1.1                          A bill for an act
  1.2             relating to liquor; regulating beer brewers and 
  1.3             wholesalers; providing for the obligations of 
  1.4             successors; allowing the commissioner of public safety 
  1.5             to issue on-sale licenses to Giants Ridge and 
  1.6             Ironworld Discovery Center; modifying restrictions for 
  1.7             temporary on-sale licenses; authorizing issuance of 
  1.8             temporary on-sale licenses to state universities; 
  1.9             regulating malt liquor sampling; authorizing certain 
  1.10            cities to issue additional on-sale licenses; amending 
  1.11            Minnesota Statutes 1996, sections 325B.01; 325B.14; 
  1.12            340A.404, subdivision 10, and by adding a subdivision; 
  1.13            340A.410, subdivision 10; 340A.412, subdivision 4; and 
  1.14            340A.510, subdivision 2; Laws 1994, chapter 611, 
  1.15            section 32, as amended. 
  1.16  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.17     Section 1.  Minnesota Statutes 1996, section 325B.01, is 
  1.18  amended to read: 
  1.19     325B.01 [DEFINITIONS.] 
  1.20     Subdivision 1.  As used in sections 325B.01 to 325B.17 and 
  1.21  unless otherwise required by the context, the terms defined in 
  1.22  this section have the meanings given them. 
  1.23     Subd. 2.  "Agreement" means one or more of the following: 
  1.24     (a) A commercial relationship between a ~~licensed~~ beer 
  1.25  wholesaler and a ~~licensed~~ brewer of a definite or indefinite 
  1.26  duration, which is not required to be evidenced in writing; 
  1.27     (b) A relationship whereby the beer wholesaler is granted 
  1.28  the right to offer and sell a brand or brands of beer offered by 
  1.29  a brewer; 
  1.30     (c) A relationship whereby the beer wholesaler, as an 
  2.1   independent business, constitutes a component of a brewer's 
  2.2   distribution system; 
  2.3      (d) A relationship whereby the beer wholesaler's business 
  2.4   is substantially associated with a brewer's brand or brands, 
  2.5   designating the brewer; 
  2.6      (e) A relationship whereby the beer wholesaler's business 
  2.7   is substantially reliant on a brewer for the continued supply of 
  2.8   beer; 
  2.9      (f) A written or oral arrangement for a definite or 
  2.10  indefinite period whereby a brewer grants to a beer wholesaler a 
  2.11  license to use a brand, trade name, trademark, or service mark, 
  2.12  and in which there is a community of interest in the marketing 
  2.13  of goods or services at wholesale or retail. 
  2.14     Subd. 3.  "Beer wholesaler" shall mean any ~~licensed~~ person 
  2.15  importing or causing to be imported into this state or 
  2.16  purchasing or causing to be purchased within this state, any 
  2.17  beer for sale or resale to retailers or wholesalers ~~licensed~~ 
  2.18  ~~under chapter 340~~, without regard to whether the business of the 
  2.19  person is conducted under the terms of an agreement with a 
  2.20  ~~licensed~~ brewer. 
  2.21     Subd. 4.  "Brewer" means every ~~licensed~~ brewer or importer 
  2.22  of beer located within or without the state of Minnesota, who 
  2.23  enters into an "agreement" with any beer wholesaler ~~licensed to~~ 
  2.24  ~~do~~ doing business in the state of Minnesota. 
  2.25     Subd. 5.  "Person" means a natural person, corporation, 
  2.26  partnership, trust, agency, or other entity as well as the 
  2.27  individual officers, directors or other persons in active 
  2.28  control of the activities of each such entity.  Person also 
  2.29  includes heirs, assigns, personal representatives and guardians. 
  2.30     Subd. 6.  "Successor" means a person who replaces a brewer, 
  2.31  importer, or wholesaler with regard to the right to manufacture, 
  2.32  sell, distribute, or import a brand or brands of beer. 
  2.33     Subd. 7.  "Territory" or "sales territory" means the area 
  2.34  of primary sales responsibility designated by any agreement 
  2.35  between any beer wholesaler and brewer for the brand or brands 
  2.36  of any brewer. 
  3.1      Sec. 2.  Minnesota Statutes 1996, section 325B.14, is 
  3.2   amended to read: 
  3.3      325B.14 [OBLIGATIONS OF ~~PURCHASER~~ SUCCESSOR.] 
