82 FR 57392 - Implementation of Statutory Amendments Requiring the Modification of the Definition of Hard Cider; Delayed Compliance Date for the Hard Cider Tax Class Labeling Statement Requirement; Reopening of Comment Period

DEPARTMENT OF THE TREASURY
Alcohol and Tobacco Tax and Trade Bureau

Federal Register Volume 82, Issue 232 (December 5, 2017)

On January 23, 2017, the Alcohol and Tobacco Tax and Trade Bureau (TTB) published a temporary rule, T.D. TTB-147, Implementation of Statutory Amendments Requiring the Modification of the Definition of Hard Cider, that amended its regulations to implement changes made to the definition of ``hard cider'' in the Internal Revenue Code of 1986 by the Protecting Americans from Tax Hikes Act (PATH Act) of 2015. The amended regulations included a requirement that the statement ``Tax class 5041(b)(6)'' appear on the container of any wine for which the hard cider tax rate is claimed if the wine is removed from wine premises or customs custody on or after January 1, 2018. Concurrent with the temporary rule, TTB published Notice of Proposed Rulemaking No. 168 requesting comments on the regulatory amendments made by T.D. TTB-147. In response to a comment received from a cider industry trade association, TTB, in a temporary rule published elsewhere in this issue of the Federal Register, is now delaying the compliance date for the hard cider tax class labeling requirement by one year, until January 1, 2019. In this document, TTB is requesting comments on that delayed compliance date, and we are also re-opening the comment period for Notice No. 168 for an additional 60 days to request comments on the regulatory amendments described in T.D. TTB-147.

[Federal Register Volume 82, Number 232 (Tuesday, December 5, 2017)]
[Proposed Rules]
[Pages 57392-57395]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-26283]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Parts 24 and 27

[Docket No. TTB-2016-0014; Notice No. 168A; Re: Notice No. 168, T.D. 
TTB-147, and T.D. TTB 147A]
RIN 1513-AC31


Implementation of Statutory Amendments Requiring the Modification 
of the Definition of Hard Cider; Delayed Compliance Date for the Hard 
Cider Tax Class Labeling Statement Requirement; Reopening of Comment 
Period

AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.

ACTION: Notice of proposed rulemaking and reopening of comment period.

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SUMMARY: On January 23, 2017, the Alcohol and Tobacco Tax and Trade 
Bureau (TTB) published a temporary rule, T.D. TTB-147, Implementation 
of Statutory Amendments Requiring the Modification of the Definition of 
Hard Cider, that amended its regulations to implement changes made to 
the definition of ``hard cider'' in the Internal Revenue Code of 1986 
by the Protecting Americans from Tax Hikes Act (PATH Act) of 2015. The 
amended regulations included a requirement that the statement ``Tax 
class 5041(b)(6)'' appear on the container of any wine for which the 
hard cider tax rate is claimed if the wine is removed from wine 
premises or customs custody on or after January 1, 2018. Concurrent 
with the temporary rule, TTB published Notice of Proposed Rulemaking 
No. 168 requesting comments on the regulatory amendments made by T.D. 
TTB-147. In response to a comment received from a cider industry trade 
association, TTB, in a temporary rule published elsewhere in this issue 
of the Federal Register, is now delaying the compliance date for the 
hard cider tax class labeling requirement by one year, until January 1, 
2019. In this document, TTB is requesting comments on that delayed 
compliance date, and we are also re-opening the comment period for 
Notice No. 168 for an additional 60 days to request comments on the 
regulatory amendments described in T.D. TTB-147.

DATES: Comments on the delayed compliance date referenced in this 
document (Notice No. 168A) are due on or before February 5, 2018. The 
comment period for the proposed rule, Notice No. 168, published on 
January

[[Page 57393]]

23, 2017, at 82 FR 7753 is reopened for 60 days, and, therefore, 
comments on Notice No. 168 also are now due on or before February 5, 
2018.

