AB492: Bill Text

Under current law, to authorize commercial brewing operations, DOR may issue a brewpub permit or a brewer's permit, but no person may hold both permits. To be eligible for a brewpub permit, a person must meet certain requirements, including that 1) the person manufactures not more than 10,000 barrels of beer per year in all locations, 2) the person operates on the brewpub premises a restaurant for which a Class “B" license is issued, and 3) the person does not hold, or have an interest in, a Class “A” license or a Class “B" or “Class B" license other than one issued for a restaurant on brewpub premises. A brewpub permit authorizes, among other activities 1) the manufacture of up to 10,000 barrels of beer per year, 2) the retail sale of alcohol beverages through a Class “B" or “Class B" license issued for the brewpub's restaurant on brewpub premises, and 3) the annual distribution of up to 1,000 barrels of the brewpub's beer to retailers, excluding the brewpub's own retail locations.

This bill creates a distillpub permit, issued by DOR, authorizing all of the following: 1) the manufacture and rectification of distilled spirits not exceeding a total of 300,000 gallons per year at all distillpub locations; 2) the bottling of distilled spirits manufactured or rectified by the distillpub; 3) the possession and storage of intoxicating liquor on distillpub premises; 4) the transportation of distilled spirits manufactured or rectified on the distillpub premises between these premises and other distillpub premises or the distillpub's retail locations (discussed below); 5) the sale and delivery of distilled spirits manufactured or rectified by the distillpub to wholesalers; 6) the sale and delivery of up to 30,000 gallons per year of distilled spirits manufactured or rectified by the distillpub to retailers, except that retail locations operated by the distillpub (discussed below) are not counted toward this 30,000 gallon limit; 7) the retail sale on distillpub premises, without a retail license, of distilled spirits manufactured or rectified by the distillpub, in original unopened packages or containers, for off-premise consumption; 8) the retail sale and direct shipment to consumers at their residences or other designated addresses, without a retail license, of distilled spirits manufactured or rectified by the distillpub if the consumer arranges while physically present on the distillpub premises to receive periodic direct shipments from the distillpub; and 9) the sale of alcohol beverages at retail in accordance with the terms of any retail license authorized to be held by the distillpub (discussed below). The bill defines “rectify” or “rectification” as blending, mixing, purifying, refining, aging, or otherwise processing distilled spirits, including with wine or other ingredients, but not including distilling. For DOR to issue a distillpub permit to an applicant, the applicant must meet all of the following requirements: 1) the applicant manufactures or rectifies not more than a total of 300,000 gallons of distilled spirits per year in all locations; 2) the applicant operates a restaurant on the distillpub premises; 3) the applicant holds a “Class B" license and the restaurant is located on the “Class B” licensed premises; 4) on the “Class B" licensed premises, the applicant offers for sale intoxicating liquor made by others, in addition to its own distilled spirits; and 5) except as discussed below, the applicant does not hold, or have an interest in, a Class “A" or “Class A” retail license, a Class “B" or “Class B" retail license, a “Class C" retail license, a wholesaler's permit, a liquor manufacturer's permit, a rectifier's permit, a brewer's permit, or an alcohol beverage warehouse permit. A distillpub may hold only the following retail licenses: 1) any “Class B” license for which the licensed premises includes a restaurant on distillpub premises; 2) not more than six “Class B” licenses in addition to those that include a restaurant on distillpub premises if any of these additional six “Class B” licenses was initially issued prior to January 1, 1983; 3) a Class “B” license for any premises for which a “Class B” license is issued; 4) one Class “A” license and one “Class A” license, both issued for the same premises and initially issued prior to January 1, 1990; and 5) if the distillpub also holds a brewpub permit issued in the same name, any Class “B” or “Class B” or “Class C” retail license authorized for a brewpub. Each retail license authorized for a distillpub must be issued in the name of the distillpub. A “Class B” license issued to a distillpub is not subject to the liquor license quota system and, unlike most other retailers, a distillpub is not required to obtain a Class “B” license in order to hold a “Class B” license. A distillpub may hold permits for not more than six distillpub locations. If more than one permit is issued to a distillpub, the distillpub is not required to manufacture or rectify distilled spirits at each location for which a permit is issued. The bill also includes various provisions that treat distillpubs similar to manufacturers, including provisions that allow intoxicating liquor to be shipped directly to distillpubs and to be sold by wholesalers to distillpubs for production purposes.

