,i  #aae? ,,congress  #a/ ,session  ,h4 
,r4 #gdg  ,,9 ,,! ,,h\se ,,(            
,,repres5tatives  ,janu>y #cj1 #bjag,mr4
 ,pauls5 7= himself1 ,mr4 ,k9d1 ,mr4    
,mc,henry1 ,mr4 ,de,fazio1 ,mr4 ,tib]i1 
,mr4 ,blum5au]1 ,mr4 ,rei*]t1 ,mr4      
,?ompson ( ,cali=nia1 ,mr4 ,ne:\se1 ,ms4
 ,p+ree1 ,mr4 ,kelly ( ,p5nsylvania1    
,mr4 ,emm]1 & ,mr4 ,amodei7 introduc$ ! 
foll[+ bill2 :i* 0 ref]r$ to !          
,committee on ,ways & ,means  ,a ,,bill 
,to am5d ! ,int]nal ,rev5ue ,code (     
#aihf to re=m taxation ( alcoholic      
bev]ages4  #a4 ,%ort title2 table (     
cont5ts2 rule ( con/ruction  7a7 ,%ort  
title ,?is ,act may be cit$ z ! ,craft  
,bev]age ,mod]nization & ,tax ,re=m ,act
 ( #bjag4  7b7 ,table ( cont5ts ,! table
 ( cont5ts ( ?is ,act is z foll[s3      
,sec4 #a4 ,%ort title2 table ( cont5ts2 
rule ( con/ruction4 ,,title             
,i--,production p]iod ,sec4 #aja4       
,production p]iod = be]1 w9e1 & di/ill$ 
spirits4 ,,title ,,ii--,be] ,sec4 #bja4 
,r$uc$ rate ( excise tax on be]4 ,sec4  

#bjb4 ,use ( :olesome products suitable 
= human food consumption 9 ! production 
( f]m5t$ bev]ages4 ,sec4 #bjc4          
,simplification ( rules reg>d+ records1 
/atem5ts1 & returns4 ,sec4 #bjd4        
,transf] ( be] betwe5 bond$ facilities4 
,,title ,,iii--,w9e ,sec4 #cja4 ,r$uc$  
rate ( excise tax on c]ta9 w9e4 ,sec4   
#cjb4 ,adju/m5t ( alcohol cont5t level =
 application ( excise tax rates4 ,sec4  
#cjc4 ,def9ition ( mead & l[ alcohol by 
volume w9e4 ,,title ,,iv--,di/ill$      
,spirits ,sec4 #dja4 ,r$uc$ rate (      
excise tax on c]ta9 di/ill$ spirits4    
,sec4 #djb4 ,bulk di/ill$ spirits4      
,,title ,v--,fund+ ,sec4 #eja4 ,increas$
 fund+ = ! ,alcohol & ,tobacco ,tax &   
,trade ,bureau4  7c7 ,rule ( con/ruction
 ,no?+ 9 ?is ,act1 ! am5dm5ts made by   
?is ,act1 or any regulation promulgat$  
"u ?is ,act or ! am5dm5ts made by ?is   
,act1 %all be con/ru$ to preempt1       
sup]s$e1 or o!rwise limit or re/rict any
 ,/ate1 local1 or tribal law t prohibits
 or regulates ! production or sale (    

di/ill$ spirits1 w9e1 or malt bev]ages4 
,i ,production p]iod  #aja4 ,production 
p]iod = be]1 w9e1 & di/ill$ spirits  7a7
 ,9 g5]al ,section #bfc;,a7f7 ( !       
,int]nal ,rev5ue ,code ( #aihf is       
am5d$-- 7#a7 by r$esignat+ p>agraph 7#d7
 z p>agraph 7#e71 &  7#b7 by ins]t+ aft]
 p>agraph 7#c7 ! foll[+ new p>agraph3   
7#d7 ,exemption = ag+ process ( be]1    
w9e1 & di/ill$ spirits ,= purposes ( ?is
 subsection1 ! production p]iod %all n  
include ! ag+ p]iod =--  7,a7 be] 7z    
def9$ 9 section #ejeb7;a771  7,b7 w9e 7z
 describ$ 9 section #ejda7;a771 or  7,c7
 di/ill$ spirits 7z def9$ 9 section     
#ejjb7;a77#h771 except su* spirits t are
 unfit = use = bev]age purposes4  4  7b7
 ,con=m+ am5dm5t ,p>agraph 7#e77;,b77ii7
 ( section #bfc;,a7f7 ( ! ,int]nal      
,rev5ue ,code ( #aihf1 z r$esignat$ by  
?is section1 is am5d$ by ins]t+ except z
 provid$ 9 p>agraph 7#d71 be=e end+ on !
 date4  7c7 ,effective date ,! am5dm5ts 
made by ?is section %all apply to int]e/
 co/s paid or incurr$ 9 taxable ye>s    

