64912 Federal Register / Vol. 66, No. 242 / Monday, December 17, 2001 / Rules and Regulations

Explanation of Provisions

Section 301.7701–3(g)(1) describes

how elective changes in the

classification of an entity will be treated

for tax purposes. Section 301.7701–

3(g)(1)(ii) provides that an elective

conversion of an association to a

partnership is deemed to have the

following form: the association

distributes all of its assets and liabilities

to its shareholders in liquidation of the

association, and immediately thereafter,

the shareholders contribute all of the

distributed assets and liabilities to a

newly formed partnership. Section

301.7701–3(g)(1)(iii) provides that an

elective conversion of an association to

an entity that is disregarded as an entity

separate from its owner is deemed to

have the following form: the association

distributes all of its assets and liabilities

to its single owner in liquidation of the

association.

Section 332 may be relevant to the

deemed liquidation of an association if

it has a corporate owner. Under section

332, no gain or loss is recognized on the

receipt by a corporation of property

distributed in complete liquidation of

another corporation if the requirements

of section 332(b) are satisfied. Those

requirements include the adoption of a

plan of liquidation at a time when the

corporation receiving the distribution

owns stock of the liquidating

corporation meeting the requirements of

section 1504(a)(2) (i.e., 80 percent of

vote and value). The elective change

from an association to a partnership or

to a disregarded entity results in a

constructive liquidation of the

association for federal tax purposes.

Formally adopting a plan of liquidation

for the entity, however, is potentially

incompatible with an elective change

under section 301.7701–3, which allows

the local law entity to remain in

existence while liquidating only for

federal tax purposes. Accordingly, to

provide tax treatment of an association’s

deemed liquidation that is compatible

with the requirements of section 332,

the regulations state that, for purposes

of satisfying the requirement of

adoption of a plan of liquidation under

section 332(b), a plan of liquidation is

deemed adopted immediately before the

deemed liquidation incident to an

elective change in entity classification,

unless a formal plan of liquidation that

contemplates the filing of the elective

change in entity classification is

adopted on an earlier date.

Effective Date

These regulations apply to elections

filed on or after December 17, 2001;

however, taxpayers may apply the

amendments retroactively if the

corporate owner claiming treatment

under section 332 and its subsidiary

making the election take consistent

positions with respect to the Federal tax

consequences of the election.

Special Analyses

It has been determined that these

regulations are not a significant

regulatory action as defined in

Executive Order 12866. Therefore, a

regulatory assessment is not required. It

also has been determined that section

533(b) of the Administrative Procedures

Act (5 U.S.C. chapter 5) does not apply

to these regulations, and because these

regulations do not impose a collection

of information on small entities, the

Regulatory Flexibility Act (5 U.S.C.

chapter 6) does not apply. Pursuant to

section 7805(f) of the Internal Revenue

Code, the notice of proposed rulemaking

preceding these regulations was

submitted to the Chief Counsel for

Advocacy of the Small Business

Administration for comment on its

impact on small business.

Drafting Information

The principal authors of these

regulations are Beverly M. Katz of the

Office of Associate Chief Counsel

(Passthroughs & Special Industries) and

David J. Sotos of the Office of Associate

Chief Counsel (International). However,

other personnel from the IRS and the

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.

Adoption of Amendments to the

Regulations

Accordingly, 26 CFR part 301 is

amended as follows:

PART 301—PROCEDURE AND

ADMINISTRATION

Paragraph 1. The authority citation

for part 301 continues to read in part as

follows:

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

Par. 2. Section 301.7701–3 is

amended as follows:

1. Redesignating the text of paragraph

(g)(2) as paragraph (g)(2)(i) and adding

a heading for newly designated

paragraph (g)(2)(i).

2. Adding a new paragraph (g)(2)(ii).

3. Revising the first sentence of

paragraph (g)(4).

The additions and revision read as

follows:

§ 301.7701–3 Classification of certain

business entities.

* * * * *

(g) * * *

(2) Effect of elective changes—(i) In

general. ***

(ii) Adoption of plan of liquidation.

