4810 Federal Register / Vol. 71, No. 19 / Monday, January 30, 2006 / Rules and Regulations 

Executive Order 12866 and Regulatory 

Flexibility Act 

This rule has been reviewed under 

Executive Order 12866. For this action, 

the Office of Management and Budget 

has waived its review under Executive 

Order 12866. 

Prior to this rule, the State of 

Minnesota was classified as an 

accredited-free State for cattle and 

bison. However, five infected herds 

have been discovered within a 48- 

month period. Under the regulations, if 

two or more affected herds are detected 

in an accredited-free State or zone 

within a 48-month period, the State or 

zone must be reclassified as modified 

accredited advanced. In keeping with 

that requirement, this interim rule 

removes Minnesota from the list of 

accredited-free States and adds it to the 

list of modified accredited advanced 

States. 

As of January 2005, there were 

approximately 27,000 cattle and bison 

operations in Minnesota, totaling 2.4 

million head. According to the National 

Agricultural Statistics Service, the total 

cash value of cattle in Minnesota was 

over $2.3 billion as of that year. Over 99 

percent of Minnesota’s cattle operations 

yield less than $750,000 annually and 

are, therefore, considered small entities 

under criteria established by the Small 

Business Administration. 

This interim rule changes the status of 

Minnesota to modified accredited 

advanced, resulting in interstate 

movement restrictions where none 

existed previously. Specifically, as 

explained previously, § 77.10 requires 

that, for movement to certain 

destinations, animals must test negative 

to an official tuberculin test and/or be 

officially identified by premises of 

origin identification before interstate 

movement. 

This rule will prove beneficial by 

preventing the spread of tuberculosis to 

other areas of the United States. 

However, the stricter requirements for 

interstate movement will have an 

economic effect on those producers 

involved in the interstate movement of 

cattle and bison from Minnesota. As 

such, this analysis will focus on the 

expenses incurred by those producers 

engaged in interstate movement and in 

determining whether those negative 

impacts are significant. 

The cost of tuberculin testing and 

individual identification is between $10 

and $15 per head, which includes the 

labor costs of the veterinarian to test and 

apply official identification. On January 

1, 2005, the average value per animal in 

Minnesota was estimated to be $950. 

Thus, we believe that the added cost of 

the required tuberculin testing and 

identification is small relative to the 

average value of cattle and bison, 

representing between 1 and 1.6 percent 

of the average animal’s value. Further, 

since this rule provides for a delay in 

date of compliance with the 

identification requirements in § 77.10(b) 

and (d), some herd owners’

identification costs may be deferred. 

The expenses stemming from the 

testing and identification requirements 

are not expected to be substantial for 

cattle and bison owners in Minnesota. 

The more a particular herd owner 

engages in interstate movement, the 

greater the resulting expense. However, 

Minnesota is a net importing State in 

the interstate movement of live cattle, 

and the latest data on interstate cattle 

movement shows that in 2003, 

Minnesota imported 370,640 live cattle 

from other States, and exported 104,729 

live cattle to other States (ERS/USDA). 

Minnesota’s net interstate imports of 

live cattle were 265,911 head and that 

year was not an exception to this trend 

of a net inflow. 

Under these circumstances, the 

Administrator of the Animal and Plant 

Health Inspection Service has 

determined that this action will not 

have a significant economic impact on 

a substantial number of small entities. 

Executive Order 12372 

This program/activity is listed in the 

Catalog of Federal Domestic Assistance 

under No. 10.025 and is subject to 

Executive Order 12372, which requires 

intergovernmental consultation with 

State and local officials. (See 7 CFR part 

3015, subpart V.) 

Executive Order 12988 

This rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. This rule: (1) Preempts all State 

and local laws and regulations that are 

in conflict with this rule; (2) has no 

retroactive effect; and (3) does not 

require administrative proceedings 

before parties may file suit in court 

challenging this rule. 

Paperwork Reduction Act 

This rule contains no new 

information collection or recordkeeping 

requirements under the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501 

et seq.). 

