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Modernization of the Labeling and Advertising 18704 Federal Register / Vol. 85, No. 64 / Thursday, April 2, 2020 / Rules and Regulations DEPARTMENT OF THE TREASURY Table of Contents consolidating TTB’s alcohol beverage I. Background advertising regulations in a new part, 27 Alcohol and Tobacco Tax and Trade CFR part 14. A. TTB’s Statutory Authority • Bureau B. Notice of Proposed Rulemaking on Incorporate into the regulations Modernization of the Labeling and TTB guidance documents and current 27 CFR Parts 4, 5, 7, and 19 Advertising Regulations for Alcohol TTB policy, as well as changes in Beverages labeling standards that have come about [Docket No. TTB–2018–0007; T.D. TTB–158; C. Scope of This Final Rule through statutory changes and Ref: Notice Nos. 176 and 176A] II. Discussion of Specific Comments Received international agreements. and TTB Responses • Provide notice and the opportunity RIN 1513–AB54 A. Issues Affecting Multiple Commodities B. Wine Issues to comment on potential new labeling Modernization of the Labeling and C. Distilled Spirits Issues policies and standards, and on certain Advertising Regulations for Wine, D. Malt Beverage Issues internal policies that had developed Distilled Spirits, and Malt Beverages III. Regulatory Analyses and Notices through the day-to-day practical A. Regulatory Flexibility Act application of the regulations to the AGENCY: Alcohol and Tobacco Tax and B. Executive Order 12866 approximately 200,000 label Trade Bureau, Treasury. C. Paperwork Reduction Act applications that TTB receives each IV. Drafting Information ACTION: Final rule; Treasury decision. year. I. Background The comment period for Notice No. SUMMARY: The Alcohol and Tobacco Tax 176 originally closed on March 26, and Trade Bureau (TTB) is amending A. TTB’s Statutory Authority 2019, but was reopened and extended at certain of its regulations governing the Sections 105(e) and 105(f) of the the request of commenters (see Notice labeling and advertising of wine, Federal Alcohol Administration Act No. 176A, 84 FR 9990). The extended distilled spirits, and malt beverages to (FAA Act), 27 U.S.C. 205(e) and 205(f), comment period ended June 26, 2019. address comments it received in set forth standards for the regulation of TTB received and posted 1,143 response to a notice of proposed the labeling and advertising of wine, comments in response to Notice No. rulemaking, Notice No. 176, published distilled spirits, and malt beverages 176. Commenters included trade on November 26, 2018. In this (referred to elsewhere in this document associations, consumer interest groups, document, TTB is finalizing certain as ‘‘alcohol beverages’’). foreign entities, a Federally-recognized liberalizing and clarifying changes that Chapter 51 of the Internal Revenue tribe, State legislators and members of were proposed, and that could be Code of 1986 (IRC), (26 U.S.C. 5001 et Congress, industry members and related implemented quickly and provide seq.), sets forth, among other things, companies, and members of the public. industry members greater flexibility. certain provisions relating to the TTB is also taking into consideration TTB is also identifying certain other taxation of, and production, marking, for purposes of this rulemaking earlier proposals that will not be adopted, and labeling requirements applicable to, comments that were submitted to the including the proposal to define an ‘‘oak distilled spirits, wine, and beer. Department of the Treasury in response barrel’’ for purposes of aging distilled The Alcohol and Tobacco Tax and to a Request for Information (RFI) spirits, the proposal to require that Trade Bureau (TTB) administers the published in the Federal Register (82 statements of composition for distilled FAA Act and IRC pursuant to section FR 27212) on June 14, 2017. The RFI spirits specialty products list 1111(d) of the Homeland Security Act of invited members of the public to submit components in ‘‘intermediate’’ products 2002, codified at 6 U.S.C. 531(d). The views and recommendations for and list distilled spirits and wines used Secretary of the Treasury (the Secretary) Treasury Department regulations that in distilled spirits specialty products in has delegated to the TTB Administrator could be eliminated, modified, or order of predominance, and the various functions and duties in the streamlined, in order to reduce burdens. proposal to adopt new policies on the administration and enforcement of these The comment period for the RFI closed use of cross-commodity terms. TTB laws through Treasury Department on October 31, 2017. continues to consider the remaining Order 120–01. For a more in-depth Eight comments on the FAA Act issues raised by comments it received discussion of TTB’s authority under the labeling regulations, which included 