664 Federal Register / Vol. 78, No. 3 / Friday, January 4, 2013 / Rules and Regulations 

1SDAPA also included a definition of 

‘‘cannabimimetic agents.’’ Although this rule is 

only addressing the 26 specific substances, DEA 

intends to issue a separate rulemaking that will 

address the broader definition of cannabimimetic 

agents. Even in the absence of such a rulemaking 

as of July 9, 2012, cannabimimetic agents, as 

defined in SDAPA are controlled under Schedule 

I. 

2See DEA Notice of Intent entitled ‘‘Schedules of 

Controlled Substances: Temporary Placement of 

Five Synthetic Cannabinoids Into Schedule I,’’ 

published in the Federal Register on November 24, 

2010, at 75 FR 71635, DEA Notice of Intent; 

correction entitled ‘‘Schedules of Controlled 

Substances: Temporary Placement of Five Synthetic 

Cannabinoids Into Schedule I; Correction,’’ 

published in the Federal Register on January 13, 

2011, at 76 FR 2287, DEA Final Order entitled 

‘‘Schedules of Controlled Substances: Temporary 

Placement of Five Synthetic Cannabinoids into 

Schedule I,’’ published in the Federal Register on 

March 1, 2011, at 76 FR 11075, and DEA Final 

Order entitled ‘‘Schedules of Controlled 

Substances: Extension of Temporary Placement of 

Five Synthetic Cannabinoids Into Schedule I of the 

Controlled Substances Act,’’ published in the 

Federal Register on February 29, 2012, at 77 FR 

12201. 

3See DEA Notice of Intent entitled ‘‘Schedules of 

Controlled Substances: Temporary Placement of 

Three Synthetic Cathinones Into Schedule I,’’ 

published in the Federal Register on September 8, 

2011, at 76 FR 55616 and DEA Final Order entitled 

‘‘Schedules of Controlled Substances: Temporary 

Placement of Three Synthetic Cathinones Into 

Schedule I,’’ published in the Federal Register on 

October 21, 2011, at 76 FR 65371. 

4See Schedules of Controlled Substances: 

Placement of Five Synthetic Cannabinoids Into 

Schedule I, 77 FR 12508, Mar. 1, 2012. 

5 DEA extended the temporary scheduling of 

methylone in a Final Order published in the 

Federal Register on October 18, 2012 at 77 FR 

64032. 

6HHS did not provide a Scientific and Medical 

Evaluation and Scheduling Recommendation 

regarding mephedrone and MDPV. 

7Some of these substances (for example, JWH– 

018) had already received drug codes by virtue of 

the prior temporary scheduling actions discussed 

above. Such substances will retain their previously 

established drug codes but are included in this rule 

for purposes of completeness and to ensure that 

each of these 26 substances are properly classified 

in the Code of Federal Regulations. Substances for 

which a drug code has not previously been 

established (for example, 2-(2,5-Dimethoxy-4- 

ethylphenyl)ethanamine (2C–E)) will have a drug 

code assigned to them by this rule. 

DEPARTMENT OF JUSTICE 

Drug Enforcement Administration 

21 CFR Part 1308 

[Docket No. DEA–368] 

Establishment of Drug Codes for 26 

Substances 

AGENCY: Drug Enforcement 

Administration (DEA), Department of 

Justice. 

ACTION: Final rule. 

SUMMARY: On July 9, 2012, the President 

signed into law the Synthetic Drug 

Abuse Prevention Act of 2012 (SDAPA). 

SDAPA amends the Controlled 

Substances Act by placing 26 substances 

in Schedule I. DEA is publishing this 

rule to establish drug codes for these 26 

substances, and to make technical and 

conforming amendments in accordance 

with SDAPA. 

DATES: Effective Date: January 4, 2013. 

