Modernization of Permit Application Requirements for Wine Premises, 80160-80172 [2024-22470]

Agencies

• Alcohol and Tobacco Tax and Trade Bureau
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 89, Number 191 (Wednesday, October 2, 2024)]
[Proposed Rules]
[Pages 80160-80172]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-22470]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 24

[Docket No. TTB-2024-0005; Notice No. 234]
RIN 1513-AC47


Modernization of Permit Application Requirements for Wine 
Premises

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 application requirements 
for wine premises. The proposed amendments also relax some reporting 
requirements associated with changes to the business of proprietors of 
wine premises. The proposed amendments are a result of TTB's evaluation 
of its permit and registration application requirements and 
consideration of relevant public comments submitted to the Treasury 
Department in response to its request for recommendations concerning 
regulations that can be eliminated, modified, or streamlined to reduce 
burdens. TTB believes the amendments proposed in this document will 
significantly reduce the time needed to complete an application to 
establish and operate wine premises.

DATES: Comments must be received on or before December 2, 2024.

ADDRESSES: You may electronically submit comments to TTB on this 
proposal, and view copies of this document, its supporting materials, 
and any comments TTB receives on it within Docket No. TTB-2024-0005 as 
posted at https://www.regulations.gov. A direct link to that docket is 
available on the TTB website at https://www.ttb.gov/wine/notices-of-proposed-rulemaking under Notice No. 234. Alternatively, you may submit 
comments via postal mail to the Director, Regulations and Ruling 
Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, 
Box 12, Washington, DC 20005. Please see the Public Participation 
section of this document for further information on the comments 
requested regarding this proposal and on the submission, 
confidentiality, and public disclosure of comments.

FOR FURTHER INFORMATION CONTACT: Christopher Forster-Smith, Regulations 
and Rulings Division, Alcohol and

[[Page 80161]]

Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 
20005; telephone (202) 453-1039, extension 150.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
    A. TTB Evaluation of Permit and Registration Application 
Requirements
    B. TTB Authority
    C. Relationship to Other Notices of Proposed Rulemaking
II. Proposed Changes to the Regulations
    A. Operational Information Required for Wine Premises 
Application
    B. Premises Description and Security
    C. Statements of Interest
    D. 30-Day Filing Requirements for Certain Changes in the 
Business
    E. Changes in Trade Names
    F. Retention of Records Off-Premises
III. Public Participation
    A. Comments Invited
    B. Submitting Comments
    C. Confidentiality and Public Disclosure 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 TTB collects from 
applicants for permit and registration applications. The purpose was to 
identify ways to streamline the application process, reduce burden on 
the regulated industry, and ensure that the process collects only 
information that is necessary to meet the agency's statutory 
obligations. TTB's general approach was to identify information being 
collected that could be eliminated without hindering TTB's ability to 
evaluate an applicant's qualifications and to more narrowly focus the 
application questions to capture only information that is necessary for 
that purpose. 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.
    During this same period, 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 starting a new business in a TTB-regulated industry, 
including the qualification process.
    Through TTB's internal evaluation and consideration of the public 
input, TTB has identified deregulatory actions that TTB can take by 
amending regulations and also, where rulemaking is not required, by 
amending guidance and forms. While this document addresses wine 
premises, TTB is engaging in further rulemaking to address other 
regulated industries within the context of their respective statutory 
eligibility requirements. Specifically, TTB has already published 
rulemaking concerning the Internal Revenue Code (IRC) permit and 
registration application requirements for distilled spirits plants (and 
users and dealers of specially denatured alcohol and tax-free alcohol) 
and application requirements for Federal Alcohol Administration Act 
(FAA Act) basic permits (which are submitted by prospective wine 
producers and blenders, alcohol beverage importers and wholesalers, and 
beverage distilled spirits plants). See Notice No. 207, published in 
the Federal Register on December 3, 2021, at 86 FR 68573, as well as 
rulemaking concerning Brewer's Notices filed with TTB under the IRC 
(Notice No. 212, published in the Federal Register on June 8, 2022, at 
87 FR 34819).
    With respect to wine premises, this document proposes to amend the 
regulations to reduce regulatory burden, increase industry flexibility, 
and eliminate or narrow the range of information that applicants must 
submit to TTB consistent with TTB's statutory obligations under the 
IRC. The proposed amendments include:
     Eliminating requirements to provide narrative descriptions 
of certain operations when applying to establish a wine premises.
     More narrowly tailoring requirements to describe the wine 
premises to specifically correspond with statutory requirements, and 
consolidating requirements to provide descriptions of alternation 
operations as part of the general wine premises description.
     Extending deadlines for reporting certain changes in the 
business from 30 days to 60 days.
     Allowing proprietors of wine premises to use new trade 
names by notifying TTB in lieu of filing an amended application.
     Allowing proprietors of wine premises to maintain required 
records at a location other than the permitted premises without first 
obtaining TTB approval.
    Section II of this document includes more in-depth discussion of 
the proposed amendments.
    As noted above, TTB's deregulatory strategy also includes 
streamlining its guidance and forms. TTB is concurrently engaged in a 
multiyear initiative to develop and deploy ``myTTB,'' a single, online 
interface for all industry transactions with TTB, including 
qualification, label approval, and formula applications, as well as tax 
filings, payments, and claims. When complete, myTTB will provide both 
industry and TTB with online access to each industry member's records, 
approvals, and filings, in a single system. With the use of myTTB, and 
the planned implementation of these newly streamlined requirements 
within myTTB, the bureau anticipates significant improvements to a 
permit applicant's user experience and corresponding reductions in 
burden.

B. TTB Authority

    The Federal Alcohol Administration Act (FAA Act, 27 U.S.C. 201, et 
seq.) and chapter 51 of the IRC, 26 U.S.C. chapter 51, require persons 
intending to engage in certain wine-related businesses to obtain a 
permit and/or permission to operate from the Secretary of the Treasury 
(Secretary) before beginning operations. Many proprietors of wine 
premises engage in operations that require both an approved permit 
application under the FAA Act and an approved application for a 
registry number under the IRC. As noted above, TTB has already 
published rulemaking proposing amendments to application requirements 
for FAA Act basic permit holders, which includes proprietors of bonded 
wine premises (see Notice No. 207, published in the Federal Register on 
December 3, 2021, at 86 FR 68573). The amendments proposed in this 
document relate to the application requirements to establish and 
operate wine premises under the IRC, including requirements to report 
certain changes in the regulated businesses.
    The IRC requires that any person establishing premises for the 
production, blending, cellar treatment, storage, bottling, packaging, 
or repackaging of untaxpaid wine must, before commencing operations, 
make application to the Secretary, file a bond (subject to certain 
exceptions), and receive permission to operate. See 26 U.S.C. 5351. 
Additionally, the IRC requires that any person bottling, packaging, or 
repackaging taxpaid wines must, before commencing operations, make 
application to the Secretary and

