[Federal Register Volume 64, Number 245 (Wednesday, December 22, 1999)]
[Rules and Regulations]
[Pages 71929-71934]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32602]



  Federal Register / Vol. 64, No. 245 / Wednesday, December 22, 1999 / 
Rules and Regulations  

[[Page 71929]]


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DEPARTMENT OF THE TREASURY

Bureau of Alcohol, Tobacco and Firearms

27 CFR Parts 270, 275, 290, 295, 296

[T.D. ATF--424]
RIN 1512-AB92


Implementation of Public Law 105-33, Section 9302, Relating to 
the Imposition of Permit Requirements on the Manufacturer of Roll-Your-
Own Tobacco (98R-370P)

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

ACTION: Temporary rule (Treasury decision).

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SUMMARY: This temporary rule implements the provision of the Balanced 
Budget Act of 1997 relating to the new permit requirements on the 
manufacture of roll-your-own tobacco. This temporary rule also removes 
references to forms which have previously been made obsolete, and 
renumbers certain forms to reflect the current ATF numbering system. In 
the Proposed Rules section of this Federal Register, ATF is also 
issuing a notice of proposed rulemaking inviting comments on this 
temporary rule for a 60-day period following the publication of this 
temporary rule.

DATES: Effective date: December 22, 1999.

FOR FURTHER INFORMATION CONTACT: Robert P. Ruhf, Regulations Division, 
650 Massachusetts Avenue, NW, Washington, DC 20226; (202) 927-8210; or 
alc/[email protected].

SUPPLEMENTARY INFORMATION:

Background

    This temporary rule implements the provision of the Balanced Budget 
Act of 1997, Public Law 105-33 (``the Act''), enacted on August 5, 1997 
relating to roll-your-own tobacco. Section 9302 of the Act amends the 
Internal Revenue Code of 1986 (IRC), 26 U.S.C. 5701 and 5702 by 
imposing new permit requirements on the manufacture of roll-your-own 
tobacco.
    This temporary rule also makes minor changes to remove references 
to obsolete forms and to replace old form numbers with current ATF form 
numbers. This rule also corrects the title of part 270 of title 27 CFR 
to include manufacturers of cigarette papers and tubes.

Roll-Your-Own Tobacco

    Roll-your-own tobacco is defined in the Act to mean ``any tobacco 
which because of its appearance, type, packaging, or labeling, is 
suitable for use and likely to be offered to, or purchased by, 
consumers as tobacco for making cigarettes.'' On or after January 1, 
2000, manufacturers of roll-your-own tobacco are required to hold a 
permit. Section 9302(i)(2) of the Act also contains a transitional rule 
which allows those who on the date of enactment, August 5, 1997, were 
engaged in the manufacture of roll-your-own tobacco and who make an 
application for a permit prior to January 1, 2000, to continue to 
engage in such business pending final action on the application. In 
addition, by amending the definitions of the terms ``Tobacco products'' 
and ``Manufacturer of tobacco products'' to include roll-your-own 
tobacco, the Act subjects manufacturers of such products to all the 
statutory and regulatory controls set forth in chapter 52 of IRC. These 
controls include tax payment, permit qualification, bonding, 
recordkeeping, and civil and criminal sanctions. This rule contains 
temporary regulations implementing the provisions of section 9302 of 
the Balanced Budget Act of 1997 described above. In addition, this 
temporary rule prescribes the packages, marks, labels, and notice 
requirements for roll-your-own tobacco.
    Specifically, these regulations require that every package of roll-
your-own tobacco shall, before removal subject to tax, have imprinted 
thereon or on a label securely affixed to the package the designation 
``roll-your-own tobacco,'' as well as a statement of the pounds and 
ounces of the product contained in the package. As an alternative to 
the designation ``roll-your-own tobacco,'' the package may be 
designated ``Tax Class J.'' The Bureau believes that allowing the use 
of this alternative designation will adequately protect the revenue by 
distinguishing the roll-your-own tobacco class from the other classes 
of tobacco products. This also facilitates the relabeling of many 
tobacco products which are subject to tax but which are currently 
labeled as ``smoking tobacco'' rather than roll-your-own tobacco.
    This document also contains a use-up rule for packages for roll-
your-own tobacco. It allows manufacturers to place roll-your-own 
tobacco in packages that do not meet the mandatory marking 
requirements. Under this use-up rule, until April 1, 2000, a 
manufacturer may continue to place roll-your-own tobacco in packages 
that were in use prior to January 1, 2000.

