Federal Register / Vol. 61, No. 115 / Thursday, June 13, 1996 / Proposed Rules 30019

27 CFR Part 20

[Notice No. 827]

RIN 1512–AB57

Distribution and Use of Denatured

Alcohol and Rum (95R–028P)

AGENCY: Bureau of Alcohol, Tobacco

and Firearms (ATF), Department of the

Treasury.

ACTION: Advance notice of proposed

rulemaking.

SUMMARY: Pursuant to the President’s

regulatory reform initiative, ATF is

conducting a complete review of all

Federal government regulations relating

to the distribution and use of denatured

alcohol and rum. ATF believes that the

regulations can be modernized and

simplified since the last major revision

in 1985.

ATF is issuing this advance notice to

solicit comments on ways in which the

regulations can be simplified so as to

greatly reduce or eliminate unnecessary

regulatory burdens on industry

members, while continuing to provide

adequate protection of the revenue.

DATES: Comments must be submitted by

August 12, 1996.

ADDRESSES: Submit all comments to:

Chief, Wine, Beer, and Spirits

Regulations Branch; Bureau of Alcohol,

Tobacco and Firearms; P.O. Box 50221;

Washington, DC 20091–0221. ATTN:

Notice No. 827.

FOR FURTHER INFORMATION CONTACT:

Mary A. Wood; Wine, Beer, and Spirits

Regulations Branch; Bureau of Alcohol,

Tobacco and Firearms; 650

Massachusetts Avenue, NW;

Washington, DC 20226; (202) 927–8210.

SUPPLEMENTARY INFORMATION:

Background

ATF wishes to solicit comments from

the public on its proposal to conduct a

complete review of the regulatory

requirements in Part 20 pertaining to the

distribution and use of denatured

alcohol and rum. ATF aims to eliminate,

revise, or simplify the regulations where

necessary. ATF believes that the current

regulations may contain unnecessary

provisions and ATF desires to delete

regulatory requirements which have

become obsolete.

ATF wants to ensure that the

regulations provided for in this part are

made as simple as possible, while still

providing the necessary protection to

the revenue. In updating the regulations,

primary emphasis will be given to the

simplification of procedures for

qualifying as a denatured alcohol and

rum distributor and user or for keeping

records and filing reports.

ATF solicits comments on the

following issues:

(1) Are specific regulations in Part 20

duplicative and unnecessary? Can

specific sections of the regulations be

combined to eliminate such

duplication?

(2) Can the permit application,

approved formula or statement of

process, or loss claim requirements in

these regulations be made more

streamlined, while continuing to

provide adequate safeguards to the

revenue?

(3) Can the labeling requirements for

articles or packages of specially

denatured spirits be simplified?

(4) Are there any other suggestions for

providing flexibility in the provisions in

Part 20, including the recovery of

denatured spirits and the reuse of the

recovered spirits.

(5) Overall, ATF would like to solicit

general comments on ways in which it

could reduce recordkeeping paperwork

and/or simplify procedures, while

continuing to maintain adequate

safeguards to the revenue.

(6) Finally, under the current

regulations, ATF may grant a

permittee’s request for an alternate

method or procedure as a variance from

some regulatory requirements. ATF is

interested in comments from permittees

concerning their experience with such

variances and whether these regulations

should be revised to incorporate some of

the practices authorized by existing

variances.

Participation

ATF requests comments from all

interested persons. All comments

received on or before the closing date

will be carefully considered. Comments

received after that date will be given the

same consideration if it is practical to

do so, but assurance of consideration

cannot be given except as to comments

received on or before the closing date.

ATF will not recognize any material

as confidential. Comments may be

disclosed to the public. Any material

which the commenter considers to be

confidential or inappropriate for

disclosure should not be included in the

comment. The name of the person

submitting the comment is not exempt

from disclosure.

During the comment period, any

person may request an opportunity to

present oral testimony at a public

hearing. However, the Director reserves

the right, in light of all circumstances,

to determine if a public hearing is

necessary.

Executive Order 12866

It has been determined that this

proposed regulation is not a significant

regulatory action as defined in

Executive Order 12866. Accordingly,

this proposal is not subject to the

analysis required by this Executive

Order.

Drafting Information: The principal author

of this document is Mary A. Wood of the

Wine, Beer, and Spirits Regulations Branch,

Bureau of Alcohol, Tobacco and Firearms.

List of Subjects in 27 CFR Part 20

Administrative practice and

procedure, Advertising, Alcohol and

alcohol beverages, Authority

delegations, Claims, Excise taxes,

Reporting and recordkeeping

requirements, Surety bonds.