  3.4      ~~Except for good cause, which shall include, but not be~~ 
  3.5   ~~limited to (1) revocation of the wholesaler's license to do~~ 
  3.6   ~~business in the state, (2) bankruptcy or insolvency of the~~ 
  3.7   ~~wholesaler, (3) assignment for the benefit of creditors or~~ 
  3.8   ~~similar disposition of the assets of the wholesaler, (4) failure~~ 
  3.9   ~~by the wholesaler to substantially comply, without reasonable~~ 
  3.10  ~~excuse or justification, with any reasonable and material~~ 
  3.11  ~~requirement imposed upon the wholesaler by the brewery, the~~ 
  3.12  ~~purchaser of a "brewer" as defined in sections 325B.01 to~~ 
  3.13  ~~325B.17 shall become obligated to all of the terms and~~ 
  3.14  ~~conditions of the agreement in effect on the date of purchase.~~  
  3.15  ~~"Purchase", as defined for the purposes of sections 325B.01 to~~ 
  3.16  ~~325B.17, shall include, but is not limited to, the sale of~~ 
  3.17  ~~stock, sale of assets, merger, lease, transfer or consolidation.~~ 
  3.18     A successor shall become obligated to all of the terms and 
  3.19  conditions of the agreement in effect on the date of 
  3.20  succession.  This section applies regardless of the character or 
  3.21  form of the succession.  A successor has the right to 
  3.22  contractually require its wholesalers to comply with operational 
  3.23  standards of performance, if the standards are uniformly 
  3.24  established for all of the successor's wholesalers and conform 
  3.25  to sections 325B.01 to 325B.17. 
  3.26     Sec. 3.  Minnesota Statutes 1996, section 340A.404, is 
  3.27  amended by adding a subdivision to read: 
  3.28     Subd. 4a.  [STATE-OWNED RECREATION; ENTERTAINMENT 
  3.29  FACILITIES.] Notwithstanding any other law, local ordinance, or 
  3.30  charter provision, the commissioner may issue on-sale 
  3.31  intoxicating liquor licenses: 
  3.32     (1) to the state agency administratively responsible for, 
  3.33  or to an entity holding a concession or facility management 
  3.34  contract with such agency for beverage sales at, the premises of 
  3.35  any Giants Ridge recreation area building or recreational 
  3.36  improvement area owned by the state in the town of White, St. 
  4.1   Louis county; and 
  4.2      (2) to the state agency administratively responsible for, 
  4.3   or to an entity holding a concession or facility management 
  4.4   contract with such agency for beverage sales at, the premises of 
  4.5   any Ironworld Discovery Center building or facility owned by the 
  4.6   state at Chisholm. 
  4.7      The commissioner shall charge a fee for licenses issued 
  4.8   under this subdivision in an amount comparable to the fee for 
  4.9   comparable licenses issued in surrounding cities. 
  4.10     Sec. 4.  Minnesota Statutes 1996, section 340A.404, 
  4.11  subdivision 10, is amended to read: 
  4.12     Subd. 10.  [TEMPORARY ON-SALE LICENSES.] The governing body 
  4.13  of a municipality may issue to (1) a club or charitable, 
  4.14  religious, or other nonprofit organization in existence for at 
  4.15  least three years, ~~or to~~ (2) a political committee registered 
  4.16  under section 10A.14, or (3) a state university, a temporary 
  4.17  license for the on-sale of intoxicating liquor in connection 
  4.18  with a social event within the municipality sponsored by the 
  4.19  licensee.  The license may authorize the on-sale of intoxicating 
  4.20  liquor for not more than four consecutive days, and may 
  4.21  authorize on-sales on premises other than premises the licensee 
  4.22  owns or permanently occupies.  The license may provide that the 
  4.23  licensee may contract for intoxicating liquor catering services 
  4.24  with the holder of a full-year on-sale intoxicating liquor 
  4.25  license issued by any municipality.  The licenses are subject to 
  4.26  the terms, including a license fee, imposed by the issuing 
  4.27  municipality.  Licenses issued under this subdivision are 
  4.28  subject to all laws and ordinances governing the sale of 
  4.29  intoxicating liquor except sections 340A.409 and 340A.504, 
  4.30  subdivision 3, paragraph (d), and those laws and ordinances 
  4.31  which by their nature are not applicable.  Licenses under this 
  4.32  subdivision are not valid unless first approved by the 
  4.33  commissioner of public safety. 