For purposes of satisfying the

requirement of adoption of a plan of

liquidation under section 332, unless a

formal plan of liquidation that

contemplates the election to be

classified as a partnership or to be

disregarded as an entity separate from

its owner is adopted on an earlier date,

the making, by an association, of an

election under paragraph (c)(1)(i) of this

section to be classified as a partnership

or to be disregarded as an entity

separate from its owner is considered to

be the adoption of a plan of liquidation

immediately before the deemed

liquidation described in paragraph

(g)(1)(ii) or (iii) of this section. This

paragraph (g)(2)(ii) applies to elections

filed on or after December 17, 2001.

Taxpayers may apply this paragraph

(g)(2)(ii) retroactively to elections filed

before December 17, 2001, if the

corporate owner claiming treatment

under section 332 and its subsidiary

making the election take consistent

positions with respect to the federal tax

consequences of the election.

* * * * *

(4) Effective date. Except as otherwise

provided in paragraph (g)(2)(ii) of this

section, this paragraph (g) applies to

elections that are filed on or after

November 29, 1999. * * *

* * * * *

Approved: December 10, 2001.

Robert E. Wenzel,

Deputy Commissioner of Internal Revenue

Service.

Mark Weinberger,

Assistant Secretary of the Treasury.

[FR Doc. 01–31006 Filed 12–14–01; 8:45 am]

BILLING CODE 4830–01–P

DEPARTMENT OF TRANSPORTATION

Coast Guard

33 CFR Part 165

[COTP Corpus Christi 01–002]

RIN 2115–AA97

Safety Zone; Gulf Intracoastal

Waterway, Port Isabel, TX

AGENCY: Coast Guard, DOT.

ACTION: Temporary final rule; request for

comments.

SUMMARY: The Coast Guard is

establishing a temporary safety zone to

Federal Register / Vol. 66, No. 242 / Monday, December 17, 2001 / Rules and Regulations 64913

ensure the safety of navigation within a

radius of 1000 feet of Queen Isabella

Bridge construction vessels and

machinery. Vessels transiting the Gulf

Intracoastal Waterway through the

Queen Isabella Bridge may do so during

daylight hours only. The safety zone is

needed to protect personnel, vessels,

and the marine environment from

potential hazards created by

construction in the vicinity of the

Queen Isabella Bridge. Entry of vessels

or persons into this zone is prohibited

unless specifically authorized by the

Captain of the Port Corpus Christi.

DATES: This regulation becomes

effective at 2 p.m. on September 26,

2001 and terminates when the reconstruction of the Queen Isabella

Bridge is completed and certified by the

Texas Department of Transportation to

the satisfaction of the Captain of the

Port or September 26, 2002 which ever

is earlier. A document announcing the

termination date will be published later

in the Federal Register. Comments and

related material must reach the Coast

Guard on or before February 15, 2002.

ADDRESSES: Any 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 COTP Corpus Christi 01–002 and

are available for inspection or copying

at U.S. Coast Guard Marine Safety Office

Corpus Christi, 555 N. Carancahua

Street, Suite 500, Corpus Christi, Texas,

78478 between 9 a.m. and 3 p.m.,

Monday through Friday, except Federal

holidays.

FOR FURTHER INFORMATION CONTACT:

LTJG C. J. Bright, Chief, Waterways

Section, Coast Guard Captain of the Port

Corpus Christi, 555 N. Carancahua St.

Suite 500, Corpus Christi, Texas, 78478,

(361) 888–3162

SUPPLEMENTARY INFORMATION:

Regulatory Information

We did not publish a notice of

proposed rulemaking (NPRM) for this

regulation. Under 5 U.S.C. 553(b)(B), the

Coast Guard finds that good cause exists

for not publishing an NPRM. Publishing

a NPRM and delaying its effective date

would be contrary to public interest

since immediate action is needed to

respond to the potential safety hazards

associated with emergency bridge

repairs.

Under 5.U.S.C 553(d)(3), the Coast

Guard finds that good cause exists for

making this rule effective less than 30

days after publication in the Federal

Register. Publishing a NPRM and

delaying its effective date would be

contrary to public interest since

immediate action is needed to respond

to the potential safety hazards

associated with the bridge construction.

