Federal Register / Vol. 69, No. 245 / Wednesday, December 22, 2004 / Rules and Regulations 76611

Authority for This Rulemaking 

Title 49 of the United States Code 

specifies the FAA’s authority to issue 

rules on aviation safety. Subtitle I, 

Section 106, describes the authority of 

the FAA Administrator. Subtitle VII, 

Aviation Programs, describes in more 

detail the scope of the Agency’s 

authority. 

We are issuing this rulemaking under 

the authority described in Subtitle VII, 

Part A, Subpart III, Section 44701, 

‘‘General requirements.’’ Under that 

section, Congress charges the FAA with 

promoting safe flight of civil aircraft in 

air commerce by prescribing regulations 

for practices, methods, and procedures 

the Administrator finds necessary for 

safety in air commerce. This regulation 

is within the scope of that authority 

because it addresses an unsafe condition 

that is likely to exist or develop on 

products identified in this rulemaking 

action. 

Regulatory Findings 

We have determined that this AD will 

not have federalism implications under 

Executive Order 13132. This AD will 

not have a substantial direct effect on 

the States, on the relationship between 

the national government and the States, 

or on the distribution of power and 

responsibilities among the various 

levels of government. 

For the reasons discussed above, I 

certify that this AD: 

(1) Is not a ‘‘significant regulatory 

action’’ under Executive Order 12866; 

(2) Is not a ‘‘significant rule’’ under 

DOT Regulatory Policies and Procedures 

(44 FR 11034, February 26, 1979); and 

(3) Will not have a significant 

economic impact, positive or negative, 

on a substantial number of small entities 

under the criteria of the Regulatory 

Flexibility Act. 

We prepared a summary of the costs 

to comply with this AD and placed it in 

the AD Docket. You may get a copy of 

this summary by sending a request to us 

at the address listed under ADDRESSES. 

Include ‘‘AD Docket No. 2003–NE–67–

AD’’ in your request.

List of Subjects in 14 CFR Part 39

Air transportation, Aircraft, Aviation 

safety, Safety.

Adoption of the Amendment

■ Accordingly, under the authority 

delegated to me by the Administrator, 

the Federal Aviation Administration 

amends 14 CFR part 39 as follows:

PART 39—AIRWORTHINESS 

DIRECTIVES

■ 1. The authority citation for part 39 

continues to read as follows:

Authority: 49 U.S.C. 106(g), 40113, 44701.

§ 39.13 [Amended]

■ 2. The FAA amends § 39.13 by adding 

the following new airworthiness 

directive (AD):

2004–26–02 GE Aircraft Engines (GE):

Amendment 39–13914. Docket No. 

2003–NE–67–AD. 

Effective Date 

(a) This AD becomes effective January 26, 

2005. 

Affected ADs 

(b) None. 

Applicability 

(c) This AD applies to GE CF34–3A, CF34–

3A2, CF34–1A, CF34–3A1, CF34–3B, and 

CF34–3B1 series turbofan engines with high 

pressure compressor (HPC) forward spool, 

part number (P/N) 6078T56P03 or 

6078T56P04, installed. These engines are 

installed on, but not limited to, Bombardier 

series Business Jet Model CL–600–2A12 (CL–

601), Bombardier series Business Jet Model 

CL–600–2B16 (CL–601–3A, CL–601–3R, and 

CL–604), and Bombardier series Regional Jet 

Model CL–600–2B19 (Regional Jet Series 100 

and 440) airplanes. 

Unsafe Condition 

(d) This AD results from an updated lowcycle fatigue (LCF) analysis performed on 

HPC forward spools, P/Ns 6078T56P03 and 

6078T56P04, by GE. We are issuing this AD 

to prevent LCF cracks and failure of the HPC 

forward spool, which could result in an 

uncontained engine failure and damage to 

the airplane. 

Compliance 

(e) You are responsible for having the 

actions required by this AD performed within 

the compliance times specified unless the 

actions have already been done. 

HPC Spool Replacement 

(f) For CF34–3B engines, remove from 

service HPC forward spools, P/Ns 

6078T56P03 and 6078T56P04 at the first 

piece-part exposure after 6,000 cycles-sincenew (CSN), but no later than 20,000 CSN. 

(g) For CF34–3A, CF34–3A2, CF34–1A, 

CF34–3A1, and CF34–3B1 engines, remove 

from service HPC forward spools, P/Ns 

6078T56P03 and 6078T56P04 at the first 

piece-part exposure after 6,000 CSN, but no 

later than 22,000 CSN. 

(h) After the effective date of this AD: 

(1) Do not install any HPC forward spool, 

P/N 6078T56P03. 

(2) Do not install any HPC forward spool, 

P/N 6078T56P04, with more than 0 CSN. 