FOR FURTHER INFORMATION CONTACT: John 

W. Partridge, Executive Assistant, Office 

of Diversion Control, Drug Enforcement 

Administration, Mailing Address: 8701 

Morrissette Drive, Springfield, Virginia 

22152; Telephone (202) 307–7165. 

SUPPLEMENTARY INFORMATION: 

Legal Authority 

DEA administers, implements, and 

enforces Titles II and III of the 

Comprehensive Drug Abuse Prevention 

and Control Act of 1970, often referred 

to as the Controlled Substances Act and 

the Controlled Substances Import and 

Export Act (21 U.S.C. 801–971), as 

amended (hereinafter, ‘‘CSA’’). The 

implementing regulations for these 

statutes are found in Title 21 of the 

Code of Federal Regulations (CFR), parts 

1300 to 1321. Under the CSA, controlled 

substances are classified in one of five 

schedules based upon their potential for 

abuse, their currently accepted medical 

use, the lack of accepted safety for use 

under medical supervision, and the 

degree of dependence the substance 

may cause. 21 U.S.C. 812. The list of 

legislatively scheduled controlled 

substances is found at 21 U.S.C. 812(c) 

and the current list of scheduled 

substances is published at 21 CFR part 

1308. These initial schedules may be 

modified either by legislation or by 

rulemaking. 

Purpose of This Rulemaking 

On July 9, 2012, the SDAPA of 2012, 

Public Law 112–144, Title XI, Subtitle 

D, became effective. SDAPA amended 

the CSA by legislatively placing 

‘‘cannabimimetic agents’’ 1 and 26 

substances in Schedule I. Public Law 

112–144, Title XI, Subtitle D, Section 

1152. DEA is publishing this rule to 

establish drug codes for these 26 

substances. These 26 substances include 

15 cannabimimetic agents, 9 

phenethylamines, and 2 cathinones and 

are listed in the regulatory text section, 

below. 

Related Procedural Matters 

At the time SDAPA became effective 

on July 9, 2012, a total of 8 substances 

were covered by temporary scheduling 

final orders: 5 synthetic cannabinoids 

(JWH–018, JWH–073, JWH–200, CP– 

47,497, and CP–47,497 C8 homologue) 2

and 3 synthetic cathinones 

(mephedrone, MDPV, and methylone).3

DEA also issued a Notice of Proposed 

Rulemaking (NPRM) in March 2012, to 

place the 5 synthetic cannabinoids 

(JWH–018, JWH–073, JWH–200, CP– 

47,497, and CP–47,497 C8 homologue) 

permanently in Schedule I.4 With the 

sole exception of methylone,5 these 

substances were specifically placed in 

Schedule I by SDAPA. Therefore, it is 

no longer necessary to finalize the 

NPRM regarding the 5 synthetic 

cannabinoids (JWH–018, JWH–073, 

JWH–200, CP–47,497, and CP–47,497 

C8 homologue), or to take further action 

with respect to 2 of the 3 synthetic 

cathinones (mephedrone and MDPV). 

However, DEA has posted a copy of the 

Secretary of Health and Human Services 

(HHS) Scientific and Medical 

Evaluation and Scheduling 

Recommendations regarding the 5 

synthetic cannabinoids on 

www.regulations.gov so that the public 

can benefit from the scientific review 

that was undertaken with respect to 

these substances.6 These HHS 

documents can be found on 

www.regulations.gov under Docket ID 

‘‘DEA–2012–0001.’’ 

In addition to establishing drug codes 

for these 26 substances,7 this 

rulemaking makes several technical and 

conforming amendments to 21 CFR 

1308.11 in accordance with SDAPA. 

This rulemaking adds a new subsection 

(g) to 21 CFR 1308.11 and gives it the 

title ‘‘cannabimimetic agents,’’ 

redesignates the old subsection (g) as (h) 

and retains its title as ‘‘[t]emporary 

listing of substances subject to 

emergency scheduling,’’ and transfers 7 

of the 8 substances currently listed in 21 

CFR 1308.11(g) under the title of 

‘‘[t]emporary listing of substances 

subject to emergency scheduling,’’ to 

either the new subsection (g) entitled 

‘‘cannabimimetic agents’’ or to the 

previously existing subsection (d) 

entitled ‘‘[h]allucinogenic substances.’’ 

