An Act to discharge more effectively obligations of the United States under certain conventions and protocols relating to the institution of controls over the manufacture of narcotic drugs, and for other purposes
PL 86-429 (H.R.529), enacted 04/22/1960

74 S T A T . ] 
PUBLIC LAW 86-429-APR. 22, 1960 
55 
Public Law 86-429 
AN ACT 
April 22, 1960 
[H. R. 529] 
To discharge more effectively obligations of the United States under certain con-
A'entions and protocols relating to the institution of controls over the manufac-
ture of narcotic diTigs, and for other purposes. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled, 
SHORT TITLE 
SECTION 1. This Act may be cited as the "Narcotics Manufacturing 
Narcotics Manu-
Actofl960". 
[tet"^ ^''°' 
NECESSITY FOR LEGISLATION 
SEC. 2. The enactment of this Act is necessary for the following 
reasons: 
(1) The Congress has long recognized that the manufacture, distri-
bution, and use of narcotic drugs for nonmedical and nonscientific 
purposes endangers the health of the American people and threatens 
the general welfare. The Congress has enacted laws and the Senate 
has approved international conventions designed to establish effective 
control over domestic and international traffic in narcotic drugs. 
(2) Until recently, most narcotic drugs were made from natural 
raw materials such as the opium poppy and the coca leaf, produced in 
limited areas of the world. In practice, control over the production 
of narcotic drugs could therefore be achieved by national and inter-
national restrictions over the production and shipment of these raw 
materials and their use to manufacture narcotic drugs. 
(3) In recent years, however, technological advances have resulted 
in the development of new types of narcotic drugs, produced syn-
thetically from a variety of generally available raw materials. As a 
result, controls over the production of narcotic drugs can no longer 
be maintained solely by controls relating to the opium poppy and the 
coca leaf. 
(4) The United States has joined with other nations in executing 
international conventions intended to establish suitable controls over 
production, shipment, and use of all narcotic drugs. These conven-
tions are not self-executing, and the obligations of the United States 
thereunder must be performed pursuant to appropriate legislation. 
(5) In order (A) to discharge more effectively the international 
obligations of the United States, (B) to promote the public health, 
safety, and welfare, (C) to regulate interstate and foreign commerce 
in narcotic drugs, and (D) to safeguard the revenue derived from 
taxation of narcotic drugs, the Congress finds it necessary to enact 
a statute for the licensing and control of the manufacture of all nar-
cotic drugs. 
DEFINITIONS 
SEC. 3. For the purposes of this Act— 
(a) The term "1931 convention" means the Convention for Limiting 
the Manufacture and Hegulating the Distribution of Narcotic Drugs, 
concluded at Geneva, July 13,1931, and entered into force with respect gtaf. 2*2^36.^^'*^' ^^ 
to the United States of America, July 9,1933, as amended by the proto-
col signed at Lake Success on December 11,1946. 
(b) The term "1948 protocol" means the protocol bringing under 
international control drugs outside the scope of the convention of 
July 13,1931, for limiting the manufacture and regulating the distri-
bution of narcotic drugs (as amended by the protocol signed at Lake 
56 
PUBLIC LAW 86-429-APR. 22, 1960 
[74 S T A T . 
Success oil December 11, 1946), signed at Paris, November 19, 1948, 
and entered into force ^yit]l resj^ect to the United States of America, 
2 usT 1629. 
September 11, 1950. 
(c) The term "Secretary or his delegate" means the Secretary of tht 
Treasury, or any officer, employee, or agency of the Treasury Depart 
inent duly authorized by the Secretary (directly or indirectly by one 
or more redelegations of authoi-ity) to perform the function mentioned 
or described in the context. 
(d) The term "person" includes an individual, partnership, corpo-
ration, association, trust, or other institution or entity. 
(e) The term "narcotic drug" means narcotic drug as defined in 
section 4731(a) of the Internal Revenue Code of 1954, as amended 
by section 4 of this Act. 
(f) The term "manufacture" means the production of a narcotic 
drug, either directly or indirectly by extraction from substances of 
vegetable origin, or independently by means of chemical synthesis or 
by a combination of extraction and chemical synthesis. 
(g) The term "basic class of narcotic drug" means any one of the 
following classes of narcotic drugs and any additional class or classes 
of narcotic drugs (other than crude opium or coca leaves), by what-
ever trade name designated, as may be defined from time to time by 
the Secretary or his delegate in accordance with section 6 of this Act: 
1. Opium, powdered, granulated, or deodorized, or tinctures or 
extracts of opium. 
2. Mixed alkaloids of opium and their salts. 
3. Morphine and its salts. 
4. Codeine and its salts. 
5. Thebaine and its salts. 
6. Narcotine and its salts. 
7. Papaverine and its salts. 
8. Cotarnine and its salts. 
9. Narceine and its salts. 
10. Ethylmorphine and its salts. 
11. Apomorphine and its salts. 
12. Nalorphine (N-allylnormorphine) and its salts. 
13. Hydromorphone (dihydromorphinone) and its salts. 
14. Metopon (methyldihydromorphinone) and its salts. 
15. Dihydrocodeine and its salts. 
16. Hydrocodone (dihydrocodeinone) and its salts. 
17. Oxycodone (dihydrohydroxycodeinone) and its salts. 
18. Cocaine and its salts. 
19. Ecgonine and its salts. 
20. Pethidine (meperidine, isonipecaine) (l-methyl-4-phenylpiperi-
dine-4-carboxylic acid ethyl ester) and its salts. 
21. Alphaprodine 
(alpha-1, 
3-dimethyl-4-phenyl-4-propionoxypi-
peridine) and its salts. 
22. Methadone (amidone) (6-dimethylamino-4, 4-diphenyl-3-hep-
tanone) and its salts. 
