HF 2767

1st Engrossment - 92nd Legislature (2021 - 2022) Posted on 03/31/2022 06:39pm

A bill for an act
relating to liquor; modifying various provisions regulating the sale and production
of intoxicating liquor; modifying various licensing provisions; establishing a liquor
regulation advisory council; providing for tax on certain malt beverages; providing
for direct shipments of wine; authorizing local licenses; appropriating money;
amending Minnesota Statutes 2020, sections 13.6905, by adding a subdivision;
295.75, subdivision 4; 297A.83, subdivision 1; 297G.07, subdivision 1; 299A.706;
340A.101, subdivision 16; 340A.22, subdivisions 1, 2, 4; 340A.28, subdivision
2; 340A.301, subdivision 8; 340A.304; 340A.307, subdivisions 1, 2, 4; 340A.404,
subdivisions 1, 1a, 6, 10; 340A.410, subdivision 10; 340A.412, subdivision 14;
340A.417; 340A.504, by adding a subdivision; proposing coding for new law in
Minnesota Statutes, chapter 340A.

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

ARTICLE 1

LIQUOR REGULATION

Section 1.

Minnesota Statutes 2020, section 340A.101, subdivision 16, is amended to
read:

Subd. 16.

Malt liquor.

"Malt liquor" is any deleted text begin beer, ale, or other deleted text end beverage made from malt
by fermentation new text begin , or by the fermentation of malt substitutes, including rice, grain of any kind,
glucose, sugar, molasses, or other carbohydrate that has not undergone distillation, new text end and
deleted text begin containing deleted text end new text begin that contains new text end not less than one-half of one percent alcohol by volume. new text begin "Beer"
means any beverage meeting the definition of malt liquor under this subdivision.
new text end

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 2020, section 340A.22, subdivision 1, is amended to read:

Subdivision 1.

Activities.

(a) A microdistillery licensed under this chapter may provide
on its premises samples of distilled spirits manufactured on its premises, in an amount not
to exceed 15 milliliters per variety per person. No more than 45 milliliters may be sampled
under this paragraph by any person on any day.

(b) A microdistillery new text begin or other licensed manufacturer of distilled spirits new text end can sell cocktails
to the public, pursuant to subdivision 2.

(c) A microdistillery new text begin or other licensed manufacturer of distilled spirits new text end may not operate
a cocktail room under subdivision 2 or conduct sales at off-sale under subdivision 4 unless
at least 50 percent of the annual production of the licensee is processed and distilled on
premises.

new text begin (d) For purposes of calculating annual production under paragraph (c), distilled spirits
that are bottled by the licensee under a contract bottling agreement with a third party are
excluded from the licensee's annual production if the:
new text end

new text begin (1) third-party contractor is an independent entity that is not owned or controlled by the
licensee;
new text end

new text begin (2) distilled spirits bottled under a third-party contract are not available for sale or
marketed by the licensee or the third party at any location licensed under subdivision 2 or
4; and
new text end

new text begin (3) distilled spirits bottled under a third-party contract are available for distribution by
wholesalers.
new text end

deleted text begin (d) deleted text end new text begin (e) new text end Distilled spirits produced or in production prior to July 1, 2017, are not counted
as part of the calculations under paragraph (c).

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2020, section 340A.22, subdivision 2, is amended to read:

Subd. 2.

Cocktail room license.

(a) A municipality, including a city with a municipal
liquor store, may issue the holder of a microdistillery license new text begin or distilled spirits manufacturer
license new text end under this chapter a deleted text begin microdistillery deleted text end cocktail room license. A deleted text begin microdistillery deleted text end cocktail
room license authorizes on-sale of distilled liquor produced by the distiller for consumption
on the premises of or adjacent to one distillery location owned by the distiller.
Notwithstanding section 340A.504, subdivision 3, a cocktail room may be open and may
conduct on-sale business on Sundays if authorized by the municipality. Nothing in this
subdivision precludes the holder of a deleted text begin microdistillery deleted text end cocktail room license from also holding
a license to operate a restaurant at the distillery. 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 distiller may only have one cocktail room license under this subdivision deleted text begin , and may
not have an ownership interest in a distillery licensed under section 340A.301, subdivision
6, clause (a) deleted text end .

(c) The municipality shall impose a licensing fee on a distiller holding a deleted text begin microdistillery deleted text end
cocktail room license under this subdivision, subject to limitations applicable to license fees
under section 340A.408, subdivision 2, paragraph (a).

(d) 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.

(e) No single entity may hold both a cocktail room and taproom license, and a cocktail
room and taproom may not be colocated.

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2020, section 340A.22, subdivision 4, is amended to read:

Subd. 4.

Off-sale license.

new text begin (a) new text end A microdistillery may be issued a license by the local
licensing authority for off-sale of distilled spirits, with the approval of the commissioner.
The license may allow deleted text begin the sale of one 375 milliliter bottle per customer per day of product
manufactured on site deleted text end new text begin sales as provided in paragraph (b) new text end , subject to the following
requirements:

(1) off-sale hours of sale must conform to hours of sale for retail off-sale licensees in
the licensing municipality; and

(2) no brand may be sold at the microdistillery unless it is also available for distribution
by wholesalers.

new text begin (b) The license allows a microdistillery to sell product manufactured on-site to each
customer per day under either one of the following amount and container size limitations:
new text end

new text begin (1) up to a total of 750 milliliters, in any size container approved under paragraph (c);
or
new text end

new text begin (2) up to a total of 1.125 liters, in any size container approved under paragraph (c) that
does not exceed 375 milliliters.
new text end

new text begin (c) The commissioner may approve any standard fill as approved by the Alcohol and
Tobacco Tax and Trade Bureau.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2020, section 340A.28, subdivision 2, is amended to read:

Subd. 2.

