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Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1985 

                        CHAPTER 305-H.F.No. 1145 
           An act relating to liquor; recodifying statutory 
          provisions relating to intoxicating liquor and 
          nonintoxicating malt liquor; amending Minnesota 
          Statutes 1984, sections 260.015, subdivision 22; 
          299A.02; 473F.02, subdivision 17; and 624.701; 
          proposing coding for new law in Minnesota Statutes, 
          chapter 171; proposing coding for new law as Minnesota 
          Statutes, chapters 297C and 340A; repealing Minnesota 
          Statutes 1984, sections 340.001 to 340.988. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                ARTICLE 1

                      VIOLATIONS; PERSONS UNDER 19
    Section 1.  [171.171] [REVOCATIONS; ILLEGAL PURCHASE OF 
ALCOHOLIC BEVERAGES.] 
    The commissioner shall suspend for a period of 30 days the 
license of a person under the age of 19 years who is convicted 
of purchasing or attempting to purchase an alcoholic beverage in 
violation of section 340A.503 if the person used a drivers 
license or permit to purchase or attempt to purchase the 
alcoholic beverage. 

                               ARTICLE 2 

                            LIQUOR TAXATION 
    Section 1.  [297C.01] [DEFINITIONS.] 
    Subdivision 1.  [TERMS.] For purposes of this chapter the 
following terms have the meaning given them unless the language 
or context clearly indicates that a different meaning is 
intended. 
    Subd. 2.  [LIQUOR ACT.] For purposes of this chapter the 
terms defined in article 3, section 1, have the meanings given 
them in that section except as provided in this section. 
    Subd. 3.  [COMMISSIONER.] "Commissioner" is the 
commissioner of revenue. 
    Subd. 4.  [COLLECTOR.] "Collector" is a person who collects 
commemorative bottles for their use and enjoyment as collectors 
items and not for the consumption of the beverage contained 
therein and does not include licensed wholesalers or retailers 
of alcoholic beverages. 
    Subd. 5.  [COMMEMORATIVE BOTTLES.] "Commemorative bottles" 
are ceramic commemorative bottles or other specially designed 
decanters which have value as collectors items and which have 
unbroken federal tax stamps thereon. 
    Sec. 2.  [297C.02] [TAX IMPOSED.] 
    Subdivision 1.  [DISTILLED SPIRITS AND WINE.] There is 
imposed on all distilled spirits and wine manufactured, 
imported, sold, or possessed in this state the following excise 
tax: 
                          Standard            Metric
(a) Distilled spirits,    $4.39 per gallon    $1.16 per liter
    liqueurs, cordials,
    and specialties
    regardless of
    alcohol content
    (excluding ethyl
    alcohol)
(b) Wine containing 14    $.27 per gallon     $.07 per liter
    percent or less
    alcohol by volume
(c) Wine containing more  $.79 per gallon     $.21 per liter
    than 14 percent but
    not more than 21
    percent alcohol by
    volume
(d) Wine containing more  $1.58 per gallon    $.42 per liter
    than 21 percent but
    not more than 24
    percent alcohol by
    volume
(e) Wine containing more  $3.08 per gallon    $.81 per liter
    than 24 percent
    alcohol by volume
(f) Natural and           $1.50 per gallon    $.40 per liter
    artificial sparkling
    wines containing
    alcohol
The metric tax is imposed on all products taxable under this 
subdivision when the net contents are stated in metric units of 
measure.  
    In computing the tax on a package of distilled spirits or 
wine a proportional tax at a like rate on all fractional parts 
of a gallon or liter must be paid, except that the tax on a 
fractional part of a gallon less than 1/16 of a gallon is the 
same as for 1/16 of a gallon.  
    The tax on miniatures of two fluid ounces or less or 50 
milliliters or less is 12 cents. 
    The commissioner of revenue may establish by rule a date 
and procedure for the conversion of excise tax computation and 
reporting from rates expressed in gallons to rates expressed in 
metric volumes.  The official conversion factor is one liter 
equals 0.264172 U.S. gallons. 
    Subd. 2.  [FERMENTED MALT BEVERAGES.] There is imposed on 
the direct or indirect sale of fermented malt beverages the 
following excise tax:  
    (1) On fermented malt beverages containing not more than 
3.2 percent alcohol by weight, $2 per barrel of 31 gallons;  
    (2) On fermented malt beverages containing more than 3.2 
percent alcohol by weight, $4 per barrel of 31 gallons.  
    The tax is at a proportional rate for fractions of a barrel 
of 31 gallons.  
    Subd. 3.  [TAX CREDIT.] A qualified brewer producing 
fermented malt beverages is entitled to a tax credit of $2 per 
barrel on the first 25,000 barrels in any fiscal year beginning 
July 1, regardless of the alcohol content of the product. 
Qualified brewers may take the credit on the 15th day of each 
month, but the total credit allowed may not exceed the allowable 
credit on more than 25,000 barrels produced and sold in 
Minnesota in any fiscal year.  
    For purposes of this subdivision, a "qualified brewer" 
means a brewer, whether or not located in this state, 
manufacturing less than 100,000 barrels of fermented malt 
beverages in the calendar year immediately preceding the 
calendar year for which the credit under this subdivision is 
claimed.  In determining the number of barrels, all brands or 
labels of a brewer must be combined.  All facilities for the 
manufacture of fermented malt beverages owned or controlled by 
the same person, corporation, or other entity must be treated as 
a single brewer. 
    Sec. 3.  [297C.03] [PAYMENT OF TAX; WINE AND DISTILLED 
SPIRITS.] 
    Subdivision 1.  [MANNER AND TIME OF PAYMENT; PENALTIES; 
DEPOSIT OF TAX PROCEEDS.] The tax on wines and distilled spirits 
on which the excise tax has not been previously paid must be 
paid to the commissioner by persons having on file with the 
commissioner a sufficient bond as provided in subdivision 2 on 
or before the tenth day of the month following the month in 
which the first sale is made in this state by a licensed 
manufacturer or wholesaler.  Every person liable for the tax on 
wines or distilled spirits imposed by section 2 must file with 
the commissioner on or before the tenth day of the month 
following first sale in this state by a licensed manufacturer or 
wholesaler a return in the form prescribed by rule of the 
commissioner, and must keep records and render reports required 
by rule of the commissioner.  A person liable for any tax on 
wines or distilled spirits not having on file a sufficient bond 
must pay the tax within 24 hours after first sale in this 
state.  The commissioner may certify to the commissioner of 
public safety any failure to pay taxes when due as a violation 
of a statute relating to the sale of intoxicating liquor for 
possible revocation or suspension of license.  
    If a person fails to pay the tax within the time specified 
or within 30 days after final determination of an appeal to the 
Minnesota tax court relating thereto, there is added a penalty 
equal to ten percent of the remaining unpaid amount.  The 
penalty must be collected as part of the tax.  The amount of tax 
not timely paid, together with the penalty, must bear interest 
at the rate specified in section 270.75 from the time the tax 
should have been paid until it is paid. 
    Subd. 2.  [FAILURE TO FILE RETURN.] In case of a failure to 
make and file a return as required by this chapter within the 
time prescribed by law or by the commissioner under law, unless 
it is shown that the failure is not due to willful neglect, 
there must be added to the tax, in lieu of the ten percent 
specific penalty in subdivision 1: 
    (1) ten percent if the failure is not for more than 30 
days, and 
    (2) an additional five percent for each additional 30 days 
or fraction thereof during which the failure continues. 
The total fine may not exceed 25 percent in the aggregate. 
    The amount added to the tax must be collected at the same 
time and in the same manner and as part of the tax.  The amount 
of the tax, together with the amount added, must bear interest 
at the rate specified in section 270.75 from the time the tax 
should have been paid until it is paid unless the tax has been 
paid before the discovery of the neglect, in which case the 
added amount must be collected in the same manner as the tax. 
    Subd. 3.  [TAX EVASION.] If a person, with intent to evade 
the tax, fails to file a required return or intentionally files 
a false or fraudulent return, there is imposed an additional 
penalty equal to 50 percent of the tax, found due for the period 
covered by the return less any amount paid on the basis of the 
false or fraudulent return.  This penalty must be collected as 
part of the tax and is in addition to other penalties collected 
by law. 
    Subd. 4.  [BOND.] Every person making sale of wines or 
distilled spirits in this state on which a tax is imposed by 
section 2 must file with the commissioner a bond or bonds, on 
forms prescribed by the commissioner, with surety approved by 
the commissioner.  The bond must be in a penal sum to be 
determined by the commissioner, not to exceed two times the 
average monthly liability of that person for the preceding 
calendar year, or for a new wholesaler an amount determined by 
the commissioner based on an estimated two month liability. 
Bonds must run to the state of Minnesota and must be conditioned 
on the payment of all taxes due the state on wines and distilled 
spirits and on the payment of all penalties imposed for failure 
to pay taxes when due. 
    Subd. 5.  [INVOICES AND BILLS OF LADING COVERING SHIPMENT 
INTO THE STATE.] Every person shipping, or causing to be 
shipped, into this state wines or distilled spirits must at the 
time of shipment mail to the commissioner a true copy of the 
invoice, bill of lading, memorandum of shipment, or other 
document as the commissioner by rule requires, showing those 
details the commissioner by rule requires. 
    Sec. 4.  [297C.04] [PAYMENT OF TAX; MALT LIQUOR.] 
    The commissioner shall by rule provide a reporting method 
for paying and collecting the excise tax on fermented malt 
beverages.  The rules must require reports to be filed with and 
the excise tax to be paid to the commissioner on or before the 
fifteenth day of the month following the month in which the 
importation into or the first sale is made in this state, 
whichever first occurs.  If the excise tax is not paid when due, 
the amount due is increased by a penalty of ten percent thereof, 
and interest on the tax and penalty at an annual rate of 20 
percent, adjusted as provided in section 270.75, from the date 
the tax became due until paid.  
    Sec. 5.  [297C.05] [RETURNS.] 
    Subdivision 1.  [COMMISSIONER TO EXAMINE AND CORRECT 
RETURN; COLLECTION OF DEFICIENCY.] As soon as practicable after 
any return is filed as directed by this chapter, the 
commissioner shall examine the return and correct it, if 
necessary, according to the commissioner's best judgment and 
information.  The return, together with the commissioner's 
corrections, if any, shall be prima facie correct and shall be 
prima facie evidence of the correctness of the amount of tax 
due, as shown therein. If the commissioner finds that any amount 
of tax is due and unpaid, the commissioner shall notify the 
taxpayer of the deficiency, stating that the taxpayer will be 
assessed the amount due together with interest and penalties as 
hereinafter provided.  If a deficiency disclosed by the 
commissioner's examination cannot be allocated to a particular 
month or months, the commissioner shall notify the taxpayer of 
the deficiency, assessing the amount due for a given period 
without allocating it to any particular month or months, 
together with the penalty provided in the case of other 
corrected returns.  If any taxpayer making any return shall die 
or shall become incompetent at any time before the commissioner 
issues a notice that an amount is due, that notice shall be 
issued to the administrator, executor, or other legal 
representative, as such, of that distributor.  
    Subd. 2.  [MONTHLY TAX PAYMENTS; PENALTY FOR NONPAYMENT.] 
All taxes shall be due and payable as directed in this chapter, 
and taxes not paid shall bear interest at the rate specified in 
section 270.75.  The commissioner in issuing a final assessment 
shall add to the amount of tax found due and unpaid a penalty of 
ten percent thereof, except that, if the commissioner finds that 
the taxpayer has made a false and fraudulent return with intent 
to evade the tax imposed by this chapter, the penalty shall be 
25 percent of the entire tax as shown by the corrected return. 
If the tax is not paid within the time herein specified for the 
payment thereof or within 30 days after final determination of 
an appeal to the Minnesota tax court relating thereto, there 
shall be added thereto a specific penalty equal to ten percent 
of the amount so remaining unpaid, but in no event shall the 
penalty for failure to pay the tax within the time provided for 
