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‘‘(8) SPECIAL RULE FOR 2018 AND 2019.— 
‘‘(A) IN GENERAL.—In the case of wine re-
moved after December 31, 2017, and before Jan-
uary 1, 2020, paragraphs (1) and (2) shall not 
apply and 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, plus 
‘‘(iii) 53.5 cents per wine gallon on the 
first 620,000 wine gallons of wine to which 
clauses (i) and (ii) do not apply, 
which are produced by the producer and removed 
during the calendar year for consumption or 
sale, or which are imported by the importer into 
the United States during the calendar year. 
‘‘(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—
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‘‘(i) in clause (i) of such subparagraph, 
by substituting ‘6.2 cents’ for ‘$1’, 
‘‘(ii) in clause (ii) of such subpara-
graph, by substituting ‘5.6 cents’ for ‘90 
cents’, and 
‘‘(iii) in clause (iii) of such subpara-
graph, by substituting ‘3.3 cents’ for ‘53.5 
cents’.’’, 
(b) CONTROLLED GROUP
AND SINGLE TAXPAYER 
RULES.—Paragraph (4) of section 5041(c) is amended by 
striking ‘‘section 5051(a)(2)(B)’’ and inserting ‘‘section 
5051(a)(5)’’. 
(c) ALLOWANCE OF CREDIT FOR FOREIGN MANUFAC-
TURERS AND IMPORTERS.—Subsection (c) of section 5041, 
as amended by subsection (a), is amended— 
(1) in subparagraph (A) of paragraph (8), by 
inserting ‘‘but only if the importer is an electing im-
porter under paragraph (9) and the wine gallons of 
wine have been assigned to the importer pursuant to 
such paragraph’’ after ‘‘into the United States during 
the calendar year’’, and 
(2) by adding at the end the following new para-
graph: 
‘‘(9) ALLOWANCE OF CREDIT FOR FOREIGN MAN-
UFACTURERS AND IMPORTERS.—
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‘‘(A) IN GENERAL.—In the case of any wine 
gallons of wine which have been produced outside 
of the United States and imported into the 
United States, the credit allowable under para-
graph (8) (referred to in this paragraph as the 
‘tax credit’) may be assigned by the person who 
produced such wine (referred to in this para-
graph as the ‘foreign producer’), provided that 
such person makes an election described in sub-
paragraph (B)(ii), to any electing importer of 
such wine gallons pursuant to the requirements 
established by the Secretary under subparagraph 
(B). 
‘‘(B) ASSIGNMENT.—The Secretary shall, 
through such rules, regulations, and procedures 
as are determined appropriate, establish proce-
dures for assignment of the tax credit provided 
under this paragraph, which shall include— 
‘‘(i) a limitation to ensure that the 
number of wine gallons of wine for which 
the tax credit has been assigned by a foreign 
producer— 
‘‘(I) to any importer does not ex-
ceed the number of wine gallons of 
wine produced by such foreign pro-
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ducer during the calendar year which 
were imported into the United States 
by such importer, and 
‘‘(II) to all importers does not ex-
ceed the 750,000 wine gallons of wine 
to which the tax credit applies, 
‘‘(ii) procedures that allow the election 
of a foreign producer to assign and an im-
porter to receive the tax credit provided 
under this paragraph, 
‘‘(iii) requirements that the foreign 
producer provide any information as the 
Secretary determines necessary and appro-
priate for purposes of carrying out this 
paragraph, and 
‘‘(iv) procedures that allow for revoca-
tion of eligibility of the foreign producer 
and the importer for the tax credit provided 
under this paragraph in the case of any er-
roneous or fraudulent information provided 
under clause (iii) which the Secretary 
deems to be material to qualifying for such 
credit. 
‘‘(C) CONTROLLED
GROUP.—For purposes 
of this section, any importer making an election
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‘‘(1) IN GENERAL.—For purposes of subsections 
(a) and (b)(1), mead and low alcohol by volume wine 
shall be deemed to be still wines containing not more 
than 16 percent of alcohol by volume. 
‘‘(2) DEFINITIONS.— 
‘‘(A) MEAD.—For purposes of this section, 
the term ‘mead’ means a wine— 
‘‘(i) containing not more than 0.64 
gram of carbon dioxide per hundred milli-
liters of wine, except that the Secretary 
shall by regulations prescribe such toler-
ances to this limitation as may be reason-
ably necessary in good commercial practice, 
‘‘(ii) which is derived solely from 
honey and water, 
‘‘(iii) which contains no fruit product 
or fruit flavoring, and 
‘‘(iv) which contains less than 8.5 per-
cent alcohol by volume. 
