Modernization of Permit and Registration Application Requirements for Distilled Spirits Plants
| Published date | 03 December 2021 |
| Citation | 86 FR 68573 |
| Record Number | 2021-25721 |
| Section | Proposed rules |
| Court | Alcohol And Tobacco Tax And Trade Bureau,Treasury Department |
Federal Register, Volume 86 Issue 230 (Friday, December 3, 2021)
[Federal Register Volume 86, Number 230 (Friday, December 3, 2021)]
[Proposed Rules]
[Pages 68573-68593]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-25721]
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DEPARTMENT OF THE TREASURY
Alcohol and Tobacco Tax and Trade Bureau
27 CFR Parts 1, 17, 19, 20, 22, 26, 27, 28, and 31
[Docket No. TTB-2021-0010; Notice No. 207]
RIN 1513-AC46
Modernization of Permit and Registration Application Requirements
for Distilled Spirits Plants
AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.
ACTION: Notice of proposed rulemaking.
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SUMMARY: In this notice of proposed rulemaking, the Alcohol and Tobacco
Tax and Trade Bureau (TTB) proposes deregulatory amendments to the
regulations to modernize and streamline the permit application for
distilled spirits plants and for users and dealers of specially
denatured alcohol and tax-free alcohol. The proposed amendments also
relax some reporting requirements associated with changes to the
business of those holding such permits and registrations. Some of these
proposed liberalizing amendments would also apply to all Federal
Alcohol Administration Act basic permit holders (including wineries,
and importers and wholesalers of distilled spirits, wine, and malt
beverages) and to alcohol beverage dealers. The proposed amendments are
a result of TTB's evaluation of its permit and registration application
requirements and consideration of relevant public comments submitted to
the Treasury Department in response to its request for recommendations
concerning regulations that can be eliminated, modified, or streamlined
in order to reduce burdens. TTB believes the amendments proposed in
this document will significantly reduce the time needed to complete an
application for a permit or registration.
DATES: Comments must be received on or before February 1, 2022.
ADDRESSES: You may electronically submit comments to TTB on this
proposal, and view copies of this document, its supporting materials,
and any comments TTB receives on it within Docket No. TTB-2021-0010 as
posted at https://www.regulations.gov. A direct link to that docket is
available on the TTB website at https://www.ttb.gov/distilled-spirits/notices-of-proposed-rulemaking under Notice No. 207. Alternatively, you
may submit comments via postal mail to the Director, Regulations and
Ruling Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G
Street NW. Box 12, Washington, DC 20005. Please see the Public
Participation section of this document for further information on the
comments requested regarding this proposal and on the submission,
confidentiality, and public disclosure of comments.
FOR FURTHER INFORMATION CONTACT: Jesse Longbrake, Regulations and
Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G
Street NW, Box 12, Washington, DC 20005; telephone (202) 453-1039,
extension 066.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
A. TTB Evaluation of Permit and Registration Application
Requirements
B. TTB Authority
C. Relationship to Other Notices of Proposed Rulemaking
II. Proposed Changes to the Regulations
A. Operational Information Required for Distilled Spirits Plant
Permit Application
B. Premises Description and Security
C. Statements of Interest
D. 30-Day Filing Requirements for Certain Changes in the
Business
E. Changes in Trade Names
F. Retention of Records Off-Premises
III. Public Participation
A. Comments Invited
B. Submitting Comments
C. Confidentiality and Public Disclosure
IV. Regulatory Analyses and Notices
A. Executive Order 112866
B. Regulatory Flexibility Act
C. Paperwork Reduction Act
I. Background
A. TTB Evaluation of Permit and Registration Application Requirements
In fiscal year 2017, the Alcohol and Tobacco Tax and Trade Bureau
(TTB) began an evaluation of the information collected during the
course of TTB's permit and registration applications. The purpose was
to identify ways to streamline the application and registration
process, reduce burden on the regulated industry, and ensure that the
process collects, where possible, only information that is necessary to
meet the agency's statutory obligations. TTB's general approach was to
identify information being collected that could be eliminated without
hindering TTB's ability to evaluate an applicant's qualifications and
to more narrowly focus the application questions to capture only the
information that is needed. In addition, TTB also considered whether
there were any requests made in the application process that were so
commonly approved that the regulations themselves could be amended to
accommodate them without the need to submit the request.
Similarly, on June 14, 2017, the Treasury Department (Treasury)
published in the Federal Register (82 FR 27217) a Request for
Information inviting members of the public to submit views and
recommendations for Treasury regulations that can be eliminated,
modified, or streamlined in order to reduce burdens. TTB reviewed
comments received in response to this request and identified proposals
that related to the permit application process or, more generally, to
beginning business in a TTB-regulated industry.
Through TTB's internal evaluation and consideration of the public
input, TTB has identified deregulatory actions that TTB can take by
amending regulations and also, where rulemaking is not required, by
amending guidance and forms. While this document addresses distilled
spirits plants, users and dealers of specially denatured alcohol and
tax-free alcohol, and Federal Alcohol Administration Act basic permit
holders, TTB intends to engage in further rulemaking to address other
regulated industries within the context of their respective statutory
eligibility requirements. Specifically, TTB will address in separate
rulemakings the Internal Revenue Code (IRC) registration and notice
requirements for wine and beer producers, respectively, as well as IRC
requirements for TTB-regulated tobacco businesses.
With respect to distilled spirits plants (DSPs), this document
proposes to amend the regulations to eliminate or narrow the range of
information that must be submitted with applications for permits or
registrations to more directly respond to TTB's statutory obligations
[[Page 68574]]
and permit or registration eligibility criteria. Proposed amendments
include:
Eliminating various requirements to submit operational
information. Specifically, TTB proposes eliminating eight (8)
regulatory provisions requiring submission of information including,
but not limited to, descriptions of production procedures and storage
systems.
Tailoring requirements to describe the DSP premises more
narrowly to specifically correspond with statutory requirements, and
consolidating requirements to provide descriptions of alternation
operations with the general DSP premises description.
Replacing requirements to submit narrative descriptions of
DSP security with certifications that the applicant's security measures
will comply with enumerated regulatory requirements.
Eliminating requirements to provide serial numbers of DSP
equipment in the application, thereby allowing equipment to be reported
in the aggregate where applicable and allowing a DSP application to be
submitted prior to physical receipt of the equipment.
TTB is also proposing to amend the regulations to increase industry
flexibility without imposing regulatory burden. These amendments
benefit DSPs, users and dealers of specially denatured alcohol and tax-
free alcohol, and, where appropriate under statute, Federal Alcohol
Administration Act basic permit holders. Proposed amendments include:
Extending deadlines for reporting certain changes in the
business from 30 days to 60 days.
Allowing regulated businesses to add or remove trade names
by submitting a notification to TTB rather than applying for TTB
approval.
Allowing regulated businesses to maintain required records
at a location other than the permitted premises without first obtaining
TTB approval.
Section II of this document includes more in-depth discussion of
the proposed amendments.
As noted above, TTB's deregulatory strategy also includes
streamlining longstanding policies and practices implementing existing
regulations. TTB has already begun deploying such streamlining efforts
in response to both TTB's internal evaluation of application processes
and to comments received from the public.
For instance, TTB has implemented significant reductions in the
information collected on form TTB F 5000.9, Personnel Questionnaire--
Alcohol and Tobacco (the Personnel Questionnaire) and its electronic
equivalent in response to comments submitted to Treasury through the
Request for Information. TTB collects the Personnel Questionnaire as
part of the application process for most types of permits or
registrations. The Personnel Questionnaire collects information about
individuals involved in an applicant's business (such as a business's
officers, directors, or principal investors), including information
about such individuals' identity, employment and residence history,
investment in the business, prior involvement in TTB-regulated
businesses, and criminal record, if any. The collection of this
information has been approved by the Office of Management and Budget
under Information Collection number 1513-0002.
TTB uses this information to determine whether the applicant,
including the individuals involved in the applicant business, meet the
statutory eligibility criteria for obtaining a permit or registration.
These criteria are set forth in detail in section 1(B) of this
document. Upon careful review, TTB recognized that it could reduce the
information collected through the Personnel Questionnaire. TTB has
revised form TTB F 5000.9 and its electronic equivalent in Permits
Online to substantially reduce the number of required fields and to
eliminate some of the most time-consuming fields (such as general
employment history and residence history). TTB also has stopped
collecting supporting documentation for certain types of investment in
an applicant business (e.g., bank statements, loan documentation,
promissory notes, etc.).
B. TTB Authority
The Federal Alcohol Administration Act (FAA Act, 27 U.S.C. 201, et
seq.) and chapter 51 of the IRC, 26 U.S.C. chapter 51, require persons
intending to engage in certain distilled spirits-related businesses to
obtain a permit, or approval of a registration, from the Secretary of
the Treasury (Secretary) before beginning operations. Many distillers
engage in operations that require both a permit under the FAA Act and a
registration under the IRC. The amendments proposed in this document
generally relate to the application requirements for such permits and
registrations, including requirements to report certain changes in the
regulated businesses. Additionally, amendments proposed in this
document address application requirements for permits under the FAA Act
for operations as importers or wholesalers of distilled spirits, wine,
and/or malt beverages.
The FAA Act requires that persons seeking to engage in business as
producers of distilled spirits, or as importers or wholesalers of
distilled spirits, wine, and malt beverages, obtain a permit before
beginning operations. See 27 U.S.C. 203. The term ``distilled
spirits,'' when used in the context of the FAA Act, applies only to
distilled spirits for nonindustrial use. The TTB regulations at 27 CFR
1.60 set out uses of spirits that are regarded as ``industrial.'' The
FAA Act at 27 U.S.C. 204(c) provides that the Secretary will prescribe
the manner and form of all applications for basic permits. Note that
the FAA Act also requires permits for producing, rectifying, or
blending wine and that these activities also require qualification
under the IRC; TTB plans to modernize wine-specific permit requirements
in a separate rulemaking document.
Chapter 51 of the IRC contains excise tax and related provisions
concerning distilled spirits, wines, and beer. This includes
requirements that persons intending to engage in certain activities
related to producing, using, or dealing in distilled spirits obtain a
registration and/or permit from the Secretary before beginning
operations. As noted above, TTB will address in a separate rulemaking
the application requirements under the IRC for bonded wine cellars,
bonded wineries, taxpaid wine bottling houses, and brewer's notices.
The IRC requires each person seeking to establish a distilled
spirits plant, before commencing operations, to apply for and receive
notice of registration of the plant. See 26 U.S.C. 5171(c). Those
persons whose distilled spirits plant operations are not required to
obtain a basic permit under the FAA Act are required to obtain an IRC
operating permit. See 26 U.S.C. 5171(d). The applications for
registrations and permits are to be in such manner and form as the
Secretary prescribes by regulation. See 26 U.S.C. 5172 (registrations);
5171(d)(1) and 5271(b)(1) (operating permits).
The IRC provides for the issuance of permits to establish plants
for the purpose of producing, processing, storing, using, and/or
distributing distilled spirits that are exclusively for fuel use
(``alcohol fuel plants''). While alcohol fuel plants, as a type of
distilled spirits plant, are generally subject to the registration and
permitting requirements of sections 5171(c) and (d), and any associated
qualification requirements, the IRC at 26 U.S.C. 5181 provides
authority to prescribe by regulation a
[[Page 68575]]
streamlined application process for such plants, see 26 U.S.C. 5181,
which TTB has done.
The IRC also governs permits relating to the procurement and use of
denatured distilled spirits, and the use of non-beverage spirits for
certain tax-free purposes. See 26 U.S.C. 5271. Section 5271 provides
that no person may procure or use distilled spirits free of tax under
the provisions of 26 U.S.C. 5214(a)(2) or (3); or procure, deal in, or
use specifically denatured distilled spirits; or recover specifically
or completely denatured distilled spirits, until he or she has applied
for and received a permit to do so from the Secretary. The application
for such permit is to be as prescribed by regulation. See 26 U.S.C.
5271(b)(1).
The IRC requires persons seeking to engage in the business of
manufacturing vinegar by the vaporizing process to first apply for and
receive approval of a registration from the Secretary, the application
for which is to be as prescribed by regulation. See 26 U.S.C. 5502.
Finally, the IRC requires all wholesale dealers and retail dealers
of distilled spirits, wine, and beer to register with the Secretary.
See 26 U.S.C. 5124.
The FAA Act and IRC set forth eligibility criteria (including
criteria rendering an applicant ineligible) for many of the above
permits and registrations. The FAA Act provides that an applicant is
not entitled to a basic permit--including those applying as producers
of distilled spirits and those applying as importers or wholesalers of
distilled spirits, wine, and beer--if the applicant has been convicted
of a felony within the previous 5 years or a misdemeanor under any
Federal law relating to liquor within the previous 3 years. See 27
U.S.C. 204(a)(2). Under this statutory provision, the ``applicant''
includes, in the case of a corporation, any of its officers, directors,
or principal stockholders. Section 204(a)(2) also provides that an
applicant is not entitled to a basic permit if the applicant is, by
reason of his or her business experience, financial standing, or trade
connections, not likely to maintain operations in conformity with
Federal law.
The IRC similarly provides that an application for a distilled
spirits operating permit may be denied if--among other reasons--the
applicant (including the principal stockholders of a corporation) is,
by reason of his or her financial standing or trade connections, not
likely to maintain operations in compliance with chapter 51 of the IRC.
See 26 U.S.C. 5271(c), 5171(d). Specifically, these eligibility
criteria apply to permits required for distilled spirits plants that
are not otherwise required to obtain an FAA Act basic permit, such as
distilled spirits plants that distill for industrial use. These
eligibility criteria also apply to permits for alcohol fuel plants
under 26 U.S.C. 5181. See 27 CFR 19.678. A permit to use tax-free
alcohol, to use or deal in specially denatured distilled spirits, or to
recover specially or completely denatured distilled spirits may also be
denied for the same reasons. See 26 U.S.C. 5271(c).
TTB administers chapter 51 (distilled spirits, wine, and beer) of
the IRC, as well as the FAA Act, pursuant to Treasury Order 120-01,
dated December 10, 2013, through which the Secretary has delegated to
TTB certain IRC and FAA Act administrative and enforcement authorities,
including those related to the issuance of the permits and
registrations covered under this rulemaking.
Section 2(d) of the FAA Act, Public Law 74-401 (1935) authorizes
the Secretary ``to prescribe such rules and regulations as may be
necessary to carry out [its] powers and duties'' under the FAA Act.
Section 7805(a) of the IRC (26 U.S.C. 7805(a)) provides the general
authority to the Secretary to issue regulations to carry out the
provisions of the IRC.
