[Federal Register Volume 86, Number 82 (Friday, April 30, 2021)]
[Rules and Regulations]
[Pages 22867-22868]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-08863]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 16

[Docket No. TTB-2021-0002; Notice No. 201]


Civil Monetary Penalty Inflation Adjustment--Alcoholic Beverage 
Labeling Act

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

ACTION: Notification of civil monetary penalty adjustment.

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SUMMARY: This document informs the public that the maximum penalty for 
violations of the Alcoholic Beverage Labeling Act (ABLA) is being 
adjusted in accordance with the Federal Civil Penalties Inflation 
Adjustment Act of 1990, as amended. Prior to the publication of this 
document, any person who violated the provisions of the ABLA was 
subject to a civil penalty of not more than $21,039, with each day 
constituting a separate offense. This document announces that this 
maximum penalty is being increased to $21,663.

DATES: The new maximum civil penalty for violations of the ABLA takes 
effect on April 30, 2021 and applies to penalties that are assessed 
after that date.

FOR FURTHER INFORMATION CONTACT: Kate M. Bresnahan, Regulations and 
Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G 
Street NW, Box 12, Washington, DC 20005; (202) 453-1039, ext. 151.

SUPPLEMENTARY INFORMATION:

Background

Statutory Authority for Federal Civil Monetary Penalty Inflation 
Adjustments

    The Federal Civil Penalties Inflation Adjustment Act of 1990 (the 
Inflation Adjustment Act), Public Law 101-410, 104 Stat. 890, 28 U.S.C. 
2461 note, as amended by the Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015, Public Law 114-74, section 
701, 129 Stat. 584, requires the regular adjustment and evaluation of 
civil monetary penalties to maintain their deterrent effect and helps 
to ensure that penalty amounts imposed by the Federal Government are 
properly accounted for and collected. A ``civil monetary penalty'' is 
defined in the Inflation Adjustment Act as any penalty, fine, or other 
such sanction that is: (1) For a specific monetary amount as provided 
by Federal law, or has a maximum amount provided for by Federal law; 
(2) assessed or enforced by an agency pursuant to Federal law; and (3) 
assessed or enforced pursuant to an administrative proceeding or a 
civil action in the Federal courts.
    The Inflation Adjustment Act, as amended, requires agencies to 
adjust civil monetary penalties annually by the inflation adjustment 
described in section 5 of the Inflation Adjustment Act. The Act also 
provides that any increase in a civil monetary penalty shall apply only 
to civil monetary penalties, including those whose associated violation 
predated such an increase, which are assessed after the date the 
increase takes effect.
    The Inflation Adjustment Act, as amended, provides that the 
inflation adjustment does not apply to civil monetary penalties under 
the Internal Revenue Code of 1986 or the Tariff Act of 1930.

Alcoholic Beverage Labeling Act

    The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the 
Federal Alcohol Administration Act (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 Department Order 120-01, dated January 24, 2003), to the TTB 
Administrator to perform the functions and duties in the administration 
and enforcement of this law.
    The FAA Act contains the Alcoholic Beverage Labeling Act (ABLA) of 
1988, Public Law 100-690, 27 U.S.C. 213-219a, which was enacted on 
November 18, 1988. Section 204 of the ABLA, codified in 27 U.S.C. 215, 
requires that a health warning statement appear on the labels of all 
containers of alcoholic beverages manufactured, imported, or bottled 
for sale or distribution in the United States, as well as on containers 
of alcoholic beverages that are manufactured, imported, bottled, or 
labeled for sale, distribution, or shipment to members or units of the 
U.S. Armed Forces, including those located outside the United States.
    The health warning statement requirement applies to containers of 
alcoholic beverages manufactured, imported, or bottled for sale or 
distribution in the United States on or after November 18, 1989. The 
statement reads as follows:

    GOVERNMENT WARNING: (1) According to the Surgeon General, women 
should not drink alcoholic beverages during pregnancy because of the 
risk of birth defects. (2) Consumption of alcoholic beverages 
impairs your ability to drive a car or operate machinery, and may 
cause health problems.