Although the Coast Guard has good

cause in implementing this regulation,

we want to afford the maritime

community the opportunity to

participate in this rulemaking by

submitting comments and related

material regarding the size and

boundaries of the safety zone in order to

minimize unnecessary burdens. If you

do so, please include your name and

address, identify the docket number for

this rulemaking, COTP Corpus Christi

01–002, indicate the specific section of

this document to which each comment

applies, and give the reason for each

comment. Please submit all comments

and related material in an unbound

format, no larger than 81⁄2 by 11 inches,

suitable for copying. If you would like

to know they reached us, please enclose

a stamped self addressed postcard or

envelope. We will consider all

comments and material received during

the comment period. We may change

this temporary final rule in view of

them.

Background and Purpose

At approximately 2:15 a.m., on

September 15, 2001, the Uninspected

Towing Vessel BROWN WATER V

allided with the Queen Isabella Bridge

in position 26°05.1′ N, 097°12.8′ W,

Intracoastal Waterway Mile Marker 665

near Port Isabel, Texas. The resulting

damage caused the Queen Isabella

Bridge to collapse in the Intracoastal

Waterway blocking the channel and

severely impacting the ability to safely

navigate the area encompassed by the

Captain of the Port Corpus Christi Zone.

As a result of the bridge collapse, the

power for the lighting of the bridge and

the bridge fendering system was also

rendered inoperable. The reconstruction of the bridge will take

approximately six months to complete

and will involve various construction

vessels and equipment. The Texas

Department of Transportation has

certified to the satisfaction of the

Captain of the Port that the bridge is safe

for vessels to transit the Intracoastal

Waterway during the re-construction.

Vessels transiting the Intracoastal

Waterway shall do so during daylight

hours only, at a minimum and safe

speed, and maintain a distance of at

least 1,000 feet around construction

vessels and machinery. The daylight

transits restriction may be lifted when

lighting for the bridge and fendering

system is operational to the satisfaction

of the Captain of the Port. This

information will be made available by

Marine Information Broadcast when the

Captain of the Port removes the daylight

transit restriction. A 1000 foot radius

around the construction area is

necessary to ensure the safety of vessels

transiting the area during the reconstruction, prevent any further

damage to the bridge, and allow the reconstruction vessels and machinery to

operate safety. The 1000 foot radius will

remain in effect during all hours and

until the re-construction is completed.

The Coast Guard is establishing a

temporary safety zone in a 1000 foot

radius around the re-construction of the

Queen Isabella Bridge and limiting

vessel transit of the Intracoastal

Waterway (Mile Marker 665) through

the bridge to daylight hours only, until

it can be determined that the waters are

safe for navigation.

Regulatory Evaluation

This rule is not a ‘‘significant

regulatory action’’ under section 3(f) of

Executive Order 12866 and does not

require an assessment of potential costs

and benefits under section 6(a)(3) of that

Order. The Office of Management and

Budget has not reviewed it under that

Order. It is not ‘‘significant’’ under the

regulatory policies and procedures of

the Department of Transportation (DOT)

(44 FR 11040, February 26, 1979).

The Coast Guard expects the

economic impact of this rule to be so

minimal that a full regulatory evaluation

is unnecessary. This regulation will

only be in effect for a short period of

time and notification to the marine

community will be made through

broadcast notice to mariners.

Small Entities

Under the Regulatory Flexibility Act

(5 U.S.C. 601–612), we considered

whether this rule would have a

significant economic impact on a

substantial number of small entities.

The term ‘‘small entities’’ comprises

small businesses, not-for-profit

organizations that are independently

owned and operated and are not

dominant in their fields, and

governmental jurisdictions with

populations of less than 50,000.

The Coast Guard certifies under 5

U.S.C. 605(b) that this rule will not have

a significant economic impact on a

substantial number of small entities.

The impact on small entities is expected

to be minimal due to the short period

of this regulation. This rule will affect

the following entities, some of which

may be small entities: the owners or

operators of vessels intending to transit

the Intracoastal Waterway and the area

surrounding the Queen Isabella Bridge

while the safety zone is established.

