House Bill No. 604
Introduced By harper, rose, grady, ellis, keenan, ream, jenkins, peck, ohs, rehbein, zook, mccann, gage
A Bill for an Act entitled: "An Act relating to brewing beer in Montana; allowing certain domestic breweries to obtain an
endorsement to sell for on- and off-premise consumption beer brewed on the premises; providing that a brewer that sells
beer for on-premise consumption may not have gambling on the premises; providing that malting barley machinery and
equipment are classified as class 6 property; providing that premises licensed for on-premise consumption of alcohol may
be licensed as a brewery if gambling does not occur on the premises; authorizing home brewing that meets the requirements
of federal law; and amending sections 15-6-136, 16-3-201, 16-3-213, 16-3-242, 16-4-101, 16-4-401, and 16-6-301, MCA."
Be it enacted by the Legislature of the State of Montana:
NEW SECTION. Section 1. Domestic breweries -- retail sale of brewed beer or malt beverages -- gambling
prohibited. (1) A brewery located in Montana and licensed as provided in Title 16, chapter 4, and that manufactures not
more than 15,000 barrels of beer in a year may:
(a) at the brewery, sell beer that it brews on the premises directly to the consumer for consumption on or off the premises;
(b) provide, without charge, beer that it manufactures for consumption at the brewery at a location other than where retail
sales are made.
(2) Prior to selling beer that it brews directly to consumers, a brewer shall obtain an on-premises consumption endorsement
of its brewer's license from the department. A written application with an application fee of $500 must be submitted to the
department for its approval. The endorsement must be renewed annually upon payment of an annual fee of $50. A brewery
may not be granted an endorsement, or an issued endorsement must be revoked if:
(a) the department determines that the applicant's or endorsement holder's premises are unsuitable for on-premise
consumption of beer;
(b) the applicant or endorsement holder has been convicted of illegal sales of beer or any other violation of this code; or
(c) gambling has occurred on the premises.
(3) on-premise retail sales of beer may be conducted only between the hours of 8 a.m. and 10 p.m.
(4) An endorsement issued under this section is not a license to sell alcoholic beverages for consumption on the premises
for the purposes of authorizing gambling or gaming on the premises as provided in Title 23, chapter 5.
Section 1. Section 15-6-136, MCA, is amended to read:
"15-6-136. Class six property -- description -- taxable percentage. (1) Class six property includes:
(a) livestock and other species of domestic animals and wildlife raised in domestication or a captive environment, except for cats, dogs, and other household pets not raised for profit;
(b) items of personal property intended for rent or lease in the ordinary course of business, provided each item of personal property satisfies all of the following:
(i) the full and true value of the personal property is less than $5,000;
(ii) the personal property is owned by a business whose primary business income is from rental or lease of personal
property to individuals wherein no one customer of the business accounts for more than 10% of the total rentals or leases
during a calendar year; and
(iii) the lease of the personal property is generally on an hourly, daily, or weekly basis; and
(c) machinery and equipment used in canola seed oil processing facilities if:
(i) the operators of such facilities employ a minimum of 15 full-time employees; and
(ii) a canola seed oil processing facility locates in the state of Montana after July 25, 1989; and
(d) machinery and equipment used in a malting barley facility.
(2) "Canola seed oil processing facility" means a facility that:
(a) extracts oil from canola seeds, refines the crude oil to produce edible oil, formulates and packages the edible oil into food products, or engages in any one or more of those processes; and
(b) employs at least 15 employees in a full-time capacity.
(3) "Malting barley facility" means a facility and integral machinery and equipment used principally to malt malting barley and includes machinery and equipment to mix, blend, transport, transfer, or process the barley and malt at the facility.
(3)(4) Class six property is taxed at 4% of its market value."
