30844 Federal Register / Vol. 61, No. 118 / Tuesday, June 18, 1996 / Proposed Rules

standard instrument approach

procedure (SIAP) to Runway (RWY) 18

has made this proposal necessary. The

intended effect of this proposal is to

provide adequate controlled airspace for

aircraft executing the NDB SIAP to RWY

18 at Manila Municipal Airport, Manila,

AR.

DATES: Comments must be received on

or before August 19, 1996.

ADDRESSES: Send comments on the

proposal in triplicate to Manager,

Operations Branch, Air Traffic Division,

Federal Aviation Administration,

Southwest Region, Docket No. 96–

ASW–11, Fort Worth, TX 76193–0530.

The official docket may be examined in

the Office of the Assistant Chief

Counsel, Federal Aviation

Administration, Southwest Region, 2601

Meacham Boulevard, Fort Worth, TX,

between 9:00 AM and 3:00 PM, Monday

through Friday, except Federal holidays.

An informal docket may also be

examined during normal business hours

at the Operations Branch, Air Traffic

Division, Federal Aviation

Administration, Southwest Region, 2601

Meacham Boulevard, Fort Worth, TX.

FOR FURTHER INFORMATION CONTACT:

Donald J. Day, Operations Branch, Air

Traffic Division, Federal Aviation

Administration, Southwest Region, Fort

Worth, TX 76193–0530; telephone: (817)

222–5593.

SUPPLEMENTARY INFORMATION:

Comments Invited

Interested parties are invited to

participate in this proposed rulemaking

by submitting such written data, views,

or arguments as they may desire.

Comments that provide the factual basis

supporting the views and suggestions

presented are particularly helpful in

developing reasoned regulatory

decisions on the proposal. Comments

are specifically invited on the overall

regulatory, aeronautical, economic,

environmental, and energy-related

aspects of the proposal.

Communications should identify the

airspace docket number and be

submitted in triplicate to the address

listed under the caption ADDRESSES.

Commenters wishing the FAA to

acknowledge receipt of their comments

on this notice must submit, with those

comments, a self-addressed stamped

postcard containing the following

statement: ‘‘Comments to Airspace

Docket No. 96–ASW–11.’’ The postcard

will be date and time stamped and

returned to the commenter. All

communications received on or before

the specified closing date for comments

will be considered before taking action

on the proposed rule. The proposal

contained in this notice may be changed

in the light of comments received. All

comments submitted will be available

for examination in the Office of the

Assistant Chief Counsel, Federal

Aviation Administration, Southwest

Region, 2601 Meacham Boulevard, Fort

Worth, TX, both before and after the

closing date for comments. A report

summarizing each substantive public

contact with FAA personnel concerned

with this rulemaking will be filed in the

docket.

Availability of NPRM’s

Any person may obtain a copy of this

Notice of Proposed Rulemaking (NPRM)

by submitting a request to the

Operations Branch, Air Traffic Division,

Federal Aviation Administration,

Southwest Region, Fort Worth, TX

76193–0530. Communications must

identify the notice number of this

NPRM. Persons interested in being

placed on a mailing list for future

NPRM’s should request a copy of

Advisory Circular No. 11–2A that

describes the application procedure.

The Proposal

The FAA is considering an

amendment to part 71 of the Federal

Aviation Regulations (14 CFR part 71) to

establish Class E Airspace, controlled

airspace extending upward from 700

feet AGL at Manila Municipal Airport,

Manila, AR. The development of a NDB

SIAP to RWY 18 has made this proposal

necessary. Designated airspace

extending upward from 700 feet above

the ground is now Class E airspace. The

intended effect of this proposal is to

provide adequate Class E airspace for

aircraft executing the NDB SIAP to RWY

18 at Manila Municipal Airport, Manila,

AR. The coordinates for this airspace

docket are based on North American

Datum 83.

Designated Class E airspace areas

extending upward from 700 feet or more

above ground level are published in

Paragraph 6005 of FAA Order 7400.9C

dated August 17, 1995, and effective

September 16, 1995, which is

incorporated by reference in 14 CFR

71.1. The Class E airspace designation

listed in this document would be

published subsequently in the order.

The FAA has determined that this

proposed regulation only involves an

established body of technical

regulations that need frequent and

routine amendments to keep them

operationally current. It, therefore—(1)

is not a ‘‘significant regulatory action’’

under Executive Order 12866; (2) is not

a ‘‘significant rule’’ under DOT

Regulatory Policies and Procedures (44

FR 11034; February 26, 1979); and (3)

does not warrant preparation of a

regulatory evaluation as the anticipated

impact is so minimal. Since this is a

routine matter that will only affect air

traffic procedures and air navigation, it

is certified that this rule, when

promulgated, will not have a significant

impact on a substantial number of small

entities under the criteria of the

Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 71

Airspace, Incorporation by reference,

Navigation (air).

