Federal Register / Vol. 71, No. 204 / Monday, October 23, 2006 / Proposed Rules 62075 

applies to the transfer. Under paragraph 

(b)(1) of this section, N reduces its basis in 

Asset 2 by $5 to $25 and, under section 

362(a), takes a basis in Asset 1 of $100. Under 

section 358(a), A receives N stock with a 

basis of $105. 

Example 7. Property transfer subject to 

both sections 362(e)(1) and 362(e)(2). (i) 

Facts. Foreign corporation FP transfers Asset 

1 and Asset 2 to a domestic corporation DS 

in a transaction that qualifies under section 

351. Asset 1 is not property described in 

section 362(e)(1)(B) and has a basis of $80 

and a fair market value of $50. Asset 2 is 

property described in section 362(e)(1)(B) 

and has a basis of $120 and a value of $110. 

Section 367(b) does not apply to the transfer 

of Asset 1 or Asset 2. 

(ii) Analysis. Under paragraphs (b)(1) and 

(b)(3) of this section, a transfer is described 

in section 362(e)(1), and thus not subject to 

this section, only if and to the extent there 

is a transfer of property described in section 

362(e)(1)(B) that otherwise would have a net 

built-in loss in the hands of the transferee. 

Because Asset 2 is property described in 

section 362(e)(1)(B) and DS would otherwise 

receive Asset 2 with a basis of $120 and a 

value of $110, FP’s transfer of property to DS 

is described in section 362(e)(1) only to the 

extent of the transfer of Asset 2. Asset 1 is 

not property described in section 

362(e)(1)(B), and under section 362(a), DS 

would receive Asset 1 with a basis ($80) in 

excess of its fair market value ($50). 

Accordingly, this section applies solely to the 

transfer of Asset 1. Under paragraph (b)(1) of 

this section, DS reduces its basis in Asset 1 

by $30 to $50. Under section 358(a), FP 

receives the DS stock with a basis of $200. 

Example 8. Section 304 sale of built-in loss 

stock. (i) Facts. Individual A owns all the 

stock of corporation X and corporation Y. A 

sells all his X stock to Y for $60. Under 

section 304, A is treated as though he 

transferred the X stock to Y in exchange for 

Y stock in a transaction to which section 351 

applies. Then, Y is treated as redeeming the 

Y stock it was treated as having issued to A 

in the section 351 transaction. At the time of 

the transaction, A holds X stock with a basis 

of $90 and a fair market value of $60. A and 

Y do not elect to apply section 362(e)(2)(C) 

to reduce A’s basis in the Y stock deemed 

received. 

(ii) Analysis. Under section 362(a), Y 

would otherwise receive X stock with an 

aggregate basis of $90, which exceeds its 

aggregate fair market value of $60. As a 

result, the X stock has a net built-in loss of 

$30, and, under paragraph (b)(1) of this 

section, Y reduces its basis in the X stock 

received by $30 to $60. Under section 358(a), 

A receives the deemed issued Y stock with 

a basis of $90. 

(e) Effective date. This section applies 

to transactions occurring after the date 

these regulations are published as final 

regulations in the Federal Register. 

Par. 5. Section 1.705–1(a)(9) is added 

to read as follows: 

§ 1.705–1 Determination of basis of 

partner’s interest. 

(a) * * * 

(9) For basis adjustments necessary to 

coordinate sections 705 and 362(e)(2), 

see § 1.362–4(c)(6). 

* * * * * 

Par. 6. In § 1.1367–1, a new sentence 

is added at the end of paragraph (c)(2) 

to read as follows: 

§ 1.1367–1 Adjustments to basis of 

shareholder’s stock in an S corporation. 

* * * * * 

(c) * * * 

(2) * * * For basis adjustments 

necessary to coordinate sections 1367 

and 362(e)(2), see § 1.362–4(c)(7). 

* * * * * 

Mark E. Matthews, 

Deputy Commissioner for Services and 

Enforcement. 

[FR Doc. E6–17649 Filed 10–20–06; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 165 

[USCG–2006–25767; CGD09–06–123] 

Safety Zones; U.S. Coast Guard Water 

Training Areas, Great Lakes 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of public meetings. 

SUMMARY: This document provides the 

times and locations of for the additional 

public meetings which will be held by 

the Coast Guard to discuss issues 

relating to the proposed permanent 

safety zones located in the Great Lakes 

to conduct live gunnery training 

exercises. These meetings will be open 

to the public and are in addition to the 

four currently scheduled public 

meetings. 

DATES: The Coast Guard will hold five 

additional public meetings as follows: 

Monday, October 30, 2006 in Rochester, 

NY; Wednesday November 1, 

Waukegan, IL (Milwaukee, WI / 

Chicago, IL area); Friday November 3, in 

Charlevoix, MI; Monday, November 6, 

in Erie, PA; and Wednesday, November 

8, Sturgeon Bay, WI. If you are unable 

to attend, you may submit comments to 

the Docket Management Facility by 

November 13, 2006. 

