Federal Register / Vol. 61, No. 123 / Tuesday, June 25, 1996 / Rules and Regulations 32651

11. Section 436.19 is amended by

revising paragraph (d) to read as

follows:

§ 436.19 Life cycle costs.

* * * * *

(d) Energy and/or water costs.

12. Section 436.21 is revised to read

as follows:

§ 436.21 Savings-to-investment ratio.

The savings-to-investment ratio is the

ratio of the present value savings to the

present value costs of an energy or water

conservation measure. The numerator of

the ratio is the present value of net

savings in energy or water and non-fuel

or non-water operation and

maintenance costs attributable to the

proposed energy or water conservation

measure. The denominator of the ratio

is the present value of the net increase

in investment and replacement costs

less salvage value attributable to the

proposed energy or water conservation

measure.

13. Section 436.22 is revised to read

as follows:

§ 436.22 Adjusted internal rate of return.

The adjusted internal rate of return is

the overall rate of return on an energy

or water conservation measure. It is

calculated by subtracting 1 from the nth

root of the ratio of the terminal value of

savings to the present value of costs,

where n is the number of years in the

study period. The numerator of the ratio

is calculated by using the discount rate

to compound forward to the end of the

study period the yearly net savings in

energy or water and non-fuel or nonwater operation and maintenance costs

attributable to the proposed energy or

water conservation measure. The

denominator of the ratio is the present

value of the net increase in investment

and replacement costs less salvage value

attributable to the proposed energy or

water conservation measure.

14. Section 436.23 is revised to read

as follows:

§ 436.23 Estimated simple payback time.

The estimated simple payback time is

the number of years required for the

cumulative value of energy or water cost

savings less future non-fuel or nonwater costs to equal the investment

costs of the building energy or water

system, without consideration of

discount rates.

15. Section 436.24 is amended by

revising the last sentence in the section

as follows:

§ 436.24 Uncertainty analyses.

* * * If additional analysis casts

substantial doubt on the life cycle cost

analysis results, a Federal agency

should consider obtaining more reliable

data or eliminating the building energy

or water system alternative.

[FR Doc. 96–16120 Filed 6–24–96;8:45am]

BILLING CODE 6450–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Airspace Docket No. 95–AGL–20]

Establishment of Class E Airspace;

Bigfork, MN; Correction

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Final rule; correction.

SUMMARY: This action corrects an error

in the airspace description of the

Bigfork, MN, Class E airspace published

in a final rule on May 2, 1996 (61 FR

19541), Airspace Docket Number 95–

AGL–20.

EFFECTIVE DATE: 0901 UTC, August 15,

1996.

FOR FURTHER INFORMATION CONTACT:

John A. Clayborn, Air Traffic Division,

Operations Branch, AGL–530, Federal

Aviation Administration, 2300 East

Devon Avenue, Des Plaines, Illinois

60018, telephone (847) 294–7568.

SUPPLEMENTARY INFORMATION:

History

Federal Register Document 96–10972,

Airspace Docket 95–AGL–20, published

on May 2, 1996 (61 FR 19541),

established the Class E airspace at

Bigfork, MN. Errors were discovered in

the legal description. This action

corrects the spelling of Bigfork and adds

the airport name, city and state in the

title of the legal description.

Correction to Final Rule

Accordingly, pursuant to the

authority delegated to me, the airspace

legal description, as published in the

Federal Register on May 2, 1996 (61 FR

19541), (Federal Register Document 96–

10972; page 19542, column 1), is

corrected in the legal description to the

incorporation by reference in 14 CFR

71.1 as follows:

§ 71.1 [Corrected]

* * * * *

AGL MN E5 Bigfork, MN [Corrected]

Bigfork Municipal Airport, MN

(Lat. 47°46′45′′N, long, 93°39′01′′W)

That airspace extending upward from 700

feet above the surface within a 7-mile radius

of the Bigfork Municipal Airport.

* * * * *

Issued in Des Plaines, Illinois on June 3,

1996.