Title Change of Part 270

    The title of 27 CFR part 270 is being changed to properly reflect 
the contents of this part. On October 17, 1996, Treasury Decision ATF-
384 was published in the Federal Register (61 FR 54084). This decision 
eliminated Part 285, Manufacturers of Cigarette Papers and Tubes, by 
merging the contents into part 270 under a new subpart K. As a result 
of this action, the title to part 270 should have been changed to 
properly reflect regulations on the manufacture of tobacco products and 
the manufacture of cigarette papers and tubes.

Obsolete Forms

    Changes to the regulations are being made to remove references to 
obsolete forms. First this removes the reference to ATF Form 2988 
(5200.8), Deferred Tax Return--Puerto Rican Cigars and Cigarettes. This 
form was eliminated by Treasury Decision ATF-277 published in the 
Federal Register on November 9, 1988 (53 FR 45266) with the 
implementation of ATF Form 5000.25, Excise Tax Return--Alcohol and 
Tobacco (Puerto Rico). References to ATF Form 2137 (5230.7), Monthly 
Tax Return--Manufacturer of Cigarette Papers and Tubes, and ATF Form 
3071 (5210.7), Tax Return-Manufacturer of Tobacco Products, are also 
removed from the regulations. These forms were made obsolete by 
Treasury Decision ATF-219 published in the Federal Register on December 
17, 1985 (50 FR 51386) with the implementation of ATF Form 5000.24, 
Excise Tax Return, for domestic producers. References to ATF Forms 
3065, Record of Large Cigars, and 3066, Record of Small Cigars, are 
removed as these forms were inadvertently not removed from the 
regulations when such recordkeeping requirements were deemed no longer 
necessary.

Renumbered ATF Forms

    Minor changes are made to reflect the correct ATF form number on 
certain forms. The regulation citation and form changes are as follows:

------------------------------------------------------------------------
      Reglation cite in 27 CFR        Old form number   New form number
------------------------------------------------------------------------
290.147............................              2140            5220.4
275.86.............................              2145            5200.11

[[Page 71930]]

 
290.222, 290.224 through 290.227,                2147            5620.7
 290.232...........................
270.201............................              3067            5210.9
270.202, 275.141...................              3068            5210.5
270.311, 270.476, 275.170, 275.172.     3069 (5200.7)            5200.7
------------------------------------------------------------------------

Regulatory Flexibility Act

    Because no notice of proposed rulemaking is required, the 
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do 
not apply. Moreover, any 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 temporary regulation will be submitted to the 
Chief Counsel for Advocacy of the Small Business Administration for 
comment on its impact on small business.

Executive Order 12866

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

Paperwork Reduction Act

    This regulation is being issued without prior notice and public 
procedure pursuant to the Administrative Procedure Act (5 U.S.C. 553). 
For this reason, the collection of information contained in this 
regulation has been reviewed under the requirements of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3507(j)), and pending receipt and 
evaluation of public comments, approved by the Office of Management and 
Budget (OMB) under control numbers 1512-0358 and 1512-0502. 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 OMB.
    The collection information in this regulation is found in 27 CFR 
270.182, 270.183, 270.216a, 275.72b, and 295.45b. This information is 
required to ensure proper payment of excise tax on roll-your-own 
tobacco products.
    For further information concerning this collection of information, 
and where to submit comments on the collection of information, refer to 
the preamble of the cross-referenced notice of proposed rulemaking 
published in the proposed rules section of this Federal Register.

Administrative Procedure Act

    This document merely implements sections of the law that were 
enacted on August 5, 1997, and immediate guidance is necessary to 
implement the provisions of the law. Therefore, it is found to be 
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 under 5 U.S.C. 553(d).

Drafting Information

    The principal author of this document is Jackie White, of the 
Regulations Division, Bureau of Alcohol, Tobacco and Firearms.