List of Subjects in 9 CFR Part 77 

Animal diseases, Bison, Cattle, 

Reporting and recordkeeping 

requirements, Transportation, 

Tuberculosis. 

■ Accordingly, we are amending 9 CFR 

part 77 as follows: 

PART 77—TUBERCULOSIS 

■ 1. The authority citation for part 77 

continues to read as follows: 

Authority: 7 U.S.C. 8301–8317; 7 CFR 2.22, 

2.80, and 371.4. 

§ 77.7 [Amended] 

■ 2. In § 77.7, paragraph (a) is amended 

by removing the word ‘‘Minnesota,’’. 

§ 77.9 [Amended] 

■ 3. In § 77.9, paragraph (a) is amended 

by adding the words ‘‘Minnesota and’’

immediately before the word ‘‘Texas’’. 

Done in Washington, DC, this 24th day of 

January 2006. 

Kevin Shea, 

Acting Administrator, Animal and Plant 

Health Inspection Service. 

[FR Doc. 06–839 Filed 1–27–06; 8:45 am] 

BILLING CODE 3410–34–P 

DEPARTMENT OF AGRICULTURE 

Animal and Plant Health Inspection 

Service 

9 CFR Part 94 

[Docket No. 04–083–3] 

Add Argentina to the List of Regions 

Considered Free of Exotic Newcastle 

Disease 

AGENCY: Animal and Plant Health 

Inspection Service, USDA. 

ACTION: Final rule. 

SUMMARY: We are amending the 

regulations by adding Argentina to the 

list of regions considered free of exotic 

Newcastle disease. We have conducted 

a risk evaluation and have determined 

that Argentina has met our requirements 

for being recognized as free of this 

disease. This action eliminates certain 

restrictions on the importation into the 

United States of poultry and poultry 

products from Argentina. We are also 

adding Argentina to the list of regions 

that, although declared free of exotic 

Newcastle disease, must provide an 

additional certification to confirm that 

any poultry or poultry products offered 

for importation into the United States 

originate in a region free of exotic 

Newcastle disease and that, prior to 

importation into the United States, such 

poultry or poultry products were not 

commingled with poultry or poultry 

products from regions where exotic 

Newcastle disease exists. 

DATES: Effective Date: March 1, 2006. 

FOR FURTHER INFORMATION CONTACT: Dr. 

David Nixon, Senior Staff Veterinarian, 

Regionalization Evaluation Services, 


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Federal Register / Vol. 71, No. 19 / Monday, January 30, 2006 / Rules and Regulations 4811 

National Center for Import and Export, 

VS, APHIS, 4700 River Road Unit 38, 

Riverdale, MD 20737–1231; (301) 734–

4356. 

SUPPLEMENTARY INFORMATION: 

Background 

The regulations in 9 CFR part 94 

(referred to below as the regulations) 

govern the importation into the United 

States of specified animals and animal 

products in order to prevent the 

introduction of various animal diseases, 

including exotic Newcastle disease 

(END). END is a contagious, infectious, 

and communicable disease of birds and 

poultry. Section 94.6 of the regulations 

provides that END is considered to exist 

in all regions of the world except those 

listed in § 94.6(a)(2), which are 

considered to be free of END. 

The Government of Argentina 

requested that APHIS evaluate 

Argentina’s animal health status with 

respect to END and provided 

information in support of that request in 

accordance with 9 CFR part 92, 

‘‘Importation of Animals and Animal 

Products: Procedures for Requesting 

Recognition of Regions.’’

On August 23, 2005, we published in 

the Federal Register (70 FR 49200–

49207, Docket No. 04–083–1) a proposal 

to amend the regulations by adding 

Argentina to the list of regions 

considered free of END. We also 

proposed to add Argentina to the list of 

regions that, although declared free of 

END, must provide an additional 

certification to confirm that any poultry 

or poultry products offered for 

importation into the United States 

originate in a region free of END and 

that, prior to importation into the 

United States, such poultry or poultry 

products were not commingled with 

poultry or poultry products from regions 

where END exists. On September 8, 

2005, we published a document in 

which we corrected an Internet address 

and Web site navigation instructions 

that had been provided in the proposed 

rule (see 70 FR 53313, Docket No. 04–

083–2). 