[[Page 80162]]

receive permission to operate. See 26 U.S.C. 5352. Further, 
applications must disclose, as specified in regulations issued by the 
Secretary, such information as may be necessary to enable the Secretary 
to determine the location and extent of the premises, the type of 
operations to be conducted on such premises, and whether the operations 
will be in conformity with law and regulations. See 26 U.S.C. 5356. The 
IRC also requires that bonded wine premises, including any 
noncontiguous portions, must be located, constructed, and equipped to 
protect the revenue, in accordance with regulations prescribed by the 
Secretary. See 26 U.S.C. 5357.
    Chapter 51 also imposes requirements governing the operations of 
bonded and taxpaid wine premises, including a requirement that 
proprietors keep records and file reports in the form and manner 
prescribed by regulation. See 26 U.S.C. 5367. In addition, section 
7805(a) of the IRC generally authorizes the Secretary to issue 
regulations to carry out the provisions of the IRC. See 26 U.S.C. 
7805(a).
    TTB administers these IRC and FAA Act provisions pursuant to 
section 1111(d) of the Homeland Security Act of 2002, as codified at 6 
U.S.C. 531(d). The Secretary has also delegated certain administrative 
and enforcement authorities to TTB through Treasury Order 120-01, 
including the authority to prescribe and evaluate applications to 
establish and operate wine premises covered under this rulemaking.
    Pursuant to its delegated IRC authorities, TTB has promulgated 
regulations setting forth the application requirements for wine 
premises at 27 CFR part 24. TTB's regulations at 27 CFR 24.105 through 
24.117 set forth the requirements for the qualifying documents that 
proprietors of wine premises must submit to TTB, including form TTB F 
5120.25, Application to Establish and Operate Wine Premises 
(application). A bonded winery, bonded wine cellar, or taxpaid wine 
bottling house may not commence operations until the proprietor has a 
valid approved application for the operations. See 27 CFR 24.105. The 
electronic version of the application form, TTB F 5120.25, is available 
through the TTB Permits Online (PONL) system. In this document, TTB 
proposes amendments to the regulations specifying the information 
proprietors of wine premises must provide on form TTB F 5120.25 or its 
electronic equivalent, as well as in certain supporting documents.
    Pursuant to TTB's IRC authorities described above, TTB has also 
promulgated regulations imposing procedural and substantive 
requirements on proprietors of wine premises. TTB regulations at 27 CFR 
24.120 through 24.132 require proprietors of wine premises to report 
certain changes in the business affecting the current approved 
application (e.g., changes in address or location, changes in 
stockholders or corporate officers, changes in proprietorship). In 
addition, regulations at 27 CFR 24.300 through 24.323 include 
recordkeeping requirements, as authorized by the IRC at 26 U.S.C. 5367.
    This notice of proposed rulemaking includes proposed amendments to 
these reporting and recordkeeping requirements. With respect to current 
reporting requirements, in instances where TTB's regulations refer to 
submitting a ``letterhead notice,'' industry members may provide such 
letterhead notices electronically. Unlike the proprietor's initial 
submission of qualifying documents, these letterhead notices do not 
require TTB approval. TTB is proposing an amendment to 27 CFR 24.10 to 
add a definition of ``letterhead notice'' to clarify these points.

C. Relationship to Other Notices of Proposed Rulemaking

    TTB previously 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 producers, blenders, importers, and 
wholesalers of wine--were included in that document and are not 
included in this document. See Notice No. 207, published in the Federal 
Register on December 3, 2021, at 86 FR 68573. TTB also previously 
published a notice of proposed rulemaking titled ``Modernization of 
Qualification Requirements for Brewer's Notices,'' in which TTB 
proposed amendments, generally similar to those proposed in this 
document, in 27 CFR part 25. See Notice No. 212, published in the 
Federal Register on June 8, 2022, at 87 FR 34819. The comment periods 
for Notice Nos. 207 and 212 are closed, and TTB is reviewing the 
comments submitted in response.

II. Proposed Changes to the Regulations

    TTB intends for the proposed amendments in this document to 
modernize and streamline the qualification requirements and processes 
under the IRC for proprietors of bonded wineries, bonded wine cellars, 
and taxpaid wine bottling houses.\1\ The general approach TTB adopted 
in developing the proposed amendments was to identify information 
currently 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 application questions and 
instructions. The proposed amendments also relax reporting requirements 
on certain changes to the business.
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    \1\ For ease of reference, this rulemaking document will 
generally refer to proprietors of bonded wineries, proprietors of 
bonded wine cellars, and proprietors of taxpaid wine bottling houses 
collectively as ``proprietors of wine premises.''
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A. Operational Information Required for Wine Premises Application

    TTB is proposing to eliminate requirements to provide certain 
operational information when applying to establish a bonded winery, 
bonded wine cellar, or taxpaid wine bottling house. The TTB regulations 
at 27 CFR 24.109 prescribe, in general, information that must be 
included in an application under the IRC to establish such a wine 
premises. Among the information currently required at sections 
24.109(f) and 24.111 are narrative descriptions of certain operations 
to be conducted on the wine premises. As explained further below, TTB 
has determined that these narrative descriptions are not necessary for 
TTB to evaluate whether an applicant qualifies for a permit and, as a 
result, can either be eliminated or amended to collect a narrower set 
of information about the operations.
    Section 24.109(h) requires applicants to provide, if applicable, a 
``description of spirits operations.'' In general, the requirements 
related to the use of spirits in the production of wine are set forth 
in TTB's regulations at 27 CFR part 24, subpart K. All proprietors of 
bonded wine premises are obligated to comply with the requirements of 
subpart K (and of part 24 in general) in their use of spirits, but such 
proprietors are not required to obtain authorization from TTB after 
their initial qualification to begin spirits operations or change their 
spirits operations. TTB has concluded that requiring applicants to 
provide a narrative description of spirits operations at the time of 
their initial application is not necessary for TTB to evaluate whether 
such applicants are qualified to establish a bonded wine premises. This 
requirement also places a burden on those applicants who intend to use 
spirits at the time of their initial application without a similar 
burden on those who decide to use

[[Page 80163]]

spirits after qualifying. As such, TTB is proposing to eliminate 
current section 24.109(h).
    The current Sec.  24.109(j) requires applicants intending to 
conduct volatile fruit-flavor concentrate operations to provide a 
description of such operations as set forth at 27 CFR 24.113. Section 
24.113 requires a step-by-step description of the production procedure 
to be employed, commencing with obtaining fruit juice and continuing 
through each step of the process up to the removal of the volatile 
fruit-flavor concentrate. For concentrates containing more than 24 
percent alcohol, the proprietor must indicate any step in the 
production procedure at which any spirits may be fit for beverage use. 
The description also must include, among other things, the maximum 
quantity in gallons of fruit must used, the amount of concentrate 
produced in 24 hours, and the maximum percent of alcohol in the 
concentrate for each kind of fruit used.
    Similar to the spirits operations previously discussed, all bonded 
wine premises proprietors are authorized to engage in volatile fruit-
flavor concentrate operations, specifically the ``preparation, storage, 
or removal of commercial fruit products and by-products (including 
volatile fruit-flavor concentrate) not taxable as wine.'' See 27 CFR 
24.101(b)(4). TTB no longer believes that collecting detailed 
information on an applicant's prospective volatile fruit-flavor 
concentrate production process is necessary at the time of initial 
qualification, and instead could be collected from applicants and 
approved wine premises proprietors upon request of the appropriate TTB 
officer, as needed to protect the revenue (given the potential to 
create taxable distilled spirits during such operations). However, 
consistent with the requirement at 27 CFR 24.114 that any still used in 
the production of volatile fruit-flavor concentrate be set up on bonded 
wine premises and registered with TTB, there remains a need to collect 
basic information on whether a bonded wine premises will engage in the 
production of volatile fruit-flavored concentrate and, if so, certain 
information concerning any still(s) to be used.
    As a result, TTB is proposing to amend Sec.  24.109(j) to replace 
the required narrative description of volatile fruit-flavor concentrate 
operations with a statement of whether the applicant intends to produce 
volatile fruit-flavor concentrate and, if so, the kind, capacity, and 
intended use of any stills to be used in such production. In addition, 
TTB is proposing to amend Sec.  24.113 to provide that bonded wine 
premises proprietors who produce volatile fruit-flavor concentrate must 
submit the step-by-step production process description currently 
required by that section only upon request of the appropriate TTB 
officer.
    TTB is also proposing a conforming amendment to 27 CFR 24.130, 
which currently requires, in general, that proprietors apply for and 
receive approval from TTB before beginning new, or changing their 
existing, production processes for volatile fruit-flavor concentrate. 
TTB is proposing to amend 24.130 to instead require that proprietors 
notify TTB when setting up any new still(s) to be used in the 
production of volatile fruit-flavor concentrate. The proposed 
notification for new stills requires the proprietor to provide the 
kind, capacity, and intended use of the still(s).
    Finally, Sec.  24.109(k) requires applicants to provide, if 
applicable, a description of ``other operations'' not specifically 
authorized under TTB's wine premises regulations. TTB has determined 
that Sec.  24.109(k) serves a purpose duplicative of Sec.  24.103, 
which governs requests to TTB for authorization to conduct on the wine 
premises other operations not specifically authorized under part 24 
(e.g., at 27 CFR 24.101 and 24.102). Section 24.103 sets forth the 
information that must be included in a request as well as the criteria 
for TTB approval. TTB believes that the duplicative provisions in 
Sec. Sec.  24.103 and 24.109(k) could cause confusion about what 
information must be submitted to obtain approval for operations not 
authorized under Sec. Sec.  24.101 or 24.102, and when such information 
must be submitted. For example, Sec.  24.109(k) could give the 
impression that plans for other operations must be finalized at the 
time of original application submission. As a result, TTB is proposing 
to eliminate Sec.  24.109(k). Requests for approval for other 
operations under Sec.  24.103, if known at the time of application, may 
still be submitted concurrently with an original application to 
establish a wine premises, but they also may be submitted later, as 
long as approval is obtained before the proprietor engages in the other 
operations.

