

revision satisfies all of the requirements

necessary to qualify for final

authorization. As such, EPA published

an immediate final rule on October 9,

1996, for 30-day public review and

comment period. The EPA did not

receive comments by the close of

business November 25, 1996. Today’s

publication is a technical correction to

the State Analog chart, listing the State

regulations that are equivalent to the

Federal rules.

DATES: Effective date: March 14, 1997.

This technical correction is in regard to

final authorization for Oklahoma which

affirms the immediate final decision

previously published, and notifies the

public that the final authorization was

effective on December 23, 1996.

FOR FURTHER INFORMATION CONTACT:

Alima Patterson, Authorization

Coordinator, Grants and Authorization

Section (6PG–G), EPA Region 6, First

Interstate Bank Tower at Fountain Place,

1445 Ross Avenue, Dallas, Texas 75202,

Phone number: (214) 665–8533.

SUPPLEMENTARY INFORMATION:

A. Technical Corrections

The Oklahoma Department of

Environmental Quality (ODEQ)

submitted a comment containing

technical corrections to the State Analog

chart at 61 FR 52884–52886, listing the

State regulations that are equivalent to

the rules promulgated to the Federal

RCRA implementing regulations in 40

CFR parts 124, 260–268, and 270 that

were published on October 9, 1996.

Many of the dates cited in that chart

were incorrect and the following chart

lists the correct dates of the State

analogs that are being recognized as

equivalent to the appropriate Federal

requirements. The following chart

replaces the previously published chart.

Federal Citation State analog

1. Requirements for Preparation, Adoption, and Submittal of Implementation Plans, [58 FR 38816] July 20, 1993. (Checklist 125).Oklahoma Hazardous Waste Management Act (OHWMA), as amended, 27A Oklahoma Statutes (O.S.), Supp. 1994, §§ 2–7–107 (A), (4)

and (5), and 2–2–104, effective 1994; and Oklahoma Administrative

Code (OAC) Rules 252:200–3–1, 252–200–3–2 through 252:200–3–

6, effective July 1, 1995.

2. Testing and Monitoring Activities, [58 FR 46040] August 31, 1993.

(Checklist 126)

OHWMA, as amended, 27A O.S., Supp. 1994, §§ 2–2–106, effective

1994, OAC Rules 252:200–3–1 through 252:200–3–6, effective July

1, 1995.

3. Burning of Hazardous Waste in Boilers and Industrial Furnaces, [58

FR 59598] November 9, 1993. (Checklist 127)

OHWMA, as amended, 27A O.S., Supp. 1994, §§ 2–2–104, and 2–7–

107(A)(5), effective 1994 and OAC Rules 252:200–3–1 through

252:200–3–6, effective July 1, 1995.

4. Hazardous Waste Management Systems; Identification and Listing of

Hazardous Waste; Waste from Wood Surface Protection, [59 FR

458] January 4, 1994. (Checklist 128)

OHWMA, as amended, 27A O.S., Supp. 1994 §§ 2–2–104 and § 2–7–

106, effective 1994 and OAC Rules 252:200–3–1 through 252:200–

3–6, effective July 1, 1995.

5. Hazardous Waste Management System; Identification and Listing of

Hazardous Waste; Treatability Studies Sample Exclusion, [59 FR

8362] February 18, 1994. (Checklist 129)

OHWMA, as amended, 27A O.S., Supp. 1994 §§ 2–2–104 and 2–7–

106, effective 1994 and OAC Rules 252:200–3–1 through 252:200–

3–6, effective July 1, 1995.

6. Hazardous Waste Management System; Identification and Listing of

Hazardous Waste; Recycled Used Oil Management Standards, [59

FR 10550] March 4, 1994. (Checklist 130).

OHWMA, as amended, 27A O.S., Supp. 1994, §§ 2–2–104, and 2–7–

107(A)(5) effective 1994, and OAC Rules 252:200–3–1 through

252:200–3–6, effective July 1, 1995.

7. Recordkeeping Instructions, [59 FR 13891] March 24, 1994. (Checklist 131).OHWMA, as amended, 27A O.S., Supp. 1994, § 2–2–104, and 2–7–

105(5), and 2–7–106, effective 1994, and OAC Rules 252:200–3–1

through 252:200–3–6, effective July 1, 1995.

8. Hazardous Waste Management System; Identification and Listing of

Hazardous Wastes; Wastes from Wood Surface Protection; Correction, [59 FR 28484] June 2, 1994. (Checklist 132).

OHWMA, as amended, 27A O.S., Supp. 1994 § 2–7–106, and 2–2–

104, effective 1994, and OAC Rules 252:200–3–1 through 252:200–

3–6, effective July 1, 1995.

9. Standards Applicable to Owners and Operators of Hazardous Waste

Treatment, Storage, and Disposal Facilities, Underground Storage,

Tanks, and Underground Injection Control Systems; Financial Assurance; Letter of Credit, [59 FR 29958] June 10, 1994. (Checklist 133).

OHWMA, as amended, 27A O.S., Supp. 1994, §§ 2–2–104, effective

1994, and OAC Rules 252:200–3–1 through 252:200–3–6 effective

July 1, 1995.

10. Hazardous Waste Management System; Correction of Listing of

P015-Beryllium Powder, [59 FR 31551–31552] June 20, 1994.

(Checklist 134).

OHWMA, as amended, 27A O.S., Supp. 1994, §§ 2–2–104, and 2–7–

106, effective 1994, and OAC Rules 252:200–3–1 through 252:200–

3–6, effective July 1, 1995.

Under Executive Order 12866 (58 FR

51735, October 4, 1993), this action is

not a ‘‘significant regulatory action’’

and, is therefore not subject to review by

the Office of Management and Budget.

In addition, this action does not impose

any enforceable duty or contain any

unfunded mandate as described in the

Unfunded Mandates Reform Act of 1995