        ENVIRONMENTAL PROTECTION AGENCY
        40 CFR Part 52
        [Region 2 Docket No. R02-OAR-2005-NY-0003, FRL-7942-6]
        Approval and Promulgation of Implementation Plans; New York State Implementation Plan Revision

          AGENCY:
          Environmental Protection Agency (EPA).

          ACTION:
          Proposed rule.

          SUMMARY:

          The Environmental Protection Agency is proposing to approve a revision to the New York State Implementation Plan (SIP) concerning New York's permitting program. The SIP revision consists of amendments to Title 6 of the New York Codes, Rules and Regulations, Part 201, “Permits and Certificates.” The intended effect of this proposal is to incorporate administrative changes to New York's permitting program into the SIP.

          DATES:
          Comments must be received on or before August 22, 2005.

          ADDRESSES:

          Submit your comments, identified by Regional Material in EDocket (RME) ID Number R02-OAR-2005-NY-0003 by one of the following methods: Federal eRulemaking Portal: http://www.regulations.gov. Follow the on-line instructions for submitting comments.
          1. Agency Web site: http://docket.epa.gov/rmepub/. Regional Material in EDocket (RME), EPA's electronic public docket and comment system, is EPA's preferred method for receiving comments. Once in the system, select “quick search,” then key in the appropriate RME Docket identification number. Follow the on-line instructions for submitting comments.
          2. E-mail: Werner.Raymond@epa.gov.
          3. Fax: (212) 637-3901.
          4. Mail: “RME ID Number R02-OAR-2005-NY-0003,” Raymond Werner, Chief, Air Programs Branch, Environmental Protection Agency, Region 2 Office, 290 Broadway, 25th Floor, New York, New York 10007-1866.
          5. Hand Delivery or Courier. Deliver your comments to: Raymond Werner, Chief, Air Programs Branch, Environmental Protection Agency, Region 2 Office, 290 Broadway, 25th Floor, New York, New York 10007-1866. Such deliveries are only accepted during the Regional Office's normal hours of operation. The Regional Office's official hours of business are Monday through Friday, 8:30 to 4:30 excluding Federal holidays.
          A copy of the New York's submittal is available at the following addresses for inspection during normal business hours:
          Environmental Protection Agency, Region 2 Office, Air Programs Branch, 290 Broadway, 25th Floor, New York, New York 10007-1866.
          New York State Department of Environmental Conservation, Division of Air Resources, 625 Broadway, Albany, New York 12233.

          FOR FURTHER INFORMATION CONTACT:

          Kirk J. Wieber, Air Programs Branch, Environmental Protection Agency, 290 Broadway, 25th Floor, New York, New York 10007-1866, (212) 637-3381 or Wieber.Kirk@epa.gov.

        SUPPLEMENTARY INFORMATION:
        I. What Was Included in New York's Submittal?
        On June 16, 1996, David Sterman, then Deputy Commissioner, New York State Department of Environmental Conservation (NYSDEC), submitted to EPA a revision to the State Implementation Plan (SIP) which included revisions to Title 6 of the New York Codes, Rules and Regulations (NYCRR), Part 201, “Permits and Certificates.” The revisions to Part 201 were submitted by New York in support of its title V Operating Permit Program under the Clean Air Act (Act), and became State effective on July 7, 1996. New York requested at that time that Subparts 201-1, 201-2, 201-3, 201-4, 201-5, 201-7, 201-8 and Appendix B be incorporated into the federally approved SIP, replacing the existing federally approved version of Part 201. EPA has deferred taking action on those revisions to Part 201 due to unresolved concerns raised by the EPA and NYSDEC regarding specific Subparts. However, on May 27, 2005, Carl Johnson, Deputy Commissioner, NYSDEC, submitted a SIP revision requesting EPA's approval of only Subparts 201-7.1, “General” and 201-7.2, “Emission Capping Using Synthetic Minor Permits,” as were State effective on July 7, 1996, and the removal of Subpart 201.5(e) of the existing federally approved version of Part 201.
        II. What Provisions to Part 201 Is EPA Acting On?
        A. Subparts 201-7.1 and 201-7.2
        The Subpart 201-7.1 and 201-7.2 provisions concern “federally enforceable emission caps.” These provisions allow owners or operators of stationary sources to accept permit conditions which restrict or “cap” emissions in order to avoid being subject to one or more applicable requirements regarding the source or emission unit. Typically, such a source has actual emissions substantially below its potential emissions and the cap would prevent increasing emissions. The owner or operator applying for an emission cap permit modification must include a proposed monitoring, recordkeeping, and reporting strategy that will be used to demonstrate that the emissions limitations under the proposed cap are verifiable, and enforceable, along with the proposed permit terms and conditions. Capping methods may include: The reduction in the hours of operation; reformulations relating to the cap, installation of control equipment; and/or other process changes.
        On an annual basis, beginning one year after the granting of an emissions cap, the responsible official shall provide a certification to the NYSDEC that the facility has operated all emission units within the limits imposed by the emission cap. Facilities subject to this provision must keep records on-site for a minimum of five years. Emission caps established by New York pursuant to Subpart 201-7.2 are subject to public review and comment, as required by 201-7.2(b).
        Although Subpart 201-7.1 makes reference to Subpart 201-7.3, EPA is not taking action on Subpart 201-7.3 at this time. However, Subpart 201.7.3 remains State enforceable.

        EPA has determined that New York's revised Subparts 201-7.1 and 201-7.2 can be incorporated into the SIP. EPA recognizes federally enforceable limits or caps on potential to emit to be approvable. In addition, New York's revised Subparts 201-7.1 and 201-7.2 are designed to ensure that the limits on potential to emit are legally and practically enforceable. An August 27, 1996, EPA policy memorandum from John S. Seitz, Director, Office of Air Quality Planning and Standards, entitled “Extension of January 25, 1995 Potential to Emit Transition Policy” states that, in light of the court's decision in Clean Air Implementation Project v. EPA, No. 96-1224 (D.C. Cir., June 28, 1996), the term “federally enforceable” in 40 CFR 70.2 should now be read to mean “federally enforceable or legally and practicably enforceable by a state or local air pollution control agency.” New York's revised Subparts 201-7.1 and 201-7.2 are currently State enforceable. The inclusion of these provisions into the SIP will ensure that New York's revised Subparts 201-7.1 and 201-7.2 are federally enforceable as well. EPA is therefore proposing approval.
        B. Subpart 201.5(e)
        As part of New York's May 27, 2005, submittal, New York requested that EPA remove existing Subpart 201.5(e) from the federally approved SIP. Subpart 201.5(e) concerns excess emissions during maintenance, malfunctions, and start-up.

        On September 20, 1999, EPA issued a policy memorandum from Steven A. Herman, Assistant Administrator for Enforcement and Compliance Assurance, entitled “State Implementation Plans: Policy Regarding Excess Emissions During Malfunctions, Startup, and Shutdown.” On November 8, 2001 and December 5, 2001, EPA issued a memorandum of clarification in regard to the September 20, 1999, policy memorandum.
        Because excess emissions might aggravate air quality so as to prevent attainment or interfere with maintenance of the ambient air quality standards, EPA views all excess emissions as violations of the applicable emission limitation. Nevertheless, EPA recognizes that imposition of a penalty for sudden and unavoidable malfunctions caused by circumstances entirely beyond the control of the owner or operator may not be appropriate. EPA's 1999 policy memorandum further specifies what is allowable and when and in what manner SIP's may provide for defenses of violations caused by periods of excess emissions due to malfunctions, startup, or shutdown.
        New York's Subpart 201.5(e) was initially incorporated into the SIP prior to the issuance of this policy memorandum. EPA has determined that New York's Subpart 201.5(e) does not meet the required criteria for excusing excess emissions from maintenance, malfunctions or startup, as outlined in the 1999 EPA policy memorandum. Therefore, EPA agrees with New York's request to remove it from the federally enforceable SIP.
        III. What Is EPA's Conclusion?
        EPA has evaluated New York's submittal for consistency with the Act, EPA regulations, and EPA policy. EPA has determined that the revisions made to Part 201.7, “Federally Enforceable Emission Caps,” specifically the inclusion of Subparts 201-7.1, “General” and 201-7.2, “Emission Capping Using Synthetic Minor Permits” meet the SIP revision requirements of the Act. In addition, EPA has determined that existing Subpart 201.5(e) should no longer be included in the Federally approved SIP. Therefore, EPA is proposing to approve revised Subparts 201-7.1 and 201-7.2 into the Federally approved New York SIP and remove existing Subpart 201.5(e) from the federally approved New York SIP.
        IV. Statutory and Executive Order Reviews

        Under Executive Order 12866 (58 FR 51735, October 4, 1993), this proposed action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This proposed action merely proposes to approve state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this proposed 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.). This rule proposes to approve pre-existing requirements under state law, does not impose any additional enforceable duty beyond that required by state law, and does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).
        This proposed rule also does not have tribal implications because it will 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, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely proposes to approve a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Act. This proposed rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant.

        In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Act. In this context, in the absence of a prior existing requirement for the state to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This proposed rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

          List of Subjects in 40 CFR Part 52
          Environmental protection, Air pollution control, Intergovernmental relations, Reporting and recordkeeping requirements.

