Federal Register / Vol. 62, No. 4 / Tuesday, January 7, 1997 / Proposed Rules 953

provides an acceptable level of safety may be

used if approved by the Manager, Los

Angeles Aircraft Certification Office, FAA.

Operators shall submit their requests through

an FAA Principal Maintenance Inspector,

who may concur or comment and then send

it to the Manager, Los Angeles Aircraft

Certification Office.

Note 2: Information concerning the

existence of approved alternative methods of

compliance with this AD, if any, may be

obtained from the Los Angeles Aircraft

Certification Office.

(f) Special flight permits may be issued in

accordance with sections 21.197 and 21.199

of the Federal Aviation Regulations (14 CFR

21.197 and 21.199) to operate the helicopter

to a location where the requirements of this

AD can be accomplished. Issued in Fort

Worth, Texas, on December 30, 1996.

Larry M. Kelly,

Acting Manager, Rotorcraft Directorate,

Aircraft Certification Service.

[FR Doc. 97–251 Filed 1–6–97; 8:45 am]

BILLING CODE 4910–13–U

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Food and Drug Administration

21 CFR Part 812

[Docket No. 95N–0342]

Export Requirements for Medical

Devices; 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 for

60 days the comment period for a

proposed rule that appeared in the

Federal Register of November 27, 1995

(60 FR 58308). The document proposed

to amend FDA’s regulations for

investigational devices to streamline

requirements for persons seeking to

export unapproved medical devices.

FDA is seeking comments on whether

this rulemaking is still needed in light

of recent changes in the export

provisions of the Federal Food, Drug,

and Cosmetic Act (the act).

DATES: Written comments by March 10,

1997.

ADDRESSES: Submit written comments

to the Dockets Management Branch

(HFA–305), Food and Drug

Administration, 12420 Parklawn Dr.,

rm. 1–23, Rockville, MD 20857.

FOR FURTHER INFORMATION CONTACT:

Philip L. Chao, Office of Policy (HF–23),

Food and Drug Administration, 5600

Fishers Lane, Rockville, MD 20850,

301–827–3380, electronic mail:

PChao@bangate.FDA.gov.

SUPPLEMENTARY INFORMATION:

I. The National Performance Review

and the Proposed Rule on Device

Exports

At present, two statutory provisions

in the act govern the export of devices

that are not approved for marketing in

the United States.

The first provision, in section

801(e)(2) of the act (21 U.S.C. 381(e)(2)),

became law as part of the Medical

Device Amendments Act of 1976 (Pub.

L. 94–295) and required FDA approval

of certain exports of unapproved

devices. The second provision, in

section 802 of the act (21 U.S.C. 382),

was the result of the FDA Export Reform

and Enhancement Act of 1996 (the

Export Act of 1996) (Pub. L. 104–134,

and amended by Pub. L. 104–180).

Before the latter provision became

law, FDA had undertaken a program to

streamline the requirements for the

exportation of unapproved devices

under section 801(e) of the act. In the

Federal Register of November 27, 1995

(60 FR 58308), FDA issued a proposed

rule to simplify the agency’s export

approval process for certain unapproved

devices. The proposed rule was

intended, in part, to respond to

concerns in the device industry that the

statutory requirement of FDA approval

of device exports may undermine a

firm’s ability to compete in international

markets and may represent an

unnecessary regulatory barrier. (It

should be emphasized, however, that

FDA’s approval times for device export

applications have decreased

significantly, from an average of 91 days

per request in 1992 to 10 days in 1995,

and further decreased to 8 days in fiscal

year 1996.)

The proposed rule was also intended

to implement part of the President’s and

Vice-President’s ‘‘National Performance

Review’’ pertaining to the exportation of

unapproved devices (as announced in

an April 1995 report entitled

‘‘Reinventing Drug and Device

Regulations’’). Under the National

Performance Review, the agency would

permit the export of unapproved

devices to certain advanced

industrialized countries without prior

FDA review and approval, provided that

the device complied with the importing

country’s laws. The report also stated

that the Administration would seek the

necessary legislative changes and would

consult Congress on the appropriate list

of advanced industrialized countries.

Furthermore, the report stated that FDA

would initiate administrative changes to

permit exports to countries that are not

on the list of advanced industrialized

countries ‘‘if the exporter has an

investigational device exemption (IDE)

permitting testing on humans in the

United States, the importing country has

given FDA a letter providing blanket

approval for IDE-type devices, and the

device is in compliance with the

importing country’s laws.’’