Pursuant to its delegated authorities described above, TTB has
promulgated regulations setting forth the application requirements for
permits or registrations related to distilled spirits operations in
title 27 of the Code of Federal Regulations (CFR), at the following
parts:
27 CFR part 1, FAA Act basic permits (i.e., distillers,
rectifiers, and blenders of distilled spirits; distilled spirits
warehousemen; and alcohol importers and wholesalers);
27 CFR part 19, IRC registrations and operating permits
for distilled spirits plants, vinegar plant permits, and alcohol fuel
plant permits (categorized as small, medium, and large alcohol fuel
plants);
27 CFR part 20, IRC permits for denatured spirits dealers
and users;
27 CFR part 22, IRC permits for tax-free alcohol users;
and
27 CFR part 31, IRC registrations for alcohol beverage
dealers.
The following TTB forms and their electronic equivalents collect
much of the information required to be submitted when applying for the
above permits and/or registrations:
TTB F 5100.24, Application for Basic Permit Under the
Federal Alcohol Administration Act, approved by the Office of
Management and Budget (OMB) under Information Collection number 1513-
0018;
TTB F 5100.18, Application for Amended Basic Permit Under
the Federal Alcohol Administration Act, approved by OMB under
Information collection number 1513-0019;
TTB F 5110.25, Application for Operating Permit Under 26
U.S.C. 5171(d), approved by OMB under Information Collection number
1513-0040;
TTB F 5110.41, Registration of Distilled Spirits Plant,
approved by OMB under Information Collection number 1513-0048;
TTB F 5110.74, Application for an Alcohol Fuel Producer
Under 26 U.S.C. 5181, approved by OMB under Information Collection
number 1513-0051;
TTB F 5150.22, Application for an Industrial Alcohol User
Permit, approved by OMB under Information Collection number 1513-0028;
and
TTB F 5000.9, Personnel Questionnaire--Alcohol and Tobacco
Products, approved by OMB under Information Collection number 1513-
0002.
Pursuant to TTB's IRC and FAA Act authorities described above, TTB
has also promulgated regulations imposing procedural and substantive
requirements on these regulated businesses. These include requirements
to report certain changes in the business affecting the permit or
registration (e.g., changes in address or location, changes in
stockholders or officers, directors, managers, etc.). These also
include recordkeeping requirements that are generally set forth
pursuant to other authority in the IRC. See, e.g., 26 U.S.C. 5207
(records of distilled spirits plant proprietors), 26 U.S.C. 5275
(records of dealers and users of denatured spirits and/or industrial
alcohol), and 26 U.S.C. 5121-5122 (records of wholesale and retail
dealers of distilled spirits).
This notice of proposed rulemaking includes proposed amendments to
these reporting and recordkeeping requirements. The regulations
implementing such requirements are set forth in title 27 of the CFR, at
the following parts:
27 CFR part 1, reporting of business changes for FAA Act
basic permits;
27 CFR part 17, recordkeeping requirements for
manufacturers of nonbeverage products claiming drawback on taxpaid
distilled spirits used in the manufacturing process;
27 CFR part 19, recordkeeping and inventory requirements,
and reporting of business changes, for distilled spirits plants,
vinegar plants, and alcohol fuel plants;
[[Page 68576]]
27 CFR part 20, recordkeeping requirements, and reporting
of business changes, for denatured spirits dealers and users;
27 CFR part 22, recordkeeping requirements, and reporting
of business changes, for tax-free alcohol users;
27 CFR part 26, recordkeeping requirements concerning
liquors and articles brought in from Puerto Rico and the Virgin
Islands;
27 CFR part 27, recordkeeping requirements for importers
of distilled spirits, wine, and beer;
27 CFR part 28, recordkeeping requirements concerning
exportation of distilled spirits, wine, and beer; and
27 CFR part 31, recordkeeping requirements and reporting
of business changes for alcohol beverage dealers (including
wholesalers).
The electronic equivalent of each application form set forth above
is available through the TTB Permits Online system. The Permits Online
system eliminates redundancy by allowing the filer to input information
only once, instead of repeating information on multiple paper
application forms. Similarly, with respect to the reporting
requirements described above, in instances where TTB's regulations
refer to submitting a ``letterhead notice'' (as defined in 27 CFR
19.1), industry members may provide such notices electronically in
Permits Online. Unlike applications, these types of notices do not
require TTB approval.
C. Relationship to Other Notices of Proposed Rulemaking
TTB plans to publish notices of proposed rulemaking to propose
generally similar amendments to regulations governing wine, beer,
tobacco products, and processed tobacco-related applications and
operations, set forth in 27 CFR parts 24, 25, 40, 41, and 44.
Liberalizing amendments related to FAA Act basic permits as importers
and wholesalers (including as importers or wholesalers of wine and/or
malt beverages) and as wine producers are included in this document and
will not be included in the notices of proposed rulemaking relating to
wine or beer.
II. Proposed Changes to the Regulations
The amendments proposed in this document are intended to modernize
and streamline the applications and application processes for distilled
spirits-related permits and registrations under the IRC and FAA Act,
and for FAA Act basic permits required for importers and wholesalers of
alcohol beverages. As noted above, TTB's general approach was to
identify information currently being collected that TTB no longer needs
in order to evaluate an applicant's qualifications and to provide more
clarity and specificity in the application questions and instructions.
The proposed amendments also relax reporting requirements on certain
changes to the business.
A. Operational Information Required for Distilled Spirits Plant
Application
TTB is proposing to eliminate requirements to provide certain
operational information when applying for a DSP registration. The TTB
regulations at 27 CFR 19.73 prescribe, in general, information that
must be included in an application for registration under the IRC as a
DSP. Paragraphs (a)(13) through (15) of Sec. 19.73 prescribe the
operational information that must be submitted if the DSP applicant
intends to operate as a distiller, warehouseman, or processor,
respectively. (A ``warehouseman'' is a proprietor of a DSP who stores
bulk distilled spirits.) TTB has determined that much of the
information currently required by Sec. 19.73(a)(13) through (15) is no
longer needed for TTB to evaluate whether an applicant qualifies for a
registration. As a result, TTB proposes to eliminate the following
regulatory sections:
a. 27 CFR 19.73(a)(13)(ii), 19.77(a), and 19.121, requiring that an
applicant intending to operate as a distiller submit a statement of
production procedures, setting forth the contents of the statement, and
requiring that a DSP proprietor report changes to its production
procedures.
b. 27 CFR 19.73(a)(13)(iii) and 19.77(b), requiring that an
applicant intending to operate as a distiller submit a statement as to
whether spirits will be redistilled and referencing formula
requirements associated with such redistillation.\1\
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\1\ Generally, applicable formula requirements prescribed under
27 CFR part 5 require DSPs to obtain formulas in connection with
certain redistillation operations.
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c. 27 CFR 19.73(a)(14)(i), requiring that an applicant intending to
operate as a warehouseman submit a narrative description of its storage
system.
d. 27 CFR 19.73(a)(14)(ii), requiring that an applicant intending
to operate as a warehouseman submit a statement of the total amount of
bulk wine gallons that can be stored.
e. 27 CFR 19.73(a)(15)(ii), requiring that an applicant intending
to operate as a processor submit a narrative description of the storage
system for spirits bottled and cased or otherwise packaged and placed
in approved containers for removal from the bonded premises.
TTB is also proposing to amend 27 CFR 19.75 to eliminate the
requirement to provide in the application for registration the serial
number of each tank, still, and condenser to be used by the DSP. While
such equipment must continue to be physically marked with a serial
number on the DSP premises pursuant to 27 CFR 19.189, removing the
requirement to provide serial numbers in the application will provide
applicants greater flexibility to report their equipment in the
aggregate. For instance, ten (10) of the same type of tank will not
need to be listed separately to account for the different serial
numbers. Additionally, allowing equipment to be reported on the
application without serial numbers allows applicants to submit an
application before equipment that has been ordered is physically
received. TTB proposes similar amendments at 27 CFR 20.42 and 22.42 to
remove requirements to provide serial numbers of equipment to be used
by applicants for permits as users of denatured alcohol and of tax-free
alcohol.
B. Premises Description and Security
TTB is proposing to relax or eliminate requirements to submit
certain information describing the DSP premises and its security with
an application for registration. As stated above, the TTB regulations
at 27 CFR 19.73 prescribe, in general, information that must be
included in an application for registration as a DSP. Among the
information required to be submitted with such application are
descriptions of the DSP premises and the security measures to be
employed at the DSP. Much of this information is currently collected in
an open-ended narrative format. TTB believes that, in general, more
direct questions and certifications would enable applicants to better
understand what information must be submitted, reduce the need for
additional submissions and follow-up communication between TTB and
applicants, and speed up the application review process. Further, TTB
has determined that some of the information currently required in these
areas is unnecessary or overly specific for the purpose of evaluating a
registration application. As a result, TTB also proposes to relax or
eliminate certain requirements to submit such information.
Therefore, TTB proposes to amend the following regulatory sections:
[[Page 68577]]
a. 27 CFR 19.74. Section 19.73(a)(8) requires that an application
for registration as a DSP include a description of the plant in
accordance with Sec. 19.74. Section 19.74 sets forth the specific
information to be included in the description, which includes: (1) A
description of each tract of land covered by the plant; (2)
identification of the bonded and any general premises; (3) descriptions
of each building and outside tank that will be used for production,
storage, and processing of spirits and for denaturing spirits,
articles, or wines; and (4) identification of the room(s) or floor(s)
of a building that will be used for plant operations, if the plant
consists of less than the entire building in which it is situated. TTB
proposes to amend Sec. 19.74 to remove the requirement to provide a
description of the tract of land and to further clarify the specific
information to be submitted as follows: (1) Overall dimensions of the
building(s) housing the DSP; (2) the dimensions of the bonded premises
and any general premises; (3) any internal walls establishing the
boundaries of the bonded premises and general premises; (4) the
external doors of the DSP premises; (5) any portions of the plant
premises that are outdoors, including the location of any outdoor
tanks; and (6) any adjacent retail premises that are to be operated by
the applicant. TTB believes that these descriptive elements are the
minimum necessary to allow TTB to evaluate whether the premises is
adequate to protect the revenue and otherwise complies with the
statutory restrictions on DSP locations set forth at 26 U.S.C. 5178.
The proposed amendments provide flexibility to submit this information
in narrative form or diagram form, whichever is better suited to the
applicant's circumstances. The proposed amendments also provide that
photographs of any of the required elements must be submitted upon
request of the appropriate TTB officer.
b. 27 CFR 19.119 and 19.122. Under current Sec. 19.119, a DSP
proprietor is required to amend his or her registration prior to
extending or curtailing any part of the plant premises, except for
certain operations described in Sec. Sec. 19.142 (alternation for
customs purposes) and 19.143 (alternation for other purposes). Section
19.122 currently requires that a DSP proprietor file a letterhead
notice prior to making any material changes to the construction or use
of the buildings or equipment at the DSP, other than changes covered by
Sec. Sec. 19.119, 19.142, and 19.143. TTB proposes to consolidate
these requirements into a single Sec. 19.119, and to further amend
that section consistent with the proposed amendments to Sec. 19.74.
Specifically, in the revised Sec. 19.119, the current text of Sec.
19.119 regarding extension or curtailment of the premises would be
maintained, but TTB proposes to incorporate as a new paragraph the
provisions of the current Sec. 19.122 relating to changes in
construction or use of buildings. TTB further proposes to amend this
new paragraph to no longer require the proprietor to describe in detail
``any material change in the construction or use of buildings or
equipment'' but instead require the reporting of changes to the
premises (other than those covered by current Sec. 19.119, Sec.
19.142, or Sec. 19.143) that would render inaccurate the description
submitted with the registration or submitted separately or previously
by the proprietor with another amendment. TTB is also proposing to
remove the requirement that the change described in the letterhead
notice also be subsequently incorporated into the next submission of an
application for amended registration on TTB F 5110.41 where such
amendment would not otherwise require submission of a premises
description. However, to the extent that subsequent applications for an
amended registration make any further reportable changes to the
premises, an up-to-date description must be submitted.
c. 27 CFR 19.673(b)(2), 19.675(b)(2), and 19.676(b)(2). TTB
proposes amendments similar to those described above in point (a) to
the requirements associated with applications for alcohol fuel plant
permits, at Sec. Sec. 19.673(b)(2), 19.675(b)(2), and 19.676(b)(2).
Note that the illustration of adjacent retail premises is not
applicable to alcohol fuel plants.
d. 27 CFR 19.643(b). TTB proposes amendments similar to those
discussed in point (a) above to the requirement that applicants for a
vinegar plant registration provide a ``description of the plant
premises,'' at Sec. 19.643(b). Note that the illustration of adjacent
retail premises is not applicable to vinegar plants.
e. 27 CFR 19.141(a), 19.142(b), and 19.143(b). Sections 19.141
through 19.143 each provide procedures for alternation of the DSP
premises. Specifically, Sec. 19.141 prescribes procedures related to
alternation of proprietors, Sec. 19.142 prescribes procedures related
to alternation for customs purposes, and Sec. 19.143 prescribes
procedures related to alternation for other purposes (such as use of
the premises as a bonded wine cellar or brewery). One of the prescribed
procedures to engage in each type of alternation is that the proprietor
must submit with his or her application for registration as a DSP a
diagram of the part of the plant that will be alternated, as well as a
description of the areas, rooms or buildings, or combination of rooms
or buildings that will be alternated. In the case of Sec. Sec.
19.141(a) and 19.142(b), the applicant must also provide a description
of the method that the applicant will use to separate the alternated
premises from any premises not subject to alternation. TTB believes
that the information collected under these sections can be consolidated
into the premises description(s) required under Sec. 19.73(a)(8).
Accordingly, TTB proposes to amend these sections to require that such
information be included in the description(s) submitted under Sec.
19.73(a)(8). TTB also proposes conforming amendments to Sec. Sec.
19.141(b) and 19.142(c).
f. 27 CFR 19.692(b)(2). TTB proposes amendments similar to those
described in the previous paragraph to the qualification requirements
for an alternating proprietorship as an alcohol fuel plant, at Sec.
19.692(b)(2).
g. 27 CFR 19.73(a)(12), 19.76, and 19.192. Section 19.73(a)(12)
requires that an application for registration as a DSP include a
statement of plant security measures in accordance with Sec. 19.76.