Section 2. Section 16-3-201, MCA, is amended to read:
"16-3-201. Possession, manufacture, importation, or disposal of beer in manner other than prescribed unlawful -- personal brewing. (1) It shall be is unlawful to manufacture, import, sell or dispose of, or possess for the purpose of sale beer of any kind or character of an alcoholic content greater than herein prescribed authorized or other than in the manner permitted by this code.
(2) This code does not prohibit the manufacture of beer, for personal or family use and not intended for sale, that meets the exemptions of 26 U.S.C. 5053(e) and regulations implementing that section, including the brewing of beer, for personal or family use, on premises other than those of the person brewing the beer."
Section 4. Section 16-3-213, MCA, is amended to read:
"16-3-213. Brewers or beer importers not to retail beer -- original package and taproom exceptions. (1) It shall be
Unless licensed under 16-4-101(2), it is unlawful for any brewer or breweries or beer importer to have or own any permit to
sell or to retail beer at any place or premises, it being the declared intention to prohibit brewers and beer importers from
engaging in the retail dispensation of beer; provided, however, that this shall not be so construed as to.
(2) Subsection (1) does not prohibit breweries from:
(a) making sale and delivery of selling or delivering beer manufactured by them, in original packages, at either wholesale
or retail, or;
(b) from providing, without charge, their products for consumption on their licensed premises; or
(c) otherwise selling beer in accordance with [section 1]."
Section 5. Section 16-3-242, MCA, is amended to read:
"16-3-242. Financial interest in retailers prohibited. (1) No A brewer, beer importer, or wholesaler shall may not
advance or loan money to or furnish money for or pay for or on behalf of any retailer any license or tax which may be
required to be paid for any retailer, and no a brewer, beer importer, or wholesaler shall may not be financially interested,
either directly or indirectly, in the conduct or operation of the business of a retailer. A brewer, beer importer, or wholesaler
shall be deemed is considered to have such a financial interest within the meaning of this section if:
(1)(a) such the brewer, beer importer, or wholesaler owns or holds any interest in or a lien or mortgage against the retailer
or his the premises;
(2)(b) such the brewer, beer importer, or wholesaler is under any contract with a retailer concerning future purchases
and/or or sale, or both, of merchandise by one from or to the other;
(3)(c) any retailer holds an interest, as a stockholder or otherwise, in the business of the wholesaler.
(2) The issuance of a license and subsequent manufacture of beer on premises licensed for on-premise consumption as
provided in 16-4-101(2) does not constitute interest in a brewer that is prohibited by this section."
Section 6. Section 16-4-101, MCA, is amended to read:
"16-4-101. Applications for sale, import, or manufacture of beer -- qualifications of applicant. (1) (a) Any person
desiring to manufacture, import, or sell beer under the provisions of this code shall first apply to the department for a
license to do so and pay with such the application the license fee prescribed. The department shall require of such the
applicant satisfactory evidence that the applicant is of good moral character and a law-abiding person.
(2)(b) Upon being satisfied, from such the application or otherwise, that such the applicant is qualified, the department
shall issue such the license to such the person,. which The license shall must be at all times prominently displayed in the
place of business of such the applicant.
(3)(c) If the department shall find finds that such the applicant is not qualified, no a license shall may not be granted and
such the license fee shall must be returned.
(2) The department shall grant a license under this section to a holder of an all-beverages license for on-premise
consumption of alcohol issued under 16-4-201 to manufacture beer on the premises if the premises are not licensed for
gambling or gaming under the provisions of Title 23, chapter 5. The license granted under this section must be revoked if
gambling occurs on the premises.
(3) A person manufacturing beer for personal or family use under 16-3-201(2) is not required to be licensed."
Section 7. Section 16-4-401, MCA, is amended to read:
"16-4-401. License as privilege -- criteria for decision on application. (1) A license under this code is a privilege which
that the state may grant to an applicant and is not a right to which any applicant is entitled.