To implement the administrative

reform aspects of the report, FDA

proposed to amend § 812.18 (21 CFR

812.18) to state that a person who

wishes to export an investigational

device subject to part 812—

Investigational Device Exemptions (21

CFR part 812) must comply with the

requirements in section 801(e)(1) of the

act, but that, for purposes of section

801(e)(2), prior FDA approval would be

unnecessary if the investigational device

to be exported is the subject of an

approved IDE (including nonsignificant

risk devices which, under FDA

regulations, are considered to have an

approved IDE) and ‘‘will be marketed or

used in clinical trials in the foreign

country for the same intended use as

that in the approved IDE and is to be

exported to a country that has expressed

its approval of the importation of

investigational devices’’ that are the

subject of an approved IDE. The

proposed rule also stated that, if the

device is the subject of an approved IDE

and has received a ‘‘CE’’ mark from the

European Union (EU), the device may

be exported to any country in the

European Economic Area (EEA).

Proposed § 812.18(b)(1) also would

have FDA’s Center for Devices and

Radiological Health (CDRH) make

available a list of countries that have

approved the importation of

investigational devices that are the

subjects of approved IDE’s. The list

would be maintained electronically.

Proposed § 812.18(b)(2) would require

prior FDA approval to export an

investigational device if FDA withdrew

approval of the IDE or the sponsor

terminated any or all parts of

investigations because unanticipated

adverse device effects present an

unreasonable risk to subjects.

In the preamble to the proposed rule,

FDA also stated that it would amend the

proposed rule to reflect any legislative

changes (60 FR 58308 at 58309).

Thus, the changes in the proposed

rule would have benefited those

companies wishing to export devices:

(1) That have an approved U.S. IDE; (2)

to countries that have agreed to accept

U.S. IDE products; and (3) whose

intended use is the same as the U.S.

IDE. FDA believed this was as much
954 Federal Register / Vol. 62, No. 4 / Tuesday, January 7, 1997 / Proposed Rules

relief as could be provided under

existing law at the time.

The agency received seven comments

on the proposed rule. Most comments

supported the rule, but recommended

expanding the rule to explicitly mention

certain devices (such as intraocular

lenses and certain in vitro diagnostic

devices), amending the rule so that a

‘‘CE’’ mark would permit exportation of

the device to any country, or amending

the rule to consider marketing

authorization by developed countries as

permitting exportation to any country.

One comment questioned the likelihood

that a country would agree to the

importation of all devices having

approved IDE’s.

II. The Export Act of 1996 and Its

Impact on the Proposed Rule

On April 26, 1996, the President

signed the Export Act of 1996 (Pub. L.

104–134, and later amended by Pub. L.

104–180). The Export Act of 1996

amended, among other things, sections

801 and 802 of the act. The Export Act

of 1996 amended section 801(e)(2) of the

act to state, in part, that export of an

unapproved device could occur only if

the agency has determined that

exportation of the device is not contrary

to the public health and safety and has

the approval of the country to which it

is intended for export or ‘‘the device is

eligible for export under section 802’’ of

the act. Section 802 of the act, as

amended, authorizes exports of

unapproved drugs and devices if certain

conditions or requirements are met.

Under section 802(b)(1) of the act, an

unapproved device may be exported to

any country if the device complies with

the laws of that country and has valid

marketing authorization in Australia,

Canada, Israel, Japan, New Zealand,

Switzerland, South Africa, or in any

country in the EU or the EEA (often

referred to as the ‘‘listed countries’’). At

present, the EU countries are Austria,

Belgium, Denmark, Germany, Greece,

Finland, France, Ireland, Italy,

Luxembourg, The Netherlands, Portugal,

Spain, Sweden, and the United

Kingdom. The EEA countries are the EU

countries, plus Iceland, Liechtenstein,

and Norway. As new countries join the

EU or the EEA, they will automatically

be treated as listed countries without

any need for FDA action. Additionally,

the Secretary of Health and Human

Services may designate additional

countries to be added to the list if

certain requirements are met.

Another provision of the Export Act

of 1996 pertains specifically to drugs

and devices exported for investigational

use. Section 802(c) of the act states that

a drug or device intended for

investigational use in any country

described in section 802(b)(1)(A)(i) and

(b)(1)(A)(ii) of the act may be exported

in accordance with the laws of that

country and shall be exempt from

regulation under sections 505(i) and

520(g) of the act (21 U.S.C. 355(i) and

360j(g)). Thus, under section 802(c) of

the act, as amended, a device may be

exported for investigational use to any

of the listed countries without prior

FDA approval and without compliance

with the IDE regulations in part 812.

