32902 Federal Register / Vol. 66, No. 118 / Tuesday, June 19, 2001 / Rules and Regulations

Code provisions, including section

332(b)(1), in a consolidated return year.

Section 538 of the Ticket to Work and

Work Incentives Improvement Act of

1999 (Public Law 106–170, 113 Stat.

1939) (the 1999 Act) enacted section

732(f) on December 17, 1999. With

certain exceptions, section 732(f)

generally provides that if (1) a corporate

partner of a partnership receives a

distribution from that partnership of

stock in another corporation, (2) the

corporate partner has control of the

distributed corporation immediately

after the distribution or at any time

thereafter, and (3) the partnership’s

adjusted basis in such stock

immediately before the distribution

exceeded the corporate partner’s

adjusted basis in such stock

immediately after the distribution, then

an amount equal to such excess shall

reduce the basis of the property held by

the distributed corporation at such time.

On December 21, 2000, Congress

enacted section 311(c) of the

Community Renewal Tax Relief Act of

2000 (Public Law 106–554, 114 Stat.

2763) (the 2000 Act), a technical

correction to section 538 of the 1999

Act. Section 311(c) of the 2000 Act

states ‘‘[t]he reference to section

332(b)(1) of the Internal Revenue Code

of 1986 in Treasury Regulation section

1.1502–34 shall be deemed to include a

reference to section 732(f) of such

Code.’’ The Conference Report states

that the rule in the consolidated return

regulations (§ 1.1502–34) aggregating

stock ownership for purposes of section

332 (relating to a complete liquidation

of a subsidiary that is a controlled

corporation) also applies for purposes of

section 732(f) (relating to basis

adjustments to assets of a controlled

corporation received in a partnership

distribution). H.R. Conf. Rep. No. 1033,

106th Cong., 2d Sess. 1022 (2000).

Section 311(d) of the 2000 Act

provides that section 311(c) of the 2000

Act takes effect as if included in the

provisions of the 1999 Act to which it

relates. Thus, the effective date of

section 311(c) of the 2000 Act is the

same as that for section 538(a) of the

1999 Act, which is contained in section

538(b) of the 1999 Act.

Explanation of Provisions

These final regulations conform

§ 1.1502–34 to a technical correction

enacted in section 311(c) of the 2000

Act and add a regulation under section

732 reflecting that correction. These

regulations reflect this statutory

provision clarifying that the stock

aggregation rules under § 1.1502–34

apply for purposes of section 732(f).

Because section 311(d) of the 2000

Act provides that section 311(c) of the

2000 Act shall take effect as if it had

been included in the provisions of the

1999 Act, the effective date provisions

of section 538(b) of the 1999 Act apply

to these regulations. Section 538(b)

generally provides that the amendments

made by section 538(a) of the 1999 Act

apply to distributions made after July

14, 1999. In the case of a corporation

that was a partner in a partnership as of

July 14, 1999, the amendments made by

section 538(a) of the 1999 Act apply to

distributions made (or treated as made)

to that partner from that partnership

after June 30, 2001. In the case of any

such distribution made after December

17, 1999, and before July 1, 2001, the

rule of the preceding sentence does not

apply unless that partner makes an

election to have the rule apply to the

distribution on the partner’s income tax

return for the year in which the

distribution occurs.

Special Analyses

It has been determined that this

Treasury Decision is not a significant

regulatory action as defined in

Executive Order 12866. Therefore, a

regulatory assessment is not required.

Because no notice of proposed

rulemaking is required for this final

regulation, the provisions of the

Regulatory Flexibility Act (5 U.S.C.

chapter 6) do not apply.

This final rule merely conforms

§ 1.1502–34 to the statutory amendment

made by section 311(c) of the 2000 Act.

Pursuant to 5 U.S.C. 553, it is

determined that prior notice and

comment are unnecessary and contrary

to the public interest. For the same

reason, good cause exists for not

delaying the effective date of this final

rule.

List of Subjects in 26 CFR Part 1

Income taxes, Reporting and

recordkeeping requirements.

Adoption of Amendments to the

Regulations

Accordingly, 26 CFR part 1 is

amended as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation

for part 1 is amended by adding entries

in numerical order to read in part as

follows:

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

Section 1.732–3 also issued under 26

U.S.C. 732(f). * * *

Section 1.1502–34 also issued under 26

U.S.C. 1502. * * *

Par. 2. Section 1.732–3 is added to

read as follows:

§ 1.732–3 Corresponding adjustment to

basis of assets of a distributed corporation

controlled by a corporate partner.

The determination of whether a

corporate partner has control of a

distributed corporation for purposes of

section 732(f) shall be made by applying

the special aggregate stock ownership

rules of § 1.1502–34.