ADDRESSES: Please send your comments on Notice No. 168 or Notice No. 
168A to one of the following addresses:
     Internet: https://www.regulations.gov (via the online 
comment forms for Notice No. 168 or Notice No. 168A, as appropriate, 
which are posted within Docket No. TTB-2016-0014 at Regulations.gov, 
the Federal e-rulemaking portal);
     U.S. Mail: Director, Regulations and Rulings Division, 
Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW., Box 12, 
Washington, DC 20005; or
     Hand delivery/courier in lieu of mail: Alcohol and Tobacco 
Tax and Trade Bureau, 1310 G Street NW., Suite 400, Washington, DC 
20005.
    See the Public Participation sections of Notice No. 168 and this 
document (Notice No. 168A) for specific instructions and requirements 
for submitting comments, and for information on how to request a public 
hearing.
    You may view copies of this document, Notice No. 168, and any 
comments made to TTB about the described proposals at https://www.regulations.gov within Docket No. TTB-2016-0014. A link to that 
docket is posted on the TTB Web site at https://www.ttb.gov/wine/wine-rulemaking.shtml under Notice No. 168 or Notice No. 168A. You also may 
view copies of this document, Notice No. 168, and any comments made to 
TTB about the described proposals by appointment at the TTB Information 
Resource Center, 1310 G Street NW., Washington, DC 20005. Please call 
(202) 453-2270 to make an appointment.

FOR FURTHER INFORMATION CONTACT: Kara Fontaine, Regulations and Rulings 
Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW., 
Box 12, Washington, DC 20005; phone (202) 453-1039, ext. 103.

SUPPLEMENTARY INFORMATION: In T.D. TTB-147, a temporary rule published 
in the Federal Register on January 23, 2017, at 82 FR 7653, the Alcohol 
and Tobacco Tax and Trade Bureau (TTB) implemented changes made to the 
definition of ``hard cider'' in the Internal Revenue Code of 1986 by 
the Protecting Americans from Tax Hikes (PATH) Act of 2015 
(Consolidated Appropriations Act, 2016 (Pub. L. 114-113), Division Q). 
The modified definition broadened the range of wines eligible for the 
hard cider tax rate. In T.D. TTB-147, TTB amended its regulations to 
reflect the modified definition of hard cider effective for products 
removed from wine premises or customs custody on or after January 1, 
2017, and set forth new labeling requirements to identify products to 
which the hard cider tax rate applies. The new labeling requirements 
include both a one-year transitional rule and a new labeling 
requirement that takes effect for products removed on or after January 
1, 2018.
    TTB solicited public comments on the temporary regulations via 
Notice No. 168, a notice of proposed rulemaking published in the 
Federal Register on January 23, 2017, at 82 FR 7753. The temporary 
regulations contained in T.D. TTB-147 served as the text of the 
proposed regulations. The original 60-day comment period for Notice No. 
168 closed on March 24, 2017.
    In response to this comment request, TTB received a comment, posted 
on February 15, 2017, from Ian Flom of Mercier Orchards, indicating 
that the timeframe to implement the new ``Tax Class 5041(b)(6)'' 
labeling statement requirement is insufficient because he buys labels 
in bulk and has a supply of labels that do not bear the tax class 
statement that he will not be able to use up before January 1, 2018. In 
addition, TTB received a letter, dated February 23, 2017, from the 
United States Association of Cider Makers (USACM), a cider industry 
trade association based in Portland, Oregon, requesting a 60-day 
extension of the comment period for Notice No. 168. In its letter, the 
USACM noted that ``there was much discussion about these proposed 
changes'' at its annual membership conference and that a number of its 
members planned to submit comments to TTB. The letter also noted, 
however, that ``orchardists are currently facing time-management 
challenges due to pruning season,'' and that the requested extension 
``would allow our members time to properly address any of their 
concerns with the proposed changes to the hard cider definition and 
related regulatory changes.'' The USACM comment period extension 
request letter is posted as Comment 2 to Notice No. 168 within Docket 
No. TTB-2016-0014 on the Regulations.gov Web site at https://www.regulations.gov.
    In addition to USACM's request to TTB to extend the comment period, 
USACM wrote a letter, on which TTB was copied, to Steven T. Mnuchin, 
Secretary of the Treasury, dated August 1, 2017, requesting both a 
reopening of the comment period of T.D. TTB-147 and a one year delay of 
the January 1, 2018, hard cider tax class labeling statement 
requirement. A copy of this USACM letter is posted as Comment 3 to 
Notice No. 168 within Docket No. TTB-2016-0014 on the Regulations.gov 
Web site.
    In light of these requests, TTB is delaying the hard cider tax 
class labeling statement compliance date. Such a delay will provide 
industry members additional time to come into compliance with the 
labeling requirement. Through the publication of a temporary rule 
elsewhere in this issue of the Federal Register, TTB is amending 27 CFR 
24.257(a)(4) to delay until January 1, 2019, the compliance date for 
the requirement that the tax class statement ``Tax class 5041(b)(6)'' 
appear on any container of wine removed from wine premises or customs 
custody for which the hard cider tax rate is claimed. Because the tax 
class labeling requirement contained in 27 CFR 27.59(b) is a cross-
reference to Sec.  24.257(a)(4), no change to the regulatory text in 
Sec.  27.59(b) is required.
    Further, in response to the USACM request to reopen the comment 
period for all the regulatory amendments contained in T.D. TTB-147, TTB 
is reopening the comment period for the related notice of proposed 
rulemaking, Notice No. 168, for an additional 60 days. TTB believes 
that this additional 60-day comment period will allow all interested 
parties to fully consider and comment on the regulatory amendments 
contained in the hard cider temporary rule.
    Therefore, new comments on Notice No. 168 and comments on this 
document (Notice No. 168A) delaying the compliance date of the hard 
cider tax class labeling requirement are due to TTB on or before 
February 5, 2018.