end+ on or aft] ,decemb] #ca1 #bjah4    
,,ii ,be]  #bja4 ,r$uc$ rate ( excise   
tax on be]  7a7 ,9 g5]al ,p>agraph 7#a7 
( section #ejea7;a7 ( ! ,int]nal ,rev5ue
 ,code ( #aihf is am5d$ to read z       
foll[s3  7#a7 ,9 g5]al  7,a7 ,imposition
 ( tax ,a tax is h]eby impos$ on all be]
 brew$ or produc$1 & remov$ =           
consumption or sale1 )9 ! ,unit$ ,/ates1
 or import$ into ! ,unit$ ,/ates4       
,except z provid$ 9 p>agraph 7#b71 !    
rate ( su* tax %all be--  7i7 #af on !  
fir/ #f1jjj1jjj b>rels ( be]-- 7,i7     
brew$ by ! brew] & remov$ dur+ ! cal5d> 
ye> = consumption or sale1 or  7,,ii7   
import$ by ! import] into ! ,unit$      
,/ates dur+ ! cal5d> ye>1 &  7ii7 #ah on
 any b>rels ( be] to :i* clause 7i7 does
 n apply4  7,b7 ,b>rel ,= purposes ( ?is
 section1 a b>rel %all conta9 n m ?an   
#ca gallons ( be]1 & any tax impos$ "u  
?is section %all be appli$ at a l rate =
 any o!r quantity or = fractional p>ts (
 a b>rel4  4  7b7 ,r$uc$ rate = c]ta9   
dome/ic production ,subp>agraph 7,a7 (  

section #ejea7;a77#b7 ( ! ,int]nal      
,rev5ue ,code ( #aihf is am5d$-- 7#a7 9 
! head+1 by /rik+ #g & ins]t+ #c4ej1 &  
7#b7 by /rik+ #g & ins]t+ #c4ej4  7c7   
,application ( r$uc$ tax rate = =eign   
manufactur]s & import]s ,subsection 7a7 
( section #ejea ( ! ,int]nal ,rev5ue    
,code ( #aihf is am5d$--  7#a7 9        
subp>agraph 7,a77i77,,ii7 ( p>agraph    
7#a71 z am5d$ by subsection 7a7 ( ?is   
section1 by ins]t+ b only if ! import]  
is an elect+ import] "u p>agraph 7#d7 & 
! b>rels h be5 assign$ to ! import]     
pursuant to su* p>agraph aft] dur+ !    
cal5d> ye>1 &  7#b7 by add+ at ! end !  
foll[+ new p>agraph3  7#d7 ,r$uc$ tax   
rate = =eign manufactur]s & import]s    
7,a7 ,9 g5]al ,9 ! case ( any b>rels (  
be] :i* h be5 brew$ or produc$ outside (
 ! ,unit$ ,/ates & import$ into ! ,unit$
 ,/ates1 ! rate ( tax applicable "u     
clause 7i7 ( p>agraph 7#a77;,a7 7ref]r$ 
to 9 ?is p>agraph z ! r$uc$ tax rate7   
may be assign$ by ! brew] 7provid$ t !  
brew] makes an election describ$ 9      

subp>agraph 7,b77ii77 to any elect+     
import] ( su* b>rels pursuant to !      
requirem5ts e/abli%$ by ! ,secret>y ( ! 
,treasury "u subp>agraph 7,b74  7,b7    
,assignm5t ,! ,secret>y ( ! ,treasury1 9
 consultation ) ! ,secret>y ( ,heal? &  
,human ,s]vices & ! ,secret>y ( !       
,dep>tm5t ( ,homel& ,security1 %all1    
?r\gh su* rules1 regulations1 &         
proc$ures z are det]m9$ appropriate1    
e/abli% proc$ures = assignm5t ( ! r$uc$ 
tax rate provid$ "u ?is p>agraph1 :i*   
%all include--  7i7 a limitation to     
ensure t ! numb] ( b>rels ( be] = :i* ! 
r$uc$ tax rate has be5 assign$ by a     
brew]--  7,i7 to any import] does n     
exce$ ! numb] ( b>rels ( be] brew$ or   
produc$ by su* brew] dur+ ! cal5d> ye>  
:i* 7 import$ into ! ,unit$ ,/ates by   
su* import]1 &  7,,ii7 to all import]s  
does n exce$ ! #f1jjj1jjj b>rels to :i* 
! r$uc$ tax rate applies1  7ii7         
proc$ures t all[ ! election ( a brew] to
 assign & an import] to receive ! r$uc$ 
tax rate provid$ "u ?is p>agraph1  7iii7

