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Minnesota Legislature

Office of the Revisor of Statutes

HF 2791

as introduced - 90th Legislature (2017 - 2018) Posted on 02/20/2018 10:15am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to alcohol; establishing craft wineries; amending Minnesota Statutes 2016,
sections 340A.101, subdivision 11; 340A.315, as amended.

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

Section 1.

Minnesota Statutes 2016, section 340A.101, subdivision 11, is amended to
read:


Subd. 11.

deleted text beginFarmdeleted text endnew text begin Craftnew text end winery.

"deleted text beginFarmdeleted text endnew text begin Craftnew text end winery" is a winery deleted text beginoperated by the owner
of a Minnesota farm and producing
deleted text endnew text begin that producesnew text end table, sparkling, or fortified wines from
grapes, grape juice, other fruit bases, or honey with a majority of the ingredients grown or
produced in 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. 2.

Minnesota Statutes 2016, section 340A.315, as amended by Laws 2017, First
Special Session chapter 4, article 5, section 7, is amended to read:


340A.315 deleted text beginFARMdeleted text endnew text begin CRAFTnew text end WINERY LICENSE.

Subdivision 1.

Licenses.

The commissioner may issue a deleted text beginfarmdeleted text endnew text begin craftnew text end winery license to the
owner or operator of a deleted text beginfarmdeleted text endnew text begin craftnew text end winery located within the state and producing table,
sparkling, or fortified wines. Licenses may be issued and renewed for an annual fee of $50,
which is in lieu of all other license fees required by this chapter.

Subd. 2.

Sales.

A license authorizes the sale, on the deleted text beginfarmdeleted text endnew text begin craftnew text end winery premises, of table,
sparkling, or fortified wines produced by that deleted text beginfarmdeleted text endnew text begin craftnew text end winery at on-sale or off-sale, in
retail, or wholesale lots in total quantities not in excess of 75,000 gallons in a calendar year,
glassware, wine literature and accessories, cheese and cheese spreads, other wine-related
food items, and the dispensing of free samples of the wines offered for sale. Sales at on-sale
and off-sale may be made on Sundays between 10:00 a.m. and 12:00 midnight. Labels for
each type or brand produced must be registered with the commissioner, without fee prior
to sale. A deleted text beginfarmdeleted text endnew text begin craftnew text end winery may provide samples of distilled spirits manufactured pursuant
to subdivision 7, on the deleted text beginfarmdeleted text endnew text begin craftnew text end winery premises, but may sell the distilled spirits only
through a licensed wholesaler. Samples of distilled spirits may not exceed 15 milliliters per
variety.

Subd. 3.

Applicability.

Except as otherwise specified in this section, all provisions of
this chapter govern the production, sale, possession, and consumption of table, sparkling,
or fortified wines produced by a deleted text beginfarmdeleted text endnew text begin craftnew text end winery.

Subd. 4.

Minnesota products.

If Minnesota-produced or -grown grapes, grape juice,
other fruit bases, or honey is not available in quantities sufficient to constitute a majority
of the table, sparkling, or fortified wine produced by a deleted text beginfarmdeleted text endnew text begin craftnew text end winery, the holder of the
deleted text begin farmdeleted text endnew text begin craftnew text end winery license may file an affidavit stating this fact with the commissioner. If
the commissioner, after consultation with the commissioner of agriculture, determines this
to be true, the deleted text beginfarmdeleted text endnew text begin craftnew text end winery may use imported products and shall continue to be governed
by the provisions of this section. The affidavit is effective for a period of one year, after
which time the deleted text beginfarmdeleted text endnew text begin craftnew text end winery must use the required amount of Minnesota products as
provided by subdivision 1 unless the deleted text beginfarmdeleted text endnew text begin craftnew text end winery holder files a new affidavit with the
commissioner.

Subd. 6.

On-sale licenses allowed.

