Unknown. Interim rule with request for comments
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/register/2008/07/09/08-1423A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
--- schema: federal-register doc_type: fedreg source_file: FR-2008-07-09.xml --- 73 132 Wednesday, July 9, 2008 Contents Agricultural Agricultural Marketing Service RULES Peanut Promotion, Research, and Information Order: Amendment to Primary Peanut-Producing States and Adjustment of Membership, 39214-39216 E8-15522 NOTICES Applications: Specialty Crop Block Grant Program-Farm Bill, 39278-39280 E8-15646 Agriculture Agriculture Department See Agricultural Marketing Service See Forest Service NOTICES Agency Information Collection Activities;
Proposals, Submissions, and Approvals, 39278 E8-15600 Alcohol Alcohol and Tobacco Tax and Trade Bureau NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39372-39373 E8-15559 Arts Arts and Humanities, National Foundation See National Foundation on the Arts and the Humanities Civil Civil Rights Commission NOTICES Meetings: Georgia Advisory Committee, 39281 E8-15575 Kentucky Advisory Committee, 39281 E8-15576 Missouri Advisory Committee, 39281 E8-15595 Coast Guard Coast Guard RULES Regattas and Marine Parades;
Great Lake Annual Marine Events, 39233-39235 E8-15490 Special Local Regulations for Marine Events; Port Huron to Mackinac Island Race, 39235 E8-15491 NOTICES Transportation Worker Identification Credential
(TWIC)Implementation in the Maritime Sector: Hazardous Materials Endorsement for a Commercial Drivers License, 39323-39324 E8-15489 Commerce Commerce Department See International Trade Administration See National Oceanic and Atmospheric Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39281-39282 E8-15572 Commodity Commodity Futures Trading Commission RULES Limited Marketing Activities Exempted Under Commodity Futures Trading Commission Regulation (30.10), 39226-39227 E8-15606 Defense Defense Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, E8-15505 E8-15523 39284-39286 E8-15525 Education Education Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, E8-15546 39286-39287 E8-15596 EPA Environmental Protection Agency RULES California State Implementation Plan; Revision: Sierra Air Quality Management District, et al., 39237-39240 E8-15435 National Ambient Air Quality Standards for Lead: Extension of Comment Period, 39235-39237 E8-15579 Pesticide Tolerances: Azoxystrobin, 39240-39247 E8-15517 Flumioxazin, 39247-39251 E8-15316 Gamma-cyhalothrin, 39261-39264 E8-15518 Sethoxydim, 39256-39261 E8-15519 Spirotetramat, 39251-39256 E8-15521 Tolerance Exemptions: Ammonium Soap Salts of Higher Fatty Acids, 39264-39269 E8-15516 PROPOSED RULES California State Implementation Plan; Revision: Sierra Air Quality Management District, et al., 39275 E8-15436 NOTICES 2008 Water Efficiency Leader Awards; Call for Applicants, 39287 E8-15577 Consent Decree: Clean Air Act Citizen Suit, 39287-39289 E8-15578 Filing of Pesticide Petitions for Residues of Pesticide Chemicals in or on Various Commodities, 39289-39291 E8-15334 Meetings: FIFRA Scientific Advisory Panel, 39292-39294 E8-15440 FIFRA Scientific Advisory Panel; Cancellation, 39291-39292 E8-15360 Product Cancellation Order: Fenvalerate, 39294-39296 E8-15314 Registration Review: Antimicrobial Pesticide, 39296-39298 E8-15443 State Innovation Grant Program: Preliminary Notice and Request for Input on the Development of a Solicitation for Proposals for 2009 Awards, 39298-39301 E8-15580 Trichoderma Species and Linalool Registration Review Proposed Decision, 39301-39303 E8-15442 FAA Federal Aviation Administration RULES Class D Airspace; Establishment: Albuquerque, NM, 39220-39221 E8-15237 Class D and Class E Airspace: Altus AFB, OK; Amendment, 39221 E8-15235 Class E Airspace; Establishment: Milford, PA, 39221 E8-15236 NOTICES Environmental Impact Statements; Availability, etc.: Spaceport America Commercial Launch Site, Sierra County, NM, 39370-39371 E8-15545 Petitions for Exemption; Summary of Petitions Received, 39371 E8-15481 FCC Federal Communications Commission RULES 2006 Quadrennial Regulatory Review: Commissions Broadcast Ownership Rules, 39269 E8-15594 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39303-39309 E8-15584 E8-15586 Radio Broadcasting Services: AM or FM Proposals to Change the Community of License, 39309 E8-15593 Federal Emergency Federal Emergency Management Agency NOTICES Disaster Declarations: Illinois, 39324-39325 E8-15531 Indiana, E8-15528 39325-39326 E8-15538 Iowa, E8-15526 39326 E8-15527 Iowa; Amendment, 39326-39327 E8-15529 Missouri, E8-15532 E8-15533 39327-39328 E8-15540 West Virginia; Amendment, 39328 E8-15535 Wisconsin, 39328-39329 E8-15530 E8-15537 Major Disaster Declarations: Nebraska, 39329 E8-15547 Wisconsin, 39329 E8-15536 Federal Highway Federal Highway Administration NOTICES Intent to Prepare an Environmental Impact Statement Jackson County, MO, 39371-39372 E8-15611 FMC Federal Maritime Commission NOTICES Agreements Filed, 39309-39310 E8-15567 Ocean Transportation Intermediary License; Applicants, 39310 E8-15568 Federal Motor Federal Motor Carrier Safety Administration NOTICES Meetings; Sunshine Act, 39372 08-1426 Federal Reserve Federal Reserve System NOTICES Formations of, Acquisitions by, and Mergers of Bank Holding Companies, 39310-39311 E8-15558 FTC Federal Trade Commission RULES Energy Consumption and Water Use of Certain Home Appliances and Other Products Required Under the Energy Policy and Conservation Act, 39221-39226 E8-15243 Fish Fish and Wildlife Service RULES Endangered and Threatened Wildlife and Plants: Critical Habitat Revised Designation for the Kootenai River Population of the White Sturgeon, 39506-39523 E8-15134 PROPOSED RULES General Regulations; Areas Administered by the National Park Service and the Fish and Wildlife Service, 39272 E8-15614 Food Food and Drug Administration NOTICES Ruminant Feed Ban Support Project; Availability of Cooperative Agreements, 39316-39318 E8-15561 Forest Forest Service NOTICES Meetings: Roadless Area Conservation National Advisory Committee, 39280-39281 E8-15563 GSA General Services Administration PROPOSED RULES General Services Acquisition Regulation: GSAR Case 2006-G504; Rewrite of GSAR Part 516; Types of Contracts, 39275-39277 E8-15587 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39284-39286, E8-15505 E8-15523 39311 E8-15524 E8-15525 Health Health and Human Services Department See Food and Drug Administration See National Institutes of Health See Substance Abuse and Mental Health Services Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39311-39313 E8-15571 E8-15601 Meetings: Secretarys Advisory Committee on National Health Promotion and Disease Prevention Objectives (2020), 39313-39314 E8-15548 Statement of Organization, Functions and Delegations of Authority, 39314-39315 E8-15430 Homeland Homeland Security Department See Coast Guard See Federal Emergency Management Agency Housing Housing and Urban Development Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, E8-15507 39330-39331 E8-15508 Interior Interior Department See Fish and Wildlife Service See Minerals Management Service See National Park Service IRS Internal Revenue Service RULES Election to Expense Certain Refineries, 39227-39233 08-1423 PROPOSED RULES Election to Expense Certain Refineries, 39270-39272 08-1424 International International Trade Administration NOTICES The Manufacturing Council: Meeting, 39282 08-1421 Justice Justice Department NOTICES Lodging of Stipulation and Order: United States v. Metropolitan District Commission and Massachusetts Water Resources Authority, et al., 39335-39336 E8-15534 Labor Labor Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39336-39337 E8-15515 Minerals Minerals Management Service PROPOSED RULES Alternative Energy and Alternate Uses of Existing Facilities on the Outer Continental Shelf, 39376-39504 E8-14911 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39331-39335 E8-15495 E8-15497 NASA National Aeronautics and Space Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, E8-15505 E8-15523 39284-39286 E8-15525 National Foundation National Foundation on the Arts and the Humanities NOTICES Meetings: Arts Advisory Panel, 39337 E8-15520 Humanities Panels, 39337-39338 E8-15585 National Council on the Humanities, 39338-39339 E8-15597 NIH National Institutes of Health NOTICES Government-Owned Inventions; Availability for Licensing, 39319-39321 E8-15562 Meetings: Center for Scientific Review Special Emphasis Panel, 39321 E8-15469 National Childrens Study Advisory Committee, 39322 E8-15467 Request for Information; High Throughput Screening Approaches for Toxicology, 39322-39323 E8-15560 NOAA National Oceanic and Atmospheric Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39282-39283 E8-15573 Meetings: Gulf of Mexico Fishery Management Council, E8-15588 39283-39284 E8-15589 National Park National Park Service PROPOSED RULES General Regulations; Areas Administered by the National Park Service and the Fish and Wildlife Service, 39272 E8-15614 Nuclear Nuclear Regulatory Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39339 E8-15569 Application for a Combined License: South Carolina Electric and Gas Company and the South Carolina Public Service Authority, 39339-39340 E8-15543 Draft Regulatory Guide: Issuance, Availability, 39340 E8-15565 Issuance of Regulatory Guide, 39340-39341 E8-15544 Peace Peace Corps PROPOSED RULES Claims against the Government under the Federal Tort Claims Act, 39270 E8-15583 Personnel Personnel Management Office RULES Prevailing Rate Systems: Redefinition of the New Orleans, LA Appropriated Fund Federal Wage System Wage Area, 39213-39214 E8-15598 Postal Postal Service PROPOSED RULES Treatment of Undeliverable Books and Sound Recordings, 39272-39273 E8-15223 Waiver of Signature Delivery Process, 39273-39275 E8-15212 Presidio Presidio Trust NOTICES Meetings: Presidio Trust Board of Directors; Revised, 39341 E8-15582 SEC Securities and Exchange Commission PROPOSED RULES Modernization of the Oil and Gas Reporting Requirements, 39526-39568 E8-14944 NOTICES Applications: The Penn Mutual Life Insurance Co., et al., 39341-39349 E8-15514 Meetings; Sunshine Act, 39349 E8-15480 Roundtable on Fair Value Accounting Standards, 39349-39350 E8-15570 Self-Regulatory Organizations; Proposed Rule Changes: American Stock Exchange LLC, 39350-39355 E8-15484 E8-15513 Chicago Board Options Exchange, Inc., 39355-39358 E8-15482 E8-15487 International Securities Exchange, LLC, 39358-39359 E8-15496 NASDAQ Stock Market LLC, 39360-39362 E8-15486 New York Stock Exchange LLC, 39363-39365 E8-15485 NYSE Arca, Inc., 39365-39367 E8-15512 The Options Clearing Corporation, 39367-39368 E8-15483 SBA Small Business Administration NOTICES Disaster Declarations: Wisconsin, 39368 E8-15263 State State Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39368-39369 E8-15591 Delegation of Authority: Arms Control and International Security, 39369 E8-15581 Substance Substance Abuse and Mental Health Services Administration NOTICES Meetings: Center for Mental Health Services, 39323 E8-15541 Thrift Thrift Supervision Office RULES Optional Charter Provisions in Mutual Holding Company Structures, 39216-39220 E8-14374 Transportation Transportation Department See Federal Aviation Administration See Federal Highway Administration See Federal Motor Carrier Safety Administration NOTICES Meetings: Intelligent Transportation Systems Program Advisory Committee, 39369-39370 E8-15602 Treasury Treasury Department See Alcohol and Tobacco Tax and Trade Bureau See Internal Revenue Service See Thrift Supervision Office Separate Parts In This Issue Part II Interior Department, Minerals Management Service, 39376-39504 E8-14911 Part III Interior Department, Fish and Wildlife Service, 39506-39523 E8-15134 Part IV Securities and Exchange Commission, 39526-39568 E8-14944 Reader Aids Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, reminders, and notice of recently enacted public laws. To subscribe to the Federal Register Table of Contents LISTSERV electronic mailing list, go to http://listserv.access.gpo.gov and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions. 73 132 Wednesday, July 9, 2008 Rules and Regulations OFFICE OF PERSONNEL MANAGEMENT 5 CFR Part 532 RIN 3206-AL68 Prevailing Rate Systems; Redefinition of the New Orleans, LA, Appropriated Fund Federal Wage System Wage Area AGENCY: U.S. Office of Personnel Management. ACTION: Interim rule with request for comments. SUMMARY: The U.S. Office of Personnel Management is issuing an interim rule to add St. Charles and St. John the Baptist Parishes, Louisiana, to the survey area of the New Orleans, LA, appropriated fund Federal Wage System wage area. The purpose of this change is to ensure the lead agency for the New Orleans wage area is able to obtain wage data that best represent the prevailing rates paid by businesses in the area. DATES: *Effective Date:* This regulation is effective on July 9, 2008. We must receive comments on or before August 8, 2008. ADDRESSES: Send or deliver comments to Charles D. Grimes III, Deputy Associate Director for Performance and Pay Systems, Strategic Human Resources Policy Division, U.S. Office of Personnel Management, Room 7H31, 1900 E Street, NW., Washington, DC 20415-8200; e-mail *pay-performance-policy@opm.gov;* or FAX:
(202)606-4264. FOR FURTHER INFORMATION CONTACT: Madeline Gonzalez,
(202)606-2838; e-mail *pay-performance-policy@opm.gov;* or FAX:
(202)606-4264. SUPPLEMENTARY INFORMATION: The U.S. Office of Personnel Management
(OPM)is adding St. Charles and St. John the Baptist Parishes, Louisiana, to the survey area of the New Orleans, LA, appropriated fund Federal Wage System
(FWS)wage area. The New Orleans survey area currently includes five of the seven parishes of the New Orleans-Metairie-Kenner, LA Metropolitan Statistical Area (MSA)—Jefferson, Orleans, Plaquemines, St. Bernard, and St. Tammany Parishes. The survey area does not include St. Charles and St. John the Baptist Parishes, which are also in the New Orleans-Metairie-Kenner MSA. While there are currently only five FWS employees working in St. Charles Parish and no FWS employees working in St. John the Baptist Parish, the addition of St. Charles and St. John the Baptist Parishes to the New Orleans survey area provides a desirable increase in the number of surveyable private sector industrial establishments in the New Orleans survey area—about 15 percent more than in the current New Orleans survey area. This survey area expansion will not create an undue survey burden on the lead agency for the wage area (the Department of Defense) and is strongly justified because of the substantial damage to private sector establishments in the New Orleans area in the aftermath of Hurricane Katrina. Expanding the New Orleans survey area will allow additional private sector establishments to provide wage data that best represents the prevailing rates paid by businesses in the New Orleans area. This change will be effective for the next full-scale wage survey in the wage area, which is scheduled to begin in November 2008. The Federal Prevailing Rate Advisory Committee, the national labor-management committee responsible for advising OPM on matters concerning the pay of FWS employees, has reviewed and recommended this change by consensus. Waiver of Notice of Proposed Rulemaking and Delay in Effective Date Pursuant to 5 U.S.C. 553(b)(3)(B) and (d)(3), I find that good cause exists to waive the general notice of proposed rulemaking. Also pursuant to 5 U.S.C. 553(d)(3), I find that good cause exists for making this rule effective in less than 30 days. This notice is being waived and the regulation is being made effective in less than 30 days because Hurricane Katrina caused substantial economic disruption in the New Orleans wage area affecting the Government's ability to adequately measure local prevailing wage levels. This change is urgent because the next scheduled wage survey in the wage area will occur in November 2008, and the lead agency must begin planning and coordination phases for the survey as soon as possible. Regulatory Flexibility Act I certify that these regulations will not have a significant economic impact on a substantial number of small entities because they will affect only Federal agencies and employees. List of Subjects in 5 CFR Part 532 Administrative practice and procedure, Freedom of information, Government employees, Reporting and recordkeeping requirements, Wages. Office of Personnel Management. Linda M. Springer, Director. Accordingly, the U.S. Office of Personnel Management is amending 5 CFR part 532 as follows: PART 532—PREVAILING RATE SYSTEMS 1. The authority citation for part 532 continues to read as follows: Authority: 5 U.S.C. 5343, 5346; § 532.707 also issued under 5 U.S.C. 552. Appendix C to Subpart B of Part 532—Appropriated Fund Wage and Survey Areas 2. In appendix C to subpart B, the wage area listing for the State of Louisiana is amended by revising the listing for New Orleans to read as follows: Louisiana New Orleans Survey Area Louisiana: Jefferson Orleans Plaquemines St. Bernard St. Charles St. John the Baptist St. Tammany Area of Application. Survey Area Plus Louisiana: Ascension Assumption East Baton Rouge East Feliciana Iberia Iberville Lafourche Livingston Pointe Coupee St. Helena St. James St. Martin St. Mary Tangipahoa Terrebonne Washington West Baton Rouge West Feliciana [FR Doc. E8-15598 Filed 7-8-08; 8:45 am] BILLING CODE 6325-39-P DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 1216 [Docket No.: AMS-FV-08-0001; FV-08-701 FR] Peanut Promotion, Research, and Information Order; Amendment to Primary Peanut-Producing States and Adjustment of Membership AGENCY: Agricultural Marketing Service, USDA. ACTION: Final rule. SUMMARY: The Department of Agriculture (Department) is adopting, as a final rule, without change, an interim final rule that added a producer member and alternate from the State of Mississippi to the National Peanut Board (Board). The change was proposed by the Board, which administers the nationally coordinated program, in accordance to the provisions of the Peanut Promotion, Research, and Information Order (Order) which is authorized under the Commodity Promotion, Research, and Information Act of 1996 (1996 Act). This change is made because Mississippi is now considered a major peanut-producing state based on the Board's review of the geographical distribution of the production of peanuts. The Order requires a review of the geographical distribution of the production of peanuts at least every five years. The addition of a member from Mississippi will provide for additional representation from another primary peanut-producing state. DATES: *Effective Date:* August 8, 2008. FOR FURTHER INFORMATION CONTACT: Jeanette Palmer, Marketing Specialist, Research and Promotion Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., Room 0632, Stop 0244, Washington, DC 20250-0244; telephone:
(202)720-9915; or fax:
(202)205-2800; or e-mail: *Jeanette.Palmer@usda.gov.* SUPPLEMENTARY INFORMATION: This rule is issued under the Peanut Promotion, Research, and Information Order [7 CFR Part 1216]. The Order is authorized under the Commodity Promotion, Research, and Information Act of 1996 [7 U.S.C. 7411-7425]. Executive Order 12866 The Office of Management and Budget has waived the review process required by Executive Order 12866 for this action. Executive Order 12988 This rule has been reviewed under Executive Order 12988, Civil Justice Reform. The rule is not intended to have a retroactive effect and will not affect or preempt any other State or Federal law authorizing promotion or research relating to an agricultural commodity. The 1996 Act provides that any person subject to an order may file a written petition with the Department of Agriculture if they believe that the order, any provision of the order, or any obligation imposed in connection with the order, is not established in accordance with the law. In any petition, the person may request a modification of the order or an exemption from the order. The petitioner is afforded the opportunity for a hearing on the petition. After a hearing, the Department would rule on the petition. The 1996 Act provides that the district court of the United States in any district in which the petitioner resides or conducts business shall have the jurisdiction to review the Department's ruling on the petition, provided a complaint is filed not later than 20 days after the date of the entry of the ruling. Regulatory Flexibility Analysis In accordance with the Regulatory Flexibility Act
(RFA)[5 U.S.C. 601-612], AMS has considered the economic impact of this rule on small entities and has prepared this final regulatory analysis impact on a substantial number of small entities. The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. The Small Business Administration
(SBA)defines, in 13 CFR part 121, small agricultural producers as those having annual receipts of no more than $750,000 and small agricultural service firms as having receipts of no more than $6,500,000. There are approximately 10,840 producers and 33 handlers of peanuts who are subject to the program. Most producers would be classified as small businesses under the criteria established by the SBA, and most of the handlers would not be classified as small businesses. The Department's National Agricultural Statistics Service (NASS), reports U.S. peanut production from the 10 major peanut-producing states. The combined production from these states totaled 3.74 billion pounds in 2007. NASS data indicates that Georgia was the largest producer (44 percent of the total U.S. production), followed by Texas (20 percent), Alabama (11 percent), Florida (9 percent), North Carolina (7 percent), South Carolina (5 percent), Mississippi (2 percent), Oklahoma (2 percent), Virginia (2 percent), and New Mexico (1 percent). According to the 2002 Census of Agriculture, small amounts of peanuts were also grown in six other states. NASS data indicates that the farm value of the peanuts produced in the top 10 states in 2007 was $763 million. Three main types of peanuts are grown in the United States: Runners, Virginia, and Spanish. The southeast growing region grows mostly the medium-kernel Runner peanuts. The southwest growing region used to grow two-thirds Spanish and one-third Runner peanuts, but now more Runners than Spanish are grown. Virtually all of the Spanish peanut production is in Oklahoma and Texas. In the Virginia-Carolina region, mainly large-kernel Virginia peanuts are grown. New Mexico grows a fourth type of peanut, the Valencia. According to the Department's *Agricultural Statistics* report, in 2005 there were 10,840 commercial producers of peanuts in the United States. If that number of growers is divided into the total U.S. production in 2005, the resulting average is 449,249 pounds of peanuts per grower. Peanuts produced during 2005 provided average gross sales of $77,808 per peanut producer, and the total value of the 2005 crop was approximately $843 million. During the 2005/2006 marketing season (which began August 1, 2005), the per capita consumption of peanuts in the United States was 6.6 pounds, the same as in the 2004/2005 season. Peanut manufacturers produce three principal peanut products: peanut butter, packaged nuts (including salted, unsalted, flavored, and honey-roasted nuts), and peanut candies. In most years, half of all peanuts produced in the United States for edible purposes are used to manufacture peanut butter. Packaged nuts account for almost one-third of all processed peanuts. Some of these (commonly referred to as “ballpark” peanuts) are roasted in the shell, while a much larger quantity is used as shelled peanuts packed as dry-roasted peanuts, salted peanuts, and salted mixed nuts. Some peanuts are ground to produce peanut granules and flour. Other peanuts are crushed to produce oil. According to the Department's Foreign Agricultural Service, exports of the United States peanuts (including peanut meal, oil, and peanut butter expressed in peanut equivalents) totaled 743 million in-shell equivalent pounds in calendar year 2006, with a value of $228 million (U.S. point of departure for the foreign country). Of the total quantity, 60 percent was shelled peanuts used as nuts, 19 percent was in peanut butter, 8 percent was blanched or otherwise prepared or preserved peanuts, 4 percent was in-shell peanuts, and 3 percent was shelled oil stock peanuts. The remaining 6 percent represents peanuts exported as either a meal or oil. The major destinations in 2006 for domestic shelled peanuts for use as nuts are Canada, Mexico, the Netherlands, and Russia. Blanched or otherwise prepared peanuts are sent mainly to Western Europe, especially Norway, Denmark, and Spain. In-shell peanuts are mainly exported to Canada and various countries in Western Europe. Peanut butter is sent to many countries, with the largest amounts going to Canada, Mexico, and Germany. Peanut oil and oil stock peanuts are exported world-wide, but major destinations can vary from year to year. Approximately 164 million in-shell equivalent pounds of peanuts and peanut butter were imported in 2006 with a combined value (freight on board country of origin) of $45 million. Peanut butter accounted for about 63 percent of the total quantity of nuts (in-shell basis) imported in 2006. Most peanut butter imports come from Canada, Mexico, and Argentina. The other major import category—processed peanuts, are shipped mainly from China. Imports of oil stock shelled peanuts and peanut meal were negligible in the United States. Most peanuts produced in other countries are crushed for oil and protein meal. The United States is the main producer of peanuts used in such edible products as peanut butter, roasted peanuts, and peanut candies. Peanuts are one of the world's principal oilseeds, ranking fourth behind soybeans, cottonseed, and rapeseed. India and China usually account for half of the world's peanut production. The Board is currently composed of 10 producer members and their alternates. There is one producer member and alternate from each of the nine major peanut-producing states (in descending order—Georgia, Texas, Alabama, Florida, North Carolina, South Carolina, Oklahoma, Virginia, and New Mexico) and one at-large member and alternate representing all other peanut-producing states. However, based on the Board's review of the geographical distribution of the production of peanuts, Mississippi is now considered a major peanut-producing state. The Order requires this review at least every five years. The Board membership would move from 10 members and their alternates to 11 members and their alternates. The addition of a producer member and alternate would be consistent with section 1216.40(b) of the Order which indicates that at least once during each five-year period, the Board shall review the geographical distribution of peanuts and make recommendation to the Secretary of Agriculture (Secretary) to continue without change or whether changes should be made in the number of representatives on the Board to reflect changes in the geographical distribution of the production of peanuts. The Order became effective on July 30, 1999, and it contains provision to add a producer member and alternate if the State meets and maintains a three-year average production of at least 10,000 tons of peanuts. At the Board's December 4-5, 2007, meeting, the Board voted unanimously to add the State of Mississippi as a primary peanut-producing state contingent on the NASS data for the 2007 crop year showing that Mississippi has maintained a three-year average annual peanut production of at least 10,000 tons per year. The most recent NASS data shows that for the years 2005, 2006, and 2007 Mississippi produced 22,400 tons, 23,200 tons, and 29,700 tons of peanuts respectively. Based on this data, the three-year average annual peanut production for Mississippi totals 22,410 tons per year (67,232 divided by 3), which well exceeds the threshold set in the Order. With regard to alternatives, the Board reviewed the peanut distribution for all the minor peanut-producing states, and Mississippi was the only State that met the Order's requirement for a three-year average peanut production of at least 10,000 tons. Nominations and appointments to the Board are conducted pursuant to sections 1216.40, 1216.41, and 1216.43 of the Order. According to these sections, appointments to the Board are made by the Secretary from a slate of nominated candidates. Pursuant to section 1216.41(a) of the Order, eligible peanut producer organizations within the State shall nominate two qualified persons for each member and each alternate member. The nomination meeting must be announced 30 days in advance. The nominees should be elected at an open meeting among peanut producers eligible to serve on the Board. At the nomination meeting, the Department will be present to oversee and to verify eligibility and count ballots. The nominees for the producer member and alternate member are then submitted to the Secretary for appointment to the Board. In accordance with the Office of Management and Budget
(OMB)regulation [5 CFR Part 1320] which implements the Paperwork Reduction Act of 1995 [44 U.S.C. Chapter 35], the background form, which represents the information collection and recordkeeping requirements that may be imposed by this rule, was previously submitted to and approved by OMB under OMB Number 0505-0001. The public reporting burden is estimated to increase by an average 0.5 hours per response for each of the four producers. The estimated annual cost of providing the information by the four producers would be $19.80 or $4.95 per producer. This additional burden will be included in the existing information collections approved for use under OMB Number 0505-0001. With regard to information collection requirements, adding a producer member and alternate member representing the State of Mississippi for the Board means that four additional producers will be required to submit background forms to the Department in order to be considered for appointment to the Board. Four producers will be affected because two names must be submitted to the Secretary for consideration for each position on the Board. However, serving on the Board is optional, and the burden of submitting the background form would be offset by the benefits of serving on the Board. The estimated annual cost of providing the information by four producers would be $19.80 for all four producers or $4.95 per producer. The Department has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule. Background The Order became effective on July 30, 1999, and is authorized under the 1996 Act. The Board is composed of 10 producer members and their alternates: one member and alternate from each primary peanut-producing state (in descending order—Georgia, Texas, Alabama, Florida, North Carolina, South Carolina, Oklahoma, Virginia, and New Mexico) and one at-large member and alternate collectively from the minor peanut-producing states. The members and alternates are nominated by producers or producer groups. Under the Order, the Board administers a nationally coordinated program of promotion, research, and information designed to strengthen the position of peanuts in the market place and to develop, maintain, and expand the demand for peanuts in the United States. Under the program, all peanut producers pay an assessment of one percent of the total value of all farmer's stock peanuts. The assessments are remitted to the Board by handlers and, for peanuts under loan, by the Commodity Credit Corporation. Pursuant to section 1216.40(b) of the Order, at least once in each five-year period, the Board shall review the geographical distribution of peanuts in the United States and make a recommendation to the Secretary to continue without change or whether changes should be made in the number of representatives on the Board to reflect changes in the geographical distribution of the production of peanuts. The Board reviewed the most recent NASS data and it reported that in 2005, 2006, and 2007 Mississippi produced 22,400 tons, 23,200 tons, and 29,700 tons of peanuts respectively. Based on this data, the three-year average annual peanut production for Mississippi totals 22,410 tons per year (67,232 divided by 3) which exceeds the requirement set in the Order of 10,000 pounds per year to become a major peanut-producing state. In addition, NASS data showed that Mississippi has produced two percent of the total United States peanut crop which is the same as Oklahoma and Virginia, two of the primary peanut-producing states. At the Board's December 4-5, 2007, meeting, the Board voted unanimously to add Mississippi as a primary peanut-producing state. Therefore, the addition of a producer member and alternate would carry out the recommendations of the Board. This action will add to the Board a member and an alternate from Mississippi which has become a primary peanut-producing state. The addition of a producer member and alternate member would allow Mississippi representation on the Board's decision making and also potentially provide an opportunity to increase diversity on the Board. Furthermore, this rule would make amendments to sections 1216.15 and 1216.21 of the Order to add the State of Mississippi as a primary peanut-producing state. Also, this rule would revise sections 1216.40(a) and 1216.40(a)(1) of the Order to specify that the Board will be composed of 11 peanut producer members and their alternates rather than 10. Nominations and appointments to the Board are conducted pursuant to sections 1216.40, 1216.41, and 1216.43 of the Order. According to these sections, appointments to the Board are made by the Secretary from a slate of nominated candidates. Pursuant to section 1216.41(a) eligible peanut producer organizations within the State as certified pursuant to section 1216.70 shall nominate two qualified persons for each member and each alternate member. The nomination meeting must be announced 30 days in advance. The nominees should be elected at an open meeting among peanut producers eligible to serve on the Board. At the nomination meeting, the Department was present to oversee and to verify eligibility and count ballots. The nominees for the producer member and alternate member will be submitted to the Secretary for appointment to the Board. An interim final rule concerning this action was published in the **Federal Register** on March 20, 2008 (73 FR 14919). Copies of the rule were made available through the Internet by the Department and the Office of the Federal Register. That rule provided a 30-day comment period which ended on April 21, 2008. Three comments were received by the deadline. Three favorable comments were received. The commenters state the addition of Mississippi as a major peanut-producing state will ensure that all growers have the opportunity to be equitably represented in setting the vision and goals of the Peanut Promotion, Research, and Information Order. An interim final rule was published in the **Federal Register** on March 20, 2008 (73 FR 14919), allowing the Board to begin the nomination process to fill the Mississippi member and alternate positions. As a result, the Mississippi nomination process began in April 2008 to allow Mississippi to have representation on the Board for the next term of office beginning January 1, 2009, and ending December 31, 2011. After consideration of all relevant material presented, the Board's recommendation, and other information, it is hereby found that this rule is consistent with and will tend to effectuate the declared policy of the 1996 Act and therefore should be adopted as a final rule, without change. List of Subjects in 7 CFR Part 1216 Administrative practice and procedure, Advertising, Consumer information, Marketing agreements, Peanut promotion, Reporting and recordkeeping requirements. PART 1216—PEANUT PROMOTION, RESEARCH, AND INFORMATION ORDER Accordingly, the interim final rule amending 7 CFR part 1216 which was published at 73 FR 14919 on March 20, 2008, is adopted as a final rule without change. Dated: July 2, 2008. Lloyd C. Day, Administrator, Agricultural Marketing Service. [FR Doc. E8-15522 Filed 7-8-08; 8:45 am] BILLING CODE 3410-02-P DEPARTMENT OF THE TREASURY Office of Thrift Supervision 12 CFR Part 575 [No. OTS-2008-0005] RIN 1550-[AC15] Optional Charter Provisions in Mutual Holding Company Structures AGENCY: Office of Thrift Supervision, Treasury. ACTION: Final rule. SUMMARY: The Office of Thrift Supervision
(OTS)is amending its mutual holding company
(MHC)regulations to permit certain MHC subsidiaries to adopt an optional charter provision that would prohibit any person from acquiring, or offering to acquire, beneficial ownership of more than ten percent of the MHC subsidiary's minority stock (stock held by persons other than the subsidiary's MHC). DATES: *Effective Date:* This final rule is effective on October 1, 2008. FOR FURTHER INFORMATION CONTACT: Donald W. Dwyer,
