LRB-5482/1
ARG:ahe/kjf/emw
2017 - 2018 LEGISLATURE
February 13, 2018 - Introduced by Senator Fitzgerald, cosponsored by
Representative Vorpagel. Referred to Committee on Economic Development,
Commerce and Local Government.
SB801,3,2 1An Act to repeal 20.566 (1) (hd); to renumber and amend 125.69 (1) (a); to
2amend
15.435 (title), 17.07 (3m), 20.566 (1) (ha), 125.02 (10), 125.02 (12),
3125.02 (13), 125.02 (15) (b), 125.02 (16) (intro.), 125.02 (21), 125.02 (23), 125.03
4(title), 125.03 (1) (a), 125.03 (1) (b), 125.03 (2), 125.04 (3) (a) (intro.), 125.04 (3)
5(b), 125.04 (3) (c), 125.04 (3) (d) 1., 125.04 (3) (d) 2., 125.04 (3) (e) 2., 125.04 (4),
6125.04 (5) (a) 5., 125.04 (9), 125.045, 125.06 (11m), 125.07 (1) (b) 4., 125.07 (4)
7(f) 3., 125.105 (1), 125.12 (1) (a), 125.12 (1) (c), 125.12 (4) (title), 125.12 (4) (ag)
8(intro.), 125.12 (5), 125.12 (6) (a), 125.12 (6) (b), 125.12 (6) (c), 125.12 (6) (cm),
9125.12 (6) (d), 125.12 (6) (dm), 125.12 (6) (e), 125.13, 125.14 (2) (c), 125.14 (2)
10(d), 125.14 (2) (e), 125.14 (2) (f), 125.14 (3) (b), 125.145, 125.15 (1), 125.17 (6) (a)
11(intro.), 125.19 (1), 125.27 (1) (a), 125.27 (2) (a) 1. (intro.), 125.27 (2) (a) 2.,
12125.27 (3) (b), 125.275 (1), 125.275 (3), 125.28 (1) (a), 125.28 (1) (b), 125.28 (2)
13(e) 2., 125.28 (4), 125.28 (5) (b), 125.28 (5) (d) 3., 125.28 (5) (e), 125.29 (1), 125.29
14(3) (intro.), 125.295 (1) (intro.), 125.295 (2) (b), 125.295 (2) (c), 125.295 (4),

1125.295 (5), 125.30 (1), 125.30 (2) (intro.), 125.30 (2) (b), 125.30 (3), 125.30 (4),
2125.30 (5), 125.33 (2) (a), 125.33 (2) (d), 125.51 (2) (am), 125.51 (5) (a) 1., 125.51
3(5) (a) 4., 125.51 (5) (b) 2., 125.51 (5) (b) 4., 125.51 (5) (c) 1., 125.51 (5) (d) 2.,
4125.52 (1) (a), 125.52 (1) (b) 1., 125.52 (1) (b) 2., 125.52 (2), 125.52 (3), 125.53
5(1), 125.535 (1), 125.535 (2), 125.535 (3) (b) 2., 125.54 (1), 125.54 (5), 125.54 (7)
6(a) 2., 125.54 (7) (c) 3., 125.54 (7) (d), 125.54 (8), 125.545 (2) (a) 3. b., 125.545 (3)
7(a) 1., 125.545 (3) (a) 2., 125.545 (5), 125.545 (6), 125.545 (7), 125.55 (1), 125.56
8(2) (a), 125.56 (2) (c), 125.56 (2) (d), 125.58 (1), 125.60 (1), 125.61 (1), 125.61 (3),
9125.61 (4), 125.62 (1), 125.62 (3), 125.63 (1), 125.63 (3), 125.65 (1), 125.65 (4)
10(intro.), 125.65 (4) (e), 125.65 (6), 125.65 (10), 125.68 (9) (b), 125.68 (9) (d),
11125.68 (9) (f), 125.68 (10), 125.69 (title), 125.69 (1) (b) 1., 125.69 (1) (c), 125.69
12(4) (e), 125.69 (6) (a), 125.70, 139.01 (4), 139.01 (5), 139.01 (6), 139.01 (10),
13139.03 (2x) (a), 139.03 (5) (a), 139.04 (4), 139.06 (3), 139.08 (3), 139.08 (4),
14139.09, 139.11 (1), 139.11 (2), 139.11 (3), 139.11 (4) (a) 2., 139.11 (4) (b) 2., 139.18
15(2), 139.22, 139.25 (9), 227.52 (1), 230.08 (2) (e) 11. and 346.93 (1); and to create
1615.435 (2), 19.42 (13) (q), 20.566 (9), 20.923 (4) (c) 6., 125.02 (11g), 125.02 (17r)
17and (17t), 125.025, 125.11 (3), 125.52 (8), 125.525, 125.535 (3) (a) 2m., 125.69
18(1) (a) 3., 125.69 (1) (b) 3., 139.01 (5g) and 139.01 (6m) of the statutes; relating
19to:
creating a resort manufacturer permit authorizing the production and sale
20of intoxicating liquor, and activities and retail interests of resort
21manufacturers; creating an Office of Alcohol Beverages Enforcement attached

1to the Department of Revenue and transferring alcohol beverages regulation