Maureen Woods,

Manager, Air Traffic Division.

[FR Doc. 96–16111 Filed 6–24–96; 8:45 am]

BILLING CODE 4910–13–M

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Food and Drug Administration

21 CFR Part 558

New Animal Drugs for Use in Animal

Feeds; Ivermectin and Lincomycin

AGENCY: Food and Drug Administration,

HHS.

ACTION: Final rule.

SUMMARY: The Food and Drug

Administration (FDA) is amending the

animal drug regulations to reflect

approval of a new animal drug

application (NADA) filed by Merck

Research Laboratories, Division of

Merck & Co., Inc. The NADA provides

for use of single ingredient ivermectin

and lincomycin Type A medicated

articles to make combination drug Type

B and C medicated swine feeds used for

treatment and control of certain

helminth, lice, and mite infections,

increased rate of weight gain, treatment

and control of swine dysentery, and

reduction of severity of swine

mycoplasma pneumonia in growingfinishing swine.

EFFECTIVE DATE: June 25, 1996.

FOR FURTHER INFORMATION CONTACT:

Melanie R. Berson, Center for Veterinary

Medicine (HFV–135), Food and Drug

Administration, 7500 Standish Pl.,

Rockville, MD 20855, 301–594–1643.

SUPPLEMENTARY INFORMATION: Merck

Research Laboratories, Division of

Merck & Co., Inc., P.O. Box 2000,

Rahway, NJ 07065, is sponsor of NADA

141–054, which provides for the use of

Ivomec (ivermectin 0.6 percent) Type

A medicated article and Lincomix

(lincomycin 20 and 50 grams (g)/pound)

Type A medicated articles to make

ivermectin/ lincomycin Type B and C

medicated swine feeds. The Type C

medicated swine feeds containing 1.8 g

ivermectin/ton with 20, 40, 100, or 200

g lincomycin/ton are fed to growingfinishing swine for treatment and

control of gastrointestinal roundworms,

kidney worms, lungworms, lice, mites,

swine dysentery; reduction of severity

of mycoplasmal pneumonia; and to

increase rate of weight gain. The NADA

is approved as of June 25, 1996, and the

regulations are amended in 21 CFR

558.300 and 558.325 to reflect the
32652 Federal Register / Vol. 61, No. 123 / Tuesday, June 25, 1996 / Rules and Regulations

approval. The basis of approval is

discussed in the freedom of information

summary.

NADA 141–054 provides for use of

ivermectin and lincomycin Type A

medicated articles to make combination

drug Type B and C medicated swine

feeds. Ivermectin is a Category II drug

which, as provided in 21 CFR 558.4(b),

requires an approved Form FDA 1900

for making Type C medicated feeds.

Therefore, use of ivermectin and

lincomycin Type A medicated articles

in making combination drug Type B and

C medicated feeds, as in this NADA,

requires an approved Form FDA 1900.

In accordance with the freedom of

information provisions of part 20 (21

CFR part 20) and § 514.11(e)(2)(ii) (21

CFR 514.11(e)(2)(ii)), a summary of

safety and effectiveness data and

information submitted to support

approval of this application may be seen

in the Dockets Management Branch

(HFA–305), Food and Drug

Administration, 12420 Parklawn Dr.,

rm. 1–23, Rockville, MD 20857, between

9 a.m. and 4 p.m., Monday through

Friday.

Under section 512(c)(2)(F)(ii) of the

Federal Food, Drug, and Cosmetic Act

(21 U.S.C. 360b(c)(2)(F)(ii)), this

approval qualifies for a 3-year marketing

exclusivity beginning June 25, 1996,

because the application contains reports

of new clinical or field investigations

(other than bioequivalence or residue

studies) essential to the approval and

conducted or sponsored by the

applicant.

The agency has determined under 21

CFR 25.24(d)(1)(ii) that this action is of

a type that does not individually or

cumulatively have a significant effect on

the human environment. Therefore,

neither an environmental assessment

nor an environmental impact statement

is required.