§ 1.1502–34 [Amended]

Par. 3. In § 1.1502–34, the first

sentence is amended by adding

‘‘732(f),’’ immediately after ‘‘351(a),’’.

Robert E. Wenzel,

Deputy Commissioner of Internal Revenue.

Approved: June 8, 2001.

Mark A. Weinberger,

Assistant Secretary of the Treasury.

[FR Doc. 01–15353 Filed 6–18–01; 8:45 am]

BILLING CODE 4830–01–P

DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Part 256

RIN: 1010–AC74

Leasing of Sulphur or Oil and Gas in

the Outer Continental Shelf—Definition

of Affected State

AGENCY: Minerals Management Service

(MMS), Interior.

ACTION: Final rule.

SUMMARY: This final rule eliminates the

definition of ‘‘Affected State’’ in Subpart

B, Oil and Gas Leasing Program. The

definition of ‘‘Affected State’’ in Subpart

A will apply to the entire Part 256,

eliminating the need for unaffected

coastal States to participate in the

preparation of a 5-year program, unless

they so choose.

EFFECTIVE DATE: The rule is effective

June 19, 2001.

FOR FURTHER INFORMATION CONTACT:

Ralph Ainger or Jane Roberts at (703)

787–1215.

SUPPLEMENTARY INFORMATION: On

December 15, 2000, we published a

Notice of Proposed Rulemaking (NPR)

(65 FR 78432), titled ‘‘Leasing of

Sulphur or Oil and Gas in the Outer

Continental Shelf—Definition of

Affected State,’’ which proposed to

remove 30 CFR 256.14. The comment

period closed February 13, 2001. We

received one comment from a coastal

State. This final rule removes the

regulation at 30 CFR 256.14. This rule

Federal Register / Vol. 66, No. 118 / Tuesday, June 19, 2001 / Rules and Regulations 32903

does not impose any requirements on

affected parties that would require a

period of time to implement. Therefore,

in order to have it codified in the next

publication of the Code of Federal

Regulations, this will become effective

on the date of publication in the Federal

Register.

The definition of ‘‘Affected State’’ in

current 30 CFR 256.5(g), will apply to

the entire part. That definition reads as

follows: ‘‘ ‘‘Affected State’’ means, with

respect to any program, plan, lease sale,

or other activity, proposed, conducted,

or approved pursuant to the provisions

of the act, any State—

(1) The laws of which are declared,

pursuant to section 4(a)(2) of the Act, to

be the law of the United States for the

portion of the Outer Continental Shelf

on which such activity is, or is proposed

to be conducted;

(2) Which is, or is proposed to be,

directly connected by transportation

facilities to any artificial island or

structure referred to in section 4(a)(1) of

the Act;

(3) Which is receiving, or in

accordance with the proposed activity

will receive, oil for processing, refining,

or transshipment which was extracted

from the Outer Continental Shelf and

transported directly to such State by

means of vessels or by a combination of

means including vessels;

(4) Which is designated by the

Secretary as a State in which there is a

substantial probability of significant

impact on or damage to the coastal,

marine, or human environment, or a

State in which there will be significant

changes in the social, governmental, or

economic infrastructure, resulting from

the exploration, development, and

production of oil and gas anywhere on

the Outer Continental Shelf; or

(5) In which the Secretary finds that

because of such activity there is, or will

be a significant risk of serious damage,

due to factors such as prevailing winds

and currents, to the marine or coastal

environment in the event of any oilspill,

blowout, or release of oil or gas from

vessels, pipelines, or other

transshipment facilities.’’

As we stated in the NPR, listing all

the States adjacent to the OCS as

‘‘affected’’ is contrary to the intent as

well as the letter of the statute and may

cause unnecessary administrative

burden for those States that are not

affected under the legal definition.

These States should not be

automatically involved if they do not

meet the statutory definition. However,

there is nothing to preclude any State’s

participation if and to the extent they

wish, as the 5-year process contains

multiple periods for public comment.

Elimination of the definition also

reduces the burden on the Government

to involve States that are not affected by

the program.

Comments on the Rule

We received one comment in

response to the NPR. The State of North

Carolina Department of Environment

and Natural Resources, Division of

Coastal Management, supported the

elimination of the definition of

‘‘Affected State’’ as it applied to Subpart

B only. The commenter stated that as

the areas off the coast of North Carolina

are withdrawn from leasing until 2012,

listing the State as affected might cause

an unnecessary administrative burden

for North Carolina. It further stated that

North Carolina should not be

automatically involved if they do not

meet the statutory definition. They

realize that nothing precludes their

participation in the 5-year process.

Procedural Matters

Regulatory Planning and Review

(Executive Order 12866)

This document is not a significant

rule and is not subject to review by the

Office of Management and Budget

(OMB) under Executive Order 12866.

(1) This rule will not have an effect of

$100 million or more on the economy.