payment be less than $10.  The commissioner may extend the time 
for paying the tax without penalty for good cause shown.  
    Subd. 3.  [RECOVERY BY COMMISSIONER.] The commissioner may 
recover the amount of any tax due and unpaid, interest, and any 
penalty in a civil action.  The collection of a tax, interest, 
or penalty shall not bar any prosecution under this chapter.  
    Subd. 4.  [PENALTY; MAXIMUM; MINIMUM; EXTENSION.] If any 
return required to be filed under the provisions of this section 
is not filed within the time specified, a penalty of five 
percent of the unpaid tax remaining each month up to a maximum 
of 25 percent is imposed.  In no event shall the penalty for 
failing to timely file a return be less than $10.  The 
commissioner of revenue may extend the time for filing a return 
without penalty for good cause shown.  
    Sec. 6.  [297C.06] [REFUNDS.] 
    The commissioner may refund to a taxpayer the amount of tax 
paid under this chapter on intoxicating liquor or malt liquor 
which becomes unfit for human consumption and is destroyed under 
an order by a federal, state, or local agency while being held 
for sale by a licensed retailer.  Refunds shall be made only if 
satisfactory proof is presented to the commissioner by the 
taxpayer and the licensed retailer that the retailer was not 
indemnified by insurance for the tax.  The commissioner may 
prescribe the method of proof required for obtaining the refund. 
    The commissioner may credit the amount determined under 
this section against taxes otherwise payable under this chapter 
by the taxpayer. 
    Claims for refund must be filed with the commissioner 
within one year from the date of the destruction order.  There 
is appropriated annually from the general fund to the 
commissioner the sums necessary to make the refunds provided by 
this section. 
    Sec. 7.  [297C.07] [EXCEPTIONS.] 
    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) Sales of wine for sacramental purposes under article 5, 
section 16. 
    (3) Fruit juices naturally fermented or beer naturally 
brewed in the home for family use. 
    (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. 
    Sec. 8.  [297C.08] [DEPOSIT OF RECEIPTS.] 
    All tax revenues and other receipts payable to the state 
under this chapter must be paid into the state treasury and 
credited to the general fund.  
    Sec. 9.  [297C.09] [IMPORTATION BY INDIVIDUALS.] 
    A person, other than a person under the age of 19 years, 
entering Minnesota from another state may have in possession one 
liter of intoxicating liquor or 288 ounces of malt liquor and a 
person entering Minnesota from a foreign country may have in 
possession four liters of intoxicating liquor or ten quarts (320 
ounces) of malt liquor without the required payment of the 
Minnesota excise tax.  A collector of commemorative bottles, 
other than a person under the age of 19 years, entering 
Minnesota from another state may have in possession 12 or fewer 
commemorative bottles without the required payment of the 
Minnesota excise tax.  A person who imports or has in possession 
untaxed intoxicating liquor or malt liquor in excess of the 
quantities provided for in this section is guilty of a 
misdemeanor.  This section does not apply to the consignments of 
alcoholic beverages shipped into this state by holders of 
Minnesota import licenses or Minnesota manufacturers and 
wholesalers when licensed by the commissioner of public safety 
or to common carriers with licenses to sell intoxicating liquor 
in more than one state.  A peace officer, the commissioner, or 
their authorized agents, may seize untaxed liquor. 
    Sec. 10.  [297C.10] [ENFORCEMENT.] 
    Subdivision 1.  [ENFORCEMENT RESPONSIBILITY.] The 
commissioners of public safety and revenue shall enforce and 
administer the provisions of this chapter. 
    Subd. 2.  [INSPECTION.] The commissioner of public safety 
or the commissioner of revenue, or their duly authorized 
employees, may, at all reasonable hours, enter in and upon a 
licensed premises, and examine the books, papers, and records of 
a brewer, manufacturer, wholesaler, or retailer for the purpose 
of determining whether the excise tax has been paid, and may 
inspect any premises where fermented malt beverages are 
manufactured, sold, offered for sale, possessed, or stored for 
the purpose of determining whether the provisions of this 
chapter are being complied with. 
    Sec. 11.  [297C.11] [EVASIONS.] 
    Subdivision 1.  [ASSESSMENT, GENERALLY.] Except as 
otherwise provided in this chapter, the amount of any tax due 
shall be assessed within 3-1/2 years after the return is filed. 
The taxes are deemed to have been assessed within the meaning of 
this section whenever the commissioner of revenue has determined 
the tax and computed and recorded the amount of tax due.  If the 
amount is found to be in excess of that originally declared on 
the return, the taxes are deemed to have been assessed whenever 
the commissioner has prepared a notice of tax assessment and 
mailed it to the taxpayer.  The notice of tax assessment shall 
be sent by mail to the post office address given in the return 
and the record of mailing shall be presumptive evidence of the 
giving of notice, and such records shall be preserved by the 
commissioner.  
    Subd. 2.  [COMPUTATION OF TIME.] For the purposes of this 
section, a return filed before the last day prescribed by law 
for filing is considered as filed on the last day.  
    Subd. 3.  [FALSE OR FRAUDULENT RETURN AND NO RETURN.] When 
a company, joint stock association, copartnership, corporation, 
or individual required to file a return under this chapter files 
a false or fraudulent return or fails to file a return, the tax 
may be assessed, and the attorney general may begin proceedings 
at any time.  
    Subd. 4.  [CONSENT TO EXTEND TIME.] Where, before the 
expiration of the time prescribed in subdivision 1 for the 
assessment of the tax, the commissioner of revenue and the 
company, joint stock association, copartnership, corporation, or 
individual filing the return consent in writing to an extension 
of time for the assessment of the tax, the tax may be assessed 
at any time prior to the expiration of the period agreed upon. 
The period so agreed upon may be extended by subsequent 
agreements in writing made before the expiration of the period 
previously agreed upon. 
    Subd. 5.  [OMISSION IN EXCESS OF 25 PERCENT.] If the 
taxpayer omits an amount properly includable which is in excess 
of 25 percent of the amount of tax stated in the return, the tax 
may be assessed, or a proceeding in court for the collection of 
the tax may be begun at any time within six years after the 
return was filed.  
    Sec. 12.  [297C.12] [UNTAXED LIQUOR; SEIZURE.] 
    Subdivision 1.  [POSSESSION.] No person may without 
authority possess distilled spirits and wine on which no tax has 
been paid to a state or to a foreign government.  No person may 
without authority possess, with intent to resell, malt liquor on 
which no tax has been paid to a state or to a foreign 
government.  The commissioner of public safety or the 
commissioner of revenue, or their designated employees may seize 
in the name of the state untaxed liquor possessed, held, sold, 
or transported in violation of this subdivision, and any 
apparatus, material, vehicle, or conveyance used in the 
manufacture, possession, sale, storage, or transportation of 
illegal untaxed liquor. 
    Subd. 2.  [SEIZURE OF CONVEYANCES.] The commissioner of 
public safety and employees designated by the commissioner may 
seize all vehicles and conveyances used in the manufacture, 
sale, possession, storage, or transportation of liquor in 
violation of this chapter, and hold them subject to the order of 
the district court of the county in which they are seized.  The 
forfeiture of a vehicle or conveyance seized is complete on 
compliance with the following procedure: 
    The commissioner of public safety and inspectors and 
employees designated by the commissioner shall file with the 
court a separate complaint against the vehicle or conveyance, 
describing it and charging its use in the specified violation, 
and specifying substantially the time and place of the unlawful 
use.  A copy of the complaint must be served on the defendant or 
person in charge of the vehicle or conveyance at the time of 
seizure, if any.  The court shall issue an order directed to any 
person known or believed to have a right, title or interest in, 
or lien on the vehicle or conveyance, and to persons unknown 
claiming a right, title, interest, or lien: 
    (1) describing the vehicle or conveyance and stating that 
it was seized and that a complaint against it, charging the 
specified violation, has been filed with the court; 
    (2) requiring such persons to file with the clerk of the 
court their answer to the complaint, setting forth any claim 
they may have to a right or title to, interest in, or lien on 
the vehicle or conveyance, within ten days after the service of 
the order; 
    (3) notifying them in substance that if they fail to file 
their answer within that time the vehicle or conveyance will be 
ordered sold by the commissioner. 
    The court shall cause the order to be served on: 
    (1) the registered owner; 
    (2) any person who has duly filed a conditional sales 
contract, mortgage, or other lien instrument covering the 
property unless it has been released or satisfied; 
    (3) any other person known or believed to have a right, 
title, interest in, or lien upon, the vehicle or conveyance as 
in the case of a summons in a civil action; and 
    (4) on unknown persons by publication, as provided for 
service of summons in a civil action. 
     If no answer is filed within the time prescribed, the court 
shall, on affidavit by the clerk of the court, setting forth 
such fact, order the vehicle or conveyance sold by the 
commissioner or the commissioner's agents, and the proceeds of 
the sale, after deducting the expense of keeping the vehicle or 
conveyance and fees and costs of sale, paid into the state 
treasury.  If an answer is filed within the time provided, the 
court shall fix a time for hearing, which shall be not less than 
ten nor more than 30 days after the time for filing the answer 
expires.  At the hearing the matter must be heard and determined 
by the court, without a jury, as in other civil actions.  If the 
court finds that the vehicle or conveyance, or any part thereof, 
was used in a violation as specified in the complaint, it shall 
order the vehicle or conveyance sold, as provided in this 
section, unless the owner shows to the satisfaction of the court 
that the vehicle was being used without the owner's consent or 
that at the time of giving the consent the owner had no notice 
or knowledge or reason to believe that the vehicle or conveyance 
was intended to be used in a violation. 
     After deducting the expense of keeping the vehicle or 
conveyance, the fee for seizure, and the costs of the sale, the 
officer making the sale shall pay, according to their priority, 
all liens established at the hearing as being bona fide and 
existing without the lienor having any notice or knowledge at 
the time the lien was created that the vehicle or conveyance was 
being used or was intended to be used in connection with any 
violation as specified in the order of the court, and shall pay 
the balance of the proceeds into the state treasury.  A sale 
under the provisions of this section frees the vehicle or 
conveyance sold from all liens, and appeal from order of the 
district court lies to the supreme court as in other civil 
actions.  At any time after seizure and before the hearing the 
vehicle or conveyance must be returned to the owner or person 
having a legal right to its possession on execution by that 
person of a valid bond to the state of Minnesota, with corporate 
surety, in the sum of not less than $100 and not more than 
double the value of the vehicle or conveyance seized, to be 
approved by the court in which the case is triable, or a judge 
thereof, conditioned on obeying any order and the judgment of 
the court, and to pay the full value of the vehicle or 
conveyance at the time of seizure. 
    Sec. 13.  [297C.13] [VIOLATIONS.] 
    Subdivision 1.  [FELONIES.] It is a felony for a holder of 
an alcoholic beverage license to: 
    (1) evade or attempt to evade the excise tax on 
intoxicating liquor and nonintoxicating malt liquor;  
    (2) fraudulently neglect or fail to keep complete accounts 
in book or books of account, or to make true and exact entries 
in them as required by the rules of the commissioner of public 
safety and the commissioner of revenue, or by law;  
    (3) conspire to violate a provision of this chapter; 
    (4) fail to do or cause to be done anything required by law;
    (5) refill or cause to be refilled a bottle or other 
container of intoxicating liquor in order to evade tax; or 
    (6) sell intoxicating liquor or nonintoxicating malt liquor 
on which the excise tax has not been paid and thereby evade the 
tax.  
    Subd. 2.  [GROSS MISDEMEANORS.] Any other violation of this 
chapter is a gross misdemeanor except where a different penalty 
is specified. 