We solicited comments concerning 

our proposal for 60 days ending October 

24, 2005. We did not receive any 

comments. Therefore, for the reasons 

given in the proposed rule, we are 

adopting the proposed rule as a final 

rule, without change. 

Executive Order 12866 and Regulatory 

Flexibility Act 

This rule has been reviewed under 

Executive Order 12866. For this action, 

the Office of Management and Budget 

has waived its review under Executive 

Order 12866. 

Under the regulations in 9 CFR part 

94, the importation into the United 

States of poultry and poultry products 

that originate in or transit any region 

where END exists is generally 

prohibited. Furthermore, even if a 

region is considered free of END, the 

importation of poultry and poultry 

products from that region may be 

restricted depending on the region’s 

proximity to or trading relationships 

with countries or regions where END is 

present. 

This rule amends the regulations by 

adding Argentina to the list of regions 

considered free of END. However, since 

Argentina shares borders with regions 

that the United States does not 

recognize as free of END, we are also 

requiring Argentina to meet additional 

certification requirements for live 

poultry and poultry products imported 

into the United States to ensure that the 

imports are free from END. 

Over the past several years, 

Argentina’s poultry industry has 

increased substantially as shown in 

table 1. Although Argentina exports 

eggs, which typically are destined to 

Denmark, the main export for Argentina 

is poultry meat. Argentina exports 

poultry meat and products to 34 

countries, with Chile expected to be the 

largest importer. In 2003, Argentina 

exported $22 million of poultry meat 

including whole broilers (36 percent), 

chicken paws (30 percent), processed 

meat from layers (5 percent), and other 

products and byproducts such as wings, 

nuggets, burgers, offal, and breasts (29 

percent). Exports for poultry meat in 

2004 are projected at 70,000 tons, 

almost twice the amount exported in 

2003. In 2005, exports are projected to 

reach 110,000 metric tons. 

TABLE 1.—POULTRY EXPORTS, IMPORTS, AND PRODUCTION IN ARGENTINA

[In metric tons] 

Year Poultry 

imports 

Poultry 

exports 

Poultry 

production 

1998 ............................................................................................................................................. 65,215 18,936 930,247 

1999 ............................................................................................................................................. 55,608 17,097 982,860 

2000 ............................................................................................................................................. 45,683 19,187 1,000,260 

2001 ............................................................................................................................................. 26,661 21,243 993,122 

2002 ............................................................................................................................................. 1,196 30,501 972,870 

Source: FAOSTAT Argentina Poultry, last accessed November 2004. 

In 2003, poultry production in the 

United States totaled 38.5 billion 

pounds for a total value of $23.3 billion. 

Broiler meat accounted for $15.2 billion 

(65 percent) of this value in 2003. The 

remaining worth was comprised of the 

value of eggs ($5.3 billion), turkey ($2.7 

billion), and other chicken products 

($48 million). The United States is also 

the world’s largest exporter of broilers, 

with broiler exports totaling 4.93 billion 

pounds, the equivalent of $1.5 billion, 

in 2003. Imports of broiler products into 

the United States in 2003 totaled 12 

million pounds, or less than 1 percent 

of the domestic production. 

In 2002, there were approximately 

32,006 broiler and other meat producing 

chicken farms in the United States, as 

shown in table 2. Under the Small 

Business Administration’s size 

standards, broiler and other meat 

production chicken farms with less than 

$750,000 in annual sales, which is the 

equivalent of 300,000 birds, qualify as 

small businesses. Given this 

information, about 20,949, or 64.5 

percent of all broiler operations, qualify 

as small businesses. 


