,,ii  #aaeth ,,congress  #ast ,session  
,s4 #bcf  ,,in ,,the ,,senate ,,of ,,the
 ,,united ,,states  ,january #cj1 #bjag 
,mr4 ,wyden 7for himself1 ,mr4 ,blunt1  
,mr4 ,carper1 ,mr4 ,roberts1 ,ms4       
,stabenow1 ,mr4 ,moran1 ,mr4 ,casey1    
,mr4 ,portman1 ,mr4 ,bennet1 ,mrs4      
,capito1 ,ms4 ,baldwin1 and ,mr4        
,gardner7 introduced the following bill2
 which was read twice and referred to   
the ,committee on ,finance  ,a ,,bill   
,to amend the ,internal ,revenue ,code  
of #aihf to reform taxation of alcoholic
 beverages4  #a4 ,short title2 table of 
contents2 rule of construction  7a7     
,short title  ,this ,act may be cited as
 the ,craft ,beverage ,modernization and
 ,tax ,reform ,act of #bjag4  7b7 ,table
 of contents ,the table of contents of  
this ,act is as follows3 ,sec4 #a4      
,short title2 table of contents2 rule of
 construction4 ,,title ,i--,production  
period ,sec4 #aja4 ,production period   
for beer1 wine1 and distilled spirits4  
,,title ,,ii--,beer ,sec4 #bja4 ,reduced

 rate of excise tax on beer4 ,sec4 #bjb4
 ,use of wholesome products suitable for
 human food consumption in the          
production of fermented beverages4 ,sec4
 #bjc4 ,simplification of rules         
regarding records1 statements1 and      
returns4 ,sec4 #bjd4 ,transfer of beer  
between bonded facilities4 ,,title      
,,iii--,wine ,sec4 #cja4 ,reduced rate  
of excise tax on certain wine4 ,sec4    
#cjb4 ,adjustment of alcohol content    
level for application of excise tax     
rates4 ,sec4 #cjc4 ,definition of mead  
and low alcohol by volume wine4 ,,title 
,,iv--,distilled ,spirits ,sec4 #dja4   
,reduced rate of excise tax on certain  
distilled spirits4 ,sec4 #djb4 ,bulk    
distilled spirits4 ,,title ,v--,funding 
,sec4 #eja4 ,increased funding for the  
,alcohol and ,tobacco ,tax and ,trade   
,bureau4  7c7 ,rule of construction     
,nothing in this ,act1 the amendments   
made by this ,act1 or any regulation    
promulgated under this ,act or the      
amendments made by this ,act1 shall be  

construed to preempt1 supersede1 or     
otherwise limit or restrict any ,state1 
local1 or tribal law that prohibits or  
regulates the production or sale of     
distilled spirits1 wine1 or malt        
beverages4  ,i ,production period  #aja4
 ,production period for beer1 wine1 and 
distilled spirits  7a7 ,in general      
,section #bfc;,a7f7 of the ,internal    
,revenue ,code of #aihf is amended--    
7#a7 by redesignating paragraph 7#d7 as 
paragraph 7#e71 and  7#b7 by inserting  
after paragraph 7#c7 the following new  
paragraph3  7#d7 ,exemption for aging   
process of beer1 wine1 and distilled    
spirits ,for purposes of this           
subsection1 the production period shall 
not include the aging period for--  7,a7
 beer 7as defined in section #ejeb7;a771
  7,b7 wine 7as described in section    
#ejda7;a771 or  7,c7 distilled spirits  
7as defined in section #ejjb7;a77#h771  
except such spirits that are unfit for  
use for beverage purposes4  4  7b7      
,conforming amendment ,paragraph        

