HF 746

1st Engrossment - 88th Legislature (2013 - 2014) Posted on 03/14/2013 05:15pm

A bill for an act
relating to liquor; allowing brewer taprooms to be located in cities with municipal
liquor; allowing a microdistillery to offer samples; allowing certain brewers with
production over 3,500 barrels to sell growlers at off-sale; permitting certain malt
liquor brewers to be owners or have interest in malt liquor wholesaler; establishing
a malt liquor educator license; amending wine tasting statute to permit the
consumption of malt liquor; making technical corrections to a beer license for the
Twin Cities Marathon; authorizing a license for Valley Fair; allowing an on-sale
liquor license for Lowertown Regional Ballpark; authorizing the city of Duluth
to issue a malt liquor license for the premises known as Wheeler Field; amending
Minnesota Statutes 2012, sections 340A.301, subdivisions 6b, 6c, 7, 7a, by
adding a subdivision; 340A.4042; 340A.418; Laws 1999, chapter 202, section 13.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2012, section 340A.301, subdivision 6b, is amended to
read:

Subd. 6b.

Brewer taproom license.

(a) A municipality new text begin , including a city with a
municipal liquor store, new text end may issue the holder of a brewer's license under subdivision 6,
clause (c), (i), or (j), a brewer taproom license. A brewer taproom license authorizes on-sale
of malt liquor produced by the brewer for consumption on the premises of or adjacent
to one brewery location owned by the brewer. Nothing in this subdivision precludes the
holder of a brewer taproom license from also holding a license to operate a restaurant at
the brewery. Section 340A.409 shall apply to a license issued under this subdivision. All
provisions of this chapter that apply to a retail liquor license shall apply to a license issued
under this subdivision unless the provision is explicitly inconsistent with this subdivision.

(b) A brewer may only have one taproom license under this subdivision, and may
not have an ownership interest in a brewery licensed under subdivision 6, clause (d).

(c) A municipality may not issue a brewer taproom license to a brewer if the brewer
seeking the license, or any person having an economic interest in the brewer seeking the
license or exercising control over the brewer seeking the license, is a brewer that brews
more than 250,000 barrels of malt liquor annually or a winery that produces more than
250,000 gallons of wine annually.

(d) The municipality shall impose a licensing fee on a brewer holding a brewer
taproom license under this subdivision, subject to limitations applicable to license fees
under section 340A.408, subdivision 2, paragraph (a).

(e) A municipality shall, within ten days of the issuance of a license under this
subdivision, inform the commissioner of the licensee's name and address and trade name,
and the effective date and expiration date of the license. The municipality shall also
inform the commissioner of a license transfer, cancellation, suspension, or revocation
during the license period.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2012, section 340A.301, subdivision 6c, is amended to read:

Subd. 6c.

deleted text begin Microdistillery fee deleted text end new text begin Microdistilleries new text end .

new text begin (a) Unless prohibited by resolution
of a licensing jurisdiction, a microdistillery may provide on its premises samples of
distilled spirits manufactured on its premises, in an amount from all varieties not to exceed
15 milliliters per person.
new text end

new text begin (b) new text end The commissioner shall establish a fee for licensing microdistilleries that
adequately covers the cost of issuing the license and other inspection requirements. The
fees shall be deposited in an account in the special revenue fund and are appropriated to
the commissioner for the purposes of this subdivision.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 3.