                                ARTICLE 3

                               DEFINITIONS
    Section 1.  [340A.101] [DEFINITIONS.] 
    Subdivision 1.  [TERMS.] For purposes of this chapter the 
following terms have the meanings given them. 
    Subd. 2.  [ALCOHOLIC BEVERAGE.] "Alcoholic beverage" is any 
beverage containing more than one-half of one percent alcohol by 
volume. 
    Subd. 3.  [AFFILIATE OR SUBSIDIARY COMPANY.] "Affiliate or 
subsidiary company" is a company in which a manufacturer or its 
stockholders own a majority of the stock. 
    Subd. 4.  [BREWER.] "Brewer" is a person who manufactures 
malt liquor for sale. 
    Subd. 5.  [CITY.] "City" is a home rule charter or 
statutory city unless otherwise specified. 
    Subd. 6.  [COMMISSIONER.] "Commissioner" is the 
commissioner of public safety except as otherwise provided. 
    Subd. 7.  [CLUB.] "Club" is an incorporated organization 
organized under the laws of the state for civic, fraternal, 
social, or business purposes, for intellectual improvement, or 
for the promotion of sports, or a congressionally chartered 
veterans' organization, which:  
    (1) has more than 50 members;  
    (2) has owned or rented a building or space in a building 
for more than one year that is suitable and adequate for the 
accommodation of its members; 
    (3) is directed by a board of directors, executive 
committee, or other similar body chosen by the members at a 
meeting held for that purpose.  No member, officer, agent, or 
employee shall receive any profit from the distribution or sale 
of beverages to the members of the club, or their guests, beyond 
a reasonable salary or wages fixed and voted each year by the 
governing body. 
    Subd. 8.  [DEPARTMENT.] "Department" is the department of 
public safety except as otherwise provided. 
    Subd. 9.  [DISTILLED SPIRITS.] "Distilled spirits" is ethyl 
alcohol, hydrated oxide of ethyl, spirits of wine, whisky, rum, 
brandy, gin, and other distilled spirits, including all 
dilutions and mixtures thereof, for nonindustrial use. 
    Subd. 10.  [EXCLUSIVE LIQUOR STORE.] "Exclusive liquor 
store" is an establishment used exclusively for the sale of 
intoxicating liquor except for the incidental sale of ice, 
tobacco, nonintoxicating malt liquor, beverages for mixing with 
intoxicating liquor, and soft drinks may also be sold, and the 
establishment may offer recorded or live entertainment and make 
available coin-operated amusement devices.  "Exclusive liquor 
store" also includes an on-sale or combination on-sale and 
off-sale intoxicating liquor establishment which sells food for 
on-premise consumption when authorized by the municipality 
issuing the license. 
    Subd. 11.  [FARM WINERY.] "Farm winery" is a winery 
operated by the owner of a Minnesota farm and producing table or 
sparkling wines from grapes, grape juice, other fruit bases, or 
honey with a majority of the ingredients grown or produced in 
Minnesota. 
    Subd. 12.  [GENERAL FOOD STORE.] "General food store" is a 
business primarily engaged in selling food and grocery supplies 
to the public for off-premise consumption. 
    Subd. 13.  [HOTEL.] "Hotel" is an establishment where food 
and lodging are regularly furnished to transients and which has: 
    (1) a resident proprietor or manager; 
    (2) a dining room serving the general public at tables and 
having facilities for seating at least 30 guests at one time; 
and 
    (3) guest rooms in the following minimum numbers:  in 
first-class cities, 50; in second-class cities, 25; in all other 
cities, 10. 
    Subd. 14.  [INTOXICATING LIQUOR.] "Intoxicating liquor" is 
ethyl alcohol, distilled, fermented, spirituous, vinous, and 
malt beverages containing more than 3.2 percent of alcohol by 
weight. 
    Subd. 15.  [LICENSED PREMISES.] "Licensed premises" is the 
premises described in the approved license application. 
    Subd. 16.  [MALT LIQUOR.] "Malt liquor" is any beer, ale, 
or other beverage made from malt by fermentation and containing 
not less than one-half of one percent alcohol by volume. 
    Subd. 17.  [MANUFACTURER.] "Manufacturer"  is a person who, 
by a process of manufacture, fermenting, brewing, distilling, 
refining, rectifying, blending, or by the combination of 
different materials, prepares or produces intoxicating liquor 
for sale. 
    Subd. 18.  [MUNICIPALITY.] "Municipality" is a city, county 
or, for purposes of licensing under article 6, section 4, 
subdivision 7, the metropolitan airports commission. 
    Subd. 19.  [NONINTOXICATING MALT LIQUOR.] "Nonintoxicating 
malt liquor" is malt liquor containing not less than one-half of 
one percent alcohol by volume nor more than 3.2 percent alcohol 
by weight. 
    Subd. 20.  [OFF-SALE.] "Off-sale" is the sale of alcoholic 
beverages in original packages for consumption off the licensed 
premises only. 
    Subd. 21.  [ON-SALE.] "On-sale" is the sale of alcoholic 
beverages for consumption on the licensed premises only. 
    Subd. 22.  [PACKAGE.] "Package" is a sealed or corked 
container of alcoholic beverages. 
    Subd. 23.  [PERSON.] "Person" has the meaning given it in 
section 645.44, subdivision 7. 
    Subd. 24.  [POPULATION.] "Population" is determined by the 
most recent federal decennial census or a special census taken 
under law. 
    Subd. 25.  [RESTAURANT.] "Restaurant" is an establishment, 
other than a hotel, under the control of a single proprietor or 
manager, where meals are regularly served at tables to the 
general public, and having seating capacity for guests in the 
following minimum numbers:  
  (a)  First class cities                 50
  (b)  Second and third class cities
       and statutory cities of over
       10,000 population                  30
  (c)  Unincorporated or unorganized
       territory other than in Cook,
       Lake, and St. Louis counties       100
  (d)  Unincorporated or unorganized
       territory in Cook, Lake, and
       St. Louis counties                 50
   In the case of classes (b) and (c) above, the governing 
body of a city or county may prescribe a higher minimum number. 
In fourth class cities and statutory cities under 10,000 
population, minimum seating requirements are those prescribed by 
the governing body of the city.  
    Subd. 26.  [RETAIL.] "Retail" is sale for consumption. 
    Subd. 27.  [TABLE OR SPARKLING WINE.] "Table or sparkling 
wine" is a beverage made without rectification or fortification 
and containing not more than 25 percent of alcohol by volume and 
made by the fermentation of grapes, grape juice, other fruits, 
or honey. 
    Subd. 28.  [WHOLESALER.] "Wholesaler" is a person who sells 
alcholic beverages to persons to whom sale is permitted under 
article 5, section 10, from a stock maintained in a warehouse in 
the state. 
    Subd. 29.  [WINE.] "Wine" is sparkling and carbonated wine, 
wine made from condensed grape must, wine made from other 
agricultural products than sound, ripe grapes, imitiation wine, 
compounds sold as wine, vermouth, cider, perry and sake, in each 
instance containing not less than seven percent nor more than 24 
percent alcohol by volume for nonindustrial use. 