(2) Except as provided in subsection (6), in the case of a license that permits on-premises consumption, the department
must shall find in every case in which it makes an order for the issuance of a new license or for the approval of the transfer
of a license that:
(a) in the case of an individual applicant:
(i) the applicant will may not possess an ownership interest in more than one establishment licensed under this chapter for
all-beverages sales;
(ii) the applicant does may not possess an ownership interest in an agency liquor store as defined in 16-1-106;
(iii) except as provided in subsection (7) the applicant or any member of the applicant's immediate family is without
financing from or any affiliation to a manufacturer, importer, bottler, or distributor of alcoholic beverages;
(iv) the applicant is a resident of the state and is qualified to vote in a state election;
(v) the applicant's past record and present status as a purveyor of alcoholic beverages and as a business person and citizen
demonstrate that the applicant is likely to operate the establishment in compliance with all applicable laws of the state and
local governments; and
(vi) the applicant is not under the age of 19 years; and
(b) in the case of a corporate applicant:
(i) the owners of at least 51% of the outstanding stock meet the requirements of subsection (2)(a)(iv);
(ii) each owner of 10% or more of the outstanding stock meets the requirements for an individual applicant listed in
subsection (2)(a);
(iii) the corporation is authorized to do business in Montana; and
(iv) in the case of a corporation not listed on a national stock exchange, each owner of stock meets the requirements of
subsections (2)(a)(i) and (2)(a)(ii); and
(c) in the case of any other business entity as applicant:
(i) if the applicant consists of more than one individual, all must meet the requirements of subsection (2)(a); and
(ii) if the applicant consists of more than one corporation, all must meet the requirements of subsection (2)(b).
(3) In the case of a license that permits only off-premises consumption, the department must shall find in every case in
which it makes an order for the issuance of a new license or for the approval of the transfer of a license that:
(a) in the case of an individual applicant:
(i) the applicant will may not possess an ownership interest in more than one establishment licensed under this chapter for
all-beverages sales;
(ii) the applicant does may not possess an ownership interest in an agency liquor store as defined in 16-1-106;
(iii) the applicant or any member of the applicant's immediate family is without financing from or any affiliation to a
manufacturer, importer, bottler, or distributor of alcoholic beverages;
(iv) the applicant has not been convicted of a felony or, if the applicant has been convicted of a felony, the applicant's rights
have been restored;
(v) the applicant's past record and present status as a purveyor of alcoholic beverages and as a business person and citizen
demonstrate that the applicant is likely to operate the establishment in compliance with all applicable laws of the state and
local governments; and
(vi) the applicant is not under the age of 19 years; and
(b) in the case of a corporate applicant:
(i) the owners of at least 51% of the outstanding stock meet the requirements of subsection (3)(a)(iv);
(ii) each owner of 10% or more of the outstanding stock meets the requirements for an individual listed in subsection (3)(a)
of this section; and
(iii) the corporation is authorized to do business in Montana; and
(c) in the case of any other business entity as applicant:
(i) if the applicant consists of more than one individual, all must meet the requirements of subsection (3)(a); and
(ii) if the applicant consists of more than one corporation, all must meet the requirements of subsection (3)(b).
