1.1                          A bill for an act 
  1.2             relating to alcoholic beverages; providing 
  1.3             restrictions on brewers who have retail on-sale 
  1.4             licenses; imposing licensing and permitting 
  1.5             requirements; requiring a license for charging for 
  1.6             possession of alcoholic beverages; requiring a permit 
  1.7             to allow consumption and display of all alcoholic 
  1.8             beverages; authorizing additional licenses in 
  1.9             Minneapolis; authorizing Clay, Stearns, and St. Louis 
  1.10            counties and the city of International Falls to issue 
  1.11            on-sale licenses; requiring a study of application of 
  1.12            primary source law; defining home brewing equipment; 
  1.13            listing items that may be sold in exclusive liquor 
  1.14            stores; repealing requirement for permit for 
  1.15            transportation of alcoholic beverages; amending 
  1.16            Minnesota Statutes 1994, sections 340A.101, 
  1.17            subdivisions 10, 25, and by adding a subdivision; 
  1.18            340A.301, subdivisions 6 and 7; 340A.401; 340A.404, 
  1.19            subdivision 2, and by adding a subdivision; 340A.412, 
  1.20            by adding a subdivision; and 340A.414, subdivision 1; 
  1.21            proposing coding for new law in Minnesota Statutes, 
  1.22            chapter 340A; repealing Minnesota Statutes 1994, 
  1.23            sections 340A.301, subdivision 10; and 340A.32. 
  1.24  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.25     Section 1.  Minnesota Statutes 1994, section 340A.101, 
  1.26  subdivision 10, is amended to read: 
  1.27     Subd. 10.  [EXCLUSIVE LIQUOR STORE.] "Exclusive liquor 
  1.28  store" is an establishment used exclusively for the sale of 
  1.29  intoxicating liquor except for the incidental sale of ice, 
  1.30  tobacco, 3.2 percent malt liquor, beverages for mixing with 
  1.31  intoxicating liquor, soft drinks, liqueur-filled candies, cork 
  1.32  extraction devices, and books and videos on the use of alcoholic 
  1.33  beverages in the preparation of food, and the establishment may 
  1.34  offer recorded or live entertainment.  "Exclusive liquor store" 
  2.1   also includes an on-sale or combination on-sale and off-sale 
  2.2   intoxicating liquor establishment which sells food for 
  2.3   on-premise consumption when authorized by the municipality 
  2.4   issuing the license those items authorized in section 340A.412, 
  2.5   subdivision 14. 
  2.6      Sec. 2.  Minnesota Statutes 1994, section 340A.101, is 
  2.7   amended by adding a subdivision to read: 
  2.8      Subd. 12a.  [HOME BREWING EQUIPMENT.] "Home brewing 
  2.9   equipment" means portable equipment designed for use in home 
  2.10  manufacturing of malt liquor in quantities of ten gallons or 
  2.11  less and supplies and ingredients for home manufacture of malt 
  2.12  liquor. 
  2.13     Sec. 3.  Minnesota Statutes 1994, section 340A.101, 
  2.14  subdivision 25, is amended to read: 
  2.15     Subd. 25.  [RESTAURANT.] "Restaurant" is an establishment, 
  2.16  other than a hotel, under the control of a single proprietor or 
  2.17  manager, where meals are regularly prepared on the premises and 
  2.18  served at tables to the general public, and having a minimum 
  2.19  seating capacity for guests in the following minimum numbers: as 
  2.20  prescribed by the appropriate license issuing authority.  
  2.21    (a)  First class cities                  50
  2.22    (b)  Second and third class cities
  2.23         and statutory cities of over
  2.24         10,000 population                   30
  2.25    (c)  Unincorporated or unorganized
  2.26         territory other than in Cook,
  2.27         Itasca, Lake, Lake of the Woods, 
  2.28         and St. Louis counties             100 
  2.29    (d)  Unincorporated or unorganized
  2.30         territory in Cook, Itasca, Lake,
  2.31         Lake of the Woods, and St. Louis 
  2.32         counties                            50
  2.33     In the case of classes (b) and (c) above, the governing 
  2.34  body of a city or county may prescribe a higher minimum number. 
  2.35  In fourth class cities and statutory cities under 10,000 
  2.36  population, minimum seating requirements are those prescribed by 
  3.1   the governing body of the city. 
