2354 Federal Register / Vol. 62, No. 11 / Thursday, January 16, 1997 / Proposed Rules

these intangibles to B for $75,000. S

recognizes a gain of $50,000 on the sale and

has no other items of income, deduction,

gain, or loss for the year, except that S also

has a net operating loss of $20,000 from prior

years that it would otherwise be entitled to

use in 1997 pursuant to section 172(b). As

part of the transaction with B, S agrees to

make the gain recognition election pursuant

to section 197(f)(9)(B).

(ii) If the gain recognition election had not

been made, S would have taxable income of

$30,000 for 1997 and a tax liability of $4,500.

As the result of the election, S must pay a

total tax liability for the year of $17,500 (35

percent of $50,000), consisting of the sum of

its regular tax liability of $4,500 and the

additional amount of $13,000 pursuant to

section 197(f)(9)(B).

(iii) Pursuant to paragraph (h)(9)(v)(A) of

this section, S determines the amount of its

net operating loss deduction in subsequent

years without regard to the gain recognized

on the sale of the section 197 intangible to

B. Accordingly, the entire $20,000 net

operating loss deduction that would have

been available in 1997 but for the gain

recognition election may be used in 1998,

subject to the limitations of section 172.

(iv) B has a basis of $75,000 in the section

197 intangibles acquired from S. As the result

of the gain recognition election by S, B may

amortize $50,000 of its basis under section

197. The remaining basis may not be

amortized by B.

Example 21. Section 338 election. (i) P

corporation makes a qualified stock purchase

of the stock of T corporation from two

shareholders in July 1997, and a section 338

election is made by P. One of the selling

shareholders is an individual who owns 25

percent of the total value of the stock of each

of the T and P corporation. No other

shareholder of either T or P owns stock in

both of these corporations, and no other

shareholder is related to any other

shareholder of either corporation.

(ii) Old target and new target (as these

terms are defined in § 1.338–1(c)(13)) are

members of a controlled group of

corporations under section 267(b)(3), as

modified by section 197(f)(9)(C)(i), and any

section 197 intangible held by old target at

any time during the transition period is not

an amortizable section 197 intangible in the

hands of new target. However, a gain

recognition election under paragraph (h)(9)(i)

of this section may be made with respect to

this transaction.

(l) Effective dates. This section is

applicable on the date final regulations are

published in the Federal Register, except

that §1.197–2(c)(13) (exception from section

197 for separately acquired rights of fixed

duration or amount) is applicable August 11,

1993 (or July 26, 1991, if a valid retroactive

election has been made under §1.197–1T).

Margaret Milner Richardson,

Commissioner of Internal Revenue.

[FR Doc. 97–866 Filed 1–9–97; 2:53 pm]

BILLING CODE 4830–01–U

DEPARTMENT OF THE INTERIOR

Fish and Wildlife Service

50 CFR Part 24

RIN 1018–AD97

Endangered and Threatened Wildlife

and Plants; Designated Ports for

Listed Plants

AGENCY: Fish and Wildlife Service,

Interior.

ACTION: Proposed rule.

SUMMARY: The Fish and Wildlife Service

(Service) proposes to amend the

regulations that establish designated

ports for the importation, exportation,

and reexportation of plants by adding

the U.S. Department of Agriculture

(USDA) ports at Laredo, Texas; and Fort

Lauderdale, Jacksonville, and Panama

City, Florida, as designated ports for the

importation of saw-logs, sawn wood,

and veneers from trees listed as

endangered or threatened under the

Endangered Species Act of 1973, as

amended (the Act), or listed under the

Convention on International Trade in

Endangered Species of Wild Fauna and

Flora (CITES). The Service also

proposes to amend these same

regulations by adding the USDA port at

Port Huron, Michigan, as a port for the

importation from Canada and

exportation or reexportation to Canada

of plants listed as endangered or

threatened under the Act, or listed

under CITES. The USDA has adequate

facilities and personnel at these ports to

qualify the ports as designated ports for

the importation, exportation, and

reexportation of plants under the terms

of the Act and CITES. The addition of

these ports to the list of designated ports

would facilitate trade and the

enforcement of the Act and CITES.

Additionally, the Service proposes to

amend the regulations that establish

designated ports for the importation,

exportation, and reexportation of plants

by removing Laredo, Texas, from the list

of ports designated for the importation,

exportation, or reexportation of plants

listed as endangered or threatened

under the Act, or listed under CITES.