          Dated: July 12, 2005.
          George Pavlou,
          Acting Regional Administrator, Region 2.

      [FR Doc. 05-14407 Filed 7-20-05; 8:45 am]
      BILLING CODE 6560-50-P


        DEPARTMENT OF THE INTERIOR
        Fish and Wildlife Service
        50 CFR Part 17
        [Docket No. FWS-R6-ES-2012-0095; FXES11130900000-134-FF09E30000]
        Endangered and Threatened Wildlife and Plants; Initiation of Status Review and 5-Year Review of the Preble's Meadow Jumping Mouse

          AGENCY:
          Fish and Wildlife Service, Interior.

          ACTION:
          Notice of initiation of status review and 5-year review.

          SUMMARY:

          We, the U.S. Fish and Wildlife Service (Service), under the authority of the Endangered Species Act of 1973, as amended (Act), announce the initiation of a status review of the Preble's meadow jumping mouse (Zapus hudsonius preblei) (Preble's) throughout its range. We conduct status reviews to determine whether a species should be listed as endangered or threatened under the Act. Following this status review, we will issue a 12-month finding on two petitions to delist Preble's. Because a status review also is required for the 5-year review of listed species under section 4(c)(2)(A) of the Act, we are electing to prepare these reviews simultaneously. At the conclusion of these simultaneous reviews, we will issue the 12-month finding on the petitions, as provided in section 4(b)(3)(B) of the Act, and make the requisite determination under section 4(c)(2)(B) of the Act based on the results of the 5-year review. Through this notice, we encourage all interested parties to provide us information regarding the Preble's. We also announce the availability of new information relevant to our consideration of the status of the Preble's.

          DATES:

          To allow us adequate time to conduct these reviews, we request that we receive comments and information no later than December 26, 2012. The deadline for submitting an electronic comment using the Federal eRulemaking Portal (see ADDRESSES section, below) is 11:59 p.m. Eastern Time on this date. After December 26, 2012, you must submit information using the U.S. mail or hand-delivery option provided in the ADDRESSES section below. Please note that we may not be able to address or incorporate information that we receive after the above requested date.

          ADDRESSES:
          You may submit comments by one of the following methods:
          • Federal eRulemaking Portal: http://www.regulations.gov. Search for Docket No. FWS-R6-ES-2012-0095 and then follow the instructions for submitting comments.
          • U.S. mail or hand-delivery: Public Comments Processing, Attn: FWS-R6-ES-2012-0095; Division of Policy and Directives Management; U.S. Fish and Wildlife Service; 4401 N. Fairfax Drive, MS 2042-PDM; Arlington, VA 22203.
          We will post all information received on http://www.regulations.gov. This generally means that we will post any personal information you provide us (see Request for Information section below for more details).

          FOR FURTHER INFORMATION CONTACT:
          Susan Linner, Field Supervisor, Colorado Ecological Services Office; mailing address P.O. Box 25486, DFC (MS 65412), Denver, CO 80225; telephone (303) 236-4773; office location: 134 Union Boulevard, Suite 670, Lakewood, CO 80228. If you use a telecommunications device for the deaf (TDD), call the Federal Information Relay Service (FIRS) at (800) 877-8339.

        SUPPLEMENTARY INFORMATION:
        Previous Federal Actions
        For a detailed description of Federal actions concerning the Preble's, please refer to the May 13, 1998, listing under the Act (63 FR 26517); the July 10, 2008, final rule amending the listing determination for the Preble's (73 FR 39790); and our August 5, 2011, reinstatement of listing protections for the Preble's (76 FR 47490).

        On December 23, 2003, we received two nearly identical petitions, one from the State of Wyoming's Office of the Governor and the second from Coloradans for Water Conservation and Development, seeking to remove the Preble's from the Federal List of Endangered and Threatened Wildlife (Freudenthal 2003; Sonnenberg 2003). The petitions maintained that Preble's should be delisted based on the taxonomic revision suggested by Ramey et al. (2003) and new distribution, abundance, and trends data that suggested the subspecies was no longer endangered or threatened (Freudenthal 2003, p. 1; Sonnenberg 2003, p. 1).
        On July 10, 2008, we published a final rule amending the listing for the Preble's by removing protections for the Preble's in Wyoming (73 FR 39790). In that rule, we determined that the Preble's was not threatened throughout all of its range, but the portion of its range located in Colorado represented a “significant portion of the range” (SPR) where the Preble's should retain its threatened status.

        On June 23, 2009, a petition for review of the 2008 amendment to the listing was filed in the United States District Court for the District of Colorado. The petitioners challenged, among other things, our interpretation of SPR as applied to the Preble's decision. The Service filed a motion for voluntary remand and vacatur of the 2008 Preble's amended listing decision. On July 7, 2011, the United States District Court for the District of Colorado granted this motion and ordered the 2008 amended listing decision vacated and remanded as of August 6, 2011 (Center for Native Ecosystems, et al. v. Salazar, et al., 09-cv-01463-AP-JLK, 2011 U.S. Dist. LEXIS 72664). On August 5, 2011, the Service issued a final rule complying with the court order and reinstating the regulatory protections under the Act for the Preble's in Wyoming, effective August 6, 2011 (76 FR 47490).

        The court also ordered that by June 1, 2013, the Service must complete its status review of the Preble's and publish a 12-month finding in the Federal Register for the petitions submitted by the State of Wyoming and Coloradans for Water Conservation and Development to delist the Preble's.
        On December 9, 2011, we published a notice of our draft policy (76 FR 76987) to establish a joint interpretation and application of SPR with the National Marine Fisheries Service that reflects a permissible reading of the law and its legislative history, and minimizes undesirable policy outcomes, while fulfilling the conservation purposes of the Act. To date, our draft policy on SPR has not been finalized.
        Background

        The Preble's is recognized as 1 of 12 subspecies of meadow jumping mouse (Zapus hudsonius), a species that ranges from the Pacific Coast of Alaska to the Atlantic Coast and from the northern limit of forests south to New Mexico, Oklahoma, and Georgia (Hafner et al. 1981, p. 501; Hall 1981, p. 843; Krutzsch 1954, pp. 420-421). Meadow jumping mice are small rodents with long tails, large hind feet, and long hind legs. Total length of an adult is approximately 7 to 10 inches (187 to 255 millimeters), with the tail of 4 to 6 inches (108 to 155 millimeters) comprising about 60 percent of that length (Krutzsch 1954, p. 420; Armstrong et al. 2011, p. 189).

        The Preble's is found along the foothills in southeastern Wyoming southward along the eastern edge of the Front Range of Colorado to Colorado Springs in El Paso County, Colorado (Hall 1981, p. 844; Clark and Stromberg 1987, pp. 184-188; Armstrong et al. 2011, p. 189; Clippenger 2002, pp. 14-15, 20). Typical habitat for the Preble's is comprised of well-developed riparian vegetation with adjacent, relatively undisturbed grassland communities and a nearby water source (Bakeman 1997, pp. 22-31). Preble's are typically captured in areas with multi-storied cover with an understory of grasses or forbs or a mixture thereof (Bakeman 1997, pp. 22-31; Schorr 2001, pp. 23-24). The shrub canopy is often willow (Salix spp.), although other shrub species may occur (Shenk and Eussen 1998, p. 9-11). Trainor et al. (2007, pp. 471-472) found that high-use areas for the Preble's tended to be close to creeks and were positively associated with the percentage of shrubs, grasses, and woody debris. Hydrologic regimes that support Preble's' habitat range from large perennial rivers, such as the South Platte River, to small drainages only 3 to 10 feet (1 to 3 meters) in width.

        Meadow jumping mice are primarily nocturnal or crepuscular (active during twilight), but also may be active during the day. The Preble's uses uplands at least as far out as 330 feet (100 meters) beyond the 100-year floodplain (Shenk and Sivert 1999, p. 11; Ryon 1999, p. 12; Schorr 2001, p. 14; Trainor et al. 2012). While Preble's dispersal capabilities are thought to be limited, in one instance a Preble's was documented moving as far as 0.7 mile (1.1 kilometers) in 24 hours (Ryon 1999, p. 12). The Preble's typically enters hibernation in September or October and emerges the following May (Whitaker 1963, p. 5; Meaney et al. 2003, p. 621).
        For additional information on the biology of this subspecies, see the May 13, 1998, final rule to list the Preble's as threatened (63 FR 26517) and the October 8, 2009, proposal to revise critical habitat for the Preble's in Colorado (74 FR 52066).
        Request for Information
        To ensure our determination is based on the best available scientific and commercial information, we request information on the Preble's from governmental agencies, Native American Tribes, the scientific community, industry, and any other interested parties. We are seeking any new information including:
        (1) Data from any systematic surveys for the Preble's, as well as any studies that may show distribution, status, population size, or population trends;
        (2) Information concerning the taxonomic status of the Preble's;
        (3) Quantitative information regarding the life history, ecology, and habitat use of the Preble's;

        (4) Information on the current and foreseeable threats faced by the Preble's in all or a significant portion of its range in relation to the five listing factors (as defined in section 4(a)(1) of the Endangered Species Act, as amended [16 U.S.C. 1531 et seq.]);
        (5) Information regarding the effects of current and foreseeable land management on the status of the Preble's;
        (6) Specific information on the potential effects of climate change on the Preble's and its habitat;
        (7) Information demonstrating what, for the Preble's, might constitute an SPR in light of our December 9, 2011, draft policy on SPR (76 FR 76987); and
        (8) Information regarding contact and interaction among Preble's populations or other information relevant to a distinct population segment analysis (see 61 FR 4722, February 7, 1996).

