This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

2351

Vol. 60, No. 5

Monday, January 9, 1995

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Food and Drug Administration

21 CFR Parts 600, 601, 606, 607, 610,

640, and 660

[Docket Nos. 94N–0066 and 94N–0080]

Review of Regulations for General

Biologics and Licensing and for Blood

Establishments and Blood Products;

Public Meeting

AGENCY: Food and Drug Administration,

HHS.

ACTION: Notice of public meeting;

request for comments.

SUMMARY: The Food and Drug

Administration (FDA) is announcing a

public meeting for interested persons to

express their comments regarding the

biologics regulations that the agency

intends to review (21 CFR parts 600,

601, 606, 607, 610, 640, and 660). In the

Federal Register of June 3, 1994 (59 FR

28821 and 28822, respectively), FDA

issued two documents, ‘‘Review of

General Biologics and Licensing

Regulations’’ (Docket No. 94N–0066)

and ‘‘Review of Regulations for Blood

Establishments and Blood Products’’

(Docket No. 94N–0080), that announced

that FDA was intending to review

certain biologics regulations and

requested public comments regarding

those regulations. The comment periods

have been extended twice and will close

on February 13, 1995. The purpose of

the public meeting is to allow additional

opportunity for public comment

concerning the biologics regulations that

the agency is reviewing.

DATES: The public meeting will be held

on January 26, 1995, from 1:30 p.m. to

5:30 p.m. Submit written notices of

participation and written copies or

summaries of oral presentations and the

approximate amount of time needed for

the presentation by January 19, 1995.

Submit written comments regarding the

biologics regulations under review by

February 13, 1995.

ADDRESSES: The public meeting will be

held at the Parklawn Bldg., conference

rooms D and E, 5600 Fishers Lane,

Rockville, MD 20857. Submit written

notices of participation and written

copies or summaries of oral

presentations and the approximate

amount of time needed for the

presentation to Timothy W. Beth, Center

for Biologics Evaluation and Research

(HFM–635), Food and Drug

Administration, 1401 Rockville Pike,

Rockville, MD 20852–1448 or FAX at

301–443–3874. Submit written

comments regarding the review of

general biologics and licensing

regulations identified with docket

number 94N–0066 and written

comments regarding the review of

regulations for blood establishments and

blood products identified with docket

number 94N–0080 to the Dockets

Management Branch (HFA–305), Food

and Drug Administration, rm. 1–23,

12420 Parklawn Dr., Rockville, MD

20857.

FOR FURTHER INFORMATION CONTACT:

Timothy W. Beth or Jean M. Olson,

Center for Biologics Evaluation and

Research (HFM–635), Food and Drug

Administration, 1401 Rockville Pike,

Rockville, MD 20852–1448, 301–594–

3074.

SUPPLEMENTARY INFORMATION: In the

Federal Register of June 3, 1994 (59 FR

28821 and 28822 respectively), FDA

issued two documents, ‘‘Review of

General Biologics and Licensing

Regulations’’ (Docket No. 94N–0066)

and ‘‘Review of Regulations for Blood

Establishments and Blood Products’’

(Docket No. 94N–0080). The documents

announced the agency’s intent to review

biologics regulations, 21 CFR parts 600,

601, 606, 607, 610, 640, and 660, and

requested written comments from the

public. Interested persons were given

until August 17, 1994, to respond to the

documents. In the Federal Register of

August 17, 1994 (59 FR 42193), FDA

extended the comment periods to

November 15, 1994, in response to

requests to allow for additional time for

public comment. In the Federal Register

of November 14, 1994 (59 FR 56448),

FDA extended the comment periods to

February 13, 1995, based on requests to

hold a public meeting regarding the

biologics regulations under review.

