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Requirements for establishing an alcohol fuel plant (AFP)

This web page provides information pertaining to:

• TTB’s statutory authority to regulate AFPs;
  
• The definition of an AFP;
  
• Application required for an AFP permit;
  
• AFP Size;
  
• Application, power of attorney, and corporate and LLC officials requirements for small AFPs.;
  
• Application, power of attorney, corporate and LLC officials, and bond requirement for medium AFPs.;
  
• Application, supporting information requirements, power of attorney, corporate and LLC officials, and bond for large AFPs.;
  
• Registration of stills; and
  
• Life of an AFP permit.

These regulations and those pertaining to the production of alcohol fuel can be found in part 19, subpart X, of Title 27 of the Code of Federal Regulations (27 CFR part 19, subpart X).  For the complete and regularly updated set of regulations please visit the CFR online.

TTB’s statutory authority to regulate AFPs.

TTB has been delegated authority under 26 U.S.C. Chapter 51 of the Internal Revenue Code of 1986 (IRC ) to promulgate regulations pertaining to AFPs.  The statutory provisions under which TTB promulgates such regulations includes Section 5181 of the IRC (26 U.S.C. 5181).  Section 5181 of the IRC provides for the establishment of AFPs to produce, process, store, and use or distribute distilled spirits to be used exclusively for fuel use.    

The definition of an AFP.

An AFP is a type of distilled spirits plant that is qualified under 27 CFR part 19, subpart X, solely for producing, processing, and storing, and using or distributing distilled spirits to be used exclusively for fuel use.

Application requirement for an AFP permit.

As provided in 27 CFR 19.673, 19.675, and 19.676, a person wishing to establish an AFP can apply for an alcohol fuel producer’s permit on TTB F 5110.74.  Two copies of the application should be sent to the TTB National Revenue Center.  The address is:

Alcohol and Tobacco Tax and Trade Bureau
National Revenue Center
550 Main Street, Suite 8002
Cincinnati, Ohio 45202

AFP Size.

TTB has promulgated regulations creating definitions and varying application and bond requirements for small, medium, and large AFPs.  The definitions for small, medium, and large AFPs are set forth in 27 CFR 19.662.  They are:

• Small plants.  A small alcohol fuel plant (small AFP) is a plant which produces and/or receives not more than 10,000 proof gallons of spirits in one calendar year.
• Medium plants.  A medium alcohol fuel plant (medium AFP) is a plant which produces and/or receives more than 10,000 but not more than 500,000 proof gallons of spirits per calendar year.
• Large plants.  A large alcohol fuel plant (large AFP) produces and/or receives more than 500,000 proof gallons of spirits per calendar year. 

Application, power of attorney, and corporate and LLC officials requirements for small AFPs.

Application.  In accordance with § 19.673 , an application for a small AFP permit must be made on TTB F 5110.74 .  The application should be mailed to the address listed above.  The application must provide the following information:  

• Name and mailing address of the applicant, and the location of the AFP if not apparent from the mailing address;
• A diagram of the plant premises;
• A statement as to the ownership of the premises (if the premises are not owned by the proprietor, the owner's consent to access by appropriate TTB officers must be furnished);
• A description of the stills on the premises and a statement of the maximum capacity of each;
• A description of the materials from which spirits will be produced; and
• A description of the security measures to be used to protect premises, buildings and equipment where spirits are produced, processed, and stored.

Power of attorney.  The proprietor of a small AFP shall execute and file TTB F 5000.8, Powers of Attorney, for each person authorized to sign or act on behalf of the proprietor.  This form is not required for persons whose authority is furnished in the application.  TTB F 5000.8 should be mailed to the TTB National Revenue Center at the address listed above.     

Corporate and LLC Officials.  The proprietor of a small AFP organized as a corporation or limited liability company shall execute and file TTB F 5100.1 , Signing Authority for Corporate and LLC Officials, for each person authorized to sign or act on behalf of the proprietor.  TTB F 5100.1 should be mailed to the TTB National Revenue Center at the address listed above.     