It will not adversely affect in a material

way the economy, productivity,

competition, jobs, the environment,

public health or safety, or State, local,

or tribal governments or communities.

Ultimately, this rule is advantageous to

the Federal Government in that it would

not have to involve certain unaffected

States in the complex, multi-step

process of preparing a 5-year program.

It also is advantageous to those States

that would not have to participate

during program preparation when the

Federal Government makes three

requests for comments and

recommendations from affected States.

Because of Presidential withdrawals and

congressional moratoria, an average of

14 of the 23 coastal States could be

deemed unaffected by a proposed 5-year

program. If those 14 States were deemed

unaffected, there could be a savings of

$170,100 ($2,100 + $168,000). At a

minimum, a State must spend 1 hour

deciding whether or not to respond.

Therefore, there would be a minimum

expenditure of $150 per State and a total

of $2,100 for all 14 States (3 requests ×

1 hour × $50 per hour = $150 × 14 States

= $2,100). If a State decides, or in some

cases is required, to participate by its

own laws, that State could spend up to

80 hours preparing a response to each

request. Therefore, there could be

another expenditure of $12,000 per

State and a total of $168,000 for all 14

States (3 requests × 80 hours × $50 per

hour = $12,000 × 14 States).

(2) This will not create a serious

inconsistency or otherwise interfere

with an action taken or planned by

another agency. There are no other

Federal agencies involved in this

process as it relates to participation by

coastal States.

(3) This rule does not alter the

budgetary effects or entitlements, grants,

user fees, or loan programs or rights or

obligations of their recipients. This rule

has no effect on these programs or such

rights.

(4) This rule does not raise novel legal

or policy issues. As previously stated,

the intent of this rule is to eliminate the

redundant and unnecessary definition

of ‘‘Affected State’’ at 30 CFR 256.14.

The term is defined at 30 CFR 256.5(g)

and applies to the entire part.

Regulatory Flexibility (RF) Act

The Department certifies that this

document will not have a significant

economic effect on a substantial number

of small entities under the RF Act (5

U.S.C. 601 et seq.). This revised rule

eliminates the redundant and

unnecessary definition of ‘‘Affected

State’’ at 30 CFR 256.14. The only

entities impacted by this rule change are

certain coastal States that we would no

longer automatically involve in a

complex, multi-step process of

preparing a 5-year program that would

not affect them.

Small Business Regulatory Enforcement

Fairness Act (SBREFA)

This rule is not a major rule under the

SBREFA, 5 U.S.C. 804(2). This rule:

(1) Does not have an annual effect on

the economy of $100 million or more.

This rule eliminates the need for the

Federal Government to automatically

involve some 1 coastal States in a

complex, multi-step process to prepare

a program that would not affect them.

(2) Will not cause a major increase in

costs or prices for consumers,

individual industries, Federal, State, or

local government agencies, or

geographic areas. This rule eliminates

the need for some coastal States that

would not be affected by a 5-year oil

and gas program from participating in

its preparation unless they so choose.

(3) Does not have significant adverse

effects on competition, employment,

investment, productivity, innovation, or

the ability of United States-based

enterprises to compete with foreignbased enterprises. There are no United

States- or foreign-based enterprises

involved in this rule.

32904 Federal Register / Vol. 66, No. 118 / Tuesday, June 19, 2001 / Rules and Regulations

Paperwork Reduction Act (PRA) of 1995

This regulation does not affect an

existing OMB-approved information

collection and an OMB Form 83–I is not

required. The proposed rule simply

removes a definition. OMB approved

the information collection requirements

in part 256 under OMB control number

1010–0006, with a current expiration

date of March 31, 2004.

Federalism (Executive Order 13132)

According to Executive Order 13132,

this rule does not have Federalism

implications. This rule does not

substantially and directly affect the

relationship between the Federal and

State Governments. Elimination of the

redundant and unnecessary definition

of an ‘‘Affected State’’ could reduce

costs on States that are not affected by

the 5-year program and the cost to the

Federal Government of involving

unaffected States.

Takings Implications Assessment

(Executive Order 12630)

According to Executive Order 12630,

the rule does not have significant

Takings implications. A Takings

Implication Assessment is not required.

This rule has no effect on Takings, as it

only applies to States that would no

longer be automatically involved in the

preparation of a program that has no

effect on them, thereby eliminating the

possible burden of doing so.

Civil Justice Reform (Executive Order

12899)

According to Executive Order 12988,

the Office of the Solicitor has

determined that this rule does not

unduly burden the judicial system and

meets the requirements of sections 3(a)

and 3(b)(2) of the Order.

National Environment Policy Act

(NEPA)

We have analyzed this rule according

to the criteria of the NEPA and 516 DM.

This rule does not constitute a major

Federal action significantly affecting the

quality of the human environment. An

environmental assessment is not

required. This rule will have no impact

regarding the criteria of the NEPA.