Minnesota Statutes 2012, section 340A.301, is amended by adding a
subdivision to read:

new text begin Subd. 6d. new text end

new text begin Small brewer license. new text end

new text begin (a) A brewer licensed under subdivision 6, clause
(c), (i), or (j), may be issued a license by a municipality for off-sale of malt liquor at its
licensed premises that has been produced and packaged by the brewer. The license must be
approved by the commissioner. The amount of malt liquor sold at off-sale may not exceed
500 barrels annually. Off-sale of malt liquor shall be limited to the legal hours for off-sale at
exclusive liquor stores in the jurisdiction in which the brewer is located, and the malt liquor
sold off-sale must be removed from the premises before the applicable off-sale closing
time at exclusive liquor stores. The malt liquor shall be packed in 64-ounce containers
commonly known as "growlers" or in 750 milliliter bottles. The containers or bottles shall
bear a twist-type closure, cork, stopper, or plug. At the time of the sale, a paper or plastic
adhesive band, strip, or sleeve shall be applied to the container or bottle and extended over
the top of the twist-type closure, cork, stopper, or plug forming a seal that must be broken
upon opening of the container or bottle. The adhesive band, strip, or sleeve shall bear the
name and address of the brewer. The containers or bottles shall be identified as malt
liquor, contain the name of the malt liquor, bear the name and address of the brewer selling
the malt liquor, and shall be considered intoxicating liquor unless the alcoholic content is
labeled as otherwise in accordance with the provisions of Minnesota Rules, part 7515.1100.
new text end

new text begin (b) A brewer may only have one license under this subdivision.
new text end

new text begin (c) A municipality may not issue a license under this subdivision to a brewer if the
brewer seeking the license, or any person having an economic interest in the brewer
seeking the license or exercising control over the brewer seeking the license, is a brewer
that brews more than 20,000 barrels of its own brands of malt liquor annually or a winery
that produces more than 250,000 gallons of wine annually.
new text end

new text begin (d) The municipality shall impose a licensing fee on a brewer holding a license
under this subdivision, subject to limitations applicable to license fees under section
340A.408, subdivision 3, paragraph (a).
new text end

Sec. 4.

Minnesota Statutes 2012, section 340A.301, subdivision 7, is amended to read:

Subd. 7.

Interest in other business.

(a) Except as provided in this subdivision,
a holder of a license as a manufacturer, brewer, importer, or wholesaler may not have
any ownership, in whole or in part, in a business holding a retail intoxicating liquor or
3.2 percent malt liquor license. The commissioner may not issue a license under this
section to a manufacturer, brewer, importer, or wholesaler if a retailer of intoxicating
liquor has a direct or indirect interest in the manufacturer, brewer, importer, or wholesaler.
A manufacturer or wholesaler of intoxicating liquor may use or have property rented
for retail intoxicating liquor sales only if the manufacturer or wholesaler has owned the
property continuously since November 1, 1933. A retailer of intoxicating liquor may not
use or have property rented for the manufacture or wholesaling of intoxicating liquor.

(b) A brewer licensed under subdivision 6, clause (d), may be issued an on-sale
intoxicating liquor or 3.2 percent malt liquor license by a municipality for a restaurant
operated in the place of manufacture. Notwithstanding section 340A.405, a brewer
who holds an on-sale license issued pursuant to this paragraph deleted text begin or a brewer who
manufactures fewer than 3,500 barrels of malt liquor in a year deleted text end may, with the approval
of the commissioner, be issued a license by a municipality for off-sale of malt liquor
produced and packaged on the licensed premises. Off-sale of malt liquor shall be limited
to the legal hours for off-sale at exclusive liquor stores in the jurisdiction in which the
brewer is located, and the malt liquor sold off-sale must be removed from the premises
before the applicable off-sale closing time at exclusive liquor stores. The malt liquor shall
be packaged in 64-ounce containers commonly known as "growlers" or in 750 milliliter
bottles. The containers or bottles shall bear a twist-type closure, cork, stopper, or plug. At
the time of the sale, a paper or plastic adhesive band, strip, or sleeve shall be applied to the
container or bottle and extend over the top of the twist-type closure, cork, stopper, or plug
forming a seal that must be broken upon opening of the container or bottle. The adhesive
band, strip, or sleeve shall bear the name and address of the brewer. The containers or
bottles shall be identified as malt liquor, contain the name of the malt liquor, bear the name
and address of the brewer selling the malt liquor, and shall be considered intoxicating
liquor unless the alcoholic content is labeled as otherwise in accordance with the provisions
of Minnesota Rules, part 7515.1100. A brewer's total retail sales at on- or off-sale under
this paragraph may not exceed 3,500 barrels per year, provided that off-sales may not total
more than 500 barrels. A brewer licensed under subdivision 6, clause (d), may hold or have
an interest in other retail on-sale licenses, but may not have an ownership interest in whole
or in part, or be an officer, director, agent, or employee of, any other manufacturer, brewer,
importer, or wholesaler, or be an affiliate thereof whether the affiliation is corporate or by
management, direction, or control. Notwithstanding this prohibition, a brewer licensed
under subdivision 6, clause (d), may be an affiliate or subsidiary company of a brewer
licensed in Minnesota or elsewhere if that brewer's only manufacture of malt liquor is:

(i) manufacture licensed under subdivision 6, clause (d);

(ii) manufacture in another state for consumption exclusively in a restaurant located
in the place of manufacture; or

(iii) manufacture in another state for consumption primarily in a restaurant located
in or immediately adjacent to the place of manufacture if the brewer was licensed under
subdivision 6, clause (d), on January 1, 1995.

(c) Except as provided in subdivision 7a, no brewer as defined in subdivision 7a or
importer may have any interest, in whole or in part, directly or indirectly, in the license,
business, assets, or corporate stock of a licensed malt liquor wholesaler.

Sec. 5.

Minnesota Statutes 2012, section 340A.301, subdivision 7a, is amended to read:

Subd. 7a.

Permitted interests in wholesale business.

(a) A brewer may financially
assist a wholesaler of malt liquor through participation in a limited partnership in which
the brewer is the limited partner and the wholesaler is the general partner. A limited
partnership authorized in this paragraph may not exist for more than ten years from the
date of its creation, and may not, directly or indirectly, be recreated, renewed, or extended
beyond that date.

(b) A brewer may financially assist a malt liquor wholesaler and collateralize the
financing by taking a security interest in the inventory and assets, other than the corporate
stock, of the wholesaler. A financial agreement authorized by this paragraph may not be
in effect for more than ten years from the date of its creation and may not be directly or
indirectly extended or renewed.

(c) A brewer who, after creation of a financial agreement authorized by paragraph
(b), or after creation of a limited partnership authorized in paragraph (a), acquires legal
or equitable title to the wholesaler's business which was the subject of the agreement or
limited partnership, or to the business assets, must divest the business or its assets within
two years of the date of acquiring them. A malt liquor wholesaler whose business or
assets are acquired by a brewer as described in this paragraph may not enter into another
such financial agreement, or participate in another such limited partnership, for 20 years
from the date of the acquisition of the business or assets.

(d) A brewer may have an interest in the business, assets, or corporate stock of a
malt liquor wholesaler as a result of (1) a judgment against the wholesaler arising out of a
default by the wholesaler or (2) acquisition of title to the business, assets, or corporate
stock as a result of a written request of the wholesaler. A brewer may maintain ownership
of or an interest in the business, assets, or corporate stock under this paragraph for not
more than two years and only for the purpose of facilitating an orderly transfer of the
business to an owner not affiliated with the brewer.

(e) A brewer may continue to maintain an ownership interest in a malt liquor
wholesaler if it owned the interest on January 1, 1991.

(f) A brewer that was legally selling the brewer's own products at wholesale in
Minnesota on January 1, 1991, may continue to sell those products at wholesale in the
area where it was selling those products on that date.