The Proposed Amendment

In consideration of the foregoing, the

Federal Aviation Administration

proposes to amend 14 CFR part 71 as

follows:

PART 71—[AMENDED]

1. The authority citation for 14 CFR

part 71 continues to read as follows:

Authority: 49 U.S.C. 40103, 40113, 40120;

E.O. 10854; 24 FR 9565, 3 CFR, 1959–1963

Comp., p. 389; 49 U.S.C. 106(g); 14 CFR

11.69.

§ 71.1 [Amended]

2. The incorporation by reference in

14 CFR 71.1 of the Federal Aviation

Administration Order 7400.9C, Airspace

Designations and Reporting Points,

dated August 17, 1995, and effective

September 16, 1995, is amended as

follows:

Paragraph 6005 Class E airspace areas

extending upward from 700 feet or more

above the surface of the earth.

* * * * *

ASW AR E5 Manila, AR [New]

Manila, Manila Municipal Airport

(Lat. 35°53′35′′ N., long. 90°09′17′′ W.)

Manila NDB

(Lat. 35°53′28′′ N., long. 90°09′25′′ W.)

That airspace extending upward from 700

feet above the surface within a 6.3-mile

radius of Manila Municipal Airport, and

within 2.5 miles each side of the 007° bearing

from the Manila NDB extending from the 6.3-

mile radius to 6.9 miles north of the airport.

* * * * *

Issued in Fort Worth, TX, on June 11, 1996.

Albert L. Viselli,

Acting Manager, Air Traffic Division,

Southwest Region.

[FR Doc. 96–15418 Filed 6–12–96; 8:45 am]

BILLING CODE 4910–13–M
Federal Register / Vol. 61, No. 118 / Tuesday, June 18, 1996 / Proposed Rules 30845

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[CO–9–96]

RIN 1545–AU16

Section 1059 Extraordinary Dividends

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Notice of proposed rulemaking

and notice of public hearing.

SUMMARY: This document contains

proposed regulations relating to certain

distributions made by corporations to

certain corporate shareholders. The

proposed regulations are necessary to

clarify that certain distributions in

redemption of stock are treated as

extraordinary dividends

notwithstanding provisions that

otherwise might exempt the

distributions from extraordinary

dividend treatment. Corporations that

receive a distribution in redemption of

stock may be affected if the redemption

is either part of a partial liquidation of

the redeeming corporation or is not pro

rata as to all shareholders. This

document also provides notice of a

public hearing on these proposed

regulations.

DATES: Written comments and outlines

of topics to be discussed at the public

hearing scheduled for Wednesday,

October 2, 1996, must be received by

September 16, 1996.

ADDRESSES: Send submissions to:

CC:DOM:CORP:R (CO–9–96), room

5228, Internal Revenue Service, POB

7604, Ben Franklin Station, Washington,

DC 20044. In the alternative,

submissions may be hand delivered

between the hours of 8 a.m. and 5 p.m.

to: CC:DOM:CORP:R (CO–9–96),

Courier’s Desk, Internal Revenue

Service, 1111 Constitution Avenue NW.,

Washington, DC. The public hearing

will be held in room 3313, Internal

Revenue Building, 1111 Constitution

Avenue NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT:

Concerning the hearing, Mike Slaughter,

Regulations Unit, Assistant Chief

Counsel (Corporate), at (202) 622–7190

(not a toll-free number). Concerning the

proposed regulations, Richard K.

Passales at (202) 622–7530 (not a tollfree number).

SUPPLEMENTARY INFORMATION:

Background

This document contains proposed

amendments to the Income Tax

Regulations (26 CFR part 1) relating to

the extraordinary dividend provisions

under section 1059 of the Internal

Revenue Code. Section 1059 was added

by the Deficit Reduction Act of 1984,

Public Law 98–369. One of the purposes

of section 1059 is to prevent a corporate

shareholder from creating an artificial

loss on stock. See General Explanation

of the Revenue Provisions of the Deficit

Reduction Act of 1984.

Section 1059(a) generally requires a

corporation that receives an

extraordinary dividend on stock it has

not held for at least two years before the

dividend announcement date to reduce

its basis (but not below zero)

immediately before any sale or

disposition of the stock by the nontaxed

portion of the dividend (generally, the

amount of the dividends received

deduction). If the nontaxed portion of

the dividend exceeds basis, the excess

generally is treated as additional gain

recognized when the stock is sold.

Section 1059(c) generally defines an

extraordinary dividend as a dividend

that equals or exceeds the threshold

percentage of the taxpayer’s adjusted

basis in such stock.

Sections 1059(d)(6), (e)(1), and (e)(2)

were enacted as part of the Tax Reform

Act of 1986. Each of those sections

affects the definition of extraordinary

dividends contained in section 1059(c).