This bill also modifies the interest restrictions applicable to brewpubs. Under the bill, if a brewpub also holds a distillpub permit in the same name, the brewpub may hold any retail license authorized for the brewpub or distillpub, and the brewpub may self-distribute its own beer directly to any of these retail licensed premises, without this distribution counting toward the brewpub's 1,000 barrel self-distribution limit.

Quota for retail liquor licenses

Current law prohibits a person from selling alcohol beverages at retail unless the seller possesses a license or permit authorizing the sale. Except when issued to a winery, a “Class B" license authorizes the retail sale of intoxicating liquor for consumption on the licensed premises and, subject to various restrictions, the retail sale of intoxicating liquor in original packages for consumption off the licensed premises. Current law imposes a quota on the number of “Class B" liquor licenses that a municipality may issue, subject to certain exceptions. The quota is generally determined by a formula based on the number of licenses previously issued by the municipality and the municipality's population. For purposes of the quota system, a reserve “Class B" license is a “Class B" liquor license first issued on or after December 1, 1997.

This bill increases municipalities' liquor license quotas by increasing by 10 percent, rounded up to the nearest whole number, the number of reserve “Class B" liquor licenses that a municipality may issue.

Brewpub regulations

Under current law, a person is eligible for a brewpub permit issued by DOR if the person meets certain requirements, including that the person manufactures not more than 10,000 barrels of beer per year in all locations. A brewpub permit authorizes, among other activities, the manufacture of up to 10,000 barrels of beer per year and the retail sale of beer through a Class “B" beer license issued for a restaurant on the brewpub premises. A person may not hold more than six brewpub permits.

This bill increases, from 10,000 to 20,000 barrels per year, the amount of beer that a brewpub may manufacture. The bill also increases, from six to 12, the number of locations for which a person may hold a brewpub permit.

Allowing brewers holding brewer's permit to sell wine and distilled spirits for on-premises consumption

Under current law, a brewer's permit issued by DOR authorizes a brewer to, among other activities, sell at retail, without a retail license, the brewer's own beer and other Wisconsin-made beer at the brewery premises and at one off-site retail outlet of the brewer. A brewer may make retail sales of intoxicating liquor only if the brewer held a retail intoxicating liquor license on June 1, 2011.

This bill allows any brewer holding a brewer's permit to sell intoxicating liquor at retail for on-premise consumption at the brewery premises or the brewery's off-site retail outlet. As under current law, intoxicating liquor sold by the brewer must be purchased from a wholesaler.

Winery regulations

Current law allows a winery to hold a retail “Class B" license authorizing the retail sale of wine. A winery operating under a retail “Class B" license may not remain open for retail sales of wine between the hours of 9 p.m. and 8 a.m.

This bill changes the closing hour for wineries operating under a retail “Class B" license from 9 p.m. to 2 a.m., but allows municipalities to establish, by ordinance, more restrictive closing hours for these wineries.

The bill also specifies that a winery may hold a Class “B" license authorizing the retail sale of beer if the winery holds, for the same premises, a “Class B" license authorizing the retail sale of wine.

Eligibility criteria for membership in a small winery cooperative wholesaler

Under current law, between October 1 and December 31, 2008, DOR was authorized to issue intoxicating liquor wholesalers' permits to small winery cooperatives (cooperative wholesalers). Only wineries certified by DOR as small wineries can be members of a cooperative wholesaler. A small winery is defined as a winery that produces and bottles less than 25,000 gallons of wine in a calendar year. The only alcohol beverage product a cooperative wholesaler can sell and distribute is the wine of its members.

This bill changes the definition of small winery so that a winery that produces and bottles less than 50,000, rather than 25,000, gallons of wine in a calendar year may become a member of an existing cooperative wholesaler.

