Federal Register/Vol. 76, No. 226/Wednesday, November 23

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proposed AD would not have a (e) Compliance (i) Terminating Action to the Repetitive substantial direct effect on the States, on Comply with this AD within the Inspections and Cleaning the relationship between the national compliance times specified, unless already Performing the modifications specified in Government and the States, or on the done. both paragraphs (g) and (h), of this AD is distribution of power and terminating action to the repetitive (f) Inspection and Cleaning of No. 4 Bearing inspections and cleanings specified in responsibilities among the various Compartment for Coking levels of government. paragraph (f)(2) of this AD. For the reasons discussed above, I (1) Within 1,000 cycles-in-service (CIS) (j) Alternative Methods of Compliance certify this proposed regulation: after the effective date of this AD, initially (AMOCs) (1) Is not a ‘‘significant regulatory inspect and clean the No. 4 bearing compartment in accordance with The Manager, Engine Certification Office, action’’ under Executive Order 12866, may approve AMOCs for this AD. Use the Accomplishment Instructions, paragraphs (2) Is not a ‘‘significant rule’’ under procedures found in 14 CFR 39.19 to make 2.A. through 2.A.(4)(b)3 of Pratt & Whitney your request. the DOT Regulatory Policies and Alert Service Bulletin No. PW4ENG–A72– Procedures (44 FR 11034, February 26, 436, Revision 6, dated September 30, 1999. (k) Related Information 1979), (2) Thereafter, within every additional (3) Will not affect intrastate aviation (1) For more information about this AD, 1,000 CIS, perform the inspection and contact Stephen Sheely, Aerospace Engineer, in Alaska, and cleaning specified in paragraph (f)(1) of this Engine & Propeller Directorate, FAA, 12 New (4) Will not have a significant AD. England Executive Park, Burlington, MA economic impact, positive or negative, 01803; phone: (781) 238–7750; fax: (781) (g) Modification To Stop Buildup of Coking on a substantial number of small entities 238–7199; email: [email protected]. in the No. 4 Bearing Compartment under the criteria of the Regulatory (2) For service information identified in Flexibility Act. (1) At the next engine visit to a this AD, contact Pratt & Whitney, 400 Main maintenance facility that is capable of St., East Hartford, CT 06108; telephone: (860) List of Subjects in 14 CFR Part 39 performing the following on-wing method or 565–8770; fax: (860) 565–4503. You may Air transportation, Aircraft, Aviation in-shop method of modification to the No. 4 review copies of the referenced service safety, Incorporation by reference, bearing compartment, but not to exceed 5 information at the FAA, Engine & Propeller Directorate, 12 New England Executive Park, Safety. years after the effective date of this AD, do the following: Burlington, MA. For information on the The Proposed Amendment (i) Replace the No. 4 bearing packing availability of this material at the FAA, call (781) 238–7125. Accordingly, under the authority transfer tube assembly; (ii) Replace the No. 4 bearing internal delegated to me by the Administrator, Issued in Burlington, Massachusetts, on scavenge tube assembly; the FAA proposes to amend 14 CFR part November 15, 2011. (iii) Remove the No. 4 bearing shield, and Peter A. White, 39 as follows: the No. 4 bearing shield option; and Manager, Engine & Propeller Directorate, (iv) Install new No. 4 bearing shield PART 39—AIRWORTHINESS Aircraft Certification Service. options. DIRECTIVES (2) For doing the on-wing method of the [FR Doc. 2011–30138 Filed 11–22–11; 8:45 am] BILLING CODE 4910–13–P 1. The authority citation for part 39 modification, do the work in accordance with continues to read as follows: Accomplishment Instructions, Paragraphs 2.A. through 2.A.(9)(a)3d of Pratt & Whitney Authority: 49 U.S.C. 106(g), 40113, 44701. Service Bulletin (SB) No. PW4ENG–72–472, DEPARTMENT OF JUSTICE § 39.13 [Amended] Revision 5, dated April 14, 1998. (3) For doing the in-shop method of the Drug Enforcement Administration 2. The FAA amends § 39.13 by adding modification, do the work in accordance with the following new airworthiness Paragraphs 2.B. through 2.B.(2)(f)2d of Pratt 21 CFR Part 1300 directive (AD): & Whitney SB No. PW4ENG–72–472, [Docket No. DEA–341P] Pratt & Whitney: Docket No. FAA–2011– Revision 5, dated April 14, 1998. 1194; Directorate Identifier 2011–NE– (h) Rerouting of the No. 4 Bearing Pressure RIN 1117–AB31 36–AD. and Scavenge Tubes Classification of Two Steroids, (a) Comments Due Date (1) At the next shop visit at which the Prostanozol and Methasterone, as We must receive comments by January 23, engine is sufficiently disassembled to Schedule III Anabolic Steroids Under 2012. perform the rerouting, but not to exceed 5 the Controlled Substances Act years after the effective date of this AD, do (b) Affected ADs the following: AGENCY: Drug Enforcement None. (i) Modify the turbine exhaust case to Administration (DEA), Department of (c) Applicability relocate the No. 4 bearing pressure and Justice. scavenge tube ports; This AD applies to all Pratt & Whitney ACTION: Notice of proposed rulemaking. (ii) Replace the internal No. 4 bearing PW4050, PW4052, PW4056, PW4056(–3), pressure and scavenge tubes; PW4156, PW4060, PW4060(–3), PW4060A, SUMMARY: This Notice of Proposed (iii) Modify or replace the turbine case PW4152, PW4152(–3), PW4156A, PW4158, Rulemaking (NPRM) proposes to PW4158(–3), PW4460, PW4460(–3), PW4462, cooling brackets to support the new No. 4 classify the following two steroids as and PW4462(–3) turbofan engines. bearing pressure and scavenge tubes; ‘‘anabolic steroids’’ under the (iv) Replace the turbine case manifolds as Controlled Substances Act (CSA): (d) Unsafe Condition necessary; and b a (v) Install the new brackets and clamps to prostanozol (17 -hydroxy-5 - This AD was prompted by reports of five androstano[3,2-c]pyrazole) and engine in-flight shutdowns and seven support the new routing configuration. unplanned engine removals due to clogging (2) Do the work specified in paragraph (h) methasterone (2a,17a-dimethyl-5a- of No. 4 bearing compartment oil pressure of this AD in accordance with androstan-17b-ol-3-one). The Drug and scavenge tubes. We are issuing this AD Accomplishment Instructions paragraph 2 of Enforcement Administration (DEA) to prevent an engine fire, a fractured fan Pratt & Whitney SB No. PW4ENG–79–76, believes that this action is necessary to drive shaft, and damage to the airplane. Revision 4, dated February 14, 2002. prevent the abuse and trafficking of

