Federal Register / Vol. 61, No. 125 / Thursday, June 27, 1996 / Proposed Rules 33407

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 continues to read as follows:

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

Par. 2. Section 1.148–5 is amended by

adding paragraphs (d)(6)(iv) through

(d)(6)(viii) and (e)(2)(iv) to read as

follows:

§ 1.148–5 Yield and valuation of

investments.

* * * * *

(d) * * *

(6) * * *

(iv) Rebuttable presumption for

establishing that a solicitation for a

guaranteed investment contract is bona

fide. For purposes of paragraph

(d)(6)(iii)(A) of this section, a

solicitation for a guaranteed investment

contract is rebuttably presumed to be

bona fide if the other requirements of

paragraph (d)(6)(iii) of this section and

the following requirements are satisfied:

(A) If the issuer uses an agent to

conduct the bidding process, the agent

does not bid to provide the investment;

(B) All bidders have equal

opportunity to bid so that, for example,

no bidder is given the opportunity to

review other bids (a last look) before

bidding; and

(C) All bidders are reasonably

competitive providers of investments of

the type purchased.

(v) Rebuttable presumption for

establishing fair market value for United

States Treasury obligations purchased

other than directly from the United

States Treasury. The purchase price of

United States Treasury obligations that

are purchased other than directly from

the United States Treasury is rebuttably

presumed to be the fair market value on

the purchase date if all of the following

requirements are satisfied:

(A) The issuer conducts in good faith

a solicitation for the purchase of

Treasury obligations that meets the

requirements of paragraphs (d)(6)(iv)(A)

through (C) of this section, and the

issuer receives at least three bona fide

bids from providers that have no

material financial interest in the issue.

For this purpose, underwriters and

financial advisors for an issue are

considered to have a material financial

interest in the issue.

(B) The issuer purchases the highestyielding Treasury obligations for which

a qualifying bid is made.

(C) The yield on the Treasury

obligations purchased is not

significantly less than the yield then

available from the provider on

reasonably comparable Treasury

obligations offered to other persons for

purchase on terms comparable to those

offered to the issuer from a source of

funds other than gross proceeds of taxexempt bonds. If closely comparable

forward prices are not offered to other

persons for purchase from a source

other than gross proceeds of tax-exempt

bonds, a reasonable basis for this

comparison may be by reference to

implied forward prices for Treasury

obligations based on standard financial

formulas. In general, a certificate

provided by an agent conducting the

bidding process detailing this

comparison establishes that this

comparability standard is met.

(D) In no event is the yield on any

Treasury obligation purchased less than

the highest yield then available on a

United States Treasury security—State

and Local Government Series from the

United States Department of the

Treasury, Bureau of Public Debt, with

the same maturity.

(E) The terms of the agreement to

purchase the Treasury obligations are

reasonable.

(F) The issuer retains the items

enumerated in paragraphs (d)(vi) and

(vii) of this section with the bond

documents.

(vi) Copies. The items described in

this paragraph (d)(vi) are a copy of each

of the following—

(A) The purchase agreement or

confirmation and a statement detailing

any oral and other terms of the

agreement;

(B) The receipt or other record of the

amount actually paid by the issuer for

the Treasury obligations, including a

statement setting out the amount of any

brokerage commission, broker fee, or

bidding fee paid to or by the seller of the

Treasury obligations; and

(C) Each bid that is received with

respect to the solicitation of the

Treasury obligations (clearly stamped to

show date and time when the bid was

received) and a description of the

bidding procedure used.

(vii) Statement. The item described in

this paragraph (d)(vii) is a statement

from the issuer, dated as of the issue

date of the bonds, certifying, under

penalties of perjury, that—

(A) If the issuer used an agent to

conduct the bidding process, the agent

did not bid to provide the investment;

(B) All bidders had equal opportunity

to bid so that, for example, no bidder

had an opportunity to review other bids

before bidding;

(C) All bidders are reasonably

competitive sellers of Treasury

obligations; and

(D) The issuer received at least three

bona fide bids from providers that have

no material financial interest in the

issue.

(viii) For purposes of paragraphs

(d)(6) (v) through (vii) of this section,

the term issuer means only the entity

that actually issues the bonds and not a

conduit borrower of the issuer.