Prohibition.

A municipality may not issue a license under this section 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 deleted text begin 20,000 deleted text end new text begin 150,000 new text end barrels of its own brands of malt liquor annually
or a winery that produces more than 250,000 gallons of wine annually.

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

new text begin [340A.29] OFF-SALE PACKAGING REQUIREMENTS FOR CERTAIN
SMALL BREWERS.
new text end

new text begin Subdivision 1. new text end

new text begin Certain off-sale authorized. new text end

new text begin Notwithstanding any law to the contrary,
and in addition to the off-sale of malt liquor allowed under section 340A.28, a brewer
licensed under section 340A.301, subdivision 6, clause (c), (i), or (j), that produces 7,500
barrels or less of malt liquor annually may be issued a license by a municipality for off-sale
at its licensed premises of up to 128 ounces per customer per day of malt liquor that has
been produced and packaged by the brewer, as provided in subdivision 2. The license must
be approved by the commissioner. The amount of malt liquor sold at off-sale under this
section must be included in calculating the annual barrel limit imposed in section 340A.28,
subdivision 1.
new text end

new text begin Subd. 2. new text end

new text begin Packaging. new text end

new text begin Malt liquor authorized for off-sale pursuant to subdivision 1 must
be packaged in a container that is in compliance with the provisions of Minnesota Rules,
parts 7515.1080 to 7515.1120.
new text end

new text begin Subd. 3. new text end

new text begin Off-sale not exclusive to brewery premises. new text end

new text begin Any brand sold under this section
must be made available for sale to a malt liquor wholesaler, other than a wholesaler owned
in whole or in part by a brewer as allowed in section 340A.301, subdivision 9.
new text end

new text begin Subd. 4. new text end

new text begin Exception; production in 2021. new text end

new text begin Notwithstanding the 7,500 barrel limit in
subdivision 1, a brewer licensed under section 340A.301, subdivision 6, clause (c), (i), or
(j), that produced more than 5,500 barrels but not more than 13,500 barrels of malt liquor
in calendar year 2021, as demonstrated by records from the Department of Revenue, may
be issued a license under this section, provided that a brewer is only allowed to make the
sales authorized in this section until the brewer's production exceeds its 2021 production
amount by 2,000 barrels.
new text end

new text begin Subd. 5. new text end

new text begin Other laws. new text end

new text begin All other requirements of chapter 340A, not inconsistent with this
section apply.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2020, section 340A.301, subdivision 8, is amended to read:

Subd. 8.

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) Except as provided in subdivision 9, no brewer as defined in subdivision 9 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.

new text begin (c) A winery holding a license under subdivision 6, paragraph (b) that produces and
sells, including sales from the winery's premises, no more than 2,500 barrels or its metric
equivalent of cider made from apples in a calendar year may own or have an interest in a
wholesaler that sells only the winery's apple-based cider products. The winery eligible to
own or have an interest in a wholesaler under this subdivision must provide the commissioner
with an affidavit stating that no existing wholesaler is available to represent and distribute
the winery's apple-based cider to retail license holders.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2020, section 340A.307, subdivision 1, is amended to read:

Subdivision 1.

Nondiscriminatory sales.

All licensed importers new text begin and manufacturers new text end
must offer for sale on an equal basis to all licensed wholesalers and manufacturers all
intoxicating liquor brought into new text begin or produced in new text end the state of Minnesota.

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.

Minnesota Statutes 2020, section 340A.307, subdivision 2, is amended to read:

Subd. 2.

Prohibited practices.

Without limiting subdivision 1, the following are failures
to offer intoxicating liquor for sale on an equal basis and are unlawful:

(1) A refusal to sell to a wholesaler or manufacturer intoxicating liquor offered for sale
to any other wholesaler or manufacturer, except when a wholesaler or manufacturer is in
arrears on payments for past purchases from the importer new text begin or manufacturer new text end who refuses to
sell.

(2) A sale of intoxicating liquor to a wholesaler or manufacturer at a price different from
that offered to another wholesaler or manufacturer, exclusive of shipping costs, except that
quantity discounts based on actual cost savings may be uniformly offered to all wholesalers
and manufacturers.

(3) A sale of intoxicating liquor to a wholesaler or manufacturer on terms of purchase
different from those offered another wholesaler or manufacturer, except that when the
importer new text begin or manufacturer new text end reasonably believes that a wholesaler or manufacturer will be
unable to comply with the existing terms of credit, other terms may be employed, including
denial of credit.

(4) Discrimination among wholesalers and manufacturers in satisfying their respective
demands for intoxicating liquor.

(5) A sale conditioned on an agreement which restricts the wholesaler or manufacturer
with respect to customers, area for distribution, or resale price, or which otherwise restrains
the wholesaler or manufacturer from competing in trade and commerce.

(6) For purposes of this subdivision and subdivision 1 only, the term "intoxicating liquor"
does not include "pop wines" as they are defined by rule of the commissioner.

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2020, section 340A.307, subdivision 4, is amended to read:

Subd. 4.

Exceptions.

