Craft Beverage Modernization and Tax Reform Act of 2017
This bill amends the Internal Revenue Code, with respect to the tax treatment of certain alcoholic beverages, to:
The Department of the Treasury must amend applicable regulations with respect to the use of wholesome products suitable for human consumption in the production of fermented beverages.
[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 747 Introduced in House (IH)]
<DOC>
115th CONGRESS
1st Session
H. R. 747
To amend the Internal Revenue Code of 1986 to reform taxation of
alcoholic beverages.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 30, 2017
Mr. Paulsen (for himself, Mr. Kind, Mr. McHenry, Mr. DeFazio, Mr.
Tiberi, Mr. Blumenauer, Mr. Reichert, Mr. Thompson of California, Mr.
Newhouse, Ms. Pingree, Mr. Kelly of Pennsylvania, Mr. Emmer, and Mr.
Amodei) introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to reform taxation of
alcoholic beverages.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS; RULE OF CONSTRUCTION.
(a) Short Title.--This Act may be cited as the ``Craft Beverage
Modernization and Tax Reform Act of 2017''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents; rule of construction.
TITLE I--PRODUCTION PERIOD
Sec. 101. Production period for beer, wine, and distilled spirits.
TITLE II--BEER
Sec. 201. Reduced rate of excise tax on beer.
Sec. 202. Use of wholesome products suitable for human food consumption
in the production of fermented beverages.
Sec. 203. Simplification of rules regarding records, statements, and
returns.
Sec. 204. Transfer of beer between bonded facilities.
TITLE III--WINE
Sec. 301. Reduced rate of excise tax on certain wine.
Sec. 302. Adjustment of alcohol content level for application of excise
tax rates.
Sec. 303. Definition of mead and low alcohol by volume wine.
TITLE IV--DISTILLED SPIRITS
Sec. 401. Reduced rate of excise tax on certain distilled spirits.
Sec. 402. Bulk distilled spirits.
TITLE V--FUNDING
Sec. 501. Increased funding for the Alcohol and Tobacco Tax and Trade
Bureau.
(c) Rule of Construction.--Nothing in this Act, the amendments made
by this Act, or any regulation promulgated under this Act or the
amendments made by this Act, shall be construed to preempt, supersede,
or otherwise limit or restrict any State, local, or tribal law that
prohibits or regulates the production or sale of distilled spirits,
wine, or malt beverages.
TITLE I--PRODUCTION PERIOD
SEC. 101. PRODUCTION PERIOD FOR BEER, WINE, AND DISTILLED SPIRITS.
(a) In General.--Section 263A(f) of the Internal Revenue Code of
1986 is amended--
(1) by redesignating paragraph (4) as paragraph (5), and
(2) by inserting after paragraph (3) the following new
paragraph:
``(4) Exemption for aging process of beer, wine, and
distilled spirits.--For purposes of this subsection, the
production period shall not include the aging period for--
``(A) beer (as defined in section 5052(a)),
``(B) wine (as described in section 5041(a)), or
``(C) distilled spirits (as defined in section
5002(a)(8)), except such spirits that are unfit for use
for beverage purposes.''.
(b) Conforming Amendment.--Paragraph (5)(B)(ii) of section 263A(f)
of the Internal Revenue Code of 1986, as redesignated by this section,
is amended by inserting ``except as provided in paragraph (4),'' before
``ending on the date''.
(c) Effective Date.--The amendments made by this section shall
apply to interest costs paid or incurred in taxable years ending on or
after December 31, 2018.
TITLE II--BEER
SEC. 201. REDUCED RATE OF EXCISE TAX ON BEER.
(a) In General.--Paragraph (1) of section 5051(a) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(1) In general.--
``(A) Imposition of tax.--A tax is hereby imposed
on all beer brewed or produced, and removed for
consumption or sale, within the United States, or
imported into the United States. Except as provided in
paragraph (2), the rate of such tax shall be--
``(i) $16 on the first 6,000,000 barrels of
beer--
``(I) brewed by the brewer and
removed during the calendar year for
consumption or sale, or
``(II) imported by the importer
into the United States during the
calendar year, and
``(ii) $18 on any barrels of beer to which
clause (i) does not apply.