        You may submit information concerning the status review or the 5-year review by one of the methods listed in the ADDRESSES section. If you submit information via http://www.regulations.gov, your entire submission—including any personal identifying information—will be posted on the Web site. If you submit a hardcopy that includes personal identifying information, you may request at the top of your document that we withhold this personal identifying information from public review. However, we cannot guarantee that we will be able to do so. We will post all hardcopy submissions on http://www.regulations.gov.

        Information and supporting documentation we receive and use in preparing a 12-month finding and 5-year review will be available for public inspection on http://www.regulations.gov, or by appointment, during normal business hours, at the U.S. Fish and Wildlife Service, Colorado Ecological Services Office (see FOR FURTHER INFORMATION CONTACT).
        New Information Available for Review

        Pertinent information received, developed, or analyzed since our July 10, 2008, final rule amending the listing determination for the Preble's (73 FR 39790) is available for review on the Service's Web site http://www.fws.gov/mountain-prairie/species/mammals/preble/, or by contacting the Field Supervisor, Colorado Ecological Services Office (see FOR FURTHER INFORMATION CONTACT). This information includes both scientific publications and selected unpublished reports. Compilations of data, correspondence, and other information are also available on the Service's Web site. See the Federal eRulemaking Portal at http://www.regulations.gov (Docket No. FWS-R6-ES-2012-0095) for additional information we receive during the comment period opened by this document.
        References Cited

        A complete list of all the references is available on the Internet at http://www.regulations.gov and upon request from the Field Supervisor, Colorado Ecological Services Field Office (see FOR FURTHER INFORMATION CONTACT.

        Authors
        The primary authors of this notice are staff members of the Colorado Ecological Services Office, U.S. Fish and Wildlife Service.

          Authority:

          The authority for this action is the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq.).

          Dated: November 15, 2012.
          G. Mendel Stewart,
          Acting Director, U.S. Fish and Wildlife Service.

      [FR Doc. 2012-28629 Filed 11-23-12; 8:45 am]
      BILLING CODE 4310-55-P


        DEPARTMENT OF COMMERCE
        National Oceanic and Atmospheric Administration
        50 CFR Part 680
        [Docket No. 0910051335-0171-01]
        RIN 0648-AY28
        Groundfish Fisheries of the Exclusive Economic Zone Off Alaska; Bering Sea/Aleutian Islands Crab Rationalization Program; Recordkeeping and Reporting

          AGENCY:
          National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

          ACTION:
          Proposed rule; request for comments.

          SUMMARY:
           This proposed action removes the Crab Rationalization Program requirements for catcher/processors to weigh all offloaded crab on a state-approved scale that produces a printed record and to report this information at the time of offload to NMFS on a catcher/processor offload report. NMFS has determined that these requirements are no longer necessary. This proposed action is intended to promote the goals and objectives of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) and other applicable laws.

          DATES:
           Comments must be received no later than August 25, 2010.

          ADDRESSES:
           You may submit comments, identified by RIN 0648-AY28, by any one of the following methods:

          • Electronic Submissions: Submit all electronic public comments via the Federal eRulemaking Portal at http://www.regulations.gov.
          • Fax: 907-586-7557, Attn: Ellen Sebastian.
          • Mail: P.O. Box 21668, Juneau, AK 99802.
          • Hand Delivery to the Federal Building: 709 West 9th Street, Room 420A, Juneau, AK.

          Instructions: No comments will be posted for public viewing until after the comment period has closed. All comments received are a part of the public record and will generally be posted to http://www.regulations.gov without change. All Personal Identifying Information (for example, name, address, etc.) voluntarily submitted by the commenter may be publicly accessible. Do not submit Confidential Business Information or otherwise sensitive or protected information.
          NMFS will accept anonymous comments (enter N/A in the required fields, if you wish to remain anonymous). You may submit attachments to electronic comments in Microsoft Word, Excel, WordPerfect, or Adobe PDF file formats only.

          Electronic copies of this rule, the Regulatory Impact Review (RIR), and the categorical exclusion memorandum may be obtained from the Alaska Region website at http://alaskafisheries.noaa.gov.

          Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this proposed rule may be submitted to NMFS Alaska, Sustainable Fisheries Division, e-mailed to David_Rostker@omb.eop.gov, or faxed to 202-395-7285.

          FOR FURTHER INFORMATION CONTACT:
           Patsy A. Bearden, 907-586-7228.

        SUPPLEMENTARY INFORMATION:
        NMFS manages the U.S. crab fisheries under the Fishery Management Plan for Bering Sea/Aleutian Islands King and Tanner Crabs (FMP). The FMP was prepared by the North Pacific Fishery Management Council under the Magnuson-Stevens Act. Regulations implementing the FMP appear at 50 CFR parts 679 and 680. General regulations that pertain to U.S. fisheries appear at subpart H of 50 CFR part 600.
        Background
        The Crab Rationalization (CR) Program is a limited-access system that allocates crab managed under the FMP among harvesters, processors, and coastal communities. Currently, NMFS requires that all crab individual fishing quota (IFQ) harvested and processed by catcher/processors be weighed at sea prior to processing and that crab weights be reported to NMFS on an IFQ crab landings report (see § 679.5(e)(8)). The weights reported on the IFQ crab landings report are used to debit crab IFQ from a quota holder's account. In addition, catcher/processors are required to weigh the crab again when it is offloaded from the vessel and report this weight to NMFS on a catcher/processor offload report (see § 680.5(e)).
        The original purpose of the offload report was to provide information so that NMFS could audit the IFQ crab landing reports. Completing this report requires a crab catcher/processor to offload all crab-processed product shoreside at a designated port and weigh that product on a scale approved by the state in which the crab is removed from the vessel. The offload report must be completed when crab are offloaded from the vessel and a scale printout showing gross product offload weight must be attached to the offload report. The weight reported on the offload report includes not only the weight of crab but also the weight of packaging, pallets, and glaze. While deductions for these items can be made, the deductions create variance in the total weight of crab landed shoreside. For this reason, NMFS has found it difficult to use the weights from the offload report to audit the weight obtained from the at-sea hopper scales as originally intended.
        Advancements in at-sea reporting of crab catch (eLandings) and the improved reliability of the at-sea motion-compensated hopper scales have changed the need for CR catcher/processors to report offloads. Catcher/processors use eLandings to report total harvest of crab to NMFS weekly while at sea, which provides NMFS with up-to-date accounting of total crab harvested. Motion-compensated hopper scales provide reliable, independent estimates of the total catch by quota sector for all crab harvested.
        Removal of the regulatory requirements for CR catcher/processors to weigh offloaded crab product and submit offload reports does not diminish NMFS' ability to verify reported CR crab catch weight. NMFS still requires that all crab be weighed at sea and scale weights of crab be submitted to NMFS on eLandings weekly reports. Alaska Department of Fish and Game (ADF&G) observers are onboard crab vessels and have the opportunity to observe hopper scale activities for consistency with the regulatory requirement that vessels weigh all landed CR crab. NOAA Fisheries Office for Law Enforcement (OLE) uses eLandings weekly reports, the printouts from the hopper scales showing the total weight of crab harvested, and additional auditing methods to verify CR quota accounting instead of using the catcher/processor offload reports. Further, even without the requirement to weigh and report the gross weight of offloaded product, the OLE will still have the authority and ability to conduct a full audit of offload weights to verify reported crab catch weight.
        Specifically, this proposed rule would remove the requirement at § 680.5(e) for the owner or operator of a catcher/processor to complete and submit to NMFS-at the time of offload of CR crab-a catcher/processor offload report with its attached scale printout showing gross product offload weight. It also would remove § 680.5(a)(2)(i)(H) because it only serves as a cross-reference to § 680.5(e), which would be removed. This rule also would remove the requirement at § 680.23(b)(4) for catcher/processors to weigh all offloaded CR Program crab on a state-approved scale.
        Classification
        Pursuant to the Magnuson-Stevens Act, the NMFS Assistant Administrator for Fisheries has determined that this proposed rule is consistent with the FMP, other provisions of the Magnuson-Stevens Act, and other applicable law, subject to further consideration after public comment.
        This rule would relieve restrictions by removing weighing and reporting requirements under the CR Program that NMFS has determined are no longer necessary for management and monitoring of the crab fisheries. Adequate information about the weight of crab harvested by catcher/processors under the CR Program is available under regulations that govern the weighing and reporting of crab catch on the IFQ landing report. The reports to be removed by this action were first implemented at the inception of the CR fisheries and were intended to be used primarily for purposes of auditing IFQ landing reports. However, with more experience managing those fisheries and advances in electronic reporting, NMFS has determined that these requirements are no longer necessary. Removing these requirements would relieve restrictions on the industry and would reduce costs to both the industry and NMFS.

