Proposed Revisions to Wine Labeling and Recordkeeping Requirements, 40584-40589 [2016-14696]
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Federal Register / Vol. 81, No. 120 / Wednesday, June 22, 2016 / Proposed Rules
government. A payment is reasonably
necessary to comply with such a Federal
debt collection law if the payment is a
necessary part of a course of action that
results in compliance with the Federal
debt collection law that would be
violated absent such course of action,
regardless of whether other actions
would also result in compliance with
the Federal debt collection law.
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■ Par. 6. Section 1.409A–4 (REG–
148326–05), as proposed at 73 FR 74380
(December 8, 2008), is proposed to be
amended by revising paragraph
(a)(1)(ii)(B) to read as follows:
§ 1.409A–4 Calculation of amount
includible in income and additional income
taxes.
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(B) Treatment of certain deferred
amounts otherwise subject to a
substantial risk of forfeiture—(1) Risk of
forfeiture disregarded. For purposes of
determining the amount includible in
income under section 409A(a)(1) and
paragraph (a)(1)(i) of this section, an
amount deferred under a plan that is
otherwise subject to a substantial risk of
forfeiture for a taxable year is treated as
not subject to a substantial risk of
forfeiture for the taxable year, if during
the taxable year any of the following
occur:
(i) A change (including an initial
deferral election) that is not authorized
under § 1.409A–1, § 1.409A–2, or
§ 1.409A–3 is made to a provision of the
plan providing for the time or form of
payment of the deferred amount, if the
service recipient has not made a
reasonable, good faith determination
that, absent the change, the provision
fails to comply with the requirements of
section 409A(a).
(ii) The service recipient has engaged
in a pattern or practice of permitting
substantially similar failures to comply
with section 409A(a) under one or more
nonqualified deferred compensation
plans while amounts deferred under the
plans are nonvested, and the facts and
circumstances indicate that the deferred
amount would be affected by the pattern
or practice. Whether such a pattern or
practice exists will depend on the facts
and circumstances, including, but not
limited to, whether the service recipient
has taken commercially reasonable
measures to identify and correct the
substantially similar failures promptly
upon discovery, whether the failures
have affected nonvested deferred
amounts with greater frequency than
vested deferred amounts, whether the
failures have occurred more frequently
under newly adopted plans, and
whether the failures appear intentional,
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are numerous, or repeat one or more
similar past failures that were
previously identified and corrected.
(iii) The correction of a failure to
comply with section 409A(a) affecting
the deferred amount is not consistent
with an applicable correction method (if
one exists) set forth in applicable
guidance issued by the Treasury
Department and the IRS for correcting
failures under section 409A(a), or the
failure is not corrected in substantially
the same manner as a substantially
similar failure affecting a nonvested
deferred amount under another plan
sponsored by the service recipient.
Solely with respect to the deferred
amount, the requirements under
applicable correction guidance with
respect to eligibility, income inclusion,
additional taxes, premium interest, and
information reporting by the service
recipient or service provider do not
apply.
■ Par. 7. Section 1.409A–6 is amended
by revising paragraph (b) to read as
follows:
§ 1.409A–6 Application of section 409A
and effective dates.
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(b) Regulatory applicability date.
Section 1.409A–0, § 1.409A–1,
§ 1.409A–2, § 1.409A–3 and this section,
as amended, apply for taxable years
beginning on or after publication of the
Treasury decision adopting these rules
as final regulations in the Federal
Register. Section 1.409A–0, § 1.409A–1,
§ 1.409A–2, § 1.409A–3 and this section
as they appeared in the April 2009
edition of 26 CFR part 1 apply for
taxable years beginning on or after
January 1, 2009 and before publication
of the Treasury decision adopting these
rules as final regulations in the Federal
Register.
John M. Dalrymple,
Deputy Commissioner for Services and
Enforcement.
[FR Doc. 2016–14331 Filed 6–21–16; 8:45 am]
BILLING CODE 4830–01–P
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DEPARTMENT OF THE TREASURY
Alcohol and Tobacco Tax and Trade
Bureau
27 CFR Parts 4 and 24
[Docket No. TTB–2016–0005; Notice No.
160]
RIN 1513–AC27
Proposed Revisions to Wine Labeling
and Recordkeeping Requirements
Alcohol and Tobacco Tax and
Trade Bureau, Treasury.
ACTION: Notice of proposed rulemaking.
AGENCY:
The Alcohol and Tobacco Tax
and Trade Bureau (TTB) proposes to
amend its labeling and recordkeeping
regulations in 27 CFR part 24 to provide
that any standard grape wine containing
7 percent or more alcohol by volume
that is covered by a certificate of
exemption from label approval may not
be labeled with a varietal (grape type)
designation, a type designation of
varietal significance, a vintage date, or
an appellation of origin unless the wine
is labeled in compliance with the
standards set forth in the appropriate
sections of 27 CFR part 4 for that label
information. TTB is also proposing to
amend its part 4 wine labeling
regulations to include a reference to the
new part 24 requirement.
DATES: TTB must receive written
comments on or before August 22, 2016.
ADDRESSES: Please send your comments
on this document to one of the
following addresses:
• Internet: https://www.regulations.gov
(via the online comment form for this
notice as posted within Docket No.
TTB–2016–0005 at ‘‘Regulations.gov,’’
the Federal e-rulemaking portal);
• U.S. Mail: Director, Regulations and
Rulings Division, Alcohol and Tobacco
Tax and Trade Bureau, 1310 G Street
NW., Box 12, Washington, DC 20005; or
• Hand delivery/courier in lieu of
mail: Alcohol and Tobacco Tax and
Trade Bureau, 1310 G Street NW., Suite
400, Washington, DC 20005.
See the Public Participation section of
this notice for specific instructions and
requirements for submitting comments,
and for information on how to request
a public hearing.
You may view copies of this
document and any comments TTB
receives about this proposal at https://
www.regulations.gov within Docket No.
TTB–2016–0005. A link to that docket is
posted on the TTB Web site at https://
www.ttb.gov/wine/winerulemaking.shtml under Notice No. 160.
You also may view copies of this
SUMMARY:
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Federal Register / Vol. 81, No. 120 / Wednesday, June 22, 2016 / Proposed Rules
proposed rule and any comments TTB
receives about this proposal by
appointment at the TTB Information
Resource Center, 1310 G Street NW.,
Washington, DC 20005. Please call 202–
453–2270 to make an appointment.
FOR FURTHER INFORMATION CONTACT:
Jennifer Berry, Alcohol and Tobacco
Tax and Trade Bureau, Regulations and
Rulings Division; telephone 202–453–
1039, ext. 275.
SUPPLEMENTARY INFORMATION:
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Background
TTB Authority
Chapter 51 of the Internal Revenue
Code of 1986, as amended (IRC), 26
U.S.C. chapter 51, sets forth excise tax
collection and related provisions
pertaining to, among other things, the
production of wine. Subchapter F of
chapter 51 sets forth provisions specific
to bonded and taxpaid wine premises.
Under 26 U.S.C. 5388(a), standard wines
may be removed from bonded and
taxpaid wine premises subject to the
provisions of subchapter F and be
marked, transported, and sold under
their proper designation as to kind and
origin, or, if there is no such designation
known to the trade or consumers, then
under a truthful and adequate statement
of composition. Pursuant to section
5367 of the IRC (26 U.S.C. 5367), a
proprietor of a bonded wine cellar or a
taxpaid wine bottling house shall keep
such records and file such returns, in
the form and containing such
information, as the Secretary of the
Treasury may by regulations provide.
A proprietor of a bonded wine cellar
(including a bonded winery) or a
taxpaid wine bottling house will be
referred to in this document as a ‘‘wine
proprietor.’’
In addition to the IRC marking and
recordkeeping requirements, wines
containing at least 7 percent alcohol by
volume are subject to the labeling
requirements of the Federal Alcohol
Administration Act (FAA Act). Section
105(e) of the FAA Act, codified at 27
U.S.C. 205(e), authorizes the Secretary
of the Treasury to prescribe regulations
for the labeling of wine, distilled spirits,
and malt beverages. The FAA Act
requires that these regulations, among
other things, prohibit consumer
deception and the use of misleading
statements on labels, and ensure that
labels provide the consumer with
adequate information as to the identity
and quality of the product.