                                ARTICLE 4

                       DEPARTMENT OF PUBLIC SAFETY
    Section 1.  [340A.201] [LIQUOR CONTROL AUTHORITY.] 
    The commissioner of public safety is the successor to the 
commissioner of liquor control with respect to the powers and 
duties vested in the latter as of February 6, 1976, except for 
those powers and duties transferred to the commissioner of 
revenue.  Any proceeding, court action, prosecution, or other 
business undertaken or commenced as of February 6, 1976, by the 
commissioner of liquor control is assigned to the commissioners 
of public safety and revenue as appropriate and may be completed 
by them.  

                                ARTICLE 5

                  MANUFACTURERS, WHOLESALERS, IMPORTERS
    Section 1.  [340A.301] [MANUFACTURERS AND WHOLESALERS 
LICENSES.] 
    Subdivision 1.  [LICENSES REQUIRED.] No person may directly 
or indirectly manufacture or sell at wholesale intoxicating 
liquor, or nonintoxicating malt liquor without obtaining an 
appropriate license from the commissioner, except where 
otherwise provided in this chapter.  A manufacturer's license 
includes the right to import.  A licensed brewer of malt liquor 
may sell products at wholesale without an additional license.  A 
licensed wholesaler of intoxicating malt liquor may sell 
nonintoxicating malt liquor at wholesale without an additional 
license.  The business of manufacturer and wholesaler may be 
combined and carried on under a single manufacturer's license. 
    Subd. 2.  [PERSONS ELIGIBLE.] Licenses under this section 
may be issued only to a person who: 
    (1) is a citizen of the United States or a resident alien; 
    (2) is of good moral character and repute; 
    (3) is 19 years of age or older; 
    (4) has not had a license issued under this chapter revoked 
within five years of the date of license application, or to any 
person who at the time of the violation owns any interest, 
whether as a holder of more than five percent of the capital 
stock of a corporation licensee, as a partner or otherwise, in 
the premises or in the business conducted thereon, or to a 
corporation, partnership, association, enterprise, business, or 
firm in which any such person is in any manner interested; and 
    (5) has not been convicted within five years of the date of 
license application of a felony, or of a willful violation of a 
federal or state law, or local ordinance governing the 
manufacture, sale, distribution, or possession for sale or 
distribution of alcoholic beverages. 
    Subd. 3.  [APPLICATION.] An application for a license under 
this section must be made to the commissioner on a form the 
commissioner prescribes. 
    Subd. 4.  [BOND.] The commissioner may not issue a license 
under this section to a person who has not filed a bond with 
corporate surety, or cash, or United States government bonds 
payable to the state.  The proof of financial responsibility 
must be approved by the commissioner before the license is 
issued.  The bond must be conditioned on the licensee obeying 
all laws governing the business and paying when due all taxes, 
fees, penalties and other charges, and must provide that it is 
forfeited to the state on a violation of law.  Bonds must be in 
the following amounts:  
      Manufacturer's and wholesalers
        of intoxicating liquor except
        as provided in this subdivision          $10,000
      Manufacturers and wholesalers of wine
        up to 25 percent alcohol by weight        $5,000
      Manufacturers and wholesalers of beer
        of more than 3.2 percent alcohol by
        weight                                    $1,000
    Subd. 5.  [PERIOD OF LICENSE.] Licenses issued under this 
section are valid for one year except that to coordinate 
expiration dates initial licenses may be issued for a shorter 
period. 
    Subd. 6.  [FEES.] The annual fees for licenses under this 
section are as follows: 
  (a) Manufacturers (except as provided 
      in clauses (b) and (c))                     $7,500
      Duplicates                                  $3,000
  (b) Manufacturers of wines of not more
      than 25 percent alcohol by volume           $  500
  (c) Brewers                                     $1,250
  (d) Wholesalers (except as provided in
      clauses (e), (f), and (g))                  $7,500
      Duplicates                                  $3,000
  (e) Wholesalers of wines of not more
      than 25 percent alcohol by volume           $  750
  (f) Wholesalers of intoxicating
      malt liquor                                 $  300
      Duplicates                                  $   15
  (g) Wholesalers of nonintoxicating
      malt liquor                                 $   10
    If a business licensed under this section is destroyed, or 
damaged to the extent that it cannot be carried on, or if it 
ceases because of the death or illness of the licensee, the 
commissioner may refund the license fee for the balance of the 
license period to the licensee or to the licensee's estate. 
    Subd. 7.  [INTEREST IN OTHER BUSINESS.] A holder of a 
license as a manufacturer, brewer, or wholesaler may not have 
any ownership, in whole or in part, in a business holding a 
retail intoxicating liquor or nonintoxicating malt liquor 
license, but a manufacturer or wholesaler of intoxicating liquor 
may use or have property rented for retail intoxicating liquor 
sales if the manufacturer or wholesaler has owned the property 
continuously since November 1, 1933. 
    Subd. 8.  [SALES WITHOUT LICENSE.] A licensed brewer may 
without an additional license sell malt liquor to employees or 
retired former employees, in amounts of not more than 768 fluid 
ounces in a week for off-premise consumption only.  A collector 
of commemorative bottles, those terms are as defined in article 
2, section 1, subdivisions 4 and 5, may sell them to another 
collector without a license.  A licensed manufacturer of wine 
containing not more than 25 percent alcohol by volume nor less 
than 51 percent wine made from Minnesota-grown agricultural 
products may sell at on-sale or off-sale wine made on the 
licensed premises without a further license. 
    Subd. 9.  [UNLICENSED MANUFACTURE.] Nothing in this chapter 
requires a license for the natural fermentation of fruit juices 
or brewing of beer in the home for family use.  
    Sec. 2.  [340A.302] [IMPORTERS.] 
    Subdivision 1.  [LICENSES REQUIRED.] Except as provided in 
section 1, subdivision 1, no person may ship alcoholic beverages 
or ethyl alcohol to a licensed manufacturer or wholesaler 
without obtaining an importer's license from the commissioner. 
    Subd. 2.  [TERMS; APPLICATION.] Importers' licenses must be 
applied for on a form the commissioner prescribes.  The form 
must contain, along with information the commissioner requires, 
an agreement on the part of the applicant to obey all laws 
relating to the importation and sale of intoxicating liquor. 
    Subd. 3.  [FEES.] Annual fees for licenses under this 
section are as follows: 
     Importers of distilled spirts, wine,
        or ethyl alcohol                          $300
     Importers of malt liquor                     $200
    Subd. 4.  [BONDS.] The commissioner may, if needed to 
protect revenue, require the holder of a license to import malt 
liquor, file a bond in an amount of not less than $1,000 nor 
more than $5,000, payable to the state and conditioned on the 
payment of all excise taxes due the state. 
    Sec. 3.  [340A.303] [TRANSFERS.] 
    A license under sections 1 or 2 may be transferred only 
with the commissioner's consent.  When a licensee is a 
corporation a change in ownership of more than ten percent of 
its stock must be reported to the commissioner within ten days 
of the change. 
    Sec. 4.  [340A.304] [LICENSE SUSPENSION AND REVOCATION.] 
    The commissioner may revoke, or suspend for up to 60 days, 
a license issued under sections 1 or 2, or may impose a fine of 
up to $1,000 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 14.70 
of the administrative procedure act. 
    Sec. 5.  [340A.305] [WAREHOUSING.] 
    Subdivision 1.  [FACILITIES.] All licensed wholesalers must 
own or lease warehouse space within the state and must have 
adequate delivery facilities to perform the function of a 
wholesaler. 
    Subd. 2.  [UNLOADING.] Except as provided in this chapter 
alcoholic beverages manufactured outside the state may be 
shipped into the state only to licensed wholesalers and must be 
unloaded into the wholesaler's warehouse located in the state. 
Licensed wholesalers may distribute alcoholic beverages only 
from the warehouse. 
    Subd. 3.  [RECIPROCITY.] The provisions of this section 
relating to warehousing do not apply to a wholesaler of malt 
liquor located in an adjoining state which permits wholesalers 
licensed in Minnesota to deliver malt liquor to retailers 
without warehousing in that state. 
    Subd. 4.  [DIRECT SHIPMENT.] Notwithstanding the provisions 
of this section, a manufacturer or United States importer of 
intoxicating liquor manufactured outside Minnesota may 
authorize, on a form the commissioner prescribes, a 
Minnesota-licensed manufacturer or wholesaler to purchase 
intoxicating liquor for direct shipment to another state, or may 
appoint a Minnesota-licensed manufacturer or wholesaler as its 
agent to sell or deliver intoxicating liquor to purchasers in 
other states from the Minnesota warehouse inventory of the 
Minnesota manufacturer or wholesaler. 
    Sec. 6.  [340A.306] [FRAUDULENT SHIPMENTS.] 
    (a) It is unlawful for: 
    (1) any person to knowingly deliver or cause to be 
delivered to a common carrier alcoholic beverages under a false 
title, name, brand, or trade mark; or 
    (2) any person, or a common carrier, or an agent of either 
to knowingly receive a fraudulent shipment under clause (1).  
    (b) A peace officer may examine the books and way bills of 
a common carrier for the purpose of tracing a fraudulent 
shipment to a shipper or receiver. 
    Sec. 7.  [340A.307] [UNLAWFUL DISCRIMINATION.] 
    Subdivision 1.  [NONDISCRIMINATORY SALES.] All licensed 
importers must offer for sale on an equal basis to all licensed 
wholesalers and manufacturers all intoxicating liquor brought 
into the state of Minnesota. 
    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: 
    (a) 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 who 
refuses to sell. 
    (b) 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. 
    (c) 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 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. 
    (d) Discrimination among wholesalers and manufacturers in 
satisfying their respective demands for intoxicating liquor. 
    (e) 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. 
    (f) 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. 
    Subd. 3.  [NONDISCRIMINATORY PRICES.] No licensed importer 
or manufacturer may offer or sell to a licensed wholesaler 
intoxicating liquor at a bottle or case price which is higher 
than the lowest price at which the liquor is contemporaneously 
being sold by the importer or manufacturer to a wholesaler 
anywhere in any other state of the United States or in the 
District of Columbia or to a state or state agency which owns 
and operates retail liquor stores. 
    In determining the lowest price for which liquor is being 
sold in any other state or in the District of Columbia, or to a 
state or state agency which owns and operates retail liquor 
stores, appropriate reductions must be made to reflect all 
discounts, rebates, free goods, allowances, and other 
inducements of any kind whatsoever offered or given to any 
wholesaler, state, or state agency purchasing the liquor in 
another state or in the District of Columbia.  This subdivision 
does not prevent differentials in price which make only due 
allowance for differences in state taxes and fees, and in the 
actual cost of delivery.  As used in this subdivision, "state 
taxes or fees" are the excise taxes imposed or the fees required 
by any state or the District of Columbia based on a quantity of 
liquor. 
    Subd. 4.  [EXCEPTIONS.] Nothing in this section applies to 
    (a) wine or malt liquor of any alcohol content; or 
    (b) intoxicating liquor which is:  
    (1) further distilled, refined, rectified, or blended 
within the state; and 
    (2) bottled within the state and labelled with the 
importer's own labels after importation into the state. 
    Sec. 8.  [340A.308] [PROHIBITED TRANSACTIONS.] 
    (a) No brewer or malt liquor wholesaler may directly or 
indirectly, or through an affiliate or subsidiary company, or 
through an officer, director, stockholder, or partner: 
    (1) give, or lend money, credit, or other thing of value to 
a retailer; 
    (2) give, lend, lease, or sell furnishing or equipment to a 
retailer; 
    (3) have an interest in a retail license; or 
    (4) be bound for the repayment of a loan to a retailer. 
    (b) This section does not prohibit a manufacturer or 
wholesaler from: 
    (1) furnishing, lending, or renting to a retailer outside 
signs, of a cost of up to $100 excluding installation and repair 
costs; 
    (2) furnishing, lending, or renting to a retailer inside 
signs and other promotional material, of a cost of up to $100 in 
a year; 
    (3) furnishing to or maintaining for a retailer equipment 
for dispensing malt liquor, of a cost of up to $100 per tap in a 
year; or 
    (4) using or renting property owned continually since 
November 1, 1933, for the purpose of selling intoxicating or 
nonintoxicating malt liquor at retail. 
    Sec. 9.  [340A.309] [EXCLUSIVE CONTRACTS.] 
    A manufacturer, brewer, or wholesaler may not directly or 
indirectly make an agreement with a retailer which binds the 
retailer to purchase the products of one manufacturer or brewer 
to the exclusion of the products of other manufacturers and 
brewers.  A retailer who is a party to a violation of this 
section or who receives the benefits of a violation is equally 
guilty of a violation.  
    Sec. 10.  [340A.310] [SALES TO WHOLESALERS.] 
    A wholesaler may sell intoxicating liquor or 
nonintoxicating malt liquor only to municipal liquor stores, 
government instrumentalities, or holders of alcoholic beverage 
licenses issued under this chapter. 
    Sec. 11.  [340A.311] [BRAND REGISTRATION.] 
    (a) A brand of intoxicating liquor or nonintoxicating malt 
liquor may not be manufactured or imported into the state unless 
the brand label has been registered with and approved by the 
commissioner.  The fee for brand registration is $20.  The brand 
label of a brand of intoxicating liquor or nonintoxicating malt 
liquor which has not been sold in the state for two years or 
more must be reregistered before its sale can be resumed.  The 
brand label of a brand of intoxicating liquor or nonintoxicating 
malt liquor which has not been sold in the state for at least 
three years is conclusively deemed abandoned by the manufacturer 
or importer.  
    (b) In this section "brand" and "brand label" include 
trademarks and designs used in connection with labels.  
    (c) A brand label may be registered only by the brand owner 
or authorized agent.  No brand may be imported into the state 
for sale without the consent of the brand owner or authorized 
agent.  This section does not limit the provisions of article 5, 
section 7. 
    Sec. 12.  [340A.312] [JOINT PURCHASES; VOLUME PRICES.] 
    Subdivision 1.  [JOINT PURCHASES.] The joint purchase by 
two or more licensed retailers of up to 300, 1.75 liter or 
smaller, bottles of distilled spirits or wine for resale to the 
public is lawful. 
    Subd. 2.  [VOLUME PRICES.] A variable volume price offered 
by a wholesaler to a licensed retailer on sales of distilled 
spirits or wine may not be for a quantity of more than 300 
one-liter or smaller bottles. 
    Sec. 13.  [340A.313] [PRICE FILING.] 
    Subdivision 1.  [FILING.] A distilled spirits or wine brand 
owner or wholesaler may not sell, offer for sale, or solicit 
orders for distilled spirits or wine unless a schedule of 
wholesale prices, including volume discounts, is filed with the 
commissioner on a form prescribed by the commissioner.  No sale 
may be made at wholesale which is not in accordance with filed 
prices.  A filing must be made by the first day of each month 
and is effective for the remainder of the month, except that any 
filed price may be amended within five days of its filing. 
    Subd. 2.  [INSPECTION.] The commissioner shall maintain 
price filings in a manner so as to make them easily accessible 
to the public.  The commissioner shall provide copies of the 
filings to any person requesting them, and may charge a 
reasonable fee for copies. 
    Sec. 14.  [340A.314] [SUGGESTED RETAIL PRICES.] 
    No wholesaler or other person may communicate in any manner 
to an off-sale licensee a suggested retail price for the sale of 
intoxicating liquor. 
    Sec. 15.  [340A.315] [FARM WINERY LICENSE.] 
    Subdivision 1.  [LICENSES.] The commissioner may issue a 
farm winery license to the owner or operator of a farm winery 
located within the state and producing table or sparkling 
wines.  Licenses may be issued and renewed for an annual fee of 
$25, which is in lieu of all other license fees required by this 
chapter. 
    Subd. 2.  [SALES.] A license authorizes the sale, on the 
farm winery premises, of table or sparkling wines produced by 
that farm winery at on-sale or off-sale, in retail, or wholesale 
lots in total quantities not in excess of 50,000 gallons in a 
calendar year, glassware, wine literature and accessories, 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 
12:00 noon and 12:00 midnight.  Labels for each type or brand 
produced must be registered with the commissioner, without fee 
prior to sale. 
    Subd. 3.  [APPLICABILITY.] Except as otherwise specified in 
this section, all provisions of this chapter govern the 
production, sale, possession, and consumption of table or 
sparkling wines produced by a farm 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 or sparkling wine produced by a farm winery, the 
holder of the farm 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 farm 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 farm winery must use the required amount of Minnesota 
products as provided by subdivision 1 unless the farm winery 
holder files a new affidavit with the commissioner. 
    Sec. 16.  [340A.316] [SACRAMENTAL WINE.] 
    The commissioner may issue licenses for the importation and 
sale of wine exclusively for sacramental purposes.  The holder 
of a sacramental wine license may sell wine only to a rabbi, 
priest, or minister of a church, or other established religious 
organization, or individual members of a religious organization 
who conduct ceremonies in their homes, if the purchaser 
certifies in writing that the wine will be used exclusively for 
sacramental purposes in religious ceremonies.  The annual fee 
for a sacramental wine license is $25.  Each licensee must also 
post a $1,000 penal bond in favor of the state, conditioned upon 
compliance with this section.  
    A rabbi, priest, or minister of a church or other 
established religious organization may import wine exclusively 
for sacramental purposes without a license.  