(g) A brewer that deleted text begin manufactures malt liquor in Minnesota may, if the brewer does
not manufacture in Minnesota in any year deleted text end new text begin manufactures no new text end more than deleted text begin 25,000 deleted text end new text begin 20,000
new text end barrels of malt liquor or its metric equivalent deleted text begin , deleted text end new text begin in a calendar year may new text end own or have an
interest in a malt liquor wholesaler that sells only the brewer's products new text begin , provided that a
brewer that manufactures between 20,000 and 25,000 barrels in any calendar year shall be
permitted to continue to own or have an interest in a malt liquor wholesaler that sells only
the brewer's products if: (1) that malt liquor wholesaler distributes no more than 20,000
barrels per calendar year; and (2) the brewer has not manufactured 25,000 barrels in any
calendar year. Notwithstanding the foregoing, a brewer that manufactured between 20,000
and 25,000 barrels in 2012 shall be permitted to continue to own or have an interest in a
malt liquor wholesaler that sells only the brewer's products until that brewer manufactures
25,000 barrels in a calendar year new text end .

(h) When the commissioner issues a license to a malt liquor wholesaler described in
paragraph (a) or (b), the commissioner may issue the license only to the entity which is
actually operating the wholesale business and may not issue the license to a brewer that is
a limited partner under paragraph (a) or providing financial assistance under paragraph (b)
unless the brewer has acquired a wholesaler's business or assets under paragraph (c) or (d).

(i) For purposes of this subdivision and subdivision 7, clause (c), "brewer" means:

(1) a holder of a license to manufacture malt liquor;

(2) an officer, director, agent, or employee of such a license holder; and

(3) an affiliate of such a license holder, regardless of whether the affiliation is
corporate or by management, direction, or control.

Sec. 6.

Minnesota Statutes 2012, section 340A.4042, is amended to read:

340A.4042 WINE new text begin OR MALT LIQUOR new text end EDUCATOR; ON-SALE LICENSE.

new text begin Subdivision 1. new text end

new text begin Wine educator license. new text end

The commissioner may issue an on-sale
license to a person meeting the requirements specified in sections 340A.402 and 340A.409,
at an annual cost of $250 per license to a wine educator and $50 per permit for each
employee of the wine educator that will be pouring wine, under the following conditions:

(1) the license may be used to purchase wine at retail and serve wine for educational
purposes in any part of the state, unless a political subdivision adopts an ordinance
prohibiting wine education;

(2) all events conducted pursuant to this license must be conducted through advance
registration, and no walk-in access to the general public is permitted;

(3) licensees must possess certification that is satisfactory to the commissioner,
including, but not limited to, a certified specialist of wine or certified wine educator status
as conferred by the Society of Wine Educators, a Wine and Spirits Education Trust
Diploma, status as a certified sommelier, or the completion of a wine industry program at
a technical college or culinary school. A wine educator must also complete Training for
Intervention Procedures (TIPS) or other certified alcohol training programs and have a
valid certificate on file with the commissioner;

(4) a license holder shall not sell alcohol for off-premises consumption and no
orders may be taken for future sales;

(5) classes shall not be conducted at retail businesses that do not have a liquor
license during business hours; and

(6) prior to providing a class authorized under this section, the licensee shall notify
the police chief of the city where the class will take place, if the event will take place
within the corporate limits of a city. If the city has no police department, the licensee shall
notify the city's clerk. If the class will take place outside the corporate limits of any city,
the licensee shall notify the sheriff of the county where the class will take place.

new text begin Subd. 2. new text end

new text begin Malt liquor educator license. new text end

new text begin The commissioner may issue an on-sale
license to a person meeting the requirements specified in sections 340A.402 and
340A.409, at an annual cost of $250 per license to a malt liquor educator and $50 per
permit for each employee of the malt liquor educator that will be pouring malt liquor,
under the following conditions:
new text end

new text begin (1) the license may be used to purchase malt liquor at retail and serve malt liquor
for educational purposes in any part of the state, unless a political subdivision adopts an
ordinance prohibiting malt liquor education;
new text end

new text begin (2) all events conducted pursuant to this license must be conducted through advance
registration, and no walk-in access to the general public is permitted;
new text end