7#e77;,b77ii7 of section #bfc;,a7f7 of  
the ,internal ,revenue ,code of #aihf1  
as redesignated by this section1 is     
amended by inserting except as provided 
in paragraph 7#d71 before ending on the 
date4  7c7 ,effective date ,the         
amendments made by this section shall   
apply to interest costs paid or incurred
 in taxable years ending on or after    
,december #ca1 #bjah4  ,,ii ,beer  #bja4
 ,reduced rate of excise tax on beer    
7a7 ,in general ,paragraph 7#a7 of      
section #ejea7;a7 of the ,internal      
,revenue ,code of #aihf is amended to   
read as follows3  7#a7 ,in general  7,a7
 ,imposition of tax ,a tax is hereby    
imposed on all beer brewed or produced1 
and removed for consumption or sale1    
within the ,united ,states1 or imported 
into the ,united ,states4 ,except as    
provided in paragraph 7#b71 the rate of 
such tax shall be--  7i7 #af on the     
first #f1jjj1jjj barrels of beer-- 7,i7 
brewed by the brewer and removed during 
the calendar year for consumption or    

sale1 or  7,,ii7 imported by the        
importer into the ,united ,states during
 the calendar year1 and  7ii7 #ah on any
 barrels of beer to which clause 7i7    
does not apply4  7,b7 ,barrel ,for      
purposes of this section1 a barrel shall
 contain not more than #ca gallons of   
beer1 and any tax imposed under this    
section shall be applied at a like rate 
for any other quantity or for fractional
 parts of a barrel4  4  7b7 ,reduced    
rate for certain domestic production    
,subparagraph 7,a7 of section           
#ejea7;a77#b7 of the ,internal ,revenue 
,code of #aihf is amended-- 7#a7 in the 
heading1 by striking #g and inserting   
#c4ej1 and  7#b7 by striking #g and     
inserting #c4ej4  7c7 ,application of   
reduced tax rate for foreign            
manufacturers and importers ,subsection 
7a7 of section #ejea of the ,internal   
,revenue ,code of #aihf is amended--    
7#a7 in subparagraph 7,a77i77,,ii7 of   
paragraph 7#a71 as amended by subsection
 7a7 of this section1 by inserting but  

only if the importer is an electing     
importer under paragraph 7#d7 and the   
barrels have been assigned to the       
importer pursuant to such paragraph     
after during the calendar year1 and     
7#b7 by adding at the end the following 
new paragraph3  7#d7 ,reduced tax rate  
for foreign manufacturers and importers 
7,a7 ,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   
,states1 the rate of tax applicable     
under clause 7i7 of paragraph 7#a77;,a7 
7referred to in this paragraph as the   
reduced tax rate7 may be assigned by the
 brewer 7provided that the brewer makes 
an election described in subparagraph   
7,b77ii77 to any electing importer of   
such barrels pursuant to the            
requirements established by the         
,secretary of the ,treasury under       
subparagraph 7,b74  7,b7 ,assignment    
,the ,secretary of the ,treasury1 in    
consultation with the ,secretary of     

,health and ,human ,services and the    
,secretary of the ,department of        
,homeland ,security1 shall1 through such
 rules1 regulations1 and procedures as  
are determined appropriate1 establish   
procedures for assignment of the reduced
 tax rate provided under this paragraph1
 which shall include--  7i7 a limitation
 to ensure that the number of barrels of
 beer for which the reduced tax rate has
 been assigned by a brewer--  7,i7 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 importer1 and  7,,ii7 to
 all importers does not exceed the      
#f1jjj1jjj barrels to which the reduced 
tax rate applies1  7ii7 procedures that 
allow the election of a brewer to assign
 and an importer to receive the reduced 
tax rate provided under this paragraph1 
7iii7 requirements that the brewer      
provide any information as the          
,secretary determines necessary and     

appropriate for purposes of carrying out
 this paragraph1 and  7iv7 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 7iii7 which the ,secretary deems
 to be material to qualifying for such  
reduced rate4  7,c7 ,controlled group   
,for purposes of this section1 any      
importer making an election described in
 subparagraph 7,b77ii7 shall be deemed  
to be a member of the controlled group  
of the brewer1 as described under       
paragraph 7#e74  4  7d7 ,controlled     
group and single taxpayer rules         
,subsection 7a7 of section #ejea of the 
,internal ,revenue ,code of #aihf1 as   
amended by this section1 is amended--   
7#a7 in paragraph 7#b7-- 7,a7 by        
striking subparagraph 7,b71 and  7,b7 by
 redesignating subparagraph 7,c7 as     
subparagraph 7,b71 and  7#b7 by adding  
at the end the following new paragraph3 

