24 Federal Register / Vol. 63, No. 1 / Friday, January 2, 1998 / Rules and Regulations

corporation for which the shareholder

makes a retroactive election will be

treated as an unpedigreed QEF, as

defined in § 1.1291–9(j)(2)(iii), with

respect to the shareholder, the

shareholder may make an election

under section 1291(d)(2) to purge its

holding period of the years or parts of

years before the effective date of the

retroactive election. If the qualification

date, within the meaning of § 1.1291–

9(e) or 1.1291–10(e), falls in a taxable

year for which the period of limitations

has expired, the shareholder may treat

the first day of the retroactive election

year as the qualification date. The

shareholder may make a section

1291(d)(2) election at the time that it

makes the retroactive election, but no

later than two years after the date that

the amended return in which the

retroactive election is made is filed. For

the requirements for making a section

1291(d)(2) election, see §§ 1.1291–9 and

1.1291–10.

(ii) Section 1294 election. A

shareholder may make an election

under section 1294 to extend the time

for payment of tax on the shareholder’s

pro rata shares of the ordinary earnings

and net capital gain of the foreign

corporation reported in the

shareholder’s amended return, and

section 6621 interest attributable to such

tax, but only to the extent the tax and

interest are attributable to earnings that

have not been distributed to the

shareholder. The shareholder must

make a section 1294 election for a

taxable year at the time that it files its

amended return for that year, as

provided in paragraph (g)(1) of this

section. For the requirements for making

a section 1294 election, see § 1.1294–1T.

(h) Effective date. The rules of this

section are effective as of January 2,

1998.

Par. 13. Section 1.1297–3T(c) is

added to read as follows:

§ 1.1297–3T Deemed sale election by a

United States person that is a shareholder

of a passive foreign investment company

(temporary).

* * * * *

(c) Application of deemed dividend

election rules.—(1) In general. A

shareholder of a former PFIC, within the

meaning of § 1.1291–9(j)(2)(iv), that was

a controlled foreign corporation, within

the meaning of section 957(a) (CFC),

during its last taxable year as a PFIC

under section 1296(a), may apply the

rules of section 1291(d)(2)(B) and

§ 1.1291–9 to an election under section

1297(b)(1) and this section made by the

time and in the manner provided in

paragraph (b) of this section.

(2) Transition rule. If the time for

making an election under this section,

as provided in paragraph (b) of this

section, expired before January 2, 1998,

a shareholder that applied rules similar

to the rules of section 1291(d)(2)(A) and

§ 1.1291–10 to an election under this

section made with respect to a

corporation that was a CFC during its

last taxable year as a PFIC under section

1296(a) may file an amended return for

the taxable year that includes the

termination date, as defined in

paragraph (a) of this section, and apply

the rules of section 1291(d)(2)(B) and

§ 1.1291–9 at any time before the

expiration of the period of limitations

for the assessment of taxes for that

taxable year.

(3) Effective date. The rules of this

paragraph are effective as of January 2,

1998.

PART 602—OMB CONTROL NUMBERS

UNDER THE PAPERWORK

REDUCTION ACT

Par. 14. The authority citation for part

602 continues to read as follows:

Authority: 26 U.S.C. 7805.

Par. 15. In § 602.101, paragraph (c) is

amended by adding entries in numerical

order to the table to read as follows:

§ 602.101 OMB Control numbers.

* * * * *

(c) * * *

CFR part of section where

identified and described

Current OMB

control No.

* * * * *

1.1295–1T ............................... 1545–1555

1.1295–3T ............................... 1545–1555

* * * * *

Michael P. Dolan,

Deputy Commissioner of Internal Revenue.

Approved: December 15, 1997.

Donald C. Lubick,

Acting Assistant Secretary of the Treasury.

[FR Doc. 97–33985 Filed 12–31–97; 8:45 am]

BILLING CODE 4830–01–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 40 and 48

[TD 8748]

RIN 1545–AU53

Gasoline and Diesel Fuel Excise Tax;

Special Rules for Alaska; Definitions

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Final regulations.

SUMMARY: This document contains final

regulations relating to the application of

the diesel fuel excise tax to fuel used in

Alaska. This document also contains

final regulations relating to the gasoline

and diesel fuel excise tax definitions.

The regulations implement certain

changes made by the Omnibus Budget

Reconciliation Act of 1993 and the

Small Business Job Protection Act of

1996. They affect certain enterers,

refiners, retailers, terminal operators,

throughputters, wholesale distributors,

and users.