``(B) Barrel.--For purposes of this section, a
barrel shall contain not more than 31 gallons of beer,
and any tax imposed under this section shall be applied
at a like rate for any other quantity or for fractional
parts of a barrel.''.
(b) Reduced Rate for Certain Domestic Production.--Subparagraph (A)
of section 5051(a)(2) of the Internal Revenue Code of 1986 is amended--
(1) in the heading, by striking ``$7'' and inserting
``$3.50'', and
(2) by striking ``$7'' and inserting ``$3.50''.
(c) Application of Reduced Tax Rate for Foreign Manufacturers and
Importers.--Subsection (a) of section 5051 of the Internal Revenue Code
of 1986 is amended--
(1) in subparagraph (A)(i)(II) of paragraph (1), as amended
by subsection (a) of this section, by inserting ``but only if
the importer is an electing importer under paragraph (4) and
the barrels have been assigned to the importer pursuant to such
paragraph'' after ``during the calendar year'', and
(2) by adding at the end the following new paragraph:
``(4) Reduced tax rate for foreign manufacturers and
importers.--
``(A) In general.--In the case of any barrels of
beer which have been brewed or produced outside of the
United States and imported into the United States, the
rate of tax applicable under clause (i) of paragraph
(1)(A) (referred to in this paragraph as the `reduced
tax rate') may be assigned by the brewer (provided that
the brewer makes an election described in subparagraph
(B)(ii)) to any electing importer of such barrels
pursuant to the requirements established by the
Secretary of the Treasury under subparagraph (B).
``(B) Assignment.--The Secretary of the Treasury,
in consultation with the Secretary of Health and Human
Services and the Secretary of the Department of
Homeland Security, shall, through such rules,
regulations, and procedures as are determined
appropriate, establish procedures for assignment of the
reduced tax rate provided under this paragraph, which
shall include--
``(i) a limitation to ensure that the
number of barrels of beer for which the reduced
tax rate has been assigned by a brewer--
``(I) to any importer does not
exceed the number of barrels of beer
brewed or produced by such brewer
during the calendar year which were
imported into the United States by such
importer, and
``(II) to all importers does not
exceed the 6,000,000 barrels to which
the reduced tax rate applies,
``(ii) procedures that allow the election
of a brewer to assign and an importer to
receive the reduced tax rate provided under
this paragraph,
``(iii) requirements that the brewer
provide any information as the Secretary
determines necessary and appropriate for
purposes of carrying out this paragraph, and
``(iv) procedures that allow for revocation
of eligibility of the brewer and the importer
for the reduced tax rate provided under this
paragraph in the case of any erroneous or
fraudulent information provided under clause
(iii) which the Secretary deems to be material
to qualifying for such reduced rate.
``(C) Controlled group.--For purposes of this
section, any importer making an election described in
subparagraph (B)(ii) shall be deemed to be a member of
the controlled group of the brewer, as described under
paragraph (5).''.
(d) Controlled Group and Single Taxpayer Rules.--Subsection (a) of
section 5051 of the Internal Revenue Code of 1986, as amended by this
section, is amended--
(1) in paragraph (2)--
(A) by striking subparagraph (B), and
(B) by redesignating subparagraph (C) as
subparagraph (B), and
(2) by adding at the end the following new paragraph:
``(5) Controlled group and single taxpayer rules.--
``(A) In general.--Except as provided in
subparagraph (B), in the case of a controlled group,
the 6,000,000 barrel quantity specified in paragraph
(1)(A)(i) and the 2,000,000 barrel quantity specified
in paragraph (2)(A) shall be applied to the controlled
group, and the 6,000,000 barrel quantity specified in
paragraph (1)(A)(i) and the 60,000 barrel quantity
specified in paragraph (2)(A) shall be apportioned
among the brewers who are members of such group in such
manner as the Secretary or his delegate shall by
regulations prescribe. For purposes of the preceding
sentence, the term `controlled group' has the meaning
assigned to it by subsection (a) of section 1563,
except that for such purposes the phrase `more than 50
percent' shall be substituted for the phrase `at least
80 percent' in each place it appears in such
subsection. Under regulations prescribed by the
Secretary or his delegate, principles similar to the
principles of the preceding two sentences shall be
applied to a group of brewers under common control
where one or more of the brewers is not a corporation.