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these steroids. If the regulations are paragraph of your comment and identify substance. DEA believes that amended, these steroids will be listed as what information you want redacted. prostanozol (17b-hydroxy-5a- Schedule III controlled substances If you want to submit confidential androstano[3,2-c]pyrazole) and subject to the regulatory control business information as part of your methasterone (2a,17a-dimethyl-5a- provisions of the CSA. comment, but do not want it to be androstan-17b-ol-3-one) meet this DATES: Electronic comments must be posted online or made available in the definition of ‘‘anabolic steroid,’’ and is submitted and written comments must public docket, you must include the proposing that they be added to the list be postmarked on or before January 23, phrase ‘‘CONFIDENTIAL BUSINESS of anabolic steroids in 21 CFR 2012. Commenters should be aware that INFORMATION’’ in the first paragraph 1300.01(b)(4). the electronic Federal Docket of your comment. You must also Anabolic steroids are a class of drugs Management System will not accept prominently identify confidential structurally related to the endogenous comments after midnight Eastern Time business information to be redacted hormone testosterone that exert on the last day of the comment period. within the comment. If a comment has androgenic (masculinizing) as well as ADDRESSES: To ensure proper handling so much confidential business anabolic (body building) effects. These of comments, please reference ‘‘Docket information that it cannot be effectively effects are mediated primarily through No. DEA–341’’ on all electronic and redacted, all or part of that comment binding of the anabolic steroid to the written correspondence. DEA may not be posted online or made androgen receptor in target tissues encourages all comments be submitted available in the public docket. (Evans, 2004). Anabolic effects include electronically through http:// Personal identifying information and promotion of protein synthesis in confidential business information www.regulations.gov using the skeletal muscle and bone, while the identified and located as set forth above electronic comment form provided on androgenic effects are characterized by will be redacted, and the comment, in that site. An electronic copy of this the development of male secondary redacted form, will be posted online and document and supplemental sexual characteristics such as hair placed in the DEA’s public docket file. information to this proposed rule are growth, deepening of the voice, Please note that the Freedom of also available at the http:// glandular activity, thickening of the Information Act applies to all comments www.regulations.gov Web site for easy skin, and central nervous system effects, received. If you wish to inspect the to name a few (Kicman, 2008). Anabolic reference. Paper comments that agency’s public docket file in person by efficacy is characterized by positive duplicate the electronic submission are appointment, please see the ‘‘For nitrogen balance and protein not necessary as all comments Further Information’’ paragraph. metabolism, resulting in increases in submitted to www.regulations.gov will protein synthesis and lean body mass be posted for public review and are part Background Information (Evans, 2004). These effects often come of the official docket record. Should On November 29, 1990, the President at a cost to the healthy individual who you, however, wish to submit written signed into law the Anabolic Steroids experiences clear physical and comments via regular or express mail, Control Act of 1990 (Title XIX of Pub. psychological complications (Trenton they should be sent to the Drug L. 101–647), which became effective and Currier, 2005; Brower, 2002; Hall et Enforcement Administration, Attention: February 27, 1991. This law established al., 2005). DEA Federal Register Representative/ and regulated anabolic steroids as a In the United States, only a small OD, 8701 Morrissette Drive, Springfield, class of drugs under Schedule III of the number of anabolic steroids are Virginia 22152. CSA. As a result, a new anabolic steroid approved for either human or veterinary FOR FURTHER INFORMATION CONTACT: is not scheduled according to the use. Approved medical uses for anabolic Rhea D. Moore, Office of Diversion procedures set out in 21 U.S.C. 811, but steroids include treatment of androgen Control, Drug Enforcement can be administratively classified as an deficiency in hypogonadal males, Administration, 8701 Morrissette Drive, anabolic steroid through the rulemaking adjunctive therapy to offset protein Springfield, Virginia 22152; Telephone process by adding the steroid to the catabolism associated with prolonged (202) 307–7165. regulatory definition of an anabolic administration of corticosteroids, SUPPLEMENTARY INFORMATION: steroid in 21 CFR 1300.01(b)(4). treatment of delayed puberty in boys, Posting of Public Comments: Please On October 22, 2004, the President treatment of metastatic breast cancer in note that all comments received are signed into law the Anabolic Steroid women, and treatment of anemia considered part of the public record and Control Act of 2004 (Pub. L. 108–358), associated with specific diseases (e.g., made available for public inspection which became effective on January 20, anemia of chronic renal failure, online at http://www.regulations.gov 2005. Section 2(a) of the Anabolic Fanconi’s anemia, and acquired aplastic and in the DEA’s public docket. Such Steroid Control Act of 2004 amended 21 anemia). However, with the exception of information includes personal U.S.C. 802(41)(A) by replacing the the treatment of male hypogonadism, identifying information (such as your existing definition of ‘‘anabolic steroid.’’ anabolic steroids are not the first-line name, address, etc.) voluntarily The Anabolic Steroid Control Act of treatment due to the availability of other submitted by the commenter. 2004 classifies a drug or hormonal preferred treatment options. DEA is not If you want to submit personal substance as an anabolic steroid if the aware of any legitimate medical use or identifying information (such as your following four criteria are met: (A) The New Drug Applications (NDA) for the name, address, etc.) as part of your substance is chemically related to two substances that DEA is proposing to comment, but do not want it to be testosterone; (B) the substance is classify by this NPRM as anabolic posted online or made available in the pharmacologically related to steroids under the definition set forth public docket, you must include the testosterone; (C) the substance is not an under 21 U.S.C. 802(41)(A). Moreover, phrase ‘‘PERSONAL IDENTIFYING estrogen, progestin, or a corticosteroid; DEA has not been able to identify any INFORMATION’’ in the first paragraph and (D) the substance is not chemical manufacturers currently using of your comment. You must also place dehydroepiandrosterone (DHEA). Any these substances as intermediates in all the personal identifying information substance that meets the criteria is their manufacturing process(es). you do not want posted online or made considered an anabolic steroid and must Adverse health effects are associated available in the public docket in the first be listed as a Schedule III controlled with abuse of anabolic steroids and