  3.2      Sec. 4.  Minnesota Statutes 1994, section 340A.301, 
  3.3   subdivision 6, is amended to read: 
  3.4      Subd. 6.  [FEES.] The annual fees for licenses under this 
  3.5   section are as follows: 
  3.6     (a) Manufacturers (except as provided 
  3.7         in clauses (b) and (c))                    $15,000 
  3.8         Duplicates                                 $ 3,000
  3.9     (b) Manufacturers of wines of not more
  3.10        than 25 percent alcohol by volume          $   500
  3.11    (c) Brewers other than those described
  3.12        in clauses (d) and (i)                     $ 2,500
  3.13    (d) Brewers who also hold a one or more
  3.14        retail on-sale license licenses and who
  3.15        manufacture fewer than 3,500 barrels
  3.16        of malt liquor in a year, except as 
  3.17        provided in subdivision 10 at any one
  3.18        licensed premises, the entire
  3.19        production of which is solely 
  3.20        for consumption on tap on the
  3.21        licensed premises.  A brewer licensed
  3.22        under this clause must obtain a separate
  3.23        license for each licensed premises where
  3.24        the brewer brews malt liquor.  A brewer
  3.25        licensed under this clause may not be
  3.26        licensed as an imported under this chapter  $  500
  3.27    (e) Wholesalers (except as provided in
  3.28        clauses (f), (g), and (h))                 $15,000
  3.29        Duplicates                                 $ 3,000
  3.30    (f) Wholesalers of wines of not more
  3.31        than 25 percent alcohol by volume          $ 2,000
  3.32    (g) Wholesalers of intoxicating
  3.33        malt liquor                                $   600
  3.34        Duplicates                                 $    25
  3.35    (h) Wholesalers of 3.2 percent 
  3.36        malt liquor                                $    10
  4.1     (i) Brewers who manufacture fewer than
  4.2         2,000 barrels of malt liquor in a year     $   150
  4.3      If a business licensed under this section is destroyed, or 
  4.4   damaged to the extent that it cannot be carried on, or if it 
  4.5   ceases because of the death or illness of the licensee, the 
  4.6   commissioner may refund the license fee for the balance of the 
  4.7   license period to the licensee or to the licensee's estate. 
  4.8      Sec. 5.  Minnesota Statutes 1994, section 340A.301, 
  4.9   subdivision 7, is amended to read: 
  4.10     Subd. 7.  [INTEREST IN OTHER BUSINESS.] (a) Except as 
  4.11  provided in this subdivision, a holder of a license as a 
  4.12  manufacturer, brewer, importer, or wholesaler may not have any 
  4.13  ownership, in whole or in part, in a business holding a retail 
  4.14  intoxicating liquor or 3.2 percent malt liquor license.  The 
  4.15  commissioner may not issue a license under this section to a 
  4.16  manufacturer, brewer, importer, or wholesaler if a retailer of 
  4.17  intoxicating liquor has a direct or indirect interest in the 
  4.18  manufacturer, brewer, importer, or wholesaler.  A manufacturer 
  4.19  or wholesaler of intoxicating liquor may use or have property 
  4.20  rented for retail intoxicating liquor sales only if the 
  4.21  manufacturer or wholesaler has owned the property continuously 
  4.22  since November 1, 1933.  A retailer of intoxicating liquor may 
  4.23  not use or have property rented for the manufacture or 
  4.24  wholesaling of intoxicating liquor. 
  4.25     (b) A licensed brewer of malt liquor described in licensed 
  4.26  under subdivision 6, clause (d) may be issued an on-sale 
  4.27  intoxicating liquor or 3.2 percent malt liquor license by a 
  4.28  municipality for a restaurant operated in or immediately 
  4.29  adjacent to the place of manufacture.  Malt liquor brewed by 
  4.30  such a licensee may not be removed from the licensed premises 
  4.31  unless the malt liquor is entered in a tasting competition where 
  4.32  none of the malt liquor so removed is sold.  A brewer licensed 
  4.33  under subdivision 6, clause (d), may hold or have an interest in 
  4.34  other retail on-sale licenses, but may not have an ownership 
  4.35  interest in whole or in part, or be an officer, director, agent, 
  4.36  or employee of, any other manufacturer, brewer, importer, or 
  5.1   wholesaler, or be an affiliate thereof whether the affiliation 
  5.2   is corporate or by management, direction, or control.  
