[Federal Register Volume 87, Number 110 (Wednesday, June 8, 2022)]
[Proposed Rules]
[Pages 34819-34834]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-11902]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 25

[Docket No. TTB-2022-0006; Notice No. 212]
RIN 1513-AC48


Modernization of Qualification Requirements for Brewer's Notices

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 qualification requirements 
for Brewer's Notices. The proposed amendments also relax requirements 
associated with reporting certain changes to brewery businesses and 
other notification requirements. The proposed amendments are a result 
of TTB's evaluation of its qualification 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.

DATES: Comments must be received on or before August 8, 2022.

ADDRESSES: You may electronically submit comments to TTB on this 
proposal using the comment form for this document as posted within 
Docket No. TTB-2022-0006 on the ``Regulations.gov'' website at https://www.regulations.gov. Within that docket, you also may view copies of 
this document, its supporting materials, and any comments TTB receives 
on this proposal. A direct link to that docket is available on the TTB 
website at https://www.ttb.gov/beer/notices-of-proposed-rulemaking 
under Notice No. 212. 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 below for further 
information on the comments requested regarding this proposal and on 
the submission, confidentiality, and public disclosure of comments.

FOR FURTHER INFORMATION CONTACT: Jesse Longbrake, 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 066.

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. Retail Service Operations
    B. Premises Description
    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
    G. Inventory Requirements
    H. Discontinuance of Business
    I. Blanket Bond Form for Multiple Breweries
    J. Notice of Intent To Destroy Taxpaid Beer Off Premises
    K. Update of OMB Control Numbers
III. Public Participation
    A. Comments Invited
    B. Submitting Comments
    C. Confidentiality and 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 collected in TTB's permit 
and registration applications. The purpose was to identify ways to 
streamline the

[[Page 34820]]

application, reduce burden on the regulated industry, and ensure that 
the application collects, where possible, only information necessary 
for meeting 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 the information that is needed. 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.
    Similarly, 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 recommendations 
for Treasury regulations that could be eliminated, modified, or 
streamlined to reduce burdens. TTB reviewed comments received in 
response to this request and identified proposals that related to 
beginning business in a TTB-regulated industry, including Brewer's 
Notices.
    Through TTB's internal evaluation and consideration of the public 
input, TTB has identified deregulatory measures that TTB could take by 
amending regulations and, also, where rulemaking is not required, by 
amending guidance and forms. While this document addresses breweries, 
TTB intends to engage in further rulemaking to address other regulated 
industries within the context of their respective statutory eligibility 
requirements. Specifically, TTB will address in separate rulemakings 
Internal Revenue Code (IRC) permit and notice requirements for wine 
producers, as well as IRC requirements for TTB-regulated tobacco 
businesses. TTB has already published rulemaking concerning distilled 
spirits plants, users and dealers of specially denatured alcohol and 
tax-free alcohol, and Federal Alcohol Administration Act (FAA Act) 
basic permit holders (Notice No. 207, published in the Federal Register 
on December 3, 2021, at 86 FR 68573).
    With respect to breweries, this document proposes to amend the 
regulations to eliminate or narrow the range of information that 
brewers must submit with Brewer's Notices to respond more directly to 
TTB's statutory obligations under the IRC. The proposed amendments 
include:
    <bullet> Removing requirements that brewers intending to sell and 
serve beer on brewery premises designate and maintain a separate 
``tavern'' area within the brewery for such activities, and including 
instead general provisions to account for beer sold and served to 
customers anywhere on brewery premises.
    <bullet> Tailoring requirements to describe the brewery premises 
more narrowly.
    TTB also is proposing regulatory amendments that will increase 
industry flexibility without creating any new obligations. These 
proposed amendments include:
    <bullet> Extending deadlines for reporting certain changes to the 
brewer's business from 30 days to 60 days.
    <bullet> Allowing brewers to use new trade names by notifying TTB 
in lieu of amending their Brewer's Notice.
    <bullet> Allowing brewers to maintain required records at a 
location other than the permitted premises without first obtaining TTB 
approval.
    <bullet> Reducing the frequency of physical inventories in certain 
circumstances and allowing greater flexibility in the timing of 
physical inventories within the inventory period.
    <bullet> Allowing entities operating multiple breweries to secure 
one bond covering all brewery operations rather than separate bonds for 
each brewery.
    <bullet> Eliminating the twelve day waiting period prior to 
destroying taxpaid beer off brewery premises.
    Section II of this document includes more in-depth discussion of 
these and other proposed amendments.
    As noted above, TTB's deregulatory strategy also includes 
streamlining its guidance and forms. TTB has already begun deploying 
such streamlining efforts in response to both TTB's internal evaluation 
of its applications and to comments received from the public.

B. TTB Authority

    The IRC, 26 U.S.C. chapter 51, imposes Federal excise taxes on 
beer, provides for payment and/or refund of those taxes, and prescribes 
requirements related to the operations of brewers. Chapter 51 also 
requires all persons intending to brew or produce beer for sale (i.e., 
brewers) to furnish qualifying documents to the Secretary of the 
Treasury (Secretary) before starting business, including a written 
notice containing the information prescribed by regulation as necessary 
to ensure collection of the revenue and, in certain cases, a bond to 
ensure protection of the revenue. See 26 U.S.C. 5401.
    With respect to the excise tax on beer, chapter 51 generally 
provides that such tax is determined when beer is removed for 
consumption or sale from a qualified brewery in the United States, or 
is imported. Beer ``removed for consumption or sale'' includes beer 
sold for consumption on brewery premises. See 26 U.S.C. 5052(c)(1). 
Section 5552 of the IRC (26 U.S.C. 5552) authorizes the Secretary to 
require ``installation of meters, tanks, pipes, or any other apparatus 
for the purpose of protecting the revenue,'' such as requiring means to 
accurately measure the amount of beer transferred or removed. Section 
5061 governs the collection of excise tax on beer. Section 5061(d) 
prescribes the time periods and due dates for paying tax on a deferred 
basis, and generally requires that the taxes be paid on a semimonthly 
basis. However, section 5061(d)(4) authorizes eligible taxpayers to use 
annual or quarterly tax return periods instead of semimonthly periods.
    Chapter 51 also imposes requirements governing the operation of 
breweries, including a requirement that brewers keep records in the 
form and manner prescribed by regulation, and a requirement that 
brewers make true and accurate reports of operations and transactions 
as prescribed by regulation. See 26 U.S.C. 5415. In addition, 26 U.S.C. 
7805(a) generally authorizes the Secretary to issue regulations to 
carry out the provisions of the IRC.
    TTB administers chapter 51 of the IRC pursuant to Treasury Order 
120-01, dated December 10, 2013, through which the Secretary has 
delegated to TTB certain IRC administrative and enforcement 
authorities, including those related to Brewer's Notices.
    Pursuant to its delegated IRC authorities, TTB has promulgated 
regulations setting forth qualification requirements for breweries at 
27 CFR part 25. TTB's regulations at 27 CFR 25.61 through 25.68 set 
forth the requirements for the qualifying documents that brewers must 
submit to TTB, including form TTB F 5130.10, Brewer's Notice. The TTB 
regulations prescribe additional information that brewers must include 
in the Brewer's Notice when they intend to operate a ``tavern'' on 
brewery premises. See 27 CFR 25.25. A brewery may not commence 
operations until TTB approves the Brewer's Notice. 27 CFR 25.61(a). TTB 
proposes amendments to the regulations specifying the information 
brewers must provide on form TTB F 5130.10 or its electronic 
equivalent, as well as in certain supporting documents.
    Concerning determination and payment of the tax on beer, TTB's 
regulations at 27 CFR 25.159 provide that the tax will be determined at 
the time of its removal for consumption or sale and will be paid by 
return as provided in part 25. TTB's regulations

[[Page 34821]]

generally require that breweries have suitable means to accurately 
measure beer for tax determination purposes. See, e.g., 27 CFR 25.41. 
Breweries operating taverns are currently required to have a ``suitable 
method for measurement of the beer'' that is tax determined for sale to 
customers for consumption at the tavern. 27 CFR 25.25(c)(1).
    TTB regulations at 27 CFR 25.71 through 25.79 require brewers to 
report certain changes in the business affecting the Brewer's Notice 
(e.g., changes in address or location, changes in stockholders or 
officers, directors, managers, etc.). In addition, regulations at 27 
CFR 25.291 through 24.301 include recordkeeping requirements as 
authorized by 26 U.S.C. 5415.
    This notice of proposed rulemaking includes proposed amendments to 
the qualification process for breweries, the tax determination 
requirements for beer sold for consumption at the brewery, and the 
reporting and recordkeeping requirements described above. With respect 
to reporting requirements, in instances where TTB's regulations refer 
to submitting a ``letterhead notice,'' industry members may provide 
such notices electronically in Permits Online. Unlike the brewer's 
initial submission of qualifying documents, these ``letterhead 
notices'' do not require TTB approval. TTB is proposing amendments to 
25 CFR 25.81 to update the term ``letterhead notice'' to the term 
``written notice'' and to 27 CFR 25.11 to add a definition of ``written 
notice.''

C. Relationship to Other Notices of Proposed Rulemaking

    TTB recently 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 importers and wholesalers of malt 
beverages--were included in that document and are not included in this 
document. See Notice No. 207, 86 FR 68573, 12/03/2021. TTB plans to 
publish notices of proposed rulemaking to propose generally similar 
amendments to regulations related to wine, tobacco products, and 
processed tobacco-related applications and operations, set forth in 27 
CFR parts 24, 40, 41, and 44.

II. Proposed Changes to the Regulations

    The amendments proposed in this document are intended to modernize 
and streamline the qualification processes for breweries under the IRC. 
The general approach TTB adopted in developing the proposed amendments 
was to identify information currently being 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 questions and instructions on the Brewer's Notice. The proposed 
amendments also relax requirements associated with certain reporting 
requirements.