 requirem5ts t ! brew] provide any      
in=mation z ! ,secret>y det]m9es        
necess>y & appropriate = purposes (     
c>ry+ out ?is p>agraph1 &  7iv7         
proc$ures t all[ = revocation (         
eligibility ( ! brew] & ! import] = !   
r$uc$ tax rate provid$ "u ?is p>agraph 9
 ! case ( any errone\s or fraudul5t     
in=mation provid$ "u clause 7iii7 :i* ! 
,secret>y deems to be mat]ial to        
qualify+ = su* r$uc$ rate4  7,c7        
,controll$ gr\p ,= purposes ( ?is       
section1 any import] mak+ an election   
describ$ 9 subp>agraph 7,b77ii7 %all be 
deem$ to be a memb] ( ! controll$ gr\p (
 ! brew]1 z describ$ "u p>agraph 7#e74  
4  7d7 ,controll$ gr\p & s+le taxpay]   
rules ,subsection 7a7 ( section #ejea ( 
! ,int]nal ,rev5ue ,code ( #aihf1 z     
am5d$ by ?is section1 is am5d$--  7#a7 9
 p>agraph 7#b7-- 7,a7 by /rik+          
subp>agraph 7,b71 &  7,b7 by r$esignat+ 
subp>agraph 7,c7 z subp>agraph 7,b71 &  
7#b7 by add+ at ! end ! foll[+ new      
p>agraph3  7#e7 ,controll$ gr\p & s+le  

taxpay] rules  7,a7 ,9 g5]al ,except z  
provid$ 9 subp>agraph 7,b71 9 ! case ( a
 controll$ gr\p1 ! #f1jjj1jjj b>rel     
quantity specifi$ 9 p>agraph            
7#a77;,a77i7 & ! #b1jjj1jjj b>rel       
quantity specifi$ 9 p>agraph 7#b77;,a7  
%all be appli$ to ! controll$ gr\p1 & ! 
#f1jjj1jjj b>rel quantity specifi$ 9    
p>agraph 7#a77;,a77i7 & ! #fj1jjj b>rel 
quantity specifi$ 9 p>agraph 7#b77;,a7  
%all be apportion$ among ! brew]s :o are
 memb]s ( su* gr\p 9 su* mann] z !      
,secret>y or 8 delegate %all by         
regulations prescribe4 ,= purposes ( !  
prec$+ s5t5ce1 ! t]m controll$ gr\p has 
! mean+ assign$ to x by subsection 7a7 (
 section #aefc1 except t = su* purposes 
! phrase m ?an #ej p]c5t %all be        
sub/itut$ = ! phrase at lea/ #hj p]c5t 9
 ea* place x appe>s 9 su* subsection4   
,"u regulations prescrib$ by ! ,secret>y
 or 8 delegate1 pr9ciples simil> to !   
pr9ciples ( ! prec$+ two s5t5ces %all be
 appli$ to a gr\p ( brew]s "u common    
control :]e "o or m ( ! brew]s is n a   

corporation4  7,b7 ,=eign manufactur]s &
 import]s ,= purposes ( p>agraph 7#d71 9
 ! case ( a controll$ gr\p1 ! #f1jjj1jjj
 b>rel quantity specifi$ 9 p>agraph     
7#a77;,a77i7 %all be appli$ to !        
controll$ gr\p & apportion$ among !     
memb]s ( su* gr\p 9 su* mann] z !       
,secret>y or 8 delegate %all by         
regulations prescribe4 ,= purposes ( !  
prec$+ s5t5ce1 ! t]m controll$ gr\p has 
! mean+ giv5 su* t]m "u subp>agraph     
7,a74 ,"u regulations prescrib$ by !    
,secret>y or 8 delegate1 pr9ciples      
simil> to ! pr9ciples ( ! prec$+ two    
s5t5ces %all be appli$ to a gr\p (      
brew]s "u common control :]e "o or m ( !
 brew]s is n a corporation4  7,c7 ,s+le 
taxpay] ,pursuant to rules issu$ by !   
,secret>y1 two or m entities 7:e!r or n 
"u common control7 t produce be] m>ket$ 
"u a simil> br&1 lic5se1 fran*ise1 or   
o!r arrangem5t %all be treat$ z a s+le  
taxpay] = purposes ( ! application ( ?is
 subsection4  4  7e7 ,effective date    
7#a7 ,9 g5]al ,subject to p>agraph 7#b71

 ! am5dm5ts made by ?is section %all    
apply to be] remov$ aft] ,septemb] #cj1 
#bjai4  7#b7 ,proration ,= purposes ( ! 
f\r? cal5d> qu>t] ( #bjai1 ! ,secret>y (
 ! ,treasury 7or ! ,secret>y's delegate7
 %all issue su* guidance1 rules1 or     
regulations z are deem$ appropriate to  
provide t ! am5dm5ts made by ?is section
 are appli$ on a prorat$ basis =        
purposes ( be] remov$ dur+ su* qu>t]4   
#bjb4 ,use ( :olesome products suitable 
= human food consumption 9 ! production 
( f]m5t$ bev]ages  7a7 ,9 g5]al ,n lat] 
?an ! date t is #a ye> aft] ! date ( !  
enactm5t ( ?is ,act1 ! ,secret>y ( !    
,treasury or ! ,secret>y ( ! ,treasury's
 delegate %all am5d subp>t ,f ( "p #be (
 sub*apt] ,a ( *apt] ,i ( title #bg1    
,code ( ,f$]al ,regulations1 to ensure  
t1 = purposes ( su* "p1 :olesome fruits1
 vegetables1 & spices suitable = human  
food consumption t are g5]ally recogniz$
 z safe = use 9 an alcoholic bev]age & t
 d n conta9 alcohol are g5]ally         
recogniz$ z a traditional +r$i5t 9 !    