Eliminating requirement that beer and intoxicating wholesalers have a minimum number of customers

Under current law, a beer wholesaler must annually sell and deliver beer to at least 25 separate and independent retail licensees or wholesalers, and an intoxicating liquor wholesaler must annually sell and deliver intoxicating liquor to at least ten separate and independent retail licensees or permittees. If a wholesaler fails to satisfy this requirement, certain penalties apply and the wholesaler's permit cannot be renewed.

This bill repeals this requirement.

For further information see the state and local 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:

AB492,1 Section 1. 125.02 (5g), (5i) and (5k) of the statutes are created to read:

AB492,6,2 125.02 (5g) “Distillpub” means a permittee under s. 125.525.

AB492,6,4 (5i) “Distillpub group" means a distillpub, including all premises for which the distillpub holds a permit issued under s. 125.525, together with all of the following:

AB492,6,7 (a) All distillpubs that share membership with the distillpub in a controlled group of distillpubs, as determined according to rules applicable under 26 USC 5041 (c) (4).

AB492,6,9 (b) All distillpubs considered with the distillpub as one taxpayer under the federal Internal Revenue Code.

AB492,6,10 (c) All franchisees, as defined in s. 553.03 (5), of the distillpub.

AB492,6,12 (d) All franchisees, as defined in s. 553.03 (5), of the distillpub's franchisor, as defined in s. 553.03 (6).

AB492,6,13 (e) The franchisor, as defined in s. 553.03 (6), of the distillpub.

AB492,6,15 (5k) “Distillpub premises" means any premises covered by a permit issued under s. 125.525.

AB492,2 Section 2. 125.02 (10) of the statutes is amended to read:

AB492,7,3 125.02 (10) “Manufacturer" means a person, other than a rectifier or distillpub, that ferments, manufactures, or distills intoxicating liquor.

AB492,3 Section 3. 125.02 (15) (b) of the statutes is amended to read:

AB492,7,7 125.02 (15) (b) With respect to intoxicating liquor, the manufacturer, the rectifier, the distillpub, or the exclusive agent designated by the manufacturer or, rectifier, or distillpub.

AB492,4 Section 4. 125.02 (16) (intro.) of the statutes is amended to read:

AB492,7,10 125.02 (16) (intro.) “Rectifier" means any one of the following but does not include a distillpub:

AB492,5 Section 5. 125.02 (21) of the statutes is amended to read:

AB492,7,15 125.02 (21) “Wholesaler" means a person, other than a brewer, brewpub, manufacturer, or rectifier, or distillpub, who sells alcohol beverages to a licensed retailer or to another person who holds a permit to sell alcohol beverages at wholesale.

AB492,6 Section 6. 125.04 (9) of the statutes is amended to read:

AB492,7,21 125.04 (9) Separate license or permit required. Except as provided under ss. 125.27 (2) (a) and 125.51 (5) (c) 1., wholesalers, manufacturers, rectifiers, distillpubs, brewers, brewpubs, and retailers shall have a separate permit or license covering each location or premises, except a licensed public warehouse, from which deliveries and sales of alcohol beverages are made or at which alcohol beverages are stored.

AB492,7 Section 7. 125.10 (4) of the statutes is amended to read:

AB492,8,5 125.10 (4) Regulation of closed retail premises. A municipality may not prohibit the permittee, licensee, employees, salespersons, employees of wholesalers issued a permit under s. 125.28 (1) or 125.54 (1); employees of permittees under s. 125.295 or 125.525 with respect to the permittee's own retail premises; or service personnel from being present on premises operated under a Class “A", “ Class A" or “Class C" license or under a Class “B" or “Class B" license or permit during hours when the premises are not open for business if those persons are performing job-related activities.

AB492,8 Section 8. 125.25 (2) (b) 5. of the statutes is amended to read:

AB492,8,10 125.25 (2) (b) 5. A Except as provided in s. 125.295 (3m), a Class “A" license may not be issued to a person holding a brewpub permit issued under s. 125.295 or to a person who has a direct or indirect ownership interest in a premises operating under a brewpub permit issued under s. 125.295.

