60562 Federal Register / Vol. 83, No. 227 / Monday, November 26, 2018 / Proposed Rules DEPARTMENT OF THE TREASURY C. The Certificate of Label Approval order, the President created the Federal (COLA) Process Alcohol Control Administration to Alcohol and Tobacco Tax and Trade D. Modernization of the Alcohol Beverage administer the codes of fair competition Bureau Labeling and Advertising Regulations E. Plain Language Principles for the alcohol beverage industry. In F. Scope of this Rulemaking 1935, the Supreme Court struck down 27 CFR Parts 4, 5, 7, 14, and 19 II. Proposed Revisions the provisions of the National Industrial [Docket No. TTB–2018–0007; Notice No. A. General Reorganization of the Parts Recovery Act as unconstitutional. See 176] B. Proposed Changes That Apply to Parts Schechter Poultry Corp. v. United 4, 5 and 7 States, 295 U.S. 495 (1935). After that RIN 1513–AB54 C. Proposed Changes Specific to 27 CFR decision, in order to provide for the Part 4 (Wine) orderly regulation of the alcohol Modernization of the Labeling and D. Proposed Changes Specific to 27 CFR Advertising Regulations for Wine, Part 5 (Distilled Spirits) beverage industry, Congress enacted the Distilled Spirits, and Malt Beverages E. Proposed Changes Specific to 27 CFR FAA Act in August of 1935. Part 7 (Malt Beverages) The legislative history of the FAA Act AGENCY: Alcohol and Tobacco Tax and F. Proposed 27 CFR Part 14 (Advertising) provides some insight concerning the Trade Bureau, Treasury. G. Impact on Public Guidance Documents general purpose of the FAA Act’s ACTION: Notice of proposed rulemaking. H. Impact on Current Labels labeling provisions, which authorize III. Derivation Tables for Proposed Parts 4, 5, TTB to regulate the labeling of alcohol SUMMARY: The Alcohol and Tobacco Tax 7, and 14 beverage products: and Trade Bureau (TTB) is proposing to IV. Public Participation amend its regulations governing the A. Comments Sought * * * the provisions of this bill show that the purpose was to carry that regulation into labeling and advertising of wine, B. Submitting Comments C. Confidentiality certain particular fields in which control of distilled spirits, and malt beverages. D. Public Disclosure interstate commerce in liquors was TTB proposes to reorganize and recodify V. Regulatory Analyses and Notices paramount and necessary. The purpose was these regulations in order to simplify A. Regulatory Flexibility Act to provide such regulations, not laid down in and clarify regulatory standards, B. Executive Order 12866 statute, so as to be inflexible, but laid down incorporate guidance documents and C. Paperwork Reduction Act under the guidance of Congress, under current policy into the regulations, and VI. Drafting Information general principles, by a body which could reduce the regulatory burden on List of Subjects change them as changes were found industry members where possible. Authority and Issuance necessary. Those regulations were intended to insure that the purchaser should get what DATES: TTB must receive comments on I. Background he thought he was getting, that this proposal on or before March 26, A. TTB’s Statutory Authority representations both in labels and in 2019. advertising should be honest and straight- Sections 105(e) and 105(f) of the ADDRESSES: Please send your comments forward and truthful. They should not be Federal Alcohol Administration Act confined, as the pure-food regulations have on this document to one of the been confined, to prohibitions of falsity, but following addresses: (FAA Act), 27 U.S.C. 205(e) and 205(f), • set forth standards for the regulation of they should also provide for the information Internet: https:// of the consumer, that he should be told what www.regulations.gov (via the online the labeling and advertising of wine, distilled spirits, and malt beverages. The was in the bottle, and all the important comment form for this document as factors which were of interest to him about posted within Docket No. TTB–2018– FAA Act was enacted in 1935 and also what was in the bottle. (See Hearings on H.R. 0007 at ‘‘Regulations.gov,’’ the Federal contains provisions regarding the 8539 before the Committee on Ways and e-rulemaking portal); requirements for basic permits that Means, House of Representatives, 74th Cong., • U.S. Mail: Director, Regulations and allow people to engage in business as 1st Sess. 10 (1935).) Rulings Division, Alcohol and Tobacco producers, importers, and wholesalers, and the regulation of unfair trade 2. Labeling and Advertising Provisions Tax and Trade Bureau, 1310 G Street of the FAA Act NW, Box 12, Washington, DC 20005; or practices. • Hand delivery/courier in lieu of The Alcohol and Tobacco Tax and Section 105(e) of the FAA Act, mail: Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the codified in the United States Code at 27 Trade Bureau, 1310 G Street NW, Suite FAA Act pursuant to section 1111(d) of U.S.C. 205(e), sets forth requirements for 400, Washington, DC 