Td 9154

Federal Register / Vol. 69, No. 165 / Thursday, August 26, 2004 / Rules and Regulations
Done in Washington, DC, this 20th day of
August 2004.
Bill Hawks,
Under Secretary for Marketing and Regulatory
Programs.
[FR Doc. 04–19519 Filed 8–25–04; 8:45 am]
BILLING CODE 3410–34–P

DEPARTMENT OF AGRICULTURE
Animal and Plant Health Inspection
Service
9 CFR Part 78
[Docket No. 01–015–2]

Brucellosis in Cattle; State and Area
Classifications; Missouri
Animal and Plant Health
Inspection Service, USDA.
ACTION: Affirmation of interim rule as
final rule.
AGENCY:

SUMMARY: We are adopting as a final
rule, without change, an interim rule
that amended the brucellosis regulations
concerning the interstate movement of
cattle by changing the classification of
Missouri from Class A to Class Free. The
interim rule was based on our
determination that Missouri meets the
standards for Class Free status. The
interim rule relieved certain restrictions
on the interstate movement of cattle
from Missouri.
DATES: Effective Date: The interim rule
became effective on February 26, 2004.
FOR FURTHER INFORMATION CONTACT: Dr.
Debra A. Donch, National Brucellosis
Epidemiologist, National Center for
Animal Health Programs, VS, APHIS,
4700 River Road Unit 43, Riverdale, MD
20737–1231; (301) 734–6954.
SUPPLEMENTARY INFORMATION:

Background
In an interim rule effective February
26, 2004, and published in the Federal
Register on March 2, 2004 (69 FR 9747–
9749, Docket No. 01–015–1), we
amended the brucellosis regulations in
9 CFR part 78 (referred to below as the
regulations) concerning the interstate
movement of cattle by changing the
classification of Missouri from Class A
to Class Free. The interim rule was
based on our determination that
Missouri meets the standards for Class
Free status. The interim rule relieved
certain restrictions on the interstate
movement of cattle from Missouri.
Comments on the interim rule were
required to be received on or before May
3, 2004. We received one comment by
that date, from a private citizen. This
commenter was opposed to the change
in Missouri’s classification. The issues

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raised by the commenter are discussed
below.
The commenter objected to the use of
the word ‘‘free’’ to describe a State or
area designated as Class Free for
brucellosis on the basis that our
regulations do not require every animal
in a State or area be tested; the
commenter asserted, therefore, that we
cannot be certain that a State or area
classified as Class Free is free of
brucellosis.
The regulations provide a system for
classifying States or areas of States
according to the rate of Brucella
infection present and the general
effectiveness of a brucellosis control and
eradication program. To attain and
maintain Class Free status, a State or
area must, among other requirements,
(1) remain free from field strain Brucella
abortus infection for 12 consecutive
months or longer; (2) trace back at least
90 percent of all brucellosis reactors
found in the course of Market Cattle
Identification (MCI) testing to the farm
of origin; (3) successfully close at least
95 percent of the MCI reactor cases
traced to the farm of origin during the
consecutive 12-month period
immediately prior to the most recent
anniversary of the date the State or area
was classified Class Free; and (4) have
a specified surveillance system, as
described above, including an approved
individual herd plan in effect within 15
days of locating the source herd or
recipient herd. A full listing of the
standards that a State must meet to be
classified as Class Free may be found in
the definition of Class Free State in
§ 78.1 of the regulations. We have no
evidence that testing every animal, as
the commenter suggests, would increase
the accuracy of the classification system
to a degree that would warrant the
massive additional burden of testing
every animal in a State or area.
The last brucellosis-infected cattle
herd in Missouri was depopulated in
October 2002. Since then, no
brucellosis-affected herds have been
detected. After reviewing the brucellosis
program records for Missouri, we have
concluded that this State meets the
standards for Class Free status.
Accordingly, the interim rule designated
Missouri as a Class Free State for
brucellosis, thereby relieving certain
restrictions on the interstate movement
of cattle from Missouri. We have no
evidence that Missouri should not have
been classified Class Free and the
commenter did not provide any such
evidence. We are making no changes in
response to this comment.
The commenter asserted that our
immediate action to change the