  5.3   Notwithstanding this prohibition, a brewer licensed under 
  5.4   subdivision 6, clause (d), may be an affiliate or subsidiary 
  5.5   company of a brewer licensed in Minnesota or elsewhere if that 
  5.6   brewer's only manufacture of malt liquor is: 
  5.7      (i) manufacture licensed under subdivision 6, clause (d); 
  5.8      (ii) manufacture in another state for consumption 
  5.9   exclusively in a restaurant located in the place of manufacture; 
  5.10  or 
  5.11     (iii) manufacture in another state for consumption 
  5.12  primarily in a restaurant located in or immediately adjacent to 
  5.13  the place of manufacture if the brewer was licensed under 
  5.14  subdivision 6, clause (d), on January 1, 1995. 
  5.15     (c) Except as provided in subdivision 7a, no brewer as 
  5.16  defined in subdivision 7a or importer may have any interest, in 
  5.17  whole or in part, directly or indirectly, in the license, 
  5.18  business, assets, or corporate stock of a licensed malt liquor 
  5.19  wholesaler. 
  5.20     Sec. 6.  [340A.33] [BREW ON PREMISES STORE.] 
  5.21     Notwithstanding anything in this chapter, the owner of a 
  5.22  brew on premises store shall not be considered a brewer, 
  5.23  manufacturer, wholesaler, or retailer of intoxicating liquor if 
  5.24  the owner complies with this section and with Code of Federal 
  5.25  Regulations, title 27, part 25, subpart L, sections 25.205 and 
  5.26  25.206.  For purposes of this section, a brew on premises store 
  5.27  is a facility that provides the ingredients and equipment for a 
  5.28  customer to use to brew malt liquor at the store.  Alcoholic 
  5.29  beverages may not be sold or otherwise provided to customers of 
  5.30  a brew on premises store, unless the owner of the brew on 
  5.31  premises store holds the appropriate liquor license.  Customers 
  5.32  using the brew on premises store must be of the minimum age 
  5.33  required to purchase intoxicating liquor.  Malt liquor brewed by 
  5.34  a customer in the store must not be sold and must be used by the 
  5.35  customer solely for personal or family use. 
  5.36     Sec. 7.  Minnesota Statutes 1994, section 340A.401, is 
  6.1   amended to read: 
  6.2      340A.401 [LICENSE REQUIRED.] 
  6.3      Except as provided in this chapter, no person may directly 
  6.4   or indirectly, on any pretense or by any device, sell, barter, 
  6.5   keep for sale, charge for possession, or otherwise dispose of 
  6.6   alcoholic beverages as part of a commercial transaction without 
  6.7   having obtained a license. 
  6.8      Sec. 8.  Minnesota Statutes 1994, section 340A.404, 
  6.9   subdivision 2, is amended to read: 
  6.10     Subd. 2.  [SPECIAL PROVISION; CITY OF MINNEAPOLIS.] (a) The 
  6.11  city of Minneapolis may issue an on-sale intoxicating liquor 
  6.12  license to the Guthrie Theatre, the Cricket Theatre, the Orpheum 
  6.13  Theatre, and the State Theatre, notwithstanding the limitations 
  6.14  of law, or local ordinance, or charter provision relating to 
  6.15  zoning or school or church distances.  The licenses authorize 
  6.16  sales on all days of the week to holders of tickets for 
  6.17  performances presented by the theatres and to members of the 
  6.18  nonprofit corporations holding the licenses and to their guests. 
  6.19     (b) The city of Minneapolis may issue an intoxicating 
  6.20  liquor license to 510 Groveland Associates, a Minnesota 
  6.21  cooperative, for use by a restaurant on the premises owned by 
  6.22  510 Groveland Associates, notwithstanding limitations of law, or 
  6.23  local ordinance, or charter provision. 
  6.24     (c) The city of Minneapolis may issue an on-sale 
  6.25  intoxicating liquor license to Zuhrah Shrine Temple for use on 
  6.26  the premises owned by Zuhrah Shrine Temple at 2540 Park Avenue 
  6.27  South in Minneapolis, notwithstanding limitations of law, or 
  6.28  local ordinances, or charter provision relating to zoning or 
  6.29  school or church distances. 
  6.30     (d) The city of Minneapolis may issue an on-sale 
  6.31  intoxicating liquor license to the American Association of 
  6.32  University Women, Minneapolis branch, for use on the premises 
  6.33  owned by the American Association of University Women, 
  6.34  Minneapolis branch, at 2115 Stevens Avenue South in Minneapolis, 
  6.35  notwithstanding limitations of law, or local ordinances, or 
  6.36  charter provisions relating to zoning or school or church 
  7.1   distances. 