  4.34     A county under this section may issue a temporary license 
  4.35  only to a premises located in the unincorporated or unorganized 
  4.36  territory of the county. 
  5.1      Sec. 5.  Minnesota Statutes 1996, section 340A.410, 
  5.2   subdivision 10, is amended to read: 
  5.3      Subd. 10.  [TEMPORARY LICENSES; RESTRICTIONS.] (a) A 
  5.4   municipality may not issue more than three four-day, four 
  5.5   three-day, ~~or~~ six two-day, or 12 one-day temporary licenses, in 
  5.6   any combination not to exceed 12 days per year, under section 
  5.7   340A.404, subdivision 10, for the sale of alcoholic beverages to 
  5.8   any one organization or registered political committee, or for 
  5.9   any one location, within a 12-month period. 
  5.10     (b) A municipality may not issue more than one temporary 
  5.11  license under section 340A.404, subdivision 10, for the sale of 
  5.12  alcoholic beverages to any one organization or registered 
  5.13  political committee, or for any one location, within any 30-day 
  5.14  period unless the licenses are issued in connection with an 
  5.15  event officially designated a community festival by the 
  5.16  municipality. 
  5.17     This restriction does not apply to a municipality with a 
  5.18  population of 5,000 or fewer people. 
  5.19     (c) A municipality that issues separate temporary wine and 
  5.20  liquor licenses may separately apply the limitations contained 
  5.21  in paragraphs (a) and (b) to the issuance of such licenses to 
  5.22  any one organization or registered political committee, or for 
  5.23  any one location. 
  5.24     Sec. 6.  Minnesota Statutes 1996, section 340A.412, 
  5.25  subdivision 4, is amended to read: 
  5.26     Subd. 4.  [LICENSES PROHIBITED IN CERTAIN AREAS.] (a) No 
  5.27  license to sell intoxicating liquor may be issued within the 
  5.28  following areas: 
  5.29     (1) where restricted against commercial use through zoning 
  5.30  ordinances and other proceedings or legal processes regularly 
  5.31  had for that purpose, except licenses may be issued to 
  5.32  restaurants in areas which were restricted against commercial 
  5.33  uses after the establishment of the restaurant; 
  5.34     (2) within the capitol or on the capitol grounds, except as 
  5.35  provided under Laws 1983, chapter 259, section 9; 
  5.36     (3) on the state fairgrounds or at any place in a city of 
  6.1   the first class within one-half mile of the fairgrounds, except 
  6.2   as otherwise provided by charter; 
  6.3      (4) on the campus of the college of agriculture of the 
  6.4   University of Minnesota or at any place in a city of the first 
  6.5   class within one-half mile of the campus, provided that a city 
  6.6   may issue one on-sale wine license in this area that is not 
  6.7   included in the area described in clause (3), except as provided 
  6.8   by charter; 
  6.9      (5) within 1,000 feet of a state hospital, training school, 
  6.10  reformatory, prison, or other institution under the supervision 
  6.11  or control, in whole or in part, of the commissioner of human 
  6.12  services or the commissioner of corrections; 
  6.13     (6) in a town or municipality in which a majority of votes 
  6.14  at the last election at which the question of license was voted 
  6.15  upon were not in favor of license under section 340A.416, or 
  6.16  within one-half mile of any such town or municipality, except 
  6.17  that intoxicating liquor manufactured within this radius may be 
  6.18  sold to be consumed outside it; 
  6.19     (7) at any place on the east side of the Mississippi River 
  6.20  within one-tenth of a mile of the main building of the 
  6.21  University of Minnesota unless the licensed establishment is on 
  6.22  property owned or operated by a nonprofit corporation organized 
  6.23  prior to January 1, 1940, for and by former students of the 
  6.24  University of Minnesota; 
  6.25     (8) within 1,500 feet of a state university, except ~~only~~ 
  6.26  ~~1,200 feet from~~ that: 
  6.27     (i) the minimum distance in the case of Winona and 
  6.28  Southwest State University~~, provided that~~ is 1,200 feet; 
  6.29     (ii) within 1,500 feet of St. Cloud State University one 
  6.30  on-sale wine and two off-sale intoxicating liquor licenses may 
  6.31  be issued, measured by a direct line from the nearest corner of 
  6.32  the administration building to the main entrance of the licensed 
  6.33  establishment ~~except~~; 
  6.34     (iii) at Mankato State University the distance is measured 
  6.35  from the front door of the student union of the Highland campus; 
  6.36  and 
  7.1      (iv) a temporary license under section 340A.404, 
  7.2   subdivision 10, may be issued to a location on the grounds of a 
  7.3   state university for an event sponsored or approved by the state 
  7.4   university; and 
  7.5      (9) within 1,500 feet of any public school that is not 
  7.6   within a city. 