``(B) Foreign manufacturers and importers.--For
purposes of paragraph (4), in the case of a controlled
group, the 6,000,000 barrel quantity specified in
paragraph (1)(A)(i) shall be applied to the controlled
group and apportioned among the members of such group
in such manner as the Secretary or his delegate shall
by regulations prescribe. For purposes of the preceding
sentence, the term `controlled group' has the meaning
given such term under subparagraph (A). Under
regulations prescribed by the Secretary or his
delegate, principles similar to the principles of the
preceding two sentences shall be applied to a group of
brewers under common control where one or more of the
brewers is not a corporation.
``(C) Single taxpayer.--Pursuant to rules issued by
the Secretary, two or more entities (whether or not
under common control) that produce beer marketed under
a similar brand, license, franchise, or other
arrangement shall be treated as a single taxpayer for
purposes of the application of this subsection.''.
(e) Effective Date.--
(1) In general.--Subject to paragraph (2), the amendments
made by this section shall apply to beer removed after
September 30, 2019.
(2) Proration.--For purposes of the fourth calendar quarter
of 2019, the Secretary of the Treasury (or the Secretary's
delegate) shall issue such guidance, rules, or regulations as
are deemed appropriate to provide that the amendments made by
this section are applied on a prorated basis for purposes of
beer removed during such quarter.
SEC. 202. USE OF WHOLESOME PRODUCTS SUITABLE FOR HUMAN FOOD CONSUMPTION
IN THE PRODUCTION OF FERMENTED BEVERAGES.
(a) In General.--Not later than the date that is 1 year after the
date of the enactment of this Act, the Secretary of the Treasury or the
Secretary of the Treasury's delegate shall amend subpart F of part 25
of subchapter A of chapter I of title 27, Code of Federal Regulations,
to ensure that, for purposes of such part, wholesome fruits,
vegetables, and spices suitable for human food consumption that are
generally recognized as safe for use in an alcoholic beverage and that
do not contain alcohol are generally recognized as a traditional
ingredient in the production of fermented beverages.
(b) Definition.--For purposes of this section, the term ``fruit''
means whole fruit, fruit juices, fruit puree, fruit extract, or fruit
concentrate.
(c) Rule of Construction.--Nothing in this section shall be
construed to revoke, prescribe, or limit any other exemptions from the
formula requirements under subpart F of part 25 of subchapter A of
chapter I of title 27, Code of Federal Regulations, for any ingredient
that has been recognized before, on, or after the date of the enactment
of this Act as a traditional ingredient in the production of fermented
beverages.
SEC. 203. SIMPLIFICATION OF RULES REGARDING RECORDS, STATEMENTS, AND
RETURNS.
(a) In General.--Subsection (a) of section 5555 of the Internal
Revenue Code of 1986 is amended by adding at the end the following:
``The Secretary shall permit a person to employ a unified system for
any records, statements, and returns required to be kept, rendered, or
made under this section for any beer produced in the brewery for which
the tax imposed by section 5051 has been determined, including any beer
which has been removed for consumption on the premises of the
brewery.''.
(b) Effective Date.--The amendments made by this section shall
apply to any calendar quarters beginning more than 1 year after the
date of the enactment of this Act.
SEC. 204. TRANSFER OF BEER BETWEEN BONDED FACILITIES.
(a) In General.--Section 5414 of the Internal Revenue Code of 1986
is amended to read as follows:
``SEC. 5414. TRANSFER OF BEER BETWEEN BONDED FACILITIES.
