Amendment ASA1-AB795

AB795-ASA1, s. 21 Section 21. 125.54 (7) (e) of the statutes is created to read:

AB795-ASA1,13,13 125.54 (7) (e) This subsection does not apply to a cooperative wholesaler under s. 125.545.

AB795-ASA1, s. 22 Section 22. 125.54 (8) of the statutes is created to read:

AB795-ASA1,13,19 125.54 (8) Duty to work in good faith. Each wholesaler has an obligation to negotiate in good faith with any manufacturer, rectifier, or winery that seeks to sell its products in this state through the wholesaler. To this end, all wholesalers shall work diligently to ensure that distribution channels are available for the sale of intoxicating liquor products through wholesalers to retailers in this state.

AB795-ASA1, s. 23 Section 23. 125.545 of the statutes is created to read:

AB795-ASA1,13,22 125.545 Small winery cooperative wholesalers. (1) Definitions. In this section:

AB795-ASA1,13,25 (a) "Member" means a small winery that meets the requirements established under this section for membership in a cooperative wholesaler and that has been qualified and accepted for membership in a cooperative wholesaler.

AB795-ASA1,14,2 (b) "Out-of-state winery" means a winery that is located in a state other than this state and that holds a valid direct shipper's permit issued under s. 125.535.

AB795-ASA1,14,4 (c) "Retailer" means any person holding a "Class A", "Class B", or "Class C" license or "Class B" permit issued under s. 125.51.

AB795-ASA1,14,6 (d) "Small winery" means any winery that produces and bottles less than 25,000 gallons of wine in a calendar year.

AB795-ASA1,14,8 (e) "Small winery cooperative wholesaler" or "cooperative wholesaler" means an entity established under this section.

AB795-ASA1,14,10 (f) "Wisconsin winery" means a winery operating under a permit issued under s. 125.53.

AB795-ASA1,14,17 (2) Creation and organization. (a) 1. A cooperative wholesaler may only be created as provided under s. 185.043 (2) and this section. Each cooperative wholesaler operating under authority of this section shall be organized under ch. 185 but shall be subject to the limitations on such cooperatives imposed by this section. Subject to subd. 3., only small wineries may be members of a cooperative wholesaler. The principal purpose of a cooperative wholesaler shall be to sell and distribute wine manufactured, blended, or mixed, and also bottled, by its members.

AB795-ASA1,14,20 2. Notwithstanding s. 185.08 (1), a cooperative wholesaler shall include in its articles of incorporation under ch. 185 a single location for its agent and principal office, which location shall be in this state.

AB795-ASA1,14,22 3. A small winery may become a member of a cooperative wholesaler only if all of the following apply:

AB795-ASA1,14,23 a. The small winery holds a direct shipper's permit under s. 125.535.

AB795-ASA1,14,25 b. The small winery is certified by the department under sub. (6) (a) as a small winery.

AB795-ASA1,15,6 (b) In addition to the requirements specified in s. 185.31 for the board of directors of a cooperative wholesaler, a director representing a member that is a Wisconsin winery shall be either an owner or an employee of that Wisconsin winery. If any out-of-state winery is a member of the cooperative wholesaler, at least one director shall be either an owner or an employee of an out-of-state winery that is a member of the cooperative wholesaler.

AB795-ASA1,15,11 (c) Notwithstanding any provision of ch. 185, a cooperative wholesaler may not employ any owner or employee of a member. However, an individual that is an owner or an employee of a member may act as a volunteer to assist that cooperative wholesaler in the sale and distribution of wine to retailers and other wholesalers in the manner authorized under this section.

AB795-ASA1,15,19 (3) Authorization and activities. (a) 1. Within 7 days after filing its articles of incorporation under ch. 185, a cooperative wholesaler shall apply to the department for a wholesaler's permit under s. 125.54. The provisions of s. 125.04 (5) (c) and (6) shall apply to a cooperative wholesaler as if the cooperative wholesaler were a corporation or a limited liability company and, for each of these provisions, the department shall determine whether the cooperative wholesaler is most similar to a corporation or a limited liability company in the context of that provision and apply that provision to the cooperative wholesaler accordingly.

AB795-ASA1,15,25 2. Notwithstanding s. 125.54 (6), the department may issue not more than one wholesaler's permit to any cooperative wholesaler. The department may not issue more than a total of 6 wholesalers' permits to cooperative wholesalers in this state. The department may not issue any new wholesaler's permit to a cooperative wholesaler after December 31, 2008, but may renew wholesalers' permits that were initially issued to cooperative wholesalers prior to that date.

