Effective Date Changed for Imposition of Floor Stocks Tax on Certain ODCS--Temporary and Proposed Regs Under Section 4682

 ACTION: Temporary regulations.

 SUMMARY: This document contains temporary regulations relating to the floor stocks tax on chemicals that deplete the ozone layer. These temporary regulations amend temporary regulations that were published on January 2, 1991, to reflect changes to the law made by the Omnibus Budget Reconciliation Act of 1990. These temporary regulations affect persons, other than manufacturers and importers of ozone-depleting chemicals, holding such chemicals for sale or for use in further manufacture on January 1 of 1991, 1992, 1993, and 1994. The text of the temporary regulations set forth in this document also serves as the text of the proposed regulations for the notice of proposed rulemaking on this subject in the Proposed Rules section of this issue of the Federal Register.

 EFFECTIVE DATE: These regulations are effective on January 1, 1991.

 FOR FURTHER INFORMATION CONTACT: Ruth Hoffman, (202) 566-4475 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

BACKGROUND

This document contains amendments to the Environmental Tax Regulations (26 CFR part 52) relating to section 4682 of the Internal Revenue Code. Section 4682 was added to the Code by the Omnibus Budget Reconciliation Act of 1989 (Pub. L. 101-239) and amended by the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508). Temporary regulations relating to this section (as originally enacted) were published in the Federal Register for September 6, 1990. Temporary regulations relating to this section (as amended) were published in the Federal Register for January 2, 1991. This document amends those temporary regulations to reflect comments submitted in response to the Notices of Proposed Rulemaking that cross-referenced those temporary regulations.

NEED FOR TEMPORARY REGULATIONS

 Immediate guidance is needed on the floor stocks tax imposed with respect to ozone-depleting chemicals. Therefore, good cause is found to dispense with the public notice requirement of 5 U.S.C. 553(b) and the delayed effective date requirement of 5 U.S.C. 553(d).

ADDITIONS TO LIST OF OZONE-DEPLETING CHEMICALS

 Section 4681 imposes a tax on ozone-depleting chemicals (ODCs). The Omnibus Budget Reconciliation Act of 1990 expanded the list of ozone-depleting chemicals by adding carbon tetrachloride, methyl chloroform, CFC-13, CFC-111, CFC-112, CFC-211, CFC-212, CFC-213, CFC- 214, CFC-215, CFC-216, and CFC-217 (post-1990 ODCs). Temporary regulations published in the Federal Register for January 2, 1991, reflected the addition of post-1990 ODCs to the list of taxed chemicals.

FLOOR STOCKS TAX

 Section 4682(h) imposes a floor stocks tax on January 1 of 1990, 1991, 1992, 1993, and 1994. The regulations published September 6, 1990, provided that no floor stocks tax is imposed on January 1, 1991, 1992, 1993, and 1994 on an ODC that has been mixed with any other ingredients if it is established that the other ingredients contribute to the accomplishment of the purpose for which the mixture will be used. The regulations published January 2, 1991, however, modified this rule by providing a special rule for certain stabilized or inhibited ODCs. Under the regulations published January 2, 1991, floor stocks tax is imposed on ODCs that have been mixed with stabilizing or inhibiting agents and not with other ingredients. Thus, for example, methyl chloroform that has been stabilized to prevent chemical reactions during transportation or use is subject to the floor stocks tax on January 1, 1991, unless it also has been mixed with other ingredients that contribute to the accomplishment of the purpose for which the mixture will be used.

 In order to provide a period of public notice before the special rule for stabilized or inhibited ODCs becomes effective, these temporary regulations change its effective date to January 1, 1992.

SPECIAL ANALYSES

It has been determined that these rules are not major rules as defined in Executive Order 12291. Therefore, a Regulatory Impact Analysis is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) and the Regulatory Flexibility Act (5 U.S.C chapter 6) do not apply to these regulations, and therefore, a final Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, the notice of proposed rulemaking that cross-references to these regulations will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.

LIST OF SUBJECTS IN 26 CFR PART 52

Excise taxes, Chemicals, Petroleum.

Treasury Decision 8356

ADOPTION OF AMENDMENTS TO THE REGULATIONS

Accordingly, title 26, part 52 of the Code of Federal Regulations is amended as follows:

Paragraph 1. The authority for part 52 continues to read in part:

Authority: 26 U.S.C. 7805 * * *

Par. 2. Section 52.4682-4T is amended by revising paragraph (b)(2)(i)(B) to read as follows:

SECTION 52.4682-4T FLOOR STOCKS TAX (TEMPORARY).

* * * * *

(b) * * *

(2) * * *

(i) * * *

(B) * * *

(2) EXCEPTION. In the case of a floor stocks tax imposed on or after January 1, 1992, a mixture is not exempt from floor stocks tax under this paragraph (b)(2)(i)(B) if it contains only ODCs and one or more stabilizing or inhibiting agents.