        The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that this proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities.
        Factual Basis for Certification
        Estimate of Economic Impact on Small Entities by Entity Size and Industry
        The impacts of this action have been evaluated in the accompanying Regulatory Impact Review (RIR). The proposed regulatory changes would remove reporting requirements for directly regulated entities. The estimated costs of the current requirement imposed on directly regulated entities are small (on the order of $25 per report and the fleet of four to six vessels submits a total of about 18 such reports, annually). Thus, because the action would remove a regulatory requirement and decrease compliance costs for directly regulated entities, this proposed action is not expected to have a significant adverse economic impact on any directly regulated small entities.
        Description and Estimate of the Number of Small Entities to Which the Rule Applies
        The number of active crab catcher/processors changes annually. As noted above, from four to six vessels have submitted these reports in recent years. In 2009, there were five crab catcher/processors. An analysis of operation gross revenues from all Alaskan sources indicates that only one of these is a small entity under RFA criteria (total gross revenues from all sources less than $4 million). While this vessel would be affected by this action, one vessel would not constitute a substantial number of small entities.
        Criteria Used to Evaluate Whether the Rule Would Impose “Significant Economic impacts”
        The two criteria recommended to determine the significant economic impact of the action are disproportionality and profitability. The proposed action would not place a substantial number of small entities at a disadvantage, relative to large entities. The proposed action would not have disproportionate impacts on small entities.
        The proposed action would not adversely affect the profitability of any small entity. Indeed, the proposed action would “remove” a reporting burden and, as such, would “reduce” economic costs imposed upon directly regulated small entities.
        Criteria Used to Evaluate Whether the Rule Would Impose Impacts on “a Substantial Number” of Small Entities

        NMFS' Guidelines for Economic Review of National Marine Fisheries Service Regulatory Actions (https://reefshark.nmfs.noaa.gov/f/pds/publicsite/documents/procedures/0111105.pdf) explain that the term “substantial number” has no specific statutory definition and the criterion does not lend itself to objective standards applicable across all regulatory actions. Rather, “substantial number” depends upon the context of the action, the problem to be addressed, and the structure of the regulated industry. The Small Business Administration casts “substantial” within the context of “more than just a few” or de minimis (“too few to care about” criteria).
        Description of and Basis for Assumptions Used
        The proposed rule would not impose adverse economic impacts on any of these entities. The economic analysis contained in the RIR further describes the potential size, distribution, and magnitude of the economic impacts that this action may have on small entities. Based upon that analysis and the foregoing, NMFS finds that the proposed action would not have a significant economic impact on the small entities participating in these fisheries. As a result, an initial regulatory flexibility analysis is not required, and none has been prepared.
        This proposed rule has been determined to be not significant for purposes of Executive Order 12866.
        Collection-of-information Requirements
        This proposed rule contains collection-of-information requirements subject to the Paperwork Reduction Act (PRA) and which have been approved by the Office for Management and Budget (OMB) under OMB Control No. 0648-0570.
        Public reporting burden per response is estimated to average 20 minutes for a catcher/processor crab offload report. This proposed rule would remove this offload report and the associated reporting burden.
        These estimates of public reporting burden include the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection-of-information.

        Send comments regarding this burden estimate or any other aspect of this data collection, including suggestions for reducing the burden, to NMFS (see ADDRESSES); e-mail to David_Rostker@omb.eop.gov or fax to 202-395-7285.
        Notwithstanding any other provision of the law, no person is required to respond to, and no person shall be subject to penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB control number.

          List of Subjects in 50 CFR Part 680
          Alaska, Fisheries, Reporting and recordkeeping requirements.

          Dated: August 4, 2010.
          Eric C. Schwaab,
          Assistant Administrator for Fisheries, National Marine Fisheries Service.

        For the reasons set out in the preamble, 50 CFR part 680 is proposed to be amended as follows:

          PART 680-SHELLFISH FISHERIES OF THE EXCLUSIVE ECONOMIC ZONE OFF ALASKA

        1. The authority citation for part 680 continues to read as follows:

          Authority:
           16 U.S.C. 1862; Pub. L. 109-241; Pub. L. 109-479.

        § 680.5 [Amended]
        2. In § 680.5, remove and reserve paragraph (a)(2)(i)(H) and paragraph (e).
        3. In § 680.23, revise paragraph (b)(4) to read as follows:

          § 680.23
          Equipment and operational requirements.

        (b) * * *
        (4) Offload all CR crab product processed onboard at a shoreside location in the United States accessible by road or regularly scheduled air service; and
        § 680.23 [Amended]
        4. At each of the locations shown in the “Location” column, remove the phrase indicated in the “Remove” column and replace it with the phrase indicated in the “Add” column for the number of times indicated in the “Frequency” column.

            Location
            Remove
            Add
            Frequency

            § 680.23(f)(3)(i)
            delivery or offload are
            delivery are
            1

            § 680.23(f)(3)(ii)
            CR crab or an offload of CR crab product must
            CR crab must
            1

      [FR Doc. 2010-19728 Filed 8-9-10; 8:45 am]
      BILLING CODE 3510-22-S


        DEPARTMENT OF LABOR
        Employment Standards Administration
        29 CFR Parts 403 and 408
        RIN 1215-AB62
         Office of Labor-Management Standards; Labor Organization Annual Financial Reports

          AGENCY:
          Office of Labor-Management Standards, Employment Standards Administration, United States Department of Labor.

          ACTION:
          Proposed rule; extension of comment period.

          SUMMARY:
          This document extends the period for comments on the proposed rule published on May 12, 2008 (73 FR 27346). The proposed rule would make several revisions to the current Form LM-2, which is used by the largest labor organizations to file their annual financial reports under the Labor-Management Reporting and Disclosure Act of 1959, as amended, and would establish a procedure and standards by which the Secretary of Labor may revoke a particular labor organization's privilege to file a simplified annual report, Form LM-3, for a limited time where appropriate, after investigation, due notice and opportunity for a hearing. The comment period, which was to expire on June 26, 2008, is extended to July 11, 2008.

          DATES:
          Comments on the proposed rule published on May 12, 2008 (73 FR 27346) must be received on or before July 11, 2008.

          ADDRESSES:
          You may submit comments, identified by RIN 1215-AB62, by any of the following methods:

          Internet—Federal eRulemaking Portal. Electronic comments may be submitted through www.regulations.gov. To locate the proposed rule, use key words such as “Labor-Management Standards” or “Form LM-2” to search documents accepting comments. Follow the instructions for submitting comments. Please be advised that comments received will be posted without change to www.regulations.gov, including any personal information provided.

            Mail: Mailed comments should be sent to: Kay H. Oshel, Director of the Office of Policy, Reports and Disclosure, Office of Labor-Management Standards, U.S. Department of Labor, 200 Constitution Avenue, NW., Room N-5609, Washington, DC 20210.
          Because of security precautions, the Department continues to experience delays in U.S. mail delivery. You should take this into consideration when preparing to meet the deadline for submitting comments.
          Ensure that your comments are received within the specified open comment period. Before acting on this proposal, OLMS will consider all comments received on or before July 11, 2008. Comments received after that date will be considered only if it is possible to do so without incurring delay.
          OLMS recommends that you confirm receipt of your mailed comments by contacting (202) 693-0123 (this is not a toll-free number). Individuals with hearing impairments may call (800) 877-8339 (TTY/TDD).
          Only those comments submitted through www.regulations.gov, hand-delivered, or mailed will be accepted.
          Comments will be available for public inspection during normal business hours at the above address.

          FOR FURTHER INFORMATION CONTACT:
          Kay H. Oshel, Director of the Office of Policy, Reports and Disclosure, at: Kay H. Oshel, U.S. Department of Labor, Office of Labor-Management Standards, 200 Constitution Avenue, NW., Room N-5609, Washington, DC 20210, (202) 693-1233 (this is not a toll-free number), (800) 877-8339 (TTY/TDD).

        SUPPLEMENTARY INFORMATION:
        In the Federal Register of May 12, 2008 (73 FR 27346), the Department published a notice of proposed rulemaking that would make several revisions to Form LM-2 and would establish a procedure and standards by which the Secretary of Labor may revoke a particular labor organization's privilege to file a simplified annual report, Form LM-3, for a limited time where appropriate, after investigation, due notice and opportunity for a hearing.
        Interested persons were invited to submit comments on or before June 26, 2008, 45 days after the publication of the notice. Based on requests that the Department extend the period for submitting comments, the Department has decided to extend the comment period until July 11, 2008.

        The proposed rule, including the proposed revised Form LM-2 and its instructions, is available on the Web site maintained by OLMS at http://www.olms.dol.gov. Anyone who is unable to access this information on the Internet can obtain the information by contacting the Employment Standards Administration at 200 Constitution Avenue, NW., Room N-5609, Washington, DC 20210, at olms-public@dol.gov or at (202) 693-0123 (this is not a toll-free number). Individuals with hearing impairments may call 1-800-877-8339 (TTY/TDD).

          Signed at Washington, DC, this 13th day of June, 2008.
          Dixon M. Wilson,
          Deputy Assistant Secretary for Employment Standards.
          Don Todd,
          Deputy Assistant Secretary for Labor-Management Programs.