The FAA Act also generally requires
a producer, blender, or wholesaler of
wine, or proprietor of a bonded wine
storeroom, to obtain a certificate of label
approval prior to bottling wine for sale
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in interstate commerce. Bottlers are
exempt from the labeling requirements
of the FAA Act if they show to the
satisfaction of the Secretary that the
wine will not be sold, offered for sale,
or shipped or delivered for shipment, or
otherwise introduced in, interstate or
foreign commerce. It should be noted
that certificates of exemption from label
approval are not available to importers
who are removing wine in containers
from customs custody for consumption.
If those removals are for sale or any
other commercial purpose, the importer
must first obtain a certificate of label
approval.
The Alcohol and Tobacco Tax and
Trade Bureau (TTB) administers chapter
51 of the IRC and the provisions of the
FAA Act pursuant to section 1111(d) of
the Homeland Security Act of 2002,
codified at 6 U.S.C. 531(d). The
Secretary has delegated various
authorities through Treasury
Department Order 120–01 (dated
December 10, 2013, superseding
Treasury Order 120–01 (Revised),
‘‘Alcohol and Tobacco Tax and Trade
Bureau,’’ dated January 24, 2003), to the
TTB Administrator to perform the
functions and duties in the
administration and enforcement of these
laws.
Current Regulatory Requirements
The TTB regulations implementing
the provisions of chapter 51 of the IRC
pertaining to the establishment and
operation of wine premises are
contained in 27 CFR part 24. The
labeling requirements applicable to
wine containers are found in 27 CFR
24.257. This section provides that
proprietors must label each bottle or
other container of wine prior to removal
for consumption or sale. Certain
mandatory information must appear on
the label, including the name and
address of the wine premises where
bottled or packed; the brand name; the
alcohol content; the kind of wine; and
the net contents of the container.
The labeling requirements of part 24
apply to wines that are subject to the
requirement for a certificate of label
approval as well as wines that are
covered by a certificate of exemption
from label approval. Furthermore, some
wines removed from wine premises may
have less than 7 percent alcohol by
volume, so they do not conform to the
definition of ‘‘wine’’ under the FAA
Act. See 27 U.S.C. 211(a)(6). These
wines would not need a certificate of
label approval or a certificate of
exemption from label approval.
Accordingly, the regulations in 27 CFR
24.257(a)(4), relating to the requirement
that the wine be labeled with the kind
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of wine, provide different rules with
regard to wines subject to label
approval, wines that are exempt from
the label approval requirement, and
wines containing less than 7 percent
alcohol by volume.
Provisions regarding the records that
a proprietor must maintain to
substantiate label information are
contained in 27 CFR 24.314. Section
24.314 provides that a proprietor who
removes bottled or packed wine with
information stated on the label (such as
a grape varietal designation, vintage
date, or an appellation of origin) shall
have complete records so that the
information appearing on the label may
be verified by a TTB audit.
Additionally, a wine is not entitled to
have information stated on the label
unless the information can be readily
verified by a complete and accurate
record trail from the beginning source
material to the removal of the wine for
consumption or sale. These regulations
apply to all wine labels, not just wines
covered by a certificate of label
approval.
Neither the labeling nor the
recordkeeping regulations in part 24
prescribe the conditions under which a
wine proprietor may use grape variety
names as a type designation or reference
vintage dates or appellations of origin
on labels of wine.
The TTB regulations implementing
the wine labeling provisions of the FAA
Act are contained in 27 CFR part 4. Part
4 includes provisions that govern the
use of one or more grape variety names
as a type designation, the use of type
designations of varietal significance, the
use of vintage dates, and the use of
appellations of origin on wine labels.
An American appellation of origin may
be the United States, a State, two or no
more than three States which are all
contiguous, a county, two or no more
than three counties in the same State, or
an American viticultural area (AVA).
Under 27 CFR 4.50(b), any bottler or
packer of wine shall be exempt from the
requirements of part 4 if upon
application the bottler or packer shows
to the satisfaction of the appropriate
TTB officer that the wine to be bottled
or packed is not to be sold, offered for
sale, or shipped or delivered for
shipment, or otherwise introduced in
interstate or foreign commerce. If TTB is
satisfied that the wine will not be
introduced into interstate commerce, it
will issue a certificate of exemption
from label approval to the bottler or
packer.
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Concerns Regarding Label Information
on Wines Covered by Certificates of
Exemption From Label Approval
Some wine industry members have
contacted TTB with their concerns
regarding the accuracy of label
information on certain wines covered by
certificates of exemption from label
approval. Specifically, the wines in
question are standard wines labeled
with AVA names, but the wines do not
appear to meet the part 4 requirements
for using an AVA name. In addition,
TTB also received a letter signed by
members of the California, Washington,
Oregon, and New York Congressional
delegations expressing similar concerns
and urging TTB to use its authority to
enforce the standards set out in the FAA
Act regulations for all wines bearing an
AVA appellation, regardless of where
they are sold.
With regard to AVAs, under 27 CFR
4.25(e)(3)(iv), in order for a wine to be
labeled with an AVA name: (1) The
AVA name must have been approved
under 27 CFR part 9; (2) not less than
85 percent of the wine must be derived
from grapes grown within the
boundaries of the viticultural area; and
(3) the wine must have been fully
finished within the State, or one of the
States, within which the labeled
viticultural area is located (except for
cellar treatments permitted by 27 CFR
4.22(c) or blending which does not
result in an alteration of class and type
under 27 CFR 4.22(b)). Thus, a wine
labeled with the AVA name ‘‘Napa
Valley’’ must have been fully finished in
California, in addition to complying
with other requirements, in order to
qualify to use the name ‘‘Napa Valley’’
as an appellation of origin on the label.
Accordingly, a wine labeled with the
appellation ‘‘Napa Valley’’ but also
labeled with a statement that indicates
that the wine is produced outside of
California, such as ‘‘Produced and
bottled by ABC Winery, Anytown,
Illinois,’’ would not meet the provisions
of § 4.25(e)(3)(iv) since the wine was not
fully finished in California. As a result,
it would not qualify for a certificate of
label approval. However, if the wine
will be sold only within the State of
Illinois, and the bottler certifies that it
will not introduce the bottled product
into interstate commerce, then, in
accordance with 27 U.S.C. 205(e), the
wine is eligible for a certificate of
exemption from label approval, which
would exempt it from the provisions of
part 4.
The letter from the members of
Congress who contacted TTB on this
issue expressed concern that the use of
AVA names on wines that are covered
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by certificates of exemption and that do
not comply with the AVA provisions
contained in § 4.25(e)(3)(iv) undermines
the best interests of the consumer and
the decades-old system of American
viticultural areas, is contrary to the
purposes of the FAA Act, and should
not be permitted under the IRC labeling
regulations in 27 CFR part 24. The
industry members asked whether
§ 24.314, which requires proprietors to
maintain complete records verifying
label information (including
information that substantiates
appellation of origin claims such as
AVAs), provides TTB with the authority
to enforce the part 4 standards for AVAs
on wines covered by certificates of
exemption. However, it is TTB’s
position that there currently are no
provisions in part 24, including
§ 24.314, that require wine proprietors
to comply with part 4 standards for
labeling when the wine is covered by a
certificate of exemption. In reviewing
this regulation, TTB also realized that
the regulation does not clearly set forth
the standards to which wines will be
held when evaluating whether labeling
claims are adequately substantiated by
records.
TTB Analysis
TTB recognizes that wines covered by
a certificate of exemption are not subject
to the substantive labeling requirements
of the FAA Act. On the other hand, the
IRC (which covers wines sold in
intrastate commerce as well as wines
sold in interstate commerce) clearly
provides TTB with authority to issue
regulations requiring truthful and
accurate information on wine containers
and labels regarding the identity and
origin of the wine. As previously noted,
section 5388(a) of the IRC requires that
wines be marked, transported and sold
under their ‘‘proper designation as to
kind and origin, or, if there is no such
designation known to the trade or
consumers, then under a truthful and
adequate statement of composition.’’ If
proprietors choose to label their wines
with varietal (grape type) designations,
type designations of varietal
significance, vintage dates, or
appellations of origin, all of which are
terms of art that are subject to specific
rules set forth in the FAA Act
regulations, then those designations
may convey to both the trade and
consumers the meaning that is ascribed
to them in the regulations under part 4.