In summary, as a result of SDAPA, a 

new subsection entitled 

‘‘cannabimimetic agents’’ will be 

created and will initially contain 15 

substances, the existing subsection 

entitled ‘‘[h]allucinogenic substances’’ 

will increase by 11 substances, and the 

existing subsection entitled ‘‘temporary 

listing of substances subject to 

emergency scheduling’’ will be 

redesignated from (g) to (h) and will 

decrease from 8 substances to 1 

substance (methylone). 


sroberts on DSK5SPTVN1PROD with 
Federal Register / Vol. 78, No. 3 / Friday, January 4, 2013 / Rules and Regulations 665 

Regulatory Analyses 

Administrative Procedure Act 

An agency may find good cause to 

exempt a rule from certain provisions of 

the Administrative Procedure Act (APA) 

(5 U.S.C. 553), including notice of 

proposed rulemaking and the 

opportunity for public comment, if it is 

determined to be unnecessary, 

impracticable, or contrary to the public 

interest. This rule merely establishes 

drug codes for the 26 substances placed 

in Schedule I by SDAPA, and makes 

several technical and conforming 

amendments in accordance with 

SDAPA. Because DEA has no discretion 

with respect to these changes, 

publishing a notice of proposed 

rulemaking and soliciting public 

comment are unnecessary. In addition, 

because the placement of these 26 

substances in Schedule I has already 

been in effect since July 9, 2012, DEA 

finds good cause exists to make this rule 

effective immediately upon publication. 

Executive Orders 12866 and 13563 

This rule, establishing drug codes for 

the 26 substances placed in Schedule I 

by SDAPA, and making technical and 

conforming amendments in accordance 

with SDAPA has been developed in 

accordance with the principles of 

Executive Orders 12866 and 13563. 

Executive Order 12988 

This regulation meets the applicable 

standards set forth in sections 3(a) and 

3(b)(2) of Executive Order 12988 Civil 

Justice Reform to eliminate ambiguity, 

minimize litigation, establish clear legal 

standards, and reduce burden. 

Executive Order 13132 

This rulemaking does not preempt or 

modify any provision of State law, 

impose enforcement responsibilities on 

any State, or diminish the power of any 

State to enforce its own laws. 

Accordingly, this rulemaking does not 

have federalism implications warranting 

the application of Executive Order 

13132. 

Executive Order 13175 

This rule is required by statute, will 

not have tribal implications, and will 

not impose substantial direct 

compliance costs on Indian tribal 

governments. 

Regulatory Flexibility Act 

The Deputy Administrator hereby 

certifies that this rulemaking has been 

drafted in accordance with the 

Regulatory Flexibility Act (5 U.S.C. 

601–612), has reviewed this regulation, 

and by approving it certifies that this 

regulation will not have a significant 

economic impact on a substantial 

number of small entities. 

Paperwork Reduction Act of 1995 

This rule does not involve a collection 

of information within the meaning of 

the Paperwork Reduction Act of 1995, 

44 U.S.C. 3501–3521. 

Unfunded Mandates Reform Act of 1995 

This rule will not result in the 

expenditure by State, local, and tribal 

governments, in the aggregate, or by the 

private sector, of $136,000,000 or more 

(adjusted for inflation) in any one year, 

and will not significantly or uniquely 

affect small governments. Therefore, no 

actions were deemed necessary under 

the provisions of the Unfunded 

Mandates Reform Act of 1995. 2 U.S.C. 

1532. 