Authority and Issuance

This advance notice of proposed

rulemaking is issued under the

authority in 26 U.S.C. 5001, 5206, 5214,

5241–5276, 5311, 5552, 5555, 5607,

6065, 7805.

Signed: May 17, 1996.

Bradley A. Buckles,

Acting Director.

Approved: May 24, 1996.

John P. Simpson,

Deputy Assistant Secretary (Regulatory, Tariff

and Trade Enforcement).

[FR Doc. 96–14858 Filed 6–12–96; 8:45 am]

BILLING CODE 4810–31–P

27 CFR Part 22

[Notice No. 828]

RIN 1512–AB51

Distribution and Use of Tax-Free

Alcohol (95R–030P)

AGENCY: Bureau of Alcohol, Tobacco

and Firearms (ATF), Department of the

Treasury.

ACTION: Notice of proposed rulemaking.

SUMMARY: Pursuant to the President’s

regulatory reform initiative, the Bureau

of Alcohol, Tobacco and Firearms (ATF)

is proposing revisions in this notice to

eliminate and liberalize certain

regulatory requirements relating to taxfree alcohol. ATF believes that these

proposed revisions will greatly reduce

and simplify the qualification process

governing the tax-free alcohol permit

application process.

DATES: Written comments must be

received on or before August 12, 1996.

ADDRESSES: Submit written comments

to: Chief, Wine, Beer, and Spirits
30020 Federal Register / Vol. 61, No. 115 / Thursday, June 13, 1996 / Proposed Rules

Regulations Branch; Bureau of Alcohol,

Tobacco and Firearms; P.O. Box 50221;

Washington, DC 20091–0221. ATTN:

Notice No. 828.

FOR FURTHER INFORMATION CONTACT:

Mary A. Wood, Wine, Beer, and Spirits

Regulations Branch; Bureau of Alcohol,

Tobacco and Firearms; 650

Massachusetts Avenue, NW;

Washington, DC 20226; (202) 927–8210.

SUPPLEMENTARY INFORMATION:

Background

There are certain registration

requirements under the law and its

implementing regulations that must be

met prior to the issuance of a permit to

withdraw and use tax-free alcohol.

Depending upon the class of the

applicant, these registration

requirements may include the

submission of a detailed application and

supporting data, the payment of special

(occupational) tax (SOT) and the

acquisition of bond coverage. Once such

registration requirements are met, the

applicant is issued a tax-free alcohol

users permit and may commence

conducting any of the uses authorized

under the law and regulations for taxfree alcohol permittees. The permittee is

allowed to purchase and acquire alcohol

from a registered distilled spirits plant

(DSP) free of the excise tax payments

normally required to be made by the

DSP proprietor.

For this reason, tax-free alcohol

authorized uses and users are limited or

restricted under the law. Tax-free

alcohol may not be withdrawn and used

for beverage purposes, in food products,

or in any preparation used in preparing

beverage or food products. Tax-free

alcohol may not be sold, used in the

manufacture of any product for sale, or

sold in any product resulting from the

use of tax-free alcohol. Finally, tax-free

alcohol or products resulting from the

use of tax-free alcohol may not be

removed from the permit premises.

Authorized users of tax-free alcohol

include any State or political

subdivision of a State, or the District of

Columbia acquiring the alcohol for

nonbeverage purposes. Tax-free alcohol

may also be used by any educational

organization (exempt from income tax),

scientific university or college of

learning, laboratory for use exclusively

in scientific research, hospital, blood

bank, sanitarium, pathological

laboratory exclusively engaged in

making analyses, or tests, for hospitals

or sanitariums, or clinic operated for

charity and not for profit. These

permittees are unique in that they are

not engaged in the business of selling

tax-free alcohol or any product

manufactured from or containing taxfree alcohol. Any permittee who uses

tax-free alcohol in a manner that

violates the laws and regulations

becomes liable for the tax and other

provisions of the Internal Revenue Code

of 1986, 26 U.S.C. 5001(a)(4).

ATF believes that the present bond

requirements are unnecessary and the

qualification requirements can be

effectively streamlined. Therefore, ATF

is proposing to delete the bond

requirements and revise the

qualification requirements for obtaining

a permit to withdraw and use tax-free

alcohol and is soliciting public

comments on them.

Bonds and Consents of Surety

Section 5272 of the Internal Revenue

Code of 1986 provides that bond

coverage may be required as part of the

tax-free alcohol permit qualification

process. Subpart E of the implementing

regulations at 27 CFR Part 22, requires

every applicant, with certain

exceptions, to obtain a bond prior to the

issuance of a permit. In 1985, the taxfree regulations were revised and the

exemption from bond coverage was

expanded. See, T.D. ATF–199, 50 Fed.

