OMB No. 1513-0013 Supporting Statement (01-2022)

DEPARTMENT OF THE TREASURY

ALCOHOL AND TOBACCO TAX AND TRADE BUREAU

Supporting Statement –– Information Collection Request

OMB Control Number 1513–0013

Change in Bond (Consent of Surety)

A. Justification

1. What are the circumstances that make this collection of information necessary, and what legal or administrative requirements necessitate the collection? Also align the information collection to TTB’s Line of Business/Sub-function and IT Investment, if one is used.

The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers chapter 51 (distilled spirits, wines, and beer), chapter 52 (tobacco products, processed tobacco, and cigarette papers and tubes), and sections 4181–4182 (firearms and ammunition excise taxes) of the Internal Revenue Code of 1986 (IRC; 26 U.S.C). TTB administers those IRC provisions pursuant to section 1111(d) of the Homeland Security Act of 2002, as codified at 6 U.S.C. 531(d). In addition, the Secretary of the Treasury (the Secretary) has delegated certain IRC administrative and enforcement authorities to TTB through Treasury Order 120–01.

To ensure that revenue generated by the Federal excise taxes imposed on alcohol and tobacco products under chapters 51 and 52 of the IRC is not jeopardized, the IRC at 26 U.S.C. 5114(b), 5173, 5272, 5354, 5401(b), and 5711 requires certain alcohol and tobacco industry proprietors to post a bond, under such regulations as the Secretary may prescribe. Under those IRC authorities, the TTB regulations require certain alcohol and tobacco industry members to file collateral or surety bonds, which, as information collections, are approved under various OMB control numbers. ¹ If a proprietor should default on payment of any alcohol or tobacco excise taxes, those bond requirements ensure payment of any taxes due.

In addition, for surety bonds, if an alcohol or tobacco industry member’s activities or circumstances change from those covered by an existing bond, the TTB regulations allow for the filing of a consent of surety to such changes (also referred to as an extension of coverage), in lieu of a new bond. Under the TTB regulations, a description of the changes to a proprietor’s bond and the consent of the surety to those changes is filed with TTB using form TTB F 5000.18, Change in Bond (Consent of Surety), which is approved under this OMB control number, 1513–0013. The proprietor and the bond’s surety company execute TTB F 5000.18 in the same manner as a surety bond, and it has the same legal authority as the original bond.

The following TTB regulations in 27 CFR allow or require the filing of TTB F 5000.18 to report changes in bonds with consent of sureties to those changes:

17.106 17.108 18.39 18.40 19.59 19.60

19.116 19.117 19.118 19.132 19.133 19.134

19.141 19.143 19.155 19.168 19.428 19.454

19.459 19.688 19.689 19.690 19.692 19.693

24.101 24.108 24.125 24.128 24.129 24.135

24.136 24.145 24.146 24.148 24.152 24.154

24.291 25.72 25.73 25.77 25.81 25.92

25.95 25.271 26.61 26.64 26.70 28.51

28.54 28.58 28.62 28.64 28.67 28.151

28.160 40.101 40.137 40.396 40.397 40.407

40.408 41.85 41.114a 41.124 44.104 44.108

44.126 and 44.231.

This information collection is aligned with ––

• Line of Business/Sub-function: General Government/Taxation Management.

• IT Investment: Tax Major Application System.

2. How, by whom, and for what purpose is this information used?

If the activities or circumstances of a TTB-regulated alcohol or tobacco industry member’s operations change from those covered by an existing surety bond agreement, the proprietor and surety company may file form TTB F 5000.18, Change in Bond (Consent of Surety), with TTB in lieu of a new bond. This form acts as an extension of the bond, identifying new activities or conditions previously not specified on the bond. TTB uses the collected information to identify the proprietor and surety company involved, the bond being changed, and the new activities or conditions previously not specified on the original bond. This information is necessary to protect the revenue.

3. To what extent does this collection of information involve the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology? What consideration is given to use information technology to reduce burden?

A respondent may electronically upload and submit a completed and signed copy of TTB F 5000.18 using TTB’s Permits Online (PONL) system (https://www.ttb.gov/ponl/customer-support). The PONL system allows the submission of original and amended permit applications, along with any required supplemental forms such as bonds and consents of sureties. The submission of TTB F 5000.18 via PONL speeds the submission process of that form for respondents. In addition, TTB F 5000.18 is available on the TTB website as a fillable-printable form (https://www.ttb.gov/forms).

4. What efforts are used to identify duplication? Can similar information already available be used or modified for use for the purposes described in Item 2 above?

TTB F 5000.18 collects information that is pertinent to each respondent and specific to changes to a respondent’s bond and the consent of the bond’s surety to those changes. As far as TTB can determine, information regarding changes to bonds and the relevant surety’s consent to those changes is not available to TTB elsewhere.

5. If this collection of information impacts small businesses or other small entities, what methods are used to minimize burden?