A. Retail Service Operations

    For brewers who intend to operate a ``tavern'' or ``brewpub,'' TTB 
proposes to remove requirements to designate and maintain a separate 
tavern area within the brewery where beer may be sold and served to 
customers for consumption on the premises, and replace these with 
general provisions related to determining tax on beer that is sold and 
served to customers on the brewery premises. (The TTB regulations use 
the term ``tavern'' although TTB forms and guidance also refer to a 
``brewpub'' to recognize a term more commonly used in the industry.) 
TTB's regulations at 27 CFR 25.25 prescribe additional information that 
brewers must include in their Brewer's Notice when seeking to operate a 
tavern on the brewery premises. For instance, a brewer is required to 
identify the areas of the brewery premises that will be operated as a 
tavern accessible to the public, and to describe the security measures 
used to separate these public areas from the non-public areas of the 
brewery. Brewers also are required to describe in detail the method 
they will use for measuring beer for the purposes of tax determination 
(i.e., measuring the beer set aside to serve to customers on-premises, 
upon which tax will later be paid). Brewers must also identify any 
tanks that will periodically contain tax-determined beer, as well as 
any other areas of the brewery where tax-determined beer will be 
stored.
    As part of TTB's evaluation of the Brewer's Notice, and in 
recognition of the comments and questions TTB has received over the 
years from brewers regarding tavern, brewpub, and taproom operations, 
TTB considered ways to simplify the relevant qualification requirements 
and to provide more flexibility for brewers considering different types 
of operations. The current regulations applicable to the concept of a 
tavern or brewpub have not been updated since they were issued in 1988. 
They require a separately-defined area for retail sales of beer in the 
brewery. These regulations were implemented to protect the revenue on 
beer sold for consumption on brewery premises. The IRC does not require 
such a separately-defined area, and TTB considered if it could 
eliminate the regulatory distinction between a brewery and a brewery 
operating a tavern without jeopardizing the revenue.
    TTB considered the differences in operations between breweries and 
breweries operating taverns (hereinafter ``brewpubs''), as currently 
defined, and the related differences in the statutory requirements for 
the permissible methods of ``removing'' beer ``for consumption or 
sale'' (that is, subject to tax). The IRC defines the term ``removal 
for consumption or sale'' at 26 U.S.C. 5052(c) to mean:
    (1) The sale and transfer of possession of beer for consumption at 
the brewery; or
    (2) Any removal of beer from the brewery (except removals without 
payment of tax, e.g., for export or transfers in bond to another 
brewery).
    The first definition relates to beer sold and served to a customer 
for consumption at the brewery. The second definition relates to beer 
removed for distribution (however, this definition also captures, for 
example, beer sold to customers at the brewery to drink outside of the 
brewery, as defined by the Brewer's Notice).
    Beer removed ``from the brewery'' is required by statute to be 
removed in containers. Pursuant to 26 U.S.C. 5412, ``Beer may be 
removed from the brewery for consumption or sale only in hogsheads, 
packages, and similar containers[.]'' [Emphasis added.] The term 
``package'' is further defined at 26 U.S.C. 5416 as a ``bottle, can, 
keg, barrel, or other original consumer container[.]''
    Section 5412's container requirement does not apply to beer removed 
by sale and transfer of possession for consumption at the brewery.
    With that understanding of the statutory removal requirements, TTB 
recognized that its regulations must address three main avenues for the 
retail sale of beer for consumption occurring at a brewery, for 
example:
    (1) Sale of untaxpaid beer from tanks to drink on the brewery 
premises;
    (2) Sale of untaxpaid beer from containers (such as barrels or 
kegs) or in containers (such as bottles) to drink on the brewery 
premises; and
    (3) Sale of beer in containers to drink outside of the brewery 
premises.
    Any beer sold in containers at the brewery for consumption outside 
of the brewery in the third scenario would be a removal ``from the 
brewery'' subject to tax under 26 U.S.C. 5052(c)(2) and the

[[Page 34822]]

container requirements of section 5412 would apply. TTB is not 
proposing any regulatory amendments affecting this type of retail sale. 
This third scenario includes situations where brewers operate ``tasting 
rooms'' or ``taprooms'' that serve beer and may be adjacent to the 
brewery, but are not part of the brewery itself (as defined by their 
Brewer's Notice). Brewers cannot make any sales of their beer at such a 
tasting room or taproom from a tank or by running lines from a tank in 
the brewery to an adjacent area that is not part of the defined brewery 
premises. Brewers wishing to make such sales could do so consistent 
with TTB's proposed regulations, discussed further below, by amending 
their Brewer's Notice to include the tasting room or taproom area in 
their brewery premises.
    TTB's proposed amendments address the first two avenues of sale 
described above: Sales for consumption at the brewery (1) from tanks, 
and (2) from or in containers. The proposed regulations eliminate the 
distinction between a brewery and a brewpub, and instead outline the 
``retail service operations'' brewers are authorized to engage in under 
a Brewer's Notice. The amendments eliminate certain brewpub regulatory 
requirements, in particular the requirements to delineate the public 
and non-public areas of the brewery and to employ security measures to 
separate those areas. Eliminating these requirements would recognize 
that brewers have an interest in providing broader access to their 
brewery operations while also ensuring that visitors do not interfere 
with those operations.
    The proposed regulations also recognize the need to retain current 
policies authorizing breweries engaging in retail activities to serve 
food, taxpaid wine, taxpaid distilled spirits, taxpaid beer of another 
brewer's production, brewery related merchandise, and anything else not 
contrary to law.
    The proposed regulations would eliminate the need for separate 
qualifications, such as are currently present in Permits Online, for 
breweries and brewpubs. Instead, brewers would merely provide basic 
information about any ``retail service operations'' in which they 
intend to engage.
    Brewers engaging in retail service operations would be required to 
keep records of such retail service operations, and properly account 
for, for tax purposes, any untaxpaid beer sold for consumption at the 
brewery. In general, in the case of (1) untaxpaid beer sold from tanks, 
the proposed regulations provide that tax will be determined based on a 
measurement of the beer dispensed for sale from a tank each day, as 
opposed to current procedures generally requiring that tanks be tax 
determined in their entirety when filled. TTB believes the proposed 
method of tax determination is simpler and will provide greater 
flexibility by eliminating the need for tax determination tanks that 
must be segregated from other untaxpaid beer on the brewery premises. 
TTB invites comments on whether to maintain tax determination tanks as 
another option for tax determination of beer to be sold for consumption 
at the brewery. In the case of (2), untaxpaid beer sold in containers, 
barrels and kegs must be tax determined at the time they are tapped for 
sale and consumption on premises, while bottles must be tax determined 
at the time they are sold for on-premises consumption.
    TTB's proposed amendments setting forth authorized retail service 
operations would replace the current Sec.  25.25. Conforming amendments 
are proposed to Sec. Sec.  25.11, 25.23, 25.24, 25.35, 25.41, 25.62, 
25.159, and 25.292.

B. Premises Description

    TTB is proposing to more narrowly tailor requirements to describe 
the brewery premises to accelerate TTB's review during initial 
qualification. TTB also is proposing to consolidate requirements to 
provide descriptions of alternation operations with the general brewery 
premises description. The TTB regulations at 27 CFR 25.62 prescribe, in 
general, information that a brewer must provide in a Brewer's Notice, 
which includes a description of the brewery premises. TTB currently 
collects these descriptions in an open-ended narrative format. TTB 
requires more detailed narrative descriptions and/or diagrams where a 
brewer wishes to operate a tavern in the brewery or intends to 
alternate its premises with an adjacent bonded or taxpaid wine 
premises. See 27 CFR 25.25 and 25.81. TTB believes that more direct 
questions and certifications could enable brewers to better understand 
what information they must submit, which may reduce the need for 
additional submissions and communication between TTB and brewers, and 
accelerate TTB's review process. TTB therefore proposes amendments, 
described below, to alter the format in which descriptions of brewery 
premises and related information are collected and to consolidate the 
collection of certain such information.
    Currently, Sec.  25.62(a)(5) requires that a Brewer's Notice 
include a description of the brewery in accordance with Sec.  25.68. 
Section 25.68(a) sets forth the specific information to be included in 
the description, which includes: (1) A description of each tract of 
land comprising the brewery; and (2) a listing of each brewery building 
by its designated letter or number, giving the approximate ground 
dimensions and the purpose for which ordinarily used. Section 25.68(b) 
also requires that the description must be in sufficient detail to 
enable TTB officers to determine the boundaries of the brewery. TTB 
proposes to amend Sec.  25.68 to remove the requirements to provide a 
description of the tract of land, and to number each building. TTB 
proposes to further clarify the specific information to be submitted in 
the brewery description, to include: (1) The overall dimensions of the 
building(s) housing the brewery and, if the brewery occupies less than 
the entire building, the boundaries of the brewery within the building; 
and (2) any portions of the brewery that are outdoors, including the 
location of any outdoor tanks.
    Section 25.25 currently requires that a brewer desiring to operate 
a tavern on the brewery premises submit certain additional information 
with the Brewer's Notice. Paragraph (b)(1) requires the brewer to 
identify the portion of the brewery that will be operated as a tavern 
``by providing a diagram or narrative description of the boundaries of 
the tavern,'' including identification of the areas of the brewery that 
will be accessible to the public. As described in section II(A) of this 
document, TTB is proposing to replace the current requirements of Sec.  
25.25 entirely with new regulations governing retail service operations 
at the brewery and to require a statement concerning retail service 
operations as part of the Brewer's Notice under a new Sec.  
25.62(a)(14).
    Section 25.81 sets forth requirements related to alternation of the 
brewery premises with a contiguous bonded winery or taxpaid wine 
bottling house, including requirements for certain qualifying 
documents. Among those qualifying documents, paragraph (b)(2) currently 
requires that brewers seeking to engage in such alternation provide 
``special diagrams,'' in duplicate, delineating the brewery premises 
and the bonded or taxpaid wine premises as they will exist in their 
relative operating sequence. Paragraph (b)(2) provides that the 
diagrams must clearly depict all areas, buildings, floors, rooms, 
equipment, and pipelines which are to be subject to alternation in 
their relative operating sequence. TTB believes that the information 
captured in the ``special diagrams'' currently required under paragraph 
(b)(2) can instead be consolidated into the premises

[[Page 34823]]

descriptions required under proposed Sec.  25.68. Accordingly, TTB 
proposes to amend Sec.  25.81(b)(2) to require that the description 
submitted under proposed Sec.  25.68 contain the information concerning 
the alternation. TTB also proposes clarifying amendments to Sec.  25.81 
to capture brewery alternation with an adjacent distilled spirits plant 
(DSP). This amendment is consistent with TTB's existing regulations at 
27 CFR 19.143, which allow alternation between a DSP and brewery.

