40992 Federal Register / Vol. 65, No. 128 / Monday, July 3, 2000 / Rules and Regulations

altitudes, especially during inclement

weather conditions. A greater degree of

safety is achieved by depicting the area

on aeronautical charts. Unless a written

adverse or negative comment, or a

written notice of intent to submit an

adverse or negative comment is received

within the comment period, the

regulation will become effective on the

date specified above. After the close of

the comment period, the FAA will

publish a document in the Federal

Register indicating that no adverse or

negative comments were received and

confirming the date on which the final

rule will become effective. If the FAA

does receive, within the comment

period, an adverse or negative comment,

or written notice of intent to submit

such a comment, a document

withdrawing the direct final rule will be

published in the Federal Register, and

a notice of proposed rulemaking may be

published with a new comment period.

Comments Invited

Although this action is in the form of

a final rule and was not preceded by a

notice of proposed rulemaking,

comments are invited on this rule.

Interested persons are invited to

comment on this rule by submitting

such written data, views, or arguments

as they may desire. Communications

should identify the Rules Docket

number and be submitted in triplicate to

the address specified under the caption

ADDRESSES. All communications

received on or before the closing date

for comments will be considered, and

this rule may be amended or withdrawn

in light of the comments received.

Factual information that supports the

commenter’s ideas and suggestions is

extremely helpful in evaluating the

effectiveness of this action and

determining whether additional

rulemaking action would be needed.

Comments are specifically invited on

the overall regulatory, economic,

environmental, and energy-related

aspects of the rule that might suggest a

need to modify the rule. All comments

submitted will be available, both before

and after the closing date for comments,

in the Rules Docket for examination by

interested persons. A report that

summarizes each FAA-public contact

concerned with the substance of this

action will be filed in the Rules Docket.

Commenters wishing the FAA to

acknowledge receipt of their comments

submitted in response to this rule must

submit a self-addressed, stamped

postcard on which the following

statement is made: ‘‘Comments to

Docket No. 00–ACA–13.’’ The postcard

will be date stamped and returned to the

commenter.

Agency Findings

The regulations adopted herein 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. Therefore, it is

determined that this final rule does not

have federalism implications under

Executive Order 13132.

The FAA has determined that this

regulation is noncontroversial and

unlikely to result in adverse or negative

comments. For the reasons discussed in

the preamble, I certify that this

regulation (1) is not a ‘‘significant

regulatory action’’ under Executive

Order 12866; (2) is not a ‘‘significant

rule’’ under Department of

Transportation (DOT) Regulatory

Policies and Procedures (44 FR 11034,

February 26, 1979); and (3) if

promulgated, will not have significant

economic impact, positive or negative,

on a substantial number of small entities

under the criteria of the Regulatory

Flexibility Act.

List of Subjects in 14 CFR Part 71

Airspace, Incorporation by reference,

Navigation (air).

Adoption of the Amendment

Accordingly, the Federal Aviation

Administration amends 14 CFR part 71

as follows:

PART 71—DESIGNATION OF CLASS A,

CLASS B, CLASS C, CLASS D, AND

CLASS E AIRSPACE AREAS;

AIRWAYS; ROUTES; AND REPORTING

POINTS

1. The authority citation for part 71

continues to read as follows:

Authority: 49 U.S.C. 106(g), 40103, 40113,

40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–

1963 Comp., p. 389.

§ 71.1 [Amended]

2. The incorporation by reference in

14 CFR 71.1 of Federal Aviation

Administration Order 7400.9G Airspace

Designations and Reporting Points,

dated September 10, 1999, and effective

September 16, 1999, is amended as

follows:

Paragraph 6004 Class E airspace areas

extending upward from 700 feet or more

above the surface of the earth.

* * * * *

ACE IA E5 Fairfield, IA [Revised]

Fairfield Municipal Airport, IA

(Lat 41°03′12′′ N., long. 91°58′44′′ W.)

That airspace extending upward from 700

feet above the surface within a 6.4-miles

radius of Fairfield Municipal Airport and

within 2.6 miles each side of the 188° bearing

from the Fairfield Municipal Airport

extending from the 6.4-mile radius to 9.5

miles south of the airport.

