66314 Federal Register / Vol. 66, No. 247 / Wednesday, December 26, 2001 / Rules and Regulations

qualified equity investment to make a

qualified low-income community investment

in Y, and X uses the proceeds of B’s qualified

equity investment to make a qualified lowincome community investment in Z. Y and

Z are not CDEs. X controls both Y and Z

within the meaning of paragraph (d)(6)(ii)(B)

of this section. In 2003, Y and Z are qualified

active low-income community businesses. In

2007, Y, but not Z, is a qualified active lowincome community business and X does not

satisfy the substantially-all requirement using

the safe harbor calculation under paragraph

(c)(5)(iii) of this section. A’s equity

investment satisfies the substantially-all

requirement of paragraph (c)(1)(ii) of this

section using the direct-tracing calculation of

paragraph (c)(5)(ii) of this section because A’s

equity investment is traceable to Y. However,

B’s equity investment fails the substantiallyall requirement using the direct-tracing

calculation because B’s equity investment is

traceable to Z. Therefore, under paragraph

(e)(2)(ii) of this section, there is a recapture

event for B’s equity investment (but not A’s

equity investment).

(f) Basis reduction—(1) In general. A

taxpayer’s basis in a qualified equity

investment is reduced by the amount of

any new markets tax credit determined

under paragraph (b)(1) of this section

with respect to the investment. A basis

reduction occurs on each credit

allowance date under paragraph (b)(2) of

this section. This paragraph (f) does not

apply for purposes of sections 1202,

1400B, and 1400F.

(2) Adjustment in basis of interest in

partnership or S corporation. The

adjusted basis of either a partner’s

interest in a partnership, or stock in an

S corporation, must be appropriately

adjusted to take into account

adjustments made under paragraph

(f)(1) of this section in the basis of a

qualified equity investment held by the

partnership or S corporation (as the case

may be).

(g) Other rules—(1) Anti-abuse. If a

principal purpose of a transaction or a

series of transactions is to achieve a

result that is inconsistent with the

purposes of section 45D and this

section, the Commissioner may treat the

transaction or series of transactions as

causing a recapture event under

paragraph (e)(2) of this section.

(2) Reporting requirements—(i)

Notification by CDE to taxpayer—(A)

Allowance of new markets tax credit. A

CDE must provide notice to any

taxpayer who acquires a qualified equity

investment in the CDE at its original

issue that the equity investment is a

qualified equity investment entitling the

taxpayer to claim the new markets tax

credit. The notice must be provided by

the CDE to the taxpayer no later than 60

days after the date the taxpayer makes

the investment in the CDE. The notice

must contain the amount paid to the

CDE for the qualified equity investment

at its original issue and the taxpayer

identification number of the CDE.

(B) Recapture event. If, at any time

during the 7-year period beginning on

the date of the original issue of a

qualified equity investment in a CDE,

there is a recapture event under

paragraph (e)(2) of this section with

respect to such investment, the CDE

must provide notice to each holder,

including all prior holders, of the

investment that a recapture event has

occurred. The notice must be provided

by the CDE no later than 60 days after

the date the CDE becomes aware of the

recapture event.

(ii) CDE reporting requirements to

Secretary. Each CDE must comply with

such reporting requirements to the

Secretary as the Secretary may

prescribe.

(iii) Manner of claiming new markets

tax credit. A taxpayer may claim the

new markets tax credit for each

applicable taxable year by completing

Form 8874, ‘‘New Markets Credit,’’ and

by filing Form 8874 with the taxpayer’s

Federal income tax return.

(iv) Reporting recapture tax. If there is

a recapture event with respect to a

taxpayer’s equity investment in a CDE,

the taxpayer must include the credit

recapture amount under section

45D(g)(2) on the line for recapture taxes

on the taxpayer’s Federal income tax

return for the taxable year in which the

recapture event under paragraph (e)(2)

of this section occurs (or on the line for

total tax, if there is no such line for

recapture taxes) and write NMCR (new

markets credit recapture) next to the

entry space.

(h) Effective date. This section applies

on or after December 26, 2001.

