(a) General. A proprietor may alternate use of a distilled spirits plant or part of the plant with one or more other proprietors. In order to do so, each proprietor must separately file and receive approval of the necessary registration, applications and bonds that are required by subparts D and E of this part. Each proprietor must also conduct operations and keep records in accordance with the regulations in this part. Where operations by alternating proprietors will be limited to parts of the plant, each proprietor must include the following in the notice of registration:
(1) A description of the areas, rooms or buildings, or combination of rooms or buildings that will alternate between proprietors;
(2) The method that the proprietor will use to separate the alternated premises from any premises that will not be alternated; and
(3) Diagrams of the parts of the plant that will be alternated.
(b) Letterhead notice. After a proprietor receives approval to alternate use of the premises with another proprietor, the alternating proprietors must separately file letterhead notices each time they intend to alternate use of the premises. The proprietors may file a single notice if the notice is signed by each proprietor or an authorized representative of each proprietor. The proprietors must submit the letterhead notice to the appropriate TTB officer prior to the first day that alternation is to take place. Proprietors must include the following with the notice:
(1) The plant number and the name of the proprietor filing the notice;
(2) Identification of the outgoing proprietor and incoming proprietor (by name and plant number);
(3) The effective date and hour of the alternation;
(4) Identification of any applicable diagrams provided with the registration of each proprietor filed under paragraph (a) of this section, showing the portions of the premises involved in the alternation;
(5) The purpose of the alternation;
(6) If distilling materials, unfinished or finished spirits, denatured spirits, or wine will be transferred to the incoming proprietor, a statement to that effect; and
(7) If denatured spirits or articles will be retained in the processing account in locked tanks during the period of alternate proprietorship, a statement to that effect.
(c) Alternation of production operations. In the case of an outgoing proprietor who intends to alternate production operations with another proprietor, the outgoing proprietor must:
(1) Completely process all distilling materials and unfinished spirits in any bonded areas, rooms, or buildings that will alternate unless the outgoing proprietor transfers them to the incoming proprietor; and
(2) Mark and remove all finished spirits in the name in which they were produced before a production gauge is made by the incoming proprietor.
(d) Alternation of storage operations. In the case of an outgoing proprietor who intends to alternate storage operations with another proprietor, the outgoing proprietor must:
(1) Transfer in bond any spirits or wines in any bonded areas, rooms, or buildings that will be alternated; and
(2) Except where no bond is required under § 19.151(d), execute a form TTB F 5000.18, Change of Bond (Consent of Surety), to continue in effect the operations or unit bond whenever operations of the areas, rooms, or buildings will be resumed by the outgoing proprietor following suspension of operations by the other proprietor.
(e) Alternation of processing operations. In the case of an outgoing proprietor who intends to alternate processing operations with another proprietor, the outgoing proprietor:
(1) Before the effective date and time of the alternation, must process to completion and remove from the affected area all spirits, denatured spirits, wines, or articles located in any rooms, areas, or buildings that will alternate, or must transfer these spirits, wines, and articles in bond to the incoming proprietor;
(2) Except where no bond is required under § 19.151(d), must execute a TTB F 5000.18, Change of Bond (Consent of Surety), to continue in effect the operations or unit bond whenever operations of the areas, rooms, or buildings will be resumed by the outgoing proprietor following suspension of operations by the other proprietor; and
(3) May retain denatured spirits and articles in tanks locked with approved locks if the outgoing proprietor maintains custody and control of the locks and keys for the tanks. In this case, the outgoing proprietor must obtain a consent of surety on TTB F 5000.18 to continue liability on the operations or unit bond for the tax on the denatured spirits or articles that retained in the locked tanks.
(f) Records. Each alternating proprietor must maintain its own records and submit its own reports. Records kept by an outgoing proprietor for spirits, wines, and alcoholic flavoring materials may be used by the incoming proprietor. All transfers of distilling materials, unfinished spirits, spirits, denatured spirits, and wines must be reflected in the records of each proprietor.
[T.D. TTB-92, 76 FR 9090, Feb. 16, 2011, as amended by T.D. TTB-146, 82 FR 1120, Jan. 4, 2017]