(202)906-6414, Director, Applications, Examinations and Supervision—Operations; or David A. Permut,
(202)906-7505, Senior Attorney, Business Transactions Division, Office of Chief Counsel, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552. SUPPLEMENTARY INFORMATION: I. Background On June 27, 2007, OTS published a notice of proposed rulemaking
(NPR)that proposed to amend the MHC Regulations to permit certain MHC subsidiaries to adopt an optional charter provision that would prohibit any person from acquiring, or offering to acquire beneficial ownership of more than ten percent of the MHC subsidiary's minority stock (stock held by persons other than the subsidiary's MHC). 1 1 *See* 72 FR 35205 (Jun. 27, 2008). Under the MHC Regulations, a subsidiary MHC, or, where there is no subsidiary MHC, the former mutual savings association that reorganized into an MHC structure (collectively, Subsidiary Company), may sell less than 50 percent of its voting stock to parties other than the top-tier MHC. 2 2 *See* 12 CFR 575.7 and 575.14(b)(2008). *See also* 12 U.S.C. 1467a(o)(8)(B). Under the MHC Regulations, a Subsidiary Company may adopt a charter provision that prohibits any person from acquiring, or offering to acquire, beneficial ownership of more than 10 percent of the Subsidiary Company's stock during the five years after a minority stock issuance. 3 The purpose of this provision, as is the case with the provision when applied to fully converted associations, is to lessen the vulnerability of the entity to attempts to take unfair advantage of the results of the offering, to protect the integrity of the offering, and to ensure that the offering is completed in a manner that strengthens the issuer. 4 3 *See* 12 CFR 552.4(b)(8) and 575.14(c)(2)(2008). 4 *See, e.g.,* Federal Home Loan Bank Board Order No. 84-90 (Feb. 23, 1984). OTS has become aware of several situations in which minority stockholders have acquired positions in the minority stock of Subsidiary Companies, and have taken actions that appear intended to influence management to engage in stock repurchases or in a sale of the institution. Because a top-tier MHC is required to retain more than 50 percent of the stock of any Subsidiary Company, holders of minority stock (minority stockholders) cannot control the outcome of most issues presented to the stockholders of a Subsidiary Company. However, there are circumstances where OTS's regulations provide that a majority of the minority stock must approve a proposal. 5 5 *See* 12 CFR 563b.500(a)(7), 563b.555, 575.11(i) and 575.12(a)(3) (2008). Minority stockholders may acquire a significant percentage of the minority stock without involving either the OTS Acquisition of Control Regulations (Control Regulations) or the charter provision discussed above, both of which are triggered by an acquisition of more than ten percent of the outstanding stock. Thus, for example, if a Subsidiary Company issues thirty percent of its stock in a public offering, a minority stockholder could acquire a third of those shares without implicating either the Control Regulations or the charter provision. In such a case, the minority stockholder may obtain a significant amount of influence, based on its ability to vote on the issues that must be presented separately to minority stockholders. OTS believes that such a result would be contrary to the purposes of the restrictions addressing post-offering acquisitions of stock in the context of conversions and minority stock offerings, that is, lessening the vulnerability of the entity to attempts to take unfair advantage of the results of the offering, to protect the integrity of the offering, and to ensure that the offering is completed in a manner that strengthens the issuer. Therefore, OTS proposed to add a provision to the MHC Regulations, which could be adopted only by Subsidiary Companies, that would provide that no entity, or person or group acting in concert could acquire more than ten percent of the outstanding minority stock of the Subsidiary Company during the five years after a Minority Stock Issuance. If a stockholder violated this charter provision, the stockholder would not be permitted to vote any stock the stockholder acquired in excess of the limit. OTS proposed that the charter provision would not limit the stockholdings of the parent MHC, because the parent MHC, under the Home Owners' Loan Act, must own more than fifty percent of the Subsidiary Company. In addition, OTS proposed that the charter provision except stock held by the Subsidiary Company's Employee Stock Ownership Plan
(ESOP)from this limitation, because ESOP acquisitions do not present the concerns that have resulted in OTS limiting post-conversion acquisitions of stock. 6 6 *See* 12 CFR 563b.525(c)(4)(2008), and the optional charter provision at section 552.4, both of which except ESOPs from the post-conversion acquisition restrictions of section 563b.525. II. Public Comments OTS received 8 comments, from 7 commenters, regarding the NPR. Of these comment letters, four were from trade associations, three were from law firms and one was from an investment firm. Five of the comment letters supported the proposal and three (including two letters from one commenter) opposed the proposal. Four of the five comments in favor of the proposal were submitted by trade associations, and one was from a law firm. Of the three comments opposing the proposal, one was from the investment firm, and the other two were from an attorney who wrote on behalf of his client. All of the comments in favor of the proposal supported OTS's reasoning as set forth in the NPR, and evidenced a belief that the proposal would appropriately limit the amount of influence minority shareholders would have over management. One commenter stated that the proposed restriction was reasonable in order to keep activist shareholders from “engaging in control” over an MHC. The two commenters who opposed the proposal cited several arguments supporting their position. They asserted that the optional charter provision would make already illiquid stock less liquid; would disenfranchise shareholders, and violate fundamental shareholder rights; was overkill to stop minority shareholders from taking actions to influence management; and was proposed in order to assist management to avoid shareholder accountability and undo the requirement that a majority of minority shareholders vote in favor of management stock benefit plans. These commenters also asserted that the proposed charter provision has no nexus to protecting the conversion (or the minority stock offering process). In addition, the comments raised technical issues regarding the proposed charter provision. OTS has carefully considered the public comments. Specific topics addressed by one or more commenters are discussed below. Except as otherwise noted in the discussion below, OTS is adopting the amendments to its regulations as proposed in the NPR. A. Adoption and Retention of the Charter Provision Three commenters addressed the time period during which a Subsidiary Company could enact and retain the optional charter provision. Two commenters asked for clarification regarding when the provision could be adopted. In addition, two commenters addressed the length of time for which a charter could include the provision in question. One commenter suggested that Subsidiary Companies should have the ability to determine how long to retain the charter provision, with five years as the outside limit, and another suggested that OTS should permit a Subsidiary Company to retain the charter provision as long as the company considers it appropriate. OTS is revising the final regulation to provide clearly that, subject to certain limitations discussed below, a Subsidiary Company may adopt the optional charter provision before it conducts its first minority stock offering, at the time of a minority stock offering, or at any time during the five years following the closing of the minority stock offering. However, regardless of when the charter provision is adopted, the charter provision must expire at some time during the five year period that commences upon the closing of the minority stock offering. OTS has considered the comment requesting that OTS permit the Subsidiary Company to decide for itself how long the charter provision should remain in place. The NPR stresses that the purpose of the charter provision is to lessen attempts to take unfair advantage of the results of an offering, protect the integrity of the offering, and ensure that the offering is completed in a manner that strengthens the issuer. OTS believes that these concerns lessen significantly when more than five years have elapsed since the completion of the offering in question. Accordingly, OTS is retaining the requirement that the provision may be in place only during the five years after the closing of an offering. B. Applicability of the Charter Provision Where a Shareholder Has Already Acquired More Than Ten Percent of the Minority Stock The comments that opposed the optional charter provision raised several issues that ultimately related to the manner in which the provision would operate if a shareholder had acquired more than ten percent of the minority stock before the charter provision had been adopted. In this regard, the comments asserted that the rule disenfranchises large stockholders, and that sterilization of shares in excess of ten percent of the minority shares is inappropriate. One of the commenters urged that OTS make the rule applicable only prospectively. OTS has carefully considered these comments. The NPR did not specifically discuss situations in which a minority shareholder had acquired shares in excess of the limit in the optional charter provision prior to adoption of the provision, and did not contemplate situations in which a shareholder who held shares before adoption of the charter provision would no longer be able to vote those shares. OTS considered prohibiting a Subsidiary Company from adopting the charter provision only where a party had already acquired more than ten percent of the minority shares, and also considered excepting (“grandfathering”) parties who had acquired more than ten percent of the minority shares at the time of the adoption of the charter provision from the restrictions in the optional charter provision. OTS does not believe that either approach would work well, due to difficulties in knowing how many shares a minority shareholder holds at a particular time. For either approach to work, it would be necessary for shareholders who would not otherwise be subject to reporting requirements to provide information regarding their holdings, and OTS does not believe it is appropriate to impose special reporting requirements on minority shareholders of Subsidiary Companies. Accordingly, OTS is revising the final regulation to provide that only Subsidiary Companies that have not engaged in minority stock issuance prior to the effective date of the regulation, may adopt the optional charter provision. OTS is not prohibiting Subsidiary Companies that engage in their initial minority stock offering after the effective date of this regulation from adopting the optional charter provision, even if they do so after a minority stock issuance, and after a minority shareholder acquires more than ten percent of the Subsidiary Company's minority stock. In order to adopt the optional charter provision after a minority stock issuance, however, the Subsidiary Company must provide full disclosure in the offering materials regarding the possibility that the optional charter provision may be adopted at a later time. 7 Accordingly, even if there was no restriction at the time a shareholder acquires a Subsidiary Company's minority stock, such a shareholder will do so with knowledge that its voting power may be adversely affected if the Subsidiary Company later adopts the optional charter provision. 7 If the Subsidiary Company engages in multiple minority stock issuances, it would have to make the appropriate disclosures in all such offerings. OTS believes that this approach eliminates concerns that the charter provision inappropriately sterilizes votes, 8 violates shareholder rights, or is in any way inconsistent with sound corporate governance. 8 OTS has long considered sterilization to be appropriate where an acquiror has violated a regulatory or charter restriction. Both the OTS Mutual-to-Stock conversion regulations and the charter provision at 12 CFR 552.4 include sterilization provisions that apply where the acquiror has violated OTS regulations, or a charter provision, and have included such provisions since the 1970s. C. Liquidity The commenter who addressed liquidity stated that the proposed charter provision would reduce liquidity of the stock of recently converted Subsidiary Companies, because acquirors who otherwise wished to purchase more than ten percent of the Subsidiary Company's shares would not be allowed to do so. OTS notes, however, that such purchases may ultimately decrease liquidity, by reducing, possibly significantly, the number of minority shareholders. The proposed rule may ultimately have the effect of increasing the number of minority shareholders over the number that would otherwise be the case, thereby increasing liquidity. Accordingly, the effect of the charter provision on liquidity is unclear. OTS does not believe that the charter provision will raise significant liquidity concerns. D. Management Accountability Comments that opposed the proposed charter provision asserted that the provision helps management avoid accountability to shareholders, and conflicts with the final rule promulgated in 2007 that required that a majority of the minority shareholders vote in favor of stock benefit plans proposed by Subsidiary Companies. 9 9 See 72 FR 35145 (2007). OTS does not believe the charter provision either enables management to avoid shareholder accountability or conflicts with the 2007 final rule requiring a majority of the minority vote in favor of stock benefit plans. The proposed charter provision merely prohibits a single entity from acquiring more than ten percent of the minority shares. Where a separate minority shareholder vote is required, a majority of such shareholders must vote in favor of a matter in order for it to be passed. Accordingly, management remains accountable to shareholders, and the charter provision does not raise the conflict of interest issues that led OTS to continue to require a majority of the minority vote. 10 10 See 72 FR 35145, at 35147-35148 (June 27, 2007). E. Purpose of the Charter Provision With regard to the comments that the only purpose of the charter provision is to make it easier to pass benefit plans, and that the charter provision is intended to protect insiders' interests, OTS set forth the rationale for the proposed charter provision in the NPR, and has repeated the rationale above. The charter provision does not prevent minority shareholders from voting in opposition to a proposed benefit plan. The charter provision would make it more difficult for a single shareholder to prevent the passage of stock benefit plans, but minority shareholders, as a class, continue to have the power to vote down a stock benefit plan. F. Treatment of Proxies One commenter requested clarification regarding whether the charter provision would prohibit a shareholder from soliciting revocable proxies. The regulatory restriction regarding acquisitions of more than ten percent of a class of voting stock after a mutual-to-stock conversion, at 12 CFR 563b.525, provides that “a person acquires beneficial ownership of more than ten percent of a class of shares when he or she holds any combination of * * * stock or revocable or irrevocable proxies under circumstances that give rise to a conclusive control determination or rebuttable control determination under §§ 574.4(a) and
(b)of this chapter.” The corresponding optional charter provision at 12 CFR 552.4 has been interpreted to apply to proxies in the same manner. 11 OTS is not aware of any reason to treat proxies differently in the context of the charter provision addressed herein. 11 *See* FHLBB Ops., Dep. G.C. (Aug. 14, 1986, and Oct. 21, 1988). III. Regulatory Findings A. Paperwork Reduction Act OTS has determined that the final rule does not involve a change to collections of information previously approved under the Paperwork Reduction Act (44 U.S.C. 3501 *et seq.* ). B. Executive Order 12866 The Director of OTS has determined that the final rule does not constitute a “significant regulatory action” for purposes of Executive Order 12866. C. Regulatory Flexibility Act Pursuant to section 605(b) of the Regulatory Flexibility Act
(RFA)(5 U.S.C. 601), the Director certifies that the final rule will not have a significant economic impact on a substantial number of small entities. The final rule would permit Subsidiary Companies to adopt an optional charter provision. Accordingly, OTS has determined that a Regulatory Flexibility Analysis is not required. D. Unfunded Mandates Reform Act of 1995 OTS has determined that the final rule will not result in expenditures by state, local, or tribal governments or by the private sector of $100 million or more and that a budgetary impact statement is not required under Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law 104-4 (Unfunded Mandates Act). The final rule would permit Subsidiary Companies to adopt an optional charter provision. The final rule changes should not have a significant impact on small institutions. Accordingly, a budgetary impact statement is not required under section 202 of the Unfunded Mandates Act. List of Subjects in 12 CFR Part 575 Administrative practice and procedure, Capital, Holding companies, Reporting and recordkeeping requirements, Savings Associations, Securities. Authority and Issuance For the reasons set forth in the preamble, OTS is amending Chapter V of title 12 of the Code of Federal Regulations, as set forth below: PART 575—MUTUAL HOLDING COMPANIES 1. The authority citation for 12 CFR part 575 continues to read as follows: Authority: 12 U.S.C. 1462, 1462a, 1463, 1464, 1467a, 1828, 2901. 2. Amend § 575.9 by redesignating paragraph
(c)as (d), and adding a new paragraph
(c)as follows: § 575.9 Charters and bylaws for mutual holding companies and their savings association subsidiaries.