Nothing in this section applies to deleted text begin : deleted text end new text begin wine or malt liquor of any alcohol
content.
new text end

deleted text begin (1) wine or malt liquor of any alcohol content;
deleted text end

deleted text begin (2) intoxicating liquor which is:
deleted text end

deleted text begin (i) further distilled, refined, rectified, or blended within the state; and
deleted text end

deleted text begin (ii) bottled within the state and labeled with the importer's own labels after importation
into the state; or
deleted text end

deleted text begin (3) any brand of intoxicating liquor which is offered for sale only in this state. No such
brand shall vary from an existing or new brand sold in another state in any manner as to
brand name, age, or proof of the product.
deleted text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

Minnesota Statutes 2020, section 340A.404, subdivision 1, is amended to read:

Subdivision 1.

Cities.

(a) A city may issue an on-sale intoxicating liquor license to the
following establishments located within its jurisdiction:

(1) hotels;

(2) restaurants;

(3) bowling centers;

(4) clubs or congressionally chartered veterans organizations with the approval of the
commissioner, provided that the organization has been in existence for at least three years
and liquor sales will only be to members and bona fide guests, except that a club may permit
the general public to participate in a wine tasting conducted at the club under section
340A.419;

(5) sports facilities, restaurants, clubs, or bars located on land owned or leased by the
Minnesota Sports Facilities Authority;

(6) sports facilities located on land owned by the Metropolitan Sports Commission; deleted text begin and
deleted text end

(7) exclusive liquor stores deleted text begin . deleted text end new text begin ; and
new text end

new text begin (8) resorts as defined in section 157.15, subdivision 11.
new text end

(b) A city may issue an on-sale intoxicating liquor license, an on-sale wine license, or
an on-sale malt liquor license to a theater within the city, notwithstanding any law, local
ordinance, or charter provision. A license issued under this paragraph authorizes sales on
all days of the week to persons attending events at the theater.

(c) A city may issue an on-sale intoxicating liquor license, an on-sale wine license, or
an on-sale malt liquor license to a convention center within the city, notwithstanding any
law, local ordinance, or charter provision. A license issued under this paragraph authorizes
sales on all days of the week to persons attending events at the convention center. This
paragraph does not apply to convention centers located in the seven-county metropolitan
area.

(d) A deleted text begin city deleted text end new text begin municipality new text end may issue an on-sale wine license and an on-sale malt liquor
license to a person who is the owner of a summer collegiate league baseball team new text begin or baseball
team competing in a league established by the Minnesota Baseball Association new text end , or to a
person holding a concessions or management contract with the owner, for beverage sales
at a ballpark or stadium located within the deleted text begin city deleted text end new text begin municipality new text end for the purposes of summer
collegiate league baseball games new text begin , town ball games, new text end and any other events at the ballpark or
stadium, notwithstanding any law, local ordinance, or charter provision. A license issued
under this paragraph authorizes sales on all days of the week to persons attending baseball
games and any other events at the ballpark or stadium.

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Minnesota Statutes 2020, section 340A.404, subdivision 1a, is amended to read:

Subd. 1a.

deleted text begin Cities deleted text end new text begin Municipalities new text end ; auto racing facilities.

A deleted text begin city deleted text end new text begin municipality new text end may issue
an on-sale intoxicating liquor license to an auto racing facility located in the deleted text begin city deleted text end new text begin municipality new text end .
The license may authorize sales both to persons attending any and all events at the facility,
and sales in a restaurant, bar, or banquet facility located on the premises of the auto racing
facility. The license authorizes sales on all days of the week. 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 a defined area as described in the application for the license.

new text begin EFFECTIVE DATE. new text end

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

Sec. 13.

Minnesota Statutes 2020, section 340A.404, subdivision 6, is amended to read:

Subd. 6.

Counties.

(a) A county board may issue an annual on-sale intoxicating liquor
license within the area of the county that is unorganized or unincorporated to a bowling
center, restaurant, club, deleted text begin or deleted text end hotel new text begin , or resort as defined in section 157.15, subdivision 11, new text end with
the approval of the commissioner.

(b) A county board may also with the approval of the commissioner issue up to ten
seasonal on-sale licenses to restaurants and clubs for the sale of intoxicating liquor within
the area of the county that is unorganized or unincorporated. Notwithstanding section
340A.412, subdivision 8, a seasonal license is valid for a period specified by the board, not
to exceed nine months. Not more than one license may be issued for any one premises
during any consecutive 12-month 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. 14.

Minnesota Statutes 2020, section 340A.404, subdivision 10, is amended to read:

Subd. 10.

Temporary on-sale licenses.

(a) The governing body of a municipality may
issue to (1) a club or charitable, religious, or other nonprofit organization in existence for
at least three years, (2) a political committee registered under section 10A.14, or (3) a state
university, a temporary license for the on-sale of intoxicating liquor in connection with a
social event within the municipality sponsored by the licensee. The license may authorize
the on-sale of intoxicating liquor for not more than four consecutive days new text begin , except as provided
for county fairs in section 340A.410, subdivision 10 new text end , and may authorize on-sales on premises
other than premises the licensee owns or permanently occupies. The license may provide
that the licensee may contract for intoxicating liquor catering services with the holder of a
full-year on-sale intoxicating liquor license issued by any municipality. The licenses are
subject to the terms, including a license fee, imposed by the issuing municipality. Licenses
issued under this subdivision are subject to all laws and ordinances governing the sale of
intoxicating liquor except sections 340A.409 and 340A.504, subdivision 3, paragraph (d),
and those laws and ordinances which by their nature are not applicable. Licenses under this
subdivision are not valid unless first approved by the commissioner of public safety.