The USDA no longer operates Laredo as

a plant inspection station and has

proposed to remove it from the list of

plant inspection stations in its

regulations. Because the Laredo plant

inspection station has closed, it no

longer is used as a designated port for

the importation, exportation, or

reexportation of plants listed as

endangered or threatened under the Act,

or listed under CITES. However, the

USDA has sufficient staff in place in

Laredo for the Service to add it instead

as a designated port for the importation

of saw-logs, sawn wood, and veneers

from trees listed as endangered or

threatened under the Act, or listed

under CITES, as discussed in the above

paragraph.

DATES: Comments must be submitted on

or before March 17, 1997. Requests for

a public hearing must be received by

March 3, 1997.

ADDRESSES: Comments and materials

concerning this proposal should be sent

to Kenneth B. Stansell, Chief, Office of

Management Authority, U.S. Fish and

Wildlife Service, 4401 North Fairfax

Drive, Room 430, Arlington, Virginia

22203. Comments and materials may be

hand-delivered to the same address

between the hours of 8:00 a.m. and 4:00

p.m. Monday through Friday during the

comment period.

FOR FURTHER INFORMATION CONTACT:

Kenneth B. Stansell, Chief, Office of

Management Authority, U.S. Fish and

Wildlife Service, telephone (703) 358–

2093.

SUPPLEMENTARY INFORMATION:

Background

The Endangered Species Act of 1973,

as amended (the Act), requires, among

other things, that plants be imported,

exported, or reexported only at

designated ports or, under certain

limited circumstances, at nondesignated

ports. Section 9(f) of the Act (16 U.S.C.

1538[f]) provides for the designation of

ports. Under section 9(f)(1), the

Secretary of the Interior (Secretary) has

the authority to establish designated

ports based on a finding that such an

action would facilitate enforcement of

the Act and reduce the costs of that

enforcement. The United States

Department of Agriculture (USDA) and

the Secretary are responsible for

enforcing provisions of the Act and the

Convention on International Trade in

Endangered Species of Wild Fauna and

Flora (CITES) relating to the

importation, exportation, and

reexportation of plants listed as

endangered or threatened under the Act

or listed under CITES.

The regulations in 50 CFR part 24,

‘‘Importation and Exportation of

Plants,’’ are for the purpose of

establishing ports for the importation,

exportation, and reexportation of plants.

Plants listed as endangered or

threatened in 50 CFR 17.12 or in the

appendices to CITES in 50 CFR 23.23

are required to be accompanied by

documentation and may be imported,

exported, or reexported only at one of

the USDA ports listed in section

24.12(a) of the regulations. Certain other
Federal Register / Vol. 62, No. 11 / Thursday, January 16, 1997 / Proposed Rules 2355

USDA ports are designated for the

importation, exportation, or

reexportation of specific listed plants.

Section 24.12(g) of the regulations

contains a list of USDA ports that are,

for the purposes of the Act and CITES,

designated ports for the importation,

exportation, and reexportation of plants

that are not listed as endangered or

threatened. (The USDA regulations in 7

CFR 319.37 contain additional

prohibitions and restrictions governing

the importation of plants through those

ports.)

For the purposes of its enforcement of

the Act and CITES, the Service requires

that a port have personnel with

expertise in identifying plants listed as

endangered or threatened under the Act,

or listed under CITES, to ensure that

such plants are properly identified by

their accompanying documentation. A

port also must possess adequate

facilities for holding live plants and

plant material, since plants are subject

to seizure if imported, exported, or

reexported in violation of the Act or

CITES. The Service further requires that,

whenever possible, ports be located to

coincide with established patterns of

plant trade in order to help reduce

shipping costs.

Effective November 16, 1995, sawlogs, sawn wood, and veneers of bigleaf

mahogany (Swietenia macrophylla)

from populations in the Americas

(North America, South America, and the

Caribbean) were listed on CITES

Appendix III at the request of the

government of Costa Rica. As a

consequence of this listing, an export of

the material included in the listing,

from any country except Costa Rica,

must be accompanied by a CITES

certificate of origin issued by the

government of that country. An export

from Costa Rica of the material included

in the listing must be accompanied by

a CITES export permit issued by the

Costa Rican government. Saw-logs,

sawn wood, and veneers from listed

trees currently may be imported into the

United States through one of the ports

listed in section 24.12(a), designated for

the importation, exportation, or

reexportation of plants listed as

endangered or threatened under the Act,

or listed under CITES; or through one of

the ports listed in section 24.12(e),

designated for the importation of logs

and lumber from trees listed as

endangered or threatened under the Act,

or listed under CITES. [As part of this

proposed rulemaking, the Service is, for

the purposes of correctness and

consistency, proposing to amend section

24.12(e) by replacing the term ‘‘logs and

lumber’’ with the term ‘‘saw-logs, sawn

wood, and veneers,’’ which is the term

used in the CITES listings and in 50

CFR part 23.]