B. Premises Description and Security

    TTB proposes to more narrowly tailor requirements to describe the 
wine premises and its security, and to consolidate requirements to 
provide descriptions of alternation operations with the general wine 
premises description. The TTB regulations generally prescribe the 
information that a proprietor must provide in an application for a wine 
premises. This includes a description of the wine premises and the 
security measures to be employed at the wine premises. See 27 CFR 
24.109(f) and 24.111. TTB currently collects these descriptions in an 
open-ended narrative format. The regulations require more detailed 
narrative descriptions and/or diagrams when a proprietor of a bonded 
winery or bonded wine cellar intends to alternate its premises with an 
adjacent distilled spirits plant or brewery, or intends to alternate 
its premises for use as taxpaid wine premises. See 27 CFR 24.111 and 
24.135 (regarding alternation for use as taxpaid wine premises), 
19.143(b)(2) (regarding alternation with distilled spirits plants), and 
25.81(b)(2) (regarding alternation with breweries). TTB believes that 
direct questions identifying the specific information requested--and 
associated certifications--will provide greater clarity to applicants 
as to the exact information TTB seeks in an application, which will 
reduce the need for additional submissions and communication between 
TTB and applicants, thus accelerating TTB's review and approval of 
applications. TTB therefore proposes amendments, described below, to 
alter the format in which descriptions of wine premises, security 
measures, and related information are collected, and, where 
appropriate, to consolidate the collection of such information.
Amendments to 27 CFR 24.109 and 24.111
    Currently, Sec.  24.109(f) requires that an application include a 
description of the wine premises in accordance with Sec.  24.111. 
Section 24.111 sets forth the specific information to be included in 
the description, and includes: (1) a description of each tract of land 
comprising wine premises; (2) a diagram of the wine premises drawn to 
scale when required by the appropriate TTB officer; (3) a clear 
indication of any area of the wine premises to be used as bonded wine 
premises, used as taxpaid wine premises, or alternated for use as 
bonded wine premises and taxpaid wine premises; (4) a description of 
the means employed to afford security and protect the revenue; (5) if 
required by the appropriate TTB officer to segregate operations within 
the premises, a description of the manner by which the operations are 
segregated; (6) a description of each building on wine premises as to 
size, construction, and use; and (7) if the wine premises consist

[[Page 80164]]

of a part of a building, a separate description of the rooms or floors, 
as well as a description the activities conducted in the adjoining 
portions of the building, and the means of ingress and egress from the 
wine premises.
    TTB proposes to amend Sec.  24.111 to remove the requirement to 
provide a description of the tract of land, to limit the required 
description to portions of the premises where wine operations will 
occur, and to clarify the specific information needed. The proposed 
amendments require the premises description to include the following 
elements in either narrative or diagram form: (1) The outline and 
dimensions of the building(s) where wine operations will occur; (2) if 
the wine premises does not occupy the entire building, the outline and 
dimensions of the wine premises within the building; (3) if the wine 
premises includes both bonded wine premises and taxpaid wine premises, 
the outline and dimensions of each; (4) the external doors of the wine 
premises; and (5) the outline and dimensions of any portions of the 
wine premises that are outdoors, including the location of any outdoor 
tanks. TTB believes that these descriptive elements are the minimum 
necessary to allow TTB to evaluate whether the premises is adequate to 
protect the revenue; the requested information provides TTB the scope 
and dimensions of the operations space and the points of access to the 
operations. The proposed amendments provide flexibility to submit this 
information in narrative form or diagram form, whichever is better 
suited to the applicant's circumstances. The proposed amendments also 
provide that photographs of any of the required elements must be 
submitted upon request of the appropriate TTB officer.
    With regard to security, Sec.  24.111 currently requires that the 
description of wine premises include a narrative description of ``the 
means employed to afford security and protect the revenue.'' TTB 
believes that this requirement is overly broad. Accordingly, TTB 
proposes to eliminate the required description of security measures 
from Sec.  24.111, and to replace it with a new Sec.  24.171 
specifically addressing security. Section 24.171 will require that 
security measures at the wine premises be of a class and construction 
designed to prevent unauthorized access to, and theft of, commercial 
property. TTB also proposes to amend Sec.  24.109 to require that an 
application include a certification that the premises' security will 
meet the requirements of Sec.  24.171. TTB believes that the proposed 
amendments clarify that TTB security requirements correspond to current 
industry standards and will provide applicants and permittees 
flexibility to secure their premises in a manner that is best suited to 
their particular circumstances.
Amendments to 27 CFR 24.131
    The TTB regulations currently require proprietors of wine premises 
to submit a notice to the appropriate TTB officer before making a 
change in the construction of buildings located on wine premises, or in 
the use of any portion of the wine premises, where such change affects 
the accuracy of their current approved application. The notice must 
describe the proposed change in detail. Proprietors must also include 
the change covered by the notice in the next amended application to be 
filed, unless the appropriate TTB officer requires immediate amendment. 
See 27 CFR 24.131.
    TTB proposes to amend Sec.  24.131 to require that proprietors 
submit a new description of the premises, meeting the requirements of 
proposed Sec.  24.111, and receive TTB approval prior to making any 
change to the premises that would render inaccurate the description of 
premises currently on file with TTB. These amendments simplify the 
process for obtaining approval for changes in premises and no longer 
require proprietors to submit the same information to TTB multiple 
times as required in the current Sec.  24.131.
    TTB also proposes to add a new paragraph to Sec.  24.131 
authorizing the proprietor, in cases of natural disaster or other 
similar emergency, to make temporary changes to the premises without 
first submitting an updated premises description, provided that the 
proprietor reports any such change(s) to TTB through a letterhead 
notice within 10 days. Emergency changes to the premises under this new 
paragraph are temporary, and the proprietor must return their premises 
to the condition reflected in the approved premises description on file 
under Sec.  24.111 within 60 days unless the proprietor files for TTB 
approval, under the general provisions of the proposed Sec.  24.131, to 
make permanent changes to the premises. TTB believes that these 
amendments will reduce burdens on proprietors seeking to respond 
quickly to situations requiring them to make emergency changes to their 
premises.\2\
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    \2\ Note that other changes to a proprietor's operations (i.e., 
those other than changes to the physical premises) necessitated by 
emergency situations remain governed by 27 CFR 24.25.
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Amendments to 27 CFR 24.135(b)(3), 24.136(a)-(b), and 24.137(b)(2)
    Sections 24.135 through 24.137 provide procedures for alternation 
of wine premises. Specifically, Sec.  24.135 prescribes procedures 
related to the alternation of bonded wine premises for use as taxpaid 
wine premises, or alternation for other purposes such as the use of 
adjacent or contiguous premises qualified under chapter 51 of the IRC 
(i.e., distilled spirits plant, brewery, etc.) for use as wine premises 
or vice versa. Section 24.136 prescribes procedures related to 
alternation of proprietors, and Sec.  24.137 prescribes procedures 
related to alternation for customs purposes.\3\ One of the procedures 
prescribed in Sec. Sec.  24.136 and 24.137 to engage in alternation of 
wine premises is that the proprietor must submit with their application 
a diagram of the part of the premises that will be alternated, as well 
as a description of the areas, buildings, floors, or rooms that will be 
alternated. TTB believes that the information collected under these 
sections can be consolidated into the premises description(s) required 
at Sec.  24.109(f). Accordingly, TTB proposes to amend these sections 
to require that such information be included in the description 
submitted under Sec.  24.109(f).
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    \3\ As further described in Sec.  24.137, proprietors may 
alternate their wine premises as a Customs Bonded Warehouse under 
applicable U.S. Customs and Border Protection laws and regulations, 
for the purpose of measuring, gauging, and bottling or packing wine.
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    In the case of Sec.  24.135, with respect to alternation as taxpaid 
wine premises, the applicant currently must provide a description of 
how taxpaid wine or spirits, or untaxpaid wine or spirits, will be 
identified and segregated. With respect to alternation with an adjacent 
brewery or distilled spirits plant (DSP), Sec.  24.135 does not 
explicitly require submission of diagrams or descriptions illustrating 
the proposed alternation, but the proprietor of the wine premises 
nonetheless must prepare alternation diagrams for submission with the 
brewery's or DSP's application for alternation. See 27 CFR 25.81(b)(2) 
(requiring ``Special diagrams, in duplicate, delineating the brewery 
premises and the bonded or taxpaid wine premises as they will exist 
both during extension and curtailment.'') and 27 CFR 19.143(b)(2) 
(requiring ``a special diagram, in duplicate, delineating 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

