DEPOSITED BY THE UNITED STATES OF AMERICA 3-31-50 U. S. TREASURY DEPARTMENT BUREAU OF INTERNAL REVENUE ALCOHOL TAX UNIT 2 1 I [The Federal Alcohol Administration Act (Act of Aug. 29, 1935, ch. 814, 49 Stat., 977 ff; 27 U. S. C. 201 ff) as amended Feb. 29, 1936, 49 Stat. 1152; June 25, 1936, 49 Stat. 1921; June 26, 1936, 49 Stat. 1965, 1966; 1940 Reorg. Plan No. III, June 30, 1940, 54 Stat. 1232; 1940 Reorg. Plan No. IV, June 30, 1940, 54 Stat. 1234; Apr. 20, 1942, 56 Stat. 219; Aug. 7, 1946, 60 Stat. 870.] (The functions of the former Federal Alcohol Administration, and of the former Administrator thereof, are now exercised by the Deputy Commissioner in charge of the Alcohol Tax Unit of the Bureau of Internal Revenue. See Appendix II.) AN ACT To further protect the revenue derived from distilled spirits, wine, Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Federal Alcohol Administration Act." I SEC. 2. (a) Appropriations to carry out powers and duties of the Secretary of the Treasury shall be available for expenditure, among other purposes, for personal services and rent in the District of Columbia and elsewhere, expenses for travel and subsistence, for law books, books of reference, magazines, periodicals, and newspapers, for contract stenographic reporting services, for subscriptions for library services, for purchase of samples for analysis or use as evidence, and for holding conferences of State and Federal liquor control officials.1 1 As originally enacted this section contained four additional subsections lettered (a)(d) which provided for the creation of a Federal Alcohol Administration, headed by an Administrator, as a division of the Treasury Department. By the Act of June 26, 1936, ch. 830, Title V, 49 Stat. 1964, however, said subdivisions were repealed. As such repeal never became effective, these subsections have been omitted, and the original subsections (e)-(h) renumbered (a)–(d). The references in the Act to the Federal Alcohol Administration and the Administrator have been changed throughout this print to the Secretary of the Treasury, in view of the 1940 Reorganization Plan No. III, see Appendix II. The original subsection (i) requiring reports to Congress was repealed by the Act of Aug. 7, 1946, 60 Stat. 870. (b) The Secretary of the Treasury may, with the consent of the department or agency affected, utilize the services of any department or other agency of the Government to the extent necessary to carry out his powers and duties and authorize officers and employees thereof to act as his agents. (c) The provisions, including penalties, of sections 9 and 102 of the Federal Trade Commission Act, as now or hereafter amended, shall be applicable to the jurisdiction, powers, and duties of the Secretary of the Treasury, and to any person (whether or not a corporation) subject to the provisions of laws administered by the Secretary of the Treasury. (d) The Secretary of the Treasury is authorized to require, in such manner and form as he shall prescribe, such reports as are necessary to carry out his powers and duties. UNLAWFUL BUSINESSES WITHOUT PERMIT SEC. 3. In order effectively to regulate interstate and foreign commerce in distilled spirits, wine, and malt beverages, to enforce the twenty-first amendment, and to protect the revenue and enforce the postal laws with respect to distilled spirits, wine, and malt beverages: (a) It shall be unlawful, except pursuant to a basic permit issued under this Act by the Secretary of the Treasury (1) to engage in the business of importing into the United States distilled spirits, wine, or malt beverages; or (2) for any person so engaged to 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. (b) It shall be unlawful, except pursuant to a basic permit issued under this Act by the Secretary of the Treasury (1) to 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 (2) for any person so engaged to 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. (c) It shall be unlawful, except pursuant to a basic permit issued under this Act by the Secretary of the Treasury— (1) to engage in the business of purchasing for resale at wholesale distilled spirits, wine, or malt beverages; or 2 See Appendix I. (2) for any person so engaged to receive or to 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.3 This section shall not apply to any agency of a State or political subdivision thereof or any officer or employee of any such agency, and no such agency or officer or employee shall be required to obtain a basic permit under this Act. PERMITS SEC. 4. (a) The following persons shall, on application therefor, entitled to a basic permit: be (1) Any person who, on May 25, 1935, held a basic permit as distiller, rectifier, wine producer, or importer issued by an agency of the Federal Government. (2) Any other person unless the Secretary of the Treasury finds (A) that such person (or in case of a corporation, any of its officers, directors, or principal stockholders) has, within five years prior to date of application, been convicted of a felony under Federal or State law or has, within three years prior to date of application, been convicted of a misdemeanor under any Federal law relating to liquor, including the taxation thereof; or (B) that such person is, by reason of his business experience, financial standing, or trade connections, not likely to commence operations within a reasonable period or to maintain such operations in conformity with Federal law; or (C) that the operations proposed to be conducted by such person are in violation of the law of the State in which they are to be conducted. (b) If upon examination of any application for a basic permit the Secretary of the Treasury has reason to believe that the applicant is not entitled to such permit, he shall notify the applicant thereof and, upon request by the applicant, afford him due notice and opportunity for hearing on the application. If the Secretary of the Treasury, after affording such notice and opportunity for hearing, finds that the applicant is not entitled to a basic permit hereunder, he shall