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4812 Federal Register / Vol. 71, No. 19 / Monday, January 30, 2006 / Rules and Regulations 

TABLE 2.—NUMBER OF FARMS SELLING BROILERS AND OTHER MEAT-TYPE CHICKENS, 2002 

Number sold Farms Number 

Average sales 

per farm 

(dollars) 

Broilers and other meat-type chickens ............................................................................ 32,006 8,500,313,357 $766,498 

1 to 1,999 ................................................................................................................. 10,869 1,146,308 304 

2,000 to 15,999 ........................................................................................................ 406 2,871,466 20,412 

16,000 to 29,999 ...................................................................................................... 206 4,420,530 61,932 

30,000 to 59,999 ...................................................................................................... 444 19,732,838 128,267 

60,000 to 99,999 ...................................................................................................... 1,060 84,498,647 230,066 

100,000 to 199,999 .................................................................................................. 3,311 498,386,958 434,425 

200,000 to 299,999 .................................................................................................. 4,653 1,137,668,155 705,651 

300,000 to 499,999 .................................................................................................. 5,754 2,191,324,340 1,099,118 

500,000 or more ....................................................................................................... 5,303 4,560,264,115 2,481,853 

Source: 2002 Census of Agriculture, Table 27. 

Broiler production in the United 

States is concentrated in a group of 

States stretching from Delaware south 

along the Atlantic coast to Georgia, then 

westward through Alabama, 

Mississippi, and Arkansas. These States 

accounted for over 70 percent of broilers 

in the United States in 2003. The top 

five broiler producing States are 

Georgia, Arkansas, Alabama, 

Mississippi, and North Carolina, whose 

2002 broiler sales are listed below in 

table 3. 

TABLE 3.—NUMBER OF FARMS SELLING BROILERS IN SELECTED STATES, 2002 

Number of broilers sold per farm U.S. total Alabama Arkansas Georgia Mississippi North 

Carolina 

Total for 

top five 

producing 

States 

1 to 1,999 ................................... 10,869 89 79 46 104 13 331 

2,000 to 59,999 .......................... 1,056 20 103 49 86 101 359 

60,000 to 99,999 ........................ 1,060 57 199 84 97 158 595 

100,000 to 199,999 .................... 3,311 385 634 25 210 539 1,793 

200,000 to 499,999 .................... 10,407 1,328 1,927 1,335 883 1,284 6,757 

500,000 or more ........................ 5,303 72 578 959 548 349 2,506 

Source: 2002 Census of Agriculture State Data Table. 

Poultry meat imported from Argentina 

could potentially affect the United 

States poultry industry. Consumers will 

benefit from any price decreases for 

poultry and poultry products, while 

producers will potentially be negatively 

affected by more competitive prices. 

However, the amount of poultry or 

poultry products that may be imported 

from Argentina is not expected to have 

a significant impact on poultry 

consumers or producers in the United 

States. In 2003, Argentina exported a 

total of $22 million worth of poultry and 

poultry products while the United 

States produced $15.2 billion worth of 

broilers. Given these numbers, any 

exports from Argentina are not likely to 

be in quantities sufficient to have a 

significant impact on U.S. poultry 

producers, and we do not anticipate that 

any U.S. entities, small or otherwise, 

will experience any significant 

economic effects as a result of this 

action. It should also be noted that 

Argentina is not currently eligible to 

export poultry products to the United 

States under the regulations of the 

Department’s Food Safety and 

Inspection Service in 9 CFR 381.196 for 

approving foreign facilities to export 

poultry meat and other poultry products 

to the United States; there will, 

therefore, be no economic effects on 

U.S. entities until establishments in 

Argentina are approved to export 

poultry meat and other poultry products 

to the United States. 

Under these circumstances, the 

Administrator of the Animal and Plant 

Health Inspection Service has 

determined that this action will not 

have a significant economic impact on 

a substantial number of small entities. 

Executive Order 12988 

This final rule has been reviewed 

under Executive Order 12988, Civil 

Justice Reform. This rule: (1) Preempts 

all State and local laws and regulations 

that are inconsistent with this rule; (2) 

has no retroactive effect; and (3) does 

not require administrative proceedings 

before parties may file suit in court 

challenging this rule. 

