Internal Revenue Code:Sec. 5181. Distilled spirits for fuel use

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Location in Internal Revenue Code

     TITLE 26 - INTERNAL REVENUE CODE
      Subtitle E - Alcohol, Tobacco, and Certain Other Excise Taxes
       CHAPTER 51 - DISTILLED SPIRITS, WINES, AND BEER
        Subchapter B - Qualification Requirements for Distilled Spirits
              Plants
       

Statute

    Sec. 5181. Distilled spirits for fuel use
 
    (a) In general
      (1) Purposes for which plant may be established
        On 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) Regulations
        In 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 exempt
      The 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 general
          An 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 application
          Within 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 applications
          If 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 general
          In 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 determination
          If the Secretary has not notified an applicant within the
        time prescribed under subparagraph (A), the application shall
        be treated as approved.
        (C) Rejection of application
          If 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) Bond
        No 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 plant
        The 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 tax
      Distilled 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 general
        Distilled spirits produced under this section shall not be
      withdrawn, used, sold, or disposed of for other than fuel use.
      (2) Rendering unfit for use
        For 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 spirits
      For purposes of this section, the term ''distilled spirits'' does
    not include distilled spirits produced from petroleum, natural gas,
    or coal.
 

Sources

    (Added Pub. L. 96-223, title II, Sec. 232(e)(1), Apr. 2, 1980, 94
    Stat. 278.)
 

Miscellaneous

                              PRIOR PROVISIONS
      A prior section 5181 was renumbered 5182 of this title.
                               EFFECTIVE DATE
      Section 232(h)(3) of Pub. L. 96-223 provided that: ''The
    amendments made by subsection (e) (enacting this section, amending
    sections 5004, 5005, 5214, and 5601, and repealing provisions set
    out as a note under section 4081 of this title) shall take effect
    on the first day of the first calendar month beginning more than 60
    days after the date of the enactment of this Act (Apr. 2, 1980).''
 

References

                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 5081, 5214, 5601, 6103 of
    this title.