USC Subchapter B

in effect

26 U.S.C. § 5171 Establishment

(a) Certain operations may be conducted only on bonded premisesExcept as otherwise provided by law, operations as a distiller, warehouseman, or processor may be conducted only on the bonded premises of a distilled spirits plant by a person who is qualified under this subchapter. (b) Establishment of distilled spirits plantA distilled spirits plant may be established only by a person who intends to conduct at such plant operations as a distiller, as a warehouseman, or as both. (c) Registration(1) In generalEach person shall, before commencing operations at a distilled spirits plant (and at such other times as the Secretary may by regulations prescribe), make application to the Secretary for, and receive notice of, the registration of such plant. (2) Application required where new operations are addedNo operation in addition to those set forth in the application made pursuant to paragraph (1) may be conducted at a distilled spirits plant until the person has made application to the Secretary for, and received notice of, the registration of such additional operation. (3) Secretary may establish minimum capacity and level of activity requirementsThe Secretary may by regulations prescribe for each type of operation minimum capacity and level of activity requirements for qualifying premises as a distilled spirits plant. (4) Applicant must comply with law and regulationsNo plant (or additional operation) shall be registered under this section until the applicant has complied with the requirements of law and regulations in relation to the qualification of such plant (or additional operation). (d) Permits(1) RequirementsEach person required to file an application for registration under subsection (c) whose distilled spirits operations (or any part thereof) are not required to be covered by a basic permit under the Federal Alcohol Administration Act (27 U.S.C. secs. 203 and 204) shall, before commencing the operations (or part thereof) not so covered, apply for and obtain a permit under this subsection from the Secretary to engage in such operations (or part thereof). Subsections (b), (c), (d), (e), (f), (g), and (h) of section 5271 are hereby made applicable to persons filing applications and permits required by or issued under this subsection. (2) Exceptions for agencies of a State or political subdivisionsParagraph (1) shall not apply to any agency of a State or political subdivision thereof or to any officer or employee of any such agency, and no such agency, officer, or employee shall be required to obtain a permit thereunder. (e) Cross references(1) For penalty for failure of a distiller or processor to file application for registration as required by this section, see section 5601(a)(2). (2) For penalty for the filing of a false application by a distiller, warehouseman, or processor of distilled spirits, see section 5601(a)(3).

26 U.S.C. § 5172 Application

The application for registration required by section 5171(c) shall, in such manner and form as the Secretary may by regulations prescribe, identify the applicant and persons interested in the business (or businesses) covered by the application, show the nature, location and extent of the premises, show the specific type or types of operations to be conducted on such premises, and show any other information which the Secretary may by regulations require for the purpose of carrying out the provisions of this chapter.