7#e7 ,controlled group and single       
taxpayer rules  7,a7 ,in general ,except
 as provided in subparagraph 7,b71 in   
the case of a controlled group1 the     
#f1jjj1jjj barrel quantity specified in 
paragraph 7#a77;,a77i7 and the          
#b1jjj1jjj barrel quantity specified in 
paragraph 7#b77;,a7 shall be applied to 
the controlled group1 and the #f1jjj1jjj
 barrel quantity specified in paragraph 
7#a77;,a77i7 and the #fj1jjj barrel     
quantity specified in paragraph         
7#b77;,a7 shall be apportioned among the
 brewers who are members of such group  
in such manner as the ,secretary or his 
delegate shall by regulations prescribe4
 ,for purposes of the preceding         
sentence1 the term controlled group has 
the meaning assigned to it by subsection
 7a7 of section #aefc1 except that for  
such purposes the phrase more than #ej  
percent shall be substituted for the    
phrase at least #hj percent in each     
place it appears in such subsection4    
,under regulations prescribed by the    

,secretary or his delegate1 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 corporation4  7,b7 ,foreign   
manufacturers and importers ,for        
purposes of paragraph 7#d71 in the case 
of a controlled group1 the #f1jjj1jjj   
barrel quantity specified in paragraph  
7#a77;,a77i7 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 prescribe4 ,for purposes
 of the preceding sentence1 the term    
controlled group has the meaning given  
such term under subparagraph 7,a74      
,under regulations prescribed by the    
,secretary or his delegate1 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 corporation4  7,c7 ,single    

taxpayer ,pursuant to rules issued by   
the ,secretary1 two or more entities    
7whether or not under common control7   
that produce beer marketed under a      
similar brand1 license1 franchise1 or   
other arrangement shall be treated as a 
single taxpayer for purposes of the     
application of this subsection4  4  7e7 
,effective date  7#a7 ,in general       
,subject to paragraph 7#b71 the         
amendments made by this section shall   
apply to beer removed after ,september  
#cj1 #bjai4  7#b7 ,proration ,for       
purposes of the fourth calendar quarter 
of #bjai1 the ,secretary of the         
,treasury 7or the ,secretary's delegate7
 shall issue such guidance1 rules1 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 quarter4  #bjb4 ,use of     
wholesome products suitable for human   
food consumption in the production of   
fermented beverages  7a7 ,in general    

,not later than the date that is #a year
 after the date of the enactment of this
 ,act1 the ,secretary of the ,treasury  
or the ,secretary of the ,treasury's    
delegate shall amend subpart ,f of part 
#be of subchapter ,a of chapter ,i of   
title #bg1 ,code of ,federal            
,regulations1 to ensure that1 for       
purposes of such part1 wholesome fruits1
 vegetables1 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 beverages4  7b7 
,definition ,for purposes of this       
section1 the term fruit means whole     
fruit1 fruit juices1 fruit puree1 fruit 
extract1 or fruit concentrate4  7c7     
,rule of construction ,nothing in this  
section shall be construed to revoke1   
prescribe1 or limit any other exemptions
 from the formula requirements under    
subpart ,f of part #be of subchapter ,a 

of chapter ,i of title #bg1 ,code of    
,federal ,regulations1 for any          
ingredient that has been recognized     
before1 on1 or after the date of the    
enactment of this ,act as a traditional 
ingredient in the production of         
fermented beverages4  #bjc4             
,simplification of rules regarding      
records1 statements1 and returns  7a7   
,in general ,subsection 7a7 of section  
#eeee of the ,internal ,revenue ,code of
 #aihf is amended by adding at the end  
the following3 ,the ,secretary shall    
permit a person to employ a unified     
system for any records1 statements1 and 
returns required to be kept1 rendered1  
or made under this section for any beer 
produced in the brewery for which the   
tax imposed by section #ejea has been   
determined1 including any beer which has
 been removed for consumption on the    
premises of the brewery44  7b7          
,effective date ,the amendments made by 
this section shall apply to any calendar
 quarters beginning more than #a year   