This safety zone will not have a

significant economic impact on a

64914 Federal Register / Vol. 66, No. 242 / Monday, December 17, 2001 / Rules and Regulations

substantial number of small entities for

the following reasons. This rule will be

in effect for only the duration of the reconstruction of the Queen Isabella

Bridge as a result of the allision. The

1000-foot safety zone does not prohibit

commercial traffic (tug and barge

combinations) from transiting the

Intracoastal Waterway and provides

smaller vessels (commercial or

recreational) ample room to transit

around the safety zone. When these

operations are completed the

Intracoastal Waterway will be reopened

and the safety zone cancelled. Before

the effective period, we will issue

maritime advisories widely available to

users of the Intracoastal Waterway and

surrounding navigable waters.

Assistance for Small Entities

Under section 213(a) of the Small

Business Regulatory Enforcement

Fairness Act of 1996 (Public Law 104–

121), we offered to assist small entities

in understanding the rule so that they

could better evaluate its effects on them

and participate in the rulemaking

process.

Small businesses may send comments

on the actions of Federal employees

who enforce, or otherwise determine

compliance with, Federal regulations to

the Small Business and Agriculture

Regulatory Enforcement Ombudsman

and the Regional Small Business

Regulatory Fairness Boards. The

Ombudsman evaluates these actions

annually and rates each agency’s

responsiveness to small business. If you

wish to comment on actions by

employees of the Coast Guard, call 1–

888–REG–FAIR (1–888–734–3247).

Collection of Information

This rule calls for no new collection

of information under the Paperwork

Reduction Act of 1995 (44 U.S.C. 3501–

3520).

Federalism

A rule has implications for federalism

under Executive Order 13132,

Federalism, if it has a substantial direct

effect on State or local governments and

would either preempt State law or

impose a substantial direct cost of

compliance on them. We have analyzed

this rule under that Order and have

determined that it does not have

implications for federalism.

Unfunded Mandates Reform Act

The Unfunded Mandates Reform Act

of 1995 (2 U.S.C. 1531–1538) requires

Federal agencies to assess the effects of

their discretionary regulatory actions. In

particular, the Act addresses actions

that may result in the expenditure by a

State, local, or tribal government, in the

aggregate, or by the private sector of

$100,000,000 or more in any one year.

Though this rule will not result in such

an expenditure, we do discuss the

effects of this rule elsewhere in this

preamble.

Taking of Private Property

This rule will not effect a taking of

private property or otherwise have

taking implications under Executive

Order 12630, Governmental Actions and

Interference with Constitutionally

Protected Property Rights.

Civil Justice Reform

This rule meets applicable standards

in sections 3(a) and 3(b)(2) of Executive

Order 12988, Civil Justice Reform, to

minimize litigation, eliminate

ambiguity, and reduce burden.

Protection of Children

We have analyzed this rule under

Executive Order 13045, Protection of

Children from Environmental Health

Risks and Safety Risks. This rule is not

an economically significant rule and

does not concern an environmental risk

to health or risk to safety that may

disproportionately affect children.

Indian Tribal Governments

This rule does not have tribal

implications under Executive Order

13175, Consultation and Coordination

with Indian Tribal Governments,

because it does not have a substantial

direct effect on one or more Indian

tribes, on the relationship between the

Federal Government and Indian tribes,

or on the distribution of power and

responsibilities between the Federal

Government and Indian tribes.

Energy Effect

We have analyzed this rule under

Executive Order 13211, Actions

Concerning Regulations That

Significantly Affect Energy Supply,

Distribution, or Use. We have

determined that it is not a ‘‘significant

energy action’’ under that order because

it is not a ‘‘significant regulatory action’’

under Executive Order 12866 and is not

likely to have a significant adverse effect

on the supply, distribution, or use of

energy. It has not been designated by the

Administrator of the Office of

Information and Regulatory Affairs as a

significant energy action. Therefore, it

does not require a Statement of Energy

Effects under Executive Order 13211.

Environment

We have considered the

environmental impact of this rule and

concluded that under figure 2–1,

paragraph 34(g), of Commandant

Instruction M16475.1D, this rule is

categorically excluded from further

environmental documentation. A

‘‘Categorical Exclusion Determination’’

is available for inspection or copying

where indicated under ADDRESSES.

