
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC5181]

 
                     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
 
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.

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


                            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].''

                  Section Referred to in Other Sections

    This section is referred to in sections 5081, 5214, 5601, 6103 of 
this title.