(4) In the case of a license that permits the manufacture, importing, or wholesaling of an alcoholic beverage, the
department must shall find in every case in which it makes an order for the issuance of a new license or for the approval of
the transfer of a license that:
(a) in the case of an individual applicant:
(i) the applicant has no ownership interest in any establishment licensed under this chapter for retail alcoholic beverages
sales;
(ii) the applicant does may not possess an ownership interest in an agency liquor store as defined in 16-1-106;
(iii) the applicant has not been convicted of a felony or, if the applicant has been convicted of a felony, rights have been
restored;
(iv) the applicant's past record and present status as a purveyor of alcoholic beverages and as a business person and citizen
demonstrate that the applicant is likely to operate the establishment in compliance with all applicable laws of the state and
local governments;
(v) the applicant is not under the age of 19 years; and
(vi) an applicant for a wholesale license is neither a manufacturer of an alcoholic beverage nor is owned or controlled by a
manufacturer of an alcoholic beverage; and
(b) in the case of a corporate applicant:
(i) the owners of at least 51% of the outstanding stock meet the requirements of subsection (4)(a)(iii);
(ii) each owner of 10% or more of the outstanding stock meets the requirements for an individual listed in subsection (4)(a)
of this section;
(iii) an applicant for a wholesale license is neither a manufacturer of an alcoholic beverage nor is owned or controlled by a
manufacturer of an alcoholic beverage; and
(iv) the corporation is authorized to do business in Montana; and
(c) in the case of any other business entity as applicant:
(i) if the applicant consists of more than one individual, all must meet the requirements of subsection (4)(a); and
(ii) if the applicant consists of more than one corporation, all must meet the requirements of subsection (4)(b).
(5) In the case of a corporate applicant, the requirements of subsections (2)(b), (3)(b), and (4)(b) apply separately to each
class of stock.
(6) The provisions of subsection (2) do not apply to an applicant for or holder of a license pursuant to 16-4-302.
(7) The issuance of a license and subsequent manufacture of beer on premises licensed for on-premise consumption as
provided in 16-4-101(2) does not constitute interest in a manufacturer that is prohibited in subsection (2)(a)(iii)."
Section 3. Section 16-6-301, MCA, is amended to read:
"16-6-301. Transfer, sale, and possession of alcoholic beverages -- when unlawful. (1) Except as provided by this
code, no a person or the person's agents or employees shall may not, within the state, by himself, his clerk, servant, or
agent,:
(a) expose or keep an alcoholic beverage for sale or,;
(b) directly or indirectly or upon any pretense or upon any device, sell or offer to sell an alcoholic beverage; or,
(c) in consideration of the purchase or transfer of any property or for any other consideration or at the time of the transfer
of any property, give to any other person any an alcoholic beverage.
(2) No A person shall may not have or keep any alcoholic beverage which that has not been purchased within the state of
Montana.
(3) Nothing in this code shall This section does not prohibit:
(a) any a person entering this state from any other another state or from any foreign country from having in his the person's
possession an amount not to exceed 3 wine gallons of alcoholic beverage which beverage shall have been that was
purchased in another state or foreign country, but no person claiming to have so entered the state shall at any time have in
his possession more than 3 wine gallons of alcoholic beverage which shall not have been purchased within the state of
Montana.;
(b) possession of beer produced for personal or family use and not intended for sale that meets the exemptions of 26 U.S.C. 5053(e) and regulations implementing that section, including the brewing of beer, for personal or family use, on premises other than those of the person brewing the beer;
(c) This subsection shall not apply to the department or to the keeping or having of possession of alcoholic beverages by
brewers, distillers, and other persons duly licensed by the United States for the manufacture of such those alcoholic
beverages; or
(d) to the keeping or having of any possession of proprietary or patent medicines or of any extracts, essences, tinctures, or
preparations where such having and keeping if the possession is authorized by this code.; or
(3)(e) Nothing contained in this section shall apply to the possession by a sheriff or his bailiff of alcoholic beverages seized
under execution or other judicial or extrajudicial process or to sales under executions or other judicial or extrajudicial
process to the department or a licensee.
(4) Except as provided in this code, no a person or the person's agents or employees shall, within the state, by himself, his
clerk, servant, or agent may not:
(a) attempt to purchase any alcoholic beverage;
(b) directly or indirectly or upon any pretense or device, purchase any alcoholic beverage; or
(c) in consideration of the sale or transfer of any property or for any other consideration or at the time of the transfer of any property, take or accept from any other person any alcoholic beverage."
NEW SECTION. Section 9. Codification instruction. [Section 1] is intended to be codified as an integral part of Title
16, chapter 3, part 2, and the provisions of Title 16, chapter 3, part 2, apply to [section 1].
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