[[Page 80165]]

sequence.'').\4\ To more clearly convey what information a proprietor 
must provide for TTB to authorize an alternating premises, specifically 
regarding how the premises will be delineated and how it will be 
extended and curtailed, TTB proposes to amend Sec.  24.135(b)(3) to 
require ``Additional versions of the description required under Sec.  
24.109(f) describing or showing the premises as they will exist, both 
during extension and curtailment, and clearly depicting all buildings, 
floors, rooms, areas, and equipment that are to be subject to 
alternation, in their relative operating sequence.'' As noted above, 
this information about the wine premises is generally already required 
to be submitted under regulations directed at breweries and distilled 
spirits plants that intend to alternate with a wine premises, and is 
needed by TTB to ensure well-defined separation of operations, 
compliance with statutory and regulatory requirements that apply to the 
different operations, and payment of the appropriate Federal excise 
tax.
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    \4\ Note that, similar to the amendments proposed in this 
document, TTB proposed in Notice Nos. 212 and 207, respectively, 
amendments to Sec. Sec.  25.81 and 19.143 providing that alternation 
descriptions be submitted on additional versions of the premises 
description required with the application for the original Brewer's 
Notice or DSP permit.
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C. Statements of Interest

    TTB proposes amendments to clarify the scope of the collection of 
information related to persons holding ownership interests in an 
applicant business. TTB collects these statements of interest in 
accordance with TTB's statutory obligation under the IRC to collect 
information necessary to determine whether the operations will be in 
conformity with law and regulations. See 26 U.S.C. 5356.
    To protect and ensure collection of the revenue, TTB must identify 
circumstances in which a bonded wine cellar or winery's ownership 
structure would affect the bonded wine cellar or winery's required 
method of tax payment and/or the bonded wine cellar or winery's 
eligibility for certain reduced rates of tax. The IRC provides that 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. See 26 U.S.C. 5061(e). 
Furthermore, in the case of a controlled group of corporations, all 
component members of the group are treated as one taxpayer.\5\ See 26 
U.S.C. 5061(e)(3)(A). To determine whether a bonded wine cellar or 
winery 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.
---------------------------------------------------------------------------

    \5\ For purposes of IRC 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.
---------------------------------------------------------------------------

    Determining whether a prospective bonded wine cellar or winery is a 
member of a controlled group is also necessary to determine whether the 
proprietor may be eligible for certain tax credits once they are in 
business following TTB approval of an application to establish a wine 
premises. The IRC provides a credit against the tax imposed under 
section 5041(a) on the first 30,000 wine gallons of wine produced by 
the producer and removed during the calendar year for consumption or 
sale. See 26 U.S.C. 5041(c)(1)(A). Further, the IRC provides a slightly 
lower credit against the tax on the next 100,000 wine gallons removed 
during the calendar year, and subsequently an even lower credit against 
the tax on the next 620,000 wine gallons removed during the calendar 
year. See 26 U.S.C. 5041(c)(1)(A).
    The tax credits under section 5041(c)(1)(A) apply to the collective 
production and removal activity of a controlled group. See 26 U.S.C. 
5041(c)(3). For example, if an application is submitted for a bonded 
winery that would produce 25,000 wine gallons of wine per year, but 
which will be part of a controlled group with another winery producing 
200,000 wine gallons of wine per year, TTB needs to collect information 
to identify the controlled group structure and thereby ensure that the 
wineries within the controlled group will not claim tax credits for 
which they are ineligible.
    The TTB regulations promulgated under the above IRC authorities 
thus require statements of interest for applications to establish and 
operate wine premises. See 27 CFR 24.110(c). TTB proposes amendments to 
27 CFR 24.110(c) to clarify and standardize the collection of basic 
identifying information of persons with an ownership interest in the 
business. The amended Sec.  24.110(c) 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 applicant must 
provide the name, title, and place of residence (city and State) of a 
representative individual for that entity. The ``representative 
individual'' generally is the individual that the entity designated 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 ownership interest in the business and to evaluate any potential 
controlled group affiliations for the applicant. TTB also proposes a 
minor conforming amendment to add the word ``ownership'' before 
``interest'' in Sec.  24.109(c).

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

    TTB proposes to extend the deadline for reporting certain changes 
in a proprietor of wine premises' business generally from 30 days to 60 
days. The TTB regulations generally require that, when there is a 
change in the information submitted to TTB in a current approved 
application to establish and operate wine premises, the proprietor of 
the business must notify TTB of the change. The timing and form of this 
notification differs depending on the type of 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 current TTB regulations require that proprietors of 
wine premises submit an amended application within 30 days of any 
change to the list of corporate officers furnished with the original 
application. See 27 CFR 24.124.
    Comments received in response to Treasury's request for 
information, described above in section I(A), suggest that 30 days is 
not enough time for regulated entities to assemble the information that 
is required to be filed in connection with various changes in the 
business. These comments suggested that such filing deadlines should be 
extended to 60 days.
    TTB reviewed these proposals and concluded that extending existing 
deadlines for reporting certain changes in the business (including in 
some cases by amending applications) from 30 to 60 days would not, in 
general, pose risk to the revenue or raise other concerns. Accordingly, 
TTB proposes to extend such deadlines in 27 CFR 24.120, 24.123, and 
24.124. Section 24.120 currently requires that, except as