AB795-ASA1,16,2 3. No cooperative wholesaler may operate in this state without a wholesaler's permit.

AB795-ASA1,16,7 (b) 1. Notwithstanding s. 125.54 (1), and except as provided in subd. 3., a cooperative wholesaler issued a wholesaler's permit under par. (a) is authorized to sell and distribute only wine. Except as provided in subd. 3., a cooperative wholesaler may not sell or distribute any alcohol beverages, or any other product, except wine.

AB795-ASA1,16,14 2. A cooperative wholesaler shall purchase on consignment wine from its members to be resold to retailers and other wholesalers. Notwithstanding s. 125.69 (5), a cooperative wholesaler may not purchase wine from any person other than a member. A cooperative wholesaler may not resell or distribute wine unless it has been purchased on consignment from a member. Notwithstanding s. 125.54 (1), a cooperative wholesaler may not sell or distribute wine except to a retailer or to a wholesaler holding a permit under s. 125.54.

AB795-ASA1,16,20 3. A cooperative wholesaler may purchase ancillary wine industry trade goods such as bottles, corks, and other supplies used by wineries in the bottling and sale of wine if such trade goods do not include any alcohol beverages. Any wine industry trade goods purchased by a cooperative wholesaler under this subdivision may be offered for resale to the cooperative wholesaler's members or to any winery that was formerly a member of the cooperative wholesaler.

AB795-ASA1,16,24 4. A cooperative wholesaler shall work with all of its members on evenhanded terms. Any preferential treatment by a cooperative wholesaler for the benefit of a member that is a Wisconsin winery, and any discrimination against a member that is an out-of-state winery, is prohibited.

AB795-ASA1,17,5 (c) Neither a cooperative wholesaler nor its members are subject to any restriction on dealings under s. 125.69 (1) between wholesalers and wineries. Except as provided in s. 125.54 (7) (e) and as otherwise provided in this section, all provisions of this chapter and ch. 139 that apply to a wholesaler issued a permit under s. 125.54 also apply to a cooperative wholesaler issued a permit under s. 125.54.

AB795-ASA1,17,10 (4) Exclusive distribution. A member of a cooperative wholesaler may make its wine available for purchase by a retailer or another wholesaler only through the cooperative wholesaler of which it is a member. A member of a cooperative wholesaler may not sell its wine directly to any other wholesaler or directly to a retailer.

AB795-ASA1,18,6 (5) Semiannual meetings and biennial reports. (a) At least once every 6 months, the board of directors of a cooperative wholesaler shall meet in person with an employee of the department. At each of these meetings, the cooperative wholesaler shall provide a detailed report of its operations and sales activities, bring whatever documentation the department considers reasonably necessary for the department to conduct its review of the cooperative wholesaler, and answer any questions the department may have about the cooperative wholesaler's activities. A representative of the University of Wisconsin Center for Cooperatives shall also attend each of these meetings. Within 7 days after each of these meetings, the department shall submit in writing to the cooperative wholesaler all additional questions for which the department requests an answer of the cooperative wholesaler. The cooperative wholesaler shall provide answers to the department's questions within 7 days. Within 6 weeks after each of these meetings, the department shall issue a report stating whether the cooperative wholesaler is operating properly under this state's law and shall detail any problem areas that the cooperative wholesaler must correct. The University of Wisconsin Center for Cooperatives shall also issue a report within 6 weeks of each of these meetings and detail in that report all recommendations on how the cooperative wholesaler can improve its operations and better comply with this state's law. All reports issued by the department and by the University of Wisconsin Center for Cooperatives shall be publicly available.

AB795-ASA1,18,11 (b) With each application for renewal of a wholesaler's permit issued to a cooperative wholesaler, each cooperative wholesaler shall file with the department, in the form and manner prescribed by the department by rule, a biennial report that includes detailed information on its members, board of directors, and sale and distribution activities.

AB795-ASA1,18,14 (6) Department certification and rule making. (a) 1. The department shall, upon application, certify eligible applicants as small wineries and renew prior certifications of eligible applicants as small wineries.

AB795-ASA1,18,22 2. Any winery seeking to become a member of, or to maintain its membership in, a cooperative wholesaler may apply to the department for certification as a small winery. If the winery meets the definition of a small winery under this section, satisfies the requirement under sub. (2) (a) 3. a., and submits any other information that the department determines is necessary to certify that the winery is operating as a small winery and is eligible for membership in a cooperative wholesaler, the department shall certify the winery as a small winery. This certification shall remain valid for one year.

AB795-ASA1,18,24 3. In certifying any winery under subd. 2., the department shall classify the winery as either a Wisconsin winery or an out-of-state winery.

