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Proposed Rule2022-11902

Modernization of Qualification Requirements for Brewer's Notices

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Published

June 8, 2022

Issuing agencies

Treasury DepartmentAlcohol and Tobacco Tax and Trade Bureau

Abstract

In this notice of proposed rulemaking, the Alcohol and Tobacco Tax and Trade Bureau (TTB) proposes deregulatory amendments to its regulations to modernize and streamline the qualification requirements for Brewer's Notices. The proposed amendments also relax requirements associated with reporting certain changes to brewery businesses and other notification requirements. The proposed amendments are a result of TTB's evaluation of its qualification 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 to reduce burdens.

Full Text

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<title>Federal Register, Volume 87 Issue 110 (Wednesday, June 8, 2022)</title>
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[Federal Register Volume 87, Number 110 (Wednesday, June 8, 2022)]
[Proposed Rules]
[Pages 34819-34834]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-11902]

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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 25

[Docket No. TTB-2022-0006; Notice No. 212]
RIN 1513-AC48

Modernization of Qualification Requirements for Brewer's Notices

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 its
regulations to modernize and streamline the qualification requirements
for Brewer's Notices. The proposed amendments also relax requirements
associated with reporting certain changes to brewery businesses and
other notification requirements. The proposed amendments are a result
of TTB's evaluation of its qualification 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 to reduce burdens.

DATES: Comments must be received on or before August 8, 2022.

ADDRESSES: You may electronically submit comments to TTB on this
proposal using the comment form for this document as posted within
Docket No. TTB-2022-0006 on the ``<a href="http://Regulations.gov">Regulations.gov</a>'' website at <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Within that docket, you also may view copies of
this document, its supporting materials, and any comments TTB receives
on this proposal. A direct link to that docket is available on the TTB
website at <a href="https://www.ttb.gov/beer/notices-of-proposed-rulemaking">https://www.ttb.gov/beer/notices-of-proposed-rulemaking</a>
under Notice No. 212. 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 below 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. Retail Service Operations
B. Premises Description
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
G. Inventory Requirements
H. Discontinuance of Business
I. Blanket Bond Form for Multiple Breweries
J. Notice of Intent To Destroy Taxpaid Beer Off Premises
K. Update of OMB Control Numbers
III. Public Participation
A. Comments Invited
B. Submitting Comments
C. Confidentiality and Disclosure of Comments
IV. Regulatory Analyses and Notices
A. Executive Order 12866
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 in TTB's permit
and registration applications. The purpose was to identify ways to
streamline the

[[Page 34820]]

application, reduce burden on the regulated industry, and ensure that
the application collects, where possible, only information necessary
for meeting 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. Additionally, TTB
considered whether applicants made any types of requests that TTB
routinely approved such that it might be reasonable to amend the
regulations to remove the need for such requests.
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 recommendations
for Treasury regulations that could be eliminated, modified, or
streamlined to reduce burdens. TTB reviewed comments received in
response to this request and identified proposals that related to
beginning business in a TTB-regulated industry, including Brewer's
Notices.
Through TTB's internal evaluation and consideration of the public
input, TTB has identified deregulatory measures that TTB could take by
amending regulations and, also, where rulemaking is not required, by
amending guidance and forms. While this document addresses breweries,
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
Internal Revenue Code (IRC) permit and notice requirements for wine
producers, as well as IRC requirements for TTB-regulated tobacco
businesses. TTB has already published rulemaking concerning distilled
spirits plants, users and dealers of specially denatured alcohol and
tax-free alcohol, and Federal Alcohol Administration Act (FAA Act)
basic permit holders (Notice No. 207, published in the Federal Register
on December 3, 2021, at 86 FR 68573).
With respect to breweries, this document proposes to amend the
regulations to eliminate or narrow the range of information that
brewers must submit with Brewer's Notices to respond more directly to
TTB's statutory obligations under the IRC. The proposed amendments
include:
<bullet> Removing requirements that brewers intending to sell and
serve beer on brewery premises designate and maintain a separate
``tavern'' area within the brewery for such activities, and including
instead general provisions to account for beer sold and served to
customers anywhere on brewery premises.
<bullet> Tailoring requirements to describe the brewery premises
more narrowly.
TTB also is proposing regulatory amendments that will increase
industry flexibility without creating any new obligations. These
proposed amendments include:
<bullet> Extending deadlines for reporting certain changes to the
brewer's business from 30 days to 60 days.
<bullet> Allowing brewers to use new trade names by notifying TTB
in lieu of amending their Brewer's Notice.
<bullet> Allowing brewers to maintain required records at a
location other than the permitted premises without first obtaining TTB
approval.
<bullet> Reducing the frequency of physical inventories in certain
circumstances and allowing greater flexibility in the timing of
physical inventories within the inventory period.
<bullet> Allowing entities operating multiple breweries to secure
one bond covering all brewery operations rather than separate bonds for
each brewery.
<bullet> Eliminating the twelve day waiting period prior to
destroying taxpaid beer off brewery premises.
Section II of this document includes more in-depth discussion of
these and other proposed amendments.
As noted above, TTB's deregulatory strategy also includes
streamlining its guidance and forms. TTB has already begun deploying
such streamlining efforts in response to both TTB's internal evaluation
of its applications and to comments received from the public.

B. TTB Authority

The IRC, 26 U.S.C. chapter 51, imposes Federal excise taxes on
beer, provides for payment and/or refund of those taxes, and prescribes
requirements related to the operations of brewers. Chapter 51 also
requires all persons intending to brew or produce beer for sale (i.e.,
brewers) to furnish qualifying documents to the Secretary of the
Treasury (Secretary) before starting business, including a written
notice containing the information prescribed by regulation as necessary
to ensure collection of the revenue and, in certain cases, a bond to
ensure protection of the revenue. See 26 U.S.C. 5401.
With respect to the excise tax on beer, chapter 51 generally
provides that such tax is determined when beer is removed for
consumption or sale from a qualified brewery in the United States, or
is imported. Beer ``removed for consumption or sale'' includes beer
sold for consumption on brewery premises. See 26 U.S.C. 5052(c)(1).
Section 5552 of the IRC (26 U.S.C. 5552) authorizes the Secretary to
require ``installation of meters, tanks, pipes, or any other apparatus
for the purpose of protecting the revenue,'' such as requiring means to
accurately measure the amount of beer transferred or removed. Section
5061 governs the collection of excise tax on beer. Section 5061(d)
prescribes the time periods and due dates for paying tax on a deferred
basis, and generally requires that the taxes be paid on a semimonthly
basis. However, section 5061(d)(4) authorizes eligible taxpayers to use
annual or quarterly tax return periods instead of semimonthly periods.
Chapter 51 also imposes requirements governing the operation of
breweries, including a requirement that brewers keep records in the
form and manner prescribed by regulation, and a requirement that
brewers make true and accurate reports of operations and transactions
as prescribed by regulation. See 26 U.S.C. 5415. In addition, 26 U.S.C.
7805(a) generally authorizes the Secretary to issue regulations to
carry out the provisions of the IRC.
TTB administers chapter 51 of the IRC pursuant to Treasury Order
120-01, dated December 10, 2013, through which the Secretary has
delegated to TTB certain IRC administrative and enforcement
authorities, including those related to Brewer's Notices.
Pursuant to its delegated IRC authorities, TTB has promulgated
regulations setting forth qualification requirements for breweries at
27 CFR part 25. TTB's regulations at 27 CFR 25.61 through 25.68 set
forth the requirements for the qualifying documents that brewers must
submit to TTB, including form TTB F 5130.10, Brewer's Notice. The TTB
regulations prescribe additional information that brewers must include
in the Brewer's Notice when they intend to operate a ``tavern'' on
brewery premises. See 27 CFR 25.25. A brewery may not commence
operations until TTB approves the Brewer's Notice. 27 CFR 25.61(a). TTB
proposes amendments to the regulations specifying the information
brewers must provide on form TTB F 5130.10 or its electronic
equivalent, as well as in certain supporting documents.
Concerning determination and payment of the tax on beer, TTB's
regulations at 27 CFR 25.159 provide that the tax will be determined at
the time of its removal for consumption or sale and will be paid by
return as provided in part 25. TTB's regulations

[[Page 34821]]

generally require that breweries have suitable means to accurately
measure beer for tax determination purposes. See, e.g., 27 CFR 25.41.
Breweries operating taverns are currently required to have a ``suitable
method for measurement of the beer'' that is tax determined for sale to
customers for consumption at the tavern. 27 CFR 25.25(c)(1).
TTB regulations at 27 CFR 25.71 through 25.79 require brewers to
report certain changes in the business affecting the Brewer's Notice
(e.g., changes in address or location, changes in stockholders or
officers, directors, managers, etc.). In addition, regulations at 27
CFR 25.291 through 24.301 include recordkeeping requirements as
authorized by 26 U.S.C. 5415.
This notice of proposed rulemaking includes proposed amendments to
the qualification process for breweries, the tax determination
requirements for beer sold for consumption at the brewery, and the
reporting and recordkeeping requirements described above. With respect
to reporting requirements, in instances where TTB's regulations refer
to submitting a ``letterhead notice,'' industry members may provide
such notices electronically in Permits Online. Unlike the brewer's
initial submission of qualifying documents, these ``letterhead
notices'' do not require TTB approval. TTB is proposing amendments to
25 CFR 25.81 to update the term ``letterhead notice'' to the term
``written notice'' and to 27 CFR 25.11 to add a definition of ``written
notice.''

C. Relationship to Other Notices of Proposed Rulemaking

TTB recently published a notice of proposed rulemaking titled
``Modernization of Permit and Registration Application Requirements for
Distilled Spirits Plants,'' in which TTB proposed amendments, generally
similar to those proposed in this document, in 27 CFR parts 1, 17, 19,
20, 22, 26, 27, 28, and 31. Amendments related to FAA Act basic
permits--including basic permits as importers and wholesalers of malt
beverages--were included in that document and are not included in this
document. See Notice No. 207, 86 FR 68573, 12/03/2021. TTB plans to
publish notices of proposed rulemaking to propose generally similar
amendments to regulations related to wine, tobacco products, and
processed tobacco-related applications and operations, set forth in 27
CFR parts 24, 40, 41, and 44.