23. Isomethadone 
(isoamidone) 
(6-diinethylamino-5-methyl-4, 
4-diphenyl-3-hexanone) and its salts. 
24. Levorphan and racemorphan (3-hydroxy-N-methylmorphinan) 
and their salts. 
25. Levomethorplian and racemethorphan (3-methoxy-N-methyI-
morphinan) and their salts. 
26. Anileridine 
(Ethyl 
l-[2-(p-amino 
phenyl)-ethyl]-4-phenyl 
piperidine-4-carboxylate) and its salts. 
27. Phenazocine 
(2'-Hydi'oxy-5, 
9-dimethyl-2-(2-phenylethyl)-6, 
7-benzomorphan) and its salts. 
74 S T A T . ] 
PUBLIC LAW 86-429-APR. 22, 1960 
57 
(h) The term "net disposal" means the quantity of a basic class of 
narcotic drug, sold, exchanged, given away, used in the production 
of another basic class of narcotic drug for which the manufacturer is 
licensed, or otherwise disposed of (as such or contained in or combined 
with other drugs compounded by the manufacturer of such basic 
class) by the manufacturer during a stated period, less the quantity 
of any such basic class of narcotic drug returned to the manufacturer 
by a customer and any quantity sold or transferred to another licensed 
manufacturer of the same basic class of narcotic drug. 
(i) The term "narcotic precursor" means a substance other than a 
narcotic drug which the Secretary or his delegate has found, after due 
notice and opportunity for public hearing— 
(1) is an immediate chemical precursor of a narcotic drug; 
(2) is produced primarily for use in the manufacture of a 
narcotic drug; and 
(3) is used, or is likely to be used, in the manufacture of a 
narcotic drug by persons other than persons licensed to manufac-
ture such narcotic drug. 
AMENDMENTS TO INTERNAL REVENUE CODE OP 1954 
SEC. 4. (a) Subsection (a) of section 4731 of the Internal Revenue 26^icf*47¥i!' 
Code of 1954 is amended to read as follows: 
"(a) NARCOTIC DRUGS.—The words 'narcotic drugs' as used in this 
|)art shall mean any of the following, whether produced directly or 
indirectly by extraction from substances of vegetable origin, or inde-
pendently by means of chemical synthesis, or by a combination of 
extraction and chemical synthesis: 
" (1) Opium, isonipecaine, coca leaves, and opiate; 
"(2) Any compound, manufacture, salt, derivative, or prepara-
tion of opium, isonipecaine, coca leaves, or opiate; 
"(3) Any substance (and any compound, manufacture, salt, 
derivative, or preparation thereof) which is chemically identical 
with any of the substances referred to in clauses (1) and (2); 
except that the words 'narcotic drugs' as used in this part shall not 
include decocainized coca leaves or extracts of coca leaves, which ex-
tracts do not contain cocaine or ecgonine." 
(b) Subsection (g) of section 4731 of the Internal Revenue Code 
of 1954 is amended to read as follows: 
"(g) OPIATE.— 
"(1) IN GENERAL.—The word 'opiate' as used in this part shall 
mean any drug (as defined in the Federal Food, Drug, and Cos-
metic Act (52 Stat. 1041, sec. 201(g); 21 U.S.C. 321)) or other 
substance found by the Secretary or his delegate and proclaimed 
by the Secretary or his delegate (after considering the technical 
advice of the Secretary of Health, Education, and Welfare, or 
his delegate, on the subject) to have been so found in the Federal 
Register, after due notice and opportunity for public hearing, to 
have an addiction-forming or addiction-sustaining liability simi-
lar to morphine or cocaine or to be capable of conversion into a 
drug having such addiction-forming or addiction-sustaining lia-
bility, where, in the judgment of the Secretary or his delegate, 
the relative technical simplicity and degree of yield of such con-
version create a risk or improper use of the drug or other 
substance. 
" (2) TERMINATION.—The Secretary or his delegate is author-
ized to withdraw any previous finding that a drug or other sub-
stance is an 'opiate' whenever (after consideringthe technical 
advice of the Secretary of Health, Education, and Welfare, or his 
Ante, p. 55. 
58 
PUBLIC LAW 86-429-APR. 22, 1960 
[74 S T A T . 
delegate, on the subject) he determines that such previous finding 
was erroneous, and upon publication of such determination in 
the Federal Kegister, the particular drug or other substance shall 
cease to be an opiate. For purposes of the foregoing provision the 
Secretary or his delegate may consider any action taken pursuant 
to article 3 of the 1948 protocol (as defined in section 3(D) of the 
Narcotics Manufacturing Act of I960)." 
"(3) 
EEGULATIONS, ETC.—The Secretary or his delegate is au-
thorized to issue necessary rules and regulations for carrying out 
the provisions of this subsection, and to confer or impose upon 
any officer or employee of the Treasury Department whom he 
shall designate or appoint, the duty of conducting any hearing 
authorized hereunder. 
"(4) CROSS REFERENCE.— 
"For treatment of certain drugs as being, or ceasing to be, opiates 
for purposes of this part, see section 5 of the Narcotics Manufac-
turing Act of 1960." 
