E9-23173. Extension of Package Use-Up Rule for Roll-Your-Own Tobacco and Pipe Tobacco (2009R-368P)

AGENCY:

Alcohol and Tobacco Tax and Trade Bureau, Treasury.

ACTION:

Notice of proposed rulemaking; cross-reference to temporary rule.

SUMMARY:

Elsewhere in this issue of the Federal Register, the Alcohol and Tobacco Tax and Trade Bureau is issuing a temporary rule to extend the use-up period and delay the application of the new pipe tobacco and roll-your-own tobacco classification rule adopted on June 22, 2009, in response to certain changes made to the Internal Revenue Code of 1986 by the Children's Health Insurance Program Reauthorization Act of 2009. That temporary rule also corrects two minor errors in the previously published regulatory texts. The text of the regulations in the temporary rule published in the Rules and Regulations section of this issue of the Federal Register serves as the text of the proposed regulations.

DATES:

Comments must be received on or before November 23, 2009.

ADDRESSES:

You may send comments on this notice to one of the following addresses:

• http://www.regulations.gov: Use the comment form for this notice on the Federal e-rulemaking portal, Regulations.gov, to submit comments via the Internet;
• Mail: Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, P.O. Box 14412, Washington, DC 20044-4412.
• Hand Delivery/Courier in Lieu of Mail: Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street, NW., Suite 200-E, Washington, DC 20005.

See the Public Participation section of this notice for specific instructions and requirements for submitting comments, and for information on how to request a public hearing.

You may view copies of this notice, selected supporting materials, and any comments we receive about this proposal within Docket No. TTB-2009-0002 at http://www.regulations.gov. A direct link to this docket is posted on the TTB Web site at http://www.ttb.gov/​tobacco/​tobacco-rulemaking.shtml under Notice No. 99. You also may view copies of this notice, all supporting materials, and any comments we receive about this proposal by appointment at the TTB Information Resource Center, 1310 G Street, NW., Washington, DC 20220. Please call 202-453-2270 to make an appointment.

FOR FURTHER INFORMATION CONTACT:

Amy Greenberg, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau (202-453-2099).

SUPPLEMENTARY INFORMATION:

Background

On June 22, 2009, the Alcohol and Tobacco Tax and Trade Bureau (TTB) published a temporary rule in the Federal Register (T.D. TTB-78, 74 FR 29401) to implement certain changes made to the Internal Revenue Code of 1986 by the Children's Health Insurance Program Reauthorization Act of 2009 (the Act). The regulatory changes made by the temporary rule went into effect on June 22, 2009. The temporary rule included a new classification rule reflecting the expansion of the statutory definition of roll-your-own tobacco to include cigar wrapper and filler. The temporary rule also outlined new notice requirements for the packaging and labeling of pipe tobacco and roll-your-own tobacco to distinguish these two products from each other for tax purposes. As such, the temporary rule included two use-up rules allowing manufacturers and importers of pipe tobacco and roll-your-own tobacco to use their existing packages until August 1, 2009.

In the June 22, 2009, issue of the Federal Register, TTB also published a notice of proposed rulemaking, Notice No. 95 (74 FR 29433), inviting comments on the temporary regulations contained in T.D. TTB-78, with comments due on or before August 21, 2009. In response to Notice No. 95, we received two comments raising concerns regarding the pipe tobacco classification and notice provisions of T.D. TTB-78, which we believe warrant immediate consideration. Both commenters requested a delay in the implementation of the pipe tobacco classification and notice-related requirements, asserting that the use-up periods in the temporary regulations (that is, to August 1, 2009) gave insufficient time for industry members to comply with the new requirements.

New Temporary Rule and Notice of Proposed Rulemaking

After carefully considering these two comments, TTB believes it should delay the application of the new classification rule regarding pipe tobacco and roll-your-own tobacco, and extend the two use-up rules for existing packaging. As a result, we are publishing a new temporary rule, T.D. TTB-81, in the Rules and Regulations section of this issue of the Federal Register. These revised temporary regulations involve amendments to parts 40, 41, and 45 of the TTB regulations (27 CFR parts 40, 41, and 45). The text of the revised temporary regulations serves as the text of these proposed regulations, and the preamble to the revised temporary regulations explains these proposed regulations in detail. The new temporary rule also corrects two minor errors in the previously published regulatory texts.

Public Participation

Comments Invited

We invite comments from interested members of the public on this proposed rulemaking.

Submitting Comments

You may submit comments on this notice by using one of the following three methods:

• Federal e-Rulemaking Portal: You may send comments via the online comment form linked to this notice in Docket No. TTB-2009-0002 on “Regulations.gov,” the Federal e-rulemaking portal, at http://www.regulations.gov. A link to the docket is available under Notice No. 99 on the TTB Web site at http://www.ttb.gov/​tobacco/​tobacco-rulemaking.shtml. Supplemental files may be attached to comments submitted via Regulations.gov. For information on how to use Regulations.gov, click on the site's Help or FAQ tabs.
• U.S. Mail: You may send comments via postal mail to the Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, P.O. Box 14412, Washington, DC 20044-4412.
• Hand Delivery/Courier: You may hand-carry your comments or have them hand-carried to the Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street, NW., Suite 200-E, Washington, DC 20005.

Please submit your comments by the closing date shown above in this notice. Your comments must reference Notice No. 99 and include your name and mailing address. Your comments also must be made in English, be legible, and be written in language acceptable for public disclosure. We do not acknowledge receipt of comments, and we consider all comments as originals.

