[Federal Register Volume 81, Number 120 (Wednesday, June 22, 2016)]
[Proposed Rules]
[Pages 40584-40589]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-14696]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Parts 4 and 24

[Docket No. TTB-2016-0005; Notice No. 160]
RIN 1513-AC27


Proposed Revisions to Wine Labeling and Recordkeeping 
Requirements

AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Alcohol and Tobacco Tax and Trade Bureau (TTB) proposes to 
amend its labeling and recordkeeping regulations in 27 CFR part 24 to 
provide that any standard grape wine containing 7 percent or more 
alcohol by volume that is covered by a certificate of exemption from 
label approval may not be labeled with a varietal (grape type) 
designation, a type designation of varietal significance, a vintage 
date, or an appellation of origin unless the wine is labeled in 
compliance with the standards set forth in the appropriate sections of 
27 CFR part 4 for that label information. TTB is also proposing to 
amend its part 4 wine labeling regulations to include a reference to 
the new part 24 requirement.

DATES: TTB must receive written comments on or before August 22, 2016.

ADDRESSES: Please send your comments on this document to one of the 
following addresses:
     Internet: http://www.regulations.gov (via the online 
comment form for this notice as posted within Docket No. TTB-2016-0005 
at ``Regulations.gov,'' the Federal e-rulemaking portal);
     U.S. Mail: Director, Regulations and Rulings Division, 
Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW., Box 12, 
Washington, DC 20005; or
     Hand delivery/courier in lieu of mail: Alcohol and Tobacco 
Tax and Trade Bureau, 1310 G Street NW., Suite 400, Washington, DC 
20005.
    See the Public Participation section of this notice for specific 
instructions and requirements for submitting comments, and for 
information on how to request a public hearing.
    You may view copies of this document and any comments TTB receives 
about this proposal at http://www.regulations.gov within Docket No. 
TTB-2016-0005. A link to that docket is posted on the TTB Web site at 
http://www.ttb.gov/wine/wine-rulemaking.shtml under Notice No. 160. You 
also may view copies of this

[[Page 40585]]

proposed rule and any comments TTB receives about this proposal by 
appointment at the TTB Information Resource Center, 1310 G Street NW., 
Washington, DC 20005. Please call 202-453-2270 to make an appointment.

FOR FURTHER INFORMATION CONTACT: Jennifer Berry, Alcohol and Tobacco 
Tax and Trade Bureau, Regulations and Rulings Division; telephone 202-
453-1039, ext. 275.

SUPPLEMENTARY INFORMATION: 

Background

TTB Authority

    Chapter 51 of the Internal Revenue Code of 1986, as amended (IRC), 
26 U.S.C. chapter 51, sets forth excise tax collection and related 
provisions pertaining to, among other things, the production of wine. 
Subchapter F of chapter 51 sets forth provisions specific to bonded and 
taxpaid wine premises. Under 26 U.S.C. 5388(a), standard wines may be 
removed from bonded and taxpaid wine premises subject to the provisions 
of subchapter F and be marked, transported, and sold under their proper 
designation as to kind and origin, or, if there is no such designation 
known to the trade or consumers, then under a truthful and adequate 
statement of composition. Pursuant to section 5367 of the IRC (26 
U.S.C. 5367), a proprietor of a bonded wine cellar or a taxpaid wine 
bottling house shall keep such records and file such returns, in the 
form and containing such information, as the Secretary of the Treasury 
may by regulations provide.
    A proprietor of a bonded wine cellar (including a bonded winery) or 
a taxpaid wine bottling house will be referred to in this document as a 
``wine proprietor.''
    In addition to the IRC marking and recordkeeping requirements, 
wines containing at least 7 percent alcohol by volume are subject to 
the labeling requirements of the Federal Alcohol Administration Act 
(FAA Act). Section 105(e) of the FAA Act, codified at 27 U.S.C. 205(e), 
authorizes the Secretary of the Treasury to prescribe regulations for 
the labeling of wine, distilled spirits, and malt beverages. The FAA 
Act requires that these regulations, among other things, prohibit 
consumer deception and the use of misleading statements on labels, and 
ensure that labels provide the consumer with adequate information as to 
the identity and quality of the product.
    The FAA Act also generally requires a producer, blender, or 
wholesaler of wine, or proprietor of a bonded wine storeroom, to obtain 
a certificate of label approval prior to bottling wine for sale in 
interstate commerce. Bottlers are exempt from the labeling requirements 
of the FAA Act if they show to the satisfaction of the Secretary that 
the wine will not be sold, offered for sale, or shipped or delivered 
for shipment, or otherwise introduced in, interstate or foreign 
commerce. It should be noted that certificates of exemption from label 
approval are not available to importers who are removing wine in 
containers from customs custody for consumption. If those removals are 
for sale or any other commercial purpose, the importer must first 
obtain a certificate of label approval.
    The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers 
chapter 51 of the IRC and the provisions of the FAA Act pursuant to 
section 1111(d) of the Homeland Security Act of 2002, codified at 6 
U.S.C. 531(d). The Secretary has delegated various authorities through 
Treasury Department Order 120-01 (dated December 10, 2013, superseding 
Treasury Order 120-01 (Revised), ``Alcohol and Tobacco Tax and Trade 
Bureau,'' dated January 24, 2003), to the TTB Administrator to perform 
the functions and duties in the administration and enforcement of these 
laws.