[[Page 80166]]

otherwise provided in part 24, a proprietor submit an amended 
application within 30 days of a change in any of the information 
included in the current approved application. Section 24.123 requires a 
proprietor to submit an amended application within 30 days of a change 
in control of a business caused by the sale or transfer of capital 
stock, or the proprietor may submit a new list of stockholders annually 
on May 1 where the change in stockholders does not result in a change 
of control or management of the business. Similarly, Sec.  24.124 
generally requires that a proprietor submit an amended application 
within 30 days of a change in the list of corporate officers furnished 
with the original application. TTB proposes to extend each of the above 
reporting deadlines from 30 to 60 days. TTB also proposes to amend 
Sec.  24.124 to require that a proprietor submit a new list of 
corporate officers as a letterhead notice rather than submitting it 
with an amended application.
    TTB also proposes conforming amendments to Sec.  24.123 to update 
references to ``stockholders'' to refer instead to ``ownership 
interests'' consistent with the proposed amendments to statements of 
interest described in Section II(C) of this document. TTB further 
proposes amendments to Sec.  24.123 to clarify a proprietor's 
obligations where a change in ownership interests does result in a 
change in control of the business. For wine premises that do not 
require an FAA Act basic permit (i.e., taxpaid wine bottling houses, 
bonded wine cellars engaging only in storage), such changes in 
ownership interests must be reported to TTB via a letterhead notice 
within 60 days of the change.
    For wine premises that do require an FAA Act basic permit (i.e., 
bonded wine cellars engaging in production and/or blending), such 
changes in ownership interests must be reported to TTB in an amended 
application within 30 days of the change. The 30-day deadline is 
required by statutory provisions of the FAA Act, which provide that FAA 
Act permits cannot be sold or transferred and will automatically 
terminate 30 days after a transfer by operation of law or a change in 
actual or legal control of the permitted business. See 27 U.S.C. 
204(g). Section 204(g)(2) also provides that if an application for a 
new permit is submitted within 30 days of such a change, the 
outstanding permit remains in effect until TTB takes final action on 
the new application. These provisions are implemented in TTB 
regulations at 27 CFR 1.44. Because maintenance of an FAA Act basic 
permit is a continuing condition of certain IRC wine premises permits 
(see 27 CFR 24.106), TTB is proposing to clarify in Sec.  24.123 that 
proprietors of wine premises engaging in the production and/or blending 
of wine must submit an amended application within 30 days of the change 
in control, consistent with the FAA Act requirements previously 
described.

E. Changes in Trade Names

    TTB proposes to revise the regulations at 27 CFR 24.122 to allow 
changes to, or additions of, trade names through a letterhead 
notification to TTB rather than through an amended application.\6\ The 
TTB regulations currently require that proprietors file an amended 
application before engaging in operations under a new trade name. See 
27 CFR 24.122. TTB's Permits Online (PONL) system already includes a 
function for electronically reporting additional trade names, which 
will satisfy the proposed requirement of a letterhead notice. 
Consistent with this established policy, TTB's proposed revision would 
update regulations to reflect that industry members may begin 
operations under the new name immediately after notifying TTB.
---------------------------------------------------------------------------

    \6\ Note that, similar to the amendment proposed in this 
document, TTB proposed in Notice No. 207 an amendment to the FAA Act 
permit regulations at Sec.  1.40 that would allow changes to, or 
additions of, trade names to be accomplished by a letterhead notice.
---------------------------------------------------------------------------

    TTB notes that, while this amendment would allow industry members 
to immediately begin operations under a new trade name upon notifying 
TTB, it remains the responsibility of the proprietor to ensure that any 
trade name is properly registered with the applicable State or local 
government. Industry members should further note that the FAA Act 
prohibits false or misleading statements on alcohol beverage labels, 
and a trade name may not be used on a label if its use creates a false 
or misleading impression as to the age, origin, or identity of the 
product. See 27 U.S.C. 205(e). The FAA Act also prohibits the use of 
misleading trade names when advertising wine. See 27 U.S.C. 205(f).

F. Retention of Records Off-Premises

    TTB is proposing amendments to allow records to be stored at a 
location other than the wine premises by notifying TTB of the intention 
to store records at an off-premises location, rather than requiring 
specific TTB 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, and that TTB routinely 
approved. One common request from proprietors of wine premises has been 
for approval to maintain required records at a location other than the 
wine premises. As a result, TTB proposes to amend 27 CFR 24.300 to 
allow proprietors of wine premises to keep records at another location 
upon providing a letterhead notice to TTB. The amendments provide that 
required records must still be made available at the wine premises upon 
request, but that copies will generally satisfy this requirement 
(consistent with current TTB policy, ``copies'' includes electronic 
copies).

III. Public Participation

A. Comments Invited

    TTB invites comments from interested members of the public on this 
proposed rulemaking. TTB also invites comments on any additional means 
to streamline application processes within the parameters of TTB's 
statutory obligations.

B. Submitting Comments

    You may submit comments on this proposal as an individual or on 
behalf of a business or other organization via the Regulations.gov 
website or via postal mail, as described in the ADDRESSES section of 
this document. Your comment must reference Notice No. 234 and must be 
submitted or postmarked by the closing date shown in the DATES section 
of this document. You may upload or include attachments with your 
comment. You also may submit a comment requesting a public hearing on 
this proposal. The TTB Administrator reserves the right to determine 
whether to hold a public hearing. If TTB schedules a public hearing, it 
will publish notification of the date, time, and place for the hearing 
in the Federal Register.

C. Confidentiality and Disclosure of Comments

    All submitted comments and attachments are part of the rulemaking 
record and are subject to public disclosure. Do not enclose any 
material in your comments that you consider confidential or that is 
inappropriate for disclosure.
    TTB will post, and you may view, copies of this document, its 
supporting materials, and any comments TTB receives about this proposal 
within the related Regulations.gov docket. In general, TTB will post 
comments as submitted, and it will not redact any

[[Page 80167]]

identifying or contact information from the body of a comment or 
attachment.
    Please contact TTB's Regulations and Rulings division by email 
using the web form available at https://www.ttb.gov/contact-rrd, or by 
telephone at 202-453-2265, if you have any questions regarding comments 
on this proposal or to request copies of this document, its supporting 
materials, or the comments received in response.

IV. Regulatory Analysis and Notices

A. Executive Order 12866

    It has been determined that this proposed rule is not a significant 
regulatory action as defined by Executive Order 12866 of September 30, 
1993, as amended. Therefore, no regulatory assessment is 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 
applications to establish wine premises;
    (2) Streamlining requirements to describe the wine premises and its 
security;
    (3) Extending deadlines for reporting certain changes in the wine 
premises proprietor's business;
    (4) Streamlining procedures for wine premises proprietors using new 
trade names;
    (5) Allowing the maintenance of required records at locations other 
than the wine premises through a notification rather than an 
application for an alternate procedure; and
    (6) Clarifying which individuals are required to submit statements 
of financial interest in the business in connection with an application 
to establish a wine 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 to establish 
wine premises, TTB proposes amendments to 27 CFR 24.109 to eliminate 
requirements that applicants provide narrative descriptions of spirits 
operations and volatile fruit-flavor concentrate in their applications.
    To streamline wine premises description requirements, TTB proposes 
amendments to 27 CFR 24.109 and 24.111 to replace requirements for 
narrative descriptions of the wine premises with requirements to submit 
more specific and narrowly tailored information regarding the premises. 
For example, Sec.  24.111 currently requires a detailed narrative 
description of the wine premises, including a description of each tract 
of land covered by the wine premises and a description of the ``size, 
construction, and use'' of each building on the wine premises. The 
proposed amendments to Sec.  24.111 remove the narrative description 
requirements and instead require the submission of more limited 
information illustrating certain specified attributes of the premises.
    An example of extending deadlines for reporting changes in a 
permitted or registered business is the proposed amendment to Sec.  
24.120, which provides the general rules for notifying TTB of any 
changes in the information included in an approved application to 
establish a wine premises. Section 24.120 generally requires that when 
such changes occur, the proprietor of the wine premises must file an 
amended application within 30 days. The proposed amendments to Sec.  
24.120 extend this deadline to 60 days. TTB proposes similar amendments 
at Sec. Sec.  24.123 and 24.124.
    Regarding changes in trade names, TTB's regulations at 27 CFR 
24.122 currently require that wine premises proprietors submit an 
amended application and receive approval from TTB before operating 
under a new trade name. The proposed amendments to 27 CFR 24.122 
clarify that a proprietor need only notify TTB of the addition of a 
trade name prior to using such name for labeling purposes, and the 
proprietor may notify TTB through a written notice. TTB's Permits 
Online (PONL) system already includes a function for reporting 
additional trade names, which will satisfy the proposed Sec.  24.122's 
requirement for a written notice.
    Concerning records maintenance, current recordkeeping requirements 
require that proprietors of wine premises maintain prescribed records 
at the wine premises. The proposed amendments to 27 CFR 24.300 
generally allow for the maintenance of required records at locations 
other than the wine premises upon written notice to TTB.
    With respect to the collection of background information, TTB 
proposes amendments to 27 CFR 24.110 to clarify the individuals who are 
required to submit statements of ownership interest in a business 
submitting an application to establish a wine premises. 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, the applicant must 
submit basic identifying information about a representative individual 
for that entity.
    In conclusion, while the entities affected by the proposed rule 
include a substantial number of small entities, 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

    Regulations addressed in this document contain current collections 
of information that have been previously reviewed and approved by the 
Office of Management and Budget (OMB) in accordance with the Paperwork 
Reduction Act of 1995 (44 U.S.C.