                                ARTICLE 6

                             RETAIL LICENSES
    Section 1.  [340A.401] [LICENSE REQUIRED.] 
    Except as provided in this chapter, no person may directly 
or indirectly, on any pretence or by any device, sell, barter, 
keep for sale, or otherwise dispose of alcoholic beverages as 
part of a commercial transaction without having obtained a 
license. 
    Sec. 2.  [340A.402] [PERSONS ELIGIBLE.] 
    No retail license may be issued to: 
    (1) a person not a citizen of the United States or a 
resident alien; 
    (2) a person under 19 years of age; 
    (3) a person who within five years of the license 
application has been convicted of a willful violation of a 
federal or state law or local ordinance governing the 
manufacture, sale, distribution, or possession for sale or 
distribution, of intoxicating or nonintoxicating malt liquors; 
    (4) a person who has had an intoxicating liquor or 
nonintoxicating liquor license revoked within five years of the 
license application, or to any person who at the time of the 
violation owns any interest, whether as a holder of more than 
five percent of the capital stock of a corporation licensee, as 
a partner or otherwise, in the premises or in the business 
conducted thereon, or to a corporation, partnership, 
association, enterprise, business, or firm in which any such 
person is in any manner interested; or 
    (5) a person not of good moral character and repute.  
    Sec. 3.  [340A.403] [NONINTOXICATING MALT LIQUOR LICENSES.] 
    Subdivision 1.  [ISSUANCE BY COUNTY OR CITY.] The governing 
body of a city or county may issue off-sale or on-sale licenses 
for the sale of nonintoxicating malt liquor within their 
respective jurisdictions. 
    Subd. 2.  [TEMPORARY LICENSES.] (a) A club or charitable, 
religious, or nonprofit organization may be issued a temporary 
on-sale license for the sale of nonintoxicating malt liquor. 
    (b) The temporary license may authorize the sale of 
nonintoxicating malt liquor in any school or school buildings. 
    (c) Temporary licenses are subject to the terms set by the 
issuing county or city.  
    Sec. 4.  [340A.404] [INTOXICATING LIQUOR; ON-SALE 
LICENSES.] 
    Subdivision 1.  [CITIES.] A city may issue an on-sale 
intoxicating liquor license to the following establishments 
located within its jurisdiction: 
    (1) hotels; 
    (2) restaurants; 
    (3) clubs or congressionally chartered veterans 
organizations 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; 
    (4) sports facilities located on land owned by the 
metropolitan sports commission; and 
    (5) exclusive liquor stores.  
    Subd. 2.  [SPECIAL PROVISION; CITY OF MINNEAPOLIS.] The 
city of Minneapolis may issue an on-sale intoxicating liquor 
license to the Guthrie Theatre and the Cricket Theatre 
notwithstanding the limitations of law, or local ordinance, or 
charter provision relating to zoning or school or church 
distances.  The licenses authorize sales on all days of the week 
to holders of tickets for dramatic performances presented by the 
theatres and to members of the nonprofit corporations holding 
the licenses and to their guests. 
    Subd. 3.  [NOTICE TO THE COMMISSIONER.] A city shall within 
ten days of the issuance of a license under subdivision 1, 
inform the commissioner of the licensee's name and address and 
trade name, and the effective date and expiration date of the 
license.  The city shall also inform the commissioner of a 
license transfer, cancellation, suspension, or revocation during 
the license period. 
    Subd. 4.  [SPECIAL PROVISIONS; SPORTS, CONVENTIONS, OR 
CULTURAL FACILITIES.] The governing body of a municipality may 
authorize a holder of a retail on-sale intoxicating liquor 
license issued by the municipality or by an adjacent 
municipality to dispense intoxicating liquor at any convention, 
banquet, conference, meeting, or social affair conducted on the 
premises of a sports, convention, or cultural facility owned by 
the municipality or instrumentality thereof having independent 
policymaking and appropriating authority and located within the 
municipality.  The licensee must be engaged to dispense 
intoxicating liquor at an event held by a person or organization 
permitted to use the premises, and may dispense intoxicating 
liquor only to persons attending the event.  The licensee may 
not dispense intoxicating liquor to any person attending or 
participating in an amateur athletic event held on the premises. 
    Subd. 5.  [WINE LICENSES.] A municipality may issue an 
on-sale wine license with the approval of the commissioner to a 
restaurant having facilities for seating at least 25 guests at 
one time.  A wine license permits the sale of wine of up to 14 
percent alcohol by volume for consumption with the sale of food. 
    Subd. 6.  [COUNTIES.] A county board may issue an on-sale 
intoxicating liquor license within the area of the county that 
is unorganized or unincorporated, to a restaurant or club with 
the approval of the commissioner.  
    Subd. 7.  [AIRPORTS COMMISSION.] On-sale licenses may be 
issued by the metropolitan airports commission for the sale of 
intoxicating liquor in major airports owned by the metropolitan 
airports commission and used as terminals for regularly 
scheduled air passenger service. 
    Subd. 8.  [LAKE SUPERIOR TOUR BOATS.] (a) The commissioner 
may issue an on-sale intoxicating liquor license to a person 
regularly engaged, on an annual or seasonal basis, in the 
business of offering tours by boat on Lake Superior and adjacent 
bays.  The license shall authorize the sale of intoxicating 
liquor for consumption on the boat while underway or attached to 
a dock or other mooring.  No license may be issued unless each 
boat used in the tour business regularly sells meals in the 
place where intoxicating liquor is sold. 
    (b) All sales of intoxicating liquor made on a boat while 
it is attached to a dock or other mooring are subject to any 
restrictions on the sale of liquor prescribed by the governing 
body of the city where the boat is attached, or of a county when 
it is attached outside a city.  A governing body may prohibit 
liquor sales within its jurisdiction but may not require an 
additional license, or require a fee or occupation tax, for the 
sales.  
     (c) If a boat is moored for a period of at least three 
consecutive months, the city may require the boat to obtain an 
on-sale intoxicating liquor license from the city, and the fee 
charged for the license must not exceed one-half the fee charged 
for a comparable annual on-sale intoxicating liquor license. 
    Subd. 9.  [MILITARY BASES AND INSTALLATIONS.] The 
commissioner may issue an on-sale license for the sale of 
intoxicating liquor within the boundaries of a military base or 
installation under the jurisdiction of the adjutant general with 
the approval of the adjutant general.  No municipal or county 
license is required for the sale of intoxicating liquor under 
this subdivision. 
    Sec. 5.  [340A.405] [INTOXICATING LIQUOR; OFF-SALE 
LICENSES.] 
    Subdivision 1. [CITIES.] A city may issue with the approval 
of the commissioner, an off-sale intoxicating liquor license to 
an exclusive liquor store or to a drugstore.  Cities of the 
first class may also issue an off-sale license to a general food 
store. 
    Subd. 2.  [COUNTIES.] A county may issue an off-sale 
intoxicating license with the approval of the commissioner to 
exclusive liquor stores located within unorganized territory of 
the county. 
    Subd. 3.  [TOWNS.] The town board of a town exercising 
powers under section 368.01, subdivision 1, may issue an 
off-sale intoxicating liquor license with the approval of the 
commissioner to an exclusive liquor store located within the 
town.  
    Sec. 6.  [340A.406] [INTOXICATING LIQUOR; COMBINATION 
LICENSES.] 
    A city of the fourth class or a statutory city of 10,000 or 
fewer population may issue an off-sale and on-sale intoxicating 
liquor license to the same licensee or, in lieu of issuing 
on-sale and off-sale licenses separately to a licensee, may 
issue a combination on-sale and off-sale license.  A city may 
continue to issue licenses under this subdivision when the 
population of the city exceeds 10,000 population.  
    Sec. 7.  [340A.407] [COMMON CARRIERS.] 
    The commissioner may issue an on-sale license to a person 
certificated by either the state or the United States of 
America, or an agency thereof, as a common carrier engaged in 
the business of transporting persons for hire in interstate or 
intrastate commerce to sell intoxicating or nonintoxicating malt 
liquor in a place where meals are sold.  A license issued under 
this subdivision only authorizes the sale of intoxicating or 
nonintoxicating malt liquor to a bona fide passenger who is 
actually being transported in interstate or intrastate commerce. 
    Sec. 8.  [340A.408] [RETAIL LICENSE FEES.] 
    Subdivision 1.  [NONINTOXICATING MALT LIQUOR.] (a) The 
license fee for an on-sale and off-sale nonintoxicating malt 
liquor license is the fee set by the county or city issuing the 
license. 
    (b) One-half of the license fee received by a county for a 
retail license to sell nonintoxicating malt liquor within any 
town in the county shall be paid to the town board where the 
business is located. 
    Subd. 2.  [INTOXICATING LIQUOR; ON-SALE.] (a) The license 
fee for a retail on-sale intoxicating liquor license is the fee 
set by the city or county issuing the license subject to the 
limitations imposed under this subdivision. 
    (b) The annual license fee for an on-sale intoxicating 
liquor license issued by a city to a club must be no greater 
than: 
    (1) $300 for a club with under 200 members; 
    (2) $500 for a club with between 201 and 500 members; 
    (3) $650 for a club with between 501 and 1,000 members; 
    (4) $800 for a club with between 1,001 and 2,000 members; 
    (5) $1,000 for a club with between 2,001 and 4,000 members; 
    (6) $2,000 for a club with between 4,001 and 6,000 members; 
or 
    (7) $3,000 for a club with over 6,000 members. 
    (c) The license fee for the issuance of a wine license may 
not exceed one-half of the license fee charged for an on-sale 
intoxicating liquor license, or $2,000, whichever is less. 
    (d) The town board of a town in which an on-sale 
establishment has been licensed by a county may impose an 
additional license fee on each such establishment in an amount 
not to exceed 20 percent of the county license fee. 
    Subd. 3.  [INTOXICATING LIQUOR; OFF-SALE.] (a) The annual 
license fee for an off-sale intoxicating liquor license issued 
by a city, when combined with any occupation tax imposed by the 
city, may not exceed the following limits: 
    (1) $1,000 for cities of the first class; 
    (2) $200 for cities over 10,000 other than cities of the 
first class; 
    (3) $150 for cities of between 5,000 and 10,000 population; 
and 
    (4) $100 for cities with less than 5,000 population. 
    (b) The annual license fee for an off-sale intoxicating 
liquor license issued by a county or town shall not exceed $500. 
    Subd. 4.  [LAKE SUPERIOR TOUR BOATS; COMMON CARRIERS.] (a) 
The annual license fee for licensing of Lake Superior tour boats 
under article 6, section 4, subdivision 8, shall be $1,000. 
    (b) The annual license fee for common carriers licensed 
under article 6, section 7 is: 
    (1) $25 for nonintoxicating malt liquor, and $2 for a 
duplicate license; and 
    (2) $100 for intoxicating liquor, and $10 for a duplicate 
license. 
    Subd. 5.  [REFUNDS.] A pro rata share of an annual license 
fee for a retail license to sell intoxicating or nonintoxicating 
malt liquor, either on-sale or off-sale, may be refunded to the 
licensee or to the licensee's estate if: 
    (1) the business ceases to operate because of destruction 
or damage; 
    (2) the licensee dies; 
    (3) the business ceases to be lawful for a reason other 
than a license revocation; or 
    (4) the licensee ceases to carry on the licensed business 
under the license. 
    Sec. 9.  [340A.409] [LIABILITY INSURANCE.] 
    Subdivision 1.  [INSURANCE REQUIRED.] No retail license may 
be issued or renewed unless the applicant demonstrates proof of 
financial responsibility with regard to liability imposed by 
article 10, section 1.  The issuing authority must submit to the 
commissioner the applicant's proof of financial responsibility. 
This subdivision does not prohibit a local unit of government 
from requiring higher insurance or bond coverages, or a larger 
deposit of cash or securities.  The minimum requirement for 
proof of financial responsibility may be given by filing: 
    (1) a certificate that there is in effect for the license 
period an insurance policy or pool providing at least $50,000 of 
coverage because of bodily injury to any one person in any one 
occurrence, $100,000 because of bodily injury to two or more 
persons in any one occurrence, $10,000 because of injury to or 
destruction of property of others in any one occurrence, $50,000 
for loss of means of support of any one person in any one 
occurrence, and $100,000 for loss of means of support of two or 
more persons in any one occurrence; 
    (2) a bond of a surety company with minimum coverages as 
provided in clause (1); or 
    (3) a certificate of the state treasurer that the licensee 
has deposited with the state treasurer $100,000 in cash or 
securities which may legally be purchased by savings banks or 
for trust funds having a market value of $100,000.  
    Subd. 2.  [MARKET ASSISTANCE.] The commissioner of commerce 
shall advise licensees and municipalities subject to the 
financial responsibility requirements of subdivision 1 of those 
persons offering insurance coverage.  The commissioner of 
commerce shall establish a program to assist licensees in 
obtaining insurance coverage.  The program shall include a 
committee appointed by the commissioner of commerce of a 
representative group of insurance carriers and producers.  The 
commissioner of commerce shall serve as an ex officio member of 
the committee.  The committee shall review and act upon all 
properly executed applications requesting liquor liability 
market assistance.  The market assistance program shall continue 
to function so long as its services are deemed by the 
commissioner of commerce to be necessary to relieve perceived 
availability problems in the liquor liability insurance market. 
If the committee finds that it cannot assist in securing 
insurance coverage, it shall notify the applicant in writing 
with a full explanation and recommendation for enhancing its 
ability to secure insurance.  The commissioner of commerce 
shall, if necessary, establish an assigned risk plan pursuant to 
subdivision 3. 
    Subd. 3.  [ASSIGNED RISK PLAN.] (a) The purpose of the 
assigned risk plan is to provide coverage required by 
subdivision 1 to persons rejected under this subdivision. 
    (b) An insurer that refuses to write the coverage required 
by subdivision 1 shall furnish the applicant with a written 
notice of refusal.  The rejected applicant shall file a copy of 
the notice of refusal with the commissioner of public safety and 
with the assigned risk plan at the time of application for 
coverage under the plan. 
    (c) The commissioner of commerce may enter into service 
contracts as necessary or beneficial to accomplish the purposes 
of the assigned risk plan including servicing of policies or 
contracts of coverage, data management, and assessment 
collections.  Services related to the administration of policies 
or contracts of coverages must be performed by one or more 
qualified insurance companies licensed pursuant to section 
60A.06, subdivision 1, clause (13), or a qualified vendor of 
risk management services.  A qualified insurer or vendor of risk 
management services must possess sufficient financial, 
professional, administrative, and personnel resources to provide 
the services required for operation of the plan.  The cost of 
all services contracted for are an obligation of the assigned 
risk plan. 
    (d) The commissioner of commerce may assess all insurers 
licensed under section 60A.06, subdivision 1, clause (13), an 
amount sufficient to fully fund the obligations of the assigned 
risk plan if the commissioner determines that the assets of the 
assigned risk plan are insufficient to meet its obligations. The 
assessment of each insurer must be in a proportion equal to the 
proportion which the amount of insurance written as reported on 
page 14 of the annual statement under line 5, commercial 
multi-peril, and line 17, other liability, during the preceding 
calendar year by that insurer bears to the total written by all 
such carriers for such lines. 
    (e) Policies and contracts of coverage issued under this 
subdivision must contain the usual and customary provisions of 
liability insurance policies, and must contain the minimum 
coverage required by subdivision 1 or the local governing unit. 
    (f) Assigned risk policies and contracts of coverage are 
subject to premium tax pursuant to section 60A.15. 
    (g) Insureds served by the assigned risk plan must be 
charged premiums based upon a rating plan approved by the 
commissioner of commerce.  Assigned risk premiums may not be 
lower than rates generally charged by insurers for the 
business.  The commissioner of commerce shall fix the 
compensation received by the agent of record. 
    (h) The commissioner of commerce may adopt rules, including 
temporary rules, needed to implement this subdivision.  The 
rules may include: 
    (1) appeal procedures from actions of the assigned risk 
plan; 
    (2) formation of an advisory committee composed of 
insurers, vendors of risk management services and licensees, to 
advise the commissioner of commerce regarding operation of the 
plan; and 
    (3) applicable rating plans and rating standards. 
    Subd. 4.  [INSURANCE NOT REQUIRED.] Subdivision 1 does not 
apply to licensees who by affidavit establish that: 
    (1) they are on-sale nonintoxicating malt liquor licensees 
with sales of less than $10,000 of nonintoxicating malt liquor 
for the preceding year; 
    (2) they are off-sale nonintoxicating malt liquor licensees 
with sales of less than $20,000 of nonintoxicating malt liquor 
for the preceding year; and 
    (3) they are holders of on-sale wine licenses with sales of 
less than $10,000 for wine for the preceding year. 
    Sec. 10.  [340A.410] [LICENSE RESTRICTIONS; GENERAL.] 
    Subdivision 1.  [COUNTIES; TOWN CONSENT.] A county may not 
issue a retail license to sell any alcoholic beverage within an 
organized town unless the governing body of the town has 
consented to the issuance of the license. 
    Subd. 2.  [COUNTIES; RECOMMENDATION AND REVIEW OF 
APPLICANTS.] (1) No county may issue or renew a retail license 
to sell any alcoholic beverage until the county board has 
received a written recommendation from the sheriff and county 
attorney stating that to the best of their knowledge that the 
applicant is eligible to be licensed under section 340A.402.  A 
copy of the statements must be given to the town board if a 
town's consent is required issuance of the license under 
subdivision 3. 
    (2) The county board shall consider the recommendations of 
the sheriff and county attorney, the character and reputation of 
the applicant, and the nature and location of the business prior 
to issuance of any license. 
    Subd. 3.  [LICENSE EXTENSION; DEATH OF LICENSEE.] In the 
case of the death of a retail licensee to sell alcoholic 
beverages, the personal representative is authorized to continue 
operation of the business for not more than 90 days after the 
death of the licensee. 
    Subd. 4.  [LICENSE POSTING.] A retail license to sell 
alcoholic beverages must be posted in a conspicuous place in the 
premises for which it is used. 
    Subd. 5.  [GAMBLING PROHIBITED.] (a) No retail 
establishment licensed to sell alcoholic beverages may keep, 
possess, or operate, or permit the keeping, possession, or 
operation on the licensed premises of dice or any gambling 
device as defined in section 349.30, or permit gambling therein 
except as provided in this subdivision.  
    (b) Gambling equipment may be kept or operated and raffles 
