13014 Federal Register / Vol. 66, No. 42 / Friday, March 2, 2001 / Rules and Regulations

corrected to read ‘‘A–19: See § 53.4958–

8T(b) of this’’.

Cynthia E. Grigsby,

Chief, Regulations Unit, Office of Special

Counsel (Modernization and Strategic

Planning).

[FR Doc. 01–5006 Filed 3–1–01; 8:45 am]

BILLING CODE 4830–01–P

DEPARTMENT OF THE TREASURY

Bureau of Alcohol, Tobacco and

Firearms

27 CFR Part 22

[T.D. ATF–443; Ref: Notice No. 828]

RIN 1512–AB57

Distribution and Use of Tax-Free

Alcohol (2000R–294P)

AGENCY: Bureau of Alcohol, Tobacco

and Firearms (ATF), Department of the

Treasury.

ACTION: Final rule (Treasury decision).

SUMMARY: This final rule amends the

regulations in 27 CFR part 22 by

eliminating the requirement for users of

tax-free alcohol to file a bond. It also

liberalizes certain qualification

requirements relating to tax-free alcohol

user permits. ATF believes that these

revisions will greatly reduce and

simplify the qualification process for

tax-free alcohol permits.

DATES: This rule is effective on May 1,

2001.

FOR FURTHER INFORMATION CONTACT: Lisa

M. Gesser, Regulations Division, Bureau

of Alcohol, Tobacco and Firearms, 650

Massachusetts Avenue NW.,

Washington, DC 20226, (202–927–9347)

or e-mail at alctob@atfhq.atf.treas.gov.

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. 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.

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.

Notice of Proposed Rulemaking

On June 13, 1996, ATF published a

notice of proposed rulemaking (Notice

No. 828, 61 FR 30019) to solicit public

comment on proposed regulations that

would eliminate the bonding

requirements for tax-free alcohol users.

ATF also proposed to revise the

qualification requirements for obtaining

a permit to withdraw and use tax-free

alcohol. The public was invited to

submit written comments on this notice

for a period of 60 (sixty) days ending

August 12, 1996.

Comments on the NPRM

In response to Notice 828, ATF

received two written comments.

Comments were received from: the

Distilled Spirits Council of the United

States (DISCUS), and the Surety

Association of America.

Bonds and Consents of Surety

As discussed in Notice No. 828, 26

U.S.C. 5272 provides that bond coverage

may be required as part of the tax-free

alcohol permit qualification process.

Prior to 1985, the regulations in 27 CFR

part 22 required that every applicant,

with certain exceptions, obtain a bond

prior to issuance of a permit. Then, in

1985, the tax-free regulations were

revised and the exemption from bond

coverage was expanded. See T.D. ATF–

199 (50 FR 9152). Under the revisions

adopted in 1985, the percentage of users

of tax-free alcohol who were exempt

from filing a surety bond increased from

36 percent to 75 percent.

Based on the post-1985 experience in

administering part 22, ATF concluded

that bond coverage should no longer be

required of any applicant for a tax-free

alcohol permit. ATF believed that

elimination of the bond requirement in

part 22 would result in substantially

reduced administrative and financial

burdens on the tax-free alcohol

permittees. Accordingly, in Notice No.

828, ATF proposed to eliminate the

requirement to obtain a bond.

In response to this proposal, DISCUS

submitted a comment stating that they

support all efforts by ATF to eliminate

unnecessary regulation and to reduce

the administrative burdens imposed

upon industry.

The Surety Association of America

commented against this proposal. They

stated that ‘‘the ATF is overlooking the

importance of the bond requirement in

preventing losses. The bond provision

may be one of the primary reasons why

the experience has been favorable, and

without it, we believe the ATF runs the

risk of losing tax revenue without a

means of recapture.’’

While ATF agrees that bond

requirements for tax-free alcohol users

may have reduced the risk of tax

revenue losses at some time in the past,

our experience since 1985 indicates that

tax-free alcohol users pose a minimal

risk to the revenue. Further, the

elimination of the bond requirement

does not leave the ATF ‘‘without a

means of recapture.’’ Any permittee

who uses tax-free alcohol in a manner

that violates the laws and regulations is

still directly liable for the tax as

provided in 26 U.S.C. 5001(a)(4).

In summary, ATF has concluded that

the bond requirement in 27 CFR part 22

is unnecessary to protect the revenue

and the proposal to eliminate the bond

requirement for tax-free alcohol users

has been adopted in this final rule.

Qualification Requirements

Section 5271 of the Internal Revenue

Code of 1986 requires the submission of

an application before a permit may be

issued to procure or use tax-free alcohol.

Regulations have required the

submission of a detailed application

with supporting data by all applicants.

The appropriate ATF officer 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.

In Notice No. 828, ATF proposed that

this waiver should be available to all

applicants when the appropriate ATF

officer concludes that the revenue is

adequately protected with respect to the

person submitting the application.