(b) A county under this section may issue a temporary license only to a premises located
in the unincorporated or unorganized territory of the county.

(c) The governing body of a municipality may issue to a brewer who manufactures fewer
than 3,500 barrels of malt liquor in a year or a microdistillery a temporary license for the
on-sale of intoxicating liquor in connection with a social event within the municipality
sponsored by the brewer or microdistillery. The terms and conditions specified for temporary
licenses under paragraph (a) shall apply to a license issued under this paragraph, except that
the requirements of section 340A.409, subdivisions 1 to 3a, shall apply to the license.

new text begin EFFECTIVE DATE. new text end

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

Sec. 15.

Minnesota Statutes 2020, section 340A.410, subdivision 10, is amended to read:

Subd. 10.

Temporary licenses; restrictions.

(a) A municipality may not issue more
than three four-day, four three-day, six two-day, or 12 one-day temporary licenses, in any
combination not to exceed 12 days per year, under section 340A.404, subdivision 10, for
the sale of alcoholic beverages to any one organization or registered political committee,
or for any one location, within a 12-month period.

(b) A municipality may not issue more than one temporary license under section
340A.404, subdivision 10, for the sale of alcoholic beverages to any one organization or
registered political committee, or for any one location, within any 30-day period unless the
licenses are issued in connection with an event officially designated a community festival
by the municipality.

This restriction does not apply to a municipality with a population of deleted text begin 5,000 deleted text end new text begin 10,000 new text end or
fewer people.

(c) A municipality that issues separate temporary wine and liquor licenses may separately
apply the limitations contained in paragraphs (a) and (b) to the issuance of such licenses to
any one organization or registered political committee, or for any one location.

new text begin (d) In addition to the temporary licenses authorized in paragraph (a), a municipality may
issue one seven-day temporary license per year to a county agricultural society established
under section 38.01, for alcoholic beverage sales at a county fair.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 16.

Minnesota Statutes 2020, section 340A.412, subdivision 14, is amended to read:

Subd. 14.

Exclusive liquor stores.

(a) Except as otherwise provided in this subdivision,
an exclusive liquor store may sell only the following items:

(1) alcoholic beverages;

(2) tobacco products;

(3) ice;

(4) beverages, either liquid or powder, specifically designated for mixing with intoxicating
liquor;

(5) soft drinks;

(6) liqueur-filled candies;

(7) food products that contain more than one-half of one percent alcohol by volume;

(8) cork extraction devices;

(9) books and videos on the use of alcoholic beverages;

(10) magazines and other publications published primarily for information and education
on alcoholic beverages;

(11) multiple-use bags designed to carry purchased items;

(12) devices designed to ensure safe storage and monitoring of alcohol in the home, to
prevent access by underage drinkers;

(13) home brewing equipment; deleted text begin and
deleted text end

(14) clothing marked with the specific name, brand, or identifying logo of the exclusive
liquor store, and bearing no other name, brand, or identifying logo deleted text begin . deleted text end new text begin ;
new text end

new text begin (15) citrus fruit; and
new text end

new text begin (16) glassware.
new text end

(b) An exclusive liquor store that has an on-sale, or combination on-sale and off-sale
license may sell food for on-premise consumption when authorized by the municipality
issuing the license.

(c) An exclusive liquor store may offer live or recorded entertainment.

new text begin EFFECTIVE DATE. new text end

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

Sec. 17.

Minnesota Statutes 2020, section 340A.504, is amended by adding a subdivision
to read:

new text begin Subd. 8. new text end

new text begin Extended hours for on-sale; World Cup. new text end

new text begin Notwithstanding the restrictions on
the days and hours for on-sale of intoxicating liquor or 3.2 percent malt liquor in this section,
during a FIFA Women's World Cup competition or FIFA World Cup competition, a licensing
jurisdiction may, at its discretion, issue special permits for service of alcohol through
extended hours. The permit only authorizes the sale of alcoholic beverages 30 minutes
before, during, and 30 minutes after a scheduled broadcast of a live World Cup match. The
sales authorized under this subdivision are not allowed during broadcasts of previously
played matches. Only holders of an existing on-sale intoxicating liquor license or a 3.2
percent malt liquor license are eligible for the extended hours. Local licensing jurisdictions
issuing special permits to operate with extended hours under this subdivision may charge
a fee up to but not to exceed $250 for a permit. In the process of issuing a permit under this
section, the licensing jurisdiction may limit approval to specified geographic, zoning, or
license classifications within its jurisdiction.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 18.

new text begin [340A.915] LIQUOR REGULATION ADVISORY COUNCIL.
new text end

new text begin Subdivision 1. new text end

new text begin Creation; composition. new text end

new text begin (a) There is created a permanent Liquor
Regulation Advisory Council. This council does not expire unless the council no longer
fulfills the purpose for which the council was established, the council has not met in the
last 18 months, or the council does not comply with the registration requirements of section
15.0599, subdivision 3. The council shall consist of nine voting members, to be appointed
by the governor as follows:
new text end

new text begin (1) three members must represent retailers, as follows:
new text end

new text begin (i) one member must represent or be employed by a municipal liquor store established
under section 340A.601;
new text end

new text begin (ii) one member must represent or be employed by an exclusive liquor store; and
new text end

new text begin (iii) one member must represent or be employed by a restaurant that has been issued an
on-sale intoxicating liquor license under section 340A.404, subdivision 1, paragraph (a),
clause (2), or subdivision 6;
new text end

new text begin (2) three members must represent wholesalers, as follows:
new text end