The USDA ports at Laredo, Texas; and

Fort Lauderdale, Jacksonville, and

Panama City, Florida, are established

ports of entry for bigleaf mahogany sawlogs, sawn wood, and veneers imported

into the United States. Since bigleaf

mahogany now is listed in the

appendices to CITES, these four ports

must, in order to avoid disrupting an

established pattern of legitimate trade,

be added to the list of ports designated

for the importation of saw-logs, sawn

wood, and veneers from trees listed as

endangered or threatened under the Act,

or listed under CITES.

Therefore, the Service has been asked

by the USDA to add the USDA ports at

Laredo, Fort Lauderdale, Jacksonville,

and Panama City to the list of ports in

section 24.12(e), designated for the

importation of saw-logs, sawn wood,

and veneers from trees listed as

endangered or threatened under the Act,

or listed under CITES. [Although the

USDA port at Laredo is currently listed

in section 24.12(a), the USDA no longer

operates that port as a plant inspection

station and has proposed (in 60 FR

13382; March 13, 1995) to remove it

from the list of plant inspection stations

in its regulations in 7 CFR 319.37–14.

Because its plant inspection station has

closed, Laredo no longer is used as a

designated port for the importation,

exportation, or reexportation of plants

listed as endangered or threatened

under the Act, or listed under CITES.

Therefore, in this proposed rule the

Service is proposing to remove Laredo

from the list of ports in section 24.12(a),

adding it instead to the list of ports in

section 24.12(e).]

The Service also has been asked by

the USDA to allow the importation of

artificially propagated plants listed as

endangered or threatened under the Act,

or listed under CITES, from Canada

through the USDA port of Port Huron,

Michigan. In order to allow such

importations, the Service must add Port

Huron to the list of ports in section

24.12(d), designated for the importation

from Canada and the exportation and

reexportation to Canada of plants listed

as endangered or threatened under the

Act, or listed under CITES. Currently,

the USDA ports at Detroit, Michigan;

Buffalo and Rouses Point, New York;

and Blaine, Washington, are the only

ports specifically designated for those

purposes. Adding Port Huron would

facilitate trade by making an additional

port of entry available to importers of

artificially propagated plants listed as

endangered or threatened under the Act,

or listed under CITES, from Canada.

After consultations with the USDA,

the Service has determined that the

USDA ports at Laredo, Fort Lauderdale,

Jacksonville, Panama City, and Port

Huron possess adequate facilities and

personnel to carry out enforcement

activities related to the Act and CITES.

Additionally, these locations appear to

coincide with established patterns of

trade. Therefore, the Service proposes to

add the ports at Laredo, Fort

Lauderdale, Jacksonville, and Panama

City to the list of designated ports for

the importation of saw-logs, sawn wood,

and veneers from trees listed as

endangered or threatened under the Act,

or listed under CITES, and to add the

port at Port Huron to the list of

designated ports for the importation

from Canada and exportation or

reexportation to Canada of plants listed

as endangered or threatened under the

Act, or listed under CITES.

Requests for Public Hearing

Section 9(f)(1) of the Act provides that

any person may request an opportunity

to comment at a public hearing before

the Secretary confers designated port

status on any port. Accordingly, the

Service will accept public hearing

requests within 45 days of the

publication of this proposed rule. Send

requests to the Service’s Office of

Management Authority at the address

listed in the ADDRESSES section of this

document.

Economic Effects

The USDA ports at Laredo, Texas; and

Fort Lauderdale, Jacksonville, and

Panama City, Florida, are established

primary ports of entry for bigleaf

mahogany saw-logs, sawn wood, and

veneers imported into the United States.

Since bigleaf mahogany now is listed in

the appendices to CITES, the addition of

these four ports to the list of ports

designated for the importation of sawlogs, sawn wood, and veneers from trees

listed as endangered or threatened

under the Act, or listed under CITES,

would avoid disrupting an established

pattern of legitimate trade by allowing

operations at those ports related to the

importation of bigleaf mahogany sawlogs, sawn wood, and veneers to

continue with only minor procedural

changes. Adding these ports would not

have a significant economic impact on

any private entities, nor on local or State

governments. Also, adding these ports

would not have a significant economic

impact on the Federal Government,

since the USDA already has adequate

facilities and personnel at these ports to

qualify them as designated ports.

