Jump to content


  • Content Count

  • Joined

  • Last visited

  • Days Won


dhdunbar last won the day on April 4

dhdunbar had the most liked content!

Community Reputation

47 Good


About dhdunbar

  • Rank
    Active Contributor

Contact Methods

  • MSN

Profile Information

  • Gender
  • Location
    Ellensburg, WA
  • Interests
    Retired from ATF and began consulting for DSP's in 2012. When I'm not working, I like to head outdoors. That can mean simply sitting on the deck reading. Regulation bores me. Helping others deal with it does not.

Recent Profile Visitors

4,104 profile views
  1. TTB just published there annual report. You can read it by links on the TTB website. I keep arguing for th need for some perspective on the question of how long. Annectodal evidence does not give a true picture. Here is what TTB said about approval times: GOAL 1: Facilitate Commerce through the Timely Issuance of Permits to Qualified Applicants Streamline permit applications to reduce applicant burden and use technology to minimize application errors and improve processing times Priority Goal: Reduce average approval times for alcohol and tobacco business permits by at least 20 percent (from 96 days to 75 days) and achieve the 75-day standard for 85 percent of applicants by September 30, 2019. That is the goal. It is across all permits and registrations and average times vary by the type of application. Here, for example, are the times for January 2019, the last month for which TTB has posted average figures. Now, for every "oh my god I'm happy" that you find here, you must end up with a balancing "oh crap, this is taking a long time." I can tell you from experience, the long and the short of it is that any application can end up on the long or the short tend. Well prepared applications put in a position to get lucky, but you must get lucky first. Not everyone does.
  2. I've got a technology that keeps me in my own lane. I know nothing about barrels. Or importing them. Or how you would figure out how they had been used and there useful life Or ... the list of things I don't know about this is almost endless :-).
  3. Huffy: This is easy. Go into your PonL DSP record (not the entity record). Click on the record info tab to be the following menu: Click on tyhe supporting documents and attachment link. It brings you to a screen that shows all the documents that you submitted and that TTB has approved. Look for the following document (I omit the left hand columns). Click on the link it the column to the left of that. It will download the approved application. Save it, print it, and send it to the DSP from which you want to obtain spirits. Hope this helps.
  4. I wish I could claim credit for some magic ability to generate quick approvals. I can't. As I have stated on this thread before, it is more a matter of the luck of the draw and how quickly a specialist looks at the application. My results are scattered, just like everyone else who submits a lot of applications will be. Remember that TTB publishes average figures, which don't describe the range, median, mode etc. to give you a better idea of what to expect. We prepare good applications, answer requests for correction quickly and try to be in a position to take advantage of luck if it comes our way. Sometimes it does and sometimes it doesn't.
  5. You find the sizes at §5.47a(2) "For metal containers which have the general shape and design of a can, which have a closure which is an integral part of the container, and which cannot be readily reclosed after opening— 355 milliliters 200 milliliters 100 milliliters 50 milliliters(2) - " The calculator on line tells me that 355 ml is 12.004 ounces. The rest are nowhere near standard can sizes.
  6. To sum this up: All the advice about not removing product in bulk (in containers of more than one gallon) is spot on. See §1.80. So you would bottle it in an approved size (§5.47a), labelled with a label for which you have an approved COLA (§5.55) and make a record of tax determination before removing it. You could probably ad lib a batch record that capture all that TTB needs to know about the production and processing of the product. I don't see that as a hurdle. As someone else said, it won't be whiskey because won't see oak before you bottle it. that's okay, I think. While you could solve that by using your nano distillery to nano store in a used oak container, t why bother? the customer knows what they are getting and what they are going to do with it. As someone said, without oak it would be a specialty item, since it does not conform to any standard in §5.22. For an example of a label like this, see the Jack Daniels specialty that is unaged spirits distilled from grain at 140 proof. You can hunt that up on TTB's public COLA registry. As no one else has said, by rule, you have to have an approved statement of production procedure before you can distill. It have to show the grains used in the mash. the statement must . to be on your registration. but that need not be a problem if you write a procedure with enough generality that the product will conform to the designation you claim on the label whatever grains might use in whatever combination you might use them. Finally, you could report it as alcohol under 160 on the production reports. So, what you propose is certainly achievable under federal regulation. I can't comment on the viability of the business model, but I'm sure you will have to make your market for the concept. Check out how others have done that. I have at least one client in Washington who has done "custom" production to retail clients' specifications. But that was done in an ambiance that screamed class.