Definition 

(i) For the purpose of this AD, the 

definition of piece-part exposure for the HPC 

forward spool is when the spool is 

completely disassembled. 

Alternative Methods of Compliance 

(j) The Manager, Engine Certification 

Office, has the authority to approve 

alternative methods of compliance for this 

AD if requested using the procedures found 

in 14 CFR 39.19. 

Material Incorporated by Reference 

(k) None. 

Related Information 

(l) None.

Issued in Burlington, Massachusetts, on 

December 15, 2004. 

Francis A. Favara, 

Acting Manager, Engine and Propeller 

Directorate, Aircraft Certification Service.

[FR Doc. 04–27948 Filed 12–21–04; 8:45 am] 

BILLING CODE 4910–13–P

FEDERAL TRADE COMMISSION

16 CFR Part 1

Federal Civil Penalties Inflation 

Adjustment Act

AGENCY: Federal Trade Commission 

(FTC).

ACTION: Final rule amendments.

SUMMARY: The FTC is making 

adjustments to certain civil penalty 

amounts within its jurisdiction, as 

required by law. These adjustments 

reflect inflation since the penalty 

amounts were last adjusted.

EFFECTIVE DATE: January 21, 2005.

FOR FURTHER INFORMATION CONTACT: Alex 

Tang, Attorney, Office of General 

Counsel, FTC, 600 Pennsylvania 

Avenue, NW., Washington, DC 20580, 

(202) 326–2447, atang@ftc.gov.

SUPPLEMENTARY INFORMATION: As 

required at least once every four years 

by the Federal Civil Penalties Inflation 

Adjustment Act of 1990, 28 U.S.C. 2461 

note, as amended by the Debt Collection 

Improvement Act of 1996, Pub. L. 104–

134, § 31001, 110 Stat. 1321–373, the 

FTC is making certain regulatory 

adjustments to civil penalty amounts 

within its jurisdiction. The civil penalty 

amounts adjusted by the FTC are set 

forth in Commission Rule 1.98, 16 CFR 

1.98. The FTC published the original 

adjustments in 1996. See 61 FR 54548 

(Oct. 21, 1996), 55840 (Oct. 29, 1996). 

No adjustments were warranted under 

the law in 2000. See 65 FR 69665 (Nov. 

20, 2000). 

Adjustments are based on the increase 

in the Consumer Price Index (CPI) 

between June of the year in which the 

prior adjustment was made and June of 

the year preceding the year in which the 

adjustment is being made. Thus, for the 

relevant period between June 1996 and 

76612 Federal Register / Vol. 69, No. 245 / Wednesday, December 22, 2004 / Rules and Regulations 

June 2003, the CPI has increased from 

156.7 to 183.7, or 17.2%. Applying this 

percentage increase to currently 

adjusted civil penalty amounts, the FTC 

is adjusting civil penalty amounts 

currently set at $5,500 under two 

statutes: Clayton Act § 11(l), for 

violations of cease-and-desist orders 

issued under § 11(b) of that Act; and 

§ 525(a) of the Energy Policy and 

Conservation Act, for recycled oil 

labeling violations. Each will be 

adjusted to $6,500, in accordance with 

the rounding rules of the adjustment 

statute, and the FTC is amending 

paragraphs (b) and (l) of Rule 1.98 to 

reflect these adjustments, which will 

become effective thirty days following 

publication. The FTC is thus deleting 

the second sentence of the Rule’s 

introductory text, regarding the prior 

effective date, which is potentially 

confusing and, in any event, 

superfluous. 

The statute’s rounding rules do not 

authorize the FTC at this time to 

increase the amounts of the other civil 

penalties within its jurisdiction. 

Increases in civil penalties of greater 

than $10,000 and less than or equal to 

$100,000 must be in $5,000 increments, 

and the increase in the CPI was not high 

enough to round up any adjustment to 

$5,000. Likewise, increases in civil 

penalties of greater than $100 and less 

than or equal to $1,000 must be in $100 

increments, and the increase in the CPI 

was not high enough to round up any 

adjustment to $100. Accordingly, all 

other paragraphs of Rule 1.98 remain 

unchanged. 

Likewise, the FTC is not adding any 

new adjustments to the rule for other 

statutory civil penalty amounts that 

have been enacted since the last 

adjustments, such as § 621(a)(2) of the 

Fair Credit Reporting Act, 15 U.S.C. 

1681s, or § 1115(a) of the Medicare Act, 

Pub. L. 108–173. These authorities are 

too recent to warrant adjustments for 

inflation. 