Bond.  The applicant is not required to provide a bond in order to establish a small plant, unless the applicant will not conduct bona fide production operations. Plants for the receipt of spirits without production must furnish a bond in accordance with 27 CFR 19.699 with a penal sum as prescribed in 27 CFR 19.700. The appropriate TTB officer must approve the bond before issuance of the perm

Application, power of attorney, corporate and LLC officials, and bond requirement for medium AFPs.

Application.  In accordance with § 19.675 , an application for a medium AFP permit must be made on TTB F 5110.74 .  The application should be mailed to the address listed above.  The application must provide the following information:  

• The information that is required for a small AFP permit;
• A statement of the maximum total proof gallons of spirits that will be produced and received during a calendar year;
• Information identifying the principal persons involved in the business. This identifying information must include each person's name, address, title, social security number, date of birth, and place of birth;
• A statement indicating whether or not the applicant or any other principal person involved in the business has been convicted of a felony or misdemeanor under Federal or State law. The statement may exclude convictions for misdemeanor traffic violations; and
• A statement of the amount and source of funds invested in the business.

Power of attorney.  The proprietor of a medium AFP shall execute and file TTB F 5000.8 , Powers of Attorney, for each person authorized to sign or act on behalf of the proprietor.  This form is not required for persons whose authority is furnished in the application.  TTB F 5000.8 should be mailed to the TTB National Revenue Center at the address listed above.     

Corporate and LLC Officials.  The proprietor of a medium AFP organized as a corporation or limited liability company shall execute and file TTB F 5100.1, Signing Authority for Corporate and LLC Officials, for each person authorized to sign or act on behalf of the proprietor.  TTB F 5100.1 should be mailed to the TTB National Revenue Center at the address listed above.     

Bond.  In accordance with §§ 19.675 and 19.699 , a bond of sufficient sum, as prescribed in § 19.700 , is required for medium AFPs.  The bond must be filed on TTB F 5110.56 and can be submitted with the application.  The bond must be submitted before a permit is issued.

A bond shall be conditioned on payment of all taxes (including any penalties and interest) imposed by 26 U.S.C. Chapter 51, on compliance with all requirements of law and regulations, and on payment of all penalties incurred or fines imposed for violations of any such provisions.  

In accordance with § 19.699 , the applicable provisions pertaining to bonds in 27 CFR part 19, Subpart F , are applicable to bonds of AFPs. 

Application, supporting information requirements, power of attorney, corporate and LLC officials, and bond for large AFPs.

Application.  In accordance with 27 CFR 19.676, an application for a large AFP permit must be made on TTB F 5110.74.  The application should be mailed to the address listed above.  The application must provide the following information:  

• The information that is required for a medium AFP permit; and
• A statement identifying the type of business organization and the persons having an ownership interest in the business. The applicant must support this statement by providing the information specified in 27 CFR 19.677.

Supporting information.  In accordance with § 19.677, the supporting information required by § 19.676, includes, as applicable, copies of—

• Corporate documents. If the applicant is a corporation, the applicant must provide the following:
  • The corporate charter or a certificate of corporate existence or incorporation;
  • A list of officers and directors with their names and addresses, other than officers and directors who will have no responsibilities in connection with the operation of the alcohol fuel plant;
  • Certified minutes or extracts of board of directors meetings, showing those individuals authorized to sign for the corporation;
  • A statement showing the number of shares of each class of stock or other basis of ownership, authorized and outstanding, and the voting rights of the respective owners or holders; and
  • A list of the offices or positions, the incumbents of which are authorized by the articles of incorporation or the board of directors to act on behalf of the proprietor or to sign the proprietor's name.
• Partnership documents. If the applicant is a partnership, the applicant must provide a copy of the articles of partnership or association, or certificate of partnership or association if required to be filed by any State, county, or municipality.
• Limited liability company/limited liability partnership documents. If the applicant is a limited liability company or limited liability partnership or other entity recognized by law as a person, the applicant must provide a copy of the articles of organization, the operating agreement and the names and addresses of all members and managers.
• Statement of interest.
• The application must include the names and addresses of the 10 persons that have the largest stock ownership, by stock class, or other interest in the corporation, limited liability company/limited liability partnership, or other legal entity, and the nature and amount of the stock or other interest of each, whether the interest is recorded in the name of the interested party or in the name of another for the interested party. If a corporation is wholly owned or controlled by another corporation, the appropriate TTB officer may request that the applicant furnish the same information for persons of the parent corporation.
• In the case of an individual owner or a partnership, the application must include the name and address of each person interested in the large plant, whether the interest is recorded in the name of the interested party or in the name of another for the interested party.
• Availability of documents. An applicant must make available to any appropriate TTB officer upon request all originals of documents submitted under this section and any additional related organizational documents such as articles of incorporation, bylaws, operating agreements and State certifications.