‘‘(B) LOW ALCOHOL BY VOLUME WINE.— 
For purposes of this section, the term ‘low alco-
hol by volume wine’ means a wine— 
‘‘(i) containing not more than 0.64 
gram of carbon dioxide per hundred milli-
liters of wine, except that the Secretary
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shall by regulations prescribe such toler-
ances to this limitation as may be reason-
ably necessary in good commercial practice, 
‘‘(ii) which is derived— 
‘‘(I) primarily from grapes, or 
‘‘(II) from grape juice concentrate 
and water, 
‘‘(iii) which contains no fruit product 
or fruit flavoring other than grape, and 
‘‘(iv) which contains less than 8.5 per-
cent alcohol by volume. 
‘‘(3) TERMINATION.—This subsection shall not 
apply to wine removed after December 31, 2019.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to wine removed after December 31, 
2017. 
SEC. 13807. REDUCED RATE OF EXCISE TAX ON CERTAIN 
DISTILLED SPIRITS. 
(a) IN GENERAL.—Section 5001 is amended by redes-
ignating subsection (c) as subsection (d) and by inserting 
after subsection (b) the following new subsection: 
‘‘(c) REDUCED RATE FOR 2018 AND 2019.— 
‘‘(1) IN GENERAL.—In the case of a distilled 
spirits operation, the otherwise applicable tax rate 
under subsection (a)(1) shall be—
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‘‘(A) $2.70 per proof gallon on the first 
100,000 proof gallons of distilled spirits, and 
‘‘(B) $13.34 per proof gallon on the first 
22,130,000 of proof gallons of distilled spirits to 
which subparagraph (A) does not apply, 
which have been distilled or processed by such oper-
ation and removed during the calendar year for con-
sumption or sale, or which have been imported by the 
importer into the United States during the calendar 
year. 
‘‘(2) CONTROLLED GROUPS.— 
‘‘(A) IN GENERAL.—In the case of a con-
trolled group, the proof gallon quantities speci-
fied under subparagraphs (A) and (B) of para-
graph (1) shall be applied to such group and ap-
portioned among the members of such group in 
such manner as the Secretary or their delegate 
shall by regulations prescribe. 
‘‘(B) DEFINITION.—For purposes of sub-
paragraph (A), the term ‘controlled group’ shall 
have the meaning given such term by subsection 
(a) of section 1563, except that ‘more than 50 
percent’ shall be substituted for ‘at least 80 per-
cent’ each place it appears in such subsection.
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‘‘(C) RULES
FOR
NON-CORPORATIONS.— 
Under regulations prescribed by the Secretary, 
principles similar to the principles of subpara-
graphs (A) and (B) shall be applied to a group 
under common control where one or more of the 
persons is not a corporation. 
‘‘(D) SINGLE TAXPAYER.—Pursuant to rules 
issued by the Secretary, two or more entities 
(whether or not under common control) that 
produce distilled spirits marketed under a simi-
lar brand, license, franchise, or other arrange-
ment shall be treated as a single taxpayer for 
purposes of the application of this subsection. 
‘‘(3) TERMINATION.—This subsection shall not 
apply to distilled spirits removed after December 31, 
2019.’’. 
(b) CONFORMING AMENDMENT.—Section 7652(f)(2) is 
amended by striking ‘‘section 5001(a)(1)’’ and inserting 
‘‘subsection (a)(1) of section 5001, determined as if sub-
section (c)(1) of such section did not apply’’. 
(c) APPLICATION OF REDUCED TAX RATE FOR FOR-
EIGN MANUFACTURERS AND IMPORTERS.—Subsection (c) of 
section 5001, as added by subsection (a), is amended— 
(1) in paragraph (1), by inserting ‘‘but only if 
the importer is an electing importer under paragraph
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(3) and the proof gallons of distilled spirits have been 
assigned to the importer pursuant to such paragraph’’ 
after ‘‘into the United States during the calendar 
year’’, and 
(2) by redesignating paragraph (3) as para-
graph (4) and by inserting after paragraph (2) the 
following new paragraph: 
‘‘(3) REDUCED TAX RATE FOR FOREIGN MANU-
FACTURERS AND IMPORTERS.— 
‘‘(A) IN GENERAL.—In the case of any proof 
gallons of distilled spirits which have been pro-
duced outside of the United States and imported 
into the United States, the rate of tax applicable 
under paragraph (1) (referred to in this para-
graph as the ‘reduced tax rate’) may be assigned 
by the distilled sprits operation (provided that 
such operation makes an election described in 
subparagraph (B)(ii)) to any electing importer 
of such proof gallons pursuant to the require-
ments established by the Secretary under sub-
paragraph (B). 