  7. I am a little reluctant to post a treatise - okay an additional treatise - on the 10 mile limit. But I think it is instructive. Consider the question, "If TTB has a 10 mile limit, why has it not publicly published that limit, thereby eliminating the questions that arise?" That would be easy. So, doesn't that strike you as a bit strange that TTB has not so? I think there are, in the public record, explanations for its silence, but you have to be ready to get wonky. In short, I think the 10 mile limit is a safe haven, an internal instruction to specialists that 10 miles or less is a distance within which, barring other reasons, TTB specialists should not question the propriety of approving discontinuous premises. I do not think it is a line drawn in the sand. So, taking a deep breath, I will jump into the deeper waters for those who might want to know. I will preface this with the admonition, “Pick your fights.” Some things are not worth fighting about. If you want to located a second building for storage, or processing, or production, 12 or 15 or even 20 miles from a currently registered DSP, and it is important to you that both sites be included under the same qualification, I would not hesitate to submit a request for a variance to §19.53, notwithstanding the fact that the 10 mile policy is often repeated as biblically ordained. Now, I have no reason to doubt that there is a 10 miles or less policy that dates 1990. That makes it older than the years that I can count on me fingers and toes. Further, and far more importantly, it is prior to at least two published notices (1998 and 2011), one of which (2011) was a final ruling explaining a major revision of the regulations. Both of those documents specifically address TTB’s position on the matter of discontinuous premises. Neither propose a 10 mile or less standard. Importantly, both those documents were issued under the Administrative Procedure Act. That makes them an official interpretation of the regulation and provides the government’s reason for that interpretation. The quotation I first offered is from 2011. Here, in somewhat more detail, is what TTB said about the separation issue in 1998. TTB affirmed ATF’s prior position in the 2011 Treasury Decision. Here is what ATF said in 1998 (quoted in full but parsed to separate the points ATF made: DISCUS recommends that the term ‘‘same general location’’ mean within 200 miles of the distilled spirits plant. We [ATF] did not adopt this recommendation in the proposed regulations. Although DISCUS states that a ‘‘200 mile rule’’ would provide increased operational flexibility for proprietors, they do not explain how this would occur under their proposal and why that distance is more appropriate than any other. [My emphasis here and below] Over the years TTB has received a number of requests to establish noncontiguous distilled spirits plant premises. We have evaluated each of these requests on a case-by-case basis. In our evaluation of each request, we consider a number of factors, such as: • Security and protection of the revenue, • Distance between the main plant premises and the proposed noncontiguous premises, • Whether the non-contiguous premises would cross State lines, • Whether the non-contiguous premises will facilitate inspections and audits, and • Whether establishment of noncontiguous premises would provide the proprietor with a means for delaying payment of taxes. [The explanation of how this gets included is kind of wonky, but I’ll offer it. ATF and TTB long have been concerned with an issue they call “downstreaming” taxes, i.e., making in bond shipments to remote locations from which a proprietor could remove spirits, later, to persons located in the downstream DSP area, thereby possible shifting the return period in which the taxes had to be paid. That was the root of the now defunct prohibition against the in-bond transfers of beverage spirits in containers of less than one gallon, the maximum size for removals for delivery to consumers. For large bottlers, shifting the date the tax payment became due by even a couple of days could significantly impact the amounts paid]. TTB then concluded: We propose to retain the case-by-case analysis based on multiple factors, instead of adopting a 200 mile rule as proposed by DISCUS. As a general rule, we believe that the ‘‘same general location’’ must not be too large an area so that the revenue is placed at risk. Also, because a distance of 200 miles could extend over a multi-state area and would cross over into different field offices within TTB, such a distance would create administrative difficulties for TTB. This provision appears in the proposed regulations at § 19.53. I think it is important