List of Subjects in 33 CFR Part 165

Harbors, Marine safety, Navigation

(water), Reporting and recordkeeping

requirements, Security measures,

Waterways.

For the reasons discussed in the

preamble, the Coast Guard amends 33

CFR part 165 as follows:

PART 165—REGULATED NAVIGATION

AREAS AND LIMITED ACCESS AREAS

1. The authority citation for part 165

continues to read as follows:

Authority: 33 U.S.C. 1231; 50 U.S.C. 191,

33 CFR 1.05–1(g), 6.04–1, 6.04–6, 160.5; 49

CFR 1.46.

2. A new § 165.T08–080 is added to

read as follows:

§ 165.T08–080 Safety Zone; Queen Isabella

Bridge, Gulf Intracoastal Waterway,

Brownsville, Texas

(a) Location. The following area is a

safety zone: All waters within a 1000-

foot radius of vessels and machinery

involved in the re-construction of the

Queen Isabella Bridge.

(b) Effective dates. This regulation

becomes effective at 2 p.m. on

September 26, 2001 and terminates

when the re-construction of the Queen

Isabella Bridge is completed and

certified by the Texas Department of

Transportation to the satisfaction of the

Captain of the Port or on September 26,

2002 which ever is earlier.

(c) Regulations.

(1) In accordance with the general

regulations in § 165.23 of this part, entry

into this zone is prohibited except as

authorized by the Captain of the Port

Corpus Christi.

(2) The safety zone is in effect during

all hours of the day. Vessels transiting

the Intracoastal Waterway (Mile Marker

665.0) under the bridge shall proceed at

minimum speed to maintain

steerageway and during daylight hours

only.

(3) No vessels may enter this safety

zone unless specifically authorized by

the Captain of the Port Corpus Christi.

The Captain of the Port will notify the

public of changes in the status of this

zone by Marine Radio Safety Broadcast

on VHF Marine Band Radio, Channel 22

(157.1 MHz).

Federal Register / Vol. 66, No. 242 / Monday, December 17, 2001 / Rules and Regulations 64915

Dated: September 26, 2001.

William J. Wagner III,

Captain, U.S. Coast Guard, Captain of the

Port Corpus Christi.

[FR Doc. 01–31012 Filed 12–14–01; 8:45 am]

BILLING CODE 4910–15–U

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric

Administration

50 CFR Part 679

[Docket No. 991207325–0063–02; I.D.

100699A]

Fisheries of the Exclusive Economic

Zone Off Alaska; North Pacific Halibut

and Sablefish IFQ Cost Recovery

Program

AGENCY: National Marine Fisheries

Service (NMFS), National Oceanic and

Atmospheric Administration (NOAA),

Commerce.

ACTION: Announcement of standard

prices and fee percentage for North

Pacific halibut and sablefish Individual

Fishing Quota (IFQ) cost recovery

program.

SUMMARY: The National Marine

Fisheries Service publishes IFQ

standard prices and notification of

adjustment of the IFQ fee percentage for

the IFQ Cost Recovery Program in the

halibut and sablefish fisheries of the

North Pacific. This action is intended to

provide holders of halibut and sablefish

IFQs with information to calculate the

payments required for IFQ cost recovery

fees due by January 31, 2002.

DATES: Effective December 17, 2001.

FOR FURTHER INFORMATION CONTACT:

Kristie Balovich, Fee Coordinator, 907–

586–7344.

SUPPLEMENTARY INFORMATION:

Background

NMFS, Alaska Region, administers

the halibut and sablefish IFQ programs

in the North Pacific. The IFQ Programs

are limited access systems authorized by

section 303(b) of the Magnuson-Stevens

Fishery Conservation and Management

Act (Magnuson-Stevens Act) and the

Northern Pacific Halibut Act of 1982.

Fishing under the IFQ Programs began

in March 1995. Regulations

implementing the IFQ Program are set

forth at 50 CFR part 679.