It should be noted that this issue is
not unique to wine. TTB has adopted a
similar policy with regard to the
labeling of distilled spirits under the
IRC regulations in part 19, which
require distilled spirits labeled under a
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certificate of exemption from label
approval to include certain labeling
designations and statements in
compliance with the requirements of the
FAA Act labeling regulations in 27 CFR
part 5. See 27 CFR 19.517.
Accordingly, TTB is proposing to
revise its regulations in §§ 24.257(b) and
24.314 to apply the part 4 rules for use
of varietal (grape type) designations,
type designations of varietal
significance, vintage dates, and
appellations of origin on wine labels to
standard grape wine that is at least 7
percent alcohol by volume, where that
wine is covered by a certificate of
exemption from label approval. This
amendment would ensure that the rules
for the use of those designations of the
origin or kind of a wine under section
5388(a) of the IRC are consistent with
the existing rules for the use of those
designations under the FAA Act.
TTB is proposing to apply this
requirement only to standard grape
wines that contain at least 7 percent or
more alcohol by volume because the
labeling of wines that contain less than
7 percent alcohol by volume is not
subject to the provisions of the FAA
Act. While wines under 7 percent
alcohol by volume are subject to the IRC
labeling requirements of part 24, as well
as the health warning statement
requirements of part 16, those products
do not fall under the definition of wine
under the FAA Act. Thus, those
products are subject to the food labeling
requirements of the regulations issued
by the U.S. Food and Drug
Administration. Because the part 4
regulations limit the use of varietal
(grape type) designations, type
designations of varietal significance,
vintage dates, and AVAs to grape wines,
TTB is similarly proposing that the new
provisions would apply solely to
standard grape wines.
TTB is not proposing in this
document to extend this provision to
include non-grape wines. However, TTB
seeks comments and additional
information on whether the
amendments proposed in this document
should be extended to non-grape wines,
such as fruit wines or agricultural
wines.
Accordingly, TTB proposes to amend
§ 24.257 to require that a standard grape
wine that contains 7 percent or more
alcohol by volume and is covered by a
certificate of exemption from label
approval may not be labeled with a
varietal (grape type) designation, a type
designation of varietal significance, a
vintage date, or an appellation of origin
unless the wine complies with the
relevant part 4 provisions for that label
information. This requirement would
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Federal Register / Vol. 81, No. 120 / Wednesday, June 22, 2016 / Proposed Rules
apply only to wines covered by
certificates of exemption, because wines
covered by certificates of label approval
are already subject to the labeling
provisions of part 4. Wines that are not
standard grape wine containing 7
percent or more alcohol by volume and
that are covered by a certificate of
exemption are exempt from all part 4
labeling provisions. TTB also proposes
to make corresponding changes in the
recordkeeping requirements of § 24.314.
Finally, TTB is also proposing to
revise § 4.50(b) to incorporate a
reference to the labeling requirements
contained in § 24.257.
Technical Changes
TTB also is removing the Office of
Management and Budget control
numbers assigned to the former Bureau
of Alcohol, Tobacco and Firearms (ATF)
and replacing them with the control
numbers assigned currently to TTB. In
§ 24.257, the former control number
1512–0503, assigned to ATF, is now
control number 1513–0092, assigned to
TTB. In § 24.314, the former control
number 1512–0298 is now control
number 1513–0115. The changes to
these control numbers are merely
technical in nature and do not change
any regulatory or recordkeeping
requirement.
Public Participation
Comments Sought
TTB requests comments from
interested members of the public on the
proposed change. Additionally, TTB
welcomes comments on whether the
new provisions should include nongrape wines. Finally, TTB solicits
comments on how many labels would
be affected by the proposed
amendments, and how much time
affected proprietors would need in order
to revise their labels to comply with the
proposed changes. Please provide
specific information in support of your
comments.
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Submitting Comments
You may submit comments on this
notice by using one of the following
three methods:
• Federal e-Rulemaking Portal: You
may send comments via the online
comment form posted with this
proposed rule within Docket No. TTB–
2016–0005 on ‘‘Regulations.gov,’’ the
Federal e-rulemaking portal, at https://
www.regulations.gov. A direct link to
that docket is available under Notice
No. 160 on the TTB Web site at https://
www.ttb.gov/wine/winerulemaking.shtml. Supplemental files
may be attached to comments submitted
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via Regulations.gov. For complete
instructions on how to use
Regulations.gov, click on the site’s
‘‘Help’’ tab.
• U.S. Mail: You may send comments
via postal mail to the Director,
Regulations and Rulings Division,
Alcohol and Tobacco Tax and Trade
Bureau, 1310 G Street NW., Box 12,
Washington, DC 20005.
• Hand Delivery/Courier: You may
hand-carry your comments or have them
hand-carried to the Alcohol and
Tobacco Tax and Trade Bureau, 1310 G
Street NW., Suite 400, Washington, DC
20005.
Please submit your comments by the
closing date shown above in this
proposed rule. Your comments must
reference Notice No. 160 and include
your name and mailing address. Your
comments also must be made in
English, be legible, and be written in
language acceptable for public
disclosure. TTB does not acknowledge
receipt of comments and considers all
comments as originals.
In your comment, please clearly state
if you are commenting for yourself or on
behalf of an association, business, or
other entity. If you are commenting on
behalf of an entity, your comment must
include the entity’s name as well as
your name and position title. In your
comment via Regulations.gov, please
enter the entity’s name in the
‘‘Organization’’ blank of the online
comment form. If you comment via
postal mail or hand delivery/courier,
please submit your entity’s comment on
letterhead.
You may also write to the
Administrator before the comment
closing date to ask for a public hearing.
The Administrator reserves the right to
determine whether to hold a public
hearing.
Confidentiality
All submitted comments and
attachments are part of the public record
and subject to disclosure. Do not
enclose any material in your comments
that you consider to be confidential or
inappropriate for public disclosure.
Public Disclosure
TTB will post, and you may view,
copies of this proposed rule and any
online or mailed comments received
about this proposal within Docket No.
TTB–2016–0005 on the Federal erulemaking portal. A direct link to that
docket is available on the TTB Web site
at https://www.ttb.gov/wine/winerulemaking.shtml under Notice No. 160.
You may also reach the relevant docket
through the Regulations.gov search page
at https://www.regulations.gov. For
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information on how to use
Regulations.gov, click on the site’s
‘‘Help’’ tab.
All posted comments will display the
commenter’s name, organization (if
any), city, and State, and, in the case of
mailed comments, all address
information, including email addresses.
TTB may omit voluminous attachments
or material that it considers unsuitable
for posting.
You may view copies of this proposed
rule and any electronic or mailed
comments TTB receives about this
proposal by appointment at the TTB
Information Resource Center, 1310 G
Street NW., Washington, DC 20005. You
may also obtain copies for 20 cents per
8.5- x 11-inch page. Contact TTB’s
information specialist at the above
address or by telephone at 202–453–
2270 to schedule an appointment or to
request copies of comments or other
materials.
Regulatory Flexibility Act
TTB certifies that this proposed
regulation, if adopted, will not have a
significant economic impact on a
substantial number of small entities.
The proposed rule, if adopted, 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.
TTB recognizes that if the proposed
rule is adopted as a final rule, some
bottlers of wine may have to make
revisions to labels currently covered by
certificates of exemption; however, we
believe that the number of affected
labels will be small. TTB specifically
solicits comments on the number of
small producers and bottlers that may
be affected by this proposed rule and
the impact of this proposed rule, if
adopted as a final rule, on those small
businesses.
Executive Order 12866
It has been determined that this
proposed rule is not a significant
regulatory action as defined by
Executive Order 12866 of September 30,
1993. Therefore, no regulatory
assessment is required.