2and enforcement functions to this office; and making appropriations.
Analysis by the Legislative Reference Bureau
This bill creates an Office of Alcohol Beverages Enforcement and a new permit
for resort manufacturers issued by the office.
Office of Alcohol Beverages Enforcement
The Office of Alcohol Beverages Enforcement is attached to the Department of
Revenue. The bill transfers DOR's alcohol beverages regulation and enforcement
functions, including issuance of certain alcohol beverages permits, to the office. The
office is led by a director appointed by the governor, subject to senate confirmation.
The director must appoint a chief legal counsel and may appoint special agents and
other employees necessary to carry out the permitting, audit, education, and
enforcement functions of the office. The director and employees of the office may not
be employed by or have a financial interest in the alcohol beverages industry and are
subject to the standards of conduct and conflict of interest prohibitions for state
public officials. The bill transfers DOR employees to the office and creates additional
employee positions in the office. The office is funded from program revenues
consisting of alcohol beverages permit fees and other administrative fees received by
the office.
Resort manufacturer permits
The bill creates a resort manufacturer permit issued by the office that
authorizes the production and sale of intoxicating liquor, which includes distilled
spirits and wine. The permittee may also sell fermented malt beverages (beer) under
the permit if the beer is purchased from a wholesaler. The bill specifies the
permissible activities and retail interests of a resort manufacturer.
Under current law, alcohol beverages are generally distributed to consumers
under a three-tier distribution system: the producer sells to a wholesaler; the
wholesaler sells to a retailer; and the retailer sells to a consumer. With specific
exceptions, no person may sell outside the three-tier system and no person may sell
alcohol beverages to a consumer unless the seller possesses a license or permit
authorizing the sale. In general, municipalities issue retail licenses authorizing the
sale of alcohol beverages to consumers. Class “A” and “Class A” licenses authorize
the retail sale of, respectively, beer and intoxicating liquor in original packages for
consumption off the licensed premises, while Class “B" and “Class B” licenses
authorize the retail sale of, respectively, beer and intoxicating liquor for consumption
on the premises or, subject to certain restrictions, off the premises. “ Class B”
licenses, other than those issued to wineries, are subject to a quota system. With
limited exceptions, a retail licensee may not purchase alcohol beverages from, or
possess alcohol beverages purchased from, any person other than a wholesaler. DOR
issues permits to alcohol beverage wholesalers and producers, such as
manufacturers, rectifiers, and wineries (a function transferred to the office under the
bill). Certain exceptions exist authorizing the retail sale of alcohol beverages to

consumers under a DOR-issued permit rather than a municipality-issued retail
license. A DOR-issued permit authorizing retail sales of intoxicating liquor is not
subject to the quota system.