new text begin (i) one member must be a member of an organized labor organization representing the
employees of a wholesaler;
new text end

new text begin (ii) one member must represent or be employed by a wholesaler of distilled spirits; and
new text end

new text begin (iii) one member must represent or be employed by a malt liquor wholesaler other than
a wholesaler described in section 340A.301, subdivision 9, paragraph (g); and
new text end

new text begin (3) three members must represent manufacturers, as follows:
new text end

new text begin (i) one member must be the holder of a brewer's license under section 340A.301,
subdivision 6, paragraph (c), (i), or (j), that brews no more than 20,000 barrels of its own
brands of malt liquor annually;
new text end

new text begin (ii) one member must be the holder of a microdistillery license under section 340A.22;
and
new text end

new text begin (iii) one member must represent or be employed by a licensed manufacturer other than
a manufacturer described in item (i) or (ii).
new text end

new text begin (b) Each council member shall appoint an alternate. Alternates shall serve in the absence
of the member they replace.
new text end

new text begin (c) The appointed voting members shall serve for terms of five years and may be
reappointed.
new text end

new text begin (d) The speaker of the house and minority leader of the house of representatives shall
each appoint a caucus member as a liaison to the council. The majority and minority leaders
of the senate shall each appoint a caucus member to serve as a liaison to the council.
new text end

new text begin (e) The compensation and removal of members shall be as provided in section 15.059.
new text end

new text begin (f) The governor must appoint a member of the council to serve as chair. The chair is
the presiding officer at all meetings of the council.
new text end

new text begin Subd. 2. new text end

new text begin Duties; recommendations. new text end

new text begin The council must submit its recommendations with
respect to amendments to this chapter having a statewide impact by February 1 of each year
to the committees of the legislature with jurisdiction over liquor regulation and shall report
its views upon any pending bill relating to this chapter to the proper legislative committee.
A recommendation may not be made by the council unless it is supported by a majority of
the council members, provided that at least one member from each group described in
subdivision 1, paragraph (a), clauses (1) to (3), supports the recommendation. At the request
of the chairs of the senate or house of representatives committees that hear liquor regulation
matters, the commissioner or the commissioner's designee must schedule a meeting of the
council with the members of the committees to discuss matters of legislative concern arising
under this chapter.
new text end

new text begin Subd. 3. new text end

new text begin Meetings; voting. new text end

new text begin (a) The council must meet as frequently as necessary to
carry out its duties and responsibilities. The council may also conduct public hearings
throughout the state as may be necessary to give interested persons an opportunity to
comment and make suggestions on the operation of the state's regulatory system for alcoholic
beverages.
new text end

new text begin (b) The meetings of the council are subject to the state's Open Meeting Law, chapter
13D, except that each group described in subdivision 1, paragraph (a), clauses (1) to (3),
may meet in separate closed caucuses for the purpose of deliberating on matters before the
council. All votes of the council must be public and recorded.
new text end

new text begin Subd. 4. new text end

new text begin Executive director. new text end

new text begin (a) The commissioner or the commissioner's designee
must appoint an executive director of the council.
new text end

new text begin (b) The executive director shall provide administrative support and information to the
council in order to allow it to monitor all elements of Minnesota's regulatory system for
alcoholic beverages.
new text end

new text begin Subd. 5. new text end

new text begin Administrative support. new text end

new text begin The commissioner must supply necessary office
space, supplies, and staff support to assist the council and its executive director in their
duties.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective after June 30, 2022.
new text end

Sec. 19. new text begin SPECIAL PROVISION; TAX ON FERMENTED MALT BEVERAGES.
new text end

new text begin Notwithstanding any law to the contrary, sake produced by an establishment producing
sake in this state prior to March 1, 2012, under a brew pub license issued under Minnesota
Statutes, section 340A.24, is a fermented malt beverage for purposes of imposing the tax
under Minnesota Statutes, chapter 297G. No refunds may be issued under this section for
tax paid under Minnesota Statutes, section 297G.03, before the date of enactment.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 20. new text begin SERVICE OF ALCOHOLIC BEVERAGES; PERSONS 17 YEARS OF
AGE.
new text end

new text begin (a) Notwithstanding Minnesota Statutes, section 340A.412, subdivision 10, or any other
law, charter provision, or ordinance to the contrary, a person who is 17 years of age may
serve or sell intoxicating liquor in a retail establishment that has an on-sale intoxicating
liquor license, provided that the person does not tend bar.
new text end

new text begin (b) This section expires two years following the date of final enactment.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 21. new text begin APPROPRIATION.
new text end

new text begin $250,000 in fiscal year 2023 is appropriated from the general fund to the commissioner
of public safety for the purpose of hiring two additional full-time employees in the Division
of Alcohol and Gambling Enforcement.
new text end

ARTICLE 2

DIRECT SHIPPED WINE

Section 1.

Minnesota Statutes 2020, section 13.6905, is amended by adding a subdivision
to read:

new text begin Subd. 36. new text end

new text begin Direct wine shipments. new text end

new text begin Data obtained and shared by the commissioner of
public safety relating to direct shipments of wine are governed by sections 340A.550 and
340A.555.
new text end

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 2020, section 295.75, subdivision 4, is amended to read:

Subd. 4.

Tax collection required.

A liquor retailer with nexus in Minnesota new text begin or a direct
ship winery as defined in section 340A.550 new text end , who is not subject to tax under subdivision 2,
is required to collect the tax imposed under subdivision 3 from the purchaser of the liquor
and give the purchaser a receipt for the tax paid. The tax collected must be remitted to the
commissioner in the same manner prescribed for the taxes imposed under chapter 297A.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases occurring on or
after July 1, 2022.
new text end

Sec. 3.

