text: SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.
  
      (a) Short Title.--This Act may be cited as the ``Distilled Spirits 
  Tax Payment Simplification Act of 1997''.
      (b) Reference to 1986 Code.--Except as otherwise expressly 
  provided, whenever an amendment or repeal is expressed in terms of an 
  amendment to, or repeal of, a section or other provision, the reference 
  shall be considered to be made to a section or other provision of the 
  Internal Revenue Code of 1986.
  
  SEC. 2. TRANSFER OF DISTILLED SPIRITS BETWEEN BONDED PREMISES.
  
      (a) In General.--Section 5212 is amended to read as follows:
  
  ``SEC. 5212. TRANSFER OF DISTILLED SPIRITS BETWEEN BONDED PREMISES.
  
      ``Distilled spirits on which the internal revenue tax has not been 
  paid as authorized by law may, under such regulations as the Secretary 
  shall prescribe, be transferred in bond between bonded premises in any 
  approved container. For the purposes of this chapter, except in the 
  case of any transfer from a premise of a bonded dealer, the removal of 
  distilled spirits for transfer in bond between bonded premises shall 
  not be construed to be a withdrawal from bonded premises.''.
      (b) Conforming Amendment.--The first sentence of section 5232(a) 
  (relating to transfer to distilled spirits plant without payment of 
  tax) is amended to read as follows: ``Distilled spirits imported or 
  brought into the United States, under such regulations as the Secretary 
  shall prescribe, may be withdrawn from customs custody and transferred 
  to the bonded premises of a distilled spirits plant without payment of 
  the internal revenue tax imposed on such distilled spirits.''.
  
  SEC. 3. ESTABLISHMENT OF DISTILLED SPIRITS PLANT.
  
      Section 5171 (relating to establishment) is amended--
              (1) in subsection (a), by striking ``or processor'' and 
          inserting ``processor, or bonded dealer'';
              (2) in subsection (b), by striking ``or as both'' and 
          inserting ``as a bonded dealer, or as any combination 
          thereof'';
              (3) in subsection (e)(1), by inserting ``, bonded dealer,'' 
          before ``processor''; and
              (4) in subsection (e)(2), by inserting ``bonded dealer,'' 
          before ``or processor''.
  
  SEC. 4. DISTILLED SPIRITS PLANTS.
  
      Section 5178(a) (relating to location, construction, and 
  arrangement) is amended by adding at the end the following:
              ``(5) Bonded dealer operations.--Any person establishing a 
          distilled spirits plant to conduct operations as a bonded 
          dealer may, as described in the application for registration--
                      ``(A) store distilled spirits in any approved 
                  container on the bonded premises of such plant, and
                      ``(B) under such regulations as the Secretary shall 
                  prescribe, store taxpaid distilled spirits, beer, and 
                  wine, and such other beverages and items (products) not 
                  subject to tax or regulation under this title on such 
                  bonded premises.''.
  
  SEC. 5. BONDED DEALERS.
  
      (a) Definitions.--Section 5002(a) (relating to definitions) is 
  amended by adding at the end the following:
      ``(16) Bonded Dealer.--The term `bonded dealer' means any person 
  who has elected under section 5011 to be treated as a bonded dealer.
      ``(17) Control State Entity.--The term `control State entity' means 
  a State, a political subdivision of a State, or any instrumentality of 
  such a State or political subdivision, in which only the State, 
  political subdivision, or instrumentality is allowed under applicable 
  law to perform distilled spirit operations.''.
      (b) Election To Be Treated as a Bonded Dealer.--Subpart A of part I 
  of subchapter A of chapter 51 (relating to distilled spirits) is 
  amended by adding at the end the following:
  
  ``SEC. 5011. ELECTION TO BE TREATED AS BONDED DEALER.
  