List of Subjects

27 CFR Part 270

    Administrative practice and procedure, Authority delegations, 
Cigarette papers and tubes, Claims, Electronic fund transfer, Excise 
taxes, Labeling, Packaging and containers, Penalties, Reporting 
requirements, Seizures and forfeitures, Surety bonds, Tobacco products.

27 CFR Part 275

    Administrative practice and procedure, Authority delegations, 
Cigarette papers and tubes, Claims, Customs duties and inspection, 
Electronic fund transfer, Excise taxes, Imports, Labeling, Packaging 
and containers, Penalties, Reporting requirements, Seizures and 
forfeitures, Surety bonds, Tobacco products, U.S. possessions, 
Warehouses.

27 CFR Part 290

    Administrative practice and procedure, Aircraft, Authority 
delegations, Cigarette papers and tubes, Claims, Customs duties and 
inspection, Excise taxes, Exports, Foreign trade zones, Labeling, 
Packaging and containers, Penalties, Surety bonds, Tobacco products, 
Vessels, Warehouses.

27 CFR Part 295

    Administrative practice and procedure, Authority delegations, 
Cigarette papers and tubes, Excise taxes, Labeling, Packaging and 
containers, Tobacco products.

27 CFR Part 296

    Authority delegations, Cigarette papers and tubes, Claims, Disaster 
assistance, Excise taxes, Floor stocks tax, Penalties, Seizures and 
forfeitures, Surety bonds, Tobacco products.

Authority and Issuance

    Accordingly, title 27 of the Code of Federal Regulations is amended 
as follows:

PART 270--MANUFACTURE OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND 
TUBES

    Paragraph 1. The heading of part 270 is revised to read as set 
forth above:
    Par. 2. The authority citation for part 270 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. 3. Section 270.11 is amended by adding the definition for 
``Roll-your-own tobacco'' and by revising the definitions 
``Manufacturer of tobacco products'' and ``Tobacco products'' to read 
as follows:


Sec. 270.11  Meaning of terms.

* * * * *
* * * * *
    Manufacturer of tobacco products. Any person who manufactures 
cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own 
tobacco but does not include:
    (1) A person who produces tobacco products solely for that person's 
own consumption or use; or
    (2) A proprietor of a Customs bonded manufacturing warehouse with 
respect to the operation of such warehouse.
* * * * *
    Roll-your-own tobacco. Any tobacco which, because of its 
appearance, type, packaging, or labeling, is suitable for use and 
likely to be offered to, or purchased by, consumers as tobacco for 
making cigarettes.
* * * * *
    Tobacco products. Cigars, cigarettes, smokeless tobacco, pipe 
tobacco, and roll-your-own tobacco.
* * * * *
    Par. 4. Subpart E is amended by removing Sec. 270.61b and by 
revising Sec. 270. 61a to read as follows:

[[Page 71931]]

Subpart E--Qualification Requirements for Manufacturers


Sec. 270.61a  Transitional rule.

    Any person who:
    (a) On August 5, 1997, was engaged in business as a manufacturer of 
roll-your-own tobacco, and
    (b) Before January 1, 2000, submits an application as provided in 
this part to engage in such business, may continue to engage in such 
business pending final action on such application. Pending such final 
action, all provisions of chapter 52 of the Internal Revenue Code of 
1986 shall apply to such applicant in the same manner and to the same 
extent as if such applicant were a holder of a permit to manufacture 
roll-your-own tobacco under such chapter 52.


Sec. 260.61b   [Removed]

    Par. 5. Section 270.133 is amended by revising the third sentence 
to read as follows:


Sec. 270.133  Amount of individual bond.

    * * * The amount of any such bond (or the total amount including 
strengthening bonds, if any) need not exceed $250,000 for a 
manufacturer producing or receiving cigarettes in bond; need not exceed 
$150,000 for a manufacturer producing or receiving cigars, smokeless 
tobacco, pipe tobacco, or roll-your-own tobacco in bond; and need not 
exceed $250,000 for a manufacturer producing or receiving, any 
combination of tobacco products in bond. * * *
    Par. 6. Section 270.181 is revised to read as follows:


Sec. 270.181  General.

