U.S.C. 211(a)) defines "distilled spirits" as ethyl alcohol, hydrated oxide of ethyl, spirits of wine, whiskey, rum, brandy, gin, and other distilled spirits, including all dilutions and mixtures thereof for nonindustrial use.

In bulk. Distilled spirits in containers having a capacity in excess of one wine gallon.

Other term. Any other term defined in the Federal Alcohol Administration Act and used in this part shall have the same meaning assigned to it by the Act.

Permittee. Any person holding a basic permit issued under the Federal Alcohol Administration Act.

Person. Any individual, partnership, joint-stock company, business trust, association, corporation, or other form of business enterprise, including a receiver, trustee, or liquidating agent.

Resale at wholesale. A sale to any trade buyer.

Trade buyer. Any person who is a wholesaler or retailer of distilled spirits, wine, or malt beverages.

Wine. Section 117(a) of the Federal Alcohol Administration Act (27 U.S.C. 211(a)) defines "wine" as:

(a) Wine as defined in section 610 and section 617 of the Revenue Act of 1918 (26 U.S.C. 5381-5392), as now in force or hereafter amended, and

(b) Other alcoholic beverages not so defined, but made in the manner of wine, including sparkling and carbonated wine, wine made from condensed grape must, wine made from other agricultural products than the juice of sound, ripe grapes, imitation wine, compounds sold as wine, vermouth, cider, perry, and sake; in each instance, only if containing not less than 7 percent and not more than 24 percent of alcohol by volume, and if for nonindustrial use.

Wine gallon. The liquid measure equivalent to the volume of 231 cubic inches.

[T.D. ATF-373, 61 FR 26098, May 24, 1996. Redesignated and amended by T.D. ATF 416, 64 FR 49985, Sept. 15, 1999]

Subpart C-Basic Permits

EDITORIAL NOTE: Nomenclature changes appear at 64 FR 49985, Sept. 15, 1999.

WHEN REQUIRED

$1.20 Importers.

No person, except pursuant to a basic permit issued under the Act, shall:

(a) Engage in the business of importing into the United States distilled spirits, wine, or malt beverages; or

(b) While so engaged, sell, offer or deliver for sale, contract to sell, or ship. in interstate or foreign commerce, directly or indirectly or through an affiliate, distilled spirits, wine, or malt beverages so imported.

§1.21 Domestic producers, rectifiers, blenders, and warehousemen.

No person, except pursuant to a basic permit issued under the Act, shall:

(a) Engage in the business of distilling distilled spirits, producing wine, rectifying or blending distilled spirits or wine, or bottling, or warehousing and bottling, distilled spirits; or

(b) While so engaged, sell, offer or deliver for sale, contract to sell, or ship, in interstate or foreign commerce, directly or indirectly or through an affiliate, distilled spirits or wine so distilled, produced, rectified, blended, or bottled, or warehoused and bottled.

$1.22 Wholesalers.

No person, except pursuant to a basic permit issued under the Act, shall:

(a) Engage in the business of purchasing for resale at wholesale, distilled spirits, wine, or malt beverages;

or,

(b) While so engaged, receive, sell, offer or deliver for sale, contract to sell, or ship in interstate or foreign commerce, directly or indirectly or through an affiliate, distilled spirits, wine, or malt beverages so purchased.

§1.23 State agencies.

This subpart 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 or officer or employee thereof shall be required to obtain a basic permit under this subpart.

PERSONS ENTITLED TO BASIC PERMITS

§ 1.24 Qualifications of applicants.

The application of any person shall be granted and the permit issued by the appropriate ATF officer if the applicant proves to the satisfaction of the appropriate ATF officer that:

(a) Such person (or in case of a corporation, any of its officers, directors, or principal stockholders) has not, within 5 years prior to the date of application, been convicted of a felony under Federal or State law, and has not, within 3 years prior to date of application, been convicted of a misdemeanor under any Federal law relating to liquor, including the taxation thereof; and

(b) Such person, by reason of the person's business experience, financial standing or trade connections, is likely to commence operations as a distiller, warehouseman and bottler, rectifier, wine producer, wine blender, importer, or wholesaler, as the case may be, within a reasonable period and to maintain such operations in conformity with Federal law; and

(c) The operations proposed to be conducted by such person are not in violation of the law of the State in which they are to be conducted.

APPLICATIONS FOR PERMITS

§1.25 General.

Applications for basic permits to engage in any of the operations set forth in §§1.20 to 1.22 must be made on ATF Form 5100.24, or 5100.18, verified as required by §1.56, and will be accompanied by such affidavits, documents, and other supporting data, as the appropriate ATF officer may require. The application will include all data, written statements, affidavits, documents, or other evidence submitted in support of the application, or upon a hearing. [T.D. ATF-416, 64 FR 49985, Sept. 15, 1999; T.D. ATF-416a, 64 FR 54776, Oct. 8, 1999]

$1.26 Incomplete or incorrectly executed applications.

Incomplete or incorrectly executed applications will not be acted upon, but the applicant shall be entitled to file a new application without prejudice, or

to complete the application already filed.

§1.27 Change in ownership, management, or control of the applicant.

