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Federal Register / Vol. 86, No. 230 / Friday, December 3, 2021 / Proposed Rules
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a class and construction that is usual and customary in the industry to secure commercial property.
h. 27 CFR 19.673b6, 19.675b6, and 19.676b6. TTB proposes to amend the application requirements for alcohol fuel plant permits consistent with those described in the previous paragraph. The proposed amendments require, instead of narrative descriptions of the plants security measures, a certification that plant security will be in accordance with the requirements of 27 CFR 19.703 and 19.704.
C. Statements of Interest TTB proposes amendments to standardize and clarify the scope of the collection of information related to persons holding certain levels of ownership interest in an applicant business. These statements of interest are collected in accordance with statutory provisions setting forth eligibility criteria for obtaining such permits and/or registrations.
Information about persons with ownership interests in applicant businesses also assists TTB in the protection and collection of the revenue.
The FAA Act at 27 U.S.C. 204a2
provides that an applicant will not be entitled to a basic permit ifamong other reasonsthe applicant including the principal stockholders of a corporate applicant is, by reason of his or her business experience, financial standing, or trade connections, not likely to maintain operations in conformance with Federal law. Currently, TTB
practice has been to interpret a principal stockholder to be any person holding ten 10 percent or more of any class of stock in a corporation or of any class of ownership in any other limited liability entity.2
The IRC at 26 U.S.C. 5271c2
similarly provides that an application for a permit to use tax-free alcohol, or to use or deal in specially denatured distilled spirits, may be denied if among other reasonsthe applicant including any principal stockholders is, by reason of his or her business experience, financial standing, or trade connections, not likely to maintain operations in compliance with chapter 51 of the IRC. Pursuant to 26
U.S.C. 5171d, the eligibility criteria of section 5271c also apply to operating permit applications for DSPs that are not required to obtain an FAA Act basic permit, such as DSPs that produce distilled spirits for industrial use and alcohol fuel plants.
2 See TTB G 20186, Permits Online Tutorial at Owner/Officer Information, available at https
www.ttb.gov/ponl/ponl-tutorial-part-2-page-11.

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Further, the IRC at 26 U.S.C. 5172
requires that an application for a DSP
registration identify the applicant and persons interested in the business. This provision applies to DSPs whether or not they are required to obtain an FAA
Act basic permit. Note that, while alcohol fuel plants have separate application processes pursuant to 26
U.S.C. 5181, those application processes fulfill the qualification requirements of 26 U.S.C. 5171. Accordingly, TTB has implemented through regulation the requirement that alcohol fuel plant applicants report the principal persons involved in the business and/or the persons having an ownership interest in the business at 27 CFR 19.675 for medium plant permit applications and at 19.676 and 19.677 for large plant permit applications.3
TTB has promulgated regulations under the above IRC authorities requiring statements of interest at: 1 27
CFR 19.73, 19.92, and 19.93, for DSP
registrations and operating permits; 2
27 CFR 19.677, for large alcohol fuel plant permits; 3 27 CFR 20.42 and 20.45, for specially denatured spirits dealer and user permits; and 4 27 CFR
22.42 and 22.45, for tax-free alcohol user permits. Additionally, the application for an FAA Act basic permit requires a listing of the owners and principal stockholders of an applicant business, as well as details concerning their investment in the business. See 27
CFR 1.25, TTB F 5100.24 approved by the Office of Management and Budget under Information Collection number 15130018.
TTB proposes amendments to 19.93, 19.677, 20.45, and 22.45 to standardize the collection of the basic identifying information of persons with an interest in the applicants business.
The amendments provide that 1 the requirement to disclose basic identifying information i.e., names and addresses of persons with an ownership interest applies to persons with an ownership interest of 10 percent or greater; and 2 where a person holding such an interest is a legal entity other than an individual, the applicant must provide the name, title, and place of residence city and state of a representative individual for that entity.
The representative individual generally will be the individual designated by the entity to represent the entitys interest 3 In addition to the proposed amendments concerning statements of interest, TTB proposes to eliminate requirements at 19.675b8 and 19.676b8 to provide the Social Security Number and date and place of birth of each principal person involved in the alcohol fuel plant business. Names and addresses of such persons, as well as their titles with the applicant business, must still be reported.

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in the applicant business or, in the absence of a designated individual, an owner, chief officer or manager, or person with similar authority within the entity. TTB believes that this is the minimum amount of information required to allow TTB to identify the individuals with an interest in the applicant business and to evaluate the applicant as to its trade connections and financial standing, including in circumstances where business entities have substantial ownership interests in the applicant.
TTB proposes minor conforming amendments to 27 CFR 1.27, 1.42, 1.44, 19.114, 19.127, 19.130, 19.684, and 19.687 to incorporate the description of ownership interests set forth above into requirements for reporting changes in ownership interests. TTB also proposes conforming amendments to 27 CFR
1.24, 19.96, 19.678, and 31.114 to incorporate this description of ownership interests into regulations describing criteria for qualification or denial of permits.
D. 30-Day Filing Requirements for Certain Changes in the Business TTB proposes to extend the deadline for reporting certain changes in a permitted business to 60 days. The TTB
regulations generally require that when there is a change in the information filed with TTB as part of an application for a permit or registration under the FAA Act or IRC, the proprietor of the business must notify TTB of the change.
The timing and form of this notification differs depending on the type of permit or registration, and the type of business change that has occurred or will occur.
Some business changes must be reported to TTB within a certain amount of time following the change, generally within 30 days. For example, the TTB
regulations at 27 CFR 19.687 require that the proprietor of a medium or large alcohol fuel plant submit a letterhead notice to TTB within 30 days of any change to the list of officers, directors, members, managers, or other principal persons provided with the application for the permit.
In the case of a change in control of the business, a permit or registration may automatically terminate and/or become invalid following the change in control unless a new application is filed within 30 days of the change in control.
The TTB regulations generally provide for the outstanding permit to remain in effect pending a final decision on the new application, as long as that application is timely filed.
Comments received in response to Treasurys request for information, described above in section IA, suggest
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