by order deny the application stating the findings which are the basis for his order. (c) The Secretary of the Treasury shall prescribe the manner and form of all applications for basic permits (including the facts to be set forth therein) and the form of all basic permits, and shall specify 3 As originally enacted, subsections (a), (b), and (c) contained provisions as to their effective dates. Subsections (a) and (b) became effective on Oct. 28, 1935, and subsection (c) on July 1, 1936. The Act of Feb. 29, 1936 (ch. 105, sec. 1, 49 Stat. 1152), postponed the original effective date of subsection (c) from Mar. 1, 1936, to July 1, 1936. in any basic permit the authority conferred by the permit and the conditions thereof in accordance with the provisions of this Act. To the extent deemed necessary by the Secretary of the Treasury for the efficient administration of this Act, separate applications and permits shall be required by the Secretary of the Treasury with respect to distilled spirits, wine, and malt beverages, and the various classes thereof, and with respect to the various classes of persons entitled to permits hereunder. The issuance of a basic permit under this Act shall not operate to deprive the United States of its remedy for any violation of law. (d) A basic permit shall be conditioned upon compliance with the requirements of section 5 (relating to unfair competition and unļawful practices) and of section 6 (relating to bulk sales and bottling), with the twenty-first amendment and laws relating to the enforcement thereof, and with all other Federal laws relating to distilled spirits, wine, and malt beverages, including taxes with respect thereto. (e) A basic permit shall by order of the Secretary of the Treasury, after due notice and opportunity for hearing to the permittee, (1) be revoked, or suspended for such period as the Secretary of the Treasury deems appropriate, if the Secretary of the Treasury finds that the permittee has willfully violated any of the conditions thereof, provided that for a first violation of the conditions thereof the permit shall be subject to suspension only; or (2) be revoked if the Secretary of the Treasury finds that the permittee has not engaged in the operations authorized by the permit for a period of more than two years; or (3) be annulled if the Secretary of the Treasury finds that the permit was procured through fraud, or misrepresentation, or concealment of material fact. The order shall state the findings which are the basis for the order. (f) Orders of the Secretary of the Treasury with respect to any denial of application, suspension, revocation, annulment, or other proceedings, shall be served (1) in person by any officer or employee of the Secretary of the Treasury designated by the Secretary of the Treasury or any internal revenue or customs officer authorized by the Secretary of the Treasury for the purpose, or (2) by mailing the order by registered mail, addressed to the applicant or respondent at his last known address in the records of the Secretary of the Treasury. (g) A basic permit shall continue in effect until suspended, revoked, or annulled as provided herein, or voluntarily surrendered; except that (1) if leased, sold or otherwise voluntarily transferred, the permit shall be automatically terminated thereupon, and (2) if 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 thirty days thereafter: Provided, That if within such thirty-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 application is finally acted on by the Secretary of the Treasury. (h) An appeal may be taken by the permittee or applicant for a permit from any order of the Secretary of the Treasury denying an application for, or suspending, revoking, or annulling, a basic permit. Such appeal shall be taken by filing, in the circuit court of appeals of the United States within any circuit wherein such person resides or has his principal place of business, or in the United States Court of Appeals for the District of Columbia, within sixty days after the entry of such order, a written petition praying that the order of the Secretary of the Treasury be modified or set aside in whole or in part. A copy of such petition shall be forthwith served upon the Secretary of the Treasury, or upon any officer designated by him for that purpose, and thereupon the Secretary of the Treasury shall certify and file in the court a transcript of the record upon which the order complained of was entered. Upon the filing of such transcript such court shall have exclusive jurisdiction to affirm, modify, or set aside such order, in whole or in part. No objection to the order of the Secretary of the Treasury shall be considered by the court unless such objection shall have been urged before the Secretary of the Treasury or unless there were reasonable grounds for failure so to do. The finding of the Secretary of the Treasury as to the facts, if supported by substantial evidence, shall be conclusive. If any party shall apply to the court for leave to adduce additional evidence, and shall show to the satisfaction of the court that such additional evidence is material and that there were reasonable grounds for failure to adduce such evidence in the proceeding before the Secretary of the Treasury, the court may order such additional evidence to be taken before the Secretary of the Treasury and to be adduced upon the hearing in such manner and upon such terms and conditions as to the court may seem proper. The Secretary of the Treasury may modify his findings as to the facts by reason of the additional evidence so taken, and he shall file with the court such modified or new findings, which, if supported by substantial evidence, shall be conclusive, and his recommendation, if any, for the modification or setting aside of the original order. The judgment and decree of the court affirming, modifying, or setting aside, in whole or in part, any such order of the Secretary of the Treasury shall be final, subject to review by the Supreme Court of the United States upon certiorari or certification as provided in sec |