15080 Federal Register / Vol. 72, No. 61 / Friday, March 30, 2007 / Proposed Rules 

attributable to one broker-dealer. This 

broker-dealer informed the NYSE that 

the fail positions were not being closed 

out because it was relying on the 

options market maker exception. 

Æ Prior to the Commission’s Proposal, 

the Commission’s Office of Compliance 

and Inspections (‘‘OCIE’’) conducted 

some examinations for Regulation SHO 

compliance and found that some brokerdealers were still carrying a significant 

amount of fails to deliver in securities 

that they were not closing out because 

they were relying on the grandfather 

provision. One broker-dealer indicated 

that it had not closed out several 

persistent fails in threshold securities 

because it was relying on the options 

market maker exception. 

Therefore, the Commission is reopening the comment period for 

Exchange Act Release No. 54154 from 

the date of this release through April 30, 

2007. 

By the Commission. 

Dated: March 26, 2007. 

Nancy M. Morris, 

Secretary. 

[FR Doc. E7–5870 Filed 3–29–07; 8:45 am] 

BILLING CODE 8010–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Parts 211, 226, 300, 500, 530, 

600, 895, and 1271 

[Docket No. 2005N–0373] 

RIN 0910–AF54 

Use of Materials Derived From Cattle in 

Medical Products Intended for Use in 

Humans and Drugs Intended for Use in 

Ruminants; Reopening of the 

Comment Period 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Proposed rule; reopening of the 

comment period. 

SUMMARY: The Food and Drug 

Administration (FDA) is reopening until 

May 14, 2007, the comment period for 

the proposed rule published in the 

Federal Register of January 12, 2007 (72 

FR 1582). The proposed rule would 

prohibit the use of certain cattle 

material in, or in the manufacture 

(including processing) of, drugs, 

biologics, and medical devices intended 

for use in humans and human cells, 

tissues, and cellular and tissue-based 

products (HCT/Ps) (collectively, 

medical products for humans), and in 

drugs intended for use in ruminant 

animals (drugs for ruminants) and 

would also require new recordkeeping 

provisions for medical products for 

humans and drugs for ruminants that 

are manufactured from or otherwise 

contain material from cattle. The agency 

is reopening the comment period in 

response to a request for more time to 

enable industry to generate more 

information on products that might be 

affected by the rule. 

DATES: Submit written or electronic 

comments on the proposed rule by May 

14, 2007. 

ADDRESSES: You may submit comments, 

identified by Docket No. 2005N–0373 

and RIN number 0910–AF54, by any of 

the following methods: 

Electronic Submissions 

Submit electronic comments in the 

following ways: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Agency Web site: http:// 

www.fda.gov/dockets/ecomments. 

Follow the instructions for submitting 

comments on the agency Web site. 

Written Submissions 

Submit written submissions in the 

following ways: 

• FAX: 301–827–6870. 

• Mail/Hand delivery/Courier [For 

paper, disk, or CD-ROM submissions]: 

Division of Dockets Management (HFA–

305), Food and Drug Administration, 

5630 Fishers Lane, rm. 1061, Rockville, 

MD 20852. 

To ensure more timely processing of 

comments, FDA is no longer accepting 

comments submitted to the agency by email. FDA encourages you to continue 

to submit electronic comments by using 

the Federal eRulemaking Portal or the 

agency Web site, as described 

previously in the ADDRESSES portion of 

this document under Electronic 

Submissions. 

Instructions: All submissions received 

must include the agency name and 

Docket No(s). and Regulatory 

Information Number (RIN) for this 

rulemaking. All comments received may 

be posted without change to http:// 

www.fda.gov/ohrms/dockets/ 

default.htm, including any personal 

information provided. For additional 

information on submitting comments, 

see section II ‘‘Comments’’ in the 

SUPPLEMENTARY INFORMATION section of 

this document. 

Docket: For access to the docket to 

read background documents or 

comments received, go to http:// 

www.fda.gov/ohrms/dockets/ 

default.htm and insert the docket 

number(s), found in brackets in the 

heading of this document, into the 

‘‘Search’’ box and follow the prompts 

and/or go to the Division of Dockets 

Management, 5630 Fishers Lane, rm. 

1061, Rockville, MD 20852. 