26'uscr4702^" 
^^^ Subsectiou (a) of section 4702 of the Internal Revenue Code of 
1954 is amended to read as follows: 
•'(a) EXCEPTIONS FROM CERTAIN PROVISIONS AUTHORIZED FOR PREP-
ARATIONS O
F No ADDICTIVE QUALITY OR OF MINOR ADDICTIVE QUALITY.— 
"(1) If the Secretary or his delegate, either upon his own 
motion or upon the application of an mterested party, after con-
sideration of the report and recommendations of an advisory 
committee appointed under paragraph (4) of this subsection, and 
after due notice and opportunity for hearing, finds that a pharma-
ceutical preparation containing a narcotic drug combined with 
other active or inactive ingredients— 
"(A) either possesses no addiction-forming or addiction-
sustaining liability, or does not possess an addiction-forming 
or addiction-sustaining liability sufficient to warrant imposi-
tion of all of the requirements of this part, and 
"(B) does not permit the recovery of a narcotic drug hav-
ing such an addiction-forming or addiction-sustaining lia-
bility, with such relative technical simplicity and degree of 
yield as to create a risk of improper use; 
the Secretary or his delegate may except such pharmaceutical 
preparation to the extent consistent with the obligations under-
taken by the United States pursuant to the Convention for Lim-
iting the Manufacture and Regulating the Distribution of Nar-
cotic Drugs, concluded at Geneva, July 13, 1931, and entered into 
force with respect to the United States of America, July 9, 1933, 
as amended by the protocol signed at Lake Success on December 
11, 1946, and the protocol bringing under international control 
drugs outside the scope of the convention of July 13, 1931, for 
limiting the manufacture and regulating the distribution of nar-
cotic drugs (as amended by the protocol signed at Lake Success on 
December 11, 1946) j signed at Paris, November 19, 1948, and 
entered into force with respect to the United States of America, 
September 11, 1950, and with the public health, safety, and 
welfare, from any or all of the requirements imposed by this 
part, other than those requirements imposed by sections 4721, 
4722 "732 *'^^^' 
^^^^' ^'^24(a), and 4732, and from any or all of the requirements 
imposed by section 6 of the Act entitled 'An Act to prohibit the 
importation and use of opium for other than medicinal purposes', 
Post, p. 66. 
approved February 9, 1909, as amended by section 15 of the Nar-
cotics Manufacturing Act of 1960. 
"(2) In excepting any pharmaceutical preparation under par-
aragraph (1), the Secretary or his delegate may, in his discretion, 
apply any or all of the following requirements: 
74 S T A T . ] 
PUBLIC LAW 86-429-APR. 22, 1960 
59 
"(A) Such pharmaceutical preparation shall be manu-
factured, 
sold, distributed, 
given 
away, dispensed, 
or 
possessed as a medicine and not for the purpose of evading 
the intentions and provisions of this subpart and subpart C; 
"(B) Any manufacturer, producer, compounder, or vendor 
(including dispensing physicians) of such phaiTaaceutical 
preparation, lawfully entitled to manufacture, produce, com-
pound, or vend such pharmaceutical preparation, shall keep 
such records relating to such pharmaceutical preparation as 
the Secretary or his delegate shall deem necessary; 
"(C) Every person so possessing or disposing oi such phar-
maceutical preparation shall register as required in section 
4722 and, if he is not paying a tax under section 4721, shall 47^2^ "^^ '*'^^' 
pay a special tax of $1 for each year, or fractional part' 
thereof, in which he is engaged in such occupation, to the 
official in charge of the collection district in which he carries 
on such occupation as provided in subpart C. 
"(3) If the Secretary or his delegate shall subsequently deter-
mine, after due notice and opportunity for hearing, that a phar-
maceutical preparation to which such exceptions have been made 
applicable possesses a degree of addiction liability, or permits 
recovery of a narcotic drug having a degree of addiction liability, 
that results in abusive use of such exceptions, he is authorized to 
withdraw and revoke such exceptions in whole or in part. 
"(4) Whenever the Secretary or his delegate shall, on his own 
motion, determine that there may exist reasonable evidence to sup-
port a finding in accordance with paragraph (1) of this sub-
section, or whenever an interested party makes an application for 
such a finding, the Secretary or his delegate shall thereupon 
appoint an advisory committee of experts. At least one member 
of such an advisory committee shall be selected by the Secretary 
or his delegate, one by the interested party making the applica-
tion, if any, one by the Surgeon General of the (United States) 
Public Health Service, and one by the (Commissioner of the 
(United States) Food and Drug Administration. 
The Secretary 
or his delegate shall submit to such advisory committee the appli-
cation of the interested party, if any, and an^ other available data. 
As soon as practicable thereafter, the advisory committee shall, 
after independent study of the material submitted to it by the 
Secretary or his delegate and other data available to it, certify a 
report and recommendations to the Secretary or his delegate with 
respect to the pharmaceutical preparation involved. 
"(5) After consideration of the report and recommendation of 
the advisory committee, and after due notice and opportunity for 
hearing, the Secretary or his delegate shall either make the finding 
provided for in paragraph (1) of this subsection and grant such 
exceptions as he deems appropriate, or determine that the evidence 
does not support such a finding and deny the application, if any." 
(d) The amendment to subsection (g) of section 4731 of the Internal 
Revenue Code of 1954, made by subsection (b) of this section, shall 
Hot affect any proceeding commenced before such amendment, but 
such proceeding shall be continued to final disposition as if the amend-
ment had not been made. 
NOTIFICATIONS, FINDINGS, AND DECISIONS UNDER T H E 194 8 PROTOCOL 
SEC. 5. (a) Before a notification may be sent on behalf of the 
United States to the Secretary General of the United Nations, under 
article 1 of the 1948 protocol, that a drug is considered liable to the 
^ "^"^ ^"^^ 
60 
PUBLIC LAW 86-429-APR. 22, 1960 
[74 STAT. 
same kind of abuse and productive of the same kind of harmful effects 
as the drugs specified in article 1, paragraph 2, of the 1931 convention, 
such drug shall have been found by the Secretary or his delegate to be 
an "opiate", as defined in section 4731(g) of the Internal Kevenue 
Code of 1954, as amended by section 4(b) of this Act, and so pro-
claimed in accordance with the procedure prescribed by section 4731 
(g) as amended by section 4(b) of this Act. 