after the date of the enactment of this 
,act4  #bjd4 ,transfer of beer between  
bonded facilities  7a7 ,in general      
,section #edad of the ,internal ,revenue
 ,code of #aihf is amended to read as   
follows3  #edad4 ,transfer of beer      
between bonded facilities  7a7 ,in      
general ,beer may be removed from one   
brewery to another bonded brewery1      
without payment of tax1 and may be      
mingled with beer at the receiving      
brewery1 subject to such conditions1    
including payment of the tax1 and in    
such containers1 as the ,secretary by   
regulations shall prescribe1 which shall
 include--  7#a7 any removal from one   
brewery to another brewery belonging to 
the same brewer1  7#b7 any removal from 
a brewery owned by one corporation to a 
brewery owned by another corporation    
when--  7,a7 one such corporation owns  
the controlling interest in the other   
such corporation1 or  7,b7 the          
controlling interest in each such       
corporation is owned by the same person 

or persons1 and  7#c7 any removal from  
one brewery to another brewery when--   
7,a7 the proprietors of transferring and
 receiving premises are independent of  
each other and neither has a proprietary
 interest1 directly or indirectly1 in   
the business of the other1 and  7,b7 the
 transferor has divested itself of all  
interest in the beer so transferred and 
the transferee has accepted             
responsibility for payment of the tax4  
7b7 ,transfer of liability for tax ,for 
purposes of subsection 7a77#c71 such    
relief from liability shall be effective
 from the time of removal from the      
transferor's bonded premises1 or from   
the time of divestment of interest1     
whichever is later4  4  7b7 ,removal    
from brewery by pipeline ,section #edab 
of the ,internal ,revenue ,code of #aihf
 is amended by inserting pursuant to    
section #edad or before by pipeline4    
7c7 ,effective date ,the amendments made
 by this section shall apply to any     
calendar quarters beginning more than #a

 year after the date of the enactment of
 this ,act4  ,,iii ,wine  #cja4 ,reduced
 rate of excise tax on certain wine  7a7
 ,in general ,section #ejda7;c7 of the  
,internal ,revenue ,code of #aihf is    
amended-- 7#a7 in the heading1 by       
striking for small domestic producers1  
7#b7 by amending paragraph 7#a7 to read 
as follows3  7#a7 ,allowance of credit  
7,a7 ,in general ,there shall be allowed
 as a credit against any tax imposed by 
this title 7other than chapters #b1 #ba1
 and #bb7 an amount equal to the sum    
of--  7i7 #a per wine gallon on the     
first #cj1jjj wine gallons of wine1 plus
  7ii7 #ij cents per wine gallon on the 
first #ajj1jjj wine gallons of wine to  
which clause 7i7 does not apply1 plus   
7iii7 #ec4e cents per wine gallon on the
 first #fbj1jjj wine gallons of wine to 
which clauses 7i7 and 7ii7 do not apply1
  which are produced by the producer and
 removed during the calendar year for   
consumption or sale1 or which are       
imported by the importer into the       

,united ,states during the calendar     
year4  7,b7 ,adjustment of credit for   
hard cider ,in the case of wine         
described in subsection 7b77#f71        
subparagraph 7,a7 of this paragraph     
shall be applied--  7i7 in clause 7i7 of
 such subparagraph1 by substituting #f4b
 cents for #a1  7ii7 in clause 7ii7 of  
such subparagraph1 by substituting #e4f 
cents for #ij cents1 and  7iii7 in      
clause 7iii7 of such subparagraph1 by   
substituting #c4c cents for #ec4e cents4
  1  7#c7 by striking paragraph 7#b71   
7#d7 by redesignating paragraphs 7#c7   
through 7#g7 as paragraphs 7#b7 through 
7#f71 respectively1 and  7#e7 by        
amending paragraph 7#f71 as redesignated
 by paragraph 7#d7 of this subsection1  
to read as follows3  7#f7 ,regulations  
,the ,secretary may prescribe such      
regulations as may be necessary to carry
 out the purposes of this subsection1   
including regulations to ensure proper  
calculation of the credit provided in   
this subsection4  4  7b7 ,controlled    