In response to this proposal, the

DISCUS submitted a comment that

expressed their support. No one

commented in opposition to this

proposal. Accordingly, the proposal has

been adopted in this final rule.

Regulatory Flexibility Act

It is hereby certified that this

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. A

Federal Register / Vol. 66, No. 42 / Friday, March 2, 2001 / Rules and Regulations 13015

copy of the proposed rule was

submitted to the Chief Counsel for

Advocacy of the Small Business

Administration in accordance with 26

U.S.C. 7805(f). No comments were

received.

Executive Order 12866

It has been determined that this

regulation is not a significant regulatory

action as defined by Executive Order

12866. Therefore, a Regulatory

Assessment is not required.

Paperwork Reduction Act

The provisions of the Paperwork

Reduction Act of 1995, 44 U.S.C.

Chapter 35, and its implementing

regulations, 5 CFR part 1320, do not

apply to this final rule because there are

no new reporting or recordkeeping

requirements.

Drafting Information

The principal author of this document

is Lisa M. Gesser, Regulations Division,

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

Accordingly, title 27, Code of Federal

Regulations part 22 is amended 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. Amend § 22.21(a) by removing

the word ‘‘bonds’’ from the first

sentence.

§ 22.25 [Removed]

Par. 3. Remove § 22.25.

§ 22.26 [Redesignated]

Par. 4. Redesignate § 22.26 as § 22.25.

§ 22.27 [Redesignated]

Par. 5. Redesignate § 22.27 as § 22.26.

§ 22.43 [Amended]

Par. 6. Amend § 22.43 by revising

paragraphs (a)(2) and (b) to read as

follows:

§ 22.43 Exceptions to application

requirements.

(a) * * *

(2) Applications, Form 5150.22, filed

by applicants, where the appropriate

ATF officer 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

appropriate ATF officer 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. Amend § 22.59 by removing

the second sentence.

§ 22.60 [Amended]

Par. 8. Amend § 22.60 as follows:

a. Remove paragraph (b);

b. Redesignate paragraph (c) as

paragraph (b); and

c. Redesignate paragraph (d) as

paragraph (c).

§ 22.62 [Amended]

Par. 9. Amend § 22.62 by removing

the last sentence.

§ 22.63 [Amended]

Par. 10. Amend § 22.63 as follows:

a. Remove the paragraph letter and

title designation ‘‘(a) Permit’’; and

b. Remove paragraph (b).

§ 22.68 [Amended]

Par. 11. Amend § 22.68 as follows:

a. Remove the paragraph letter and

title designation ‘‘(a) Notice’’; and

b. Remove paragraph (b).

Subpart E—[Removed and Reserved]

Par. 12. Remove and reserve Subpart

E (Bonds and Consent of Surety).

§ 22.152 [Amended]

Par. 13. Amend § 22.152 as follows:

a. Remove paragraph (b); and

b. Redesignate paragraph (c) as

paragraph (b).

Bradley A. Buckles,

Director.

Approved: February 1, 2001.

Timothy E. Skud,

Acting Deputy Assistant Secretary

(Regulatory, Tariff and Trade Enforcement).

[FR Doc. 01–5130 Filed 3–1–01; 8:45 am]

BILLING CODE 4810–31–P

DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation

and Enforcement

30 CFR Part 934

[SPATS No. ND–041–FOR, Amendment No.

XXX]

North Dakota Regulatory Program

AGENCY: Office of Surface Mining

Reclamation and Enforcement, Interior.

ACTION: Final rule; approval of

amendment.

SUMMARY: The Office of Surface Mining

Reclamation and Enforcement (OSM) is

approving this proposed amendment to

the North Dakota regulatory program

(hereinafter, the ‘‘North Dakota

program’’) under the Surface Mining

Control and Reclamation Act of 1977

(SMCRA). North Dakota proposed

revisions to rules about rulemaking

notices, prime farmland reclamation

plans, permit approval and denial

criteria, performance bond liability

period, bond release applications,

surface water monitoring, revegetation

success standards, prime farmland

reclamation standards, and small

operator assistance.

The State intended to revise its

program to be consistent with the

corresponding Federal regulations and

SMCRA, and improve operational

efficiency.

EFFECTIVE DATE: March 2, 2001.

FOR FURTHER INFORMATION CONTACT: Guy

Padgett, Telephone: 307/261–6550,

Internet address: GPadgett@OSMRE.gov.

SUPPLEMENTARY INFORMATION:

I. Background on the North Dakota Program

II. Submission of the Proposed Amendment

III. Director’s Findings

IV. Summary and Disposition of Comments

V. Director’s Decision

VI. Procedural Determinations

I. Background on the North Dakota

Program

On December 15, 1980, the Secretary

of the Interior conditionally approved

the North Dakota program. You can find

background information on the North

Dakota program, including the

Secretary’s findings, the disposition of

comments, and conditions of approval

in the December 15, 1980, Federal

Register (45 FR 82214). You can also

find later actions concerning North

Dakota’s program and program

amendments at 30 CFR 934.15 and

934.16.