(b) With respect to any drug which is or may be used for medical 
or scientific purposes and to which the 1931 convention does not apply, 
and which is liable to the same kind of abuse and productive of the 
same kind of harmful effects as the drugs specified in article 1, para-
graph 2 of the 1931 convention, upon receipt by the United States of 
a finding or decision made pursuant to article 1 or article 2 of the 
1948 protocol that any such drug is capable of producing addiction 
or of conversion into a drug capable of producing addiction and that 
the appropriate provisions of the 1931 convention shall apply to such 
drug, such finding or decision shall be transmitted to the Secretary or 
^p^iication in \I{Q delegate. 
The Secretary or his delegate shall cause such finding 
or decision to be published in the Federal Register unless such drug 
has already been determined to be an opiate under the procedure 
prescribed by section 4731(g) of the Internal Revenue Code of 1954, 
as amended by section 4 of this Act. 
From the time of such publica-
tion, such drug shall be an opiate to the same extent as if the pro-
cedure prescribed by section 4731(g) of the Internal Revenue Code 
of 1954, as amended by section 4 of this Act, had been followed with 
respect to such drug. 
(c) If the finding or decision so received and published in the Fed-
eral Register relates to a drug which has not previously been deter-
mined to be an opiate under the procedure prescribed by section 
4731(g) of the Internal Revenue Code of 1954, as amended by sec-
tion 4 of this Act, any person in the United States interested in the 
domestic manufacture and distribution of such drug for medical and 
scientific purposes may submit to the Secretary or his delegate written 
data, views, and argument opposed to such finding or decision. 
Such 
written data, views, and argument shall be transmitted to the Sec-
retary General of the United Nations for consideration by the World 
Health Organization or the Commission on Narcotic Drugs of the 
2 usT 1634. 
United Nations, as the case may be, under article 3 of the 1948 protocol. 
If thereafter the United States receives a revised finding or decision, 
under article 3 of the 1948 protocol, that such a drug is not capable 
of producing addiction or conversion into a drug capable of produc-
ing addiction and that the provisions of the 1931 convention shall not 
apply to such drug, such revised finding or decision shall be trans-
mitted to the Secretary or his delegate, who shall cause such revised 
finding or decision to be published in the Federal Register within 
ninety days of receipt thereof by the Secretary or his delegate. 
From 
the time of such publication, such drug shall cease to be an opiate, 
unless the Secretary or his delegate has theretofore initiated an opiate 
procedure under section 4731 (g) of the Internal Revenue Code of 1954, 
as amended by section 4 of this Act. 
2 U
S
T 1634. 
((J) Upon receipt by the United States of a revised finding or 
decision under article 3 of the 1948 protocol (except a revised finding 
or decision to w^hich subsection (c) applies) that a drug (theretofore 
subject to the Federal narcotic law^s as an opiate) is not capable of 
producing addiction or conversion into a drug capable of producing 
addiction and that the provisions of the 1931 convention shall not 
apply to such drug, the revised finding or decision shall be transmitted 
to the Secretary or his delegate. The Secretary or his delegate may, 
in his discretion, publish the revised finding or decision in the Federal 
74 S T A T . ] 
PUBLIC LAW 8 6 - 4 2 9 - A P R . 22, 1960 
61 
Register and, from the time of such publication, such drug shall cease 
to be an opiate. If the revised finding or decision is not so published 
in the Federal Register, the said drug shall continue to be an opiate. 
MODIFICATION OF LIST OF BASIC NARCOTIC DRUGS 
. SEC. 6. The Secretary or his delegate, upon his initiative or upon 
the petition of any interested person shall have the power by rule 
made on the record after opportunity for hearing, to alter classifica-
tions set forth in section 3(g) by adding to, subtracting from, or 
further defining such classifications or any one or more of them, on 
the basis of their chemical structure and content and addiction liability 
or convertibility into an addicting drug. 
No new basic class shall be 
added unless with respect to any drug or drugs falling within such 
class the Secretary or his delegate shall have determined that such 
drug is a narcotic drug as defined by section 4731 of the Internal 
Revenue Code of 1954, as amended by section 4 of this Act, or has 
caused a finding or decision to be published in the Federal Register 
pursuant to section 5 of this Act. For purposes of this section, the 
Secretary or his delegate may consider changes in classification 
established by the World Health Organization or its successor in 
function. 
RESTRICTIONS ON T H E MANUFACTURE OF NARCOTIC DRUGS 
SEC. 7. (a) Except as otherwise provided in this Act, it shall be 
unlawful for any person to manufacture any narcotic drug unless— 
(1) such narcotic drug falls within a basic class of narcotic 
drugs established by or pursuant to this Act, and 
(2) such person holds a currently effective license and manu-
facturing quota with respect to such basic class of narcotic drug 
issued pursuant to section 8 of this Act. 
(b) The omission of a narcotic drug from the classification estab-
lished pursuant to section 3(g) shall not be construed to permit the 
manufacture of such narcotic drug, the intent of this Act being to 
limit the manufacture of narcotic drugs in the United States to those 
narcotic drugs established under this Act as a basic class of narcotic 
drugs or as a member of a basic class of narcotic drugs. The fact that 
the Secretary or his delegate shall have— 
(1) determined that a drug is a narcotic drug as defined by sec-
tion 4731 of the Internal Revenue Code of 1954, as amended by 
section 4 of this Act, or 
(2) caused a finding or decision with respect to any drug or 
other substance to be published in the Federal Register pursuant 
to section 5 of this Act, 
shall not require the Secretary or his delegate to add such narcotic 
drug to the classifications set forth in section 3 (g) or to grant a manu-
facturing quota for such narcotic drug, if the Secretary or his delegate 
shall determine that it is contrary to the public health and safety to 
permit the manufacture of such drug within the United States. 