Under current law, a manufacturer's permit or rectifier's permit authorizes the
permittee to, respectively, manufacture or rectify intoxicating liquor and sell it to
wholesalers. Current law prohibits a manufacturer or rectifier from holding an
interest in a retail license and prohibits a retail licensee from holding an interest in
a manufacturer or rectifier, but a manufacturer's permit or rectifier's permit
authorizes limited retail sales, without a retail license, of intoxicating liquor
manufactured or rectified on the premises. A winery permit authorizes the winery
to manufacture, blend, and bottle wine for sale to wholesalers. A winery may also
hold one retail license. If the retail license is a “Class B" license, the license is limited
compared to other “Class B” licenses and authorizes the winery to sell only wine, not
distilled spirits. A winery issued a retail license may provide wine made by the
winery directly to its own retail licensed premises without the wine first passing
through a wholesaler.
This bill creates a resort manufacturer permit, issued by the office, authorizing
all of the following: 1) the manufacture or rectification of up to 150,000 gallons of
intoxicating liquor per year on the resort manufacturer premises; 2) the bottling of
intoxicating liquor manufactured or rectified by the resort manufacturer; 3) the
possession and storage of alcohol beverages on the resort manufacturer premises; 4)
the sale of intoxicating liquor manufactured or rectified by the resort manufacturer
to wholesalers; 5) the retail sale on resort manufacturer premises, without a retail
license, of intoxicating liquor manufactured or rectified on these premises, for
consumption on the premises or off the premises; 6) the retail sale on resort
manufacturer premises, without a retail license, of beer and of intoxicating liquor not
manufactured or rectified on the premises, for consumption on the premises, if the
beer or intoxicating liquor is purchased from a wholesaler; and 7) the sale and
delivery of intoxicating liquor manufactured or rectified on the resort manufacturer
premises to the retail licensed premises of the resort or of a secondary resort facility
(discussed below). Among the requirements for the office to issue a resort
manufacturer permit, the applicant must own and operate at least one resort located
in this state. The bill defines a “resort” as a hospitality business operation involving
multiple facilities under the same ownership that includes at least 300 guest rooms
and includes all of the following located within 15 miles of these guest rooms: at least
one spa; comprehensive food and beverage services consisting of at least five separate
restaurants; and championship golf courses consisting of at least 36 holes. The bill
defines a “secondary resort facility” as a facility, other than a resort, that is located
in this state, that is owned by a resort manufacturer, that is of the same or
substantially similar consumer brand family as the resort, and that provides lodging
or has at least one golf course or both. To be eligible for a resort manufacturer permit,
the applicant's entire process for manufacturing or rectifying intoxicating liquor
must occur on the resort manufacturer premises. A resort manufacturer may hold
the following retail licenses: 1) retail licenses for licensed premises that are part of
the resort; 2) Class “B” and “Class B” licenses for up to ten licensed locations that are

part of a secondary resort facility; and 3) if a Class “B” or “Class B” license has been
issued for a secondary resort facility, a Class “A” or “Class A” license, or both, for any
gift shop associated with the secondary resort facility. A person may not hold a resort
manufacturer's permit and also a manufacturer's permit or rectifier's permit.
The bill also includes various provisions that treat resort manufacturers
similar to manufacturers and rectifiers, including provisions relating to tax
reporting.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB801,1 1Section 1. 15.435 (title) of the statutes is amended to read:
SB801,5,2 215.435 (title) Same; attached boards and offices.
SB801,2 3Section 2. 15.435 (2) of the statutes is created to read:
SB801,5,84 15.435 (2) Office of alcohol beverages enforcement. There is created an
5office of alcohol beverages enforcement which is attached to the department of
6revenue under s. 15.03. The office shall be under the direction and supervision of a
7director nominated by the governor, and with the advice and consent of the senate
8appointed, for a 6-year term, subject to removal under s. 17.07 (3m).