Current Regulatory Requirements

    The TTB regulations implementing the provisions of chapter 51 of 
the IRC pertaining to the establishment and operation of wine premises 
are contained in 27 CFR part 24. The labeling requirements applicable 
to wine containers are found in 27 CFR 24.257. This section provides 
that proprietors must label each bottle or other container of wine 
prior to removal for consumption or sale. Certain mandatory information 
must appear on the label, including the name and address of the wine 
premises where bottled or packed; the brand name; the alcohol content; 
the kind of wine; and the net contents of the container.
    The labeling requirements of part 24 apply to wines that are 
subject to the requirement for a certificate of label approval as well 
as wines that are covered by a certificate of exemption from label 
approval. Furthermore, some wines removed from wine premises may have 
less than 7 percent alcohol by volume, so they do not conform to the 
definition of ``wine'' under the FAA Act. See 27 U.S.C. 211(a)(6). 
These wines would not need a certificate of label approval or a 
certificate of exemption from label approval. Accordingly, the 
regulations in 27 CFR 24.257(a)(4), relating to the requirement that 
the wine be labeled with the kind of wine, provide different rules with 
regard to wines subject to label approval, wines that are exempt from 
the label approval requirement, and wines containing less than 7 
percent alcohol by volume.
    Provisions regarding the records that a proprietor must maintain to 
substantiate label information are contained in 27 CFR 24.314. Section 
24.314 provides that a proprietor who removes bottled or packed wine 
with information stated on the label (such as a grape varietal 
designation, vintage date, or an appellation of origin) shall have 
complete records so that the information appearing on the label may be 
verified by a TTB audit. Additionally, a wine is not entitled to have 
information stated on the label unless the information can be readily 
verified by a complete and accurate record trail from the beginning 
source material to the removal of the wine for consumption or sale. 
These regulations apply to all wine labels, not just wines covered by a 
certificate of label approval.
    Neither the labeling nor the recordkeeping regulations in part 24 
prescribe the conditions under which a wine proprietor may use grape 
variety names as a type designation or reference vintage dates or 
appellations of origin on labels of wine.
    The TTB regulations implementing the wine labeling provisions of 
the FAA Act are contained in 27 CFR part 4. Part 4 includes provisions 
that govern the use of one or more grape variety names as a type 
designation, the use of type designations of varietal significance, the 
use of vintage dates, and the use of appellations of origin on wine 
labels. An American appellation of origin may be the United States, a 
State, two or no more than three States which are all contiguous, a 
county, two or no more than three counties in the same State, or an 
American viticultural area (AVA). Under 27 CFR 4.50(b), any bottler or 
packer of wine shall be exempt from the requirements of part 4 if upon 
application the bottler or packer shows to the satisfaction of the 
appropriate TTB officer that the wine to be bottled or packed is not to 
be sold, offered for sale, or shipped or delivered for shipment, or 
otherwise introduced in interstate or foreign commerce. If TTB is 
satisfied that the wine will not be introduced into interstate 
commerce, it will issue a certificate of exemption from label approval 
to the bottler or packer.