Under Sec. 19.76, the plant security statement must include a
``general description of plant security,'' a ``statement regarding the
use of guard personnel,'' and other similar statements regarding the
use of alarm systems and locks. Plant security as a continuing
requirement for a permit is also addressed at Sec. 19.192, which
generally requires that a DSP proprietor provide adequate security to
protect the revenue, and specifies requirements relating to building
construction and the locking mechanisms to be used on storage tanks and
points of entry to the DSP premises. Section 19.192(f) also sets forth
specifications for locks to be used in DSPs. TTB believes that the
narrative statements concerning plant security required under
Sec. Sec. 19.73(a)(12) and 19.76 are overly broad and should be more
consistent with the ongoing requirements of the permit set forth in
Sec. 19.192. Accordingly, TTB proposes to eliminate Sec. 19.76 and to
amend Sec. 19.73(a)(12) to instead require that an application for
registration as a DSP include a certification that the plant's security
will be compliant with the requirements of Sec. 19.192. TTB also
believes that the specifications for locks set forth in Sec. 19.192(f)
are unnecessarily specific, and proposes to replace those
specifications with a requirement that the locks used to secure the
plant be of
[[Page 68578]]
a class and construction that is usual and customary in the industry to
secure commercial property.
h. 27 CFR 19.673(b)(6), 19.675(b)(6), and 19.676(b)(6). 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
plant's 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. 204(a)(2) provides that an applicant will
not be entitled to a basic permit if--among other reasons--the
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\
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\2\ See TTB G 2018-6, ``Permits Online Tutorial'' at Owner/
Officer Information, available at https://www.ttb.gov/ponl/ponl-tutorial-part-2-page-11.
---------------------------------------------------------------------------
The IRC at 26 U.S.C. 5271(c)(2) 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
reasons--the 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. 5171(d), the eligibility
criteria of section 5271(c) 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.
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\
---------------------------------------------------------------------------
\3\ In addition to the proposed amendments concerning statements
of interest, TTB proposes to eliminate requirements at Sec. Sec.
19.675(b)(8) and 19.676(b)(8) 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.
---------------------------------------------------------------------------
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 1513-0018).
TTB proposes amendments to Sec. Sec. 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 applicant's 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 entity's interest 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 Treasury's request for
information, described above in section I(A), suggest
[[Page 68579]]
that 30 days is too short a time for regulated entities to assemble the
information that is required to be filed in connection with various
changes in the business. These comments suggested that such filing
deadlines should be extended to 60 days.
TTB reviewed these proposals and concluded that extending existing
deadlines for reporting certain changes in the business (including in
some cases by applying for a new or amended permit or registration)
from 30 to 60 days would not, in general, pose risk to the revenue or
raise other concerns with regard to permits and/or registrations issued
under the authority of the IRC. Accordingly, TTB proposes to extend
such deadlines as described immediately below. Requirements and
timeframes related to FAA Act permits are discussed separately at the
end of this section. FAA Act permits have a different statutory basis,
which sets forth certain reporting timeframes that TTB is unable to
modify by regulation. In some circumstances, industry members holding
both an FAA Act permit and an IRC registration (such as DSPs producing
nonindustrial spirits) will be limited by the shorter statutory
reporting period of the FAA Act.
In 27 CFR part 19, TTB proposes to amend the following sections to
extend reporting deadlines for changes in the permitted business to 60
days: Sec. Sec. 19.112, 19.114, and 19.123 relating to DSP
registrations; Sec. Sec. 19.126, 19.127, and 19.130 relating to DSP
operating permits; Sec. 19.644 relating to vinegar plants; and
Sec. Sec. 19.683, 19.684, 19.686, 19.687, and 19.691 relating to
alcohol fuel plants.
Concerning DSP registrations, 27 CFR 19.112 provides the general
rules for amending a registration, and requires that, ``if there is a
change in any of the information in the proprietor's current, approved
notice of registration, the proprietor must amend the registration''
within 30 days of the change unless another time period is specified by
another, more specific regulation. Section 19.114 requires that a DSP
proprietor ``notify TTB of any changes in the list of stockholders or
persons with interest that was filed with TTB'' as part of the
registration application and provides that, ``if the change results in
a change of control, the proprietor must file form TTB F 5110.41,
Registration of Distilled Spirits Plant, within 30 days of the
change.'' TTB proposes to extend each of these deadlines from 30 days
to 60 days. Section 19.123 requires that a DSP proprietor notify TTB if
any change is made to the statement of plant security filed under 27
CFR 19.76. TTB proposes in this document (as discussed above) to remove
Sec. 19.76 entirely, and accordingly proposes to remove Sec. 19.123.
TTB also proposes conforming amendments in 27 CFR 19.80 to clarify
that, when an IRC operating permit or an FAA Act permit remains in
effect pending final TTB action on a new application for such a permit
necessitated by a business change, the approved notice of registration
associated with that permit also remains valid during that time.
Concerning DSP operating permits, which apply to industrial alcohol
operations, Sec. 19.126 provides the general rules for amending a
permit and requires that, ``if there is a change in any of the
information that the proprietor provided as part of the current
approved application for an operating permit, the proprietor must amend
the operating permit'' within 30 days of the change unless another time
period is specified by another, more specific regulation. Section
19.127 provides for the automatic termination of a DSP operating permit
under certain circumstances. In the case of a corporation, Sec. 19.127
provides that the operating permit will terminate 30 days following a
change in actual or legal control of the corporation, but if an
application for a new permit is submitted within that 30 days, the
outstanding permit may remain in effect until TTB takes final action on
the new application. Section 19.130 requires that the proprietor notify
TTB of any changes in the list of stockholders or persons with interest
that was filed in connection with the operating permit application. If
such a change results in a change in actual or legal control of the
business, the proprietor must file an application for a new permit
within 30 days. TTB proposes to extend each of these deadlines from 30
to 60 days. With respect to the automatic termination provisions of
Sec. 19.127, the proposed amendments also necessarily extend the
timeframe for termination to 60 days.
Concerning vinegar plants, Sec. 19.644 provides that the
proprietor of a vinegar plant must ``immediately'' notify TTB in
writing of ``any change in the information that was provided in an
approved application.'' TTB proposes to amend this section to require
the notification be made within 60 days of the change.
Concerning alcohol fuel plants, Sec. 19.683 provides the general
rules for amending a permit and requires that, ``if there is a change
relating to any of the information contained in, or considered a part
of, the application'' for an alcohol fuel plant permit, ``the
proprietor must amend the information previously submitted within 30
days of the change'' unless another time period is specified by
another, more specific regulation. Section 19.684 provides for the
automatic termination of an alcohol fuel plant permit under certain
circumstances. In the case of a corporation, the permit will terminate
30 days following a change in actual or legal control of the
corporation, but if an application for a new permit is submitted within
those 30 days, the outstanding permit may remain in effect until TTB
takes final action on the new application. Section 19.686 provides
that, ``When there is a change in the name of the individual, firm,
corporation, or other entity holding the permit, the proprietor must
file an application to amend the permit . . . within 30 days of the
change.'' Section 19.687 requires that the proprietor provide TTB with
letterhead notice within 30 days of any change to the list of officers,
directors, members, managers, or other principal persons provided with
the application for a permit as a medium or large alcohol fuel plant.
Section 19.691 states that, ``if there is a change in the address of an
alcohol fuel plant that does not involve a change in the location or
area of the plant itself, the proprietor must submit a letterhead
notice to the appropriate TTB officer within 30 days of the change.''
TTB proposes to extend each of these deadlines from 30 to 60 days. With
respect to the automatic termination provisions of Sec. 19.684, the
proposed amendments also necessarily extend the timeframe for
termination to 60 days.
Concerning permits for dealers or users of denatured alcohol and
rum, TTB proposes to amend provisions in 27 CFR part 20 to extend a
similar 30-day requirement to 60 days, and to remove one notification
requirement. Section 20.56 requires that a permittee submit a written
notification to TTB within 30 days of certain changes ``relating to any
of the information contained in, or considered a part of[,] the
application'' for a permit. Section 20.57 requires that the permit
holder provide written notice to TTB within 10 days of a change in
proprietorship or a change in actual or legal control of the business.
Section 20.57 further provides that the permit will terminate 30 days
following a change in proprietorship or control, unless the permit
holder submits an application for a new permit within 30 days of the
change, in which case the outstanding permit may remain in effect until
TTB takes final action on the new application. TTB proposes to extend
the
[[Page 68580]]
filing deadline of Sec. 20.56 from 30 to 60 days, and to remove the
10-day notification requirement of Sec. 20.57. With respect to the
automatic termination provisions of Sec. 20.57, the proposed
amendments extend the timeframe for termination to 60 days.
Concerning permits for users of tax-free (industrial) alcohol, TTB
proposes to amend Sec. Sec. 22.57 and 22.58. Section 22.57 requires
that such a permittee submit a written notification to TTB within 30
days of certain changes ``relating to any of the information contained
in, or considered a part of[,] the application'' for a permit. Section
22.58 requires that the permit holder provide written notice to TTB
within 10 days of a change in proprietorship or a change in actual or
legal control of the business. Section 22.58 further provides that the
permit will terminate 30 days following a change in proprietorship or
control, unless the permit holder submits an application for a new
permit within 30 days of the change, in which case the outstanding
permit may remain in effect until TTB takes final action on the new
application. TTB proposes to remove the 10-day notification requirement
of Sec. 22.58. TTB proposes to extend the filing deadline of Sec.
22.57 from 30 to 60 days. With respect to the automatic termination
provisions of Sec. 22.58, the proposed amendments also extend the
timeframe for termination to 60 days.
In 27 CFR part 31, concerning alcohol beverage dealers, TTB
proposes to amend Sec. 31.138 to provide 60 days for an alcohol
beverage dealer to notify TTB of the discontinuance of their business,
rather than the current 30 days.
As noted above, FAA Act basic permits are subject to certain
reporting timeframes, similar to some of those IRC timeframes discussed
above, that TTB is unable to extend by regulation because they are
statutory. Specifically, the FAA Act at 27 U.S.C. 204(g) provides that
FAA Act permits cannot be sold or transferred, and will automatically
terminate 30 days after a transfer by operation of law or a change in
actual or legal control of the permitted business. However, section
204(g)(2) also provides that if an application for a new permit is
submitted within 30 days of such a change, the outstanding permit
remains in effect until TTB takes final action on the new application.
These provisions are implemented in TTB regulations at 27 CFR 1.44. TTB
cannot extend the Sec. 1.44 deadline for filing a new permit
application from 30 to 60 days, because the 30-day provision is in the
statute (cited above). However, TTB is proposing to amend 27 CFR 1.42
to clarify that any changes in the ownership, management, or control of
the business, including changes that fall under Sec. 1.44, must be
reported to TTB within 30 days rather than ``immediately,'' as
currently required. If the change requires the filing of a new
application under Sec. 1.44, a timely application will also satisfy
the notification requirement of Sec. 1.42.
Industry members who hold both a basic permit under the authority
of the FAA Act and a registration under the authority of the IRC (such
as DSPs producing nonindustrial spirits) should be aware that an
extension of the timeframes applicable to the registration issued under
the IRC does not apply in any way to the basic permit under the FAA
Act. As a result, such DSPs must still report changes in the ownership
or management of their business within 30 days (and submit any required
applications within 30 days) to comply with the requirements of their
FAA Act basic permit.
E. Changes in Trade Names
TTB proposes amendments to the regulations at 27 CFR 1.40, 19.129,
20.61, 22.62, and 31.132 to allow changes to, or additions of, trade
names through a notification to TTB rather than through an amended
permit or registration. These regulations apply to holders of FAA Act
basic permits, DSP operating permits, specially denatured spirits user
and dealer permits, tax-free alcohol user permits, and alcohol beverage
dealer registrations, respectively. The regulations currently require
that holders of such permits or registrations apply for and obtain an
amended permit or submit an amended registration before engaging in
operations under a new trade name (see, e.g., 27 CFR 19.129) or
requesting FAA Act label approval reflecting a new trade name (see 27
CFR 5.36(f)). Currently, TTB automatically approves trade name
amendments. Consistent with this policy, TTB is also proposing to amend
27 CFR 19.94 to remove the requirement that an applicant for an
original DSP operating permit submit supporting documentation for the
trade names identified in the application. TTB's proposed amendments
generally would update regulations to reflect that industry members may
begin operations under the new name immediately after notifying TTB.
TTB notes that, while this amendment would allow industry members
to immediately begin operations under a new trade name upon notifying
TTB, it remains the responsibility of the permit holder or registered
alcohol dealer to ensure that any trade name is properly registered
with the applicable state or local government. Industry members should
further note that the FAA Act prohibits false or misleading statements
on alcohol beverage labels, and TTB will not approve an application for
label approval proposing to use a trade name on a label that gives a
misleading impression as to the age, origin, or identity of the
product. The FAA Act also prohibits the use of misleading trade names
when advertising distilled spirits for beverage purposes.
F. Retention of Records Off-Premises
As part of its evaluation of permit and registration applications,
TTB sought to identify types of requests to vary from the regulations
that were commonly submitted along with a permit or registration
application. One common request relevant to distilled spirits is to
retain required records at a location other than the premises covered
under the permit or registration. TTB is proposing amendments to
recordkeeping requirements in parts 17, 20, 22, 26, 27, 28, and 31 to
allow records to be stored at a location other than the permitted
premises, and allow applicants to notify TTB of their intention to
store records at an off-premises location as part of the application
process. The amendments provide that required records must still be
made available at the permitted premises upon request, but that copies
(including electronic copies) will generally satisfy this requirement.
The TTB regulations at 27 CFR 19.573 provide that a DSP's records
may be maintained at the DSP or at a central recordkeeping location
maintained by the DSP proprietor. In the latter case, the proprietor
must submit a letterhead notice to TTB informing TTB of the location
where the records are kept. Section 19.574, concerning availability of
records, further provides that if records are kept at a location other
than the DSP premises, they must nonetheless be made available at the
DSP premises upon request, generally within two days of the request.
The current recordkeeping requirements applicable to TTB-regulated
manufacturers of nonbeverage products, specially denatured spirits
dealers and users, tax-free alcohol users, importers, wholesalers, and
alcohol beverage dealers do not similarly allow records to be
maintained at a location other than the premises covered by the permit
or registration. As a result, such proprietors generally must submit a
request for specific authorization to retain records at a central
recordkeeping location rather than at the premises covered by the
permit or registration. TTB proposes to amend the record
[[Page 68581]]
retention requirements applicable to such entities (i.e., record
retention requirements in 27 CFR parts 17, 20, 22, 26, 27, 28, and 31)
to reflect those set forth in Sec. Sec. 19.573 and 19.574, described
above. TTB also proposes amendments to Sec. 19.574, as well as other
record retention provisions in part 19, intended to clarify that an
industry member generally may satisfy a request for documents by
providing copies of such documents, including electronic copies.
III. Public Participation
A. Comments Invited
TTB invites comments from interested members of the public on this
proposed rulemaking. TTB also invites comments on any additional means
to streamline application processes within the parameters of TTB's
statutory obligations.