26 U.S.C. § 5173 Bonds

(a) Operations at, and withdrawals from, distilled spirits plant must be covered by bond(1) OperationsExcept as provided under section 5551(d), no person intending to establish a distilled spirits plant may commence operations at such plant unless such person has furnished bond covering operations at such plant. (2) WithdrawalsExcept as provided under section 5551(d), no distilled spirits (other than distilled spirits withdrawn under section 5214 or 7510) may be withdrawn from bonded premises except on payment of tax unless the proprietor of the bonded premises has furnished bond covering such withdrawal. (b) Operations bondsThe bond required by paragraph (1) of subsection (a) shall meet the requirements of paragraph (1), (2), or (3) of this subsection:(1) One plant bondThe bond covers operations at a single distilled spirits plant. (2) Adjacent wine cellar bondThe bond covers operations at a distilled spirits plant and at an adjacent bonded wine cellar. (3) Area bondThe bond covers operations at 2 or more distilled spirits plants (and adjacent bonded wine cellars) which—(A) are located in the same geographical area (as designated in regulations prescribed by the Secretary), and (B) are operated by the same person (or, in the case of a corporation, by such corporation and its controlled subsidiaries). (c) Withdrawal bondsThe bond required by paragraph (2) of subsection (a) shall cover withdrawals from 1 or more bonded premises the operations at which could be covered by the same operations bond under subsection (b). (d) Unit bondsUnder regulations prescribed by the Secretary, the requirements of paragraphs (1) and (2) of subsection (a) shall be treated as met by a unit bond which covers both operations at, and withdrawals from, 1 or more bonded premises which could be covered by the same operations bond under subsection (b). (e) Terms and conditions(1) In generalAny bond furnished under this section shall be conditioned that the person furnishing the bond—(A) will faithfully comply with all provisions of law and regulations relating to the activities covered by such bond, and (B) will pay—(i) all taxes imposed by this chapter, and (ii) all penalties incurred by, or fines imposed on, such person for violation of any such provision. (2) Other terms and conditionsAny bond furnished under this section shall contain such other terms and conditions as may be required by regulations prescribed by the Secretary. (f) Amount(1) In generalThe penal sum of any bond shall be the amount determined under regulations prescribed by the Secretary. (2) Maximum and minimum amountThe Secretary shall by regulations prescribe a minimum amount and a maximum amount for each type of bond which may be furnished under this section. (g) Total amount availableThe total amount of any bond furnished under this section shall be available for the satisfaction of any liability incurred under the terms and conditions of such bond. (h) Special rulesFor purposes of this section—(1) Withdrawal bondsIn the case of any bond furnished under this section which covers withdrawals but not operations—(A) such bond shall be in addition to the operations bond, and (B) if distilled spirits are withdrawn under such bond, the operations bond shall no longer cover liability for payment of the tax on the spirits withdrawn. (2) Adjacent wine cellars(A) RequirementsNo wine cellar shall be treated as being adjacent to a distilled spirits plant unless—(i) such distilled spirits plant is qualified under this subchapter for the production of distilled spirits, and (ii) such wine cellar and the distilled spirits plant are operated by the same person (or, in the case of a corporation, by such corporation and its controlled subsidiaries). (B) Bond in lieu of wine cellar bondIn the case of any adjacent wine cellar, a bond furnished under this section which covers operations at such wine cellar shall be in lieu of any bond which would otherwise be required under section 5354 with respect to such wine cellar (other than supplemental bonds required under the second sentence of section 5354).

26 U.S.C. § 5175 Export bonds

(a) RequirementsNo distilled spirits shall be withdrawn from bonded premises for exportation, or for transfer to a customs bonded warehouse, without payment of tax unless the exporter has furnished bond to cover such withdrawal under such regulations and conditions, and in such form and penal sum, as the Secretary may prescribe. (b) Exception where proprietor withdraws spirits for exportationIn the case of distilled spirits withdrawn from bonded premises by the proprietor for exportation without payment of tax, the bond of such proprietor required to be furnished under paragraph (1) of section 5173(a) covering such premises shall cover such exportation, and subsection (a) shall not apply. (c) Cancellation or credit of export bondsThe bonds given under subsection (a) shall be cancelled or credited and the bonds liable under subsection (b) credited if there is such proof of exportation as the Secretary may by regulations require.

26 U.S.C. § 5176 New or renewed bonds

(a) GeneralNew bonds shall be required under sections 5173 and 5175 in case of insolvency or removal of any surety, and may, at the discretion of the Secretary, be required in any other contingency affecting the validity or impairing the efficiency of such bond. (b) BondsIf the proprietor of a distilled spirits plant fails or refuses to furnish a bond required under paragraph (1) of section 5173(a) or to renew the same, and neglects to immediately withdraw the spirits and pay the tax thereon, the Secretary shall proceed to collect the tax.

26 U.S.C. § 5177 Other provisions relating to bonds

(a) General provisions relating to bondsThe provisions of section 5551 shall be applicable to the bonds required by or given under sections 5173 and 5175. (b) Cross references(1) For deposit of United States bonds or notes in lieu of sureties, see section 9303 of title 31, United States Code. (2) For penalty and forfeiture for failure or refusal to give bond, or for giving false, forged, or fraudulent bond, or carrying on the business of a distiller without giving bond, see sections 5601(a)(4), 5601(a)(5), 5601(b), and 5615(3).