II. Proposed Changes to the Regulations

The amendments proposed in this document are intended to modernize
and streamline the qualification processes for breweries under the IRC.
The general approach TTB adopted in developing the proposed amendments
was to identify information currently being collected that could be
eliminated without hindering TTB's ability to protect and ensure
collection of the revenue, and to provide more clarity and specificity
in the questions and instructions on the Brewer's Notice. The proposed
amendments also relax requirements associated with certain reporting
requirements.

A. Retail Service Operations

For brewers who intend to operate a ``tavern'' or ``brewpub,'' TTB
proposes to remove requirements to designate and maintain a separate
tavern area within the brewery where beer may be sold and served to
customers for consumption on the premises, and replace these with
general provisions related to determining tax on beer that is sold and
served to customers on the brewery premises. (The TTB regulations use
the term ``tavern'' although TTB forms and guidance also refer to a
``brewpub'' to recognize a term more commonly used in the industry.)
TTB's regulations at 27 CFR 25.25 prescribe additional information that
brewers must include in their Brewer's Notice when seeking to operate a
tavern on the brewery premises. For instance, a brewer is required to
identify the areas of the brewery premises that will be operated as a
tavern accessible to the public, and to describe the security measures
used to separate these public areas from the non-public areas of the
brewery. Brewers also are required to describe in detail the method
they will use for measuring beer for the purposes of tax determination
(i.e., measuring the beer set aside to serve to customers on-premises,
upon which tax will later be paid). Brewers must also identify any
tanks that will periodically contain tax-determined beer, as well as
any other areas of the brewery where tax-determined beer will be
stored.
As part of TTB's evaluation of the Brewer's Notice, and in
recognition of the comments and questions TTB has received over the
years from brewers regarding tavern, brewpub, and taproom operations,
TTB considered ways to simplify the relevant qualification requirements
and to provide more flexibility for brewers considering different types
of operations. The current regulations applicable to the concept of a
tavern or brewpub have not been updated since they were issued in 1988.
They require a separately-defined area for retail sales of beer in the
brewery. These regulations were implemented to protect the revenue on
beer sold for consumption on brewery premises. The IRC does not require
such a separately-defined area, and TTB considered if it could
eliminate the regulatory distinction between a brewery and a brewery
operating a tavern without jeopardizing the revenue.
TTB considered the differences in operations between breweries and
breweries operating taverns (hereinafter ``brewpubs''), as currently
defined, and the related differences in the statutory requirements for
the permissible methods of ``removing'' beer ``for consumption or
sale'' (that is, subject to tax). The IRC defines the term ``removal
for consumption or sale'' at 26 U.S.C. 5052(c) to mean:
(1) The sale and transfer of possession of beer for consumption at
the brewery; or
(2) Any removal of beer from the brewery (except removals without
payment of tax, e.g., for export or transfers in bond to another
brewery).
The first definition relates to beer sold and served to a customer
for consumption at the brewery. The second definition relates to beer
removed for distribution (however, this definition also captures, for
example, beer sold to customers at the brewery to drink outside of the
brewery, as defined by the Brewer's Notice).
Beer removed ``from the brewery'' is required by statute to be
removed in containers. Pursuant to 26 U.S.C. 5412, ``Beer may be
removed from the brewery for consumption or sale only in hogsheads,
packages, and similar containers[.]'' [Emphasis added.] The term
``package'' is further defined at 26 U.S.C. 5416 as a ``bottle, can,
keg, barrel, or other original consumer container[.]''
Section 5412's container requirement does not apply to beer removed
by sale and transfer of possession for consumption at the brewery.
With that understanding of the statutory removal requirements, TTB
recognized that its regulations must address three main avenues for the
retail sale of beer for consumption occurring at a brewery, for
example:
(1) Sale of untaxpaid beer from tanks to drink on the brewery
premises;
(2) Sale of untaxpaid beer from containers (such as barrels or
kegs) or in containers (such as bottles) to drink on the brewery
premises; and
(3) Sale of beer in containers to drink outside of the brewery
premises.
Any beer sold in containers at the brewery for consumption outside
of the brewery in the third scenario would be a removal ``from the
brewery'' subject to tax under 26 U.S.C. 5052(c)(2) and the

[[Page 34822]]

container requirements of section 5412 would apply. TTB is not
proposing any regulatory amendments affecting this type of retail sale.
This third scenario includes situations where brewers operate ``tasting
rooms'' or ``taprooms'' that serve beer and may be adjacent to the
brewery, but are not part of the brewery itself (as defined by their
Brewer's Notice). Brewers cannot make any sales of their beer at such a
tasting room or taproom from a tank or by running lines from a tank in
the brewery to an adjacent area that is not part of the defined brewery
premises. Brewers wishing to make such sales could do so consistent
with TTB's proposed regulations, discussed further below, by amending
their Brewer's Notice to include the tasting room or taproom area in
their brewery premises.
TTB's proposed amendments address the first two avenues of sale
described above: Sales for consumption at the brewery (1) from tanks,
and (2) from or in containers. The proposed regulations eliminate the
distinction between a brewery and a brewpub, and instead outline the
``retail service operations'' brewers are authorized to engage in under
a Brewer's Notice. The amendments eliminate certain brewpub regulatory
requirements, in particular the requirements to delineate the public
and non-public areas of the brewery and to employ security measures to
separate those areas. Eliminating these requirements would recognize
that brewers have an interest in providing broader access to their
brewery operations while also ensuring that visitors do not interfere
with those operations.
The proposed regulations also recognize the need to retain current
policies authorizing breweries engaging in retail activities to serve
food, taxpaid wine, taxpaid distilled spirits, taxpaid beer of another
brewer's production, brewery related merchandise, and anything else not
contrary to law.
The proposed regulations would eliminate the need for separate
qualifications, such as are currently present in Permits Online, for
breweries and brewpubs. Instead, brewers would merely provide basic
information about any ``retail service operations'' in which they
intend to engage.
Brewers engaging in retail service operations would be required to
keep records of such retail service operations, and properly account
for, for tax purposes, any untaxpaid beer sold for consumption at the
brewery. In general, in the case of (1) untaxpaid beer sold from tanks,
the proposed regulations provide that tax will be determined based on a
measurement of the beer dispensed for sale from a tank each day, as
opposed to current procedures generally requiring that tanks be tax
determined in their entirety when filled. TTB believes the proposed
method of tax determination is simpler and will provide greater
flexibility by eliminating the need for tax determination tanks that
must be segregated from other untaxpaid beer on the brewery premises.
TTB invites comments on whether to maintain tax determination tanks as
another option for tax determination of beer to be sold for consumption
at the brewery. In the case of (2), untaxpaid beer sold in containers,
barrels and kegs must be tax determined at the time they are tapped for
sale and consumption on premises, while bottles must be tax determined
at the time they are sold for on-premises consumption.
TTB's proposed amendments setting forth authorized retail service
operations would replace the current Sec. 25.25. Conforming amendments
are proposed to Sec. Sec. 25.11, 25.23, 25.24, 25.35, 25.41, 25.62,
25.159, and 25.292.

B. Premises Description

TTB is proposing to more narrowly tailor requirements to describe
the brewery premises to accelerate TTB's review during initial
qualification. TTB also is proposing to consolidate requirements to
provide descriptions of alternation operations with the general brewery
premises description. The TTB regulations at 27 CFR 25.62 prescribe, in
general, information that a brewer must provide in a Brewer's Notice,
which includes a description of the brewery premises. TTB currently
collects these descriptions in an open-ended narrative format. TTB
requires more detailed narrative descriptions and/or diagrams where a
brewer wishes to operate a tavern in the brewery or intends to
alternate its premises with an adjacent bonded or taxpaid wine
premises. See 27 CFR 25.25 and 25.81. TTB believes that more direct
questions and certifications could enable brewers to better understand
what information they must submit, which may reduce the need for
additional submissions and communication between TTB and brewers, and
accelerate TTB's review process. TTB therefore proposes amendments,
described below, to alter the format in which descriptions of brewery
premises and related information are collected and to consolidate the
collection of certain such information.
Currently, Sec. 25.62(a)(5) requires that a Brewer's Notice
include a description of the brewery in accordance with Sec. 25.68.
Section 25.68(a) sets forth the specific information to be included in
the description, which includes: (1) A description of each tract of
land comprising the brewery; and (2) a listing of each brewery building
by its designated letter or number, giving the approximate ground
dimensions and the purpose for which ordinarily used. Section 25.68(b)
also requires that the description must be in sufficient detail to
enable TTB officers to determine the boundaries of the brewery. TTB
proposes to amend Sec. 25.68 to remove the requirements to provide a
description of the tract of land, and to number each building. TTB
proposes to further clarify the specific information to be submitted in
the brewery description, to include: (1) The overall dimensions of the
building(s) housing the brewery and, if the brewery occupies less than
the entire building, the boundaries of the brewery within the building;
and (2) any portions of the brewery that are outdoors, including the
location of any outdoor tanks.
Section 25.25 currently requires that a brewer desiring to operate
a tavern on the brewery premises submit certain additional information
with the Brewer's Notice. Paragraph (b)(1) requires the brewer to
identify the portion of the brewery that will be operated as a tavern
``by providing a diagram or narrative description of the boundaries of
the tavern,'' including identification of the areas of the brewery that
will be accessible to the public. As described in section II(A) of this
document, TTB is proposing to replace the current requirements of Sec.
25.25 entirely with new regulations governing retail service operations
at the brewery and to require a statement concerning retail service
operations as part of the Brewer's Notice under a new Sec.
25.62(a)(14).
Section 25.81 sets forth requirements related to alternation of the
brewery premises with a contiguous bonded winery or taxpaid wine
bottling house, including requirements for certain qualifying
documents. Among those qualifying documents, paragraph (b)(2) currently
requires that brewers seeking to engage in such alternation provide
``special diagrams,'' in duplicate, delineating the brewery premises
and the bonded or taxpaid wine premises as they will exist in their
relative operating sequence. Paragraph (b)(2) provides that the
diagrams must clearly depict all areas, buildings, floors, rooms,
equipment, and pipelines which are to be subject to alternation in
their relative operating sequence. TTB believes that the information
captured in the ``special diagrams'' currently required under paragraph
(b)(2) can instead be consolidated into the premises

[[Page 34823]]

descriptions required under proposed Sec. 25.68. Accordingly, TTB
proposes to amend Sec. 25.81(b)(2) to require that the description
submitted under proposed Sec. 25.68 contain the information concerning
the alternation. TTB also proposes clarifying amendments to Sec. 25.81
to capture brewery alternation with an adjacent distilled spirits plant
(DSP). This amendment is consistent with TTB's existing regulations at
27 CFR 19.143, which allow alternation between a DSP and brewery.