B. Submitting Comments
You may submit comments on this proposal as an individual or on
behalf of a business or other organization via the Regulations.gov
website or via postal mail, as described in the ADDRESSES section of
this document. Your comment must reference Notice No. 207 and must be
submitted or postmarked by the closing date shown in the DATES section
of this document. You may upload or include attachments with your
comment. You also may submit a comment requesting a public hearing on
this proposal. The TTB Administrator reserves the right to determine
whether to hold a public hearing. If TTB schedules a public hearing, it
will publish notification of the date, time, and place for the hearing
in the Federal Register.
C. Confidentiality and Disclosure of Comments
All submitted comments and attachments are part of the rulemaking
record and are subject to public disclosure. Do not enclose any
material in your comments that you consider confidential or that is
inappropriate for disclosure.
TTB will post, and you may view, copies of this document, its
supporting materials, and any comments TTB receives about this proposal
within the related Regulations.gov docket. In general, TTB will post
comments as submitted, and it will not redact any identifying or
contact information from the body of a comment or attachment.
Please contact TTB's Regulations and Rulings division by email
using the web form available at https://www.ttb.gov/contact-rrd, or by
telephone at 202-453-2265, if you have any questions regarding comments
on this proposal or to request copies of this document, its supporting
materials, or the comments received in response.
IV. Regulatory Analysis and Notices
A. Executive Order 12866
It has been determined that this proposed rule is not a significant
regulatory action as defined by Executive Order 12866. Therefore, a
regulatory impact assessment is not required.
B. Regulatory Flexibility Act
In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.), TTB has analyzed the potential economic effects of this action
on small entities. In lieu of the initial regulatory flexibility
analysis required to accompany proposed rules under 5 U.S.C. 603,
section 605 allows the head of an agency to certify that a rule will
not, if promulgated, have a significant economic impact on a
substantial number of small entities. The following analysis provides
the factual basis for TTB's certification under section 605.
Impact on Small Entities
While TTB believes the majority of businesses subject to this
proposed rule are small businesses, the changes proposed in this
document will not have a significant impact on those small entities.
The proposed amendments are generally aimed at reducing burden on
regulated entities of all sizes by: (1) Eliminating the collection of
certain information from applications for permits or registrations; (2)
replacing required narrative descriptions of an applicant's premises
with more specific description requirements; (3) extending deadlines
for reporting certain changes in a permitted or registered business;
(4) relaxing the requirements associated with amending the trade names
available for use by a permitted or registered business; (5) allowing
the maintenance of required records at locations other than the
permitted or registered premises; and (6) clarifying and limiting which
individuals are required to submit certain background information in
connection with an application for permit or registration. Many of the
proposed changes are consistent with recommendations submitted by
industry in response to Treasury's request for recommendations for
Treasury regulations that can be eliminated, modified, or streamlined
in order to reduce burdens.
Examples of eliminating the collection of information from
applications for permits or registrations are the proposed amendments
to Sec. Sec. 19.73(a)(12), 19.76, and 19.123, which eliminate a
requirement that an applicant for a DSP registration submit a statement
of plant security measures and replace it with a requirement that the
applicant certify its premises is in compliance with the security
specifications already established at Sec. 19.192. Additionally,
proposed amendments to Sec. 19.75 eliminate the requirement to provide
in the application for registration the serial numbers of the tanks,
stills, and condensers to be used on the DSP premises, allowing an
application to be filed when equipment is on order but not yet
received.
The proposed amendments to Sec. Sec. 19.73, 19.74, 19.141, 19.142,
19.143, 19.643, 19.673, 19.675, 19.676, and 19.692 replace requirements
for narrative descriptions of an applicant's DSP premises with
requirements to submit more specific information regarding the
premises. For example, in connection with an application for
registration as a DSP, Sec. 19.74 currently requires a detailed
narrative description of the DSP premises, including each tract of land
covered by the DSP, featuring ``directions and distances in enough
detail to enable the appropriate TTB officer to readily determine the
boundaries of the plant.'' The proposed amendments to Sec. 19.74
remove the narrative description requirements and instead require the
submission of more limited information illustrating certain specified
attributes.
An example of extending deadlines for reporting changes in a
permitted or registered business is the proposed amendment to Sec.
19.112, which provides the general rules for notifying TTB of any
changes in the information included in a DSP's notice of registration.
Section 19.112 generally requires that when such changes occur, the
proprietor must file specified documentation with TTB to amend the
registration within 30 days. The proposed amendments to Sec. 19.112
extend this deadline to 60 days. TTB proposes similar amendments at
Sec. Sec. 19.114, 19.126, 19.127, 19.130, 19.644, 19.683, 19.684,
19.686, 19.687, 19.691, 20.56, 20.57, 22.57, 22.58, and 31.138.
An example of relaxing the reporting requirements associated with
changes in the trade names available for use by a permitted or
registered business is the proposed amendment to Sec. 19.129. Section
19.129 currently requires that a proprietor of a DSP apply for, and
receive approval of, an amended operating permit prior to operating
under a new trade name. The proposed amendment to Sec. 19.129 allows
the
[[Page 68582]]
addition of a new trade name through a letterhead notice that does not
require TTB approval. TTB proposes similar amendments at Sec. Sec.
1.40, 20.61, 22.62, and 31.132.
Concerning records maintenance, current recordkeeping requirements
applicable to manufacturers of nonbeverage products, specially
denatured spirits dealers and users, tax-free alcohol users, importers,
wholesalers, and alcohol beverage dealers do not allow records to be
maintained at a location other than the premises covered by the permit
or registration. The proposed amendments to Sec. Sec. 17.161, 17.171,
20.267, 22.164, 26.174, 26.275, 26.310, 27.136, 28.45, 31.152, 31.172,
and 31.181 generally allow for the maintenance of required records at
locations other than the permitted or registered premises upon
letterhead notice to TTB.
With respect to the collection of applicant background information,
TTB proposes amendments to 27 CFR 19.93, 19.677, 20.45, and 22.45 to
clarify the individuals who are required to submit statements of
financial interest in a business applying for a distilled spirits-
related permit or registration. The proposed amendments clarify that:
(1) Such statements of interest are required only from persons with an
ownership interest in the applicant of 10 percent or greater; and (2)
where a ``person'' holding such an interest is a legal entity other
than an individual, an applicant must submit basic identifying
information about a representative individual for that entity.
In conclusion, while the entities affected by the proposed rule
include a substantial number of small entities, the effects of the
changes in this proposed rule are expected to be positive for the
affected entities.
In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.), TTB certifies that this proposed rule, if promulgated, will not
have a significant economic impact on a substantial number of small
entities. The proposed rule will not impose, or otherwise cause, a
significant increase in reporting, recordkeeping, or other compliance
burdens on a substantial number of small entities. The proposed rule is
not expected to have significant secondary or incidental effects on a
substantial number of small entities. Accordingly, a regulatory
flexibility analysis is not required. Pursuant to 26 U.S.C. 7805(f),
TTB will submit the proposed regulations to the Chief Counsel for
Advocacy of the Small Business Administration for comment on the impact
of the proposed regulations on small businesses.
C. Paperwork Reduction Act
Regulations addressed in this document contain current collections
of information that have been previously reviewed and approved by the
Office of Management and Budget (OMB) in accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C. 3504(h)) and assigned control numbers
1513-0002, 1513-0018, 1513-0019, 1513-0028, 1513-0040, 1513-0041, 1513-
0044, 1513-0048, 1513-0051, 1513-0052, 1513-0059, 1513-0060, 1513-0061,
1513-0062, 1513-0065, 1513-0066, 1513-0073, 1513-0075, 1513-0088, 1513-
0089, and 1513-0112. The specific regulatory sections in this proposed
rule that contain collections of information, either current or
proposed, are Sec. Sec. 1.27, 1.40, 1.42, 1.44, 17.161, 19.73, 19.74,
19.75, 19.93, 19.94, 19.112, 19.114, 19.119, 19.126, 19.127, 19.129,
19.130, 19.141, 19.142, 19.143, 19.192, 19.574, 19.643, 19.644, 19.673,
19.675, 19.676, 19.677, 19.683, 19.684, 19.686, 19.687, 19.691, 19.692,
20.42, 20.45, 20.56, 20.57, 20.61, 20.267, 22.42, 22.45, 22.57, 22.58,
22.62, 22.164, 26.174, 26.275, 26.310, 27.136, 28.45, 31.114, 31.132,
31.138, 31.152, 31.172, and 31.181. 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 amendments that TTB proposes in this document, along with
certain corresponding policy changes, are designed to reduce the
overall burden associated with the information collections noted above.
In general, the proposed amendments involve: (1) Eliminating the
collection of certain information from applications for permits or
registrations; (2) replacing required narrative descriptions of an
applicant's premises with more specific information; (3) extending
deadlines for reporting certain changes in a permitted or registered
business; (4) relaxing the requirements associated with amending the
trade names available for use by a permitted or registered business;
(5) allowing the maintenance of required records at locations other
than the permitted or registered premises; and (6 clarifying which
individuals are required to submit certain background information in
connection with an application for permit or registration.
To reduce the amount of information collected in applications for
distilled spirits-related permits or registrations, TTB proposes to
amend 27 CFR 19.73, 19.75, and 19.192, and to eliminate 27 CFR 19.76,
19.77, and 19.123. Proposed amendments to Sec. 19.73(a)(13) and the
elimination of Sec. 19.77 eliminate requirements that an applicant for
a DSP registration intending to operate as a distiller submit a
statement of its production procedures and a statement as to whether
spirits will be redistilled. Proposed amendments to current Sec.
19.73(a)(14) eliminate requirements that an applicant for a DSP
registration intending to operate as a warehouseman submit a narrative
description of its storage system and a statement of the total amount
of bulk wine gallons that can be stored. Additionally, proposed
amendments to current Sec. 19.73(a)(15) eliminate requirements that an
applicant for a DSP registration intending to operate as a processor
submit a narrative description of the storage system for spirits
bottled and cased or otherwise packaged and placed in approved
containers for removal from the bonded premises. Proposed amendments to
Sec. Sec. 19.73(a)(12) and 19.192, and the elimination of Sec. Sec.
19.76 and 19.123, eliminate a requirement that an applicant for a DSP
registration submit a statement of plant security measures and replace
it with a requirement that the applicant certify its premises is in
compliance with the security specifications already established at
Sec. 19.192. The amendments to Sec. 19.192 also generalize the
required specifications for locks to be used on the DSP premises. The
proposed amendments to Sec. 19.75 eliminate the requirement to provide
in the application for registration the serial numbers of the tanks,
stills, and condensers to be used on the DSP premises. Sections 19.73,
19.75, 19.76, 19.77, 19.123, and 19.192 are currently included in the
collection of information assigned OMB control number 1513-0048. TTB
has submitted to OMB a revision of that information collection to
account for the reduced burden of the proposed amendments.
Similar to the amendments to Sec. 19.75 described in the previous
paragraph, TTB proposes amendments 27 CFR 20.42 and 22.42 to remove
requirements to provide serial numbers of equipment to be used by
applicants for permits as users of denatured alcohol and of tax-free
alcohol. Sections 20.42 and 22.42 are currently included in the
collection of information assigned OMB control number 1513-0028. TTB
has submitted to OMB a revision of that information collection to
account for the reduced burden of the proposed amendments.
To replace required narrative descriptions of applicant premises
with more specific information and certifications, TTB proposes
amendments to 27 CFR 19.73, 19.74, 19.141, 19.142, 19.143, 19.643,
19.673, 19.675, 19.676, and 19.692. The
[[Page 68583]]
proposed amendments to Sec. 19.74 eliminate requirements to submit
detailed narrative descriptions of the plant and certain of its
attributes, and replace these requirements with a more specific set of
information and certifications. TTB proposes similar amendments with
respect to applications for alcohol fuel plant permits at Sec. Sec.
19.673, 19.675, and 19.676; and with respect to applications for
vinegar plants at Sec. 19.643. Sections 19.141, 19.142, and 19.143
each relate to qualifying to alternate the DSP premises. TTB proposes
amendments to these sections to eliminate requirements to submit
narrative statements describing the areas to be alternated and the
means by which the alternated areas will be separated from other parts
of the premises. TTB's proposed amendments require more specific
information. TTB proposes similar amendments to with respect to
alternation of an alcohol fuel plant at Sec. 19.692.
Sections 19.74 and 19.143 are currently included in the collection
of information assigned OMB control number 1513-0048; Sec. Sec. 19.141
and 19.142 are being added to the collection of information assigned
OMB control number 1513-0048 in revisions submitted to OMB (these
sections were inadvertently not referenced in the supporting statement,
but their burden has been accounted for); Sec. Sec. 19.673, 19.675,
and 19.676 are currently included in the collection of information
assigned OMB control number 1513-0051; and the amended provisions of
Sec. 19.692 are currently included in the collection of information
assigned OMB control number 1513-0051. TTB has submitted to OMB
revisions of those information collections to account for the reduced
burden of the proposed amendments. The information collected under
Sec. 19.643 is not subject to the Paperwork Reduction Act due to the
limited number of respondents.
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, the proprietor of the regulated business must
notify TTB of the change. To extend deadlines for reporting certain
changes in a permitted or registered business, TTB proposes amendments
to 27 CFR 19.112, 19.114, 19.126, 19.127, 19.130, 19.644, 19.683,
19.684, 19.686, 19.687, 19.691, 20.56, 20.57, 22.57, 22.58, and 31.138.
In each case, the deadline for reporting the specified change in the
business is extended to 60 days, typically from 30 days (in some cases,
current regulatory text required industry to inform TTB ``immediately''
of certain changes; see, e.g., Sec. 19.644). Sections 19.112 and
19.114 are currently included in the collection of information assigned
OMB control number 1513-0048; Sec. Sec. 19.126 and 19.130 are
currently included in the collection of information assigned OMB
control number 1513-0040; Sec. Sec. 19.683, 19.684, and 19.686 are
currently included in the collection of information assigned OMB
control number 1513-0051; Sec. Sec. 19.683, 19.687, and 19.691 are
currently included in the collection of information assigned OMB
control number 1513-0052 (additionally, the letterhead application
provisions of Sec. 19.686 are being added to this collection of
information in revisions submitted to OMB); Sec. Sec. 20.56 and 20.57
are currently included in the collection of information assigned OMB
control number 1513-0061; Sec. Sec. 22.57 and 22.58 are currently
included in the collection of information assigned OMB control number
1513-0060; and Sec. 31.138 is currently included in the collection of
information assigned OMB control number 1513-0112. TTB has submitted to
OMB revisions of those information collections to account for the
reduced burden of the proposed amendments. The revision to number 1513-
0040 also adds a reference to Sec. 19.127. The information collected
under Sec. 19.644 is not subject to the Paperwork Reduction Act due to
the limited number of respondents.