new text begin (3) licensees must possess certification that is satisfactory to the commissioner,
including, but not limited to, certification as a cicerone, completion of coursework from
the Master Brewer's Association of America, or other brewer or brewing certification
program acceptable to the commissioner. A malt liquor educator must also complete
Training for Intervention Procedures (TIPS) or other certified alcohol training programs
and have a valid certificate on file with the commissioner;
new text end

new text begin (4) a license holder shall not sell alcohol for off-premises consumption and no
orders may be taken for future sales;
new text end

new text begin (5) classes shall not be conducted at retail businesses that do not have a liquor
license during business hours; and
new text end

new text begin (6) prior to providing a class authorized under this section, the licensee shall notify
the police chief of the city where the class will take place, if the event will take place
within the corporate limits of a city. If the city has no police department, the licensee shall
notify the city's clerk. If the class will take place outside the corporate limits of any city,
the licensee shall notify the sheriff of the county where the class will take place.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 7.

Minnesota Statutes 2012, section 340A.418, is amended to read:

340A.418 WINE new text begin OR MALT LIQUOR new text end TASTINGS.

Subdivision 1.

Definition.

For purposes of this section, a "wine new text begin or malt liquor
new text end tasting" deleted text begin is deleted text end new text begin or "tasting" means new text end an event at which persons pay a fee or donation to
participate, and are allowed to consume wine new text begin , malt liquor, or both, new text end by the glass without
paying a separate charge for each glass.

Subd. 2.

Tastings authorized.

(a) A charitable, religious, or other nonprofit
organization may conduct a deleted text begin wine deleted text end tasting of not more than four hours duration on premises
the organization owns or leases or has use donated to it, or on the licensed premises of a
holder of an on-sale intoxicating liquor license that is not a temporary license, if the
organization holds a temporary on-sale intoxicating liquor license under section 340A.404,
subdivision 10, and complies with this section. An organization holding a temporary
license may be assisted in conducting the deleted text begin wine deleted text end tasting by another nonprofit organization.

(b) An organization that conducts a deleted text begin wine deleted text end tasting under this section may use the net
proceeds from the deleted text begin wine deleted text end tasting only for:

(1) the organization's primary nonprofit purpose; or

(2) donation to another nonprofit organization assisting in the deleted text begin wine deleted text end tasting, if the
other nonprofit organization uses the donation only for that organization's primary
nonprofit purpose.

(c) No wine new text begin or malt liquor new text end at a deleted text begin wine deleted text end tasting under this section may be sold, or orders
taken, for off-premises consumption.

(d) Notwithstanding any other law, an organization may purchase or otherwise
obtain wine new text begin or malt liquor new text end for a deleted text begin wine deleted text end tasting conducted under this section from a
wholesaler licensed to sell wine new text begin or malt liquor new text end , and the wholesaler may sell or give wine
new text begin or malt liquor new text end to an organization for a deleted text begin wine deleted text end tasting conducted under this section and may
provide personnel to assist in the deleted text begin wine deleted text end tasting. A wholesaler who sells or gives wine new text begin or
malt liquor new text end to an organization for a deleted text begin wine deleted text end tasting under this section must deliver the wine
new text begin or malt liquor new text end directly to the location where the deleted text begin wine deleted text end tasting is conducted.

(e) This section does not prohibit or restrict a deleted text begin wine deleted text end tasting that is:

(1) located on on-sale premises where no charitable organization is participating; or

(2) located on on-sale premises where the proceeds are for a designated charity but
where the tasting is primarily for educational purposes.

(f) The four-hour limitation specified in paragraph (a) shall not apply to a deleted text begin wine
deleted text end tasting at a convention of fine wine new text begin , malt liquor, new text end and gourmet food exhibitors, provided the
convention has at least 100 exhibitors and takes place over not more than three days.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 8.

Laws 1999, chapter 202, section 13, is amended to read:

Sec. 13. CITY OF ST. PAUL; LICENSES AUTHORIZED.

