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[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 1562 Introduced in Senate (IS)]

114th CONGRESS
  1st Session
                                S. 1562

   To amend the Internal Revenue Code of 1986 to reform taxation of 
                          alcoholic beverages.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             June 11, 2015

   Mr. Wyden introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
   To amend the Internal Revenue Code of 1986 to reform taxation of 
                          alcoholic beverages.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS; RULE OF CONSTRUCTION.

    (a) Short Title.--This Act may be cited as the ``Craft Beverage 
Modernization and Tax Reform Act of 2015''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents; rule of construction.
            TITLE I--BONDING AND CAPITALIZATION REQUIREMENTS

Sec. 101. Removal of bond requirements and extending filing periods for 
                            certain taxpayers with limited excise tax 
                            liability.
Sec. 102. Production period for beer, wine, and distilled spirits.
                             TITLE II--BEER

Sec. 201. Reduced rate of excise tax on beer.
Sec. 202. Use of wholesome products suitable for human food consumption 
                            in the production of fermented beverages.
Sec. 203. Simplification of rules regarding records, statements, and 
                            returns.
Sec. 204. Transfer of beer between bonded facilities.
                         TITLE III--HARD CIDER

Sec. 301. Modification of definition of hard cider.
                             TITLE IV--WINE

Sec. 401. Reduced rate of excise tax on wine produced domestically by 
                            certain qualifying producers.
Sec. 402. Adjustment of alcohol content level for application of excise 
                            tax rates.
                       TITLE V--DISTILLED SPIRITS

Sec. 501. Reduced rate of excise tax on certain distilled spirits.
Sec. 502. Exemption of home distillery establishments from certain 
                            taxation and bonding requirements.
       TITLE VI--PROGRAM INTEGRITY AND EXCISE TAX ADMINISTRATION

Sec. 601. Program Integrity Cap Adjustment for the Alcohol and Tobacco 
                            Tax and Trade Bureau.
Sec. 602. Increase information sharing to administer excise taxes.
    (c) Rule of Construction.--Nothing in this Act, the amendments made 
by this Act, or any regulation promulgated under this Act or the 
amendments made by this Act, shall be construed to preempt, supersede, 
or otherwise limit or restrict any State, local, or tribal law that 
prohibits or regulates the production or sale of distilled spirits, 
wine, or malt beverages.

            TITLE I--BONDING AND CAPITALIZATION REQUIREMENTS

SEC. 101. REMOVAL OF BOND REQUIREMENTS AND EXTENDING FILING PERIODS FOR 
              CERTAIN TAXPAYERS WITH LIMITED EXCISE TAX LIABILITY.

