27 U.S.C. § 204 — Permits

submitted 91 years ago by ch. 814 to r/title-27-INTOXICATING-LIQUORS · 1,391 words · no verdicts yet

in plain englishAI-generated · not legal advice

This law says who can get a federal permit to make, import, or sell alcohol. The Secretary of the Treasury can deny, suspend, or revoke a permit after notice and a hearing. Permit holders can appeal a bad decision to a federal court of appeals.

(a) Who's entitled to a permit — Two groups automatically qualify for a basic permit, if they apply: (1) Anyone who already held a federal basic permit as a distiller, rectifier, wine producer, or importer as of May 25, 1935. (2) Anyone else — unless the Secretary of the Treasury finds: (A) that the applicant (or, for a corporation, one of its officers, directors, or main stockholders) was convicted of a felony in the past five years, or of a liquor-related federal misdemeanor in the past three years; (B) that the applicant's business experience, finances, or trade connections make it unlikely they'll start operating soon or keep operating legally; or (C) that the applicant's planned operations would break the law of the state where they'd happen. (b) Refusing a permit — If the Secretary suspects an applicant doesn't qualify, the Secretary must notify them, and — if the applicant asks — give them notice and a hearing. If, after the hearing, the Secretary still finds the applicant doesn't qualify, the Secretary must deny the application in writing, explaining the reasons. (c) Application form — The Secretary sets the format for permit applications and permits themselves, including what facts they must include, and states each permit's specific authority and conditions. The Secretary can require separate applications and permits for spirits, wine, and malt beverages, and for different classes of applicants. Getting a basic permit doesn't stop the government from pursuing any other legal remedy for a violation. (d) Conditions — A basic permit requires following: section 205 (about unfair competition and illegal practices), section 206 (about bulk sales and bottling), the 21st Amendment and its enforcement laws, and all other federal alcohol laws, including taxes. (e) Revoking, suspending, or annulling a permit — After notice and a hearing, the Secretary can, by order: (1) revoke or suspend the permit if the holder willfully broke its conditions — though a first violation can only lead to suspension, not revocation; (2) revoke it if the holder hasn't actually used it for more than two years; or (3) annul it if it was obtained through fraud, lying, or hiding an important fact. The order must explain the reasons. (f) Serving orders — The Secretary's orders (denying, suspending, revoking, annulling, or otherwise) must be delivered either: (1) in person, by an authorized officer or employee; or (2) by registered mail to the person's last known address on file. (g) Duration — A permit stays valid until it's suspended, revoked, annulled, or voluntarily given up. Exceptions: (1) if the permit is leased, sold, or otherwise voluntarily transferred, it ends immediately; and (2) if it's transferred by law, or if someone else takes actual or legal control of the holder (through stock ownership or otherwise), the permit ends automatically 30 days later — unless the new owner or the original holder applies for a new permit within those 30 days, in which case the old permit stays valid until the Secretary decides on the new application. (h) Appeals — A permit holder or applicant can appeal any Secretary order denying, suspending, revoking, or annulling a permit. They must file a written petition — within 60 days of the order — in the federal court of appeals for the circuit where they live or do business, or in the D.C. Circuit, asking the court to change or cancel the order. The Secretary must then file the case record with the court. The court has exclusive power to affirm, change, or cancel the order. The court won't consider an objection unless it was already raised before the Secretary, unless there was a good reason not to. The Secretary's factual findings are final if backed by substantial evidence. If a party wants to add new evidence, and shows it's important and there was good reason it wasn't presented before, the court can send the case back to the Secretary to take that evidence and possibly issue new findings — which are also final if backed by substantial evidence. The court's final decision can be reviewed by the Supreme Court. Filing an appeal automatically pauses the Secretary's order, unless the court says otherwise. (i) Time limit — The Secretary can't start a proceeding to suspend or revoke a permit for breaking federal law more than 18 months after a conviction — or, if there was no conviction, more than three years after the violation happened. And a permit can't be suspended or revoked for a violation that a government official with authority to do so has already "compromised" (settled).

the actual law source: uscode.house.gov ↗public domain

(a) Who entitled thereto

The following persons shall, on application therefor, be entitled to a basic permit:

(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 the 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) Refusal of permit; hearing

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.

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 in any basic permit the authority conferred by the permit and the conditions thereof in accordance with the provisions of this subchapter. To the extent deemed necessary by the Secretary of the Treasury for the efficient administration of this subchapter, 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 subchapter shall not operate to deprive the United States of its remedy for any violation of law.

(d) Conditions

A basic permit shall be conditioned upon compliance with the requirements of section 205 of this title (relating to unfair competition and unlawful practices) and of section 206 of this title (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) Revocation, suspension, and annulment

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 finds that the permittee has wilfully 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 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 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) Service of orders

Orders of the Secretary 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 designated by him or any internal revenue or customs officer authorized by the Secretary 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.

(g) Duration

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) Appeal; procedure

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 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 be modified or set aside in whole or in part. A copy of such petition shall be forthwith transmitted by the clerk of the court to the Secretary, or any officer designated by him for that purpose, and thereupon the Secretary shall file in the court the record upon which the order complained of was entered, as provided in section 2112 of title 28. Upon the filing of such petition 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 shall be considered by the court unless such objection shall have been urged before the Secretary or unless there were reasonable grounds for failure so to do. The finding of the Secretary 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, the court may order such additional evidence to be taken before the Secretary 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 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 shall be final, subject to review by the Supreme Court of the United States upon certiorari or certification as provided in section 1254 of title 28. The commencement of proceedings under this subsection shall, unless specifically ordered by the court to the contrary, operate as a stay of the Secretary’s order.

(i) Limitation

No proceeding for the suspension or revocation of a basic permit for violation of any condition thereof relating to compliance with Federal law shall be instituted by the Secretary more than eighteen months after conviction of the violation of Federal law, or, if no conviction has been had, more than three years after the violation occurred; and no basic permit shall be suspended or revoked for a violation of any such condition thereof if the alleged violation of Federal law has been compromised by any officer of the Government authorized to compromise such violation.

Source credit: (Aug. 29, 1935, ch. 814, title I, § 104, formerly § 4, 49 Stat. 978; 1940 Reorg. Plan No. III, § 2, eff. June 30, 1940, 5 F.R. 2108, 54 Stat. 1232; June 25, 1948, ch. 646, § 32(a), 62 Stat. 991; May 24, 1949, ch. 139, § 127, 63 Stat. 107; Pub. L. 85–791, § 14, Aug. 28, 1958, 72 Stat. 946; renumbered title I, § 104, and amended Pub. L. 100–690, title VIII, § 8001(a)(1), (2), (b)(2), (3), Nov. 18, 1988, 102 Stat. 4517, 4521.)

history & why it existsrecord from the source credit

1935Enacted · Act of Aug. 29, 1935, ch. 814 · 49 Stat. 978
1948Amended · Act of June 25, 1948, ch. 646 · 62 Stat. 991
1949Amended · Act of May 24, 1949, ch. 139 · 63 Stat. 107
1958Amended · Pub. L. 85-791 · 72 Stat. 946
1988Amended · Pub. L. 100-690 · 102 Stat. 4517, 4521

A history note hasn’t been published yet. The record shows enactment by ch. 814 on 1935-08-29.

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