[[Page 80168]]

3504(h)) and assigned control numbers 1513-0009, 1513-0057, and 1513-
0115. The specific regulatory sections in this proposed rule that 
contain collections of information, either current or proposed, are 
Sec. Sec.  24.109, 24.110, 24.111, 24.113, 24.120, 24.122, 24.123, 
24.124, 24.130, 24.131, 24.135, 24.136, 24.137, and 24.300. An agency 
may not conduct or sponsor, and a person is not required to respond to, 
a collection of information unless it displays a valid control number 
assigned by OMB.
    The amendments that TTB proposes in this document, along with 
certain corresponding policy changes, are designed to reduce the 
overall burden associated with the information collections noted above. 
In general, the proposed amendments involve:
    (1) Eliminating the collection of certain information from 
applications to establish wine premises;
    (2) Streamlining requirements to describe the wine premises and its 
security;
    (3) Extending deadlines for reporting certain changes in the wine 
premises proprietor's business;
    (4) Streamlining procedures for wine premises proprietors using new 
trade names;
    (5) Allowing the maintenance of required records at locations other 
than the wine premises through a notification rather than an 
application for an alternate procedure; and
    (6) Clarifying which individuals are required to submit statements 
of financial interest in the business in connection with an application 
to establish a wine premises.
    To reduce the information collected in applications to establish 
wine premises, TTB proposes amendments to 27 CFR 24.109, paragraphs (h) 
and (j), to eliminate requirements that applicants provide in their 
application narrative descriptions of spirits operations and volatile 
fruit-flavor concentrate applications, respectively. Paragraphs (h) is 
eliminated entirely while paragraph (j) is revised to require only 
information about the capacity, kind, and intended use of any still(s) 
to be used in the production of volatile fruit-flavor concentrate. 
Regarding volatile fruit-flavor concentrate operations, TTB is 
proposing conforming amendments at 27 CFR 24.113 and 24.130. Instead of 
requiring all applicants to submit a description of their volatile 
fruit-flavor concentrate production process, the amended Sec.  24.113 
would require that applicants and proprietors submit such a description 
only upon TTB request. Instead of requiring proprietors to report any 
changes to their volatile fruit-flavor concentrate production process, 
the amended Sec.  24.130 would only require that proprietors notify TTB 
of any new stills to be used in the production of volatile fruit-flavor 
concentrate. TTB is also proposing to eliminate the current Sec.  
24.109(k) requiring applicants to provide, if applicable, a description 
of ``other operations'' not specifically authorized under TTB's wine 
premises regulations, as it is duplicative of 27 CFR 24.103. Sections 
24.109, 24.113, and 24.130 are currently included in the collection of 
information assigned OMB control number 1513-0009. As a result of the 
proposed amendments to Sec.  24.130 changing the collection of 
information from an amended application to a letterhead notice, TTB 
believes it is more appropriate to instead account for that section in 
the collection of information assigned OMB control number 1513-0057. 
TTB has submitted to OMB revisions of information collections 1513-0009 
and 1513-0057 to account for the updated, and overall reduced, burden 
of the proposed amendments.
    To streamline requirements to describe the wine premises and its 
security, TTB proposes amendments to 27 CFR 24.109, 24.111, 24.131, 
24.135, 24.136, and 24.137. The proposed amendments to Sec. Sec.  
24.109 and 24.111 eliminate requirements to submit detailed narrative 
descriptions of the wine premises and certain of its attributes, and 
will replace these requirements with a more specific set of information 
and a certification as to the premises security. TTB proposed 
conforming amendments in Sec.  24.131. The proposed amendments to 
Sec. Sec.  24.135-24.137 generally consolidate the requirements to 
provide specific descriptions or diagrams of wine premises alternation 
into the generally-applicable premises description requirements of 
Sec. Sec.  24.209 and 24.111. Sections 24.109, 24.111, 24.131. 24.135, 
24.136, and 24.137 are currently included in the collection of 
information assigned OMB control number 1513-0009. TTB has submitted to 
OMB a revision of that information collection to account for the 
reduced burden of the proposed amendments.
    To extend deadlines for reporting certain changes in the wine 
premises proprietor's business, TTB proposes amendments to 27 CFR 
24.120, 24.123, and 24.124. The proposed amendment to Sec.  24.120 
extends the generally-applicable deadline for submitting an amended 
application from 30 to 60 days following a change in the information 
included in the approved application. The proposed amendment to Sec.  
24.124 similarly extends the deadline for reporting changes in 
corporate officers from 30 to 60 days. The proposed amendments to Sec.  
24.123 extend the deadline for reporting certain changes in ownership 
of the business from 30 to 60 days, except where the Federal Alcohol 
Administration Act establishes by law the 30-day deadline. Sections 
24.120, 24.123, and 24.124 are currently included in the collection of 
information assigned OMB control number 1513-0009. 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 changes to, or additions 
of, the trade names under which a permitted business may operate be 
made by filing for an amended permit. Such applications would need to 
be approved prior to the applicant beginning operations under the new 
trade name. To relax the requirements associated with altering the 
trade names available for use by a wine premises proprietor, TTB 
proposes amendments to 27 CFR 24.122. The amendments would allow 
changes to, or additions of, trade names to be accomplished by a 
letterhead notice. Section 24.122 is currently included in the 
collection of information assigned OMB control number 1513-0009. As a 
result of the proposed amendments changing the collection of 
information from an amended application to a letterhead notice, TTB 
believes it is more appropriate to instead account for the collection 
of trade name information in the collection assigned OMB control number 
1513-0057 (note that provisions of Sec.  24.122 relating to amended 
permits for changes in legal name will remain accounted for in 
collection 1513-0009). TTB has submitted to OMB revisions of 
information collections 1513-0009 and 1513-0057 to account for the 
updated, and overall reduced, burden of the proposed amendments.
    Concerning records maintenance, current recordkeeping requirements 
require that proprietors of wine premises maintain prescribed records 
at the wine premises. Under current regulation and policy, proprietors 
can request, under the authority of 27 CFR 24.22, ``Alternate method or 
procedure,'' to maintain records at an off-premises location. Such 
request must be approved by TTB before the proprietor can maintain 
records at the off-premises location. The proposed amendments to 27 CFR 
24.300 generally allow for the maintenance of required records at 
locations other than the wine premises immediately upon written notice 
to TTB. Section 24.300 is currently included in the collection of 
information assigned OMB control