PART 602—OMB CONTROL NUMBERS

UNDER THE PAPERWORK

REDUCTION ACT

Par. 3. The authority citation for part

602 continues to read as follows:

Authority: 26 U.S.C. 7805.

Par. 4. In § 602.101, paragraph (b) is

amended by adding an entry to the table

in numerical order to read as follows:

§ 602.101 OMB Control numbers.

* * * * *

(b) * * *

CFR part or section where

identified and described

Current

OMB control

No.

*****

1.45D–1T .................................. 1545–1765

CFR part or section where

identified and described

Current

OMB control

No.

*****

Approved: December 17, 2001.

Robert E. Wenzel,

Deputy Commissioner of Internal Revenue.

Mark Weinberger,

Assistant Secretary of the Treasury.

[FR Doc. 01–31528 Filed 12–21–01; 8:45 am]

BILLING CODE 4830–01–P

DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation

and Enforcement

30 CFR Part 917

[KY–221–FOR]

Kentucky Regulatory Program

AGENCY: Office of Surface Mining

Reclamation and Enforcement (OSM),

Interior.

ACTION: Final rule.

SUMMARY: OSM is approving an

amendment to the Kentucky regulatory

program (Kentucky program) under the

Surface Mining Control and

Reclamation Act of 1977 (SMCRA).

Kentucky is proposing revisions to the

Kentucky Administrative Regulations

(KAR) pertaining to the general

requirements for performance bonds

and liability insurance. Kentucky

intends to revise its program to be

consistent with the corresponding

Federal regulations.

EFFECTIVE DATE: December 26, 2001.

FOR FURTHER INFORMATION CONTACT:

William J. Kovacic, Field Office

Director, Lexington Field Office, 2675

Regency Road, Lexington, Kentucky

40503. Telephone: (859) 260–8400.

Internet address: bkovacic@osmre.gov.

SUPPLEMENTARY INFORMATION:

I. Background on the Kentucky Program

II. Submission of the Amendment

III. Director’s Findings

IV. Summary and Disposition of Comments

V. Director’s Decision

VI. Procedural Determinations

I. Background on the Kentucky

Program

Section 503(a) of SMCRA permits a

State to assume primacy for the

regulation of surface coal mining and

reclamation operations on non-Federal

and non-Indian lands within its borders

by demonstrating that its State program

includes, among other things, ‘‘a State

law which provides for the regulation of

Federal Register / Vol. 66, No. 247 / Wednesday, December 26, 2001 / Rules and Regulations 66315

surface coal mining and reclamation

operations in accordance with the

requirements of the SMCRA * * *’’ and

‘‘rules and regulations consistent with

regulations issued by the Secretary’’

pursuant to the SMCRA. See 30 U.S.C.

1253(a)(1) and (7). On the basis of these

criteria, the Secretary of the Interior

conditionally approved the Kentucky

program on May 18, 1982. You can find

background information on the

Kentucky program, including the

Secretary’s findings, the disposition of

comments, and the conditions of

approval in the May 18, 1982, Federal

Register (47 FR 21404). Subsequent

actions concerning the Kentucky

program and previous amendments are

codified at 30 CFR 917.11, 917.13,

917.15, 917.16, and 917.17.

II. Submission of the Proposed

Amendment

By letter dated May 4, 1999

(Administrative Record No. KY–1459),

Kentucky submitted a proposed

amendment to its program at 405 KAR

10:010 under SMCRA (30 U.S.C. 1201 et

seq.). By letter dated August 20, 1999

(Administrative Record No. KY–1465),

Kentucky advised us it revised section

2(2) of 405 KAR 10:010 by inserting

references to sections 5(1)(a) and 5(1)(g)

where the new bond forms are

incorporated by reference. The final

regulation and bond forms were

otherwise unchanged. OSM did not reopen the public comment period

because the revision did not constitute

a substantive change to the original

submission.

We announced receipt of the

proposed amendment in the June 1,

1999, Federal Register (64 FR 29247),

invited public comment, and provided

an opportunity for a public hearing on

the adequacy of the proposed

amendment. The public comment

period closed on July 1, 1999. We did

not receive any comments and we did

not hold a public hearing because no

one requested one.