Minnesota Statutes 2020, section 297A.83, subdivision 1, is amended to read:

Subdivision 1.

Persons applying.

(a) A retailer required to collect and remit sales taxes
under section 297A.66 new text begin or a direct ship winery as defined in section 340A.550 new text end shall file with
the commissioner an application for a permit new text begin under this section new text end .

(b) A retailer making retail sales from outside this state to a destination within this state
who is not required to obtain a permit under paragraph (a) may nevertheless voluntarily file
an application for a permit.

(c) The commissioner may require any person or class of persons obligated to file a use
tax return under section 289A.11, subdivision 3, to file an application for a permit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for permits applied for after June 30,
2022.
new text end

Sec. 4.

Minnesota Statutes 2020, section 297G.07, subdivision 1, is amended to read:

Subdivision 1.

Exemptions.

The following are not subject to the excise tax:

(1) Sales by a manufacturer, brewer, or wholesaler for shipment outside the state in
interstate commerce.

(2) Alcoholic beverages sold or transferred between Minnesota wholesalers.

(3) Sales to common carriers engaged in interstate transportation of passengers, except
as provided in this chapter.

(4) Malt beverages served by a brewery for on-premise consumption at no charge, or
distributed to brewery employees for on-premise consumption under a labor contract.

deleted text begin (5) Shipments of wine to Minnesota residents under section 340A.417.
deleted text end

deleted text begin (6) deleted text end new text begin (5) new text end Fruit juices naturally fermented or beer naturally brewed in the home for family
use and not sold or offered for sale.

deleted text begin (7) deleted text end new text begin (6) new text end Sales of wine for sacramental purposes under section 340A.316.

deleted text begin (8) deleted text end new text begin (7) new text end Alcoholic beverages sold to authorized manufacturers of food products or
pharmaceutical firms. The alcoholic beverage must be used exclusively in the manufacture
of food products or medicines. For purposes of this clause, "manufacturer" means a person
who manufactures food products intended for sale to wholesalers or retailers for ultimate
sale to the consumer.

deleted text begin (9) deleted text end new text begin (8) new text end Liqueur-filled candy.

deleted text begin (10) deleted text end new text begin (9) new text end Sales to a federal agency, that the state of Minnesota is prohibited from taxing
under the Constitution or laws of the United States or under the Constitution of Minnesota.

deleted text begin (11) deleted text end new text begin (10) new text end Sales to Indian tribes as defined in section 297G.08.

deleted text begin (12) deleted text end new text begin (11) new text end Shipments of intoxicating liquor from foreign countries to diplomatic personnel
of foreign countries assigned to service in this state.

deleted text begin (13) deleted text end new text begin (12) new text end Shipments of bulk distilled spirits or bulk wine to farm wineries licensed under
section 340A.315 for input to the final product.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2022.
new text end

Sec. 5.

Minnesota Statutes 2020, section 299A.706, is amended to read:

299A.706 ALCOHOL ENFORCEMENT ACCOUNT; APPROPRIATION.

An alcohol enforcement account is created in the special revenue fund, consisting of
money credited to the account by law. Money in the account may be appropriated by law
for (1) costs of the Alcohol and Gambling Division related to administration and enforcement
of sections 340A.403, subdivision 4; 340A.414, subdivision 1a; deleted text begin and deleted text end 340A.504, subdivision
7; new text begin and 340A.550, subdivisions 2, 4, 5, and 6; new text end and (2) costs of the State Patrol.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2022.
new text end

Sec. 6.

Minnesota Statutes 2020, section 340A.304, is amended to read:

340A.304 LICENSE SUSPENSION AND REVOCATION.

The commissioner shall revoke, or suspend for up to 60 days, a license issued under
section 340A.301 deleted text begin or deleted text end new text begin , new text end 340A.302, new text begin or 340A.550, new text end or impose a fine of up to $2,000 for each
violation, on a finding that the licensee has violated a state law or rule of the commissioner
relating to the possession, sale, transportation, or importation of alcoholic beverages. A
license revocation or suspension under this section is a contested case under sections 14.57
to 14.69 of the Administrative Procedure Act.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2022.
new text end

Sec. 7.

Minnesota Statutes 2020, section 340A.417, is amended to read:

340A.417 new text begin WINE new text end SHIPMENTS deleted text begin INTO MINNESOTA deleted text end .

(a) Notwithstanding section 297G.07, subdivision 2, or any provision of this chapter new text begin
except for section 340A.550 new text end , a winery licensed in a state other than Minnesota, or a winery
located in Minnesota, may ship, for personal use and not for resale, not more than deleted text begin two cases deleted text end new text begin
12 cases new text end of wine, containing a maximum of nine liters per case, in any calendar year to any
resident of Minnesota age 21 or over. deleted text begin Delivery of a shipment under this section may not be
deemed a sale in this state.
deleted text end

(b) The shipping container of any wine sent under this section must be clearly marked
"Alcoholic Beverages: adult signature (over 21 years of age) required."

(c) It is not the intent of this section to impair the distribution of wine through distributors
or importing distributors, but only to permit shipments of wine for personal use.