C. Statements of Interest

    TTB proposes amendments to clarify the scope of the collection of 
information related to persons holding ownership interests in a 
business. TTB collects these statements of interest in accordance with 
TTB's statutory obligations to collect the information necessary to 
protect and ensure collection of the revenue. See 26 U.S.C. 5401(a).
    TTB must identify circumstances in which a brewery's ownership 
structure would affect the brewery's required method of tax payment 
and/or the brewery's eligibility for certain reduced rates of tax. 
Pursuant to 26 U.S.C. 5061(e), 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. Paragraph (3)(A) of that subsection provides that, in 
the case of a controlled group of corporations, all component members 
of the group are treated as one taxpayer.\1\ To determine whether a 
brewer 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.
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    \1\ For purposes of 26 U.S.C. 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.
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    Determining whether a prospective brewery is a member of a 
controlled group is also necessary to determine whether the brewer may 
be eligible for certain reduced tax rates upon TTB approval of a 
Brewer's Notice. Pursuant to 26 U.S.C. 5051(a)(1)(A), a reduced rate of 
tax is available on the first 6,000,000 barrels of beer brewed by the 
brewer and removed during the calendar year for consumption or sale. 
Section 5051(a)(2) provides a further reduced rate on the first 60,000 
barrels of beer brewed and removed during a calendar year, available to 
brewers who produce not more than 2,000,000 barrels of beer during the 
calendar year.
    The reduced rates under sections 5051(a)(1)(A) and (a)(2) each take 
into account the collective production and removal activity of a 
controlled group. See 26 U.S.C. 5051(a)(5)(A). For example, if a 
Brewer's Notice is to be issued to a brewery that produces 50,000 
barrels per year, but which is part of a controlled group with another 
brewery producing 3,000,000 barrels per year, TTB will need to collect 
information to identify the controlled group structure and thereby 
ensure that the breweries within the controlled group do not claim 
reduced tax rates for which they are ineligible.
    TTB proposes amendments to 27 CFR 25.66 to clarify and standardize 
the collection of the basic identifying information of persons with an 
interest in the business. The amended Sec.  25.66 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 brewer must 
provide the name, title, and place of residence (city and State) of a 
representative individual for that entity. The representative 
individual generally will be the individual designated by the entity 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 interest in the business 
and to evaluate the brewer as to any potential controlled group 
affiliations.

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

    TTB proposes to extend the reporting period for certain changes in 
a brewery's business to 60 days. The TTB regulations generally require 
that, when there is a change in the information submitted in a Brewer's 
Notice, the proprietor of the business must notify TTB of the change. 
The timing and form of this notification differs depending on the type 
of business 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 TTB regulations at 27 CFR 25.75 require that the 
brewer submit an amended Brewer's Notice within 30 days of any change 
in the list of officers or directors furnished with the original 
Brewer's Notice.
    Comments received in response to Treasury's 2017 request for 
information, described in section I(A) of this document, suggest that 
30 days is too short a time for regulated entities to assemble the 
information that is required. These comments suggested that TTB should 
extend such filing deadlines to 60 days.
    TTB reviewed these proposals and concluded that extending existing 
deadlines for reporting changes in the business (including in some 
cases by amending Brewer's Notices) from 30 to 60 days may not pose 
risk to the revenue or raise other concerns. Accordingly, TTB proposes 
amendments to extend such deadlines in 27 CFR 25.71, 25.74, and 25.75. 
Section 25.71 currently requires that, unless another time period is 
specified, a brewer submit an amended notice within 30 days of ``a 
change with respect to the information shown in the Brewer's Notice, 
Form 5130.10.'' Section 25.74 requires a brewer to submit an amended 
notice to TTB within 30 days of a change in control or management of a 
business caused by the sale or transfer of capital stock. Section 25.75 
generally requires that a brewer submit an amended Brewer's Notice 
within 30 days of a change to the list of officers or directors. TTB 
proposes to extend each of the above reporting deadlines from 30 to 60 
days.

E. Changes in Trade Names

    TTB proposes to revise currently-reserved section 27 CFR 25.76 to 
allow changes to, or additions of, trade names through a written notice 
to TTB rather than through an amended Brewer's Notice. The regulations 
at Sec.  25.71(a)(1) currently require that brewers submit an amended 
Brewer's Notice for a change with respect to information shown in the 
Brewer's Notice, which includes the list of trade names required by 27 
CFR 25.62(a)(6). The proposed regulation clarifies that a brewer need 
only notify TTB of the addition of a trade name prior to using such 
name for marking or labeling purposes as required by subpart J of part 
25 (27 CFR 25.141--25.145). TTB's Permits Online system already 
includes a function for reporting additional trade names, which will 
satisfy the proposed Sec.  25.76's requirement for a written notice.
    TTB notes that it remains the responsibility of the brewer to 
ensure that any trade name is properly

[[Page 34824]]

registered with the applicable State or local government. Brewers 
should further note that the FAA Act prohibits false or misleading 
statements on malt beverage labels, and TTB will not approve an 
application for label approval proposing to use a trade name on a malt 
beverage label that gives a misleading impression as to the age, 
origin, or identity of the product. 27 U.S.C. 205(e). The FAA Act also 
prohibits the use of misleading trade names when advertising malt 
beverages. 27 U.S.C. 205(e)(5).

F. Retention of Records Off-Premises

    TTB is proposing amendments to allow records to be stored at a 
location other than the brewery and to allow brewers to simply notify 
TTB of their intention to store records at an off-brewery location, 
rather than apply for 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 that TTB routinely approved. 
One common request from brewers has been for approval to retain 
required records at a location other than the premises covered by the 
Brewer's Notice. As a result, TTB proposes to amend 27 CFR 25.300 to 
allow brewers to keep records at another location upon providing a 
written notice to TTB. The amendments provide that required records 
must still be made available at the brewery premises upon request, but 
that copies will generally satisfy this requirement (consistent with 
current TTB policy, ``copies'' includes electronic copies).

G. Inventory Requirements

    TTB is proposing amendments reducing the frequency of physical 
inventories in certain circumstances and allowing greater flexibility 
in the timing of physical inventories within the inventory period. The 
TTB regulations at 27 CFR 25.294 require that brewers take physical 
inventories of beer and cereal beverages on hand at least once each 
calendar month and prescribe the information required on the inventory 
record. Section 25.294 requires that brewers take the required 
inventory within seven days of the close of the calendar month for 
which it is made.
    One comment received in response to Treasury's request for 
information seeks elimination of Sec.  25.294 or, alternatively, 
relaxation of its requirements to allow inventories to be taken within 
the final 15 days of the month. The comment suggests that these 
amendments would reduce burdens on both TTB and industry. TTB 
considered these suggestions and proposes to relax inventory 
requirements as described below.
    With respect to the frequency of physical inventories, TTB proposes 
to align the taking of inventories with the filing of tax returns for 
brewers who file less frequently than monthly. As described in section 
I(B) of this document, 26 U.S.C. 5061(d) requires that the taxes on 
beer be paid on a semimonthly basis. However, section 5061(d)(4) 
authorizes eligible taxpayers to use annual or quarterly tax return 
periods instead of semimonthly periods. Specifically, section 
5061(d)(4)(A)(ii) allows a taxpayer who reasonably expects to be liable 
for not more than $1,000 in excise taxes for the calendar year and who 
was liable for not more than $1,000 in such taxes in the preceding 
calendar year to make returns annually. Section 5061(d)(4)(A)(i) allows 
a taxpayer who reasonably expects to be liable for not more than 
$50,000 in excise taxes for the calendar year and who was liable for 
not more than $50,000 in such taxes in the preceding calendar year to 
make returns quarterly. TTB has implemented these provisions in its 
regulations at 27 CFR 25.164. TTB proposes to amend Sec.  25.294 to 
allow brewers authorized by 26 U.S.C. 5061(d) and Sec.  25.164 of the 
TTB regulations to file tax returns on an annual or quarterly basis to 
complete physical inventories on an annual or quarterly basis, 
respectively. Brewers required to file semimonthly tax returns will 
still be required to conduct monthly physical inventories.
    TTB further proposes to amend Sec.  25.294 to allow physical 
inventories to be taken within 15 days of the close of the applicable 
inventory period (i.e., month, quarter, or year), rather than within 7 
days of the close of the applicable inventory period.

H. Discontinuance of Business

    TTB proposes to amend 27 CFR 25.85 to streamline procedures for 
discontinuing business as a brewer. The current Sec.  25.85 requires a 
brewer discontinuing its business to first file a notice to that effect 
using the Brewer's Notice form, TTB F 5130.10, or its electronic 
equivalent in Permits Online. Under the regulations, TTB must approve 
and return a copy of the notice to the brewer once ``all beer has been 
lawfully disposed of.'' This may require additional communication with 
the brewer prior to approving the discontinuance notice. Once TTB 
approves and returns the notice, the brewer must file a ``final 
report'' on form TTB F 5130.9, ``Brewer's Report of Operations,'' or 
its electronic equivalent, showing no beer or cereal beverage on hand.
    TTB proposes to amend Sec.  25.85 to allow a written notice to the 
appropriate TTB officer to serve as adequate notice of discontinuance 
of business, rather than requiring submission of form TTB F 5130.10 and 
TTB approval. The notice must indicate the date on which business 
discontinued or will discontinue. The proposed amendments also dispose 
of the blanket requirement for a final report and provide that the 
brewer must submit such report only upon request of the appropriate TTB 
officer. While TTB will continue to examine the operations of closing 
businesses on a case-by-case basis to ensure that there are no 
outstanding tax liabilities, this examination would no longer impact 
TTB's processing of notices of discontinuance of business. TTB believes 
this proposal will ease burdens on brewers exiting the industry.
    TTB is also proposing conforming amendments to 27 CFR 25.102, 
Termination of surety's liability, to remove a reference to TTB's 
``approval'' of a discontinuance notice. Under the proposed Sec.  
25.85, a notice of discontinuance of business is effective on the date 
indicated on the notice submitted to TTB.