In 1996, the Magnuson-Stevens Act

was amended (by Pub. L. 104–297) to,

among other things, require the

Secretary of Commerce to ‘‘collect a fee

to recover the actual costs directly

related to the management and

enforcement of any . . . individual

fishing quota program’’ (Section

304(d)(2)(A)). Section 304(d)(2)(B) of the

Magnuson-Stevens Act specifies an

upper limit on these fees, when the fees

must be collected, and where the fees

must be deposited. Section 303(d)(4) of

the Magnuson-Stevens Act allows

NMFS to reserve up to 25 percent of the

fees collected for use in an IFQ loan

program to aid in financing the

purchase of IFQ or quota share (QS) by

entry-level and small-vessel fishermen.

NMFS published, on December 27,

1999 (64 FR 72302), a proposed rule to

implement the IFQ Cost Recovery

Program and published the final rule on

March 20, 2000 (65 FR 14919). The final

regulations implementing the IFQ Cost

Recovery Program are set forth at 50

CFR 679.45.

Under the regulations, an IFQ permit

holder incurs a cost recovery fee

liability for every pound of IFQ halibut

and IFQ sablefish that is landed on his

or her IFQ permit(s). The IFQ permit

holder is responsible for self-collecting

the fee liability for all IFQ halibut and

IFQ sablefish landings on his or her

permit(s). The IFQ permit holder is also

responsible for submitting a fee liability

payment to NMFS on or before the due

date of January 31 following the year in

which the IFQ landings were made. The

dollar amount of the fee due is

determined by multiplying the annual

IFQ fee percentage (3 percent or less) by

the ex-vessel value of each IFQ landing

made on a permit and summing the

totals of each permit (if more than one).

Fee Percentage

Three percent of the ex-vessel value of

IFQ halibut and IFQ sablefish harvested

is the maximum fee amount allowed by

section 304(d)(2)(B) of the MagnusonStevens Act. Regulations at § 679.45(d)

allow the Administrator, Alaska Region,

NMFS (Regional Administrator) to

reduce the fee percentage if actual

management and enforcement costs

could be recovered through a lesser

percentage. In this event the Regional

Administrator will publish a

notification of any adjustment of the

IFQ fee percentage in the Federal

Register pursuant to § 679.45(d)(4).

For 2001, the Regional Administrator

has determined that a fee of 2.0 percent

(0.020) is necessary to recover the actual

management and enforcement costs.

Therefore, the Regional Administrator is

adjusting the cost recovery fee

applicable to year 2001 IFQ landings

from 3 percent (0.03) to 2.0 percent

(0.020).

Standard Prices

The fee liability is based on the sum

of all payments of monetary worth made

to fishermen for the sale of the fish. This

includes any retro-payments (e.g.,

bonuses, delayed partial payments,

post-season payments) made to the IFQ

permit holder for previously landed IFQ

halibut or sablefish.

For purposes of calculating IFQ cost

recovery fees, NMFS distinguishes

between two types of ex-vessel value:

‘‘Actual ex-vessel value’’ and ‘‘standard

ex-vessel value.’’ ‘‘Actual ex-vessel

value’’ is the amount of money an IFQ

permit holder received as payment for

his or her IFQ fish sold. ‘‘Standard exvessel value’’ is the default value on

which to base fee liability calculations.

However, IFQ permit holders have the

option of using ‘‘actual ex-vessel value’’

if they can satisfactorily document those

values.

Regulations at § 679.45(c)(2)(i) require

the Regional Administrator to publish

IFQ standard prices during the last

quarter of each calendar year. These

standard prices are used, along with

estimates of IFQ halibut and sablefish

landings, to calculate standard values.

The standard prices are described in

U.S. dollars per IFQ equivalent pound,

for IFQ halibut and IFQ sablefish

landings made during the year. IFQ

equivalent pound(s) means the weight

amount, recorded in pounds, for an IFQ

landing and calculated as round weight

for sablefish and headed and gutted

(‘‘net’’) weight for halibut. NMFS

calculates the standard prices to reflect,

as closely as possible, by month and

port or port-group, the variations in the

actual ex-vessel values of IFQ halibut

and IFQ sablefish landings. The

standard prices for IFQ halibut and IFQ

sablefish are listed in the following

table. Data from ports are combined as

necessary to protect confidentiality of

data submissions.