    (a) Filing Requirements.--Paragraph (4) of section 5061(d) of the 
Internal Revenue Code of 1986 is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``In the case of'' and inserting 
                the following:
                            ``(i) More than $1,000 and not more than 
                        $50,000 in taxes.--Except as provided in clause 
                        (ii), in the case of'',
                    (B) by striking ``under bond for deferred 
                payment'', and
                    (C) by adding at the end the following new clause:
                            ``(ii) Not more than $1,000 in taxes.--In 
                        the case of any taxpayer who reasonably expects 
                        to be liable for not more than $1,000 in taxes 
                        imposed with respect to distilled spirits, 
                        wines, and beer under subparts A, C, and D and 
                        section 7652 for the calendar year and who was 
                        liable for not more than $1,000 in such taxes 
                        in the preceding calendar year, the last day 
                        for the payment of tax on withdrawals, 
                        removals, and entries (and articles brought 
                        into the United States from Puerto Rico) shall 
                        be the 14th day after the last day of the 
                        calendar year.'', and
            (2) in subparagraph (B)--
                    (A) by striking ``Subparagraph (A)'' and inserting 
                the following:
                            ``(i) Exceeds $50,000 limit.--Subparagraph 
                        (A)(i)'', and
                    (B) by adding at the end the following new clause:
                            ``(ii) Exceeds $1,000 limit.--Subparagraph 
                        (A)(ii) shall not apply to any taxpayer for any 
                        portion of the calendar year following the 
                        first date on which the aggregate amount of tax 
                        due under subparts A, C, and D and section 7652 
                        from such taxpayer during such calendar year 
                        exceeds $1,000, and any tax under such subparts 
                        which has not been paid on such date shall be 
                        due on the 14th day after the last day of the 
                        calendar quarter in which such date occurs.''.
    (b) Bond Requirements.--
            (1) In general.--Section 5551 of such Code is amended--
                    (A) in subsection (a), by striking ``No 
                individual'' and inserting ``Except as provided under 
                subsection (d), no individual'', and
                    (B) by adding at the end the following new 
                subsection:
    ``(d) Removal of Bond Requirements.--
            ``(1) In general.--During any period to which subparagraph 
        (A) of section 5061(d)(4) applies to a taxpayer (determined 
        after application of subparagraph (B) thereof), such taxpayer 
        shall not be required to furnish any bond covering operations 
        or withdrawals of distilled spirits or wines for nonindustrial 
        use or of beer.
            ``(2) Satisfaction of bond requirements.--Any taxpayer for 
        any period described in paragraph (1) shall be treated as if 
        sufficient bond has been furnished for purposes of covering 
        operations and withdrawals of distilled spirits or wines for 
        nonindustrial use or of beer for purposes of any requirements 
        relating to bonds under this chapter.''.
            (2) Conforming amendments.--
                    (A) Bonds for distilled spirits plants.--Section 
                5173(a) of such Code is amended--
                            (i) in paragraph (1), by striking ``No 
                        person'' and inserting ``Except as provided 
                        under section 5551(d), no person'', and
                            (ii) in paragraph (2), by striking ``No 
                        distilled spirits'' and inserting ``Except as 
                        provided under section 5551(d), no distilled 
                        spirits''.
                    (B) Bonded wine cellars.--Section 5351 of such Code 
                is amended--
                            (i) by striking ``Any person'' and 
                        inserting the following:
    ``(a) In General.--Any person'',
                            (ii) by inserting ``, except as provided 
                        under section 5551(d),'' before ``file bond'',
                            (iii) by striking ``Such premises shall'' 
                        and all that follows through the period, and
                            (iv) by adding at the end the following new 
                        subsection:
    ``(b) Definitions.--For purposes of this chapter--
            ``(1) Bonded wine cellar.--The term `bonded wine cellar' 
        means any premises described in subsection (a), including any 
        such premises established by a taxpayer described in section 
        5551(d).
            ``(2) Bonded winery.--At the discretion of the Secretary, 
        any bonded wine cellar that engages in production operations 
        may be designated as a `bonded winery'.''.
                    (C) Bonds for breweries.--Section 5401 of such Code 
                is amended by adding at the end the following new 
                subsection:
    ``(c) Exception From Bond Requirements for Certain Breweries.--
Subsection (b) shall not apply to any taxpayer for any period described 
in section 5551(d).''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date that is 1 year after the date of the enactment of 
this Act.

SEC. 102. PRODUCTION PERIOD FOR BEER, WINE, AND DISTILLED SPIRITS.

    (a) In General.--Section 263A(f) of the Internal Revenue Code of 
1986 is amended--
            (1) by redesignating paragraph (4) as paragraph (5), and
            (2) by inserting after paragraph (3) the following new 
        paragraph:
            ``(4) Exemption for aging process of finished beer, wine, 
        and distilled spirits.--For purposes of this section, the 
        production period shall not include the aging period for--
                    ``(A) beer (as defined in section 5052(a)),
                    ``(B) wine (as described in section 5041(a)), or
                    ``(C) distilled spirits (as defined in section 
                5002(a)(8)), except such spirits that are unfit for use 
                for beverage purposes.''.
    (b) Conforming Amendment.--Paragraph (5)(B)(ii) of section 263A(f) 
of the Internal Revenue Code of 1986, as redesignated by this section, 
is amended by inserting ``except as provided in paragraph (4),'' before 
``ending on the date''.
    (c) Effective Date.--The amendments made by this section shall 
apply to production periods beginning after December 31, 2016.

                             TITLE II--BEER

SEC. 201. REDUCED RATE OF EXCISE TAX ON BEER.