I. Blanket Bond Form for Multiple Breweries

    TTB is proposing amendments allowing entities operating multiple 
breweries to secure one bond covering all brewery operations rather 
than separate bonds for each brewery. The TTB regulations at 27 CFR 
25.91 generally require that every person intending to commence 
business as a brewer must file a bond covering operations at the 
brewery at the time of filing the original Brewer's Notice. There is an 
exemption to the bond requirement at 27 CFR 25.91(e) for brewers who 
are eligible to pay tax on a deferred basis annually or quarterly 
pursuant to 27 CFR 25.164. Section 25.91 further requires the brewer to 
file a new bond or continuation certificate every four years. A comment 
received in response to Treasury's request for information requests 
that TTB allow entities operating multiple breweries to obtain blanket 
bonds covering all locations under one bond. The comment suggests that 
this would reduce the amount of effort required to procure and maintain 
multiple bonds with differing expiration dates.
    TTB agrees that allowing entities operating multiple breweries to 
secure one bond covering all operations is an appropriate measure to 
reduce burden

[[Page 34825]]

on both industry and TTB. TTB is proposing amendments to Sec. Sec.  
25.91 and 25.93 to provide this option and set forth the penal sum 
requirements associated with such blanket bonds. TTB's proposed 
amendments generally provide that the penal sum required for a blanket 
bond will be equal to the aggregate of such sums applicable to each 
brewery location, as calculated under current regulation. TTB will also 
amend form TTB F 5130.22, Brewer's Bond, to allow coverage of multiple 
breweries.

J. Notice of Intent To Destroy Taxpaid Beer Off Premises

    TTB is proposing to eliminate the requirement that brewers notify 
TTB prior to destroying taxpaid beer off brewery premises. The TTB 
regulations at 27 CFR 25.222 require that brewers destroying taxpaid 
beer off brewery premises submit to TTB a notice of intent (NOI) 
containing specific information about the destruction at least 12 days 
prior to the destruction. Generally, TTB requires brewers to submit the 
information contained in the NOI with a subsequent claim for refund or 
credit of tax pursuant to 27 CFR 25.283. The NOI is intended to provide 
TTB an opportunity to assign personnel to witness a destruction under 
25.223. In response to the COVID-19 pandemic, TTB suspended the NOI 
requirement and instead has relied on the supporting information 
submitted with claims, and TTB has requested additional proof of 
destruction where necessary (as such proof is not specifically required 
as supporting information under Sec.  25.283).
    To provide brewers additional flexibility in the timing of beer 
destructions, and to avoid requiring brewers to store taxpaid beer 
longer than is necessary to arrange its destruction, TTB is proposing 
to permanently eliminate the requirement that brewers notify TTB prior 
to destroying taxpaid beer off brewery premises, as well as the 
provision concerning routine TTB supervision of such destruction. TTB 
is proposing to amend Sec.  25.283 to instead require that brewers 
submit, with a claim for refund or credit of tax on taxpaid beer 
destroyed off brewery premises, proof of destruction in the form of 
commercial records. TTB is also proposing to amend 27 CFR 25.221 to 
give TTB discretion to require a brewer to submit an NOI before 
destruction if the appropriate TTB officer determines that pre-
notification is necessary to protect the revenue.

K. Update of OMB Control Numbers

    In this document, TTB also proposes to update the Office of 
Management and Budget (OMB) control numbers and, as needed, the list of 
regulatory sections in 27 CFR part 25 containing information 
collections covered by those numbers. Therefore, in 27 CFR 25.5, TTB 
proposes to: (1) Update the OMB control numbers previously assigned to 
TTB's predecessor agency, the former Bureau of Alcohol, Tobacco and 
Firearms (ATF) (OMB No. 1512-_), to the control numbers currently 
assigned to TTB (OMB No. 1513-_); (2) add inadvertently missing OMB 
control numbers for existing information collections and remove control 
numbers for obsolete collections; and (3) add inadvertently missing 
sections, remove obsolete sections, or otherwise correct the list of 
sections containing information collections.
    OMB has previously reviewed and approved all of the information 
collections contained in the part 25 regulations listed below in 
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507). 
The update, addition, or removal of OMB control numbers and regulatory 
sections in Sec.  25.5 is merely informational in nature, and these 
proposed technical and conforming amendments do not change the 
requirements or burden of any currently approved TTB information 
collection contained in part 25.
    The OMB control numbers and the regulatory sections containing 
information collections in part 25 are as follows:

------------------------------------------------------------------------
            OMB Control No.              Occurs in part 25 in section(s)
------------------------------------------------------------------------
1513-0005 (Letterhead Applications &     25.23, 25.52, 25.61, 25.62,
 Notices Filed by Brewers, & Brewer's     25.64, 25.66, 25.68, 25.71-
 Notice).                                 25.81, 25.85, 25.141, 25.142,
                                          25.144, 25.158, 25.167,
                                          25.184, 25.213, 25.221,
                                          25.272, 25.273, 25.277, &
                                          25.282.
1513-0007 (Brewer's Report of            25.296(b), & 25.297.
 Operations, and Quarterly Brewer's
 Report of Operations).
1513-0009 (Application to Operate Wine   25.81(b)(3).
 Premises, & Wine Bond).
1513-0013 (Change of Bond (Consent of    25.72, 25.73, 25.77, 25.81,
 Surety)).                                25.92, 25.95, 25.103, &
                                          25.271.
1513-0014 (Power of Attorney)..........  25.65.
1513-0015 (Brewer's Bonds and Brewer's   25.73, 25.77, 25.91, 25.93,
 Bonds Continuation Certificates).        25.94, 25.95, 25.97, 25.98, &
                                          25.274.
1513-0030 (Claims--Alcohol, Tobacco,     25.281-25.283, 25.285, &
 and Firearms Taxes).                     25.286.
1513-0048 (Registration of Distilled     25.81(b)(5).
 Spirits Plants).
1513-0058 (Usual & Customary Records     25.42, 25.186, 15.192, 25.195,
 Maintained by Brewers).                  25.196, 25.211, 25.252,
                                          25.263, 25.264, 25.276, 25.291-
                                          25.296, 25.300, & 25.301.
1513-0083 (Excise Tax Return)..........  25.160, 25.163-25.166, 25.168,
                                          25.175, 25.224, 25.285, &
                                          25.298.
1513-0085 (Principal Place of Business   25.241-25.143.
 Address & Place of Production Coding
 on Beer & Malt Beverage Labels).
1513-0086 (Marks on Brewery Equipment &  25.24, 25.35, 25.141-25.143,
 Structures, & Marks & Labels on          25.145, 25.192, 25.196,
 Containers of Beer).                     25.213, 25.231, 25.242,
                                          25.251, & 25.263.
1513-0088 (Alcohol, Tobacco, and         25.72-25.75, 25.77, 25.78,
 Firearms Related Documents for Tax       25.151, 25.163, 25.276, 25.281-
 Returns and Claims).                     25.286, 25.291, 25.298, &
                                          25.300.
1513-0118 (Formulas for Fermented        25.53, & 25.55-25.58.
 Beverage Products).
1513-0122 (Formula & Process for         25.53, & 25.55-25.58.
 Domestic & Imported Alcohol Beverages.
------------------------------------------------------------------------

    The proposed Sec.  25.5 also includes changes to existing 
information collections as discussed in section IV(C) of this document.

III. Public Participation

A. Comments Invited

    TTB invites comments from interested members of the public on the 
proposals described in this document. TTB also invites comments on any 
additional means to streamline the Brewer's Notice within the 
parameters of TTB's statutory obligations. As noted in section II(A) of

[[Page 34826]]

this document, TTB specifically invites comments from brewers on 
whether to maintain tax determination tanks as another option for tax 
determination of beer to be sold for consumption at the brewery.

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. 212 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.

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 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.

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. Therefore, a 
regulatory impact assessment is not 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 Brewer's 
Notices;
    (2) Replacing required narrative descriptions of the premises with 
more specific information;
    (3) Extending deadlines for reporting certain changes in the 
brewer's business;
    (4) Streamlining procedures for brewers using new trade names;
    (5) Allowing the maintenance of required records at locations other 
than the brewery premises through a notification rather than an 
application for an alternate procedure;
    (6) Clarifying which individuals are required to submit statements 
of financial interest in the business in connection with an application 
for a Brewer's Notice;
    (7) Reducing the frequency of physical inventories for certain 
brewers and providing additional flexibility in the timing of 
inventories;
    (8) Streamlining procedures for discontinuing business as a brewer;
    (9) Allowing entities operating multiple breweries to secure one 
bond covering all operations; and
    (10) Eliminating the requirement that brewers notify TTB before 
voluntarily destroying taxpaid beer off brewery 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 for Brewer's 
Notices, TTB proposes amendments to 27 CFR 25.25 to eliminate 
requirements for brewers interested in engaging in retail service 
operations to specifically delineate and identify the locations within 
the brewery where such operations will take place and to describe the 
security measures they will employ to segregate the public service area 
(the ``tavern,'' as described in current regulation) from the brewing 
areas.
    To streamline brewery description requirements, TTB proposes 
amendments to 27 CFR 25.68 and 25.81 to replace requirements for 
narrative descriptions of the brewery premises with requirements to 
submit more specific information regarding the premises. For example, 
Sec.  25.68 currently requires a detailed narrative description of the 
brewery premises, including each tract of land covered by the brewery, 
featuring ``approximate ground dimensions.'' The proposed amendments to 
Sec.  25.68 remove the narrative description requirements and instead 
require the submission of more limited information illustrating certain 
specified attributes.
    An example of extending deadlines for reporting changes in a 
permitted or registered business is the proposed amendment to Sec.  
25.71, which provides the general rules for notifying TTB of any 
changes in the information included in a Brewer's Notice. Section 25.71 
generally requires that when such changes occur, the brewer must file 
an amended Brewer's Notice within 30 days. The proposed amendments to 
Sec.  25.71 extend this deadline to 60 days. TTB proposes similar 
amendments at Sec. Sec.  25.74 and 25.75.
    Regarding changes in trade names, TTB's regulations at 27 CFR 
25.71(a)(1) currently require that brewers submit an amended Brewer's 
Notice when there is a change in the information shown on the notice, 
which includes the list of trade names required by 27 CFR 25.62(a)(6). 
The proposed amendments to 27 CFR 25.76 clarify that a brewer need only 
notify TTB of the addition of a trade name prior to using such name for 
labeling purposes as required by subpart J of part 25 (27 CFR 25.141-
25.145), and may notify TTB through a written notice. TTB's Permits 
Online system already includes a function for reporting additional 
trade names, which will satisfy the proposed Sec.  25.76's requirement 
for a written notice.
    Concerning records maintenance, current recordkeeping requirements