[[Page 80169]]

number 1513-0115. Section 24.22 is currently included in the collection 
of information assigned OMB control number 1513-0057. TTB has submitted 
to OMB revisions of information collections 1513-0115 and 1513-0057 to 
account for the reduced burden of the proposed amendments.
    With respect to the collection of applicant background information, 
TTB proposes amendments to 27 CFR 24.110 to clarify the individuals who 
are required to submit statements of financial interest in the 
applicant business. Section 24.110 generally requires statements 
disclosing the identities of persons holding certain levels of 
ownership in a business applying to establish a wine premises to be 
submitted with such applications. The proposed amendments clarify that 
(1) Such statements of interest are required only from persons with an 
ownership interest in the applicant of 10 percent or greater; and (2) 
where a ``person'' holding such an interest is a legal entity other 
than an individual, an applicant must submit basic identifying 
information about a representative individual for that entity. Section 
24.110 is currently included in the collection of information assigned 
OMB control number 1513-0009. TTB has submitted to OMB a revision of 
that information collection to account for the reduced burden of the 
proposed amendments.
    As noted above, TTB has submitted the revised information 
collection requirements to OMB for review. Comments on these revised 
recordkeeping and reporting requirements should be sent to OMB at 
Office of Management and Budget, Attention: Desk Officer for the 
Department of the Treasury, Office of Information and Regulatory 
Affairs, Washington, DC 20503 or by email to 
[email protected]. A copy should also be sent to TTB by any 
of the methods previously described. Comments on the information 
collections should be submitted no later than December 2, 2024. 
Comments are specifically requested concerning:
     Whether the collections of information submitted to OMB 
are necessary for the proper performance of the functions of the 
Alcohol and Tobacco Tax and Trade Bureau, including whether the 
information will have practical utility;
     The accuracy of the estimated burdens associated with the 
collections of information submitted to OMB;
     How to enhance the quality, utility, and clarity of the 
information to be collected;
     How to minimize the burden of complying with the proposed 
revisions of the collections of information, including the application 
of automated collection techniques or other forms of information 
technology; and
     Estimates of capital or start-up costs and costs of 
operation, maintenance, and purchase of services to provide 
information.

List of Subjects in 27 CFR Part 24

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

Amendments to the Regulations

    For the reasons discussed above in the preamble, TTB proposes to 
amend 27 CFR part 24 as follows:

PART 24--WINE

0
1. The authority citation for part 24 is revised 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, 5556, 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
2. Section 24.10 is amended by adding, in alphabetical order, a 
definition of ``Letterhead notice'' to read as follows:


Sec.  24.10   Meaning of terms.

* * * * *
    Letterhead notice. A statement on a company's letterhead or other 
piece of paper that clearly shows the company name from a company 
representative with signature authority. Letterhead notices may be 
filed electronically by any means authorized by the appropriate TTB 
officer. Letterhead notices do not require TTB approval.
* * * * *


Sec.  24.22   [Amended]

0
3. Section 24.22 is amended by:
0
a. Removing the parenthetical legal citations at the end of the 
section; and
0
b. Removing the OMB control number ``1512-0292'' in the second 
parenthetical phrase at the end of the section and adding, in its 
place, the OMB control number ``1513-0057''.
0
4. Section 24.109 is amended by:
0
a. Adding the word ``ownership'' before ``interest'' in the first 
sentence of paragraph (c);
0
b. Revising paragraphs (g) through (l);
0
c. Removing paragraph (m); and
0
d. Removing the parenthetical legal citations at the end of the 
section.
    The revisions read as follows:


Sec.  24.109   Data for application.

* * * * *
    (g) A certification that the premises' security is in compliance 
with Sec.  24.171;
    (h) Trade names (see Sec.  24.112);
    (i) With respect to wine premises to which the application relates, 
a list of the applicant's basic permits and bonds (including those 
filed with the application) showing the name of the surety for each 
bond;
    (j) A statement of whether the applicant intends to produce 
volatile fruit-flavor concentrate and, if so, the kind, capacity, and 
intended use of any stills to be used in such production;
    (k) A statement whether the applicant is required to furnish a bond 
under Sec.  24.146; and
    (l) The applicant shall, when required by the appropriate TTB 
officer, furnish as part of the application, additional information as 
may be necessary to determine whether the application should be 
approved. If any of the submitted information changes during the 
pending application, the applicant shall immediately notify the 
appropriate TTB officer of the revised information.
* * * * *
0
5. Section 24.110 is amended by:
0
a. Revising paragraph (c);
0
b. Removing the first parenthetical phrase at the end of the section; 
and
0
c. Revising the second parenthetical phrase at the end of the section.
    The revisions read as follows:


Sec.  24.110   Organizational documents.

* * * * *
    (c) Statement 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

[[Page 80170]]

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) If any interested person named under paragraphs (c)(1) and 
(c)(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 applicant business or, in the absence of a designated 
individual, an owner, chief officer or manager, or person with similar 
authority within the entity.
* * * * *
(Approved by the Office of Management and Budget under control 
number 1513-0009)

0
6. Section 24.111 is revised to read as follows:


Sec.  24.111   Description of premises.

    (a) As required by Sec.  24.109(f), the application for 
registration must include a description of wine premises. The 
description may be in narrative form or diagram form, and must 
illustrate:
    (1) The outline and dimensions of the building(s) where wine 
operations will occur;
    (2) If the wine premises does not occupy the entirety of the 
building(s), the outline and dimensions of the wine premises within the 
building(s);
    (3) If the wine premises includes both bonded wine premises and 
taxpaid wine premises, the outline and dimensions of each;
    (4) The external doors of the wine premises; and
    (5) The outline and dimensions of any portions of the wine premises 
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 submitted upon request of the 
appropriate TTB officer.

(Approved by the Office of Management and Budget under control 
number 1513-0009)

0
7. Section 24.113 is revised to read as follows:


Sec.  24.113   Description of volatile fruit-flavor concentrate 
operations.

    Each applicant intending to produce volatile fruit-flavor 
concentrate and each approved proprietor of a bonded wine premises who 
produces volatile fruit-flavor concentrate shall provide, upon request 
of the appropriate TTB officer, a step-by-step description of their 
production procedure. The description will commence with the obtaining 
of juice from the fruit and continue through each step of the process 
to removal of volatile fruit-flavor concentrate from the system. If 
volatile fruit-flavor concentrate containing more than 24 percent 
alcohol (high-proof concentrates (essences)) is to be produced, the 
applicant or proprietor shall indicate any step in the production 
procedure at which any spirits may be fit for beverage purposes. For 
each kind of fruit used, the description must include the maximum 
quantity (in gallons) of fruit must used and volatile fruit-flavor 
concentrate produced in 24 hours, the maximum and minimum fold, and the 
maximum percent of alcohol in the volatile fruit-flavor concentrate.

(Approved by the Office of Management and Budget under control 
number 1513-0009)


Sec.  24.120   [Amended]

0
8. Section 24.120 is amended by:
0
a. Removing the phrase ``30 days'' and adding in its place ``60 days'' 
in the first sentence;
0
b. Removing the first parenthetical phrase at the end of the section; 
and
0
c. Removing the OMB control number ``1512-0058'' in the second 
parenthetical phrase at the end of the section and adding, in its 
place, the OMB control number ``1513-0009''.
0
9. Section 24.122 is revised to read as follows:


Sec.  24.122   Change in name of proprietor or trade name.

    (a) Legal name. Where there is to be a change in the name of the 
proprietor, the proprietor shall file an amended application and, if a 
basic permit has been issued under the Federal Alcohol Administration 
Act (49 Stat. 978; 27 U.S.C. 203), an application for amendment of the 
basic permit. Operations under a new name may not be conducted before 
approval of the amended application or issuance of an amended permit, 
as the case may be.
    (b) Trade name. Where there is a change in or addition of a trade 
name, the proprietor must first file a letterhead notice with the 
appropriate TTB officer listing the new names and the offices where 
they are registered. The proprietor is not required to file another 
letterhead notice of a change in or addition of a trade name if the 
proprietor has previously filed a letterhead notice pursuant to 27 CFR 
1.40 notifying TTB of the same change in or addition of a trade name.

(Approved by the Office of Management and Budget under control 
number 1513-0009 and 1513-0057)

0
10. Section 24.123 is revised to read as follows:


Sec.  24.123   Change in ownership interests.

