37836 Federal Register / Vol. 77, No. 122 / Monday, June 25, 2012 / Proposed Rules 

the Paperwork Reduction Act, 44 U.S.C. 

3501–3520. 

C. Regulatory Flexibility Act 

We have examined the impacts of the 

proposed rule under the Regulatory 

Flexibility Act (5 U.S.C. 601–612). The 

Regulatory Flexibility Act requires 

agencies to analyze regulatory options 

that would minimize any significant 

impact of a rule on small entities. 

Because the proposed rule would revoke 

outdated regulatory requirements, the 

Commission certifies that the proposed 

rule would not have a significant 

economic impact on a substantial 

number of small entities. 

D. Environmental Considerations 

This rule falls within the scope of the 

Commission’s environmental review 

regulation at 16 CFR 1021.5(c)(1), which 

provides a categorical exclusion from 

any requirement for the agency to 

prepare an environmental assessment or 

an environmental impact statement for 

rules that revoke product safety 

standards. 

E. Executive Order 12988 

According to Executive Order 12988 

(February 5, 1996), agencies must state 

in clear language the preemptive effect, 

if any, of new regulations. The 

preemptive effect of regulations such as 

this proposal is stated in section 18 of 

the FHSA. 15 U.S.C. 1261n. 

F. Effective Date 

The Commission is proposing that the 

rule revoking 16 CFR 1500.18(a)(5), 

1500.47, and 1500.86(a)(6) would 

become effective 30 days after 

publication of the final rule in the 

Federal Register. 

List of Subjects in 16 CFR Part 1500 

Consumer protection, Hazardous 

substances, Imports, Infants and 

children, Labeling, Law enforcement, 

Reporting and recordkeeping 

requirements, Toys. 

For the reasons stated in the 

preamble, and under the authority of 15 

U.S.C. 1261–1262 and 5 U.S.C. 553, the 

Consumer Product Safety Commission 

proposes to amend 16 CFR part 1500 as 

follows: 

PART 1500—HAZARDOUS 

SUBSTANCES AND ARTICLES; 

ADMINISTRATION AND 

ENFORCEMENT REGULATIONS 

1. The authority citation for 16 CFR 

part 1500 continues to read as follows: 

Authority: 15 U.S.C. 1261–1278. 

§ 1500.18 [Amended] 

2. Section 1500.18 is amended by 

removing and reserving paragraph (a)(5). 

§ 1500.47 [Removed] 

3. Section 1500.47 is removed 

entirely. 

§ 1500.86 [Amended] 

4. Section 1500.86 is amended by 

removing and reserving paragraph (a)(6). 

Dated: June 20, 2012. 

Todd A. Stevenson, 

Secretary, U.S. Consumer Product Safety 

Commission. 

[FR Doc. 2012–15409 Filed 6–22–12; 8:45 am] 

BILLING CODE 6355–01–P 

CONSUMER PRODUCT SAFETY 

COMMISSION 

16 CFR Chapter II 

[Docket No. CPSC–2012–0034] 

Petition Requesting Commission 

Action Regarding Crib Bumpers 

AGENCY: U.S. Consumer Product Safety 

Commission. 

ACTION: Petition for rulemaking. 

SUMMARY: The U.S. Consumer Product 

Safety Commission (‘‘Commission’’) has 

received a petition (CPSC–2012–0034), 

requesting that the Commission initiate 

rulemaking to distinguish and regulate 

‘‘hazardous pillow-like’’ crib bumpers 

from ‘‘non-hazardous traditional’’ crib 

bumpers under sections 7 and 9 of the 

Consumer Product Safety Act (‘‘CPSA’’). 

The Commission invites written 

comments concerning the petition. 

DATES: The Office of the Secretary must 

receive comments on the petition by 

August 24, 2012. 

ADDRESSES: You may submit comments, 

identified by Docket No. CPSC–2012– 

0034, by any of the following methods: 

Electronic Submissions 

Submit electronic comments in the 

following way: 

Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

To ensure timely processing of 

comments, the Commission is no longer 

accepting comments submitted by 

electronic mail (email), except through 

www.regulations.gov. 

Written Submissions 

Submit written submissions in the 

following way: 

Mail/Hand delivery/Courier (for 

paper, disk, or CD–ROM submissions), 

preferably in five copies, to: Office of 

the Secretary, U.S. Consumer Product 

Safety Commission, Room 820, 4330 

East West Highway, Bethesda, MD 

20814; telephone (301) 504–7923. 