  7.7      (b) The restrictions of this subdivision do not apply to a 
  7.8   manufacturer or wholesaler of intoxicating liquor or to a 
  7.9   drugstore or to a person who had a license originally issued 
  7.10  lawfully prior to July 1, 1967. 
  7.11     Sec. 7.  Minnesota Statutes 1996, section 340A.510, 
  7.12  subdivision 2, is amended to read: 
  7.13     Subd. 2.  [MALT LIQUOR FURNISHED FOR SAMPLING.] (a) 
  7.14  Notwithstanding section 340A.308, with respect only to sampling 
  7.15  authorized under subdivision 1, a brewer may furnish at no cost 
  7.16  to an off-sale retailer malt liquor the brewer manufactures if: 
  7.17     (1) the malt liquor is dispensed by the retailer only for 
  7.18  tastings authorized under subdivision 1; 
  7.19     (2) the retailer makes available for return to the brewer 
  7.20  any unused malt liquor and empty containers; 
  7.21     (3) the samples are dispensed by an employee of the 
  7.22  retailer or brewer or by a sampling service retained by the 
  7.23  retailer or brewer and not affiliated directly or indirectly 
  7.24  with a ~~brewer or~~ malt liquor wholesaler; 
  7.25     (4) the brewer furnishes not more than three cases of malt 
  7.26  liquor to the retailer for each sampling; 
  7.27     (5) each sampling continues for not more than eight hours; 
  7.28     (6) the brewer has furnished malt liquor for not more than 
  7.29  five samplings for any retailer in any calendar year; 
  7.30     (7) the brewer delivers the malt liquor for the sampling to 
  7.31  its exclusive wholesaler for that malt liquor; 
  7.32     (8) the brewer has at least seven days before the sampling 
  7.33  filed with the commissioner, on a form the commissioner 
  7.34  prescribes, written notice of intent to furnish malt liquor for 
  7.35  the sampling, which contains (i) the name and address of the 
  7.36  retailer conducting the sampling, (ii) the amount of malt liquor 
  8.1   being furnished by the brewer, (iii) the number of times the 
  8.2   brewer has furnished malt liquor to the retailer in the calendar 
  8.3   year in which the notice is filed, (iv) the date and time of the 
  8.4   sampling, (v) the exclusive wholesaler to whom the brewer will 
  8.5   deliver the malt liquor, and (vi) a statement by the brewer to 
  8.6   the effect that to the brewer's knowledge all requirements of 
  8.7   this section have been or will be complied with; and 
  8.8      (9) the commissioner has not notified the brewer filing the 
  8.9   notice under clause (8) that the commissioner disapproves the 
  8.10  notice. 
  8.11     (b) For purposes of this subdivision, "retailer" means a 
  8.12  licensed off-sale retailer of alcoholic beverages and a 
  8.13  municipal liquor store that sells at off-sale. 
  8.14     Sec. 8.  Laws 1994, chapter 611, section 32, as amended by 
  8.15  Laws 1996, chapter 418, section 15, is amended to read: 
  8.16     Sec. 32.  [EAGAN; LICENSES AUTHORIZED.] 
  8.17     The city of Eagan may issue not more than ~~eight~~ 12 on-sale 
  8.18  intoxicating liquor licenses in addition to the number 
  8.19  authorized by Minnesota Statutes, section 340A.413.  All 
  8.20  provisions of Minnesota Statutes, chapter 340A, not inconsistent 
  8.21  with this section, apply to the licenses authorized by this 
  8.22  section. 