However, all devices exported under

section 802 of the act are subject to

certain requirements, under section

802(f) of the act. For example, the

device must be manufactured,

processed, packaged, and held in

substantial conformity with current

good manufacturing practice (CGMP)

requirements or meet international

standards as certified by an

international standards organization

recognized by the agency; must not be

adulterated under section 501(a)(1),

(a)(2)(A), (a)(3), and (c) of the act (21

U.S.C. 351(a)(1), (a)(2)(A), (a)(3), and

(c)); and must comply with section

801(e)(1)(A) through (e)(1)(D) of the act,

which require the device to be intended

for export, accord to the foreign

purchaser’s specifications, not be in

conflict with the laws of the foreign

country to which the device is being

exported, be labeled on the outside of

the shipping package that the device is

intended for export, and not be sold or

offered for sale in domestic commerce.

The Export Act of 1996 affects the

proposed rule in several ways. First, it

accomplished some changes to the

proposed rule that the comments

requested, particularly those comments

that requested that FDA expand the

proposed rule to cover other devices

and other FDA-regulated products or

requested FDA to permit exportation to

any country if a device received

marketing authorization in the EU or

marketing authorization in a ‘‘developed

country.’’ Second, the Export Act of

1996 also distinguishes between exports

under section 801(e) of the act and

exports under section 802 of the act. For

example, when FDA published the

proposed rule on November 27, 1995,

devices were subject only to the

requirements in section 801(e) of the

act. The Export Act of 1996 gives firms

an option whether to export a device

under section 801(e) of the act or under

section 802 of the act, and assigned

different requirements to exports under

each section of the act. Thus, any final

rule on device exports that FDA

publishes would have to reflect these

changes in the law.

Finally, as stated earlier in this

document, section 802(b)(1)(A) of the

act authorizes export of an unapproved

device to any country if the device

complies with the laws of the importing

country and the device has a valid

marketing approval in any of the 25

countries identified in the act. Devices

exported under section 802(b)(1)(A) of

the act are also not required to obtain

prior FDA approval, although they are

subject to certain notification

requirements, nor are they required to

have an IDE. In contrast, the proposed

rule’s reference to exports of

investigational devices for marketing

purposes is limited to devices exported

under section 801(e)(1) of the act and

presumes that the person exporting the

device has an IDE or is considered to

have an approved IDE; thus, at a

minimum, the proposed rule would

have to be changed to reflect the

requirements in section 802(b)(1)(A) of

the act.

Section 802(c) of the act also has a

significant impact on the proposed rule.

Under section 802(c) of the act, devices

exported for investigational use to any

listed country are not subject to the IDE

requirements and can be exported

without prior FDA approval. In

comparison, the proposed rule would

have required the exported device to

have an approved IDE or to be a

nonsignificant risk device and be

considered to have an approved IDE,

and the streamlined requirements

described in the proposal would have

applied only to exports to countries that

had notified FDA of their willingness to

accept IDE devices.

The Export Act of 1996 contains other

provisions that affect device exports.

For example, devices exported under

section 801(e) of the act do not have to

comply with CGMP’s, but devices

exported under section 802 of the act

must be in ‘‘substantial conformity’’

with CGMP’s or meet international

standards as certified by an

international standards organization

recognized by the agency. Devices

exported under section 801(e) of the act

must: (1) Accord to the foreign

purchaser’s specifications; (2) not

conflict with the laws of the foreign

country; (3) be labeled on the outside of

the shipping package that the device is

intended for export; and (4) not be

offered for sale in the United States. In

contrast, the labeling for devices

exported under section 802 of the act

must, in addition to the requirements in

section 801(e)(1) of the act, be in

accordance with the requirements and

conditions of use of the listed country

that authorized its marketing as well as

the requirements and conditions of use
Federal Register / Vol. 62, No. 4 / Tuesday, January 7, 1997 / Proposed Rules 955

in the foreign country that will receive

the device. The labeling for devices

exported under section 802 of the act

also must be in the language and units

of measurement of the foreign country

or in the language designated by that

country.

III. Issues for Public Comment

Considering these changes in the

export authority for devices, FDA is

reopening for 60 days the comment

period for the proposed rule. FDA is

soliciting public comment on the

following issues:

1. Is a final rule still necessary? Given

that section 802 of the act now provides

additional flexibility for device exports

and to export devices without the need

to make export requests under section

801(e)(2) of the act, is there still a need

to streamline the export procedure

under section 801(e)(2) of the act? If so,

what specific relief for exports under

§ 801(e)(2) of the act is sought for U.S.

IDE devices that is not preceded by the

new legislation?

2. If a final rule is still necessary,

what changes to the rule should be

made? For example, the proposed rule

included a program option under which

foreign countries would notify FDA of

their willingness to accept devices that

are the subject of an approved IDE.

However, there is little evidence to

suggest that foreign governments will be

willing to accept all IDE devices.