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depend on several factors (e.g., age, sex, prostanozol was named in conjunction drostanolone; methasteron; anabolic steroid used, the amount used, with other products presenting safety methyldrostanolone; 2a,17a- and the duration of use) (Hall and Hall, concerns. dimethyldihydrotestosterone; and 2005; Quaglio et al., 2009). These 2a,17a-dimethyl-etiocholan-17b-ol-3- Evaluation of Statutory Factors for one. DEA has determined that the include cardiovascular, dermatological, Classification as an Anabolic Steroid behavioral, hepatic, and gender specific chemical structure of methasterone is endocrine side effects. Anabolic steroids DEA is proposing by this NPRM to chemically related to testosterone. The have direct and indirect impact on the classify prostanozol (17b-hydroxy-5a- chemical structure of methasterone developing adolescent brain and androstano[3,2-c]pyrazole) and differs from testosterone by the behavior (Sato et al., 2008). methasterone (2a,17a-dimethyl-5a- following three chemical groups: an Furthermore, adolescent abuse of androstan-17b-ol-3-one) as anabolic alpha methyl group at carbon 17 (C17), anabolic steroids may result in stunted steroids under the definition set forth an alpha methyl group at C2, and the growth due to premature closure of the under 21 U.S.C. 802(41)(A). As noted lack of a double bond between spanning growth plates in long bones. In previously, a drug or hormonal C4 and C5. Removal of the C4–C5 adolescent boys, anabolic steroid abuse substance is classified as an anabolic double bond (A-ring) and methylation at can cause precocious sexual steroid by meeting the following four the C2 and C17 positions has been development. In both girls and women, definitional requirements: (A) The shown to increase anabolic activity anabolic steroid abuse induces substance is chemically related to (Zaffroni, 1960; Fragkaki et al., 2009). permanent physical changes such as testosterone; (B) the substance is Furthermore, methyl group substitution deepening of the voice, increased facial pharmacologically related to at the C2 and C17 has been reported to and body hair growth, menstrual testosterone; (C) the substance is not an impair aromatization, thus, prolonging irregularities, and clitoral hypertrophy. estrogen, progestin, or corticosteroid; the anabolic effect (Fragkaki et al., In men, anabolic steroid abuse can and (D) the substance is not DHEA. 2009). cause testicular atrophy, decreased (A) Chemically Related to Testosterone (B) Pharmacologically Related to sperm count, and sterility. To classify a substance as an anabolic Testosterone Gynecomastia (i.e., enlargement of the steroid, a substance must be chemically A substance must also be male breast tissue) can develop with the related to testosterone. A structure abuse of those anabolic steroids with pharmacologically related to activity relationship (SAR) evaluation testosterone (i.e., produce similar estrogenic actions. In both men and for each substance compared the biological effects) to be classified as a women, anabolic steroid abuse can chemical structure of the steroid to that Schedule III anabolic steroid. The damage the liver and may result in high of testosterone. Substances with a pharmacology of a steroid, as related to cholesterol levels, which may increase structure similar to that of testosterone testosterone, can be established by the risk of strokes and cardiovascular are predicted to possess comparable performing one or more of the following heart attacks. Furthermore, anabolic pharmacological and biological activity. androgenic and anabolic activity assays: steroid abuse is purported to induce Prostanozol is also known by the ventral prostate assay, seminal vesicle psychological effects such as aggression, following name: 17b-hydroxy-5a- assay, levator ani assay, and androgen increased feelings of hostility, and androstano[3,2-c]pyrazole. DEA receptor binding and efficacy assays. psychological dependence and determined that the chemical structure These assays are described below. addiction (Brower, 2002; Kanayama et of prostanozol is similar to testosterone, Ventral Prostate Assay, Seminal al., 2008). Upon abrupt termination of differing by only the attachment of a Vesicle Assay, and Levator Ani Assay: long-term anabolic steroid abuse, a pyrazole ring at carbon 2 (C2) and The classic scientific procedure for withdrawal syndrome may appear carbon 3 (C3) positions of the evaluating androgenic (masculinizing) including severe depression. androstane skeleton, replacing the C3- and anabolic (muscularizing) effects of a Additionally, polysubstance abuse is keto group and the lack of a double steroid is the ventral prostate assay, routinely associated with anabolic bond between carbon 4 (C4) and carbon seminal vesicle assay, and levator ani steroid abuse, where ancillary drugs, 5 (C5) positions. Similar modifications assay. This testing paradigm allows for including recreational and prescription to testosterone’s chemical structure have the direct comparison to testosterone. drugs, are abused in response to been documented and, in general, they Select male accessory tissues (i.e., the unwanted side effects (Hall et al., 2005; have been found to be well tolerated, ventral prostate, seminal vesicles, and Parkinson et al., 2005; Skarberg et al., displaying both anabolic and levator ani muscle) are testosterone 2009). androgenic activity (Fragkaki et al., sensitive, specifically requiring A review of the scientific literature 2009; Vida, 1969). Clinton and testosterone to grow and remain finds adverse health effects including coworkers, in their synthesis of healthy. Upon the removal of the testes liver toxicity with renal failure reported prostanozol, described the modification (i.e., castration), the primary in conjunction with methasterone abuse as a fusion of a pyrazole ring to the endogenous source of testosterone is (Shah et al., 2008; Jasiurkowski et al., androstane steroidal nucleus at C2 and eliminated causing the atrophy of the 2006; Singh et al., 2009; Nasr and C3 (Clinton et al., 1961). Further ventral prostate, seminal vesicles, and Ahmad, 2008; and Krishnan et al., analysis finds the chemical structure of levator ani muscle (Eisenberg et al., 2009). In March 2006, the U.S. Food and prostanozol to be very similar to the 1949; Nelson et al., 1940; Scow, 1952; Drug Administration (FDA) issued a anabolic steroid stanozolol. The two Wainman and Shipounoff, 1941). Warning Letter in response to adverse structures differ only about a 17a- Numerous scientific studies have health effects associated with the methyl group (alpha methyl group demonstrated the ability of exogenous product Superdrol (methasterone). In attached to carbon 17). testosterone or a pharmacologically July 2009, FDA issued a warning Methasterone is known by the similar steroid administered to rats regarding bodybuilding products following chemical names: 2a,17a- following castration to maintain the containing steroid or steroid-like dimethyl-5a-androstan-17b-ol-3-one; normal weight and size of all three substances. In this warning, a product 2a,17a-dimethyl-17b-hydroxy-5a- testosterone sensitive organs (Biskind containing the THP ether derivative of androstan-3-one; 17a-methyl- and Meyer, 1941; Dorfman and