  8.23     Sec. 9.  [CITY OF ALBERT LEA; LIQUOR LICENSES.] 
  8.24     The city of Albert Lea may issue three on-sale intoxicating 
  8.25  liquor licenses in addition to the number authorized by law.  
  8.26  All provisions of Minnesota Statutes, chapter 340A, not 
  8.27  inconsistent with this section, apply to the licenses authorized 
  8.28  under this section, except that the city may issue the licenses 
  8.29  only to establishments that derive 50 percent or more of their 
  8.30  gross income from food sales. 
  8.31     Sec. 10.  [CITY OF VIRGINIA; LIQUOR LICENSES.] 
  8.32     The city of Virginia may issue one on-sale intoxicating 
  8.33  liquor license in addition to the number authorized by law.  All 
  8.34  provisions of Minnesota Statutes, chapter 340A, not inconsistent 
  8.35  with this section, apply to the license authorized under this 
  8.36  section. 
  9.1      Sec. 11.  [EAST GRAND FORKS; LICENSES AUTHORIZED.] 
  9.2      The city of East Grand Forks may issue four on-sale 
  9.3   intoxicating liquor licenses in addition to the number 
  9.4   authorized by law.  All provisions of Minnesota Statutes, 
  9.5   chapter 340A, not inconsistent with this section, apply to the 
  9.6   license authorized under this section. 
  9.7      Sec. 12.  [CANOSIA TOWNSHIP; OFF-SALE HOURS.] 
  9.8      Notwithstanding any other law, Canosia township may by 
  9.9   ordinance permit the off-sale of intoxicating liquor until 10:00 
  9.10  p.m. on Monday through Saturday. 
  9.11     Sec. 13.  [LAKE COUNTY; OFF-SALE LICENSE.] 
  9.12     Notwithstanding Minnesota Statutes, section 340A.405, 
  9.13  subdivision 2, paragraph (e), the Lake county board may issue an 
  9.14  off-sale intoxicating liquor license within one mile of the city 
  9.15  of Two Harbors.  All provisions of Minnesota Statutes, chapter 
  9.16  340A, not inconsistent with this section, apply to the license 
  9.17  authorized under this section. 
  9.18     Sec. 14.  [CITY OF PINE CITY; LIQUOR LICENSE.] 
  9.19     The city of Pine City may issue one on-sale intoxicating 
  9.20  liquor license in addition to the number authorized by law.  All 
  9.21  provisions of Minnesota Statutes, chapter 340A, not inconsistent 
  9.22  with this section, apply to the license authorized under this 
  9.23  section. 
  9.24     Sec. 15.  [STUDY.] 
  9.25     The house research department, office of senate counsel and 
  9.26  research, and applicable committee staff, in consultation with 
  9.27  the departments of revenue and public safety, shall study issues 
  9.28  relating to direct shipment of liquor into Minnesota.  The study 
  9.29  shall consider the legal, tax, public policy, and regulatory 
  9.30  aspects of direct shipment.  The study shall be submitted to the 
  9.31  chairs of the commerce committees of the legislature by February 
  9.32  1, 1999. 
  9.33     Sec. 16.  [EFFECTIVE DATE.] 
  9.34     Sections 3, 5, and 7 are effective the day following final 
  9.35  enactment. 
  9.36     Section 8 is effective on approval by the Eagan city 
 10.1   council and compliance with Minnesota Statutes, section 645.021. 
 10.2      Section 9 is effective upon approval by the Albert Lea city 
 10.3   council and compliance with Minnesota Statutes, section 645.021. 
 10.4      Section 10 is effective upon approval by the Virginia city 
 10.5   council and compliance with Minnesota Statutes, section 645.021. 
 10.6      Section 11 is effective on approval by the East Grand Forks 
 10.7   city council and compliance with Minnesota Statutes, section 
 10.8   645.021. 
 10.9      Section 12 is effective upon approval by the Canosia town 
 10.10  board and compliance with Minnesota Statutes, section 645.021.  
 10.11     Section 13 is effective upon approval by the Lake county 
 10.12  board and compliance with Minnesota Statutes, section 645.021. 
 10.13     Section 14 is effective upon approval by the Pine City city 
 10.14  council and compliance with Minnesota Statutes, section 645.021.