SECTION 3. TEMPORARY SAFE

HARBOR AND TRANSITIONAL RULE

(a) Safe harbor . If a credit or payment is allowable with respect to alcohol on account of an event (such as a mixture producer’s sale of an alcohol fuel mixture for use as a fuel) occurring after December 31, 2008, and before the date specified in further guidance on this issue, the following rules apply:

(1) The Service will not challenge a claim to a credit or payment with respect to the approved denaturants included in the volume of such alcohol if—

(i) In determining the proof of the alcohol, not more than 2 percent of its volume is disregarded as an added denaturant; and

(ii) There is no clear evidence establishing that added denaturants are more than 2.5 percent of the volume of such alcohol (including added denaturants).

(2) Approved denaturants are any denaturants (including gasoline and nonalcohol fuel denaturants) that reduce the purity of the alcohol and do not exceed the amount of denaturants that may be added to such alcohol under a formula approved by the Secretary.

(b) Nonproducer rule for January 2009 . The volume of alcohol for which a credit or payment is allowable may be determined under the rules in effect before January 1, 2009, if— (1) The credit or payment is allowable to a person other than the producer of the alcohol; and

(2) The credit or payment is allowable on account of an event (such as a mixture producer’s sale of an alcohol fuel mixture for use as a fuel) occurring before February 1, 2009.