Residences in conjunction with Distilleries

[dhdunbar]

Ralph - TTB has delegation orders. They are a public document. The authority to grant approval is often delegated to the Director of the National Revenue Center (Cincinnati). In the case of requests for approval of a DSP on a parcel of land that also houses a residence, TTB looks to the Rulings and Regulations Division (Washington). Absent a ruling, the specialist at the NRC is likely to challenge any location where the proposed DSP is collocated with (on the same property as) a residence. That is their job. The challenge is proper. But it is not their job to say, "You can't do that." If my experience is a reliable gauge of where TTB stands, the specialist should instead ask, "Has this been approved?" If you do not want to experience a good deal of delay, it is best if you can say "yes," and upload the letter of approval to the application.

I find it interesting that there is an upcoming meeting, particularly since the regulations were recently revised and the restrictions on location and use were left intact. TTB has not been blind to this issue and I suspect that the decision to leave them intact was reached after debate within the agency. I do not know this, since I am outside of the room where they would take place. However, since TTB is consciously approving some instances of collocation, i.e., it is granting approval for reasons other than inadvertent error by an inattentive specialist, it may be that they are motivated to provide some basic guidelines to escape the need to rule on ever instance individually. They could do this with some sort of "distance" rule, saying that anything over some arbitrary distance from the residence would be considered not to be connected, then allowing individuals to request approval for something inside that distance under the particular set of circumstances attendant to their situation. But in the interest of the small distiller, we should lobby for a rule that establishes a degree of separation beyond which TTB will hold that the two presumptively are not connected for purpose of Section 5178. That sort of rule allows the specialist to recommend approval without a ruling in some instances, but not deny the possibility in others, thereby allowing distillers to seek a ruling in instances where they do not satisfy the presumptive rule.

In short, and I am rarely short, the fight should not be for a rule. I adhere to the warning, "Be careful what you ask for." The fight should instead be a fight for a reasonable way to allow farm distilleries. Farm distilleries come with at least two potential advantages, which probably do not need repeating here, but I'll do so anyway. First, they can save the distiller a bunch of money, thereby making the operation more feasible. Second, they fit a story that creates an image that can help sell product.

I think we are arguing for the same thing; I just think that we need to be careful of unintended consequences.

Finally, a note on ambiguity. I would argue that ambiguity can have advantages. It can create opportunities that a hard and fast rule can deny. It allows the line to shift more easily with the times. Draw a hard line in the sand and the issue is resolved, but not necessarily in favor of the small distiller. One can be stuck with hard lines until enough pressure builds to get it reconsidered. That can be years.

[Ralph at Tuthilltown]

No debate on the ambiguity, sometimes being an advantage. May I suggest, Mr. Dunbar, that you put your suggestions to the TTB. My personal preference is for an interpretation based on the degree of connection. Not an attorney, but my call is that if the building is not connected (by wall, breezeway, roof, fence, etc) to the building which is the actual distillery building, that separation is sufficient to determine it is not "connected" with a home or residence. We'll see what comes of the TTB discussion on the topic.

[mendodistilling]

you cant live in the building you are distilling in. if there is a seperation and the fire marshal is ok with it, the feds will be ok with it. I got preapproved for such situation in preliminary talks with everyone on the county and abc level.