(d) new text begin Except for a violation of section 295.75 or chapters 297A and 297G, new text end no criminal
penalty may be imposed on a person for a violation of this section new text begin or section 340A.550 new text end
other than a violation described in paragraph (e) or (f). Whenever it appears to the
commissioner that any person has engaged in any act or practice constituting a violation of
this section deleted text begin , deleted text end new text begin or section 340A.550 new text end and the violation is not within two years of any previous
violation of this section, the commissioner shall issue and cause to be served upon the person
an order requiring the person to cease and desist from violating this section. The order must
give reasonable notice of the rights of the person to request a hearing and must state the
reason for the entry of the order. Unless otherwise agreed between the parties, a hearing
shall be held not later than deleted text begin seven deleted text end new text begin 20 new text end days after the request for the hearing is received by the
commissioner after which and within 20 days after the receipt of the administrative law
judge's report and subsequent exceptions and argument, the commissioner shall issue an
order vacating the cease and desist order, modifying it, or making it permanent as the facts
require. If no hearing is requested within 30 days of the service of the order, the order
becomes final and remains in effect until modified or vacated by the commissioner. All
hearings shall be conducted in accordance with the provisions of chapter 14. If the person
to whom a cease and desist order is issued fails to appear at the hearing after being duly
notified, the person shall be deemed in default, and the proceeding may be determined
against the person upon consideration of the cease and desist order, the allegations of which
may be deemed to be true.

(e) Any person who violates this section new text begin or section 340A.550 new text end within two years of a
violation for which a cease and desist order was issued under paragraph (d), is guilty of a
misdemeanor.

(f) Any person who commits a third or subsequent violation of this section new text begin or section
340A.550 new text end within any subsequent two-year period is guilty of a gross misdemeanor.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2022.
new text end

Sec. 8.

new text begin [340A.550] DIRECT SHIPMENTS OF WINE; LICENSING, TAXATION,
AND RESTRICTIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) "Direct ship purchaser" means a person who purchases
wine for personal use and not for resale from a winery located in a state other than Minnesota
for delivery to a Minnesota address.
new text end

new text begin (b) "Direct ship winery" means a winery licensed in a state other than Minnesota that
manufactures and makes a retail sale of wine and ships the wine to a direct ship purchaser
as authorized under section 340A.417.
new text end

new text begin Subd. 2. new text end

new text begin License requirements. new text end

new text begin (a) A direct ship winery must apply to the commissioner
for a direct ship license. The commissioner must not issue a license under this section unless
the applicant:
new text end

new text begin (1) is a licensed winery in a state other than Minnesota and provides a copy of its current
license in any state in which it is licensed to manufacture wine;
new text end

new text begin (2) provides a shipping address list, including all addresses from which it intends to ship
wine;
new text end

new text begin (3) agrees to comply with the requirements of subdivision 4; and
new text end

new text begin (4) consents to the jurisdiction of the Departments of Public Safety and Revenue, the
courts of this state, and any statute, law, or rule in this state related to the administration or
enforcement of this section, including any provision authorizing the commissioners of public
safety and revenue to audit a direct ship winery for compliance with this and any related
section.
new text end

new text begin (b) A direct ship winery obtaining a license under this section must annually renew its
license by January 1 of each year and must inform the commissioner at the time of renewal
of any changes to the information previously provided in paragraph (a).
new text end

new text begin (c) The application fee for a license is $50. The fee for a license renewal is $50. The
commissioner must deposit all fees received under this subdivision in the alcohol enforcement
account in the special revenue fund established under section 299A.706.
new text end

new text begin Subd. 3. new text end

new text begin Direct ship wineries; restrictions. new text end

new text begin (a) A direct ship winery may only ship
wine from an address provided to the commissioner as required in subdivision 2, paragraph
(a), clause (2), or through a third-party provider whose name and address the licensee
provided to the commissioner in the licensee's application for a license.
new text end

new text begin (b) A direct ship winery or its third-party provider may only ship wine from the direct
ship winery's own production.
new text end

new text begin Subd. 4. new text end

new text begin Taxation. new text end

new text begin A direct ship winery must:
new text end

new text begin (1) collect and remit the liquor gross receipts tax as required in section 295.75;
new text end

new text begin (2) apply for a permit as required in section 297A.83 and collect and remit the sales and
use tax imposed as required in chapter 297A;
new text end

new text begin (3) remit the tax as required in chapter 297G; and
new text end

new text begin (4) provide a statement to the commissioner, on a form prescribed by the commissioner,
detailing each shipment of wine made to a resident of this state and any other information
required by the commissioner.
new text end

new text begin Subd. 5. new text end

new text begin Private or nonpublic data; classification and sharing. new text end

new text begin (a) Data collected,
created, or maintained by the commissioner as required under this section are classified as
private data on individuals or nonpublic data, as defined in section 13.02, subdivisions 9
and 12.
new text end

new text begin (b) The commissioner must share data classified as private or nonpublic under this
section with the commissioner of revenue for purposes of administering section 295.75 and
chapters 289A, 297A, and 297G.
new text end

new text begin Subd. 6. new text end

new text begin Enforcement; penalties. new text end

new text begin Section 340A.417, paragraphs (d), (e), and (f), apply
to this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2022.
new text end

Sec. 9.