C. Statements of Interest

TTB proposes amendments to clarify the scope of the collection of
information related to persons holding ownership interests in a
business. TTB collects these statements of interest in accordance with
TTB's statutory obligations to collect the information necessary to
protect and ensure collection of the revenue. See 26 U.S.C. 5401(a).
TTB must identify circumstances in which a brewery's ownership
structure would affect the brewery's required method of tax payment
and/or the brewery's eligibility for certain reduced rates of tax.
Pursuant to 26 U.S.C. 5061(e), any taxpayer who, in any calendar year,
was liable for at least $5,000,000 in taxes on distilled spirits,
wines, or beer must pay such taxes in the following year by electronic
fund transfer. Paragraph (3)(A) of that subsection provides that, in
the case of a controlled group of corporations, all component members
of the group are treated as one taxpayer.\1\ To determine whether a
brewer belongs to a controlled group, and thereby to enforce section
5061(e), TTB must collect information identifying the persons holding
ownership interests in the business.
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\1\ For purposes of 26 U.S.C. sections 5061(e) and
5051(a)(5)(A), a ``controlled group of corporations'' has the
meaning given to such term by 26 U.S.C. 1563(a), except that ``more
than 50 percent'' must be substituted for ``at least 80 percent''
each place it appears in section 1563(a). Section 5061(e)(3)(B)
clarifies that rules similar to paragraph (3)(A) apply to a group of
persons under common control where one or more of such persons is
not a corporation.
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Determining whether a prospective brewery is a member of a
controlled group is also necessary to determine whether the brewer may
be eligible for certain reduced tax rates upon TTB approval of a
Brewer's Notice. Pursuant to 26 U.S.C. 5051(a)(1)(A), a reduced rate of
tax is available on the first 6,000,000 barrels of beer brewed by the
brewer and removed during the calendar year for consumption or sale.
Section 5051(a)(2) provides a further reduced rate on the first 60,000
barrels of beer brewed and removed during a calendar year, available to
brewers who produce not more than 2,000,000 barrels of beer during the
calendar year.
The reduced rates under sections 5051(a)(1)(A) and (a)(2) each take
into account the collective production and removal activity of a
controlled group. See 26 U.S.C. 5051(a)(5)(A). For example, if a
Brewer's Notice is to be issued to a brewery that produces 50,000
barrels per year, but which is part of a controlled group with another
brewery producing 3,000,000 barrels per year, TTB will need to collect
information to identify the controlled group structure and thereby
ensure that the breweries within the controlled group do not claim
reduced tax rates for which they are ineligible.
TTB proposes amendments to 27 CFR 25.66 to clarify and standardize
the collection of the basic identifying information of persons with an
interest in the business. The amended Sec. 25.66 provides that: (1)
The requirement to disclose basic identifying information (i.e. names
and addresses) of persons with an ownership interest in the business
applies to persons with an interest at least equivalent to that of a
principal stockholder in a corporation--that is, 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 brewer 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 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 identify the individuals with an interest in the business
and to evaluate the brewer as to any potential controlled group
affiliations.

D. 30-Day Filing Requirements for Certain Changes in the Business

TTB proposes to extend the reporting period for certain changes in
a brewery's business to 60 days. The TTB regulations generally require
that, when there is a change in the information submitted in a Brewer's
Notice, the proprietor of the business must notify TTB of the change.
The timing and form of this notification differs depending on the type
of business change.
Proprietors must report some business changes to TTB within a
certain amount of time following the change, generally within 30 days.
For example, the TTB regulations at 27 CFR 25.75 require that the
brewer submit an amended Brewer's Notice within 30 days of any change
in the list of officers or directors furnished with the original
Brewer's Notice.
Comments received in response to Treasury's 2017 request for
information, described in section I(A) of this document, suggest that
30 days is too short a time for regulated entities to assemble the
information that is required. These comments suggested that TTB should
extend such filing deadlines to 60 days.
TTB reviewed these proposals and concluded that extending existing
deadlines for reporting changes in the business (including in some
cases by amending Brewer's Notices) from 30 to 60 days may not pose
risk to the revenue or raise other concerns. Accordingly, TTB proposes
amendments to extend such deadlines in 27 CFR 25.71, 25.74, and 25.75.
Section 25.71 currently requires that, unless another time period is
specified, a brewer submit an amended notice within 30 days of ``a
change with respect to the information shown in the Brewer's Notice,
Form 5130.10.'' Section 25.74 requires a brewer to submit an amended
notice to TTB within 30 days of a change in control or management of a
business caused by the sale or transfer of capital stock. Section 25.75
generally requires that a brewer submit an amended Brewer's Notice
within 30 days of a change to the list of officers or directors. TTB
proposes to extend each of the above reporting deadlines from 30 to 60
days.

E. Changes in Trade Names

TTB proposes to revise currently-reserved section 27 CFR 25.76 to
allow changes to, or additions of, trade names through a written notice
to TTB rather than through an amended Brewer's Notice. The regulations
at Sec. 25.71(a)(1) currently require that brewers submit an amended
Brewer's Notice for a change with respect to information shown in the
Brewer's Notice, which includes the list of trade names required by 27
CFR 25.62(a)(6). The proposed regulation clarifies that a brewer need
only notify TTB of the addition of a trade name prior to using such
name for marking or labeling purposes as required by subpart J of part
25 (27 CFR 25.141--25.145). TTB's Permits Online system already
includes a function for reporting additional trade names, which will
satisfy the proposed Sec. 25.76's requirement for a written notice.
TTB notes that it remains the responsibility of the brewer to
ensure that any trade name is properly

[[Page 34824]]

registered with the applicable State or local government. Brewers
should further note that the FAA Act prohibits false or misleading
statements on malt beverage labels, and TTB will not approve an
application for label approval proposing to use a trade name on a malt
beverage label that gives a misleading impression as to the age,
origin, or identity of the product. 27 U.S.C. 205(e). The FAA Act also
prohibits the use of misleading trade names when advertising malt
beverages. 27 U.S.C. 205(e)(5).

F. Retention of Records Off-Premises

TTB is proposing amendments to allow records to be stored at a
location other than the brewery and to allow brewers to simply notify
TTB of their intention to store records at an off-brewery location,
rather than apply for approval. As part of its evaluation of permit and
registration applications, TTB sought to identify any types of requests
to vary from the regulations that applicants commonly submitted with
their permit or registration applications that TTB routinely approved.
One common request from brewers has been for approval to retain
required records at a location other than the premises covered by the
Brewer's Notice. As a result, TTB proposes to amend 27 CFR 25.300 to
allow brewers to keep records at another location upon providing a
written notice to TTB. The amendments provide that required records
must still be made available at the brewery premises upon request, but
that copies will generally satisfy this requirement (consistent with
current TTB policy, ``copies'' includes electronic copies).

G. Inventory Requirements

TTB is proposing amendments reducing the frequency of physical
inventories in certain circumstances and allowing greater flexibility
in the timing of physical inventories within the inventory period. The
TTB regulations at 27 CFR 25.294 require that brewers take physical
inventories of beer and cereal beverages on hand at least once each
calendar month and prescribe the information required on the inventory
record. Section 25.294 requires that brewers take the required
inventory within seven days of the close of the calendar month for
which it is made.
One comment received in response to Treasury's request for
information seeks elimination of Sec. 25.294 or, alternatively,
relaxation of its requirements to allow inventories to be taken within
the final 15 days of the month. The comment suggests that these
amendments would reduce burdens on both TTB and industry. TTB
considered these suggestions and proposes to relax inventory
requirements as described below.
With respect to the frequency of physical inventories, TTB proposes
to align the taking of inventories with the filing of tax returns for
brewers who file less frequently than monthly. As described in section
I(B) of this document, 26 U.S.C. 5061(d) requires that the taxes on
beer be paid on a semimonthly basis. However, section 5061(d)(4)
authorizes eligible taxpayers to use annual or quarterly tax return
periods instead of semimonthly periods. Specifically, section
5061(d)(4)(A)(ii) allows a taxpayer who reasonably expects to be liable
for not more than $1,000 in excise taxes for the calendar year and who
was liable for not more than $1,000 in such taxes in the preceding
calendar year to make returns annually. Section 5061(d)(4)(A)(i) allows
a taxpayer who reasonably expects to be liable for not more than
$50,000 in excise taxes for the calendar year and who was liable for
not more than $50,000 in such taxes in the preceding calendar year to
make returns quarterly. TTB has implemented these provisions in its
regulations at 27 CFR 25.164. TTB proposes to amend Sec. 25.294 to
allow brewers authorized by 26 U.S.C. 5061(d) and Sec. 25.164 of the
TTB regulations to file tax returns on an annual or quarterly basis to
complete physical inventories on an annual or quarterly basis,
respectively. Brewers required to file semimonthly tax returns will
still be required to conduct monthly physical inventories.
TTB further proposes to amend Sec. 25.294 to allow physical
inventories to be taken within 15 days of the close of the applicable
inventory period (i.e., month, quarter, or year), rather than within 7
days of the close of the applicable inventory period.

H. Discontinuance of Business

TTB proposes to amend 27 CFR 25.85 to streamline procedures for
discontinuing business as a brewer. The current Sec. 25.85 requires a
brewer discontinuing its business to first file a notice to that effect
using the Brewer's Notice form, TTB F 5130.10, or its electronic
equivalent in Permits Online. Under the regulations, TTB must approve
and return a copy of the notice to the brewer once ``all beer has been
lawfully disposed of.'' This may require additional communication with
the brewer prior to approving the discontinuance notice. Once TTB
approves and returns the notice, the brewer must file a ``final
report'' on form TTB F 5130.9, ``Brewer's Report of Operations,'' or
its electronic equivalent, showing no beer or cereal beverage on hand.
TTB proposes to amend Sec. 25.85 to allow a written notice to the
appropriate TTB officer to serve as adequate notice of discontinuance
of business, rather than requiring submission of form TTB F 5130.10 and
TTB approval. The notice must indicate the date on which business
discontinued or will discontinue. The proposed amendments also dispose
of the blanket requirement for a final report and provide that the
brewer must submit such report only upon request of the appropriate TTB
officer. While TTB will continue to examine the operations of closing
businesses on a case-by-case basis to ensure that there are no
outstanding tax liabilities, this examination would no longer impact
TTB's processing of notices of discontinuance of business. TTB believes
this proposal will ease burdens on brewers exiting the industry.
TTB is also proposing conforming amendments to 27 CFR 25.102,
Termination of surety's liability, to remove a reference to TTB's
``approval'' of a discontinuance notice. Under the proposed Sec.
25.85, a notice of discontinuance of business is effective on the date
indicated on the notice submitted to TTB.