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Dorfman, 1963; Dorfman and Kincl, the reporter gene. The androgen androgen receptor transactivation assay, 1963; Kincl and Dorfman, 1964; Nelson receptor binding assay and androgen prostanozol displayed increased activity et al., 1940; Scow, 1952; Wainman and receptor transactivation assay are highly relative to testosterone.1 Effects elicited Shipounoff, 1941). Thus, a steroid with valuable tools in assessing the potential by prostanozol in this transactivation testosterone-like activity will also activity of a steroid and comparing the assay were consistent and comparable to prevent the atrophy of these three activity to testosterone. those of testosterone. Taken together, testosterone-dependent organs in data from in vitro and in vivo assays Results of the Androgenic and Anabolic castrated rats. indicate the pharmacology of Castrated male rats are administered Activity Assays prostanozol to be similar to testosterone. the steroid for a number of days, then DEA reviewed the published the rats are euthanized and the scientific literature, and Methasterone previously described tissues are excised pharmacological studies were The synthesis of methasterone and weighed. Tissue weights from the undertaken to collect additional (2a,17a-dimethyl-5a-androstan-17b-ol- three animal test groups are compared, information on prostanozol and 3-one) was reported in 1956 and the castrated animals alone, castrated methasterone in several different anabolic activity in 1959 (Ringold and animals receiving the steroid, and androgenic and anabolic activity assays. Rosenkranz, 1956; Ringold et al., 1959). healthy intact animals (control), to Findings from these studies indicate Methasterone was described as a potent assess anabolic and androgenic activity. that in addition to being structurally anabolic agent exhibiting weak A reduction in tissue weights relative to similar to testosterone, prostanozol and androgenic activity in the castrated male the control group suggests a lack of methasterone have similar rat (Ringold et al., 1959). Zaffaroni and androgenic and/or anabolic activity. An pharmacological activity as testosterone. coworkers reported methasterone increase in tissue weights relative to the possessed one-fifth the androgenic Prostanozol castrated rats receiving no steroid activity and four times the anabolic suggests an androgenic and/or anabolic The chemical synthesis and anabolic activity of the anabolic steroid effect. and androgenic effects of prostanozol methyltestosterone, when administered Androgen Receptor Binding and (17b-hydroxy-5a-androstano[3,2- orally to the experimental animal Efficacy Assay: Anabolic steroids bind c]pyrazole) were published in 1961 (Zaffaroni et al., 1960). with the androgen receptor to exert their (Clinton et al., 1961). Clinton and Additional pharmacological studies biological effect. Affinity for the coworkers evaluated the anabolic were undertaken to further evaluate the receptor is evaluated in the receptor activity by means of nitrogen balance androgenic and anabolic effects of binding assay, while the transactivation and androgenic activity based on weight methasterone. 1 Methasterone was (functional) assay provides additional changes of the ventral prostrate of administered subcutaneously and orally information as to both affinity and prostanozol upon subcutaneous to castrated male rats. By both routes of ability to activate the receptor. Receptor administration to rats with the reference administration, methasterone prevented binding and transactivation studies are standard testosterone propionate. The the atrophy (loss in weight) of ventral valuable tools in evaluating potency ratio of anabolic activity to prostate, seminal vesicles, and levator pharmacological activity and drawing androgenic activity for prostanozol was ani muscle. Tissue weight increases for comparisons to other substances. A reported to be eight (Clinton et al., the castrated methasterone-treated steroid displaying affinity for the 1961). In another study, prostanozol was animals were comparable to the androgen receptor and properties of reported to have approximately the castrated rats treated with testosterone being an agonist in transactivation same relative binding affinity for human and methyltestosterone. These results studies is determined to be sex steroid binding protein as were consistent with earlier findings pharmacologically similar to testosterone (Cunningham et al., 1981). that methasterone is anabolic and testosterone. To build on these findings, a androgenic (Zaffaroni, 1960; Ringold et Studies used to evaluate anabolic pharmacological study 1 was conducted al., 1959). Functional assays were also steroids are the androgen receptor to evaluate the anabolic and androgenic undertaken to further evaluate binding assay and the androgen receptor effects of prostanozol in castrated male methasterone.1 Methasterone displayed transactivation assay. Both are well- rats. Results were compared to affinity for the androgen receptor established and provide significant testosterone by a similar protocol. comparable to testosterone in a utility in evaluating steroids for affinity Administration of prostanozol to competitive binding assay.1 In the to their biological target and the castrated male rats by subcutaneous androgen receptor transactivation assay, modulation of activity. The androgen injection prevented the atrophy (loss in methasterone displayed increased receptor binding assay provides specific weight) of the ventral prostate, seminal activity relative to testosterone.1 Effects detail as to the affinity of a steroid for vesicles, and levator ani muscle.1 These elicited by methasterone in the the androgen receptor (biological target testosterone sensitive tissues androgen transactivation assay were of anabolic steroids). To assess further experienced increases in weight consistent and comparable to those of whether the steroid is capable of comparable to testosterone in castrated testosterone. Collectively, in vivo and in activating the androgen receptor, the male rats. Results from this study vitro results indicate that the androgen receptor transactivation assay support that prostanozol possesses both pharmacology of methasterone is similar evaluates the binding of a steroid to the androgenic and anabolic activity. to testosterone. androgen receptor and subsequent Additional studies were conducted to interaction with DNA. In this study, (C) Not Estrogens, Progestins, and further assess prostanozol’s anabolic Corticosteroids transcription of a reporter gene provides effect. In a competitive binding assay, information as to a steroid’s ability to prostanozol was found to possess DEA has determined that prostanozol modulate a biological event. This affinity for the androgen receptor and methasterone are unrelated to activity measurement provides comparable to testosterone.1 In the estrogens, progestins, and information as to the potency of a corticosteroids. DEA evaluated the SAR steroid to bind to a receptor and either 1 2009 BIOQUAL, Inc. study commissioned by the for each of the substances. The chemical initiate or inhibit the transcription of National Institutes of Health on behalf of DEA. structure of each substance was