The TTB regulations generally require that changes to, or additions
of, the trade names under which a permitted or registered business may
operate be made by filing for an amended permit or registration. Such
applications would need to be approved prior to the applicant beginning
operations under the new trade name. To relax the requirements
associated with altering the trade names available for use by a
permitted or registered business, TTB proposes amendments to 27 CFR
1.40, 19.129, 20.61, 22.62, and 31.132. The amendments would allow
changes to, or additions of, trade names to be accomplished by a
letterhead notice. TTB also proposes an amendment to 27 CFR 19.94 to
remove the requirement that an applicant for an original DSP operating
permit submit supporting documentation for the trade names identified
in the application. Section 1.40 is currently included in the
collection of information assigned OMB control number 1513-0019;
Sec. Sec. 19.94 and 19.129 are currently included in the collection of
information assigned OMB control number 1513-0040; Sec. 20.61 is
currently included in the collection of information assigned OMB
control number 1513-0061; Sec. 22.62 is currently included in the
collection of information assigned OMB control number 1513-0060; and
Sec. 31.132 currently included in the collection of information
assigned OMB control number 1513-0112. TTB has submitted to OMB
revisions of those information collections to account for the reduced
burden of the proposed amendments.
The current recordkeeping requirements applicable to specially
denatured spirits dealers and users, tax-free alcohol users,
manufacturers of nonbeverage products, importers, wholesalers, and
alcohol beverage dealers do not allow records to be maintained at a
location other than the premises covered by the permit or registration.
As a result, such proprietors generally must submit a request for
specific authorization to retain records at a central recordkeeping
location rather than the premises covered by the permit or
registration. To allow the maintenance of required records at locations
other than the permitted or registered premises, TTB proposes
amendments to 27 CFR 17.161, 17.171, 20.267, 22.164, 26.174, 26.275,
26.310, 27.136, 28.45, 31.152, 31.172, and 31.181. These amendments, as
well as amendments to 27 CFR 19.574, also clarify that an industry
member generally may satisfy a request for documents by providing
copies of such documents, including electronic copies. Sections 17.161
and 17.171 are currently included in the collection of information
assigned OMB control number 1513-0073; Sec. 19.574 is currently
included in the collection of information assigned OMB control number
1513-0041; the general record retention provisions of Sec. 22.164 are
currently included in the collection of information assigned OMB
control number 1513-0059, while the proposed notice associated with
off-premises records retention has been added to the collection of
information assigned OMB control number 1513-0060 in revisions
submitted to OMB. In addition, Sec. 20.267 is currently included in
OMB control number 1513-0062; Sec. Sec. 26.174 and 26.310 are
currently included in the collection of information assigned OMB
control number 1513-0089; Sec. 28.45 is currently included in the
collection of information assigned OMB control number 1513-0075;
Sec. Sec. 31.152 and 31.172 are currently included in the collection
of information assigned OMB control number 1513-0065; Sec. 31.181 is
currently included in the collection of information assigned OMB
control number 1513-0066; and Sec. Sec. 19.574, 26.174, 26.310, and
27.136 are currently
[[Page 68584]]
included in the collection of information assigned OMB control number
1513-0088. TTB has submitted to OMB revisions of those information
collections as needed to account for the reduced burden of the proposed
amendments. Additionally, the revision to OMB control number 1513-0088
adds references to Sec. Sec. 26.275 and 28.45. TTB also submitted to
OMB a revision of the information collection assigned OMB control
number 1513-0061, to add a reference to Sec. 20.267.
With respect to the collection of applicant background information,
TTB proposes amendments to 27 CFR 19.93, 19.677, 20.45, 22.45, and
31.114 to clarify the individuals who are required to submit statements
of financial interest in the applicant business. The above regulations
generally require statements disclosing the identities of persons
holding certain levels of ownership in a business applying for a
distilled spirits-related registration or permit be submitted with such
applications. The proposed amendments clarify that (1) Such statements
of interest are required only from persons with an ownership interest
in the applicant of 10 percent or greater; and (2) where a ``person''
holding such an interest is a legal entity other than an individual, an
applicant must submit basic identifying information about a
representative individual for that entity. Section 19.93 is currently
included in the collection of information assigned OMB control number
1513-0040, and TTB has proposed revisions to also include it in the
collection of information assigned OMB control number 1513-0048; Sec.
19.677 is currently included in the collection of information assigned
OMB control number 1513-0051; Sec. Sec. 20.45 and 22.45 are currently
included in the collection of information assigned OMB control number
1513-0028; and Sec. 31.114 is currently included in the collection of
information assigned OMB control number 1513-0112. TTB proposes
conforming amendments to 27 CFR 1.27, 1.42, 1.44, 19.114, 19.127,
19.130, 19.684, and 19.687, each relating to reporting changes in the
ownership of the applicant or permitted business, to update the
description of ownership interests consistent with the amendments
described above. Section 1.27 is currently included in the collection
of information assigned OMB control number 1513-0018; Sec. 1.42 is
currently included in the collection of information assigned OMB
control number 1513-0019; Sec. 19.114 is currently included in the
collection of information assigned OMB control number 1513-0048; Sec.
19.130 is currently included in the collection of information assigned
OMB control number 1513-0040; Sec. 19.684 currently included in the
collection of information assigned OMB control number 1513-0051; and
Sec. 19.687 is currently included in the collection of information
assigned OMB control number 1513-0052. TTB has submitted to OMB
revisions of the collections of information assigned OMB control
numbers 1513-0019 and 1513-0040 to add references to Sec. Sec. 1.44
and 19.127, respectively. The burden for these sections was already
accounted for, but citations to these sections were left out in error.
As noted above, TTB has submitted the revised information
collection requirements to OMB for review. Comments on these revised
recordkeeping and reporting requirements should be sent to OMB at
Office of Management and Budget, Attention: Desk Officer for the
Department of the Treasury, Office of Information and Regulatory
Affairs, Washington, DC 20503 or by email to
[email protected]. A copy should also be sent to TTB by any
of the methods previously described. Comments on the information
collections should be submitted no later than February 1, 2022.
Comments are specifically requested concerning:
Whether the collections of information submitted to OMB
are necessary for the proper performance of the functions of the
Alcohol and Tobacco Tax and Trade Bureau, including whether the
information will have practical utility;
The accuracy of the estimated burdens associated with the
collections of information submitted to OMB;
How to enhance the quality, utility, and clarity of the
information to be collected;
How to minimize the burden of complying with the proposed
revisions of the collections of information, including the application
of automated collection techniques or other forms of information
technology; and
Estimates of capital or start-up costs and costs of
operation, maintenance, and purchase of services to provide
information.
List of Subjects
27 CFR Part 1
Alcohol and alcoholic beverages, Application procedures, Distilled
spirits plants, Importers, Permit requirements, Reporting and
recordkeeping requirements, Trade names, Wholesalers.
27 CFR Part 17
Claims, Excise taxes, Liquors, Reporting and recordkeeping
requirements.
27 CFR Part 19
Alcohol and alcoholic beverages, Alcohol fuel plants, Alternation,
Application procedures, Distilled spirits plants, Permit requirements,
Registration requirements, Reporting and recordkeeping requirements,
Security requirements, Trade names, Vinegar plants.
27 CFR Part 20
Alcohol, Application procedures, Denatured spirits, Distilled
spirits plants, Permit requirements, Reporting and recordkeeping
requirements, Specially denatured spirits, Trade names.
27 CFR Part 22
Alcohol, Application procedures, Permit requirements, Reporting and
recordkeeping requirements, Tax-free alcohol.
27 CFR Part 26
Alcohol and alcohol beverages, Puerto Rico, Reporting and
recordkeeping requirements, Virgin Islands.
27 CFR Part 27
Alcohol and alcohol beverages, Importation, Importers, Reporting
and recordkeeping requirements.
27 CFR Part 28
Alcohol and alcohol beverages, Exportation, Exporters, Reporting
and recordkeeping requirements.
27 CFR Part 31
Alcohol and alcohol beverages, Reporting and recordkeeping
requirements, Retail dealers, Trade names, Wholesale dealers.
Amendments to the Regulations
For the reasons discussed above in the preamble, TTB proposes to
amend 27 CFR parts 1, 17, 19, 20, 22, 26, 27, 28, and 31 as follows:
PART 1--BASIC PERMIT REQUIREMENTS UNDER THE FEDERAL ALCOHOL
ADMINISTRATION ACT, NONINDUSTRIAL USE OF DISTILLED SPIRITS AND
WINE, BULK SALES AND BOTTLING OF DISTILLED SPIRITS
0
1. The authority citation for part 1 continues to read as follows:
Authority: 27 U.S.C. 203, 204, 206, 211 unless otherwise noted.
[[Page 68585]]
0
2. Section 1.24 is amended by revising paragraph (a) to read as
follows:
Sec. 1.24 Qualifications of applicants.
* * * * *
(a) Such person (or in case of a limited liability entity, any of
its officers, directors, or persons holding a 10 percent or more
ownership interest in any of the classes or types of ownership of the
applicant) has not, within 5 years prior to the date of application,
been convicted of a felony under Federal or State law, and has not,
within 3 years prior to the date of application, been convicted of a
misdemeanor under any Federal law relating to liquor, including the
taxation thereof; and
* * * * *
0
3. Section 1.27 is revised to read as follows:
Sec. 1.27 Change in ownership, management, or control of the
applicant.
In the event of any change in the ownership, management, or control
of the applicant (in case of a limited liability entity, any change in
the officers, directors, or persons holding a 10 percent or more
ownership interest in any of the classes or types of ownership of the
applicant), after the date of filing of any application for a basic
permit and prior to final action on such application, the applicant
must notify the appropriate TTB officer immediately of such change.
0
4. Section 1.40 is revised to read as follows:
Sec. 1.40 Change in name.
(a) Legal name. In the event of any change in the name of the
individual, firm, corporation, or other entity holding a basic permit,
the permittee must file application form TTB F 5100.18 for an amended
basic permit. The application must be approved and an amended permit
issued before operations may be commenced under the new name.
(b) Trade name. In the event of any change in a trade name of a
permittee, or, in the event a permittee desires to engage in operations
under an additional trade name, the permittee must first file a
letterhead notice with the appropriate TTB officer listing the new
names and the offices where they are registered.
(Approved by the Office of Management and Budget under control
number 1513-0019)
0
5. Section 1.42 is revised to read as follows:
Sec. 1.42 Change in ownership, management, or control of business.
In the event of any change in the ownership, management, or control
of any business operated pursuant to a basic permit (in case of a
limited liability entity, any change in the officers, directors, or
persons holding a 10 percent or more ownership interest in any of the
classes or types of ownership of the permittee) the permittee must
within 30 days notify the appropriate TTB officer of such change,
giving the names and addresses of all new persons participating in the
ownership, management, or control of such business. Notice to the
appropriate TTB officer of any such change must be accompanied or
supplemented by such data in reference to the personal or business
history of such persons as the appropriate TTB officer may require.
Sec. 1.44 [Amended]
0
6. Section 1.44 is amended by removing the word ``stock'' in the second
sentence.
PART 17--DRAWBACK ON TAXPAID DISTILLED SPIRITS USED IN
MANUFACTURING NONBEVERAGE PRODUCTS
0
7. The authority citation for part 17 continues to read as follows:
Authority: 26 U.S.C. 5010, 5111-5114, 5123, 5206, 5273, 6065,
6091, 6109, 7213, 7652, 7805; 31 U.S.C. 9301, 9303, 9304, 9306.
0
8. Section 17.161 is revised to read as follows:
Sec. 17.161 General.
Each person claiming drawback on taxpaid distilled spirits used in
the manufacture of nonbeverage products must maintain records showing
the information required in this subpart. No particular form is
prescribed for these records, but the data required to be shown must be
clearly recorded and organized to enable appropriate TTB officers to
trace each operation or transaction, monitor compliance with law and
regulations, and verify the accuracy of each claim. Ordinary business
records, including invoices and cost accounting records, are acceptable
if they show the required information or are annotated to show any such
information that is lacking. The records must be kept complete and
current at all times and must be retained by the manufacturer for the
period prescribed in Sec. 17.170 and at the place prescribed in Sec.
17.171.
0
9. Section 17.171 is amended by:
0
a. Designating the paragraph as paragraph (a);
0
b. Removing the word ``shall'' each place it appears and adding in its
place the word ``must'' in newly designated paragraph (a);
0
c. Adding paragraph (b); and
0
d. Removing the parenthetical authority citation at the end of the
section.
The revision reads as follows:
Sec. 17.171 Inspection of records.
* * * * *
(b) A manufacturer may keep the records required by this part at a
location other than the premises where the distilled spirits are used
in the manufacture or production of nonbeverage products, if he or she
has first provided a letterhead notice to the appropriate TTB officer,
identifying the location where the records are to be kept. A
manufacturer keeping records at a location other than the premises
where distilled spirits are used in the manufacture or production of
nonbeverage products must make the records available at such premises
upon request of the appropriate TTB officer; however, the TTB officer
may, at his or her discretion, allow the permittee to supply copies
(including electronic copies) of such records instead of the originals.
PART 19--DISTILLED SPIRITS PLANTS
0
10. The authority citation for part 19 continues to read as follows:
Authority: 19 U.S.C. 81c, 1311; 26 U.S.C. 5001, 5002, 5004-
5006, 5008, 5010, 5041, 5061, 5062, 5066, 5081, 5101, 5111-5114,
5121-5124, 5142, 5143, 5146, 5148, 5171-5173, 5175, 5176, 5178-5181,
5201-5204, 5206, 5207, 5211-5215, 5221-5223, 5231, 5232, 5235, 5236,
5241-5243, 5271, 5273, 5301, 5311-5313, 5362, 5370, 5373, 5501-5505,
5551-5555, 5559, 5561, 5562, 5601, 5612, 5682, 6001, 6065, 6109,
6302, 6311, 6676, 6806, 7011, 7510, 7805; 31 U.S.C. 9301, 9303,
9304, 9306.
0
11. Section 19.73 is amended by:
0
a. Revising paragraphs (a)(12) and (13);
0
b. Removing paragraph (a)(14);
0
c. Redesignating paragraph (a)(15) as paragraph (a)(14) and revising
newly redesignated paragraph (a)(14);
0
d. Redesignating paragraph (a)(16) as paragraph (a)(15); and
0
e. Removing the parenthetical authority citation at the end of the
section.
The revisions read as follows:
Sec. 19.73 Information required in an application for registration.