* * * * *

Issued in Kansas City, MO, on June 16,

2000.

Richard L. Day,

Acting Manager, Air Traffic Division, Central

Region.

[FR Doc. 00–16661 Filed 6–30–00; 8:45 am]

BILLING CODE 4910–13–M

SECURITIES AND EXCHANGE

COMMISSION

17 CFR Part 211

[Release No. SAB 101B]

Staff Accounting Bulletin No. 101B

AGENCY: Securities and Exchange

Commission.

ACTION: Publication of Staff Accounting

Bulletin.

SUMMARY: Staff Accounting Bulletin No.

101 (‘‘SAB 101’’) was released on

December 3, 1999 (64 FR 68936

December 9, 1999) and provides the

staff’s views in applying generally

accepted accounting principles to

selected revenue recognition issues.

SAB 101A was released on March 24,

2000 (65 FR 16811 March 30, 2000) and

delayed for one fiscal quarter the

implementation date of SAB 101 for

registrants with fiscal years beginning

between December 16, 1999 and March

15, 2000. Since the issuance of SAB 101

and SAB 101A, the staff has continued

to receive requests from a number of

groups asking for additional time to

determine the effect, if any, on

registrant’s revenue recognition

practices. This staff accounting bulletin

delays the implementation date of SAB

101 until no later than the fourth fiscal

quarter of fiscal years beginning after

December 15, 1999.

EFFECTIVE DATE: June 26, 2000.

FOR FURTHER INFORMATION CONTACT:

Richard Rodgers, Scott Taub, or Eric

Jacobsen, Professional Accounting

Fellows, Office of the Chief Accountant

(202/942–4400) or Robert Bayless,

Division of Corporation Finance (202/

942–2960), Securities and Exchange

Commission, 450 Fifth Street, NW,

Washington, DC 20549; electronic

addresses: RodgersR@sec.gov;

TaubS@sec.gov; JacobsenE@sec.gov; or

BaylessR@sec.gov.

SUPPLEMENTARY INFORMATION: The

statements in the staff accounting

bulletins are not rules or interpretations

Federal Register / Vol. 65, No. 128 / Monday, July 3, 2000 / Rules and Regulations 40993

1APB Opinion No. 20, ¶ 13 and ¶ 36–37 describe

and provide the accounting and disclosure

requirements applicable to the correction of an error

in previously issued financial statements. Because

the term ‘‘error’’ as used in APB Opinion No. 20

includes ‘‘oversight or misuse of facts that existed

at the time that the financial statements were

prepared,’’ that term includes both unintentional

errors as well as intentional fraudulent financial

reporting and misappropriation of assets as

described in Statement on Auditing Standards No.

82, Consideration of Fraud in a Financial Statement

Audit.

of the Commission, nor are they

published as bearing the Commission’s

official approval. They represent

interpretations and practices followed

by the Division of Corporation Finance

and the Office of the Chief Accountant

in administering the disclosure

requirements of the Federal securities

laws.

Dated: June 26, 2000.

Margaret H. McFarland,

Deputy Secretary.

PART 211—[AMENDED]

Accordingly, Part 211 of Title 17 of

the Code of Federal Regulations is

amended by adding Staff Accounting

Bulletin No. 101B to the table found in

Subpart B.

Staff Accounting Bulletin No. 101B

[The text of Staf Accounting Bulletin

No. 101B will not appear in the Code of

Federal Regulations.]

The staff hereby amends Question 2 of

Section B of Topic 13 of the Staff

Accounting Bulletin Series.

Topic 13: Revenue Recognition

* * * * *

B. Disclosures

Question 1

* * * * *

Question 2

Question: Will the staff expect retroactive

changes by registrants to comply with the

accounting described in this bulletin?

Interpretive Response: All registrants are

expected to apply the accounting and

disclosures described in this bulletin. The

staff, however, will not object if registrants

that have not applied this accounting do not

restate prior financial statements provided

they report a change in accounting principle

in accordance with APB Opinion No. 20,

Accounting Changes, and FASB Statement

No. 3, Reporting Accounting Changes in

Interim Financial Statements, no later than

the fourth fiscal quarter of the fiscal year

beginning after December 15, 1999. In

periods subsequent to transition, registrants

should disclose the amount of revenue (if

material to income before income taxes)

recognized in those periods that was

included in the cumulative effect adjustment.

