Modernization of Permit Application Requirements for Wine Premises

DEPARTMENT OF THE TREASURY <SUBAGY>Alcohol and Tobacco Tax and Trade Bureau</SUBAGY> <CFR>27 CFR Part 24</CFR> <DEPDOC>[Docket No. TTB-2024-0005; Notice No. 234]</DEPDOC> <RIN>RIN 1513-AC47</RIN> <SUBJECT>Modernization of Permit Application Requirements for Wine Premises</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Alcohol and Tobacco Tax and Trade Bureau, Treasury. <HD SOURCE="HED">ACTION:</HD> Notice of proposed rulemaking. <SUM> <HD SOURCE="HED">SUMMARY:</HD> 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. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Comments must be received on or before December 2, 2024. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> 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 <E T="03">https://www.regulations.gov.</E> A direct link to that docket is available on the TTB website at <E T="03">https://www.ttb.gov/wine/notices-of-proposed-rulemaking</E> 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. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Christopher Forster-Smith, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005; telephone (202) 453-1039, extension 150. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Table of Contents </HD> <EXTRACT> <FP SOURCE="FP-2">I. Background</FP> <FP SOURCE="FP1-2">A. TTB Evaluation of Permit and Registration Application Requirements</FP> <FP SOURCE="FP1-2">B. TTB Authority</FP> <FP SOURCE="FP1-2">C. Relationship to Other Notices of Proposed Rulemaking</FP> <FP SOURCE="FP-2">II. Proposed Changes to the Regulations</FP> <FP SOURCE="FP1-2">A. Operational Information Required for Wine Premises Application</FP> <FP SOURCE="FP1-2">B. Premises Description and Security</FP> <FP SOURCE="FP1-2">C. Statements of Interest</FP> <FP SOURCE="FP1-2">D. 30-Day Filing Requirements for Certain Changes in the Business</FP> <FP SOURCE="FP1-2">E. Changes in Trade Names</FP> <FP SOURCE="FP1-2">F. Retention of Records Off-Premises</FP> <FP SOURCE="FP-2">III. Public Participation</FP> <FP SOURCE="FP1-2">A. Comments Invited</FP> <FP SOURCE="FP1-2">B. Submitting Comments</FP> <FP SOURCE="FP1-2">C. Confidentiality and Public Disclosure of Comments</FP> <FP SOURCE="FP-2">IV. Regulatory Analyses and Notices</FP> <FP SOURCE="FP1-2">A. Executive Order 12866</FP> <FP SOURCE="FP1-2">B. Regulatory Flexibility Act</FP> <FP SOURCE="FP1-2">C. Paperwork Reduction Act </FP> </EXTRACT> <HD SOURCE="HD1">I. Background</HD> <HD SOURCE="HD2">A. TTB Evaluation of Permit and Registration Application Requirements</HD> 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 <E T="04">Federal Register</E> (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 <E T="04">Federal Register</E> 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 <E T="04">Federal Register</E> 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. <HD SOURCE="HD2">B. TTB Authority</HD> The Federal Alcohol Administration Act (FAA Act, 27 U.S.C. 201, <E T="03">et seq.</E> ) 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 <E T="04">Federal Register</E> 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, ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 86k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━