Instructions: All submissions received 

must include the agency name and 

docket number for this notice. All 

comments received may be posted 

without change, including any personal 

identifiers, contact information, or other 

personal information provided, to: 

http://www.regulations.gov. Do not 

submit confidential business 

information, trade secret information, or 

other sensitive or protected information 

electronically. Such information should 

be submitted in writing. 

Docket: For access to the docket to 

read background documents or 

comments received, go to: http:// 

www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Rockelle Hammond, Office of the 

Secretary, U.S. Consumer Product 

Safety Commission, Room 820, 4330 

East West Highway, Bethesda, MD 

20814; telephone (301) 504–6833. 

SUPPLEMENTARY INFORMATION: The 

Commission has received 

correspondence from the Juvenile 

Products Manufacturers Association 

(JPMA), (‘‘petitioner’’), dated May 9, 

2012, requesting that the Commission 

initiate rulemaking to distinguish and 

regulate ‘‘hazardous pillow-like’’ crib 

bumpers from ‘‘non-hazardous 

traditional’’ crib bumpers under 

sections 7 and 9 of the Consumer 

Product Safety Act (‘‘CPSA’’). The 

Commission is docketing this request as 

a petition under the Consumer Product 

Safety Act. 15 U.S.C. 2056 and 2058. 

Petitioner states that, despite 

information to the contrary regarding 

the safety of traditional crib bumpers, 

some are advocating banning bumpers 

altogether from the marketplace. 

Petitioner believes that banning 

traditional crib bumpers may lead to 

caregivers adding unsafe soft bedding to 

cribs to serve as a protective barrier 

from the tight dimensions and hard 

wooden surface of the crib slats. 

Petitioner includes a third party review 

of previous studies of crib bumper pads 

as support of the fact that claims of 

increased risk to infants from traditional 

crib bumper use are unfounded. 

Petitioner also includes a copy of 

proposed ASTM performance 

requirements that petitioner believes 

provide a reasonable basis for a 

mandatory crib bumper performance 

standard. 

By this notice, the Commission seeks 

comments concerning this petition. 

Interested parties may obtain a copy of 

the petition by writing or calling the 

Office of the Secretary, U.S. Consumer 


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Federal Register / Vol. 77, No. 122 / Monday, June 25, 2012 / Proposed Rules 37837 

Product Safety Commission, Room 820, 

4330 East West Highway, Bethesda, MD 

20814; telephone (301) 504–7923. A 

copy of the petition also will be made 

available for viewing under ‘‘Supporting 

and Related Materials’’ in 

www.regulations.gov under this docket 

number. 

Dated: June 18, 2012. 

Todd A. Stevenson, 

Secretary, U.S. Consumer Product Safety 

Commission. 

[FR Doc. 2012–15328 Filed 6–22–12; 8:45 am] 

BILLING CODE 6355–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–134935–11] 

RIN 1545–BK55 

Overall Foreign Loss Recapture on 

Property Dispositions 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: These proposed regulations 

provide guidance regarding the 

coordination of the rules for 

determining high-taxed income with 

capital gains adjustments and the 

allocation and recapture of overall 

foreign losses and overall domestic 

losses, as well as the coordination of the 

recapture of overall foreign losses on 

certain dispositions of property and 

other rules concerning overall foreign 

losses and overall domestic losses. 

These regulations affect individuals and 

corporations claiming foreign tax 

credits. 

DATES: Written or electronic comments 

and requests for a public hearing must 

be received by August 24, 2012. 

ADDRESSES: Send submissions to 

CC:PA:LPD:PR (REG–134935–11), room 

5203, Internal Revenue Service, PO Box 

7604, Ben Franklin Station, Washington, 

DC 20044. Submissions may be hand 

delivered Monday through Friday 

between the hours of 8 a.m. and 4 p.m. 

to CC:PA:LPD:PR (REG–134935–11), 

Courier’s desk, Internal Revenue 

Service, 1111 Constitution Avenue NW., 

Washington, DC 20044, or sent 

electronically, via the Federal 

eRulemaking Portal at 

www.regulations.gov (IRS REG–134935– 

11). 

FOR FURTHER INFORMATION CONTACT: 

Concerning the regulations, Jeffrey L. 