(a) * * *
(12) A certification that the plant's security will be in
compliance with Sec. 19.192;
[[Page 68586]]
(13) If the applicant intends to operate as a distiller, a
statement of the total proof gallons of spirits that can be produced
daily;
(14) If the applicant intends to operate as a processor, a
statement whether spirits will or will not be bottled, denatured,
redistilled, and whether articles will be manufactured; and
* * * * *
0
12. Section 19.74 is revised to read as follows:
Sec. 19.74 Description of the plant.
(a) As required by Sec. 19.73(a)(8), the application for
registration must include a description of the distilled spirits plant.
The description may be in narrative form or diagram form, and must
illustrate:
(1) The overall dimensions of the building(s) housing the distilled
spirits plant;
(2) The dimensions of the bonded premises and any general premises;
(3) Any internal walls establishing the boundaries of the bonded
premises and general premises;
(4) The external doors of the distilled spirits plant premises;
(5) Any portions of the plant premises that are outdoors, including
the location of any outdoor tanks; and
(6) Any adjacent retail premises that are to be operated by the
applicant.
(b) Photographs further illustrating any of the elements required
in paragraph (a) of this section must be submitted upon request of the
appropriate TTB officer.
0
13. Section 19.75 is amended by:
0
a. Revising the first sentences of paragraphs (a) and (b);
0
b. Revising paragraph (c); and
0
c. Removing the parenthetical authority citation at the end of the
section.
The revisions read as follows:
Sec. 19.75 Major equipment.
* * * * *
(a) The capacity of each tank in the plant. * * *
(b) The kind, capacity, and intended use of each still in the
plant. * * *
(c) The number of condensers used in the plant.
Sec. 19.76 [Removed]
0
14. Section 19.76 is removed.
Sec. 19.77 [Removed]
0
15. Section 19.77 is removed.
0
16. Section 19.80 is amended by:
0
a. Adding a sentence before the last sentence; and
0
b. Removing the parenthetical authority citation at the end of the
section.
The addition reads as follows:
Sec. 19.80 Approved notice of registration.
* * * In a circumstance in which a proprietor of a distilled
spirits plant is authorized to continue to operate under either an FAA
Act permit or an operating permit under the IRC while a new permit
application is pending, such as under 27 CFR 1.44 or 19.127, the
proprietor's notice of registration will also remain valid until TTB
takes final action upon the new application. * * *
0
17. Section 19.93 is amended by:
0
a. Removing the citation to ``19.92(a)(4)'' and adding in its place
``19.92(b)(4)'' in the first sentence of paragraph (a) introductory
text;
0
b. Adding the word ``ownership'' before the word ``interest'' the first
time it appears in paragraph (b)(1);
0
c. Revising paragraphs (b)(2)(i) and (ii);
0
d. Adding paragraph (b)(3); and
0
e. Removing the parenthetical authority citation at the end of the
section.
The revisions and addition read as follows:
Sec. 19.93 Applicant organization documents.
* * * * *
(b) * * *
(2) * * *
(i) The names and addresses of persons having a 10 percent or more
ownership interest in each of the classes or types of ownership
interest in the applicant, and the nature and amount of ownership
interest of each person.
(ii) The name of the person in whose name the interest appears. If
the limited liability entity is under actual or legal control of
another limited liability entity, the appropriate TTB officer may
request the same information regarding ownership for the parent limited
liability entity.
(3) Representative. If any interested person named under paragraphs
(b)(1) and (2) of this section is a legal entity other than an
individual, the applicant must also provide the name, title, and city
and state of residence of a representative individual for the entity.
The representative individual must be the individual designated by the
entity to represent the entity's interest 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.
Sec. 19.94 [Amended]
0
18. Section 19.94 is amended by removing the final sentence in
paragraph (a) and the parenthetical authority citation at the end of
the section.
0
19. Section 19.96 is amended by:
0
a. Revising paragraph (a); and
0
b. Removing the parenthetical authority citation at the end of the
section.
The revision reads as follows:
Sec. 19.96 Denial of permit.
* * * * *
(a) The applicant (including, in the case of a limited liability
entity, any of its officers, directors, or persons holding a 10 percent
or more ownership interest in any of the classes or types of ownership
of the applicant) is, by reason of business experience, financial
standing, or trade connections, not likely to maintain operations in
compliance with 26 U.S.C. chapter 51, or the regulations in this
chapter;
* * * * *
Sec. 19.112 [Amended]
0
20. Section 19.112 is amended by:
0
a. Removing the phrase ``30 days'' and adding in its place ``60 days''
in the first sentence of the introductory text; and
0
b. Removing the parenthetical authority citation at the end of the
section.
Sec. 19.114 [Amended]
0
21. Section 19.114 is amended by:
0
a. Adding the words ``an ownership'' before the word ``interest'' in
the first sentence of the introductory text;
0
b. Removing the phrase ``30 days'' each place it appears and adding in
its place ``60 days''; and
0
c. Removing the parenthetical authority citation at the end of the
section.
0
22. Section 19.119 is amended by:
0
a. Designating the paragraph as paragraph (a);
0
b. Adding paragraph (b); and
0
c. Removing the parenthetical authority citation at the end of the
section.
The addition reads as follows:
Sec. 19.119 Change in premises.
* * * * *
(b)(1) If the proprietor intends to make any change to the
premises, other than those covered by paragraph (a) of this section or
by Sec. Sec. 19.142 and 19.143, that would render inaccurate the
description submitted with the registration or submitted separately or
previously by the proprietor with another reported change, the
proprietor must first submit to TTB updated information meeting the
requirements of Sec. 19.74.
(2) The proprietor may make emergency changes to the premises
described in paragraph (b)(1) of this section without first submitting
updated information. However, the proprietor
[[Page 68587]]
must promptly report any emergency change to the appropriate TTB
officer and submit updated information meeting the requirements of
Sec. 19.74 within 60 days of the emergency changes.
Sec. 19.121 [Removed]
0
23. Section 19.121 is removed.
Sec. 19.122 [Removed]
0
24. Section 19.122 is removed.
Sec. 19.123 [Removed]
0
25. Section 19.123 is removed.
Sec. 19.126 [Amended]
0
26. Section 19.126 is amended by:
0
a. Removing the phrase ``30 days'' and adding in its place ``60 days''
in paragraph (a); and
0
b. Removing the parenthetical authority citation at the end of the
section.
0
27. Section 19.127 is amended by:
0
a. Revising paragraph (a)(3); and
0
b. Removing the parenthetical authority citation at the end of the
section.
The revision reads as follows:
Sec. 19.127 Automatic termination of permits.
(a) * * *
(3) In the case of a limited liability entity (i.e., a corporation,
limited liability partnership, limited liability company, or other
legal entity in which some or all of the owners have limited personal
liability for the activities of the entity) holding a permit issued
under subpart D of this part, if actual or legal control of such
limited liability entity changes, directly or indirectly, whether by
reason of a change in ownership or control (in the permittee limited
liability entity or any other limited liability entity), by operation
of law, or in any other manner, the permittee must file an application
for a new permit within 60 days of the change. If an application for a
new permit is not filed within 60 days of the change, the outstanding
permit will automatically terminate. If an application for a new permit
is filed within the 60-day period prescribed in the preceding
sentences, the outstanding permit will remain in effect until TTB takes
final action on the application. When TTB takes final action on the
application, the outstanding permit will automatically terminate.
* * * * *
0
28. Section 19.129 is revised to read as follows:
Sec. 19.129 Change in trade name.
In the event of any change in a trade name of a proprietor of a
distilled spirits plant, or, in the event a proprietor desires to
engage in operations under an additional trade name, the proprietor
must first file a letterhead notice with the appropriate TTB officer
listing the new names and the offices where they are registered.
Sec. 19.130 [Amended]
0
29. Section 19.130 is amended by:
0
a. Adding the words ``an ownership'' before the word ``interest'' in
the first sentence of the introductory text;
0
b. Removing the phrase ``30 days'' each place it appears and adding in
its place ``60 days''; and
0
c. Removing the parenthetical authority citation at the end of the
section.
0
30. Section 19.141 is amended by:
0
a. Revising paragraph (a);
0
b. Removing the word ``diagrams'' and adding in its place
``description'' in paragraph (b)(4); and
0
c. Removing the parenthetical authority citation at the end of the
section.
The revision reads as follows:
Sec. 19.141 Procedures for alternation of proprietors.
(a) General. A proprietor may alternate use of a distilled spirits
plant or part of the plant with one or more other proprietors. In order
to do so, each proprietor must separately file and receive approval of
the necessary registration, applications and bonds that are required by
subpart D of this part and this subpart. Each proprietor must also
conduct operations and keep records in accordance with the regulations
in this part. Where operations by alternating proprietors will be
limited to parts of the plant, the descriptions required to be
submitted with each proprietor's application for registration under
Sec. 19.73(a)(8) must additionally illustrate the following:
(1) The areas, rooms, or buildings, or combination of rooms and/or
buildings, that will alternate between proprietors; and
(2) The means by which the alternated premises will be separated
from any premises that will not be alternated.
* * * * *
0
31. Section 19.142 is amended by:
0
a. Revising paragraph (b);
0
b. Removing the word ``diagrams'' and adding in its place
``description'' in paragraph (c)(3); and
0
c. Removing the parenthetical authority citation at the end of the
section.
The revision reads as follows:
Sec. 19.142 Alternate use of premises and equipment for customs
purposes.
* * * * *
(b) Qualification. Before alternating the plant premises for
customs purposes, the proprietor must file and receive approval of the
necessary registration, application and bonds as required by this part.
The description required to be submitted with the proprietor's
application for registration under Sec. 19.73(a)(8) must additionally
illustrate the following:
(1) The areas, rooms, or buildings, or combination of rooms and/or
buildings, that will alternate between proprietors; and
(2) The means by which the alternated premises will be separated
from any premises that will not be alternated.
* * * * *
0
32. Section 19.143 is amended by:
0
a. Revising paragraph (b)(2); and
0
b. Removing the parenthetical authority citation at the end of the
section.
The revision reads as follows:
Sec. 19.143 Alternation for other purposes.
* * * * *
(b) * * *
(2) Description. For all alternate uses, the proprietor must
provide additional versions of the description required under Sec.
19.73(a)(8) describing or showing the premises as they will exist, both
during extension and curtailment, and clearly depicting all buildings,
floors, rooms, areas, equipment that are to be subject to alternation,
in their relative operating sequence.
* * * * *
0
33. Section 19.192 is amended by:
0
a. Revising paragraph (e);
0
b. Removing paragraph (f);
0
c. Redesignating paragraph (g) as paragraph (f); and
0
d. Removing the parenthetical authority citation at the end of the
section.
The revision reads as follows:
Sec. 19.192 Security.
* * * * *
(e) Locks. Locks of a class and construction that is usual and
customary in the industry to prevent unauthorized access to, and theft
of, commercial property must be used to secure:
(1) Outdoor tanks used to store spirits, or an enclosure around
such tanks;
(2) Indoor tanks used to store spirits, or the door from which
access may be gained from the outside to the rooms or buildings in
which such tanks are housed; and
(3) Any doors from which access may be gained from the outside to
rooms or buildings containing spirits stored in portable bulk
containers.
* * * * *
[[Page 68588]]
0
34. Section 19.574 is revised to read as follows:
Sec. 19.574 Availability of records.
The records required by this part must be available for inspection
by the appropriate TTB officer during normal business hours. Any
proprietor keeping records at a location other than the distilled
spirits plant where operations or transactions occur must make them
available at the distilled spirits plant premises upon request of the
appropriate TTB officer; however, the TTB officer may, in his or her
discretion, allow the proprietor to supply copies (including electronic
copies) of such records instead of the originals.
0
35. Section 19.643 is revised to read as follows:
Sec. 19.643 Qualification requirements.
(a) General. Before beginning the business of manufacturing vinegar
by the vaporizing process, a person must make written application to
the appropriate TTB officer and receive approval of the application
from TTB. The application must include:
(1) The applicant's name and principal business address (including
the plant address if different from the applicant's principal business
address);
(2) A description of the plant premises;
(3) A description of the operations to be conducted; and
(4) A description of each still, including the name and address of
the owner, the kind of still and its capacity, and the purpose for
which the still was set up.
(b) Specifications of plant description. (1) The description
required by paragraph (a)(2) of this section may be in narrative form
or diagram form, and must describe or illustrate the following:
(i) The overall dimensions of the building(s) housing the vinegar
plant;
(ii) The dimensions of the bonded premises and any general
premises;
(iii) Any internal walls establishing the boundaries of the bonded
premises and general premises;
(iv) The external doors of the plant premises; and
(v) Any portions of the plant premises that are outdoors, including
the location of any outdoor tanks.
(2) Photographs further illustrating the elements required under
paragraph (b)(1) of this section must be submitted upon request of the
appropriate TTB officer.
0
36. Section 19.644 is amended by:
0
a. Revising the first sentence; and
0
b. Removing the parenthetical authority citation at the end of the
section.
The revision reads as follows:
Sec. 19.644 Changes after original qualification.
If there is any change in the information that was provided in an
approved application, the proprietor of the vinegar plant must notify
the appropriate TTB officer in writing within 60 days of the change. *
* *
0
37. Section 19.673 is amended by:
0
a. Revising paragraphs (b)(2) and (6);
0
b. Redesignating paragraphs (c) through (e) as paragraph (d) through
(f);
0
c. Adding a new paragraph (c); and
0
d. Removing the parenthetical authority citation at the end of the
section.
The revisions and addition read as follows:
Sec. 19.673 Small plant permit applications.
* * * * *
(b) * * *
(2) A description of the plant premises;
* * * * *
(6) A certification that the plant's construction and security will
be in compliance with Sec. Sec. 19.703 and 19.704.
(c) Specifications of plant description. (1) The description
required by paragraph (b)(2) of this section may be in narrative form
or diagram form, and must describe or illustrate the following:
(i) The overall dimensions of the building(s) housing the alcohol
fuel plant;
(ii) The dimensions of the bonded premises and any general
premises;
(iii) Any internal walls establishing the boundaries of the bonded
and general premises;
(iv) The external doors of the plant premises; and
(v) Any portions of the plant premises that are outdoors, including
the location of any outdoor tanks.
(2) Photographs further illustrating the elements required under
paragraph (c)(1) of this section must be submitted upon request of the
appropriate TTB officer.
* * * * *
0
38. Section 19.675 is amended by:
0
a. Revising paragraphs (b)(2), (6), and (8);
0
b. Redesignating paragraphs (c) through (f) as paragraphs (d) through
(g);
0
c. Adding a new paragraph (c); and
0
d. Removing the parenthetical authority citation at the end of the
section.