that ATF stated that it did not know why the 200 mile separation was “more appropriate than any other.” I read this as ATF saying, “There is not a necessarily appropriate maximum distance.” And as the above list shows, distance is only one of the factors TTB states it will consider when determining whether to approve. In short, had TTB wanted to draw a firm, 10 mile line in the sand, they had opportunity to do so in 1998 and again in 2011, l but they did not do so. Further, if they wanted to consider other things, while holding the 10 mile limit, they could have said, “If the plant is within 10 miles we will approve if you also can establish to our satisfaction that …. “ It did not do so. I conclude that the fact that it did not do so suggests that the 10-mile rule is safe harbor rule., i.e., that, barring other reasons, TTB specialists will not challenge an amendment that proposes a location that is within 10 miles. I conclude it does not say that TTB will deny a variance, in every case, when the location is greater than 10 miles. I conclude that it will instead consider the distance in conjunction with the other factorsATF enumerated in 1998 and TTB affirmed in 2011, then decide. But, the rule is so often stated that you may end up in a fight. That is why I said at the beginning, pick your fights carefully. It is possible to win battles and lose wars. So, if you have a need, worthy of the fight, to establish a location that is more than 10 miles away, as a part of the current DSP, then you would argue from all those points ATF raised in 1998 and TTB affirmed in 2011, including arguing why it would facilitate TTB’s auditing to have both locations under the same DSP. That's what I would do if it were important to me. Finally, this is why it is important to ask persons within TTB what they rely on when they tell you what the rule is. If real estate is location, location, location, regulation is citation, citation, citation.
  8. A new question arrives while I am posting my last response. You may have as many DSP's as you like. There is no restriction. But each must have its own permit and registration and every transfer between them becomes a transfer in bond that must be authorized by an approved transfer in bond application (one approved application is good for all future transfer,s) and must be accompanied by the appropriate transfer records. Each of the DSP's must then file its own tax returns and operating reports and if some cler wag tries to keep below the 100,000 pg limit for the $2.70 a p.g. tax rate, TTB requires that the removals from all be lumped together for that purpose, not that many of you will have that problem.
  9. As others state, generally this is done by amendment for discontinuous storage, but not always. TTB can insist on spearate qwualifications. The ten mile rule is a good guide to a generally unquestioned safe harbor, but in need not be absolute. The rule appears in §19.53 It provides: As a general rule, the premises of a distilled spirits plant must be continuous except for separations by public waterways, roads, or carrier rights-of-way. However, the appropriate TTB officer may approve the registration of the plant where there are separations of the plant premises and all parts of the plant are in the same general location if: (a) There is no jeopardy to revenue caused by the separation of premises; and (b) The separation of premises does not create administrative problems for TTB. The Distilled Spirits Institute has argued, unsuccessfully, for 200 miles in the past. TTB had suggested changes to the DSP regulations in 1998 and after some consideration, issued a final rule on the changes in 2011. I have not misstated the dates. Here is TTB's response: TTB Response: In the preamble to Notice No. 83, we explained that we would not adopt a 200-mile rule and the current comment does not provide sufficient justification for any change of our position. We will continue to evaluate requests for alternate methods or procedures concerning plant continuity on a case-by-case basis, each analysis to be based upon multiple factors. Generally, we believe that the ‘‘same general location’’ must not be too large an area so that the revenue is placed at risk. Also, because a distance of 200 miles could extend over a multistate area and would cross over into different field offices within TTB, such a distance would create administrative difficulties for TTB. That is TTB's official position. I too tell people 10 miles is a good "safe harbor" rule of thumb. But if you find a location that is 12 or 15 miles away, that is not ruled out. If i were making the arguments, I'd explain why the extra two or five or even 10 miles does not create a risk to the revenue. TTB's specific reference to "different field offices" provides a hint of how to argue that it would not create administrative difficulties. ne could possible argue that a separation of more than 10 miles in a rural area creates less administrative difficult than a separation of three miles in a an urban area, especially since it reduces the number of reports and returns with which TTB must deal. Whether it is worth the argument depends on your circumstances.
  10. dhdunbar