[[Page 40586]]

Concerns Regarding Label Information on Wines Covered by Certificates 
of Exemption From Label Approval

    Some wine industry members have contacted TTB with their concerns 
regarding the accuracy of label information on certain wines covered by 
certificates of exemption from label approval. Specifically, the wines 
in question are standard wines labeled with AVA names, but the wines do 
not appear to meet the part 4 requirements for using an AVA name. In 
addition, TTB also received a letter signed by members of the 
California, Washington, Oregon, and New York Congressional delegations 
expressing similar concerns and urging TTB to use its authority to 
enforce the standards set out in the FAA Act regulations for all wines 
bearing an AVA appellation, regardless of where they are sold.
    With regard to AVAs, under 27 CFR 4.25(e)(3)(iv), in order for a 
wine to be labeled with an AVA name: (1) The AVA name must have been 
approved under 27 CFR part 9; (2) not less than 85 percent of the wine 
must be derived from grapes grown within the boundaries of the 
viticultural area; and (3) the wine must have been fully finished 
within the State, or one of the States, within which the labeled 
viticultural area is located (except for cellar treatments permitted by 
27 CFR 4.22(c) or blending which does not result in an alteration of 
class and type under 27 CFR 4.22(b)). Thus, a wine labeled with the AVA 
name ``Napa Valley'' must have been fully finished in California, in 
addition to complying with other requirements, in order to qualify to 
use the name ``Napa Valley'' as an appellation of origin on the label.
    Accordingly, a wine labeled with the appellation ``Napa Valley'' 
but also labeled with a statement that indicates that the wine is 
produced outside of California, such as ``Produced and bottled by ABC 
Winery, Anytown, Illinois,'' would not meet the provisions of Sec.  
4.25(e)(3)(iv) since the wine was not fully finished in California. As 
a result, it would not qualify for a certificate of label approval. 
However, if the wine will be sold only within the State of Illinois, 
and the bottler certifies that it will not introduce the bottled 
product into interstate commerce, then, in accordance with 27 U.S.C. 
205(e), the wine is eligible for a certificate of exemption from label 
approval, which would exempt it from the provisions of part 4.
    The letter from the members of Congress who contacted TTB on this 
issue expressed concern that the use of AVA names on wines that are 
covered by certificates of exemption and that do not comply with the 
AVA provisions contained in Sec.  4.25(e)(3)(iv) undermines the best 
interests of the consumer and the decades-old system of American 
viticultural areas, is contrary to the purposes of the FAA Act, and 
should not be permitted under the IRC labeling regulations in 27 CFR 
part 24. The industry members asked whether Sec.  24.314, which 
requires proprietors to maintain complete records verifying label 
information (including information that substantiates appellation of 
origin claims such as AVAs), provides TTB with the authority to enforce 
the part 4 standards for AVAs on wines covered by certificates of 
exemption. However, it is TTB's position that there currently are no 
provisions in part 24, including Sec.  24.314, that require wine 
proprietors to comply with part 4 standards for labeling when the wine 
is covered by a certificate of exemption. In reviewing this regulation, 
TTB also realized that the regulation does not clearly set forth the 
standards to which wines will be held when evaluating whether labeling 
claims are adequately substantiated by records.

