(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to any calendar quarters beginning 
more than 1 year after the date of the enactment of this 
Act. 
SEC. 204. TRANSFER OF BEER BETWEEN BONDED FACILI-
TIES. 
(a) IN GENERAL.—Section 5414 of the Internal Rev-
enue Code of 1986 is amended to read as follows: 
‘‘SEC. 5414. TRANSFER OF BEER BETWEEN BONDED FACILI-
TIES. 
‘‘(a) IN GENERAL.—Beer may be removed from one 
brewery to another bonded brewery, without payment of 
tax, and may be mingled with beer at the receiving brew-
ery, subject to such conditions, including payment of the 
tax, and in such containers, as the Secretary by regula-
tions shall prescribe, which shall include— 
‘‘(1) any removal from one brewery to another 
brewery belonging to the same brewer, 
‘‘(2) any removal from a brewery owned by one 
corporation to a brewery owned by another corpora-
tion when— 
‘‘(A) one such corporation owns the con-
trolling interest in the other such corporation, 
or 
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‘‘(B) the controlling interest in each such 
corporation is owned by the same person or per-
sons, and 
‘‘(3) any removal from one brewery to another 
brewery when— 
‘‘(A) the proprietors of transferring and 
receiving premises are independent of each 
other and neither has a proprietary interest, di-
rectly or indirectly, in the business of the other, 
and 
‘‘(B) the transferor has divested itself of 
all interest in the beer so transferred and the 
transferee has accepted responsibility for pay-
ment of the tax. 
‘‘(b) TRANSFER OF LIABILITY FOR TAX.—For pur-
poses of subsection (a)(3), such relief from liability shall 
be effective from the time of removal from the transferor’s 
bonded premises, or from the time of divestment of inter-
est, whichever is later.’’. 
(b) REMOVAL FROM BREWERY BY PIPELINE.—Sec-
tion 5412 of such Code is amended by inserting ‘‘pursuant 
to section 5414 or’’ before ‘‘by pipeline’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to any calendar quarters beginning 
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more than 1 year after the date of the enactment of this 
Act. 
TITLE III—HARD CIDER 
SEC. 301. MODIFICATION OF DEFINITION OF HARD CIDER. 
(a) IN GENERAL.—Section 5041 of the Internal Rev-
enue Code of 1986 is amended— 
(1) in paragraph (6) of subsection (b), by strik-
ing ‘‘which is a still wine’’ and all that follows 
through ‘‘alcohol by volume’’, and 
(2) by adding at the end the following new sub-
section: 
‘‘(g) HARD CIDER.—For purposes of subsection 
(b)(6), the term ‘hard cider’ means a wine— 
‘‘(1) containing not more than 0.64 gram of 
carbon dioxide per hundred milliliters of wine, except 
that the Secretary may by regulations prescribe such 
tolerances to this limitation as may be reasonably 
necessary in good commercial practice, 
‘‘(2) which is derived primarily from— 
‘‘(A) apples, apple juice concentrate, pears, 
or pear juice concentrate, and 
‘‘(B) water, 
‘‘(3) which contains no fruit product or fruit 
flavoring other than apple or pear, and 
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‘‘(4) which contains at least one-half of 1 per-
cent and less than 8.5 percent alcohol by volume.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to hard cider removed during cal-
endar years beginning after December 31, 2016. 
TITLE IV—WINE 
SEC. 401. REDUCED RATE OF EXCISE TAX ON WINE PRO-
DUCED DOMESTICALLY BY CERTAIN QUALI-
FYING PRODUCERS. 
(a) IN GENERAL.—Section 5041(c) of the Internal 
Revenue Code of 1986 is amended— 
(1) by amending paragraph (1) to read as fol-
lows: 
‘‘(1) ALLOWANCE OF CREDIT.— 
‘‘(A) IN GENERAL.—Except as provided in 
paragraph (2), there shall be allowed as a credit 
against any tax imposed by this title (other 
than chapters 2, 21, and 22) an amount equal 
to the sum of— 
‘‘(i) $1 per wine gallon on the first 
30,000 wine gallons of wine, plus 
‘‘(ii) 90 cents per wine gallon on the 
first 100,000 wine gallons of wine to which 
clause (i) does not apply, 
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on wine gallons which are removed during such 
year for consumption or sale and which have 
been produced at qualified facilities in the 
United States. 
‘‘(B) ADJUSTMENT OF CREDIT FOR HARD 
CIDER.—In the case of wine described in sub-
section (b)(6), subparagraph (A) of this para-
graph shall be applied— 
‘‘(i) in clause (i) of such subpara-
graph, by substituting ‘6.2 cents’ for ‘$1’, 
and 
‘‘(ii) in clause (ii) of such subpara-
graph, by substituting ‘5.6 cents’ for ‘90 
cents’. 
‘‘(C) DENIAL OF CREDIT FOR CHAMPAGNE 
AND
OTHER
SPARKLING
WINES.—This para-
graph shall not apply to wines described in sub-
section (b)(4).’’, 
(2) in paragraph (2)— 
(A) by striking ‘‘paragraph (1)’’ and in-
serting ‘‘clause (ii) of paragraph (1)(A)’’, and 
(B) by striking ‘‘1,000 wine gallons of 
wine produced in excess of 150,000 wine gal-
lons’’ and inserting ‘‘10,000 wine gallons of 
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wine produced in excess of 1,000,000 wine gal-
lons’’, and 
(3) in paragraph (7)— 
(A) in subparagraph (A), by striking ‘‘this 
subsection from benefitting any person who pro-
duces more than 250,000 wine gallons’’ and in-
serting ‘‘paragraph (1)(A)(ii) from benefitting 
any person who produces more than 2,000,000 
wine gallons’’, and 
(B) in subparagraph (B), by striking 
‘‘150,000 
wine 
gallons’’ 
and 
inserting 
‘‘1,000,000 wine gallons’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to wine removed during calendar 
years beginning after December 31, 2016. 
SEC. 402. ADJUSTMENT OF ALCOHOL CONTENT LEVEL FOR 
APPLICATION OF EXCISE TAX RATES. 
(a) IN GENERAL.—Paragraphs (1) and (2) of section 
5041(b) of the Internal Revenue Code of 1986 are amend-
ed by striking ‘‘14 percent’’ each place it appears and in-
serting ‘‘14.25 percent’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to wine removed during calendar 
years beginning after December 31, 2016. 
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