I. Blanket Bond Form for Multiple Breweries

TTB is proposing amendments allowing entities operating multiple
breweries to secure one bond covering all brewery operations rather
than separate bonds for each brewery. The TTB regulations at 27 CFR
25.91 generally require that every person intending to commence
business as a brewer must file a bond covering operations at the
brewery at the time of filing the original Brewer's Notice. There is an
exemption to the bond requirement at 27 CFR 25.91(e) for brewers who
are eligible to pay tax on a deferred basis annually or quarterly
pursuant to 27 CFR 25.164. Section 25.91 further requires the brewer to
file a new bond or continuation certificate every four years. A comment
received in response to Treasury's request for information requests
that TTB allow entities operating multiple breweries to obtain blanket
bonds covering all locations under one bond. The comment suggests that
this would reduce the amount of effort required to procure and maintain
multiple bonds with differing expiration dates.
TTB agrees that allowing entities operating multiple breweries to
secure one bond covering all operations is an appropriate measure to
reduce burden

[[Page 34825]]

on both industry and TTB. TTB is proposing amendments to Sec. Sec.
25.91 and 25.93 to provide this option and set forth the penal sum
requirements associated with such blanket bonds. TTB's proposed
amendments generally provide that the penal sum required for a blanket
bond will be equal to the aggregate of such sums applicable to each
brewery location, as calculated under current regulation. TTB will also
amend form TTB F 5130.22, Brewer's Bond, to allow coverage of multiple
breweries.

J. Notice of Intent To Destroy Taxpaid Beer Off Premises

TTB is proposing to eliminate the requirement that brewers notify
TTB prior to destroying taxpaid beer off brewery premises. The TTB
regulations at 27 CFR 25.222 require that brewers destroying taxpaid
beer off brewery premises submit to TTB a notice of intent (NOI)
containing specific information about the destruction at least 12 days
prior to the destruction. Generally, TTB requires brewers to submit the
information contained in the NOI with a subsequent claim for refund or
credit of tax pursuant to 27 CFR 25.283. The NOI is intended to provide
TTB an opportunity to assign personnel to witness a destruction under
25.223. In response to the COVID-19 pandemic, TTB suspended the NOI
requirement and instead has relied on the supporting information
submitted with claims, and TTB has requested additional proof of
destruction where necessary (as such proof is not specifically required
as supporting information under Sec. 25.283).
To provide brewers additional flexibility in the timing of beer
destructions, and to avoid requiring brewers to store taxpaid beer
longer than is necessary to arrange its destruction, TTB is proposing
to permanently eliminate the requirement that brewers notify TTB prior
to destroying taxpaid beer off brewery premises, as well as the
provision concerning routine TTB supervision of such destruction. TTB
is proposing to amend Sec. 25.283 to instead require that brewers
submit, with a claim for refund or credit of tax on taxpaid beer
destroyed off brewery premises, proof of destruction in the form of
commercial records. TTB is also proposing to amend 27 CFR 25.221 to
give TTB discretion to require a brewer to submit an NOI before
destruction if the appropriate TTB officer determines that pre-
notification is necessary to protect the revenue.

K. Update of OMB Control Numbers

In this document, TTB also proposes to update the Office of
Management and Budget (OMB) control numbers and, as needed, the list of
regulatory sections in 27 CFR part 25 containing information
collections covered by those numbers. Therefore, in 27 CFR 25.5, TTB
proposes to: (1) Update the OMB control numbers previously assigned to
TTB's predecessor agency, the former Bureau of Alcohol, Tobacco and
Firearms (ATF) (OMB No. 1512-_), to the control numbers currently
assigned to TTB (OMB No. 1513-_); (2) add inadvertently missing OMB
control numbers for existing information collections and remove control
numbers for obsolete collections; and (3) add inadvertently missing
sections, remove obsolete sections, or otherwise correct the list of
sections containing information collections.
OMB has previously reviewed and approved all of the information
collections contained in the part 25 regulations listed below in
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507).
The update, addition, or removal of OMB control numbers and regulatory
sections in Sec. 25.5 is merely informational in nature, and these
proposed technical and conforming amendments do not change the
requirements or burden of any currently approved TTB information
collection contained in part 25.
The OMB control numbers and the regulatory sections containing
information collections in part 25 are as follows:

------------------------------------------------------------------------
OMB Control No. Occurs in part 25 in section(s)
------------------------------------------------------------------------
1513-0005 (Letterhead Applications & 25.23, 25.52, 25.61, 25.62,
Notices Filed by Brewers, & Brewer's 25.64, 25.66, 25.68, 25.71-
Notice). 25.81, 25.85, 25.141, 25.142,
25.144, 25.158, 25.167,
25.184, 25.213, 25.221,
25.272, 25.273, 25.277, &
25.282.
1513-0007 (Brewer's Report of 25.296(b), & 25.297.
Operations, and Quarterly Brewer's
Report of Operations).
1513-0009 (Application to Operate Wine 25.81(b)(3).
Premises, & Wine Bond).
1513-0013 (Change of Bond (Consent of 25.72, 25.73, 25.77, 25.81,
Surety)). 25.92, 25.95, 25.103, &
25.271.
1513-0014 (Power of Attorney).......... 25.65.
1513-0015 (Brewer's Bonds and Brewer's 25.73, 25.77, 25.91, 25.93,
Bonds Continuation Certificates). 25.94, 25.95, 25.97, 25.98, &
25.274.
1513-0030 (Claims--Alcohol, Tobacco, 25.281-25.283, 25.285, &
and Firearms Taxes). 25.286.
1513-0048 (Registration of Distilled 25.81(b)(5).
Spirits Plants).
1513-0058 (Usual & Customary Records 25.42, 25.186, 15.192, 25.195,
Maintained by Brewers). 25.196, 25.211, 25.252,
25.263, 25.264, 25.276, 25.291-
25.296, 25.300, & 25.301.
1513-0083 (Excise Tax Return).......... 25.160, 25.163-25.166, 25.168,
25.175, 25.224, 25.285, &
25.298.
1513-0085 (Principal Place of Business 25.241-25.143.
Address & Place of Production Coding
on Beer & Malt Beverage Labels).
1513-0086 (Marks on Brewery Equipment & 25.24, 25.35, 25.141-25.143,
Structures, & Marks & Labels on 25.145, 25.192, 25.196,
Containers of Beer). 25.213, 25.231, 25.242,
25.251, & 25.263.
1513-0088 (Alcohol, Tobacco, and 25.72-25.75, 25.77, 25.78,
Firearms Related Documents for Tax 25.151, 25.163, 25.276, 25.281-
Returns and Claims). 25.286, 25.291, 25.298, &
25.300.
1513-0118 (Formulas for Fermented 25.53, & 25.55-25.58.
Beverage Products).
1513-0122 (Formula & Process for 25.53, & 25.55-25.58.
Domestic & Imported Alcohol Beverages.
------------------------------------------------------------------------

The proposed Sec. 25.5 also includes changes to existing
information collections as discussed in section IV(C) of this document.

III. Public Participation

A. Comments Invited

TTB invites comments from interested members of the public on the
proposals described in this document. TTB also invites comments on any
additional means to streamline the Brewer's Notice within the
parameters of TTB's statutory obligations. As noted in section II(A) of

[[Page 34826]]

this document, TTB specifically invites comments from brewers on
whether to maintain tax determination tanks as another option for tax
determination of beer to be sold for consumption at the brewery.

B. Submitting Comments

You may submit comments on this proposal as an individual or on
behalf of a business or other organization via the <a href="http://Regulations.gov">Regulations.gov</a>
website or via postal mail, as described in the ADDRESSES section of
this document. Your comment must reference Notice No. 212 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.

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 <a href="http://Regulations.gov">Regulations.gov</a> 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 <a href="https://www.ttb.gov/contact-rrd">https://www.ttb.gov/contact-rrd</a>, 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.

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 economic 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 Brewer's
Notices;
(2) Replacing required narrative descriptions of the premises with
more specific information;
(3) Extending deadlines for reporting certain changes in the
brewer's business;
(4) Streamlining procedures for brewers using new trade names;
(5) Allowing the maintenance of required records at locations other
than the brewery premises through a notification rather than an
application for an alternate procedure;
(6) Clarifying which individuals are required to submit statements
of financial interest in the business in connection with an application
for a Brewer's Notice;
(7) Reducing the frequency of physical inventories for certain
brewers and providing additional flexibility in the timing of
inventories;
(8) Streamlining procedures for discontinuing business as a brewer;
(9) Allowing entities operating multiple breweries to secure one
bond covering all operations; and
(10) Eliminating the requirement that brewers notify TTB before
voluntarily destroying taxpaid beer off brewery premises.
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 to reduce
burdens. TTB reviewed comments received in response to this request and
identified proposals that related to the permit application or, more
generally, to beginning business in a TTB-regulated industry. Many of
the proposed changes are consistent with recommendations submitted by
industry in response to Treasury's request.
To reduce the information collected in applications for Brewer's
Notices, TTB proposes amendments to 27 CFR 25.25 to eliminate
requirements for brewers interested in engaging in retail service
operations to specifically delineate and identify the locations within
the brewery where such operations will take place and to describe the
security measures they will employ to segregate the public service area
(the ``tavern,'' as described in current regulation) from the brewing
areas.
To streamline brewery description requirements, TTB proposes
amendments to 27 CFR 25.68 and 25.81 to replace requirements for
narrative descriptions of the brewery premises with requirements to
submit more specific information regarding the premises. For example,
Sec. 25.68 currently requires a detailed narrative description of the
brewery premises, including each tract of land covered by the brewery,
featuring ``approximate ground dimensions.'' The proposed amendments to
Sec. 25.68 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.
25.71, which provides the general rules for notifying TTB of any
changes in the information included in a Brewer's Notice. Section 25.71
generally requires that when such changes occur, the brewer must file
an amended Brewer's Notice within 30 days. The proposed amendments to
Sec. 25.71 extend this deadline to 60 days. TTB proposes similar
amendments at Sec. Sec. 25.74 and 25.75.
Regarding changes in trade names, TTB's regulations at 27 CFR
25.71(a)(1) currently require that brewers submit an amended Brewer's
Notice when there is a change in the information shown on the notice,
which includes the list of trade names required by 27 CFR 25.62(a)(6).
The proposed amendments to 27 CFR 25.76 clarify that a brewer need only
notify TTB of the addition of a trade name prior to using such name for
labeling purposes as required by subpart J of part 25 (27 CFR 25.141-
25.145), and may notify TTB through a written notice. TTB's Permits
Online system already includes a function for reporting additional
trade names, which will satisfy the proposed Sec. 25.76's requirement
for a written notice.
Concerning records maintenance, current recordkeeping requirements