group and single taxpayer rules         
,paragraph 7#c7 of section #ejda7;c71 as
 redesignated by subsection 7a77#d71 is 
amended by striking section             
#ejea7;a77#b77;,b7 and inserting section
 #ejea7;a77#e74  7c7 ,allowance of      
credit for foreign manufacturers and    
importers ,subsection 7c7 of section    
#ejda of the ,internal ,revenue ,code of
 #aihf1 as amended by subsection 7a71 is
 amended--  7#a7 in subparagraph 7,a7 of
 paragraph 7#a71 by inserting but only  
if the importer is an electing importer 
under paragraph 7#f7 and the wine       
gallons of wine have been assigned to   
the importer pursuant to such paragraph 
after into the ,united ,states during   
the calendar year1  7#b7 by             
redesignating paragraph 7#f7 as         
paragraph 7#g71 and  7#c7 by inserting  
after paragraph 7#e7 the following new  
paragraph3  7#f7 ,allowance of credit   
for foreign manufacturers and importers 
7,a7 ,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 ,states1  
the credit allowable under paragraph    
7#a7 7referred to in this paragraph as  
the tax credit7 may be assigned by the  
person who produced such wine 7referred 
to in this paragraph as the foreign     
producer71 provided that such person    
makes an election described in          
subparagraph 7,b77ii71 to any electing  
importer of such wine gallons pursuant  
to the requirements established by the  
,secretary of the ,treasury under       
subparagraph 7,b74  7,b7 ,assignment    
,the ,secretary of the ,treasury1 in    
consultation with the ,secretary of     
,health and ,human ,services and the    
,secretary of the ,department of        
,homeland ,security1 shall1 through such
 rules1 regulations1 and procedures as  
are determined appropriate1 establish   
procedures for assignment of the tax    
credit provided under this paragraph1   
which shall include--  7i7 a limitation 
to ensure that the number of wine       

gallons of wine for which the tax credit
 has been assigned by a foreign         
producer--  7,i7 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 importer1 and  7,,ii7 to all       
importers does not exceed the #gej1jjj  
wine gallons of wine to which the tax   
credit applies1  7ii7 procedures that   
allow the election of a foreign producer
 to assign and an importer to receive   
the tax credit provided under this      
paragraph1  7iii7 requirements that the 
foreign producer provide any information
 as the ,secretary determines necessary 
and appropriate for purposes of carrying
 out this paragraph1 and  7iv7          
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 7iii7 which the   

,secretary deems to be material to      
qualifying for such credit4  7,c7       
,controlled group  ,for purposes of this
 section1 any importer making an        
election described in subparagraph      
7,b77ii7 shall be deemed to be a member 
of the controlled group of the foreign  
producer1 as described under paragraph  
7#c74  4  7d7 ,effective date  7#a7 ,in 
general ,subject to paragraph 7#b71 the 
amendments made by this section shall   
apply to wine removed after ,september  
#cj1 #bjai4  7#b7 ,proration ,for       
purposes of the fourth calendar quarter 
of #bjai1 the ,secretary of the         
,treasury 7or the ,secretary's delegate7
 shall issue such guidance1 rules1 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 quarter4  #cjb4 ,adjustment 
of alcohol content level for application
 of excise tax rates  7a7 ,in general   
,paragraphs 7#a7 and 7#b7 of section    

#ejda7;b7 of the ,internal ,revenue     
,code of #aihf are amended by striking  
#ad percent each place it appears and   
inserting #af percent4  7b7 ,effective  
date ,the amendments made by this       
section shall apply to wine removed     
during calendar years beginning after   
,december #ca1 #bjah4  #cjc4 ,definition
 of mead and low alcohol by volume wine 
7a7 ,in general ,section #ejda of the   
,internal ,revenue ,code of #aihf is    
amended-- 7#a7 in subsection 7a71 by    
striking ,still wines and inserting     
,subject to subsection 7h71 still wines1
 and  7#b7 by adding at the end the     
following new subsection3  7h7 ,mead and
 low alcohol by volume wine  7#a7 ,in   
general ,for purposes of subsections 7a7
 and 7b77#a71 mead and low alcohol by   
volume wine shall be deemed to be still 
wines containing not more than #af      
percent of alcohol by volume4  7#b7     
,definitions  7,a7 ,mead ,for purposes  
of this section1 the term mead means a  
wine-- 7i7 containing not more than     