      [FR Doc. E8-13837 Filed 6-18-08; 8:45 am]
      BILLING CODE 4510-CM-P


        DEPARTMENT OF TRANSPORTATION
        National Highway Traffic Safety Administration
        49 CFR Part 571
        [Docket No. NHTSA 2004-17365]
        RIN 2127-AG87
        Federal Motor Vehicle Safety Standards; Lamps, Reflective Devices, and Associated Equipment

          AGENCY:
          National Highway Traffic Safety Administration (NHTSA), DOT.

          ACTION:
          Notice of withdrawal of proposed rulemaking.

          SUMMARY:
          This document withdraws a 1998 notice of proposed rulemaking (NPRM) that would have amended the Federal motor vehicle safety standard on lighting to reorganize the sections related to headlighting. The intention of the rulemaking was to remove inconsistencies and to facilitate easy reference to the standard, in an effort to improve its comprehensibility. We have decided to terminate the rulemaking for the administrative rewrite of headlighting requirements, due to other regulatory priorities and limited agency resources.

          FOR FURTHER INFORMATION CONTACT:
          The following persons at the NHTSA, 400 Seventh Street, SW., Washington, DC 20590.
          For non-legal issues, you may call Mr. Richard VanIderstine, Office of Crash Avoidance Standards (Telephone: 202-366-2720) (Fax: 202-366-7002).
          For legal issues, you may call Mr. Eric Stas, Office of Chief Counsel (Telephone: 202-366-2992) (Fax: 202-366-3820).

        SUPPLEMENTARY INFORMATION:

        I. Background
        Federal Motor Vehicle Safety Standard (FMVSS) No. 108, Lamps, Reflective Devices, and Associated Equipment, establishes performance requirements for lighting-related equipment on new motor vehicles, as well as their location. The standard also covers replacement lighting equipment. The present version of FMVSS No. 108 represents over 30 years of accumulated amendments to the standard and the incorporation of numerous industry consensus standards. Consequently, the standard is lengthy, and requirements concerning a particular lighting device are sometimes found at different places within the standard, with the result being a heavy demand for interpretation of the standard by vehicle and equipment manufacturers, inventors, vehicle owners, and State agencies.

        In order to simplify FMVSS No. 108 for users, NHTSA published an NPRM on November 12, 1998 proposing to reorganize the headlighting requirements under the standard (see 63 FR 63258; see also 64 FR 6021 (February 8, 1999) (notice extending comment period)). The proposed amendments were not intended to change the requirements of the standard, except in a few minor instances that were clearly identified and discussed. The NPRM included a set of “Drafting Guidelines” which discussed the rubric for the proposed administrative simplification, including inclusion of relevant lighting requirements in the text of the standard (i.e., minimizing incorporation by reference to outside standards), updating references to the most current version of the Society of Automotive Engineers (SAE) standard (whenever appropriate), elimination of past effective dates, and use of a single, consistent numbering scheme. A similar administrative rewrite for the non-headlighting provisions of FMVSS No. 108 was contemplated at a future point.
        NHTSA received 13 comments on the 1998 NPRM. Most commenters were supportive of the agency's efforts to conduct an administrative rewrite of FMVSS No. 108's headlighting provisions, and numerous technical recommendations were provided.
        II. Reason for Withdrawal
        Our review of the public comments on the NPRM revealed that unexpected issues, substantive in character, would have to be addressed prior to publication of a final rule, and, as a result, significant additional analyses would be required. Consequently, completion of a final rule to simplify the headlighting provisions of FMVSS No. 108 would be more complicated and resource-intensive than previously anticipated. Although NHTSA continues to believe that an administrative rewrite of FMVSS No. 108 would be beneficial, we have concluded that, after a careful review of regulatory priorities, limited agency resources should be expended on other projects likely to produce a greater safety benefit.
        The agency receives numerous congressional mandates and petitions for rulemaking from outside parties each year, so it is not possible to undertake all of the discretionary rulemaking activities that we identify. Accordingly, for the reasons discussed above, we are terminating this rulemaking activity at the present time and withdrawing the associated NPRM for a reorganization of the headlighting provisions of FMVSS No. 108.

          Authority:
          49 U.S.C. 322, 30111, 30115, 30117, and 30166; delegation of authority at 49 CFR 1.50.

          Issued: March 19, 2004.
          Stephen R. Kratzke,
          Associate Administrator for Rulemaking.

      [FR Doc. 04-6587 Filed 3-23-04; 8:45 am]
      BILLING CODE 4910-59-P


        DEPARTMENT OF COMMERCE
        National Oceanic and Atmospheric Administration
        50 CFR Part 226
        [Docket No. 09022432-91321-03]
        RIN 0648-AX50
        Endangered and Threatened Species; Designation of Critical Habitat for the Cook Inlet Beluga Whale

          AGENCY:
           National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

          ACTION:
           Proposed rule; extension of public comment period.

          SUMMARY:

           We, NMFS, are extending the date by which public comments are due concerning the proposed rule to designate critical habitat for the endangered Cook Inlet beluga whale, Delphinapterus leucas, under the Endangered Species Act of 1973, as amended (ESA). We published a proposed rule to designate critical habitat for this species in the Federal Register of December 2, 2009. The original due date for receipt of public comments was scheduled to end on February 1, 2010, and today we extend the public comment period to March 3, 2010.

          DATES:
           The comment date for the proposed rule published December 2, 2009 (74 FR 63080) is extended to March 3, 2010.

          ADDRESSES:
           Send comments to Kaja Brix, Assistant Regional Administrator, Protected Resources, Alaska Region, NMFS, ATTN: Ellen Sebastian. You may submit comments, identified by “RIN 0648-AX50” by any one of the following methods:

          Electronic submissions: Submit all electronic public comments via the Federal eRulemaking Portal website at http://www.regulations.gov.
          Mail: P.O. Box 21668, Juneau, AK 99802-1668
          Fax: 907-586-7557
          Hand deliver to the Federal Building: 709 West 9th Street, Room 420A, Juneau, AK.

          All comments received are a part of the public record and generally will be posted to http://www.regulations.gov without change. All Personal Identifying Information (e.g. name, address) voluntarily submitted by the commenter may be publicly accessible. Do not submit Confidential Business Information or otherwise sensitive or protected information. NMFS will accept anonymous comments (enter N/A in the required fields, if you wish to remain anonymous). Attachments to electronic comments will be accepted in Microsoft Word, WordPerfect, of Adobe portable document file (PDF) format only.

          The proposed rule and other materials relating to the proposed rule to designate critical habitat for the Cook Inlet beluga whale can be found on our Web site at: http://www.fakr.noaa.gov/

          FOR FURTHER INFORMATION CONTACT:
           Kaja Brix, (907) 586-7824, or Marta Nammack, (301) 713-1401.

        SUPPLEMENTARY INFORMATION:

        We published a proposed rule to designate critical habitat for the Cook Inlet beluga whale in the Federal Register of December 2, 2009 (74 FR 63080). We received several requests, including from the Alaska Congressional delegation, to extend the comment period to allow the public to provide input to the designation of critical habitat and, in particular, to comment on the economic report. The Alaska Congressional delegation asked for an additional 30 days; another commenter asked for an additional 60 days. An additional 30-day comment period should allow sufficient time for responders to comment while preserving the time needed for NMFS to prepare the final rule. The original due date for receipt of public comments was scheduled to end on February 1, 2010, and today we extend the public comment period to March 3, 2010.

          Authority:
          16 U.S.C. 1533 et seq.

          Dated: January 6, 2010.
          James W. Balsiger,
          Assistant Administrator for Fisheries, National Marine Fisheries Service.

      [FR Doc. 2010-384 Filed 1-7-10; 4:15 pm]
      BILLING CODE 3510-22-S


        DEPARTMENT OF COMMERCE
        National Oceanic and Atmospheric Administration
        50 CFR Part 622
        [I.D. 012405B]
        Gulf of Mexico Fishery Management Council; Public Hearings

          AGENCY:
          National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

          ACTION:
          Public hearings; request for comments.

          SUMMARY:
          The Gulf of Mexico Fishery Management Council (Council) will hold a series of public hearings to receive public comments on “Amendment Number 13 to the Fishery Management Plan for the Shrimp Fishery of the Gulf of Mexico, U.S. Waters with Environmental Assessment, Regulatory Impact Review, and Regulatory Flexibility Act Analysis.”

          DATES:

          Written comments must be received by the Council on or before March 4, 2005. The meetings will be held in February 2005 (see SUPPLEMENTARY INFORMATION for specific dates and times).

          ADDRESSES:

          The hearings will be held in Alabama, Florida, Louisiana, Mississippi, and Texas (see SUPPLEMENTARY INFORMATION for specific locations).
          Comments may be submitted by any of the following methods:
          • E-mail: gulfcouncil@gulfcouncil.org.
          • Federal e-Rulemaking: http://www.regulations.gov.
          • Mail: Gulf of Mexico Fishery Management Council, 3018 U.S. Highway 301, North, Suite 1000, Tampa, FL 33619.
          Copies of Amendment 13 to the Shrimp FMP can be obtained from the Gulf of Mexico Fishery Management Council.

          FOR FURTHER INFORMATION CONTACT:
          Richard Leard, Deputy Executive Director, Gulf of Mexico Fishery Management Council; telephone:   (813) 228-2815.