In general, to protect the revenue, the IRC requires alcohol and tobacco industry members to furnish bonds to protect the revenue. However, the IRC now exempts small alcohol beverage producers, defined as those eligible to file tax returns on an annual or quarterly basis, from its bond requirements.² Therefore, such small entities no longer need to use TTB F 5000.18, as they are no longer required to file a bond. Since small alcohol beverage producers previously made up the largest group of respondents to this collection, TTB believes that this information request does not effect a significant number of small entities.

For those TTB-regulated businesses still required to furnish a bond, TTB believes that TTB F 5000.18 provides flexibility to all entities, regardless of size, as the form provides for an extension of existing surety bond in lieu of having to file a new bond.

6. What consequences to Federal program or policy activities and what, if any, technical or legal obstacles to reducing burden will occur if this collection is not conducted or is conducted less frequently?

For those alcohol and tobacco industry proprietors required by the IRC to have a bond, the TTB regulations require the use of TTB F 5000.18 only when the respondent desires to change the activities covered under, or conditions of, an existing bond. As such, TTB cannot conduct this information collection less frequently. Additionally, if TTB did not provide for a change in bond and consent of surety as filed on TTB F 5000.18, proprietors would have to file a new bond, perhaps at additional cost, and their ability to engage in activities not covered by an existing bond would be delayed.

7. Are there any special circumstances associated with this information collection that would require it to be conducted in a manner inconsistent with OMB guidelines? (See 5 CFR 1320.5(d)(2).)

There are no special circumstances associated with this information collection that would require it to be inconsistent with OMB guidelines.

8. What effort was made to notify the general public about this collection of information? Summarize the public comments that were received and describe the action taken by the agency in response to those comments.

To solicit comments from the public, TTB published a “60-day” comment request notice for this information collection in the Federal Register on November 16, 2021, at 86 FR 63448. TTB received no comments on this information collection in response.

9. Was any payment or gift given to respondents, other than remuneration of contractors or grantees? If so, why?

No payment or gift is associated with this information collection.

10. What assurance of confidentiality was provided to respondents, and what was the basis for the assurance in statute, regulations, or agency policy?

TTB provides no specific assurance of confidentiality for this information collection on TTB F 5000.18. However, Federal law at 5 U.S.C. 552 protects the confidentiality of proprietary information obtained by the Government from regulated businesses and individuals, and 26 U.S.C. 6103 prohibits disclosure of tax returns and related information unless the section specifically authorizes such disclosure. TTB maintains the collected information in secure file rooms and computer systems with controlled access.

11. What is the justification for questions of a sensitive nature? If personally identifiable information (PII) is being collected in an electronic system, identify the Privacy Impact Assessment (PIA) that has been conducted for the information collected under this request and/or the Privacy Act System of Records notice (SORN) issued for the electronic system in which the PII is being stored.

This information collection contains no questions of a sensitive nature. This request collects personally identifiable information and TTB has conducted a Privacy Impact Assessment (PIA) for that information as part of the Tax Major Application system. TTB’s PIAs are available on its website at https://www.ttb.gov/foia/privacy-impact-assessments. TTB also has published a Privacy Act System of Records notice (SORN), which includes that system, under “Department of the Treasury, Alcohol and Tobacco Tax and Trade Bureau (TTB) .001–Regulatory Enforcement System of Records.” TTB’s latest SORN appeared in the Federal Register on February 10, 2021, at 86 FR 8988.

12. What is the estimated hour burden of this collection of information?

Estimated Burden Hours: Based on recent data, TTB estimates that 120 alcohol and tobacco industry proprietors will file one TTB F 5000.18, Change in Bond (Consent of Surety), form per year, and that completion of each response requires 1 hour. This results in 120 total annual responses and 120 total burden hours for this information collection.

Estimated Respondent Labor Costs: Based on the average fully-loaded labor rate of $30.54 per hour for office and administrative support function employees in the beverage and tobacco product manufacturing industries, TTB estimates the per-respondent and total respondent labor costs for this information collection as follows:³

Annual Respondent Labor Costs for OMB No. 1513–0030 (Office and Administrative Support Accountants and Auditors in the Beverage and Tobacco Manufacturing Industries)
Avg. Time / Response	Fully-loaded Labor Rate / Response*	Responses / Respondent	Labor Costs / Respondent	Total Responses	Total Labor Costs
1.0 hour	$30.543	1	$30.54	120	$3,664.80

* Fully-loaded labor rate rounded to the nearest whole cent.

Recordkeeping: In general, the TTB regulations require alcohol and tobacco industry proprietors to keep a permit file, which includes copies of any required bonds and any related change in bond (consent of surety) forms. Proprietors must keep that file at their premises, readily available for TTB inspection, for as long as they remain in business. See 27 CFR 19.81 (distilled spirits plants), 24.117 (wineries), 25.64 (breweries), 40.76 (tobacco product manufacturers), 41.203 (tobacco importers), and 44.93 (export warehouse proprietors).

