[Federal Register Volume 61, Number 109 (Wednesday, June 5, 1996)]
[Notices]
[Pages 28639-28640]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14126]



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DEPARTMENT OF THE TREASURY

Customs Service
[T.D. 96-47]


Petroleum Refineries in Foreign Trade Subzones

AGENCY: Customs Service, Department of the Treasury.

ACTION: General notice; modification of T.D. 66-16.

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SUMMARY: This document publishes an attribution schedule approved in 
accordance with the foreign trade zone regulations for use by the 
Valero Refining Company, operating as Foreign Trade Subzone No. 122j, 
in Corpus Christi, Texas, covering three feedstocks not otherwise 
covered by a published schedule, for the purpose of calculating the 
amount of selected feedstock which would be required to produce a given 
category of product in the subzone, with inventory accounting for 
feedstock and product, as well as duty assessment for any such product 
removed from or consumed within the subzone, being determined 
accordingly.

FOR FURTHER INFORMATION CONTACT: Louis Hryniw, Office of Regulatory 
Audit, (202) 927-0677.

SUPPLEMENTARY INFORMATION:

Background

    By a final rule document published in the Federal Register as T.D. 
95-35 (60 FR 20628) on April 27, 1995, Customs amended its foreign 
trade zone regulations (19 CFR part 146) to add special procedures and 
requirements governing the operation of petroleum refineries approved 
as foreign trade subzones, in implementation of Sec. 9002 of the 
Technical and Miscellaneous Revenue Act of 1988, codified as 19 U.S.C. 
81c(d). These regulations, issued as a new subpart H to part 146 
(Secs. 146.91-146.96), essentially establish procedures to account for 
the various products refined in a subzone as well as the feedstocks 
that are used therein in such refining operations, with duty assessment 
being determined accordingly.
    Specifically in this connection, Sec. 146.93(a) requires that all 
final product refined in, and either removed from or consumed within, a 
petroleum refinery subzone, be attributed to feedstock admitted into 
the subzone in the current or prior manufacturing period.
    One method of attribution permits a quantity of product to be 
attributed as having been refined from a given quantity of feedstock to 
the extent that the quantity of such product was producible (could have 
been produced) from the stated quantity of feedstock. 19 CFR 146.95(a) 
(1) and (2). This method, known as producibility, calls for the 
establishment of objective production standards to govern its 
application. Such standards, called industry standards of potential 
production on a practical operating basis, have already been 
established, adopted and published in T.D. 66-16. 19 CFR 146.95(a)(2). 
In this regard, T.D. 66-16 lists several categories of products as well 
as a number of different feedstocks, together with the noted industry 
standards expressed in percentages.
    Section 146.95(a)(3)(i) deals with the attribution of product to 
feedstock not listed in T.D. 66-16, and requires in this situation that 
the operator submit a proposed attribution schedule, supported by a 
technical memorandum, to the appropriate port director. The port 
director must refer the request to the Director, Office of Regulatory 
Audit, who is responsible for reviewing and verifying the refiner's 
records and approving or denying the request, following due 
coordination with the Director, Office of Laboratories and Scientific 
Services.
    In the present case, Valero Refining Company, operating as Foreign 
Trade Subzone No. 122j, in Corpus Christi, Texas, has submitted such a 
request, which has since been evaluated by Customs as described, and 
approved, concerning the establishment of a verified attribution 
schedule for heretofore unlisted residual cracking feedstocks of 
classes I, II, and III, respectively. Section 146.95(a)(3)(i)

[[Page 28640]]

requires that such a modification of T.D. 66-16 be published.
    Consequently, this document informs the public that, pursuant to 
the approval granted to it under Sec. 146.95(a)(3)(i), the refinery 
subzone in question may use the attribution schedule hereinafter 
published in calculating the amount of selected feedstock which would 
be required to produce a quantity of a given petroleum product, with 
inventory recordkeeping and control for both feedstock and product in 
the subzone, and duty assessment for any product removed from or 
consumed within the subzone, being determined accordingly.

   Industry Standards of Potential Production on a Practical Operating  
               Basis Approved for Valero Refining Company               
------------------------------------------------------------------------
                                     Residual     Residual     Residual 
                                     Cracking     Cracking     Cracking 
             Product                Feedstock    Feedstock    Feedstock 
                                     Class I,    Class II,    Class III,
                                     percent      percent      percent  
------------------------------------------------------------------------
Motor gasoline...................           86           77           86
Aviation gasoline.                                                      
Special naphthas.................           11           16            9
Jet fuels.                                                              
Kerosene and range oil...........  ...........            4            4
Distillate oils..................            4           24            3
Residual oils....................          100          100          100
Lubricating oils.                                                       
Paraffin wax.                                                           
Petroleum coke...................            8            6            7
Asphalt.                                                                
Road oil.                                                               
Still gas........................           10           10           10
Liquified refinery gas...........           12           20           23
Petroleum synthetic rubbers.                                            
Petrochemical plastics and                                              
 resins.                                                                
All other petrochemical products.            3            4            1
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George J. Weise,
Commissioner of Customs.

    Approved: May 8, 1996.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc 96-14126 Filed 6-4-96; 8:45 am]
BILLING CODE 4820-02-P