#j4fd gram of carbon dioxide per hundred
 milliliters of wine1 except that the   
,secretary may by regulations prescribe 
such tolerances to this limitation as   
may be reasonably necessary in good     
commercial practice1  7ii7 which is     
derived solely from honey and water1    
7iii7 which contains no fruit product or
 fruit flavoring1 and  7iv7 which       
contains less than #h4e percent alcohol 
by volume4  7,b7 ,low alcohol by volume 
wine ,for purposes of this section1 the 
term low alcohol by volume wine means a 
wine-- 7i7 containing not more than     
#j4fd gram of carbon dioxide per hundred
 milliliters of wine1 except that the   
,secretary may by regulations prescribe 
such tolerances to this limitation as   
may be reasonably necessary in good     
commercial practice1  7ii7 which is     
derived-- 7,i7 primarily from grapes1 or
  7,,ii7 from grape juice concentrate   
and water1  7iii7 which contains no     
fruit product or fruit flavoring other  
than grape1 and  7iv7 which contains    

less than #h4e percent alcohol by       
volume4  4  7b7 ,effective date ,the    
amendments made by this section shall   
apply to wine removed during calendar   
years beginning after ,december #ca1    
#bjah4  ,,iv ,distilled ,spirits  #dja4 
,reduced rate of excise tax on certain  
distilled spirits  7a7 ,in general      
,section #ejja of the ,internal ,revenue
 ,code of #aihf is amended by           
redesignating subsection 7c7 as         
subsection 7d7 and by inserting after   
subsection 7b7 the following new        
subsection3  7c7 ,reduced rate  7#a7 ,in
 general ,in the case of a distilled    
spirits operation1 the otherwise        
applicable tax rate under subsection    
7a77#a7 shall be--  7,a7 #b4gj per proof
 gallon on the first #ajj1jjj proof     
gallons of distilled spirits1 and  7,b7 
#ac4cd per proof gallon on the first    
#bb1acj1jjj of proof gallons of         
distilled spirits to which subparagraph 
7,a7 does not apply1  which have been   
distilled or processed by such operation

 and removed during the calendar year   
for consumption or sale1 or which have  
been imported by the importer into the  
,united ,states during the calendar     
year4  7#b7 ,controlled groups  7,a7 ,in
 general ,in the case of a controlled   
group1 the proof gallon quantities      
specified under subparagraphs 7,a7 and  
7,b7 of paragraph 7#a7 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 prescribe4  7,b7 ,definition
 ,for purposes of subparagraph 7,a71 the
 term controlled group shall have the   
meaning given such term by subsection   
7a7 of section #aefc1 except that more  
than #ej percent shall be substituted   
for at least #hj percent each place it  
appears in such subsection4  7,c7 ,rules
 for non-corporations ,under regulations
 prescribed by the ,secretary1          
principles similar to the principles of 
subparagraphs 7,a7 and 7,b7 shall be    
applied to a group under common control 

where one or more of the persons is not 
a corporation4  7,d7 ,single taxpayer   
,pursuant to rules issued by the        
,secretary1 two or more entities        
7whether or not under common control7   
that produce distilled spirits marketed 
under a similar brand1 license1         
franchise1 or other arrangement shall be
 treated as a single taxpayer for       
purposes of the application of this     
subsection4  4  7b7 ,conforming         
amendment ,section #gfeb7;f77#b7 of the 
,internal ,revenue ,code of #aihf is    
amended by striking section             
#ejja7;a77#a7 and inserting subsection  
7a77#a7 of section #ejja1 determined as 
if subsection 7c77#a7 of such section   
did not apply4  7c7 ,application of     
reduced tax rate for foreign            
manufacturers and importers ,subsection 
7c7 of section #ejja of the ,internal   
,revenue ,code of #aihf1 as added by    
subsection 7a71 is amended--  7#a7 in   
paragraph 7#a71 by inserting but only if
 the importer is an electing importer   

under paragraph 7#c7 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 year1 and   
7#b7 by adding at the end the following 
new paragraph3  7#c7 ,reduced tax rate  
for foreign manufacturers and importers 
7,a7 ,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 ,states1 the rate of tax        
applicable under paragraph 7#a7         
7referred to in this paragraph as the   
reduced tax rate7 may be assigned by the
 distilled sprits operation 7provided   
that such operation makes an election   
described in subparagraph 7,b77ii77 to  
any electing importer of such proof     
gallons pursuant to the requirements    
established by the ,secretary of the    
,treasury under subparagraph 7,b74  7,b7
 ,assignment ,the ,secretary of the     
,treasury1 in consultation with the     