III. Director’s Findings

Following are the findings we made

concerning the amendment under

SMCRA and the Federal regulations at

30 CFR 732.15 and 732.17. We are

approving the amendment. Any

revisions that we do not specifically

discuss below concern nonsubstantive

wording changes.

At section 2(2), Kentucky adds

language which clarifies that for surface

coal mining operations on non-Federal

lands the applicant shall file the bond

form designated at section 5(1)(a) and

for coal mining operations on Federal

lands the applicant shall file the bond

form designated at section 5(1)(g). This

amendment does not change the

substantive meaning of the rule; rather

it further clarifies the intent of the rule

by defining which bond form is used for

what type of land (non-Federal vs.

Federal lands). We therefore find that

with this change the State provision is

consistent with the Federal provisions

at 30 CFR 800.11(a) which requires a

permit applicant to file a bond on a form

prescribed and furnished by the

regulatory authority. The change is

therefore approved.

At section 5(1), Kentucky revises the

following titles to the documents it

incorporates by reference: Irrevocable

Standby Letter of Credit—Form SME–72

(July 1994); Certificate of Liability

Insurance—Form SME–29; Notice of

Cancellation, Non-Renewal or Change of

Liability Insurance—Form SME–30; and

Escrow Agreement—Form SME–64,

(May 1991). The incorporation by

reference of these documents was

previously approved by OSM on

December 17, 1996, at 61 FR 66220–

66225. The revisions do not alter the

requirements of the previously

approved provisions in the Kentucky

regulations. Since these revisions are

nonsubstantive, we find that they will

not make the Kentucky regulations

inconsistent with the Federal

regulations.

Kentucky also revises the edition date

to the Confirmation of Irrevocable

Standby Letter of Credit—Form SME–

72–A, from April 1991 to July 1994,

which is incorporated by reference at

section 5(1). Nothing else on the form

was changed. The incorporation by

reference of this form was also approved

by OSM on December 17, 1996. The

revision does not alter the requirements

of the previously approved provision in

the Kentucky regulations. Since this is

a nonsubstantive change, we find that it

will not make the Kentucky regulation

inconsistent with the Federal

regulations.

Kentucky is also incorporating by

reference and revising the form:

Performance Bond—Form SME–42,

(June 1999). Revised form SME–42 is a

standard performance bond form for

Non-Federal Lands as required by KRS

350.060(11) and section 2 of this

regulation. It specifies the terms and

conditions of the bond, including the

obligations of the principal and surety

and bond release or forfeiture

conditions. It identifies among other

things: the permit or application

number, the amount and type of bond,

and the acreage and location of the

bonded land. The following deletions

from the original form were made: the

requirement that a resident Kentucky

agent countersign a surety bond

executed by an out-of-State surety (KRS

304.3–250 originally required it, this

section was repealed on July 15, 1998)

and the requirement to enter the name

of the community near the lands

associated with the bond. The June 1999

edition replaces the February 1991

edition. There is no Federal counterpart

to either requirement that Kentucky

proposes to delete. Therefore, the

deletion of both the countersignature

and the name of the nearby community

do not render the Kentucky program

less effective than the Federal rules.

New form SME–42–F is a standard

performance bond form for Federal

Lands as required by KRS 350.060(11),

KRS 350.064(11) and section 2 of this

regulation. Pursuant to 523(c) of

SMCRA, Kentucky and the Secretary of

the Department of the Interior entered

into a Cooperative Agreement (the

‘‘Agreement’’) for the regulation of

surface coal mining and reclamation

operations on Federal lands in

Kentucky. See 63 FR 53252 (October 2,

1998). Article IX of the Agreement

requires that the performance bond form

for Federal lands, state on its face, that

in the event the Agreement is

terminated, the portion of the bond

covering Federal lands shall be assigned

to the United States. The Agreement

also required the bond form to state that

if subsequent to the forfeiture of the

bond, the Agreement is terminated, any

unspent or uncommitted proceeds of the

bond covering the Federal lands shall be

assigned and forwarded to the United

States. The new form includes these

requirements on the form. The new form

also specifies the terms and conditions

of the bond, including the obligations of

the principal and surety and bond

release and forfeiture conditions. It

identifies, among other things, the

permit or application number, the

amount and type of bond and the

acreage and location of the bonded land.