``(a) In General.--Beer may be removed from one brewery to another
bonded brewery, without payment of tax, and may be mingled with beer at
the receiving brewery, subject to such conditions, including payment of
the tax, and in such containers, as the Secretary by regulations shall
prescribe, which shall include--
``(1) any removal from one brewery to another brewery
belonging to the same brewer,
``(2) any removal from a brewery owned by one corporation
to a brewery owned by another corporation when--
``(A) one such corporation owns the controlling
interest in the other such corporation, or
``(B) the controlling interest in each such
corporation is owned by the same person or persons, and
``(3) any removal from one brewery to another brewery
when--
``(A) the proprietors of transferring and receiving
premises are independent of each other and neither has
a proprietary interest, directly or indirectly, in the
business of the other, and
``(B) the transferor has divested itself of all
interest in the beer so transferred and the transferee
has accepted responsibility for payment of the tax.
``(b) Transfer of Liability for Tax.--For purposes of subsection
(a)(3), such relief from liability shall be effective from the time of
removal from the transferor's bonded premises, or from the time of
divestment of interest, whichever is later.''.
(b) Removal From Brewery by Pipeline.--Section 5412 of the Internal
Revenue Code of 1986 is amended by inserting ``pursuant to section 5414
or'' before ``by pipeline''.
(c) Effective Date.--The amendments made by this section shall
apply to any calendar quarters beginning more than 1 year after the
date of the enactment of this Act.
TITLE III--WINE
SEC. 301. REDUCED RATE OF EXCISE TAX ON CERTAIN WINE.
(a) In General.--Section 5041(c) of the Internal Revenue Code of
1986 is amended--
(1) in the heading, by striking ``for Small Domestic
Producers'',
(2) by amending paragraph (1) to read as follows:
``(1) Allowance of credit.--
``(A) In general.--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 subsection (b)(6),
subparagraph (A) of this paragraph shall be applied--
``(i) in clause (i) of such subparagraph,
by substituting `6.2 cents' for `$1',
``(ii) in clause (ii) of such subparagraph,
by substituting `5.6 cents' for `90 cents', and
``(iii) in clause (iii) of such
subparagraph, by substituting `3.3 cents' for
`53.5 cents'.'',
(3) by striking paragraph (2),
(4) by redesignating paragraphs (3) through (7) as
paragraphs (2) through (6), respectively, and
(5) by amending paragraph (6), as redesignated by paragraph
(4) of this subsection, to read as follows:
``(6) Regulations.--The Secretary may prescribe such
regulations as may be necessary to carry out the purposes of
this subsection, including regulations to ensure proper
calculation of the credit provided in this subsection.''.
(b) Controlled Group and Single Taxpayer Rules.--Paragraph (3) of
section 5041(c), as redesignated by subsection (a)(4), is amended by
striking ``section 5051(a)(2)(B)'' and inserting ``section
5051(a)(5)''.
(c) Allowance of Credit for Foreign Manufacturers and Importers.--
Subsection (c) of section 5041 of the Internal Revenue Code of 1986, as
amended by subsection (a), is amended--
(1) in subparagraph (A) of paragraph (1), by inserting
``but only if the importer is an electing importer under
paragraph (6) 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'',
(2) by redesignating paragraph (6) as paragraph (7), and
(3) by inserting after paragraph (5) the following new
paragraph:
``(6) Allowance of credit for foreign manufacturers and
importers.--
``(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 paragraph (1) (referred to in this
paragraph as the `tax credit') may be assigned by the
person who produced such wine (referred to in this
paragraph as the `foreign producer'), provided that
such person makes an election described in subparagraph
(B)(ii), to any electing importer of such wine gallons
pursuant to the requirements established by the
Secretary of the Treasury under subparagraph (B).