      ``(a) Election.--Any wholesale dealer or any control State entity 
  may elect, at such time and in such manner as the Secretary shall 
  prescribe, to be treated as a bonded dealer if such wholesale dealer or 
  entity sells bottled distilled spirits exclusively to a wholesale 
  dealer in liquor, to an independent retail dealer subject to the 
  limitation set forth in subsection (b), or to another bonded dealer.
      ``(b) Limitation in Case of Sales to Retail Dealers.--
              ``(1) By bonded dealer.--Any person, other than a control 
          State entity, who is a bonded dealer shall not be considered as 
          selling to an independent retail dealer if--
                      ``(A) the bonded dealer has a greater than 10 
                  percent ownership interest in, or control of, the 
                  retail dealer;
                      ``(B) the retail dealer has a greater than 10 
                  percent ownership interest in, or control of, the 
                  bonded dealer; or
                      ``(C) any person has a greater than 10 percent 
                  ownership interest in, or control of, both the bonded 
                  and retail dealer.
          For purposes of this paragraph, ownership interest, not limited 
          to stock ownership, shall be attributed to other persons in the 
          manner prescribed by section 318.
              ``(2) By control state entity.--In the case of any control 
          State entity, subsection (a) shall be applied by substituting 
          `retail dealer' for `independent retail dealer'.
      ``(c) Inventory Owned at Time of Election.--Any bottled distilled 
  spirits in the inventory of any person electing under this section to 
  be treated as a bonded dealer shall, to the extent that the tax under 
  this chapter has been previously determined and paid at the time the 
  election becomes effective, not be subject to such additional tax on 
  such spirits as a result of the election being in effect.
      ``(d) Revocation of Election.--The election made under this section 
  may be revoked by the bonded dealer at any time, but once revoked shall 
  not be made again without the consent of the Secretary. When the 
  election is revoked, the bonded dealer shall immediately withdraw the 
  distilled spirits on determination of tax in accordance with a tax 
  payment procedure established by the Secretary.
      ``(e) Equitable Treatment of Bonded Dealers Using LIFO Inventory.--
  The Secretary shall provide such rules as may be necessary to assure 
  that taxpayers using the last-in, first-out method of inventory 
  valuation do not suffer a recapture of their LIFO reserve by reason of 
  making the election under this section or by reason of operating a 
  bonded wine cellar as permitted by section 5351.
      ``(f) Approval of Application.--Any person submitting an 
  application under section 5171(c) and electing under this section to be 
  treated as a bonded dealer shall be entitled to approval of such 
  application to the same extent such person would be entitled to 
  approval of an application for a basic permit under section 104(a)(2) 
  of the Federal Alcohol Administration Act (27 U.S.C 204(a)(2)), and 
  shall be accorded notice and hearing as described in section 104(b) of 
  such Act (27 U.S.C. 204(b)).''.
      (c) Conforming Amendment.--The tables of sections of subpart A of 
  part I of subchapter A of chapter 51 is amended by adding at the end 
  the following:
  
                                ``Sec. 5011. Election to be treated as 
                                          bonded dealer.''.
  
  SEC. 6. DETERMINATION OF TAX.
  
      The first sentence of section 5006(a)(1) (relating to requirements) 
  is amended to read as follows: ``Except as otherwise provided in this 
  section, the tax on distilled spirits shall be determined when the 
  spirits are transferred from a distilled spirits plant to a bonded 
  dealer or are withdrawn from bond.''.
  
  SEC. 7. LOSS OR DESTRUCTION OF DISTILLED SPIRITS.
  
      Section 5008 (relating to abatement, remission, refund, and 
  allowance for loss or destruction of distilled spirits) is amended--
              (1) in subsections (a)(1)(A) and (a)(2), by inserting 
          ``bonded dealer,'' after ``distilled spirits plant,'' both 
          places it appears;
              (2) in subsection (c)(1), by striking ``of a distilled 
          spirits plant''; and
              (3) in subsection (c)(2), by striking ``distilled spirits 
          plant'' and inserting ``bonded premises''.
  