(e) * * *

(2) * * *

(iv) Special rule for United States

Treasury obligations purchased other

than directly from the United States

Treasury. For Treasury obligations

purchased other than directly from the

United States Treasury, a fee paid to a

bidding agent is a qualified

administrative cost only if the following

requirements are satisfied:

(A) The fee must be reasonable. In

general, a fee must be separately stated

in order for the issuer to have a basis for

determining that a fee is reasonable. The

fee is presumed to be reasonable if it

does not exceed .02 percent of the

amount invested in Treasury

obligations.

(B) The fee must be comparable to a

fee that would be charged for a

reasonably comparable investment of

Treasury obligations if acquired with a

source of funds other than gross

proceeds of tax-exempt bonds. This

comparability standard must be applied

even if no identical investments are

customarily acquired with a source of

funds other than gross proceeds of taxexempt bonds. In general, reference

must be made to the bidding fees paid

by investors that are not issuers of taxexempt bonds in those transactions that

are most closely comparable to the

purchase of investments by the issuer of

tax-exempt bonds. For example,

reference to the bidding fees generally

paid for the purchase of forward

contracts for Treasury obligations is

ordinarily a reasonable method of

determining whether bidding fees are

reasonable.

* * * * *

Margaret Milner Richardson,

Commissioner of Internal Revenue.

[FR Doc. 96–16378 Filed 6–26–96; 8:45 am]

BILLING CODE 4830–01–U
33408 Federal Register / Vol. 61, No. 125 / Thursday, June 27, 1996 / Proposed Rules

26 CFR Part 301

[IA–29–96]

RIN 1545–AU42

Extensions of Time To Make Elections

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Notice of proposed rulemaking

by cross-reference to temporary

regulations and notice of public hearing.

SUMMARY: In the Rules and Regulations

section of this issue of the Federal

Register, the IRS is issuing temporary

regulations relating to extensions of

time for making certain elections under

the Internal Revenue Code (Code). The

regulations provide the standards that

the Commissioner will use to grant

taxpayers extensions of time for making

these elections. The text of those

temporary regulations also serves as the

text of these proposed regulations. This

document also provides notice of a

public hearing on these proposed

regulations.

DATES: Written comments must be

received by September 25, 1996.

Outlines of oral comments to be

presented at the public hearing

scheduled for Wednesday, October 30,

1996, at 10 a.m. must be received by

October 9, 1996.

ADDRESSES: Send submissions to:

CC:DOM:CORP:R (IA–29–96), room

5226, Internal Revenue Service, POB

7604, Ben Franklin Station, Washington,

DC 20044. In the alternative,

submissions may be delivered between

the hours of 8 a.m. and 5 p.m. to:

CC:DOM:CORP:R (IA–29–96), Courier’s

Desk, Internal Revenue Service, 1111

Constitution Avenue NW, Washington,

DC. The public hearing will be held in

the IRS Classroom (room 2617), Internal

Revenue Building, 1111 Constitution

Avenue NW, Washington, DC.

FOR FURTHER INFORMATION CONTACT:

Concerning the regulations, Robert A.

Testoff of the Office of Assistant Chief

Counsel (Income Tax & Accounting) at

(202) 622–4960; concerning submissions

and the hearing, Christina Vasquez of

the Regulations Unit, (202) 622–7190

(not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The collection of information

contained in this notice of proposed

rulemaking has been submitted to the

Office of Management and Budget

(OMB) for review in accordance with

the Paperwork Reduction Act of 1995

(44 U.S.C. 3507).

Comments on the collection of

information should be sent to the Office

of Management and Budget, Attn: Desk

Officer for the Department of the

Treasury, Office of Information and

Regulatory Affairs, Washington, DC

20503, with copies to the Internal

Revenue Service, Attn: IRS Reports

Clearance Officer, T:FP, Washington, DC

20224. Comments on the collection of

information should be received by

August 26, 1996.

An agency may not conduct or

sponsor, and a person is not required to

respond to, a collection of information

unless the collection of information

displays a valid control number.

The collection of information is in

§§ 301.9100–2T and 301.9100–3T. This

information is required for a taxpayer to

obtain an extension of time to make an

election. This information will be used

by the IRS to determine whether to grant

an extension of time to make an

election. The likely respondents are

businesses or other for-profit

institutions, small businesses or

organizations, nonprofit institutions,

individuals or households, and farms.