``(B) Assignment.--The Secretary of the Treasury,
in consultation with the Secretary of Health and Human
Services and the Secretary of the Department of
Homeland Security, shall, through such rules,
regulations, and procedures as are determined
appropriate, establish procedures 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
exceed the number of wine gallons of
wine produced by such foreign producer
during the calendar year which were
imported into the United States by such
importer, and
``(II) to all importers does not
exceed 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 importer
to receive the tax credit provided under this
paragraph,
``(iii) requirements that the foreign
producer provide any information as the
Secretary determines necessary and appropriate
for purposes of carrying out this paragraph,
and
``(iv) procedures that allow for revocation
of eligibility of the foreign producer and the
importer for the tax credit provided under this
paragraph in the case of any erroneous 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 described in
subparagraph (B)(ii) shall be deemed to be a member of
the controlled group of the foreign producer, as
described under paragraph (3).''.
(d) Effective Date.--
(1) In general.--Subject to paragraph (2), the amendments
made by this section shall apply to wine removed after
September 30, 2019.
(2) Proration.--For purposes of the fourth calendar quarter
of 2019, the Secretary of the Treasury (or the Secretary's
delegate) shall issue such guidance, rules, or regulations as
are deemed appropriate to provide that the amendments made by
this section are applied on a prorated basis for purposes of
wine removed during such quarter.
SEC. 302. ADJUSTMENT OF ALCOHOL CONTENT LEVEL FOR APPLICATION OF EXCISE
TAX RATES.
(a) In General.--Paragraphs (1) and (2) of section 5041(b) of the
Internal Revenue Code of 1986 are amended by striking ``14 percent''
each place it appears and inserting ``16 percent''.
(b) Effective Date.--The amendments made by this section shall
apply to wine removed during calendar years beginning after December
31, 2018.
SEC. 303. DEFINITION OF MEAD AND LOW ALCOHOL BY VOLUME WINE.
(a) In General.--Section 5041 of the Internal Revenue Code of 1986
is amended--
(1) in subsection (a), by striking ``Still wines'' and
inserting ``Subject to subsection (h), still wines'', and
(2) by adding at the end the following new subsection:
``(h) Mead and Low Alcohol by Volume Wine.--
``(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 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,
``(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 percent
alcohol by volume.
``(B) Low alcohol by volume wine.--For purposes of
this section, the term `low alcohol by volume wine'
means a wine--
``(i) 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,
``(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 percent
alcohol by volume.''.
(b) Effective Date.--The amendments made by this section shall
apply to wine removed during calendar years beginning after December
31, 2018.
TITLE IV--DISTILLED SPIRITS
SEC. 401. REDUCED RATE OF EXCISE TAX ON CERTAIN DISTILLED SPIRITS.
(a) In General.--Section 5001 of the Internal Revenue Code of 1986
is amended by redesignating subsection (c) as subsection (d) and by
inserting after subsection (b) the following new subsection:
``(c) Reduced Rate.--
``(1) In general.--In the case of a distilled spirits
operation, the otherwise applicable tax rate under subsection
(a)(1) shall be--
``(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 operation and
removed during the calendar year for consumption 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 controlled
group, the proof gallon quantities specified under
subparagraphs (A) and (B) of paragraph (1) shall be
applied to such group and apportioned among the members
of such group in such manner as the Secretary or his
delegate shall by regulations prescribe.
``(B) Definition.--For purposes of subparagraph
(A), the term `controlled group' shall have the meaning
given such term by subsection (a) of section 1563,
except that `more than 50 percent' shall be substituted
for `at least 80 percent' each place it appears in such
subsection.
``(C) Rules for non-corporations.--Under
regulations prescribed by the Secretary, principles
similar to the principles of subparagraphs (A) and (B)
shall be applied to a group under common control where
one or more of the persons is not a corporation.
``(D) Single taxpayer.--Pursuant to rules issued by
the Secretary, two or more entities (whether or not
under common control) that produce distilled spirits
marketed under a similar brand, license, franchise, or
other arrangement shall be treated as a single taxpayer
for purposes of the application of this subsection.''.