production ( f]m5t$ bev]ages4  7b7      
,def9ition ,= purposes ( ?is section1 ! 
t]m fruit means :ole fruit1 fruit       
juices1 fruit puree1 fruit extract1 or  
fruit conc5trate4  7c7 ,rule (          
con/ruction ,no?+ 9 ?is section %all be 
con/ru$ to revoke1 prescribe1 or limit  
any o!r exemptions f ! =mula requirem5ts
 "u subp>t ,f ( "p #be ( sub*apt] ,a (  
*apt] ,i ( title #bg1 ,code ( ,f$]al    
,regulations1 = any +r$i5t t has be5    
recogniz$ be=e1 on1 or aft] ! date ( !  
enactm5t ( ?is ,act z a traditional     
+r$i5t 9 ! production ( f]m5t$ bev]ages4
  #bjc4 ,simplification ( rules reg>d+  
records1 /atem5ts1 & returns  7a7 ,9    
g5]al ,subsection 7a7 ( section #eeee ( 
! ,int]nal ,rev5ue ,code ( #aihf is     
am5d$ by add+ at ! end ! foll[+3 ,!     
,secret>y %all p]mit a p]son to employ a
 unifi$ sy/em = any records1 /atem5ts1 &
 returns requir$ to be kept1 r5d]$1 or  
made "u ?is section = any be] produc$ 9 
! brew]y = :i* ! tax impos$ by section  
#ejea has be5 det]m9$1 includ+ any be]  

:i* has be5 remov$ = consumption on !   
premises ( ! brew]y44  7b7 ,effective   
date ,! am5dm5ts made by ?is section    
%all apply to any cal5d> qu>t]s beg9n+ m
 ?an #a ye> aft] ! date ( ! enactm5t (  
?is ,act4  #bjd4 ,transf] ( be] betwe5  
bond$ facilities  7a7 ,9 g5]al ,section 
#edad ( ! ,int]nal ,rev5ue ,code ( #aihf
 is am5d$ to read z foll[s3  #edad4     
,transf] ( be] betwe5 bond$ facilities  
7a7 ,9 g5]al ,be] may be remov$ f "o    
brew]y to ano!r bond$ brew]y1 )\t paym5t
 ( tax1 & may be m+l$ ) be] at ! receiv+
 brew]y1 subject to su* conditions1     
includ+ paym5t ( ! tax1 & 9 su*         
conta9]s1 z ! ,secret>y by regulations  
%all prescribe1 :i* %all include--  7#a7
 any removal f "o brew]y to ano!r brew]y
 belong+ to ! same brew]1  7#b7 any     
removal f a brew]y own$ by "o           
corporation to a brew]y own$ by ano!r   
corporation :5--  7,a7 "o su*           
corporation owns ! controll+ int]e/ 9 ! 
o!r su* corporation1 or  7,b7 !         
controll+ int]e/ 9 ea* su* corporation  

is own$ by ! same p]son or p]sons1 &    
7#c7 any removal f "o brew]y to ano!r   
brew]y :5-- 7,a7 ! proprietors (        
transf]r+ & receiv+ premises are        
indep5d5t ( ea* o!r & nei!r has a       
propriet>y int]e/1 directly or          
indirectly1 9 ! bus9ess ( ! o!r1 &  7,b7
 ! transf]or has dive/$ itself ( all    
int]e/ 9 ! be] s transf]r$ & ! transf]ee
 has accept$ responsibility = paym5t ( !
 tax4  7b7 ,transf] ( liability = tax ,=
 purposes ( subsection 7a77#c71 su*     
relief f liability %all be effective f !
 "t ( removal f ! transf]or's bond$     
premises1 or f ! "t ( dive/m5t ( int]e/1
 :i*ev] is lat]4  4  7b7 ,removal f     
brew]y by pipel9e ,section #edab ( !    
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by ins]t+ pursuant to section #edad or  
be=e by pipel9e4  7c7 ,effective date ,!
 am5dm5ts made by ?is section %all apply
 to any cal5d> qu>t]s beg9n+ m ?an #a   
ye> aft] ! date ( ! enactm5t ( ?is ,act4
  ,,iii ,w9e  #cja4 ,r$uc$ rate ( excise
 tax on c]ta9 w9e  7a7 ,9 g5]al ,section