(c)*Optional charter provision limiting minority stock ownership.* A federal resulting association or federal acquiree association that engages in its initial minority stock issuance after October 1, 2008 may, before it conducts its initial minority stock issuance, at the time of such minority stock issuance, or at any time during the five years following a minority stock issuance that such association conducts in accordance with the purchase priorities set forth in 12 CFR part 563b, include in its charter the following provision. For purposes of this charter provision, the definitions set forth at § 552.4(b)(8) of this chapter apply. This charter provision expires a maximum of five years from the date of the minority stock issuance. The federal resulting association or federal acquiree association may adopt the charter provision after a minority stock issuance only if it provided, in the offering materials related to its previous minority stock issuance or issuances, full disclosure of the possibility that the association might adopt such a charter provision. *Beneficial Ownership Limitation.* No person may directly or indirectly offer to acquire or acquire the beneficial ownership of more than 10 percent of the outstanding stock of any class of voting stock of the association held by persons other than the association's mutual holding company. This limitation expires on [insert date of minority stock issuance] and does not apply to a transaction in which an underwriter purchases stock in connection with a public offering, or the purchase of stock by an employee stock ownership plan or other tax-qualified employee stock benefit plan that is exempt from the approval requirements under § 574.3(c)(1)(vii) of the Office's regulations. In the event a person acquires stock in violation of this section, all stock beneficially owned by such person in excess of 10 percent of the stock held by stockholders other than the mutual holding company shall be considered “excess shares” and shall not be counted as stock entitled to vote and shall not be voted by any person or counted as voting stock in connection with any matters submitted to the stockholders for a vote. 3. Amend § 575.14 by redesignating paragraphs (c)(3) and
(4)as
(4)and (5), respectively, and add a new (c)(3) to read as follows: § 575.14 Subsidiary holding companies.
(3)*Optional charter provision limiting minority stock ownership.* A subsidiary holding company that engages in its initial minority stock issuance after October 1, 2008 may, before it conducts its initial minority stock issuance, at the time it conducts its initial minority stock issuance, or at any time during the five years following a minority stock issuance that such subsidiary holding company conducts in accordance with the purchase priorities set forth in 12 CFR part 563b, include in its charter the provision set forth below. For purposes of this charter provision, the definitions set forth at § 552.4(b)(8) of this chapter apply. This charter provision expires a maximum of five years from the date of the minority stock issuance. The subsidiary holding company may adopt the charter provision after a minority stock issuance only if it provided, in the offering materials related to its previous minority stock issuance or issuances, full disclosure of the possibility that the association might adopt such a charter provision. *Beneficial Ownership Limitation.* No person may directly or indirectly offer to acquire or acquire the beneficial ownership of more than 10 percent of the outstanding stock of any class of voting stock of the association held by persons other than the subsidiary holding company's mutual holding company parent. This limitation expires on [insert date of minority stock issuance] and does not apply to a transaction in which an underwriter purchases stock in connection with a public offering, or the purchase of stock by an employee stock ownership plan or other tax-qualified employee stock benefit plan which is exempt from the approval requirements under § 574.3(c)(1)(vii) of the Office's regulations. In the event a person acquires stock in violation of this section, all stock beneficially owned in excess of 10 percent shall be considered “excess stock” and shall not be counted as stock entitled to vote and shall not be voted by any person or counted as voting stock in connection with any matters submitted to the stockholders for a vote. Dated: June 20, 2008. By the Office of Thrift Supervision. John M. Reich, Director. [FR Doc. E8-14374 Filed 7-8-08; 8:45 am] BILLING CODE 6720-01-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2007-0915; Airspace Docket No. 07-ASW-13] Establishment of Class D Airspace; Albuquerque, NM AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule. SUMMARY: This action establishes Class D airspace at Albuquerque, NM. Establishment of an air traffic control tower at Double Eagle II Airport, Albuquerque, NM, has made this action necessary for the safety of Instrument Flight Rule
(IFR)operations at the airport. This action also makes minor corrections to the geographic coordinates of the airport. DATES: *Effective Date:* 0901 UTC, September 25, 2008. The Director of the Federal Register approves this incorporation by reference action under 1 CFR part 51, subject to the annual revision of FAA Order 7400.9 and publication of conforming amendments. FOR FURTHER INFORMATION CONTACT: Gary Mallett, Central Service Center, Operations Support Group, Federal Aviation Administration, Southwest Region, 2601 Meacham Blvd., Fort Worth, TX 76193-0530; telephone
(817)222-4949. SUPPLEMENTARY INFORMATION: History On April 9, 2008, the FAA published in the **Federal Register** a notice of proposed rulemaking to establish Class D airspace at Albuquerque, NM (73 FR 19174, 07-ASW-13 Docket No. FAA-2007-0915). Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received. This rule makes minor corrections to the geographic coordinates of Double Eagle II Airport. With the exception of editorial changes, and the changes described above, this rule is the same as that proposed in the NPRM. Class D airspace designations are published in paragraph 5000 of FAA Order 7400.9R signed August 15, 2007, and effective September 15, 2007, which is incorporated by reference in 14 CFR part 71.1. The Class D airspace designations listed in this document will be published subsequently in that Order. The Rule This action amends Title 14 Code of Federal Regulations (14 CFR) part 71 by establishing Class D airspace extending upward from the surface to and including 7,500 feet MSL within a 4.3-mile radius of Double Eagle II Airport. The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this regulation:
(1)Is not a “significant regulatory action” under Executive Order 12866;
(2)is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and
(3)does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the U.S. Code. Subtitle 1, section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it establishes controlled airspace at Double Eagle II Airport, Albuquerque, NM. List of Subjects in 14 CFR Part 71 Airspace, Incorporation by reference, Navigation (air). Adoption of the Amendment In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows: PART 71—DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR TRAFFIC SERVICE ROUTES; AND REPORTING POINTS 1. The authority citation for 14 CFR part 71 continues to read as follows: Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389. § 71.1 [Amended] 2. The incorporation by reference in 14 CFR part 71.1 of the Federal Aviation Administration Order 7400.9R, Airspace Designations and Reporting Points, signed August 15, 2007, and effective September 15, 2007, is amended as follows: *Paragraph 5000 Class D Airspace.* ASW NM D Albuquerque, NM [New] Double Eagle II Airport, NM (Lat. 35°08′43″ N., long. 106°47′43″ W.) That airspace extending upward from the surface to and including 7,500 feet MSL within a 4.3-mile radius of Double Eagle II Airport, and within 1 mile each side of the Double Eagle Runway 22 ILS localizer northeast course, extending from the 4.3-mile radius to 5.9 miles northeast of the airport. This Class D airspace area is effective during the specific dates and times established in advance by a Notice to Airmen. The effective date and time will thereafter be continuously published in the Airport/Facility Directory. Issued in Fort Worth, TX, on June 27, 2008. Donald R. Smith, Manager, Operations Support Group, ATO Central Service Center. [FR Doc. E8-15237 Filed 7-8-08; 8:45 am] BILLING CODE 4910-13-M DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2008-0339; Airspace Docket No. 08-ASW-5] Amendment of Class D and Class E Airspace; Altus AFB, OK AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Direct final rule; withdrawal. SUMMARY: A direct final rule, published in the **Federal Register** April 14, 2008 (73 FR 19997) docket No. FAA-2008-0339, adding additional Class D and Class E airspace at Altus AFB, Altus, OK, is being withdrawn. Although the rule became effective June 5, 2008, charting of this airspace was never completed. A new rulemaking will be forthcoming with an effective date that coincides with the new charting date. DATES: *Effective Date:* 0901 UTC July 9, 2008. FOR FURTHER INFORMATION CONTACT: Gary Mallett, Central Service Center, Operations Support Group, Federal Aviation Administration, Southwest Region, 2601 Meacham Blvd., Fort Worth, Texas 76193-0530; telephone number
(817)222-4949. SUPPLEMENTARY INFORMATION: History On April 14, 2008, the FAA published a direct final rule; request for comments, in the **Federal Register** (73 FR 19997) Docket No. FAA-2008-0339, amending the existing Class D and Class E airspace areas at Altus AFB, Altus, OK. No comments were received therefore the rule became effective on the date specified, June 5, 2008. It was then determined that the airspace had not been charted. Therefore, the FAA is withdrawing this rulemaking and will issue a new rulemaking with a new effective date to coincide with the charting date. List of Subjects in 14 CFR Part 71 Airspace, Incorporation by reference, Navigation (Air). Withdrawal of the Rule Accordingly, pursuant to the authority delegated to me, Airspace Docket No. 08-ASW-5, as published in the **Federal Register** on April 14, 2008 (73 FR 19997), is hereby withdrawn. Authority: 49 U.S.C. 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389. Issued in Fort Worth, TX, on June 27, 2008. Donald R. Smith, Manager, Operations Support Group, ATO Central Service Center. [FR Doc. E8-15235 Filed 7-8-08; 8:45 am] BILLING CODE 4910-13-M DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2008-0160; Airspace Docket No. 08-AEA-13] Establishment of Class E Airspace; Milford, PA AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule, confirmation of effective date. SUMMARY: This action confirms the effective date of a direct final rule published in the **Federal Register** (73 FR 15061) that establishes Class E Airspace at Milford, PA to support a new Area Navigation
(RNAV)Global Positioning System
(GPS)Special Instrument Approach Procedure
(IAP)that has been developed for medical flight operations into the Myer Airport. DATES: Effective 0901 UTC, September 25, 2008. The Director of the Federal Register approves this incorporation by reference action under title 1, Code of Federal Regulations, part 51, subject to the annual revision of FAA Order 7400.9 and publication of conforming amendments. FOR FURTHER INFORMATION CONTACT: Melinda Giddens, System Support Group, Eastern Service Center, Federal Aviation Administration, P.O. Box 20636, Atlanta, Georgia 30320; telephone
(404)305-5610. SUPPLEMENTARY INFORMATION: Confirmation of Effective Date The FAA published this direct final rule with a request for comments in the **Federal Register** on March 21, 2008 (73 FR 15061), Docket No. FAA-2008-0161; Airspace Docket No. 08-AEA-13. The FAA uses the direct final rulemaking procedure for a non-controversial rule where the FAA believes that there will be no adverse public comment. This direct final rule advised the public that no adverse comments were anticipated, and that unless a written adverse comment, or a written notice of intent to submit such an adverse comment, were received within the comment period, the regulation would become effective on September 25, 2008. No adverse comments were received, and thus this notice confirms that effective date. Issued in College Park, Georgia, on June 4, 2008. Mark D. Ward, Manager, Operations Support Group, Eastern Service Center, Air Traffic Organization. [FR Doc. E8-15236 Filed 7-8-08; 8:45 am] BILLING CODE 4910-13-M FEDERAL TRADE COMMISSION 16 CFR Part 305 RIN 3084-AA74 Rule Concerning Disclosures Regarding Energy Consumption and Water Use of Certain Home Appliances and Other Products Required Under the Energy Policy and Conservation Act (“Appliance Labeling Rule”) AGENCY: Federal Trade Commission (“FTC” or “Commission”). ACTION: Final Rule. SUMMARY: Section 324 of the Energy Independence and Security Act of 2007 requires the Commission to issue labeling rules for metal halide lamp fixtures and ballasts. In accordance with this directive, the Commission has completed the required rulemaking and is publishing final amendments to the Appliance Labeling Rule (“Rule”). DATES: The amendments published in this final rule will become effective on January 1, 2009. ADDRESSES: Requests for copies of this document are available from: Public Reference Branch, Room 130, Federal Trade Commission, 600 Pennsylvania Avenue, NW., Washington, DC 20580. The complete record of this proceeding is also available at that address. Relevant portions of the proceeding, including this document, are available at *http://www.ftc.gov.* FOR FURTHER INFORMATION CONTACT: Hampton Newsome,
(202)326-2889, Attorney, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue, NW., Washington, DC 20580. SUPPLEMENTARY INFORMATION: As directed by the Energy Independence and Security Act of 2007 (“EISA” or “Act”) (Pub. L. 110-140), the Commission has conducted a rulemaking to create new labeling requirements for the Appliance Labeling Rule (16 CFR Part 305) for metal halide lamp fixture packaging and ballasts contained within those fixtures. On April 1, 2008, the Commission published a Notice of Proposed Rulemaking (“NPRM”) seeking comment on draft labeling requirements for halide lamp fixtures (63 FR 17263). The Commission is now publishing final amendments to the Rule. In support of these amendments, this Notice provides information about EISA’s requirements, a description of the FTC’s amendments to implement that law, and a discussion of comments received in response to the proposed amendments. The Notice also explains that the FTC will be conducting a separate rulemaking in the future related to energy disclosures for lamp products as required by EISA. Finally, this Notice contains analysis under the Paperwork Reduction Act and Regulatory Flexibility Act. I. Labeling for Metal Halide Lamp Fixtures A. *EISA’s Directive:* Section 324(d) of EISA amends the Energy Policy and Conservation Act (42 U.S.C. 6291 *et seq.* ) (“EPCA”) to require the Commission to issue labeling rules for metal halide lamp fixture packaging and ballasts. The law limits these labeling requirements to products that are subject to Department of Energy (“DOE”) efficiency standards issued pursuant to 42 U.S.C. 6295. Under EISA, the Commission must prescribe these rules by July 1, 2008. The statute also directs that the rules, once issued, must apply to any fixture manufactured on or after January 1, 2009. EISA defines a “metal halide lamp” as a “high intensity discharge lamp in which the major portion of the light is produced by radiation of metal halides and their products of dissociation, possibly in combination with metallic vapors.” 1 These lamps produce a bright, white light and offer high color rendition compared to other high-intensity lighting. They typically light large indoor areas, such as gymnasiums and sports arenas, as well as outdoor areas, such as car lots. 2 As discussed below, the Commission is issuing labeling rules for metal halide lamp fixtures consistent with the directive of EISA. 1 *See* Pub. L. 110-140, 324(a). The Act also contains definitions for “metal halide ballast” (used to start and operate metal halide lamps) and “metal halide lamp fixture.” 2 *See* *http://www.eere.energy.gov/consumer/* (“A Consumer’s Guide to Energy Efficiency and Renewable Energy”). Specifically, EISA directs the FTC to issue a rule requiring manufacturers to label metal halide lamp fixture packages and the ballasts in those fixtures with “a capital letter ‘E’ printed within a circle.” 3 The encircled capital letter “E” ( *i.e.* , circle “E”) will indicate that the product meets applicable DOE energy efficiency standards consistent with the labeling requirements for other lighting products. 4 Because EISA excludes some metal halide lamp fixture types from those efficiency standards 5 and the FTC labeling requirements only apply to products that meet the DOE standards, the circle “E” will aid consumers in identifying products that satisfy the DOE standard. 3 42 U.S.C. 6294(a)(2)(C)(ii). EISA mandates FTC labeling rules for metal halide lamp fixtures and ballasts contained in those fixtures. It does not specifically require labeling for metal halide lamps themselves. 4 Under EISA (42 U.S.C. 6294(a)(2)(C)), the FTC’s labeling rules cover only those fixtures subject to DOE efficiency standards issued pursuant to 42 U.S.C. 6295. Section 324(e) of EISA (42 U.S.C. 6295(hh)) specifically mandates DOE energy standards for metal halide lamp fixtures. Those standards become effective on the same date as the FTC’s labeling requirements. 5 42 U.S.C. 6295(hh)(1)(B). B. *FTC’s Final Requirements:* In its NPRM, the Commission proposed amendments to the Appliance Labeling Rule to implement EISA’s directive. The final amendments follow the proposed rule provision (with some minor exceptions explained in Section II of this Notice). There are four basic elements to the final amendments. First, the amendments insert metal halide lamp fixtures into the list of covered products at Section 305.2 and include metal halide lamp fixtures in the descriptions of covered products at Section 305.3. 