In the event of any change in the ownership, management, or control of the applicant (in case of a corporation, any change in the officers, directors, or persons holding more than 10 percent of the corporate stock), after the date of filing of any application for a basic permit and prior to final action on such application, the applicant shall notify the appropriate ATF officer immediately of such change.

§1.29 Individual plant or premises.

An application for a basic permit must be filed, and permit issued, to cover each individual plant or premises where any of the businesses specified in section 103 of the Act is engaged in.

[T.D. ATF-416, 64 FR 49985, Sept. 15, 1999]

§1.30 Power of attorney; Form 5000.8 (1534).

If the application and other documents in support of such application are signed by an attorney in fact of an individual, partnership, association, or corporation, or by one of the members of a copartnership or association, or, in the case of a corporation by an officer or other person not authorized by the corporation's bylaws or by its board of directors to sign such applications and supporting documents, the applications must be supported by a duly authenticated copy of the power of attorney conferring authority upon the person signing the documents to execute the same. Such powers of attorney will be executed on Form 5000.8 (1534).

(Approved by the Office of Management and Budget under control number 1512-0079) [T.D. ATF-373, 61 FR 26098, May 24, 1996, as amended by T.D. ATF-416, 64 FR 49985, Sept. 15, 1999].

§1.31 Denial of permit applications.

If, upon examination of any application for a basic permit, the appropriate ATF officer has reason to believe that the applicant is not entitled to such a permit, the appropriate ATF officer shall institute proceedings for the denial of the application in accordance

with the procedure set forth in part 200 of this chapter.

AUTHORIZATION

§1.35 Authority to issue, amend, deny, suspend, revoke, or annul basic permits.

The authority and power of issuing, amending, or denying basic permits, or amendments thereof, is conferred upon the appropriate ATF officer except as to agency initiated curtailment. The Director, upon consideration of appeals on petitions for review in part 200 of this chapter, may order the appropriate ATF officer to issue, deny, suspend, revoke, or annul basic permits. [T.D. ATF 416, 64 FR 49985, Sept. 15, 1999] AMENDMENT AND DURATION OF BASIC PERMITS

§1.40 Change of name.

In the event of any change in the name (trade or corporate name) of a permittee, or, in the event a permittee desires to engage in operations under an additional trade name, such permittee must file application Form 5100.18 for an amended basic permit, which application must be approved, and amended permit issued, before operations may be commenced under the

new name.

(Approved by the Office of Management and Budget under control number 1512-0090)

[T.D. ATF-373, 61 FR 26098, May 24, 1996, as amended by T.D. ATF- 416, 64 FR 49985, Sept. 15, 1999]

§1.41 Change of address.

In the event of a change in address the permittee must file application Form 5100.18 for an amended basic permit.

[T.D. ATF-373, 61 FR 26098, May 24, 1996, as amended by T.D. ATF- 416, 64 FR 49985, Sept. 15, 1999]

§1.42 Change in ownership, management, or control of business.

In the event of any change in the ownership, management, or control of any business operated pursuant to a basic permit (if the permittee is a corporation, if any change occurs in the officers, directors, or persons owning or

controlling more than 10 percent of the voting stock of said corporation) the permittee shall immediately notify the appropriate ATF officer of such change, giving the names and addresses of all new persons participating in the ownership, management, or control of such business, or in the case of a cor poration, the names and addresses of such new officers, directors, or persons owning or controlling more than 10 percent of the voting stock. Notice to the appropriate ATF officer of any such change shall be accompanied or supplemented by such data in reference to the personal or business history of such persons as the appropriate ATF officer may require.

§1.43 Duration of permits.

A basic permit shall continue in effect until suspended, revoked, annulled, voluntarily surrendered, automatically terminated, as provided in the Act and in this part.

or

§1.44 Automatic termination of permits.

No basic permit shall be leased, sold, or otherwise voluntarily transferred, and, in the event of such lease, sale, or other voluntary transfer, such basic permit shall automatically terminate thereupon. If any basic permit is transferred by operation of law or if actual or legal control of the permittee is acquired, directly or indirectly whether by stock ownership or in any other manner, by any person, then such permit shall be automatically terminated at the expiration of 30 days thereafter: Provided, That if within such 30-day period application for a new basic permit is made by the transferee or permittee, respectively, then the outstanding basic permit shall continue in effect until such time as the application is finally acted upon.

REVOCATION, SUSPENSION, OR ANNULMENT OF BASIC PERMITS §1.50 Revocation or suspension.

Whenever the appropriate ATF officer has reason to believe that any permittee has willfully violated any of the conditions of the permittee's basic permit or has not engaged in the operations authorized by the permit for a

period of more than two years, the appropriate ATF officer shall institute proceedings for the revocation or suspension of such permit, in accordance with the procedure set forth in part 200 of this chapter, which part is made applicable to such proceedings.

§1.51 Annulment.

Whenever the appropriate ATF officer has reason to believe that any basic permit was procured through fraud, or misrepresentation or concealment of material fact, the appropriate ATF officer shall institute proceedings for the annulment of such permit in accordance with the procedure set forth in part 200 of this chapter, which part is made applicable to such proceedings. §1.52 Disposition of stocks of alcoholic beverages upon revocation, annulment, or automatic termination of basic permit.