[[Page 34827]]

require that brewers maintain prescribed records at the brewery. The
proposed amendments to 27 CFR 25.300 generally allow for the
maintenance of required records at locations other than the brewery
upon written notice to TTB.
With respect to the collection of background information, TTB
proposes amendments to 27 CFR 25.66 to clarify the individuals who are
required to submit statements of ownership interest in a business
submitting a Brewer's Notice. The proposed amendments clarify that: (1)
such statements of interest are required only from persons with an
ownership interest in the applicant business of 10 percent or greater;
and (2) where a ``person'' holding such an interest is a legal entity
other than an individual, a brewer must submit basic identifying
information about a representative individual for that entity.
To ease burdens associated with conducting physical inventories of
beer, TTB proposes amendments to 27 CFR 25.294 to reduce the frequency
with which brewers are required to conduct inventories where such
brewers are eligible to file annual or quarterly tax returns under 26
U.S.C. 5061(d)(4). Section 5061(d)(4) allows brewers falling under
certain annual tax liability thresholds to file annual or quarterly tax
returns, rather than semimonthly returns. The proposed amendment aligns
inventories with the annual or quarterly return periods, where
applicable. The proposed amendments to Sec. 25.294 also provide
additional flexibility to all brewers by allowing inventories to be
taken within the final 15 days of the applicable inventory period
(i.e., month, year, or quarter), rather than within the final 7 days.
To streamline procedures for discontinuing business as a brewer,
TTB proposes to amend Sec. 25.85 to allow a written notice to the
appropriate TTB officer to serve as adequate notice of discontinuance
of business, rather than requiring the outgoing brewer to file and
receive TTB approval of a new Brewer's Notice. The proposed notice must
indicate the date on which the business discontinued or will
discontinue. The proposed amendments also dispose of the blanket
requirement for a final report and provide that a brewer must submit
such report only upon request of the appropriate TTB officer.
To provide additional flexibility in securing brewery bond
coverage, TTB proposes amendments to 27 CFR 25.91 and 25.93 to allow
entities operating multiple breweries to secure one bond covering all
operations rather than requiring separate bonds for each brewery. The
amendments allowing blanket bonds will reduce the amount of effort
required to procure and maintain multiple bonds with differing
expiration dates.
To provide brewers additional flexibility in the timing of beer
destructions, and to avoid requiring brewers to store taxpaid beer
longer than is necessary to arrange its destruction, TTB is proposing
to eliminate the requirement that brewers notify TTB prior to
destroying taxpaid beer off brewery premises. TTB is proposing to amend
Sec. 25.283 to instead require that brewers submit, with a claim for
refund or credit of tax on taxpaid beer destroyed off brewery premises,
proof of destruction.
In conclusion, while the entities affected by the proposed rule
include a substantial number of small entities, TTB expects the effects
of the changes in this proposed rule to include modest burden
reductions 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. 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

As discussed above, in 27 CFR part 25, TTB proposes to update the
Office of Management and Budget (OMB) control numbers and the list of
regulatory sections containing information collections. OMB has
previously reviewed and approved all of the information collections
contained in the part 25 regulations in accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C. 3507). The OMB control numbers
assigned to information collections currently contained in part 25 are:
1513-0005, 1513-0007, 1513-0009, 1513-0013, 1513-0014, 1513-0015, 1513-
0030, 1513-0058, 1513-0083, 1513-0085, 1513-0086, 1513-0088, 1513-0118,
and 1513-0122.
The update, addition, or removal of OMB control numbers and section
numbers containing information collections in part 25 is merely
informational in nature, and these technical amendments do not change
the requirements or burden of any currently approved TTB information
collection. 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.
In addition to those technical updates, several regulations
specifically addressed in this document affect current collections of
information under control numbers 1513-0005, 1513-0015, 1513-0030,
1513-0058, 1513-0083, and 1513-0086. The specific regulatory sections
in this proposed rule that contain such collections of information,
either current or proposed, are Sec. Sec. 25.23, 25.24, 25.25, 25.35,
25.62, 25.66, 25.68, 25.71, 25.74, 25.75, 25.76, 25.81, 25.85, 25.91,
25.93, 25.167, 25.221, 25.222, 25.225, 25.283, 25.284, 25.292, 25.294,
and 25.300.
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 Brewer's
Notices;
(2) Replacing required narrative descriptions of a brewer's
premises with more specific information;
(3) Extending deadlines for reporting certain changes in the
brewer's business;
(4) Streamlining procedures for brewers using new trade names;
(5) Allowing the maintenance of required records at locations other
than the brewery premises;
(6) Clarifying which individuals are required to submit certain
background information in connection with a Brewer's Notice;
(7) Reducing the frequency of physical inventories for certain
brewers and providing additional flexibility in the timing of
inventories;
(8) Streamlining procedures for discontinuing business as a brewer;
(9) Allowing entities operating multiple breweries to secure one
bond covering all operations; and
(10) Eliminating the requirement that brewers notify TTB before
voluntarily destroying taxpaid beer off brewery premises.
To reduce the amount of information collected in applications for
Brewer's Notices, TTB proposes to amend 27 CFR 25.25 to remove
requirements that a brewer designate and maintain a separate ``tavern''
area within the brewery where brewers may sell and serve beer to
customers. Instead, TTB

[[Page 34828]]

proposes to replace these requirements with general provisions related
to accounting for beer sold and served to customers on the brewery
premises. The amendments eliminate certain requirements associated with
the current tavern regulations, in particular the requirements to
delineate the public and non-public areas of the brewery, and to employ
security measures to separate those areas. Under the proposed 27 CFR
25.62, brewers are merely required to disclose whether they intend to
engage in retail service operations, and if so what kind. TTB proposes
to amend 27 CFR 25.292 to incorporate recordkeeping requirements
related to the retail service operations authorized under the proposed
Sec. 25.25.
Section 25.25 is currently included in the collections of
information assigned OMB control numbers 1513-0005 and 1513-0086; Sec.
25.62 is currently included in the collection of information assigned
OMB control number 1513-0005; and Sec. 25.292 is currently included in
the collection of information assigned OMB control number 1513-0058.
Under the proposed amendments, Sec. 25.25 no longer imposes a
collection of information. Accordingly, TTB has submitted to OMB
revisions of information collection numbers 1513-0005 and 1513-0086 to
account for the reduced burden of the proposed amendments. TTB has
submitted a revision of information collection number 1513-0058 to
account for the related recordkeeping requirements under proposed Sec.
25.292. Conforming amendments related to retail service operations are
also made in proposed 27 CFR 25.23, 25.24, and 25.35; section 25.23 is
currently included in the collection of information assigned OMB
control number 1513-0005, while Sec. Sec. 25.24 and 25.35 are
currently included the collection of information assigned OMB control
number 1513-0086. However, the amendments to those sections proposed in
this document are unrelated to the collections of information included
in those sections.
To replace required narrative descriptions of brewery premises with
more specific information, TTB proposes amendments to Sec. Sec. 25.68
and 25.81. The proposed amendments to Sec. 25.68 eliminate
requirements to submit detailed narrative descriptions of the brewery
and certain of its attributes and replace these requirements with a
more specific set of information. Section 25.81 relates to qualifying
to alternate the brewery premises. TTB believes that, in general, the
more direct questions in the proposed regulations will enable brewers
to better understand what information they must submit, reduce the need
for additional submissions and communication between TTB and brewers,
and accelerate TTB's review process. TTB proposes amendments to Sec.
25.81 to allow descriptions or diagrams of areas to be alternated and
how the alternated areas will be separated from other parts of the
premises to be consolidated with the general premises description or
diagram provided under Sec. 25.68. Sections 25.68 and 25.81 are
currently included in the collection of information assigned OMB
control number 1513-0005. TTB has submitted to OMB a revision of that
information collection to account for the reduced burden of the
proposed amendments.
The TTB regulations generally require that, when there is a change
in the information shown in the Brewer's Notice, the brewer must notify
TTB of the change. To extend deadlines for reporting certain changes in
the brewery business, TTB proposes amendments to 27 CFR 25.71, 25.74,
and 25.75. In each case, TTB proposes to extend the deadline for
reporting the specified change in the business to 60 days from 30 days.
Sections 25.71, 25.74, and 25.75 are currently included in the
collection of information assigned OMB control number 1513-0005. TTB
has submitted to OMB a revision of that information collection to
account for the reduced burden of the proposed amendments.
The TTB regulations generally require that brewers report changes
to, or additions of, the trade names under which a brewery may operate
to TTB by submitting an amended Brewer's Notice. See 27 CFR 25.62 and
26.71. TTB proposes a new 27 CFR 25.76 to clarify that a brewer need
only notify TTB of the addition of a trade name prior to using such
name for marking or labeling purposes as required by subpart J of part
25 (27 CFR 25.141-25.145) and may notify TTB through a written notice.
TTB's Permits Online system already includes a function for reporting
additional trade names, which will satisfy the proposed Sec. 25.76's
requirement for a written notice. The proposed Sec. 25.76 does not
require conforming amendments to Sec. Sec. 25.62 and 25.71. Sections
25.62 and 25.71 are currently included in the collection of information
assigned OMB control number 1513-0005. TTB has submitted to OMB a
revision of information collection 1513-0005 to account for the reduced
burden of the proposed Sec. 25.76.
The current applicable recordkeeping requirements do not explicitly
allow brewers to maintain records at a location other than the brewery
premises. As a result, brewers generally must submit a request for
specific authorization to retain records at a central recordkeeping
location rather than the brewery premises. To allow the maintenance of
required records at locations other than the brewery premises, TTB
proposes amendments to 27 CFR 25.300. These amendments also clarify
that a brewer generally may satisfy a request for documents by
providing copies of such documents, including electronic copies.
Section 25.300 is currently included in the collection of information
assigned OMB control number 1513-0058. TTB has submitted to OMB a
revision of that information collection to account for the reduced
burden of the proposed amendments.
With respect to the collection of background information, TTB
proposes amendments to 27 CFR 25.66 to specify the individuals who are
required to submit statements of ownership interest in the business.
Section 25.66 generally requires that brewers submit a statement
disclosing the identities of persons holding certain levels of
ownership in a business submitting a Brewer's Notice. The proposed
amendments clarify that: (1) Such statements of interest are required
only from persons with an ownership interest in the business of 10
percent or greater; and (2) where a ``person'' holding such an interest
is a legal entity other than an individual, a brewer must submit basic
identifying information about a representative individual for that
entity. Section 25.66 is currently included in the collection of
information assigned OMB control number 1513-0005. TTB has submitted to
OMB a revision of that information collection to account for the
reduced burden of the proposed amendments.
To reduce burdens associated with physical inventories, TTB
proposes to amend Sec. 25.294 to allow brewers authorized by sections
5061(d) of the IRC and Sec. 25.164 of the TTB regulations to file tax
returns on an annual or quarterly basis to complete physical
inventories on an annual or quarterly basis, respectively. TTB further
proposes to amend Sec. 25.294 to allow physical inventories to be
taken within the final 15 days of the applicable inventory period
(i.e., month, year, or quarter). Section 25.294 is currently included
in the collection of information assigned OMB control number 1513-0058.
TTB has submitted to OMB a revision of that information collection to
account for the reduced burden of the proposed amendments.
Concerning discontinuing business as a brewer, TTB proposes to
amend Sec. 25.85 to allow any written notice to

