Implementation of Public Law 105-34, Section 1417, Related to the Use of Additional Ameliorating Material in Certain Wines

DEPARTMENT OF THE TREASURY

Bureau of Alcohol, Tobacco and Firearms

27 CFR Parts 4 and 24

[T.D. ATF-403]

RIN 1512-AB78

Implementation of Public Law 105-34, Section 1417, Related to the

Use of Additional Ameliorating Material in Certain Wines

AGENCY: Bureau of Alcohol, Tobacco and Firearms (ATF), Department of

the Treasury.

ACTION: Temporary rule (Treasury decision).

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SUMMARY: This temporary rule implements one of the provisions of the

Taxpayer Relief Act of l997. In accordance with the new law, the wine

regulations are amended to extend the amelioration and sweetening

limitations so that wines made exclusively from any fruit (excluding

grapes) or berry with a fixed acid content of 20 or more parts per

thousand are entitled to a volume of up to 60 percent ameliorating

material. In the Proposed Rules section of this Federal Register, ATF

is also issuing a notice of proposed rulemaking inviting comments on

this temporary rule for a 90-day period following the publication of

this temporary rule.

DATES: The temporary regulations are retroactive to April 1, 1998.

ADDRESSES: Send written comments to: Chief, Regulations Division,

Bureau of Alcohol, Tobacco and Firearms, P.O. Box 50221, Washington, DC

20091-0221.

FOR FURTHER INFORMATION CONTACT: Thomas B. Busey, Regulations Division,

650 Massachusetts Avenue, NW., Washington, DC 20226 (202) 927-8204.

SUPPLEMENTARY INFORMATION:

Background

This temporary rule implements one of the provisions of the

Taxpayer Relief Act of 1997, Public Law 105-34 (``the Act''). Section

1417 of the Act amended Section 5384(b)(2)(D) of the Internal Revenue

Code of 1986 by striking ``loganberries, currants, or gooseberries,''

and inserting ``any fruit or berry with a natural fixed acid of 20

parts per thousand or more (before any correction to such fruit or

berry).''

Current Regulation for Amelioration of Fruit and Berries

Before enactment of the Act, the amelioration and sweetening

limitations of 26 U.S.C. 5384(b)(2)(D) could only be used for wines

produced exclusively from loganberries, currants, or gooseberries. For

wine produced exclusively from loganberries, currants, or gooseberries,

the volume of ameliorating material added to juice or wine may not have

exceeded 60 percent of the total volume of ameliorated juice or wine

(calculated exclusive of pulp). If the starting fixed acid level was or

exceeded 12.5 grams per liter, a maximum of 1,500 gallons of

ameliorating material may have been added to each 1,000 gallons of wine

or juice.

Section 1417 of Public Law 105-34 now extends the amelioration and

sweetening limitations so that wines made from any fruit or berry with

a natural fixed acid of 20 parts per thousand or more (before any

correction of such fruit or berry) is entitled to a volume of up to 60

percent ameliorating material. These provisions do not apply to grape

wine, only to fruit or berry wine.

Regulatory Flexibility Act

Because no notice of proposed rulemaking is required for this

temporary rule, the provisions of the Regulatory Flexibility Act (5 USC

601) do not apply. Pursuant to 26 U.S.C. 7805(f), this temporary

regulation will be submitted to the Chief Counsel for Advocacy of the

Small Business Administration for comment on its impact on small

business.

Executive Order 12866

It has been determined that this temporary rule is not a

significant regulatory action as defined by Executive Order 12866.

Paperwork Reduction Act

The provisions of the Paperwork Reduction Act of 1995 (44 U.S.C.

3507) and its implementing regulations, 5 CFR part 1320, do not apply

to this temporary rule because no new collection of information is

contained in this regulation.

Administrative Procedure Act

It has been determined that 5 USC 553 (b)(A) applies to this

temporary rule. Moreover, because this document merely implements a

section of the law which was effective April 1, 1998, and because

immediate guidance is necessary to implement the provisions of the law,

it is found to be impracticable to issue this Treasury decision with

notice and public procedure under 5 U.S.C. 553(b), or subject to the

effective date limitation in section 553(d).

Drafting Information

The principal author of this document is Thomas B. Busey,

Regulations Division, Bureau of Alcohol, Tobacco and Firearms.