[[Page 34827]]

require that brewers maintain prescribed records at the brewery. The 
proposed amendments to 27 CFR 25.300 generally allow for the 
maintenance of required records at locations other than the brewery 
upon written notice to TTB.
    With respect to the collection of background information, TTB 
proposes amendments to 27 CFR 25.66 to clarify the individuals who are 
required to submit statements of ownership interest in a business 
submitting a Brewer's Notice. 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, a brewer must submit basic identifying 
information about a representative individual for that entity.
    To ease burdens associated with conducting physical inventories of 
beer, TTB proposes amendments to 27 CFR 25.294 to reduce the frequency 
with which brewers are required to conduct inventories where such 
brewers are eligible to file annual or quarterly tax returns under 26 
U.S.C. 5061(d)(4). Section 5061(d)(4) allows brewers falling under 
certain annual tax liability thresholds to file annual or quarterly tax 
returns, rather than semimonthly returns. The proposed amendment aligns 
inventories with the annual or quarterly return periods, where 
applicable. The proposed amendments to Sec.  25.294 also provide 
additional flexibility to all brewers by allowing inventories to be 
taken within the final 15 days of the applicable inventory period 
(i.e., month, year, or quarter), rather than within the final 7 days.
    To streamline procedures for discontinuing business as a brewer, 
TTB proposes to amend Sec.  25.85 to allow a written notice to the 
appropriate TTB officer to serve as adequate notice of discontinuance 
of business, rather than requiring the outgoing brewer to file and 
receive TTB approval of a new Brewer's Notice. The proposed notice must 
indicate the date on which the business discontinued or will 
discontinue. The proposed amendments also dispose of the blanket 
requirement for a final report and provide that a brewer must submit 
such report only upon request of the appropriate TTB officer.
    To provide additional flexibility in securing brewery bond 
coverage, TTB proposes amendments to 27 CFR 25.91 and 25.93 to allow 
entities operating multiple breweries to secure one bond covering all 
operations rather than requiring separate bonds for each brewery. The 
amendments allowing blanket bonds will reduce the amount of effort 
required to procure and maintain multiple bonds with differing 
expiration dates.
    To provide brewers additional flexibility in the timing of beer 
destructions, and to avoid requiring brewers to store taxpaid beer 
longer than is necessary to arrange its destruction, TTB is proposing 
to eliminate the requirement that brewers notify TTB prior to 
destroying taxpaid beer off brewery premises. TTB is proposing to amend 
Sec.  25.283 to instead require that brewers submit, with a claim for 
refund or credit of tax on taxpaid beer destroyed off brewery premises, 
proof of destruction.
    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

    As discussed above, in 27 CFR part 25, TTB proposes to update the 
Office of Management and Budget (OMB) control numbers and the list of 
regulatory sections containing information collections. OMB has 
previously reviewed and approved all of the information collections 
contained in the part 25 regulations in accordance with the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3507). The OMB control numbers 
assigned to information collections currently contained in part 25 are: 
1513-0005, 1513-0007, 1513-0009, 1513-0013, 1513-0014, 1513-0015, 1513-
0030, 1513-0058, 1513-0083, 1513-0085, 1513-0086, 1513-0088, 1513-0118, 
and 1513-0122.
    The update, addition, or removal of OMB control numbers and section 
numbers containing information collections in part 25 is merely 
informational in nature, and these technical amendments do not change 
the requirements or burden of any currently approved TTB information 
collection. 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.
    In addition to those technical updates, several regulations 
specifically addressed in this document affect current collections of 
information under control numbers 1513-0005, 1513-0015, 1513-0030, 
1513-0058, 1513-0083, and 1513-0086. The specific regulatory sections 
in this proposed rule that contain such collections of information, 
either current or proposed, are Sec. Sec.  25.23, 25.24, 25.25, 25.35, 
25.62, 25.66, 25.68, 25.71, 25.74, 25.75, 25.76, 25.81, 25.85, 25.91, 
25.93, 25.167, 25.221, 25.222, 25.225, 25.283, 25.284, 25.292, 25.294, 
and 25.300.
    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 Brewer's 
Notices;
    (2) Replacing required narrative descriptions of a brewer's 
premises with more specific information;
    (3) Extending deadlines for reporting certain changes in the 
brewer's business;
    (4) Streamlining procedures for brewers using new trade names;
    (5) Allowing the maintenance of required records at locations other 
than the brewery premises;
    (6) Clarifying which individuals are required to submit certain 
background information in connection with a Brewer's Notice;
    (7) Reducing the frequency of physical inventories for certain 
brewers and providing additional flexibility in the timing of 
inventories;
    (8) Streamlining procedures for discontinuing business as a brewer;
    (9) Allowing entities operating multiple breweries to secure one 
bond covering all operations; and
    (10) Eliminating the requirement that brewers notify TTB before 
voluntarily destroying taxpaid beer off brewery premises.
    To reduce the amount of information collected in applications for 
Brewer's Notices, TTB proposes to amend 27 CFR 25.25 to remove 
requirements that a brewer designate and maintain a separate ``tavern'' 
area within the brewery where brewers may sell and serve beer to 
customers. Instead, TTB

[[Page 34828]]

proposes to replace these requirements with general provisions related 
to accounting for beer sold and served to customers on the brewery 
premises. The amendments eliminate certain requirements associated with 
the current tavern regulations, in particular the requirements to 
delineate the public and non-public areas of the brewery, and to employ 
security measures to separate those areas. Under the proposed 27 CFR 
25.62, brewers are merely required to disclose whether they intend to 
engage in retail service operations, and if so what kind. TTB proposes 
to amend 27 CFR 25.292 to incorporate recordkeeping requirements 
related to the retail service operations authorized under the proposed 
Sec.  25.25.
    Section 25.25 is currently included in the collections of 
information assigned OMB control numbers 1513-0005 and 1513-0086; Sec.  
25.62 is currently included in the collection of information assigned 
OMB control number 1513-0005; and Sec.  25.292 is currently included in 
the collection of information assigned OMB control number 1513-0058. 
Under the proposed amendments, Sec.  25.25 no longer imposes a 
collection of information. Accordingly, TTB has submitted to OMB 
revisions of information collection numbers 1513-0005 and 1513-0086 to 
account for the reduced burden of the proposed amendments. TTB has 
submitted a revision of information collection number 1513-0058 to 
account for the related recordkeeping requirements under proposed Sec.  
25.292. Conforming amendments related to retail service operations are 
also made in proposed 27 CFR 25.23, 25.24, and 25.35; section 25.23 is 
currently included in the collection of information assigned OMB 
control number 1513-0005, while Sec. Sec.  25.24 and 25.35 are 
currently included the collection of information assigned OMB control 
number 1513-0086. However, the amendments to those sections proposed in 
this document are unrelated to the collections of information included 
in those sections.
    To replace required narrative descriptions of brewery premises with 
more specific information, TTB proposes amendments to Sec. Sec.  25.68 
and 25.81. The proposed amendments to Sec.  25.68 eliminate 
requirements to submit detailed narrative descriptions of the brewery 
and certain of its attributes and replace these requirements with a 
more specific set of information. Section 25.81 relates to qualifying 
to alternate the brewery premises. TTB believes that, in general, the 
more direct questions in the proposed regulations will enable brewers 
to better understand what information they must submit, reduce the need 
for additional submissions and communication between TTB and brewers, 
and accelerate TTB's review process. TTB proposes amendments to Sec.  
25.81 to allow descriptions or diagrams of areas to be alternated and 
how the alternated areas will be separated from other parts of the 
premises to be consolidated with the general premises description or 
diagram provided under Sec.  25.68. Sections 25.68 and 25.81 are 
currently included in the collection of information assigned OMB 
control number 1513-0005. 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, when there is a change 
in the information shown in the Brewer's Notice, the brewer must notify 
TTB of the change. To extend deadlines for reporting certain changes in 
the brewery business, TTB proposes amendments to 27 CFR 25.71, 25.74, 
and 25.75. In each case, TTB proposes to extend the deadline for 
reporting the specified change in the business to 60 days from 30 days. 
Sections 25.71, 25.74, and 25.75 are currently included in the 
collection of information assigned OMB control number 1513-0005. 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 brewers report changes 
to, or additions of, the trade names under which a brewery may operate 
to TTB by submitting an amended Brewer's Notice. See 27 CFR 25.62 and 
26.71. TTB proposes a new 27 CFR 25.76 to clarify that a brewer need 
only notify TTB of the addition of a trade name prior to using such 
name for marking or labeling purposes as required by subpart J of part 
25 (27 CFR 25.141-25.145) and may notify TTB through a written notice. 
TTB's Permits Online system already includes a function for reporting 
additional trade names, which will satisfy the proposed Sec.  25.76's 
requirement for a written notice. The proposed Sec.  25.76 does not 
require conforming amendments to Sec. Sec.  25.62 and 25.71. Sections 
25.62 and 25.71 are currently included in the collection of information 
assigned OMB control number 1513-0005. TTB has submitted to OMB a 
revision of information collection 1513-0005 to account for the reduced 
burden of the proposed Sec.  25.76.
    The current applicable recordkeeping requirements do not explicitly 
allow brewers to maintain records at a location other than the brewery 
premises. As a result, brewers generally must submit a request for 
specific authorization to retain records at a central recordkeeping 
location rather than the brewery premises. To allow the maintenance of 
required records at locations other than the brewery premises, TTB 
proposes amendments to 27 CFR 25.300. These amendments also clarify 
that a brewer generally may satisfy a request for documents by 
providing copies of such documents, including electronic copies. 
Section 25.300 is currently included in the collection of information 
assigned OMB control number 1513-0058. TTB has submitted to OMB a 
revision of that information collection to account for the reduced 
burden of the proposed amendments.
    With respect to the collection of background information, TTB 
proposes amendments to 27 CFR 25.66 to specify the individuals who are 
required to submit statements of ownership interest in the business. 
Section 25.66 generally requires that brewers submit a statement 
disclosing the identities of persons holding certain levels of 
ownership in a business submitting a Brewer's Notice. The proposed 
amendments clarify that: (1) Such statements of interest are required 
only from persons with an ownership interest in the business of 10 
percent or greater; and (2) where a ``person'' holding such an interest 
is a legal entity other than an individual, a brewer must submit basic 
identifying information about a representative individual for that 
entity. Section 25.66 is currently included in the collection of 
information assigned OMB control number 1513-0005. TTB has submitted to 
OMB a revision of that information collection to account for the 
reduced burden of the proposed amendments.
    To reduce burdens associated with physical inventories, TTB 
proposes to amend Sec.  25.294 to allow brewers authorized by sections 
5061(d) of the IRC and Sec.  25.164 of the TTB regulations to file tax 
returns on an annual or quarterly basis to complete physical 
inventories on an annual or quarterly basis, respectively. TTB further 
proposes to amend Sec.  25.294 to allow physical inventories to be 
taken within the final 15 days of the applicable inventory period 
(i.e., month, year, or quarter). Section 25.294 is currently included 
in the collection of information assigned OMB control number 1513-0058. 
TTB has submitted to OMB a revision of that information collection to 
account for the reduced burden of the proposed amendments.
    Concerning discontinuing business as a brewer, TTB proposes to 
amend Sec.  25.85 to allow any written notice to