[[Page 34829]]

the appropriate TTB officer to serve as adequate notice of
discontinuance of business. The notice must indicate the date on which
business discontinued or will discontinue. The proposed amendments also
dispose of the blanket requirement for a final report, and provide that
brewers must submit such report only upon request of the appropriate
TTB officer. Section 25.85 is currently included in the collection of
information assigned OMB control number 1513-0005. TTB has submitted to
OMB a revision of that information collection to account for the
reduced burden of the proposed amendments.
To provide greater flexibility in obtaining bond coverage to
entities operating multiple breweries, TTB proposes amendments to
Sec. Sec. 25.91 and 25.93 to allow such entities to secure one bond
covering all operations. TTB's proposed amendments also set forth the
penal sum requirements associated with these blanket bonds. Sections
25.91 and 25.93 are currently included in the collection of information
assigned OMB control number 1513-0015. TTB has submitted to OMB a
revision of that information collection to account for the reduced
burden of the proposed amendments.
Finally, TTB is proposing to eliminate the requirement that brewers
notify TTB before voluntarily destroying taxpaid beer off brewery
premises. To provide brewers additional flexibility in the timing of
beer destructions, and to avoid requiring brewers to store taxpaid beer
longer than is necessary to arrange its destruction, TTB is proposing
to eliminate entirely Sec. Sec. 25.222 and 25.223 requiring the
notice, and to amend Sec. 25.283 to instead require that brewers
submit proof of destruction with a claim for refund or credit of tax on
taxpaid beer destroyed off brewery premises. Section 25.222 is
currently included in the collection of information assigned OMB
control number 1513-0005; and Sec. Sec. 25.283 is currently included
in the collection of information assigned OMB control number 1513-0030.
TTB has submitted to OMB revisions of those information collections to
account for the reduced burden of the proposed amendments.
As noted above, TTB has submitted the revised information
collection requirements to the 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
<a href="/cdn-cgi/l/email-protection#dd92948f9c82aea8bfb0b4aeaeb4b2b3ae9db2b0bff3b8b2adf3bab2ab"><span class="__cf_email__" data-cfemail="aae5e3f8ebf5d9dfc8c7c3d9d9c3c5c4d9eac5c7c884cfc5da84cdc5dc">[email&#160;protected]</span></a>. 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 August 8, 2022. Comments
are specifically requested concerning:
(1) 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;
(2) The accuracy of the estimated burdens associated with the
collections of information submitted to OMB;
(3) How to enhance the quality, utility, and clarity of the
information to be collected;
(4) 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
(5) Estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of services to provide information.

List of Subjects in 27 CFR Part 25

Alcohol and alcoholic beverages, Application procedures, Beer,
Notice requirements, Reporting and recordkeeping requirements, Security
requirements, Trade names.

Proposed Amendments to the Regulations

For the reasons discussed above in the preamble, TTB proposes to
amend 27 CFR part 25 as follows:

PART 25--BEER

0
1. The authority citation for part 25 continues to read as follows:

Authority: 19 U.S.C. 81c; 26 U.S.C. 5002, 5051-5054, 5056, 5061,
5121, 5122-5124, 5222, 5401-5403, 5411-5417, 5551, 5552, 5555, 5556,
5671, 5673, 5684, 6011, 6061, 6065, 6091, 6109, 6151, 6301, 6302,
6311, 6313, 6402, 6651, 6656, 6676, 6806, 7342, 7606, 7805; 31
U.S.C. 9301, 9303-9308.

0
2. Section 25.5 is revised to read as follows:

Sec. 25.5 OMB control numbers assigned under the Paperwork Reduction
Act.

(a) Purpose. This section displays the control numbers assigned to
information collection requirements in this part by the Office of
Management and Budget (OMB) under the Paperwork Reduction Act of 1995,
Public Law 104-13.
(b) Display. The following display identifies each section in this
part that contains an information collection requirement and the OMB
control number assigned to that information collection requirement.

Table 1 to Paragraph (b)
----------------------------------------------------------------------------------------------------------------
Current OMB Section where Current OMB
Section where contained control No. contained control No.
----------------------------------------------------------------------------------------------------------------
25.23........................................................... 1513-0005 25.163 1513-0083
25.24........................................................... 1513-0086 1513-0088
25.35........................................................... 1513-0086 25.164 1513-0088
25.42........................................................... 1513-0058 25.165 1513-0088
25.52........................................................... 1513-0005 25.166 1513-0088
25.53........................................................... 1513-0118 25.167 1513-0005
1513-0122 25.168 1513-0083
25.55........................................................... 1513-0118 25.175 1513-0083
1513-0122 25.184 1513-0005
25.56........................................................... 1513-0118 25.186 1513-0058
1513-0122 25.192 1513-0058
25.57........................................................... 1513-0118 1513-0086
1513-0122 25.195 1513-0058
25.58........................................................... 1513-0118 25.196 1513-0058
1513-0122 1513-0086
25.61........................................................... 1513-0005 25.211 1513-0058
25.62........................................................... 1513-0005 25.213 1513-0005

[[Page 34830]]

25.64........................................................... 1513-0005 1513-0086
25.65........................................................... 1513-0014 25.221 1513-0005
25.66........................................................... 1513-0005 25.224 1513-0083
25.68........................................................... 1513-0005 25.231 1513-0086
25.71........................................................... 1513-0005 25.241 1513-0085
25.72........................................................... 1513-0005 25.242 1513-0085
1513-0013 1513-0086
1513-0088 25.243 1513-0085
25.73........................................................... 1513-0005 25.251 1513-0086
1513-0013 25.252 1513-0058
1513-0015 25.263 1513-0058
1513-0088 1513-0086
25.74........................................................... 1513-0005 25.264 1513-0058
1513-0088 25.271 1513-0013
25.75........................................................... 1513-0005 25.272 1513-0005
1513-0088 25.273 1513-0005
25.76........................................................... 1513-0005 25.274 1513-0015
25.77........................................................... 1513-0005 25.276 1513-0058
1513-0013 1513-0088
1513-0015 25.277 1513-0005
1513-0088 25.281 1513-0030
25.78........................................................... 1513-0005 1513-0088
1513-0088 25.282 1513-0005
25.79........................................................... 1513-0005 1513-0030
1513-0088
25.81........................................................... 1513-0005 25.283 1513-0030
1513-0009 1513-0088
1513-0013 25.284 1513-0088
25.85........................................................... 1513-0005 25.285 1513-0030
25.91........................................................... 1513-0015 1513-0083
25.92........................................................... 1513-0013 1513-0088
25.93........................................................... 1513-0015 25.286 1513-0030
25.94........................................................... 1513-0015 1513-0088
25.95........................................................... 1513-0013 25.291 1513-0058
1513-0015 1513-0088
25.97........................................................... 1513-0015 25.292 1513-0058
25.98........................................................... 1513-0015 25.293 1513-0058
25.103.......................................................... 1513-0013 25.294 1513-0058
25.141.......................................................... 1513-0005 25.295 1513-0058
1513-0086 25.296 1513-0007
25.142.......................................................... 1513-0005 25.296 1513-0058
1513-0086 25.297 1513-0007
25.143.......................................................... 1513-0086 25.298 1513-0083
25.144.......................................................... 1513-0005 1513-0088
25.145.......................................................... 1513-0086 25.300 1513-0058
25.151.......................................................... 1513-0088 1513-0088
25.158.......................................................... 1513-0005 25.301 1513-0058
25.160.......................................................... 1513-0083
----------------------------------------------------------------------------------------------------------------

0
3. Section 25.11 is amended by:
0
a. Removing the phrase ``Form 5130.10'' each place it appears and
adding, in its place, ``form TTB F 5130.10''; and
0
b. Adding, in alphabetical order, definitions of ``Retail service
operation'' and ``Written notice''.
The additions read as follows:

Sec. 25.11 Meaning of terms.

* * * * *
Retail service operation. Retail sale by a brewer on brewery
premises of beer produced by the brewer, other alcohol beverages, food,
or other brewery related merchandise.
* * * * *
Written notice. A statement on a company's letterhead or similar
medium that clearly identifies the company and shows that the statement
is from a company representative with power of attorney described at
Sec. 25.65, submitted in paper or electronically.
0
4. Section 25.23 is amended by:
0
a. Revising paragraph (b)(6) and the first sentence of paragraph (c);
and
0
b. Removing the parenthetical authority citation at the end of the
section.
The revisions read as follows:

Sec. 25.23 Restrictions on use.