AB795-ASA1,19,3 4. The department shall refuse to certify under this paragraph any winery that cannot demonstrate it holds all necessary permits for its operations or that the department finds is otherwise not in full compliance with the laws of this state.

AB795-ASA1,19,5 (b) The department shall promulgate rules to administer and enforce the requirements under this section.

AB795-ASA1,19,9 (7) Penalties. (a) Any winery that sells or distributes its wine directly to a retailer, rather than through a wholesaler or cooperative wholesaler, is subject to a fine of not more than $10,000 and revocation of all of its permits by the department under s. 125.12 (5).

AB795-ASA1,19,13 (b) Any cooperative wholesaler that provides preferential treatment to a Wisconsin winery or discriminates against an out-of-state winery is subject to a fine of not more than $10,000 and revocation of its wholesaler's permit by the department under s. 125.12 (5).

AB795-ASA1, s. 24 Section 24. 125.55 (1) (intro.) and (a) of the statutes are consolidated, renumbered 125.55 (1) and amended to read:

AB795-ASA1,19,17 125.55 (1) The department may issue the following combination permits: (a) A a combination manufacturer's and rectifier's permit.

AB795-ASA1, s. 25 Section 25. 125.55 (1) (b) of the statutes is repealed.

AB795-ASA1, s. 26 Section 26. 125.55 (2) of the statutes is amended to read:

AB795-ASA1,19,21 125.55 (2) A combination manufacturer's and wholesaler's permit may not be issued. A combination rectifier's and wholesaler's permit may not be issued.

AB795-ASA1, s. 27 Section 27. 125.58 (1) of the statutes is amended to read:

AB795-ASA1,20,16 125.58 (1) The department shall issue out-of-state shippers' permits which authorize persons located outside this state to sell or ship intoxicating liquor into this state. Except as provided under sub. (4), intoxicating liquor may be shipped into this state only to a person holding a manufacturer's, rectifier's, wholesaler's, industrial alcohol or medicinal alcohol permit under s. 125.54 or, if shipped from a manufacturer or rectifier in another state holding a permit under this section, to a person holding a manufacturer's or rectifier's permit under s. 125.52 or a winery permit under s. 125.53. Except as provided under sub. (4), a separate out-of-state shipper's permit is required for each location from which any intoxicating liquor is sold or shipped into this state, including the location from which the invoices are issued for the sales or shipments. Any person holding an out-of-state shipper's permit issued under this section may solicit orders for sales or shipments by the permittee without obtaining the sales solicitation permit required by s. 125.65, but every agent, salesperson or other representative who solicits orders for sales or shipments by an out-of-state shipper shall first obtain a permit for soliciting orders under s. 125.65. No holder of an out-of-state shipper's permit issued under this section may sell intoxicating liquor in this state or ship intoxicating liquor into this state unless the out-of-state shipper is the primary source of supply for that intoxicating liquor.

AB795-ASA1, s. 28 Section 28. 125.58 (4) (a) (intro.) of the statutes is renumbered 125.58 (4) and amended to read:

AB795-ASA1,20,21 125.58 (4) A winery located outside of this state may ship wine into this state as provided under s. 125.68 (10) (bm) if all of the following apply: 125.535 and is not required to hold an out-of-state shipper's permit under this section.

AB795-ASA1, s. 29 Section 29. 125.58 (4) (a) 1. to 4. of the statutes are repealed.

AB795-ASA1, s. 30 Section 30. 125.58 (4) (b) of the statutes is repealed.

AB795-ASA1, s. 31 Section 31. 125.65 (8) of the statutes is amended to read:

AB795-ASA1,21,3 125.65 (8) Nonresident persons holding permits under this section may solicit sales from retailers in this state only if the orders are solicited for, and will be filled by, persons holding permits under s. 125.52 or 125.54.

AB795-ASA1, s. 32 Section 32. 125.68 (10) (a) of the statutes is amended to read:

AB795-ASA1,21,10 125.68 (10) (a) Except as provided in par. (bm) s. 125.535, no intoxicating liquor may be shipped into this state unless consigned to a person holding a wholesaler's permit for the sale of intoxicating liquor, other than a retail "Class B" permit under s. 125.54 or, if shipped from a manufacturer or rectifier in another state holding a permit under s. 125.58, consigned to a person holding a manufacturer's or rectifier's permit under s. 125.52 or a winery permit under s. 125.53.