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compared to that of estrogens, Impact of Proposed Rule and Effect of declaration for each shipment. An progestins, and corticosteroids, since Classifying These Substances as individual who purchases either of chemical structure can be related to its Anabolic Steroids these substances directly from foreign pharmacological and biological activity. If this rulemaking is finalized as companies and has them shipped to the DEA found that these two substances proposed, DEA will classify prostanozol United States will be considered to be lack the necessary chemical structures (17b-hydroxy-5a-androstano[3,2- importing even if the steroids are to impart significant estrogenic activity c]pyrazole) and methasterone (2a,17a- intended for personal use. Illegal (e.g., aromatic A ring) (Duax et al., 1988; dimethyl-5a-androstan-17b-ol-3-one) as importation of these substances would Jordan et al., 1985; Williams and Schedule III anabolic steroids. If be a violation of the CSA that may result Stancel, 1996), progestational activity classified as Schedule III anabolic in imprisonment and fines (21 U.S.C. (e.g., 17b-alkyl group) (Williams and steroids, any person who manufactures, 960). Stancel, 1996), or corticosteroidal distributes, dispenses, imports, or Requirements for Handling Substances activity (e.g., 17b-ketone group or 11b- exports prostanozol or methasterone or Defined as Anabolic Steroids hydroxyl group) (Miller et al., 2002). who engages in research or conducts Furthermore, methasterone was instructional activities with respect to Upon consideration of public reported to display anti-estrogenic these two substances would be required comments from this NPRM, DEA may activity in mouse assay to assess to obtain a Schedule III registration in issue a final rule classifying prostanozol estrogen stimulated uterine growth accordance with the CSA and its (17b-hydroxy-5a-androstano[3,2- (Dorfman et al., 1961). To assess the implementing regulations. c]pyrazole) and methasterone (2a,17a- estrogenic, progestational, and Manufacturers and importers of these dimethyl-5a-androstan-17b-ol-3-one) as corticosteroid activity of prostanozol two substances would be required to anabolic steroids. If classified as and methasterone, these substances register with DEA and would be anabolic steroids, prostanozol and were evaluated in receptor binding and permitted to distribute these substances methasterone would become subject to functional transactivation assays. only to other DEA registrants. Only CSA regulatory controls and Prostanozol and methasterone showed persons registered as dispensers would administrative, civil, and criminal low binding affinity for the estrogen, be allowed to dispense these substances sanctions applicable to the manufacture, progesterone, and glucocorticoid to end users. The CSA defines a distribution, dispensing, importation, receptors. Furthermore, these steroids practitioner as ‘‘a physician, dentist, and exportation of a Schedule III displayed low to no transactivation veterinarian, scientific investigator, controlled substance, including the mediated by the estrogen receptors, pharmacy, hospital, or other person following: progesterone receptors, or licensed, registered, or otherwise Registration. Any person who glucocorticoid receptors. Therefore, permitted, by the United States or the manufactures, distributes, dispenses, based on these data, prostanozol and jurisdiction in which he practices or imports, exports, or engages in research methasterone are not estrogens, does research, to distribute, dispense, or conducts instructional activities with progestins, or corticosteroids and these conduct research with respect to, a substance defined as an anabolic anabolic steroids are not exempt from administer, or use in teaching or steroid, or who desires to engage in such control on this basis. chemical analysis, a controlled activities, would be required to be registered to conduct such activities (D) Not Dehydroepiandrosterone substance in the course of professional practice or research.’’ 21 U.S.C. 802(21). with Schedule III controlled substances Dehydroepiandrosterone, also known At present, there are no approved in accordance with 21 CFR Part 1301. as DHEA, is exempt from control as an medical uses for these two substances. Security. Substances defined as anabolic steroid by definition (21 U.S.C. Until a manufacturer applies to the FDA anabolic steroids would be subject to 802(41)(A)). Prostanozol and and gains approval for products Schedule III–V security requirements methasterone are not containing these substances, no person and would be required to be dehydroepiandrosterone and therefore, may dispense them in response to a manufactured, distributed, and stored in are not exempt from control on this prescription. accordance with 21 CFR 1301.71, basis. Manufacture, import, export, 1301.72(b), (c), and (d), 1301.73, 1301.74, 1301.75(b) and (c), 1301.76 and Conclusion distribution, or sale of prostanozol (17b- hydroxy-5a-androstano[3,2-c]pyrazole) 1301.77. Therefore, based on the above, DEA and methasterone (2a,17a-dimethyl-5a- Labeling and Packaging. All labels concludes that prostanozol and androstan-17b-ol-3-one) except by DEA and labeling for commercial containers methasterone meet the CSA definition registrants, would become a violation of of substances defined as anabolic of ‘‘anabolic steroid’’ because each the CSA that may result in steroids would be required to comply substance is: (A) Chemically related to imprisonment and fines (see, e.g., 21 with requirements of 21 CFR 1302.03– testosterone; (B) pharmacologically U.S.C. 841, 960). Possession of these 1302.07. related to testosterone; (C) not an two steroids, unless legally obtained, Inventory. Every registrant required to estrogen, progestin, or a corticosteroid; would also become subject to criminal keep records and who possesses any and (D) not DHEA (21 U.S.C. 802(41)). penalties (21 U.S.C. 844). quantity of any substance defined as an All anabolic steroids are classified as In addition, under the CSA, these two anabolic steroid would be required to Schedule III controlled substances (21 substances could be imported only for keep an inventory of all stocks of the U.S.C. 812). Once a substance is medical, scientific, or other legitimate substances on hand pursuant to 21 determined to be an anabolic steroid, uses (21 U.S.C. 952(b)) under an import U.S.C. 827 and 21 CFR 1304.03, 1304.04 DEA has no discretion regarding the declaration filed with DEA (21 CFR and 1304.11. Every registrant who scheduling of these substances. As 1312.18). Importation of these desires registration in Schedule III for discussed further below, all substances would be illegal unless the any substance defined as an anabolic requirements pertaining to controlled person importing these substances is steroid would be required to conduct an substances in Schedule III would registered with DEA as an importer or inventory of all stocks of the substances pertain to these substances. researcher and files the required on hand at the time of registration.