(c) It shall be unlawful for any person (1) to manufacture or 
attempt to manufacture any narcotic drug, or (2) to knowingly per-
mit the manufacture of any narcotic drug, in or upon any place owned, 
leased, occupied, used or controlled by him unless he (or the lessee, 
tenant, or other occupant as the case may be) is the holder of a license 
and quota for the manufacture during the period in question of such 
narcotic drug in accordance with the provisions of sections 3(g), 8, 
and 11 of this Act; and it shall be unlawful for the holder of any such 
62 
PUBLIC LAW 86-429-APR. 22, 1960 
[74 STAT. 
quota to manufacture during the period for which the quota is appli-
cable any quantity of sucli narcotic drug in excess of the amount 
authorized by such quota. 
LICENSES TO MANUFACXrRE NARCOTIC DRUGS 
SEC. 8. (a) Every person who manufactures a basic class or classes 
of narcotic drug shall, on or before January 1, 1961, if then already 
engaged in such manufacture, or otherwise before engaging in sucn 
manufacture, obtain from the Secretary or his delegate a ncense or 
licenses for the appropriate basic class or classes of narcotic drug. 
There shall be a separate license for the manufacture of each basic 
class of narcotic drug. In determining whether to issue a license for 
a particular basic class of narcotic drug to a particular applicant, the 
Secretary or his delegate shall be governed by the following factors— 
(1) maintenance of effective controls against the diversion of 
the particular basic class of narcotic drug and of narcotic drugs 
compounded therefrom into other than legitimate medical and 
scientific channels through limitation of manufacture of the par-
ticular basic class of narcotic drug to the smallest number of 
establishments which will produce an adequate and uninterrupted 
supply of narcotic drugs of or derived from such basic class of 
narcotic drugs for medical and scientific purposes, consistent with 
the public interest; and 
(2) compliance with the obligations undertaken by the United 
States pursuant to the 1931 convention and the 1948 protocol; and 
(3) promotion of technical advances in the art of manufactur-
ing narcotic drugs and the development of new narcotic drug 
products; and 
(4) the applicant's education, moral character and reputation, 
the applicant's past drug manufacturing experience and the 
quality of his products, his technical competence, the existence 
in the applicant's establishment of adequate safeguards against 
diversion of narcotic drugs into other than legitimate medical 
and scientific channels; and 
(5) such other factors as may be relevant to and consistent with 
the public interest. 
26 use 4722. 
(^|j) Registration pursuant to section 4722 of the Internal Revenue 
Code of 1954, shall be a prerequisite to the issuance of any license 
under this section. Licenses shall be in such form as the Secretary or 
his delegate shall prescribe and shall continue in effect subject only to 
annual renewal of registration unless revoked pursuant to section 9 
of this Act or voluntarily surrendered. Issuance of a license pursuant 
to this section shall not entitle the licensee to perform any act with 
respect to narcotic drugs as to which the consent or approval of the 
Secretary or his delegate is required by the provisions of this or any 
other Act. 
(c) Issuance of a license for the manufacture of any one basic class 
of narcotic drug shall not entitle the holder thereof to manufacture 
for sale, distribution, or other use any other basic class of narcotic 
drug. 
(d) Notwithstanding the foregoing provisions of this section, the 
Secretary or his delegate shall authorize any person registered as a 
manufacturer or as a person engaged in research under section 4722 
26 use 4722. 
of the Internal Revenue Code of 1954, who meets the standards for 
licensing under subsection (a) (4) of this section 8, whether or not 
such person actually holds a license under subsection (a), to produce 
such limited quantities as the Secretary or his delegate may specify 
of any narcotic drug, except crude opium or coca leaves, whether or 
74 S T A T . ] 
PUBLIC LAW 86-429~APR. 22, 1960 
63 
not a basic class for such drug has been established under section 3 (g) 
of this Act, exclusively for research in the development of manufac-
turing processes for the drug, or for chemical, pharmacological or 
medical testing of such drugs, for fitness for medical or scientific use 
and for determination of its suitability for general manufacture and 
distribution for medical or scientific use. Such person shall make 
such reports as the Secretary or his delegate may require relating to 
the quantities of narcotic drug manufactured and to use and disposal 
of such quantities of such narcotic drug. 
Such quantities of such 
narcotic drug may be disposed of only in accordance with the regula-
tions of the Secretary or his delegate. Any authorization made under 
this subsection (d) shall be subject to revocation or suspension in 
accordance with the procedure set forth in section 9 of this Act. 
(e) In issuing or refusing to issue manufacturing licenses pursuant 
to this section, the Secretary or his delegate shall act in conformity 
with the procedure prescribed by section 5 of the Administrative Pro-
cedure Act and the Secretary or his delegate shall be deemed to consti- 
so stat^ 23^9. ^ ^ 
tute "the agency" for purposes of compliance with sections 7 and 8 looe, 1007. 
of such Act. 
Each licensee of the basic class of narcotic drug with 
respect to which a license is sought to be obtained shall be deemed a 
person entitled to notice within the meaning of section 5(a) of the 
Administrative Procedure Act. 
REVOCATION OR SUSPENSION OF LICENSES 
SEC. 9. (a) Any license issued pursuant to section 8 of this Act 
may be revoked by the Secretary or his delegate if the licensee— 
(1) has been convicted of violating or conspiring to violate any 
law of the United States or of any State where the offense involves 
any activity or transaction with respect to narcotic drugs; or 
(2) has violated or failed to comply with any duly promul-
gated regulation of the Secretary or his delegate relating to nar-
cotic drugs, and such violation or failure to comply reflects 
adversely on the licensee's reliability and integrity with respect 
to narcotic drugs. 