List of Subjects in 21 CFR Part 558

Animal drugs, Animal feeds.

Therefore, under the Federal Food,

Drug, and Cosmetic Act and under

authority delegated to the Commissioner

of Food and Drugs and redelegated to

the Center for Veterinary Medicine, 21

CFR part 558 is amended as follows:

PART 558—NEW ANIMAL DRUGS FOR

USE IN ANIMAL FEEDS

1. The authority citation for 21 CFR

part 558 continues to read as follows:

Authority: Secs. 512, 701 of the Federal

Food, Drug, and Cosmetic Act (21 U.S.C.

360b, 371).

2. Section 558.300 is amended by

revising paragraph (a) and by adding

new paragraphs (c)(2) through (c)(5) to

read as follows:

§ 558.300 Ivermectin.

(a) Approvals. (1) Type A medicated

articles: 0.6 percent (2.72 grams per

pound; 6 grams per kilogram) to 000006

in § 510.600(c) of this chapter, and

(2) Type B medicated feeds for

ivermectin alone or with lincomycin.

See § 558.4 of this chapter for maximum

drug levels to 000006 in § 510.600(c) of

this chapter.

* * * * *

(c) * * *

(2) Amount per ton. 1.8 grams of

ivermectin (to provide 0.1 milligram per

kilogram of body weight per day) with

20 grams of lincomycin.

(i) Indications for use. For treatment

and control of gastrointestinal

roundworms (Ascaris suum, adults and

fourth-stage larvae; Ascarops

strongylina, adults; Hyostrongylus

rubidus, adults and fourth-stage larvae;

Oesophagostomum spp., adults and

fourth-stage larvae), kidneyworms

(Stephanurus dentatus, adults and

fourth-stage larvae), lungworms

(Metastrongylus spp., adults), lice

(Haematopinus suis), and mange mites

(Sarcoptes scabiei var. suis). For

increased rate of weight gain.

(ii) Limitations. For weaned, growingfinishing swine. Feed as sole ration for

7 consecutive days. Withdraw 5 days

before slaughter. A separate feed

containing 20 grams per ton lincomycin

may be continued. Not to be fed to

swine that weigh more than 250

pounds. Do not allow rabbits, hamsters,

guinea pigs, horses, or ruminants access

to feeds containing lincomycin.

Ingestion by these species may result in

severe gastrointestinal effects. Consult

your veterinarian for assistance in the

diagnosis, treatment, and control of

parasitism.

(3) Amount per ton. 1.8 grams of

ivermectin (to provide 0.1 milligram per

kilogram of body weight per day) with

40 grams of lincomycin.

(i) Indications for use. For treatment

and control of gastrointestinal

roundworms (Ascaris suum, adults and

fourth-stage larvae; Ascarops

strongylina, adults; Hyostrongylus

rubidus, adults and fourth-stage larvae;

Oesophagostomum spp., adults and

fourth-stage larvae), kidneyworms

(Stephanurus dentatus, adults and

fourth-stage larvae), lungworms

(Metastrongylus spp., adults), lice

(Haematopinus suis), and mange mites

(Sarcoptes scabiei var. suis). For control

of swine dysentery. For use in swine on

premises with a history of swine

dysentery, but where symptoms have

not yet occurred.

(ii) Limitations. For weaned, growingfinishing swine. Feed as sole ration for

7 consecutive days. Withdraw 5 days

before slaughter. A separate feed

containing 40 grams per ton lincomycin

may be continued. Not to be fed to

swine that weigh more than 250

pounds. Do not allow rabbits, hamsters,

guinea pigs, horses, or ruminants access

to feeds containing lincomycin.

Ingestion by these species may result in

severe gastrointestinal effects. Consult

your veterinarian for assistance in the

diagnosis, treatment and control of

parasitism.

(4) Amount per ton. 1.8 grams of

ivermectin (to provide 0.1 milligram per

kilogram of body weight per day) with

100 grams of lincomycin.