(b) Conforming Amendment.--Section 7652(f)(2) of the Internal
Revenue Code of 1986 is amended by striking ``section 5001(a)(1)'' and
inserting ``subsection (a)(1) of section 5001, determined as if
subsection (c)(1) of such section did not apply''.
(c) Application of Reduced Tax Rate for Foreign Manufacturers and
Importers.--Subsection (c) of section 5001 of the Internal Revenue Code
of 1986, as added by subsection (a), is amended--
(1) in paragraph (1), by inserting ``but only if the
importer is an electing importer under paragraph (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 adding at the end the following new paragraph:
``(3) Reduced tax rate for foreign manufacturers and
importers.--
``(A) In general.--In the case of any proof gallons
of distilled spirits which have been produced outside
of the United States and imported into the United
States, the rate of tax applicable under paragraph (1)
(referred to in this paragraph 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
requirements established by the Secretary of the
Treasury under subparagraph (B).
``(B) Assignment.--The Secretary of the Treasury,
in consultation with the Secretary of Health and Human
Services and the Secretary of the Department of
Homeland Security, shall, through such rules,
regulations, and procedures as are determined
appropriate, establish procedures for assignment of the
reduced tax rate provided under this paragraph, which
shall include--
``(i) a limitation to ensure that the
number of proof gallons of distilled spirits
for which the reduced tax rate has been
assigned by a distilled spirits operation--
``(I) to any importer does not
exceed the number of proof gallons
produced by such operation during the
calendar year which were imported into
the United States by such importer, and
``(II) to all importers does not
exceed 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
``(iv) procedures that allow for revocation
of eligibility of the distilled spirits
operation and the importer for the reduced tax
rate provided under this paragraph in the case
of any erroneous or fraudulent information
provided under clause (iii) which the Secretary
deems to be material to qualifying for such
reduced rate.
``(C) Controlled group.--
``(i) In general.--For purposes of this
section, any importer making an election
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 controlled group,
rules similar to section 5051(a)(5)(B) shall
apply.''.
(d) Effective Date.--
(1) In general.--Subject to paragraph (2), the amendments
made by this section shall apply to distilled spirits removed
after September 30, 2019.
(2) Proration.--For purposes of the fourth calendar quarter
of 2019, the Secretary of the Treasury (or the Secretary's
delegate) shall issue such guidance, rules, or regulations as
are deemed appropriate to provide that the amendments made by
this section are applied on a prorated basis for purposes of
distilled spirits removed during such quarter.
SEC. 402. BULK DISTILLED SPIRITS.
(a) In General.--Section 5212 of the Internal Revenue Code of 1986
is amended--
(1) by striking ``Bulk distilled spirits on which'' and
inserting ``Distilled spirits on which'', and
(2) by striking ``bulk'' each place it appears.
(b) Effective Date.--The amendments made by this section shall
apply distilled spirits transferred in bond in any calendar quarters
beginning more than 1 year after the date of the enactment of this Act.
TITLE V--FUNDING
SEC. 501. INCREASED FUNDING FOR THE ALCOHOL AND TOBACCO TAX AND TRADE
BUREAU.
(a) In General.--For necessary expenses of carrying out section
1111(d) of the Homeland Security Act of 2002 (6 U.S.C. 531(d)), there
are authorized to be appropriated--
(1) for fiscal year 2017, $116,439,000, to remain available
until September 30, 2018; and
(2) for fiscal year 2018, $119,081,000, to remain available
until September 30, 2019.
(b) Availability of Funds.--Of the amounts authorized to be
appropriated under subsection (a), for each of fiscal years 2017 and
2018--
(1) $5,000,000 shall be for the costs of accelerating the
processing of formula and label applications;
(2) $5,000,000 shall be for the costs of programs to
enforce trade practice violations of the Federal Alcohol
Administration Act (27 U.S.C. 201 et seq.); and
(3) $5,000,000 shall be for the purpose of carrying out the
provisions of this Act and the amendments made by this Act,
including accelerating the processing of permit applications
for non-industrial alcohol production and distribution.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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