26 U.S.C. § 5178 Premises of distilled spirits plants

(a) Location, construction, and arrangement(1) General(A) The premises of a distilled spirits plant shall be as described in the application required by section 5171(c). The Secretary shall prescribe such regulations relating to the location, construction, arrangement, and protection of distilled spirits plants as he deems necessary to facilitate inspection and afford adequate security to the revenue. (B) No distilled spirits plant for the production of distilled spirits shall be located in any dwelling house, in any shed, yard, or inclosure connected with any dwelling house, or on board any vessel or boat, or on premises where beer or wine is made or produced, or liquors of any description are retailed, or on premises where any other business is carried on (except when authorized under subsection (b)). (C) Notwithstanding any other provision of this chapter relating to distilled spirits plants the Secretary may approve the location, construction, arrangement, and method of operation of any establishment which was qualified to operate on the date preceding the effective date of this section if he deems that such location, construction, arrangement, and method of operation will afford adequate security to the revenue. (2) Production operations(A) Any person establishing a distilled spirits plant may, as described in his application for registration, produce distilled spirits from any source or substance. (B) The distilling system shall be continuous and shall be so designed and constructed and so connected as to prevent the unauthorized removal of distilled spirits before their production gauge. (C) The Secretary is authorized to order and require—(i) such identification of, changes of, and additions to, distilling apparatus, connecting pipes, pumps, tanks, and any machinery connected with or used in or on the premises, and (ii) such fastenings, locks, and seals to be part of any of the stills, tubs, pipes, tanks, and other equipment, as he may deem necessary to facilitate inspection and afford adequate security to the revenue. (3) Warehousing operations(A) Any person establishing a distilled spirits plant for the production of distilled spirits may, as described in the application for registration, warehouse bulk distilled spirits on the bonded premises of such plant. (B) Distilled spirits plants for the bonded warehousing of bulk distilled spirits elsewhere than as described in subparagraph (A) may be established at the discretion of the Secretary by proprietors referred to in subparagraph (A) or by other persons under such regulations as the Secretary shall prescribe. (4) Processing operationsAny person establishing a distilled spirits plant may, as described in the application for registration, process distilled spirits on the bonded premises of such plant. (b) Use of premises for other businessesThe Secretary may authorize the carrying on of such other businesses (not specifically prohibited by section 5601(a)(6)) on premises of distilled spirits plants, as he finds will not jeopardize the revenue. Such other businesses shall not be carried on until an application to carry on such business has been made to and approved by the Secretary. (c) Cross references(1) For provisions authorizing the Secretary to require installation of meters, tanks, and other apparatus, see section 5552. (2) For penalty for distilling on prohibited premises, see section 5601(a)(6). (3) For provisions relating to the bottling of distilled spirits labeled as alcohol, see section 5235. (4) For provisions relating to the unauthorized use of distilled spirits in any manufacturing process, see section 5601(a)(9).

26 U.S.C. § 5179 Registration of stills

(a) RequirementsEvery person having in his possession or custody, or under his control, any still or distilling apparatus set up, shall register such still or apparatus with the Secretary immediately on its being set up, by subscribing and filing with the Secretary a statement, in writing, setting forth the particular place where such still or distilling apparatus is set up, the kind of still and its capacity, the owner thereof, his place of residence, and the purpose for which said still or distilling apparatus has been or is intended to be used (except that stills or distilling apparatus not used or intended to be used for the distillation, redistillation, or recovery of distilled spirits are not required to be registered under this section). (b) Cross references(1) For penalty and forfeiture provisions relating to unregistered stills, see sections 5601(a)(1) and 5615(1). (2) For provisions requiring notification to set up a still, boiler, or other vessel for distilling, see section 5101(a)(2).

26 U.S.C. § 5180 Signs

(a) RequirementsEvery person engaged in distilled spirits operations shall place and keep conspicuously on the outside of his place of business a sign showing the name of such person and denoting the business, or businesses, in which engaged. The sign required by this subsection shall be in such form and contain such information as the Secretary shall by regulations prescribe. (b) PenaltyFor penalty and forfeiture relating to failure to post sign or improperly posting such sign, see section 5681.