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Records. All registrants would be determine whether this regulation as This rule is not a significant regulatory required to keep records, as generally proposed would have a significant action but has been reviewed by the provided in 21 U.S.C. 827(a) and economic impact on a substantial Office of Management and Budget. As specifically pursuant to 21 CFR 1304.03, number of small entities, DEA seeks discussed above, the effect of this rule 1304.04, 1304.05, 1304.21, 1304.22, comment on whether this regulation, if would be to remove products containing 1304.23 and 1304.26. promulgated as a Final Rule, will have these substances from the over-the- Prescriptions. All prescriptions for a significant economic impact on a counter marketplace. DEA has no basis these Schedule III substances or for substantial number of small entities. for estimating the size of the market for products containing these Schedule III As of March 2010, DEA had identified these products. DEA notes, however, substances would be required to be approximately 75 dietary supplements that virtually all of the substances are issued pursuant to 21 U.S.C. 829(b) and that were currently or had been imported. According to U.S. 21 CFR 1306.03–1306.06 and 1306.21– promoted for building muscle and International Trade Commission data, 1306.27. All prescriptions for these increasing strength that purported to the import value of all anabolic steroids Schedule III compounds or for products contain prostanozol or methasterone. in 2009 was $5.9 million. These two containing these Schedule III Thirteen dietary supplements were substances would be a subset of those substances, if authorized for refilling, purported to contain prostanozol and 62 imports. The total market for products would be limited to five refills within dietary supplements were purported to containing these substances, therefore, six months of the date of issuance of the contain methasterone. These dietary is probably quite small. Moreover, DEA prescription. Controlled substance supplements are marketed and sold over believes that the importation of these dispensing via the Internet would have the Internet. two substances is for illegitimate to comply with 21 U.S.C. 829(e). The manufacturers and distributors of purposes. Importation and Exportation. All dietary supplements purported to The benefit of controlling these importation and exportation of any contain prostanozol and methasterone substances is to remove from the substance defined as an anabolic steroid also sell a variety of other dietary marketplace substances that have would be required to be in compliance supplements. DEA has identified a dangerous side effects and no legitimate with 21 U.S.C. 952(b) and 953(e) and 21 substantial number of Internet medical use in treatment in the United CFR Part 1312. distributors that sell these dietary States. As discussed in detail above, Criminal Liability. Any activity with supplements. However, these these substances can produce serious any substance defined as an anabolic distributors also sell a variety of other health effects in adolescents and adults. steroid not authorized by, or in violation nutritional products. Without If medical uses for these substances are of, the Controlled Substances Act or the information on the percentage of developed and approved, the drugs Controlled Substances Import and revenues derived from these dietary would be available as Schedule III Export Act would be unlawful. supplements, DEA is not able to controlled substances in response to a determine the economic impact of the prescription issued by a medical Disposal of Anabolic Steroids removal of these dietary supplements professional for a legitimate medical If this regulation is finalized as alone on the business of the firms. purpose. Until that time, however, this proposed, persons who possess These steroids have been the focus of action would bar the importation, substances that become classified as warning letters issued by the FDA. exportation, and sale of these two anabolic steroids and who wish to However, products continue to be substances except for legitimate dispose of them rather than becoming marketed despite these warnings. DEA research or industrial uses. registered to handle them should has not been able to identify any contact their local DEA Diversion field chemical manufacturers that are Executive Order 12988 office for assistance in disposing of currently using these substances as This regulation meets the applicable these substances legally. The DEA intermediates in their manufacturing standards set forth in Sections 3(a) and Diversion field office will provide the process(es). 3(b)(2) of Executive Order 12988 Civil person with instructions regarding the As of March 2010, DEA had identified Justice Reform. 13 chemical manufacturers and disposal. A list of local DEA Diversion Executive Order 13132 field offices may be found at http:// distributors that sell at least one of the www.deadiversion.usdoj.gov. two steroids addressed in this NPRM. This rulemaking does not preempt or Most of these companies are located in modify any provision of State law; nor Regulatory Analyses China and sell a variety of other does it impose enforcement Regulatory Flexibility Act anabolic steroids. DEA notes that, as the responsibilities on any State; nor does it vast majority of entities handling these diminish the power of any State to The Administrator hereby certifies substances are Internet based, it is enforce its own laws. Accordingly, this that this rulemaking has been drafted in virtually impossible to accurately rulemaking does not have federalism accordance with the Regulatory quantify the number of persons implications warranting the application Flexibility Act (5 U.S.C. 601–612). DEA handling these substances at any given of Executive Order 13132. is not able to determine whether this time. DEA has not identified any regulation, if promulgated as a Final company based in the United States that Executive Order 13175 Rule, will not have a significant manufactures or distributes these This proposed rule will not have economic impact on a substantial substances. DEA notes, upon placement Tribal implications and will not impose number of small entities. DEA has not into Schedule III, these substances may substantial direct compliance costs on identified any company based in the be used for analytical purposes. Indian Tribal governments. United States that manufactures or distributes these substances. Thus, DEA Executive Orders 12866 and 13563 Paperwork Reduction Act does not believe this proposed rule This rulemaking has been drafted in This rule proposes to regulate two would have a significant economic accordance with the principles of anabolic steroids, which are neither impact on a substantial number of small Executive Order 12866, 1(b), as approved for medical use in humans nor entities. Because DEA is unable to reaffirmed by Executive Order 13563. approved for administration to cattle or