DATES: These regulations are effective

January 2, 1998. For dates of

applicability of these regulations, see

§§ 48.4082–5(h) and 48.6715–1(a)(3).

FOR FURTHER INFORMATION CONTACT:

Frank Boland, (202) 622–3130 (not a

toll-free call).

SUPPLEMENTARY INFORMATION:

Background

Section 4081 imposes a tax on certain

removals, entries, and sales of diesel

fuel. However, under section 4082, tax

is not imposed if, among other

conditions, the diesel fuel is indelibly

dyed in accordance with Treasury

regulations. Section 1801 of the Small

Business Job Protection Act of 1996

amends section 4082 to create an

exception to the dyeing requirement

that effectively applies only to diesel

fuel that is removed, entered, or sold in

Alaska.

Temporary regulations (TD 8693)

relating to this change were published

in the Federal Register on December 17,

1996 (61 FR 66215) along with a notice

of proposed rulemaking (REG–247678–

96) cross-referencing the temporary

regulations (61 FR 66246). The notice of

proposed rulemaking also proposed

other changes to the gasoline and diesel

fuel excise tax regulations that were not

contained in the temporary regulations.

A public hearing was neither

requested nor held. After consideration

of written comments, the proposed

regulations are adopted as revised by
Federal Register / Vol. 63, No. 1 / Friday, January 2, 1998 / Rules and Regulations 25

this Treasury decision. Comments and

revisions are discussed below.

Explanation of Provisions

The proposed regulations provide a

definition of kerosene for purposes of

the diesel fuel tax. Several

commentators questioned this proposal.

Because the IRS is continuing its review

of this issue, the final regulations do not

define kerosene. However, a definition

may be included in a future Treasury

decision.

The proposed regulations also include

changes to the effective date of other

proposed regulations that were

published in the Federal Register on

March 14, 1996 (61 FR 10490). Those

regulations propose requirements

relating to dye injection equipment and

are not being finalized at this time.

However, the IRS appreciates the

concern expressed by several

commentators that, as revised, the

proposed effective dates still would not

give taxpayers sufficient time to comply

with the proposed requirements. Thus,

the final dye injection regulations will

provide a longer period of time between

the publication date and the effective

date than was proposed.

In response to comments, these final

regulations modify the definition of

terminal to exclude an otherwise

qualifying facility that stores only taxed

gasoline and taxed, undyed diesel fuel.

As a result of this modification, tax will

not be imposed again when the fuel is

removed from this type of facility.

The final regulations generally adopt

as proposed the provisions dealing with

diesel fuel that is removed, entered, or

sold in Alaska. However, several

comments suggested that the definition

of qualified dealer in the proposed

regulations was too narrow and

prevented unlicensed vendors from

selling diesel fuel for exempt uses. In

response, the final regulations expand

the definition of qualified dealer to

include unlicensed diesel fuel retailers

that are registered by the IRS under

specified conditions. As a result of this

modification, many retailers that serve

remote communities in Alaska will be

able to buy diesel fuel tax free for resale

for nontaxable uses.

The final regulations also make minor

modifications to existing gasoline and

diesel fuel regulations. For example,

existing regulations generally require

gasoline and diesel fuel refund claims to

be filed with the same service center

where the claimant’s income tax return

is filed. Because all excise tax refund

claims are now processed at the

Cincinnati Service Center, this

regulatory provision is removed.

Special Analyses

It has been determined that this

Treasury decision is not a significant

regulatory action as defined in EO

12866. Therefore, a regulatory

assessment is not required. It also has

been determined that section 553(b) of

the Administrative Procedure Act (5

U.S.C. chapter 5) does not apply to these

regulations and, because these

regulations do not impose a collection

of information on small entities, the

Regulatory Flexibility Act (5 U.S.C.

chapter 6) does not apply. Therefore, a

Regulatory Flexibility Analysis is not

required. Pursuant to section 7805(f) of

the Internal Revenue Code, the notice of

proposed rulemaking preceding these

regulations was submitted to the Chief

Counsel for Advocacy of the Small

Business Administration for comment

on its impact on small business.

Drafting Information

The principal author of these

regulations is Frank Boland, Office of

Assistant Chief Counsel (Passthroughs

and Special Industries). However, other

personnel from the IRS and Treasury

Department participated in their

development.

List of Subjects in 26 CFR Parts 40 and

48

Excise taxes, Reporting and

recordkeeping requirements.