Paperwork Reduction Act 

This final rule contains no 

information collection or recordkeeping 

requirements under the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501 

et seq.). 

List of Subjects in 9 CFR Part 94 

Animal diseases, Imports, Livestock, 

Meat and meat products, Milk, Poultry 

and poultry products, Reporting and 

recordkeeping requirements. 

■ Accordingly, we are amending 9 CFR 

part 94 as follows: 

PART 94—RINDERPEST, FOOT-ANDMOUTH DISEASE, FOWL PEST (FOWL 

PLAGUE), EXOTIC NEWCASTLE 

DISEASE, AFRICAN SWINE FEVER, 

CLASSICAL SWINE FEVER, AND 

BOVINE SPONGIFORM 

ENCEPHALOPATHY: PROHIBITED 

AND RESTRICTED IMPORTATIONS 

■ 1. The authority citation for part 94 

continues to read as follows: 

Authority: 7 U.S.C. 450, 7701–7772, 7781–

7786, and 8301–8317; 21 U.S.C. 136 and 

136a; 31 U.S.C. 9701; 7 CFR 2.22, 2.80, and 

371.4. 

§ 94.6 [Amended] 

■ 2. In § 94.6, paragraph (a)(2) is 

amended by adding the word 


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Federal Register / Vol. 71, No. 19 / Monday, January 30, 2006 / Rules and Regulations 4813 

‘‘Argentina,’’ before the word 

‘‘Australia,’’. 

■ 3. Section 94.26 is amended as 

follows: 

■ a. In the introductory text of the 

section, in the first sentence, by 

removing the words ‘‘The Mexican’’ and 

adding the words ‘‘Argentina and the 

Mexican’’ in their place. 

■ b. In paragraph (a), by removing the 

words ‘‘Government of Mexico’’ and 

adding the words ‘‘national Government 

of the exporting region’’ in their place. 

■ c. In paragraph (c)(1), by removing the 

words ‘‘Government of Mexico’’ and 

adding the words ‘‘national Government 

of the exporting region’’ in their place. 

■ d. In paragraph (c)(4), by removing the 

words ‘‘Government of Mexico’’ and 

adding the words ‘‘national Government 

of the exporting region’’ in their place. 

Done in Washington, DC, this 24th day of 

January 2006. 

Kevin Shea, 

Acting Administrator, Animal and Plant 

Health Inspection Service. 

[FR Doc. 06–840 Filed 1–27–06; 8:45 am] 

BILLING CODE 3410–34–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[TD 9247] 

RIN 1545–BF23 

Allocation and Apportionment of 

Expenses Alternative Method for 

Determining Tax Book Value of Assets 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final regulations. 

SUMMARY: This document contains final 

regulations providing an alternative 

method of valuing assets for purposes of 

apportioning expenses under the tax 

book value method of § 1.861–9T. The 

alternative tax book value method, 

which is elective, allows taxpayers to 

determine, for purposes of apportioning 

expenses, the tax book value of all 

tangible property that is subject to a 

depreciation deduction under section 

168 by using the straight line method, 

conventions, and recovery periods of 

the alternative depreciation system 

under section 168(g)(2). The alternative 

tax book value method is intended to 

minimize basis disparities between 

foreign and domestic assets of taxpayers 

that may arise when taxpayers use 

adjusted tax basis to value assets under 

the tax book value method of expense 

apportionment. These final regulations 

may affect taxpayers that are required to 

apportion expenses under section 861. 

DATES: Effective Date: These regulations 

are effective January 30, 2006. 

Applicability Dates: For dates of 

applicability, see § 1.861–9(i)(4). 

FOR FURTHER INFORMATION CONTACT: 

David Bergkuist at (202) 622–3850 (not 

a toll-free call). 