 #ejda7;c7 ( ! ,int]nal ,rev5ue ,code ( 
#aihf is am5d$-- 7#a7 9 ! head+1 by     
/rik+ = small dome/ic produc]s1  7#b7 by
 am5d+ p>agraph 7#a7 to read z foll[s3  
7#a7 ,all[ance ( cr$it  7,a7 ,9 g5]al   
,!re %all be all[$ z a cr$it aga9/ any  
tax impos$ by ?is title 7o!r ?an *apt]s 
#b1 #ba1 & #bb7 an am\nt equal to ! sum 
(--  7i7 #a p] w9e gallon on ! fir/     
#cj1jjj w9e gallons ( w9e1 plus  7ii7   
#ij c5ts p] w9e gallon on ! fir/        
#ajj1jjj w9e gallons ( w9e to :i* clause
 7i7 does n apply1 plus  7iii7 #ec4e    
c5ts p] w9e gallon on ! fir/ #fbj1jjj   
w9e gallons ( w9e to :i* clauses 7i7 &  
7ii7 d n apply1  :i* are produc$ by !   
produc] & remov$ dur+ ! cal5d> ye> =    
consumption or sale1 or :i* are import$ 
by ! import] into ! ,unit$ ,/ates dur+ !
 cal5d> ye>4  7,b7 ,adju/m5t ( cr$it =  
h>d cid] ,9 ! case ( w9e describ$ 9     
subsection 7b77#f71 subp>agraph 7,a7 (  
?is p>agraph %all be appli$--  7i7 9    
clause 7i7 ( su* subp>agraph1 by        
sub/itut+ #f4b c5ts = #a1  7ii7 9 clause

 7ii7 ( su* subp>agraph1 by sub/itut+   
#e4f c5ts = #ij c5ts1 &  7iii7 9 clause 
7iii7 ( su* subp>agraph1 by sub/itut+   
#c4c c5ts = #ec4e c5ts4  1  7#c7 by     
/rik+ p>agraph 7#b71  7#d7 by r$esignat+
 p>agraphs 7#c7 ?r\gh 7#g7 z p>agraphs  
7#b7 ?r\gh 7#f71 respectively1 &  7#e7  
by am5d+ p>agraph 7#f71 z r$esignat$ by 
p>agraph 7#d7 ( ?is subsection1 to read 
z foll[s3  7#f7 ,regulations ,!         
,secret>y may prescribe su* regulations 
z may be necess>y to c>ry out ! purposes
 ( ?is subsection1 includ+ regulations  
to ensure prop] calculation ( ! cr$it   
provid$ 9 ?is subsection4  4  7b7       
,controll$ gr\p & s+le taxpay] rules    
,p>agraph 7#c7 ( section #ejda7;c71 z   
r$esignat$ by subsection 7a77#d71 is    
am5d$ by /rik+ section                  
#ejea7;a77#b77;,b7 & ins]t+ section     
#ejea7;a77#e74  7c7 ,all[ance ( cr$it = 
=eign manufactur]s & import]s           
,subsection 7c7 ( section #ejda ( !     
,int]nal ,rev5ue ,code ( #aihf1 z am5d$ 
by subsection 7a71 is am5d$--  7#a7 9   

subp>agraph 7,a7 ( p>agraph 7#a71 by    
ins]t+ b only if ! import] is an elect+ 
import] "u p>agraph 7#f7 & ! w9e gallons
 ( w9e h be5 assign$ to ! import]       
pursuant to su* p>agraph aft] into !    
,unit$ ,/ates dur+ ! cal5d> ye>1  7#b7  
by r$esignat+ p>agraph 7#f7 z p>agraph  
7#g71 &  7#c7 by ins]t+ aft] p>agraph   
7#e7 ! foll[+ new p>agraph3  7#f7       
,all[ance ( cr$it = =eign manufactur]s &
 import]s  7,a7 ,9 g5]al ,9 ! case ( any
 w9e gallons ( w9e :i* h be5 produc$    
outside ( ! ,unit$ ,/ates & import$ into
 ! ,unit$ ,/ates1 ! cr$it all[able "u   
p>agraph 7#a7 7ref]r$ to 9 ?is p>agraph 
z ! tax cr$it7 may be assign$ by ! p]son
 :o produc$ su* w9e 7ref]r$ to 9 ?is    
p>agraph z ! =eign produc]71 provid$ t  
su* p]son makes an election describ$ 9  
subp>agraph 7,b77ii71 to any elect+     
import] ( su* w9e gallons pursuant to ! 
requirem5ts e/abli%$ by ! ,secret>y ( ! 
,treasury "u subp>agraph 7,b74  7,b7    
,assignm5t ,! ,secret>y ( ! ,treasury1 9
 consultation ) ! ,secret>y ( ,heal? &  

,human ,s]vices & ! ,secret>y ( !       
,dep>tm5t ( ,homel& ,security1 %all1    
?r\gh su* rules1 regulations1 &         
proc$ures z are det]m9$ appropriate1    
e/abli% proc$ures = assignm5t ( ! tax   
cr$it provid$ "u ?is p>agraph1 :i* %all 
include--  7i7 a limitation to ensure t 
! numb] ( w9e gallons ( w9e = :i* ! tax 
cr$it has be5 assign$ by a =eign        
produc]--  7,i7 to any import] does n   
exce$ ! numb] ( w9e gallons ( w9e       
produc$ by su* =eign produc] dur+ !     
cal5d> ye> :i* 7 import$ into ! ,unit$  
,/ates by su* import]1 &  7,,ii7 to all 
import]s does n exce$ ! #gej1jjj w9e    
gallons ( w9e to :i* ! tax cr$it        
applies1  7ii7 proc$ures t all[ !       
election ( a =eign produc] to assign &  
an import] to receive ! tax cr$it       
provid$ "u ?is p>agraph1  7iii7         
requirem5ts t ! =eign produc] provide   
any in=mation z ! ,secret>y det]m9es    
necess>y & appropriate = purposes (     
c>ry+ out ?is p>agraph1 &  7iv7         
proc$ures t all[ = revocation (         