Adoption of Amendments to the

Regulations

Accordingly, 26 CFR parts 40 and 48

are amended as follows:

PART 40—EXCISE TAX PROCEDURAL

REGULATIONS

Paragraph 1. The authority citation

for part 40 continues to read in part as

follows:

Authority: 26 U.S.C. 7805 * * *

§ 40.6011(a)–1 [Amended]

Par. 2. Section 40.6011(a)–1(b)(2)(vi)

is amended by removing the language ‘‘a

taxable fuel registrant’’ and adding

‘‘registered under section 4101’’ in its

place.

PART 48—MANUFACTURERS AND

RETAILERS EXCISE TAXES

Par. 3. The authority citation for part

48 is amended by removing the entry for

§ 48.4082–5T and adding an entry in

numerical order to read in part as

follows:

Authority: 26 U.S.C. 7805 * * *

Section 48.4082–5 also issued under

26 U.S.C. 4082. * * *

Par. 4. Section 48.4081–1 is amended

as follows:

1. Paragraph (b) is amended by:

a. Adding a definition in alphabetical

order; and

b. Revising the definition of terminal.

2. Paragraph (c)(1)(i) is amended by

removing the language ‘‘any mixture’’

and adding ‘‘any taxable fuel’’ in its

place and by removing the language

‘‘and that consists of’’ and adding ‘‘by

mixing’’ in its place.

3. Paragraph (d) is revised.

The addition and revisions read as

follows:

§ 48.4081–1 Taxable fuel; definitions.

* * * * *

(b) * * *

Aviation gasoline means all special

grades of gasoline that are suitable for

use in aviation reciprocating engines, as

described in ASTM Specification D 910

and Military Specification MIL–G–5572.

The ASTM specification may be

obtained from the American Society for

Testing and Materials and the military

specification from the Standardization

Document Order Desk at the addresses

provided in paragraph (c)(2)(i) of this

section.

* * * * *

Terminal means a taxable fuel storage

and distribution facility that is supplied

by pipeline or vessel and from which

taxable fuel may be removed at a rack.

However, the term does not include any

facility at which gasoline blendstocks

are used in the manufacture of products

other than finished gasoline and from

which no gasoline is removed. Also,

effective January 2, 1998, the term does

not include any facility operated by a

taxable fuel registrant if all of the

finished gasoline and diesel fuel (other

than diesel fuel dyed in accordance

with § 48.4082–1(b)) stored at the

facility has been previously taxed under

section 4081 upon removal from a

refinery or terminal.

* * * * *

(d) Effective date. This section is

applicable January 1, 1994, except that

in paragraph (b) of this section the

definition of aviation gasoline and the

third sentence in the definition of

terminal are effective January 2, 1998.

§ 48.4082–5T [Redesignated as § 48.4082–

5]

Par. 5. Section 48.4082–5T is

redesignated as § 48.4082–5 and the

language ‘‘(temporary)’’ is removed from

the section heading.

Par. 6. Section 48.4082–5, as

redesignated, is amended as follows:

1. Paragraph (b) is amended by

revising the definition of qualified

dealer.
26 Federal Register / Vol. 63, No. 1 / Friday, January 2, 1998 / Rules and Regulations

2. Paragraphs (f) and (g) are

redesignated as paragraphs (g) and (h),

respectively.

3. A new paragraph (f) is added.

4. Paragraph (h), as redesignated, is

revised.

The addition and revisions read as

follows:

§ 48.4082–5 Diesel fuel; Alaska

* * * * *

(b) * * *

Qualified dealer means any person

that holds a qualified dealer license

from the state of Alaska or has been

registered by the district director as a

qualified retailer. The district director

will register a person as a qualified

retailer only if the district director—

(1) Determines that the person, in the

course of its trade or business, regularly

sells diesel fuel for use by its buyer in

a nontaxable use; and

(2) Is satisfied with the filing, deposit,

payment, and claim history for all

federal taxes of the person and any

related person.

* * * * *

(f) Registration. With respect to each

person that has been registered as a

qualified retailer by the district director,

the rules of § 48.4101–1(g), (h), and (i)

apply.

* * * * *

(h) Effective date. This section is

applicable with respect to diesel fuel

removed or entered after December 31,

1996. A person registered by the district

director as a qualified retailer before

April 2, 1998 may be treated, to the

extent the district director determines

appropriate, as a qualified dealer for the

period before that date.

§ 48.6416(b)(4)–1 [Removed]

Par. 7. Section 48.6416(b)(4)-1 is

removed.