If a registrant files financial statements with

the Commission before applying the

guidance in this bulletin, disclosures similar

to those described in Staff Accounting

Bulletin Topic 11–M, Disclosure of the

Impact that Recently Issued Accounting

Standards Will Have on the Financial

Statements of a Registrant When Adopted in

a Future Period, should be provided. With

regard to question 10 of Topic 13–A and

Topic 8–A regarding income statement

presentation, the staff would normally expect

retroactive application to all periods

presented unless the effect of applying the

guidance herein is immaterial.

However, if registrants have not previously

complied with generally accepted accounting

principles, for example, by recording revenue

for products prior to delivery that did not

comply with the applicable bill-and-hold

guidance, those registrants should apply the

guidance in APB Opinion No. 20 for the

correction of an error.1 In addition,

registrants should be aware that the

Commission may take enforcement action

where a registrant in prior financial

statements has violated the antifraud or

disclosure provisions of the securities laws

with respect to revenue recognition.

[FR Doc. 00–16580 Filed 6–30–00; 8:45 am]

BILLING CODE 8010–01–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 8889]

RIN 1545–AV10

Guidance Regarding Claims for Certain

Income Tax Convention Benefits

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Final regulations.

SUMMARY: This document contains final

regulations relating to treaty

withholding rates for items of income

received by entities that are fiscally

transparent in the United States and/or

a foreign jurisdiction. The regulations

affect the determination of tax treaty

benefits available to foreign persons

with respect to such items of income.

DATES: Effective Dates: These

regulations are effective June 30, 2000.

Applicability Dates: These regulations

apply to items of income paid on or

after June 30, 2000.

FOR FURTHER INFORMATION CONTACT:

Shawn R. Pringle, (202) 622–3850 (not

a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

This document contains final

regulations relating to the Income Tax

Regulations (CFR part 1) under section

894 of the Internal Revenue Code

(Code). On June 30, 1997, the IRS and

Treasury issued temporary regulations

(TD 8722 [1997–2 C.B. 81]) in the

Federal Register (62 FR 35673, as

corrected at 62 FR 46876, 46877) under

section 894 of the Code relating to

eligibility for benefits under income tax

treaties for payments to entities. A

notice of proposed rulemaking ([1997–2

C.B. 646]) cross-referencing the

temporary regulations was also

published in the same issue of the

Federal Register (62 FR 35755).

Need for Changes

Since the publication of TD 8722 and

proposed regulation § 1.894(d)(REG–

104893–97, 62 FR 35755), the IRS and

Treasury have received numerous

comments. This Treasury decision

contains changes made in response to

some of those comments.

Explanation of Provisions

I. General

These final section 894 regulations

clarify the availability of treaty benefits

with respect to an item of U.S. source

income paid to an entity that is treated

as fiscally transparent under the laws of

one or more jurisdictions (including the

United States) with respect to that item

of income. An entity that is treated as

fiscally transparent in one jurisdiction

but not another is referred to as a hybrid

entity. If an item of U.S. source income

is paid to a hybrid entity, the United

States may regard the entity as fiscally

transparent with respect to the item of

income and the foreign treaty

jurisdiction may regard the entity as

deriving the item of income.

Alternatively, the United States may

regard the entity as deriving the item of

income under U.S. tax principles, but a

foreign treaty jurisdiction may regard

the entity as fiscally transparent and

may therefore regard the interest holders

as deriving the item of income. This

dual classification may give rise to

inappropriate and unintended results

under tax treaties, such as double nontaxation or double taxation of the item

of income, unless the tax treaties are

interpreted to resolve the conflict of

laws.

These final regulations clarify how to

apply U.S. treaties when the entity

classification law of the United States

and a foreign treaty jurisdiction conflict

by providing that a reduced treaty rate

for an item of U.S. source income is

available only if the income is derived

by a foreign recipient resident in the

applicable treaty jurisdiction. This

general rule, which has been simplified

but not substantially changed from the

rule contained in the temporary and