Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 26011 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Part 878 

[Docket No. 2006N–0362] 

General and Plastic Surgery Devices; 

Reclassification of the Absorbable 

Hemostatic Device; Reopening of 

Comment Period 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Proposed rule; reopening of 

comment period. 

SUMMARY: The Food and Drug 

Administration (FDA) is reopening until 

June 7, 2007, the comment period for 

the proposed rule, published in the 

Federal Register of October 31, 2006 (71 

FR 63278). The proposed rule would 

reclassify the absorbable hemostatic 

device intended to produce hemostasis 

from class III (premarket approval) into 

class II (special controls). FDA is taking 

this action in response to two requests 

for an extension of the comment period 

for this rulemaking. Elsewhere in this 

issue of the Federal Register, FDA is 

also reopening the comment period on 

a notice of availability of a draft 

guidance document that would serve as 

the special control if FDA reclassifies 

this device. 

DATES: Submit written or electronic 

comments on the proposed rule by June 

7, 2007. 

ADDRESSES: You may submit comments, 

identified by Docket No. 2006N–0362, 

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. 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 the ‘‘Request for 

Comments’’ heading of 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: 

David Krause, Center for Devices and 

Radiological Health (HFZ–410), Food 

and Drug Administration, 9200 

Corporate Blvd., Rockville, MD 20850, 

301–594–3090, ext. 141. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In the Federal Register of October 31, 

2006 (71 FR 63728), FDA published a 

proposed rule to reclassify the 

absorbable hemostatic device intended 

to produce hemostasis from class III 

(premarket approval) into class II 

(special controls). FDA invited 

interested persons to comment on the 

proposed rule by January 29, 2007. Two 

companies requested FDA to extend the 

comment period by 90 days because the 

proposal presented complex medical 

and scientific issues that required the 

company to assemble a team of many 

different specialties in order to prepare 

their comments. 

FDA was unable to respond to the 

request to extend the comment period 

before the comment period ended. 

Therefore, FDA is reopening the 

comment period for 30 days in order to 

allow the requestors and other 

interested persons to complete and 

prepare their comments. FDA believes 

that these 30 days in addition to the 

time that has already passed since the 

proposal was published allows for 

sufficient time for preparation of 

comments. 

Elsewhere in this issue of the Federal 

Register, FDA is also reopening the 

comment period on a notice of 

availability of a draft guidance 

document that would serve as the 

special control if FDA reclassifies this 

device. 

II. Request for 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 number 

found in brackets in the heading of this 

document. Received comments may be 

seen in the Division of Dockets 

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

Monday through Friday. 

Dated: April 25, 2007. 

Jeffrey Shuren, 

Assistant Commissioner for Policy. 

[FR Doc. E7–8784 Filed 5–7–07; 8:45 am] 

BILLING CODE 4160–01–S 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–144859–04] 

RIN 1545–BD72 

Section 1367 Regarding Open Account 

Debt; Correction 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Correction to notice of proposed 

rulemaking. 

SUMMARY: This document contains 

corrections to a notice of proposed 

rulemaking (REG–144859–04) that was 

published in the Federal Register on 

Thursday, April 12, 2007 (72 FR 18417) 

relating to the treatment of open account 

debt between S corporations and their 

shareholders. 

FOR FURTHER INFORMATION CONTACT: 

Stacy L. Short or Deanne M. Burke, 

(202) 622–3070 (not a toll-free number). 

SUPPLEMENTARY INFORMATION: 

Background 

The correction notice that is the 

subject of this document is under 

section 1367 of the Internal Revenue 

Code. 

Need for Correction 

As published, the notice of proposed 

rulemaking (REG–144859–04) contains 

errors that may prove to be misleading 

and are in need of clarification. 


cprice-sewell on PROD1PC62 with PROPOSALS
26012 Federal Register / Vol. 72, No. 88 / Tuesday, May 8, 2007 / Proposed Rules 

Correction of Publication 

Accordingly, the publication of 

proposed rulemaking (REG–144859–04), 

which was the subject of FR Doc. E7–

6764, is corrected as follows: 

1. On page 18417, column 3, in the 

preamble, under the caption DATES:, 

first sentence of the paragraph, the 

language ‘‘Written or electronic 

comments and requests for a public 

hearing must be received by July 11, 

2007.’’ is corrected to read ‘‘Written or 

electronic comments must be received 

by July 10, 2007.’’. 

2. On page 18418, column 1, in the 

preamble, under the caption FOR

FURTHER INFORMATION CONTACT:, lines six 

through eleven, the language ‘‘attend the 

hearing, Richard Hurst at (202) 622–

2949 (TDD Telephone) (not toll free 

numbers) and his e-mail address is 

Richard.A.Hurst@irscounsel.treas.gov, 

(202) 622–7180 (not toll-free numbers).’’

is corrected to read ‘‘attend the hearing, 

Richard Hurst at 

Richard.A.Hurst@irscounsel.treas.gov, 

(202) 622–7180 (not toll-free numbers). 

3. On page 18420, column 2, in the 

preamble, under the paragraph heading 

‘‘Comments and Public Hearing’’, the 

second paragraph of the column, first 

line, the language ‘‘The rules of 26 CFR 

606.601(a)(3)’’ is corrected to read ‘‘The 

rules of 26 CFR 601.601(a)(3)’’. 

