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Federal Register / Vol. 86, No. 230 / Friday, December 3, 2021 / Proposed Rules streamlined application process for such plants, see 26 U.S.C. 5181, which TTB
has done.
The IRC also governs permits relating to the procurement and use of denatured distilled spirits, and the use of non-beverage spirits for certain taxfree purposes. See 26 U.S.C. 5271.
Section 5271 provides that no person may procure or use distilled spirits free of tax under the provisions of 26 U.S.C.
5214a2 or 3; or procure, deal in, or use specifically denatured distilled spirits; or recover specifically or completely denatured distilled spirits, until he or she has applied for and received a permit to do so from the Secretary. The application for such permit is to be as prescribed by regulation. See 26 U.S.C. 5271b1.
The IRC requires persons seeking to engage in the business of manufacturing vinegar by the vaporizing process to first apply for and receive approval of a registration from the Secretary, the application for which is to be as prescribed by regulation. See 26 U.S.C.
5502.
Finally, the IRC requires all wholesale dealers and retail dealers of distilled spirits, wine, and beer to register with the Secretary. See 26 U.S.C. 5124.
The FAA Act and IRC set forth eligibility criteria including criteria rendering an applicant ineligible for many of the above permits and registrations. The FAA Act provides that an applicant is not entitled to a basic permitincluding those applying as producers of distilled spirits and those applying as importers or wholesalers of distilled spirits, wine, and beerif the applicant has been convicted of a felony within the previous 5 years or a misdemeanor under any Federal law relating to liquor within the previous 3
years. See 27 U.S.C. 204a2. Under this statutory provision, the applicant includes, in the case of a corporation, any of its officers, directors, or principal stockholders. Section 204a2 also provides that an applicant is not entitled to a basic permit if the applicant is, by reason of his or her business experience, financial standing, or trade connections, not likely to maintain operations in conformity with Federal law.
The IRC similarly provides that an application for a distilled spirits operating permit may be denied if among other reasonsthe applicant including the principal stockholders of a corporation is, by reason of his or her financial standing or trade connections, not likely to maintain operations in compliance with chapter 51 of the IRC.
See 26 U.S.C. 5271c, 5171d.
Specifically, these eligibility criteria
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apply to permits required for distilled spirits plants that are not otherwise required to obtain an FAA Act basic permit, such as distilled spirits plants that distill for industrial use. These eligibility criteria also apply to permits for alcohol fuel plants under 26 U.S.C.
5181. See 27 CFR 19.678. A permit to use tax-free alcohol, to use or deal in specially denatured distilled spirits, or to recover specially or completely denatured distilled spirits may also be denied for the same reasons. See 26
U.S.C. 5271c.
TTB administers chapter 51 distilled spirits, wine, and beer of the IRC, as well as the FAA Act, pursuant to Treasury Order 12001, dated December 10, 2013, through which the Secretary has delegated to TTB certain IRC and FAA Act administrative and enforcement authorities, including those related to the issuance of the permits and registrations covered under this rulemaking.
Section 2d of the FAA Act, Public Law 74401 1935 authorizes the Secretary to prescribe such rules and regulations as may be necessary to carry out its powers and duties under the FAA Act. Section 7805a of the IRC 26
U.S.C. 7805a provides the general authority to the Secretary to issue regulations to carry out the provisions of the IRC.
Pursuant to its delegated authorities described above, TTB has promulgated regulations setting forth the application requirements for permits or registrations related to distilled spirits operations in title 27 of the Code of Federal Regulations CFR, at the following parts:
27 CFR part 1, FAA Act basic permits i.e., distillers, rectifiers, and blenders of distilled spirits; distilled spirits warehousemen; and alcohol importers and wholesalers;
27 CFR part 19, IRC registrations and operating permits for distilled spirits plants, vinegar plant permits, and alcohol fuel plant permits categorized as small, medium, and large alcohol fuel plants;
27 CFR part 20, IRC permits for denatured spirits dealers and users;
27 CFR part 22, IRC permits for taxfree alcohol users; and 27 CFR part 31, IRC registrations for alcohol beverage dealers.
The following TTB forms and their electronic equivalents collect much of the information required to be submitted when applying for the above permits and/or registrations:
TTB F 5100.24, Application for Basic Permit Under the Federal Alcohol Administration Act, approved by the Office of Management and Budget
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OMB under Information Collection number 15130018;
TTB F 5100.18, Application for Amended Basic Permit Under the Federal Alcohol Administration Act, approved by OMB under Information collection number 15130019;
TTB F 5110.25, Application for Operating Permit Under 26 U.S.C.
5171d, approved by OMB under Information Collection number 1513
0040;
TTB F 5110.41, Registration of Distilled Spirits Plant, approved by OMB under Information Collection number 15130048;
TTB F 5110.74, Application for an Alcohol Fuel Producer Under 26 U.S.C.
5181, approved by OMB under Information Collection number 1513
0051;
TTB F 5150.22, Application for an Industrial Alcohol User Permit, approved by OMB under Information Collection number 15130028; and TTB F 5000.9, Personnel QuestionnaireAlcohol and Tobacco Products, approved by OMB under Information Collection number 1513
0002.
Pursuant to TTBs IRC and FAA Act authorities described above, TTB has also promulgated regulations imposing procedural and substantive requirements on these regulated businesses. These include requirements to report certain changes in the business affecting the permit or registration e.g., changes in address or location, changes in stockholders or officers, directors, managers, etc.. These also include recordkeeping requirements that are generally set forth pursuant to other authority in the IRC. See, e.g., 26 U.S.C.
5207 records of distilled spirits plant proprietors, 26 U.S.C. 5275 records of dealers and users of denatured spirits and/or industrial alcohol, and 26 U.S.C.
51215122 records of wholesale and retail dealers of distilled spirits.
This notice of proposed rulemaking includes proposed amendments to these reporting and recordkeeping requirements. The regulations implementing such requirements are set forth in title 27 of the CFR, at the following parts:
27 CFR part 1, reporting of business changes for FAA Act basic permits;
27 CFR part 17, recordkeeping requirements for manufacturers of nonbeverage products claiming drawback on taxpaid distilled spirits used in the manufacturing process;
27 CFR part 19, recordkeeping and inventory requirements, and reporting of business changes, for distilled spirits plants, vinegar plants, and alcohol fuel plants;

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