Federal Register / Vol. 65, No. 98 / Friday, May 19, 2000 / Rules and Regulations 31803

DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Parts 450 and 771

49 CFR Parts 619 and 622

Federal Transit Administration

Policy Guidance Concerning

Application of Title VI of the Civil

Rights Act of 1964 to Metropolitan and

Statewide Planning

AGENCIES: Federal Highway

Administration (FHWA), and Federal

Transit Administration (FTA), DOT.

ACTION: Notice of policy.

SUMMARY: This document publishes

guidance regarding the implementation

of Title VI of the Civil Rights Act of

1964 (42 U.S.C. 2000d–2000d–4)

concerning nondiscrimination in

federally assisted programs, in

metropolitan and statewide planning.

This guidance was previously issued on

October 7, 1999, as a memorandum to

FTA Regional Administrators and

FHWA Division Administrators, and is

printed in its entirety.

FOR FURTHER INFORMATION CONTACT: For

application to metropolitan planning,

Mr. Sheldon M. Edner, FHWA, (202)

366–4066 or Mr. Charles Goodman,

FTA, (202) 366–1944. For application to

statewide planning, Mr. Dee Spann,

FHWA, (202) 366–4086 or Mr. Paul

Verchinski, FTA, (202) 366–1626. All

are located at the U.S. Department of

Transportation, 400 Seventh Street,

SW., Washington, DC 20590–0001.

Office hours are from 7:45 a.m. to 4:30

p.m., e.t., Monday through Friday,

except Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access

An electronic copy of this document

may be downloaded by using a

computer, modem and suitable

communications software from the

Government Printing Office’s Electronic

Bulletin Board Service at (202) 512–

1661. Internet users may reach the

Office of the Federal Register’s home

page at http://www.nara.gov/fedreg and

the Government Printing Office’s web

page at http://www.access.gpo.gov/nara.

(Authority: 23 U.S.C. 315; 49 CFR 1.48

and 1.51)

Issued on: May 9, 2000.

Nuria I. Fernandez,

Acting Administrator.

Kenneth R. Wykle,

Federal Highway Administrator.

The guidance memorandum reads as

follows:

Date: October 7, 1999.

Subject: ACTION: Implementing Title

VI Requirements in Metropolitan

and Statewide Planning

From: Gordon J. Linton, Administrator,

FTA

Kenneth R. Wykle, Administrator,

FHWA

To: FTA Regional Administrators

FHWA Division Administrators

Background

The purpose of this memorandum is

to issue clarification to you in

implementing Title VI of the 1964 Civil

Rights Act (42 U.S.C. 2000d–1) and

related regulations, The President’s

Executive Order on Environmental

Justice, the U.S. DOT Order, and the

FHWA Order.

Title VI states that ‘‘No person in the

United States shall, on the ground of

race, color, or national origin, be

excluded from participation in, be

denied the benefits of, or be subjected

to discrimination under any program or

activity receiving Federal financial

assistance.’’ Title VI bars intentional

discrimination as well as disparate

impact discrimination (i.e., a neutral

policy or practice that has a disparate

impact on protected groups).

The Environmental Justice (EJ) Orders

further amplify Title VI by providing

that ‘‘each Federal agency shall make

achieving environmental justice part of

its mission by identifying and

addressing, as appropriate,

disproportionately high and adverse

human health or environmental effects

of its programs, policies, and activities

on minority populations and lowincome populations.’’

Increasingly, concerns for compliance

with provisions of Title VI and the EJ

Orders have been raised by citizens and

advocacy groups with regard to broad

patterns of transportation investment

and impact considered in metropolitan

and statewide planning. While Title VI

and EJ concerns have most often been

raised during project development, it is

important to recognize that the law also

applies equally to the processes and

products of planning. The appropriate

time for FTA and FHWA to ensure

compliance with Title VI in the

planning process is during the planning

certification reviews conducted for

Transportation Management Areas

(TMAs) and through the statewide

planning finding rendered at approval

of the Statewide Transportation

Improvement Program (STIP).

This memorandum serves as

clarification pending issuance of revised

planning and environmental

regulations.

Requested Action

We request that during certification

reviews you raise questions that serve to

substantiate metropolitan planning

organization (MPO) self-certification of

Title VI compliance. Suggested

questions are attached. Also attached

are a series of actions that could be

taken to support Title VI compliance

and EJ goals, improve planning

performance, and minimize the

potential for subsequent corrective

action and complaint.