AB492,9 Section 9. 125.28 (5) (b) of the statutes is repealed.

AB492,10 Section 10. 125.28 (5) (c) of the statutes is amended to read:

AB492,8,15 125.28 (5) (c) No fermented malt beverages retail licensee or wholesaler may receive a benefit from a violation under par. (a) or (b) with knowledge of the circumstances giving rise to the violation.

AB492,11 Section 11. 125.29 (3) (h) of the statutes is amended to read:

AB492,8,22 125.29 (3) (h) Notwithstanding ss. 125.04 (9) and 125.09 (1), the retail sale of intoxicating liquor, for on-premise consumption by individuals at the brewery premises or an off-site retail outlet established by the brewer, if the brewer held, on June 1, 2011, a license or permit authorizing the retail sale of intoxicating liquor and if the intoxicating liquor has been purchased by the brewer from a wholesaler holding a permit under s. 125.54.

AB492,12 Section 12. 125.295 (1) (a) of the statutes is amended to read:

AB492,9,2 125.295 (1) (a) The manufacture of fermented malt beverages on the brewpub premises if the entire manufacturing process occurs on these premises and not more than 10,000 20,000 barrels of fermented malt beverages are manufactured in a calendar year by the permittee's brewpub group.

AB492,13 Section 13. 125.295 (2) (a) 1. of the statutes is amended to read:

AB492,9,5 125.295 (2) (a) 1. The applicant's brewpub group manufactures a total of not more than 10,000 20,000 barrels of fermented malt beverages in a calendar year.

AB492,14 Section 14. 125.295 (2) (a) 6. a. of the statutes is amended to read:

AB492,9,8 125.295 (2) (a) 6. a. A Except as provided in sub. (3m), a Class “A" license issued under s. 125.25.

AB492,15 Section 15. 125.295 (2) (a) 6. b. of the statutes is amended to read:

AB492,9,11 125.295 (2) (a) 6. b. Except as provided in subd. 4. and subs. (1) (h) and, (3) (b), and (3m), a Class “B" license issued under s. 125.26.

AB492,16 Section 16. 125.295 (2) (a) 6. e. of the statutes is amended to read:

AB492,9,14 125.295 (2) (a) 6. e. Except as provided in subs. (1) (h) and, (3) (c), and (3m), a “Class B" license or permit or “Class C" license issued under s. 125.51.

AB492,17 Section 17. 125.295 (3) (a) of the statutes is amended to read:

AB492,9,17 125.295 (3) (a) No brewpub group may hold more than 6 12 brewpub permits issued under this section.

AB492,18 Section 18. 125.295 (3) (b) of the statutes is amended to read:

AB492,9,25 125.295 (3) (b) A Except as provided in sub. (3m), a brewpub may not hold any Class “B" license other than one issued for a restaurant on the brewpub premises. Notwithstanding s. 125.26 (2) (a), each Class “B" license shall be issued for the brewpub's restaurant in the same name as the permittee under this section. Notwithstanding s. 125.33 (1), a brewpub may own the furniture, fixtures, fittings, furnishings, and equipment on the Class “B" premises and shall pay any license fee or tax required for the operation of the premises.

AB492,19 Section 19. 125.295 (3) (c) of the statutes is amended to read:

AB492,10,4 125.295 (3) (c) Subject Except as provided in sub. (3m), and subject to the requirements specified in s. 125.51 (3) and (3m), a brewpub may also hold “Class B" licenses and “Class C" licenses, but only for restaurants on brewpub premises.

AB492,20 Section 20. 125.295 (3m) of the statutes is created to read:

AB492,10,8 125.295 (3m) If a brewpub also holds a distillpub permit under s. 125.525 and the brewpub permit and distillpub permit are issued in the same name, in addition to any authorization under sub. (1), the permittee may do any of the following:

AB492,10,9 (a) Hold any retail license authorized under s. 125.525 (4) (b).

