01-24052. Implementation of Public Law 106-544 for Certain Amendments Related to Balanced Budget Act of 1997 (2001R-9OT)

AGENCY:

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

ACTION:

Final Rule (Treasury Decision).

SUMMARY:

This document implements regulations relating to certain provisions of the Consolidated Appropriations Act, 2001, Public Law 106-554. These provisions revised the definition of “manufacturer of cigarette papers and tubes” and removed the definition of “cigarette papers” in section 5702 of Title 26 of the United States Code. The provisions of these sections are retroactive to the effective date of section 9302 of the Balanced Budget Act of 1997, which was January 1, 2000.

EFFECTIVE DATE:

January 1, 2000.

FOR FURTHER INFORMATION CONTACT:

Robert Ruhf, Regulations Division, Bureau of Alcohol, Tobacco and Firearms, 650 Massachusetts Avenue, NW, Washington, DC 20226, [phone], e-mail, [e-mail].

SUPPLEMENTARY INFORMATION:

On December 21, 2000, the President signed the Consolidated Appropriations Act, 2001, Public Law 106-554 (114 Stat. 2763), which contains the Community Renewal Tax Relief Act (referred to as the Act). As noted in the accompanying Conference Report, sections 315(a)(2)(A) and (B) of the Act, contained in Title III—Administrative and Technical Provisions, were conforming amendments to reflect the fact that the tax on cigarette papers has not been imposed on “books” or papers since January 1, 2000. See 146 Cong. Rec. H 12418 (daily ed. December 15, 2000). Section 315(b) of the Act made the effective date of the provisions of section 315 retroactive to the effective date of section 9302 of the Balanced Budget Act of 1997, January 1, 2000 (111 Stat. 672).

The provisions of section 315(a)(2)(A) revised the definition of manufacturer of cigarette papers and tubes. Prior to this revision, the definition of manufacturer of cigarette papers and tubes meant any person who makes up cigarette paper into books or sets containing more than 25 papers each, or into tubes, except for personal use or consumption. Section 315(a)(2)(A) amended the definition to mean “any person who manufactures cigarette paper, or makes up cigarette paper into tubes, except for his own personal use or consumption.” This definition was amended because section 9302 of the Balanced Budget Act of 1997 changed the imposition of the Federal excise tax on cigarette papers under section 5701(c) of Title 26 of the United States Code. Under section 5701(c), a tax now is imposed on all cigarette papers manufactured in the United States regardless of whether the cigarette papers were in books or sets containing more than 25 papers each. Consequently, the definition of manufacturer of cigarette papers and tubes was changed to conform to the Federal excise tax imposed on cigarette papers.

The provisions of section 315(a)(2)(B) removed the definition of cigarette papers in 26 U.S.C. 5702. Prior to this amendment, the definition of cigarette papers meant taxable books or sets of cigarette papers. Because section 5701 of Title 26 of the United States Code imposes a tax on all cigarette papers, regardless of whether the cigarette papers are in books or sets, the definition of cigarette papers was deleted.

In this final rule, we are amending the regulations in 27 CFR parts 40, 44, 275 and 295 to conform to the changes made by the aforementioned provisions. Consequently, we are revising the regulatory definition of “manufacturer of cigarette papers and tubes” and removing the definition of “cigarette papers”.

Administrative Procedure Act

This document merely revises existing regulations to restate the language as currently set forth in the statute. Therefore, we find it is unnecessary to issue this Treasury decision with notice and public procedure under 5 U.S.C. 553(b), or subject to the effective date limitation in section 553(d).

Regulatory Flexibility Act

The provisions of the Regulatory Flexibility Act relating to a final regulatory flexibility analysis (5 U.S.C. 604) do not apply to this final rule. We were not required to publish a general notice of proposed rulemaking under 5 U.S.C. 553 or any other law. The revenue effects of this rulemaking on small businesses result directly from the underlying statute. Pursuant to 26 U.S.C. 7805(f), we have sent a copy of this regulation to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small businesses. No comments were received.

Executive Order 12866

It has been determined that this final rule is not a significant regulatory action as defined by Executive Order 12866. Therefore, a regulatory assessment is not required.

Paperwork Reduction Act of 1995

The provisions of the Paperwork Reduction Act of 1995, Public Law 104-13, 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 or revised recordkeeping or reporting requirements.

Drafting Information

The principal author of this document is Robert Ruhf, Regulations Division, Bureau of Alcohol, Tobacco and Firearms.