ADDRESSES: The Coast Guard will hold 

additional public meetings at the 

following addresses: 

1. Rochester, NY: Rochester Fast Ferry 

Terminal, 1000 N. River Street, 

Rochester, NY 14612, (877) 283–7327; 

2. Chicago, IL/ Milwaukee, WI: 

Genesee Theatre, 203 N. Genesee Street, 

Waukegan, IL 60085, (847) 782–2366; 

3. Charlevoix, MI: Charlevoix Public 

Library, 220 W. Clinton Street, 

Charlevoix, MI 49720, (231) 547–2651; 

4. Erie, PA: Port of Erie Cruise Boat 

Terminal, 1 Holland Street, Erie PA 

16507, (814) 455–7557; and 

5. Sturgeon Bay, WI: Stoneharbor 

Resort, 107 North First Avenue, 

Sturgeon Bay, WI (877) 746–0700. 

You may submit your comments and 

related material by one of the following 

means: 

(1) By mail to the Docket Management 

Facility (USCG–2006–2567), U.S. 

Department of Transportation, room PL–

401, 400 Seventh Street, SW., 

Washington, DC 20590–0001. 

(2) By delivery to room PL–401 on the 

Plaza level of the Nassif Building, 400 

Seventh Street, SW., Washington, DC 

between 9 a.m. and 5 p.m. Monday 

through Friday, except Federal holidays. 

The telephone number is 202–366–

9329. 

(3) By fax to the Docket Management 

Facility at 202–493–2251. 

(4) Electronically through the Web 

site for the Docket Management System 

at http://dms.dot.gov. 

The Docket Management Facility 

maintains the public docket for the 

rulemaking. Comments and material 

received from the public will become 

part of this docket and will be available 

for inspection or copying at room PL–

401, located on the Plaza level of the 

Nassif Building at the same address 

between 9 a.m. and 5 p.m., Monday 

through Friday, except Federal holidays. 

You may electronically access the 

public docket by performing a ‘‘Simple 

Search’’ for docket number 25767 on the 

Internet at http://dms.dot.gov. 

Electronic forms of all comments 

received into any of our dockets can be 

searched by the name of the individual 

submitting the comment (or signing the 

comment, if submitted on behalf of an 

association, business, labor unit, etc.) 

and is open to the public without 

restriction. You may review the 

Department of Transportation’s 

complete Privacy Act Statement in the 

Federal Register published on April 11, 

2000 (65 FR 19477–78), or you may visit 

http://dms.dot.gov. 

FOR FURTHER INFORMATION CONTACT: For 

further information concerning this 

notice and the public meeting, contact 

Commander Gustav Wulfkuhle, Chief 

Enforcement Branch, Ninth Coast Guard 

District, Cleveland, Ohio at (216) 902–

6091. If you have any questions on 

viewing or submitting material to the 

docket, call Renee V. Wright, Program 

mstockstill on PROD1PC76 with PROPOSALS

62076 Federal Register / Vol. 71, No. 204 / Monday, October 23, 2006 / Proposed Rules 

Manager, Docket Operations, telephone 

202–493–0402. 

SUPPLEMENTARY INFORMATION: 

Public Meetings 

The Coast Guard will hold five 

additional public meetings as follows: 

Monday, October 30, 2006 in Rochester, 

NY; Wednesday November 1, 

Waukegan, IL (Milwaukee, WI/Chicago, 

IL area); Friday, November 3, in 

Charlevoix, MI; Monday, November 6, 

in Erie, PA; and Wednesday, November 

8, in Sturgeon Bay, WI. These meetings 

will be held to take comments regarding 

the proposed Safety Zones; U.S. Coast 

Guard Water Training Areas, Great 

Lakes, published on August 1, 2006, in 

the Federal Register at 71 FR 43402. 

The Coast Guard encourages 

interested persons to submit written 

data, views, or comments. Persons 

submitting comments should please 

include their name and address and 

identify the docket number (USCG–

2006–25767). You may submit your 

comments and material by mail, hand 

delivery, fax or electronic means to the 

Docket Management Facility at the 

address under ADDRESSES. 

Regulatory History 

On August 1, 2006, the Coast Guard 

published a notice of proposed 

rulemaking (NPRM) (71 FR 43402) to 

establish permanent safety zones 

throughout the Great Lakes, which 

would restrict vessels from portions of 

the Great Lakes during live fire gun 

exercises that will be conducted by 

Coast Guard cutters and small boats. 

