‘‘(1) BONDED WINE CELLAR.—The term ‘bond-
ed wine cellar’ means any premises described in sub-
section (a), including any such premises established 
by a taxpayer described in section 5551(d). 
‘‘(2) BONDED WINERY.—At the discretion of 
the Secretary, any bonded wine cellar that engages 
in production operations may be designated as a 
‘bonded winery’.’’. 
(C) BONDS
FOR
BREWERIES.—Section 
5401 of such Code is amended by adding at the 
end the following new subsection: 
‘‘(c) EXCEPTION FROM BOND REQUIREMENTS FOR 
CERTAIN BREWERIES.—Subsection (b) shall not apply to 
any taxpayer for any period described in section 
5551(d).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date that is 1 year 
after the date of the enactment of this Act. 
SEC. 102. PRODUCTION PERIOD FOR BEER, WINE, AND DIS-
TILLED SPIRITS. 
(a) IN GENERAL.—Section 263A(f) of the Internal 
Revenue Code of 1986 is amended— 
(1) by redesignating paragraph (4) as para-
graph (5), and 
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(2) by inserting after paragraph (3) the fol-
lowing new paragraph: 
‘‘(4) EXEMPTION FOR AGING PROCESS OF FIN-
ISHED BEER, WINE, AND DISTILLED SPIRITS.—For 
purposes of this section, the production period shall 
not include the aging period for— 
‘‘(A) beer (as defined in section 5052(a)), 
‘‘(B) 
wine 
(as 
described 
in 
section 
5041(a)), or 
‘‘(C) distilled spirits (as defined in section 
5002(a)(8)), except such spirits that are unfit 
for use for beverage purposes.’’. 
(b) CONFORMING AMENDMENT.— 
(1) Section 263A(f)(5)(B)(ii) of such Code, as 
redesignated by this section, is amended by inserting 
‘‘except as provided in paragraph (4),’’ before ‘‘end-
ing on the date’’. 
(2) Section 312(n)(1)(C) of such Code is 
amended by striking ‘‘section 263A(f)(4)(B)’’ and 
inserting ‘‘section 263A(f)(5)(B)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to production periods beginning 
after December 31, 2016. 
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TITLE II—BEER 
SEC. 201. REDUCED RATE OF EXCISE TAX ON BEER. 
(a) IN GENERAL.—Section 5051(a)(1) of the Internal 
Revenue Code of 1986 is amended to read as follows: 
‘‘(1) IN GENERAL.— 
‘‘(A) IMPOSITION OF TAX.—A tax is here-
by imposed on all beer brewed or produced, and 
removed for consumption or sale, within the 
United States, or imported into the United 
States. Except as provided in paragraph (2), 
the rate of such tax shall be— 
‘‘(i) $16 on the first 6,000,000 barrels 
of beer which are removed during the cal-
endar year for consumption or sale by a 
brewer or imported into the United States 
in such year by an importer, and 
‘‘(ii) $18 on any barrels of beer to 
which clause (i) does not apply. 
‘‘(B) BARREL.—For purposes of this sec-
tion, a barrel shall contain not more than 31 
gallons of beer, and any tax imposed under this 
section shall be applied at a like rate for any 
other quantity or for fractional parts of a bar-
rel.’’. 
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(b) REDUCED RATE FOR CERTAIN DOMESTIC PRO-
DUCTION.—Section 5051(a)(2)(A) of such Code is amend-
ed— 
(1) in the heading, by striking ‘‘$7’’ and insert-
ing ‘‘$3.50’’, and 
(2) by striking ‘‘$7’’ and inserting ‘‘$3.50’’. 
(c) 
CONFORMING
AMENDMENTS.—Section 
5051(a)(2)(B) of such Code is amended by inserting ‘‘the 
6,000,000 barrel quantity specified in paragraph (1)(A)(i) 
and’’ before ‘‘the 2,000,000 barrel quantity’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to beer removed during calendar 
years beginning after December 31, 2016. 
SEC. 202. USE OF WHOLESOME PRODUCTS SUITABLE FOR 
HUMAN FOOD CONSUMPTION IN THE PRO-
DUCTION OF FERMENTED BEVERAGES. 
(a) IN GENERAL.—Not later than the date that is 
1 year after the date of the enactment of this Act, the 
Secretary of the Treasury or the Secretary of the Treas-
ury’s delegate shall amend subpart F of part 25 of sub-
chapter A of chapter I of title 27, Code of Federal Regula-
tions to ensure that, for purposes of such part, wholesome 
fruits, vegetables, and spices suitable for human food con-
sumption that are generally recognized as safe for use in 
an alcoholic beverage and that do not contain alcohol are 
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generally recognized as a traditional ingredient in the pro-
duction of fermented beverages. 
(b) DEFINITION.—For purposes of this section, the 
term ‘‘fruit’’ means whole fruit, fruit juices, fruit puree, 
fruit extract, or fruit concentrate. 
(c) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to revoke, prescribe, or limit any 
other exemptions from the formula requirements under 
subpart F of part 25 of subchapter A of chapter I of title 
27, Code of Federal Regulations for any ingredient that 
has been recognized before, on, or after the date of the 
enactment of this Act as a traditional ingredient in the 
production of fermented beverages. 
SEC. 
203. 
SIMPLIFICATION 
OF 
RULES 
REGARDING 
RECORDS, STATEMENTS, AND RETURNS. 
(a) IN GENERAL.—Section 5555(a) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following: ‘‘The Secretary shall permit a person to em-
ploy a unified system for any records, statements, and re-
turns required to be kept, rendered, or made under this 
section for any beer produced in the brewery for which 
the tax imposed by section 5051 has been determined, in-
cluding any beer which has been removed for consumption 
on the premises of the brewery.’’. 
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