Paperwork Reduction Act
The two collections of information
affected by this notice of proposed
rulemaking have been previously
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Federal Register / Vol. 81, No. 120 / Wednesday, June 22, 2016 / Proposed Rules
reviewed and approved by the Office of
Management and Budget (OMB) in
accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C.
3507(d)) and assigned control numbers
1513–0092 and 1513–0115. An agency
may not conduct or sponsor, and a
person is not required to respond to, a
collection of information unless it
displays a valid control number
assigned by OMB.
The proposed regulatory text in 27
CFR 24.257 contains an alteration to the
information collection currently
approved under OMB control number
1513–0092. If adopted, this revision
would require changes in the labeling of
certain wines currently covered by a
certificate of exemption from label
approval, where those wines are labeled
with varietal (grape type) designations,
type designations of varietal
significance, vintage dates, or
appellations of origin, in a manner that
would not be allowed under the
standards set forth in the regulations in
27 CFR part 4. However, since the
labeling of wines, whether covered by
certificates of exemption or by
certificates of label approval, is a usual
and customary business practice and
would be done by proprietors with or
without the TTB regulatory
requirement, TTB does not believe that
there would be any increase in the
current burden hours associated with
this information collection. We are,
however, reporting an increase in the
number of respondents to this
collection, from 10,506 to 10,970, to
reflect the current number of wine
industry members regulated by TTB. We
estimate the current burden associated
with this information collection as
follows:
• Estimated Number of Respondents:
10,970.
• Estimated Annual Frequency of
Responses: 1 (one).
• Estimated Average Annual Total
Burden Hours: 1 hour.
The proposed regulatory text in 27
CFR 24.314 contains an alteration to the
information collection currently
approved under OMB control number
1513–0115. If adopted, this revision
would require proprietors to keep
records substantiating certain
information contained on the labels of
certain wines currently covered by a
certificate of exemption from label
approval, where those wines are labeled
with varietal (grape type) designations,
type designations of varietal
significance, vintage dates, or
appellations of origin. In particular, the
records would have to substantiate that
the claims would be allowed under the
standards for use of such claims under
VerDate Sep<11>2014
17:40 Jun 21, 2016
Jkt 238001
the regulations in 27 CFR part 4.
However, since the keeping of records
substantiating the information provided
on wine labels, whether covered by
certificates of exemption or by
certificates of label approval, is a usual
and customary business practice and
would be done by proprietors with or
without the TTB regulatory
requirement, TTB does not believe that
there would be any increase in the
current burden for this information
collection, which is estimated as
follows:
• Estimated Number of Respondents:
10,970.
• Estimated Annual Frequency of
Responses: 1 (one).
• Estimated Average Annual Total
Burden Hours: 1 hour.
Revisions of these two currently
approved collections have been
submitted to OMB for review.
Comments on the revisions to OMB
control number 1513–0092 and 1513–
0115 should be sent to OMB by one of
these two methods:
• By U.S. Mail: 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 E-mail: submission@
omb.eop.gov.
A copy should also be sent to the
Alcohol and Tobacco Tax and Trade
Bureau by any of the methods
previously described. Comments on the
information collection should be
submitted not later than August 22,
2016. Comments are specifically
requested concerning:
• Whether the proposed revisions of
the collections of information approved
under OMB control number 1513–0115
and 1513–0092 are necessary for the
proper performance of the functions of
the Alcohol and Tobacco Tax and Trade
Bureau, including whether the
information will have practical utility;
• The accuracy of the estimated
burdens associated with the proposed
revisions of the collections of
information;
• How to enhance the quality, utility,
and clarity of the information to be
collected;
• How to minimize the burden of
complying with the proposed revision
of the collection of information,
including the application of automated
collection techniques or other forms of
information technology; and
• Estimates of capital or start-up costs
and costs of operation, maintenance,
and purchase of services to provide
information.
PO 00000
Frm 00041
Fmt 4702
Sfmt 4702
Drafting Information
Jennifer Berry of the Regulations and
Rulings Division, Alcohol and Tobacco
Tax and Trade Bureau, drafted this
document.
List of Subjects
27 CFR Part 4
Administrative practice and
procedure, Advertising, Customs duties
and inspection, Imports, Labeling,
Packaging and containers, Reporting
and recordkeeping requirements, Trade
practices, Wine.
27 CFR Part 24
Administrative practice and
procedure, Claims, Electronic funds
transfers, Excise taxes, Exports, Food
additives, Fruit juices, Labeling,
Liquors, Packaging and containers,
Reporting and recordkeeping
requirements, Research, Scientific
equipment, Spices and flavorings,
Surety bonds, Vinegar, Warehouses,
Wine.
Proposed Regulatory Amendments
For the reasons discussed in the
preamble, TTB proposes to amend 27
CFR, chapter I, parts 4 and 24 as set
forth below:
PART 4—LABELING AND
ADVERTISING OF WINE
1. The authority citation for 27 CFR
part 4 continues to read as follows:
■
Authority: 27 U.S.C. 205, unless otherwise
noted.
2. Section § 4.50 is amended by
adding a sentence to the end of
paragraph (b) to read as follows:
■
§ 4.50
Certificates of label approval.
*
*
*
*
*
(b) * * * See § 24.257 of this chapter
for additional labeling rules that apply
to wines covered by a certificate of
exemption.
*
*
*
*
*
PART 24—WINE
3. The authority citation for 27 CFR
part 24 continues to read as follows:
■
Authority: 5 U.S.C. 552(a); 26 U.S.C. 5001,
5008, 5041, 5042, 5044, 5061, 5062, 5121,
5122–5124, 5173, 5206, 5214, 5215, 5351,
5353, 5354, 5356, 5357, 5361, 5362, 5364–
5373, 5381–5388, 5391, 5392, 5511, 5551,
5552, 5661, 5662, 5684, 6065, 6091, 6109,
6301, 6302, 6311, 6651, 6676, 7302, 7342,
7502, 7503, 7606, 7805, 7851; 31 U.S.C. 9301,
9303, 9304, 9306.
4. Section § 24.257 is amended by
revising paragraph (b) and by revising
the OMB control number located in the
■
E:\FR\FM\22JNP1.SGM
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Federal Register / Vol. 81, No. 120 / Wednesday, June 22, 2016 / Proposed Rules
second parenthetical phrase at the end
of the section, to read as follows:
§ 24.257
Labeling wine containers.
*
*
*
*
*
(b) Requirements applicable to
information on labels—(1) Verification
and recordkeeping requirements. The
information shown on any label applied
to bottled or packed wine is subject to
the verification and recordkeeping
requirements of § 24.314.
(2) Varietal designations, type
designations of varietal significance,
grape vintage dates, and appellations of
origin. For wines covered by a certificate
of exemption from label approval, the
use of any label that includes a varietal
(grape type) designation, a type
designation of varietal significance, a
grape vintage date, or an appellation of
origin for any standard grape wine
containing 7 percent or more alcohol by
volume is prohibited unless the wine
would be entitled to use of such a
labeling term under the standards set
forth in the following sections of 27 CFR
part 4:
(i) Varietal (grape type) designation.
The use of a varietal (grape type)
designation must conform to the
requirements of § 4.23 of this chapter;
(ii) Type designation of varietal
significance. The use of a type
designation of varietal significance must
conform to the requirements of § 4.28 of
this chapter;
(iii) Vintage date. The use of a vintage
date must conform to the requirements
of § 4.27 of this chapter; and
(iv) Appellation of origin. The use of
an appellation of origin must conform to
the requirements of § 4.25 of this
chapter.
*
*
*
*
*
(Approved by the Office of Management and
Budget under control number 1513–0092)
5. Section 24.314 is amended to read
as follows:
■
sradovich on DSK3TPTVN1PROD with PROPOSALS
§ 24.314
Label information record.
17:40 Jun 21, 2016
Jkt 238001
(Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as
amended (26 U.S.C. 5367))
(Approved by the Office of Management and
Budget under control number 1513–0115)
Signed: April 7, 2016.
John J. Manfreda,
Administrator.
Approved: April 22, 2016.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and
Tariff Policy).