Statewide planning is also subject to

the same Title VI legislative

requirements as the metropolitan

planning process. The FHWA division

offices, jointly with FTA regional

offices, should review and document

Title VI compliance when making the

TEA–21 required finding that STIP

development and the overall planning

process is consistent with the planning

requirements.

In part, the purpose of asking the

questions attached to this memorandum

is to review the basis upon which the

annual self-certification of compliance

with Title VI is made. The metropolitan

planning certification reviews in TMAs

and STIP findings offer an opportunity

to FHWA and FTA staff to verify the

procedures and analytical foundation

upon which the self-certification is

made. If it becomes evident that the selfcertification was not adequately

supported, a corrective action is to be

included in their certification report to

rectify the deficiency.

The FHWA’s and FTA’s Division and

Regional Administrators should involve

their respective civil rights staffs in the

EJ and Title VI portions of the

metropolitan planning certification

reviews in TMAs and statewide

planning findings.

Forthcoming Planning Regulations

As you know, FHWA and FTA are

preparing to revise the planning (23 CFR

450 and 49 CFR 619) and environmental

(23 CFR 771 and 49 CFR 622)

regulations. In these rulemakings and

subsequent documents, we will propose

clarifications and appropriate

procedural and analytical approaches

for more completely complying with the

provisions of Title VI and the Executive

Order on Environmental Justice.

Specifically, the proposals will focus on

31804 Federal Register / Vol. 65, No. 98 / Friday, May 19, 2000 / Rules and Regulations

public involvement strategies for

minority and low-income groups and

assessment of the distribution of

benefits and adverse environmental

impacts at both the plan and project

level.

If you have questions on metropolitan

applications of this memorandum,

please contact Sheldon M. Edner, Team

Leader, Metropolitan Planning and

Policies, FHWA, (202) 366–4066; or

Charlie Goodman, Division Chief,

Metropolitan Planning, FTA (202) 366–

1944. On statewide applications, please

contact Dee Spann, Team Leader,

Statewide Planning, FHWA; (202) 366–

4086; or Paul Verchinski, Chief,

Statewide Planning, FTA, (202) 366–

1626.

Assessing Title VI Capability—Review

Questions

September 1999

Discussion of these important issues

will be held as part of planning

certification reviews, and the discussion

will be held as part of statewide

planning findings that are made as part

of Statewide Transportation

Improvement Program (STIP) approval.

These questions are offered as an aid to

reviewing and verifying compliance

with Title VI requirements:

1. Overall Strategies and Goals

• What strategies and efforts has the

planning process developed for

ensuring, demonstrating, and

substantiating compliance with Title VI?

What measures have been used to verify

that the multi-modal system access and

mobility performance improvements

included in the plan and Transportation

Improvement Program (TIP) or STIP,

and the underlying planning process,

comply with Title VI?

• Has the planning process developed

a demographic profile of the

metropolitan planning area or State that

includes identification of the locations

of socio-economic groups, including

low-income and minority populations

as covered by the Executive Order on

Environmental Justice and Title VI

provisions?

• Does the planning process seek to

identify the needs of low-income and

minority populations? Does the

planning process seek to utilize

demographic information to examine

the distributions across these groups of

the benefits and burdens of the

transportation investments included in

the plan and TIP (or STIP)? What

methods are used to identify

imbalances?

2. Service Equity

• Does the planning process have an

analytical process in place for assessing

the regional benefits and burdens of

transportation system investments for

different socio-economic groups? Does it

have a data collection process to

support the analysis effort? Does this

analytical process seek to assess the

benefit and impact distributions of the

investments included in the plan and

TIP (or STIP)?

• How does the planning process

respond to the analyses produced?

Imbalances identified?

3. Public Involvement

• Does the public involvement

process have an identified strategy for

engaging minority and low-income

populations in transportation

decisionmaking? What strategies, if any,

have been implemented to reduce

participation barriers for such

populations? Has their effectiveness

been evaluated?

• Has public involvement in the

planning process been routinely

evaluated as required by regulation?

Have efforts been undertaken to

improve performance, especially with

regard to low-income and minority

populations? Have organizations

representing low-income and minority

populations been consulted as part of

this evaluation? Have their concerns

been considered?