List of Subjects

27 CFR Part 4

Advertising, Consumer protection, Customs duties and inspection,

Imports, Labeling, Packaging and containers, Wine.

27 CFR Part 24

Administrative practice and procedure, Authority delegations,

Claims, Electronic fund transfers, Excise taxes, Exports, Food

additives, Fruit juices, Labeling, Liquors, Packaging and containers,

Reporting and recordkeeping requirements, Research, Scientific

equipment, Spices and flavoring, Surety bonds, Taxpaid wine bottling

house, Transportation, Vinegar, Warehouses, Wine.

Authority and Issuance:

Accordingly, Chapter I of title 27, Code of Federal Regulations is

amended as follows:

PART 4--LABELING AND ADVERTISING OF WINE

Par. 1. The authority citation for 27 CFR part 4 continues to read

as follows:

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

Par. 2. Section 4.21 is amended by revising the proviso in

paragraph (e)(1)(i) to read as follows:

Sec. 4.21 The standards of identity.

* * * * *

(e) * * *

(1)(i) * * * Provided, That a domestic product may be ameliorated

or sweetened in accordance with the provisions of 26 U.S.C. 5384 and

any product other than domestic may be ameliorated before, during, or

after fermentation by adding, separately or in combination, dry sugar,

or such an amount of dry sugar and water solution as will increase the

volume of resulting product, in the case of wines produced from any

fruit or berry other than grapes, having a normal acidity of 20 parts

or more per thousand, not more than 60 percent, but in no event shall

[[Page 50253]]

any product so ameliorated have an alcoholic content, derived by

fermentation, of more than 13 percent by volume, or a natural acid

content, if water has been added, of less than 5 parts per thousand, or

a total solids content of more than 22 grams per 100 cubic centimeters.

* * * * *

Par. 3. Section 4.22 is amended by revising the proviso in

paragraph (b)(5) to read as follows:

Sec. 4.22 Blends, cellar treatment, alteration of class or type.

* * * * *

(b) * * *

(5) * * * Provided, That the class or type thereof shall not be

deemed to be altered:

(i) Where such wine (other than grape wine) is derived from fruit,

or other agricultural products, having a high normal acidity, if the

total solids content is not more than 22 grams per 100 cubic

centimeters, and the content of natural acid is not less than 7.5 parts

per thousand and

(ii) Where such wine is derived exclusively from fruit, or other

agricultural products, the normal acidity of which is 20 parts or more

per thousand, if the volume of the resulting product has been increased

not more than 60 percent by the addition of sugar and water solution,

for the sole purpose of correcting natural deficiencies due to such

acidity, and (except in the case of such wine when produced from fruit

or berries other than grapes) there is stated as part of the class and

type designation the phrase ``Made with over 35 percent sugar

solution''.

* * * * *

PART 24--WINE

Par. 1. 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, 5081, 5111-5113, 5121, 5122, 5142, 5143, 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, 7011, 7302, 7342,

7502, 7503, 7606, 7805, 7851; 31 U.S.C. 9301, 9303, 9304, 9306.

Par. 2. Section 24.178 is amended by revising paragraph (b) (3) and

(b) (4) to read as follows:

Sec. 24.178 Amelioration.

* * * * *

(b) * * *

(3) For all wine, except for wine described in (b) (4), the volume

of ameliorating material added to juice or wine may not exceed 35

percent of the total volume of ameliorated juice or wine (calculated

exclusive of pulp). Where the starting fixed acid level is or exceeds

7.69 grams per liter, a maximum of 538.4 gallons of ameliorating

material may be added to each 1,000 gallons of wine or juice.

(4) For wine produced from any fruit (excluding grapes) or berry

with a natural fixed acid of 20 parts per thousand or more (before any

correction of such fruit or berry), the volume of ameliorating material

added to juice or wine may not exceed 60 percent of the total volume of

ameliorated juice (calculated exclusive of pulp). If the starting fixed

acid level is or exceeds 12.5 grams per liter, a maximum of 1,500

gallons of ameliorating material may be added to each 1,000 gallons of

wine or juice. (26 U.S.C. 5383, 5384).

* * * * *

Signed: July 22, 1999.

John W. Magaw,

Director.

Approved: August 13, 1999.

John P. Simpson,

Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).

[FR Doc. 99-24158 Filed 9-15-99; 8:45 am]

BILLING CODE 4810-31-P