The Biotechnology Industry

Organization and the Pharmaceutical

Research and Manufacturers of America

requested a public meeting to allow for

the presentation of comments regarding

the agency’s intent to review the

biologics regulations. FDA agrees that a

public meeting would be useful, and

therefore, is holding a public meeting to

allow all interested persons to present

their comments. Representatives from

the Center for Biologics Evaluation and

Research (CBER) will chair the public

meeting.

Every effort will be made to

accommodate each person who wants to

participate in the public meeting.

However, each person who wants to

ensure his or her participation in the

meeting is encouraged, by close of

business on January 19, 1995, to: (1) File

a written notice of participation

containing the name, address, phone

number, facsimile number, affiliation, if

any, of the participant, topic of the

presentation, and approximate amount

of time requested for the presentation;

and (2) submit a copy or summary of

their presentation. The requested

information, including the written

notice of participation, may be

submitted to the contact person (address

above).

Before the meeting, CBER will

determine the amount of time assigned

to each person and the approximate

scheduled time for each presentation. A

schedule showing the persons making

presentations will be filed with the

Dockets Management Branch (address

above) and mailed or FAX’ed to each

participant before the meeting.

Interested persons attending the meeting

who did not request an opportunity to

make a presentation will be given the

opportunity to make an oral

presentation at the conclusion of the

meeting, as time permits.

All public comments received at the

public meeting and all written

comments submitted to the Dockets

Management Branch by February 13,

1995, will be considered in the review

of the regulations to determine whether

they should be revised, rescinded, or

continued without change. After careful

review of the public comments, FDA

intends to publish a proposed rule to

amend those regulations that FDA

deems appropriate.

Interested persons may, on or before

February 13, 1995, submit written

comments regarding the biologics

regulations the agency intends to review

(21 CFR parts 600, 601, 606, 607, 610,
2352 Federal Register / Vol. 60, No. 5 / Monday, January 9, 1995 / Proposed Rules

640, and 660) to the Dockets

Management Branch (address above).

Two copies of any comments are to be

submitted, except that individuals may

submit one copy. Comments are to be

identified with the appropriate 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.

Transcripts of the public meeting may

be requested in writing from the

Freedom of Information Office (HFI–35),

Food and Drug Administration, rm.

12A–16, 5600 Fishers Lane, Rockville,

MD 20857, approximately 15 working

days after the meeting, at a cost of 10

cents per page. The transcript of the

public meeting and copies of

information and comments submitted to

the meeting record will be available for

examination at the Dockets Management

Branch (address above) approximately

15 working days after the meeting,

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

through Friday.

Dated: January 4, 1995.

William K. Hubbard,

Interim Deputy Commissioner for Policy.

[FR Doc. 95–460 Filed 1–4–95; 3:01 pm]

BILLING CODE 4160–01–F

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[PS–76–92]; [PS–51–93]

RIN 1545–AR48; RIN 1545–AR93

Recognition of Gain or Loss by

Contributing Partner on Distribution of

Contributed Property or Other Property

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Notice of proposed rulemaking

and notice of public hearing.

SUMMARY: This document contains

proposed regulations relating to the

recognition of gain or loss on certain

distributions of contributed property by

a partnership under section 704(c)(1)(B)

of the Internal Revenue Code of 1986

(Code). This document also contains

proposed regulations relating to the

recognition of gain on certain

distributions to a contributing partner

under section 737. Changes to the

applicable law were made by the

Revenue Reconciliation Act of 1989 and

the Energy Policy Act of 1992. The

proposed regulations affect partnerships

and their partners and are necessary to

provide guidance for complying with

the applicable tax law.

DATES: Written comments must be

received by April 10, 1995. Requests to

speak (with outlines of oral comments)

at a public hearing scheduled for June

19, 1995, at 10 a.m. must be received by

May 29, 1995.