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52419

classification of Missouri from Class A
to Class Free was not warranted.
It is important to reclassify States
when they have met the criteria for
reclassification as Class Free. This
encourages cooperation and compliance
with the brucellosis control and
eradication program and regulations by
relieving certain restrictions on the
interstate movement of cattle when they
are determined to be no longer
necessary. We have no evidence
indicating that Missouri does not meet
the standards for being declared Class
Free, and the commenter did not
provide any such evidence. We are
making no changes in response to this
comment.
Therefore, for the reasons given in the
interim rule and in this document, we
are adopting the interim rule as a final
rule without change.
This action also affirms the
information contained in the interim
rule concerning Executive Order 12866
and the Regulatory Flexibility Act,
Executive Orders 12372 and 12988, and
the Paperwork Reduction Act.
Further, for this action, the Office of
Management and Budget has waived its
review under Executive Order 12866.
List of Subjects in 9 CFR Part 78
Animal diseases, Bison, Cattle, Hogs,
Quarantine, Reporting and
recordkeeping requirements,
Transportation.
PART 78—BRUCELLOSIS
Accordingly, we are adopting as a final
rule, without change, the interim rule
that amended 9 CFR part 78 and that was
published at 69 FR 9747–9749 on March
2, 2004.

■

Authority: 7 U.S.C. 8301–8317; 7 CFR 2.22,
2.80, and 371.4.
Done in Washington, DC, this 19th day of
August, 2004.
Kevin Shea,
Acting Administrator, Animal and Plant
Health Inspection Service.
[FR Doc. 04–19517 Filed 8–25–04; 8:45 am]
BILLING CODE 3410–34–P

DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9154]
RIN 1545–BD64

Extension of Time To Elect Method for
Determining Allowable Loss
Internal Revenue Service (IRS),
Treasury.

AGENCY:

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52420
ACTION:

Federal Register / Vol. 69, No. 165 / Thursday, August 26, 2004 / Rules and Regulations
Temporary regulations.

SUMMARY: This document contains
temporary regulations under section
1502 of the Internal Revenue Code of
1986. The temporary regulations extend
the time for consolidated groups to elect
to apply a method for determining
allowable loss on a disposition of
subsidiary stock, and permit
consolidated groups to revoke such
elections. The temporary regulations
affect corporations filing consolidated
returns, both during and after the period
of affiliation, and also affect purchasers
of the stock of members of a
consolidated group. The text of these
temporary regulations 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 August 26, 2004.
Applicability Date: For dates of
applicability, see § 1.1502–20T(i)(6)(v).
FOR FURTHER INFORMATION CONTACT:
Theresa Abell (202) 622–7700 or Martin
Huck (202) 622–7750 (not toll-free
numbers).
SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act
The collection of information
contained in these regulations has been
previously reviewed and approved by
the Office of Management and Budget
under control number 1545–1774.
Responses to this collection of
information are required to obtain a
benefit. This collection of information is
revised by these regulations. These
amended 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 revised
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 1545–1774.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a valid control
number assigned by the Office of
Management and Budget.
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 of the crossreferencing notice of proposed

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rulemaking published in the Proposed
Rules section of 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 and Explanation of
Provisions
On March 7, 2002, the IRS and
Treasury Department issued regulations
(the 2002 regulations) permitting
consolidated groups to calculate
allowable loss or the basis reduction
required on certain dispositions and
deconsolidations of subsidiary stock by
applying § 1.1502–20 in its entirety,
§ 1.1502–20 without regard to the
duplicated loss factor of the loss
disallowance formula, or § 1.337(d)–2T.
If a consolidated group chose to apply
either § 1.1502–20 without regard to the
duplicated loss factor of the loss
disallowance formula, or § 1.337(d)–2T,
the 2002 regulations required the
consolidated group to file an election
under § 1.1502–20T(i) to apply the
chosen provision. The 2002 regulations
also included several correlative rules to
address cases in which, as a result of the
election, additional losses became
available to the subsidiary the stock of
which was disposed of.
Concurrently with the publication of
these temporary regulations, the IRS and
Treasury Department are publishing
Notice 2004–58 (2004–39 I.R.B.)
(September 27, 2004). That Notice sets
forth a method that the IRS will accept
for determining whether subsidiary
stock loss is disallowed and subsidiary
stock basis is reduced under § 1.337(d)–
2T.
Given the availability of the method
described in Notice 2004–58, the IRS
and Treasury Department are publishing
these temporary regulations to permit
taxpayers to make, amend, or revoke
elections under § 1.1502–20T(i). These
temporary regulations give taxpayers the
ability to take the Notice into account in
choosing a method for determining
allowable loss. In general these
regulations allow taxpayers to elect into,
or out of, the application of § 1.1502–20
in its entirety, § 1.1502–20 without
regard to the duplicated loss factor of
the loss disallowance formula, or
§ 1.337(d)–2T. Under these regulations,
a taxpayer that was permitted to make
an election under § 1.1502–20T(i), but
did not previously make such an
election, may make an election to apply
either § 1.1502–20 without regard to the