    (a) In General.--Paragraph (1) of section 5051(a) of the Internal 
Revenue Code of 1986 is amended to read as follows:
            ``(1) In general.--
                    ``(A) Imposition of tax.--A tax is hereby imposed 
                on all beer brewed or produced, and removed for 
                consumption or sale, within the United States, or 
                imported into the United States. Except as provided in 
                paragraph (2), the rate of such tax shall be--
                            ``(i) $16 on the first 6,000,000 barrels of 
                        beer which are removed during the calendar year 
                        for consumption or sale by a brewer or imported 
                        into the United States in such year by an 
                        importer, and
                            ``(ii) $18 on any barrels of beer to which 
                        clause (i) does not apply.
                    ``(B) Barrel.--For purposes of this section, a 
                barrel shall contain not more than 31 gallons of beer, 
                and any tax imposed under this section shall be applied 
                at a like rate for any other quantity or for fractional 
                parts of a barrel.''.
    (b) Reduced Rate for Certain Domestic Production.--Subparagraph (A) 
of section 5051(a)(2) of the Internal Revenue Code of 1986 is amended--
            (1) in the heading, by striking ``$7'' and inserting 
        ``$3.50'', and
            (2) by striking ``$7'' and inserting ``$3.50''.
    (c) Conforming Amendments.--Section 5051(a)(2)(B) of the Internal 
Revenue Code of 1986 is amended by inserting ``the 6,000,000 barrel 
quantity specified in paragraph (1)(A)(i) and'' before ``the 2,000,000 
barrel quantity''.
    (d) Effective Date.--The amendments made by this section shall 
apply to beer removed during calendar years beginning after December 
31, 2016.

SEC. 202. USE OF WHOLESOME PRODUCTS SUITABLE FOR HUMAN FOOD CONSUMPTION 
              IN THE PRODUCTION OF FERMENTED BEVERAGES.

    (a) In General.--Not later than the date that is 1 year after the 
date of the enactment of this Act, the Secretary of the Treasury or the 
Secretary of the Treasury's delegate shall amend subpart F of part 25 
of subchapter A of chapter I of title 27, Code of Federal Regulations 
to ensure that, for purposes of such part, wholesome fruits, 
vegetables, and spices suitable for human food consumption that are 
generally recognized as safe for use in an alcoholic beverage and that 
do not contain alcohol are generally recognized as a traditional 
ingredient in the production of fermented beverages.
    (b) Definition.--For purposes of this section, the term ``fruit'' 
means whole fruit, fruit juices, fruit puree, fruit extract, or fruit 
concentrate.
    (c) Rule of Construction.--Nothing in this section shall be 
construed to revoke, prescribe, or limit any other exemptions from the 
formula requirements under subpart F of part 25 of subchapter A of 
chapter I of title 27, Code of Federal Regulations for any ingredient 
that has been recognized before, on, or after the date of the enactment 
of this Act as a traditional ingredient in the production of fermented 
beverages.

SEC. 203. SIMPLIFICATION OF RULES REGARDING RECORDS, STATEMENTS, AND 
              RETURNS.

    (a) In General.--Subsection (a) of section 5555 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following: 
``The Secretary shall permit a person to employ a unified system for 
any records, statements, and returns required to be kept, rendered, or 
made under this section for any beer produced in the brewery for which 
the tax imposed by section 5051 has been determined, including any beer 
which has been removed for consumption on the premises of the 
brewery.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to any calendar quarters beginning more than 1 year after the 
date of the enactment of this Act.

SEC. 204. TRANSFER OF BEER BETWEEN BONDED FACILITIES.

    (a) In General.--Section 5414 of the Internal Revenue Code of 1986 
is amended to read as follows:

``SEC. 5414. TRANSFER OF BEER BETWEEN BONDED FACILITIES.

    ``(a) In General.--Beer may be removed from one brewery to another 
bonded brewery, without payment of tax, and may be mingled with beer at 
the receiving brewery, subject to such conditions, including payment of 
the tax, and in such containers, as the Secretary by regulations shall 
prescribe, which shall include--
            ``(1) any removal from one brewery to another brewery 
        belonging to the same brewer,
            ``(2) any removal from a brewery owned by one corporation 
        to a brewery owned by another corporation when--
                    ``(A) one such corporation owns the controlling 
                interest in the other such corporation, or
                    ``(B) the controlling interest in each such 
                corporation is owned by the same person or persons, and
            ``(3) any removal from one brewery to another brewery 
        when--
                    ``(A) the proprietors of transferring and receiving 
                premises are independent of each other and neither has 
                a proprietary interest, directly or indirectly, in the 
                business of the other, and
                    ``(B) the transferor has divested itself of all 
                interest in the beer so transferred and the transferee 
                has accepted responsibility for payment of the tax.
    ``(b) Transfer of Liability for Tax.--For purposes of subsection 
(a)(3), such relief from liability shall be effective from the time of 
removal from the transferor's bonded premises, or from the time of 
divestment of interest, whichever is later.''.
    (b) Removal From Brewery by Pipeline.--Section 5412 of the Internal 
Revenue Code of 1986 is amended by inserting ``pursuant to section 5414 
or'' before ``by pipeline''.
    (c) Effective Date.--The amendments made by this section shall 
apply to any calendar quarters beginning more than 1 year after the 
date of the enactment of this Act.

