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tion of the Regional regulatory administrator 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 his 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 shall be made on the appropriate form prescribed by the Director, Alcohol and Tobacco Tax Division, verified as required by § 1.56, and shall be accompanied by such affidavits, documents, and other supporting data, as the Director, Alcohol and Tobacco Tax Division or the Fegional regulatory administrator shall require. All data written statements, affidavits, documents, or other evidence submitted in support of the application, or upon hearing thereon, shall be deemed to be a part of the application. All applications shall be filed by mailing or delivering the same to the office of the Regional regulatory administrator.

§ 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 preju

dice, 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 Regional regulatory administrator immediately of such change.

§ 1.28 Forms upon which to apply for basic permits.

The appropriate forms upon which to apply for basic permits may be secured from the regional regulatory administrator's office upon request.

§ 1.29 Individual plant or premises.

An application for basic permit must be filed, and permit issued, to cover each individual plant or premises where any of the businesses specified in section 3 of the act is engaged in such application to be filed with and permit issued by the Regional regulatory administrator for the region wherein such plant or premises is located.

§ 1.30 Power of attorney; Form 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 1534, in triplicate, and submitted to the Regional regulatory administrator.

§ 1.31 Denial of permit applications.

If, upon examination of any application for a basic permit, the Regional regulatory administrator has reason to believe that the applicant is not entitled to such permit he shall institute proceedings for the denial of the application in accordance with the procedure set forth in 26 CFR Part 200, which part is made applicable to such proceedings.

Subpart D-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 Director and (except as to agency initiated curtailment) upon the Regional regulatory administrator. The authority and power of suspending, revoking or annulling basic permits is conferred upon the Director, and upon the hearing examiners referred to in 26 CFR Part 200. The Director, upon consideration of appeals on petitions for review, may order the Regional regulatory administrator to issue, deny, suspend, revoke, and annul basic permits.

(49 Stat. 977, as amended; 27 U.S.C. 202 note; 26 U.S.C. 7805 (68A Stat. 917), 27 U.S.C. 205 (49 Stat. 981 as amended), 18 U.S.C. 926 (82 Stat. 959), and Sec. 38, Arms Export Control Act (22 U.S.C. 2778, 90 Stat. 744))

[T.D. 6521, 25 FR 13831, Dec. 29, 1960, as amended at T.D. ATF-48, 43 FR 13531, Mar. 31, 1978]

Subpart E-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 1643), with the Regional regulatory administrator, for an amended basic permit, which application must be approved, and amended permit issued, before op

erations may be commenced under the new name.

§1.41 Change of address.

In the event of a change in address the permittee must file application (Form 1643), with the Regional regulatory administrator, for an amended basic permit.

§ 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 Regional regulatory administrator 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 corporation, 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 Regional regulatory administrator 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 Regional regulatory administrator may require.

§ 1.43 Duration of permits.

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

§ 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, the said 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 ter

minated 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.

Subpart F-Revocation, Suspension, or Annulment of Basic Permits

§ 1.50 Revocation or suspension.

Whenever the Regional regulatory administrator has reason to believe that any permittee has willfully violated any of the conditions of his basic permit or has not engaged in the operations authorized by the permit for a period of more than two years, he shall institute proceedings for the revocation or suspension of such permit, in accordance with the procedure set forth in 26 CFR Part 200, which part is made applicable to such proceedings.

§ 1.51 Annulment.

Whenever the Regional regulatory administrator has reason to believe that any basic permit was procured through fraud, or misrepresentation or concealment of material fact, he shall institute proceedings for the annulment of such permit in accordance with the procedure set forth in 26 CFR Part 200, 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 26 CFR Part 200, or in the event such permit is automatically terminated by operation of law (27 U.S.C. 204(g)) and section 144, the Regional regulatory administrator 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.

Subpart G-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 Regional regulatory administrator.

§ 1.56 Oaths and affirmations.

Any document required by regulations or instructions of the Director to be verified, shall be so verified upon 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 State, Territory, or District wherein such document is to be executed. § 1.57 Procedure.

The procedures prescribed by the rules of practice in Permit Proceedings (26 CFR Part 200) are applicable to administrative proceedings for the issuance, amendment, denial, revocation, suspension, and annulment of basic permits, the issuance of subpoenas and the taking of depositions under the Federal Alcohol Administration 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 Government officers.

§ 1.59 Public information as to applications acted upon.

The Regional regulatory administrator shall cause to be maintained currently in his 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 Regional regulatory administrator shall make available for inspection at his office, upon request therefor: The transcript of the hearing, a copy of the examiner's recommended decision, a copy of the Regional regulatory administrator's decision and, in the event of an appeal to the Director, Alcohol and Tobacco Tax Division, the decision on appeal with the reasons given in support thereof.

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Subpart A-Scope of Regulations

§2.1 Nonindustrial use of distilled spirits and wine.

The regulations in this part specify what uses of distilled spirits and wine are "nonindustrial," as that term is used in section 17 of the Federal Alcohol Administration Act. No procedural requirements are prescribed.

Subpart B-Definitions

§ 2.5 Distilled spirits.

Section 17(a) of the Federal Alcohol Administration Act 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.

Section 17(a) of the Federal Alcohol Administration Act defines "wine" as (a) wine as defined in section 610 and section 617 of the Revenue Act of 1918 (26 U.S.C. 3036, 3044, 3045), 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 per centum and not more than 24 per centum of alcohol by volume, and if for nonindustrial use.

(26 U.S.C. 7805 (68A Stat. 917), 27 U.S.C. 205 (49 Stat. 981 as amended), 18 U.S.C. 926 (82 Stat. 959), and Sec. 38, Arms Export Control Act (22 U.S.C. 2778, 90 Stat. 744)) [T.D. ATF-48, 43 FR 13532, Mar. 31, 1978]

Subpart C-Uses Regarded as Industrial

§ 2.10 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 or Territory, any political subdivision of a State or Territory, 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. 503(b)(2) 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.

§ 2.11 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 Territories and the District of Columbia or of any political subdivision thereof or by any agency of such governments; or

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

§ 2.12 Use of distilled spirits or wine for experimental purposes and in manufacture of nonbeverage products.

The use of distilled spirits or wine for experimental purposes and in the manufacture of (a) medicinal, pharmaceutical, or antiseptic products, including prescriptions compounded by retail druggists; (b) toilet preparations; (c) flavoring extracts, syrups, or food products; or (d) scientific, chemical, mechanical, or industrial products, provided such products are unfit for beverage use, is regarded as "industrial," and will be excluded from any application of the term "nonindustrial use."

Subpart D-Uses Classed as Nonindustrial

§ 2.15 General.

All uses of distilled spirits and wines, except as provided in Subpart C of this part, are regarded as "nonindustrial." Such "nonindustrial" use shall include, but not be limited to, distilled spirits or wine used for beverage purposes, or in the manufacture, rectification, or blending of alcoholic beverages; or in the preparation of food or drink by a hotel, restaurant, tavern, or similar establishment; or for sacramental purposes; or as a medicine.

§2.16 Distilled spirits in containers of a capacity of one gallon or less.

Distilled spirits in containers of a capacity of one wine gallon or less, except anhydrous alcohol and alcohol which may be withdrawn free of tax under the internal revenue laws, will be deemed to be for nonindustrial use.

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