28 that are not addressed in this document. FAA Act and the IRC regarding labeling, specific recommendations, were TTB plans to address those issues in see Notice No. 176. submitted in response to the RFI. For subsequent rulemaking documents. The ease of reference, TTB has posted these B. Notice of Proposed Rulemaking on comments in the docket for this regulatory amendments in this Modernization of the Labeling and document will not require industry rulemaking. TTB is considering all of Advertising Regulations for Alcohol the relevant recommendations members to make changes to alcohol Beverages beverage labels or advertisements and submitted in response to the RFI either instead will afford them additional On November 26, 2018, TTB as comments to Notice No. 176 or as flexibility to make certain changes if published in the Federal Register suggestions for separate agency action, they wish. Notice No. 176 (83 FR 60562), as appropriate. ‘‘Modernization of the Labeling and DATES: This final rule is effective May 4, Advertising Regulations for Wine, C. Scope of This Final Rule 2020. Distilled Spirits, and Malt Beverages.’’ The comments TTB received in FOR FURTHER INFORMATION CONTACT: The principal goals of that proposed response to Notice No. 176 provided Christopher M. Thiemann or Kara T. rule were to: thorough, substantive, and thoughtful Fontaine, Regulations and Rulings • Make the regulations governing the information on a diverse array of issues. Division, Alcohol and Tobacco Tax and labeling of alcohol beverages easier to Determining the appropriate course of Trade Bureau, 1310 G Street NW, Box understand and easier to navigate. This action on all those issues will require 12, Washington, DC 20005; phone 202– included clarifying requirements, as further consideration by the Bureau. 453–2265. well as reorganizing the regulations in However, there are some issues that SUPPLEMENTARY INFORMATION: 27 CFR parts 4, 5, and 7 and TTB has decided to address now, while VerDate Sep<11>2014 19:54 Apr 01, 2020 Jkt 250001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\02APR2.SGM 02APR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 64 / Thursday, April 2, 2020 / Rules and Regulations 18705 it considers the remaining issues. In this not having the intended result within has completed review of all of the issues final rule, TTB is amending certain the purpose of the FAA Act. As a result, raised by commenters in response to regulations, identifying certain TTB is not finalizing certain of the Notice No. 176 against the potential proposals it will not move forward with, proposals in Notice No. 176. One such benefit of providing some more and identifying certain other issues proposal is TTB’s proposed definition of immediate flexibility in identified areas raised by commenters that TTB has an ‘‘oak barrel’’ for purposes of aging and certainty in others. TTB has determined are outside the scope of this distilled spirits. TTB received nearly decided to promulgate a final rule for a rulemaking or otherwise require 700 comments on this issue, almost all subset of the proposals in Notice No. separate, further rulemaking. of which raised specific concerns in 176. TTB plans to address the remaining opposition to the proposed definition. 1. Liberalizing and Clarifying Changes proposals from Notice No. 176 in In addition to not adopting its subsequent Federal Register That Are Being Implemented in This proposed definition of an ‘‘oak barrel,’’ Final Rule publications, whether by finalizing TTB has decided not to finalize: other proposed changes from Notice No. • The issues that TTB has decided to A proposed restriction on the use of 176, announcing that such changes will integrate into the regulations through certain types of cross-commodity terms not be adopted, or initiating further this final rule were well supported by (for example, imposing restrictions on rulemaking proceedings on certain commenters, can be implemented the use of various types of distilled issues to obtain the benefit of further relatively quickly, and would either give spirits terms, including homophones of public comment. The fact that TTB will more flexibility to industry members or distilled spirits classes on wine or malt address those issues in future help industry members understand beverage labels). • rulemaking documents rather than in existing requirements, while not Proposed changes to statements of this final rule does not in any way requiring any current labels or composition for distilled spirits labels, indicate whether the proposed changes advertisements to be changed. including changes that would have will or will not ultimately be adopted. Liberalizing measures that TTB is required disclosure of components of finalizing in this document include: intermediate
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