13. What is the estimated annual cost burden to respondents or record keepers resulting from this information collection request (excluding the value of the hour burden in Question 12 above)?

TTB estimates that respondents do not have any non-labor costs for this occasional information collection. As for mailing supply and postage costs for this collection request, TTB has determined that 50 percent of the 120 annual respondents file TTB F 5000.18 by mail, resulting in 60 such submissions. TTB estimates that each mail submission requires $2.00 in mailing supply and postage costs, resulting in a total of $120.00 in such costs for this information collection.

14. What is the annualized cost to the Federal Government?

TTB estimates of the annual cost to the Federal Government for this information collection are as follows:

General costs: There are no overhead costs associated with this low-volume information collection. In addition, there are no printing and distribution costs to TTB for this collection due to the availability of TTB forms on the TTB website (see https://www.ttb.gov/forms).

Labor costs: TTB estimates the annualized labor costs to the Federal Government for this information collection request as follows:

Labor Costs for Personnel at TTB’s National Revenue Center in Cincinnati, Ohio, for OMB No. 1513–0013
Position	Fully-loaded Labor Rate per Hour4	Processing Time per Response	Labor Costs per Response	Total Responses	Total TTB Labor Costs
GS–5, Step 5, Clerk	$33.27	0.1 hour	$3.33	120	$399.60
GS–11, Step 5, Specialist	$60.99	2 hours	$121.98		$14,637.60
GS–13, Step 5, Supervisor	$87.76	0.25 hour	21.94		$2,632.80
TOTALS	(avg. $62.66)	2.35 hours	$147.25	120	$17,670.00

* Fully-loaded labor rates and Labor costs rounded to the nearest whole cent.

Total Costs: TTB estimates the total cost to the Federal government for this information collection to be $17,670.00, which consists entirely of labor costs.

15. What is the reason for any program changes or adjustments reported?

There are no program changes or adjustments associated with this information collection request at this time. On form TTB F 5000.18, in the Paperwork Reduction Act notice, TTB is revising the title of the person to whom respondent direct comments regarding the information collection and its burden, from “Reports Management Officer,” to “Paperwork Reduction Act Officer,” and is adding a reminder to respondents not to mail completed forms to the comment submission address.

16. Outline plans for tabulation and publication for collections of information whose results will be published.

TTB will not publish the results of this information collection.

17. If seeking approval to not display the expiration date for OMB approval of this information collection, what are the reasons that the display would be inappropriate?

TTB will display the expiration date for OMB approval for this information collection on its related form, TTB F 5000.18.

18. What are the exceptions to the certification statement?

(c) See item 5 above.

(f) This is not a recordkeeping requirement.

(i) No statistics are involved.

B. Collections of Information Employing Statistical Methods.

This information collection does not employ statistical methods.

1 TTB’s alcohol and tobacco bond-related information collection requests include OMB Control Nos. 1513–0009 (wine bonds), 1513–0015 (brewer’s bonds), 1513–0103 (tobacco bonds), 1513–0116 (bond for distilled spirits drawback under 26 U.S.C. 5111), and 1513–0125 (distilled spirits bonds).

2 Effective January 1, 2017, section 332 of the Protecting Americans from Tax Hikes Act (PATH Act; Public Law 114–113, Division Q) amended the IRC at 26 U.S.C. 5551(d) to remove bond requirements for distilled spirits, wine, and beer excise taxpayers who are eligible to file excise tax returns on an annual or quarterly basis. Under the IRC at 26 U.S.C. 5061(d)(4), to use annual filing, a taxpayer must reasonably expect to be liable for not more than $1,000 in excise taxes for the calendar year and must be liable for not more than $1,000 in such taxes in the preceding calendar . To use quarterly filing, under that section, a taxpayer must reasonably expect to be liable for not more than $50,000 in excise taxes for the calendar year and must be liable for not more than $50,000 in such taxes in the preceding calendar year.

3 Private Sector Fully-loaded Labor Rate per Hour = Hourly wage rate multiplied by a factor of 1.44 to account for employee benefit costs. Per the most recent U.S. Department of Labor, Bureau of Labor Statistics, data for National Industry-Specific Occupational Employment and Wage Estimates for NAICS 312000—Beverage and Tobacco Product Manufacturing, the average fully-loaded labor rate per hour for Office and Administrative Support Function employees is $30.54. See https://www.bls.gov/oes/current/naics3_312000.htm.

4 Federal Government Fully-loaded Labor Rate = Hourly wage rate x 1.63 to account for benefit costs. Per the most recent Office of Personnel Management (OPM) hourly wage data, the fully-loaded labor rates for Federal employees in the Cincinnati, Ohio, wage area are: (1) $33.27 for GS–5 (step 5), and (2) $120.85 for a GS–15 (step 5). See https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2022/CIN_h.pdf.

OPI:NRC OMB No. 1513–0013 Supporting Statement (01–2022)