Parry, (202) 622–3850; concerning 

submissions of comments, 

Oluwafunmilayo (Funmi) Taylor, (202) 

622–7180 (not toll-free numbers). 

SUPPLEMENTARY INFORMATION: 

Background and Explanation of 

Provisions 

1. High-Taxed Income 

Section 904(d)(2)(F) of the Internal 

Revenue Code (Code) provides that 

certain high-taxed income that would 

otherwise be passive income will be 

treated as general category income if the 

foreign taxes paid or accrued, and 

deemed paid or accrued, with respect to 

such income exceed the highest rate of 

tax specified in section 1 or section 11, 

whichever applies, multiplied by the 

amount of such income. Section 1.904– 

4(c) provides detailed rules for 

determining whether income is hightaxed, including rules for testing income 

based on subgroups within passive 

income and allocating expenses, losses 

and other deductions to that income. 

Questions have arisen regarding the 

coordination of these rules with the 

capital gains adjustments under section 

904(b) and loss allocations and loss 

account recapture under section 904(f) 

and (g). The proposed regulations at 

§ 1.904–4(c) clarify that the 

determination as to whether income is 

high-taxed is made before taking into 

account any adjustments under section 

904(b) or any allocation of losses or 

recapture of loss accounts under section 

904(f) and (g). The Treasury Department 

and the IRS believe these ordering rules 

are consistent with the use in section 

904(d)(2)(F) of the highest statutory U.S. 

tax rate, rather than the taxpayer’s precredit effective U.S. tax rate, to 

determine whether income is hightaxed. 

2. Dispositions of Property Under 

Section 904(f)(3) 

Section 904(f)(3) provides that if a 

taxpayer disposes of certain property 

used or held for use predominantly 

without the United States in a trade or 

business, gain is recognized on that 

disposition and treated as foreign source 

income, regardless of whether the gain 

would otherwise be recognized, to the 

extent of any overall foreign loss 

account in the separate category of 

foreign source taxable income generated 

by the property. Section 1.904(f)–2(d) 

provides separate rules for dispositions 

in which gain is recognized irrespective 

of section 904(f)(3) and dispositions in 

which the gain would not otherwise be 

recognized. 

Questions have arisen regarding the 

coordination of overall foreign loss 

recapture under section 904(f)(3) with 

other provisions of section 904(f) and 

(g). Accordingly, these proposed 

regulations revise the ordering rules 

under § 1.904(g)–3 that generally 

provide for the coordination of section 

904(f) and (g) to include specific 

references for taking into account 

overall foreign loss recapture under 

section 904(f)(3). 

In the case of dispositions in which 

gain is recognized irrespective of section 

904(f)(3), the overall foreign loss 

recapture is included in Step Five along 

with other general overall foreign loss 

recapture. 

Dispositions in which the gain would 

not otherwise be recognized are 

addressed separately. Section 1.904(f)– 

2(d)(4)(i) provides, in part, that where 

gain would not otherwise be recognized 

on a disposition, the amount of gain that 

will be recognized under section 

904(f)(3) is equal to the balance in the 

applicable foreign loss account after 

taking into account any amounts 

recaptured from the account from other 

recognized income for the year (as well 

as certain other adjustments). In other 

words, the additional amount of income 

to be recognized can only be determined 

after the first seven steps of the ordering 

rules in § 1.904(g)–3 have been 

completed. Accordingly, a new Step 

Eight is added to those ordering rules to 

address the recognition of the additional 

income under section 904(f)(3) and the 

corresponding recapture of the 

applicable overall foreign loss account. 

New Step Eight also provides that if the 

additional recognition of gain increases 

the allowable amount of the net 

operating loss deduction, then the 

recapture of the overall foreign loss 

account occurs first before the 

additional net operating loss carryover 

is taken into account to offset all or a 

portion of that gain. The Treasury 

Department and the IRS believe priority 

should be given to the additional 

recapture of the overall foreign loss 

account pursuant to section 904(f)(3) 

before any net operating loss carryover 

reduces that gain. This is because the 

primary reason for recognizing the 

otherwise unrecognized gain is to 

recapture the overall foreign loss 

account. 

Proposed Effective Date 

The regulations, as proposed, will 

apply to any taxable year ending on or 

after the date of publication of a 

Treasury decision adopting these rules 

as final regulations in the Federal 

Register. 

Special Analyses 

It has been determined that this notice 

of proposed rulemaking is not a 


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