                         TITLE III--HARD CIDER

SEC. 301. MODIFICATION OF DEFINITION OF HARD CIDER.

    (a) In General.--Section 5041 of the Internal Revenue Code of 1986 
is amended--
            (1) in paragraph (6) of subsection (b), by striking ``which 
        is a still wine'' and all that follows through ``alcohol by 
        volume'', and
            (2) by adding at the end the following new subsection:
    ``(g) Hard Cider.--For purposes of subsection (b)(6), the term 
`hard cider' means a wine--
            ``(1) containing not more than 0.64 gram of carbon dioxide 
        per hundred milliliters of wine, except that the Secretary may 
        by regulations prescribe such tolerances to this limitation as 
        may be reasonably necessary in good commercial practice,
            ``(2) which is derived primarily from--
                    ``(A) apples, apple juice concentrate, pears, or 
                pear juice concentrate, and
                    ``(B) water,
            ``(3) which contains no fruit product or fruit flavoring 
        other than apple or pear, and
            ``(4) which contains at least one-half of 1 percent and 
        less than 8.5 percent alcohol by volume.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to hard cider removed during calendar years beginning after 
December 31, 2016.

                             TITLE IV--WINE

SEC. 401. REDUCED RATE OF EXCISE TAX ON WINE PRODUCED DOMESTICALLY BY 
              CERTAIN QUALIFYING PRODUCERS.

    (a) In General.--Section 5041(c) of the Internal Revenue Code of 
1986 is amended--
            (1) by amending paragraph (1) to read as follows:
            ``(1) Allowance of credit.--
                    ``(A) In general.--Except as provided in paragraph 
                (2), there shall be allowed as a credit against any tax 
                imposed by this title (other than chapters 2, 21, and 
                22) an amount equal to the sum of--
                            ``(i) $1 per wine gallon on the first 
                        30,000 wine gallons of wine, plus
                            ``(ii) 90 cents per wine gallon on the 
                        first 100,000 wine gallons of wine to which 
                        clause (i) does not apply,
                on wine gallons which are removed during such year for 
                consumption or sale and which have been produced at 
                qualified facilities in the United States.
                    ``(B) Adjustment of credit for hard cider.--In the 
                case of wine described in subsection (b)(6), 
                subparagraph (A) of this paragraph shall be applied--
                            ``(i) in clause (i) of such subparagraph, 
                        by substituting `6.2 cents' for `$1', and
                            ``(ii) in clause (ii) of such subparagraph, 
                        by substituting `5.6 cents' for `90 cents'.
                    ``(C) Denial of credit for champagne and other 
                sparkling wines.--This paragraph shall not apply to 
                wines described in subsection (b)(4).'',
            (2) in paragraph (2)--
                    (A) by striking ``paragraph (1)'' and inserting 
                ``clause (ii) of paragraph (1)(A)'', and
                    (B) by striking ``1,000 wine gallons of wine 
                produced in excess of 150,000 wine gallons'' and 
                inserting ``10,000 wine gallons of wine produced in 
                excess of 1,000,000 wine gallons'', and
            (3) in paragraph (7)--
                    (A) in subparagraph (A), by striking ``this 
                subsection from benefiting any person who produces more 
                than 250,000 wine gallons'' and inserting ``paragraph 
                (1)(A)(ii) from benefitting any person who produces 
                more than 2,000,000 wine gallons'', and
                    (B) in subparagraph (B), by striking ``150,000 wine 
                gallons'' and inserting ``1,000,000 wine gallons''.
    (b) Effective Date.--The amendments made by this section shall 
apply to wine removed during calendar years beginning after December 
31, 2016.