6 6 These descriptions are the same as the definitions in EISA ( *see* 42 U.S.C. 6291(62-64)) except that the FTC amendments limit the description of “metal halide lamp fixtures” to models subject to DOE efficiency standards. In addition, in the final amendments, the descriptions of metal halide-related terms in section 305.3 appear in a different order than in the proposed amendments. In the proposed amendments, the descriptions implied that fixtures, lamps, and ballasts are all separate covered products. In the final amendments, the order and appearance of these descriptions clarify that only “metal halide lamp fixtures”(not ballasts or lamps) are covered products. Second, the amendments (§ 305.15(c)) require that the circle “E” be clearly and conspicuously disclosed in color-contrasting ink on the label of metal halide lamp fixture packages and the ballasts contained in those fixtures. Consistent with current requirements for similar products, this disclosure will be deemed conspicuous, in terms of size, if it appears in typeface at least as large as either the manufacturer’s name or another logo disclosed on the label ( *e.g.* , “UL” or “ETL”), whichever is larger. 7 7 These requirements track existing requirements for fluorescent lamp ballasts and luminaires ( *see* 16 CFR 305.15(a)&(b)). Third, the amendments (§ 305.20) require retail catalog sellers to include the circle “E” in their descriptions of metal halide lamp fixtures. 8 The final amendments also require the circle “E” disclosures in point of sale promotional material as required for other covered products (§ 305.19). 9 8 EPCA requires energy disclosures for catalog sellers of covered products. (42 U.S.C. 6296(a)). 9 EPCA authorizes the Commission to require such point of sale disclosures for covered products (42 U.S.C. 6294(c)(4)). The current Rule contains similar requirements for fluorescent lamp ballasts (305.19(a)(2)). Finally, consistent with requirements for other covered products, the final amendments add reporting requirements for metal halide lamp fixtures to section 305.8 of the Rule. 10 10 Under Section 305.8, the final amendments will require the submission of data including, but not limited to, model number, voltage, and ballast efficiency. The proposed due date for annual reports of these products was March 1 of each year. As discussed in section II of this Notice, the reporting date in the final amendments is September 1 of each year. II. Comments Received in Response to Proposed Rule The Commission received one written comment in response to the NPRM. The comment, submitted by the National Electrical Manufacturers Association (“NEMA”), raised four issues. Specifically, it requested that the Commission: 1) extend the deadline for the publishers of printed catalogs to meet the Rule’s requirements; 2) eliminate the proposed annual reporting requirement; 3) eliminate the proposed requirement that manufacturers include the circle “E” on shipping documents for metal halide products; and 4) consider adding a requirement that the circle “E” appear on metal halide fixtures themselves in addition to packaging and ballasts. Each of these issues is addressed in turn. *Printed Catalog Disclosures:* Consistent with requirements for other products covered by the Rule, the amendments (§ 305.20) require retail catalog sellers to include the circle “E” in their descriptions of metal halide lamp fixtures. Such catalogs include websites and traditional paper catalogs. In its comments, NEMA sought more time to allow manufacturers to revise their paper catalogs because it was concerned that manufacturers would incur large costs reprinting paper catalogs outside of their standard printing cycles. The Commission believes that NEMA’s comment is reasonable and that additional compliance time would not have a significant impact on the efficacy of disclosures. Accordingly, the final amendments apply to any catalog published after July 1, 2009 (instead of January 1, 2009 as proposed in the NPRM). 11 11 NEMA did not specify an additional time period necessary for marketers to redraft their catalogs. Absent any specific suggested time period, the Commission has afforded marketers an additional six months, giving them more than a full annual printing cycle to comply. *Reporting Requirements:* NEMA also opposed the proposed yearly reporting requirements because, in its view, they would be overly burdensome. NEMA also took issue with the FTC’s reporting burden estimate, arguing that the FTC should take into account the many product lines (“well over 100”) in the industry and not just the number of manufacturers. Finally, NEMA stated that, if the FTC is unable to eliminate the reporting requirement, then the agency should establish an electronic database to ease the reporting burden. The final amendments retain the proposed reporting requirements. Under Section 326 of EPCA (42 U.S.C. 6296), manufacturers of covered products must submit annual reports to the Commission containing energy data for their products. This annual reporting requirement is applicable to all products covered by the Rule, including appliances, heating and cooling equipment, covered lighting products, and covered plumbing products. Accordingly, the Commission has no discretion to forgo reporting. However, to provide manufacturers with additional time in preparing their initial
(2009)report, the Commission has changed the annual reporting date for metal halide lamp fixtures from March 1 of each year to September 1 ( *see* Section 305.8(b)(1)). 12 While this change does not eliminate the annual reporting requirement, it will give manufacturers more time to gather data on their models for the initial
(2009)report. Once manufacturers have assembled their data for the first
(2009)annual report, they should be able to use that data as a starting point for preparing reports in subsequent years, thus making it easier to prepare reports thereafter. 12 The final rule also contains a slight clarification to the reporting requirements. The EISA amendments (42 U.S.C. 6293(b)(18)) dictate the DOE test procedure that must be used for metal halide lamp ballasts. The final FTC reporting requirements (section 305.8(a)(5)(vii)) contain a reference to that statutory requirement to ensure that ballast efficiency data submitted to the FTC are consistent with the results of the DOE test procedure. The FTC labeling rule itself does not impose testing requirements for metal halide products. Although the Commission cannot eliminate the reporting requirement, it does seek to provide manufacturers with flexibility in submitting their reporting data. For example, the FTC allows manufacturers to submit data through a variety of means, including paper letters, printed catalogs, and electronic files via email. In addition, the Commission understands that the DOE is considering the development of a web-based system to facilitate the submission of energy data for covered products. If such a system is implemented, it may provide an additional means of simplifying FTC data submission. *Disclosures on Shipping Documents:* NEMA also took issue with a portion of the proposed Rule that would require the circle “E” on documentation accompanying pallet loads of fixtures under section 305.15(c)(3). NEMA argued that this requirement adds no value because the shipping document does not help those who purchase products. NEMA also argued that the disclosure fails to aid enforcement efforts because inspectors do not review shipping documents to determine compliance with efficiency standards. In this regard, NEMA has raised valid concerns. The benefit of the disclosure on shipping documents is unclear. For purchases outside of brick and mortar stores, the Rule’s website and catalog disclosures provide the information consumers need to determine compliance with energy standards. Similarly, because the final amendments require the circle “E” disclosure on the pallet sheeting itself, there appears to be little need to include it in separate shipping documentation. Accordingly, the final amendments do not include this requirement. 13 13 A similar requirement applies to disclosures for fluorescent lamp ballasts and luminaires (16 CFR § 305.15(a)&(b)). The upcoming rulemaking on the effectiveness of lighting disclosures will give the Commission an opportunity to review the appropriateness of that requirement. *Marking on Metal Halide Fixture:* Finally, NEMA urged the Commission to consider requiring the circle “E” on the fixture itself, in addition to the package and ballasts as proposed. NEMA indicated that such a requirement would “provide more visibility for the enforcement of the law and ensure that compliant manufacturers remain competitive.” The Commission has considered NEMA’s suggestion and decided not to require the disclosure on fixtures at this time. The statute appears broad enough to provide the FTC with discretion to require marking on the metal halide fixture itself because the law contains a general mandate for the Commission “to issue labeling rules” for metal halide lamp fixtures. Such a requirement, however, would constitute a significant departure from the proposed amendments, which track Congress’s specific directive for labeling on packages and ballasts. Given this significant departure, it would be appropriate to seek further comment before making such a change. However, if the Commission were to delay this proceeding to seek such comment, it could not meet the July 1, 2008 Congressional deadline. Accordingly, the Commission has determined to issue the Rule as proposed. The upcoming rulemaking on the lamp labeling alternatives (discussed below) will provide an opportunity for further consideration of this issue. For now, although the final amendments will apply only to the fixture package and the ballast itself, nothing prohibits manufacturers from printing the circle “E” on the fixture itself as long as the fixture meets applicable energy standards. III. Upcoming Rulemaking on the Effectiveness of Lamp Labeling EISA requires the FTC to conduct a rulemaking to examine the effectiveness of current lighting disclosures required by the Commission and to explore alternative labeling approaches. 14 To meet the Congressional deadline for metal halide lamp fixture labeling requirements, the Commission will initiate the rulemaking on lamp label effectiveness as a separate proceeding. 14 EISA Section 321(b) (42 U.S.C. 6294(a)(2)(C)). IV. Paperwork Reduction Act The proposed requirements for package and product labels, as well as point-of-sale materials and catalog disclosures do not constitute a “collection of information” under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) because they are a “public disclosure of information originally supplied by the government to the recipient for the purpose of disclosure to the public” as indicated in OMB regulations. 15 The data reporting from metal halide lamp ballast manufacturers, however, would constitute a “collection of information.” 16 Consistent with past estimates for fluorescent ballast manufacturers, we estimated in the NPRM that such reporting would require six hours per manufacturer. We also estimated that there are approximately 20 manufacturers of metal halide lamp fixtures. 17 NEMA’s comments, however, indicated that, while there are approximately 20 manufacturers, some of those manufacturers have multiple divisions or product lines. NEMA estimates that there are “well over 100” such lines within the industry. Accordingly, in the final estimate, we conservatively assume there are 110 divisions or product lines and that reporting will require six hours for each of these entities ( *i.e.* , the same amount of time we estimate for a manufacturer). 18 Therefore, our final estimate is 660 hours (110 product/division lines x 6 hours) as a reporting burden for these entities. In addition, we estimate that the yearly recordkeeping burden for metal halide manufacturers will be no more than 2 hours each or 220 hours total (2 hours x 110 product/division lines). Therefore, the total estimated annual burden of the final amendments is 880 hours. Pursuant to the Paperwork Reduction Act, 44 U.S.C. 3501-3521, the FTC submitted to the Office of Management and Budget
(OMB)for review and approval the collections of information contained in the Rule. On May 23, 2008, under OMB Control No. 3084-0069, OMB granted approval through May 31, 2011. 15 5 CFR 1320.3(c)(2). 16 The final amendments impose no reporting requirements on catalog sellers. 17 This number
(20)is consistent with our estimate for fluorescent lamp ballast manufacturers. *See* 69 FR 64289, 64291 (Nov. 4, 2004). U.S. Economic Census data indicate that there are approximately 80 electric lamp bulb and part manufacturers, 473 residential electric lighting fixture manufacturers and 356 commercial, industrial, and institutional electric lighting fixture manufacturers in the U.S. *See* ( *http://www.census.gov/econ/census02/guide/INDRPT31.HTM* ) (Codes 335110, 335121, and 335122). 18 This assumption applies across all the industry, regardless of the size of a particular manufacturer’s product line or division. We believe this assumption is very conservative because some product lines or divisions may be very small and require substantially less than six hours of burden per year. V. Regulatory Flexibility Act The Regulatory Flexibility Act (“RFA”), 5 U.S.C. 601-612, requires an agency to provide a Final Regulatory Flexibility Analysis (“FRFA”) with a final rule, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. *See* 5 U.S.C. 603-605. In light of the comments submitted in response to the NPRM, the FTC reaffirms its belief that the amendments will not have a significant economic impact on a substantial number of small entities. Although the Commission certifies under the RFA that the rule in this notice will not have a significant impact on a substantial number of small entities, the Commission has determined, nonetheless, to publish a FRFA to explain the impact of the Rule on small entities as follows: A. Statement of the need for, and objectives of, the amendments Section 324 of EISA requires the Commission to issue labeling rules for metal halide lamp products. EISA specifies the content of such labels to provide energy information for purchasers. Also, the Commission is charged with enforcing the requirements of 42 U.S.C. 6294, which require the agency to issue these amendments. The objective of the amendments are to establish energy labeling requirements for metal halide lamp fixtures and ballasts. B. Issues raised by comments in response to the initial regulatory flexibility analysis No significant issues were raised by public comment related specifically to small business impacts. NEMA’s comment raised concerns about the compliance burden related to catalog disclosures and reporting requirements. As discussed in detail in Section II of this Notice, the Commission has changed aspects of the amendments to address these concerns. C. Estimate of the number of small entities to which the amendments will apply Under the Small Business Size Standards issued by the Small Business Administration, lighting fixture manufacturers qualify as small businesses if they have fewer than 500 employees. As discussed in more detail in Section III of this Notice, the Commission estimates that only a small fraction of lamp fixture manufacturers (approximately 20 entities) produce metal halide lamp fixtures and ballasts. Even if most of these entities were small businesses, the number would not be substantial. The Commission also estimates that 200 catalog retailers (including website sellers) would have to comply with the new reporting requirements, most or all of which are probably small businesses. As with catalog sellers of fluorescent lamp ballasts under the current rule, catalog sellers of metal halide fixtures and ballasts would have to insert the circle “E” in each description of metal halide lamp fixtures they offer for sale. We expect that the burden associated with such disclosures will be *de minimis* . D. Projected reporting, recordkeeping, and other compliance requirements The Commission recognizes that the final labeling rule will involve some increased costs for affected parties. Most of these costs will be in the form of redrafting information placed on packages and products and placing the required disclosure in paper and web-based catalogs. Specifically, the amendments require that labels for metal halide lamp fixtures and ballasts, and point-of-sale promotional material for fixtures, disclose a circle “E.” As manufacturers already include information on packages and ballasts in the ordinary course of business, the Rule will require manufacturers to reformat their labels only one time to include the circle “E” symbol. The requirement that catalog sellers include the circle “E” in their product descriptions will involve the same, one-time change to all of the metal halide lamp fixture descriptions in the seller’s catalog. Similarly, the Rule contains standard reporting requirements for manufacturers to submit data that, in all likelihood, they already generate and disseminate during the normal course of business in catalogs and other disclosures. The Commission does not expect that there will be any significant legal, professional, or training costs or skills needed to comply with the Rule. The Commission does not expect that the labeling requirements will impose significant incremental costs for websites or other advertising. Thus, the Commission anticipates that, in total, the burdens imposed by the amendment should not be significant for any particular entity. E. Alternatives considered The amendments closely track the prescriptive requirements of the statute, and thus leave little room for significant alternatives to decrease the burden on regulated entities. Although the Commission has no discretion on the timing of the labeling requirements for the products and product packages, the statutory deadline does not apply to catalog disclosures or reporting requirements. Accordingly, in response to comments, the Commission has extended the time given to manufacturers to comply with the catalog disclosure requirements and has changed the annual reporting date as explained in Section II of this Notice. In addition, the Commission routinely allows manufacturers to submit required data through electronic means. VI. Final Rule Language List of Subjects in 16 CFR Part 305 Advertising, Energy conservation, Household appliances, Labeling, Reporting and recordkeeping requirements. For the reasons set out above, the Commission is issuing the following amendments to 16 CFR Part 305: PART 305—RULE CONCERNING DISCLOSURES REGARDING ENERGY CONSUMPTION AND WATER USE OF CERTAIN HOME APPLIANCES AND OTHER PRODUCTS REQUIRED UNDER THE ENERGY POLICY AND CONSERVATION ACT (“APPLIANCE LABELING RULE”) 1. The authority citation for Part 305 continues to read as follows: Authority: 42 U.S.C. 6294. § 305.2 [Amended] 2. In paragraph (k)(2) of section 305.2, add the phrase “metal halide lamp fixtures,” after the phrase “fluorescent lamp ballasts,”. 3. In § 305.2, revise paragraph (l)(21), and add paragraph (l)(22) to read as follows: § 305.2 Definitions.