Section 1059(d)(6) generally excludes an

extraordinary dividend from section

1059(a) treatment if the distributee is an

original shareholder of the distributing

corporation and the earnings and profits

from which the dividend is paid are

attributable solely to the original

shareholder. Section 1059(e)(2)

generally excludes a dividend from

extraordinary dividend treatment if it is

a ‘‘qualifying dividend.’’ A dividend

generally is a qualifying dividend if the

distributee and distributing corporations

are affiliated at the time of the

distribution and the distribution is out

of affiliated year earnings and profits.

Both sections 1059(d)(6) and (e)(2)

contemplate that the distribution that

otherwise would be an extraordinary

dividend subject to section 1059(a) is

derived from earnings and profits

accumulated while the distributee

corporation is a shareholder of the

distributing corporation. Generally, a

corporate shareholder’s ability to create

an artificial loss is reduced if all of the

distributing corporation’s earnings and

profits are accumulated while the

distributee corporation is a shareholder

of the distributing corporation.

Section 1059(e)(1) expands the scope

of the extraordinary dividend definition

in section 1059(c) by disregarding the

holding period and threshold rules for

certain distributions. Generally, section

1059(e)(1) provides that a non pro rata

redemption or a partial liquidation that

is treated as a dividend under section

301 is an extraordinary dividend to

which section 1059(a) applies without

regard to the threshold percentage or the

period the taxpayer held such stock. See

General Explanation of the Tax Reform

Act of 1986, Joint Committee on

Taxation, 100th Cong., 1st Sess. (May 4,

1987).

These regulations address the

question of whether section 1059(d)(6)

or (e)(2) applies to a distribution

otherwise treated as an extraordinary

dividend under section 1059(e)(1). The

IRS and Treasury Department believe

that applying those provisions to section

1059(e)(1) is inconsistent with the

purpose of section 1059 and may create

inappropriate consequences, such as

basis shifting that eliminates gain or

creates an artificial loss.

Accordingly, these regulations clarify

that neither section 1059(d)(6) nor

section 1059(e)(2) applies to a

distribution treated as an extraordinary

dividend under section 1059(e)(1). In

finalizing these regulations, the IRS and

Treasury Department will consider

comments that illustrate distributions

described in section 1059(e)(1) to which

the application of section 1059(d)(6) or

(e)(2) is appropriate or to which section

1059(e)(1) otherwise should not apply.

These regulations also address the

question of whether an exchange treated

as a dividend under section 356(a)(2) is

subject to section 1059(e)(1). These

regulations clarify that for purposes of

section 1059(e)(1), an exchange under

section 356(a)(1) is treated as a

redemption and, to the extent any

amount is treated as a dividend under

section 356(a)(2), it is treated as a

dividend under section 301.

Explanation of Provisions

Proposed § 1.1059(e)–1(a) provides

that neither section 1059(d)(6) nor

section 1059(e)(2) will prevent any

distribution treated as an extraordinary

dividend under section 1059(e)(1) from

being treated as an extraordinary

dividend. For example, if a redemption

of stock is not pro rata as to all

shareholders, any amount treated as a

dividend under section 301 is treated as

an extraordinary dividend regardless of

whether the dividend is a qualifying

dividend.

Proposed § 1.1059(e)–1(b) provides

that for purposes of section 1059(e)(1),

an exchange under section 356(a)(1) is

treated as a redemption and, to the

extent any amount is treated as a

dividend under section 356(a)(2), it is

treated as a dividend under section 301.
30846 Federal Register / Vol. 61, No. 118 / Tuesday, June 18, 1996 / Proposed Rules

Proposed Effective Date

These regulations are proposed to

apply to distributions announced on or

after June 17, 1996.

Special Analyses

It has been determined that this notice

of proposed rulemaking 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) and the Regulatory

Flexibility Act (5 U.S.C. chapter 6) do

not apply to these regulations, and,

therefore, a Regulatory Flexibility

Analysis is not required. Pursuant to

section 7805(f) of the Internal Revenue

Code, this notice of proposed

rulemaking will be submitted to the

Chief Counsel for Advocacy of the Small

Business Administration for comment

on its impact on small business.

Comments and Public Hearing

Before these proposed regulations are

adopted as final regulations,

consideration will be given to any

written comments (a signed original and

eight (8) copies) that are submitted

timely to the IRS. All comments will be

available for public inspection and

copying.

A public hearing has been scheduled

at 10 a.m. on Wednesday, October 2,

1996, room 3313, Internal Revenue

Service, 1111 Constitution Avenue NW.,

Washington, DC. Because of access

restrictions, visitors will not be

admitted beyond the Internal Revenue

Building lobby more that 15 minutes

before the hearing starts.