Books or records relating to the

collection of information must be

retained as long as their contents may

become material in the administration

of any internal revenue law. Generally,

tax returns and tax return information

are confidential, as required by 26

U.S.C. 6103.

Estimated total annual reporting

burden: 5,000 hours.

Estimated annual burden per

respondent: 10 hours.

Estimated number of respondents:

500.

Estimated annual frequency of

responses: Occasional.

Background

Temporary regulations in the Rules

and Regulations section of this issue of

the Federal Register amend 26 CFR part

301. The temporary regulations contain

rules relating to extensions of time for

making certain elections.

The text of those temporary

regulations also serves as the text of

these proposed regulations. The

preamble to the temporary regulations

explains the temporary regulations.

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 has also

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 businesses.

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

for Wednesday, October 30, 1996, at 10

a.m. in the IRS Classroom (room 2617),

Internal Revenue Building, 1111

Constitution Avenue NW, Washington,

DC. Because of access restrictions,

visitors will not be admitted beyond the

building lobby more than 15 minutes

before the hearing starts.

The rules of § 601.601(a)(3) apply to

the hearing.

Persons that have submitted written

comments by September 25, 1996 and

want to present oral comments at the

hearing must submit, by October 9,

1996, an outline of the topics to be

discussed and the time to be devoted to

each topic (signed original and eight (8)

copies). 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 the temporary

regulations is Robert A. Testoff of the

Office of Assistant Chief Counsel

(Income Tax and Accounting). However,

other personnel from the IRS and

Treasury Department participated in

their development.

List of Subjects in 26 CFR Part 301

Employment taxes, Estate taxes,

Excise taxes, Gift taxes, Income taxes,

Penalties, Reporting and recordkeeping

requirements.

Proposed Amendments to the

Regulations

Accordingly, 26 CFR part 301 is

proposed to be amended as follows:

PART 301—PROCEDURE AND

ADMINISTRATION

Paragraph 1. The authority citation

for part 301 is amended by removing the

entries for §§ 301.9100–1T through
Federal Register / Vol. 61, No. 125 / Thursday, June 27, 1996 / Proposed Rules 33409

301.9100–3T and adding entries in

numerical order to read as follows:

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

Section 301.9100–1 also issued under 26

U.S.C. 6081;

Section 301.9100–2 also issued under 26

U.S.C. 6081;

Section 301.9100–3 also issued under 26

U.S.C. 6081; * * *

Par. 2. Sections 301.9100–1 and

301.9100–1T through 301.9100–3T are

removed.

Par. 3. Sections 301.9100–1 through

301.9100–3 are added to read as follows:

§ 301.9100–1 Extensions of time to make

elections.

§ 301.9100–2 Automatic extensions.

§ 301.9100–3 Other extensions.

[The text of these above proposed

sections are the same as the text of

§§ 301.9100–1T through 301.9100–3T

published elsewhere in this issue of the

Federal Register.]

Margaret Milner Richardson,

Commissioner of Internal Revenue.

[FR Doc. 96–16377 Filed 6–26–96; 8:45 am]

BILLING CODE 4830–01–U

DEPARTMENT OF DEFENSE

Department of the Army

32 CFR Part 619

Program for Qualifying DOD, Motor

Common Carriers of Perishable

Subsistence and Bulk Fuel

AGENCY: Military Traffic Management

Command, DOD.

ACTION: Proposed rule.

SUMMARY: This action revises the

qualifications standards to the basic

agreement between the Military Traffic

Management Command and Motor

Common Carriers for Approval to

Transport General Commodities for and

on behalf of U.S. Department of Defense.

This action also updates the basic

agreement between the Military Traffic

Management Command and Motor

Common Carriers for Governing the

Transportation of Hazardous Material

other than Class A and B Explosives for

and on Behalf of the U.S. Department of

Defense. The proposal to amend those

qualifications, where appropriate, are

submitted to be consistent with the

program qualifications for DOD Motor

Common Carriers of Perishable

Subsistence and Bulk Fuel.

DATES: Comments must be received by

July 29, 1996.