In the case of a licensee holding more than one license issued pursuant 
to section 8 of this Act, revocation may be in the discretion of the 
Secretary or his delegate extended to all licenses held by such licensee, 
(b) Before revoking any license pursuant to subsection (a), the 
Secretary or his delegate shall serve upon the licensee an order to 
show cause why an order of revocation should not be issued. 
Any 
such order to show cause shall contain a statement of the basis thereof, 
and shall call upon such licensee to appear before the Secretary 
or his delegate at a time and place stated in the order, but in no 
event less than thirty days after the date of receipt of such order, 
and give evidence upon the matter specified therein. 
The Secretary 
or his delegate may in his discretion suspend any license simultane-
ously with the issuance of an order to show cause, in cases where he 
finds that the public health, safety, or interest require such suspension. 
Such suspension shall continue m effect until the conclusion of any 
revocation proceeding, including judicial review thereof, unless sooner 
withdrawn by the Secretary or his delegate, or dissolved by a court 
of competent jurisdiction. 
Every hearing held pursuant to this sec-
tion shall be conducted in accordance with section 5 of the Adminis- ,„5„^u^?.?^ 1004, 
trative Procedure Act and the Secretary or his delegate shall be 
deemed to constitute "the agency" for purposes of compliance wuth 
sections 7 and 8 of such Act. 
If after hearing, default, or waiver 
thereof by the licensee, the Secretary or his delegate determines that 
an order of revocation should issue, he shall issue such order, which 
1006, 1007. 
64 
PUBLIC LAW 86-429-APR. 22, 1960 
[74 STAT. 
shall include a statement of his findings and the grounds and reasons 
therefor and shall specify the effective date of the order, and he shall 
cause such order to be served on the licensee. 
In any case where a 
hearing is conducted pursuant to the provisions of this section both 
the burden of proceeding with the introduction of evidence and the 
burden of proof shall be upon the Secretary or his delegate. 
Pro-
ceedings under this section shall be independent of, and not in lieu 
of, criminal prosecution or other proceedings under this Act or any 
other law of the United States. 
AUTHORITY TO SEIZE NARCOTIC DRUGS, ORDER FORMS, AND TAX STAMPS 
SEC. 10. In the event of the suspension or revocation of a license 
obtained under section 8, all narcotic drugs owned or possessed by such 
person at the time of suspension or at the effective date of the revoca-
tion order, as the case may be, whether or not taxes have been paid 
on such narcotic drugs, together with all unused order forms or nar-
cotic tax stamps owned or possessed by such person, may at the discre-
tion of the Secretary or his delegate be placed under seal and no dis-
position made until the time for taking an appeal has elapsed or until 
all appeals have been concluded. Upon a suspension or revocation 
order becoming final all narcotic drugs, tax stamps, and order forms 
shall be forfeited to the Government. 
MANUFACTURING QUOTAS FOR BASIC CLASSES OF NARCOTIC DRUGS 
SEC. 11. (a) For the purpose of fixing manufacturing quotas under 
this section and in order to carry out the treaty obligations of the 
United States, the Secretary or his delegate shall make determinations 
of the total quantity of each basic class of narcotic drug necessary to 
be manufactured during each calendar year to provide for the esti-
mated medical and scientific needs of the United States, for lawful 
export requirements, and for establishment and maintenance of reserve 
stocks. 
(b) In fixing individual manufacturing quotas for any basic class 
of narcotic drug for a calendar year pursuant to this section, or at 
any time after fixing such individual quotas, the Secretary or his dele-
gate shall limit or reduce such individual quotas to the extent neces-
sary to prevent the aggregate of such individual quotas from exceed-
ing the amount of the determination of the Secretary or his delegate 
under subsection (a). 
In any such limitation or reduction pursuant 
to this subsection the quota of each licensed manufacturer of such 
basic class of drug shall be limited or reduced in the same proportion 
as the limitation or reduction of the aggregate of such quotas. 
How-
ever, if any licensee, before the issuance of a limitation or reduction 
in quota, has manufactured in excess of his quota so limited or 
reduced, the amount of such excess shall be subtracted from such 
licensee's manufacturing quota for the following year. 
(c) On or before June 1 of each year, upon application therefor 
by a person having a license to manufacture a basic class of narcotic 
drug, the Secretary or his delegate shall fix a manufacturing quota 
for such calendar year for such basic class of narcotic drug for such 
person. 
Subject to the provisions of subsections (a) and (b), such 
quota shall be sufficient to cover the applicant's estimated disposal, 
inventory, and other requirements for the calendar year as determined 
by the Secretary or his delegate, who shall take into account the appli-
cant's current disposal rate, the trend of such disposal rate during the 
preceding calendar year, the applicant's production cycle and inven-
tory position, the economic availability of raw materials, yield and 
74 S T A T . ] 
PUBLIC LAW 86-429-APR. 22, 1960 
stability problems, emergencies such as strikes and fires, and other 
factors. 
Subject to the provisions of subsections (a) and (b), such 
quota shall not be less than the sum of— 
(1) such licensed manufacturer's net disposal of such basic 
class of narcotic drug during the immediately preceding calendar 
year or the average of the three immediately precedinj^ calendar 
years in which such manufacturer produced such basic class of 
narcotic drug, whichever is greater; and 
(2) one-half of such manufacturer's net disposal of such basic 
class of narcotic drug during the immediately preceding calendar 
year; 
less such manufacturer's inventory of such basic class of narcotic drug 
on December 31 of the preceding calendar year. 