(1)* * *
(21)Metal halide lamp fixtures.
(22)Any other type of consumer product that the Department of Energy classifies as a covered product under section 322(b) of the Act (42 U.S.C. 6292). 4. In section 305.3, add paragraph
(s)to read as follows: § 305.3 Description of covered products.
(s)*Metal halide lamp fixture* means a light fixture for general lighting application that is designed to be operated with a metal halide lamp and a ballast for a metal halide lamp and that is subject to and complies with Department of Energy efficiency standards issued pursuant to 42 U.S.C. 6295.
(1)*Metal halide ballast* means a ballast used to start and operate metal halide lamps.
(2)*Metal halide lamp* means a high intensity discharge lamp in which the major portion of the light is produced by radiation of metal halides and their products of dissociation, possibly in combination with metallic vapors. 5. Section 305.8 is amended as follows: a. In paragraph (a)(1), add the phrase “metal halide lamp fixtures,” after the phrase “fluorescent lamp ballasts,”. b. Add paragraph (a)(5). c. Revise paragraph (b)(1) to read as follows: § 305.8 Submission of data.
(a)* * *
(5)Each manufacturer of a metal halide lamp fixture shall submit annually to the Commission a report for each basic model of metal halide lamp fixture in current production. The report shall contain the following information:
(i)Name and address of manufacturer;
(ii)All trade names under which the metal halide lamp fixture is marketed;
(iii)Model number;
(iv)Starting serial number, date code or other means of identifying the date of manufacture (date of manufacture information must be included with only the first submission for each basic model);
(v)Type of ballast ( *e.g.* , pulse, probe, or electronic);
(vi)Nominal input voltage and frequency;
(vii)Ballast efficiency (as determined pursuant to 42 U.S.C. 6293(b)(18)); and
(viii)Lamp type and wattage (or range of wattages) with which the metal halide lamp fixture is designed to be used. (b)(1) All data required by § 305.8(a) except serial numbers shall be submitted to the Commission annually, on or before the following dates: Product category Deadline for data submission Refrigerators Aug. 1 Refrigerators-freezers Aug. 1 Freezers Aug. 1 Central air conditioners July 1 Heat pumps July 1 Dishwashers June 1 Water heaters May 1 Room air conditioners May 1 Furnaces May 1 Pool heaters May 1 Clothes washers Oct. 1 Fluorescent lamp ballasts Mar. 1 Showerheads Mar. 1 Faucets Mar. 1 Water closets Mar. 1 Urinals Mar. 1 Metal halide lamp fixtures Sept. 1 Fluorescent lamps Mar. 1 [Stayed] Medium Base Compact Fluorescent Lamps Mar. 1 [Stayed] Incandescent Lamps, incl. Reflector Lamps Mar. 1 [Stayed] § 305.10 [Amended] 6. In paragraph
(a)of section 305.10, add the phrase “metal halide lamp fixtures,” after the phrase “fluorescent lamp ballasts,”. 7. In section 305.15, add paragraph
(c)to read as follows: § 305.15 Labeling for lighting products.
(c)*Metal halide lamp fixtures and metal halide* ballasts —(1) *Contents.* Metal halide ballasts contained in a metal halide lamp fixture covered by this Part shall be marked conspicuously, in color-contrasting ink, with a capital letter “E” printed within a circle. Packaging for metal halide lamp fixtures covered by this Part shall also be marked conspicuously with a capital letter “E” printed within a circle. For purposes of this section, the encircled capital letter “E” will be deemed ‘‘conspicuous,’’ in terms of size, if it is as large as either the manufacturer’s name or another logo, such as the “UL,” “CBM” or “ETL” logos, whichever is larger, that appears on the metal halide ballast, or the packaging for the metal halide lamp fixture, whichever is applicable for purposes of labeling.
(2)*Product Labeling.* The encircled capital letter “E” on metal halide ballasts must appear conspicuously, in color-contrasting ink ( *i.e.* , in a color that contrasts with the background on which the encircled capital letter “E” is placed) on the surface that is normally labeled. It may be printed on the label that normally appears on the metal halide ballast, printed on a separate label, or stamped indelibly on the surface of the metal halide ballast.
(3)*Package Labeling.* For purposes of labeling under this section, packaging for metal halide lamp fixtures consists of the plastic sheeting, or ‘‘shrink-wrap,’’ covering pallet loads of metal halide lamp fixtures as well as any containers in which such metal halide lamp fixtures are marketed individually or in small numbers. The encircled capital letter “E” on packages containing metal halide lamp fixtures must appear conspicuously, in color-contrasting ink, on the surface of the package on which printing or a label normally appears. If the package contains printing on more than one surface, the label must appear on the surface on which the product inside the package is described. The encircled capital letter “E” may be printed on the surface of the package, printed on a label containing other information, printed on a separate label, or indelibly stamped on the surface of the package. In the case of pallet loads containing metal halide lamp fixtures, the encircled capital letter “E” must appear conspicuously, in color-contrasting ink, on the plastic sheeting, unless clear plastic sheeting is used and the encircled capital letter “E” is legible underneath this packaging. 8. In paragraph (a)(1) of section 305.19, add the phrase “metal halide lamp fixtures,” after the phrase “fluorescent lamp ballasts,” and revise paragraph (a)(2) to read as follows: § 305.19 Promotional material displayed or distributed at point of sale.
(a)* * *
(2)Any manufacturer, distributor, retailer or private labeler who prepares printed material for display or distribution at point of sale concerning a covered product that is a fluorescent lamp ballast or metal halide lamp fixture to which standards are applicable under section 325 of the Act, shall disclose conspicuously in such printed material, in each description of such product, an encircled capital letter “E”. 9. In paragraph
(a)of section 305.20, add the phrase “metal halide lamp fixtures,” after the phrase “fluorescent lamp ballasts,” and add paragraph
(e)to read as follows: § 305.20 Paper catalogs and websites.
(e)Any manufacturer, distributor, retailer, or private labeler who advertises metal halide lamp fixtures manufactured on or after January 1, 2009 in a catalog prepared after July 1, 2009, from which they may be purchased by cash, charge account or credit terms, shall disclose conspicuously in such catalog, in each description of such metal halide lamp fixture, a capital letter “E” printed within a circle. By direction of the Commission. Richard C. Donohue, Acting Secretary. [FR Doc. E8-15243 Filed 7-8-08: 8:45 am] BILLING CODE 6750-01-S COMMODITY FUTURES TRADING COMMISSION 17 CFR Part 30 Limited Marketing Activities From a United States Location by Certain Firms and Their Employees or Other Representatives Exempted Under Commodity Futures Trading Commission Regulation 30.10 AGENCY: Commodity Futures Trading Commission. ACTION: Order. SUMMARY: The Commodity Futures Trading Commission (“Commission”) is confirming that designated members of the Taiwan Futures Exchange (“TAIFEX”) may engage in limited marketing conduct with respect to foreign futures or options contracts within the U.S. through their employees or representatives consistent with prior Commission orders. This order is issued pursuant to Commission Regulation 30.10, which permits persons to file a petition with the Commission for exemption from the application of certain of the Regulations set forth in Part 30 and authorizes the Commission to grant such an exemption if such action would not be otherwise contrary to the public interest or to the purposes of the provision from which exemption is sought. DATES: *Effective Date:* July 9, 2008. FOR FURTHER INFORMATION CONTACT: Andrew Chapin, Special Counsel, Division of Clearing and Intermediary Oversight, at
(202)418-5430 Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW., Washington, DC 20581. Electronic mail: *achapin@cftc.gov* . SUPPLEMENTARY INFORMATION: The Commission has issued the following Order: Order Issued Pursuant to Regulation 30.10 Confirming That Designated Members of TAIFEX May Engage in Limited Marketing Conduct With Respect to Foreign Futures and Options Contracts Within the United States Through Their Employees or Other Representatives. Commission regulations governing the offer and sale of commodity futures and option contracts traded on or subject to the regulations of a foreign board of trade to customers located in the U.S. are contained in Part 30 of the Commission's regulations. 1 These regulations include requirements for intermediaries with respect to registration, disclosure, capital adequacy, protection of customer funds, recordkeeping and reporting, and sales practice and compliance procedures that are generally comparable to those applicable to transactions on U.S. markets. 1 Commission regulations referred to herein are found at 17 CFR Ch. I (2007). Appendix A to Part 30, “Interpretative Statement With Respect to the Commission's Exemptive Authority Under § 30.10 of Its Rules” generally sets forth the elements the Commission will evaluate in determining whether a particular regulatory program may be found to be comparable for purposes of exemptive relief pursuant to Regulation 30.10. 52 FR 28990, 29001 (Aug. 5, 1987). In formulating a regulatory program to govern the offer and sale of foreign futures and option products to customers located in the U.S., the Commission, among other things, considered the desirability of ameliorating the potential extraterritorial impact of such a program and avoiding duplicative regulation of firms engaged in international business. Based upon these considerations, the Commission determined to permit persons located outside the U.S. and subject to a comparable regulatory structure in the jurisdiction in which they were located to seek an exemption from certain of the requirements under Part 30 of the Commission's regulations based upon substituted compliance with the regulatory requirements of the foreign jurisdiction (“Regulation 30.10 relief”). On October 28, 1992, the Commission issued an order to permit firms that have obtained confirmation of Regulation 30.10 relief to engage in limited marketing conduct with respect to foreign futures or options contracts within the U.S. through their employees or representatives without prior notification to the Commission. 2 The Commission stated that 2 57 FR 49644 (Nov. 3, 1992). the success of the [Regulation] 30.10 program as well as the existence of working relationships established under that program with foreign regulatory and self-regulatory authorities provide assurances that the conduct of [Regulation] 30.10 exempted firms through their employees or other representatives located in the United States, if of a limited duration and subject to proper supervisory controls, will not be inconsistent with the Commission's obligations under the [Commodity Exchange Act] to ensure appropriate customer protection. To provide the appropriate level of customer protection, the relief was limited to conduct directed towards certain institutions and governmental entities as described in Regulation 4.7. 3 In addition, the Commission stated that any person who established a fixed location in the U.S. for the solicitation or acceptance of business, or whose marketing activities involved long or repeated periods within the U.S. that can be characterized as a *de facto* fixed presence, would be disqualified from Regulation 30.10 relief and would be required to register with the Commission. On August 4, 1994, the Commission issued an order expanding the category of persons to whom designated firms may direct limited marketing conduct to include all “accredited investors,” as that term is defined in section 230.501(a) of Securities and Exchange Commission Regulation D issued pursuant to the Securities Act of 1933. 4 The orders issued by the Commission in 1992 and 1994 are collectively known as the Limited Marketing Orders. 3 The order limited the relief to marketing conduct directed towards persons whose description in terms of sophistication and assets was derived generally from the definition of “qualified eligible participant” (“QEP”), as defined in Regulation 4.7(a)(1)(ii). In 2000, the Commission streamlined Regulation 4.7 by combining into a single definition those persons formerly defined as QEPs and “qualified eligible clients” (“QECs”). As a result of the revision, both QEPs and QECs are termed “qualified eligible persons.” 65 FR 47848, 47849-50 (Aug. 4, 2000). 4 59 FR 42156 (Aug. 17, 1994). Pursuant to the terms set forth therein, a foreign regulatory or self-regulatory organization must obtain a written confirmation from the Commission that the Limited Marketing Orders apply to firms in its jurisdiction with confirmed Regulation 30.10 relief. On March 23, 2007, the Commission issued an order granting relief under Regulation 30.10 authorizing designated members of TAIFEX to solicit and accept orders from customers located in the U.S. for otherwise permitted transactions on TAIFEX. 5 By letter dated April 16, 2008, counsel for TAIFEX petitioned the Commission to confirm that designated TAIFEX members may engage in limited marketing conduct with respect to foreign futures or options contracts within the U.S. through their employees or other representatives, as set forth in the Limited Marketing Orders. 5 72 FR 14413 (Mar. 28, 2007) (“TAIFEX Order”). As previously stated, the Commission believes that certain contacts between firms with confirmed Regulation 30.10 relief and certain sophisticated customers located in the U.S., who have a high degree of sophistication and financial resources, would not be contrary to the public interest. Accordingly, the Commission has determined to issue this order permitting designated TAIFEX members to engage in limited marketing conduct with respect to foreign futures or option contracts within the U.S. through their employees or other representatives, as set forth in the Limited Marketing Orders. Prior to engaging in any marketing activity in the U.S., a TAIFEX member must obtain confirmation of Regulation 30.10 relief from the National Futures Association (“NFA”). 6 Any TAIFEX member operating pursuant to this order will remain subject to all of the terms and conditions set forth in the Limited Marketing Orders and the TAIFEX Order. In particular, the Commission notes that every order granting Regulation 30.10 relief has required a firm seeking relief under such an order to consent to jurisdiction in the U.S. under the Commodity Exchange Act and file with NFA a valid and binding appointment of an agent in the U.S. for service of process. 6 The Commission has delegated to NFA certain responsibilities, including the responsibility to receive requests for confirmation of Regulation 30.10 relief on behalf of particular firms, to verify such firms' fitness and compliance with the conditions of the appropriate Regulation 30.10 Order and to grant exemptive relief from registration to qualifying firms. 62 FR 47792, 47793 (Sept. 11, 1997). Dated: July 3, 2008. By the Commission David Stawick, Secretary of the Commission. [FR Doc. E8-15606 Filed 7-8-08; 8:45 am] BILLING CODE 6351-01-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Parts 1 and 602 [TD 9412] RIN 1545-BF06 Election To Expense Certain Refineries AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Temporary regulations. SUMMARY: This document contains temporary regulations relating to the election to expense qualified refinery property under section 179C of the Internal Revenue Code, and affects taxpayers who own refineries located in the United States. These temporary regulations reflect changes to the law made by the Energy Policy Act of 2005. The text of these temporary regulations also serves as the text of the proposed regulations set forth in the notice of proposed rulemaking on this subject in the Proposed Rules section in this issue of the **Federal Register** . DATES: *Effective Date:* These regulations are effective on July 9, 2008. *Applicability Date:* For dates of applicability, see § 1.179C-1T(g). FOR FURTHER INFORMATION CONTACT: Philip Tiegerman
(202)622-3110 (not a toll-free number). SUPPLEMENTARY INFORMATION: Paperwork Reduction Act These temporary regulations are being issued without prior notice and public procedure pursuant to the Administrative Procedure Act (5 U.S.C. 553). For this reason, the collection of information contained in these regulations has been reviewed and, pending receipt and evaluation of public comments, approved by the Office of Management and Budget under control number (1545-2103). Responses to this collection of information are mandatory. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. For further information concerning this collection of information, and where to submit comments on the collection of information and the accuracy of the estimated burden, and suggestions for reducing this burden, please refer to the preamble to the cross-referencing notice of proposed rulemaking published in the Proposed Rules section in this issue of the **Federal Register** . Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103. Background This document contains proposed amendments to 26 CFR part 1 to provide regulations under section 179C of the Internal Revenue Code (Code). Section 179C was added to the Code by section 1323(a) of the Energy Policy Act of 2005, Public Law 109-58 (119 Stat. 594) to encourage the construction of new refineries and the expansion of existing refineries to enhance the nation's refinery capacity. Section 179C(a) allows a taxpayer to elect to deduct 50 percent of the cost of any qualified refinery property. The remaining 50 percent of the taxpayer's qualifying expenditures are generally recovered under section 168 and section 179B, if applicable. The provisions of section 179C apply to qualified refinery property placed in service by a taxpayer after August 8, 2005, and before January 1, 2012. All costs properly capitalized into qualified refinery property are includable in the cost of the qualified refinery property. Explanation of Provisions Scope The temporary regulations restate the provisions of section 179C and provide guidance on certain issues related to electing and determining the deduction allowable under section 179C(a). Specifically, the temporary regulations provide guidance on making elections under section 179C(a) and (g), and the associated reporting requirements contained in section 179C(h). Further, the temporary regulations provide guidance on determining and substantiating the production capacity requirement, as well as guidance addressing the availability of the deduction in certain sale-leaseback transactions. The temporary regulations generally interpret the statute in a manner consistent with existing statutory and regulatory principles and recognize that taxpayers have had to address section 179C issues for prior tax years in the absence of regulations. While these temporary regulations generally apply to taxable years ending on or after July 9, 2008 and terminate three years after the date they are published in the **Federal Register** , the temporary regulations may be applied by taxpayers to taxable years ending prior to July 9, 2008. These temporary regulations also provide procedures for claiming the section 179C(a) deduction for taxable years ending prior to July 9, 2008. Property Eligible for the Section 179C Deduction Under section 179C(c), property must meet several requirements to be considered qualified refinery property eligible for the section 179C(a) deduction. These requirements include the following:
(1)The property must be part of a qualified refinery;
(2)the original use of the property must commence with the taxpayer;
(3)the property must be placed in service within a specified time period;
(4)the property must meet certain production capacity requirements;
(5)the property must meet all applicable environmental laws; and
(6)the property must meet certain construction and written binding contract requirements. Description of Qualified Refinery Section 179C(d) provides that a qualified refinery is a refinery located in the United States, whose primary purpose is to process liquid fuel from crude oil or qualified fuels. Section 179C(f) provides that refinery property is ineligible for the section 179C(a) deduction if the primary purpose of the refinery is for use as a topping plant, asphalt plant, lube oil facility, crude or product terminal, or blending facility; or if the refinery property is built solely to comply with consent decrees or projects mandated by Federal, state, or local governments. Original Use Requirement Pursuant to the requirements under section 179C(c)(1)(A), the temporary regulations provide that the original use of qualified refinery property must commence with the taxpayer. The temporary regulations define original use as the first use to which the property is put, whether or not that use corresponds to the use of the property by the taxpayer, and provide certain exceptions for taxpayers that engage in certain sale-leaseback transactions. The temporary regulations provide that if a taxpayer incurs capital expenditures to recondition or rebuild property acquired or owned by the taxpayer, those capital expenditures will meet the original use requirement, and may qualify for deduction under section 179C(a). Consistent with the statute, the temporary regulations clarify that reconditioned or rebuilt property acquired by a taxpayer does not satisfy the original use requirement and is not qualified refinery property. The question of whether property is reconditioned or rebuilt property is a question of fact. Consistent with section 179C(c)(2), the temporary regulations also provide an exception to the original use requirement for certain sale-leaseback transactions. If property is originally placed in service by a person after August 8, 2005, and is sold to a taxpayer, and leased back to the person by the taxpayer within three months after the date the property was originally placed in service by the person, the original use of that property is considered to have commenced with the taxpayer-lessor. Placed in Service Requirements Section 179C(c)(1)(B) provides that qualified refinery property is property that is placed in service by the taxpayer after August 8, 2005, and before January 1, 2012. Consistent with section 179C(c)(2), the temporary regulations provide that, for certain sale-leaseback transactions, if property is originally placed in service by a person after August 8, 2005, and is sold to a taxpayer and leased back to the person by the taxpayer within three months after the date the property was originally placed in service by the person, the new property is treated as originally placed in service by the taxpayer-lessor not earlier than the date on which the property is used by the lessee under the sale-leaseback. Production Capacity Requirements The production capacity requirement of section 179C(c)(1)(C) and
(e)is met if any portion of qualified refinery property:
(1)Enables an existing qualified refinery to increase its total volume output, determined without regard to asphalt or lube oil, by 5 percent or more on an average daily basis; or
(2)enables the existing qualified refinery to increase the percentage of total throughput attributable to processing qualified fuels to a rate that is at least 25 percent of total throughput on an average daily basis. Any reasonable method may be used to determine the appropriate baseline for measuring capacity increases and to demonstrate and substantiate that the capacity of the existing qualified refinery has been sufficiently increased. For example, the average annual output over a number of normal production years may provide a reasonable baseline for measuring an increase in capacity. The temporary regulations confirm that the existing qualified refinery is the refinery prior to the installation of qualified refinery property. The temporary regulations also confirm that the question of whether the qualified refinery property has sufficiently enabled output or throughput increases is properly evaluated as of the placed-in-service date of the qualified refinery property. Any Applicable Environmental Laws Requirement Section 179C(c)(1)(D) provides that qualified refinery property must meet all applicable Federal, state, and local environmental laws. However, the environmental compliance requirement applies only with respect to the laws in effect on the date that qualified refinery property is placed in service after August 8, 2005, and before January 1, 2012. Furthermore, a refinery's failure to meet applicable environmental laws with respect to a portion of the refinery that was in service prior to August 8, 2005 will not disqualify the taxpayer from making the election under section 179C(a) with respect to the otherwise qualifying refinery property. Section 179C(c)(1)(D) and (c)(3) provides that the property must comply with the Clean Air Act, notwithstanding any waiver received by the taxpayer under that Act. Consistent with section 179C(f)(2), the temporary regulations provide that the section 179C(a) election is not available for identifiable refinery property built solely to comply with state, locally or Federally mandated projects or consent decrees. For example, a taxpayer may not elect to expense the cost of a scrubber necessary for the refinery to comply with the Clean Air Act, even if the scrubber is installed as part of a larger project, if the scrubber itself does not otherwise enable an increase in production capacity. Construction and Written Binding Contract Requirements Under section 179C(c)(1), qualified refinery property will include otherwise qualified property that is placed in service by the taxpayer after August 8, 2005, and before January 1, 2012, but only if no written binding contract for the construction of the property was in effect on or before June 14, 2005. Pursuant to section 179C(c)(1)(F), a taxpayer must take some action constituting a construction commitment before January 1, 2008. To meet this test, any of the following three acts is sufficient:
(1)Entering into a written binding construction contract before January 1, 2008;
(2)placing the property in service before January 1, 2008; or
(3)in the case of self-constructed property, starting self-construction after June 14, 2005, and before January 1, 2008. Consistent with existing section 168(k) principles, in the case of self-constructed property, the temporary regulations provide that construction begins when physical work (not including preliminary activities such as planning or designing, securing financing, exploring, or researching) of a significant nature begins. The determination of when work of a significant nature begins depends on the facts and circumstances. *Cf* . Treas. Regs. § 1.168(k)-1(b)(4)(iii)(B). Recognizing that taxpayers have had to make some determinations as to whether self-constructed property could qualify for the section 179C deduction in the absence of regulations, the temporary regulations provide that physical work of a significant nature will be deemed to have begun before January 1, 2008 for purposes of section 179C if the taxpayer performed some physical work before January 1, 2008 (such as clearing a site or excavation) and has performed physical work of a significant nature (as defined in Treas. Regs. § 1.168(k)-1(b)(4)(iii)(B)) before October 7, 2008. Elections Section 179C provides two elections. The first election is provided under section 179C(a), which allows a taxpayer to elect to deduct an amount equal to 50 percent of the costs paid or incurred by the taxpayer for qualified refinery property in the year the property is placed in service. The election generally must be made by the due date (including extensions) for filing the taxpayer's Federal income tax return for the taxable year in which the qualified refinery property is placed in service by the taxpayer. The taxpayer must make the election by entering the deduction claimed at the appropriate place on the taxpayer's Federal income tax return. A taxpayer that did not claim the section 179C(a) deduction on a Federal income tax return filed for a taxable year ending prior to July 9, 2008 but wishes to claim the deduction for that taxable year may do so by properly making a section 179C(a) election under these proposed regulations on an amended return filed by December 31, 2008. In general, once an election is made under section 179C(a), it may not be revoked except with the written consent of the Commissioner. However, these temporary regulations provide that a taxpayer is deemed to have requested and been granted consent to revoke an election under section 179C(a) if the taxpayer revokes the election before the revocation deadline. The revocation deadline is the later of December 31, 2008, or 24 months after the due date (including extensions) of the taxpayer's Federal income tax return for the taxable year for which the election applies. The taxpayer revokes the election by attaching a statement to an amended return for the taxable year for which the election applies. A taxpayer is not permitted to revoke an election under section 179C(a) after the revocation deadline. The revocation deadline may not be extended under § 301.9100-1. The second election is provided in section 179C(g), which allows a taxpayer that is a subchapter T cooperative (cooperative taxpayer) and that has a subchapter T cooperative as one or more of its owners (cooperative owner(s)) to elect to allocate all or a portion of the deduction allowable under section 179C(a) for the taxable year to the cooperative owner(s). If a cooperative taxpayer makes an election under section 179C(g), the temporary regulations provide that this allocation is equal to the cooperative owner's ratable share of the total amount allocated, determined on the basis of the cooperative owner's ownership interest in the cooperative taxpayer at the beginning of the cooperative taxpayer's taxable year. Under the temporary regulations, the section 179C(g) election must be made by the due date (including extensions) for filing the cooperative taxpayer's original Federal income tax return for the taxable year for which the section 179C(a) election is made by the cooperative taxpayer. Under the temporary regulations, a cooperative taxpayer is required to make the election under section 179C(g) by attaching a statement to the cooperative taxpayer's Federal income tax return providing the name and taxpayer identification number of the cooperative taxpayer, the amount of the deduction allowable to the cooperative taxpayer, the name and taxpayer identification number of each cooperative owner, and the amount of the deduction allocated to each of the cooperative owner(s). Consistent with section 179C(g)(3), the temporary regulations also require the cooperative taxpayer to notify any cooperative owner in writing, and on Form 1099-PATR, “Taxable Distributions Received from Cooperatives,” of the amount of the section 179C(a) deduction that is apportioned to that cooperative owner. The written notice must be provided to the cooperative owner(s) before the due date (including extensions) of the cooperative taxpayer's original Federal income tax return. Consistent with section 179C(g)(2), once made, an election under section 179C(g) may not be revoked. Consequently, a taxpayer that has made an irrevocable section 179C(g) election may not elect to revoke its section 179C(a) election. Reporting Requirements Section 179C(h) provides that any taxpayer making a section 179C(a) election must submit a statement in order to claim the section 179C(a) deduction. The temporary regulations provide that in order to claim the section 179C(a) deduction on a tax return filed after July 23, 2008, the taxpayer must attach the statement to the taxpayer's Federal income tax return for the taxable year in which the qualified refinery property is placed in service by the taxpayer. The taxpayer must identify the name and location of the qualified refinery property and provide an affirmation that the taxpayer's refinery property meets the production capacity requirements of section 179C(e). The taxpayer also must provide the total cost basis of the qualified refinery property and the depreciation treatment of the capitalized portion of the qualified refinery property. If it has not already filed the statement, a taxpayer that has claimed the section 179C(a) deduction on a Federal income tax return filed prior to July 23, 2008, must attach a statement to its next Federal income tax return for each taxable year in which the taxpayer claimed the deduction but did not file a statement. Effective/Applicability Date These temporary regulations generally apply to taxable years ending on or after July 9, 2008, and terminate on July 1, 2011. However, the proposed regulations may be relied upon by taxpayers for taxable years ending prior to July 9, 2008. Special Analyses It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. For the applicability of the Regulatory Flexibility Act (5 U.S.C. chapter 6) refer to the Special Analyses section of the preamble to the cross-reference notice of proposed rulemaking published in the Proposed Rules section in this issue of the **Federal Register** . Pursuant to section 7805(f) of the Code, these regulations have been submitted to the Chief Counsel for Advocacy of Small Business Administration for comment on their impact on small business. Drafting Information The principal author of these regulations is Philip Tiegerman, Office of Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the IRS and Treasury Department participated in their development. List of Subjects 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. 26 CFR Part 602 Reporting and recordkeeping requirements. Amendments to the Regulations Accordingly, 26 CFR parts 1 and 602 are amended as follows: PART 1—INCOME TAXES **Paragraph 1.** The authority for part 1 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * **Par. 2.** Section 1.179C-1T is added to read as follows: § 1.179C-1T Election to expense certain refineries (temporary).
(a)*Scope and definitions* —(1) *Scope.* This section provides the rules for determining the deduction allowable under section 179C(a) for the cost of any qualified refinery property. The provisions of this section apply only to a taxpayer that elects to apply section 179C in the manner prescribed under paragraph
(d)of this section.
(2)*Definitions.* For purposes of section 179C and this section, the following definitions apply:
(i)*Applicable environmental laws* are any applicable Federal, state, or local environmental laws.
(ii)*Qualified fuels* has the meaning set forth in section 45K(c).
(iii)*Cost* is the unadjusted depreciable basis (as defined in § 1.168(b)-1(a)(3), but without regard to the reduction in basis for any portion of the basis the taxpayer properly elects to treat as an expense under section 179C and this section) of the property.
(iv)*Throughput* is a volumetric rate measuring the flow of crude oil or qualified fuels processed over a given period of time, typically referenced on the basis of barrels per calendar day.
(v)*Barrels per calendar day* is the amount of fuels that a facility can process under usual operating conditions, expressed in terms of capacity during a 24-hour period and reduced to account for down time and other limitations.
(vi)*United States* has the same meaning as that term is defined in section 7701(a)(9).
(b)*Qualified refinery property* —(1) *In general.* Qualified refinery property is any property that meets the requirements set forth in paragraphs (b)(2) through (b)(7) of this section.
(2)*Description of qualified refinery property* —(i) *In general.* Property that comprises any portion of a qualified refinery may be qualified refinery property. For purposes of section 179C and this section, a qualified refinery is any refinery located in the United States that is designed to serve the primary purpose of processing crude oil or qualified fuels.
(ii)*Nonqualified refinery property.* Refinery property is not qualified refinery property for purposes of this paragraph (b)(2) if—
(A)The primary purpose of the refinery property is for use as a topping plant, asphalt plant, lube oil facility, crude or product terminal, or blending facility; or
(B)The refinery property is built solely to comply with consent decrees or projects mandated by Federal, state or local governments.
(3)*Original use* —(i) *In general.* For purposes of the deduction allowable under section 179C(a), refinery property will meet the requirements of this paragraph (b)(3) if the original use of the property commences with the taxpayer. Except as provided in paragraph (b)(3)(ii) of this section, original use means the first use to which the property is put, whether or not that use corresponds to the use of the property by the taxpayer. Thus, if a taxpayer incurs capital expenditures to recondition or rebuild property acquired or owned by the taxpayer, only the capital expenditures incurred by the taxpayer to recondition or rebuild the property acquired or owned by the taxpayer satisfy the original use requirement. However, the cost of reconditioned or rebuilt property acquired by a taxpayer does not satisfy the original use requirement. Whether property is reconditioned or rebuilt property is a question of fact. For purposes of this paragraph (b)(3)(i), acquired or self-constructed property that contains used parts will be treated as reconditioned or rebuilt only if the cost of the used parts is more than 20 percent of the total cost of the property.
(ii)*Sale-leaseback.* If any new portion of a qualified refinery is originally placed in service by a person after August 8, 2005, and is sold to a taxpayer and leased back to the person by the taxpayer within three months after the date the property was originally placed in service by the person, the taxpayer-lessor is considered the original user of the property.