If you are commenting on behalf of an association, business, or other entity, your comment must include the entity's name as well as your name and position title. If you comment via Regulations.gov, please include the entity's name in the “Organization” blank of the comment form. If you comment via postal mail, please submit your entity's comment on letterhead.

You may also write to the Administrator before the comment closing date to ask for a public hearing. The Administrator reserves the right to determine whether to hold a public hearing.

Confidentiality

All submitted comments and attachments are part of the public record and subject to disclosure. Do not enclose any material in your comments that you consider to be confidential or that is inappropriate for public disclosure.

Public Disclosure

On the Federal e-rulemaking portal, Regulations.gov, we will post, and the public may view, copies of this notice, the related temporary rule, selected supporting materials, and any electronic or mailed comments we receive about this proposal. A direct link to the Regulations.gov docket containing this notice and the posted comments received on it is available on the TTB Web site at http://www.ttb.gov/​tobacco/​tobacco-rulemaking.shtml under Notice No. 99. You may also reach the docket containing this notice and the posted comments received on it through the Regulations.gov search page at http://www.regulations.gov.

All posted comments will display the commenter's name, organization (if any), city, and State, and, in the case of mailed comments, all address information, including e-mail addresses. We may omit voluminous attachments or material that we consider unsuitable for posting.

You and other members of the public may view copies of this notice, the related temporary rule, other supporting materials, and any electronic or mailed comments we receive about this proposal by appointment at the TTB Information Resource Center, 1310 G Street, NW., Washington, DC 20220. You may also obtain copies at 20 cents per 8.5 x 11-inch page. Contact our information specialist at the above address or by telephone at 202-453-2270 to schedule an appointment or to request copies of comments or other materials.

Regulatory Flexibility Act, Paperwork Reduction Act, and Executive Order 12866

Since the regulatory text proposed in this notice of proposed rulemaking is identical to that contained in the companion temporary rule published elsewhere in this issue of the Federal Register, the analyses contained in the preamble of the temporary rule concerning the Regulatory Flexibility Act, the Paperwork Reduction Act, and Executive Order 12866 also apply to this proposed rule.

Drafting Information

Michael Hoover of the Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, drafted this document.

List of Subjects

27 CFR Part 40

• Cigars and cigarettes
• Claims
• Electronic funds transfers
• Excise taxes
• Imports
• Labeling
• Packaging and containers
• Reporting and recordkeeping requirements
• Surety bonds
• Tobacco

27 CFR Part 41

• Cigars and cigarettes
• Claims
• Customs duties and inspection
• Electronic funds transfers
• Excise taxes
• Imports
• Labeling
• Packaging and containers
• Puerto Rico
• Reporting and recordkeeping requirements
• Surety bonds
• Tobacco
• Virgin Islands
• Warehouses

27 CFR Part 45

• Administrative practice and procedure
• Authority delegations (Government agencies)
• Cigars and cigarettes
• Excise taxes
• Labeling
• Packaging and containers
• Reporting and recordkeeping requirements
• Tobacco

Proposed Amendments to the Regulations

For the reasons discussed in the preamble, TTB proposes to amend 27 CFR, chapter I, parts 40, 41, and 45 as follows:

PART 40—MANUFACTURE OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES, AND PROCESSED TOBACCO

1. The authority citation for part 40 is revised to read as follows:

Authority: 26 U.S.C. 5142, 5143, 5146, 5701-5705, 5711-5713, 5721-5723, 5731, 5741, 5751, 5753, 5761-5763, 6061, 6065, 6109, 6151, 6301, 6302, 6311, 6313, 6402, 6404, 6423, 6676, 6806, 7011, 7212, 7325, 7342, 7502, 7503, 7606, 7805; 31 U.S.C. 9301, 9303, 9304, 9306.

2. [The proposed amendatory instructions and the proposed amended regulatory text for part 40 are the same as the amendatory instructions and the amended regulatory text set forth in the temporary rule on this subject published in the Rules and Regulations section of this issue of the Federal Register.]

PART 41—IMPORTATION OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES, AND PROCESSED TOBACCO

3. The authority citation for part 41 is revised to read as follows:

Authority: 26 U.S.C. 5701-5705, 5708, 5712, 5713, 5721-5723, 5741, 5754, 5761-5763, 6301, 6302, 6313, 6402, 6404, 7101, 7212, 7342, 7606, 7651, 7652, 7805; 31 U.S.C. 9301, 9303, 9304, 9306.

4. [The proposed amendatory instructions and the proposed amended regulatory text for part 41 are the same as the amendatory instructions and the amended regulatory text set forth in the temporary rule on this subject published in the Rules and Regulations section of this issue of the Federal Register.]

PART 45—REMOVAL OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES, WITHOUT PAYMENT OF TAX, FOR USE OF THE UNITED STATES

5. The authority citation for part 45 is revised to read as follows:

Authority: 26 U.S.C. 5702-5705, 5723, 5741, 5751, 5762, 5763, 6313, 7212, 7342, 7606, 7805; 44 U.S.C. 3504(h).

6. [The proposed amendatory instructions and the proposed amended regulatory text for part 45 are the same as the amendatory instructions and the amended regulatory text set forth in the temporary rule on this subject published in the Rules and Regulations section of this issue of the Federal Register.]

Signed: August 23, 2009.

John J. Manfreda,

Administrator.

Approved: September 4, 2009.

Timothy E. Skud,

Deputy Assistant Secretary. (Tax, Trade, and Tariff Policy).