* * * * *
(b) * * *
(6) Involve retail service operations in accordance with Sec.
25.25.
(c) Application. Except as provided in Sec. 25.25 for retail
service operations on brewery premises, a brewer desiring to use a
brewery for other purposes must submit to the appropriate TTB officer
an application listing the purposes. * * *

Sec. 25.24 [Amended]

0
5. Section 25.24 is amended by:
0
a. Removing, in paragraph (a)(1), the words ``nontaxpaid beer'' and
adding, in

[[Page 34831]]

their place, ``beer that has not been tax determined'';
0
b. Removing, in paragraph (a)(2), the word ``shall'' and adding, in its
place, the word ``must''; and
0
c. Removing the parenthetical authority citation at the end of the
section.
0
6. Section 25.25 is revised to read as follows:

Sec. 25.25 Retail service operations at brewery.

(a) General. A brewer desiring to sell untaxpaid beer, taxpaid beer
of another brewer's production, taxpaid wine, or taxpaid distilled
spirits for consumption at the brewery is authorized to engage in such
operations subject to the procedures and conditions set forth in this
section.
(b) Sale of beer from tanks. A brewer may dispense untaxpaid beer
from tanks for sale and consumption at the brewery, subject to the
conditions relating to tax determination set forth in this paragraph
(b). The brewer must have a suitable method for measurement of the beer
dispensed from any tank as required by subpart E of this part, such as
a meter or gauge glass. The brewer must determine the tax on the beer
dispensed by measuring the amount dispensed for sale each day and
preparing the brewer's record of tax determination, required by Sec.
25.292(a)(8).
(c) Sale of packaged beer. A brewer may dispense untaxpaid beer
from barrels and kegs, or make available untaxpaid beer in bottles, for
sale and consumption at the brewery, subject to the following
conditions relating to tax determination:
(1) Barrels and kegs. Barrels and kegs must be tax determined at
the time they are tapped for the sale of beer for consumption on the
brewery premises; barrels and kegs must be reflected on the brewer's
record of tax determination, required by Sec. 25.292(a)(8), for the
day on which they are tapped. Barrels and kegs that have been tapped
and tax determined for sale and consumption on the brewery premises
must be physically marked or segregated in such a manner as to preclude
mixing with beer that has not been tax determined.
(2) Bottles. Bottles must be tax determined at the time they are
sold for consumption on the brewery premises and reflected on the
brewer's record of tax determination, required by Sec. 25.292(a)(8),
for the day on which sold.
(3) Storage of taxpaid or tax determined beer. The prohibition of
Sec. 25.24 does not apply to tax determined or taxpaid beer handled in
accordance with this subsection. Such beer may continue to be sold for
consumption on the brewery premises after it has been tax determined or
taxpaid.
(d) Sale of taxpaid alcohol. A brewer may sell taxpaid wine and
distilled spirits, as well as taxpaid beer of another brewer's
production, for consumption at the brewery. Any taxpaid beer of another
brewer's production must be stored as required by Sec. 25.24(a). Any
records of sales of taxpaid wine, distilled spirits, and/or beer of
another brewer's production must be distinguishable from records of
sales of beer described in paragraphs (b) and (c) of this section.
(e) Other sales. A brewer may sell food as well as brewery-related
merchandise at the brewery. Any business records of other sales that
the brewer may keep must be distinguishable from records of sales of
beer described in paragraphs (b) and (c) of this section.

Sec. 25.35 [Amended]

0
7. Section 25.35 is amended in the introductory text by:
0
a. Removing the word ``stationary''; and
0
b. Removing the word ``shall'' and adding, in its place, the word
``must''.
0
8. Section 25.41 is revised to read as follows:

Sec. 25.41 Measuring system required.

The brewer must accurately and reliably measure the quantity of
beer transferred from the brewery cellars for bottling and for racking,
as well as the quantity of untaxpaid beer sold for consumption on
brewery premises in accordance with Sec. 25.25. The brewer may use a
measuring device, such as a meter or gauge glass, or any other suitable
method.
0
9. Section 25.62 is amended by:
0
a. In paragraph (a) introductory text:
0
i. Removing the word ``shall'' each place it appears and adding, in its
place, ``must''; and
0
ii. Removing the phrase ``Form 5130.10'' and adding, in its place,
``form TTB F 5130.10''.
0
b. Removing the parenthetical authority citation at the end of the
section.
0
10. Section 25.66 is amended by:
0
a. Revising paragraph (c);
0
b. Removing the word ``shall'' in paragraph (d) and adding, in its
place, ``must''; and
0
c. Removing the parenthetical authority citation at the end of the
section.
The revision reads as follows:

Sec. 25.66 Organizational documents.

* * * * *
(c) Statements of interest--(1) Sole proprietorships and general
partnerships. In the case of an individual owner or a general
partnership, the name and address of each person having an 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:
(i) The names and addresses of persons having a 10 percent or more
ownership or other interest in each of the classes of ownership of the
entity, and the nature and amount of ownership or other 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) Legal entities other than individuals. If any interested person
named under paragraphs (c)(1) and (2) of this section is a legal entity
other than an individual, 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 brewery or, in the
absence of a designated individual, an owner, chief officer or manager,
or person with similar authority within the entity.
* * * * *
0
11. Section 25.68 is revised to read as follows:

Sec. 25.68 Description of brewery.

(a) As required by Sec. 25.62(a)(5), the Brewer's Notice must
include a description of the brewery premises. The description may be
in narrative form or diagram form, and must describe or illustrate:
(1) The overall dimensions of the building(s) housing the brewery
and, if the brewery occupies less than the entire building, the
boundaries of the brewery within the building; and
(2) Any portions of the brewery that are outdoors, including the
location of any outdoor tanks.
(b) Photographs further illustrating any of the elements required
in paragraph (a) of this section must be

[[Page 34832]]

submitted upon request of the appropriate TTB officer.

Sec. 25.71 [Amended]

0
12. Section 25.71 is amended by:
0
a. Removing ``shall'' and ``30 days'' and adding, in their places,
``must'' and ``60 days'', respectively, in paragraph (a)(1);
0
b. Removing the phrase ``Form 5130.10'' each place it appears in
paragraphs (a)(1) and (2) and (b)(2) and adding, in its place, ``form
TTB F 5130.10''; and
0
c. Removing the parenthetical authority citation at the end of the
section.
0
13. Section 25.74 is revised to read as follows:

Sec. 25.74 Changes in ownership interests.

Changes in the list of persons with an ownership interest furnished
under the provisions of Sec. 25.66(c)(2) must be submitted annually by
the brewer on July 1 or on any other date approved by the appropriate
TTB officer. When a change in the ownership interests results in a
change in the control or management of the business, notification of
the change will be made within 60 days in accordance with Sec. 25.71.
0
14. Section 25.75 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. 25.75 Change in officers and directors.

When there is any change in the list of officers or directors
furnished under the provisions of Sec. 25.66(a)(2), the brewer must
submit, within 60 days of the change, an amended notice on form TTB F
5130.10. * * *
0
15. Section 25.76 is added to read as follows:

Sec. 25.76 Change in trade name.

Before using a trade name for marking or labeling purposes as
required by subpart J of this part, the brewer must first submit a
written notice to the appropriate TTB officer listing the new name and
the office(s) where it is registered.
0
16. Section 25.81 is amended by:
0
a. Revising paragraphs (a), (b), (c), (d)(6), and (e); and
0
b. Removing the parenthetical authority citation at the end of the
section.
The revisions read as follows:

Sec. 25.81 Alternation of brewery and wine premises or distilled
spirits plant.

(a) General. A brewer may temporarily extend or curtail the brewery
premises to allow for several other types of alternate uses. A
curtailment or extension of brewery premises may allow for the use of
the premises as:
(1) An adjacent bonded wine cellar;
(2) An adjacent taxpaid wine bottling house; or
(3) An adjacent distilled spirits plant.
(b) Qualifying documents. Before alternating the brewery for a
purpose listed in paragraph (a) of this section, the proprietor must
file and receive approval of the necessary registration, application
forms and attachments that relate to the proposed alternate use.
Depending on the type of alternation involved, the proprietor must file
one or more of the following qualification documents:
(1) Brewer's Notice. For all alternate uses of the brewery
described in paragraph (a) of this section the proprietor must file a
form TTB F 5130.10, Brewer's Notice, to cover the proposed alternation
of premises.
(2) Description. For all alternate uses, the proprietor must
provide additional versions of the description required under Sec.
25.62(a)(5) describing in narrative form or illustrating by diagram 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.
(3) Bond. For all alternate uses, the proprietor must provide
evidence of an existing bond, consent of surety, or a new bond to cover
the proposed alternation of premises. The requirement in this paragraph
(b)(3) does not apply if a bond is not required under this chapter to
cover the proposed alternation.
(4) Bonded wine cellar or taxpaid wine bottling house. If the
proprietor intends to alternate the brewery premises or part of the
brewery premises as a bonded wine cellar or taxpaid wine bottling
house, the proprietor must also file form TTB F 5120.25, Application to
Establish and Operate Wine Premises.
(5) Distilled spirits plant. If the proprietor intends to alternate
the brewery premises or part of the brewery premises as a distilled
spirits plant, the proprietor must also file form TTB F 5110.41,
Registration of a Distilled Spirits Plant, to cover the proposed
alternation of premises.
(c) Brewer's responsibility. After approval of qualifying
documents, the proprietor may alternate the designated premises
pursuant to a written notice submitted to the appropriate TTB officer.
The notice must contain the information required by paragraph (d) of
this section. Prior to the effective date and hour of the alternation,
the proprietor must segregate products as follows:
(1) Wine operations. Prior to alternation from brewery premises to
wine premises, the proprietor must remove all beer from the brewery
premises that will be alternated. Prior to alternation from wine
premises to brewery premises, the proprietor must remove all wine and
spirits from the wine premises that will be alternated.
(2) Distilled spirits plant. Prior to alternation of brewery
premises to distilled spirits plant premises, the proprietor must
remove all beer from the premises except beer that is being received
for production of distilled spirits as provided in 27 CFR 19.296. Prior
to alternation from distilled spirits plant premises to operation of a
brewery the proprietor must remove all spirits, denatured spirits,
articles and wine from the premises to be alternated to brewery
premises.
(d) * * *
(6) Identification of the description or diagram depicting the
premises as they exist when curtailed or extended; and
* * * * *
(e) Separation of premises. The appropriate TTB officer may require
that the portion of brewery premises, wine premises, or distilled
spirits plant premises extended or curtailed under this section be
separated, in a manner satisfactory to the appropriate TTB officer,
from the remaining portion of the brewery premises, wine premises, or
distilled spirits plant premises.
0
17. Section 25.85 is revised to read as follows:

Sec. 25.85 Notice of permanent discontinuance.