new text begin [340A.555] COMMON CARRIER REGULATIONS FOR DIRECT
SHIPMENTS OF WINE.
new text end

new text begin Subdivision 1. new text end

new text begin Monthly report required. new text end

new text begin Each common carrier that contracts with a
winery under section 340A.417 for delivery of wine into this state must file with the
commissioner a monthly report of known wine shipments made by the carrier. The report
must be made in a form and manner as prescribed by the commissioner and must contain:
new text end

new text begin (1) the name of the common carrier making the report;
new text end

new text begin (2) the period of time covered by the report;
new text end

new text begin (3) the name and business address of the consignor;
new text end

new text begin (4) the name and address of the consignee;
new text end

new text begin (5) the weight of the package delivered to the consignee;
new text end

new text begin (6) a unique tracking number; and
new text end

new text begin (7) the date of delivery.
new text end

new text begin Subd. 2. new text end

new text begin Record availability and retention. new text end

new text begin Upon written request by the commissioner,
any records supporting the report in subdivision 1 must be made available to the
commissioner within 30 days of the request. Any records containing information relating
to a required report must be retained and preserved for a period of two years, unless
destruction of the records prior to the end of the two-year period is authorized in writing
by the commissioner. All retained records must be open and available for inspection by the
commissioner upon written request. The commissioner must make the required reports
available to any law enforcement agency or regulatory body of any local government in the
state in which the common carrier making the report resides or does business.
new text end

new text begin Subd. 3. new text end

new text begin Penalty. new text end

new text begin If a common carrier willfully violates the requirement to report a
delivery under this section or violates any rule related to the administration and enforcement
of this section, the commissioner must notify the common carrier in writing of the violation.
The commissioner may impose a fine in an amount not to exceed $500 for each subsequent
violation.
new text end

new text begin Subd. 4. new text end

new text begin Exemptions. new text end

new text begin This section does not apply to common carriers regulated as
provided by United States Code, title 49, section 10101, et. seq.; or to rail
trailer-on-flatcar/container-on-flatcar (TOFC/COFC) service, as provided by Code of Federal
Regulations, title 49, section 1090.1; or highway TOFC/COFC service provided by a rail
carrier, either itself or jointly with a motor carrier, as part of continuous intermodal freight
transportation, including but not limited to any other TOFC/COFC transportation as defined
under federal law.
new text end

new text begin Subd. 5. new text end

new text begin Private or nonpublic data; classification and sharing. new text end

new text begin (a) Data collected,
created, or maintained by the commissioner as required under subdivision 1, clauses (4) to
(6), are classified as private data on individuals or nonpublic data, as defined in section
13.02, subdivisions 9 and 12.
new text end

new text begin (b) The commissioner must share data classified as private or nonpublic under this
section with the commissioner of revenue for purposes of administering section 295.75 and
chapters 289A, 297A, and 297G.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2022.
new text end

ARTICLE 3

SPECIAL LOCAL LIQUOR LAWS

Section 1. new text begin CITY OF WILLMAR; ON-SALE LICENSE.
new text end

new text begin Notwithstanding any law or ordinance to the contrary, in addition to the number of
licenses authorized, the city of Willmar may issue an on-sale wine license and an on-sale
malt liquor license to a person who is the owner of a junior league hockey team or to a
person holding a concessions or management contract with the city or the team owner for
beverage sales at the Willmar Civic Center. The licenses must authorize the dispensing of
wine or malt liquor only to persons attending events at the civic center for consumption on
the premises. A license issued under this section authorizes sales on all days of the week to
persons attending junior hockey league games or other events at the civic center.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 2. new text begin CITY OF SAUK RAPIDS; ON-SALE LICENSE.
new text end

new text begin (a) Notwithstanding any law or ordinance to the contrary, in addition to the number of
licenses authorized, the city of Sauk Rapids may issue an on-sale intoxicating liquor license
to an entity holding a management or concessions contract with the city for operation within
Bob Cross Regional Park. The license must authorize the service of intoxicating liquor only
to persons attending events scheduled or organized by the entity, for consumption within
Bob Cross Regional Park.
new text end

new text begin (b) Notwithstanding any law or ordinance to the contrary, in addition to the number of
licenses authorized, the city of Sauk Rapids may issue an on-sale intoxicating liquor license
to an entity holding a concessions or management contract with the city for operation of a
regional event center located within Lions Park or Southside Park. The license must authorize
the service of intoxicating liquor only to persons attending events scheduled or organized
by the entity, for consumption within Lions Park or Southside Park.
new text end

new text begin (c) A license issued under this section authorizes sales on all days of the week. All other
provisions of Minnesota Statutes, chapter 340A, not inconsistent with this section apply.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 3. new text begin CITY OF ST. PAUL; LICENSE AUTHORIZED.
new text end

new text begin Notwithstanding Minnesota Statutes, section 340A.412, subdivision 4, the city of St.
Paul may issue a temporary on-sale malt liquor license to the Thai Cultural Council of
Minnesota. The license may authorize the sale of malt liquor on the grounds of the State
Capitol for both days of the Minnesota Songkran Festival. 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 end

new text begin EFFECTIVE DATE. new text end

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

Sec. 4. new text begin CITY OF ST. CLOUD; ON-SALE LICENSE.
new text end

new text begin Notwithstanding any law or ordinance to the contrary, the city of St. Cloud may issue
an on-sale wine license and an on-sale malt liquor license to a city recreation facility known
as Whitney Recreation, located at 1529 Northway Drive, that is owned by the city. The
license must authorize the dispensing of wine or malt liquor only to persons attending events
anywhere on the property described as Whitney Park. The license may be issued to the city
of St. Cloud or to any persons under contract or agreement with the city with respect to the
operation of the facilities. The license authorizes sales on all days of the week. All other
provisions of Minnesota Statutes, chapter 340A, not inconsistent with this section shall
apply.
new text end

new text begin EFFECTIVE DATE. new text end

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