(i) Indications for use. For treatment

and control of gastrointestinal

roundworms (Ascaris suum, adults and

fourth-stage larvae; Ascarops

strongylina, adults; Hyostrongylus

rubidus, adults and fourth-stage larvae;

Oesophagostomum spp., adults and

fourth-stage larvae), kidneyworms

(Stephanurus dentatus, adults and

fourth-stage larvae), lungworms

(Metastrongylus spp., adults), lice

(Haematopinus suis), and mange mites

(Sarcoptes scabiei var. suis). Treatment

of swine dysentery.

(ii) Limitations. For weaned, growingfinishing swine. Feed as sole ration for

7 consecutive days followed by a

separate feed containing 100 grams per

ton lincomycin for an additional 14

days to complete the lincomycin

treatment. Withdraw 6 days before

slaughter. Not to be fed to swine that

weigh more than 250 pounds. Do not

allow rabbits, hamsters, guinea pigs,

horses, or ruminants access to feeds

containing lincomycin. Ingestion by

these species may result in severe

gastrointestinal effects. Consult your

veterinarian for assistance in the

diagnosis, treatment, and control of

parasitism.

(5) Amount per ton. 1.8 grams of

ivermectin (to provide 0.1 milligram per

kilogram of body weight per day) with

200 grams of lincomycin.

(i) Indications for use. For treatment

and control of gastrointestinal

roundworms (Ascaris suum, adults and

fourth-stage larvae; Ascarops

strongylina, adults; Hyostrongylus

rubidus, adults and fourth-stage larvae;

Oesophagostomum spp., adults and

fourth-stage larvae), kidneyworms

(Stephanurus dentatus, adults and

fourth-stage larvae), lungworms

(Metastrongylus spp., adults), lice

(Haematopinus suis), and mange mites

(Sarcoptes scabiei var. suis). For

reduction in severity of swine
Federal Register / Vol. 61, No. 123 / Tuesday, June 25, 1996 / Rules and Regulations 32653

mycoplasmal pneumonia caused by

Mycoplasma hyopneumoniae.

(ii) Limitations. For weaned, growingfinishing swine. Feed as sole ration for

7 consecutive days followed by a

separate feed containing 200 grams per

ton lincomycin for an additional 14

days to complete the lincomycin

treatment. Withdraw 6 days before

slaughter. Not to be fed to swine that

weigh more than 250 pounds. Do not

allow rabbits, hamsters, guinea pigs,

horses, or ruminants access to feeds

containing lincomycin. Ingestion by

these species may result in severe

gastrointestinal effects. Consult your

veterinarian for assistance in the

diagnosis, treatment, and control of

parasitism.

3. Section 558.325 is amended by

adding new paragraph (c)(4)(iii) to read

as follows:

§ 558.325 Lincomycin.

* * * * *

(c) * * *

(4) * * *

(iii) Ivermectin as in § 558.300.

Dated: June 14,1996.

Stephen F. Sundlof,

Director, Center for Veterinary Medicine.

[FR Doc. 96–16103 Filed 6–24–96; 8:45 am]

BILLING CODE 4160–01–F

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 8676]

RIN 1545–AT14

Modifications of Bad Debts and Dealer

Assignments of Notional Principal

Contracts

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Temporary regulations.

SUMMARY: This document contains

temporary regulations relating to the

allowance of a deduction for a partially

worthless debt when the terms of a debt

instrument have been modified. The

temporary regulations provide guidance

to certain taxpayers that modify the

terms of a debt instrument after

deducting an amount for partial

worthlessness. This document also

contains temporary regulations relating

to certain assignments of notional

principal contracts by dealers in those

contracts. The temporary regulations

provide guidance to taxpayers relating

to consequences of these assignments.

The text of these temporary regulations

also serves as the text of the proposed

regulations set forth in the notice of

proposed rulemaking on this subject in

the Proposed Rules section of this issue

of the Federal Register.

DATES: These regulations are effective

September 23, 1996.