This form satisfies the requirements

in the Agreement and is not inconsistent

with the Federal rules since it

implements the bonding requirements.

The change is therefore approved.

At section 5(2), Kentucky provides for

the inspection and reproduction of the

above materials. There is no direct

Federal counterpart. This amendment

makes the bond form available to the

public. We therefore find that with this

change the State provision is not

inconsistent with the Federal rules. The

change is therefore approved.

66316 Federal Register / Vol. 66, No. 247 / Wednesday, December 26, 2001 / Rules and Regulations

IV. Summary and Disposition of

Comments

Public Comments

We solicited public comments on the

amendment. No comments were

submitted.

Federal Agency Comments

On March 1, 2000, we asked for

comments from various Federal

agencies who may have an interest in

the Kentucky amendment

(Administrative Record No. KY–1492)

according to 30 CFR 732.17(h)(11)(i) and

section 503(b) of SMCRA. No one

responded.

Environmental Protection Agency (EPA)

Concurrence and Comments

Under 30 CFR 732.17(h)(11)(i) and

(ii), we are required to get a written

agreement from EPA for those

provisions of the program amendment

that relate to air or water quality

standards issued under the authority of

the Clean Water Act (33 U.S.C. 1251 et

seq.) or the Clean Air Act (42 U.S.C.

7401 et seq.). Since none of the

proposed amendment provisions relate

to air or water quality, we did not ask

EPA to agree on the amendment. We did

ask EPA to comment but they did not

respond.

V. Director’s Decision

Based on the above findings, we

approve the proposed amendment

submitted by Kentucky on May 4, 1999,

and revised on August 20, 1999.

To implement this decision, we are

amending the Federal regulations at 30

CFR Part 917, codifying decisions

concerning the Kentucky program. We

find that good cause exists under 5

U.S.C. 553(d)(3) of SMCRA to make this

final rule effective immediately. Section

503(a) of SMCRA requires that the

State’s program demonstrates that the

State has the capability of carrying out

the provisions of SMCRA and meeting

its purposes. Making this regulation

effective immediately will expedite that

process. SMCRA requires consistency of

State and Federal standards.

Effect of the Director’s Decision

Section 503 of SMCRA provides that

a State may not exercise jurisdiction

under SMCRA unless the State program

is approved by the Secretary. Similarly,

30 CFR 732.17(a) requires that any

alteration of an approved State program

be submitted to OSM for review as a

program amendment. Thus, any changes

to the State program are not enforceable

until approved by OSM. The Federal

regulations at 30 CFR 732.17(g) prohibit

any unilateral changes to approved State

programs. In the oversight of the

Kentucky program, we will recognize

only the statutes, regulations, and other

materials we have approved, together

with any consistent implementing

policies, directives, and other materials.

We will require that Kentucky enforce

only such provisions.

VI. Procedural Determinations

Executive Order 12630—Takings

This rule does not have takings

implications. This determination is

based on the analysis performed for the

counterpart Federal regulation.

Executive Order 12866—Regulatory

Planning and Review

This rule is exempted from review by

the Office of Management and Budget

(OMB) under Executive Order 12866.

Executive Order 12988—Civil Justice

Reform

The Department of the Interior has

conducted the reviews required by

section 3 of Executive Order 12988 and

has determined that, to the extent

allowed by law, this rule meets the

applicable standards of subsections (a)

and (b) of that section. However, these

standards are not applicable to the

actual language of State regulatory

programs and program amendments

since each such program is drafted and

promulgated by a specific State, not by

OSM. Under sections 503 and 505 of

SMCRA (30 U.S.C. 1253 and 1255) and

30 CFR 730.11, 732.15, and

732.17(h)(10), decisions on proposed

State regulatory programs and program

amendments submitted by the States

must be based solely on a determination

of whether the submittal is consistent

with SMCRA and its implementing

Federal regulations and whether the

other requirements of 30 CFR parts 730,

731, and 732 have been met.