Reg. 9152 (March 6, 1985). Under those

revisions, the percentage of users of taxfree alcohol who were exempt from

filing a surety bond increased from 36

percent under the prior regulations to 75

percent under the adopted regulations.

Based on the post-1985 experience in

administering Part 22, ATF believes that

bond coverage should no longer be

required of any applicant for a tax-free

alcohol permit.

Additionally, ATF believes that

elimination of the bond requirement

under Subpart E will result in

substantially reduced administrative

and financial burdens on the tax-free

alcohol permittees.

Qualification

Section 5271 of the Internal Revenue

Code of 1986 requires the submission of

an application before a permit may be

issued to procure and use tax-free

alcohol. Current regulations require the

submission of a detailed application

with supporting data by all applicants.

The regional director (compliance) is

authorized to waive some of the detailed

data for applicants who are a State,

political subdivisions thereof or the

District of Columbia or whose annual

withdrawal and usage of tax-free alcohol

will not exceed 1,500 proof gallons.

ATF believes that this waiver should

be available to all applicants when the

regional director (compliance)

concludes that the revenue is

adequately protected with respect to the

person submitting the application. ATF

is, therefore, proposing that regulatory

provisions be made that will allow the

regional director (compliance) to waive

detailed applications with supporting

data for all applicants. The regulations

will continue to recognize the current

waiver category of applicants who are

governmental entities and the waiver

category based on the 1,500 proof gallon

annual withdrawal and usage is

encompassed by the proposed amended

regulation.

Public Participation

ATF requests written comments from

all interested persons. All comments

received on or before the closing date

will be carefully considered. Comments

received after that date will be given the

same consideration if it is practical to

do so, but assurance of consideration

cannot be given except as to comments

received on or before the closing date.

ATF will not recognize any material

as confidential. Any material which the

commenter considers to be confidential

or inappropriate for disclosure should

not be included in the comment. The

name of the person submitting the

comment is not exempt from disclosure.

Any interested person who desires an

opportunity to comment orally at a

public hearing should submit his or her

request, in writing, to the Director

within the 60-day comment period. The

Director, however, reserves the right to

determine, in light of all circumstances,

whether a public hearing will be

scheduled.

Written comments will be available

for public inspection during normal

business hours at the following address:

ATF Reading Room, Office of Public

Affairs and Disclosure, Room 6480, 650

Massachusetts Avenue, NW,

Washington, DC.

Regulatory Flexibility Act

It is hereby certified that this

proposed regulation will not have a

significant economic impact on a

substantial number of small entities.

The regulations will give ATF specific

regulatory authority to relax and remove

certain registration requirements. The

regulations will not increase

recordkeeping or reporting

requirements. Accordingly, a regulatory

flexibility analysis is not required

because the proposal, if promulgated as

a final rule, will not have a significant

economic impact on a substantial

number of small entities.

Executive Order 12866

It has been determined that this

proposed regulation is not a significant

regulatory action as defined in
Federal Register / Vol. 61, No. 115 / Thursday, June 13, 1996 / Proposed Rules 30021

Executive Order 12866. Accordingly,

this proposal is not subject to the

analysis required by this Executive

Order.

Paperwork Reduction Act

The provisions of the Paperwork

Reduction Act of 1980, Pub. L. 96–511,

44 U.S.C. Chapter 35, and its

implementing regulations, 5 CFR Part

1320, do not apply to this notice

because no new information collection

requirements are being proposed.

The existing collections of

information contained in this notice of

proposed rulemaking have been

previously reviewed and approved by

the Office of Management and Budget in

accordance with the requirements of the

Paperwork Reduction Act of 1980 (44

U.S.C. 3504(h) under control numbers

1512–0334 and 1512–0335.

Drafting Information: The principal drafter

of this document is Mary A. Wood of the

Wine, Beer, and Spirits Regulations Branch,

Bureau of Alcohol, Tobacco, and Firearms.

List of Subjects in 27 CFR Part 22

Administrative practice and

procedure, Advertising, Alcohol and

alcohol beverages, Authority delegations

(Government agencies), Claims, Excise

taxes, Reporting and recordkeeping

requirements, Surety bonds.

Authority and Issuance

ATF is proposing to amend Part 22 in

Title 27 of the Code of Federal

Regulations as follows:

PART 22—DISTRIBUTION AND USE OF

TAX-FREE ALCOHOL

Par. 1. The authority citation for Part

22 continues to read as follows:

Authority: 26 U.S.C. 5001, 5121, 5142,

5143, 5146, 5206, 5214, 5271–5276, 5311,

5552, 5555, 6056, 6061, 6065, 6109, 6151,

6806, 7011, 7805; 31 U.S.C. 9304, 9306.