        SUPPLEMENTARY INFORMATION:
        The Gulf of Mexico Fishery Management Council (Council) will hold a series of public hearings to receive public comments on “Amendment Number 13 to the Fishery Management Plan for the Shrimp Fishery of the Gulf of Mexico, U.S. Waters with Environmental Assessment, Regulatory Impact Review, and Regulatory Flexibility Act Analysis.”  Amendment 13 contains alternatives to (1) establish a separate vessel permit for the royal red shrimp fishery or an endorsement to the existing federal shrimp vessel permit (Action 1); (2) define MSY, OY, the overfishing threshold, and the overfished condition for royal red and penaeid shrimp stocks in the Gulf (Actions 2 through 7); (3) establish bycatch reporting methodologies and improve collection of shrimping effort data in the EEZ through the use of logbooks, electronic logbooks, and observers (Action 8); (4) require completion of a Gulf Shrimp Vessel and Gear Characterization Form by at least a subset of shrimp vessel permit holders (Action 9); (5) establish a moratorium on the issuance of commercial shrimp vessel permits (Action 10); and (6) require reporting and certification of landings during  a moratorium (Action 11).  For each action, a “No Action” alternative may also be considered.  The Council is soliciting public comment on alternatives under each of these potential actions, and for other alternatives, that should be considered by the Council.  The Council is soliciting public comment on these issues through the public hearings, by mail and by e-mail; and must be received by the Council on or before March 4, 2005.
        The Gulf of Mexico Fishery Management Council is one of the eight regional fishery management councils that were established by the Magnuson-Stevens Fishery Conservation and Management Act of 1976.  The Gulf of Mexico Fishery Management Council prepares fishery management plans that are designed to manage fishery resources in the Exclusive Economic Zone (EEZ) of the U.S. Gulf of Mexico.
        Hearing Dates, Times, and Locations
        The hearings will begin at 7 p.m. and end no later than 10 p.m. on the following dates and at the locations specified below:

          Monday, February 14, 2005, Holiday Inn I-10, 5465 Highway 90 West, Mobile, AL 36619; 866-436-4329;

          Tuesday, February 15, 2005, Mississippi Department of Marine Resources, 1141 Bayview Drive, Biloxi, MS 39530; 228-374-5000;

          Tuesday, February 15, 2005, DoubleTree Grand Key Resort, 3990 South Roosevelt Boulevard, Key West, FL 33040; 888-310-1540;

          Wednesday, February 16, 2005, LSU Agricultural Center Extension Office, 1105 West Port Street, Abbeville, LA 70510; 337-898-4335;

          Thursday, February 17, 2005, Ramada Inn Houma, 1400 West Tunnel Boulevard, Houma, LA 70360; 985-879-4871;

          Thursday, February 17, 2005, DoubleTree Guest Suites Tampa Bay, 3050 North Rocky Point Drive, Tampa, FL 33607; 813-888-8800;

          Monday, February 21, 2005, Brownsville Events Center, 1 Events Center Boulevard, Brownsville, TX 78526; 956-554-0700;

          Tuesday, February 22, 2005, Palacios Rec Center, 2401 Perryman, Palacios, TX 77465; 361-972-2387;

          Wednesday, February 23, 2005, San Luis Resort, 5222 Seawall Boulevard, Galveston Island, TX 77651; 409-744-1500; and

          Thursday, February 24, 2005,  New Orleans Airport Ramada Inn & Suites, 110 James Drive East, St. Rose, LA 70087; 504-466-1355.
        Special  Accommodations

        The hearings are open to the public and are physically accessible to people with disabilities.  Requests for sign language interpretation or other auxiliary aids should be directed to Dawn Aring at the Council office (see ADDRESSES) by February 7, 2005.

          Dated: January 27, 2005.
          Alan D. Risenhoover,
          Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service.

      [FR Doc. 05-1800 Filed 1-31-05; 8:45 am]
      BILLING CODE 3510-22-S


        DEPARTMENT OF TREASURY
        Internal Revenue Service
        26 CFR Part 1
        [REG-159420-04]
        RIN 1545-BE14
        Credit for Increasing Research Activities: Intra-Group Gross Receipts

          AGENCY:
          Internal Revenue Service (IRS), Treasury.

          ACTION:
          Notice of proposed rulemaking and notice of public hearing.

          SUMMARY:
          This document contains proposed regulations under section 41 of the Internal Revenue Code (Code) relating to the treatment of qualified research expenditures (QREs) and gross receipts resulting from transactions between members of a controlled group of corporations or a group of trades or businesses under common control (intra-group transactions) for purposes of determining the credit under section 41 for increasing research activities (research credit). These proposed regulations will affect controlled groups of corporations or groups of trades or businesses under common control (controlled groups) that are engaged in research activities. This document also provides notice of a public hearing on these proposed regulations.

          DATES:
          Written or electronic comments must be received by March 13, 2014. Outlines of topics to be discussed at the public hearing scheduled for April 23, 2014, at 10:00 a.m. must be received by March 13, 2014.

          ADDRESSES:

          Send submissions to: CC:PA:LPD:PR (REG-159420-04), Room 5205, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions also may be hand delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-159420-04), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW., Washington, DC, or sent electronically via the Federal eRulemaking Portal at http://www.regulations.gov (IRS REG-159420-04). The public hearing will be held in the IRS Auditorium, Internal Revenue Building, 1111 Constitution Avenue NW., Washington, DC.

          FOR FURTHER INFORMATION CONTACT:
          Concerning these proposed regulations, David Selig, (202) 317-4137; concerning submission of comments, the hearing, and/or to be placed on the building access list to attend the hearing, Oluwafunmilayo (Funmi) Taylor, (202) 317-6901 (not toll-free numbers).

        SUPPLEMENTARY INFORMATION:

        Background
        These proposed regulations address how the interaction of section 41(f)(1) (relating to the treatment of controlled groups as a single taxpayer) and section 41(c)(7) (relating to the exclusion from gross receipts of amounts received by a foreign corporation that are not effectively connected to a United States trade or business) affects the computation of gross receipts resulting from intra-group transactions between domestic controlled group members (domestic members) and foreign corporate members of the controlled group (foreign corporate members). These proposed regulations apply to an intra-group transaction that is followed by a transaction between a foreign corporate member and a party outside of the controlled group involving the same or a modified version of tangible or intangible property or services that was the subject of the intra-group transaction, and the transaction with the party outside of the controlled group does not give rise to gross receipts that are effectively connected with a trade or business within the United States, the Commonwealth of Puerto Rico, or any possession of the United States.
        Section 41(f)(1) provides that in determining the amount of the research credit, all members of the same controlled group of corporations and all commonly controlled trades or businesses (whether or not incorporated) shall be treated as a single taxpayer. For this purpose, controlled group is defined by reference to section 1563(a), except that “more than 50 percent” is substituted for “at least 80 percent,” and the determination is made without regard to subsections (a)(4) (regarding certain insurance companies) and (e)(3)(C) (regarding stock owned by an employees' trust). The statute provides no rules, however, regarding how the single taxpayer treatment is to be implemented. Commentators have noted the ambiguity associated with similar provisions of the Code. See, e.g., Prop. Reg. § 1.199-1, 70 FR 67220, 67236 (November 4, 2005) (“the single corporation language in section 199(d)(4)(A) has created confusion among commentators and the proposed regulations clarify the meaning of this language”).
        The IRS and the Treasury Department believe that the single taxpayer concept should be interpreted consistently with the purpose the statute is intended to advance. The single taxpayer concept as it relates to the computation of the research credit first appeared in 1981 when Congress initially enacted the research credit. As originally enacted, the research credit was determined solely by reference to a taxpayer's QREs. Specifically, to ensure that the research credit was available only for actual increases in research expenditures, former section 44F(f)(1) provided that the QREs of a controlled group of corporations and all commonly controlled trades or businesses (whether or not incorporated) were aggregated and treated as those of a single taxpayer. H. Rept. No. 97-201, 1981-2 CB 364-365 (demonstrating that controlled groups are prevented from increasing research expenditures by shifting these expenditures from an entity that has a high baseline of research expenditures to one that does not).