SB801,3 9Section 3. 17.07 (3m) of the statutes is amended to read:
SB801,5,1210 17.07 (3m) Notwithstanding sub. (3), the parole commission chairperson and
11the director of the office of alcohol beverages enforcement
may be removed by the
12governor, at pleasure.
SB801,4 13Section 4. 19.42 (13) (q) of the statutes is created to read:
SB801,5,1514 19.42 (13) (q) The director and employees of the office of alcohol beverages
15enforcement.
SB801,5 16Section 5 . 20.005 (3) (schedule) of the statutes: at the appropriate place, insert
17the following amounts for the purposes indicated: - See PDF for table PDF
SB801,6 1Section 6. 20.566 (1) (ha) of the statutes is amended to read:
SB801,6,112 20.566 (1) (ha) Administration of liquor tax and alcohol beverages enforcement.
3The amounts in the schedule for computer, audit, and enforcement costs incurred in
4administering the tax under s. 139.03 (2m) and for costs incurred in enforcing the
53-tier system for alcohol beverages production, distribution, and sale under ch. 125
.
6All moneys received from the administration fee under s. 139.06 (1) (a) and any
7permit fee under s. 125.535 (2)
shall be credited to this appropriation.
8Notwithstanding s. 20.001 (3) (a), at the end of each fiscal year, the unencumbered
9balance of this appropriation account, minus an amount equal to 10 percent of the
10sum of the amounts expended and the amounts encumbered from the account during
11the fiscal year, shall lapse to the general fund.
SB801,7 12Section 7. 20.566 (1) (hd) of the statutes is repealed.
SB801,8 13Section 8. 20.566 (9) of the statutes is created to read:
SB801,6,1914 20.566 (9) Office of alcohol beverages enforcement. (g) General program
15operations.
The amounts in the schedule for alcohol beverages regulation and
16enforcement under ch. 125 and general program operations of the office of alcohol
17beverages enforcement. All moneys received by the office of alcohol beverages
18enforcement, including all moneys transferred under 2017 Wisconsin Act .... (this
19act), section 137 (1) (a), shall be credited to this appropriation account.
SB801,9 20Section 9. 20.923 (4) (c) 6. of the statutes is created to read:
SB801,7,1
120.923 (4) (c) 6. Office of alcohol beverages enforcement: director of.
SB801,10 2Section 10. 125.02 (10) of the statutes is amended to read:
SB801,7,43 125.02 (10) “Manufacturer" means a person, other than a rectifier or resort
4manufacturer
, that ferments, manufactures, or distills intoxicating liquor.
SB801,11 5Section 11. 125.02 (11g) of the statutes is created to read:
SB801,7,76 125.02 (11g) Except in ss. 125.30 (3) and 125.545 (2) (a) 2., “office" means the
7office of alcohol beverages enforcement.
SB801,12 8Section 12. 125.02 (12) of the statutes is amended to read:
SB801,7,119 125.02 (12) “Peace officer" means a sheriff, undersheriff, deputy sheriff, police
10officer, constable, marshal, deputy marshal or any employee of the department office
11or of the department of justice authorized to act under this chapter.
SB801,13 12Section 13. 125.02 (13) of the statutes is amended to read:
SB801,7,1413 125.02 (13) “Permit" means any permit issued by the department office under
14this chapter.
SB801,14 15Section 14. 125.02 (15) (b) of the statutes is amended to read:
SB801,7,1816 125.02 (15) (b) With respect to intoxicating liquor, the manufacturer, the
17rectifier, the resort manufacturer, or the exclusive agent designated by the
18manufacturer or, rectifier, or resort manufacturer.
SB801,15 19Section 15. 125.02 (16) (intro.) of the statutes is amended to read:
SB801,7,2120 125.02 (16) (intro.) “Rectifier" means any one of the following but does not
21include a resort manufacturer
:
SB801,16 22Section 16. 125.02 (17r) and (17t) of the statutes are created to read:
SB801,7,2323 125.02 (17r) “Resort manufacturer” means a permittee under s. 125.525.
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