    Every manufacturer of tobacco products must keep records of his 
operations and transactions which shall reflect, for each day, the 
information specified in Sec. Sec. 270.182 and 270.183. For this 
purpose day shall mean calendar day, except that the regional director 
(compliance) may, upon application of the manufacturer by letter, in 
duplicate, authorize as such day for a factory a 24-hour cycle of 
operation other than the calendar day. A day once so established as 
other than the calendar day may be changed only by another application 
approved by the regional director (compliance). No specific form is 
required. The manufacturer may use commercial records from which the 
required information may be readily ascertained for this purpose. The 
manufacturer shall keep the auxiliary and supplemental records from 
which such records are compiled and shall keep supporting records, as 
specified in Sec. Sec. 270.184 and 270.186, of tobacco products removed 
subject to tax and transferred in bond. Except as provided in 
Sec. Sec. 270.184 and 270.186, the entries in the commercial records so 
maintained or kept shall be made not later than the close of the next 
business day following the day on which the transaction(s) occurred. As 
used in this section the term business day shall mean any day other 
than Saturday, Sunday, a legal holiday in the District of Columbia, or 
a statewide legal holiday in the State wherein the factory to which the 
records relate is located.
    Par. 7. Section 270.182 is amended by revising paragraph (a) to 
read as follows:


Sec. 270.182  Record of tobacco.

* * * * *
    (a) Received (including tobacco resulting from reduction of cigars 
and cigarettes, and unpackaging of smokeless tobacco, pipe tobacco and 
roll-your-own tobacco), together with the name and address of the 
person from whom received;
* * * * *
    Par. 8. Section 270.183 is amended by revising the introductory 
text to read as follows:


Sec. 270.183  Record of tobacco products.

    The record of a manufacturer of tobacco products shall show the 
date and total quantities of all tobacco products, by kind (small 
cigars-large cigars; small cigarettes-large cigarettes; chewing 
tobacco-snuff; pipe tobacco; roll-your-own tobacco): * * *
* * * * *


Sec. 270.201   [Amended]

    Par. 9. Section 270.201 is amended by removing the reference to 
``Form 3067'' and adding in its place the reference ``Form 5210.9'' 
wherever it appears.


Sec. 270.202   [Amended]

    Par. 10. Section 270.202, introductory text, is amended by removing 
the reference to ``Form 3068'' and adding in its place the reference 
``Form 5210.5'' wherever it appears.


Sec. 270.216a  [Removed]


Sec. 270.216b  [Redesignated as Sec. 270.216a]

    Par. 11. Section 270.216a is removed, Sec. 270.216b is redesignated 
as Sec. 270.216a and a new Sec. 270.216b is added to read as follows:


Sec. 270.216b  Notice for roll-your-own tobacco.

    (a) Product designation. Every package of roll-your-own tobacco 
shall, before removal subject to tax, have adequately imprinted 
thereon, or on a label securely affixed thereto, the designation 
``roll-your-own tobacco.'' As an alternative, packages of roll-your-own 
tobacco may be designated ``Tax Class J.''
    (b) Product weight. Every package of roll-your-own tobacco shall, 
before removal subject to tax, have adequately imprinted thereon, or on 
a label securely affixed thereto, a clear statement of the actual 
weight in pounds and ounces of the product contained therein.

(Approved by the Office of Management and Budget under control 
number 1512-0502)

    Par. 12. Section 270.216c is revised to read as follows:


Sec. 270.216c  Package use-up rule.

    Until April 1, 2000, manufacturers of roll-your-own tobacco, may 
continue to place roll-your-own tobacco in packages that do not meet 
the marking requirements of Sec. Sec. 270.212 and 216b. The 
manufacturer must have used such packaging for roll-your-own tobacco 
before January 1, 2000.
    Par. 13. The second sentence of Sec. 270.231 is revised to read as 
follows:


Sec. 270.231  Consumption by employees.