In the event of the revocation or annulment of a basic permit, pursuant to part 200 of this chapter, or in the event such permit is automatically terminated by operation of law (27 U.S.C. 204(g) and §1.44 of this part), the appropriate ATF officer may authorize the orderly disposition of stocks of distilled spirits, wines, or malt beverages then held by the permittee or former permittee upon such conditions as may be considered proper.

MISCELLANEOUS

§1.55 Recalling permits for correction.

Whenever it shall be discovered that any basic permit has been issued authorizing acts, or combinations of acts, which may not properly, under the law and regulations, as of now or hereafter in force, be authorized, or that any material mistake has occurred in the issuance thereof, the holder of such permit shall forthwith surrender the same for correction or amendment upon demand of the appropriate ATF officer.

$1.56 Oaths and affirmations.

A document must be verified by an oath or affirmation taken before a person authorized by the laws of the United States or by State or local law to administer oaths or affirmations in

the jurisdiction where the document is executed when required by:

(a) Regulation; or

(b) An appropriate ATF officer. [T.D. ATF-416, 64 FR 49985, Sept. 15, 1999] $1.57 Procedure.

The procedures prescribed by the rules of practice in permit proceedings (part 200 of this chapter) are applicable to administrative proceedings for the issuance, amendment, denial, revocation, suspension, or annulment of basic permits, the issuance of subpoenas and the taking of depositions under the Act.

§1.58 Filing of permits.

Every person receiving a basic permit under the provisions of this part must file the same, at the place of business covered by the basic permit, so that it may be examined by appropriate ATF officers.

[T.D. ATF-373, 61 FR 26098, May 24, 1996, as amended by T.D. ATF-416, 64 FR 49985, Sept. 15, 1999]

$1.59 Public information as to applications acted upon.

The appropriate ATF officer shall cause to be maintained currently in the appropriate ATF officer's office for public inspection, until the expiration of one year following final action on the application, the following information with respect to each application for basic permit filed:

(a) The name, including trade name or names, if any, and the address of the applicant; the kind of permit applied for and the location of the business; whether the applicant is an individual, a partnership or a corporation; if a partnership, the name and address of each partner; if a corporation, the name and address of each of the principal officers and of each stockholder owning 10 percent or more of the corporate stock.

(b) The time and place set for any hearing on the application.

(c) The final action taken on the application. In the event a hearing is held upon an application for a basic permit, the appropriate ATF officer shall make

available for inspection at the appropriate ATF officer's office, upon request therefor: The transcript of the hearing, a copy of the administrative law judge's recommended decision, a copy of the appropriate ATF officer's decision and, in the event of an appeal to the Director, the decision on appeal with the reasons given in support thereof.

[T.D. ATF-373, 61 FR 26098, May 24, 1996, as amended by T.D. ATF- 416, 64 FR 49985, Sept. 15, 1999]

Subpart D-Nonindustrial Use of Distilled Spirits and Wine

USES REGARDED AS INDUSTRIAL

§1.60 Use of distilled spirits.

The following uses of distilled spirits are regarded as "industrial" and will be excluded from any application of the term "nonindustrial use." The use of distilled spirits:

(a) Free of tax by, and for the use of, the United States or any governmental agency thereof, any State, any political subdivision of a State, or the District of Columbia, for nonbeverage purposes; or

(b) Free of tax for nonbeverage purposes and not for resale or use in the manufacture of any product for sale:

(1) For the use of any educational organization described in 26 U.S.C. 170(b)(1)(A)(ii) which is exempt from income tax under 26 U.S.C. 501(a), or for the use of any scientific university or college of learning;

(2) For any laboratory for use exclusively in scientific research;

(3) For use at any hospital, blood bank, or sanitarium (including use in making analysis or test at such hospital, blood bank, or sanitarium), or at any pathological laboratory exclusively engaged in making analyses, or tests, for hospitals or sanitariums; or

(4) For the use of any clinic operated for charity and not for profit (including use in compounding of bona fide medicines for treatment outside of such clinics of patients thereof); or

(c) Free of tax, after denaturation of such spirits in the manner prescribed by law for:

(1) Use in the manufacture of ether, chloroform, or other definite chemical

substance where such distilled spirits are changed into some other chemical substance and do not appear in the finished product; or

(2) Any other use in the arts and industries (except for uses prohibited by 26 U.S.C. 5273 (b) or (d)) and for fuel. light, and power.

$1.61 Use of wine.

The following uses of wine are regarded as "industrial" and will be excluded from any application of the term "nonindustrial". The use of wine: (a) Without payment of tax for use in the production of vinegar; or

(b) Free of tax for experimental or research purposes by any scientific university, college of learning, or institution of scientific research; or

(c) Free of tax for use by the United States or any agency thereof, and for use for analysis, testing, research, or experimentation by the governments of the several States and the District of Columbia or of any political subdivision thereof or by any agency of such governments; or

(d) Which has been rendered unfit for beverage use.