The rules of 26 CFR 601.601(a)(3)

apply to the hearing.

Persons that wish to present oral

comments at the hearing must submit

written comments by September 16,

1996, and submit an outline of the

topics to be discussed and the time to

be devoted to each topic (signed original

and eight (8) copies) by September 16,

1996.

A period of 10 minutes will be

allotted to each person for making

comments.

An agenda showing the scheduling of

the speakers will be prepared after the

deadline for receiving outlines has

passed. Copies of the agenda will be

available free of charge at the hearing.

Drafting Information. The principal author

of these regulations is Richard K. Passales,

Office of Assistant Chief Counsel (Corporate),

IRS. However, other personnel from the IRS

and Treasury Department participated in

their development.

List of Subjects in 26 CFR Part 1

Income taxes, Reporting and

recordkeeping requirements.

Proposed Amendments to the

Regulations

Accordingly, 26 CFR part 1 is

proposed to be amended as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation

for part 1 is amended by adding an entry

in numerical order to read as follows:

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

1.1059(e)–1 also issued under 26 U.S.C.

1059(e)(1) and (e)(2). * * *

Par. 2. Section 1.1059(e)–1 is added to

read as follows:

§ 1.1059(e)–1 Non pro rata redemptions.

(a) In general. Section 1059(d)(6)

(exception where stock held during

entire existence of corporation) and

section 1059(e)(2) (qualifying dividends)

do not apply to a distribution treated as

an extraordinary dividend under section

1059(e)(1). For example, if a redemption

of stock is not pro rata as to all

shareholders, any amount treated as a

dividend under section 301 is treated as

an extraordinary dividend regardless of

whether the dividend is a qualifying

dividend.

(b) Reorganizations. For purposes of

section 1059(e)(1), an exchange under

section 356(a)(1) is treated as a

redemption and, to the extent any

amount is treated as a dividend under

section 356(a)(2), it is treated as a

dividend under section 301.

(c) Effective date. This section applies

to distributions announced (within the

meaning of section 1059(d)(5)) on or

after June 17, 1996.

Margaret Milner Richardson,

Commissioner of Internal Revenue.

[FR Doc. 96–15454 Filed 6–17–96; 8:45 am]

BILLING CODE 4830–01–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 63

[AD–FRL–5521–6]

RIN 2060–AD98

National Emission Standards for

Hazardous Air Pollutants for

Shipbuilding and Ship Repair (Surface

Coating) Operations

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Proposed rule.

SUMMARY: This action proposes to revise

the compliance date for the ‘‘National

Emission Standards For Hazardous Air

Pollutants For Shipbuilding and Ship

Repair (Surface Coating) Operations’’ to

December 16, 1997. This action also

proposes to extend the June 13, 1996

deadline for submittal of

implementation plans to December 16,

1996, and to remove the requirement for

approval of implementation plans by

the EPA. Because the revisions

primarily change the date for submittal

of an implementation plan and extend

the compliance date to allow better

coordination with the control

techniques guidelines (CTG) that EPA

plans to publish in the near future, the

EPA does not anticipate receiving

adverse comments. Consequently, the

revisions are also being issued as a

direct final rule in the final rules section

of this Federal Register. If no significant

and timely adverse comments are

received, no further action will be taken

with respect to this proposal and the

direct final rule will become final on the

date provided in that action.

DATES: Comments. Comments must be

received on or before July 18, 1996,

unless a hearing is requested by June 28,

1996. If a hearing is requested, written

comments must be received by August

2, 1996.

Public Hearing. Anyone requesting a

public hearing must contact the EPA no

later than June 28, 1996. If a hearing is

held, it will take place on July 3, 1996,

beginning at 10:00 a.m.

ADDRESSES: Comments. Comments

should be submitted to: Air and

Radiation Docket and Information

Center (6102), Attention Docket Number

A–92–11 (see docket section below),

Room M–1500, U.S. Environmental

Protection Agency, 401 M Street, SW,

Washington, D.C. 20460.

Public Hearing. If a public hearing is

held, it will be held at the EPA’s Office

of Administration Auditorium, Research

Triangle Park, North Carolina. Persons

interested in attending the hearing or

wishing to present oral testimony

should notify Mrs. Janet Eck, U.S.

Environmental Protection Agency,

Research Triangle Park, N.C. 27711,

telephone (919) 541–7946.

Docket. Docket No. A–92–11,

containing the supporting information

for the original NESHAP and this action,

is available for public inspection and

copying between 8:00 a.m. and 5:30

p.m., Monday through Friday, at the

EPA’s Air and Radiation Docket and

Information Center, Waterside Mall,

Room M–1500, first floor, 401 M Street

SW, Washington, DC 20460, or by

calling (202) 260–7548 or 260–7549. A

reasonable fee may be charged for

copying.