AB795-ASA1, s. 33 Section 33. 125.68 (10) (b) of the statutes is amended to read:

AB795-ASA1,21,19 125.68 (10) (b) Except as provided in par. (bm) s. 125.535, no common carrier or other person may transport into and deliver within this state any intoxicating liquor unless it is consigned to a person holding a wholesaler's permit for the sale of intoxicating liquor, other than a retail "Class B" permit under s. 125.54 or, if shipped from a manufacturer or rectifier in another state holding a permit under s. 125.58, consigned to a person holding a manufacturer's or rectifier's permit under s. 125.52 or a winery permit under s. 125.53. Any common carrier violating this paragraph shall forfeit $100 for each violation.

AB795-ASA1, s. 34 Section 34. 125.68 (10) (bm) of the statutes is repealed.

AB795-ASA1, s. 35 Section 35. 125.68 (10) (bs) of the statutes is repealed.

AB795-ASA1, s. 36 Section 36. 125.68 (10) (c) of the statutes is repealed.

AB795-ASA1, s. 37 Section 37. 125.69 (1) (a) of the statutes is amended to read:

AB795-ASA1,22,4 125.69 (1) (a) No intoxicating liquor manufacturer, rectifier, winery, out-of-state shipper permittee, or wholesaler may hold any direct or indirect interest in any "Class A" license or establishment and no "Class A" licensee may hold any direct or indirect interest in a wholesale permit or establishment, except that a winery that has a permit under s. 125.53 may have an ownership interest in a "Class A" license.

AB795-ASA1, s. 38 Section 38. 125.69 (1) (b) 1. of the statutes is amended to read:

AB795-ASA1,22,12 125.69 (1) (b) 1. Except as provided under subds. 2. to subd. 4., no intoxicating liquor manufacturer, rectifier, winery, out-of-state shipper permittee, or wholesaler may hold any direct or indirect interest in any "Class B" license or permit or establishment or "Class C" license or establishment and no "Class B" licensee or permittee or "Class C" licensee may hold any direct or indirect interest in a manufacturer, rectifier, winery, out-of-state shipper, or wholesale permit or establishment.

AB795-ASA1, s. 39 Section 39. 125.69 (1) (b) 2. and 3. of the statutes are repealed.

AB795-ASA1, s. 40 Section 40. 125.69 (1) (c) (intro.) of the statutes is renumbered 125.69 (1) (c) and amended to read:

AB795-ASA1,22,23 125.69 (1) (c) No manufacturer, rectifier, winery, or out-of-state shipper permittee, whether located within or without this state, may hold any direct or indirect interest in any wholesale permit or establishment, except as provided in s. 125.53, and except that a manufacturer that is also a brewer may hold a permit issued under s. 125.54 for the wholesale sale of wine only. This paragraph does not prohibit any of the following persons from obtaining a permit under s. 125.65:. Except as provided in s. 125.53, no retail licensee may hold any direct or indirect interest in any manufacturer, rectifier, winery, or out-of-state shipper permittee.

AB795-ASA1, s. 41 Section 41. 125.69 (1) (c) 1. to 3. of the statutes are repealed.

AB795-ASA1, s. 42 Section 42. 125.69 (4) (c) of the statutes is repealed.

AB795-ASA1, s. 43 Section 43. 125.69 (6) (a) of the statutes is amended to read:

AB795-ASA1,23,5 125.69 (6) (a) No campus or retail licensee or permittee may purchase intoxicating liquor from, or possess intoxicating liquor purchased from, any person other than a manufacturer, rectifier or wholesaler holding a permit under this chapter for the sale of intoxicating liquor.

AB795-ASA1, s. 44 Section 44. 139.035 of the statutes is repealed and recreated to read:

AB795-ASA1,24,2 139.035 Wine shipped directly to individuals in this state. (1) All wine shipped directly to an individual located in Wisconsin by a person holding a direct wine shipper's permit under s. 125.535 shall be sold with the occupational tax imposed under s. 139.03 included in the selling price. As directed by the department, the taxes imposed under s. 139.03 shall be paid to, and a quarterly return filed with, the department once every quarter on or before the 15th day of the next month following the close of the calendar quarter. In addition to filing a quarterly liquor tax return, each person holding a direct wine shipper's permit under s. 125.535 shall be required to file an addendum, on forms furnished by the department, that provides, at minimum, the identity, quantity, and price of all wine shipped to individuals in this state during the previous quarter, along with the name, address, and birthdate of each person who purchased the wine as well as the name of the person of legal drinking age who acknowledged delivery of the wine. Working with permittees under s. 125.535, the department shall develop forms, in both paper and electronic format, for use by such permittees in obtaining this information and complying with any other requirement under this state's law in connection with the direct shipment of wine. The department shall keep confidential, in the same manner required for tax returns under s. 71.78 (1) and (5) to (8), reports submitted under this subsection, but the department may use aggregated or summary information from such reports for purposes of s. 139.11 (4) (b).