Executive Order 13132—Federalism

This rule does not have Federalism

implications. SMCRA delineates the

roles of the Federal and State

governments with regard to the

regulation of surface coal mining and

reclamation operations. One of the

purposes of SMCRA is to ‘‘establish a

nationwide program to protect society

and the environment from the adverse

effects of surface coal mining

operations.’’ Section 503(a)(1) of

SMCRA requires that State laws

regulating surface coal mining and

reclamation operations be ‘‘in

accordance with’’ the requirements of

SMCRA, and section 503(a)(7) requires

that State programs contain rules and

regulations ‘‘consistent with’’

regulations issued by the Secretary

pursuant to SMCRA.

Executive Order 13211—Regulations

That Significantly Affect The Supply,

Distribution, or Use of Energy

On May 18, 2001, the President issued

Executive Order 13211 which requires

agencies to prepare a Statement of

Energy Effects for a rule that is (1)

considered significant under Executive

Order 12866, and (2) likely to have a

significant adverse effect on the supply,

distribution, or use of energy. Because

this rule is exempt from review under

Executive Order 12866 and is not

expected to have a significant adverse

effect on the supply, distribution, or use

of energy, a Statement of Energy Effects

is not required.

National Environmental Policy Act

This rule does not require an

environmental impact statement

because section 702(d) of SMCRA (30

U.S.C. 1292(d)) provides that agency

decisions on proposed State regulatory

program provisions do not constitute

major Federal actions within the

meaning of section 102(2)(C) of the

National Environmental Policy Act (42

U.S.C. 4332(2)(C)).

Paperwork Reduction Act

This rule does not contain

information collection requirements that

require approval by OMB under the

Paperwork Reduction Act (44 U.S.C.

3507 et seq.).

Regulatory Flexibility Act

The Department of the Interior

certifies that this rule will not have a

significant economic impact on a

substantial number of small entities

under the Regulatory Flexibility Act (5

U.S.C. 601 et seq.). The State submittal,

which is the subject of this rule, is based

upon counterpart Federal regulations for

which an economic analysis was

prepared and certification made that

such regulations would not have a

significant economic effect upon a

substantial number of small entities. In

making the determination as to whether

this rule would have a significant

economic impact, the Department relied

upon the data and assumptions for the

counterpart Federal regulations.

Small Business Regulatory Enforcement

Fairness Act

This rule is not a major rule under 5

U.S.C. 804(2), the Small Business

Regulatory Enforcement Fairness Act.

This rule: (a) Does not have an annual

effect on the economy of $100 million.

(b) Will not cause a major increase in

costs or prices for consumers,

Federal Register / Vol. 66, No. 247 / Wednesday, December 26, 2001 / Rules and Regulations 66317

individual industries, Federal, State, or

local government agencies, or

geographic regions. (c) Does not have

significant adverse effects on

competition, employment, investment,

productivity, innovation, or the ability

of U.S. based enterprises to compete

with foreign-based enterprises. This

determination is based upon the fact

that the State submittal, which is the

subject of this rule, is based upon

counterpart Federal regulations for

which an analysis was prepared and a

determination made that the Federal

regulation was not considered a major

rule.

Unfunded Mandates

This rule will not impose an

unfunded mandate on State, local, or

tribal governments or the private sector

of $100 million or more in any given

year. This determination is based upon

the fact that the State submittal, which

is the subject of this rule, is based upon

counterpart Federal regulations for

which an analysis was prepared and a

determination made that the Federal

regulation did not impose an unfunded

mandate.

List of Subjects in 30 CFR Part 917

Intergovernmental relations, Surface

mining, Underground mining.

Dated: October 24, 2001.

Roger Calhoun,

Acting Regional Director, Appalachian

Regional Coordinating Center.

For the reasons set out in the

preamble, Title 30, Chapter VII,

Subchapter T of the Code of Federal

Regulations is amended as set forth

below:

PART 917—KENTUCKY

1. The authority citation for Part 917

continues to read as follows:

Authority: 30 U.S.C. 1201 et seq.