FOR FURTHER INFORMATION CONTACT: 

For information concerning products 

regulated by the Center for Drug 

Evaluation and Research: Audrey 

A. Thomas, Center for Drug 

Evaluation and Research (HFD–

007), Food and Drug 

Administration, 5600 Fishers Lane, 

Rockville, MD 20857, 301–443–

5533, e-mail: 

audrey.thomas@fda.hhs.gov. 

For information concerning products 

regulated by the Center for Biologics 

Evaluation and Research: Stephen 

M. Ripley, Center for Biologics 

Evaluation and Research (HFM–17), 

Food and Drug Administration, 

1401 Rockville Pike, suite 200N, 

Rockville, MD 20852–1448, 301–

827–6210, e-mail: 

stephen.ripley@fda.hhs.gov. 

For information concerning products 

regulated by the Center for Devices 

and Radiological Health: Scott G. 

McNamee, Center for Devices and 

Radiological Health, Food and Drug 

Administration, 2094 Gaither Rd., 

rm. 230, Rockville, MD 20850, 240–

276–0105, e-mail: 

scott.mcnamee@fda.hhs.gov. 

For information concerning products 

regulated by the Center for 

Veterinary Medicine: Michael J. 

Popek, Center for Veterinary 

Medicine (HFV–144), Food and 

Drug Administration, 7500 Standish 

Pl., Rockville, MD 20855, 301–827–

6462, e-mail: 

michael.popek@fda.hhs.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In the Federal Register of January 12, 

2007 (72 FR 1582), FDA published a 

proposed rule that, if finalized, would 

prohibit the use of certain cattle 

material in, or in the manufacture 

(including processing) of, medical 

products for humans and drugs for 

ruminants. FDA also proposed new 

recordkeeping requirements for medical 

products for humans and drugs for 

ruminants that are manufactured from 

or otherwise contain material from 

cattle. 

Interested persons were given until 

March 13, 2007, to submit written or 

electronic comments to the agency on 

the proposal. On February 12, 2007, 


pwalker on PROD1PC71 with PROPOSALS
Federal Register / Vol. 72, No. 61 / Friday, March 30, 2007 / Proposed Rules 15081 

FDA received a request to extend the 

comment period. FDA believes that 

extending the comment period by 45 

days is appropriate to allow industry to 

generate information on products that 

might be affected by the rule. Therefore, 

FDA is extending the comment period 

until May 14, 2007. This extension will 

provide the public with a total of 105 

days to submit comments. 

II. Comments 

Interested persons may submit to the 

Division of Dockets Management (see 

ADDRESSES) written or electronic 

comments on the proposed rule. Submit 

a single copy of electronic comments or 

two paper copies of any mailed 

comments, except that individuals may 

submit one paper copy. Comments are 

to be identified with the Docket No. 

2005N–0373. Received comments may 

be seen in the Division of Dockets 

Management between 9 a.m. and 4 p.m., 

Monday through Friday. 

Dated: March 23, 2007. 

Jeffrey Shuren, 

Assistant Commissioner for Policy. 

[FR Doc. E7–5894 Filed 3–29–07; 8:45 am] 

BILLING CODE 4160–01–S 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–156779–06] 

RIN 1545–BG27 

Determining the Amount of Taxes Paid 

for Purposes of Section 901 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice of proposed rulemaking 

and notice of public hearing. 

SUMMARY: These proposed regulations 

provide guidance relating to the 

determination of the amount of taxes 

paid for purposes of section 901. The proposed regulations affect 

taxpayers that claim direct and indirect 

foreign tax credits. This document also 

provides notice of a public hearing. 

DATES: Written or electronic comments 

must be received by June 28, 2007. 

Outlines of topics to be discussed at the 

public hearing scheduled for July 30, 

2007, at 10 a.m. must be received by 

July 9, 2007. 

ADDRESSES: Send submissions to 

CC:PA:LPD:PR (REG–156779–06), Room 

5203, Internal Revenue Service, P.O. 

Box 7604, Ben Franklin Station, 

Washington, DC 20044. Submissions 

may be hand delivered Monday through 

Friday between the hours of 8 a.m. and 

4 p.m. to CC:PA:LPD:PR (REG–156779–

06), Courier’s Desk, Internal Revenue 

Service, 1111 Constitution Avenue, 

NW., Washington, DC, or sent 

electronically via the Federal 

eRulemaking Portal at http:// 

www.regulations.gov (IRS REG–156779–

06). The public hearing will be held in 

the Auditorium of the Internal Revenue 

Building, 1111 Constitution Avenue, 

NW., Washington, DC. 