ADDRESSES: Send submissions to:

CC:DOM:CORP:T:R (PS–76–92; PS–51–

93), 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 8:00 a.m.

and 5:00 p.m. to: CC:DOM:CORP:T:R

(PS–76–92; PS–51–93), Courier’s Desk,

Internal Revenue Service, 1111

Constitution Avenue NW, Washington,

DC. The public hearing has been

scheduled to be held in the Auditorium,

Internal Revenue Building, 1111

Constitution Avenue, NW, Washington,

DC.

FOR FURTHER INFORMATION CONTACT:

Concerning the regulations, Stephen J.

Coleman, (202) 622–3060; concerning

submissions and the hearing, Michael

Slaughter, (202) 622–7190 (not toll-free

numbers).

SUPPLEMENTARY INFORMATION:

Introduction

This document proposes to add new

§§ 1.704–4, 1.737–1, 1.737–2, 1.737–3,

1.737–4, and 1.737–5 to the Income Tax

Regulations (26 CFR part 1) under

sections 704(c)(1)(B), 704(c)(2), and 737

of the Code.

Background

Section 704(c)(1)(A) of the Internal

Revenue Code (Code) requires that gain

or loss with respect to property

contributed to a partnership by a partner

be shared among the partners so as to

take into account any built-in gain or

loss in the property at the time of the

contribution. Prior to its amendment by

the Revenue Reconciliation Act of 1989

(1989 Act), section 704(c) did not

require the recognition of built-in gain

or loss by a contributing partner on a

distribution of contributed property by

the partnership. The 1989 Act added

sections 704(c)(1)(B) and 704(c)(2) to the

Code. Section 704(c)(1)(B) provides that

in the case of a distribution of

contributed property to another partner

within five years of its contribution to

the partnership, the contributing partner

must recognize gain or loss in an

amount equal to the gain or loss the

partner would have been allocated

under section 704(c)(1)(A) on a sale of

the property by the partnership at its

fair market value at the time of the

distribution. Section 704(c)(2) provides

for an exception for distributions of

certain like-kind property. The

legislative history of the 1989 Act

indicates that Congress intended section

704(c)(1)(B) to eliminate the

inconsistent treatment of sales and

distributions by a partnership and

thereby prevent partners from

circumventing the rule requiring precontribution gain or loss on contributed

property to be allocated to the

contributing partner by distributing the

property to another partner. H.R. Rep.

No. 101–247, 101st Cong., 1st Sess. 406

(1989).

Prior to the enactment of the Energy

Policy Act of 1992 (1992 Act), a partner

who contributed appreciated property to

a partnership did not recognize gain on

a distribution to the distributee partner

of partnership property other than

money. The 1992 Act added section 737

to the Code to require a contributing

partner to recognize gain to the extent

of the lesser of (i) the net

precontribution gain on property

contributed to the partnership by the

partner, or (ii) the excess of the value of

the distributed property over the

adjusted basis of the partner’s interest in

the partnership. H.R. Rep. No. 102–

1018, 102d Cong., 2d Sess. 428 (1992).

Explanation of Provisions

A. Overview

Section 704(c)(1)(B) generally requires

a contributing partner to recognize gain

or loss when the property contributed

by that partner is distributed to another

partner within five years of its

contribution to the partnership. Section

737 generally requires a contributing

partner to recognize gain when the

partner receives, within five years of the

contribution, a distribution of other

property with a fair market value in

excess of the partner’s adjusted basis in

the partnership. Both sections apply

only to distributions made to a partner

in the partner’s capacity as a partner.

Section 704(c)(1)(B) and section 737 do

not apply to transactions or

distributions in which the partner is not

acting in the capacity of a partner (e.g.,

transactions or distributions subject to

section 707(a) or section 751(b)).

The proposed regulations provide

rules for determining when section

704(c)(1)(B) and section 737 apply and

the amount of gain or loss that must be

recognized by the contributing partner

under the applicable section. The

proposed regulations also provide rules

for determining the character of such

gain or loss and for making the

necessary basis adjustments. The

proposed regulations contain several

exceptions that are based on the