TTB Analysis

    TTB recognizes that wines covered by a certificate of exemption are 
not subject to the substantive labeling requirements of the FAA Act. On 
the other hand, the IRC (which covers wines sold in intrastate commerce 
as well as wines sold in interstate commerce) clearly provides TTB with 
authority to issue regulations requiring truthful and accurate 
information on wine containers and labels regarding the identity and 
origin of the wine. As previously noted, section 5388(a) of the IRC 
requires that wines be marked, transported and sold under their 
``proper designation as to kind and origin, or, if there is no such 
designation known to the trade or consumers, then under a truthful and 
adequate statement of composition.'' If proprietors choose to label 
their wines with varietal (grape type) designations, type designations 
of varietal significance, vintage dates, or appellations of origin, all 
of which are terms of art that are subject to specific rules set forth 
in the FAA Act regulations, then those designations may convey to both 
the trade and consumers the meaning that is ascribed to them in the 
regulations under part 4.
    It should be noted that this issue is not unique to wine. TTB has 
adopted a similar policy with regard to the labeling of distilled 
spirits under the IRC regulations in part 19, which require distilled 
spirits labeled under a certificate of exemption from label approval to 
include certain labeling designations and statements in compliance with 
the requirements of the FAA Act labeling regulations in 27 CFR part 5. 
See 27 CFR 19.517.
    Accordingly, TTB is proposing to revise its regulations in 
Sec. Sec.  24.257(b) and 24.314 to apply the part 4 rules for use of 
varietal (grape type) designations, type designations of varietal 
significance, vintage dates, and appellations of origin on wine labels 
to standard grape wine that is at least 7 percent alcohol by volume, 
where that wine is covered by a certificate of exemption from label 
approval. This amendment would ensure that the rules for the use of 
those designations of the origin or kind of a wine under section 
5388(a) of the IRC are consistent with the existing rules for the use 
of those designations under the FAA Act.
    TTB is proposing to apply this requirement only to standard grape 
wines that contain at least 7 percent or more alcohol by volume because 
the labeling of wines that contain less than 7 percent alcohol by 
volume is not subject to the provisions of the FAA Act. While wines 
under 7 percent alcohol by volume are subject to the IRC labeling 
requirements of part 24, as well as the health warning statement 
requirements of part 16, those products do not fall under the 
definition of wine under the FAA Act. Thus, those products are subject 
to the food labeling requirements of the regulations issued by the U.S. 
Food and Drug Administration. Because the part 4 regulations limit the 
use of varietal (grape type) designations, type designations of 
varietal significance, vintage dates, and AVAs to grape wines, TTB is 
similarly proposing that the new provisions would apply solely to 
standard grape wines.
    TTB is not proposing in this document to extend this provision to 
include non-grape wines. However, TTB seeks comments and additional 
information on whether the amendments proposed in this document should 
be extended to non-grape wines, such as fruit wines or agricultural 
wines.
    Accordingly, TTB proposes to amend Sec.  24.257 to require that a 
standard grape wine that contains 7 percent or more alcohol by volume 
and is covered by a certificate of exemption from label approval may 
not be labeled with a varietal (grape type) designation, a type 
designation of varietal significance, a vintage date, or an appellation 
of origin unless the wine complies with the relevant part 4 provisions 
for that label information. This requirement would

[[Page 40587]]

apply only to wines covered by certificates of exemption, because wines 
covered by certificates of label approval are already subject to the 
labeling provisions of part 4. Wines that are not standard grape wine 
containing 7 percent or more alcohol by volume and that are covered by 
a certificate of exemption are exempt from all part 4 labeling 
provisions. TTB also proposes to make corresponding changes in the 
recordkeeping requirements of Sec.  24.314.
    Finally, TTB is also proposing to revise Sec.  4.50(b) to 
incorporate a reference to the labeling requirements contained in Sec.  
24.257.

Technical Changes

    TTB also is removing the Office of Management and Budget control 
numbers assigned to the former Bureau of Alcohol, Tobacco and Firearms 
(ATF) and replacing them with the control numbers assigned currently to 
TTB. In Sec.  24.257, the former control number 1512-0503, assigned to 
ATF, is now control number 1513-0092, assigned to TTB. In Sec.  24.314, 
the former control number 1512-0298 is now control number 1513-0115. 
The changes to these control numbers are merely technical in nature and 
do not change any regulatory or recordkeeping requirement.

Public Participation

Comments Sought

    TTB requests comments from interested members of the public on the 
proposed change. Additionally, TTB welcomes comments on whether the new 
provisions should include non-grape wines. Finally, TTB solicits 
comments on how many labels would be affected by the proposed 
amendments, and how much time affected proprietors would need in order 
to revise their labels to comply with the proposed changes. Please 
provide specific information in support of your comments.