  7.2      (e) The city of Minneapolis may issue an on-sale wine 
  7.3   license and an on-sale 3.2 percent malt liquor license to a 
  7.4   restaurant located at 5000 Penn Avenue South, notwithstanding 
  7.5   any law or local ordinance or charter provision. 
  7.6      Sec. 9.  Minnesota Statutes 1994, 340A.404, is amended by 
  7.7   adding a subdivision to read: 
  7.8      Subd. 12.  [CATERER'S PERMIT.] The commissioner may issue a 
  7.9   caterer's permit to a restaurant that holds an on-sale 
  7.10  intoxicating liquor license issued by any municipality.  The 
  7.11  holder of a caterer's permit may sell intoxicating liquor as an 
  7.12  incidental part of a food service that serves prepared meals at 
  7.13  a place other than the premises for which the holder's on-sale 
  7.14  intoxicating liquor license is issued. 
  7.15     (a) A caterer's permit is auxiliary to the primary on-sale 
  7.16  license held by the licensee. 
  7.17     (b) The restrictions and regulations which apply to the 
  7.18  sale of intoxicating liquor on the licensed premises also apply 
  7.19  to the sale under the authority of a caterer's permit, and any 
  7.20  act that is prohibited on the licensed premises is also 
  7.21  prohibited when the licensee is operating other than on the 
  7.22  licensed premises under a caterer's permit. 
  7.23     (c) Any act, which if done on the licensed premises would 
  7.24  be grounds for cancellation or suspension of the on-sale 
  7.25  licensee, is grounds for cancellation of both the on-sale 
  7.26  license and the caterer's permit if done when the permittee is 
  7.27  operating away from the licensed premises under the authority of 
  7.28  the caterer's permit. 
  7.29     (d) The permittee shall notify prior to any catered event: 
  7.30     (1) the police chief of the city where the event will take 
  7.31  place, if the event will take place within the corporate limits 
  7.32  of a city; or 
  7.33     (2) the county sheriff of the county where the event will 
  7.34  take place, if the event will be outside the corporate limits of 
  7.35  any city. 
  7.36     (e) If the primary license ceases to be valid for any 
  8.1   reason, the caterer's permit ceases to be valid. 
  8.2      (f) Permits issued under this subdivision are subject to 
  8.3   all laws and ordinances governing the sale of intoxicating 
  8.4   liquor except those laws and ordinances which by their nature 
  8.5   are not applicable. 
  8.6      (g) The annual state fee for a caterer's permit is $200. 
  8.7      Sec. 10.  Minnesota Statutes 1994, section 340A.412, is 
  8.8   amended by adding a subdivision to read: 
  8.9      Subd. 14.  [EXCLUSIVE LIQUOR STORES.] (a) Except as 
  8.10  otherwise provided in this subdivision, an exclusive liquor 
  8.11  store may sell only the following items: 
  8.12     (1) alcoholic beverages; 
  8.13     (2) tobacco products; 
  8.14     (3) ice; 
  8.15     (4) beverages for mixing with intoxicating liquor; 
  8.16     (5) soft drinks; 
  8.17     (6) liqueur-filled candies; 
  8.18     (7) food products that contain more than one-half of one 
  8.19  percent alcohol by volume; 
  8.20     (8) cork extraction devices; 
  8.21     (9) books and videos on the use of alcoholic beverages; 
  8.22     (10) magazines and other publications published primarily 
  8.23  for information and education on alcoholic beverages; and 
  8.24     (11) home brewing equipment. 
  8.25     (b) An exclusive liquor store that has an on-sale, or 
  8.26  combination on-sale and off-sale license may sell food for 
  8.27  on-premise consumption when authorized by the municipality 
  8.28  issuing the license. 
  8.29     (c) An exclusive liquor store may offer live or recorded 
  8.30  entertainment. 
  8.31     Sec. 11.  Minnesota Statutes 1994, section 340A.414, 
  8.32  subdivision 1, is amended to read: 
  8.33     Subdivision 1.  [PERMIT REQUIRED.] No business 
  8.34  establishment or club which does not hold an on-sale 
  8.35  intoxicating liquor license may directly or indirectly allow the 
  8.36  consumption and display of intoxicating liquor alcoholic 
  9.1   beverages or knowingly serve any liquid for the purpose of 
  9.2   mixing with intoxicating liquor without first having obtained a 
  9.3   permit from the commissioner. 