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other non-humans. Under this proposal, Dated: November 8, 2011. V.S., and Gray, L.E. (2002). Development only chemical manufacturers who may Michele M. Leonhart, of two androgen receptor assays using adenoviral transduction of MMTV-Luc use these substances as chemical Administrator. intermediates for the synthesis of other reporter and/or hAR for endocrine List of References screening. Toxicological Sciences, 66: steroids would be required to register 82–90. with DEA under the CSA. However, Biskind, G.R. and Meyer, M.A. (1941). The Jasiurkowski, B., Raj, J., Wisinger, D., DEA has not been able to identify any comparative androgenic potency of Carlson, R., Zou, L., and Nadir, A. chemical manufacturers that are testosterone, methyltestosterone and (2006). Cholestatic jaundice and IgA currently using these substances as testosterone propionate administered in nephropathy induced by OTC muscle pellet form. Endocrinology, 28(2): 217– intermediates in their manufacturing building agent superdrol. American 221. Journal of Gastroenterology, 101(11): process(es). Although this proposal is Brower, K.J. (2002). Anabolic steroid abuse unlikely to impose a new collection of 2659–2662. and dependence. Current Psychiatry Jordan, V.C., Mittal, S., Gosden, B., Koch, R., information requirement under the Reports, 4: 377–387. and Lieberman, M.E. (1985). Structure- Paperwork Reduction Act of 1995, 44 Clinton, R.O., Manson, A.J., Stonner, F.W., activity relationships of estrogen. U.S.C. 3501–3521, DEA is nevertheless Neumann, H.C., Christiansen, R.G., Environmental Health Perspectives, 61: seeking input from the chemical Clarke, R.L., Ackerman, J.H., Page, D.F., 97–110. industry on any manufacturing Dean, J.W., Dickinson, W.B., and Kanayama, G., Hudson, J.I., and Pope, H.G. Carabateas, C. (1961). Steroidal[3,2- process(es) that may be affected. (2008). Long-term psychiatric and c]pyrazoles. II. Androstanes, 19- medical consequences of anabolic- Unfunded Mandates Reform Act of 1995 Norandrostanes and their Unsaturated androgenic steroid abuse: A looming Analogs. Journal of the American public health concern? Drug and Alcohol This rule will not result in the Chemical Society, 83: 1478–1491. expenditure by state, local, and Tribal Dependence, 98: 1–12. Cunningham, G.R., Tindall, D.J., Lobl, T.J., Kicman, A.T. (2008). Pharmacology of governments, in the aggregate, or by the Campbell, J.A., and Means, A.R. (1981). anabolic steroids. British Journal of private sector, of $136,000,000 or more Steroid structural requirements for high Pharmacology, 154: 502–521. (adjusted for inflation) in any one year, affinity binding to human sex steroid Kincl, F.A. and Dorfman, R.I. (1964). and will not significantly or uniquely binding protein (SBP). Steroids, 38(3): Anabolic-androgenic potency of various 243–262. steroids in a castrated rat assay. Steroids, affect small governments. Therefore, no Dorfman, R.I. and Dorfman, A.S. (1963). The 3: 109–122. actions were deemed necessary under assay of subcutaneously injected Krishnan, P.V., Feng, Z–Z., Gordon, S.C. the provisions of the Unfunded androgens in the castrated rat. ACTA (2009). Prolonged intrahepatic Mandates Reform Act of 1995, 2 U.S.C. Endocrinologica, 42: 245–253. cholestasis and renal failure secondary to 1532. Dorfman, R.I. and Kincl, F.A. (1963). Relative anabolic androgenic steroid-enriched potency of various steroids in an dietary supplements. Journal of Clinical List of Subjects in 21 CFR Part 1300 anabolic-androgenic assay using the Gastroenterology, 43(7): 672–675. castrated rat. Endocrinology, 72: 259– Chemicals, Drug traffic control. Miller, D.D., Brueggemeier, R.W., and Dalton, For the reasons set out above, 21 CFR 266. Dorfman, R.I., Kincl, F.A., and Ringold, H.J. J.T. (2002). Adrenocorticoids. In D.A. part 1300 is proposed to be amended as (1961). Anti-estrogen assay of neutral Williams and T.L. Lemke (Eds.) Foye’s follows: steroids administered by subcutaneous Principle of Medicinal Chemistry (5th injection. Endocrinology, 68: 17–24. ed.). Philadelphia, Lippincott Williams PART 1300—DEFINITIONS Duax, W.L., Griffin, J.F., Weeks, C.M., and and Wilkins. Nasr, J. and Ahmad, J. (2009). Severe 1. The authority citation for part 1300 Wawrzak, Z. (1988). The mechanism of action of steroid antagonists: Insights cholestasis and renal failure associated continues to read as follows: from crystallographic studies. Journal of with the use of the designer steroid Authority: 21 U.S.C. 802, 821, 829, 871(b), Steroid Biochemistry and Molecular superdrol (methasteron): A case report 951, 958(f). Biology, 31: 481–492. and literature review. Digestive Diseases Eisenberg, E., Gordan, G.S. and Elliott, H.W. and Science, 54: 1144–46. 2. Section 1300.01 is proposed to be (1949). Testosterone and tissue Nelson, D., Greene, R.R. and Wells, J.A. amended by: respiration of the castrate male rat with (1940). Variations in the effectiveness of A. Redesignating paragraphs possible test for myotrophic activity. percutaneously applied androgens in the (b)(4)(xxxii) through (b)(4)(lxiii) as Endocrinology, 45(2): 113–119. rat. Endocrinology, 26: 651–655. (b)(4)(xxxiii) through (b)(4)(lxiv), Evans, N.A. (2004). Current concepts in Parkinson, A.B. and Evans, N.A. (2005). B. Adding a new paragraph anabolic-androgenic steroids. The Anabolic androgenic steroids: A survey (b)(4)(xxxii), American Journal of Sports Medicine, of 500 users. Medicine & Science in C. Further redesignating newly 32(2): 534–542. Sports & Exercise, 644–651. Fragkaki, A.G., Angelis, Y.S., Koupparis, M., Quaglio, G., Fornasiero, A., Mezzelani, P., designated paragraphs (b)(4)(lviii) Moreschini, S., Lugoboni, F., and Lechi, through (b)(4)(lxiv) as (b)(4)(lix) through Tsantili-Kakoulidou, A., Kokotos, G., Georgakopoulos, C. (2009). Structural A. (2009). Anabolic steroids: (b)(4)(lxv), and characteristics of anabolic androgenic Dependence and complications of D. Adding new paragraph (b)(4)(lviii). steroids contributing to binding to the chronic use. Internal and Emergency The additions read as follows: androgen receptor and to their anabolic Medicine, 4: 289–296. and androgenic activities. Applied Ringold, H.J., Batres, E., Halpern, O., and § 1300.01 Definitions relating to controlled modifications in the steroidal structure. Necoechea, E. (1959). Steroids. CV. 2- substances. Steroids, 74: 172–197. Methyl and 2-hydroxymethylene- * * * * * Hall, R.C.W. and Hall, R.C.W. (2005). Abuse androstane derivatives. Journal of the (b) * * * of supraphysiological doses of anabolic American Chemical Society, 81: 427– (4) * * * steroids. Southern Medical Journal, 432. (xxxii) Methasterone (2a,17a- 98(5): 550–555. Ringold, H.J. and Rosenkranz, G. (1956). dimethyl-5a-androstan-17b-ol-3-one) Hall, R.C.W. Hall, R.C.W., and Chapman, M.J. Steroids. LXXXIII. Synthesis of 2-methyl and 2,2-dimethyl hormone analogs. * * * * * (2005). Psychiatric complications of anabolic steroid abuse. Psychosomatics, Journal of Organic Chemistry, 21: 1333– (lviii) Prostanozol (17b-hydroxy-5a- 46(4): 285–290. 1335. androstano[3,2-c]pyrazole) Hartig, P.C., Bobseine, K.L., Britt, B.H., Sato, S.M., Schulz, K.M., Sisk, C.L., and * * * * * Cardon, M.C., Lambright, C.R., Wilson, Wood, R.I. (2008). Adolescents and