Submitting Comments

    You may submit comments on this notice by using one of the 
following three methods:
     Federal e-Rulemaking Portal: You may send comments via the 
online comment form posted with this proposed rule within Docket No. 
TTB-2016-0005 on ``Regulations.gov,'' the Federal e-rulemaking portal, 
at http://www.regulations.gov. A direct link to that docket is 
available under Notice No. 160 on the TTB Web site at http://www.ttb.gov/wine/wine-rulemaking.shtml. Supplemental files may be 
attached to comments submitted via Regulations.gov. For complete 
instructions on how to use Regulations.gov, click on the site's 
``Help'' tab.
     U.S. Mail: You may send comments via postal mail to the 
Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and 
Trade Bureau, 1310 G Street NW., Box 12, Washington, DC 20005.
     Hand Delivery/Courier: You may hand-carry your comments or 
have them hand-carried to the Alcohol and Tobacco Tax and Trade Bureau, 
1310 G Street NW., Suite 400, Washington, DC 20005.
    Please submit your comments by the closing date shown above in this 
proposed rule. Your comments must reference Notice No. 160 and include 
your name and mailing address. Your comments also must be made in 
English, be legible, and be written in language acceptable for public 
disclosure. TTB does not acknowledge receipt of comments and considers 
all comments as originals.
    In your comment, please clearly state if you are commenting for 
yourself or on behalf of an association, business, or other entity. If 
you are commenting on behalf of an entity, your comment must include 
the entity's name as well as your name and position title. In your 
comment via Regulations.gov, please enter the entity's name in the 
``Organization'' blank of the online comment form. If you comment via 
postal mail or hand delivery/courier, please submit your entity's 
comment on letterhead.
    You may also write to the Administrator before the comment closing 
date to ask for a public hearing. The Administrator reserves the right 
to determine whether to hold a public hearing.

Confidentiality

    All submitted comments and attachments are part of the public 
record and subject to disclosure. Do not enclose any material in your 
comments that you consider to be confidential or inappropriate for 
public disclosure.

Public Disclosure

    TTB will post, and you may view, copies of this proposed rule and 
any online or mailed comments received about this proposal within 
Docket No. TTB-2016-0005 on the Federal e-rulemaking portal. A direct 
link to that docket is available on the TTB Web site at http://www.ttb.gov/wine/wine-rulemaking.shtml under Notice No. 160. You may 
also reach the relevant docket through the Regulations.gov search page 
at http://www.regulations.gov. For information on how to use 
Regulations.gov, click on the site's ``Help'' tab.
    All posted comments will display the commenter's name, organization 
(if any), city, and State, and, in the case of mailed comments, all 
address information, including email addresses. TTB may omit voluminous 
attachments or material that it considers unsuitable for posting.
    You may view copies of this proposed rule and any electronic or 
mailed comments TTB receives about this proposal by appointment at the 
TTB Information Resource Center, 1310 G Street NW., Washington, DC 
20005. You may also obtain copies for 20 cents per 8.5- x 11-inch page. 
Contact TTB's information specialist at the above address or by 
telephone at 202-453-2270 to schedule an appointment or to request 
copies of comments or other materials.

Regulatory Flexibility Act

    TTB certifies that this proposed regulation, if adopted, will not 
have a significant economic impact on a substantial number of small 
entities. The proposed rule, if adopted, will not impose, or otherwise 
cause, a significant increase in reporting, recordkeeping, or other 
compliance burdens on a substantial number of small entities. 
Accordingly, a regulatory flexibility analysis is not required. 
Pursuant to 26 U.S.C. 7805(f), TTB will submit the proposed regulations 
to the Chief Counsel for Advocacy of the Small Business Administration 
for comment on the impact of the proposed regulations on small 
businesses.
    TTB recognizes that if the proposed rule is adopted as a final 
rule, some bottlers of wine may have to make revisions to labels 
currently covered by certificates of exemption; however, we believe 
that the number of affected labels will be small. TTB specifically 
solicits comments on the number of small producers and bottlers that 
may be affected by this proposed rule and the impact of this proposed 
rule, if adopted as a final rule, on those small businesses.

Executive Order 12866

    It has been determined that this proposed rule is not a significant 
regulatory action as defined by Executive Order 12866 of September 30, 
1993. Therefore, no regulatory assessment is required.

Paperwork Reduction Act

    The two collections of information affected by this notice of 
proposed rulemaking have been previously