ADDRESSES: Headquarters, Military

Traffic Management Command, ATTN:

MTOP–Q, 5611 Columbia Pike, Falls

Church, Virginia 22041–5050.

FOR FURTHER INFORMATION CONTACT:

Mr. Rick Wirtz at (703) 681–6393;

Headquarters, Military Traffic

Management Command, ATTN: MTOP–

QQ, 5611 Columbia Pike, Falls Church,

Virginia 22041–5050.

SUPPLEMENTARY INFORMATION: Basic

information on the Carrier Qualification

Program was previously published in

the Federal Register, 53 FR 17970, 54

FR 17070, 54 FR 27667, 55 FR 7361, 55

FR 52976, 56 FR 45895, and 57 FR

11376.

Executive Order 12219

This proposed rule was reviewed

under Executive Order 12219 and the

Secretary of the Army has classified this

action as non major. The effect of the

rule on the economy will be less than

$100 million.

Regulatory Flexibility Act

This rule has been reviewed with

regard to the requirements of the

Regulatory Flexibility Act of 1980 and

the Secretary of the Army has certified

that this action does not have a

significant impact on a substantial

number of small entities. The objective

of the program is to ensure that DOD

obtains safe, dependable and reliable

transportation services. The

requirements are not designed to

preclude participation by small

business. Rather, they are part of a

mechanism designed to ensure that the

traffic offered to small businesses does

not exceed their capabilities. The

program’s reporting and record keeping

requirements are essentially

administrative in nature and do not

demand significant expenditures of

resources such as personnel, computer

equipment, or software. No professional

or technical training is necessary to

comply with these requirements.

Alternatives to facilitate entry of small

businesses have been identified and

implemented.

Paperwork Reduction Act

This rule has been approved by the

Office of Management and Budget as

required under the requirements of the

Paperwork Reduction Act of 1980 (44

U.S.C. 3507).

List of Subjects in 32 CFR Part 619

Common carriers, Freight, Motor

vehicle, Safety, Shipping, and Trucks.

Accordingly, Title 32, Part 619, of the

Code of Federal Regulations is amended

by the following changes:

PART 619 [AMENDED]

1. The authority citation for part 619

continues to read as follows:

Authority: 49 U.S.C. 1801–1813, 2503,

2505, and 2509.

2. In § 619.4, the Insurance—Public

liability and cargo text is amended by

revising paragraphs (b), introductory

text, (b) (3) and (4) as follows:

§ 619.4 Insurance—public liability and

cargo.

* * * * *

(b) Cargo. Motor common carriers,

surface freight forwarders, shipper

agents and air freight forwarders must

have their insurance company provide a

certificate of insurance form. The

deductible portion will be shown on the

certificate. The insurance underwriter

must have a policyholder’s rating in the

Best’s Insurance Guide, listed in the

Fiscal Service Treasury Department

Circular 570, Listing of Surety

Companies or specifically approved by

HQMTMC. DOD’s minimum cargo

insurance requirements are listed below.

* * * * *

(3) Perishables carriers—$10,000 per

shipment.

(4) Bulk Fuel carriers—$10,000 per

shipment.

* * * * *

3. Appendix A to Part 619 is revised

to read as follows:

Appendix A to Part 619—Basic

Agreement Between the Military Traffic

Management Command and Motor

Common Carriers for Approval To

Transport General Commodities for

and on Behalf of U.S. Department of

Defense.

1. The undersigned, who is duly

authorized and empowered to act on behalf

of llllll (Name of Company, Typed or

Legibly Printed), hereinafter called the

carrier, as a prerequisite for approval to

transport general commodities for the

account of the Department of Defense (DOD)

and the Military Traffic Management

Command (MTMC), hereinafter called the

Government, agree to comply with all

additional requirements, terms and

conditions as set forth in this Agreement.

This Agreement governs the transportation of

all DOD general commodity freight

administered by the Carrier Qualification

Division, MTMC (except used household

goods). Noncompliance by the carrier with

any provision of this Agreement may result

in MTMC taking action against the carrier

under the Carrier Performance Program,

governed by MTMC Regulation 15–1, and

revoking approval to participate in this

traffic. If the carrier’s approval is revoked, the

carrier may be disqualified from further

participation in any DOD Freight Traffic.

2. Approval and Revocation. a. Carrier

understands that its initial approval and