‘‘(B) ASSIGNMENT.—The Secretary shall, 
through such rules, regulations, and procedures 
as are determined appropriate, establish proce-
dures for assignment of the reduced tax rate pro-
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vided under this paragraph, which shall in-
clude— 
‘‘(i) a limitation to ensure that the 
number of proof gallons of distilled spirits 
for which the reduced tax rate has been as-
signed by a distilled spirits operation— 
‘‘(I) to any importer does not ex-
ceed the number of proof gallons pro-
duced by such operation during the 
calendar year which were imported 
into the United States by such im-
porter, and 
‘‘(II) to all importers does not ex-
ceed the 22,230,000 proof gallons of 
distilled spirits to which the reduced 
tax rate applies, 
‘‘(ii) procedures that allow the election 
of a distilled spirits operation to assign and 
an importer to receive the reduced tax rate 
provided under this paragraph, 
‘‘(iii) requirements that the distilled 
spirits operation provide any information 
as the Secretary determines necessary and 
appropriate for purposes of carrying out 
this paragraph, and
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‘‘(iv) procedures that allow for revoca-
tion of eligibility of the distilled spirits op-
eration and the importer for the reduced tax 
rate provided under this paragraph in the 
case of any erroneous or fraudulent infor-
mation provided under clause (iii) which 
the Secretary deems to be material to quali-
fying for such reduced rate. 
‘‘(C) CONTROLLED GROUP.— 
‘‘(i) IN
GENERAL.—For purposes of 
this section, any importer making an elec-
tion described in subparagraph (B)(ii) shall 
be deemed to be a member of the controlled 
group of the distilled spirits operation, as 
described under paragraph (2). 
‘‘(ii) APPORTIONMENT.—For purposes 
of this paragraph, in the case of a con-
trolled group, rules similar to section 
5051(a)(5)(B) shall apply.’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to distilled spirits removed after Decem-
ber 31, 2017. 
SEC. 13808. BULK DISTILLED SPIRITS. 
(a) IN GENERAL.—Section 5212 is amended by adding 
at the end the following sentence: ‘‘In the case of distilled
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spirits transferred in bond after December 31, 2017, and 
before January 1, 2020, this section shall be applied with-
out regard to whether distilled spirits are bulk distilled 
spirits.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply distilled spirits transferred in bond after 
December 31, 2017. 
Subpart B—Miscellaneous Provisions 
SEC. 13821. MODIFICATION OF TAX TREATMENT OF ALASKA 
NATIVE CORPORATIONS AND SETTLEMENT 
TRUSTS. 
(a) EXCLUSION FOR ANCSA PAYMENTS ASSIGNED TO 
ALASKA NATIVE SETTLEMENT TRUSTS.— 
(1) IN GENERAL.—Part III of subchapter B of 
chapter 1 is amended by inserting before section 140 
the following new section: 
‘‘SEC. 139G. ASSIGNMENTS TO ALASKA NATIVE SETTLE-
MENT TRUSTS. 
‘‘(a) IN GENERAL.—In the case of a Native Corpora-
tion, gross income shall not include the value of any pay-
ments that would otherwise be made, or treated as being 
made, to such Native Corporation pursuant to, or as re-
quired by, any provision of the Alaska Native Claims Set-
tlement Act (43 U.S.C. 1601 et seq.), including any pay-
ment that would otherwise be made to a Village Corporation
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pursuant to section 7(j) of the Alaska Native Claims Settle-
ment Act (43 U.S.C. 1606(j)), provided that any such pay-
ments— 
‘‘(1) are assigned in writing to a Settlement 
Trust, and 
‘‘(2) were not received by such Native Corpora-
tion prior to the assignment described in paragraph 
(1). 