AB795-ASA1,24,7 (2) Any failure of a person holding a direct wine shipper's permit under s. 125.535 to pay the occupational tax or file the addendum required under sub. (1) within 30 days of its due date constitutes grounds for revocation or suspension of the permit. The provisions on timely filing under s. 71.80 (18) apply to the tax and addendum required under this section.

AB795-ASA1,24,10 (3) No wine may be shipped directly to an individual in this state by a person holding a direct wine shipper's permit under s. 125.535 unless the tax imposed under s. 77.52 or 77.53 is paid on the sale of such wine.

AB795-ASA1, s. 45 Section 45. 139.11 (4) (title) of the statutes is amended to read:

AB795-ASA1,24,12 139.11 (4) (title) Confidentiality and publications.

AB795-ASA1, s. 46 Section 46. 139.11 (4) of the statutes is renumbered 139.11 (4) (a) and amended to read:

AB795-ASA1,24,22 139.11 (4) (a) Sections 71.78 (1) and (4) to (9) and 71.83 (2) (a) 3., relating to confidentiality of income, franchise and gift tax returns, apply to any information obtained from any person on a fermented malt beverage or intoxicating liquor tax return, report, schedule, exhibit or other document or from an audit report relating to any of those documents, except that the department of revenue shall publish brewery production and sales statistics and shall publish or permit the publication of statistics on the total number of gallons of the types and brands of intoxicating liquor sold in this state.

AB795-ASA1, s. 47 Section 47. 139.11 (4) (b) of the statutes is created to read:

AB795-ASA1,25,4 139.11 (4) (b) Sections 71.78 (1) and (4) to (9) and 71.83 (2) (a) 3., relating to confidentiality of income, franchise and gift tax returns, do not apply to any information obtained from any person on an intoxicating liquor tax return, report, schedule, exhibit or other document or from an audit report relating to any of those documents. With the information provided to the department by any person, the department of revenue shall publish at least once each month:

AB795-ASA1,25,6 1. Statistics on the total number of liters of the types and brands of intoxicating liquor sold in this state.

AB795-ASA1,25,13 2. A current and regularly updated list, made available on paper and on the department's Internet Web site, of permit holders that minimally includes detailed information on the name, address, contact person, and date of permit issuance for every manufacturer's and rectifier's permit issued under s. 125.52, winery permit issued under s. 125.53, direct wine shipper's permit issued under s. 125.535, wholesaler's permit issued under s. 125.54, and out-of-state shipper's permit issued under s. 125.58.

AB795-ASA1,25,16 3. A report summarizing the identity, quantity, and price of all products sold under each winery permit issued under s. 125.53 and each direct wine shipper's permit issued under s. 125.535.

AB795-ASA1,25,18 4. A report summarizing the sales quantity and product data available for all products sold under each wholesaler's permit issued under s. 125.54.

AB795-ASA1, s. 48 Section 48. 185.043 of the statutes is renumbered 185.043 (1) and amended to read:

AB795-ASA1,25,23 185.043 (1) Five Except as provided in sub. (2), 5 or more adults, one of whom must be a resident, may form a cooperative by signing, acknowledging and filing articles.

AB795-ASA1, s. 49 Section 49. 185.043 (2) of the statutes is created to read:

AB795-ASA1,26,7 185.043 (2) If the cooperative is formed for purposes of operating as a small winery cooperative wholesaler under s. 125.545, 3 or more individuals, at least one of whom must be a resident and all of which must be owners of small wineries certified by the department of revenue under s. 125.545 (6) (a), may form a cooperative by signing, acknowledging, and filing articles. Membership in a cooperative formed under this subsection is limited to small wineries certified by the department of revenue under s. 125.545 (6) (a).

AB795-ASA1, s. 50 Section 50 . Nonstatutory provisions.

AB795-ASA1,26,15 (1) Position authorization. The authorized FTE positions for the department of revenue are increased by 1.0 PR position, to be funded from the appropriation under section 20.566 (1) (ha) of the statutes, as affected by this act, for the purpose of performing computer, audit, and enforcement services incurred in administering the tax under section 139.03 (2m) of the statutes and for enforcing the 3-tier system for alcohol beverages production, distribution, and sale under chapter 125 of the statutes.

AB795-ASA1,26,17 (2) Small winery interim certification. (a ) The department of revenue shall, upon application, certify under this subsection eligible applicants as small wineries.