[FR Doc. 2016–14696 Filed 6–21–16; 8:45 am]
BILLING CODE 4810–31–P
DEPARTMENT OF COMMERCE
United States Patent and Trademark
Office
37 CFR Parts 2 and 7
[Docket No. PTO–T–2016–0002]
(a) General. A proprietor who
removes bottled or packed wine with
information stated on the label (e.g.,
varietal, vintage, appellation of origin,
analytical data, date of harvest) shall
have complete records, as applicable, so
that the information appearing on the
label may be verified by a TTB audit. A
wine is not entitled to have information
stated on the label unless the
information can be readily verified by a
complete and accurate record trail from
the beginning source material to
removal of the wine for consumption or
sale.
(b) Establishing that wine is entitled to
labeling claims. A proprietor must keep
VerDate Sep<11>2014
records that will enable TTB to verify
that the labeling of the wine complies
with the applicable labeling
requirements in this part. In addition, if
wine is subject to Federal Alcohol
Administration Act labeling provisions
under 27 CFR part 4, the records must
establish that the labeling of the wine
complies with the applicable labeling
provisions of 27 CFR part 4. For wines
covered by a certificate of exemption,
the use of any label that includes a
varietal (grape type) designation, a type
designation of varietal significance, a
grape vintage date, or an appellation of
origin for any standard grape wine
containing 7 percent or more alcohol by
volume is prohibited unless the
proprietor has records establishing that
the use of such a term complies with the
standards set forth in the appropriate
sections of 27 CFR part 4 for use of such
a labeling term.
(c) Record retention. All records
necessary to verify wine label
information are subject to the record
retention requirements of § 24.300(d).
RIN 0651–AD07
Changes in Requirements for
Affidavits or Declarations of Use,
Continued Use, or Excusable Nonuse
in Trademark Cases
United States Patent and
Trademark Office, Commerce.
ACTION: Notice of proposed rulemaking.
AGENCY:
In order to assess and
promote the accuracy and integrity of
the trademark register, the United States
Patent and Trademark Office (USPTO or
Office) proposes to amend its rules
concerning the examination of affidavits
SUMMARY:
PO 00000
Frm 00042
Fmt 4702
Sfmt 4702
40589
or declarations of continued use or
excusable nonuse filed pursuant to
section 8 of the Trademark Act, or
affidavits or declarations of use in
commerce or excusable nonuse filed
pursuant to section 71 of the Trademark
Act. Specifically, the USPTO proposes
to require the submission of
information, exhibits, affidavits or
declarations, and such additional
specimens of use as may be reasonably
necessary for the USPTO to ensure that
the register accurately reflects marks
that are in use in the United States for
all the goods/services identified in the
registrations, unless excusable nonuse is
claimed in whole or in part. A register
that does not accurately reflect marks in
use in the United States for the goods/
services identified in registrations
imposes costs and burdens on the
public. The proposed rules will allow
the USPTO to require additional proof
of use to verify the accuracy of claims
that a trademark is in use in connection
with particular goods/services identified
in the registration.
DATES: Comments must be received by
August 22, 2016 to ensure
consideration.
ADDRESSES: The USPTO prefers that
comments be submitted via electronic
mail message to TMFRNotices@
uspto.gov. Written comments may also
be submitted by mail to the
Commissioner for Trademarks, P.O. Box
1451, Alexandria, VA 22313–1451,
attention Jennifer Chicoski; by hand
delivery to the Trademark Assistance
Center, Concourse Level, James Madison
Building-East Wing, 600 Dulany Street,
Alexandria, VA, 22314, attention
Jennifer Chicoski; or by electronic mail
message via the Federal eRulemaking
Portal at https://www.regulations.gov.
See the Federal eRulemaking Portal Web
site for additional instructions on
providing comments via the Federal
eRulemaking Portal. All comments
submitted directly to the USPTO or
provided on the Federal eRulemaking
Portal should include the docket
number (PTO–T–2016–0002).
The comments will be available for
public inspection on the USPTO’s Web
site at https://www.uspto.gov, on the
Federal eRulemaking Portal, and at the
Office of the Commissioner for
Trademarks, Madison East, Tenth Floor,
600 Dulany Street, Alexandria, VA
22314. Because comments will be made
available for public inspection,
information that is not desired to be
made public, such as an address or
phone number, should not be included.
FOR FURTHER INFORMATION CONTACT:
Jennifer Chicoski, Office of the Deputy
Commissioner for Trademark
E:\FR\FM\22JNP1.SGM
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]]>Agencies
[Federal Register Volume 81, Number 120 (Wednesday, June 22, 2016)]
[Proposed Rules]
[Pages 40584-40589]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-14696]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Alcohol and Tobacco Tax and Trade Bureau
27 CFR Parts 4 and 24
[Docket No. TTB-2016-0005; Notice No. 160]
RIN 1513-AC27
Proposed Revisions to Wine Labeling and Recordkeeping
Requirements
AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Alcohol and Tobacco Tax and Trade Bureau (TTB) proposes to
amend its labeling and recordkeeping regulations in 27 CFR part 24 to
provide that any standard grape wine containing 7 percent or more
alcohol by volume that is covered by a certificate of exemption from
label approval may not be labeled with a varietal (grape type)
designation, a type designation of varietal significance, a vintage
date, or an appellation of origin unless the wine is labeled in
compliance with the standards set forth in the appropriate sections of
27 CFR part 4 for that label information. TTB is also proposing to
amend its part 4 wine labeling regulations to include a reference to
the new part 24 requirement.
DATES: TTB must receive written comments on or before August 22, 2016.
ADDRESSES: Please send your comments on this document to one of the
following addresses:
Internet: https://www.regulations.gov (via the online
comment form for this notice as posted within Docket No. TTB-2016-0005
at ``Regulations.gov,'' the Federal e-rulemaking portal);
U.S. Mail: Director, Regulations and Rulings Division,
Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW., Box 12,
Washington, DC 20005; or
Hand delivery/courier in lieu of mail: Alcohol and Tobacco
Tax and Trade Bureau, 1310 G Street NW., Suite 400, Washington, DC
20005.
See the Public Participation section of this notice for specific
instructions and requirements for submitting comments, and for
information on how to request a public hearing.
You may view copies of this document and any comments TTB receives
about this proposal at https://www.regulations.gov within Docket No.
TTB-2016-0005. A link to that docket is posted on the TTB Web site at
https://www.ttb.gov/wine/wine-rulemaking.shtml under Notice No. 160. You
also may view copies of this
[[Page 40585]]
proposed rule and any comments TTB receives about this proposal by
appointment at the TTB Information Resource Center, 1310 G Street NW.,
Washington, DC 20005. Please call 202-453-2270 to make an appointment.
FOR FURTHER INFORMATION CONTACT: Jennifer Berry, Alcohol and Tobacco
Tax and Trade Bureau, Regulations and Rulings Division; telephone 202-
453-1039, ext. 275.
SUPPLEMENTARY INFORMATION:
Background
TTB Authority
Chapter 51 of the Internal Revenue Code of 1986, as amended (IRC),
26 U.S.C. chapter 51, sets forth excise tax collection and related
provisions pertaining to, among other things, the production of wine.
Subchapter F of chapter 51 sets forth provisions specific to bonded and
taxpaid wine premises. Under 26 U.S.C. 5388(a), standard wines may be
removed from bonded and taxpaid wine premises subject to the provisions
of subchapter F and be marked, transported, and sold under their proper
designation as to kind and origin, or, if there is no such designation
known to the trade or consumers, then under a truthful and adequate
statement of composition. Pursuant to section 5367 of the IRC (26
U.S.C. 5367), a proprietor of a bonded wine cellar or a taxpaid wine
bottling house shall keep such records and file such returns, in the
form and containing such information, as the Secretary of the Treasury
may by regulations provide.
A proprietor of a bonded wine cellar (including a bonded winery) or
a taxpaid wine bottling house will be referred to in this document as a
``wine proprietor.''