conducted on licensed premises and adjoining rooms when the use 
of the gambling equipment is authorized under chapter 349. 
    Subd. 6.  [RACIAL DISCRIMINATION; CLUBS.] No retail license 
to sell alcoholic beverages may be issued or renewed by a 
municipality or county to a club which discriminates against 
members or applicants for membership or guests of members on the 
basis of race. 
    Subd. 7.  [LICENSE LIMITED TO SPACE SPECIFIED.] A retail 
license to sell any alcoholic beverage is only effective for the 
compact and contiguous space specified in the approved license 
application.  
    Sec. 11.  [340A.411] [LICENSE RESTRICTIONS; NONINTOXICATING 
MALT LIQUOR LICENSES.] 
    Subdivision 1.  [ON-SALE LICENSES.] On-sale nonintoxicating 
liquor licenses may only be issued to drugstores, restaurants, 
hotels, clubs, and establishments used exclusively for the sale 
of nonintoxicating malt liquor with the incidental sale of 
tobacco and soft drinks. 
    Subd. 2.  [LICENSE DURATION.] All retail nonintoxicating 
malt liquor licenses must be issued for one year, except that 
for the purpose of coordinating the time of expiration of 
licenses in general, licenses may be issued for a shorter time, 
in which case a pro rata license fee must be charged. 
    Sec. 12.  [340A.412] [LICENSE RESTRICTIONS; INTOXICATING 
LIQUOR LICENSES.] 
    Subdivision 1.  [BOND REQUIRED.] A local unit of government 
shall not grant a retail license to sell intoxicating liquor 
until the applicant has filed a bond with corporate surety, or 
cash, or United States government bonds in the amount of not 
less than $3,000 nor more than $5,000 for on-sale licenses, and 
not less than $1,000 nor more than $3,000 for off-sale 
licenses.  A common carrier who applies for a license to sell 
intoxicating liquor under article 6, section 7, must file with 
the commissioner a bond with corporate surety, or cash, or 
government bonds in the sum of $1,000.  A bond filed under this 
subdivision must be conditional on the licensee obeying all laws 
governing the business and paying all taxes, fees, penalties, 
and other charges, and must provide that the bond is forfeited 
to the unit of government issuing the license on a violation of 
law.  The commissioner must approve all bonds filed by 
applicants for an off-sale license. 
    Subd. 2.  [INVESTIGATION OF ON-SALE LICENSES.] (a) The city 
or county having jurisdiction over on-sale licenses to sell 
intoxicating liquor shall on initial application for an on-sale 
license or on application for a transfer of an existing license 
conduct a preliminary background and financial investigation of 
the applicant.  The application must be in the form prescribed 
by the bureau of criminal apprehension and with any additional 
information as the governing body of the city or county having 
jurisdiction over the license requires.  If the governing body 
of the city or county having jurisdiction determines or if the 
bureau of criminal apprehension on its own initiative determines 
that a comprehensive background and investigation of the 
applicant is necessary, the governing body may conduct the 
investigation itself or contract with the bureau of criminal 
apprehension for the investigation.  In addition, an 
investigation may be required prior to renewal of an existing 
on-sale license when the governing body of the city or county 
deems it in the public interest.  An investigation fee not to 
exceed $500 shall be charged an applicant by the city or county 
if the investigation is conducted within the state, or the 
actual cost not to exceed $10,000 if the investigation is 
required outside the state.  
    (b) No license may be issued, transferred, or renewed if 
the results of the investigation show, to the satisfaction of 
the governing body, that issuance, transfer, or renewal would 
not be in the public interest.  
    Subd. 3.  [LIMITATIONS ON ISSUANCE OF LICENSES TO ONE 
PERSON OR PLACE.] (a) No more than one off-sale intoxicating 
liquor license may be directly or indirectly issued to any one 
person or for any one place in each city or county. 
    (b) For the purpose of this subdivision, the term 
"interest": 
    (1) includes any pecuniary interest in the ownership, 
operation, management, or profits of a retail liquor 
establishment, and a person who receives money from time to time 
directly or indirectly from a licensee, in the absence of 
consideration and excluding gifts or donations, has a pecuniary 
interest in the retail license; and 
    (2) does not include loans; rental agreements; open 
accounts or other obligations held with or without security 
arising out of the ordinary and regular course of business of 
selling or leasing merchandise, fixtures, supplies to the 
establishment; an interest in a corporation owning or operating 
a hotel but having at least 150 or more rental units holding a 
liquor license in conjunction therewith; or ten percent or less 
interest in any other corporation holding a license. 
    (c) In determining whether an "interest" exists, the 
transaction must have been bona fide and the reasonable value of 
the goods and things received as consideration for a payment by 
the licensee and all other facts reasonably tending to prove or 
disprove the existence of a purposeful scheme or arrangement to 
evade the restrictions of this subdivision must be considered. 
    Subd. 4.  [LICENSES PROHIBITED IN CERTAIN AREAS.] (a) No 
license to sell intoxicating liquor may be issued within the 
following areas: 
    (1) where restricted against commercial use through zoning 
ordinances and other proceedings or legal processes regularly 
had for that purpose, except licenses may be issued to 
restaurants in areas which were restricted against commercial 
uses after the establishment of the restaurant; 
    (2) within the capitol or on the capitol grounds, except as 
provided under Laws 1983, chapter 259, section 9; 
    (3) on the state fairgrounds or at any place in a city of 
the first class within one-half mile of the fairgrounds, except 
as otherwise provided by charter; 
    (4) on the campus of the college of agriculture of the 
University of Minnesota or at any place in a city of the first 
class within one-half mile of the campus, provided that a city 
may issue one on-sale wine license in this area that is not 
included in the area described in clause (3), except as provided 
by charter; 
    (5) within 1,000 feet of a state hospital, training school, 
reformatory, prison, or other institution under the supervision 
or control, in whole or in part, of the commissioner of human 
services or the commissioner of corrections; 
    (6) in a town or municipality in which a majority of votes 
at the last election at which the question of license was voted 
upon were not in favor of license under article 6, section 16, 
or within one-half mile of any such town or municipality, except 
that intoxicating liquor manufactured within this radius may be 
sold to be consumed outside it; 
    (7) at any place on the east side of the Mississippi River 
within one-tenth of a mile of the main building of the 
University of Minnesota unless the licensed establishment is on 
property owned or operated by a nonprofit corporation organized 
prior to January 1, 1940, for and by former students of the 
University of Minnesota; 
    (8) within 1,500 feet of a state university, except only 
1,200 feet from Winona and Southwest State University, provided 
that within 1,500 feet of St. Cloud State University one on-sale 
wine and two off-sale intoxicating liquor licenses may be 
issued, measured by a direct line from the nearest corner of the 
administration building to the main entrance of the licensed 
establishment except at Mankato State University the distance is 
measured from the front door of the student union of the 
Highland campus; and 
    (9) within 1,500 feet of any public school that is not 
within a city. 
    (b) The restrictions of this subdivision do not apply to a 
manufacturer or wholesaler of intoxicating liquor or to a 
drugstore or to a person who had a license originally issued 
lawfully prior to July 1, 1967.  
    Subd. 5.  [LICENSES IN CONNECTION WITH PREMISES OF 
ANOTHER.] An intoxicating liquor license may not be issued to a 
person in connection with the premises of another to whom a 
license could not be issued under the provisions of this 
chapter.  This subdivision does not prevent the granting of a 
license to a proper lessee because the person has leased the 
premises of a minor, a noncitizen who is not a resident alien, 
or a person who has been convicted of a crime other than a 
violation of this chapter. 
    Subd. 6.  [OFF-SALE LICENSES WHERE NONINTOXICATING MALT 
LIQUOR IS SOLD.] An off-sale intoxicating liquor license may not 
be issued to a place where nonintoxicating malt liquor is sold 
for consumption on the premises.  This subdivision does not 
apply to those places where both an on-sale and off-sale license 
or a combination license have been issued under article 6, 
section 6. 
    Subd. 7.  [DRUGSTORES.] No intoxicating liquor license may 
be issued to a person operating a drugstore unless the person 
has operated it for at least two years or has purchased a 
drugstore that has been in continuous operation for two or more 
years. 
    Subd. 8.  [EXPIRATION DATE.] All intoxicating liquor 
licenses issued by a county or a city, other than cities of the 
first class, must expire on the same date. 
    Subd. 9.  [LICENSE TRANSFER.] A license may be transferred 
with the consent of the issuing authority, provided that a 
license is issued to a location at a racetrack licensed under 
chapter 240 may not be transferred.  Where a license is held by 
a corporation, a change in ownership of ten percent or more of 
the stock of the corporation must be reported in writing to the 
authority who issued the license within ten days of the transfer.
    Subd. 10.  [EMPLOYMENT OF MINORS.] No person under 18 years 
of age may be employed in a place where intoxicating liquor is 
sold for consumption on the premises, except persons under 18 
years of age may be employed as musicians or in bussing or 
washing dishes in a restaurant or hotel that is licensed to sell 
intoxicating liquor and may be employed as waiters or waitresses 
at a restaurant, hotel, or motel where only wine is sold, 
provided that the person under the age of 18 may not serve or 
sell any wine. 
    Subd. 11.  [REISSUANCE OF LICENSES IN CERTAIN CITIES.] A 
city having territory in which the sale of intoxicating liquor 
has been prohibited by law or charter and in which real property 
taken for a public purpose by negotiation or eminent domain 
proceedings was, immediately prior to the taking, actually and 
lawfully used for the sale of intoxicating liquor, may reissue 
the license previously issued to the location at any otherwise 
lawful location in the city.  A change of location due to taking 
after July 1, 1972, must have been accomplished by July 1, 1976, 
but these licenses may be renewed, reissued, transferred, or 
relocated after that date. 
    Sec. 13.  [340A.413] [RESTRICTIONS ON THE NUMBER OF 
INTOXICATING LIQUOR LICENSES THAT MAY BE ISSUED.] 
    Subdivision 1.  [ON-SALE LICENSES.] No on-sale intoxicating 
liquor license may be issued in any city except as provided in 
this section in excess of the following limits: 
    (1) in cities of the first class, one license for every 
1,500 population, up to 200 licenses; 
    (2) in cities of the second class, not more than 18 
licenses plus one for every 2,500 population over 45,000; 
    (3) in cities of the third class, not more than 12 licenses;
    (4) in cities of the fourth class, not more than seven 
licenses; 
    (5) in statutory cities of 5,000 to 10,000 population, not 
more than six licenses; 
     (6) in statutory cities of 2,500 to 5,000 population, not 
more than five licenses; 
    (7) in statutory cities of 500 to 2,500 population, not 
more than four licenses; and 
    (8) in statutory cities under 500 population, not more than 
three licenses. 
    Subd. 2.  [ADDITIONAL ON-SALE LICENSES PERMITTED FOR CITIES 
IN ST. LOUIS COUNTY.] For cities in St. Louis county no on-sale 
liquor license may be issued in excess of the following limits, 
without the approval of the commissioner: 
    (1) in cities of the third class, not more than 15 licenses;
    (2) in cities of the fourth class, not more than nine 
licenses; and 
    (3) in statutory cities of 2,500 to 5,000 population, not 
more than six licenses. 
    Subd. 3.  [REFERENDUM FOR ADDITIONAL ON-SALE LICENSES.] (a) 
The governing body of a city may issue on-sale intoxicating 
liquor licenses over the number permitted under subdivision 1 
when authorized by the voters of the city at a general or 
special election. 
    (b) The governing body may direct that either of the 
following questions be placed on the ballot: 
    (1) "Shall the city council be allowed to issue 'on-sale' 
licenses for the sale of intoxicating liquor at retail in excess 
of the number permitted by law?"  
                                   Yes .......
                                   No ........"
    (2) "Shall the city council be allowed to issue (a number 
to be determined by the governing body) 'on-sale' licenses for 
the sale of intoxicating liquor at retail in excess of the 
number now permitted by law?" 
                                   Yes .......
                                   No ........"
    (c) If a majority of voters voting on the question in 
clause (1) vote yes, the governing body may issue an unlimited 
number of on-sale licenses.  If a majority of voters voting on 
the question in clause (2) vote yes, the governing body may 
issue additional on-sale licenses in the number stated in the 
question. 
    Subd. 4.  [EXCLUSIONS FROM LICENSE LIMITS.] On-sale 
intoxicating liquor licenses may be issued to the following 
entities by a city, in addition to the number authorized by this 
section: 
    (1) clubs, or congressionally chartered veterans 
organizations; 
    (2) restaurants located at a racetrack licensed under 
chapter 240; 
    (3) restaurants that are issued licenses to sell wine under 
article 6, section 4, subdivision 5;  
    (4) Lake Superior tour boats that are issued licenses under 
article 6, section 4, subdivision 8; and 
    (5) theaters that are issued licenses under article 6, 
section 4, subdivision 2. 
    Subd. 5.  [OFF-SALE LICENSES.] No off-sale intoxicating 
liquor license may be issued in any city, except as provided in 
this section, in excess of the following limits: 
    (1) in cities of the first class, not more than one 
off-sale license for each 5,000 population; and 
    (2) in all other cities the limit shall be determined by 
the governing body of the city. 
    Subd. 6.  [AREA THAT HAS BEEN ANNEXED OR CONSOLIDATED.] A 
license validly issued within the number prescribed in this 
section is not rendered invalid or illegal by reason of the 
consolidation or annexation of territory to a city and may 
continue to remain in effect and be renewed, except that the 
limitations as to ownership under article 6, section 12, 
subdivision 2. 
    Sec. 14.  [340A.414] [LICENSING OF BOTTLE CLUBS.] 
    Subdivision 1.  [PERMIT REQUIRED.] No business 
establishment or club which does not hold an on-sale 
intoxicating liquor license may directly or indirectly allow the 
consumption and display of intoxicating liquor or knowingly 
serve any liquid for the purpose of mixing with intoxicating 
liquor without first having obtained a permit from the 
commissioner. 
    Subd. 2.  [ELIGIBILITY FOR PERMIT.] (a) The commissioner 
may issue a permit under this section only to: 
    (1) an applicant who has not, within five years prior to 
the application, been convicted of a felony or of violating any 
provision of this chapter or rule adopted under this chapter; 
    (2) a restaurant; 
    (3) a hotel; 
    (4) an establishment licensed for the sale of 
nonintoxicating malt liquor; 
    (5) a resort as defined in section 157.01; and 
    (6) a club as defined in section 340.07, subdivision 15, or 
an unincorporated club otherwise meeting that definition. 
    (b) The commissioner may not issue a permit to a club 
holding an on-sale intoxicating liquor license. 
    Subd. 3.  [ONLY AUTHORIZED TO PERMIT THE CONSUMPTION AND 
DISPLAY.] A permit issued under this section authorizes the 
establishment to permit the consumption and display of 
intoxicating liquor on the premises.  The permit does not 
authorize the sale of intoxicating liquor. 
    Subd. 4.  [PERMIT EXPIRATION.] All permits issued under 
this section expire on June 30 of each year. 
    Subd. 5.  [LOCAL CONSENT REQUIRED.] A permit issued under 
this section is not effective until approved by the governing 
body of the city or county where the establishment is located. 
    Subd. 6.  [PERMIT FEES.] The annual fee for issuance of a 
permit under this section is $150.  The governing body of a city 
or county where the establishment is located may impose an 
addition of fee of not more than $300. 
    Subd. 7.  [INSPECTION.] An establishment holding a permit 
under this section is open for inspection by the commissioner 
and the commissioner's representative and by peace officers, who 
may enter and inspect during reasonable hours.  Intoxicating 
liquor sold, served, or displayed in violation of law may be 
seized and may be disposed of under article 2, section 12. 
    Subd. 8.  [LOCKERS.] A club issued a permit under this 
section may allow members to bring and keep a personal supply of 
intoxicating liquor in lockers on the club's premises.  All 
bottles kept on the premises must have attached to it a label 
signed by the member.  No person under 19 years of age may keep 
a supply of intoxicating liquor on club premises.  
    Subd. 9.  [ONE-DAY CITY PERMITS.] A city may issue a 
one-day permit for the consumption and display of intoxicating 
liquor under this section to a nonprofit organization in 
conjunction with a social activity in the city sponsored by the 
organization.  The permit must be approved by the commissioner 
and is valid only for the day indicated on the permit.  The fee 
for the permit may not exceed $25.  A city may not issue more 
than ten permits under this section in any one year. 
    Sec. 15.  [340A.415] [LICENSE REVOCATION OR SUSPENSION.] 
    The authority issuing or approving any retail license or 
permit under this chapter may either suspend for up to 60 days 
or revoke the license or permit, and the approving authority, if 
the commissioner, may impose fines of up to $500 for each 
violation on a finding that the license or permit holder has 
failed to comply with an applicable statute, regulation, or 
ordinance relating to alcoholic beverages.  No suspension or 
revocation takes effect until the license or permit holder has 
been afforded an opportunity for a hearing under chapter 14. 
    Sec. 16.  [340A.416] [LOCAL OPTION ELECTION.] 
    Subdivision 1.  [PETITION.] Upon receipt of a petition 
signed by 30 percent of the persons voting at the last city 
election or 200 registered voters residing in the city, 
whichever is less, a statutory city or home rule charter city of 
the fourth class shall place before the voters of the city the 
question of whether the city will issue intoxicating liquor 
licenses. 
    Subd. 2.  [BALLOT QUESTION.] The question of the referendum 
under this section must be on a separate ballot and must allow 
the voters to vote either "for license" or "against license." 
    Subd. 3.  [EFFECT OF ELECTION RESULTS.] If a majority of 
persons voting on the referendum question the vote "against 
license" the city may not issue intoxicating liquor licenses 
until the results of the referendum have been reversed at a 
subsequent election where the question has been submitted as 
provided in this section. 
    Subd. 4.  [CERTIFICATION TO SECRETARY OF STATE.] The clerk 
or recorder must certify results of a referendum held under this 
section to the secretary of state within ten days of the 
election. 
    Subd. 5.  [CHALLENGE OF ELECTION.] Where the results of a 
referendum under this section are challenged by any voter, the 
county attorney of the county where the election was held must 
appear in defense of the validity of the election. 