[[Page 40588]]

reviewed and approved by the Office of Management and Budget (OMB) in 
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) 
and assigned control numbers 1513-0092 and 1513-0115. An agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information unless it displays a valid control number 
assigned by OMB.
    The proposed regulatory text in 27 CFR 24.257 contains an 
alteration to the information collection currently approved under OMB 
control number 1513-0092. If adopted, this revision would require 
changes in the labeling of certain wines currently covered by a 
certificate of exemption from label approval, where those wines are 
labeled with varietal (grape type) designations, type designations of 
varietal significance, vintage dates, or appellations of origin, in a 
manner that would not be allowed under the standards set forth in the 
regulations in 27 CFR part 4. However, since the labeling of wines, 
whether covered by certificates of exemption or by certificates of 
label approval, is a usual and customary business practice and would be 
done by proprietors with or without the TTB regulatory requirement, TTB 
does not believe that there would be any increase in the current burden 
hours associated with this information collection. We are, however, 
reporting an increase in the number of respondents to this collection, 
from 10,506 to 10,970, to reflect the current number of wine industry 
members regulated by TTB. We estimate the current burden associated 
with this information collection as follows:
     Estimated Number of Respondents: 10,970.
     Estimated Annual Frequency of Responses: 1 (one).
     Estimated Average Annual Total Burden Hours: 1 hour.
    The proposed regulatory text in 27 CFR 24.314 contains an 
alteration to the information collection currently approved under OMB 
control number 1513-0115. If adopted, this revision would require 
proprietors to keep records substantiating certain information 
contained on the labels of certain wines currently covered by a 
certificate of exemption from label approval, where those wines are 
labeled with varietal (grape type) designations, type designations of 
varietal significance, vintage dates, or appellations of origin. In 
particular, the records would have to substantiate that the claims 
would be allowed under the standards for use of such claims under the 
regulations in 27 CFR part 4. However, since the keeping of records 
substantiating the information provided on wine labels, whether covered 
by certificates of exemption or by certificates of label approval, is a 
usual and customary business practice and would be done by proprietors 
with or without the TTB regulatory requirement, TTB does not believe 
that there would be any increase in the current burden for this 
information collection, which is estimated as follows:
     Estimated Number of Respondents: 10,970.
     Estimated Annual Frequency of Responses: 1 (one).
     Estimated Average Annual Total Burden Hours: 1 hour.
    Revisions of these two currently approved collections have been 
submitted to OMB for review. Comments on the revisions to OMB control 
number 1513-0092 and 1513-0115 should be sent to OMB by one of these 
two methods:
     By U.S. Mail: Office of Management and Budget, Attention: 
Desk Officer for the Department of the Treasury, Office of Information 
and Regulatory Affairs, Washington, DC 20503; or
     By E-mail: [email protected].
    A copy should also be sent to the Alcohol and Tobacco Tax and Trade 
Bureau by any of the methods previously described. Comments on the 
information collection should be submitted not later than August 22, 
2016. Comments are specifically requested concerning:
     Whether the proposed revisions of the collections of 
information approved under OMB control number 1513-0115 and 1513-0092 
are necessary for the proper performance of the functions of the 
Alcohol and Tobacco Tax and Trade Bureau, including whether the 
information will have practical utility;
     The accuracy of the estimated burdens associated with the 
proposed revisions of the collections of information;
     How to enhance the quality, utility, and clarity of the 
information to be collected;
     How to minimize the burden of complying with the proposed 
revision of the collection of information, including the application of 
automated collection techniques or other forms of information 
technology; and
     Estimates of capital or start-up costs and costs of 
operation, maintenance, and purchase of services to provide 
information.
Drafting Information
    Jennifer Berry of the Regulations and Rulings Division, Alcohol and 
Tobacco Tax and Trade Bureau, drafted this document.

List of Subjects

27 CFR Part 4

    Administrative practice and procedure, Advertising, Customs duties 
and inspection, Imports, Labeling, Packaging and containers, Reporting 
and recordkeeping requirements, Trade practices, Wine.

27 CFR Part 24

    Administrative practice and procedure, Claims, Electronic funds 
transfers, Excise taxes, Exports, Food additives, Fruit juices, 
Labeling, Liquors, Packaging and containers, Reporting and 
recordkeeping requirements, Research, Scientific equipment, Spices and 
flavorings, Surety bonds, Vinegar, Warehouses, Wine.

Proposed Regulatory Amendments

    For the reasons discussed in the preamble, TTB proposes to amend 27 
CFR, chapter I, parts 4 and 24 as set forth below:

PART 4--LABELING AND ADVERTISING OF WINE

0
1. The authority citation for 27 CFR part 4 continues to read as 
follows:

    Authority:  27 U.S.C. 205, unless otherwise noted.

0
2. Section Sec.  4.50 is amended by adding a sentence to the end of 
paragraph (b) to read as follows:


Sec.  4.50  Certificates of label approval.