Power of attorney.  In accordance with § 19.676 the proprietor of a large AFP shall execute and file TTB F 5000.8 , Powers of Attorney, for each person authorized to sign or act on behalf of the proprietor.  This form is not required for persons whose authority is furnished in the application.  TTB F 5000.8 should be mailed to the TTB National Revenue Center at the address listed above.      

Corporate and LLC Officials.  The proprietor of a large AFP organized as a corporation or limited liability company shall execute and file TTB F 5100.1, Signing Authority for Corporate and LLC Officials, for each person authorized to sign or act on behalf of the proprietor.  TTB F 5100.1 should be mailed to the TTB National Revenue Center at the address listed above.     

Bond.  In accordance with §§ 19.676 and 19.699, a bond of sufficient sum, as prescribed in § 19.700, is required for large plants.  The bond must be filed on TTB F 5110.56 and can be submitted with the application.  The bond must be submitted before a permit is issued.    

In accordance with § 19.699, the applicable provisions pertaining to bonds in 27 CFR part 19, Subpart F, are applicable to bonds of AFPs. 

Registration of stills. 

In accordance with 27 CFR 19.680 , the description of stills on the approved alcohol fuel producer’s permit (TTB F 5110.74 ) application constitutes registration of stills.  A change in type or location of a still constitutes amendment of the permit.  Permits can be amended on TTB F 5110.74 .

Life of an AFP permit. 

The TTB regulations at 27 CFR 19.679 provide that an AFP permit is continuing unless automatically terminated under 27 CFR 19.684, suspended or revoked as provided in 27 CFR 19.697, or voluntarily surrendered. 

In accordance with § 19.684, automatic termination of an AFP permit occurs when the lease, sale, or other transfer of business operations are transferred.  In the case of a corporation holding a permit under 27 CFR part 19, subpart X, if actual or legal control of the permittee corporation changes, directly or indirectly, whether by reason of change in stock ownership or control (in the permittee corporation or in any other corporation), by operation of law, or in any other manner, the permit may remain in effect until the expiration of 30 days after the change, whereupon the permit will automatically terminate.  However, if operations are to be continued after the change in control, and an application for a new permit is filed within 30 days of the change, then the outstanding permit may remain in effect until final action is taken on the new application. When final action is taken on the application, the outstanding permit automatically terminates. 

In accordance with § 19.697, the Deputy Assistant Administrator for TTB Field Operations has the authority to revoke or suspend an AFP permit if he/she has reason to believe that the proprietor:

• Has not in good faith complied with the applicable provisions of 26 U.S.C. Chapter 51, or 27 CFR part 19, subpart X; or
• Has violated conditions of the permit; or
• Has made any false statements as to any material fact in the application thereof; or
• Has failed to disclose any material information required to be furnished under 27 CFR, part 19;
• Has violated or conspired to violate any law of the U.S. relating to intoxicating liquor; or
• Has been convicted of any offense under Title 26, U.S.C. punishable as a felony or of any conspiracy to commit such offense.

The Director, TTB National Revenue Center has the authority to revoke or suspend an AFP permit if he/she has reason to believe that the proprietor:

• Has not engaged in any of the operations authorized by the permit for a period of more than 2 years.

TTB G: 2011-2
OPR: RRD
April 7, 2011