[[Page 34829]]

the appropriate TTB officer to serve as adequate notice of 
discontinuance of business. The notice must indicate the date on which 
business discontinued or will discontinue. The proposed amendments also 
dispose of the blanket requirement for a final report, and provide that 
brewers must submit such report only upon request of the appropriate 
TTB officer. Section 25.85 is currently included in the collection of 
information assigned OMB control number 1513-0005. TTB has submitted to 
OMB a revision of that information collection to account for the 
reduced burden of the proposed amendments.
    To provide greater flexibility in obtaining bond coverage to 
entities operating multiple breweries, TTB proposes amendments to 
Sec. Sec.  25.91 and 25.93 to allow such entities to secure one bond 
covering all operations. TTB's proposed amendments also set forth the 
penal sum requirements associated with these blanket bonds. Sections 
25.91 and 25.93 are currently included in the collection of information 
assigned OMB control number 1513-0015. TTB has submitted to OMB a 
revision of that information collection to account for the reduced 
burden of the proposed amendments.
    Finally, TTB is proposing to eliminate the requirement that brewers 
notify TTB before voluntarily destroying taxpaid beer off brewery 
premises. To provide brewers additional flexibility in the timing of 
beer destructions, and to avoid requiring brewers to store taxpaid beer 
longer than is necessary to arrange its destruction, TTB is proposing 
to eliminate entirely Sec. Sec.  25.222 and 25.223 requiring the 
notice, and to amend Sec.  25.283 to instead require that brewers 
submit proof of destruction with a claim for refund or credit of tax on 
taxpaid beer destroyed off brewery premises. Section 25.222 is 
currently included in the collection of information assigned OMB 
control number 1513-0005; and Sec. Sec.  25.283 is currently included 
in the collection of information assigned OMB control number 1513-0030. 
TTB has submitted to OMB revisions of those information collections to 
account for the reduced burden of the proposed amendments.
    As noted above, TTB has submitted the revised information 
collection requirements to the 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 
<a href="/cdn-cgi/l/email-protection#dd92948f9c82aea8bfb0b4aeaeb4b2b3ae9db2b0bff3b8b2adf3bab2ab"><span class="__cf_email__" data-cfemail="aae5e3f8ebf5d9dfc8c7c3d9d9c3c5c4d9eac5c7c884cfc5da84cdc5dc">[email protected]</span></a>. 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 August 8, 2022. Comments 
are specifically requested concerning:
    (1) 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;
    (2) The accuracy of the estimated burdens associated with the 
collections of information submitted to OMB;
    (3) How to enhance the quality, utility, and clarity of the 
information to be collected;
    (4) 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
    (5) 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 25

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

Proposed Amendments to the Regulations

    For the reasons discussed above in the preamble, TTB proposes to 
amend 27 CFR part 25 as follows:

PART 25--BEER

0
1. The authority citation for part 25 continues to read as follows:

    Authority: 19 U.S.C. 81c; 26 U.S.C. 5002, 5051-5054, 5056, 5061, 
5121, 5122-5124, 5222, 5401-5403, 5411-5417, 5551, 5552, 5555, 5556, 
5671, 5673, 5684, 6011, 6061, 6065, 6091, 6109, 6151, 6301, 6302, 
6311, 6313, 6402, 6651, 6656, 6676, 6806, 7342, 7606, 7805; 31 
U.S.C. 9301, 9303-9308.

0
2. Section 25.5 is revised to read as follows:


Sec.  25.5  OMB control numbers assigned under the Paperwork Reduction 
Act.

    (a) Purpose. This section displays the control numbers assigned to 
information collection requirements in this part by the Office of 
Management and Budget (OMB) under the Paperwork Reduction Act of 1995, 
Public Law 104-13.
    (b) Display. The following display identifies each section in this 
part that contains an information collection requirement and the OMB 
control number assigned to that information collection requirement.

                                            Table 1 to Paragraph (b)
----------------------------------------------------------------------------------------------------------------
                                                                    Current OMB    Section where    Current OMB
                     Section where contained                        control No.      contained      control No.
----------------------------------------------------------------------------------------------------------------
25.23...........................................................       1513-0005          25.163       1513-0083
25.24...........................................................       1513-0086                       1513-0088
25.35...........................................................       1513-0086          25.164       1513-0088
25.42...........................................................       1513-0058          25.165       1513-0088
25.52...........................................................       1513-0005          25.166       1513-0088
25.53...........................................................       1513-0118          25.167       1513-0005
                                                                       1513-0122          25.168       1513-0083
25.55...........................................................       1513-0118          25.175       1513-0083
                                                                       1513-0122          25.184       1513-0005
25.56...........................................................       1513-0118          25.186       1513-0058
                                                                       1513-0122          25.192       1513-0058
25.57...........................................................       1513-0118                       1513-0086
                                                                       1513-0122          25.195       1513-0058
25.58...........................................................       1513-0118          25.196       1513-0058
                                                                       1513-0122                       1513-0086
25.61...........................................................       1513-0005          25.211       1513-0058
25.62...........................................................       1513-0005          25.213       1513-0005

[[Page 34830]]

 
25.64...........................................................       1513-0005                       1513-0086
25.65...........................................................       1513-0014          25.221       1513-0005
25.66...........................................................       1513-0005          25.224       1513-0083
25.68...........................................................       1513-0005          25.231       1513-0086
25.71...........................................................       1513-0005          25.241       1513-0085
25.72...........................................................       1513-0005          25.242       1513-0085
                                                                       1513-0013                       1513-0086
                                                                       1513-0088          25.243       1513-0085
25.73...........................................................       1513-0005          25.251       1513-0086
                                                                       1513-0013          25.252       1513-0058
                                                                       1513-0015          25.263       1513-0058
                                                                       1513-0088                       1513-0086
25.74...........................................................       1513-0005          25.264       1513-0058
                                                                       1513-0088          25.271       1513-0013
25.75...........................................................       1513-0005          25.272       1513-0005
                                                                       1513-0088          25.273       1513-0005
25.76...........................................................       1513-0005          25.274       1513-0015
25.77...........................................................       1513-0005          25.276       1513-0058
                                                                       1513-0013                       1513-0088
                                                                       1513-0015          25.277       1513-0005
                                                                       1513-0088          25.281       1513-0030
25.78...........................................................       1513-0005                       1513-0088
                                                                       1513-0088          25.282       1513-0005
25.79...........................................................       1513-0005                       1513-0030
                                                                                                       1513-0088
25.81...........................................................       1513-0005          25.283       1513-0030
                                                                       1513-0009                       1513-0088
                                                                       1513-0013          25.284       1513-0088
25.85...........................................................       1513-0005          25.285       1513-0030
25.91...........................................................       1513-0015                       1513-0083
25.92...........................................................       1513-0013                       1513-0088
25.93...........................................................       1513-0015          25.286       1513-0030
25.94...........................................................       1513-0015                       1513-0088
25.95...........................................................       1513-0013          25.291       1513-0058
                                                                       1513-0015                       1513-0088
25.97...........................................................       1513-0015          25.292       1513-0058
25.98...........................................................       1513-0015          25.293       1513-0058
25.103..........................................................       1513-0013          25.294       1513-0058
25.141..........................................................       1513-0005          25.295       1513-0058
                                                                       1513-0086          25.296       1513-0007
25.142..........................................................       1513-0005          25.296       1513-0058
                                                                       1513-0086          25.297       1513-0007
25.143..........................................................       1513-0086          25.298       1513-0083
25.144..........................................................       1513-0005                       1513-0088
25.145..........................................................       1513-0086          25.300       1513-0058
25.151..........................................................       1513-0088                       1513-0088
25.158..........................................................       1513-0005          25.301       1513-0058
25.160..........................................................       1513-0083
----------------------------------------------------------------------------------------------------------------

0
3. Section 25.11 is amended by:
0
a. Removing the phrase ``Form 5130.10'' each place it appears and 
adding, in its place, ``form TTB F 5130.10''; and
0
b. Adding, in alphabetical order, definitions of ``Retail service 
operation'' and ``Written notice''.
    The additions read as follows:


Sec.  25.11  Meaning of terms.

* * * * *
    Retail service operation. Retail sale by a brewer on brewery 
premises of beer produced by the brewer, other alcohol beverages, food, 
or other brewery related merchandise.
* * * * *
    Written notice. A statement on a company's letterhead or similar 
medium that clearly identifies the company and shows that the statement 
is from a company representative with power of attorney described at 
Sec.  25.65, submitted in paper or electronically.
0
4. Section 25.23 is amended by:
0
a. Revising paragraph (b)(6) and the first sentence of paragraph (c); 
and
0
b. Removing the parenthetical authority citation at the end of the 
section.
    The revisions read as follows:


Sec.  25.23  Restrictions on use.

* * * * *
    (b) * * *
    (6) Involve retail service operations in accordance with Sec.  
25.25.
    (c) Application. Except as provided in Sec.  25.25 for retail 
service operations on brewery premises, a brewer desiring to use a 
brewery for other purposes must submit to the appropriate TTB officer 
an application listing the purposes. * * *


Sec.  25.24  [Amended]

0
5. Section 25.24 is amended by:
0
a. Removing, in paragraph (a)(1), the words ``nontaxpaid beer'' and 
adding, in

[[Page 34831]]

their place, ``beer that has not been tax determined'';
0
b. Removing, in paragraph (a)(2), the word ``shall'' and adding, in its 
place, the word ``must''; and
0
c. Removing the parenthetical authority citation at the end of the 
section.
0
6. Section 25.25 is revised to read as follows:


Sec.  25.25  Retail service operations at brewery.