    * * * Each employee may also be gratuitously furnished by the 
manufacturer, for off-factory personal consumption, not more than 5 
large cigars or cigarettes, 20 small cigars or cigarettes, or one 
retail package of chewing tobacco, snuff, pipe tobacco or roll-your-own 
tobacco, or a proportionate quantity of each, without determination and 
payment of tax, on each day the employee is at work. * * *
* * * * *
    Par. 14. The second sentence of Sec. 270.252 is revised to read as 
follows:


Sec. 270.252  Reduction of tobacco products to materials.

    * * * If the tobacco products have been entered in the factory 
record as manufactured or received, an entry shall be made in such 
record of the quantity of pipe tobacco or roll-your-own tobacco and the 
kind and quantity of cigars, cigarettes, and smokeless tobacco reduced 
to materials and of the quantity of tobacco resulting from the 
reduction. * * *
    Par. 15. The first sentence of Sec. 270.255 is revised to read as 
follows:


Sec. 270.255  Shortages and overages in inventory.

    Whenever a manufacturer of tobacco products makes a physical 
inventory of packaged tobacco products in bond, either as part of 
normal operations or when required by an ATF officer, and such 
inventory discloses a shortage or overage in such products by kind as 
recorded and reported (i.e., small cigars, large cigars, chewing 
tobacco, snuff,

[[Page 71932]]

pipe tobacco, or roll-your-own tobacco), the manufacturer shall enter 
such shortage or overage in the records required by Sec. 270.183. * * *
* * * * *


Sec. 270.311   [Amended]

    Par. 16. Section 270.311 is amended by removing the reference 
``Form 3069 (5200.7)'' and adding in its place the reference ``Form 
5200.7'' wherever it appears.


Sec. 270.476   [Amended]

    Par. 17. Section 270.476 is amended by removing the reference 
``Form 3069 (5200.7)'' and adding in its place the reference ``Form 
5200.7'' wherever it appears.

PART 275--IMPORTATION OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND 
TUBES

    Par. 18. The authority citation for part 275 continues to read as 
follows:

    Authority: 26 U.S.C. 5701, 5703-5705, 5708, 5722, 5723, 5741, 
5761-5763, 6301, 6302, 6313, 6404, 7101, 7212, 7342, 7606, 7652, 31 
U.S.C. 9301, 9303, 9304, 9306.

    Par. 19. Section 275.11 is amended by revising the definitions of 
``Computation or computed,'' ``Manufacturer of tobacco products,'' and 
``Tobacco products,'' and by adding a definition for ``Roll-your-own 
tobacco'' to read as follows:


Sec. 275.11  Meaning of terms.

* * * * *
    Computation or computed. When used with respect to the tax on 
tobacco products of Puerto Rican manufacture, computation or computed 
shall mean that the bonded manufacturer has ascertained the quantity 
and kind (small cigars, large cigars, small cigarettes, large 
cigarettes, chewing tobacco, snuff, pipe tobacco, or roll-your-own 
tobacco) of tobacco products and the sale price of large cigars being 
shipped to the United States; that adequate bond has been posted to 
cover the payment, in Puerto Rico, of the tax on such products to be 
deferred under subpart G of this part; that the tax imposed on such 
products by 26 U.S.C. 7652(a) has been calculated; that the bonded 
manufacturer has executed an agreement to pay the internal revenue tax 
which will become due with respect to such products, as provided in 
this part; and that an ATF officer has verified and executed a 
certification of such calculation.
* * * * *
    Manufacturer of tobacco products. Any person who manufactures 
cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own 
tobacco but does not include:
    (1) A person who produces tobacco products solely for that person's 
own consumption or use; or
    (2) A proprietor of a Customs bonded manufacturing warehouse with 
respect to the operation of such warehouse.
* * * * *
    Roll-your-own tobacco. Any tobacco which, because of its 
appearance, type, packaging, or labeling, is suitable for use and 
likely to be offered to, or purchased by, consumers as tobacco for 
making cigarettes.
* * * * *
    Tobacco products. Cigars, cigarettes, smokeless tobacco, pipe 
tobacco, and roll-your-own tobacco.
    Par. 20. A new Sec. 275.72b is added to read as follows:


Sec. 275.72b  Notice for roll-your-own tobacco.