However, without these ports being

designated, the established legitimate
2356 Federal Register / Vol. 62, No. 11 / Thursday, January 16, 1997 / Proposed Rules

trade in bigleaf mahogany saw-logs,

sawn wood, and veneers through these

ports would cease. This would increase

shipping costs on importers in the

United States who have been using

Laredo, Fort Lauderdale, Jacksonville,

and Panama City as ports of import for

bigleaf mahogany saw-logs, sawn wood,

and veneers, by forcing these importers

to travel out of their way to one of the

current designated ports in order to

legally import their bigleaf mahogany.

The closest designated Mexican border

port to the port of Laredo is

Brownsville, Texas, about 150 miles

away; the closest designated port to the

port of Fort Lauderdale is Miami,

Florida, about 30 miles away; the closest

designated port to the port of

Jacksonville is Orlando, Florida, about

125 miles away; and the closest

designated port to the port of Panama

City is Mobile, Alabama, about 150

miles away.

Adding the USDA port at Port Huron,

Michigan, as a designated port for the

importation from Canada and

exportation or reexportation to Canada

of plants listed as endangered or

threatened under the Act, or listed

under CITES, likewise would not have

a significant economic impact on any

private entities, nor on local or State

governments. Also, adding this port

would not have a significant economic

impact on the Federal Government,

since the USDA already has adequate

facilities and personnel at the port to

qualify it as a designated port. Adding

Port Huron as a designated port would

facilitate trade by making an additional

port of entry available to importers of

artificially propagated plants listed as

endangered or threatened under the Act,

or listed under CITES, from Canada.

Currently, the USDA ports at Detroit,

Michigan; Buffalo and Rouses Point,

New York; and Blaine, Washington, are

the only ports specifically designated

for those purposes. However, Port

Huron’s designation is not expected to

result in a significant increase in the

importation of such plants from Canada.

Therefore, the Service has determined

under the Regulatory Flexibility Act of

1980 (5 U.S.C. 601 et seq.) that this

rulemaking would not have a significant

effect on a substantial number of small

entities, which include businesses,

organizations, or governmental

jurisdictions. This rulemaking was not

subject to review by the Office of

Management and Budget under

Executive Order 12866.

This rulemaking would not have any

direct effects on the States, in their

relationship with the Federal

Government, or on the distribution of

power and responsibilities among the

various levels of government. Therefore,

in accordance with Executive Order

12612, it is determined that this

rulemaking would not have sufficient

Federalism implications to warrant the

preparation of a Federalism Assessment.

The Service has determined and

certifies pursuant to the Unfunded

Mandates Act (2 U.S.C. 1502 et seq.)

that this rulemaking would not impose

a cost of $100 million or more in any

given year on local or State governments

or private entities.

The Department of the Interior has

determined that these proposed

regulations meet the applicable

standards provided in Sections 3(a) and

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

Paperwork Reduction Act

The Service has examined this

proposed rule under the Paperwork

Reduction Act of 1995, and found it to

contain no information collection

requirements.

List of Subjects in 50 CFR Part 24

Endangered and threatened species,

Exports, Harbors, Imports, and Plants.

Accordingly, the Service proposes to

amend title 50, part 24 as follows:

PART 24—[AMENDED]

1. The authority citation for part 24

continues to read as follows:

Authority: Secs. 9(f)(1), 11(f), Pub. L. 93–

205, 87 Stat. 893, 897 (16 U.S.C. 1538(f)(1),

1540(f)).

2. Section 24.12 would be amended

by: Removing ‘‘Laredo, Texas’’ from

paragraph (a),

b. Adding the words ‘‘and Port

Huron’’ immediately following

‘‘Detroit’’ in paragraph (d), and

c. Revising paragraph (e) to read as

follows:

§ 24.12 Designated parts.

* * * * *

(e) The U.S. Department of

Agriculture ports at Mobile, Alabama;

Fort Lauderdale, Jacksonville, and

Panama City, Florida; Savannah,

Georgia; Baltimore, Maryland; Gulfport,

Mississippi; Wilmington and Morehead

City, North Carolina; Portland, Oregon;

Philadelphia, Pennsylvania; Charleston,

South Carolina; Laredo, Texas; Norfolk,

Virginia; and Vancouver, Washington,

are designated ports for the importation

of saw-logs, sawn wood, and veneers

from trees which are listed in the

appendices to the Convention on

International Trade in Endangered

Species of Wild Fauna and Flora

(CITES) or in 50 CFR 17.12 or 23.23 and

which are required to be accompanied

by documentation under 50 CFR part 17

or 23.

* * * * *

Dated: December 5, 1996.

George T. Frampton,

Assistant Secretary, Fish and Wildlife and

Parks.

[FR Doc. 97–702 Filed 1–15–97; 8:45 am]

BILLING CODE 4310–55–P