SEC. 402. ADJUSTMENT OF ALCOHOL CONTENT LEVEL FOR APPLICATION OF EXCISE 
              TAX RATES.

    (a) In General.--Paragraphs (1) and (2) of section 5041(b) of the 
Internal Revenue Code of 1986 are amended by striking ``14 percent'' 
each place it appears and inserting ``14.25 percent''.
    (b) Effective Date.--The amendments made by this section shall 
apply to wine removed during calendar years beginning after December 
31, 2016.

                       TITLE V--DISTILLED SPIRITS

SEC. 501. REDUCED RATE OF EXCISE TAX ON CERTAIN DISTILLED SPIRITS.

    (a) In General.--Section 5001 of the Internal Revenue Code of 1986 
is amended by redesignating subsection (c) as subsection (d) and by 
inserting after subsection (b) the following new subsection:
    ``(c) Reduced Rate.--
            ``(1) In general.--In the case of a distilled spirits 
        operation, the otherwise applicable tax rate under subsection 
        (a)(1) on the first 100,000 of proof gallons of distilled 
        spirits which are removed in the calendar year and which have 
        been distilled or processed by such operation at a qualified 
        facility in the United States shall be $2.70 per proof gallon.
            ``(2) Controlled groups.--
                    ``(A) In general.--In the case of a controlled 
                group, the 100,000 proof gallon quantity specified in 
                paragraph (1) shall be applied to the controlled group.
                    ``(B) Definition.--For purposes of subparagraph 
                (A), the term `controlled group' shall have the meaning 
                given such term by subsection (a) of section 1563, 
                except that--
                            ``(i) `more than 50 percent' shall be 
                        substituted for `at least 80 percent' each 
                        place it appears in such subsection, and
                            ``(ii) such determination shall be made 
                        without regard to section 1563(b)(2)(C).
                    ``(C) Rules for non-corporations.--Under 
                regulations prescribed by the Secretary, principles 
                similar to the principles of subparagraphs (A) and (B) 
                shall be applied to a group under common control where 
                one or more of the persons is not a corporation.
                    ``(D) Single taxpayer.--Pursuant to rules issued by 
                the Secretary, any distilled spirits operation which 
                produces distilled spirits marketed under a similar 
                brand, license, franchise, or other arrangement shall 
                be treated as a single taxpayer for purposes of the 
                application of this paragraph.''.
    (b) Conforming Amendment.--Section 7652(f)(2) of the Internal 
Revenue Code of 1986 is amended by striking ``section 5001(a)'' and 
inserting ``sections 5001(a)(1) and 5001(c)(1)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to distilled spirits removed in calendar years beginning after 
December 31, 2016.

SEC. 502. EXEMPTION OF HOME DISTILLERY ESTABLISHMENTS FROM CERTAIN 
              TAXATION AND BONDING REQUIREMENTS.