SUPPLEMENTARY INFORMATION: 

Background 

On September 14, 1988, the IRS 

published temporary regulations (TD 

8228 (1988–2 CB 136) (53 FR 35467)) 

that address the allocation and 

apportionment of interest expense. On 

March 26, 2004, the IRS published a 

Treasury decision, TD 9120 (2004–1 CB 

881) (69 FR 15673), which contained 

temporary regulations that provide for 

an alternative method of valuing assets 

for purposes of apportioning expenses 

under the tax book value method of 

§ 1.861–9T, and a notice of proposed 

rulemaking that cross-references the 

temporary regulations, 2004–1 CB 894 

(69 FR 15753). A public hearing was 

held on July 19, 2004. 

For purposes of allocating and 

apportioning expenses, a taxpayer may 

compute the value of its assets under 

either the tax book value method or the 

fair market value method. Sections 

1.861–8T(c)(2) and 1.861–9T(g)(1)(ii). 

The temporary and proposed 

regulations issued in 2004 provided 

taxpayers with an alternative method of 

apportioning expenses under the tax 

book value method. This alternative tax 

book value method, which is elective, 

allows taxpayers to determine, for 

purposes of apportioning expenses, the 

tax book value of all tangible property 

that is subject to a depreciation 

deduction under section 168 by using 

the straight line method, conventions, 

and recovery periods of the alternative 

depreciation system under section 

168(g)(2). The alternative method 

provided in the temporary and proposed 

regulations is intended to minimize 

basis disparities between foreign and 

domestic assets of taxpayers that may 

arise when taxpayers use adjusted tax 

basis to value assets under the tax book 

value method of expense 

apportionment. 

Taxpayers using the tax book value 

method, including those that have 

elected the alternative tax book value 

method, may elect to change to the fair 

market value method at any time. Rev. 

Proc. 2003–37 (2003–1 CB 950) (May 27, 

2003). Taxpayers that elect to use the 

fair market value method must continue 

to use that method unless expressly 

authorized by the Commissioner to 

change methods. See § 1.861–8T(c)(2). 

See also Rev. Proc. 2005–28, 2005–21 

IRB 1093 (May 23, 2005), regarding 

automatic consent procedure applicable 

for taxable years beginning on or after 

March 26, 2004, but before March 26, 

2006, for which no return has 

previously been filed. Revocation of an 

election to use the alternative tax book 

value method, other than in conjunction 

with an election to use the fair market 

value method, for a taxable year prior to 

the sixth taxable year for which the 

election applies requires the consent of 

the Commissioner. 

Explanation of Provisions and 

Summary of Comments 

These final regulations adopt the rules 

of the temporary and proposed 

regulations. The alternative tax book 

value method, as set forth in § 1.861–

9(i), allows a taxpayer to elect to 

determine the tax book value of its 

tangible property that is subject to 

depreciation under section 168 of the 

Internal Revenue Code (Code) as though 

all such property had been depreciated 

using the alternative depreciation 

system under section 168(g) during the 

entire period in which the property has 

been in service. These final regulations 

prescribe the application of section 

168(g)(2) solely for determining an 

asset’s tax book value for purposes of 

apportioning expenses (including the 

calculation of the alternative minimum 

tax foreign tax credit pursuant to section 

59(a)) under the asset method described 

in § 1.861–9T(g). Application of section 

168(g)(2) pursuant to these final 

regulations does not otherwise affect the 

results under other provisions of the 

Code, including the amount of any 

deduction claimed under sections 167, 

168, 169, 263(a), 617, or any other 

capital cost recovery provision. 

As with the temporary and proposed 

regulations, the final regulations 

generally provide that, for a taxpayer 

that elects the alternative tax book value 

method, the tax book value of tangible 

property that is depreciated under 

section 168 of the Code is determined as 

though such property were subject to 

the alternative depreciation system 

under section 168(g) for the entire 

period that such property has been in 

service. Thus, if a taxpayer elects the 

alternative tax book value method 

effective for the 2005 taxable year, the 

tax book value of tangible property 

placed in service in 2005 is determined 

each year using the rules of section 

168(g) that apply to property placed in 

service in 2005 and the tax book value 

of tangible property placed in service in 

2006 is determined each year using the 


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