Public Participation

Comments Sought

    TTB requests comments from interested members of the public on the 
one-year delay, from January 1, 2018, to January 1, 2019, of the hard 
cider tax-class labeling statement requirement contained in 27 CFR 
24.257, as described in the temporary rule, T.D. TTB-147A, published 
elsewhere in this issue of the Federal Register. TTB also requests new 
comments on the regulatory amendments to 27 CFR parts 24 and 27 set 
forth in the temporary rule, T.D. TTB-147, published in the Federal 
Register on January 23, 2017 at 82 FR 7653.

Submitting Comments

    You may submit comments by using one of the following three 
methods:
     Federal e-Rulemaking Portal: You may send comments via the 
online

[[Page 57394]]

comment form for this proposed rule (Notice No. 168A) or for Notice No. 
168, as appropriate, posted within Docket No. TTB-2016-0014 on 
``Regulations.gov,'' the Federal e-rulemaking portal, at https://www.regulations.gov. A direct link to that docket is available under 
Notice No. 168 and Notice No. 168A on the TTB Web site at https://www.ttb.gov/wine/wine-rulemaking.shtml. Supplemental files may be 
attached to comments submitted via Regulations.gov. For complete 
instructions on how to use Regulations.gov, click on the site's 
``Help'' tab.
     U.S. Mail: You may send comments via postal mail to the 
Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and 
Trade Bureau, 1310 G Street NW., Box 12, Washington, DC 20005.
     Hand Delivery/Courier: You may hand-carry your comments or 
have them hand-carried to the Alcohol and Tobacco Tax and Trade Bureau, 
1310 G Street NW., Suite 400, Washington, DC 20005.
    Please submit your comments by the closing date shown above in this 
proposed rule. Your comments must reference Notice No. 168A or Notice 
No. 168, as appropriate, and include your name and mailing address. 
Your comments also must be made in English, be legible, and be written 
in language acceptable for public disclosure. TTB does not acknowledge 
receipt of comments and considers all comments as originals.
    In your comment, please clearly state if you are commenting for 
yourself or on behalf of an association, business, or other entity. If 
you are commenting on behalf of an entity, your comment must include 
the entity's name as well as your name and position title. In your 
comment via Regulations.gov, please enter the entity's name in the 
``Organization'' blank of the online comment form. If you comment via 
postal mail or hand delivery/courier, please submit your entity's 
comment on letterhead.
    You may also write to the Administrator before the comment closing 
date to ask for a public hearing. The Administrator reserves the right 
to determine whether to hold a public hearing.

Confidentiality

    All submitted comments and attachments are part of the public 
record and subject to disclosure. Do not enclose any material in your 
comments that you consider to be confidential or inappropriate for 
public disclosure.

