DEPARTMENT OF THE TREASURY

Bureau of Alcohol, Tobacco and Firearms

27 CFR Part 24

[RIN 1512-AB65]

(Notice No. 852)

Implementation of Public Law 104-188, Section 1702, Amendments related to Revenue Reconciliation Act of 1990 (96R-028T)

AGENCY: Bureau of Alcohol, Tobacco and Firearms (ATF), Department of the Treasury

ACTION: Notice of proposed rulemaking cross referenced to temporary regulations.

SUMMARY: In the Rules and Regulations portion of this Federal Register, the Bureau of Alcohol, Tobacco and Firearms (ATF) is issuing temporary regulations to implement section 1702 the Small Business Job Protection Act of 1996. The new law changed the small producers’ wine tax credit and wine bond provisions of the Internal Revenue Code of 1986. The wine regulations are amended to extend the application of the credit to "transferees in bond" (proprietors who store wine for a small producer, but who do not hold title to such wine) in certain circumstances, and to make conforming changes to the bond computation instructions, which were also affected by the law change. In this notice of proposed rulemaking, ATF invites comments on the temporary rule.

DATES: Written comments must be received on or before August 1, 1997.

ADDRESSES: Send written comments to: Chief, Wine, Beer & Spirits Regulations Branch, Bureau of Alcohol, Tobacco and Firearms, P.O. Box 50221, Washington, DC 20091-0221, Attention: Notice Number 852.

FOR FURTHER INFORMATION CONTACT: Marjorie D. Ruhf, Wine, Beer & Spirits Regulations Branch, 650 Massachusetts Avenue, NW, Washington, DC 20226, (202) 927-8230.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

It has been determined that this proposed rule is not a significant regulatory action as defined by Executive Order 12866, because the economic effects flow directly from the underlying statue and not from the proposed regulations. Therefore, a regulatory assessment is not required.

Regulatory Flexibility Act

It is hereby certified that these proposed regulations will not have a significant economic impact on a substantial number of small entities. Accordingly, a regulatory flexibility analysis is not required. The revenue effects of this rulemaking on small businesses flow directly from the underlying statute. Likewise, any secondary or incidental effects, and any reporting, recordkeeping, or other compliance burdens flow directly from the statute. Pursuant to 26 U.S.C. 7805(f), this proposed regulation will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

Paperwork Reduction Act

The collections of information contained in this notice of proposed rulemaking have been submitted to the Office of Management and Budget (OMB) for review in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)). Comments on the collections of information should be sent to the Office of Management and Budget, Attention: Desk Officer for the Department of the Treasury, Bureau of Alcohol, Tobacco and Firearms, Office of Information and Regulatory Affairs, Washington, D.C., 20503, with copies to the Bureau of Alcohol, Tobacco and Firearms at the address previously specified. Comments are specifically requested concerning:

Whether the proposed collections of information are necessary for the proper performance of the functions of the Bureau of Alcohol, Tobacco and Firearms, including whether the information will have practical utility;

The accuracy of the estimated burden associated with the proposed collections of information (see below);

How the quality, utility, and clarity of the information to be collected may be enhanced; and

How the burden of complying with the proposed collections of information may be minimized, including through the application of automated collection techniques or other forms of information technology.

The collections of information in this proposed regulation are in 27 CFR •• 24.278 and 24.279 (OMB control numbers 1512-0540 and 1512-0492,respectively). This information is required to advise the transferee of any available credit, and to support entries on tax returns and claims. This information will be used by the transferee and the small producer to compute taxes or claims and may also be reviewed by ATF during an audit to confirm that wine tax credits were properly taken. The collections of information are required to obtain a benefit (reduced rate of tax). The likely recordkeepers are businesses and small businesses.

Since this collection of information involves a disclosure (consisting of shipping instructions from the producer-owner of the wine to the transferee) and recordkeeping which must take place for commercial reasons unrelated to the regulatory requirement, ATF estimates a burden of 1 hour for OMB control number 1512-0540 (information collected in support of small producer’s wine tax credit). The estimated total annual recordkeeping burden associated OMB control number 1512-0492 (usual and customary records kept in support of tax returns and claims) will not increase.

Estimated number or respondents and/or recordkeepers: 30 transferees in bond and 250 small producers.

No reports are required as part of these regulations.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the Office of Management and Budget.

Public Participation

ATF requests comments on the temporary regulations from all interestedpersons. 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 practicable to do so, but assurance of consideration cannot be given except as to comments received on or before the closing date.

Comments may be submitted by facsimile transmission (FAX) to (202) 927-8602, provided the comments: (1) are legible, (2) are 8 1/2" x 11" in size, (3) contain a written signature, and (4) are three pages or less in length. This limitation is necessary to assure reasonable access to the equipment. Comments sent by FAX in excess of three pages will not be accepted. Receipt of FAX transmittals will not be acknowledged. Facsimile transmitted comments will be treated as originals.

ATF will not recognize any material in comments as confidential. Comments may be disclosed to the public. Any material which the commenter considers to be confidential or inappropriate for disclosure to the public 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.

The temporary regulations in this issue of the Federal Register amend the regulations in 27 CFR Part 24. For the text of the temporary regulations see T.D. ATF-390 published in the Rules and Regulations section of this issue of the Federal Register.

Drafting Information

The principal author of this document is Marjorie D. Ruhf, Wine, Beer & Spirits Regulations Branch, Bureau of Alcohol, Tobacco and Firearms.

Signed: December 23, 1996

John W. Magaw

Director

Approved:

Dennis M. O’Connell

ActingDeputy Assistant Secretary

(Regulatory, Tariff and Trade Enforcement)