eligibility ( ! =eign produc] & !       
import] = ! tax cr$it provid$ "u ?is    
p>agraph 9 ! case ( any errone\s or     
fraudul5t in=mation provid$ "u clause   
7iii7 :i* ! ,secret>y deems to be       
mat]ial to qualify+ = su* cr$it4  7,c7  
,controll$ gr\p ,= purposes ( ?is       
section1 any import] mak+ an election   
describ$ 9 subp>agraph 7,b77ii7 %all be 
deem$ to be a memb] ( ! controll$ gr\p (
 ! =eign produc]1 z describ$ "u p>agraph
 7#c74  4  7d7 ,effective date  7#a7 ,9 
g5]al ,subject to p>agraph 7#b71 !      
am5dm5ts made by ?is section %all apply 
to w9e remov$ aft] ,septemb] #cj1 #bjai4
  7#b7 ,proration ,= purposes ( ! f\r?  
cal5d> qu>t] ( #bjai1 ! ,secret>y ( !   
,treasury 7or ! ,secret>y's delegate7   
%all issue su* guidance1 rules1 or      
regulations z are deem$ appropriate to  
provide t ! am5dm5ts made by ?is section
 are appli$ on a prorat$ basis =        
purposes ( w9e remov$ dur+ su* qu>t]4   
#cjb4 ,adju/m5t ( alcohol cont5t level =
 application ( excise tax rates  7a7 ,9 

g5]al ,p>agraphs 7#a7 & 7#b7 ( section  
#ejda7;b7 ( ! ,int]nal ,rev5ue ,code (  
#aihf are am5d$ by /rik+ #ad p]c5t ea*  
place x appe>s & ins]t+ #af p]c5t4  7b7 
,effective date ,! am5dm5ts made by ?is 
section %all apply to w9e remov$ dur+   
cal5d> ye>s beg9n+ aft] ,decemb] #ca1   
#bjah4  #cjc4 ,def9ition ( mead & l[    
alcohol by volume w9e  7a7 ,9 g5]al     
,section #ejda ( ! ,int]nal ,rev5ue     
,code ( #aihf is am5d$-- 7#a7 9         
subsection 7a71 by /rik+ ,/ill w9es &   
ins]t+ ,subject to subsection 7h71 /ill 
w9es1 &  7#b7 by add+ at ! end ! foll[+ 
new subsection3  7h7 ,mead & l[ alcohol 
by volume w9e  7#a7 ,9 g5]al ,= purposes
 ( subsections 7a7 & 7b77#a71 mead & l[ 
alcohol by volume w9e %all be deem$ to  
be /ill w9es conta9+ n m ?an #af p]c5t (
 alcohol by volume4  7#b7 ,def9itions   
7,a7 ,mead ,= purposes ( ?is section1 ! 
t]m mead means a w9e-- 7i7 conta9+ n m  
?an #j4fd gram ( c>bon dioxide p] hundr$
 millilit]s ( w9e1 except t ! ,secret>y 
may by regulations prescribe su*        

tol]ances to ?is limitation z may be    
reasonably necess>y 9 good comm]cial    
practice1  7ii7 :i* is d]iv$ solely f   
honey & wat]1  7iii7 :i* conta9s no     
fruit product or fruit flavor+1 &  7iv7 
:i* conta9s less ?an #h4e p]c5t alcohol 
by volume4  7,b7 ,l[ alcohol by volume  
w9e ,= purposes ( ?is section1 ! t]m l[ 
alcohol by volume w9e means a w9e--  7i7
 conta9+ n m ?an #j4fd gram ( c>bon     
dioxide p] hundr$ millilit]s ( w9e1     
except t ! ,secret>y may by regulations 
prescribe su* tol]ances to ?is          
limitation z may be reasonably necess>y 
9 good comm]cial practice1  7ii7 :i* is 
d]iv$-- 7,i7 prim>ily f grapes1 or      
7,,ii7 f grape juice conc5trate & wat]1 
7iii7 :i* conta9s no fruit product or   
fruit flavor+ o!r ?an grape1 &  7iv7 :i*
 conta9s less ?an #h4e p]c5t alcohol by 
volume4  4  7b7 ,effective date ,!      
am5dm5ts made by ?is section %all apply 
to w9e remov$ dur+ cal5d> ye>s beg9n+   
aft] ,decemb] #ca1 #bjah4  ,,iv ,di/ill$
 ,spirits  #dja4 ,r$uc$ rate ( excise   