26 U.S.C. § 5181 Distilled spirits for fuel use

(a) In general(1) Purposes for which plant may be establishedOn such application and bond and in such manner as the Secretary may prescribe by regulation, a person may establish a distilled spirits plant solely for the purpose of—(A) producing, processing, and storing, and (B) using or distributing, distilled spirits to be used exclusively for fuel use. (2) RegulationsIn prescribing regulations under paragraph (1) and in carrying out the provisions of this section, the Secretary shall, to the greatest extent possible, take steps to—(A) expedite all applications; (B) establish a minimum bond; and (C) generally encourage and promote (through regulation or otherwise) the production of alcohol for fuel purposes. (b) Authority to exemptThe Secretary may by regulation provide for the waiver of any provision of this chapter (other than this section or any provision requiring the payment of tax) for any distilled spirits plant described in subsection (a) if the Secretary finds it necessary to carry out the provisions of this section. (c) Special rules for small plant production(1) Applications(A) In generalAn application for an operating permit for an eligible distilled spirits plant shall be in such a form and manner, and contain such information, as the Secretary may by regulations prescribe; except that the Secretary shall, to the greatest extent possible, take steps to simplify the application so as to expedite the issuance of such permits. (B) Receipt of applicationWithin 15 days of receipt of an application under subparagraph (A), the Secretary shall send a written notice of receipt to the applicant, together with a statement as to whether the application meets the requirements of subparagraph (A). If such a notice is not sent and the applicant has a receipt indicating that the Secretary has received an application, paragraph (2) shall apply as if a written notice required by the preceding sentence, together with a statement that the application meets the requirements of subparagraph (A), had been sent on the 15th day after the date the Secretary received the application. (C) Multiple applicationsIf more than one application is submitted with respect to any eligible distilled spirits plant in any calendar quarter, the provisions of this section shall apply only to the first application submitted with respect to such plant during such quarter. For purposes of the preceding sentence, if a corrected or amended first application is filed, such application shall not be considered as a separate application, and the 15-day period referred to in subparagraph (A) shall commence with receipt of the corrected or amended application. (2) Determination(A) In generalIn any case in which the Secretary under paragraph (1)(B) has notified an applicant of receipt of an application which meets the requirements of paragraph (1)(A), the Secretary shall make a determination as to whether such operating permit is to be issued, and shall notify the applicant of such determination, within 45 days of the date on which notice was sent under paragraph (1)(B). (B) Failure to make determinationIf the Secretary has not notified an applicant within the time prescribed under subparagraph (A), the application shall be treated as approved. (C) Rejection of applicationIf the Secretary determines under subparagraph (A) that a permit should not be issued—(i) the Secretary shall include in the notice to the applicant of such determination under subparagraph (A) detailed reasons for such determination, and (ii) such determination shall not prejudice any further application for such operating permit. (3) BondNo bond shall be required for an eligible distilled spirits plant. For purposes of section 5212 and subsection (e)(2) of this section, the premises of an eligible distilled spirits plant shall be treated as bonded premises. (4) Eligible distilled spirits plantThe term “eligible distilled spirits plant” means a plant which is used to produce distilled spirits exclusively for fuel use and the production from which does not exceed 10,000 proof gallons per year. (d) Withdrawal free of taxDistilled spirits produced under this section may be withdrawn free of tax from the bonded premises (and any premises which are not bonded by reason of subsection (c)(3)) of a distilled spirits plant exclusively for fuel use as provided in section 5214(a)(12). (e) Prohibited withdrawal, use, sale, or disposition(1) In generalDistilled spirits produced under this section shall not be withdrawn, used, sold, or disposed of for other than fuel use. (2) Rendering unfit for useFor protection of the revenue and under such regulations as the Secretary may prescribe, distilled spirits produced under this section shall, before withdrawal from the bonded premises of a distilled spirits plant, be rendered unfit for beverage use by the addition of substances which will not impair the quality of the spirits for fuel use. (f) Definition of distilled spiritsFor purposes of this section, the term “distilled spirits” does not include distilled spirits produced from petroleum, natural gas, or coal.

26 U.S.C. § 5182 Cross references

For provisions requiring recordkeeping by wholesale liquor dealers, see section 5121, and by retail liquor dealers, see section 5122.