        In 1989, Congress modified the computation of the research credit (now section 41 of the Code) by adding the base amount concept embodied in section 41(a)(1)(B), which included gross receipts in the calculation of the research credit for the first time. See the Omnibus Budget Reconciliation Act of 1989 (Pub. L. 101-239, § 7110) (the “1989 Act”). The legislative history of the 1989 Act explains that gross receipts were included in the computation of the research credit to address concerns with the existing rules and incentivize spending on research activities. In particular, Congress wished to modify the pre-existing incremental credit structure in order to maximize the research credit's efficiency by not allowing (to the extent possible) credits for research that would have been undertaken in any event. Congress believed that businesses often determine their research budgets as a fixed percentage of gross receipts and determined that it was appropriate to compute the research credit, in part, based on the increase in a taxpayer's gross receipts. This approach also had the advantage of effectively indexing the research credit for inflation and preventing taxpayers from being rewarded for increases in research spending that are attributable solely to inflation. See H.R. Rep. No. 101-247, 101st Cong., 1st Sess. 1199-1200 (1989).
        The 1989 Act also amended section 41 to provide certain parameters for measuring gross receipts. Specifically, section 41(c)(7) provides that gross receipts are reduced by returns and allowances made during the taxable year. Section 41(c)(7) also provides that in the case of a foreign corporation, only gross receipts effectively connected with the conduct of a trade or business within the United States, the Commonwealth of Puerto Rico, or any possession of the United States are taken into account in the computation of the research credit. See section 41(c)(7), as amended. The legislative history of the 1989 Act does not expressly address the purpose of the gross receipts provision relating to foreign corporations. The enactment of the controlled group aggregation rules in section 41(f)(1) (treating all members of a controlled group as a single taxpayer) preceded the enactment of the foreign corporation gross receipts rule in section 41(c)(7). Congress, however, did not make clear how the two provisions should interact and did not provide any additional indication regarding the consequences of being treated as a single taxpayer, including when the deemed single taxpayer is comprised of both domestic and foreign controlled group members.
        Current Regulatory Scheme
        Section 1.41-3(c) defines gross receipts generally as the total amount, determined under the taxpayer's method of accounting, derived from all its activities and from all sources. Section 1.41-6(i) interprets the single taxpayer concept of section 41(f)(1) to provide that transfers between members of a controlled group of corporations are generally disregarded for purposes of determining the research credit under section 41 for both gross receipts and QREs. The IRS and the Treasury Department believe that, in most cases, the general rule that disregards intra-group transactions for both gross receipts and QREs furthers the statutory purpose of ensuring that the computation of the research credit is based upon an economic measure of gross receipts relative to QREs and not artificially increased by multiple intra-group transactions.
        The IRS and the Treasury Department believe, however, that an interpretation of section 41(f)(1) that completely excludes gross receipts associated with certain transactions is inconsistent with Congressional intent. For example, assume that a domestic corporation incurs research expenditures and sells a product that it produced to a foreign corporate member, and the foreign corporate member then sells the product to a customer in a transaction that does not give rise to gross receipts effectively connected with a trade or business within the United States, the Commonwealth of Puerto Rico, or any possession of the United States. If gross receipts from the sales transactions are excluded because the intra-group transaction is disregarded under § 1.41-6 and the foreign corporate member's gross receipts are excluded under section 41(c)(7) for the second transaction, the aggregate amount of gross receipts for purposes of determining the research credit is distorted. The distortion results because the QREs of the domestic member are included, but its gross receipts from the sale to the foreign corporate member are not. Accordingly, the IRS and the Treasury Department propose to revise the regulations to include gross receipts in this situation, including in cases where the property is modified prior to being transferred by the foreign corporate member, the gross receipts are in the form of royalties, interest, or other cash or non-cash remuneration, or the gross receipts relate to services ultimately provided by the foreign corporate member to a third-party customer.
        However, the IRS and the Treasury Department believe that multiple inclusions of gross receipts associated with intra-group transactions involving the same or a modified version of tangible or intangible property or services would be inconsistent with Congressional intent. Thus, for example, it would not be appropriate to overstate gross receipts, and thereby reduce the research credit available to a controlled group, by taking into account the transfer of a single piece of property (including a modified form of the same property) more than one time (that is, first as a transfer between controlled group members and then as a transfer with a third party).
        Explanation of Provisions
        The proposed regulations retain the current rule that generally disregards transactions among members of a controlled group for purposes of computing the research credit, but provide a narrow exception to this rule. Under the exception, gross receipts (within the meaning of § 1.41-3(c)) from an intra-group transaction are taken into account if (1) a foreign corporate member engages in a transaction with a party outside of the group (external transaction) involving the same or a modified version of tangible or intangible property or a service that was previously the subject of one or more intra-group transactions (an internal transaction); and (2) the external transaction does not give rise to gross receipts that are effectively connected with a trade or business within the United States, the Commonwealth of Puerto Rico, or any possession of the United States. The exception harmonizes the application of sections 41(f)(1) and 41(c)(7) and is consistent with the purposes of these provisions as well as the broader statutory changes that made gross receipts a central feature of the research credit computation.
        For example, if a domestic member transfers property to a foreign corporate member, and the foreign corporate member then transfers the property outside of the controlled group in a transaction that does not give rise to gross receipts that are effectively connected with a trade or business within the United States, the Commonwealth of Puerto Rico, or any possession of the United States, the proposed regulations provide that the domestic member includes in its gross receipts amounts received from the foreign corporate member for that transaction. The amounts are taken into account in computing gross receipts in the taxable year in which the foreign corporate member engages in the external transaction. The fact that the foreign corporate member that ultimately engages in a transaction involving the property outside of the controlled group is not the same foreign corporate member to which the domestic member directly transferred the property (for example, one foreign corporate member re-transfers the property to another foreign corporate member) is not material to the determination of the domestic member's gross receipts.

        To prevent multiple inclusions of gross receipts in cases in which transactions involving the same or a modified version of tangible or intangible property or services occur successively between domestic and foreign corporate members, the proposed regulations provide that only the last internal transaction giving rise to gross receipts (within the meaning of section 1.41-3(c)) is taken into account in the research credit computation.

        These proposed regulations embody the statutory requirement of consistency in determining a taxpayer's base amount (generally, the product of the fixed-base percentage and 4-year average annual gross receipts preceding the credit year). See section 41(c)(6). Accordingly, in computing the research credit for taxable years beginning on or after the date of publication of these proposed regulations as final regulations, QREs and gross receipts taken into account in computing a taxpayer's fixed-base percentage and a taxpayer's base amount must be determined on a basis consistent with the definition of QREs and gross receipts for the credit year, without regard to the law in effect for the earlier taxable years that are taken into account in computing the fixed-base percentage or the base amount. However, the proposed regulations do not specify the manner in which a taxpayer must make the base amount adjustments. The IRS and the Treasury Department recognize that accounting for intra-group transactions in prior years presents a unique burden because taxpayers may not have records for the base years with sufficient information to satisfy the proposed regulations' requirement of consistency. These proposed regulations are intended to capture some measure of intra-group gross receipts for purposes of satisfying the requirement of consistency, but are not intended to preclude research credit claims for taxpayers that do not have adequate information in their books and records for the base years. Accordingly, the IRS and Treasury Department request comments regarding the need for a rule or safe harbor in applying the consistency rule for purposes of determining the base amount in accordance with these proposed regulations.
        QREs
        These proposed regulations remove the rules in § 1.41-6(i)(4) (relating to the treatment of lease payments as QREs) to reflect changes to section 41 by the Tax Reform Act of 1986, Public Law 99-514.
        These proposed regulations generally would not change the rules concerning whether payments between members of a controlled group constitute QREs. The IRS and the Treasury Department request comments concerning whether any revisions are necessary.
        Proposed Effective Date

        The amendments to § 1.41-6(i) are proposed to apply to taxable years beginning on or after the date that these regulations are published as final regulations in the Federal Register.
        Special Analysis
        It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. It also has been determined that section 553(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. Therefore, a Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.
        Comments and Public Hearing
        Before these proposed regulations are adopted as final regulations, consideration will be given to any electronic or written comments (a signed original and eight (8) copies) that are submitted timely to the IRS. The IRS and the Treasury Department request comments on all aspects of the proposed rules.
        All comments will be available for public inspection and copying.

        A public hearing has been scheduled for April 23, 2014, beginning at 10:00 a.m. in the IRS Auditorium, Internal Revenue Building, 1111 Constitution Avenue NW., Washington, DC. Due to building security procedures, visitors must enter at the Constitution Avenue entrance. In addition, all visitors must present photo identification to enter the building. Because of access restrictions, visitors will not be admitted beyond the immediate entrance area more than 30 minutes before the hearing starts. For information about having your name placed on the building access list to attend the hearing, see the FOR FURTHER INFORMATION CONTACT section of this preamble.
        The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who wish to present oral comments at the hearing must submit electronic or written comments by March 13, 2014, and submit an outline of the topics to be discussed and the amount of time to be devoted to each topic (a signed original and eight (8) copies) by March 13, 2014. A period of 10 minutes will be allotted to each person for making comments. An agenda showing the scheduling of the speakers will be prepared after the deadline for receiving outlines has passed. Copies of the agenda will be available free of charge at the hearing.
        Drafting Information
        The principal author of these proposed regulations is David Selig, Office of the Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the IRS and the Treasury Department participated in their development.

          List of Subjects in 26 CFR part 1
          Income taxes, Reporting and recordkeeping requirements.

        Proposed Amendments to the Regulations
        Accordingly, 26 CFR part 1 is proposed to be amended as follows:

          PART 1—INCOME TAXES

          Paragraph 1. The authority citation for part 1 continues to read in part as follows:

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

          Par. 2. In § 1.41-0, the table of contents is amended by:
        1. Revising the section heading for § 1.41-6 and the entries for § 1.41-6(i), (i)(1), (i)(2), (i)(3), (i)(4), and (i)(5).
        2. Adding a new entry for § 1.41-6(i)(6).
        3. Adding a new entry for § 1.41-6(j)(4).
        The addition reads as follows:

          § 1.41-0
          Table of contents.

          § 1.41-6
          Controlled groups.

          (i) Transactions between controlled group members.
          (1) In general.
          (2) Exception for certain amounts received from foreign corporate controlled group members.
          (3) In-house research expenses.
          (4) Contract research expenses.
          (5) Payment for supplies.
          (6) Consistency requirement.
          (j) * * *

          (4) Intra-group transactions.