• What efforts have been made to

engage low-income and minority

populations in the certification review

public outreach effort? Does the public

outreach effort utilize media (such as

print, television, radio, etc.) targeted to

low-income or minority populations?

What issues were raised, how are their

concerns documented, and how do they

reflect on the performance of the

planning process in relation to Title VI

requirements?

• What mechanisms are in place to

ensure that issues and concerns raised

by low-income and minority

populations are appropriately

considered in the decisionmaking

process? Is there evidence that these

concerns have been appropriately

considered? Has the metropolitan

planning organization (MPO) or State

DOT made funds available to local

organizations that represent low-income

and minority populations to enable their

participation in planning processes?

Guidance:

Assessing Title VI Capability—FTA/

FHWA Actions

Environmental Justice in State Planning

and Research (SPR) and Unified

Planning Work Programs (UPWPs)

At a minimum, FHWA and FTA

should review with States, MPOs, and

transit operators how Title VI is

addressed as part of their public

involvement and plan development

processes. Since there is likely to be the

need for some upgrading of activity in

this area, a work element to assess and

develop improved strategies for

reaching minority and low-income

groups through public involvement

efforts and to begin developing or

enhancing analytical capability for

assessing impact distributions should be

considered in upcoming SPRs and

UPWPs.

Review Public Involvement Efforts

During Certification Reviews for Title VI

Consistency

In many areas, room for improvement

exists in public involvement processes

regarding engagement of minority and

low-income individuals. It is

appropriate to review the extent to

which MPOs and States have made

proactive efforts to engage these groups

through their public involvement

programs. Further, FHWA and FTA

should review the record of complaints

or concerns raised regarding Title VI in

the planning process under review.

During the on-site element of the

metropolitan certification review, the

public involvement process, now

required by statute, should make a

special effort to engage and involve

representatives of minority and lowincome groups to hear their views

regarding changes to and performance of

the planning process.

Options for FHWA/FTA Metropolitan

Certification Review Actions

(1) FHWA and FTA should seek to

determine what, if any, processes are in

place to assess the distribution of

impacts on different socio-economic

groups for the investments identified in

the transportation plan and TIP. If the

planning process has no such capability

in place, there needs to be further

investigation as to how the MPO is able

to annually self-certify its compliance

with the provisions of Title VI.

(2) If no documented process exists

for assessing the distributional effects of

the transportation investments in the

region, the planning certification report

should include a corrective action

directing the development of a process

for accomplishing this end. This will

Federal Register / Vol. 65, No. 98 / Friday, May 19, 2000 / Rules and Regulations 31805

serve to put the process on notice

regarding existing requirements and

prepare it for future regulatory

requirements. If a minimal effort is in

place, FHWA and FTA should

encourage the planning process

participants to become familiar with the

provisions of the Executive Order on

Environmental Justice and identify

needed improvements based on the

Order.

(3) If no formal evaluation of the

public involvement process has been

conducted per the requirement for

periodic assessment (see 23 CFR

450.316(b)), a corrective action to

conduct an evaluation should be

included in the certification report. The

formal evaluation should, at a

minimum, assess the effectiveness of

efforts to engage minority and lowincome populations through the local

public involvement process. If the MPO

or State has conducted a public

involvement evaluation, FHWA and

FTA should determine whether the

involvement of minorities and lowincome individuals has been addressed

and what strengths and deficiencies

were identified. Recommended

improvements or corrective actions for

the certification report or STIP findings

can be tied to the results of the MPO’s

or State’s public involvement

evaluation.

[FR Doc. 00–12590 Filed 5–18–00; 8:45 am]

BILLING CODE 4910–22–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 8885]

RIN 1545–AW55

The Solely for Voting Stock

Requirement in Certain Corporate

Reorganizations

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Final regulation.

SUMMARY: This document contains final

regulations relating to the solely for

voting stock requirement in certain

corporate reorganizations under section

368(a)(1)(C). The final regulations

provide that a prior acquisition of a

target corporation’s stock by an

acquiring corporation generally will not

prevent the solely for voting stock

requirement in a ‘‘C’’ reorganization of

the target corporation and the acquiring

corporation from being satisfied. They

affect persons engaging in certain

transactions occurring after December

31, 1999.

DATES: Effective Date: These regulations

are effective May 19, 2000.