    (a) General. If there is a change in the list of persons with 
ownership interests submitted pursuant to Sec.  24.110(c), the 
proprietor may, in lieu of submission within 60 days of the change 
under the provisions of Sec.  24.120, submit a new list of persons with 
ownership interests annually on May 1, or any other approved date, to 
the appropriate TTB officer, provided that the change in ownership 
interest(s) does not result in a change in control of the business.
    (b) Changes in control. (1) Wine premises required to maintain a 
basic permit. For wine premises required to obtain and maintain an FAA 
Act basic permit as described in Sec.  24.106 and 27 CFR part 1, where 
a change in ownership interests results in a change in the actual or 
legal control of the business, the proprietor must submit a new list of 
persons with ownership interests to the appropriate TTB officer within 
30 days of the change. The proprietor's application for a new FAA Act 
basic permit, required under 27 CFR 1.44 and 24.121 and containing such 
information as required under Sec.  24.110(c), will serve as adequate 
notice for purposes of this paragraph.
    (2) Wine premises not required to maintain a basic permit. For wine 
premises, subject to this part, other than those described in Sec.  
24.106 and 27 CFR part 1, where a change in ownership interests results 
in a change in legal control of the business, the proprietor must 
submit a letterhead notice containing a new list of persons with 
ownership interests to the appropriate TTB officer within 60 days of 
the change.

(Approved by the Office of Management and Budget under control 
number 1513-0009)


Sec.  24.124   [Amended]

0
11. Section 24.124 is amended by:
0
a. Removing the phrase ``30 days'' and adding in its place ``60 days'' 
in the first sentence;
0
b. Removing the phrase ``an amended application supported by'' and 
adding in its place ``a letterhead notice providing'' in the first 
sentence;
0
c. Removing the phrase ``an amended application'' and adding in its 
place ``a letterhead notice'' in the second sentence;
0
d. Removing the first parenthetical phrase at the end of the section; 
and
0
e. Removing the OMB control number ``1512-0058'' in the second 
parenthetical phrase at the end of the section and adding, in its 
place, the OMB control number ``1513-0009''.

[[Page 80171]]

0
12. Section 24.130 is revised to read as follows:


Sec.  24.130  Change in volatile fruit-flavor concentrate operations.

    Prior to using any new still in the production of volatile fruit-
flavor concentrate, the proprietor must submit a letterhead notice to 
the appropriate TTB officer describing the kind, capacity, and intended 
use of the still. Such letterhead notice will satisfy the still 
registration requirement set forth at 27 CFR 24.114.

(Approved by the Office of Management and Budget under control 
number 1513-0057)

0
13. Section 24.131 is revised to read as follows:


Sec.  24.131   Change in premises.

    (a) Where a proprietor intends to make any change to the wine 
premises, other than those covered by Sec. Sec.  24.135--24.137, that 
would render inaccurate the description submitted with the application 
to establish the wine premises or submitted separately or previously by 
the proprietor with another reported change, the proprietor must first 
submit to TTB updated information meeting the requirements of Sec.  
24.111 and obtain TTB approval prior to making the change. Updated 
premises descriptions may be submitted on form TTB F 5120.25 or its 
electronic equivalent.
    (b) In cases of natural disaster or other similar emergency, the 
proprietor may make temporary changes to the premises (as described in 
paragraph (a) of this section) without first submitting an updated 
premises description. However, the proprietor must report any such 
change(s) to the appropriate TTB officer through a letterhead notice 
within 10 days. The proprietor must then return their premises to the 
condition reflected in the approved premises description on file under 
Sec.  24.111 within 60 days unless the proprietor files for TTB 
approval to make permanent changes to the premises pursuant to 
paragraph (a) of this section.

(Approved by the Office of Management and Budget under control 
number 1513-0009)

0
14. Section 24.135 is amended by:
0
a. Revising paragraph (b)(3);
0
b. Removing the first parenthetical phrase at the end of the section; 
and
0
c. Removing the OMB control number ``1512-0058'' in the second 
parenthetical phrase at the end of the section and adding, in its 
place, the OMB control number ``1513-0009''.
    The revision reads as follows:


Sec.  24.135   Wine premises alternation.

* * * * *
    (b) * * *
    (3) Additional versions of the description required under Sec.  
24.109(f) describing or showing the premises as they will exist, both 
during extension and curtailment, and clearly depicting all buildings, 
floors, rooms, areas, and equipment that are to be subject to 
alternation, in their relative operating sequence; and
* * * * *
0
15. Section 24.136 is amended by:
0
a. Revising paragraphs (a) and (b); and
0
b. Removing the first parenthetical phrase at the end of the section; 
and
0
c. Revising the second parenthetical phrase at the end of the section.
    The revisions read as follows:


Sec.  24.136   Procedure for alternating proprietors.

    (a) General. Wine premises, or parts thereof, may be operated 
alternately by proprietors who have each filed and received approval of 
the necessary applications and bonds and have qualified under the 
provisions of this part. Where operations by alternating proprietors 
are limited to parts of the wine premises, the descriptions required to 
be submitted with each proprietor's application for registration under 
Sec.  24.109(f) must additionally illustrate the following:
    (1) The areas, rooms, or buildings, or combination of rooms and/or 
buildings, that will alternate between proprietors; and
    (2) The means by which the alternated premises will be separated 
from any premises that will not be alternated.
    (b) Alternation. Once the qualifying documents have been approved, 
and operations initiated, the wine premises, or parts thereof, may be 
alternated. Any transfer of wine, spirits, or other accountable 
materials from one proprietor to the other proprietor will be indicated 
in the records and reports of each proprietor. Operation of a bonded 
winery engaged in the production of wine by an alternate proprietor 
will be at least one calendar day in length. All operations in any 
area, building, floor, or room to be alternated will be completely 
finished and all wine, spirits, and other accountable materials will be 
removed from the alternated wine premises or transferred to the 
incoming proprietor. However, wine, spirits, and other accountable 
materials may be retained in locked tanks at wine premises to be 
alternated and remain in the custody of the outgoing proprietor.
* * * * *
(Approved by the Office of Management and Budget under control 
numbers 1513-0009, 1513-0053, and 1513-0115)

0
16. Section 24.137 is amended by:
0
a. Revising paragraph (b)(2);
0
b. Removing the first parenthetical phrase at the end of the section; 
and
0
c. Removing the OMB control number ``1512-0058'' in the second 
parenthetical phrase at the end of the section and adding, in its 
place, the OMB control number ``1513-0009''.
    The revision reads as follows:


Sec.  24.137   Alternate use of the wine premises for customs purposes.

* * * * *
    (b) * * *
    (2) Additional versions of the description required under Sec.  
24.109(f) describing or showing the areas, rooms, or buildings, or 
combination of rooms and/or buildings that will be alternated, and the 
means by which the alternated premises will be separated from any 
premises that will not be alternated; and
* * * * *
0
17. Add Sec.  24.171 to subpart E to read as follows:


Sec.  24.171   Security.

    Security measures at the wine premises will be of a class and 
construction designed to prevent unauthorized access to, and theft of, 
commercial property.
0
18. Section 24.300 is amended by:
0
a. Revising paragraph (e);
0
b. Revising the heading of paragraph (f);
0
c. Removing the first parenthetical phrase at the end of the section; 
and
0
d. Revising the second parenthetical phrase at the end of the section.
    The revisions read as follows:


Sec.  24.300   General.

* * * * *
    (e) Availability of records. The records required by this part must 
be available for inspection by the appropriate TTB officer during 
normal business hours. If a proprietor desires to keep the required 
records at any location other than the wine premises, they must first 
provide a letterhead notice to the appropriate TTB officer of the 
location where the records are to be kept. Any proprietor keeping 
records at a location other than the wine premises where operations or 
transactions occur must make them available at the wine premises upon 
request of the appropriate TTB officer; however, the proprietor may 
supply copies (including electronic copies) of such records as provided 
in paragraph (f) of this section.

[[Page 80172]]

    (f) Copies of records. * * *.
* * * * *
(Approved by the Office of Management and Budget under control 
numbers 1513-0053, 1513-0057, and 1513-0115)

    Signed: September 23, 2024.
Mary G. Ryan,
Administrator.
    Approved: September 24, 2024.
Aviva R. Aron-Dine,
Deputy Assistant Secretary, Tax Policy.
[FR Doc. 2024-22470 Filed 10-1-24; 8:45 am]
BILLING CODE 4810-31-P