Congressional Review Act 

This rule is not a major rule as 

defined by the Congressional Review 

Act (5 U.S.C. 804). This rule will not 

result in an annual effect on the 

economy of $100,000,000 or more, a 

major increase in cost or prices, or have 

significant adverse effects on 

competition, employment, investment, 

productivity, innovation, or the ability 

of United States-based companies to 

compete with foreign based companies 

in domestic and export markets. 

However, DEA has submitted a copy of 

this rule to both Houses of Congress and 

to the Comptroller General. 

List of Subjects in 21 CFR Part 1308 

Administrative practice and 

procedure, Drug traffic control, 

Reporting and recordkeeping 

requirements. 

For the reasons set out above, 21 CFR 

part 1308 is amended as follows: 

PART 1308—SCHEDULES OF 

CONTROLLED SUBSTANCES 

■ 1. The authority citation for part 1308 

continues to read as follows: 

Authority: 21 U.S.C. 811, 812, 871(b), 

unless otherwise noted. 

■ 2. Amend § 1308.11 by: 

■ a. Adding new paragraphs (d)(36) 

through (d)(46); 

■ b. Redesignating paragraph (g) as 

paragraph (h) and revising newly 

redesignated paragraph (h)(1); and 

■ c. Adding a new paragraph (g). 

The additions and revisions read as 

follows: 

§ 1308.11 Schedule I. 

* * * * * 

(d) * * * 

(36) 4-methylmethcathinone 

(Mephedrone) ............................... 1248 

(37) 3,4- 

methylenedioxypyrovalerone 

(MDPV) ......................................... 7535 

(38) 2-(2,5-Dimethoxy-4- 

ethylphenyl)ethanamine (2C–E) .. 7509 

(39) 2-(2,5-Dimethoxy-4- 

methylphenyl)ethanamine (2C– 

D) .................................................. 7508 

(40) 2-(4-Chloro-2,5- 

dimethoxyphenyl)ethanamine 

(2C–C) ........................................... 7519 

(41) 2-(4-Iodo-2,5- 

dimethoxyphenyl)ethanamine 

(2C–I) ............................................ 7518 

(42) 2-[4-(Ethylthio)-2,5- 

dimethoxyphenyl]ethanamine 

(2C–T–2) ....................................... 7385 

(43) 2-[4-(Isopropylthio)-2,5- 

dimethoxyphenyl]ethanamine 

(2C–T–4) ....................................... 7532 

(44) 2-(2,5- 

Dimethoxyphenyl)ethanamine 

(2C–H) ........................................... 7517 

(45) 2-(2,5-Dimethoxy-4-nitrophenyl)ethanamine (2C–N) ......... 7521 

(46) 2-(2,5-Dimethoxy-4-(n)- 

propylphenyl)ethanamine (2C–P) 7524 

* * * * * 

(g) Cannabimimetic agents. Unless 

specifically exempted or unless listed in 

another schedule, any material, 

compound, mixture, or preparation 

which contains any quantity of the 

following substances, or which contains 

their salts, isomers, and salts of isomers 

whenever the existence of such salts, 

isomers, and salts of isomers is possible 

within the specific chemical 

designation: 