    (a) Product designation. Every package of roll-your-own tobacco 
shall, before removal subject to tax, have adequately imprinted 
thereon, or on a label securely affixed thereto, the designation 
``roll-your-own tobacco.'' As an alternative, packages of roll-your-own 
tobacco may be designated ``Tax Class J.''
    (b) Product weight. Every package of roll-your-own tobacco shall, 
before removal subject to tax, have adequately imprinted thereon, or on 
a label securely affixed thereto, a clear statement of the actual 
weight in pounds and ounces of the product contained therein.

(Approved by the Office of Management and Budget under control number 
1512-0502)

    Par. 21. Section 275.81 is amended by adding a new paragraph (c)(7) 
to read as follows:


Sec. 275.81  Taxpayment.

* * * * *
    (c) * * *
    (7) For roll-your-own tobacco: The importer will show the 
designation ``roll-your-own'' or ``Tax Class J'', the number of pounds 
and ounces, the rate of tax and the amount of tax due.
* * * * *


Sec. 275.86  [Amended]

    Par. 22. Section 275.86 is amended by removing the reference to 
``Form 2145'' and adding in its place the reference ``Form 5200.11'' 
wherever it appears.
    Par. 23. Section 275.107 is revised to read as follows:


Sec. 275.107  Procedures at port of entry.

    (a) The port director of customs at the port of entry will inspect 
the shipment to determine whether the quantity specified on the Form 
3075 is contained in the shipment. He will then execute his certificate 
on the three copies of the Form 3075 in his possession, and indicate on 
each copy any exceptions found at the time of release.
    (b) The statement of exceptions shall identify each shipping 
container which sustained a loss; the tobacco products and cigarette 
papers and tubes reported shipped in such container; and the tobacco 
products and cigarette papers and tubes lost from such container. 
Losses occurring as the result of missing packages, cases, or shipping 
containers shall be listed separately from losses caused by damage.
    (c) Where the statement is made on the basis of tobacco products or 
cigarette papers or tubes missing or damaged, the port director of 
customs shall show:
    (1) The numbers of small cigarettes, large cigarettes, and small 
cigars.
    (2) The number and total sale price of large cigars with a sale 
price of not more than $235.294 per thousand,
    (3) The number of large cigars with a sale price of more than 
$235.294 per thousand,
    (4) The number of books or sets of cigarette papers of each 
different numerical content.
    (5) The number of cigarette tubes,
    (6) The pounds and ounces of chewing tobacco and snuff,
    (7) The pounds and ounces of pipe tobacco, and roll-your-own 
tobacco.
    (d) If the port director of customs finds that the full amount of 
the tax has not been prepaid, he will require the difference due to be 
paid to him prior to release of the tobacco products and cigarette 
papers and tubes. When the inspection of the shipment has been 
effected, and any additional tax found to be due has been paid to the 
port director of customs, the shipment may be released.
    Par. 24. Section 275.110 is amended by revising paragraph (e) to 
read as follows:


Sec. 275.110  Computation of tax and execution of agreement to pay tax.

    * * * (e) the pounds and ounces of pipe tobacco or roll-your-own 
tobacco to be shipped, * * *
* * * * *
    Par. 25. Section 275.117 is amended by revising paragraph (e) to 
read as follows:


Sec. 275.117  Procedure at port of entry.

    * * * (e) the pounds and ounces of pipe tobacco or roll-your-own 
tobacco.
* * * * *
    Par. 26. Section 275.121 is amended by revising the first sentence, 
and the last sentence to read as follows:

[[Page 71933]]

Sec. 275.121  Amount of bond.

    In order that tobacco products may be shipped to the United States 
on computation of tax under the provisions of this subpart, the total 
amount of the bond or bonds shall at all times be in an amount not less 
than the amount of unpaid tax chargeable at any one time against the 
bond: Provided, That the amount of any such bond need not exceed 
$250,000 where payment of tax on cigarettes or on any combination of 
tobacco products is deferred; and need not exceed $150,000 where the 
tax on cigars, smokeless tobacco, pipe tobacco, or roll-your-own 
tobacco is deferred. * * * The manufacturer shall charge such account 
with the amount of tax that was agreed to be paid on Form 2987. The 
manufacturer must credit the account for the amount paid on Form 
5000.25, at the time the tax return is filed.
    Par. 27. Section 275.139 is amended by revising paragraph (a) to 
read as follows:


Sec. 275.139  Records.