    White Whiskey

    I may have missed this conversation on purpose. TTB makes standards of identity.The standards are in 27 CFR 5.22. The distillate that becomes whiskey must derive from 100% grain distilled at less than 190 proof. Other restrictions apply to different types of the class whiskey. I will talk only about the class standard. Further, I will ignore the corn whiskey exception. All references here to "whiskey" should be read as "whiskey except for corn whiskey." A distillate of 100% grain distilled at less than 190 proof is not whiskey. Such distillates becomes whiskey only after storage in an "oak container." The oak container necessary for turning an appropriate distillate into whiskey may be new or used. The type of storage determines, in part, the type of whiskey. You can put oak staves in a barrel, but unless the barrel is oak, the spirit is not aged because it is not stored in oak. That is a matter of definition. Puting spirits into a container, of any type, that has oak staves, chips etc, is a treatment of the whiskey. If you treat the whiskey with oak staves, chips, etc you must disclose that you treated it with staves, chips, etc. The label for any whiskey that has not been stored in oak for four years or more must contain a statement of age. If a whiskey is held in an oak for 5 seconds, then, if the container is new, the statement would be "aged 5 seconds," or" aged not less than 5 seconds." If the container is used, the statement of age will be "stored 5 seconds," or "stored not less than 5 seconds." If a product does not meet a standard set out in §5.22, it must be labeled as a distilled spirits specialty. A distilled spirits specialty is supposed to be labeled "in accordance §5.35. §5.35 requires a fanciful name and truthful and adequate statement of composition. Other restrictions and conditions may apply. For example:. You may not state age on a distilled spirits specialty. Unless a specialty item contains a class or type of spirit as an ingredient, the label may not make mention of the class and type. Since a distillate of 100% grain distilled at less than 190 proof that has not been stored in oak is not a whiskey, it follows that the term whiskey could not appear on the label in the form "unaged whiskey" or"white whiskey" or any other reference that includes the term "whiskey". An aside - Note that the unadorned class and type statement is deemed to be a truthful and adequate statement of composition when the product meets the standard for that type. TTB does not state it that way, but it is one way of thinking about the standards. Of course, the adequacy depends on how well the type standard is known. Who among you would care to compare and contract blended whiskey, a blend of straight whiskeys, and light whiskey. I will not do it without rereading the standards, which few people routinely carry with them when they are shopping. So, every label that was approved for white or unaged whiskey in the past was approved in error. Don' try to confuse me with the fact that there are a few of them out there. I know that. So does TTB. TTB recognizes that its position on age is ludicrous, given its adamant refusal to require some minimal period of storage. Because it is ludicrous - or perhaps to remedy its past errors of approval - TTB proposes to change the rules to create a standard for unaged or white whiskey. Now, TTB does not use the word "ludicrous," That word is mine and I will own it. Here, in TTB's won words, is how it describes the situation and a proposed change that would create a standard of identity for white and unaged whiskey. I've taken the liberty of parsing the statement, bullet style, to make it easier to understand: TTB also proposes to provide for a new type designation of ‘‘white whisky or unaged whisky.’’ TTB has seen a marked increase in the number of products on the market that are distilled from grain but are unaged or that are aged for very short periods of time. Under current regulations, unaged products would not be eligible for a whisky designation (other than corn whisky) and would have to be labeled with a distinctive or fanciful name, along with a statement of composition. In order to provide guidance for these products. TTB proposes that products that are either unaged (so they are colorless) or aged and then filtered to remove color should be designated as ‘‘white whisky’’ or ‘‘unaged whisky,’’ respectively. This proposal represents a change in policy, because currently all whiskies (except corn whisky) must be aged, although there is no minimum time requirement for such aging. TTB believes that currently some distillers may be using a barrel for a very short aging process solely for the purpose of meeting the requirement to age for a minimal time. Consequently, TTB is proposing the new type designation of ‘‘white whisky or unaged whisky’’ and specifically requests comments on this new type and its standards. I will add that TTB damn well knows that some distillers are using a very short aging process, which make a mockery of TTB's dual positions that (1) age is important to creating the character a spirit must have to be whiskey, but (2) there is no need for a required minimum period of storage that will create the required character. See - the term "ludicrous" does not seem to be so harsh a judgement after all. If you have a horse in this race, comment,m as TTB that requests you to do. Read the NPR at https://www.govinfo.gov/content/pkg/FR-2018-11-26/pdf/2018-24446.pdf and submit your comments through this link: www.regulations.gov/comment?D=TTB-2018-0007-0001. I emphasis that because it is important. I provide the rather detailed background so that you know the context in which the proposal resides.