(1) 5-(1,1-dimethylheptyl)-2- 

[(1R,3S)-3- 

hydroxycyclohexyl]-phenol 

(CP–47,497) .......................... 7297 

(2) 5-(1,1-dimethyloctyl)-2- 

[(1R,3S)-3- 

hydroxycyclohexyl]-phenol 

(cannabicyclohexanol or 

CP–47,497 C8-homolog) ...... 7298 

(3) 1-pentyl-3-(1-naphthoyl)indole (JWH–018 and 

AM678) ................................. 7118 

(4) 1-butyl-3-(1-naphthoyl)indole (JWH–073) ....... 7173 

(5) 1-hexyl-3-(1-naphthoyl)indole (JWH–019) ....... 7019 

(6) 1-[2-(4-morpholinyl)ethyl]- 

3-(1-naphthoyl)indole 

(JWH–200) ............................ 7200 

(7) 1-pentyl-3-(2- 

methoxyphenylacetyl)indole 

(JWH–250) ............................ 6250 

(8) 1-pentyl-3-[1-(4- 

methoxynaphthoyl)]indole 

(JWH–081) ............................ 7081 

(9) 1-pentyl-3-(4-methyl-1- 

naphthoyl)indole (JWH–122) 7122 

(10) 1-pentyl-3-(4-chloro-1- 

naphthoyl)indole (JWH–398) 7398 

(11) 1-(5-fluoropentyl)-3-(1- 

naphthoyl)indole (AM2201) 7201 

(12) 1-(5-fluoropentyl)-3-(2- 

iodobenzoyl)indole (AM694) 7694 


sroberts on DSK5SPTVN1PROD with 
666 Federal Register / Vol. 78, No. 3 / Friday, January 4, 2013 / Rules and Regulations 

(13) 1-pentyl-3-[(4-methoxy)- 

benzoyl]indole (SR–19 and 

RCS–4) .................................. 7104 

(14) 1-cyclohexylethyl-3-(2- 

methoxyphenylacetyl)indole 

7008 (SR–18 and RCS–8) ..... 7008 

(15) 1-pentyl-3-(2- 

chlorophenylacetyl)indole 

(JWH–203) ............................ 7203 

(h) * * * 

(1) 3,4-methylenedioxy-Nmethylcathinone (Other 

names: methylone) ............... 7540 

* * * * * 

Dated: December 21, 2012. 

Michele M. Leonhart, 

Administrator. 

[FR Doc. 2012–31698 Filed 1–3–13; 8:45 am] 

BILLING CODE 4410–09–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[TD 9609] 

RIN 1545–BK45; 1545–BL29 

Treasury Inflation-Protected Securities 

Issued at a Premium; Bond Premium 

Carryforward 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final and temporary 

regulations. 

SUMMARY: This document contains final 

regulations that provide guidance on the 

tax treatment of Treasury InflationProtected Securities issued with more 

than a de minimis amount of premium. 

This document also contains temporary 

regulations that provide guidance on the 

tax treatment of a debt instrument with 

a bond premium carryforward in the 

holder’s final accrual period, including 

a Treasury bill acquired at a premium. 

The regulations in this document 

provide guidance to holders of Treasury 

Inflation-Protected Securities and other 

debt instruments. The text of the 

temporary regulations in this document 

also serves as the text of the proposed 

regulations (REG–140437–12) set forth 

in the Proposed Rules section in this 

issue of the Federal Register. 

DATES: Effective Date: These regulations 

are effective on January 4, 2013. 

Applicability Dates: For the dates of 

applicability, see §§ 1.171– 

2T(a)(4)(i)(C)(2) and 1.1275–7(h)(2). 

FOR FURTHER INFORMATION CONTACT: 

William E. Blanchard, (202) 622–3900 

(not a toll-free number). 

SUPPLEMENTARY INFORMATION: 

Background 

On December 5, 2011, temporary 

regulations (TD 9561) relating to the 

federal income tax treatment of Treasury 

Inflation-Protected Securities issued 

with more than a de minimis amount of 

premium were published in the Federal 

Register (76 FR 75781). See § 1.1275– 

7T. A notice of proposed rulemaking 

(REG–130777–11) cross-referencing the 

temporary regulations was published in 

the Federal Register for the same day 

(76 FR 75829). No comments were 

received on the notice of proposed 

rulemaking. No public hearing was 

requested or held. 

The proposed regulations are adopted 

without substantive change by this 

Treasury decision, and the 

corresponding temporary regulations are 

removed. 

Explanation of Provisions 

1. Final Regulations—Treasury 

Inflation-Protected Securities (TIPS) 

Issued With More Than a De Minimis 

Amount of Premium 

The following is a general explanation 

of the provisions in the final 

regulations, which are the same as the 

provisions in the temporary regulations. 