Public Disclosure

    TTB will post, and you may view, copies of the proposed rules, the 
related temporary rules, and any online or mailed comments received 
about them, within Docket No. TTB-2016-0014 on Regulations.gov, the 
Federal e-rulemaking portal. A direct link to that docket is available 
on the TTB Web site at https://www.ttb.gov/wine/wine-rulemaking.shtml 
under Notice No. 168 or Notice No. 168A. You may also reach the 
relevant docket through the Regulations.gov search page at https://www.regulations.gov. For information on how to use Regulations.gov, 
click on the site's ``Help'' tab.
    All posted comments will display the commenter's name, organization 
(if any), city, and State, and, in the case of mailed comments, all 
address information, including email addresses. TTB may omit voluminous 
attachments or material that it considers unsuitable for posting.
    You may view copies of the proposed rules, the related temporary 
rules, and any electronic or mailed comments TTB receives about them by 
appointment at the TTB Information Resource Center, 1310 G Street NW., 
Washington, DC 20005. You may also obtain copies for 20 cents per 8.5- 
x 11-inch page. Contact TTB's information specialist at the above 
address or by telephone at (202) 453-2270 to schedule an appointment or 
to request copies of comments or other materials.

Regulatory Flexibility Act, Paperwork Reduction Act, and Executive 
Order 12866

    Since the regulatory text proposed in this notice of proposed 
rulemaking is identical to that contained in the companion temporary 
rule published elsewhere in this issue of the Federal Register, the 
analyses contained in the preamble of the temporary rule concerning the 
Regulatory Flexibility Act, the Paperwork Reduction Act, and Executive 
Order 12866 also apply to this proposed rule.

Drafting Information

    Kara Fontaine and Michael Hoover of the Regulations and Rulings 
Division drafted this document with the assistance of other Alcohol and 
Tobacco Tax and Trade Bureau personnel.

List of Subjects

27 CFR Part 24

    Administrative practice and procedure, Cider, Claims, Electronic 
funds transfers, Excise taxes, Exports, Food additives, Fruit juices, 
Hard Cider, Labeling, Liquors, Packaging and containers, Reporting and 
recordkeeping requirements, Research, Scientific equipment, Spices and 
flavorings, Surety bonds, Vinegar, Warehouses, Wine.

27 CFR Part 27

    Alcohol and alcoholic beverages, Beer, Cosmetics, Customs duties 
and inspections, Electronic funds transfers, Excise taxes, Imports, 
Labeling, Liquors, Packaging and containers, Reporting and 
Recordkeeping requirements, Wine.

Proposed Amendments to the Regulations

    For the reasons discussed in the preamble, TTB proposes to amend 27 
CFR chapter I, parts 24 and 27, as follows:

PART 24--WINE

0
1. The authority citation for part 24 continues to read as follows:

    Authority:  5 U.S.C. 552(a); 26 U.S.C. 5001, 5008, 5041, 5042, 
5044, 5061, 5062, 5121, 5122-5124, 5173, 5206, 5214, 5215, 5351, 
5353, 5354, 5356, 5357, 5361, 5362, 5364-5373, 5381-5388, 5391, 
5392, 5511, 5551, 5552, 5661, 5662, 5684, 6065, 6091, 6109, 6301, 
6302, 6311, 6651, 6676, 7302, 7342, 7502, 7503, 7606, 7805, 7851; 31 
U.S.C. 9301, 9303, 9304, 9306.


Sec.  24.257  [Amended]

0
2. In Sec.  24.257:
0
a. Paragraph (a)(4) is amended by removing the date ``January 1, 2018'' 
each place it appears and adding in its place the date ``January 1, 
2019''; and
0
b. The Office of Management and Budget control number reference at the 
end of the section is amended by removing the phrase ``1513-0115 and 
1513-XXXX'' and adding in its place the phrase ``1513-0092 and 1513-
0138''.

PART 27--IMPORTATION OF DISTILLED SPIRITS, WINES, AND BEER

0
3. The authority citation for part 27 is revised to read as follows:

    Authority:  5 U.S.C. 552(a), 19 U.S.C. 81c, 1202; 26 U.S.C. 
5001, 5007, 5008, 5010, 5041, 5051, 5054, 5061, 5121, 5122-5124, 
5201, 5205, 5207, 5232, 5273, 5301, 5313, 5382, 5555, 6109, 6302, 
7805.


Sec.  27.59  [Amended]

0
4. In Sec.  27.59, the Office of Management and Budget control number 
reference at the end of the section is amended by removing the phrase 
``number 1513-XXXX'' and adding in its place the phrase ``numbers 1513-
0092 and 1513-0138''.


[[Page 57395]]


    Signed: October 30, 2017.
John J. Manfreda,
Administrator.
    Approved: November 30, 2017.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade and Tariff Policy).
[FR Doc. 2017-26283 Filed 12-4-17; 8:45 am]
 BILLING CODE 4810-31-P