(a) The city of St. Paul may issue temporary intoxicating liquor licenses under
Minnesota Statutes, section 340A.404, subdivision 10, to Macalester college for the
Macalester Scottish fair, Springfest, and for the annual alumni reunion weekend without
regard to the limitation in Minnesota Statutes, section 340A.410, subdivision 10,
paragraph (b).

(b) Notwithstanding Minnesota Statutes, section 340A.412, subdivision 4, the city
of St. Paul may issue a temporary on-sale intoxicating liquor license to deleted text begin Twin Cities
Marathon, Inc deleted text end new text begin Twin Cities in Motion, or its successor organization, if any new text end . The license
may authorize only the sale of intoxicating malt liquor and 3.2 percent malt liquor on the
grounds of the state capitol on the day of the Twin Cities Marathon. The intoxicating
malt liquor and 3.2 percent malt liquor must be produced by a Minnesota brewery. All
provisions of Minnesota Statutes, section 340A.404, subdivision 10, not inconsistent with
this section, apply to the license authorized by this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 9. new text begin VALLEY FAIR; ON-SALE LICENSE.
new text end

new text begin Notwithstanding Minnesota Statutes, section 340A.404, subdivision 1, or any other
law to the contrary, the city of Shakopee may issue an on-sale intoxicating liquor license
to Cedar Fair Entertainment Co., dba Valley Fair, in addition to the number authorized by
law. The license may authorize sales both to persons attending any and all events, and
sales in a restaurant, bar, or banquet facility at Valley Fair. The license authorizes sales on
all days of the week. All provisions of Minnesota Statutes, chapter 340A, not inconsistent
with this section, apply to the license under this section. The license may be issued for a
space that is not compact and contiguous, provided that the licensed premises may include
only the space within the park as described in the approved license application.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon approval by the Shakopee City
Council and compliance with Minnesota Statutes, section 645.021.
new text end

Sec. 10. new text begin LOWERTOWN REGIONAL BALLPARK; ON-SALE LICENSE.
new text end

new text begin Notwithstanding Minnesota Statutes, section 340A.404, subdivision 1, or any other
law to the contrary, the city of Saint Paul may issue an on-sale intoxicating liquor license
to the St. Paul Saints Baseball Club, Inc., or such other entity affiliated with it that
may operate food and beverage concessions at the ballpark, in addition to the number
authorized by law. The license may authorize sales both to persons attending any and
all events, and sales in a restaurant, bar, or banquet facility at the ballpark. The license
authorizes sales on all days of the week. All provisions of Minnesota Statutes, chapter
340A, not inconsistent with this section, apply to the license under this section. The
license may be issued for a space that is not compact and contiguous, provided that the
licensed premises may include only the space within the ballpark or on ballpark premises
or grounds, as described in the approved license application.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon approval by the Saint Paul City
Council and compliance with Minnesota Statutes, section 645.021.
new text end

Sec. 11. new text begin WHEELER FIELD; 3.2 MALT LIQUOR LICENSE.
new text end

new text begin Notwithstanding any law or ordinance to the contrary, the city of Duluth may issue
an on-sale intoxicating liquor license for the premises known as Wheeler Field in addition
to the number authorized by law. The license may authorize sales to persons attending
softball games and other athletic events held at the premises. The license may authorize
the sale and consumption of 3.2 malt liquor at the concession stand and approved dining
area of the premises. The license may be issued to the city or to a person or corporation
under contract or agreement with the city. The license authorizes sales on all days of the
week. All provisions of Minnesota Statutes, chapter 340A, not inconsistent with this
section apply to the license under this section.
new text end

Sec. 12. new text begin EFFECTIVE DATE; LOCAL APPROVAL.
new text end

new text begin Section 11 is effective upon approval by the Duluth City Council and compliance
with Minnesota Statutes, section 645.021.
new text end