  SEC. 8. TIME FOR COLLECTING TAX ON DISTILLED SPIRITS.
  
      (a) In General.--Section 5061(d) (relating to time for collecting 
  tax on distilled spirits, wines, and beer) is amended by redesignating 
  paragraph (5) as paragraph (6) and by inserting after paragraph (4) the 
  following:
              ``(5) Advanced payment of distilled spirits tax.--
          Notwithstanding the preceding provisions of this subsection, in 
          the case of any tax imposed by section 5001 with respect to a 
          bonded dealer who has an election in effect on September 20 of 
          any year, any payment of which would, but for this paragraph, 
          be due in October or November of that year, such payment shall 
          be made on such September 20. No penalty or interest shall be 
          imposed for the period from such September 20 until the due 
          date determined without regard to this paragraph to the extent 
          that tax due exceeds the tax which would have been due with 
          respect to distilled spirits in the preceding October and 
          November had the election under section 5011 been in effect.''.
      (b) Conforming Amendment.--Section 5061(e)(1) (relating to payment 
  by electronic fund transfer) is amended by inserting ``or any bonded 
  dealer,'' after ``respectively,''.
  
  SEC. 9. EXEMPTION FROM OCCUPATIONAL TAX NOT APPLICABLE.
  
      Section 5113(a) (relating to sales by proprietors of controlled 
  premises) is amended by adding at the end the following: ``This 
  subsection shall not apply to a proprietor of a distilled spirits plant 
  whose premises are used for operations of a bonded dealer.''.
  
  SEC. 10. CONFORMING AMENDMENTS.
  
              (1) Section 5003(3) is amended by striking ``certain''.
              (2) Section 5214 is amended by redesignating subsection (b) 
          as subsection (c) and by inserting after subsection (a) the 
          following:
      ``(b) Exception.--Paragraphs (1), (2), (3), (5), (10), (11), and 
  (12) of subsection (a) shall not apply to distilled spirits withdrawn 
  from premises used for operations as a bonded dealer.''.
              (3) Section 5215 is amended--
                      (A) in subsection (a), by striking ``the bonded 
                  premises'' and all that follows through the period and 
                  inserting ``bonded premises.'';
                      (B) in the heading of subsection (b), by striking 
                  ``a Distilled Spirits Plant'' and inserting ``Bonded 
                  Premises''; and
                      (C) in subsection (d), by striking ``a distilled 
                  spirits plant'' and inserting ``bonded premises''.
              (4) Section 5362(b)(5) is amended by adding at the end the 
          following: ``The term does not mean premises used for 
          operations as a bonded dealer.''.
              (5) Section 5551(a) is amended by inserting ``bonded 
          dealer,'' after ``processor'' both places it appears.
              (6) Subsections (a)(2) and (b) of section 5601 are each 
          amended by inserting ``, bonded dealer,'' before ``or 
          processor'' .
              (7) Paragraphs (3), (4), and (5) of section 5601(a) are 
          each amended by inserting ``bonded dealer,'' before ``or 
          processor'' .
              (8) Section 5602 is amended--
                      (A) by inserting ``, warehouseman, processor, or 
                  bonded dealer'' after ``distiller''; and
                      (B) in the heading, by striking ``by distiller''.
              (9) Sections 5115, 5180, and 5681 are repealed.
              (10) The table of sections for part II of subchapter A of 
          chapter 51 is amended by striking the item relating to section 
          5115.
              (11) The table of sections for subchapter B of chapter 51 
          is amended by striking the item relating to section 5180.
              (12) The item relating to section 5602 in the table of 
          sections for part I of subchapter J of chapter 51 is amended by 
          striking ``by distiller''.
              (13) The table of sections for part IV of subchapter J of 
          chapter 51 is amended by striking the item relating to section 
          5681.
  
  SEC. 11. REGISTRATION FEES.
  