* * * * *
    (a) Date, quantity, kind of cigars, cigarettes, smokeless tobacco, 
pipe tobacco and roll-your-own tobacco (number of small cigars--large 
cigars; number of small cigarettes--large cigarettes; pounds and ounces 
of chewing tobacco--snuff; pounds and ounces of pipe tobacco--roll-
your-own tobacco).
* * * * *
    Par. 28. Section 275.140 is amended by revising the last sentence 
and adding a sentence to read as follows:


Sec. 275.140  Taxpayment in the United States.

* * * * *
    Such tobacco products and cigarettes papers and tubes shall be 
separately listed and identified as articles of Puerto Rican 
manufacture on Form 5000.24. The amount of tax paid on such articles 
shall be separately stated on Form 5000.24.


Sec. 275.141  [Amended]

    Par. 29. Section 275.141 is amended by removing the reference 
``Form 3068'' and adding in its place the reference ``Form 5210.5'' 
wherever it appears.


Secs. 275.170 and 275.172  [Amended]

    Par. 30. Remove the reference ``Form 3069 (5200.7)'' and add in 
place of it the reference ``Form 5200.7'' wherever it appears in the 
following sections:
    (a) 275.170; and
    (b) 275.172.

PART 290--EXPORTATION OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND 
TUBES, WITHOUT PAYMENT OF TAX, OR WITH DRAWBACK OF TAX

    Par. 31. The authority citation for part 290 continues to read as 
follows:

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

    Par. 32. Section 290.11 is amended by adding the definition for 
``Roll-your-own tobacco,'' and by revising the definitions for 
``Manufacturer of tobacco products,'' and ``Tobacco products'' to read 
as follows:


Sec. 290.11  Meaning of terms.

* * * * *
    Manufacturer of tobacco products. Any person who manufactures 
cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own 
tobacco but does not include:
    (1) A person who produces tobacco products solely for that person's 
own consumption or use; or
    (2) A proprietor of a Customs bonded manufacturing warehouse with 
respect to the operation of such warehouse.
* * * * *
    Roll-your-own tobacco. Any tobacco which, because of its 
appearance, type, packaging, or labeling, is suitable for use and 
likely to be offered to, or purchased by, consumers as tobacco for 
making cigarettes.
* * * * *
    Tobacco products. Cigars, cigarettes, smokeless tobacco, pipe 
tobacco, and roll-your-own tobacco.
* * * * *
    Par. 33. Section 290.143 is amended by revising paragraph (a) to 
read as follows:


Sec. 290.143  General.

    (a) Every export warehouse proprietor shall at the times specified 
in this subpart make a true and accurate inventory of products held on 
ATF Form 5220.3 (3373). This inventory must be submitted to the 
Regional Director (Compliance), and must specify the following:
    (1) The number of small cigars, large cigars, small cigarettes, 
large cigarettes, cigarette papers, and cigarette tubes held by such 
proprietor at the times specified in this subpart.
    (2) The pounds and ounces of chewing tobacco, snuff, pipe tobacco 
and roll-your-own tobacco held by such proprietor at the times 
specified in this subpart.
    (b) * * *
* * * * *


Sec. 290.147  [Amended]

    Par. 34. Section 290.147 is amended by removing the reference to 
``Form 2140'' and add in its place the reference ``Form 5220.4''.


Secs. 290.222, 290.224, 290.225, 290.226, 290.227, and 
290.232  [Amended]

    Par. 35. Remove the reference to ``Form 2147'' and add in its place 
the reference ``Form 5620.7'' wherever it appears in the following 
sections:
    (a) Section 290.222;
    (b) Section 290.224;
    (c) Section 290.225;
    (d) Section 290.226;
    (e) Section 290.227; and
    (f) Section 290.232.