List of Subjects

27 CFR Part 40

• Administrative practice and procedure
• Authority delegations
• Cigars and cigarettes
• Claims
• Electronic fund transfers
• Excise taxes
• Imports
• Labeling
• Packaging and containers
• Penalties
• Reporting and recordkeeping requirements
• Seizures and forfeitures
• Surety bonds
• Tobacco

27 CFR Part 44

• Administrative practice and procedure
• Authority delegations
• Cigars and cigarettes
• Claims
• Customs duties and inspections
• Excise taxes
• Exports
• Foreign trade zones
• Labeling
• Packaging and containers
• Penalties
• Reporting and recordkeeping requirements
• Surety bonds
• Tobacco
• Transportation
• Warehouses

27 CFR Part 275

• Administrative practice and procedure
• Authority delegations
• Cigars and cigarettes
• Claims
• Electronic fund transfer
• Excise taxes
• Imports
• Labeling
• Packaging and containers
• Penalties
• Reporting requirements
• Seizures and forfeitures
• Surety bonds
• Tobacco
• Warehouses

27 CFR Part 295

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

Issuance

27 CFR chapter I is amended as follows:

PART 40—[AMENDED]

Paragraph 1. The authority citation for 27 CFR part 40 continues to read as follows:

Authority: 26 U.S.C. 5142, 5143, 5146, 5701, 5703-5705, 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.

Par. 2. Section 40.11 is amended to:

a. Remove the definition of “cigarette papers”; and

b. Revise the definition of “manufacturer of cigarette papers and tubes” to read as follows:

§ 40.11

Meaning of terms.

* * * * *

Manufacturer of cigarette papers and tubes. Any person who manufactures cigarette paper, or makes up cigarette paper into tubes, except for his own personal use or consumption.

* * * * *

Par. 3. Section 40.391 is revised to read as follows:

§ 40.391

Persons required to qualify.

Every person who manufactures cigarette paper, or makes up cigarette paper into tubes, except for his own personal use or consumption, must first qualify as a manufacturer of cigarette papers and tubes in accordance with the provisions of this subpart.

PART 44—[AMENDED]

Par. 4. The authority citation for 27 CFR part 44 continues to read as follows:

Authority: 26 U.S.C. 5142, 5143, 5146, 5701, 5703-5705, 5711-5713, 5721-5723, 5731, 5741, 5751, 5754, 6061, 6065, 6151, 6402, 6404, 6806, 7011, 7212, 7342, 7606, 7805; 31 U.S.C. 9301, 9303, 9304, 9306.

Par. 5. Section 44.11 is amended to: a. Remove the definition of “cigarette papers”; and

b. Revise the definition of “manufacturer of cigarette papers and tubes” to read as follows:

§ 44.11

Meaning of terms.

* * * * *

Manufacturer of cigarette papers and tubes. Any person who manufactures cigarette paper, or makes up cigarette paper into tubes, except for his own personal use or consumption.

* * * * *

PART 275—[AMENDED]

Par. 6. The authority citation for 27 CFR part 275 continues to read as follows:

Authority: 18 U.S.C. 2342; 26 U.S.C. 5701, 5703, 5704, 5705, 5708, 5712, 5713, 5721, 5722, 5723, 5741, 5754, 5761, 5762, 5763, 6301, 6302, 6313, 6404, 7101, 7212, 7342, 7606, 7652, 7805; 31 U.S.C. 9301, 9303, 9304, 9306.

Par. 7. Section 275.11 is amended to:

a. Remove the definition of

“cigarette papers”; and

b. Revise the definition of “manufacturer of cigarette papers and tubes” to read as follows:

§ 275.11

Meaning of terms.

* * * * *

Manufacturer of cigarette papers and tubes. Any person who manufactures cigarette paper, or makes up cigarette paper into tubes, except for his own personal use or consumption.

* * * * *

PART 295—[AMENDED]

Par. 8. The authority citation for 27 CFR part 295 continues to read as follows:

Authority: 26 U.S.C. 5703, 5704, 5705, 5723, 5741, 5751, 5762, 5763, 6313, 7212, 7342, 7606, 7805, 44 U.S.C. 3504(h).

Par. 9. Section 295.11 is amended to:

a. Remove the definition of “cigarette papers”; and

b. Revise the definition of “manufacturer of cigarette papers and tubes” to read as follows:

§ 295.11

Meaning of terms.

* * * * *

Manufacturer of cigarette papers and tubes. Any person who manufactures cigarette paper, or makes up cigarette paper into tubes, except for his own personal use or consumption.

* * * * *

Signed: July 17, 2001.

Bradley A. Buckles,

Director.

Approved: August 23, 2001.

Timothy E. Skud,

Acting Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).