    (a) In General.--Section 5001 of the Internal Revenue Code of 1986, 
as amended by section 501, is amended by redesignating subsection (d) 
as subsection (e), and by inserting after subsection (c) the following 
new subsection:
    ``(d) Exemption for Distilled Spirits Produced at a Home Distillery 
Establishment.--Subject to regulations prescribed by the Secretary, the 
tax imposed by subsection (a) shall not apply to distilled spirits 
produced at a home distillery establishment (as defined in section 
5002(a)(16)).''.
    (b) Definition of Home Distillery Establishment.--Section 5002(a) 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new paragraph:
            ``(16) Home distillery establishment.--
                    ``(A) In general.--The term `home distillery 
                establishment' means an establishment that--
                            ``(i) is located in the dwelling house of 
                        the owner of such establishment or in any shed, 
                        yard, enclosure, or other property connected 
                        with such dwelling house, and
                            ``(ii) produces distilled spirits solely 
                        for personal or family use by the owner of such 
                        establishment.
                    ``(B) Personal or family use.--
                            ``(i) In general.--A home distillery 
                        establishment shall be treated as producing 
                        distilled spirits for personal or family use 
                        if--
                                    ``(I) any stills or distilling 
                                apparatuses contained in such 
                                establishment have a mash capacity of 
                                not greater than 15.5 gallons,
                                    ``(II) such establishment produces 
                                no more than--
                                            ``(aa) in the case of a 
                                        household with 1 adult, 24 
                                        proof gallons of distilled 
                                        spirits during the calendar 
                                        year, or
                                            ``(bb) in the case of a 
                                        household with 2 or more 
                                        adults, 48 proof gallons of 
                                        distilled spirits during the 
                                        calendar year, and
                                    ``(III) no distilled spirits 
                                produced by such establishment are sold 
                                to any person, or transferred to any 
                                person (for payment or otherwise) for 
                                sale by such person.
                            ``(ii) Adult.--For purposes of this 
                        paragraph, the term `adult' means an individual 
                        who has attained 18 years of age, or the 
                        minimum age (if any) established by law 
                        applicable in the locality in which the 
                        household is situated at which distilled 
                        spirits may be sold to individuals, whichever 
                        is greater.''.
    (c) Exemption From Establishment Requirements.--Section 5171 of the 
Internal Revenue Code of 1986 is amended--
            (1) in subsection (a), by striking ``Except as otherwise 
        provided by law'' and inserting ``Except as provided by 
        subsection (e) or any other provision of law'', and
            (2) by redesignating subsection (e) as subsection (f), and 
        by inserting after subsection (d) the following new subsection:
    ``(e) Exception for Home Distillery Establishment.--The 
requirements of this section shall not apply in the case of a home 
distillery establishment (as described in section 5002(a)(16)).''.
    (d) Criminal Penalties.--Paragraph (6) of section 5601(a) of the 
Internal Revenue Code of 1986 is amended by inserting ``or section 
5171(e)'' after ``5178(a)(1)(C)''.
    (e) Limitation on Sales for Personal or Family Use.--Section 5101 
of such Code is amended--
            (1) by redesignating subsection (b) as subsection (c), and
            (2) by inserting after subsection (a) the following new 
        subsection:
    ``(b) Limitation on Sales for Home Distillery Establishments.--The 
Secretary shall, pursuant to regulations, require that no still, 
boiler, or other vessel with a mash capacity of greater than 15.5 
gallons be sold or transferred to any person who intends to use such 
still, boiler, or vessel solely as part of a home distillery 
establishment (as described in section 5002(a)(16)).''.
    (f) Effective Date.--The amendments made by this section shall take 
effect on the date that is 1 year after the date of the enactment of 
this Act.

       TITLE VI--PROGRAM INTEGRITY AND EXCISE TAX ADMINISTRATION

SEC. 601. PROGRAM INTEGRITY CAP ADJUSTMENT FOR THE ALCOHOL AND TOBACCO 
              TAX AND TRADE BUREAU.