FOR FURTHER INFORMATION CONTACT:

Concerning the modifications of bad

debts, Craig R. Wojay, Office of

Assistant Chief Counsel (Financial

Institutions and Products), (202) 622–

3920 (not a toll-free number), and

concerning dealer assignments of

notional principal contracts, Thomas J.

Kelly, Office of the Assistant Chief

Counsel (Financial Institutions and

Products), (202) 622– 3940 (not a tollfree number).

SUPPLEMENTARY INFORMATION:

Background

On December 2, 1992, the IRS

published in the Federal Register (57

FR 57034) a notice of proposed

rulemaking that set forth proposed

income tax regulations (26 CFR part 1)

under section 1001 of the Internal

Revenue Code (Code). Under § 1.1001–

3(a) of the proposed regulations, a

significant modification of a debt

instrument is deemed to result in an

exchange of the original debt instrument

for a modified instrument that differs

materially either in kind or in extent.

This rule is retained in the final

regulations under § 1.1001–3, published

in the Rules and Regulations section of

this issue of the Federal Register. Thus,

when a debt is significantly modified, a

taxpayer (holder) is required to

recognize gain or loss based on the

difference between the issue price of the

significantly modified debt and the

taxpayer’s adjusted issue price in the

original instrument.

Prior to finalizing the § 1.1001–3

regulations, the IRS and Treasury

received comments that gain recognized

as the result of a significant

modification of a debt instrument often

is attributable to the fact that the

taxpayer previously claimed a

deduction for partial worthlessness with

respect to the debt. According to the

commentators, the modification does

not alter the fact that a portion of the

debt remains uncollectible. Thus, the

commentators suggested that, in this

situation, a taxpayer should be

permitted to offset the gain with a

corresponding bad debt deduction.

The IRS and Treasury also received

comments that the assignment by a

dealer in notional principal contracts of

its position in a contract to another

dealer should not result in a deemed

exchange under section 1001. Although

the dealer will recognize gain or loss on

the disposition of its position, treating

the transaction as a deemed exchange

would force the counterparty to realize

the gain or loss on the contract even

though the counterparty is maintaining

its position. The commentators argued

that dealer-to-dealer assignments are a

common business practice and that

these assignments have relatively little

significance to the dealers’

counterparties.

Explanation of Provisions

Section 166(a)(2) and § 1.166–3(a)

provide that a deduction for a partially

worthless debt is allowed only to the

extent the debt is charged off in the

taxable year. The charge-off requirement

is also contained in § 1.166–2(d) (1) and

(3), which provides for a conclusive

presumption of worthlessness under

certain circumstances.

In general, the amount of a deduction

on account of partial worthlessness is

the amount by which the adjusted basis

of a debt (as determined under section

1011) exceeds the amount recoverable

on the debt. The amount of the

deduction, however, may not exceed the

amount charged off during the taxable

year. The charge-off requirement is

satisfied for a debt when a portion of the

debt is removed from a taxpayer’s books

and records. This generally is

accomplished by reducing the debt’s

book basis. Thus, when an amount has

been deducted for partial worthlessness,

there is generally a reduction of both the

book basis and tax basis of a debt.

When a taxpayer is required to

recognize gain under section 1001

because of a modification of a debt

instrument, the taxpayer’s tax basis in

the debt is increased by the amount of

gain recognized. Commentators on the

proposed § 1.1001–3 regulations have

indicated, however, that regulatory and

general accounting principles generally

would not permit a corresponding

increase in the book basis of the debt.

Because the prior charge-off is not

restored (that is, the book basis of the

debt is not increased), there is no

opportunity for the taxpayer to take a

new charge-off for pre-existing

worthlessness. Thus, the charge-off

requirement of section 166(a)(2) can

never be satisfied with respect to the

amount by which the debt’s tax basis

exceeds its book basis as a result of the

modification, and the excess would not

be allowed as a deduction until the debt

becomes totally worthless.

The temporary regulations contained

in this document set forth limited

circumstances under which a taxpayer

will be permitted to deduct an amount

on account of a partially worthless debt