tax on c]ta9 di/ill$ spirits  7a7 ,9    
g5]al ,section #ejja ( ! ,int]nal       
,rev5ue ,code ( #aihf is am5d$ by       
r$esignat+ subsection 7c7 z subsection  
7d7 & by ins]t+ aft] subsection 7b7 !   
foll[+ new subsection3  7c7 ,r$uc$ rate 
7#a7 ,9 g5]al ,9 ! case ( a di/ill$     
spirits op]ation1 ! o!rwise applicable  
tax rate "u subsection 7a77#a7 %all be--
  7,a7 #b4gj p] pro( gallon on ! fir/   
#ajj1jjj pro( gallons ( di/ill$ spirits1
 &  7,b7 #ac4cd p] pro( gallon on ! fir/
 #bb1acj1jjj ( pro( gallons ( di/ill$   
spirits to :i* subp>agraph 7,a7 does n  
apply1  :i* h be5 di/ill$ or process$ by
 su* op]ation & remov$ dur+ ! cal5d> ye>
 = consumption or sale1 or :i* h be5    
import$ by ! import] into ! ,unit$      
,/ates dur+ ! cal5d> ye>4  7#b7         
,controll$ gr\ps  7,a7 ,9 g5]al ,9 !    
case ( a controll$ gr\p1 ! pro( gallon  
quantities specifi$ "u subp>agraphs 7,a7
 & 7,b7 ( p>agraph 7#a7 %all be appli$  
to su* gr\p & apportion$ among ! memb]s 
( su* gr\p 9 su* mann] z ! ,secret>y or 

8 delegate %all by regulations          
prescribe4  7,b7 ,def9ition ,= purposes 
( subp>agraph 7,a71 ! t]m controll$ gr\p
 %all h ! mean+ giv5 su* t]m by         
subsection 7a7 ( section #aefc1 except t
 m ?an #ej p]c5t %all be sub/itut$ = at 
lea/ #hj p]c5t ea* place x appe>s 9 su* 
subsection4  7,c7 ,rules =              
non-corporations ,"u regulations        
prescrib$ by ! ,secret>y1 pr9ciples     
simil> to ! pr9ciples ( subp>agraphs    
7,a7 & 7,b7 %all be appli$ to a gr\p "u 
common control :]e "o or m ( ! p]sons is
 n a corporation4  7,d7 ,s+le taxpay]   
,pursuant to rules issu$ by ! ,secret>y1
 two or m entities 7:e!r or n "u common 
control7 t produce di/ill$ spirits      
m>ket$ "u a simil> br&1 lic5se1         
fran*ise1 or o!r arrangem5t %all be     
treat$ z a s+le taxpay] = purposes ( !  
application ( ?is subsection4  4  7b7   
,con=m+ am5dm5t ,section #gfeb7;f77#b7 (
 ! ,int]nal ,rev5ue ,code ( #aihf is    
am5d$ by /rik+ section #ejja7;a77#a7 &  
ins]t+ subsection 7a77#a7 ( section     

#ejja1 det]m9$ z if subsection 7c77#a7 (
 su* section did n apply4  7c7          
,application ( r$uc$ tax rate = =eign   
manufactur]s & import]s ,subsection 7c7 
( section #ejja ( ! ,int]nal ,rev5ue    
,code ( #aihf1 z add$ by subsection 7a71
 is am5d$--  7#a7 9 p>agraph 7#a71 by   
ins]t+ b only if ! import] is an elect+ 
import] "u p>agraph 7#c7 & ! pro(       
gallons ( di/ill$ spirits h be5 assign$ 
to ! import] pursuant to su* p>agraph   
aft] into ! ,unit$ ,/ates dur+ ! cal5d> 
ye>1 &  7#b7 by add+ at ! end ! foll[+  
new p>agraph3  7#c7 ,r$uc$ tax rate =   
=eign manufactur]s & import]s  7,a7 ,9  
g5]al ,9 ! case ( any pro( gallons (    
di/ill$ spirits :i* h be5 produc$       
outside ( ! ,unit$ ,/ates & import$ into
 ! ,unit$ ,/ates1 ! rate ( tax          
applicable "u p>agraph 7#a7 7ref]r$ to 9
 ?is p>agraph z ! r$uc$ tax rate7 may be
 assign$ by ! di/ill$ sprits op]ation   
7provid$ t su* op]ation makes an        
election describ$ 9 subp>agraph         
7,b77ii77 to any elect+ import] ( su*   