The revisions and addition read as follows:
Sec. 19.675 Medium plant permit applications.
* * * * *
(b) * * *
(2) A description of the plant premises;
* * * * *
(6) A certification that the plant's construction and security will
be in compliance with Sec. Sec. 19.703 and 19.704;
* * * * *
(8) Information identifying the principal persons involved in the
management of the business. This identifying information must include
each person's name, address, and title;
* * * * *
(c) Specifications of plant description. (1) The description
required by paragraph (b)(2) of this section may be in narrative form
or diagram form, and must describe or illustrate the following:
(i) The overall dimensions of the building(s) housing the alcohol
fuel plant;
(ii) The dimensions of the bonded premises and any general
premises;
(iii) Any internal walls establishing the boundaries of the bonded
premises and general premises;
(iv) The external doors of the plant premises; and
(v) Any portions of the plant premises that are outdoors, including
the location of any outdoor tanks.
(2) Photographs further illustrating the elements required under
paragraph (c)(1) of this section must be submitted upon request of the
appropriate TTB officer.
* * * * *
0
39. Section 19.676 is amended by:
0
a. Revising paragraphs (b)(2), (6), and (8);
0
b. Redesignating paragraphs (c) through (g) as paragraph (d) through
(h);
0
c. Adding a new paragraph (c); and
0
d. Removing the parenthetical authority citation at the end of the
section.
The revisions and addition read as follows:
Sec. 19.676 Large plant permit applications.
* * * * *
(b) * * *
(2) A description of the plant premises;
* * * * *
(6) A certification that the plant's construction and security will
be in compliance with Sec. Sec. 19.703 and 19.704;
* * * * *
(8) Information identifying the principal persons involved in the
management of the business. This identifying information must include
each person's name, address, and title;
* * * * *
(c) Specifications of plant description. (1) The description
required by
[[Page 68589]]
paragraph (b)(2) of this section may be in narrative form or diagram
form, and must describe or illustrate the following:
(i) The overall dimensions of the building(s) housing the alcohol
fuel plant;
(ii) The dimensions of the bonded premises and any general
premises;
(iii) Any internal walls establishing the boundaries of the bonded
premises and general premises;
(iv) The external doors of the plant premises; and
(v) Any portions of the plant premises that are outdoors, including
the location of any outdoor tanks.
(2) Photographs further illustrating the elements required under
paragraph (c)(1) of this section must be submitted upon request of the
appropriate TTB officer.
* * * * *
0
40. Section 19.677 is amended by:
0
a. Revising paragraphs (a)(2) and (d); and
0
b. Removing the parenthetical authority citation at the end of the
section.
The revisions read as follows:
Sec. 19.677 Large plant applications--organizational documents.
* * * * *
(a) * * *
(2) A list of officers and directors with their names and
addresses;
* * * * *
(d) Statement of interest--(1) Sole proprietorships and general
partnerships. In the case of an individual owner or a general
partnership, the applicant must provide the name and address of each
person having an ownership interest in the business and a statement
indicating whether the interest appears in the name of the interested
person or in the name of another person.
(2) Limited liability entities. In the case of a corporation,
limited liability partnership, limited liability company, or other
legal entity in which some or all of the owners have limited personal
liability for the activities of the entity, the applicant must provide
the following information about persons having an ownership interest in
the business:
(i) The names and addresses of persons having a 10 percent or more
ownership interest in each of the classes or types of ownership
interests in the applicant, and the nature and amount of ownership
interest of each person.
(ii) The name of the person in whose name the interest appears. If
the limited liability entity is under actual or legal control of
another limited liability entity, the appropriate TTB officer may
request the same information regarding ownership for the parent limited
liability entity.
(3) Representative. If any interested person named under paragraphs
(d)(1) and (2) of this section is a legal entity other than an
individual, the applicant must also provide the name, title, and city
and state of residence of a representative individual for the entity.
The representative individual must be the individual designated by the
entity to represent the entity's interest 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.
* * * * *
0
41. Section 19.678 is amended by:
0
a. Revising paragraph (a); and
0
b. Removing the parenthetical authority citation at the end of the
section.
The revision reads as follows:
Sec. 19.678 Criteria for issuance of permit.
* * * * *
(a) The applicant (including, in the case of a limited liability
entity, any of its officers, directors, or persons holding a 10 percent
or more ownership interest in any of the classes or types of ownership
of the applicant) is, by reason of business experience, financial
standing, or trade connections, not likely to maintain operations in
compliance with 26 U.S.C. chapter 51, or the regulations in this
chapter;
* * * * *
Sec. 19.683 [Amended]
0
42. Section 19.683 is amended by:
0
a. Removing the phrase ``30 days'' each place it appears and adding in
its place ``60 days''; and
0
b. Removing the parenthetical authority citation at the end of the
section.
0
43. Section 19.684 is amended by:
0
a. Revising paragraph (b); and
0
b. Removing the parenthetical authority citation at the end of the
section.
The revision reads as follows:
Sec. 19.684 Automatic termination of permits.
* * * * *
(b) Limited liability entities. In the case of a limited liability
entity (i.e., a corporation, limited liability partnership, limited
liability company, or other legal entity in which some or all of the
owners have limited personal liability for the activities of the
entity) holding a permit issued under this subpart, if actual or legal
control of such limited liability entity changes, directly or
indirectly, whether by reason of a change in ownership or control (in
the permittee limited liability entity or any other limited liability
entity), by operation of law, or in any other manner, the permittee
must file an application for a new permit within 60 days of the change.
If an application for a new permit is not filed within 60 days of the
change, the outstanding permit will automatically terminate. If an
application for a new permit is filed within the 60-day period
prescribed in the preceding sentences, the outstanding permit will
remain in effect until TTB takes final action on the application. When
TTB takes final action on the application, the outstanding permit will
automatically terminate.
Sec. 19.686 [Amended]
0
44. Section 19.686 is amended by:
0
a. Removing the phrase ``30 days'' and adding in its place ``60 days''
in the first sentence; and
0
b. Removing the parenthetical authority citation at the end of the
section.
0
45. Section 19.687 is revised to read as follows:
Sec. 19.687 Changes in officers, directors, members, managers, or
principal persons.
If there is a change in the list of officers, directors, members,
managers, or other principal persons furnished under the provisions of
Sec. 19.675, Sec. 19.676, or Sec. 19.677, the proprietor must submit
a letterhead notice to the appropriate TTB officer within 60 days of
the change. The letterhead notice must identify each change and must
include the identifying information for each new officer, director,
member, manager, or other principal person required by Sec. 19.675,
Sec. 19.676, or Sec. 19.677.
Sec. 19.691 [Amended]
0
46. Section 19.691 is amended by:
0
a. Removing the phrase ``30 days'' and adding in its place ``60 days'';
and
0
b. Removing the parenthetical authority citation at the end of the
section.
0
47. Section 19.692 is amended by:
0
a. Revising paragraph (b)(2); and
0
b. Removing the parenthetical authority citation at the end of the
section.
The revision reads as follows:
Sec. 19.692 Qualifying for alternating proprietorship.
* * * * *
(b) * * *
(2) Additional versions of the description required under Sec.
19.673(b)(2), Sec. 19.675(b)(2), or Sec. 19.676(b)(2) describing or
illustrating the arrangement for the alternation of
[[Page 68590]]
the premises. Where operations by alternating proprietors are limited
to parts of an alcohol fuel plant, the description or illustration must
include the areas, rooms, or buildings, or combination of rooms and/or
buildings, that will alternate between proprietors. The description or
illustration must also include the means by which the alternated
premises will be separated from any premises that will not be
alternated. A description or illustration must be submitted for each
arrangement under which the premises will be operated;
* * * * *
Sec. 19.761 [Amended]
0
48. Section 19.761 is amended by removing the entries for Sec. Sec.
19.76, 19.77, 19.121, 19.122, and 19.123 from the table in paragraph
(b).
PART 20--DISTRIBUTION AND USE OF DENATURED ALCOHOL AND RUM
0
49. The authority citation for part 20 continues to read as follows:
Authority: 26 U.S.C. 5001, 5206, 5214, 5271-5275, 5311, 5552,
5555, 5607, 6065, 7805.
Sec. 20.42 [Amended]
0
50. Section 20.42 is amended by removing the phrase ``serial number,''
in paragraph (a)(8).
0
51. Section 20.45 is amended by revising paragraph (c) to read as
follows:
Sec. 20.45 Organizational documents.
* * * * *
(c) Statement of interest--(1) Sole proprietorships and general
partnerships. In the case of an individual owner or a general
partnership, the applicant must provide the name and address of each
person having an ownership interest in the business and a statement
indicating whether the interest appears in the name of the interested
person or in the name of another person.
(2) Limited liability entities. In the case of a corporation,
limited liability partnership, limited liability company, or other
legal entity in which some or all of the owners have limited personal
liability for the activities of the entity, the applicant must provide
the following information about persons having an interest in the
business:
(i) The names and addresses of persons having a 10 percent or more
ownership interest in each of the classes or types of ownership
interest of the applicant, and the nature and amount of ownership
interest of each person.
(ii) The name of the person in whose name the interest appears. If
the limited liability entity is under actual or legal control of
another limited liability entity, the appropriate TTB officer may
request the same information regarding ownership for the parent limited
liability entity.
(3) Representative. If any interested person named under paragraphs
(c)(1) and (2) of this section is a legal entity other than an
individual, the applicant must also provide the name, title, and city
and state of residence of a representative individual for the entity.
The representative individual must be the individual designated by the
entity to represent the entity's interest 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.
0
52. Section 20.56 is amended by:
0
a. Removing the phrase ``30 days'' and adding in its place ``60 days''
in paragraph (a)(1); and
0
b. Revising paragraphs (c) heading and (c)(3).
The revisions read as follows:
Sec. 20.56 Changes affecting applications and permits.
* * * * *
(c) Changes in officers, directors, and ownership interests. * * *
(3) Ownership interests. In lieu of reporting all changes, within
60 days, to the list of persons with an ownership interest furnished
under the provisions of Sec. 20.45(c), a permittee may, upon filing
written notice to the appropriate TTB officer and establishing a
reporting date, file an annual notice of changes. The notice of changes
in ownership interest holders does not apply if the sale or transfer of
ownership interest(s) results in a change in ownership or control which
is required to be reported under Sec. 20.57.
* * * * *
0
53. Section 20.57 is amended by revising paragraph (b) to read as
follows:
Sec. 20.57 Automatic termination of permits.
* * * * *
(b) Limited liability entities. In the case of a limited liability
entity (i.e., a corporation, limited liability partnership, limited
liability company, or other legal entity in which some or all of the
owners have limited personal liability for the activities of the
entity) holding a permit issued under this part, if actual or legal
control of such limited liability entity changes, directly or
indirectly, whether by reason of a change in ownership or control (in
the permittee limited liability entity or any other limited liability
entity), by operation of law, or in any other manner, the permittee
must file an application for a new permit within 60 days of the change.
If an application for a new permit is not filed within 60 days of the
change, the outstanding permit will automatically terminate. If an
application for a new permit is filed within the 60-day period
prescribed above, the outstanding permit will remain in effect until
TTB takes final action on the application. When TTB takes final action
on the application, the outstanding permit will automatically
terminate.
* * * * *
0
54. Section 20.61 is revised to read as follows:
Sec. 20.61 Change in trade name.
In the event of any change in a trade name of a permittee, or, in
the event a permittee desires to engage in operations under an
additional trade name, the permittee must first file a letterhead
notice with the appropriate TTB officer listing the names and the
offices where they are registered.
(Approved by the Office of Management and Budget under control
number 1513-0061)
0
55. Section 20.267 is amended by revising the section heading and
paragraphs (b) and (c) to read as follows:
Sec. 20.267 Filing and retention of records.
* * * * *
(b) File all records and copies of reports at the premises where
the operations are conducted. A permittee may keep the required records
at a location other than the permitted premises, if he or she has first
provided a letterhead notice to the appropriate TTB officer identifying
the location where the records are to be kept.
(c) Make the files of records and copies of reports available for
inspection by the appropriate TTB officer during regular business
hours. Any permittee keeping records at a location other than the
premises where operations are conducted must make them available at
such premises upon request of the appropriate TTB officer; however, the
TTB officer may, at his or her discretion, allow the permittee to
supply copies (including electronic copies) of such records instead of
the originals.
PART 22--DISTRIBUTION AND USE OF TAX-FREE ALCOHOL
0
56. The authority citation for part 22 continues to read as follows:
Authority: 26 U.S.C. 5001, 5121, 5123, 5206, 5214, 5271-5275,
5311, 5552, 5555, 6056, 6061, 6065, 6109, 6151, 6806, 7805; 31
U.S.C. 9304, 9306.
[[Page 68591]]
Sec. 22.42 [Amended]
0
57. Section 22.42 is amended by removing the phrase ``serial number,''
in paragraph (a)(8).
0
58. Section 22.45 is amended by revising paragraph (c) to read as
follows:
Sec. 22.45 Organizational documents.
* * * * *
(c) Statement of interest--(1) Sole proprietorships and general
partnerships. In the case of an individual owner or a general
partnership, the applicant must provide the name and address of each
person having an ownership interest in the business and a statement
indicating whether the interest appears in the name of the interested
person or in the name of another person.
(2) Limited liability entities. In the case of a corporation,
limited liability partnership, limited liability company, or other
legal entity in which some or all of the owners have limited personal
liability for the activities of the entity, the applicant must provide
the following information about persons having an interest in the
business:
(i) The names and addresses of persons having a 10 percent or more
ownership interest in each of the classes or types of ownership
interest of the applicant, and the nature and amount of ownership
interest of each person.
(ii) The name of the person in whose name the interest appears. If
the limited liability entity is under actual or legal control of
another limited liability entity, the appropriate TTB officer may
request the same information regarding ownership for the parent limited
liability entity.
(3) Representative. If any interested person named under paragraphs
(c)(1) and (2) of this section is a legal entity other than an
individual, the applicant must also provide the name, title, and city
and state of residence of a representative individual for the entity.
The representative individual must be the individual designated by the
entity to represent the entity's interest 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.
0
59. Section 22.57 is amended by:
0
a. Removing the phrase ``30 days'' and adding in its place ``60 days''
each place it appears in paragraph (a)(1).
0
b. Revising paragraphs (c) heading and (c)(3).
The revisions read as follows:
Sec. 22.57 Changes affecting applications and permits.
* * * * *
(c) Changes in officers, directors, and ownership interests. * * *
(3) Ownership interests. In lieu of reporting all changes, within
60 days, to the list of persons with an ownership interest furnished
under the provisions of Sec. 22.45(c), a permittee may, upon filing
written notice to the appropriate TTB officer and establishing a
reporting date, file an annual notice of changes. The notice of changes
in ownership interest holders does not apply if the sale or transfer of
ownership interest(s) results in a change in ownership or control which
is required to be reported under Sec. 22.58.