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duplicated loss factor, or § 1.337(d)–2T.
These regulations also permit a taxpayer
that previously made an election to
apply § 1.1502–20 without regard to the
duplicated loss factor to revoke the
election and apply § 1.1502–20 in its
entirety, or to amend the election in
order to apply § 1.337(d)–2T. In
addition, these regulations permit a
taxpayer that previously made an
election to apply § 1.337(d)–2T to
revoke the election and apply § 1.1502–
20 in its entirety or to amend the
election in order to apply § 1.1502–20
without regard to duplicated loss factor.
Finally, these regulations extend relief
to acquiring groups by amending
§ 1.1502–32T(b)(4)(b)(vii)(C) to change
its date of applicability from May 7,
2003, to August 26, 2004.
If a group revokes an election to apply
either § 1.1502–20 without regard to the
duplicated loss factor, or § 1.337(d)–2T,
and applies § 1.1502–20 in its entirety,
no election under § 1.1502–20(g) will be
available, even if the group had
previously made an election under
§ 1.1502–20(g) to reattribute losses of
the subsidiary the stock of which was
disposed of.
Pursuant to these regulations, an
election under § 1.1502–20T(i) must be
made, amended, or revoked by
including the statement required with a
timely filed (including extensions)
original return for a taxable year that
includes any date on or before August
26, 2004, or with or as part of an
amended return filed before the date the
original return for the taxable year that
includes August 26, 2004, is due
(including any extensions). The new
election or the revocation or amendment
of a prior election, however, only will
affect open years.
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.
These temporary regulations provide
relief to consolidated groups by
extending the time to elect a method for
determining allowable loss. The
extension of time allows taxpayers to
take into account concurrent guidance
in choosing a method for determining
allowable loss. It is necessary to provide
the extension of time immediately.
Accordingly, good cause is found for
dispensing with prior notice and
comment pursuant to 5 U.S.C. 553(b)
and for dispensing with a delayed
effective date pursuant to 5 U.S.C.
553(d). For applicability of the
Regulatory Flexibility Act (5 U.S.C.
chapter 6), see the notice of proposed

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Federal Register / Vol. 69, No. 165 / Thursday, August 26, 2004 / Rules and Regulations
rulemaking on this subject in the
Proposed Rules section of this issue of
the Federal Register. The IRS and
Treasury Department request comments
from small entities that believe they
might be adversely affected by these
regulations. Pursuant to section 7805(f)
of the Internal Revenue Code, these
temporary regulations will be submitted
to the Chief Counsel for the Advocacy
of the Small Business Administration
for comment on their impact.
Drafting Information
The principal authors of these
regulations are Theresa Abell and
Martin Huck of the Office of Associate
Chief Counsel (Corporate). However,
other personnel from the Treasury
Department and the IRS participated in
their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
Amendments to the Regulations
Accordingly, 26 CFR part 1 amended
as follows:

■

PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read, in part, as
follows:

■

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

Par. 2. Section 1.1502–20T(i) is
amended by:
■ 1. Revising the first sentence of
paragraph (i)(4).
■ 2. Redesignating paragraph (i)(6) as
(i)(7).
■ 3. Adding new paragraph (i)(6).
The revision and addition read as
follows:
■

§ 1.1502–20T Disposition or
deconsolidation of subsidiary stock
(temporary).

*

*
*
*
*
(i) * * *
(4) Time and manner of making the
election. An election to determine
allowable loss or basis reduction by
applying the provisions described in
paragraph (i)(2)(i) or (ii) of this section
is made by including the statement
required by this paragraph with or as
part of any timely filed (including any
extensions) original return for a taxable
year that includes any date on or before
August 26, 2004, or with or as part of
an amended return filed before the date
the original return for the taxable year
that includes August 26, 2004, is due
(including any extensions). * * *
*
*
*
*
*
(6) Revocation or amendment of prior
elections—(i) In general.