FOR FURTHER INFORMATION CONTACT: 

Concerning submission of comments, 

the hearing, and/or to be placed on the 

building access list to attend the 

hearing, Kelly Banks (202) 622–7180; 

concerning the regulations, Bethany A. 

Ingwalson, (202) 622–3850 (not toll-free 

numbers). 

SUPPLEMENTARY INFORMATION: 

Background 

Section 901 of the Internal Revenue 

Code (Code) permits taxpayers to claim 

a credit for income, war profits, and 

excess profits taxes paid or accrued (or 

deemed paid) during the taxable year to 

any foreign country or to any possession 

of the United States. 

Section 1.901–2(a) of the regulations 

defines a tax as a compulsory payment 

pursuant to the authority of a foreign 

country to levy taxes, and further 

provides that a tax is an income, war 

profits, or excess profits tax if the 

predominant character of the tax is that 

of an income tax in the U.S. sense. 

Section 1.901–2(e) provides rules for 

determining the amount of tax paid by 

a taxpayer for purposes of section 901. 

Section 1.901–2(e)(5) provides that an 

amount paid is not a compulsory 

payment, and thus is not an amount of 

tax paid, to the extent that the amount 

paid exceeds the amount of liability 

under foreign law for tax. For purposes 

of determining whether an amount paid 

exceeds the amount of liability under 

foreign law for tax, § 1.901–2(e)(5) 

provides the following rule: 

An amount paid does not exceed the 

amount of such liability if the amount paid 

is determined by the taxpayer in a manner 

that is consistent with a reasonable 

interpretation and application of the 

substantive and procedural provisions of 

foreign law (including applicable tax treaties) 

in such a way as to reduce, over time, the 

taxpayer’s reasonably expected liability 

under foreign law for tax, and if the taxpayer 

exhausts all effective and practical remedies, 

including invocation of competent authority 

procedures available under applicable tax 

treaties, to reduce, over time, the taxpayer’s 

liability for foreign tax (including liability 

pursuant to a foreign tax audit adjustment). 

Section 1.901–2(e)(5) provides further 

that if foreign tax law includes options 

or elections whereby a taxpayer’s 

liability may be shifted, in whole or 

part, to a different year, the taxpayer’s 

use or failure to use such options or 

elections does not result in a 

noncompulsory payment, and that a 

settlement by a taxpayer of two or more 

issues will be evaluated on an overall 

basis, not on an issue-by-issue basis, in 

determining whether an amount is a 

compulsory amount. In addition, it 

provides that a taxpayer is not required 

to alter its form of doing business, its 

business conduct, or the form of any 

transaction in order to reduce its 

liability for tax under foreign law. 

A. U.S.-Owned Foreign Entities 

Commentators have raised questions 

regarding the application of § 1.901–

2(e)(5) to a U.S. person that owns one 

or more foreign entities. In particular, 

commentators have raised questions 

concerning the application of the 

regulation when one foreign entity 

directly or indirectly owned by a U.S. 

person transfers, pursuant to a group 

relief type regime, a net loss to another 

foreign entity, which may or may not 

also be owned by the U.S. person. 

Certain commentators have expressed 

concern that foreign taxes paid by the 

transferor in a subsequent tax year 

might not be compulsory payments to 

the extent the transferor could have 

reduced its liability for those foreign 

taxes had it chosen not to transfer the 

net loss in the prior year. This concern 

arises because the current final 

regulations apply on a taxpayer-bytaxpayer basis, obligating each taxpayer 

to minimize its liability for foreign taxes 

over time, even though the net effect of 

the loss surrender may be to minimize 

the amount of foreign taxes paid in the 

aggregate by the controlled group over 

time. 

Similar questions and concerns arise 

when one or more foreign subsidiaries 

of a U.S. person reach a combined 

settlement with a foreign taxing 

authority that results in an increase in 

the amount of one foreign subsidiary’s 

foreign tax liability and a decrease in 

the amount of a second foreign 

subsidiary’s foreign tax liability. 

B. Certain Structured Passive 

Investment Arrangements 

The IRS and Treasury Department 

have become aware that certain U.S. 

taxpayers are engaging in highly 

structured transactions with foreign 

counterparties in order to generate 

foreign tax credits. These transactions 

are intentionally structured to create a 

foreign tax liability when, removed from 

the elaborately engineered structure, the 

basic underlying business transaction 


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