Conceivably, a foreign government

might be inclined to impose conditions

on its acceptance of IDE devices, or

accept some, but not all, devices. What

are some alternatives to this program

option? FDA invites interested persons

to submit draft language for any

suggested regulatory change.

Interested persons may, on or before

March 10, 1997 submit to the Dockets

Management Branch (address above)

written comments regarding this

proposal. Two copies of any comments

are to be submitted, except that

individuals may submit one 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 office

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

Monday through Friday.

During this comment period and

FDA’s review of the comments, FDA

will issue export permits under section

801(e)(2) of the act using current CDRH

procedures. A copy of the procedures

may be obtained through the

Information Processing and Office

Automation Branch (HFZ–307),

Division of Program Operations, CDRH,

by calling 301–594–4520 or by faxing a

request to 301–594–4528. In the event

that FDA decides, after considering the

comments received, not to issue a final

rule or to issue a new proposal, FDA

will continue to issue export permits

under section 801(e)(2) of the act using

current CDRH procedures.

Dated: December 31, 1996.

William K. Hubbard,

Associate Commissioner for Policy

Coordination.

[FR Doc. 97–292 Filed 1–6–97; 8:45 am]

BILLING CODE 4160–01–F

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1 and 301

[REG–208172–91]

RIN 1545–AU71

Basis Reduction Due to Discharge of

Indebtedness

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Notice of proposed rulemaking

and notice of public hearing.

SUMMARY: This document contains

proposed regulations that provide

ordering rules for the reduction of bases

of property under sections 108 and 1017

of the Internal Revenue Code of 1986.

The regulations will affect taxpayers

that exclude discharge of indebtedness

from gross income under section 108.

DATES: Written comments must be

received by April 7, 1997. Outlines of

oral comments to be presented at the

public hearing scheduled for April 24,

1997, at 10 a.m. must be received by

April 3, 1997.

ADDRESSES: Send submissions to:

CC:DOM:CORP:R (REG–208172–91),

room 5228, Internal Revenue Service,

POB 7604, Ben Franklin Station,

Washington, DC 20044. In the

alternative, submissions may be hand

delivered between the hours of 8 a.m.

and 5 p.m. to: CC:DOM:CORP:R (REG–

208172–91), Courier’s Desk, Internal

Revenue Service, 1111 Constitution

Avenue, NW., Washington, DC.

Alternatively, taxpayers may submit

comments electronically via the internet

by selecting the ‘‘Tax Regs’’ option on

the IRS Home Page, or by submitting

comments directly to the IRS internet

site at http://www.irs.ustreas.gov/prod/

taxlregs/comments.html.

FOR FURTHER INFORMATION CONTACT:

Concerning the regulations generally,

Sharon L. Hall or Christopher F. Kane

of the Office of Assistant Chief Counsel

(Income Tax & Accounting) at (202)

622–4930; concerning partnership

adjustments under section 1017, Brian

M. Blum of the Office of Assistant Chief

Counsel (Passthroughs & Special

Industries) at (202) 622–3050;

concerning submissions and the

hearing, Evangelista C. Lee of the

Regulations Unit at (202) 622–7190 (not

toll-free numbers).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The collections of information

contained in this notice of proposed

rulemaking have been submitted to the

Office of Management and Budget for

review in accordance with the

Paperwork Reduction Act of 1995 (44

U.S.C. 3507(d)).

Comments on the collections of

information should be sent to the Office

of Management and Budget, Attn: Desk

Officer for the Department of the

Treasury, Office of Information and

Regulatory Affairs, Washington, DC

20503, with copies to the Internal

Revenue Service, Attn: IRS Reports

Clearance Officer, T:FP, Washington, DC

20224. Comments on the collections of

information should be received by

March 10, 1997. Comments are

specifically requested concerning:

Whether the proposed collections of

information are necessary for the proper

performance of the functions of the

Internal Revenue Service, including

whether the information will have

practical utility;

The accuracy of the estimated burden

associated with the proposed collections

of information (see below);

How the quality, utility, and clarity of

the information to be collected may be

enhanced;

How the burden of complying with

the proposed collections of information

may be minimized, including through

the application of automated collection

techniques or other forms of information

technology; and

Estimates of capital or start-up costs

and costs of operation, maintenance,

and purchase of service to provide

information.

The collections of information in this

proposed regulation are in §§ 1.108–

4(b), 1.1017–1(e)(2), and 1.1017–1(f)(2)

(ii) and (iii). This information is

required for a taxpayer to elect to reduce

the adjusted bases of depreciable

property under section 108(b)(5), to

elect to treat section 1221(1) real

property as either depreciable property

or depreciable real property, and to

account for a partnership interest as

either depreciable property or

depreciable real property. This

information will be used to determine