    Section 251(b)(2) of the Balanced Budget and Emergency Deficit 
Control Act of 1985 (2 U.S.C. 901(b)(2)) is amended by adding at the 
end the following new subparagraphs:
                    ``(E) Enforcement and compliance activities 
                conducted by the alcohol and tobacco tax and trade 
                bureau.--
                            ``(i) In general.--If a bill or joint 
                        resolution is enacted making appropriations for 
                        a fiscal year to the Alcohol and Tobacco Tax 
                        and Trade Bureau of not less than the first 
                        amount specified in subclauses (I) through (VI) 
                        of clause (ii) for tax activities for that 
                        fiscal year, including tax compliance to 
                        address the Federal tax gap (taxes owed but not 
                        paid), and provides an additional appropriation 
                        for tax activities, including tax compliance to 
                        address the Federal tax gap, the adjustment 
                        shall be the amount of the additional 
                        appropriation, except that the adjustment shall 
                        not exceed the second amount specified in that 
                        subclause.
                            ``(ii) Amounts specified.--The amounts 
                        specified are--
                                    ``(I) for fiscal year 2016, an 
                                appropriation of $101,000,000, and an 
                                additional appropriation of $5,000,000;
                                    ``(II) for fiscal year 2017, an 
                                appropriation of $103,000,000, and an 
                                additional appropriation of $9,000,000;
                                    ``(III) for fiscal year 2018, an 
                                appropriation of $106,000,000, and an 
                                additional appropriation of 
                                $14,000,000;
                                    ``(IV) for fiscal year 2019, an 
                                appropriation of $108,000,000, and an 
                                additional appropriation of 
                                $18,000,000;
                                    ``(V) for fiscal year 2020, an 
                                appropriation of $111,000,000, and an 
                                additional appropriation of 
                                $24,000,000; and
                                    ``(VI) for fiscal year 2021, an 
                                appropriation of $113,000,000, and an 
                                additional appropriation of 
                                $24,000,000.
                            ``(iii) Definitions.--As used in this 
                        subparagraph--
                                    ``(I) the term `additional 
                                appropriation for tax activities, 
                                including tax compliance to address the 
                                Federal tax gap' means new and 
                                continuing investments in expanding and 
                                improving the effectiveness and 
                                efficiency of the overall tax 
                                enforcement and compliance program of 
                                the Alcohol and Tobacco Tax and Trade 
                                Bureau and fully funding operational 
                                support activities at the Alcohol and 
                                Tobacco Tax and Trade Bureau; and
                                    ``(II) the term `new and continuing 
                                investments' includes additional 
                                resources for implementing new 
                                authorities and for conducting 
                                additional examinations and audits.
                            ``(iv) Appropriation.--The first amount 
                        specified in subclauses (I) through (VI) of 
                        clause (ii) is the amount under the heading in 
                        an appropriations Act for the Alcohol and 
                        Tobacco Tax and Trade Bureau that is specified 
                        to pay for the costs of tax activities, 
                        including tax compliance to address the Federal 
                        tax gap, and to pay for regulatory activities 
                        that protect the public.
                            ``(v) Additional amount.--The amounts 
                        further specified in subclauses (I) through 
                        (VI) of clause (ii) are the amounts under the 
                        heading in an appropriations act for the 
                        Alcohol and Tobacco Tax and Trade Bureau for 
                        the amount of the additional appropriation for 
                        tax activities, including tax compliance to 
                        address the Federal tax gap.
                    ``(F) Activities that protect the public conducted 
                by the alcohol and tobacco tax and trade bureau.--
                            ``(i) In general.--If a bill or joint 
                        resolution is enacted making appropriations for 
                        a fiscal year to the Alcohol and Tobacco Tax 
                        and Trade Bureau of not less than the first 
                        amount specified in subclauses (I) through (VI) 
                        of subparagraph (E)(ii) for tax activities for 
                        that fiscal year, including tax compliance to 
                        address the Federal tax gap (taxes owed but not 
                        paid), and regulatory activities conducted by 
                        the Alcohol and Tobacco Tax and Trade Bureau, 
                        and making appropriations in the amount and for 
                        the purpose of the adjustment in the second 
                        amount specified in subclauses (I) through (VI) 
                        of subparagraph (E)(ii), then the further 
                        additional adjustment for that fiscal year 
                        shall be the further additional appropriation 
                        provided in that Act for regulatory activities 
                        that protect the public for that fiscal year, 
                        but shall not exceed $5,000,000 in additional 
                        new budget authority.
                            ``(ii) Definitions.--As used in this 
                        subparagraph--
                                    ``(I) the term `regulatory 
                                activities that protect the public' 
                                means new budget authority for new and 
                                continuing investments in expanding and 
                                improving programs at the Alcohol and 
                                Tobacco Tax and Trade Bureau, such as 
                                regulating permitting, labeling, 
                                advertising, distribution and trade of 
                                alcohol and tobacco products; and
                                    ``(II) the term `further additional 
                                new budget authority' means the amount 
                                provided for a fiscal year in excess of 
                                the first amount specified in 
                                subclauses (I) through (VI) of 
                                subparagraph (E)(ii) and the adjustment 
                                in the second amount specified in 
                                subclauses (I) through (VI) of 
                                subparagraph (E)(ii), not to exceed 
                                $5,000,000.''.

SEC. 602. INCREASE INFORMATION SHARING TO ADMINISTER EXCISE TAXES.

    (a) In General.--Section 6103(o) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new paragraph:
            ``(3) Taxes imposed by section 4481.--Returns and return 
        information with respect to taxes imposed by section 4481 shall 
        be open to inspection by or disclosure to officers and 
        employees of United States Customs and Border Protection of the 
        Department of Homeland Security whose official duties require 
        such inspection or disclosure for purposes of administering 
        such section.''.
    (b) Conforming Amendments.--Paragraph (4) of section 6103(p) of the 
Internal Revenue Code of 1986 is amended by striking ``or (o)(1)(A)'' 
each place it appears and inserting ``, (o)(1)(A) or (o)(3)''.
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