Unfunded Mandate Reform Act (UMRA)

of 1995

This rule does not impose an

unfunded mandate on State, local, or

tribal governments or the private sector

of more than $100 million per year. This

rule does not create any kind of a

mandate for State, local, or tribal

governments or the private sector. In

fact, it eliminates the need for the

Federal Government to involve certain

States in the preparation of a program

that will not affect them. A statement

containing the information required by

the UMRA, 2 U.S.C. 1501 et seq. is not

required.

List of Subjects in 30 CFR Part 256

Administrative practice and

procedure, Continental shelf,

Environmental protection, Government

contracts, Intergovernmental relations,

MMS, Oil and gas exploration, Public

lands-mineral resources, Public landsrights-of-way, Reporting and

recordkeeping requirements, Surety

bonds.

Dated: May 30, 2001.

Piet deWitt,

Acting Assistant Secretary, Land and

Minerals Management.

For the reasons stated in the

preamble, the Minerals Management

Service amends 30 CFR part 256 as

follows:

PART 256—LEASING OF SULPHUR OR

OIL AND GAS IN THE OUTER

CONTINENTAL SHELF

1. The authority citation for Part 256

continues to read as follows:

Authority: 42 U.S.C 6213, 43 U.S.C. 1331

et seq.

§ 256.14 [Removed]

2. Section 256.14 is removed.

[FR Doc. 01–15393 Filed 6–18–01; 8:45 am]

BILLING CODE 4310–MR–P

DEPARTMENT OF TRANSPORTATION

Coast Guard

33 CFR Parts 110, 117, 165

[CGD09–01–004]

RIN 2115-AA97

Sail Detroit and Tall Ship Celebration

2001, Detroit and Saginaw Rivers, MI

AGENCY: Coast Guard, DOT.

ACTION: Temporary final rule.

SUMMARY: The Coast Guard is

establishing temporary safety zones and

anchorage areas during the Sail Detroit

tall ship visit and harbor celebration in

the Detroit River, Detroit, Michigan, to

be held July 18–24, 2001 and the Tall

Ship Celebration 2001 to be held July

26–30, 2001 in the Saginaw River, Bay

City, Michigan. These zones are

necessary to promote the safe navigation

of vessels and the safety of life and

property during the periods of heavy

vessel traffic expected during these

events. These zones are intended to

restrict vessel traffic from a portion of

the Detroit River and restrict vessel

traffic in a portion of the Saginaw River.

DATES: This rule is effective from July

18–30, 2001, except for § 110.T09–007

and the suspension of § 110.206 which

are effective July 22, 2001 from 7:30

a.m. to 5:30 p.m. and the amendments

to § 117.647 which are effective July 26,

2001 from 1 p.m. to 7 p.m.

ADDRESSES: Comments and material

received from the public, as well as

documents indicated in this preamble as

being available in the docket, are part of

docket CGD09–01–004 and are available

for inspection or copying at U.S. Coast

Guard Marine Safety Office Detroit, 110

Mt. Elliott Ave., Detroit, MI 48207,

between 9 a.m. and 3 p.m., Monday

through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT:

Lieutenant Dennis O’Mara, Marine

Safety Office Detroit, Detroit, MI, (313)

568–9580.

SUPPLEMENTARY INFORMATION:

Regulatory History

On April 9, 2001, the Coast Guard

published a notice of proposed

rulemaking (NPRM) entitled Sail Detroit

and Tall Ship Celebration 2001, Detroit

and Saginaw Rivers, MI in the Federal

Register (66 FR 18419). The Coast Guard

did not receive any letters commenting

on the proposed rulemaking. No public

hearing was requested, and none was

held.

Background and Purpose

These temporary regulations are for

the Sail Detroit tall ship visit and harbor

celebration and Tall Ship Celebration

2001 to be held in the Detroit and

Saginaw Rivers, respectively. The Sail

Detroit tall ship visit is scheduled to be

part of Detroit 300, the celebration to

honor the 300th birthday of Detroit’s

founding. It is a shared international

event between the sister cities of Detroit,

MI and Windsor, Ontario Canada.

Temporary safety zones will be

established along both waterfront areas,

once tall ships are moored. Sail Detroit

will be highlighted by a 5-mile historic

vessel parade (approximately 50 vessels,

including 20 or more tall ships),

waterside events, in-port tours,

waterside moored vessel viewing, and a

re-enactment of Cadillac’s landing in

Detroit. The parade of historic ships will

take place in the Detroit River on July

22, 2001 between the Ojibway

Anchorage and Belle Isle. The reenactment of Antoine de la Mothe

Cadillac’s 1701 landing in Detroit will

take place on July 24, 2001, between

Belle Isle and Hart Plaza. The Coast