Federal Register / Vol. 65, No. 17 / Wednesday, January 26, 2000 / Proposed Rules 4207

not to occur within the 20-year period that

begins on January 1, 2000 (which is the issue

date of the T preferred stock) as a result of

the exchange, under paragraph (b) of this

section, the P preferred stock received by A

is treated as QPS. Thus, the P preferred stock

received is not ‘‘other property’’ within the

meaning of section 356(a)(1)(B).

Example 3. The facts are the same as in

Example 2, except that, in addition, in 2010,

pursuant to a recapitalization of P under

section 368(a)(1)(E), A exchanges the P

preferred stock above for P NQPS that

permits the holder to require P to redeem the

stock in 2020. Under paragraph (b) of this

section, the P preferred stock surrendered by

A is treated as QPS. Because the P preferred

stock received by A in the recapitalization is

not substantially identical to the P preferred

stock surrendered, the P preferred stock

received by A is not treated as QPS. Thus,

the P preferred stock received is ‘‘other

property’’ within the meaning of section

356(a)(1)(B).

Example 4. T issues preferred stock to A

on January 1, 2000 that permits the holder to

require T to redeem the stock on January 1,

2018, or at any time thereafter, but which is

not NQPS solely because, as of the issue date,

the holder’s right to redeem is subject to a

contingency which makes remote the

likelihood of redemption on or before

January 1, 2020. In 2007, pursuant to a

reorganization under section 368(a)(1)(A) in

which T merges into P, A surrenders the T

preferred stock in exchange for P preferred

stock with terms that are identical to the

terms of the T preferred stock. Immediately

before the exchange, the contingency to

which the holder’s right to cause redemption

of the T stock is subject makes remote the

likelihood of redemption before January 1,

2020, but the P stock, although subject to the

same contingency, is more likely than not to

be redeemed before January 1, 2020. Because,

as a result of the exchange of T stock for P

stock, the exercise of the redemption right

became more likely than not to occur within

the 20-year period beginning on the issue

date of the T preferred stock, the P preferred

stock received by A is not substantially

identical to the T stock surrendered, and is

not treated as QPS. Thus, the P preferred

stock received is ‘‘other property’’ within the

meaning of section 356(a)(1)(B).

Example 5. The facts are the same as in

Example 4, except that, immediately before

the merger of T into P in 2007, the

contingency to which the holder’s right to

cause redemption of the T stock is subject

makes it more likely than not that the T stock

will be redeemed before January 1, 2020.

Because exercise of the redemption right did

not become more likely than not to occur

within the 20-year period beginning on the

issue date of the T preferred stock as a result

of the exchange, the P preferred stock

received by A is substantially identical to the

T stock surrendered, and is treated as QPS.

Thus, the P preferred stock received is not

‘‘other property’’ within the meaning of

section 356(a)(1)(B).

Example 6. A is an employee of T. In

connection with A’s performance of services

for T, T transfers to A in 2000 an amount of

T common stock that represents reasonable

compensation. The T common stock contains

a term granting A the right to require T to

redeem the common stock, but only upon A’s

separation from service from T. In 2005,

pursuant to a reorganization under section

368(a)(1)(A) in which T merges into P, A

receives, in exchange for A’s T common

stock, P preferred stock granting a similar

redemption right upon A’s separation from

P’s service. Under paragraph (c) of this

section, the P preferred stock received by A

is treated as transferred in connection with

the performance of services (and representing

reasonable compensation) within the

meaning of section 351(g)(2)(C)(i)(II). Thus,

the P preferred stock received by A is QPS.

(f) Effective dates. This section

applies to transactions occurring on or

after the date these regulations are

published as final regulations in the

Federal Register.

Par. 5. Section 1.1036–1 is amended

by adding paragraph (d) as follows:

§ 1.1036–1 Stock for stock of the same

corporation.

* * * * *

(d) Nonqualified preferred stock. See

§ 1.356–7(a) for the applicability of the

definition of nonqualified preferred

stock in section 351(g)(2) for stock

issued prior to June 9, 1997, and for

stock issued in transactions occurring

after June 8, 1997, that are described in

section 1014(f) of the Taxpayer Relief

Act of 1997, Public Law 105–34, 111

Stat. 788,921.

Robert E. Wenzel,

Deputy Commissioner of Internal Revenue.

[FR Doc. 00–1529 Filed 1–21–00 11:59 am]

BILLING CODE 4380–01–U

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52

[IN 87–1b; FRL–6527–9]

Approval of Post-1996 Rate of

Progress Plan: Indiana

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Proposed rule.

SUMMARY: We are proposing to approve

Indiana’s Post-1996 Rate of Progress

Plan for Lake and Porter Counties,

Indiana, submitted on December 17,

1997, and January 22, 1998. The Plan

identifies volatile organic compound

control measures and documents

projections that those measures provide

3% per year (9% total) emission

reductions in Lake and Porter Counties

between 1996 and 1999. Our approval

means that EPA finds the State Plan

meets Clean Air Act (Act) requirements.

In the final rules section of this Federal

Register, the EPA is approving the

State’s request as a direct final rule

without prior proposal because EPA

views this action as noncontroversial

and anticipates no adverse comments. A

detailed rationale for approving the

State’s request is set forth in the direct

final rule. The direct final rule will

become effective without further notice

unless the Agency receives relevant

adverse written comment on this action.

Should the Agency receive such

comment, it will publish a final rule

informing the public that the direct final

rule will not take effect and such public

comment received will be addressed in

a subsequent final rule based on this

proposed rule. If no adverse written

comments are received, the direct final

rule will take effect on the date stated

in that document and no further activity

will be taken on this proposed rule. EPA

does not plan to institute a second

comment period on this action. Any

parties interested in commenting on this

action should do so at this time.

DATES: Written comments must be

received on or before February 25, 2000.

ADDRESSES: Written comments should

be mailed to: J. Elmer Bortzer, Chief,

Regulation Development Section, Air

Programs Branch (AR–18J),

Environmental Protection Agency,

Region 5, 77 West Jackson Boulevard,

Chicago, Illinois 60604.

Copies of the State submittal are

available for inspection at: Regulation

Development Section, Air Programs

Branch (AR–18J), Environmental

Protection Agency, Region 5, 77 West

Jackson Boulevard, Chicago, Illinois

60604.

FOR FURTHER INFORMATION CONTACT:

Ryan Bahr, Environmental Engineer,

Regulation Development Section, Air

Programs Branch (AR–18J),

Environmental Protection Agency,

Region 5, 77 West Jackson Boulevard,

Chicago, Illinois 60604, (312) 353–4366.

SUPPLEMENTARY INFORMATION: For

additional information see the direct

final rule published in the final rules

section of this Federal Register.

Dated: January 6, 2000.

Francis X. Lyons,

Regional Administrator, Region 5.

[FR Doc. 00–1559 Filed 1–25–00; 8:45 am]

BILLING CODE 6560–50–P