          Par. 3. Section 1.41-6 is amended by:
        1. Revising the section heading.
        2. Revising paragraph (i)(1).
        3. Removing paragraph (i)(4).
        4. Redesignating paragraphs (i)(2) and (3) as paragraphs (i)(3) and (4), respectively.
        5. Adding new paragraph (i)(2).
        6. Adding new paragraph (i)(6).

        7. Revising the first sentence of paragraph (j)(1).

        8. Adding new paragraph (j)(4).
        The revisions and additions read as follows:

          § 1.41-6
          Controlled groups.

          (i) Transactions between controlled group members—(1) In general—Treatment of transactions. Except as otherwise provided in this paragraph, all activities giving rise to amounts included in gross receipts under § 1.41-3(c) (transactions) between members of a controlled group as defined in paragraph (a)(3) of this section (intra-group transactions) are generally disregarded in determining the QREs and gross receipts of a member for purposes of the research credit.
          (2) Exception for certain amounts received from foreign corporate controlled group members—(i) In general. Notwithstanding paragraph (i)(1) of this section, gross receipts (within the meaning of § 1.41-3(c)) from an intra-group transaction are taken into account if—
          (A) A foreign corporate controlled group member engages in a transaction with a party outside of the group (an external transaction) involving the same or a modified version of tangible or intangible property or a service that was previously the subject of one or more intra-group transactions (an internal transaction); and
          (B) The external transaction does not give rise to gross receipts that are effectively connected with a trade or business within the United States, the Commonwealth of Puerto Rico, or any possession of the United States.
          (ii) Timing of inclusion. The amount described as taken into account in computing gross receipts in paragraph (i)(2)(i) of this section is taken into account in the year a foreign corporate controlled group member engages in the external transaction described in paragraph (i)(2)(i)(B) of this section.
          (iii) Multiple intra-group transactions. If there is more than one internal transaction, then only the last internal transaction giving rise to gross receipts (within the meaning of section 1.41-3(c)) is taken into account in the research credit computation pursuant to paragraph (i)(2)(i) of this section.
          (iv) Examples. The following examples illustrate the principles of paragraph (i)(2) of this section.

            Example 1.

              Domestic Controlled Group Member Includes in Gross Receipts Proceeds From Intra-group Sale. D and F are members of the same controlled group. D is a domestic corporation. F is a foreign corporation that is organized under the laws of Country. F does not conduct a trade or business within the United States, Puerto Rico, or any U.S. possession. In Year 1, D sells Product to F for $8x. In Year 2, F sells Product to F's unrelated customer for $10x. Because the Product that F sells outside the group is the same Product that was the subject of an internal transaction (i.e., the sale from D to F), and the $10x that F receives upon sale of Product outside the group is not effectively connected with a trade or business within the United States, the Commonwealth of Puerto Rico, or any possession of the United States, the $8x that D receives from F is included in D's gross receipts for purposes of computing the amount of the group credit. The $8x of gross receipts is taken into account in Year 2, the year of the external transaction. See paragraph (i)(2) of this section. The $10x that F receives from F's customer is excluded from gross receipts under section 41(c)(7) because it is not effectively connected with the conduct of a trade or business within the United States, the Commonwealth of Puerto Rico, or any possession of the United States.

            Example 2.

              Domestic Controlled Group Member Includes in Gross Receipts Amounts Received For Intra-group Transfer of License. Assume the same facts as in Example 1, except in Year 1, D licenses intellectual property (license) to F for $8x. F owns similar intellectual property that it plans to license to a customer together with the license it received from D. In Year 2, F licenses its intellectual property and sublicenses D's intellectual property to F's unrelated customer for $20x. Because the intellectual property that F sublicenses outside the group is the same intellectual property that was the subject of an internal transaction (i.e., the license from D to F), and the $20x that F receives for the license and sublicense of intellectual property outside the group is not effectively connected with a trade or business within the United States, the Commonwealth of Puerto Rico, or any possession of the United States, the $8x that D receives from F is included in D's gross receipts for purposes of computing the amount of the group credit. The $8x of gross receipts is taken into account in Year 2, the year of the external transaction. See paragraph (i)(2) of this section. The $20x that F receives from F's customer is excluded from gross receipts under section 41(c)(7) because it is not effectively connected with the conduct of a trade or business within the United States, the Commonwealth of Puerto Rico, or any possession of the United States.

            Example 3.

              Domestic Controlled Group Member Includes in Gross Receipts Proceeds From Intra-group Sale Following Multiple Internal Transactions. D, F1, and F2 are members of the same controlled group. D is a domestic corporation. F1 and F2 are foreign corporations that are organized under the laws of Country. F1 and F2 do not conduct a trade or business within the United States, Puerto Rico, or any U.S. possession. In Year 1, D sells Product to F1 for $8x. In Year 2, F1 sells Product to F2 for $9x, and F2 sells Product to F2's unrelated customer for $10x. Both D's sale to F1 and F1's sale to F2 are internal transactions involving Product that precede F2's external transaction involving Product. The $10x that F2 receives upon sale of Product outside the group is not effectively connected with a trade or business within the United States, the Commonwealth of Puerto Rico, or any possession of the United States. Accordingly, the group will include gross receipts from an internal transaction in its research credit computation pursuant to paragraph (i)(2)(i) of this section. Because F1's sale of Product to F2 does not produce gross receipts that are effectively connected with the conduct of a trade or business within the United States, the Commonwealth of Puerto Rico, or any possession of the United States, those gross receipts are not taken into account even though that sale is the most recent internal transaction preceding the external transaction. See section 41(c)(7) and paragraph (i)(2)(i) of this section. Therefore, D will include $8x of gross receipts in its research credit computation in Year 2, the year of the external transaction, because the transfer from D to F1 is the last internal transaction giving rise to includible gross receipts. See paragraph (i)(2)(iii) of this section.

            Example 4.

              Foreign Partnership Controlled Group Member Includes in Gross Receipts Proceeds From Intra-group Sale. Assume the same facts as in Example 3, except that F1 is a foreign partnership for federal income tax purposes and is part of the controlled group (within the meaning of § 1.41-6(a)(3)(ii)) that includes D and F2. Both D's sale to F1 and F1's sale to F2 are internal transactions involving Product that precede F2's external transaction involving Product. The $10x that F2 receives upon sale of Product outside the group is not effectively connected with a trade or business within the United States, the Commonwealth of Puerto Rico, or any possession of the United States. Accordingly, the group will include gross receipts from an internal transaction in its research credit computation pursuant to paragraph (i)(2)(i) of this section. F1's sale to F2 is the most recent internal transaction preceding the external transaction giving rise to gross receipts (see paragraph (i)(2)(iii)). The gross receipts from F1's sale to F2 are not excluded under section 41(c)(7) and paragraph (i)(2)(i) of this section because F1 is a partnership. Therefore, F1 will include $9x of gross receipts in its research credit computation in Year 2 because the transfer from F1 to F2 is the last internal transaction giving rise to gross receipts. See paragraph (i)(2)(iii) of this section.

            Example 5.

              Domestic Controlled Group Member Includes in Gross Receipts Proceeds From Intra-group Sale Following Multiple Internal Transactions that Include a Section 721 Exchange.

            Assume the same facts as Example 3, except that in an exchange meeting the requirements of section 721(a), F2 transfers Product to PRS, a partnership that is not part of the controlled group within the meaning of § 1.41-6(a)(3)(ii). Both D's sale to F1 and F1's sale to F2 are internal transactions involving Product that precede F2's transfer of Product to PRS. The exchange engaged in by F2 does not give rise to gross receipts that are effectively connected with a trade or business within the United States, the Commonwealth of Puerto Rico, or any possession of the United States. Because F1's sale of Product to F2 does not produce gross receipts that are effectively connected with the conduct of a trade or business within the United States, the Commonwealth of Puerto Rico, or any possession of the United States, those gross receipts are not taken into account even though that sale is the most recent internal transaction preceding the external transaction. See section 41(c)(7) and paragraph (i)(2)(i) of this section. Therefore, D will include $8x of gross receipts in its research credit computation in Year 2, the year of the external transaction, because the transfer from D to F1 is the last internal transaction giving rise to includible gross receipts. See paragraphs (i)(2)(i) and (i)(2)(iii) of this section.

          (6) Consistency requirement. In computing the research credit for taxable years beginning on or after the date of publication of these regulations as final regulations in the Federal Register, QREs and gross receipts taken into account in computing a taxpayer's fixed-base percentage and a taxpayer's base amount must be determined on a basis consistent with the definition of QREs and gross receipts for the credit year, without regard to the law in effect for the taxable years taken into account in computing the fixed-base percentage or the base amount. This consistency requirement applies even if the period for filing a claim for credit or refund has expired for any taxable year taken into account in computing the fixed-base percentage or the base amount.
          (j) Effective/applicability dates—(1) In general. Except as otherwise provided in this paragraph (j), these regulations apply to taxable years ending on or after May 24, 2005.

          (4) Intra-group transactions. Paragraphs (i)(1) and (2) of this section apply to taxable years beginning on or after the date of publication of these regulations as final regulations in the Federal Register.

          Beth Tucker,
          Deputy Commissioner for Operations Support.

      [FR Doc. 2013-29539 Filed 12-12-13; 8:45 am]
      BILLING CODE 4830-01-P