PART 295--REMOVAL OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND 
TUBES, WITHOUT PAYMENT FOR USE OF THE UNITED STATES

    Par. 36. The authority citation for 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. 37. Section 295.11 is amended by adding the definition for 
``Roll-your-own tobacco'', and by revising the definitions for 
``Manufacturer of tobacco products,'' and ``Tobacco products'' to read 
as follows:


Sec. 295.11  Meaning of terms.

* * * * *
    Manufacturer of tobacco products. Any person who manufactures 
cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own 
tobacco but does not include:
    (1) A person who produces tobacco products solely for that person's 
own consumption or use; or
    (2) A proprietor of a Customs bonded manufacturing warehouse with 
respect to the operation of such warehouse.
* * * * *
    Roll-your-own tobacco. Any tobacco which, because of its 
appearance, type, packaging, or labeling, is suitable for use and 
likely to be offered to, or purchased by, consumers as tobacco for 
making cigarettes.
* * * * *
    Tobacco products. Cigars, cigarettes, smokeless tobacco, pipe 
tobacco, and roll-your-own tobacco.
* * * * *
    Par. 38. Section 295.45b is revised to read as follows:

[[Page 71934]]

Sec. 295.45b  Notice for roll-your-own tobacco.

    (a) Product designation. Every package of roll-your-own tobacco 
shall, before removal subject to tax, have adequately imprinted 
thereon, or on a label securely affixed thereto, the designation 
``roll-your-own tobacco.'' As an alternative, packages of roll-your-own 
tobacco may be designated ``Tax Class J''.
    (b) Product weight. Every package of roll-your-own tobacco shall, 
before removal subject to tax, have adequately imprinted thereon, or on 
a label securely affixed thereto, a clear statement of the actual 
weight in pounds and ounces of the product contained therein.

(Approved by the Office of Management and Budget under control 
number 1512-0502)

    Par. 39. Section 295.45c is added to read as follows:


Sec. 295.45c  Package use-up rule.

    Until April 1, 2000, manufacturers of roll-your-own tobacco, may 
continue to place roll-your-own tobacco in packages that do not meet 
the marking requirements of Secs. 270.212 and 216b. The manufacturer 
must have used such packaging for roll-your-own tobacco before January 
1, 2000.

PART 296--MISCELLANEOUS REGULATIONS RELATING TO TOBACCO PRODUCTS 
AND CIGARETTE PAPERS AND TUBES

    Par. 40. The authority citation for part 296 continues to read as 
follows:

    Authority: 18 U.S.C. 2341-2346, 26 U.S.C. 5708, 5751, 5761-5763, 
6001, 6601, 6621, 6622, 7212, 7342, 7602, 7606, 7805, 44 U.S.C. 
3504(h), 49 U.S.C. 782.

    Par. 41. Section 296.72 is amended by revising the definitions for 
``Tobacco Products'' to read as follows:


Sec. 296.72  Meaning of Terms.

* * * * *
    Tobacco Products. Cigars, cigarettes, smokeless tobacco, pipe 
tobacco, and roll-your-own tobacco.
* * * * *


Sec. 296.74  [Amended]

    Par. 42. The second sentence of Sec. 296.74 is amended by adding 
the words ``and roll-your-own-tobacco'' after the term ``pipe 
tobacco''.
    Par. 43. Section 296.163 is amended by revising the definitions for 
``Manufacturer of tobacco products'' and ``Tobacco products'' to read 
as follows:


Sec. 296.163  Meaning of terms.

* * * * *
    Manufacturer of tobacco products. Any person who manufactures 
cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own 
tobacco but does not include:
    (1) A person who produces tobacco products solely for that person's 
own consumption or use; or
    (2) A proprietor of a Customs bonded manufacturing warehouse with 
respect to the operation of such warehouse.
* * * * *
    Tobacco Products. Cigars, cigarettes, smokeless tobacco, pipe 
tobacco, and roll-your-own tobacco.
* * * * *
    Signed: August 13, 1999.
John W. Magaw,
Director.

    Approved: October 27, 1999.
John P. Simpson,
Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).
[FR Doc. 99-32602 Filed 12-21-99; 8:45 am]
BILLING CODE 4810-31-U