2. Section 917.15 is amended in the

table in paragraph (a) by adding a new

entry in chronological order by ‘‘Date of

Final Publication’’ to read as follows:

§ 917.15 Approval of Kentucky regulatory

program amendments.

(a) * * *

Original amendment

submission date

Date of final

publication Citation/description

*******

May 4, 1999 ............. December 26,

2001

KAR 10:010 Sections 2(2), 5(1), 5(2) and bond forms SME–42(6/99 ed.) and SME–42–F(6/99 ed.)

* * * * *

[FR Doc. 01–31535 Filed 12–21–01; 8:45 am]

BILLING CODE 4310–05–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Parts 52 and 81

[LA–55–1–7485a; FRL–7121–4]

Approval and Promulgation of

Implementation Plans and Designation

of Areas for Air Quality Planning

Purposes; State of Louisiana;

Redesignation of Lafourche Parish

Ozone Nonattainment Area to

Attainment for Ozone

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Direct final rule.

SUMMARY: EPA is taking direct final

action on redesignation of Lafourche

Parish from nonattainment to

attainment for the 1-hour ozone

National Ambient Air Quality Standard

(NAAQS). This determination is based

on three years of complete, qualityassured, ambient air monitoring data for

the 1997 to 1999 ozone seasons that

demonstrate that the ozone NAAQS has

been attained in the area. On August 9,

2000 the State of Louisiana submitted a

request to redesignate the ozone

nonattainment area of Lafourche Parish

to attainment. Under the Clean Air Act

(CAA), nonattainment areas may be

redesignated to attainment if sufficient

data are available to warrant the

redesignation and the area meets the

other CAA redesignation requirements.

In this action, EPA will, unless adverse

or critical comment is received, approve

Louisiana’s request for designation of

Lafourche Parish because the request

meets the requirements of the CAA.

DATES: This direct final rule is effective

on February 25, 2002, unless EPA

receives adverse comment by January

25, 2002. If EPA receives such comment,

EPA will publish a timely withdrawal in

the Federal Register informing the

public that this rule will not take effect.

ADDRESSES: Written comments should

be addressed to Mr. Thomas H. Diggs,

Chief, Air Planning Section (6PD–L), at

the EPA Region 6 Office listed below.

Copies of documents relevant to this

action are available for public

inspection during normal business

hours at the following locations.

Anyone wanting to examine these

documents should make an

appointment with the appropriate office

at least two working days in advance.

Environmental Protection Agency,

Region 6, Air Planning Section (6PD–L),

1445 Ross Avenue, Dallas, Texas 75202–

2733.

Louisiana Department of

Environmental Quality, Air Quality

Division, 7290 Bluebonnet Boulevard,

Baton Rouge, Louisiana 70810.

FOR FURTHER INFORMATION CONTACT:

Thomas Diggs at (214) 665–7214.

SUPPLEMENTARY INFORMATION:

Throughout this document wherever

‘‘we,’’ ‘‘us,’’ or ‘‘our’’ are used, we mean

the EPA.

Table of Contents

I. What action is EPA taking?

II. What is the background for this action?

III. Why are we taking this action?

IV. What evaluation criteria was used?

V. What are the effects of this action?

VI. Why is this a ‘‘Final Action’’?

VII. What administrative requirements apply

for this action?

I. What Action Is EPA Taking?

We have determined that the

Lafourche Parish ozone nonattainment

area has attained the NAAQS for ozone.

EPA has evaluated the State’s

redesignation request for consistency

with the CAA, EPA regulations and

policy. EPA believes that the

redesignation request and monitoring

data demonstrate that this area has

attained the ozone standard. In addition,

EPA has determined that the

redesignation request meets the

requirements and policy set forth in the

General Preamble and policy

memorandum discussed in this

document for area designations. EPA is

today approving Louisiana’s

redesignation request for Lafourche

Parish.

II. What Is the Background for This

Action?

The CAA as amended in 1977

required areas that were designated