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Electronic Code of Federal Regulations

e-CFR Data is current as of April 15, 2014

Title 27: Alcohol, Tobacco and Firearms
PART 19—DISTILLED SPIRITS PLANTS
Subpart X—Distilled Spirits for Fuel Use


§19.700   Amount of bond.

A proprietor must determine the penal sum of the bond based on the total quantity of distilled spirits that will be produced and received during a calendar year. The method for computing required bond amounts is as follows:

(a) Small plants without production operations. A proprietor that operates a small plant that receives not more than 10,000 proof gallons of spirits per year and does not conduct bona fide production operations must provide a bond with a penal sum of $1,000.

(b) Medium plants. A proprietor that operates a medium plant that produces and receives more than 10,000 but not more than 20,000 proof gallons of spirits per year must provide a bond with a penal sum of at least $2,000.00. The proprietor must increase the penal sum of the bond by $1,000 for each additional 10,000 gallons, or fraction of 10,000 gallons, (over 20,000 gallons) that will be produced or received. The maximum bond for a medium plant is $50,000.00, representing the penal sum applicable to 500,000 proof gallons. The following table provides examples of required minimum bond amounts:

Annual Production and Receipts in Proof Gallons

More thanBut not
over
Amount of
bond
10,00020,000$2,000
20,00030,0003,000
90,000100,00010,000
190,000200,00020,000
490,000500,00050,000

(c) Large plants. A proprietor that operates a large plant that produces and receives more than 500,000 but not more than 510,000 proof gallons of spirits per year must provide a bond with a penal sum of at least $52,000.00. The proprietor must increase the penal sum of the bond by $2,000 for each additional 10,000 gallons, or fraction of 10,000 gallons (over 510,000 gallons) that will be produced and received. The maximum bond for a large plant is $200,000.00. The following table provides examples of required minimum bond amounts:

Annual Production and Receipts in Proof Gallons

More thanBut not
over
Amount of
bond
500,000510,000$52,000
510,000520,00054,000
740,000750,000100,000
990,0001,000,000150,000
1,240,000200,000

(d) New or strengthening bonds. A proprietor must obtain a new bond or a strengthening bond in accordance with §19.167 if the level of production and receipts at the alcohol fuel plant increases so that the current bond no longer is in the amount of at least the required minimum penal sum.

(26 U.S.C. 5173, 5181)



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