    (a) General. A brewer desiring to sell untaxpaid beer, taxpaid beer 
of another brewer's production, taxpaid wine, or taxpaid distilled 
spirits for consumption at the brewery is authorized to engage in such 
operations subject to the procedures and conditions set forth in this 
section.
    (b) Sale of beer from tanks. A brewer may dispense untaxpaid beer 
from tanks for sale and consumption at the brewery, subject to the 
conditions relating to tax determination set forth in this paragraph 
(b). The brewer must have a suitable method for measurement of the beer 
dispensed from any tank as required by subpart E of this part, such as 
a meter or gauge glass. The brewer must determine the tax on the beer 
dispensed by measuring the amount dispensed for sale each day and 
preparing the brewer's record of tax determination, required by Sec.  
25.292(a)(8).
    (c) Sale of packaged beer. A brewer may dispense untaxpaid beer 
from barrels and kegs, or make available untaxpaid beer in bottles, for 
sale and consumption at the brewery, subject to the following 
conditions relating to tax determination:
    (1) Barrels and kegs. Barrels and kegs must be tax determined at 
the time they are tapped for the sale of beer for consumption on the 
brewery premises; barrels and kegs must be reflected on the brewer's 
record of tax determination, required by Sec.  25.292(a)(8), for the 
day on which they are tapped. Barrels and kegs that have been tapped 
and tax determined for sale and consumption on the brewery premises 
must be physically marked or segregated in such a manner as to preclude 
mixing with beer that has not been tax determined.
    (2) Bottles. Bottles must be tax determined at the time they are 
sold for consumption on the brewery premises and reflected on the 
brewer's record of tax determination, required by Sec.  25.292(a)(8), 
for the day on which sold.
    (3) Storage of taxpaid or tax determined beer. The prohibition of 
Sec.  25.24 does not apply to tax determined or taxpaid beer handled in 
accordance with this subsection. Such beer may continue to be sold for 
consumption on the brewery premises after it has been tax determined or 
taxpaid.
    (d) Sale of taxpaid alcohol. A brewer may sell taxpaid wine and 
distilled spirits, as well as taxpaid beer of another brewer's 
production, for consumption at the brewery. Any taxpaid beer of another 
brewer's production must be stored as required by Sec.  25.24(a). Any 
records of sales of taxpaid wine, distilled spirits, and/or beer of 
another brewer's production must be distinguishable from records of 
sales of beer described in paragraphs (b) and (c) of this section.
    (e) Other sales. A brewer may sell food as well as brewery-related 
merchandise at the brewery. Any business records of other sales that 
the brewer may keep must be distinguishable from records of sales of 
beer described in paragraphs (b) and (c) of this section.


Sec.  25.35   [Amended]

0
7. Section 25.35 is amended in the introductory text by:
0
a. Removing the word ``stationary''; and
0
b. Removing the word ``shall'' and adding, in its place, the word 
``must''.
0
8. Section 25.41 is revised to read as follows:


Sec.  25.41  Measuring system required.

    The brewer must accurately and reliably measure the quantity of 
beer transferred from the brewery cellars for bottling and for racking, 
as well as the quantity of untaxpaid beer sold for consumption on 
brewery premises in accordance with Sec.  25.25. The brewer may use a 
measuring device, such as a meter or gauge glass, or any other suitable 
method.
0
9. Section 25.62 is amended by:
0
a. In paragraph (a) introductory text:
0
i. Removing the word ``shall'' each place it appears and adding, in its 
place, ``must''; and
0
ii. Removing the phrase ``Form 5130.10'' and adding, in its place, 
``form TTB F 5130.10''.
0
b. Removing the parenthetical authority citation at the end of the 
section.
0
10. Section 25.66 is amended by:
0
a. Revising paragraph (c);
0
b. Removing the word ``shall'' in paragraph (d) and adding, in its 
place, ``must''; and
0
c. Removing the parenthetical authority citation at the end of the 
section.
    The revision reads as follows:


Sec.  25.66  Organizational documents.

* * * * *
    (c) Statements 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 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) Legal entities other than individuals. If any interested person 
named under paragraphs (c)(1) and (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 brewery or, in the 
absence of a designated individual, an owner, chief officer or manager, 
or person with similar authority within the entity.
* * * * *
0
11. Section 25.68 is revised to read as follows:


Sec.  25.68  Description of brewery.

    (a) As required by Sec.  25.62(a)(5), the Brewer's Notice must 
include a description of the brewery premises. The description may be 
in narrative form or diagram form, and must describe or illustrate:
    (1) The overall dimensions of the building(s) housing the brewery 
and, if the brewery occupies less than the entire building, the 
boundaries of the brewery within the building; and
    (2) Any portions of the brewery 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

[[Page 34832]]

submitted upon request of the appropriate TTB officer.


Sec.  25.71   [Amended]

0
12. Section 25.71 is amended by:
0
a. Removing ``shall'' and ``30 days'' and adding, in their places, 
``must'' and ``60 days'', respectively, in paragraph (a)(1);
0
b. Removing the phrase ``Form 5130.10'' each place it appears in 
paragraphs (a)(1) and (2) and (b)(2) and adding, in its place, ``form 
TTB F 5130.10''; and
0
c. Removing the parenthetical authority citation at the end of the 
section.
0
13. Section 25.74 is revised to read as follows:


Sec.  25.74  Changes in ownership interests.

    Changes in the list of persons with an ownership interest furnished 
under the provisions of Sec.  25.66(c)(2) must be submitted annually by 
the brewer on July 1 or on any other date approved by the appropriate 
TTB officer. When a change in the ownership interests results in a 
change in the control or management of the business, notification of 
the change will be made within 60 days in accordance with Sec.  25.71.
0
14. Section 25.75 is amended by:
0
a. Revising the first sentence; and
0
b. Removing the parenthetical authority citation at the end of the 
section.
    The revision reads as follows:


Sec.  25.75  Change in officers and directors.

    When there is any change in the list of officers or directors 
furnished under the provisions of Sec.  25.66(a)(2), the brewer must 
submit, within 60 days of the change, an amended notice on form TTB F 
5130.10. * * *
0
15. Section 25.76 is added to read as follows:


Sec.  25.76  Change in trade name.

    Before using a trade name for marking or labeling purposes as 
required by subpart J of this part, the brewer must first submit a 
written notice to the appropriate TTB officer listing the new name and 
the office(s) where it is registered.
0
16. Section 25.81 is amended by:
0
a. Revising paragraphs (a), (b), (c), (d)(6), and (e); and
0
b. Removing the parenthetical authority citation at the end of the 
section.
    The revisions read as follows:


Sec.  25.81  Alternation of brewery and wine premises or distilled 
spirits plant.

    (a) General. A brewer may temporarily extend or curtail the brewery 
premises to allow for several other types of alternate uses. A 
curtailment or extension of brewery premises may allow for the use of 
the premises as:
    (1) An adjacent bonded wine cellar;
    (2) An adjacent taxpaid wine bottling house; or
    (3) An adjacent distilled spirits plant.
    (b) Qualifying documents. Before alternating the brewery for a 
purpose listed in paragraph (a) of this section, the proprietor must 
file and receive approval of the necessary registration, application 
forms and attachments that relate to the proposed alternate use. 
Depending on the type of alternation involved, the proprietor must file 
one or more of the following qualification documents:
    (1) Brewer's Notice. For all alternate uses of the brewery 
described in paragraph (a) of this section the proprietor must file a 
form TTB F 5130.10, Brewer's Notice, to cover the proposed alternation 
of premises.
    (2) Description. For all alternate uses, the proprietor must 
provide additional versions of the description required under Sec.  
25.62(a)(5) describing in narrative form or illustrating by diagram 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 sequence.
    (3) Bond. For all alternate uses, the proprietor must provide 
evidence of an existing bond, consent of surety, or a new bond to cover 
the proposed alternation of premises. The requirement in this paragraph 
(b)(3) does not apply if a bond is not required under this chapter to 
cover the proposed alternation.
    (4) Bonded wine cellar or taxpaid wine bottling house. If the 
proprietor intends to alternate the brewery premises or part of the 
brewery premises as a bonded wine cellar or taxpaid wine bottling 
house, the proprietor must also file form TTB F 5120.25, Application to 
Establish and Operate Wine Premises.
    (5) Distilled spirits plant. If the proprietor intends to alternate 
the brewery premises or part of the brewery premises as a distilled 
spirits plant, the proprietor must also file form TTB F 5110.41, 
Registration of a Distilled Spirits Plant, to cover the proposed 
alternation of premises.
    (c) Brewer's responsibility. After approval of qualifying 
documents, the proprietor may alternate the designated premises 
pursuant to a written notice submitted to the appropriate TTB officer. 
The notice must contain the information required by paragraph (d) of 
this section. Prior to the effective date and hour of the alternation, 
the proprietor must segregate products as follows:
    (1) Wine operations. Prior to alternation from brewery premises to 
wine premises, the proprietor must remove all beer from the brewery 
premises that will be alternated. Prior to alternation from wine 
premises to brewery premises, the proprietor must remove all wine and 
spirits from the wine premises that will be alternated.
    (2) Distilled spirits plant. Prior to alternation of brewery 
premises to distilled spirits plant premises, the proprietor must 
remove all beer from the premises except beer that is being received 
for production of distilled spirits as provided in 27 CFR 19.296. Prior 
to alternation from distilled spirits plant premises to operation of a 
brewery the proprietor must remove all spirits, denatured spirits, 
articles and wine from the premises to be alternated to brewery 
premises.
    (d) * * *
    (6) Identification of the description or diagram depicting the 
premises as they exist when curtailed or extended; and
* * * * *
    (e) Separation of premises. The appropriate TTB officer may require 
that the portion of brewery premises, wine premises, or distilled 
spirits plant premises extended or curtailed under this section be 
separated, in a manner satisfactory to the appropriate TTB officer, 
from the remaining portion of the brewery premises, wine premises, or 
distilled spirits plant premises.
0
17. Section 25.85 is revised to read as follows:


Sec.  25.85  Notice of permanent discontinuance.

    When a brewer desires to discontinue business permanently, they 
must provide a written notice to the appropriate TTB officer indicating 
the date on which business discontinued or will discontinue. Upon 
request of the appropriate TTB officer, the brewer must file a final 
report of operations on form TTB F 5130.9 or form TTB F 5130.26 showing 
no beer or cereal beverage on hand and marked ``Final Report.''
0
18. Section 25.91 is amended by:
0
a. Removing the phrase ``Form 5130.22'' each place it appears in 
paragraphs (a) and (b) and adding, in its place, ``form TTB F 
5130.22'';
0
b. Removing the word ``shall'' each place it appears in paragraphs (a) 
and (c) and adding, in its place, ``must'';
0
c. Adding paragraph (f); and

[[Page 34833]]

0
d. Removing the parenthetical authority citation at the end of the 
section.
    The addition reads as follows:


Sec.  25.91  Requirement for bond.