(d) During the period from January 1 until a manufacturing quota 
for such calendar year is fixed pursuant to subsection (c), any licensed 
manufacturer entitled to receive a quota for any basic class of narcotic 
drug under subsection (c) may manufacture a provisional quota of 
not more than 75 per centum of whichever of the following is greater— 
(1) such manufacturer's net disposal of such basic class of 
narcotic drug during the twelve months immediately preceding 
September 30 of the preceding calendar year; or 
(2) twelve times such manufacturer's average monthly net 
disposal of such basic class of narcotic drug for the thirty-three 
months immediately preceding September 30 of the preceding 
calendar year; 
or such higher or lower percentage as the Secretary or his delegate 
may from time to time for good cause direct. Any higher or lower 
percentage so directed shall apply to the provisional quotas of all 
licensed manufacturers for such basic class of narcotic drug. 
(e) The Secretary or his delegate shall, on application therefor, and 
subject to the provisions of subsections (a) and (b), fix a quota for 
any licensed manufacturer of a basic class of narcotic drug who has 
not manufactured such basic class of narcotic drug during one or 
more of the three immediately preceding calendar years, in an amount 
adequate to cover such manuiacturer's reasonably anticipated require-
ments for the current calendar year. 
(f) At any time during the calendar year any licensed manufacturer 
who has applied for or received a manufacturing quota for a basic 
class of narcotic drug may apply for an increase in such quota, to meet 
his estimated disposal, inventory, and other requirements during the 
remainder of such calendar year. In passing upon such application 
the Secretary or his delegate shall take into consideration any occur-
rences since the filing of such manufacturer's initial quota application 
that may require an increased manufacturing rate by such manu-
facturer during the balance of such calendar year. In passing upon 
such application the Secretary or his delegate may also take into con-
sideration the amount, if any, by which the determination of the Secre-
tary or his delegate under subsection (a) exceeds the aggregate of the 
quotas of all manufacturers under this section, and the equitable dis-
tribution of such excess among other manufacturers. 
EXCEPTION 
rROM 
APPLICABILITY 
OF LICENSE 
AND 
QUOTA 
PROVISIONS 
SEC. 12. Nothwithstanding any other provisions of this Act— 
(1) no license or quota shall be required for the manufacture 
of such quantities of narcotic drugs as incidentally but necessarily 
result from the manufacturing process used for the manufacture 
of a basic class of narcotic drug duly licensed under this Act; and 
(2) no license or quota shall be required for the manufacture of 
such quantities of narcotic drugs as incidentally but necessarily re-
48232 0 - 6 1 - 5 
•6 
PUBLIC LAW 86-429-APR. 22, 1960 
[74 STAT. 
suit from the manufacture of any substance which is not a nar-
cotic drug. 
Unless such incidentally but necessarily resulting narcotic drug shall 
have been determined to be nonaddicting by the Secretary or his dele-
gate, it may (apart from being used in the process of producing a 
narcotic drug for which license and quota are held) be retained or 
disposed of only in such manner as may be prescribed or authorized 
by the Secretary or his delegate. 
REGULATION W I T H RESPECT TO PERSONS W^HO MANUFACTUEE 
NAE(X)TIG 
PRECURSORS 
SEC. 13. Persons who manufacture, compound, package, sell, deal in, 
or give away any narcotic precursor shall keep such records and make 
such reports with respect to such narcotic precursor as the Secretary 
or his delegate shall by regulation prescribe. 
The Secretary or his 
delegate may advise the Congress whether in his opinion the manu-
facture and distribution of narcotic precursors threaten to result in 
the diversion of narcotic drugs into other than legitimate medical 
and scientific channels and whether in his judgment further legislation 
Avith respect to narcotic precursors is necessary or desirable. 
CERTAIN PROCEDURES FOR JUDICIAL REVIEW 
SEC. 14. Every final decision of the Secretary or his delegate under 
sections 3(i), 6, 8, 9, 11 (c), 11(e), or 11 (f) of this Act shall be subject 
to judicial review as provided by and in the manner prescribed m 
Public Law 901, Eighty-first Congress, approved December 29, 1950 
64 Stat. 1129. 
(5 XJ.S.C, secs. 1031-1042). 
.\MENDMENT TO LAW W I T H RESPECT TO EXPORTATION OF NARCOTIC DRUGS 
SEC. 15. Section 6 of the Act entitled "An Act to prohibit the 
importation and use of opium for other than medicinal purposes", 
approved February 9, 1909, as amended (21 U.S.C. 182), is amended 
to read as follows: 
"SEC. 6. (a) No person subject to the jurisdiction of the United 
States Government shall export or cause to be exported from the 
United States, or from territory under its control or jurisdiction, any 
narcotic drug to any other country except— 
"(1) to a country which has ratified and become a party to the 
38 Stat. 1912. 
International Opium Convention of 1912 for the Suppression of 
the Abuses of Opium, Morphine, Cocaine, and Derivative Drugs, 
or to the International Opium Convention signed at Geneva on 
61 Stat. 2230. 
February 19, 1925, any narcotic drugs derived directly or indi-
rectly from crude opium or coca leaves; or 
" (2) to a country which has ratified and become a party to the 
(Convention for Limiting the Manufacture and Regulating the 
Distribution of Narcotic Drugs concluded at Geneva, July 13, 
1931, and entered into force with respect to the United States of 
America, July 9, 1933, as amended by the protocol signed at Lake 
Success on December 11, 1946, and the protocol bringing under 
international control drugs outside the scope of the convention of 
July 13, 1931, for limiting the manufacture and regulating the 
distribution of narcotic drugs (as amended by the protocol signed 
at Lake Success on December 11,1946) signed at Paris November 
19, 1948, and entered into force with respect to the United States 
of America, September 11, 1950, any narcotic drugs not derived 
directly or indirectly from crude opium or coca leaves; 
42 Stat. 597. 
74 S T A T . ] 
PUBLIC LAW 86-429-APR. 22, 1960 
07 
and in the instance of (1) and (2) then only if— 
"(A) such country has instituted and maintains, in conformity 
with the respective conventions, a system which the Secretary of 
the Treasury or his delegate deems adequate, for the control of 
imports of narcotic drugs; 
"(B) the narcotic drug is consigned to a holder of such permits 
or licenses as may be required under the laws of the country of 
import; and 
"(C) there is furnished to the Secretary or his delegate proof 
deemed adequate by him that the narcotic dru^ is to be applied 
exclusively to medical and scientific uses withni the country to 
which exported, that it will not be reexported from such country, 
and that there is an actual need for the narcotic drug for medical 
and scientific uses within such country. 