However, the provisions that were in 

the temporary regulations are now 

contained in newly designated 

paragraphs (g)(2) and (h)(2) of § 1.1275– 

7 of the final regulations. 

TIPS are securities issued by the 

Department of the Treasury. The 

principal amount of a TIPS is adjusted 

for any inflation or deflation that occurs 

over the term of the security. The rules 

for the taxation of inflation-indexed 

debt instruments, including TIPS, are 

contained in § 1.1275–7 of the Income 

Tax Regulations. See also § 1.171–3(b) 

(rules for inflation-indexed debt 

instruments with bond premium). 

Under § 1.1275–7(d)(2)(i), the coupon 

bond method described in § 1.1275–7(d) 

is not available with respect to inflationindexed debt instruments that are 

issued with more than a de minimis 

amount of premium (that is, an amount 

greater than .0025 times the stated 

principal amount of the security times 

the number of complete years to the 

security’s maturity). Prior to 2011, TIPS 

had not been issued with more than a 

de minimis amount of premium, and the 

coupon bond method had applied to 

TIPS rather than the more complex 

discount bond method described in 

§ 1.1275–7(e). 

In 2011, the Treasury Department 

anticipated that TIPS might be issued 

with more than a de minimis amount of 

premium. As a result, in Notice 2011– 

21 (2011–19 IRB 761), to provide a more 

uniform method for the federal income 

taxation of TIPS, the Treasury 

Department and the IRS announced that 

regulations would be issued to provide 

that taxpayers must use the coupon 

bond method described in § 1.1275–7(d) 

for TIPS issued with more than a de 

minimis amount of premium. As a 

result, the discount bond method 

described in § 1.1275–7(e) would not 

apply to TIPS issued with more than a 

de minimis amount of premium. Notice 

2011–21 provided that the regulations 

would be effective for TIPS issued on or 

after April 8, 2011. On December 5, 

2011, the Treasury Department and the 

IRS published the temporary regulations 

in the Federal Register. These 

temporary regulations contained the 

rules described in Notice 2011–21 and 

applied to TIPS issued on or after April 

8, 2011. As noted earlier in this 

preamble, the final regulations are 

substantively the same as the temporary 

regulations. 

Under the final regulations, a taxpayer 

must use the coupon bond method 

described in § 1.1275–7(d) for a TIPS 

that is issued with more than a de 

minimis amount of premium. The final 

regulations include the example from 

the temporary regulations illustrating 

how to apply the coupon bond method 

to a TIPS issued with more than a de 

minimis amount of premium and a 

negative yield. As stated in Notice 

2011–21, the final regulations apply to 

TIPS issued on or after April 8, 2011. 

See § 601.601(d)(2)(ii)(b). 

2. Temporary Regulations—Treatment 

of Bond Premium Carryforward in a 

Holder’s Final Accrual Period 

During the consideration of the final 

regulations relating to TIPS issued with 

more than a de minimis amount of 

premium, the Treasury Department and 

the IRS received questions about the 

holder’s treatment of a taxable zero 

coupon debt instrument, including a 

Treasury bill, acquired at a premium 

and a negative yield. In this situation, as 

described in more detail below, under 

§§ 1.171–2 and 1.1016–5(b) of the 

current regulations, a holder that elected 

to amortize the bond premium generally 

would have a capital loss upon the sale, 

retirement, or other disposition of the 

debt instrument rather than an ordinary 

deduction under section 171(a)(1) for all 

or a portion of the bond premium. This 

situation, which has arisen as a result of 

recent market conditions, was not 

contemplated when the current 

regulations were adopted in 1997. 

Under section 171 and § 1.171–2 of 

the current regulations, an electing 

holder amortizes bond premium by 

offsetting the qualified stated interest (as 


sroberts on DSK5SPTVN1PROD with