* * * * *
    (b) * * * See Sec.  24.257 of this chapter for additional labeling 
rules that apply to wines covered by a certificate of exemption.
* * * * *

PART 24--WINE

0
3. The authority citation for 27 CFR part 24 continues to read as 
follows:

    Authority:  5 U.S.C. 552(a); 26 U.S.C. 5001, 5008, 5041, 5042, 
5044, 5061, 5062, 5121, 5122-5124, 5173, 5206, 5214, 5215, 5351, 
5353, 5354, 5356, 5357, 5361, 5362, 5364-5373, 5381-5388, 5391, 
5392, 5511, 5551, 5552, 5661, 5662, 5684, 6065, 6091, 6109, 6301, 
6302, 6311, 6651, 6676, 7302, 7342, 7502, 7503, 7606, 7805, 7851; 31 
U.S.C. 9301, 9303, 9304, 9306.

0
4. Section Sec.  24.257 is amended by revising paragraph (b) and by 
revising the OMB control number located in the

[[Page 40589]]

second parenthetical phrase at the end of the section, to read as 
follows:


Sec.  24.257  Labeling wine containers.

* * * * *
    (b) Requirements applicable to information on labels--(1) 
Verification and recordkeeping requirements. The information shown on 
any label applied to bottled or packed wine is subject to the 
verification and recordkeeping requirements of Sec.  24.314.
    (2) Varietal designations, type designations of varietal 
significance, grape vintage dates, and appellations of origin. For 
wines covered by a certificate of exemption from label approval, the 
use of any label that includes a varietal (grape type) designation, a 
type designation of varietal significance, a grape vintage date, or an 
appellation of origin for any standard grape wine containing 7 percent 
or more alcohol by volume is prohibited unless the wine would be 
entitled to use of such a labeling term under the standards set forth 
in the following sections of 27 CFR part 4:
    (i) Varietal (grape type) designation. The use of a varietal (grape 
type) designation must conform to the requirements of Sec.  4.23 of 
this chapter;
    (ii) Type designation of varietal significance. The use of a type 
designation of varietal significance must conform to the requirements 
of Sec.  4.28 of this chapter;
    (iii) Vintage date. The use of a vintage date must conform to the 
requirements of Sec.  4.27 of this chapter; and
    (iv) Appellation of origin. The use of an appellation of origin 
must conform to the requirements of Sec.  4.25 of this chapter.
* * * * *

(Approved by the Office of Management and Budget under control 
number 1513-0092)

0
5. Section 24.314 is amended to read as follows:


Sec.  24.314  Label information record.

    (a) General. A proprietor who removes bottled or packed wine with 
information stated on the label (e.g., varietal, vintage, appellation 
of origin, analytical data, date of harvest) shall have complete 
records, as applicable, so that the information appearing on the label 
may be verified by a TTB audit. A wine is not entitled to have 
information stated on the label unless the information can be readily 
verified by a complete and accurate record trail from the beginning 
source material to removal of the wine for consumption or sale.
    (b) Establishing that wine is entitled to labeling claims. A 
proprietor must keep records that will enable TTB to verify that the 
labeling of the wine complies with the applicable labeling requirements 
in this part. In addition, if wine is subject to Federal Alcohol 
Administration Act labeling provisions under 27 CFR part 4, the records 
must establish that the labeling of the wine complies with the 
applicable labeling provisions of 27 CFR part 4. For wines covered by a 
certificate of exemption, the use of any label that includes a varietal 
(grape type) designation, a type designation of varietal significance, 
a grape vintage date, or an appellation of origin for any standard 
grape wine containing 7 percent or more alcohol by volume is prohibited 
unless the proprietor has records establishing that the use of such a 
term complies with the standards set forth in the appropriate sections 
of 27 CFR part 4 for use of such a labeling term.
    (c) Record retention. All records necessary to verify wine label 
information are subject to the record retention requirements of Sec.  
24.300(d).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended (26 U.S.C. 
5367))

(Approved by the Office of Management and Budget under control 
number 1513-0115)


    Signed: April 7, 2016.
John J. Manfreda,
Administrator.
    Approved: April 22, 2016.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 2016-14696 Filed 6-21-16; 8:45 am]
 BILLING CODE 4810-31-P