    Section 204 of the ABLA also specifies that the Secretary of the 
Treasury shall have the power to ensure the enforcement of the 
provisions of the ABLA and issue regulations to carry them out. In 
addition, section 207 of the ABLA, codified in 27 U.S.C. 218, provides 
that any person who violates the provisions of the ABLA is subject to a 
civil penalty of not more than $10,000, with each day constituting a 
separate offense.

[[Page 22868]]

    Most of the civil monetary penalties TTB administers are imposed by 
the Internal Revenue Code of 1986, and thus are not subject to the 
inflation adjustment mandated by the Inflation Adjustment Act. The only 
civil monetary penalty TTB enforces that is subject to the inflation 
adjustment is the penalty imposed by the ABLA at 27 U.S.C. 218.

TTB Regulations

    The TTB regulations implementing the ABLA are found in 27 CFR part 
16, and the regulations implementing the Inflation Adjustment Act with 
respect to the ABLA penalty are found in 27 CFR 16.33. This section 
provides that, in accordance with the ABLA, any person who violates the 
provisions of this part is subject to a civil penalty of not more than 
$10,000. Further, pursuant to the provisions of the Federal Civil 
Penalties Inflation Adjustment Act of 1990, as amended, this civil 
penalty is subject to periodic cost-of-living adjustments. Accordingly, 
any person who violates the provisions of 27 CFR part 16 is subject to 
a civil penalty of not more than the amount listed at https://www.ttb.gov/laws-regulations-and-public-guidance/labeling-act-penalty. 
Each day constitutes a separate offense.
    To adjust the penalty, Sec.  16.33(b) states that TTB will provide 
notice in the Federal Register and at the website mentioned above of 
cost-of-living adjustments to the civil penalty for violations of 27 
CFR part 16.

Penalty Adjustment

    In this document, TTB is adjusting the maximum ABLA penalty, as 
required by the amended Inflation Adjustment Act. TTB last published a 
yearly adjustment on April 9, 2019 (Notice No. 180, 84 FR 14614). TTB 
did not publish an adjustment in 2020. In order to satisfy the annual 
adjustment requirement, TTB is making the 2021 adjustment in this 
document. Since adjustments apply to penalties assessed after the 
effective date of the adjustment, TTB will not assess any penalties 
based on the amount that would have been the 2020 adjustment, but is 
including the calculation below to illustrate how it arrived at its 
2021 adjustment.
    As mentioned earlier, the ABLA contains a maximum civil monetary 
penalty. For such penalties, section 5 of the Inflation Adjustment Act 
indicates that the inflation adjustment is determined by increasing the 
maximum penalty by the cost-of-living adjustment. The cost-of-living 
adjustment means the percentage increase (if any) between the Consumer 
Price Index for all-urban consumers (CPI-U) for the October preceding 
the date of the adjustment and the prior year's October CPI-U.
    The CPI-U in October 2018 was 252.885, and the CPI-U in October 
2019 was 257.346. The rate of inflation between October 2018 and 
October 2019 was therefore 1.764 percent. When applied to the current 
ABLA penalty of $21,039, this rate of inflation yields a raw 
(unrounded) inflation adjustment of $371.12796. Rounded to the nearest 
dollar, this inflation adjustment is $371, meaning that the 2020 
maximum civil penalty for violations of the ABLA would have been 
$21,410.
    The CPI-U in October 2019 was 257.346, and the CPI-U in October 
2020 was 260.388. The rate of inflation between October 2019 and 
October 2020 was therefore 1.182 percent. When applied to the 2020 ABLA 
penalty of $21,410 calculated in the previous paragraph, this rate of 
inflation yields a raw (unrounded) inflation adjustment of $253.0662. 
Rounded to the nearest dollar, the inflation adjustment is $253, 
meaning that the new maximum civil penalty for violations of the ABLA 
will be $21,663.
    The new maximum civil penalty of $21,663 will apply to all 
penalties that are assessed after April 30, 2021. TTB will also update 
its web page at https://www.ttb.gov/laws-regulations-and-public-guidance/labeling-act-penalty to reflect the adjusted penalty.

    Dated: April 23, 2021.
Amy R. Greenberg,
Director, Regulations and Rulings Division.
[FR Doc. 2021-08863 Filed 4-29-21; 8:45 am]
BILLING CODE 4810-31-P