  11. It is all state law. State liquor law still often = blue law. They are a zany mix. Ask the local ABC agents what the law is in your state.
  12. Definitions matter. When you consider §19.54, you should know what the terms it includes mean to understand what it prohibits. As other say, you are fine. Here is why. The term "distilled spirits plant" is defined in §19.1. It means, "An establishment which is qualified under this part to conduct distilled spirits operations." A distilled spirits plant is composed of "the" bonded premises, which means that it must have such premises, and"any" general premises, which means general premises are optional. The term "bonded premises" is defined. It means "The premises of a distilled spirits plant, or part thereof [the other part being the general premises if you elect to have them] , as described in the application for registration, on which the conduct of distilled spirits operations defined in 26 U.S.C. 5002 is authorized." So the bonded premises extend only to the area you describe, which can be a portion of a building. "General premises" is also defined. It means, "Any business office, service facility, or other part of the premises described in the notice of registration other than bonded premises." Here again, it is something you describe. If it is included general premises on the application, and the application is approved, then the general premises is within the boundaries of the DSP plant and you may not conduct other business without TTB's approval. Any undescribed portions of the building are not DSP premises. Since the restriction to which you refer, §19.54's prohibition on other business, applies only to the area you have described, on your application as within the DSP premises,l all of the other businesses conducted in the rest of the building are not affected by and do not affect your application.. However, you must provide security that prevents persons from gaining unauthorized access to the spirits without forced entry. That is my description; you will not find that wording in the regulations. The regulations, §19.192, require (1) that you provide "adequate security measures at the plant to protect the revenue," and (2) that "the buildings, rooms, and partitions must be constructed of substantial materials. Doors, windows, or any other openings to the building must be secured or fastened during times when distilled spirits plant operations are not being conducted." And that is it. So you must set your DSP apart from other areas by partitions constructed of substantial materials that afford adequate protection to the revenue. Whether what you have does so is TTB's call, but there are precedents. TTB specialists have developed a mantra, "floor to ceiling," which they chant, and which reflects an interpretation of the separation needed that is not found in the regulation itself - for example, §19.192 itself allows outside tanks that are within an enclosure, for which a chain link fence has always sufficed and some of my clients have separated adjacent breweries and wineries for the DSP by chain link fencing that does not reach the ceiling,, after full disclosure and without objection. But, if you have walls, then TTB is not going to object to the quilting store next door and the canoe manufacturer on the other side of the other wall. A sidebar - TTB will insist on floor to ceiling separation of any space that is used for the retail sale of liquors (read that distilled spirits, wine or beer) and will not permit such sales on general premises. You can taste on general premises, but only if there is no charge, direct or indirect. An indirect charge would include charges for tours or for parking for tours, as wll as charges for tasting. But that is usually easily enough solved. Don't put the place you sell spirits in the description of the DSP which defines the boundaries. To those of you who have approvals that are contrary to what I've said, and I know they exist, when you go to amend your application, you are going to have to affirm that you understand those restrictions. Thatch is correct., It is local zoning, development and fire codes that present the largest hurdle. ALWAYS make sure that you can get that approval, for the space you propose to use, before going to great expense only to find that complying is going to bust the budget. ,