AB492,10,13 (b) Distribute fermented malt beverages manufactured on the brewpub premises directly to the permittee's Class “A” or Class “B" licensed premises authorized under s. 125.525 (4) (b), which distribution shall not be included in any calculation of the 1,000 barrel limitation under sub. (1) (g).

AB492,21 Section 21. 125.33 (9) of the statutes is amended to read:

AB492,10,21 125.33 (9) Campuses and retailers to purchase from wholesalers. Except as provided in ss. 125.29 (3m) (b) and (c), 125.295 (1) (g) and (3m), and 125.30 (4), no campus or retail licensee or permittee may purchase or possess fermented malt beverages purchased from any person other than a wholesaler holding a permit under this chapter for the sale of fermented malt beverages. Any person who violates this subsection may be fined not more than $10,000 or imprisoned for not more than 9 months or both.

AB492,22 Section 22. 125.51 (2) (am) of the statutes is amended to read:

AB492,11,11 125.51 (2) (am) In addition to the authorization under par. (a) and s. 125.06 (13), a “Class A" license authorizes the licensee to provide, free of charge, to customers and visitors who have attained the legal drinking age, taste samples of intoxicating liquor other than wine that are not in original packages or containers and that do not exceed 0.5 fluid ounces each, for consumption on the “Class A" premises. No “Class A" licensee may provide more than one such taste sample per day to any one person. Taste samples may be provided under this paragraph only between the hours of 11 a.m. and 7 p.m. Any representative of a manufacturer, rectifier, distillpub, winery, or out-of-state shipper issued a permit under s. 125.52, 125.525, 125.53, or 125.58 may assist the “Class A" licensee in dispensing or serving the taste samples. No “Class A" licensee may provide as taste samples under this paragraph intoxicating liquor other than wine that the “Class A" licensee did not purchase from a wholesaler, unless the “Class A” licensee is a distillpub providing intoxicating liquor manufactured or rectified by the distillpub.

AB492,23 Section 23. 125.51 (3) (f) of the statutes is amended to read:

AB492,11,16 125.51 (3) (f) A “Class B" license may be issued only to a holder of a retail Class “B" license to sell fermented malt beverages unless the “Class B" license is the kind of “Class B" license specified under par. (am) or , is a temporary “Class B" license under sub. (10), or is a “Class B” license issued to a distillpub.

AB492,24 Section 24. 125.51 (4) (a) 1. of the statutes is amended to read:

AB492,11,20 125.51 (4) (a) 1. “License" means a retail “Class B" license issued under sub. (3) but does not include a “Class B" license issued to wineries under sub. (3) (am) or a “Class B” license issued to a distillpub.

AB492,25 Section 25. 125.51 (4) (br) 1. i. of the statutes is created to read:

AB492,11,24 125.51 (4) (br) 1. i. Multiply the result under subd. 1. a. to h. by 1.1, except that if the product is not a whole number, round the product up to the nearest whole number.

AB492,26 Section 26. 125.51 (4) (br) 2. of the statutes is renumbered 125.51 (4) (br) 2. (intro.) and amended to read:

AB492,12,6 125.51 (4) (br) 2. (intro.) Notwithstanding subd. 1., if the difference between the number of licenses determined under par. (b) 1g. and under par. (bm) 1. is 3 or fewer, the number of reserve “Class B" licenses authorized to be issued by that municipality is the sum of the following:

AB492,12,14 a. The difference between the number of licenses determined under par. (b) 1g. and under par. (bm) 1., plus one per each increase of 500 population to the population recorded under par. (bm), plus one for each license transferred to the municipality under par. (e), minus one for each license transferred from the municipality under par. (e), plus one if the municipality had issued a license under s. 125.51 (4) (br) 2., 1999 stats., based on a fraction of 500 population but only as long as the total number of licenses issued by the municipality equals the maximum number of licenses authorized.

AB492,27 Section 27. 125.51 (4) (br) 2. b. of the statutes is created to read:

AB492,12,18 125.51 (4) (br) 2. b. The result under subd. 2. a. multiplied by 0.1, except that if the product is not a whole number, round the product up to the nearest whole number.