  9.4      Sec. 12.  [CLAY COUNTY; ON-SALE LICENSE.] 
  9.5      Notwithstanding any state or local law or charter 
  9.6   provision, the Clay county board may issue one on-sale 
  9.7   intoxicating liquor license to a premises located in Elkton 
  9.8   township.  The license is not subject to the requirements of 
  9.9   Minnesota Statutes, section 340A.101, subdivision 25.  The 
  9.10  license is subject to all other provisions of Minnesota 
  9.11  Statutes, chapter 340A. 
  9.12     Sec. 13.  [ST. LOUIS COUNTY; ON-SALE LICENSE.] 
  9.13     Notwithstanding any state or local law or charter provision 
  9.14  to the contrary, the St. Louis county board may issue one 
  9.15  on-sale intoxicating malt liquor license to an establishment 
  9.16  located in township 65, range 18, section 33.  The county board 
  9.17  shall set the fee for the license.  The license is subject to 
  9.18  all provisions of Minnesota Statutes, chapter 340A, not 
  9.19  inconsistent with this section. 
  9.20     Sec. 14.  [INTERNATIONAL FALLS; TEMPORARY LICENSE.] 
  9.21     Notwithstanding any law to the contrary, the city of 
  9.22  International Falls may issue to a nonprofit organization or 
  9.23  corporation a temporary on-sale license for the sale and serving 
  9.24  of intoxicating liquor in a sports arena owned by independent 
  9.25  school district No. 361.  The license authorized under this 
  9.26  section is valid for not more than seven consecutive days during 
  9.27  the months of June and July 1995.  The license is in addition to 
  9.28  the number of temporary on-sale licenses authorized by law.  The 
  9.29  city shall determine the fee for the license.  All provisions of 
  9.30  Minnesota Statutes, chapter 340A, not inconsistent with this 
  9.31  section, apply to the license authorized by this section. 
  9.32     Sec. 15.  [STEARNS COUNTY; ON-SALE LICENSE.] 
  9.33     Notwithstanding Minnesota Statutes, section 340A.412, 
  9.34  subdivision 4, paragraph (a), clause (9), or any local law or 
  9.35  charter provision, the Stearns county board may issue one 
  9.36  combination off-sale and on-sale intoxicating liquor license to 
 10.1   a premises located in Farming township.  The license is subject 
 10.2   to all provisions of Minnesota Statutes, chapter 340A, not 
 10.3   inconsistent with this section. 
 10.4      Sec. 16.  [PRIMARY SOURCE STUDY.] 
 10.5      The house research department and office of senate counsel 
 10.6   and research shall study issues relating to the extension of 
 10.7   Minnesota Statutes, section 340A.311, paragraph (c), to include 
 10.8   distilled spirits.  The study shall include findings but shall 
 10.9   not include recommendations on changes in law or rules.  The 
 10.10  house research department and office of senate counsel and 
 10.11  research shall jointly report their findings to the chairs of 
 10.12  the legislative committees and divisions with jurisdiction over 
 10.13  alcoholic beverage law and policy by March 1, 1996. 
 10.14     Sec. 17.  [REPEALER.] 
 10.15     Minnesota Statutes 1994, section 340A.301, subdivision 10; 
 10.16  and 340A.32, are repealed. 
 10.17     Sec. 18.  [EFFECTIVE DATE.] 
 10.18     Sections 1 to 7, 9 to 11, and 16 to 17 are effective the 
 10.19  day following final enactment.  Section 8 is effective on 
 10.20  approval by the Minneapolis city council and compliance with 
 10.21  Minnesota Statutes, section 645.021.  Section 12 is effective on 
 10.22  approval by the Clay county board and compliance with Minnesota 
 10.23  Statutes, section 645.021.  Section 13 is effective on approval 
 10.24  by the St. Louis county board and compliance with Minnesota 
 10.25  Statutes, section 645.021.  Section 14 is effective on approval 
 10.26  by the International Falls city council and compliance with 
 10.27  Minnesota Statutes, section 645.021.  Section 15 is effective on 
 10.28  approval by the Stearns county board and compliance with 
 10.29  Minnesota Statutes, section 645.021.