In addition to the IRC marking and recordkeeping requirements,
wines containing at least 7 percent alcohol by volume are subject to
the labeling requirements of the Federal Alcohol Administration Act
(FAA Act). Section 105(e) of the FAA Act, codified at 27 U.S.C. 205(e),
authorizes the Secretary of the Treasury to prescribe regulations for
the labeling of wine, distilled spirits, and malt beverages. The FAA
Act requires that these regulations, among other things, prohibit
consumer deception and the use of misleading statements on labels, and
ensure that labels provide the consumer with adequate information as to
the identity and quality of the product.
The FAA Act also generally requires a producer, blender, or
wholesaler of wine, or proprietor of a bonded wine storeroom, to obtain
a certificate of label approval prior to bottling wine for sale in
interstate commerce. Bottlers are exempt from the labeling requirements
of the FAA Act if they show to the satisfaction of the Secretary that
the wine will not be sold, offered for sale, or shipped or delivered
for shipment, or otherwise introduced in, interstate or foreign
commerce. It should be noted that certificates of exemption from label
approval are not available to importers who are removing wine in
containers from customs custody for consumption. If those removals are
for sale or any other commercial purpose, the importer must first
obtain a certificate of label approval.
The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers
chapter 51 of the IRC and the provisions of the FAA Act pursuant to
section 1111(d) of the Homeland Security Act of 2002, codified at 6
U.S.C. 531(d). The Secretary has delegated various authorities through
Treasury Department Order 120-01 (dated December 10, 2013, superseding
Treasury Order 120-01 (Revised), ``Alcohol and Tobacco Tax and Trade
Bureau,'' dated January 24, 2003), to the TTB Administrator to perform
the functions and duties in the administration and enforcement of these
laws.
Current Regulatory Requirements
The TTB regulations implementing the provisions of chapter 51 of
the IRC pertaining to the establishment and operation of wine premises
are contained in 27 CFR part 24. The labeling requirements applicable
to wine containers are found in 27 CFR 24.257. This section provides
that proprietors must label each bottle or other container of wine
prior to removal for consumption or sale. Certain mandatory information
must appear on the label, including the name and address of the wine
premises where bottled or packed; the brand name; the alcohol content;
the kind of wine; and the net contents of the container.
The labeling requirements of part 24 apply to wines that are
subject to the requirement for a certificate of label approval as well
as wines that are covered by a certificate of exemption from label
approval. Furthermore, some wines removed from wine premises may have
less than 7 percent alcohol by volume, so they do not conform to the
definition of ``wine'' under the FAA Act. See 27 U.S.C. 211(a)(6).
These wines would not need a certificate of label approval or a
certificate of exemption from label approval. Accordingly, the
regulations in 27 CFR 24.257(a)(4), relating to the requirement that
the wine be labeled with the kind of wine, provide different rules with
regard to wines subject to label approval, wines that are exempt from
the label approval requirement, and wines containing less than 7
percent alcohol by volume.
Provisions regarding the records that a proprietor must maintain to
substantiate label information are contained in 27 CFR 24.314. Section
24.314 provides that a proprietor who removes bottled or packed wine
with information stated on the label (such as a grape varietal
designation, vintage date, or an appellation of origin) shall have
complete records so that the information appearing on the label may be
verified by a TTB audit. Additionally, a wine is not entitled to have
information stated on the label unless the information can be readily
verified by a complete and accurate record trail from the beginning
source material to the removal of the wine for consumption or sale.
These regulations apply to all wine labels, not just wines covered by a
certificate of label approval.
Neither the labeling nor the recordkeeping regulations in part 24
prescribe the conditions under which a wine proprietor may use grape
variety names as a type designation or reference vintage dates or
appellations of origin on labels of wine.
The TTB regulations implementing the wine labeling provisions of
the FAA Act are contained in 27 CFR part 4. Part 4 includes provisions
that govern the use of one or more grape variety names as a type
designation, the use of type designations of varietal significance, the
use of vintage dates, and the use of appellations of origin on wine
labels. An American appellation of origin may be the United States, a
State, two or no more than three States which are all contiguous, a
county, two or no more than three counties in the same State, or an
American viticultural area (AVA). Under 27 CFR 4.50(b), any bottler or
packer of wine shall be exempt from the requirements of part 4 if upon
application the bottler or packer shows to the satisfaction of the
appropriate TTB officer that the wine to be bottled or packed is not to
be sold, offered for sale, or shipped or delivered for shipment, or
otherwise introduced in interstate or foreign commerce. If TTB is
satisfied that the wine will not be introduced into interstate
commerce, it will issue a certificate of exemption from label approval
to the bottler or packer.
[[Page 40586]]
Concerns Regarding Label Information on Wines Covered by Certificates
of Exemption From Label Approval
Some wine industry members have contacted TTB with their concerns
regarding the accuracy of label information on certain wines covered by
certificates of exemption from label approval. Specifically, the wines
in question are standard wines labeled with AVA names, but the wines do
not appear to meet the part 4 requirements for using an AVA name. In
addition, TTB also received a letter signed by members of the
California, Washington, Oregon, and New York Congressional delegations
expressing similar concerns and urging TTB to use its authority to
enforce the standards set out in the FAA Act regulations for all wines
bearing an AVA appellation, regardless of where they are sold.
With regard to AVAs, under 27 CFR 4.25(e)(3)(iv), in order for a
wine to be labeled with an AVA name: (1) The AVA name must have been
approved under 27 CFR part 9; (2) not less than 85 percent of the wine
must be derived from grapes grown within the boundaries of the
viticultural area; and (3) the wine must have been fully finished
within the State, or one of the States, within which the labeled
viticultural area is located (except for cellar treatments permitted by
27 CFR 4.22(c) or blending which does not result in an alteration of
class and type under 27 CFR 4.22(b)). Thus, a wine labeled with the AVA
name ``Napa Valley'' must have been fully finished in California, in
addition to complying with other requirements, in order to qualify to
use the name ``Napa Valley'' as an appellation of origin on the label.
Accordingly, a wine labeled with the appellation ``Napa Valley''
but also labeled with a statement that indicates that the wine is
produced outside of California, such as ``Produced and bottled by ABC
Winery, Anytown, Illinois,'' would not meet the provisions of Sec.
4.25(e)(3)(iv) since the wine was not fully finished in California. As
a result, it would not qualify for a certificate of label approval.
However, if the wine will be sold only within the State of Illinois,
and the bottler certifies that it will not introduce the bottled
product into interstate commerce, then, in accordance with 27 U.S.C.
205(e), the wine is eligible for a certificate of exemption from label
approval, which would exempt it from the provisions of part 4.
The letter from the members of Congress who contacted TTB on this
issue expressed concern that the use of AVA names on wines that are
covered by certificates of exemption and that do not comply with the
AVA provisions contained in Sec. 4.25(e)(3)(iv) undermines the best
interests of the consumer and the decades-old system of American
viticultural areas, is contrary to the purposes of the FAA Act, and
should not be permitted under the IRC labeling regulations in 27 CFR
part 24. The industry members asked whether Sec. 24.314, which
requires proprietors to maintain complete records verifying label
information (including information that substantiates appellation of
origin claims such as AVAs), provides TTB with the authority to enforce
the part 4 standards for AVAs on wines covered by certificates of
exemption. However, it is TTB's position that there currently are no
provisions in part 24, including Sec. 24.314, that require wine
proprietors to comply with part 4 standards for labeling when the wine
is covered by a certificate of exemption. In reviewing this regulation,
TTB also realized that the regulation does not clearly set forth the
standards to which wines will be held when evaluating whether labeling
claims are adequately substantiated by records.
TTB Analysis
TTB recognizes that wines covered by a certificate of exemption are
not subject to the substantive labeling requirements of the FAA Act. On
the other hand, the IRC (which covers wines sold in intrastate commerce
as well as wines sold in interstate commerce) clearly provides TTB with
authority to issue regulations requiring truthful and accurate
information on wine containers and labels regarding the identity and
origin of the wine. As previously noted, section 5388(a) of the IRC
requires that wines be marked, transported and sold under their
``proper designation as to kind and origin, or, if there is no such
designation known to the trade or consumers, then under a truthful and
adequate statement of composition.'' If proprietors choose to label
their wines with varietal (grape type) designations, type designations
of varietal significance, vintage dates, or appellations of origin, all
of which are terms of art that are subject to specific rules set forth
in the FAA Act regulations, then those designations may convey to both
the trade and consumers the meaning that is ascribed to them in the
regulations under part 4.