§ 1.1367–2 [Corrected] 

4. On page 18422, column 1, 

§ 1.1367–2, first paragraph of the 

column, third line of the paragraph, the 

language ‘‘1. The section heading is 

revised.’’ is corrected to read ‘‘1. The 

section heading and paragraph are 

revised.’’. 

5. On page 18422, column 1, 

§ 1.1367–2, first paragraph of the 

column, lines four through seven are 

removed. 

§ 1.1367–3 [Corrected] 

6. On page 18422, column 1, 

§ 1.1367–3, second paragraph of the 

column, the language of the paragraph 

heading ‘‘§ 1.1367–3 Effective dates and 

transitional rules.’’ is corrected to read 

‘‘§ 1.1367–3 Effective date.’’. 

LaNita Van Dyke, 

Chief, Publications and Regulations Branch, 

Legal Processing Division, Associate Chief 

Counsel (Procedure and Administration). 

[FR Doc. E7–8705 Filed 5–7–07; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–123365–03] 

RIN 1545–BC94 

Guidance Regarding the Active Trade 

or Business Requirement Under 

Section 355(b) 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: This document contains 

proposed regulations that provide 

guidance regarding the active trade or 

business requirement under section 

355(b) of the Internal Revenue Code. 

These proposed regulations provide 

guidance on issues involving the active 

trade or business requirement under 

section 355(b), including guidance 

resulting from the enactment of section 

355(b)(3). These proposed regulations 

will affect corporations and their 

shareholders. 

DATES: Written or electronic comments 

and requests for a public hearing must 

be received by August 6, 2007. 

ADDRESSES: Send submissions to: 

CC:PA:LPD:PR (REG–123365–03), room 

5203, Internal Revenue Service, PO Box 

7604, Ben Franklin Station, Washington, 

DC 20044. Submissions may be handdelivered Monday through Friday 

between the hours of 8 a.m. and 4 p.m. 

to CC:PA:LPD:PR (REG–123365–03), 

Courier’s Desk, Internal Revenue 

Service, 1111 Constitution Avenue, 

NW., Washington, DC, or sent 

electronically via the Federal 

eRulemaking Portal at 

www.regulations.gov (IRS REG–123365–

03). 

FOR FURTHER INFORMATION CONTACT: 

Concerning the proposed regulations, 

Russell P. Subin, (202) 622–7790; 

concerning submissions and the 

hearing, Kelly Banks, (202) 622–7180 

(not toll-free numbers). 

SUPPLEMENTARY INFORMATION: 

Background and Explanation of 

Provisions 

A. Background and Overview of the Key 

Aspects of the Proposed Regulations 

1. Background 

Section 355(a) of the Internal Revenue 

Code (Code) provides that, under certain 

circumstances, a corporation may 

distribute stock and securities of a 

corporation it controls to its 

shareholders and security holders 

without causing either the corporation 

or its shareholders and security holders 

to recognize income, gain or loss. 

Sections 355(a)(1)(C) and 355(b)(1) 

generally require that the distributing 

corporation (distributing) and controlled 

corporation (controlled) each be 

engaged, immediately after the 

distribution, in the active conduct of a 

trade or business. Section 355(b)(2)(A) 

provides that a corporation shall be 

treated as engaged in the active conduct 

of a trade or business if and only if it 

is engaged in the active conduct of a 

trade or business, or substantially all of 

its assets consist of stock and securities 

of a corporation controlled by it 

(immediately after the distribution) 

which is so engaged. For this purpose, 

control is defined under section 368(c). 

All references to control in this 

preamble are references to control as 

defined in section 368(c). 

Section 202 of the Tax Increase 

Prevention and Reconciliation Act of 

2005, Public Law 109–222 (120 Stat. 

345, 348) (TIPRA) amended section 

355(b) by adding section 355(b)(3). 

Section 355(b)(3)(A), as amended by 

Division A, Section 410 of the Tax 

Relief and Health Care Act of 2006, 

Public Law 109–432 (120 Stat. 2922, 

2963), provides that in the case of any 

distribution made after May 17, 2006, a 

corporation shall be treated as meeting 

the requirement of section 355(b)(2)(A) 

if and only if such corporation is 

engaged in the active conduct of a trade 

or business. Section 355(b)(3)(B) 

provides that for purposes of section 

355(b)(3)(A) (and, consequently, section 

355(b)(2)(A)), all members of such 

corporation’s separate affiliated group 

(SAG) shall be treated as one 

corporation (SAG rule). For purposes of 

the preceding sentence, a corporation’s 

SAG is the affiliated group which would 

be determined under section 1504(a) if 

such corporation were the common 

parent and section 1504(b) did not 

apply. 

Thus, the separate affiliated group of 

distributing (DSAG) is the affiliated 

group that consists of distributing as the 

common parent and all corporations 

affiliated with distributing through 

stock ownership described in section 

1504(a)(1)(B) (regardless of whether the 

corporations are includible corporations 

under section 1504(b)). The separate 

affiliated group of controlled (CSAG) is 

determined in a similar manner (with 

controlled as the common parent). 

Accordingly, unlike prior law, a 

corporation is not treated as engaged in 

the active conduct of a trade or business 

solely as a result of substantially all of 

its assets consisting of stock, or stock 

and securities, of one or more 


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