(4)*Placed-in-service date* —(i) *In general.* Refinery property will meet the requirements of this paragraph (b)(4) if the property is placed in service by the taxpayer after August 8, 2005, and before January 1, 2012.
(ii)*Sale-leaseback.* If a new portion of refinery property is originally placed in service by a person after August 8, 2005, and is sold to a taxpayer and leased back to the person by the taxpayer within three months after the date the property was originally placed in service by the person, the property is treated as originally placed in service by the taxpayer-lessor not earlier than the date on which the property is used by the lessee under the leaseback.
(5)*Production capacity* —(i) *In general.* Refinery property is considered qualified refinery property if—
(A)It enables the existing qualified refinery to increase the total volume output, determined without regard to asphalt or lube oil, by at least five percent on an average daily basis; or
(B)It enables the existing qualified refinery to increase the percentage of total throughput attributable to processing qualified fuels to a rate that is at least 25 percent of total throughput on an average daily basis.
(ii)*When production capacity is tested.* The production capacity requirement of this paragraph (b)(5) is determined as of the date the property is placed in service by the taxpayer. Any reasonable method may be used to determine the appropriate baseline for measuring capacity increases and to demonstrate and substantiate that the capacity of the existing qualified refinery has been sufficiently increased.
(iii)*Multi-stage projects.* In the case of multi-stage projects, a taxpayer must satisfy the reporting requirements of paragraph (f)(2) of this section, sufficient to establish that the production capacity requirements of this paragraph (b)(5) will be met as a result of the taxpayer's overall plan.
(6)*Applicable environmental laws* —(i) *In general.* The environmental compliance requirement applies only with respect to refinery property, or any portion of refinery property, that is placed in service after August 8, 2005. A refinery's failure to meet applicable environmental laws with respect to a portion of the refinery that was in service prior to August 8, 2005 will not disqualify a taxpayer from making the election under section 179C(a) with respect to otherwise qualifying refinery property.
(ii)*Waiver under the Clean Air Act.* Refinery property must comply with the Clean Air Act, notwithstanding any waiver received by the taxpayer under that Act.
(7)*Construction of property* —(i) *In general.* Qualified property will meet the requirements of this paragraph (b)(7) if—
(A)The property is placed in service by the taxpayer after August 8, 2005, and before January 1, 2012; and
(B)No written binding contract for the construction of the property was in effect before June 14, 2005.
(ii)*Definition of binding contract* —(A) *In general.* A contract is binding only if it is enforceable under state law against the taxpayer or a predecessor, and does not limit damages to a specified amount (for example, by use of a liquidated damages provision). For this purpose, a contractual provision that limits damages to an amount equal to at least 5 percent of the total contract price will not be treated as limiting damages to a specified amount. In determining whether a contract limits damages, the fact that there may be little or no damages because the contract price does not significantly differ from fair market value will not be taken into account.
(B)*Conditions.* A contract is binding even if subject to a condition, as long as the condition is not within the control of either party or the predecessor of either party. A contract will continue to be binding if the parties make insubstantial changes in its terms and conditions, or if any term is to be determined by a standard beyond the control of either party. A contract that imposes significant obligations on the taxpayer or a predecessor will be treated as binding, notwithstanding the fact that insubstantial terms remain to be negotiated by the parties to the contract.
(C)*Options.* An option to either acquire or sell property is not a binding contract.
(D)*Supply agreements.* A binding contract does not include a supply or similar agreement if the payment amount and design specification of the property to be purchased have not been specified.
(E)*Components.* A binding contract to acquire one or more components of a larger property will not be treated as a binding contract to acquire the larger property. If a binding contract to acquire a component does not satisfy the requirements of this paragraph (b)(7), the component is not qualified refinery property.
(iii)*Self-constructed property* —(A) *In general.* Except as provided in paragraph (b)(7)(iii)(B) of this section, if a taxpayer manufactures, constructs, or produces property for use by the taxpayer in its trade or business (or for the production of income by the taxpayer), the construction of property rules in this paragraph (b)(7) are treated as met for qualified refinery property if the taxpayer began manufacturing, constructing, or producing the property after June 14, 2005, and before January 1, 2008. Property that is manufactured, constructed or produced for the taxpayer by another person under a written binding contract (as defined in paragraph (b)(7)(ii) of this section) that is entered into prior to the manufacture, construction, or production of the property for use by the taxpayer in its trade or business (or for the production of income) is considered to be manufactured, constructed, or produced by the taxpayer.
(B)*When construction begins.* For purposes of this paragraph (b)(7)(iii), construction of property generally begins when physical work of a significant nature begins. Physical work does not include preliminary activities such as planning or designing, securing financing, exploring, or researching. The determination of when physical work of a significant nature begins depends on the facts and circumstances. Nevertheless, physical work of a significant nature will be deemed to have begun for purposes of this paragraph (b)(7)(iii)(B), and the construction of the property will be deemed to have met the requirements of paragraph (b)(7)(iii)(A) of this section, if the taxpayer performed some physical work before January 1, 2008 (such as clearing a site or excavation) and has performed physical work of a significant nature (as defined in Treas. Regs. § 1.168(k)-1(b)(4)(iii)(B)) before October 7, 2008.
(C)*Components of self-constructed property* —( *1* ) *Acquired components.* If a binding contract (as defined in paragraph (b)(7)(ii) of this section) to acquire a component of self-constructed property is in effect on or before June 14, 2005, the component does not satisfy the requirements of paragraph (b)(7)(i) of this section, and is not qualified refinery property. However, if construction of the self-constructed property begins after June 14, 2005, the self-constructed property may be qualified refinery property if it meets all other requirements of section 179C and this section (including paragraph (b)(7)(i) of this section), even though the component is not qualified refinery property. If the construction of self-constructed property begins before June 14, 2005, neither the self-constructed property nor any component related to the self-constructed property is qualified refinery property. If the component was acquired before January 1, 2008, but the construction of the self-constructed property begins after December 31, 2007, the component may qualify as qualified refinery property even if the self-constructed property is not qualified refinery property. ( *2* ) *Self-constructed components.* If the manufacture, construction, or production of a component fails to meet any of the requirements of paragraph (b)(7)(iii) of this section, the component is not qualified refinery property. However, if the manufacture, construction, or production of a component fails to meet any of the requirements provided in paragraph (b)(7)(iii) of this section, but the construction of the self-constructed property begins after June 14, 2005, the self-constructed property may qualify as qualified refinery property if it meets all other requirements of section 179C and this section (including paragraph (b)(7)(i) of this section). If the construction of the self-constructed property begins before June 14, 2005, neither the self-constructed property nor any components related to the self-constructed property are qualified refinery property. If the component was self-constructed before January 1, 2008, but the construction of the self-constructed property begins after December 31, 2007, the component may qualify as qualified refinery property, although the self-constructed property is not qualified refinery property.
(c)*Computation of expense deduction for qualified refinery property.* In general, the allowable deduction under paragraph
(d)of this section for qualified refinery property is determined by multiplying by 50 percent the cost of the qualified refinery property paid or incurred by the taxpayer.
(d)*Election* —(1) *In general.* A taxpayer may make an election to deduct as an expense 50 percent of the cost of any qualified refinery property. A taxpayer making this election takes the 50 percent deduction for the taxable year in which the qualified refinery property is placed in service.
(2)*Time and manner for making election* —(i) *Time for making election.* An election specified in this paragraph
(d)generally must be made not later than the due date (including extensions) for filing the original Federal income tax return for the taxable year in which the qualified refinery property is placed in service by the taxpayer. However, a taxpayer that did not claim the section 179C(a) deduction on a Federal income tax return filed for a taxable year ending prior to July 9, 2008 but wishes to claim the deduction for that taxable year may do so by properly making a section 179C(a) election under this paragraph
(d)on an amended return filed by December 31, 2008.
(ii)*Manner of making election.* The taxpayer makes an election under section 179C(a) and this paragraph
(d)by entering the amount of the deduction at the appropriate place on the taxpayer's timely filed original Federal income tax return for the taxable year in which the qualified refinery property is placed in service (or on the amended return, as provided in paragraph (d)(2)(i) of this section), and attaching a report as specified in paragraph
(f)of this section to the taxpayer's timely filed original Federal income tax return for the taxable year in which the qualified refinery property is placed in service (or on the amended return, as provided in paragraph (d)(2)(i) of this section).
(3)*Revocation of election* —(i) *In general.* An election made under section 179C(a) and this paragraph (d), and any specification contained in such election, may not be revoked except with the consent of the Commissioner of Internal Revenue.
(ii)*Revocation prior to the revocation deadline.* A taxpayer is deemed to have requested, and to have been granted, consent of the Commissioner to revoke an election under section 179C(a) and this paragraph
(d)if the taxpayer revokes the election before the revocation deadline. The revocation deadline is the later of December 31, 2008, or 24 months after the due date (including extensions) for filing the taxpayer's Federal income tax return for the taxable year for which the election applies. An election under section 179C(a) and this paragraph
(d)is revoked by attaching a statement to an amended return for the taxable year for which the election applies. The statement must specify the name and address of the refinery for which the election applies and the amount deducted on the taxpayer's original Federal income tax return for the taxable year for which the election applies.
(iii)*Revocation after the revocation deadline.* An election under section 179C(a) and this paragraph
(d)may not be revoked after the revocation deadline. The revocation deadline may not be extended under § 301.9100-1.
(iv)*Revocation by cooperative taxpayer.* A taxpayer that has made an election to allocate the section 179C deduction to cooperative owners under section 179C(g) and paragraph
(e)of this section may not revoke its election under section 179C(a).
(e)*Election to allocate section 179C deduction to cooperative owners* —(1) *In general.* If a cooperative taxpayer makes an election under section 179C(g) and this paragraph (e), the cooperative taxpayer may elect to allocate all, some, or none of the deduction allowable under section 179C(a) for that taxable year to the cooperative owner(s). This allocation is equal to the cooperative owner(s)’ ratable share of the total amount allocated, determined on the basis of each cooperative owner's ownership interest in the cooperative taxpayer. For purposes of this section, a cooperative taxpayer is an organization to which part I of subchapter T applies, and in which another organization to which part I of subchapter T applies (cooperative owner) directly holds an ownership interest. No deduction shall be allowed under section 1382 for any amount allocated under this paragraph (e).
(2)*Time and manner for making election* —(i) *Time for making election.* A cooperative taxpayer must make the election under section 179(g) and this paragraph
(e)by the due date (including extensions) for filing the cooperative taxpayer's original Federal income tax return for the taxable year to which the cooperative taxpayer's election under section 179C(a) and paragraph
(d)of this section applies.
(ii)*Manner of making election.* An election under this paragraph
(e)is made by attaching to the cooperative taxpayer's timely filed Federal income tax return for the taxable year (including extensions) to which the cooperative taxpayer's election under section 179C(a) and paragraph
(d)of this section applies a statement providing the following information:
(A)The name and taxpayer identification number of the cooperative taxpayer.
(B)The amount of the deduction allowable to the cooperative taxpayer for the taxable year to which the election under section 179C(a) and paragraph
(d)of this section applies.
(C)The name and taxpayer identification number of each cooperative owner to which the cooperative taxpayer is allocating all or some of the deduction allowable.
(D)The amount of the allowable deduction that is allocated to each cooperative owner listed in paragraph (e)(2)(ii)(C) of this section.
(3)*Written notice to owners.* If any portion of the deduction allowable under section 179C(a) is allocated to a cooperative owner, the cooperative taxpayer must notify the cooperative owner of the amount of the deduction allocated to the cooperative owner in a written notice, and on Form 1099-PATR, “Taxable Distributions Received from Cooperatives.” This notice must be provided on or before the due date (including extensions) of the cooperative taxpayer's original Federal income tax return for the taxable year for which the cooperative taxpayer's election under section 179C(a) and paragraph
(d)of this section applies.
(4)*Irrevocable election.* A section 179C(g) election, once made, is irrevocable.
(f)*Reporting requirement* —(1) *In general.* A taxpayer may not claim a deduction under section 179C(a) for any taxable year unless the taxpayer files a report with the Secretary containing information with respect to the operation of the taxpayer's refineries.
(2)*Information to be included in the report.* The taxpayer must specify—
(i)The name and address of the refinery;
(ii)Under which production capacity requirement under section 179C(e) and paragraph (b)(5)(i)(A) and
(B)of this section the taxpayer's qualified refinery qualifies;
(iii)Whether the refinery is qualified refinery property under section 179C(d) and paragraph (b)(2) of this section, sufficient to establish that the primary purpose of the refinery is to process liquid fuel from crude oil or qualified fuels.
(iv)The total cost basis of the qualified refinery property at issue for the taxpayer's current taxable year; and
(v)The depreciation treatment of the capitalized portion of the qualified refinery property.
(3)*Time and manner for submitting report* —(i) *Time for submitting report.* The taxpayer is required to submit the report specified in this paragraph
(f)not later than the due date (including extensions) of the taxpayer's Federal income tax return for the taxable year in which the qualified refinery property is placed in service. A taxpayer that has made a section 179C(a) election for a prior taxable year by claiming the section 179C(a) deduction on a Federal income tax return filed prior to July 23, 2008, but has not already filed a report for that year, must attach a report to its next Federal income tax return for each taxable year the taxpayer claimed the deduction but did not file a report.
(ii)*Manner of submitting report.* The taxpayer must attach the report specified in this paragraph
(f)to the taxpayer's timely filed original Federal income tax return for the taxable year in which the qualified refinery property is placed in service.
(g)*Effective/applicability date.* This section is applicable for taxable years ending on or after July 9, 2008.
(h)*Expiration date.* The applicability of this section expires on or before July 1, 2011. PART 602—OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT **Par. 3.** The authority citation for part 602 continues to read as follows: Authority: 26 U.S.C. 7805 * * * **Par. 4.** In § 602.101, paragraph
(b)is amended by adding the following entry in numerical order to the table to read as follows: § 602.101 OMB Control numbers.
(b)* * * CFR part or section where identified and described Current OMB Control No. * * * * * 1.179C-1T 1545-2103 * * * * * Approved: July 3, 2008. Linda E. Stiff, Deputy Commissioner for Services and Enforcement. Eric Solomon, Assistant Secretary of the Treasury (Tax Policy). [FR Doc. 08-1423 Filed 7-3-08; 3:33 pm]
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U.S. Code
- Rule making§ 553
- Prevailing rate determinations; wage schedules; night differentials§ 5343
- Public information; agency rules, opinions, orders, records, and proceedings§ 552
- Regulation of holding companies§ 1467a
- Purposes§ 3501
- Definitions§ 601
- Definitions§ 1462
- Federal Aviation Administration§ 106
- Definitions§ 6291
- Energy conservation standards§ 6295
- Labeling§ 6294
- Requirements of manufacturers§ 6296
- Test procedures§ 6293
- Coverage§ 6292
- Confidentiality and disclosure of returns and return information§ 6103
- Rules and regulations§ 7805
25 references not yet in our index
- 5 CFR 532
- 7 CFR 1216
- 7 USC 7411-7425
- 5 USC 601-612
- 13 CFR 121
- 5 CFR 1320
- 12 CFR 575
- 12 CFR 575.7
- 12 CFR 552.4(b)(8)
- 12 CFR 563
- 12 CFR 552.4
- Pub. L. 104-4
- 14 CFR 71
- 1 CFR 51
- 16 CFR 305
- Pub. L. 110-140
- 44 USC 3501-3521
- 5 CFR 1320.3(c)(2)
- 5 USC 603-605
- 17 CFR 30
- T.D. 9412
- 26 CFR 1
- Pub. L. 109-58
- 119 Stat. 594
- 26 CFR 602
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