It should be noted that this issue is not unique to wine. TTB has
adopted a similar policy with regard to the labeling of distilled
spirits under the IRC regulations in part 19, which require distilled
spirits labeled under a certificate of exemption from label approval to
include certain labeling designations and statements in compliance with
the requirements of the FAA Act labeling regulations in 27 CFR part 5.
See 27 CFR 19.517.
Accordingly, TTB is proposing to revise its regulations in
Sec. Sec. 24.257(b) and 24.314 to apply the part 4 rules for use of
varietal (grape type) designations, type designations of varietal
significance, vintage dates, and appellations of origin on wine labels
to standard grape wine that is at least 7 percent alcohol by volume,
where that wine is covered by a certificate of exemption from label
approval. This amendment would ensure that the rules for the use of
those designations of the origin or kind of a wine under section
5388(a) of the IRC are consistent with the existing rules for the use
of those designations under the FAA Act.
TTB is proposing to apply this requirement only to standard grape
wines that contain at least 7 percent or more alcohol by volume because
the labeling of wines that contain less than 7 percent alcohol by
volume is not subject to the provisions of the FAA Act. While wines
under 7 percent alcohol by volume are subject to the IRC labeling
requirements of part 24, as well as the health warning statement
requirements of part 16, those products do not fall under the
definition of wine under the FAA Act. Thus, those products are subject
to the food labeling requirements of the regulations issued by the U.S.
Food and Drug Administration. Because the part 4 regulations limit the
use of varietal (grape type) designations, type designations of
varietal significance, vintage dates, and AVAs to grape wines, TTB is
similarly proposing that the new provisions would apply solely to
standard grape wines.
TTB is not proposing in this document to extend this provision to
include non-grape wines. However, TTB seeks comments and additional
information on whether the amendments proposed in this document should
be extended to non-grape wines, such as fruit wines or agricultural
wines.
Accordingly, TTB proposes to amend Sec. 24.257 to require that a
standard grape wine that contains 7 percent or more alcohol by volume
and is covered by a certificate of exemption from label approval may
not be labeled with a varietal (grape type) designation, a type
designation of varietal significance, a vintage date, or an appellation
of origin unless the wine complies with the relevant part 4 provisions
for that label information. This requirement would
[[Page 40587]]
apply only to wines covered by certificates of exemption, because wines
covered by certificates of label approval are already subject to the
labeling provisions of part 4. Wines that are not standard grape wine
containing 7 percent or more alcohol by volume and that are covered by
a certificate of exemption are exempt from all part 4 labeling
provisions. TTB also proposes to make corresponding changes in the
recordkeeping requirements of Sec. 24.314.
Finally, TTB is also proposing to revise Sec. 4.50(b) to
incorporate a reference to the labeling requirements contained in Sec.
24.257.
Technical Changes
TTB also is removing the Office of Management and Budget control
numbers assigned to the former Bureau of Alcohol, Tobacco and Firearms
(ATF) and replacing them with the control numbers assigned currently to
TTB. In Sec. 24.257, the former control number 1512-0503, assigned to
ATF, is now control number 1513-0092, assigned to TTB. In Sec. 24.314,
the former control number 1512-0298 is now control number 1513-0115.
The changes to these control numbers are merely technical in nature and
do not change any regulatory or recordkeeping requirement.
Public Participation
Comments Sought
TTB requests comments from interested members of the public on the
proposed change. Additionally, TTB welcomes comments on whether the new
provisions should include non-grape wines. Finally, TTB solicits
comments on how many labels would be affected by the proposed
amendments, and how much time affected proprietors would need in order
to revise their labels to comply with the proposed changes. Please
provide specific information in support of your comments.
Submitting Comments
You may submit comments on this notice by using one of the
following three methods:
Federal e-Rulemaking Portal: You may send comments via the
online comment form posted with this proposed rule within Docket No.
TTB-2016-0005 on ``Regulations.gov,'' the Federal e-rulemaking portal,
at https://www.regulations.gov. A direct link to that docket is
available under Notice No. 160 on the TTB Web site at https://www.ttb.gov/wine/wine-rulemaking.shtml. Supplemental files may be
attached to comments submitted via Regulations.gov. For complete
instructions on how to use Regulations.gov, click on the site's
``Help'' tab.
U.S. Mail: You may send comments via postal mail to the
Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and
Trade Bureau, 1310 G Street NW., Box 12, Washington, DC 20005.
Hand Delivery/Courier: You may hand-carry your comments or
have them hand-carried to the Alcohol and Tobacco Tax and Trade Bureau,
1310 G Street NW., Suite 400, Washington, DC 20005.
Please submit your comments by the closing date shown above in this
proposed rule. Your comments must reference Notice No. 160 and include
your name and mailing address. Your comments also must be made in
English, be legible, and be written in language acceptable for public
disclosure. TTB does not acknowledge receipt of comments and considers
all comments as originals.
In your comment, please clearly state if you are commenting for
yourself or on behalf of an association, business, or other entity. If
you are commenting on behalf of an entity, your comment must include
the entity's name as well as your name and position title. In your
comment via Regulations.gov, please enter the entity's name in the
``Organization'' blank of the online comment form. If you comment via
postal mail or hand delivery/courier, please submit your entity's
comment on letterhead.
You may also write to the Administrator before the comment closing
date to ask for a public hearing. The Administrator reserves the right
to determine whether to hold a public hearing.
Confidentiality
All submitted comments and attachments are part of the public
record and subject to disclosure. Do not enclose any material in your
comments that you consider to be confidential or inappropriate for
public disclosure.
Public Disclosure
TTB will post, and you may view, copies of this proposed rule and
any online or mailed comments received about this proposal within
Docket No. TTB-2016-0005 on the Federal e-rulemaking portal. A direct
link to that docket is available on the TTB Web site at https://www.ttb.gov/wine/wine-rulemaking.shtml under Notice No. 160. You may
also reach the relevant docket through the Regulations.gov search page
at https://www.regulations.gov. For information on how to use
Regulations.gov, click on the site's ``Help'' tab.
All posted comments will display the commenter's name, organization
(if any), city, and State, and, in the case of mailed comments, all
address information, including email addresses. TTB may omit voluminous
attachments or material that it considers unsuitable for posting.
You may view copies of this proposed rule and any electronic or
mailed comments TTB receives about this proposal by appointment at the
TTB Information Resource Center, 1310 G Street NW., Washington, DC
20005. You may also obtain copies for 20 cents per 8.5- x 11-inch page.
Contact TTB's information specialist at the above address or by
telephone at 202-453-2270 to schedule an appointment or to request
copies of comments or other materials.
Regulatory Flexibility Act
TTB certifies that this proposed regulation, if adopted, will not
have a significant economic impact on a substantial number of small
entities. The proposed rule, if adopted, 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.
TTB recognizes that if the proposed rule is adopted as a final
rule, some bottlers of wine may have to make revisions to labels
currently covered by certificates of exemption; however, we believe
that the number of affected labels will be small. TTB specifically
solicits comments on the number of small producers and bottlers that
may be affected by this proposed rule and the impact of this proposed
rule, if adopted as a final rule, on those small businesses.
Executive Order 12866
It has been determined that this proposed rule is not a significant
regulatory action as defined by Executive Order 12866 of September 30,
1993. Therefore, no regulatory assessment is required.
Paperwork Reduction Act
The two collections of information affected by this notice of
proposed rulemaking have been previously
[[Page 40588]]
reviewed and approved by the Office of Management and Budget (OMB) in
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d))
and assigned control numbers 1513-0092 and 1513-0115. An agency may not
conduct or sponsor, and a person is not required to respond to, a
collection of information unless it displays a valid control number
assigned by OMB.