The initial comment period for this 

NPRM ended on August 31, 2006. In 

response to public requests, the Coast 

Guard re-opened the comment period 

on this NPRM. (71 FR 53629, September 

12, 2006) Re-opening the comment 

period from September 12, 2006 to 

November 13, 2006, provides the public 

more time to submit comments and 

recommendations. On September 19, 

2006, the Coast Guard published a brief 

document announcing the dates of 

public meetings. (71 FR 54792) On 

September 27, 2006 we published a 

document containing detailed 

information about the first set of 

meetings. (71 FR 56420) 

On October 12, 2006, the Coast Guard 

announced that the addition of three 

more public meetings and again stated 

that more detailed information related 

to the meetings would be published at 

a later date. (71 FR 60094) This 

document provides detailed information 

regarding these additional meetings by 

providing the locations of the public 

meetings and the topics to be discussed. 

We are also announcing the addition of 

public meetings to be held in Erie, PA 

and Sturgeon Bay, WI. 

Background and Purpose 

The thirty-four permanent safety 

zones proposed in the NPRM will be 

located throughout the Great Lakes in 

order to accommodate the training 

needs of 57 separate Coast Guard units. 

The proposed safety zones are all 

located more than three nautical miles 

from the shoreline. Establishing 

permanent training areas serves to 

notify the public and solicit its input on 

selection of the training locations. 

The proposed safety zones will be 

enforced only when training is 

conducted, and then only after notice by 

the Captain of the Port for the area in 

which the exercise will be held. The 

Captain of the Port will use all 

appropriate means to effect the widest 

publicity among the affected segments 

of the public, including publication in 

the Federal Register if practicable, in 

accordance with 33 CFR 65.7(a). Such 

means of notification may also include, 

but are not limited to, Broadcast Notice 

to Mariners or Local Notice to Mariners. 

The appropriate Captain of the Port will 

also issue a Broadcast Notice to 

Mariners and Local Notice to Mariners 

notifying the public when enforcement 

of a live fire exercise safety zone is 

suspended. 

Interested individuals are encouraged 

to attend the open house forums and 

public meetings, provide comments and 

ask questions about the weapons 

training areas. In the event that the 

Coast Guard decides to conduct a higher 

level of environmental analysis 

pursuant to the National Environmental 

Policy Act, input received from all nine 

public meetings in the Great Lakes area 

will serve as ‘‘scoping,’’ to determine 

the issues to be addressed in that 

analysis. 

Meeting Times and Topics 

The meetings are expected to run 

from 5:30 p.m. to 8 p.m. (local). We may 

end the meetings early if there are no 

additional comments or questions. 

Topics to be covered during the 

public meetings include the following: 

(1) Introduction of the proposed zones 

and the need to train on the Great Lakes; 

(2) How the Coast Guard determined 

the locations of the zones; 

(3) Scheduling and frequency of 

training in the zones; 

(4) Notification procedures; 

(5) Safety procedures; 

(6) Weapons and munitions; and 

(7) Environmental risk assessment 

overview. 

Before the start of the formal public 

meetings, from 4 p.m. to 5:30 p.m. 

(local), the Coast Guard is hosting an 

open house so that the public can speak 

with Coast Guard personnel and obtain 

more information on the proposed 

zones. 

Procedure 

Each open house and meeting is open 

to the public. Ideally, comments will 

provide specific information and facts 

related to the impact of the zone(s) on 

the commenter. Detailed and focused 

comments will enable the Coast Guard 

to address identified areas of concern in 

the rulemaking process. Please note that 

the meeting may close early if all 

business is finished. If you are unable to 

attend, you may submit comments to 

the Docket Management Facility at the 

address under ADDRESSES by November 

13, 2006. 

Information on Services for Individuals 

With Disabilities 

If you plan to attend any of the public 

meetings and require special assistance, 

such as sign language interpretation or 

other reasonable accommodations, 

please contact us as indicated in FOR

FURTHER INFORMATION CONTACT. 

Dated: October 18, 2006. 

John E. Crowley, Jr., 

Rear Admiral, U.S. Coast Guard, Commander, 

Ninth Coast Guard District. 

[FR Doc. 06–8849 Filed 10–19–06; 3:10 pm] 

BILLING CODE 4910–15–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Parts 51 and 52 

[EPA–HQ–OAR–2003–0064; FRL–8233–4] 

RIN 2060–AL75 

Prevention of Significant Deterioration 

(PSD) and Nonattainment New Source 

Review (NSR): Debottlenecking, 

Aggregation, and Project Netting 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Notice of public hearing. 

SUMMARY: The EPA is announcing a 

public hearing to be held on November 

6, 2006, for the proposed rule on 

‘‘Prevention of Significant Deterioration 

(PSD) and Nonattainment New Source 

Review (NSR): Debottlenecking, 

Aggregation, and Project Netting.’’ This 

rulemaking action was published in the 

Federal Register on September 14, 2006 

and proposes to revise the regulations 

governing the NSR programs mandated 

by parts C and D of title I of the Clean 

Air Act. The public hearing will provide 

interested parties the opportunity to 

mstockstill on PROD1PC76 with PROPOSALS