Applicability Date: These regulations

apply to transactions occurring after

December 31, 1999, unless the

transaction occurs pursuant to a written

agreement that is (subject to customary

conditions) binding on that date and at

all times thereafter.

FOR FURTHER INFORMATION CONTACT:

Marnie Rapaport, (202) 622–7550 (not a

toll-free number).

SUPPLEMENTARY INFORMATION:

Background

On June 14, 1999, the IRS and

Treasury issued a notice of proposed

rulemaking in the Federal Register (64

FR 31770) setting forth rules relating to

the solely for voting stock requirement

in reorganizations under section

368(a)(1)(C). The proposed regulations

provided that prior ownership of stock

of a target corporation by an acquiring

corporation will not by itself prevent the

solely for voting stock requirement of a

‘‘C’’ reorganization from being satisfied.

The regulations propose to reverse the

IRS’s previous position that the

acquisition of assets of a partially

controlled subsidiary does not qualify as

a tax-free ‘‘C’’ reorganization. See Rev.

Rul. 54–396 (1954–2 C.B. 147). This

position subsequently was sustained in

litigation in Bausch & Lomb Optical Co.

v. Commissioner, 267 F.2d 75 (2d Cir.),

cert. denied, 361 U.S. 835 (1959) (the

Bausch & Lomb doctrine). A public

hearing regarding these proposed

regulations was held on October 5,

1999. Written comments to the notice

were received. After consideration of all

the comments, the proposed regulations

are adopted as revised by this Treasury

decision.

Explanation of Revisions and Summary

of Comments

The Applicability Date

The proposed regulations apply to

transactions occurring after the date that

a Treasury decision adopting the

regulations is published in the Federal

Register, except that they do not apply

to any transactions occurring pursuant

to a written agreement which is (subject

to customary conditions) binding on the

date that the regulations are published

as final regulations in the Federal

Register, and at all times thereafter.

A commentator requested that

taxpayers be allowed to apply the

proposed regulations to transactions

occurring before the proposed

regulations are published as final

regulations.

The IRS and Treasury Department

determined that the increased flexibility

that results from the proposed

regulations should be available to

taxpayers in structuring transactions

before their publication as final

regulations. Accordingly, the IRS and

the Treasury Department issued Notice

2000–1 (2000–2 I.R.B. 288), which

changes the proposed effective date of

the proposed regulations to apply to any

transactions occurring after December

31, 1999, unless the transaction occurs

pursuant to a written agreement binding

on that date. Notice 2000–1 further

provides that the proposed regulations,

when finalized, will adopt this effective

date rule and that taxpayers may rely on

Notice 2000–1 until final regulations are

issued. Accordingly, the final

regulations adopt this effective date

rule.

Finally, Notice 2000–1 provides that

taxpayers may request a private letter

ruling permitting them to apply the final

regulations to transactions occurring on

or after June 11, 1999 (the date the

proposed regulations were filed with the

Federal Register) to which the final

regulations would not otherwise apply,

and for which there was not a written

agreement (subject to customary

conditions) binding on June 11, 1999

and at all times thereafter. The Notice

cautions, however, that a private letter

ruling will not be issued unless the

taxpayer establishes to the satisfaction

of the IRS that there is not a significant

risk of different parties to the

transaction taking inconsistent

positions, for U.S. tax purposes, with

respect to the applicability of the final

regulations to the transaction. Any such

requests for a ruling will continue to be

considered.

Extension of the Repeal of the Bausch

& Lomb Doctrine to ‘‘B’’ Reorganizations

A comment was received requesting

that the IRS reconsider its position in

Rev. Rul. 69–294 (1969–1 C.B. 110),

where the Bausch & Lomb doctrine was

applied to disqualify a purported

section 368(a)(1)(B) reorganization that

followed a tax-free section 332

liquidation. In Rev. Rul. 69–294, X

owned all of the stock of Y and Y owned

80 percent of the stock of Z. Y

completely liquidated into X in a

section 332 liquidation. As part of the

plan, X (now owning 80 percent of the

stock of Z) acquired the minority 20

percent stock interest in Z in exchange

for X voting stock in a purported ‘‘B’’

reorganization. The ruling holds that the

exchange with the 20 percent minority

shareholders was not a ‘‘B’’

reorganization. The rationale is that

although the acquisition from the