  13. I'll leave my area of expertise and express some opinions here. Call them an observation about life in general. There are situations that are complicated. I use the word to denote things that are hard to understand, but which, if you understand them, you can confidently predict the outcome. Then there situations that are complex. I use that term to denote situations in which, even if you know the rules, you cannot predict the outcome. For example, the rules of law that apply to a situation may be complicated, but the judge can provide the jury with instructions about how the rules apply to the case the jury is weighing. What the jury will decide, when applying, or ignoring, those rules, is unpredictable. It is complex in the way I use the word. TTB labeling rules for whiskey are the same. You can understand correctly what they say - you may wonder at how they came to say what they say - but you cannot predict what TTB will do when you submit an application for a certificate of label approval. The rules are complixated, the situation is complex. So too, it seems, is how the person who is deemed to be the authority having jurisdiction is going to apply the development and fire codes. The complexity is amplified when the agency decides it has given a wrong answer to a preliminary question. Not even asking in advance can give absolute assurance. So we arrive at Murphy's law, to which I might propose the corollary, "There is no rule that someone will not misinterpret." To which I add, "There is no rule that someone will not ignore," and "In the absence of a rule, there is someone who will invent one." Uncertainty has many roots.. In the discussion of outside tanks, I seesee two themes. One comes from the general experience that the rules that may apply to outside tanks have not caused problems. There are three possible reasons for this. One is that persons generally comply with the rules, so it is reasonable that there have been no problems. The second is that the code books are so thick that the authority with jurisdiction doesn't know what rules to apply. The third is that the agency doesn't care what the rule book says. Any of those situations may exist. I'm also sure that we could, collectively, site examples of each. Here is my reading of this discussion, based only on the arguments made here: The complication vector - I think it is likely that, under the rules that apply to outdoor tanks, outdoor tanks can, in most instances, be located and constructed in ways that are a more affordable solution to storage problems, if such problems exist in your jurisdiction, than indoor tanks. You need to wade through the rules on that, but if you are located in on property where you can put an outside tank, you may want to consider doing so if the local authorities are making indoor solutions expensive. The complexity vector - However, before you purchase tanks for outside use, it would be prudent to talk with with the the agency to see what rules they will apply to the tanks. Further - this is my interjection - if I were you, I would want to know what the rules say even if they agency with jurisdiction is not inclined to enforce them. What that agency says today may have no bearing on what it says tomorrow. The TTB vector - Returning to what I do know, the TTB rules for outside tanks and insider tanks basically are the same. The construction requirements don't vary and the locking requirements do not vary. However, it is my opinion that TTB often ignores the construction requirements when the tanks are indoor tanks, but that it would not do so when the tanks are outdoor tanks. I cite, as an example, the ubiquitous, stackable, plastic totes.
  14. You are correct. Under the provisions of §19.192 the tanks themselves do not need to be locked, if they are within an enclosure and the enclosure is locked. That is as definitive as TTB gets. "Enclosure" is not defined. it has the common meaning "an area surrounded by a fence or other structure in order to be kept separate from other areas." One supposes the adequacy depends on the purpose. In the case of an enclosure around outside tanks, it is surely more than a one foot high buffer and less than 25 foot high fence, but I don't know of any guidelines about where in between the extremes, Goldilocks style, t too little and too much become just right. You must describe it on your application to register the DSP - or an amendment to an existing registration - and in theory, at least, TTB will say thumbs up or thumbs down by its approval or denial. But locked or not, all tanks must be equipped for locking. would leave an outside tank unlocked if were within a locked enclosure. No, unless I were sure that the fence was truly adequate to secure the spirits. But that is a matter of my caution, not an imposed requirement. I know of nothing that precludes a permanent pipe between the outdoor tank and an inside tank. They exist. Again, I know of no rules that say how the pipeline would need to be constructed, but I would assume continuous piping. In one place, in the days when TTB provided better explanations than it does now in its online instructions, it gave the following example of how to explain the "arrangement of buildings," "Building A is located on the bonded premises directly west of Building B. A bonded bulk tank farm consisting of 10 tanks is located 150 feet to the west of Building A. The tanks are arranged in two rows of 5. Each tank is connected by pipeline to the bottling plant . My emphasis. The valves don't lock with a key :-); they are equipped so that they can be locked with a padlock of the sort required by §19.192(f). Local locksmiths should be able to provide those padlocks and if not, I'm sure people here on the forum can tell you where you can find them online.
  • Create New...