‘‘(b) INCLUSION IN GROSS INCOME.—In the case of a 
Settlement Trust which has been assigned payments de-
scribed in subsection (a), gross income shall include such 
payments when received by such Settlement Trust pursuant 
to the assignment and shall have the same character as if 
such payments were received by the Native Corporation. 
‘‘(c) AMOUNT
AND SCOPE
OF ASSIGNMENT.—The 
amount and scope of any assignment under subsection (a) 
shall be described with reasonable particularity and may 
either be in a percentage of one or more such payments or 
in a fixed dollar amount. 
‘‘(d) DURATION
OF ASSIGNMENT; REVOCABILITY.— 
Any assignment under subsection (a) shall specify— 
‘‘(1) a duration either in perpetuity or for a pe-
riod of time, and 
‘‘(2) whether such assignment is revocable.
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‘‘(e) PROHIBITION ON DEDUCTION.—Notwithstanding 
section 247, no deduction shall be allowed to a Native Cor-
poration for purposes of any amounts described in sub-
section (a). 
‘‘(f) DEFINITIONS.—For purposes of this section, the 
terms ‘Native Corporation’ and ‘Settlement Trust’ have the 
same meaning given such terms under section 646(h).’’. 
(2) CONFORMING AMENDMENT.—The table of sec-
tions for part III of subchapter B of chapter 1 is 
amended by inserting before the item relating to sec-
tion 140 the following new item: 
‘‘Sec. 139G. Assignments to Alaska Native Settlement Trusts.’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to taxable years begin-
ning after December 31, 2016. 
(b) DEDUCTION OF CONTRIBUTIONS TO ALASKA NA-
TIVE SETTLEMENT TRUSTS.— 
(1) IN GENERAL.—Part VIII of subchapter B of 
chapter 1 is amended by inserting before section 248 
the following new section: 
‘‘SEC. 247. CONTRIBUTIONS TO ALASKA NATIVE SETTLE-
MENT TRUSTS. 
‘‘(a) IN GENERAL.—In the case of a Native Corpora-
tion, there shall be allowed a deduction for any contribu-
tions made by such Native Corporation to a Settlement 
Trust (regardless of whether an election under section 646
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is in effect for such Settlement Trust) for which the Native 
Corporation has made an annual election under subsection 
(e). 
‘‘(b) AMOUNT OF DEDUCTION.—The amount of the de-
duction under subsection (a) shall be equal to— 
‘‘(1) in the case of a cash contribution (regard-
less of the method of payment, including currency, 
coins, money order, or check), the amount of such con-
tribution, or 
‘‘(2) in the case of a contribution not described 
in paragraph (1), the lesser of— 
‘‘(A) the Native Corporation’s adjusted basis 
in the property contributed, or 
‘‘(B) the fair market value of the property 
contributed. 
‘‘(c) LIMITATION AND CARRYOVER.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), the 
deduction allowed under subsection (a) for any tax-
able year shall not exceed the taxable income (as de-
termined without regard to such deduction) of the Na-
tive Corporation for the taxable year in which the 
contribution was made. 
‘‘(2) CARRYOVER.—If the aggregate amount of 
contributions described in subsection (a) for any tax-
able year exceeds the limitation under paragraph (1),
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(B) by adding at the end the following new 
subsection: 
‘‘(e) DEDUCTIBLE CONTRIBUTIONS BY NATIVE COR-
PORATIONS TO ALASKA NATIVE SETTLEMENT TRUSTS.— 
‘‘(1) IN GENERAL.—Any Native Corporation (as 
defined in subsection (m) of section 3 of the Alaska 
Native Claims Settlement Act (43 U.S.C. 1602(m))) 
which has made a contribution to a Settlement Trust 
(as defined in subsection (t) of such section) to which 
an election under subsection (e) of section 247 applies 
shall provide such Settlement Trust with a statement 
regarding such election not later than January 31 of 
the calendar year subsequent to the calendar year in 
which the contribution was made. 
‘‘(2) CONTENT OF STATEMENT.—The statement 
described in paragraph (1) shall include— 
‘‘(A) the total amount of contributions to 
which the election under subsection (e) of section 
247 applies, 
‘‘(B) for each contribution, whether such 
contribution was in cash, 
‘‘(C) for each contribution which consists of 
property other than cash, the date that such 
property was acquired by the Native Corporation 
and the adjusted basis and fair market value of