§ 22.21 [Amended]

Par. 2. Section 22.21(a) is amended by

removing the word ‘‘bonds,’’ from the

first sentence.

§ 22.25 [Removed]

Par. 3. Section 22.25 is removed.

§ 22.26 [Redesignated]

Par. 4. Section 22.26 is redesignated

as § 22.25.

§ 22.27 [Redesignated]

Par. 5. Section 22.27 is redesignated

as § 22.26.

§ 22.43 [Amended]

Par. 6. In § 22.43, paragraphs (a)(2)

and (b) are revised as follows:

§ 22.43 Exceptions to application

requirements.

(a) * * *

(2) Applications, Form 5150.22, filed

by applicants where the regional

director (compliance) has determined

that the waiver of such requirements

does not pose any jeopardy to the

revenue or a hindrance of the effective

administration of this part.

(b) The waiver provided for in this

section will terminate for a permittee,

other than States or political

subdivisions thereof or the District of

Columbia, when the permittee files an

application to amend the permit and the

regional director (compliance)

determines that the conditions justifying

the waiver no longer exist. In this case,

the permittee will furnish the

information in respect to the previously

waived items, as provided in

§ 22.57(a)(2).

§ 22.59 [Amended]

Par. 7. In § 22.59, the second sentence

of the section is removed.

§ 22.60 [Amended]

Par. 8. Section 22.60 is amended as

follows:

1. Paragraph (b) is removed.

2. Paragraph (c) is redesignated as

paragraph (b).

3. Paragraph (d) is redesignated as

paragraph (c).

§ 22.62 [Amended]

Par. 9. Section 22.62 is amended by

the removal of the last sentence in the

section.

§ 22.63 [Amended]

Par. 10. Section 22.63 is amended as

follows:

1. Paragraph (b) is removed.

2. The paragraph letter and title ‘‘(a)

Permit.’’ designation is removed.

§ 22.68 [Amended]

Par. 11. Section 22.68 is amended as

follows:

1. Paragraph (b) is removed.

2. The paragraph letter and title ‘‘(a)

Notice.’’ designation is removed.

Subpart E [Removed and Reserved]

Par. 12. Subpart E (Bonds and

Consent of Surety) is removed and

reserved.

§ 22.152 [Amended]

Par. 13. Section 22.152 is amended as

follows:

1. Paragraph (b) is removed.

2. Paragraph (c) is redesignated as

paragraph (b).

Signed: May 8, 1996.

Bradley A. Buckles,

Acting Director.

Approved: May 24, 1996.

John P. Simpson.

Deputy Assistant Secretary (Regulatory, Tariff

and Trade Enforcement).

[FR Doc. 96–14850 Filed 6–12–96; 8:45 am]

BILLING CODE 4810–13–U

27 CFR Part 250

[Notice No. 825]

RIN: 1512–AB50

Liquors and Articles From Puerto Rico

and the Virgin Islands (1512–AB50)

AGENCY: Bureau of Alcohol, Tobacco

and Firearms (ATF), Department of the

Treasury.

ACTION: Advance notice of proposed

rulemaking.

SUMMARY: ATF is considering the

revision and recodification of the

regulations regarding liquors and

articles (hereinafter ‘‘alcoholic

products’’) which are brought into the

United States from Puerto Rico or the

Virgin Islands. The purpose of the

proposed revision/recodification is to

update and simplify the regulations in

27 CFR Part 250 and to reissue those

regulations as part of the same chapter.

ATF is issuing this advance notice to

solicit comments on its proposal to

eliminate application and transaction

forms required to be submitted by

persons who bring alcoholic products

into the United States from Puerto Rico.

Comments are also being solicited on

proposals to coordinate with the U.S.

Customs Service to reduce duplicate

efforts involving shipments of

merchandise from Puerto Rico to the

United States. ATF would also like to

receive comments regarding other

suggestions for reducing or eliminating

unnecessary regulatory burdens on

proprietors in both Puerto Rico and the

United States while continuing to

provide adequate protection to the

revenue.

DATES: Written comments must be

received on or before September 11,

1996.

ADDRESSES: Comments must be

submitted to the Chief, Wine, Beer, and

Spirits Branch, P.O. Box 50221,

Washington, DC 20091–0221. ATTN

Notice No. 825.

FOR FURTHER INFORMATION CONTACT:

Tami Light, Wine, Beer and Spirits

Branch, Bureau of Alcohol, Tobacco and

Firearms, Washington, DC 20226, (202)

927–8210.