pro( gallons pursuant to ! requirem5ts  
e/abli%$ by ! ,secret>y ( ! ,treasury "u
 subp>agraph 7,b74  7,b7 ,assignm5t ,!  
,secret>y ( ! ,treasury1 9 consultation 
) ! ,secret>y ( ,heal? & ,human ,s]vices
 & ! ,secret>y ( ! ,dep>tm5t ( ,homel&  
,security1 %all1 ?r\gh su* rules1       
regulations1 & proc$ures z are det]m9$  
appropriate1 e/abli% proc$ures =        
assignm5t ( ! r$uc$ tax rate provid$ "u 
?is p>agraph1 :i* %all include--  7i7 a 
limitation to ensure t ! numb] ( pro(   
gallons ( di/ill$ spirits = :i* ! r$uc$ 
tax rate has be5 assign$ by a di/ill$   
spirits op]ation--  7,i7 to any import] 
does n exce$ ! numb] ( pro( gallons     
produc$ by su* op]ation dur+ ! cal5d>   
ye> :i* 7 import$ into ! ,unit$ ,/ates  
by su* import]1 &  7,,ii7 to all        
import]s does n exce$ ! #bb1bcj1jjj pro(
 gallons ( di/ill$ spirits to :i* !     
r$uc$ tax rate applies1  7ii7 proc$ures 
t all[ ! election ( a di/ill$ spirits   
op]ation to assign & an import] to      
receive ! r$uc$ tax rate provid$ "u ?is 

p>agraph1  7iii7 requirem5ts t ! di/ill$
 spirits op]ation provide any in=mation 
z ! ,secret>y det]m9es necess>y &       
appropriate = purposes ( c>ry+ out ?is  
p>agraph1 &  7iv7 proc$ures t all[ =    
revocation ( eligibility ( ! di/ill$    
spirits op]ation & ! import] = ! r$uc$  
tax rate provid$ "u ?is p>agraph 9 !    
case ( any errone\s or fraudul5t        
in=mation provid$ "u clause 7iii7 :i* ! 
,secret>y deems to be mat]ial to        
qualify+ = su* r$uc$ rate4  7,c7        
,controll$ gr\p  7i7 ,9 g5]al ,=        
purposes ( ?is section1 any import] mak+
 an election describ$ 9 subp>agraph     
7,b77ii7 %all be deem$ to be a memb] ( !
 controll$ gr\p ( ! di/ill$ spirits     
op]ation1 z describ$ "u p>agraph 7#b74  
7ii7 ,apportionm5t ,= purposes ( ?is    
p>agraph1 9 ! case ( a controll$ gr\p1  
rules simil> to section                 
#ejea7;a77#e77;,b7 %all apply4  4  7d7  
,effective date  7#a7 ,9 g5]al ,subject 
to p>agraph 7#b71 ! am5dm5ts made by ?is
 section %all apply to di/ill$ spirits  

remov$ aft] ,septemb] #cj1 #bjai4  7#b7 
,proration ,= purposes ( ! f\r? cal5d>  
qu>t] ( #bjai1 ! ,secret>y ( ! ,treasury
 7or ! ,secret>y's delegate7 %all issue 
su* guidance1 rules1 or regulations z   
are deem$ appropriate to provide t !    
am5dm5ts made by ?is section are appli$ 
on a prorat$ basis = purposes ( di/ill$ 
spirits remov$ dur+ su* qu>t]4  #djb4   
,bulk di/ill$ spirits  7a7 ,9 g5]al     
,section #ebab ( ! ,int]nal ,rev5ue     
,code ( #aihf is am5d$-- 7#a7 by /rik+  
,bulk di/ill$ spirits on :i* & ins]t+   
,di/ill$ spirits on :i*1 &  7#b7 by     
/rik+ bulk ea* place x appe>s4  7b7     
,effective date ,! am5dm5ts made by ?is 
section %all apply di/ill$ spirits      
transf]r$ 9 bond 9 any cal5d> qu>t]s    
beg9n+ m ?an #a ye> aft] ! date ( !     
enactm5t ( ?is ,act4  ,v ,fund+  #eja4  
,increas$ fund+ = ! ,alcohol & ,tobacco 
,tax & ,trade ,bureau  7a7 ,9 g5]al ,=  
necess>y exp5ses ( c>ry+ out section    
#aaaa7;d7 ( ! ,homel& ,security ,act (  
#bjjb 7#f ,u4,s4,c4 #eca7;d771 !re are  

au?oriz$ to be appropriat$--  7#a7 =    
fiscal ye> #bjag1 #aaf1dci1jjj1 to rema9
 available until ,septemb] #cj1 #bjah2 &
  7#b7 = fiscal ye> #bjah1 #aai1jha1jjj1
 to rema9 available until ,septemb] #cj1
 #bjai4  7b7 ,availability ( funds ,( ! 
am\nts au?oriz$ to be appropriat$ "u    
subsection 7a71 = ea* ( fiscal ye>s     
#bjag & #bjah--  7#a7 #e1jjj1jjj %all be
 = ! co/s ( accel]at+ ! process+ ( =mula
 & label applications2  7#b7 #e1jjj1jjj 
%all be = ! co/s ( programs to en=ce    
trade practice violations ( ! ,f$]al    
,alcohol ,adm9i/ration ,act 7#bg        
,u4,s4,c4 #bja et seq472 &  7#c7        
#e1jjj1jjj %all be = ! purpose ( c>ry+  
out ! provisions ( ?is ,act & ! am5dm5ts
 made by ?is ,act1 includ+ accel]at+ !  
process+ ( p]mit applications =         
non-indu/rial alcohol production &      
di/ribution4