§ 48.6421–3 [Amended]

Par. 8. In § 48.6421–3, paragraph

(d)(2) is amended by removing the last

sentence.

§ 48.6427–3 [Amended]

Par. 9. In § 48.6427–3, paragraph

(d)(2) is amended by removing the last

sentence.

Par. 10. In § 48.6715–1, paragraph

(a)(3) is revised to read as follows:

§ 48.6715–1 Penalty for misuse of dyed

diesel fuel.

(a) * * *

(3) The alteration or attempted

alteration occurs in an exempt area of

Alaska after September 30, 1996.

* * * * *

§ 48.6715–2T [Removed]

Par. 11. Section 48.6715–2T is

removed.

Approved: November 6, 1997.

Michael P. Dolan,

Acting Commissioner of Internal Revenue.

Donald C. Lubick,

Acting Assistant Secretary of the Treasury.

[FR Doc. 97–33988 Filed 12–31–97; 8:45 am]

BILLING CODE 4830–01–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52

[FRL–5937–7]

Final Determination to Extend Deadline

for Promulgation of Action on Section

126 Petitions

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Final rule.

SUMMARY: The EPA is extending by an

additional three-day period the deadline

for taking final action on petitions that

eight States have submitted to require

EPA to make findings that sources

upwind of those States contribute

significantly to nonattainment problems

in those States. Under the Clean Air Act

(CAA), EPA is authorized to grant this

time extension if EPA determines that

the extension is necessary, among other

things, to meet the purposes of the Act’s

rulemaking requirements. By this

document, EPA is making that

determination.

EFFECTIVE DATE: This action is effective

as of December 15, 1997.

FOR FURTHER INFORMATION CONTACT:

Howard J. Hoffman, Office of General

Counsel, MC–2344, 401 M St., SW,

Washington, D.C. 20460, (202) 260–

5892.

SUPPLEMENTARY INFORMATION:

I. Background

Today’s action follows closely EPA’s

final actions taken by notice dated

October 22, 1997 (62 FR 54769) and

November 20, 1997 (62 FR 61914).

Familiarity with those documents is

assumed, and background information

in them will not be repeated here.

In the November 20, 1997 document,

EPA extended by one month, pursuant

to its authority under CAA section

307(d)(10), the time-frame for taking

final action on petitions submitted by

Connecticut, Maine, Massachusetts,

New Hampshire, New York,

Pennsylvania, Rhode Island, and

Vermont under CAA section 126. This

extension established the deadline at

December 14, 1997, but because that

date fell on a Sunday, the deadline

became the following Monday,

December 15, 1997. In the November 20,

1997 document, EPA indicated that it

was reserving its option to extend the

date for final action by all or part of the

remaining four months of the six-month

extension period provided under

section 307(d)(10).

EPA is today extending the deadline

for an additional three days, to

December 18, 1997. In the November 20,

1997 document, EPA justified the

second one-month extension as

necessary in part to allow the agency,

working with the section 126 petitioners

and other interested parties, to conclude

the process for determining an

appropriate schedule for action on the

section 126 petitions. This schedule

would include, as important elements,

timetables for proposed rulemaking, a

public hearing, and a public comment

period. In this manner, the extension

furthered the purposes of section

307(d)(10) by promoting public

participation in the rulemaking process.

EPA believes that these same reasons

continue to apply to favor another, brief

extension, at this time. In particular,

EPA seems to be in the final stages of

finalizing with the section 126

petitioners an appropriate schedule for

section 126 rulemaking. Accordingly,

EPA again concludes today that

extending the date for action on the

section 126 petitions for another three

days is necessary.

As EPA indicated in its previous

notices, EPA, even with today’s action,

continues not to use the entire six

months provided under section

307(d)(10) for the extension. EPA

continues to reserve the right to apply

the remaining period, or a portion

thereof, as an additional extension, if

necessary, immediately following the

conclusion of the three-day period, or to

apply the remaining time to the period

following EPA’s proposed rulemaking.

II. Final Action

A. Rule

Today, EPA is determining, under

CAA section 307(d)(10), that an

additional three-day period is necessary

to assure the development of an

appropriate schedule for rulemaking on

the section 126 petitions, which

schedule would allow EPA adequate

time to prepare a notice for proposal

that will best facilitate public comment,

as well as allow the public sufficient

time to comment. Under this extension,

the date for action on each of the section

126 petitions is December 18, 1997.