                               ARTICLE 7

                        RETAIL SALES REGULATIONS
    Section 1.  [340A.501] [RESPONSIBILITY OF LICENSEE.] 
    Every licensee is responsible for the conduct in the 
licensed establishment and any sale of alcoholic beverage by any 
employee authorized to sell alcoholic beverages in the 
establishment is the act of the licensee. 
    Sec. 2.  [340A.502] [SALES TO OBVIOUSLY INTOXICATED 
PERSONS.] 
    No person may sell, give, furnish, or in any way procure 
for another alcoholic beverages for the use of an obviously 
intoxicated person. 
    Sec. 3.  [340A.503] [PERSONS UNDER 19; ILLEGAL ACTS.] 
    Subdivision 1.  [CONSUMPTION.] It is unlawful for any: 
    (1) retail intoxicating liquor or nonintoxicating liquor 
licensee or bottle club permit holder under article 6, section 
14, to permit any person under the age of 19 years to consume 
alcoholic beverages on the licensed premises; or 
    (2) person under the age of 19 years to consume any 
alcoholic beverages unless in the household of the person's 
parent or guardian and with the consent of the parent or 
guardian. 
    Subd. 2.  [PURCHASING.] It is unlawful for any person: 
    (1) to sell, barter, furnish, or give alcoholic beverages 
to a person under 19 years of age, except that a parent or 
guardian of a person under the age of 19 years may give or 
furnish alcoholic beverages to that person solely for 
consumption in the household of the parent or guardian; 
    (2) under the age of 19 years to purchase or attempt to 
purchase any alcoholic beverage; or 
    (3) to induce a person under the age of 19 years to 
purchase or procure any alcoholic beverage. 
    Subd. 3.  [POSSESSION.] It is unlawful for a person under 
the age of 19 years to possess any alcoholic beverage with the 
intent to consume it at a place other than the household of the 
person's parent or guardian.  Possession at a place other than 
the household of the parent or guardian is prima facie evidence 
of intent to consume it at a place other than the household of 
the parent or guardian. 
    Subd. 4.  [ENTERING LICENSED PREMISES.] It is unlawful for 
a person under the age of 19 years to enter an establishment 
licensed for the sale of alcoholic beverages or any municipal 
liquor store for the purpose of purchasing or having served or 
delivered any alcoholic beverage. 
    Subd. 5.  [MISREPRESENTATION OF AGE.] It is unlawful for a 
person under the age of 19 years to misrepresent his or her age 
for the purpose of purchasing alcoholic beverages. 
    Subd. 6.  [PROOF OF AGE.] Proof of age for purchasing or 
consuming alcoholic beverages may be established only by a valid 
drivers license or Minnesota identification card, or in the case 
of a foreign national by a valid passport. 
    Sec. 4.  [340A.504] [HOURS AND DAYS OF SALE.] 
    Subdivision 1.  [NONINTOXICATING MALT LIQUOR.] No sale of 
nonintoxicating malt liquor may be made between 1:00 a.m. and 
8:00 a.m. on the days of Monday through Saturday, nor between 
1:00 a.m. and 12:00 noon on Sunday, provided that an 
establishment located on land owned by the metropolitan sports 
commission may sell nonintoxicating malt liquor between 10:00 
a.m. and 12:00 noon on a Sunday on which a sports or other event 
is scheduled to begin at that location on or before 1:00 p.m. of 
that day. 
    Subd. 2.  [INTOXICATING LIQUOR; ON-SALE.] No sale of 
intoxicating liquor for consumption on the licensed premises may 
be made: 
    (1) between 1:00 a.m. and 8:00 a.m. on the days of Tuesday 
through Saturday; 
    (2) between 12 midnight and 8:00 a.m. on Mondays; 
    (3) after 1:00 a.m. on Sundays, except as provided by 
subdivision 3; 
    (4) between 8:00 p.m. on December 24 and 8:00 a.m. on 
December 25, except as provided by subdivision 3. 
    Subd. 3.  [INTOXICATING LIQUOR; SUNDAY SALES; ON-SALE.] (a) 
A restaurant, club, or hotel with a seating capacity for at 
least 30 persons and which holds an on-sale intoxicating liquor 
license may sell intoxicating liquor for consumption on the 
premises in conjunction with the sale of food between the hours 
of 12 noon and 12 midnight on Sundays. 
    (b) The governing body of a municipality within the 
seven-county metropolitan area as defined in section 473.121, 
subdivision 2, may by ordinance permit a restaurant, hotel, or 
club to sell intoxicating liquor for consumption on the premises 
in conjunction with the sale of food between the hours of 10:00 
a.m. and 12 midnight on Sundays, provided that the licensee is 
in conformance with the Minnesota Clean Air Act. 
    (c) An establishment serving intoxicating liquor on Sundays 
must obtain a Sunday license.  The license must be issued by the 
governing body of the municipality for a period of one year, and 
the fee for the license may not exceed $200. 
    (d) A municipality may issue a Sunday intoxicating liquor 
license only if authorized to do so by the voters of the 
municipality voting on the question at a general or special 
election. 
    (e) An election conducted in a town on the question of the 
issuance by the county of Sunday sales licenses to 
establishments located in the town must be held on the day of 
the annual election of town officers. 
    (f) Voter approval is not required for licenses issued by 
the metropolitan airports commission or common carrier licenses 
issued by the commissioner.  Common carriers serving 
intoxicating liquor on Sunday must obtain a Sunday license from 
the commissioner at an annual fee of $50, plus $5 for each 
duplicate. 
    Subd. 4.  [INTOXICATING LIQUOR; OFF-SALE.] No sale of 
intoxicating liquor may be made by an off-sale licensee: 
    (1) on Sundays; 
    (2) before 8:00 a.m. on Monday through Saturday; 
    (3) after 10:00 p.m. on Monday through Saturday at an 
establishment located in a city other than a city of the first 
class or within a city located within 15 miles of a city of the 
first class in the same county; 
    (4) after 8:00 p.m. on Monday through Thursday and after 
10:00 p.m. on Friday and Saturday at an establishment located in 
a city of the first class or within a city located within 15 
miles of a city of the first class in the same county, provided 
that an establishment may sell intoxicating liquor until 10:00 
p.m. on December 31 and July 3 unless otherwise prohibited under 
clause (1); 
    (5) on New Years Day, January 1; 
    (6) on Independence Day, July 4; 
    (7) on Thanksgiving Day; 
    (8) on Christmas Day, December 25; or 
    (9) after 8:00 p.m. on Christmas Eve, December 24. 
    Subd. 5.  [BOTTLE CLUBS.] No establishment licensed under 
article 6, section 14, may permit a person to consume or display 
intoxicating liquor, and no person may consume or display 
intoxicating liquor between 1:00 a.m. and 12 noon on Sundays, 
and between 1:00 a.m. and 8:00 a.m. on Monday through Saturday. 
    Subd. 6.  [MUNICIPALITIES MAY LIMIT HOURS.] A municipality 
may further limit the hours of sale of alcoholic beverages, 
provided that further restricted hours must apply equally to 
sales of nonintoxicating malt liquor and intoxicating liquor.  A 
city may not permit the sale of alcoholic beverages during hours 
when the sale is prohibited by this section.  
    Sec. 5.  [340A.505] [LICENSEE MAY NOT SELL FOR RESALE.] 
    A retail licensee may not sell alcoholic beverages to any 
person for the purpose of resale or to any person whom the 
licensee has reason to believe intends to resell the alcoholic 
beverage without written approval of the commissioner. 
    Sec. 6.  [340A.506] [SALES OF ETHYL ALCOHOL AND NEUTRAL 
SPIRITS PROHIBITED.] No person may sell at retail for beverage 
purposes ethyl alcohol or neutral spirits, or substitutes 
thereof, possessing the taste, aroma, and characteristics 
generally attributed to ethyl alcohol or neutral spirits. 
Nothing in this section prohibits the manufacture or sale of 
other products obtained by use of ethyl alcohol or neutral 
spirits as defined in United States Treasury Department, Bureau 
of Internal Revenue, Regulations 125, Article II, Standards of 
Identity for Distilled Spirits. 
    Sec. 7.  [340A.507] [REGULATION OF ADVERTISING.] 
    Subdivision 1.  [RULES.] The commissioner may by rule 
regulate the advertising of alcoholic beverages.  Rules must be 
adopted under chapter 14. 
    Subd. 2.  [WINE CATALOGS.] No rule may be construed as 
prohibiting the advertising of wines by off-sale licensees or 
municipal liquor stores by means of catalogs distributed by 
direct mail listing not less than 25 varieties of wine and the 
price of each. 
    Subd. 3.  [BORDER CITIES.] No rule may prohibit the 
advertising of intoxicating liquor prices by an off-sale 
licensee in a newspaper of general circulation published in an 
adjoining state if it is the primary newspaper of general 
circulation in the licensee's area. 
    Sec. 8.  [340A.508] [TAMPERING OR REFILLING BOTTLES.] 
    Subdivision 1.  [REFILLING BOTTLES.] It is unlawful for a 
person to sell, offer for sale, or keep for sale alcoholic 
beverages in a package or bottle which has been refilled or 
partly refilled. 
    Subd. 2.  [TAMPERING OR DILUTING CONTENTS.] It is unlawful 
for a person holding a retail intoxicating liquor license or a 
nonintoxicating liquor license, directly or indirectly through 
an agent, employee, or other person, to dilute or in any manner 
tamper with the contents of an original package or bottle so as 
to change its composition or alcoholic content while the 
contents are in the original package or bottle.  Possession on 
the premises by a licensee of alcoholic beverages in the 
original package or bottle, differing in composition or 
alcoholic content from when it was received from the 
manufacturer or wholesaler from whom it was purchased, is prima 
facie evidence that the contents of the original package or 
bottle has been diluted, changed, or tampered with in violation 
of this section.  
    Sec. 9.  [340A.509] [LOCAL RESTRICTIONS.] 
    A local authority may impose further restrictions and 
regulations on the sale and possession of alcoholic beverages 
within its limits. 

                                ARTICLE 8

                         MUNICIPAL LIQUOR STORES
    Section 1.  [340A.601] [ESTABLISHMENT OF MUNICIPAL LIQUOR 
STORES.] 
    Subdivision 1.  [AUTHORITY.] A city having a population of 
not more than 10,000 may establish, own, and operate a municipal 
liquor store which may sell at retail intoxicating liquor, 
nonintoxicating malt liquor, tobacco products, ice, soft drinks, 
beverages for mixing intoxicating liquor, and food for 
consumption on the premises.  A municipal liquor store may also 
offer recorded or live entertainment and make available 
coin-operated amusement devices. 
    Subd. 2.  [POPULATION CHANGE.] A city which has established 
a municipal liquor store may continue to operate it 
notwithstanding a subsequent change in population if within one 
year after the effective date of the census by which the 
municipality exceeds 10,000 in population, the question, "Shall 
the city continue to operate its municipal liquor store?" is 
submitted to the voters of the city at a general or special 
municipal election and a majority of the voters voting on the 
question at the election vote in the affirmative on the 
question.  The notice of the election shall state the question 
to be submitted to the electors at the election. 
    Subd. 3.  [SCOPE AND APPLICATION.] A city which established 
a liquor store prior to July 1, 1967, may continue to own and 
operate it. 
    Subd. 4.  [NEWLY FORMED MUNICIPALITIES; MUNICIPAL LIQUOR 
STORES; LIQUOR LICENSES.] A city may not establish or operate a 
municipal liquor store or issue an on-sale or off-sale liquor 
license until two years after its incorporation.  This 
restriction does not apply to a newly incorporated statutory 
city which had formerly been a town or is made up of a major 
geographic portion of what had formerly been a town, which town 
had the powers of a statutory city under section 368.01.  
    Subd. 5.  [ISSUANCE OF LICENSES TO PRIVATE PERSONS.] A city 
owning and operating a municipal liquor store may issue on-sale 
liquor licenses to hotels, clubs, and restaurants.  A city 
issuing on-sale licenses under this subdivision may continue to 
operate the municipal liquor store or may resume operation of a 
municipal liquor store previously discontinued. 
    The number of on-sale licenses issued under this section by 
a city is governed by article 6, section 13. 
    A city may not issue licenses under this section until 
authorized by the voters of the city voting on the question at a 
special election called for that purpose.  
    Subd. 6.  [MUNICIPALITIES; CERTAIN ON-SALE LICENSES.] A 
city which did not permit the sale of intoxicating liquor within 
its boundaries as of June 30, 1969, or was incorporated after 
that date may issue on-sale licenses for the sale of 
intoxicating liquor in accordance with subdivision 5. 
    Subd. 7.  [NOTICE OF INTENT.] A city which has issued 
retail intoxicating liquor licenses may not establish a 
municipal liquor store until one year after publishing a notice 
of its intention in the city's legal newspaper.  The city must 
provide in the notice if the municipality will be engaging in 
the sale of intoxicating liquor to the exclusion of all private 
interests. 
    Sec. 2.  [340A.602] [CONTINUATION.] 
    In any city in which the report of the operations of a 
municipal liquor store has shown a net loss in any two of three 
consecutive years or has shown that no contribution to other 
municipal funds has been made from the net income of the 
operation in any two of three consecutive years, the city 
council shall, not more than 45 days prior to the end of the 
fiscal year following the three-year period, hold a public 
hearing on the question of whether the city shall continue to 
operate a municipal liquor store.  Two weeks notice, written in 
clear and easily understandable language, of the hearing must be 
printed in the city's official newspaper.  Following the hearing 
the city council may on its own motion or shall upon petition of 
five percent or more of the registered voters of the city, 
submit to the voters at a general or special municipal election 
the question of whether the city shall continue or discontinue 
municipal liquor store operations by a date which the city 
council shall designate.  The date designated by the city 
council must not be more than 30 months following the date of 
the election. 
    Sec. 3.  [340A.603] [FINANCIAL RESPONSIBILITY.] 
    Every municipal liquor store must demonstrate proof of 
financial responsibility required of licensees under article 6, 
section 9.  Proof of financial responsibility must be filed by 
January 15 of each year.  The commissioner may suspend the 
operation of a municipal liquor store failing to demonstrate 
proof of financial responsibility until the commissioner is 
satisfied that the municipal liquor store is in compliance with 
article 6, section 9.  The commissioner must notify in writing 
the municipality operating the store of the effective date of 
the suspension.  A suspension under this subdivision is a 
contested case under the administrative procedure act.  
    Sec. 4.  [340A.604] [SUSPENSION OF OPERATION.] 
    A court shall notify the commissioner in writing within ten 
days whenever a muncipal officer or employee has been convicted 
of any of the following offenses committed in a municipal liquor 
store:  
    (1) selling alcoholic beverages to persons or at times 
prohibited by law;  
    (2) selling alcoholic beverages for resale;  
    (3) selling alcoholic beverages on which state taxes have 
not been paid; or 
    (4) violating the provisions of article 6, section 10, 
subdivision 6 relating to gambling and gambling devices.  
    On receiving the notice of conviction the commissioner may 
suspend for up to 30 days the operation of the municipal liquor 
store where the offense occurred.  The commissioner must notify 
in writing the municipality operating the store of the effective 
dates of the suspension.  An appeal of the suspension is a 
contested case under sections 14.57 to 14.69 of the 
administrative procedure act.  

                                ARTICLE 9

                        VIOLATIONS AND PENALTIES
    Section 1.  [340A.701] [FELONIES.] It is a felony: 
    (1) to manufacture alcoholic beverages in violation of this 
chapter;  
    (2) to transport or import alcoholic beverages into the 
state in violation of this chapter for purposes of resale; or 
    (3) to sell or give away for beverage purposes poisonous 
alcohol, methyl alcohol, denatured alcohol, denaturing material, 
or any other alcoholic substance capable of causing serious 
physical or mental injuries to a person consuming it.  
    Sec. 2.  [340A.702] [GROSS MISDEMEANORS.] 
    It is a gross misdemeanor:  
    (1) to sell an alcoholic beverage without a license 
authorizing the sale;  
    (2) for a licensee to refuse or neglect to obey a lawful 
direction or order of the commissioner or the commissioner's 
agent, withhold information or a document the commissioner calls 
for examination, obstruct or mislead the commissioner in the 
execution of the commissioner's duties or swear falsely under 
oath;  
    (3) to violate the provisions of article 5, sections 1 to 
13; 
    (4) to violate the provisions of article 7, section 8; 
    (5) for any person, partnership, or corporation to 
knowingly have or possess direct or indirect interest in more 
than one off-sale intoxicating liquor license in a municipality 
in violation of article 6, section 12, subdivision 2; 
    (6) to sell or otherwise dispose of intoxicating liquor 
within 1,000 feet of a state hospital, training school, 
reformatory, prison, or other institution under the supervision 
and control, in whole or in part, of the commissioner of human 
services or the commissioner of corrections; 
    (7) to violate the provisions of article 7, section 2; 
    (8) to violate the provisions of article 7, section 3, 
subdivision 2, clause (1) or (3); 
    (9) to withhold any information, book, paper, or other 
thing called for by the commissioner for the purpose of an 
examination; 
    (10) to obstruct or mislead the commissioner in the 
execution of the commissioner's duties; or 
    (11) to swear falsely concerning any matter stated under 
oath. 
    Sec. 3.  [340A.703] [MISDEMEANORS.] 
    Where no other penalty is specified a violation of any 
provision of this chapter is a misdemeanor. 
    Sec. 4.  [340A.704] [SEARCH WARRANTS.] 
    Search warrants may be issued in connection with violation 
of this chapter or other laws relating to sale, taxation, 
transportation, manufacture, or possession of alcoholic 
beverages in accordance with chapter 626. 
    Sec. 5.  [340A.705] [PRIMA FACIE EVIDENCE.] 
    The finding of an unauthorized still is prima facie 
evidence of possession for the purpose of unlawful manufacture 
of alcoholic beverages. 