20005. the Homeland Security Act of 2002, labeling of wine (which is defined in the See the Public Participation section of codified at 6 U.S.C. 531(d). The FAA Act to cover only wines that this document for specific instructions Secretary of the Treasury (the Secretary) contain at least 7 percent alcohol by and requirements for submitting has delegated various authorities to volume), distilled spirits, and malt comments, and for information on how administer and enforce this law to the beverages (collectively referred to as to request a public hearing. TTB Administrator through Treasury ‘‘alcohol beverages’’ throughout this FOR FURTHER INFORMATION CONTACT: Department Order 120–01 (dated document). This section of the FAA Act Christopher M. Thiemann or Kara T. December 10, 2013, superseding authorizes the Secretary to issue Fontaine, Regulations and Rulings Treasury Order 120–01 (Revised), regulations to prevent deception of the Division, Alcohol and Tobacco Tax and ‘‘Alcohol and Tobacco Tax and Trade consumer, to provide the consumer with Trade Bureau, 1310 G Street NW, Box Bureau,’’ dated January 24, 2003). ‘‘adequate information’’ as to the identity and quality of the product, to 12, Washington, DC 20005; telephone 1. History of the FAA Act 202–453–2265. prohibit false or misleading statements, After the repeal of Prohibition by the SUPPLEMENTARY INFORMATION: and to provide information as to the enactment of the Twenty-First alcohol content of the product. Table of Contents Amendment in 1933, the alcohol beverage industry was subject to Federal 3. FAA Act Prohibition of Sale or I. Background Shipment of Mislabeled Products A. TTB’s Statutory Authority regulation under the codes of fair B. Current TTB Alcohol Beverage Labeling competition authorized by the National Section 105(e) of the FAA Act (27 and Advertising Regulations Industrial Recovery Act. By Executive U.S.C. 205(e)) also prohibits the sale or VerDate Sep<11>2014 18:26 Nov 23, 2018 Jkt 247001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 E:\FR\FM\26NOP2.SGM 26NOP2 Federal Register / Vol. 83, No. 227 / Monday, November 26, 2018 / Proposed Rules 60563 shipment in interstate or foreign content thereof, the net contents of the abbreviation thereof, and will prevent commerce of wine, distilled spirits, or package, and the manufacturer or bottler the use of a graphic, pictorial, or malt beverages that are not bottled, or importer of the product. This section emblematic representation of any such packaged, and labeled in accordance provides the basis for most of the individual or organization, if the use of with regulations issued by the Secretary. mandatory information requirements in such name or representation is likely to Violations of section 105(e) are the TTB labeling regulations. falsely lead the consumer to believe that misdemeanors that are punishable by a With regard to alcohol content, the product has been endorsed, made or fine. See 27 U.S.C. 207. section 105(e)(2) sets out different used by, or produced for, or under the The prohibition in section 105(e) requirements for wine, distilled spirits, supervision of, or in accordance with applies to any person engaged in and malt beverages. This section the specifications of, such individual or business as a distiller, brewer, rectifier, provides the Secretary with the organization. Certain ‘‘grandfathering’’ blender, or other producer, or as an authority to issue regulations that provisions are included in this section. importer or wholesaler of wine, distilled require alcohol content statements on These provisions are incorporated into spirits or malt beverages, or as a bottler, labels of distilled spirits products and the current regulations on prohibited or warehouseman and bottler, of for wines with an alcohol content of practices. distilled spirits. The law makes it over 14 percent alcohol by volume, unlawful for such persons, directly or leaving such statements optional for 5. Prohibition of Alteration, Mutilation, indirectly or through an affiliate, to sell wines with an alcohol content at or Destruction, Obliteration, or Removal of or ship, or deliver for sale or shipment, below 14 percent. Furthermore, the FAA Labels or otherwise introduce, in interstate or Act contains language that specifically Section 105(e) makes it unlawful for foreign commerce, or to receive therein, prohibits placement of alcohol content any person to alter, mutilate, destroy, or to remove from customs custody for statements on malt beverage labels, obliterate, or remove any mark, brand, consumption, any wine, distilled spirits, unless required by State law. In 1995, or label upon wine, distilled spirits, or or malt beverages in bottles, unless the that statutory ban was struck down on malt beverages held for sale in interstate products are bottled, packaged, and First Amendment grounds by the U.S. or foreign commerce or after shipment labeled in conformity with the Supreme Court in Rubin v.