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Notwithstanding anything to the
contrary in this paragraph (i), if a
consolidated group made an election
under paragraph (i) of this section to
apply the provisions described in
paragraph (i)(2)(i) or (ii) of this section,
the consolidated group may revoke or
amend that election as provided in this
paragraph (i)(6).
(ii) Time and manner of revoking or
amending an election. An election to
apply the provisions described in
paragraph (i)(2)(i) or (ii) of this section
is revoked or amended by including the
statement required by paragraph
(i)(6)(iii) of this section with or as part
of any timely filed (including any
extensions) original return for a taxable
year that includes any date on or before
August 26, 2004, or with or as part of
an amended return filed before the date
the original return for the taxable year
that includes August 26, 2004, is due
(including any extensions).
(iii) Required statement—(A)
Revocation. To revoke an election to
apply the provisions described in
paragraph (i)(2)(i) or (ii) of this section,
the consolidated group must file a
statement entitled ‘‘Revocation of
Election Under Section 1.1502–20T(i).’’
The statement must include the name
and employer identification number
(E.I.N.) of the subsidiary and of the
member(s) that disposed of the
subsidiary stock.
(B) Amendment. To amend an
election to apply the provisions
described in paragraph (i)(2)(i) or (ii) of
this section, the consolidated group
must file a statement entitled
‘‘Amendment of Election Under Section
1.1502–20T(i).’’ The statement must
include the following information—
(1) The name and employer
identification number (E.I.N.) of the
subsidiary and of the member(s) that
disposed of the subsidiary stock; and
(2) The provision the taxpayer elects
to apply to determine allowable loss or
basis reduction (described in paragraph
(i)(2)(i) or (ii) of this section).
(iv) Special rule. If a consolidated
group revokes an election made under
paragraph (i) of this section, an election
described in § 1.1502–20(g) to
reattribute losses will not be respected,
even if such election was filed with the
group’s return for the year of the
disposition.
(v) This paragraph (i)(6) is applicable
on and after August 26, 2004.
*
*
*
*
*
■ Par. 3. Section § 1.1502–
32T(b)(4)(vii)(C) is amended by
removing the language ‘‘May 7, 2003’’

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52421

and adding the language ‘‘August 25,
2004’’ each time it appears.
Mark E. Matthews,
Deputy Commissioner for Services and
Enforcement.
Approved: August 19, 2004.
Gregory F. Jenner,
Acting Assistant Secretary of the Treasury
(Tax Policy).
[FR Doc. 04–19476 Filed 8–25–04; 8:45 am]
BILLING CODE 4830–01–P

DEPARTMENT OF THE TREASURY
Alcohol and Tobacco Tax and Trade
Bureau
27 CFR Parts 40, 41, 44, 45, 46, 70, and
275
[T.D. TTB–16]
RIN 1513–AA20

Importation of Tobacco Products and
Cigarette Papers and Tubes;
Recodification of Regulations;
Administrative Changes Due to the
Homeland Security Act of 2002
(2000R–546P)
Alcohol and Tobacco Tax and
Trade Bureau (TTB), Treasury.
ACTION: Final rule; Treasury decision.
AGENCY:

SUMMARY: The Alcohol and Tobacco Tax
and Trade Bureau (TTB) is recodifying
its regulations pertaining to the
importation of tobacco products and
cigarette papers and tubes. We are also
making administrative changes to these
regulations to reflect TTB’s new name
and organizational structure resulting
from changes made by the Homeland
Security Act of 2002. This document
does not include any substantive
regulatory changes.
DATES: This rule is effective on August
26, 2004.
FOR FURTHER INFORMATION CONTACT: N.
A. Sutton, Regulations and Procedures
Division, Alcohol and Tobacco Tax and
Trade Bureau, telephone 415–271–1254
or e-mail: [email protected].
SUPPLEMENTARY INFORMATION:

Background
As a part of its continuing efforts to
reorganize chapter I of title 27 of the
Code of Federal Regulations (27 CFR
chapter I), the Alcohol and Tobacco Tax
and Trade Bureau (TTB) is removing all
of part 275, Importation of Tobacco
Products and Cigarette Papers and
Tubes, from subchapter M, Alcohol,
Tobacco and Other Excise Taxes, and
recodifying it as part 41 in subchapter
B, Tobacco. This change merely

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