* * * * *
0
60. Section 22.58 is amended by revising paragraph (b) and the
parenthetical Office of Management and Budget control number statement
to read as follows:
Sec. 22.58 Automatic termination of permits.
* * * * *
(b) Limited liability entities. In the case of a limited liability
entity (i.e., a corporation, limited liability partnership, limited
liability company, or other legal entity in which some or all of the
owners have limited personal liability for the activities of the
entity) holding a permit issued under this part, if actual or legal
control of such limited liability entity changes, directly or
indirectly, whether by reason of a change in ownership or control (in
the permittee limited liability entity or any other limited liability
entity), by operation of law, or in any other manner, the permittee
must file an application for a new permit within 60 days of the change.
If an application for a new permit is not filed within 60 days of the
change, the outstanding permit will automatically terminate. If an
application for a new permit is filed within the 60-day period
prescribed above, the outstanding permit will remain in effect until
TTB takes final action on the application. When TTB takes final action
on the application, the outstanding permit will automatically
terminate.
* * * * *
(Approved by the Office of Management and Budget under control
number 1513-0060)
0
61. Section 22.62 is revised to read as follows:
Sec. 22.62 Change in trade name.
In the event of any change in a trade name of a permittee, or, in
the event a permittee desires to engage in operations under an
additional trade name, the permittee must first file a letterhead
notice with the appropriate TTB officer listing the new names and the
offices where they are registered.
(Approved by the Office of Management and Budget under control
number 1513-0060)
0
62. Section 22.164 is amended by revising paragraph (b) and adding
paragraph (c) to read as follows:
Sec. 22.164 Filing and retention of records.
* * * * *
(b) Maintain all records at the permitted premises. A permittee may
keep the required records at a location other than the permitted
premises, if he or she has first provided a letterhead notice to the
appropriate TTB officer identifying the location where the records are
to be kept.
(c) Make the files of records and copies of claims available for
inspection by the appropriate TTB officer during regular business
hours. Any permittee keeping records at a location other than the
permitted premises must make them available at the permitted premises
upon request of the appropriate TTB officer; however, the TTB officer
may, at his or her discretion, allow the permittee to supply copies
(including electronic copies) of such records instead of the originals.
PART 26--LIQUORS AND ARTICLES FROM PUERTO RICO AND THE VIRGIN
ISLANDS
0
63. The authority citation for part 26 continues to read as follows:
Authority: 19 U.S.C. 81c; 26 U.S.C. 5001, 5007, 5008, 5010,
5041, 5051, 5061, 5111-5114, 5121, 5122-5124, 5131-5132, 5207, 5232,
5271, 5275, 5301, 5314, 5555, 6001, 6109, 6301, 6302, 6804, 7101,
7102, 7651, 7652, 7805; 27 U.S.C. 203, 205; 31 U.S.C. 9301, 9303,
9304, 9306.
0
64. Section 26.174 is amended by revising paragraphs (a) and (e) and
the parenthetical Office of Management and Budget control number
statement to read as follows:
Sec. 26.174 Records.
(a) General. Every person intending to file a claim for drawback on
eligible articles brought into the United States from Puerto Rico must
keep permanent records of the data elements required by this section.
* * * * *
(e) Retention and availability of records. (1) Each drawback
claimant must retain for a period of not less than three years all
records required by this subpart, all commercial invoices or shipping
documents, and all bills of lading received evidencing receipt and tax
determination of the spirits. In addition, a copy of each approved
formula returned to the manufacturer of eligible articles must be
retained for not less than three years from the date the
[[Page 68592]]
claimant files their last claim for drawback under the formula.
(2) The records required under this subpart must be maintained at
the business premises for which the claim is filed, or at any other
location provided that the claimant first provides a letterhead notice
to the appropriate TTB officer of the location where the records are to
be kept. Records must be available for inspection by any appropriate
TTB officer during business hours. If the records are stored at a
location other than the business premises for which the claim is filed,
they must be made available at such premises upon request of the
appropriate TTB officer; however, the TTB officer may, at his or her
discretion, allow copies (including electronic copies) of such records
to be provided instead of the originals.
(Approved by the Office of Management and Budget under control
number 1513-0089)
0
65. Section 26.275 is amended by:
0
a. Revising paragraph (a); and
0
b. Removing the parenthetical authority citation at the end of the
section.
The revision reads as follows:
Sec. 26.275 Filing.
(a) All records and reports required by this part will be
maintained separately, by transaction or reporting date, at the
importer's place of business. An importer may keep the required records
and reports at an alternative location other than his or her place of
business, if he or she has first provided a letterhead notice to the
appropriate TTB officer identifying the location where the records are
to be kept. Any importer keeping records at a location other than the
importer's place of business must make them available at the importer's
place of business upon request of the appropriate TTB officer; however,
the TTB officer may, at his or her discretion, allow the importer to
supply copies (including electronic copies) of such records instead of
the originals. The appropriate TTB officer may require an importer to
maintain the required records and reports at his or her place of
business if the alternative location is found to cause undue
inconvenience to appropriate TTB or Customs officers desiring to
examine the files or cause delay in the timely submission of documents.
* * * * *
0
66. Section 26.310 is amended by revising paragraphs (a) and (e) and
the parenthetical Office of Management and Budget control number
statement to read as follows:
Sec. 26.310 Records.
(a) General. Every person intending to file claim for drawback on
eligible articles brought into the United States from the Virgin
Islands must keep permanent records of the data elements required by
this section.
* * * * *
(e) Retention and availability of records. (1) Each drawback
claimant must retain for a period of not less than three years all
records required by this subpart, all commercial invoices or shipping
documents, and all bills of lading received evidencing receipt and tax
determination of the spirits. In addition, a copy of each approved
formula returned to the manufacturer of eligible articles must be
retained for not less than three years from the date the claimant files
their last claim for drawback under the formula.
(2) The records required under this subpart must be maintained at
the business premises for which the claim is filed, or at any other
location provided that the claimant first provides a letterhead notice
to the appropriate TTB officer of the location where the records are to
be kept. Records must be available for inspection by any appropriate
TTB officer during business hours. If the records are stored at a
location other than the business premises for which the claim is filed,
they must be made available at such premises upon request of the
appropriate TTB officer; however, the TTB officer may, at his or her
discretion, allow copies (including electronic copies) of such records
to be provided instead of the originals.
(Approved by the Office of Management and Budget under control
number 1513-0089)
PART 27--IMPORTATION OF DISTILLED SPIRITS, WINES, AND BEER
0
67. The authority citation for part 27 continues to read as follows:
Authority: 5 U.S.C. 552(a), 19 U.S.C. 81c, 1202; 26 U.S.C. 5001,
5007, 5008, 5010, 5041, 5051, 5054, 5061, 5121, 5122-5124, 5201,
5205, 5207, 5232, 5273, 5301, 5313, 5382, 5555, 6109, 6302, 7805.
0
68. Section 27.136 is amended by:
0
a. Revising paragraph (a) and the parenthetical Office of Management
and Budget control number statement; and
0
b. Removing the parenthetical authority citation at the end of the
section.
The revisions read as follows:
Sec. 27.136 Filing.
(a) All records and reports required by this part will be
maintained separately, by transaction or reporting date, at the
importer's place of business. An importer may keep the required records
and reports at an alternative location other than his or her place of
business, if he or she has first provided a letterhead notice to the
appropriate TTB officer identifying the location where the records are
to be kept. Any importer keeping records at a location other than the
importer's place of business must make them available at the importer's
place of business upon request of the appropriate TTB officer; however,
the TTB officer may, at his or her discretion, allow the importer to
supply copies (including electronic copies) of such records instead of
the originals. The appropriate TTB officer may require an importer to
maintain the required records and reports at his or her place of
business if the alternative location is found to cause undue
inconvenience to appropriate TTB or Customs officers desiring to
examine the files or cause delay in the timely submission of documents.
* * * * *
(Approved by the Office of Management and Budget under control
number 1513-0088)
PART 28--EXPORTATION OF ALCOHOL
0
69. The authority citation for part 28 continues to read as follows:
Authority: 5 U.S.C. 552(a); 19 U.S.C. 81c, 1202; 26 U.S.C. 5001,
5007, 5008, 5041, 5051, 5054, 5061, 5121, 5122, 5201, 5205, 5207,
5232, 5273, 5301, 5313, 5555, 6109, 6302, 7805; 27 U.S.C. 203, 205;
44 U.S.C. 3504(h).
0
70. Section 28.45 is revised to read as follows:
Sec. 28.45 Retention of records.
File copies of forms required by this part to be retained by any
proprietor or claimant, and all records, documents, or copies of
records and documents supporting such forms, must be preserved by such
proprietor or claimant for a period of not less than two years, and
during such period must be available for inspection by any appropriate
TTB officer at the proprietor or claimant's place of business. A
proprietor or claimant may keep the required records at a location
other than his or her place of business if he or she has first provided
a letterhead notice to the appropriate TTB officer identifying the
location where the records are to be kept. The proprietor or claimant
must nonetheless make the records available at the permitted premises
upon request of the appropriate TTB officer; however, the TTB officer
may, at his or her discretion, allow the proprietor or claimant to
supply copies (including
[[Page 68593]]
electronic copies) of such records instead of the originals.
(Approved by the Office of Management and Budget under control
number 1513-0075)
PART 31--ALCOHOL BEVERAGE DEALERS
0
71. The authority citation for part 31 continues to read as follows:
Authority: 26 U.S.C. 5001, 5002, 5121, 5122-5124, 5131, 5132,
5206, 5207, 5273, 5301, 5352, 5555, 5603, 5613, 5681, 5687, 6061,
6065, 6071, 6091, 6103, 6109, 6723, 6724, 7805.
0
72. Section 31.114 is amended by:
0
a. Removing the word ``true'' and adding in its place ``legal'' in
paragraph (b)(1);
0
b. Revising paragraph (b)(8); and
0
c. Removing the parenthetical authority citation at the end of the
section.
The revision reads as follows:
Sec. 31.114 Completion of registration form.
* * * * *
(b) * * *
(8) Ownership and control information. This consists of the name,
position, and residence address of every owner of the business and of
every person having power to control its management and policies with
respect to the activity subject to registration. ``Owner of the
business'' includes every partner if the dealer is a partnership and,
in the case of a limited liability entity, any of its officers,
directors, or persons holding a 10 percent or more ownership interest
in any of the classes or types of ownership of the applicant. However,
the ownership and control information required by this paragraph (b)(8)
need not be stated if the same information has been previously provided
to TTB and that previously provided information is still current.
* * * * *
0
73. Section 31.132 is revised to read as follows:
Sec. 31.132 Change in name.
(a) Legal name. In the event of any change in the name of the
individual, firm, corporation, or other entity registered as a dealer
at a given location, the dealer must complete an amended registration
and submit it on or before the next July 1.
(b) Trade name. In the event of any change in a trade name of a
dealer registered at a given location, or in the event a dealer desires
to engage in operations under an additional trade name at a given
location, the dealer must first file a letterhead notice with the
appropriate TTB officer listing the new names and the offices where
they are registered.
Sec. 31.138 [Amended]
0
74. Section 31.138 is amended by removing the phrase ``30 days'' and
adding ``60 days'' in its place.
0
75. Section 31.152 is revised to read as follows:
Sec. 31.152 Requirements as to wines and beer.
(a) General. Every wholesale dealer in liquors who receives wines,
or wines and beer, and every wholesale dealer in beer must keep a
complete record showing the quantities of wine and beer received, from
whom the wine and beer were received, and the dates of receipt. This
record, which must be kept for a period of not less than three years as
prescribed in Sec. 31.191, must consist of all purchase invoices or
bills covering wines and beer received or, at the option of the dealer,
a book record containing all of the required information. Wholesale
dealers are not required to prepare or submit reports to the
appropriate TTB officer of transactions relating to wines and beer.
(b) Availability of records. The records required under this
subpart must be kept at the dealer's place of business. A dealer may
keep the required records at a location other than his or her place of
business premises, if he or she has first provided a letterhead notice
to the appropriate TTB officer identifying the location where the
records are to be kept. The dealer must make the files of records and
copies of reports available for inspection by the appropriate TTB
officer during regular business hours. Any dealer keeping records at a
location other than his or her place of business must make them
available at the his or her place of business upon request of the
appropriate TTB officer; however, the TTB officer may, at his or her
discretion, allow the dealer to supply copies (including electronic
copies) of such records instead of the originals.
(Approved by the Office of Management and Budget under control
number 1513-0065.)
0
76. Section 31.172 is revised to read as follows:
Sec. 31.172 Place of filing.
Records of receipt and disposition and monthly summary reports
required by Sec. Sec. 31.155, 31.156, and 31.160 must be maintained at
the dealer's place of business. A dealer may keep the required records
at a location other than his or her place of business premises, if he
or she has first provided a letterhead notice to the appropriate TTB
officer identifying the location where the records are to be kept. Any
dealer keeping records at a location other than his or her place of
business must make them available at his or her place of business upon
request of the appropriate TTB officer; however, the TTB officer may,
at his or her discretion, allow the dealer to supply copies (including
electronic copies) of such records instead of the originals.
0
77. Section 31.181 is amended by:
0
a. Revising paragraph (a); and
0
b. Removing the parenthetical authority citation at the end of the
section.
The revision reads as follows:
Sec. 31.181 Requirements for retail dealers.
(a) Records of receipt. All retail dealers must keep at their place
of business complete records showing the quantities of all distilled
spirits, wines, and beer received, from whom the distilled spirits,
wines, and beer were received, and the dates of receipt. Records of
receipts must consist of all purchase invoices or bills covering
distilled spirits, wines, and beer received, or, at the option of the
retail dealer, a book record containing all of the required
information. A retail dealer may keep the required records at a
location other than his or her place of business premises, if he or she
has first provided a letterhead notice to the appropriate TTB officer
identifying the location where the records are to be kept. Any retailer
dealer keeping records at a location other than his or her place of
business must make them available at the his or her place of business
upon request of the appropriate TTB officer; however, the TTB officer
may, at his or her discretion, allow the dealer to supply copies
(including electronic copies) of such records instead of the originals.
* * * * *
Signed: November 19, 2021.
Mary G. Ryan,
Administrator.
Approved: November 19, 2021.
Timothy E. Skud,
Deputy Assistant Secretary, Tax, Trade and Tariff Policy.
[FR Doc. 2021-25721 Filed 12-2-21; 8:45 am]
BILLING CODE 4810-31-P