•'(b) The exceptions contained in subsection (a) shall not apply to 
smoking opium or opium prepared for smoking, the exportation of 
which is absolutely prohibited. 
"(c) Notwithstanding the provisions of subsection (a), the Secre-
tary or his delegate may authorize the exportation of any narcoti(5 
drug (including crude opium and coca leaves) to a country which has 
ratified and become a party either to the 1912 convention, the 1925 
convention, or the 1931 convention and supplementing protocols of 
1946 and 1948, if the particular drug is to be applied to a special scien-
tific purpose in the country of destination and the authorities of such 
country will permit the importation of the particular drug for such 
purpose. 
"(d) The Secretary of State shall request all foreign governments 
to communicate through the diplomatic channels copies of the laws 
and regulations promulgated in their respective countries which pro-
hibit or regulate the importation and shipment in transit of any nar-
cotic drug and, when received, shall advise the Secretary or his dele-
gate thereof." 
AUTHORIZING IMPORTATION OF NARCOTIC DRUGS AS TO CERTAIN PERSONS 
SEC. 16. Notwithstanding the provisions of this Act or any other 
law, the Secretary or his delegate may in his discretion authorize the 
importation of any narcotic drug or drugs (including crude opium 
or coca leaves) for delivery to officials of the United Nations, of the 
Government of the United States, or of any of the several States, or to 
any person licensed or qualified to be licensed under section 8 of this 
Act, for scientific purposes only. 
ENFORCEMENT AND AUTHORITY TO DELEGATE FUNCTIONS 
SEC. 17. It shall be the duty of the Secretary or his delegate to 
enforce the provisions of this Act, and he is hereby authorized to 
make, prescribe, and publish all necessary rules and regulations for 
carrying out its provisions, including but not limited to rules and 
regulations for the prevention of unlawful diversion of narcotic 
drugs, and to confer or impose any of the rights, privileges, powers, 
and duties conferred or imposed upon him by this Act upon such 
officers or employees of the Treasury Department as he shall designate 
or appoint. 
PENAL, PROVISIONS 
SEC. 18. (a) Any person who violates any of the provisions of this 
Act shall be guilty of a felony, and, upon conviction thereof, shall 
be fined not more than $10,000 or imprisoned not more than five 
years, or both. 
68 
PUBLIC LAW 86-430-APR. 22, 1960 
[74 STAT. 
(b) Any person who willfully makes, aids, or assists in the making 
of, or procures, counsels, or advises in the preparation or presentation 
of, a false or fraudulent statement in any application made pursuant 
to this Act shall be guilty of a misdemeanor, and, upon conviction 
thereof, shall be fined not more than $2,000 or imprisoned for not 
more than one year, or both. 
PROCEDURE AND PRESUMPTIONS 
SEC. 19. I t shall not be necessary to negative any exemptions set 
forth in this Act in any complaint, information, indictment, or other 
writ or proceeding laid or brought under this Act and the burden of 
proof of any such exemption shall be upon the person claiming its 
benefit. 
In the absence of proof by such person that he is the duly 
authorized holder of an appropriate license or quota issued under this 
Act, he shall be presumed not to be the holder of such license or quota 
and the burden of proof shall be upon him to rebut such presumption. 
APPLICABILITY OF ACT 
SEC. 20. The provisions of this Act shall apply to the several States, 
the District of Columbia, the Canal Zone, the Commonwealth of 
Puerto Rico, the Trust Territory of the Pacific Islands, and the other 
insular territories and possessions of the United States. 
SEPARABILITY OF INVALID PROVISIONS 
SEC. 21. If any provision of this Act, or the application of such 
provision to any circumstances, shall be held invalid, the validity of 
the remainder of the Act and the applicability of such provision to 
other persons or circumstances shall not be affected thereby. 
EFFECTIVE DATE 
S E C 22. With the exception of section 8(a), this Act shall take 
effect on January 1 of the year following the date of its enactment. 
Section 8(a) shall take effect on the date of enactment of this Act. 
Approved April 22, 1960. 
Public Law 86-430 
April 22, 1960 
^^ ACT 
[H. R. 9451] 
rjj^ amend the Act of July 19, 1054, to exempt from taxation certain additional 
property of the Veterans of Foreign Wars of the United States in the District 
of Columbia, and to provide that the tax exemption granted the property of 
the Veterans of Foreign Wars of the United States in the District of Columbia 
shall be effective with respect to taxable years beginning on and after July 1, 
1059. 
Be It enojcted hy the Senate and Hoii^e of Representatives 
of the 
pYrei^ifwa^s"^ °^ i'n^7ec? States of America in Congress assembled^ That (a) the Act 
entitled "An Act to exempt from taxation certain property of the 
Veterans of Foreign Wars of the United States in the District of 
Columbia", approved July 19, 1954 (Public Law 510, Eighty-third 
staf T99 ^^^' ^^ Congress), as amended, is amended— 
D c Code 47- 
(1) by striking out "lots 38, 20, and 19" and inserting in lieu 
832! ' 
thereof "lots 38,20,19, and 841"; and 
(2) by inserting "with respect to taxable years beginning on 
and after July 1, 1959," immediately after "exempt". 
Approved April 22, 1960.