,secretary of ,health and ,human        
,services and the ,secretary of the     
,department of ,homeland ,security1     
shall1 through such rules1 regulations1 
and procedures as are determined        
appropriate1 establish procedures for   
assignment of the reduced tax rate      
provided under this paragraph1 which    
shall include--  7i7 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--  7,i7 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 importer1 and  7,,ii7 to all    
importers does not exceed the           
#bb1bcj1jjj proof gallons of distilled  
spirits to which the reduced tax rate   
applies1  7ii7 procedures that allow the
 election of a distilled spirits        
operation to assign and an importer to  
receive the reduced tax rate provided   

under this paragraph1  7iii7            
requirements that the distilled spirits 
operation provide any information as the
 ,secretary determines necessary and    
appropriate for purposes of carrying out
 this paragraph1 and  7iv7 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 7iii7 
which the ,secretary deems to be        
material to qualifying for such reduced 
rate4  7,c7 ,controlled group  7i7 ,in  
general ,for purposes of this section1  
any importer making an election         
described in subparagraph 7,b77ii7 shall
 be deemed to be a member of the        
controlled group of the distilled       
spirits operation1 as described under   
paragraph 7#b74  7ii7 ,apportionment    
,for purposes of this paragraph1 in the 
case of a controlled group1 rules       
similar to section #ejea7;a77#e77;,b7   

shall apply4  4  7d7 ,effective date    
7#a7 ,in general ,subject to paragraph  
7#b71 the amendments made by this       
section shall apply to distilled spirits
 removed after ,september #cj1 #bjai4   
7#b7 ,proration ,for purposes of the    
fourth calendar quarter of #bjai1 the   
,secretary of the ,treasury 7or the     
,secretary's delegate7 shall issue such 
guidance1 rules1 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 quarter4  #djb4 ,bulk distilled    
spirits  7a7 ,in general ,section #ebab 
of the ,internal ,revenue ,code of #aihf
 is amended-- 7#a7 by striking ,bulk    
distilled spirits on which and inserting
 ,distilled spirits on which1 and  7#b7 
by striking bulk each place it appears4 
7b7 ,effective date ,the amendments made
 by this section shall apply distilled  
spirits transferred in bond in any      
calendar quarters beginning more than #a

 year after the date of the enactment of
 this ,act4  ,v ,funding  #eja4         
,increased funding for the ,alcohol and 
,tobacco ,tax and ,trade ,bureau  7a7   
,in general ,for necessary expenses of  
carrying out section #aaaa7;d7 of the   
,homeland ,security ,act of #bjjb 7#f   
,u4,s4,c4 #eca7;d771 there are          
authorized to be appropriated--  7#a7   
for fiscal year #bjag1 #aaf1dci1jjj1 to 
remain available until ,september #cj1  
#bjah2 and  7#b7 for fiscal year #bjah1 
#aai1jha1jjj1 to remain available until 
,september #cj1 #bjai4  7b7             
,availability of funds ,of the amounts  
authorized to be appropriated under     
subsection 7a71 for each of fiscal years
 #bjag and #bjah--  7#a7 #e1jjj1jjj     
shall be for the costs of accelerating  
the processing of formula and label     
applications2  7#b7 #e1jjj1jjj shall be 
for the costs of programs to enforce    
trade practice violations of the        
,federal ,alcohol ,administration ,act  
7#bg ,u4,s4,c4 #bja et seq472 and  7#c7 

#e1jjj1jjj shall be for the purpose of  
carrying out the provisions of this ,act
 and the amendments made by this ,act1  
including accelerating the processing of
 permit applications for non-industrial 
alcohol production and distribution4