In light of the ministerial nature of the 

adjustments, the public comment 

requirements of the Administrative 

Procedure Act (APA) do not apply to 

this action. 5 U.S.C. 553(b)(B) 

(exception when public comment is 

unnecessary). For this reason, the 

requirements of the Regulatory 

Flexibility Act also do not apply. 5 

U.S.C. 603, 604 (no regulatory flexibility 

analyses required where the APA does 

not require public comment).

List of Subjects for 16 CFR Part 1

Administrative practice and 

procedure, Penalties, Trade practices.

■ For the reasons set forth in the 

preamble, the Federal Trade 

Commission amends Title 16, chapter I, 

subchapter A, of the Code of Federal 

Regulations, as follows:

PART 1—GENERAL PROCEDURES

Subpart L—Civil Penalty Adjustments 

Under the Federal Civil Penalties 

Inflation Adjustment Act of 1990 as 

Amended by the Debt Collection 

Improvement Act of 1996

■ 1. The authority citation for subpart L 

continues to read as follows:

Authority: 28 U.S.C. 2461 note.

■ 2. Revise the introductory text of § 1.98 

and paragraphs (b) and (l) to read as 

follows:

§ 1.98 Adjustment of civil monetary 

penalty amounts. 

This section makes inflation 

adjustments in the dollar amounts of 

civil monetary penalties within the 

Commission’s jurisdiction.

* * * * *

(b) Section 11(l) of the Clayton Act, 15 

U.S.C. 21(l)—$6,500;

* * * * *

(l) Sections 525(a) and (b) of the 

Energy Policy and Conservation Act, 42 

U.S.C. 6395(a) and (b), respectively—

$6,500 and $11,000, respectively; and

* * * * *

By direction of the Commission. 

Donald S. Clark, 

Secretary.

[FR Doc. 04–27980 Filed 12–21–04; 8:45 am] 

BILLING CODE 6750–01–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service 

26 CFR Part 1

[TD 9170] 

RIN 1545–BD99

Section 1374 Effective Dates

AGENCY: Internal Revenue Service (IRS), 

Treasury.

ACTION: Final and temporary 

regulations. 

SUMMARY: These temporary regulations 

provide guidance concerning the 

applicability of section 1374 to S 

corporations that acquire assets in 

carryover basis transactions from C 

corporations on or after December 27, 

1994, and to certain corporations that 

terminate S corporation status and later 

elect again to become S corporations. 

The text of the temporary regulations 

also serves as the text of the proposed 

regulations set forth in the notice of 

proposed rulemaking on this subject in 

the Proposed Rules section in this issue 

of the Federal Register.

DATES: Effective Date: These regulations 

are effective December 22, 2004. 

Applicability Dates: Section 1.1374–

8T applies to any transaction described 

in section 1374(d)(8) that occurs on or 

after December 27, 1994. Section 

1.1374–10T applies for taxable years 

beginning after December 22, 2004. The 

applicability of § 1.1374(d)–8T and 

§ 1.1374(d)–10T will expire on or before 

December 21, 2007.

FOR FURTHER INFORMATION CONTACT:

Stephen R. Cleary; (202) 622–7750, (not 

a toll-free number).

SUPPLEMENTARY INFORMATION:

Background and Explanation of 

Provisions 

1. Section 1374 and Its Effective Dates 

Under the General Utilities doctrine, 

see General Utilities & Operating Co. v. 

Helvering, 296 U.S. 200 (1935), a C 

corporation, in certain cases, could 

distribute appreciated assets to its 

shareholders or sell appreciated assets 

without recognizing gain. Section 1374 

of the Internal Revenue Code of 1986 

(Code), amended in the Tax Reform Act 

of 1986 (TRA) as part of the repeal of the 

General Utilities doctrine, prevents a 

corporation from circumventing General 

Utilities repeal by converting to S 

corporation status before distributing 

appreciated assets to its shareholders or 

selling appreciated assets. 

Section 1374 generally imposes a 

corporate level tax on an S corporation’s 

net recognized built-in gain attributable 

to assets that it held on the date it 

converted from a C corporation to an S 

corporation. This tax is imposed on 

built-in gain recognized during the 10-

year period beginning on the first day 

the corporation is an S corporation. 

Section 1374(d)(8), which was added by 

the Technical and Miscellaneous 

Revenue Act of 1988 (TAMRA), imposes 

a corporate level tax on an S 

corporation’s net recognized built-in 

gain attributable to assets that it 

acquired in a carryover basis transaction 

from a C corporation for the 10-year 

recognition period beginning on the day 

of the carryover basis transaction.

Under section 1374(d)(9), which also 

was added by TAMRA, any reference in 

section 1374 to the first taxable year the 

corporation was an S corporation is a 

reference to the first taxable year it was 

an S corporation pursuant to its most 

recent S corporation election under 

section 1362.