The proposed regulatory text in 27 CFR 24.257 contains an
alteration to the information collection currently approved under OMB
control number 1513-0092. If adopted, this revision would require
changes in the labeling of certain wines currently covered by a
certificate of exemption from label approval, where those wines are
labeled with varietal (grape type) designations, type designations of
varietal significance, vintage dates, or appellations of origin, in a
manner that would not be allowed under the standards set forth in the
regulations in 27 CFR part 4. However, since the labeling of wines,
whether covered by certificates of exemption or by certificates of
label approval, is a usual and customary business practice and would be
done by proprietors with or without the TTB regulatory requirement, TTB
does not believe that there would be any increase in the current burden
hours associated with this information collection. We are, however,
reporting an increase in the number of respondents to this collection,
from 10,506 to 10,970, to reflect the current number of wine industry
members regulated by TTB. We estimate the current burden associated
with this information collection as follows:
Estimated Number of Respondents: 10,970.
Estimated Annual Frequency of Responses: 1 (one).
Estimated Average Annual Total Burden Hours: 1 hour.
The proposed regulatory text in 27 CFR 24.314 contains an
alteration to the information collection currently approved under OMB
control number 1513-0115. If adopted, this revision would require
proprietors to keep records substantiating certain information
contained on the labels of certain wines currently covered by a
certificate of exemption from label approval, where those wines are
labeled with varietal (grape type) designations, type designations of
varietal significance, vintage dates, or appellations of origin. In
particular, the records would have to substantiate that the claims
would be allowed under the standards for use of such claims under the
regulations in 27 CFR part 4. However, since the keeping of records
substantiating the information provided on wine labels, whether covered
by certificates of exemption or by certificates of label approval, is a
usual and customary business practice and would be done by proprietors
with or without the TTB regulatory requirement, TTB does not believe
that there would be any increase in the current burden for this
information collection, which is estimated as follows:
Estimated Number of Respondents: 10,970.
Estimated Annual Frequency of Responses: 1 (one).
Estimated Average Annual Total Burden Hours: 1 hour.
Revisions of these two currently approved collections have been
submitted to OMB for review. Comments on the revisions to OMB control
number 1513-0092 and 1513-0115 should be sent to OMB by one of these
two methods:
By U.S. Mail: 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 E-mail: submission@omb.eop.gov.
A copy should also be sent to the Alcohol and Tobacco Tax and Trade
Bureau by any of the methods previously described. Comments on the
information collection should be submitted not later than August 22,
2016. Comments are specifically requested concerning:
Whether the proposed revisions of the collections of
information approved under OMB control number 1513-0115 and 1513-0092
are necessary for the proper performance of the functions of the
Alcohol and Tobacco Tax and Trade Bureau, including whether the
information will have practical utility;
The accuracy of the estimated burdens associated with the
proposed revisions of the collections of information;
How to enhance the quality, utility, and clarity of the
information to be collected;
How to minimize the burden of complying with the proposed
revision of the collection of information, including the application of
automated collection techniques or other forms of information
technology; and
Estimates of capital or start-up costs and costs of
operation, maintenance, and purchase of services to provide
information.
Drafting Information
Jennifer Berry of the Regulations and Rulings Division, Alcohol and
Tobacco Tax and Trade Bureau, drafted this document.
List of Subjects
27 CFR Part 4
Administrative practice and procedure, Advertising, Customs duties
and inspection, Imports, Labeling, Packaging and containers, Reporting
and recordkeeping requirements, Trade practices, Wine.
27 CFR Part 24
Administrative practice and procedure, Claims, Electronic funds
transfers, Excise taxes, Exports, Food additives, Fruit juices,
Labeling, Liquors, Packaging and containers, Reporting and
recordkeeping requirements, Research, Scientific equipment, Spices and
flavorings, Surety bonds, Vinegar, Warehouses, Wine.
Proposed Regulatory Amendments
For the reasons discussed in the preamble, TTB proposes to amend 27
CFR, chapter I, parts 4 and 24 as set forth below:
PART 4--LABELING AND ADVERTISING OF WINE
0
1. The authority citation for 27 CFR part 4 continues to read as
follows:
Authority: 27 U.S.C. 205, unless otherwise noted.
0
2. Section Sec. 4.50 is amended by adding a sentence to the end of
paragraph (b) to read as follows:
Sec. 4.50 Certificates of label approval.
* * * * *
(b) * * * See Sec. 24.257 of this chapter for additional labeling
rules that apply to wines covered by a certificate of exemption.
* * * * *
PART 24--WINE
0
3. The authority citation for 27 CFR part 24 continues to read as
follows:
Authority: 5 U.S.C. 552(a); 26 U.S.C. 5001, 5008, 5041, 5042,
5044, 5061, 5062, 5121, 5122-5124, 5173, 5206, 5214, 5215, 5351,
5353, 5354, 5356, 5357, 5361, 5362, 5364-5373, 5381-5388, 5391,
5392, 5511, 5551, 5552, 5661, 5662, 5684, 6065, 6091, 6109, 6301,
6302, 6311, 6651, 6676, 7302, 7342, 7502, 7503, 7606, 7805, 7851; 31
U.S.C. 9301, 9303, 9304, 9306.
0
4. Section Sec. 24.257 is amended by revising paragraph (b) and by
revising the OMB control number located in the
[[Page 40589]]
second parenthetical phrase at the end of the section, to read as
follows:
Sec. 24.257 Labeling wine containers.
* * * * *
(b) Requirements applicable to information on labels--(1)
Verification and recordkeeping requirements. The information shown on
any label applied to bottled or packed wine is subject to the
verification and recordkeeping requirements of Sec. 24.314.
(2) Varietal designations, type designations of varietal
significance, grape vintage dates, and appellations of origin. For
wines covered by a certificate of exemption from label approval, the
use of any label that includes a varietal (grape type) designation, a
type designation of varietal significance, a grape vintage date, or an
appellation of origin for any standard grape wine containing 7 percent
or more alcohol by volume is prohibited unless the wine would be
entitled to use of such a labeling term under the standards set forth
in the following sections of 27 CFR part 4:
(i) Varietal (grape type) designation. The use of a varietal (grape
type) designation must conform to the requirements of Sec. 4.23 of
this chapter;
(ii) Type designation of varietal significance. The use of a type
designation of varietal significance must conform to the requirements
of Sec. 4.28 of this chapter;
(iii) Vintage date. The use of a vintage date must conform to the
requirements of Sec. 4.27 of this chapter; and
(iv) Appellation of origin. The use of an appellation of origin
must conform to the requirements of Sec. 4.25 of this chapter.
* * * * *
(Approved by the Office of Management and Budget under control
number 1513-0092)
0
5. Section 24.314 is amended to read as follows:
Sec. 24.314 Label information record.
(a) General. A proprietor who removes bottled or packed wine with
information stated on the label (e.g., varietal, vintage, appellation
of origin, analytical data, date of harvest) shall have complete
records, as applicable, so that the information appearing on the label
may be verified by a TTB audit. A wine is not entitled to have
information stated on the label unless the information can be readily
verified by a complete and accurate record trail from the beginning
source material to removal of the wine for consumption or sale.
(b) Establishing that wine is entitled to labeling claims. A
proprietor must keep records that will enable TTB to verify that the
labeling of the wine complies with the applicable labeling requirements
in this part. In addition, if wine is subject to Federal Alcohol
Administration Act labeling provisions under 27 CFR part 4, the records
must establish that the labeling of the wine complies with the
applicable labeling provisions of 27 CFR part 4. For wines covered by a
certificate of exemption, the use of any label that includes a varietal
(grape type) designation, a type designation of varietal significance,
a grape vintage date, or an appellation of origin for any standard
grape wine containing 7 percent or more alcohol by volume is prohibited
unless the proprietor has records establishing that the use of such a
term complies with the standards set forth in the appropriate sections
of 27 CFR part 4 for use of such a labeling term.
(c) Record retention. All records necessary to verify wine label
information are subject to the record retention requirements of Sec.
24.300(d).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended (26 U.S.C.
5367))
(Approved by the Office of Management and Budget under control
number 1513-0115)
Signed: April 7, 2016.
John J. Manfreda,
Administrator.
Approved: April 22, 2016.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 2016-14696 Filed 6-21-16; 8:45 am]
BILLING CODE 4810-31-P