When a brewer desires to discontinue business permanently, they
must provide a written notice to the appropriate TTB officer indicating
the date on which business discontinued or will discontinue. Upon
request of the appropriate TTB officer, the brewer must file a final
report of operations on form TTB F 5130.9 or form TTB F 5130.26 showing
no beer or cereal beverage on hand and marked ``Final Report.''
0
18. Section 25.91 is amended by:
0
a. Removing the phrase ``Form 5130.22'' each place it appears in
paragraphs (a) and (b) and adding, in its place, ``form TTB F
5130.22'';
0
b. Removing the word ``shall'' each place it appears in paragraphs (a)
and (c) and adding, in its place, ``must'';
0
c. Adding paragraph (f); and

[[Page 34833]]

0
d. Removing the parenthetical authority citation at the end of the
section.
The addition reads as follows:

Sec. 25.91 Requirement for bond.

* * * * *
(f) Blanket bond. A brewer that operates more than one brewery may,
in lieu of filing separate bonds, file a blanket bond on form TTB F
5130.22 for any or all of the breweries. The total amount of any
blanket bond given under this section must be available for the
satisfaction of any liability incurred at any factory covered by the
bond.
0
19. Section 25.93 is amended by:
0
a. Adding paragraph (a)(4);
0
b. Removing the word ``shall'' each place it appears in paragraph (b)
and adding, in its place, ``must'';
0
c. Revising paragraph (c); and
0
d. Removing the parenthetical authority citation at the end of the
section.
The addition and revision read as follows:

Sec. 25.93 Penal sum of bond.

(a) * * *
(4) Blanket bonds. Where a brewer operates multiple breweries and
obtains a blanket bond covering any or all of the breweries, the penal
sum of the blanket bond must be equal to the aggregate penal sum
applicable to all of the breweries covered by such bond, as calculated
under paragraphs (a)(1) through (3) of this section.
* * * * *
(c) Maximum and minimum penal sums--(1) Single brewery bond. The
maximum penal sum of the bond (or total penal sum if original and
strengthening bonds are filed) is not to exceed $150,000 when the tax
on beer is to be prepaid, or $500,000 when the tax is to be deferred as
provided in Sec. 25.164. The minimum penal sum of a bond is $1,000.
(2) Blanket bond. The maximum penal sum of the blanket bond (or
total penal sum if original and strengthening bonds are filed) is not
to exceed $150,000 per brewery covered by the blanket bond where the
tax on beer is to be prepaid, or $500,000 per brewery covered by the
blanket bond when the tax is to be deferred as provided in Sec.
25.164. The minimum penal sum of a blanket bond is $1,000 per brewery
covered by the blanket bond.
0
20. Section 25.102 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. 25.102 Termination of surety's liability.

* * * * *
(b) The date of discontinuance of business of the brewer indicated
on the notice required under Sec. 25.85;
* * * * *
0
21. Section 25.159 is amended by
0
a. Revising paragraph (a);
0
b. Removing the word ``shall'' in paragraph (c)(2) and adding, in its
place, ``must''; and
0
c. Removing the parenthetical authority citation at the end of the
section.
The revision reads as follows:

Sec. 25.159 Time of tax determination and payment; offsets.

(a) Time and payment. The tax on beer will be determined at the
time of its removal for consumption or sale, and will be paid by return
as provided in this part. In the case of retail service operations, see
Sec. 25.25 for tax determination requirements.
* * * * *
0
22. Section 25.221 is amended by:
0
a. Revising paragraph (a)(2); and
0
b. Removing the parenthetical authority citation at the end of the
section.
The revision reads as follows:

Sec. 25.221 Voluntary destruction of beer.

(a) * * *
(2) A brewer conducting retail service operations under Sec.
25.25(b) or (c) may destroy taxpaid or tax-determined beer stored on
brewery premises, in accordance with the requirements of Sec. 25.225.
* * * * *
0
23. Section 25.222 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. 25.222 Notice of brewer.

* * * * *
(b) Execution of notice. The brewer shall serially number each
notice and execute each notice under penalties of perjury as defined in
Sec. 25.11. The brewer shall specify the date on which the beer is to
be destroyed.
* * * * *
0
24. Section 25.225 is amended by:
0
a. Revising paragraphs (a) and (b)(1); and
0
b. Removing the word ``shall'' in paragraph (b)(2) and adding, in its
place, ``must''.
The revisions read as follows:

Sec. 25.225 Destruction of taxpaid beer which was never removed from
brewery premises.

(a) General. A brewer conducting retail service operations under
Sec. 25.25(b) or (c) may destroy taxpaid or tax-determined beer which
was never removed from brewery premises, in accordance with the
recordkeeping requirements of paragraph (b) of this section, and with
the benefit of the tax refund provisions of paragraph (c) of this
section.
(b) * * *
(1) When taxpaid or tax-determined beer which was never removed
from brewery premises is destroyed, the brewer must prepare a record of
the quantity of beer destroyed, and the reason for, date of, and method
of, destruction. The brewer may prepare this record on form TTB F
5620.8 for submission as a claim under Sec. 25.283.
* * * * *
0
25. Section 25.283 is amended by:
0
a. Removing the word ``shall'' each place it appears in paragraphs (a)
introductory text, (b) introductory text, (c) introductory text, and
(e) and adding, in its place, ``must'';
0
b. Revising paragraphs (a)(9) and (10) and adding paragraph (a)(11);
0
c. Removing the phrase ``Form 2635 (5620.8)'' and adding, in its place,
``form TTB F 5620.8'' in paragraph (e); and
0
d. Removing the parenthetical authority citation at the end of the
section.
The revisions and addition read as follows:

Sec. 25.283 Claims for refund of tax.

(a) * * *
(9) A statement that the tax has been fully paid or determined;
(10) A reference to the notice filed under Sec. 25.213 (if
required) or Sec. 25.222; and
(11) For beer voluntarily destroyed at a location other than a
brewery, proof of the destruction through commercial records relating
to the destruction.
* * * * *

Sec. 25.284 [Amended]

0
26. Section 25.284 is amended by:
0
a. Removing the phrase ``Form 5000.24'' in paragraph (a) and adding, in
its place, ``form TTB F 5000.24'';
0
b. Removing the word ``shall'' in paragraph (f) introductory text and
adding, in its place, ``must''; and
0
c. Removing the phrase ``and (10)'' and adding, in its place, ``(10),
and (11)'' in paragraph (f)(1); and
0
d. Removing the parenthetical authority citation at the end of the
section.
0
27. Section 25.292 is amended by:
0
a. Removing the word ``shall'' each place it appears in paragraphs (a)
introductory text and (b) introductory text and adding, in its place,
``must'';
0
b. Revising paragraphs (a)(8) and (11); and

[[Page 34834]]

0
c. Removing the parenthetical authority citation at the end of the
section.
The revisions read as follows:

Sec. 25.292 Daily records of operations.

(a) * * *
(8) Beer removed for consumption or sale.
(i) For each removal of beer from the brewery, the record will show
the date of removal, the person to whom the beer was shipped or
delivered (not required for sales in quantities of one-half barrel or
less for delivery at the brewery), and the quantities of beer removed
in kegs and in bottles.
(ii) For removals of beer for sale and consumption at the brewery,
the record will show, for each day of operation, the barrel equivalent
of: The total bottles of beer sold for consumption at the brewery; the
total amount of beer poured from any tank(s) and sold for consumption
at the brewery; and the barrels or kegs tapped for the sale of beer for
consumption at the brewery. Barrel equivalents must be calculated in
accordance with Sec. Sec. 25.156 through 25.158. The daily record will
be supported by records of individual sales transactions.
* * * * *
(11) Beer provided gratuitously for consumption at the brewery and
not as part of a retail service operation.
* * * * *
0
28. Section 25.294 is amended by:
0
a. Revising paragraph (a);
0
b. Redesignating paragraphs (b) and (c) as paragraphs (c) and (d),
respectively;
0
c. Adding a new paragraph (b);
0
d. Adding headings to newly redesignated paragraphs (c) and (d);
0
e. Removing the word ``shall'' each place it appears in newly
redesignated paragraphs (c) introductory text and (d) and adding, in
its place, ``must''; and
0
f. Removing the parenthetical authority citation at the end of the
section.
The additions and revision read as follows:

Sec. 25.294 Inventories.

(a) General. The brewer must take a physical inventory of beer and
cereal beverage at least once each calendar month. The brewer must take
this inventory within 15 days of the close of the calendar month for
which made.
(b) Exception for annual and quarterly filers. A brewer authorized
to use an annual return period under Sec. 25.164(c)(2) need only take
a physical inventory of beer and cereal beverage in the month that
their annual tax return is due. A brewer authorized to use a quarterly
return period under Sec. 25.164(c)(3) need only take physical
inventories of beer and cereal beverage in the months in which their
quarterly tax returns are due. The brewer must take the inventories
required by this paragraph (b) within 15 days of the close of the
calendar month in which made.
(c) Inventory record. * * *
(d) Record retention. * * *
0
29. Section 25.300 is amended by:
0
a. Revising paragraph (a); and
0
b. Removing the word ``shall'' in paragraph (b) and adding, in its
place, ``must''; and
0
c. Removing the parenthetical authority citation at the end of the
section.
The revision reads as follows:

Sec. 25.300 Retention and preservation of records.

(a) Place of maintenance. Records required by this part generally
will be prepared and kept by the brewer at the brewery premises where
the operation or transaction occurs and will be available for
inspection by any appropriate TTB officer during business hours. If a
brewer desires to keep the required records at any location other than
the brewery premises, they must first provide written notice to the
appropriate TTB officer of the location where the records are to be
kept. Any brewer keeping records at a location other than the brewery
premises must make them available at the brewery premises upon request
of the appropriate TTB officer; however, the appropriate TTB officer
may allow the brewer to supply copies (including electronic copies) of
such records instead of the originals.
* * * * *

Signed: May 27, 2022.
Mary Ryan,
Administrator.

Approved: May 27, 2022.
Timothy E. Skud,
Deputy Assistant Secretary, (Tax, Trade and Tariff Policy).
[FR Doc. 2022-11902 Filed 6-7-22; 8:45 am]
BILLING CODE 4810-31-P

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