* * * * *
    (f) Blanket bond. A brewer that operates more than one brewery may, 
in lieu of filing separate bonds, file a blanket bond on form TTB F 
5130.22 for any or all of the breweries. The total amount of any 
blanket bond given under this section must be available for the 
satisfaction of any liability incurred at any factory covered by the 
bond.
0
19. Section 25.93 is amended by:
0
a. Adding paragraph (a)(4);
0
b. Removing the word ``shall'' each place it appears in paragraph (b) 
and adding, in its place, ``must'';
0
c. Revising paragraph (c); and
0
d. Removing the parenthetical authority citation at the end of the 
section.
    The addition and revision read as follows:


Sec.  25.93  Penal sum of bond.

    (a) * * *
    (4) Blanket bonds. Where a brewer operates multiple breweries and 
obtains a blanket bond covering any or all of the breweries, the penal 
sum of the blanket bond must be equal to the aggregate penal sum 
applicable to all of the breweries covered by such bond, as calculated 
under paragraphs (a)(1) through (3) of this section.
* * * * *
    (c) Maximum and minimum penal sums--(1) Single brewery bond. The 
maximum penal sum of the bond (or total penal sum if original and 
strengthening bonds are filed) is not to exceed $150,000 when the tax 
on beer is to be prepaid, or $500,000 when the tax is to be deferred as 
provided in Sec.  25.164. The minimum penal sum of a bond is $1,000.
    (2) Blanket bond. The maximum penal sum of the blanket bond (or 
total penal sum if original and strengthening bonds are filed) is not 
to exceed $150,000 per brewery covered by the blanket bond where the 
tax on beer is to be prepaid, or $500,000 per brewery covered by the 
blanket bond when the tax is to be deferred as provided in Sec.  
25.164. The minimum penal sum of a blanket bond is $1,000 per brewery 
covered by the blanket bond.
0
20. Section 25.102 is amended by:
0
a. Revising paragraph (b); and
0
b. Removing the parenthetical authority citation at the end of the 
section.
    The revision reads as follows:


Sec.  25.102  Termination of surety's liability.

* * * * *
    (b) The date of discontinuance of business of the brewer indicated 
on the notice required under Sec.  25.85;
* * * * *
0
21. Section 25.159 is amended by
0
a. Revising paragraph (a);
0
b. Removing the word ``shall'' in paragraph (c)(2) and adding, in its 
place, ``must''; and
0
c. Removing the parenthetical authority citation at the end of the 
section.
    The revision reads as follows:


Sec.  25.159  Time of tax determination and payment; offsets.

    (a) Time and payment. The tax on beer will be determined at the 
time of its removal for consumption or sale, and will be paid by return 
as provided in this part. In the case of retail service operations, see 
Sec.  25.25 for tax determination requirements.
* * * * *
0
22. Section 25.221 is amended by:
0
a. Revising paragraph (a)(2); and
0
b. Removing the parenthetical authority citation at the end of the 
section.
    The revision reads as follows:


Sec.  25.221  Voluntary destruction of beer.

    (a) * * *
    (2) A brewer conducting retail service operations under Sec.  
25.25(b) or (c) may destroy taxpaid or tax-determined beer stored on 
brewery premises, in accordance with the requirements of Sec.  25.225.
* * * * *
0
23. Section 25.222 is amended by:
0
a. Revising paragraph (b); and
0
b. Removing the parenthetical authority citation at the end of the 
section.
    The revision reads as follows:


Sec.  25.222  Notice of brewer.

* * * * *
    (b) Execution of notice. The brewer shall serially number each 
notice and execute each notice under penalties of perjury as defined in 
Sec.  25.11. The brewer shall specify the date on which the beer is to 
be destroyed.
* * * * *
0
24. Section 25.225 is amended by:
0
a. Revising paragraphs (a) and (b)(1); and
0
b. Removing the word ``shall'' in paragraph (b)(2) and adding, in its 
place, ``must''.
    The revisions read as follows:


Sec.  25.225  Destruction of taxpaid beer which was never removed from 
brewery premises.

    (a) General. A brewer conducting retail service operations under 
Sec.  25.25(b) or (c) may destroy taxpaid or tax-determined beer which 
was never removed from brewery premises, in accordance with the 
recordkeeping requirements of paragraph (b) of this section, and with 
the benefit of the tax refund provisions of paragraph (c) of this 
section.
    (b) * * *
    (1) When taxpaid or tax-determined beer which was never removed 
from brewery premises is destroyed, the brewer must prepare a record of 
the quantity of beer destroyed, and the reason for, date of, and method 
of, destruction. The brewer may prepare this record on form TTB F 
5620.8 for submission as a claim under Sec.  25.283.
* * * * *
0
25. Section 25.283 is amended by:
0
a. Removing the word ``shall'' each place it appears in paragraphs (a) 
introductory text, (b) introductory text, (c) introductory text, and 
(e) and adding, in its place, ``must'';
0
b. Revising paragraphs (a)(9) and (10) and adding paragraph (a)(11);
0
c. Removing the phrase ``Form 2635 (5620.8)'' and adding, in its place, 
``form TTB F 5620.8'' in paragraph (e); and
0
d. Removing the parenthetical authority citation at the end of the 
section.
    The revisions and addition read as follows:


Sec.  25.283  Claims for refund of tax.

    (a) * * *
    (9) A statement that the tax has been fully paid or determined;
    (10) A reference to the notice filed under Sec.  25.213 (if 
required) or Sec.  25.222; and
    (11) For beer voluntarily destroyed at a location other than a 
brewery, proof of the destruction through commercial records relating 
to the destruction.
* * * * *


Sec.  25.284  [Amended]

0
26. Section 25.284 is amended by:
0
a. Removing the phrase ``Form 5000.24'' in paragraph (a) and adding, in 
its place, ``form TTB F 5000.24'';
0
b. Removing the word ``shall'' in paragraph (f) introductory text and 
adding, in its place, ``must''; and
0
c. Removing the phrase ``and (10)'' and adding, in its place, ``(10), 
and (11)'' in paragraph (f)(1); and
0
d. Removing the parenthetical authority citation at the end of the 
section.
0
27. Section 25.292 is amended by:
0
a. Removing the word ``shall'' each place it appears in paragraphs (a) 
introductory text and (b) introductory text and adding, in its place, 
``must'';
0
b. Revising paragraphs (a)(8) and (11); and

[[Page 34834]]

0
c. Removing the parenthetical authority citation at the end of the 
section.
    The revisions read as follows:


Sec.  25.292  Daily records of operations.

    (a) * * *
    (8) Beer removed for consumption or sale.
    (i) For each removal of beer from the brewery, the record will show 
the date of removal, the person to whom the beer was shipped or 
delivered (not required for sales in quantities of one-half barrel or 
less for delivery at the brewery), and the quantities of beer removed 
in kegs and in bottles.
    (ii) For removals of beer for sale and consumption at the brewery, 
the record will show, for each day of operation, the barrel equivalent 
of: The total bottles of beer sold for consumption at the brewery; the 
total amount of beer poured from any tank(s) and sold for consumption 
at the brewery; and the barrels or kegs tapped for the sale of beer for 
consumption at the brewery. Barrel equivalents must be calculated in 
accordance with Sec. Sec.  25.156 through 25.158. The daily record will 
be supported by records of individual sales transactions.
* * * * *
    (11) Beer provided gratuitously for consumption at the brewery and 
not as part of a retail service operation.
* * * * *
0
28. Section 25.294 is amended by:
0
a. Revising paragraph (a);
0
b. Redesignating paragraphs (b) and (c) as paragraphs (c) and (d), 
respectively;
0
c. Adding a new paragraph (b);
0
d. Adding headings to newly redesignated paragraphs (c) and (d);
0
e. Removing the word ``shall'' each place it appears in newly 
redesignated paragraphs (c) introductory text and (d) and adding, in 
its place, ``must''; and
0
f. Removing the parenthetical authority citation at the end of the 
section.
    The additions and revision read as follows:


Sec.  25.294  Inventories.

    (a) General. The brewer must take a physical inventory of beer and 
cereal beverage at least once each calendar month. The brewer must take 
this inventory within 15 days of the close of the calendar month for 
which made.
    (b) Exception for annual and quarterly filers. A brewer authorized 
to use an annual return period under Sec.  25.164(c)(2) need only take 
a physical inventory of beer and cereal beverage in the month that 
their annual tax return is due. A brewer authorized to use a quarterly 
return period under Sec.  25.164(c)(3) need only take physical 
inventories of beer and cereal beverage in the months in which their 
quarterly tax returns are due. The brewer must take the inventories 
required by this paragraph (b) within 15 days of the close of the 
calendar month in which made.
    (c) Inventory record. * * *
    (d) Record retention. * * *
0
29. Section 25.300 is amended by:
0
a. Revising paragraph (a); and
0
b. Removing the word ``shall'' in paragraph (b) and adding, in its 
place, ``must''; and
0
c. Removing the parenthetical authority citation at the end of the 
section.
    The revision reads as follows:


Sec.  25.300  Retention and preservation of records.

    (a) Place of maintenance. Records required by this part generally 
will be prepared and kept by the brewer at the brewery premises where 
the operation or transaction occurs and will be available for 
inspection by any appropriate TTB officer during business hours. If a 
brewer desires to keep the required records at any location other than 
the brewery premises, they must first provide written notice to the 
appropriate TTB officer of the location where the records are to be 
kept. Any brewer keeping records at a location other than the brewery 
premises must make them available at the brewery premises upon request 
of the appropriate TTB officer; however, the appropriate TTB officer 
may allow the brewer to supply copies (including electronic copies) of 
such records instead of the originals.
* * * * *

    Signed: May 27, 2022.
Mary Ryan,
Administrator.

    Approved: May 27, 2022.
Timothy E. Skud,
Deputy Assistant Secretary, (Tax, Trade and Tariff Policy).
[FR Doc. 2022-11902 Filed 6-7-22; 8:45 am]
BILLING CODE 4810-31-P


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