                               ARTICLE 10

                             CIVIL LIABILITY
    Section 1.  [340A.801] [CIVIL ACTIONS.] 
    Subdivision 1.  [RIGHT OF ACTION.] A spouse, child, parent, 
guardian, employer, or other person injured in person, property, 
or means of support, or who incurs other pecuniary loss by an 
intoxicated person or by the intoxication of another person, has 
a right of action in the person's own name for all damages 
sustained against a person who caused the intoxication of that 
person by illegally selling alcoholic beverages.  All damages 
recovered by a minor under this section must be paid either to 
the minor or to the minor's parent, guardian, or next friend as 
the court directs. 
    Subd. 2.  [ACTIONS.] All suits for damages under this 
section must be by civil action in a court of this state having 
jurisdiction. 
    Subd. 3.  [COMPARATIVE NEGLIGENCE.] Actions under this 
section, except for actions for injury to person, property, or 
means of support brought by a spouse, child, parent, guardian, 
or other dependent of an intoxicated person are governed by 
section 604.01. 
    Sec. 2.  [340A.802] [NOTICE OF INJURY.] 
    Subdivision 1.  [NOTICE OF INJURY.] A person who claims 
damages and a person or insurer who claims contribution or 
indemnity from a licensed retailer of alcoholic beverages or 
municipal liquor store for or because of an injury within the 
scope of article 10, section 1 must give a written notice to the 
licensee or municipality stating: 
    (1) the time and date when and person to whom the liquor 
was sold or bartered; 
    (2) the name and address of the person or persons who were 
injured or whose property was damaged; and 
    (3) the approximate time and date, and the place where the 
injury to person or property occurred. 
     A licensee or municipality who claims contribution or 
indemnification from another licensee or municipality must give 
a written notice to the other licensee or municipality in the 
form and manner specified in this section. 
    An error or omission in the notice does not void the 
notice's effect if the notice is otherwise valid unless the 
error or omission is of a substantially material nature. 
    Subd. 2.  [LIMITATIONS; CONTENT.] In the case of a claim 
for damages, the notice must be served by the claimant's 
attorney within 120 days of the date of entering an 
attorney-client relationship with the person in regard to the 
claim.  In the case of claims for contribution or indemnity, the 
notice must be served within 120 days after the injury occurs or 
within 60 days after receiving written notice of a claim for 
contribution or indemnity, whichever is applicable.  No action 
for damage or for contribution or indemnity may be maintained 
unless the notice has been given.  Actual notice of sufficient 
facts reasonably to put the licensee or governing body of the 
municipality on notice of a possible claim complies with the 
notice requirement. 
    No action may be maintained under article 10, section 1 
unless commenced within two years after the injury. 

                               ARTICLE 11

                        MISCELLANEOUS PROVISIONS
    Section 1.  [340A.901] [CITATION.] 
    This chapter may be cited as the liquor act. 
    Sec. 2.  [340A.902] [DRUNKENNESS NOT A CRIME.] 
    No person may be charged with or convicted of the offense 
of drunkenness or public drunkenness.  Nothing herein prevents 
the prosecution and conviction of an intoxicated person for 
offenses other than drunkenness or public drunkenness nor does 
this section relieve a person from civil liability for an injury 
to persons or property caused by the person while intoxicated. 
    Sec. 3.  [340A.903] [SIZE OF CONTAINERS.] 
    Notwithstanding any law or rule to the contrary, 
nonintoxicating malt liquor may be sold in containers of not 
more than 128 fluid ounces. 
    Sec. 4.  [340A.904] [SEIZED LIQUOR.] 
    Subdivision 1.  [DISPOSAL ALTERNATIVES.] Contingent on the 
final determination of any action pending in a court, the 
commissioner shall dispose of alcoholic beverages, material, 
apparatus, or vehicle seized by inspectors or employees of the 
department by: 
    (1) delivering alcoholic beverages to the bureau of 
criminal apprehension or state patrol for use in chemical 
testing programs; 
    (2) delivering on written requests of the commissioner of 
administration any material, apparatus, or vehicle for use by a 
state department; 
    (3) selling intoxicating liquor to licensed retailers 
within the state; 
    (4) selling any material, apparatus, or vehicle; or 
    (5) destroying alcoholic beverages or contraband articles 
that have no lawful use. 
    Subd. 2.  [SALE PROCEDURE.] A sale of intoxicating liquor, 
materials, apparatus, or vehicles may be made only with the 
written approval of the commissioner of administration and after 
notice of the sale is published in one issue of a legal 
newspaper published in St. Paul.  Sealed bids must be publicly 
opened in the office of the commissioner of public safety on a 
date stated in the notice, which may not be less than 15 days or 
more than 30 days after its publication.  The net proceeds from 
the sale of alcoholic beverages or articles must, after the 
deduction of the expense of seizure or sale, be deposited by the 
commissioner of public safety with the state treasurer and 
credited to the general fund. 
    Subd. 3.  [TAX EXEMPTION.] Sales of alcoholic beverages 
made by the commissioner are exempt from the state excise tax if 
stamps evidencing the payment of the excise tax have not been 
placed thereon prior to the seizure if before resale proper 
excise stamps are attached to all containers. 
    Sec. 5.  [340A.905] [NOTICE OF VIOLATION.] 
    When any municipal liquor store or licensed dealer in 
alcoholic beverages or agent or employee thereof is convicted of 
a violation of any provision of this chapter or any law or 
ordinance regulating the sale of alcoholic beverages or any 
violation of law or ordinance in the operation of the licensed 
premises, the clerk of the court shall, within ten days after 
the conviction, mail a written notice of the conviction to the 
clerk of the municipality or county auditor of the county having 
jurisdiction to issue alcoholic beverage licenses for the 
premises.  A copy of the notice must be mailed to the 
commissioner of public safety. 
    Sec. 6.  [340A.906] [NONAPPLICABILITY.] 
    This chapter does not apply to: 
    (1) medicines intended for therapeutic purposes and not 
intended as a beverage; 
    (2) industrial alcohol designed for mechanical, chemical, 
scientific, pharmaceutical, or industrial purposes; or 
    (3) nonpotable compounds or preparations containing alcohol.
    Sec. 7.  [EXISTING LICENSES.] 
    Nothing in this act may be construed to affect the status 
of a license lawfully issued prior to the effective date of this 
act. 

                               ARTICLE 12

                          MISCELLANEOUS CHANGES
    Section 1.  Minnesota Statutes 1984, section 260.015, 
subdivision 22, is amended to read: 
    Subd. 22.  [JUVENILE ALCOHOL OFFENDER.] "Juvenile alcohol 
offender" means a child who violates any provision of article 7, 
section 340.035, subdivision 1, clause (4), (5), or (6) or 
section 340.731 3 or an equivalent local ordinance.  
    Sec. 2.  Minnesota Statutes 1984, section 299A.02, is 
amended to read: 
    299A.02 [COMMISSIONERS OF PUBLIC SAFETY AND REVENUE; LIQUOR 
CONTROL FUNCTIONS.] 
    Subdivision 1.  [DIRECTOR OF DIVISION OF LIQUOR CONTROL.] 
No employee of the department of public safety or the department 
of revenue having any responsibility for the administration or 
enforcement of chapter 340 articles 2 to 11 shall have a direct 
or indirect interest, except through ownership or investment in 
pension or mutual funds, in the manufacture, transportation or 
sale of intoxicating liquor or any malt or vinous beverages, 
intoxicating, nonintoxicating, or commercial or industrial 
alcohol.  The commissioner of public safety or the commissioner 
of revenue may remove an employee of his department in the 
unclassified civil service for any intentional violation of 
sections 340.02, 340.031 to 340.036, 340.11 to 340.19, 340.355 
to 340.357, 340.402 to 340.408, 340.44 to 340.493, 340.53 to 
340.56, 340.601 to 340.62, or 340.70 to 340.983 any provision in 
articles 2 to 11.  Intentional violation of the preceding 
sections by a classified employee of one of the departments may 
be grounds for removal of that employee pursuant to section 
43A.33. 
    Subd. 2.  [GENERAL POWERS.] The commissioner shall 
administer and enforce the provisions of chapter 340 articles 2 
to 11 except for those provisions thereof for which 
administration and enforcement are reserved to the commissioner 
of revenue. 
    Subd. 3.  [REPORTS; RULES.] The commissioner shall have 
power to require periodic factual reports from all licensed 
importers, manufacturers, wholesalers and retailers of 
intoxicating liquors and to make all reasonable rules to effect 
the object of chapter 340 articles 2 to 11.  The rules shall 
include provisions for assuring the purity of intoxicating 
liquors and the true statement of its contents and proper 
labeling thereof with regard to all forms of sale. 
    Subd. 4.  [SUBPOENAS.] In all matters relating to his 
official duties, the commissioner shall have the powers 
possessed by courts of law to issue subpoenas and cause them to 
be served and enforced.  All public officials, and their 
respective deputies and employees, and all individuals, 
partnerships, firms, corporations, incorporated and 
unincorporated associations, and others who manufacture, 
transport, or sell intoxicating liquor, or are connected 
therewith in any manner, shall at all times attend and answer 
under oath the commissioner's lawful inquiries, produce and 
exhibit such books, accounts, documents and property as he may 
desire to inspect, and in all things aid him in the performance 
of his duties. 
     Sec. 3.  Minnesota Statutes 1984, section 473F.02, 
subdivision 17, is amended to read: 
    Subd. 17.  "Public grants" means (1) the sum of all moneys 
received by a municipality pursuant to sections 273.13, 
subdivisions 3 and 15(4), 290.361, subdivision 4, 297.13, and 
340.60; and (2) one-tenth of all other moneys received by a 
municipality from the federal and state governments, and their 
agencies and political subdivisions, under programs of 
intergovernmental aids and grants distributed by formula or upon 
application.  The state auditor shall certify the public grants 
of each municipality for each year to the commissioner of 
finance not later than September 1 of the subsequent year. 
     Sec. 4.  Minnesota Statutes 1984, section 624.701, is 
amended to read: 
    624.701 [LIQUORS IN CERTAIN BUILDINGS OR GROUNDS.] 
    Subdivision 1.  Any person who shall introduce upon, or 
have in his possession upon, or in, any school ground, or any 
schoolhouse or school building, any intoxicating liquor or 
nonintoxicating malt liquor alcoholic beverage as defined in 
chapter 340 article 3, section 1, except for experiments in 
laboratories and except for those organizations who have been 
issued temporary licenses to sell nonintoxicating malt liquor 
pursuant to article 6, section 340.02 3, subdivision 2, and any 
person possessing nonintoxicating malt liquor as a result of a 
purchase from those organizations holding temporary licenses 
pursuant to article 6, section 340.02 3, subdivision 2, shall be 
guilty of a misdemeanor.  
    Subd. 2.  Any person who except by prescription of a 
licensed physician or permission of the hospital administrator 
shall introduce upon, or have in his possession upon, or in, any 
state hospital or grounds thereof under the responsibility of 
the commissioner of public welfare any intoxicating liquor or 
nonintoxicating malt liquor alcoholic beverage as defined in 
chapter 340 article 3, section 1, shall be guilty of a 
misdemeanor.  
    Sec. 5.  [INSTRUCTIONS TO REVISOR.] 
    In the following sections of Minnesota Statutes, the 
revisor of statutes shall change the reference to chapter 340 
listed in column B which occurs in the section specified in 
column A to the new reference listed in column C. 
Column A, section   Column B, section   Column C, section
16A.26                  340.60              297C.02 to 297C.08
28.16                   340.02              340A.403
28.16                   340.11              340A.404 to
                                              340A.407
290.612                 340.01              340A.403 
290.612                 340.13              340A.404 to 
                                              340A.406 
297A.431                340.01              340A.403 
297A.431                340.13              340A.404 to 
                                              340A.406 
466.15                  340.95              340A.801 
471.981, subd. 1        340.95              340A.801 
471.981, subd. 1        340.951             340A.802 
624.731, subd. 5        340.001, subd. 2    340A.101, subd. 19
624.731, subd. 5        340.07, subd. 2     340A.101, subd. 13 

                               ARTICLE 13 

                                REPEALER 
     Section 1.  [REPEALER.] 
     Minnesota Statutes 1984, sections 340.001; 340.01; 340.013; 
340.02; 340.024; 340.031; 340.032; 340.033; 340.034; 340.035; 
340.036; 340.038; 340.039; 340.069; 340.07; 340.081; 340.10; 
340.11; 340.112; 340.113; 340.114; 340.115; 340.119; 340.12; 
340.13; 340.133; 340.134; 340.135; 340.14; 340.141; 340.142; 
340.143; 340.145; 340.15; 340.17; 340.18; 340.19; 340.20; 
340.21; 340.323; 340.33; 340.353; 340.354; 340.355; 340.356; 
340.357; 340.358; 340.38; 340.39; 340.401; 340.402; 340.403; 
340.404; 340.405; 340.406; 340.407; 340.408; 340.435; 340.436; 
340.44; 340.45; 340.46; 340.461; 340.47; 340.485; 340.492; 
340.493; 340.50; 340.51; 340.515; 340.53; 340.54; 340.55; 340.56;
340.57; 340.58; 340.59; 340.60; 340.601; 340.62; 340.621; 340.63;
340.64; 340.65; 340.66; 340.70; 340.71; 340.73; 340.731; 340.732;
340.74; 340.76; 340.77; 340.79; 340.80; 340.83; 340.85; 340.86; 
340.87; 340.88; 340.89; 340.90; 340.91; 340.92; 340.93; 340.94; 
340.941; 340.942; 340.95; 340.951; 340.961; 340.983; 340.987; 
and 340.988 are repealed. 
    Approved June 5, 1985