Nothing in this section or in any other section of
law prevents a deleted text beginfarmdeleted text endnew text begin craftnew text end winery from obtaining a separate on-sale license and operating a
business establishment that utilizes that license in conjunction with and within the physical
facilities of the winery and its buildings.

Subd. 7.

Distilled spirits permitted.

deleted text beginFarmdeleted text endnew text begin Craftnew text end wineries licensed under this section
are permitted to manufacture distilled spirits as defined under section 340A.101, subdivision
9
, which may exceed 25 percent alcohol by volume, made from Minnesota-produced or
Minnesota-grown grapes, grape juice, other fruit bases, or honey. The following conditions
pertain:

(1) no deleted text beginfarmdeleted text endnew text begin craftnew text end winery or firm owning multiple deleted text beginfarmdeleted text endnew text begin craftnew text end wineries may manufacture
more than 5,000 gallons of distilled spirits in a given year, and this 5,000 gallon limit is
part of the 50,000 gallon limit found in subdivision 2;

(2) a deleted text beginfarmdeleted text endnew text begin craftnew text end winery may not sell at on-sale, off-sale, or wholesale, a distilled spirit
that does not qualify as a Minnesota spirit. For purposes of this section, to qualify as a
Minnesota spirit, 50 percent of the distilled spirit must be processed and distilled on premises.
Distilled spirits produced or in production prior to July 1, 2017, are not counted as part of
the calculations under this clause;

(3) deleted text beginfarmdeleted text endnew text begin craftnew text end wineries must pay an additional annual fee of $50 to the commissioner
before beginning production of distilled spirits; and

(4) deleted text beginfarmdeleted text endnew text begin craftnew text end wineries may not sell or produce distilled spirits for direct sale to
manufacturers licensed under section 340A.301, subdivision 6, paragraph (a).

Subd. 8.

Bulk wine.

deleted text beginFarmdeleted text endnew text begin Craftnew text end wineries licensed under this section are permitted to
purchase and use bulk wine, provided that:

(1) the quantity of bulk wine in any deleted text beginfarmdeleted text endnew text begin craftnew text end winery's annual production shall not
exceed ten percent of that winery's annual production;

(2) the bulk wine under subdivision 4 shall be counted as a portion of the 49 percent of
product that need not be Minnesota-grown and may be imported from outside Minnesota;
and

(3) the bulk wine must be blended and not directly bottled.

"Bulk wine," as used in this subdivision, means fermented juice from grapes, other fruit
bases, or honey.

deleted text begin Subd. 9. deleted text end

deleted text begin Agricultural land. deleted text end

deleted text begin A farm winery license must be issued for operation of a
farm winery on agricultural land, operating under an agricultural classification, zone, or
conditional use permit. Farm wineries with licenses issued prior to March 1, 2012, are
exempt from this provision.
deleted text end

Subd. 10.

Storage.

A deleted text beginfarmdeleted text endnew text begin craftnew text end winery may store finished wine and distilled spirits in
a noncontiguous warehouse location, provided that the chosen location complies with
Minnesota Rules, part 7515.0300, subpart 12, and any other state or federal requirements.
Cartage of finished goods between the deleted text beginfarmdeleted text endnew text begin craftnew text end winery and warehouse must be continuously
in the possession of a motor carrier of property as defined in section 221.012, subdivision
27, or carried in a motor vehicle owned, leased, or rented by the deleted text beginfarmdeleted text endnew text begin craftnew text end winery.

Subd. 11.

Bulk wine or distilled spirits.

If no wholesaler is able to provide bulk wine
or bulk distilled spirits, a deleted text beginfarmdeleted text endnew text begin craftnew text end winery may purchase either bulk wine or bulk distilled
spirits for purposes allowed under this chapter from any available source allowed under
federal law.

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. new text beginREVISOR'S INSTRUCTION.
new text end

new text begin The revisor of statutes shall change the term "farm winery" to "craft winery" in Minnesota
Statutes and Minnesota Rules.
new text end