      (a) General Rule.--The Director of the Bureau of Alcohol, Tobacco, 
  and Firearms shall, in accordance with this section, assess and collect 
  registration fees solely to defray a portion of any net increased costs 
  of regulatory activities of the Government resulting from enactment of 
  this Act.
      (b) Persons Subject to Fee.--Fees shall be paid in a manner 
  prescribed by the Director by the bonded dealer.
      (c) Amount and Timing of Fees.--Fees shall be paid annually and 
  shall not exceed $1,000 per bonded premise.
      (d) Deposit and Credit.--The moneys received during any fiscal year 
  from fees described in subsection (a) shall be deposited as an 
  offsetting collection in, and credited to, the account providing 
  appropriations to conduct the regulatory activities of the Government 
  resulting from enactment of this Act.
      (e) Limitation.--The aggregate amount of fees assessed and 
  collected under this section may not exceed in any fiscal year the 
  aggregate amount of any net increased costs of regulatory activity 
  referred to in subsection (a).
  
  SEC. 12. COOPERATIVE AGREEMENTS.
  
      (a) Study.--The Secretary of the Treasury shall study and report to 
  Congress concerning possible administrative efficiencies which could 
  inure to the benefit of the Federal Government of cooperative 
  agreements with States regarding the collection of distilled spirits 
  excise taxes. Such study shall include, but not be limited to, possible 
  benefits of the standardization of forms and collection procedures and 
  shall be submitted 1 year after the date of enactment of this Act.
      (b) Cooperative Agreement.--The Secretary of the Treasury is 
  authorized to enter into such cooperative agreements with States which 
  the Secretary deems will increase the efficient collection of distilled 
  spirits excise taxes.
  
  SEC. 13. EFFECTIVE DATE.
  
      (a) In General.--Except as provided in subsection (b), the 
  amendments made by this Act take effect on the date which is 120 days 
  after the date of enactment of this Act.
      (b) Exceptions.--
              (1) Establishment of distilled spirits plant.--The 
          amendments made by section 3 take effect on the date of 
          enactment of this Act.
              (2) Special rule.--Each wholesale dealer who is required to 
          file an application for registration under section 5171(c) of 
          the Internal Revenue Code of 1986 whose operations are required 
          to be covered by a basic permit under sections 103 and 104 of 
          the Federal Alcohol Administration Act (27 U.S.C. 203, 204) and 
          who has received such basic permits as an importer, wholesaler, 
          or as both, and has obtained a bond required under subchapter B 
          of chapter 51 of subtitle E of such Code before the close of 
          the fourth month following the date of enactment of this Act, 
          shall be qualified to operate bonded premises until such time 
          as the Secretary of the Treasury takes final action on the 
          application. Any control State entity (as defined in section 
          5002(a)(17) of such Code, as added by section 5(a)) that has 
          obtained a bond required under such subchapter shall be 
          qualified to operate bonded premises until such time as the 
          Secretary of the Treasury takes final action on the application 
          for registration under section 5171(c) of such Code.
target: Distilled Spirits Tax Payment Simplification Act of 1997 - Amends the Internal Revenue Code to modify or impose requirements regarding: (1) the transfer of distilled spirits (including imported distilled spirits) between bonded premises; (2) operations as a bonded dealer conducted on the bonded premises of a distilled spirits plant; (3) establishment and operation of such a plant by a bonded dealer; (4) election to be treated as a bonded dealer; (5) the time at which the tax on distilled spirits is determined; (6) distilled spirits lost or destroyed in bond or returned to bonded premises; (7) the time for tax payment and payment by electronic transfer; and (8) application to a plant used by a bonded dealer of provisions relating to sales by proprietors of controlled premises. 
  Directs the Director of the Bureau of Alcohol, Tobacco, and Firearms to assess and collect registration fees to defray a portion of the costs resulting from the enactment of this Act. 
  Directs the Secretary of the Treasury to study and report to the Congress concerning cooperative agreements regarding the collection of distilled spirits excise taxes.
feat_title: Distilled Spirits Tax Payment Simplification Act of 1997