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androgens, receptors, and rewards. ACTION: Notice of proposed rulemaking. 382, the attribution rules of section Hormones and Behavior, 53: 647–658. 318(a)(2) apply, without limitation, to Scow, R.O. (1952). Effect of testosterone on SUMMARY: This document contains treat individuals as the owners of loss muscle and other tissues and on carcass proposed regulations under section 382 corporation stock. Pursuant to section composition in hypophysectomized, of the Internal Revenue Code (Code). 382(g)(4)(A), individual shareholders thyroidectomized, and gonadectomized These proposed regulations provide who own less than five percent of a loss male rats. Endocrinology, 51: 42–51. guidance regarding the application of Skarberg, K., Nyberg, F., and Engstrom, I. corporation are aggregated and treated the segregation rules to public groups as a single 5-percent shareholder (a (2009). Multisubstance use as a feature of under section 382 of the Code. These addiction to anabolic-androgenic public group). steroids. European Addiction Research, regulations affect corporations. The regulations extend the public 15: 99–106. DATES: Written or electronic comments group concept to situations in which a Shah, N.L., Zacharias, I., Khettry, U., Afdhal, and requests for a public hearing must loss corporation is owned by one or N., and Gordon, F.D. (2008). be received by February 21, 2012. more entities, as defined in § 1.382–3(a) Methasteron-associated cholestic liver ADDRESSES: Send submissions to: (generally, partnerships, corporations, injury: Clinicopathologic findings in 5 CC:PA:LPD:PR (REG–149625–10), room estates, and trusts). If an entity directly cases. Clinical Gastroenterology and 5203, Internal Revenue Service, P.O. Hepatology, 6(2): 255–258. or indirectly owns five percent or more Singh, V., Rudraraju, M., Carey, E.J., Byrne, Box 7604, Ben Franklin Station, of the loss corporation, that entity has T.J., Vargas, H.E., Williams, J.E., Balan, Washington, DC 20044. Submissions its own public group if its owners who V., and Douglas, D.D. (2009). Severe may be hand delivered Monday through are not 5-percent shareholders own, in hepatotoxicity caused by a methasteron- Friday between the hours of 8 a.m. and the aggregate, five percent or more of the containing, performance-enhancing 4 p.m. to CC:PA:LPD:PR (REG–149625– loss corporation. (Such an entity is supplement. Journal of Clinical 10), Courier’s Desk, Internal Revenue referred to as a 5-Percent Entity in this Gastroenterology, 43(3): 287. Service, 1111 Constitution Avenue NW., preamble.) Trenton, A.J. and Currier, G.W. (2005). Washington, DC, or sent electronically The segregation rules, which are Behavioural manifestations of anabolic via the Federal eRulemaking Portal at generally contained in § 1.382–2T(j), steroid use. CNS Drugs, 19(7): 571–595. and the exceptions thereto, which are Vida, J.A. (1969). Androgens and Anabolic http://www.regulations.gov/ (IRS REG– Agents: Chemistry and Pharmacology. 149625–10). generally contained in § 1.382–3(j), New York: Academic Press. FOR FURTHER INFORMATION CONTACT: apply to certain transactions affecting Wainman, P. and Shipounoff, G.C. (1941). Concerning the proposed regulations, ownership by the loss corporation’s The effects of castration and testosterone Stephen R. Cleary, (202) 622–7750; direct public group and by the public propionate on the striated perineal concerning submission of comments or groups of a 5-Percent Entity. The musculature in the rat. Endocrinology, to request a public hearing, application of the segregation rules 29(6): 975–978. results in the creation of a new public Williams, C.L. and Stancel, G.M. (1996). Oluwafunmilayo (Funmi) P. Taylor, (202) 622–7180 (not toll-free numbers). group in addition to the one (or more) Estrogens and Progestins. In J.G. that existed previously. That new group SUPPLEMENTARY INFORMATION: Hardman, L.E. Limbird, P.B. Molinoff, is treated as a new 5-percent R.W. Ruddon, A. Goodman Gilman (Eds.) Goodman and Gilman’s The Background shareholder that increases its ownership interest in the loss corporation. Pharmacological Basis of Therapeutics 1. Segregation and Aggregation— (9th ed.). New York: McGraw-Hill, 1411– Section 382(g)(4)(B) mandates Statute, Legislative History, and Current application of the segregation rules to 1440. Regulations Wilson, V.S., Bobseine, K., Lambright, C.R., transactions constituting equity and Gray, L.E. (2002). A novel cell line, Section 382 imposes a limitation on a structure shifts of the loss corporation. MDA-kb2, that stably expresses an corporation’s use of net operating loss Generally, equity structure shifts are androgen- and glucocorticoid-responsive carryovers following a change in acquisitive asset reorganizations and reporter for the detection of hormone ownership. The legislative history recapitalizations under section 368. receptor agonists and antagonists. explains that a limitation is necessary Section 382(g)(3)(B) provides regulatory Toxicological Sciences, 66: 69–81. following a change in ownership authority to treat public offerings and Zaffaroni, A. (1960). The effect of alkyl- and electronegative-group substitution on because new shareholders otherwise similar transactions as equity structure steroidal hormone activity. Acta would have an opportunity to shifts. Pursuant to that authority, the Endrocrinologica, 34(2 Suppla): S139– contribute income-producing assets (or current segregation rules, subject to the S145. divert income opportunities) to the cash issuance and small issuance corporation, thus inappropriately exceptions (described in this preamble), [FR Doc. 2011–30081 Filed 11–22–11; 8:45 am] accelerating the use of net operating loss treat issuances of stock under section BILLING CODE 4410–09–P carryovers. The section 382 limitation is 1032, redemptions, and redemption-like intended to prevent a corporation from transactions as segregation events. The obtaining greater loss utilization than it segregation rules also apply to transfers DEPARTMENT OF THE TREASURY could have achieved absent a change in of loss corporation stock by an ownership. S. Rep. No. 99–313 at 232 individual 5-percent shareholder to Internal Revenue Service (1986). public shareholders and a 5-Percent A loss corporation has an ownership Entity’s transfer of loss corporation 26 CFR Part 1 change if the percentage of stock of a stock to public shareholders. [REG–149625–10] loss corporation that is owned by one or The small issuance and cash issuance more 5-percent shareholders has exceptions exempt certain amounts of RIN 1545–BK03 increased by more than 50 percentage stock issuances from the segregation Application of the Segregation Rules points over the lowest percentage of rules. Generally, the small issuance to Small Shareholders stock of the loss corporation owned by exception exempts the total amount of such shareholders at any time during stock issued during a taxable year to the AGENCY: Internal Revenue Service (IRS), the testing period (generally, a three- extent it does not exceed 10 percent of Treasury. year period). For purposes of section the total value of the corporation’s

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