SENATE BILL NO. 48
INTRODUCED BY M. SPRAGUE
AN ACT CLARIFYING THAT ALL ALCOHOLIC BEVERAGES TO BE SOLD TO CONSUMERS IN MONTANA MUST BE DISTRIBUTED ACCORDING TO THE MONTANA ALCOHOLIC BEVERAGE CODE; CLARIFYING THAT OUT-OF-STATE SHIPPERS OF ALCOHOLIC BEVERAGES MAY NOT SHIP DIRECTLY TO MONTANA RESIDENTS WHO DO NOT POSSESS A CONNOISSEUR'S LICENSE; CLARIFYING THE MANNER IN WHICH BREWERIES PROVIDE BEER TO THE PUBLIC; ESTABLISHING A CONNOISSEUR'S LICENSE; ALLOWING LIMITED DIRECT SHIPMENT OF BEER AND WINE FROM OUT-OF-STATE BREWERIES AND WINERIES TO CONNOISSEUR'S LICENSE HOLDERS; PROVIDING THAT OUT-OF-STATE BREWERIES AND WINERIES REGISTER WITH THE DEPARTMENT OF REVENUE; LIMITING THE AMOUNT OF BEER OR WINE THAT OUT-OF-STATE BREWERIES AND WINERIES MAY SHIP INTO THE STATE TO CONNOISSEUR'S LICENSE HOLDERS; ESTABLISHING AN OFFENSE OF ILLEGAL IMPORTATION OR DISTRIBUTION OF ALCOHOLIC BEVERAGES; ESTABLISHING PENALTIES FOR ILLEGAL SHIPMENTS; AMENDING SECTIONS 16-1-101, 16-1-104, 16-3-101, 16-3-214, 16-6-301, AND 16-6-302, MCA; AND PROVIDING EFFECTIVE DATES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 16-1-101, MCA, is amended to read:
"16-1-101. Citation -- declaration of policy -- subject matters of regulation. (1) Chapters 1 through 6 of this title may be cited as the "Montana Alcoholic Beverage Code".
(2) It is hereby declared to be the policy of the state of Montana to effectuate and ensure the entire control of the manufacture, sale, importation, and distribution of alcoholic beverages within the state of Montana, as that term is defined in this code, subject to the authority of the state of Montana through the Montana department of revenue.
(3) This code is an exercise of the police power of the state, in and for the protection of the welfare, health, peace,
morals, and safety of the people of the state, and its provisions shall be construed for the accomplishment of such purposes
and of the state's power under the 21st amendment to the United States constitution to control the transportation and
importation of alcoholic beverages into the state. The provisions of this code must be broadly construed to accomplish
these purposes."
Section 2. Section 16-1-104, MCA, is amended to read:
"16-1-104. Intent and construction of code. (1) The purpose and intent of this code are to:
(a) establish a state licensing system to control the transportation and importation of alcoholic beverages into Montana and the manufacture, sale, transportation, and distribution of alcoholic beverages within the state of Montana; and
(b) prohibit transactions in alcoholic beverages which take place wholly within the state of Montana except under state
control as specifically provided by this code, and every.
(2) Every section and provision of this code shall must be construed accordingly according to subsection (1). The
provisions of this code dealing with the importation, sale, and disposition of alcoholic beverages within the state, through
the instrumentality of a department and otherwise, provide the means by which such state control shall be made effective,
and nothing in this code shall be construed as forbidding, affecting, or regulating any transaction which is not subject to the
legislative authority of the state."
Section 3. Section 16-3-101, MCA, is amended to read:
"16-3-101. Alcoholic beverages dispensed beverage transactions -- only in accordance with code. (1) No brewer,
beer importer, distiller, or manufacturer of alcoholic beverages shall, within the state, by himself, his clerk, servant, or
agent, give A person who manufactures, imports, distributes, or sells alcoholic beverages or the persons's agent may not
give or sell to any person within the state any alcoholic beverage except as may be permitted by and in accordance with the
rules made under provisions of this code.
(2) (a) Except as otherwise provided by this code, a person or the person's agent may not ship, transport, or consign or cause to be shipped, transported, or consigned:
(i) any alcoholic beverage to any person in this state who does not hold a valid wholesaler's license or connoisseur's license issued by the department; or
(ii) any liquor except to the state liquor warehouse.
(b) The prohibition in subsection (2)(a) includes alcoholic beverages ordered or purchased by telephone, computer, or other device, except by persons holding a valid connoisseur's license provided for in [section 7].
(3) Except as otherwise provided by this code, alcoholic beverages shipped, transported, or consigned pursuant to subsection (2)(a) and intended for sale to any person not licensed under this code must be distributed by the licensed wholesaler to a licensed retailer for sale to the ultimate consumer."
Section 4. Section 16-3-214, MCA, is amended to read:
"16-3-214. Beer sales by brewers -- sample room exception. (1) Subject to the limitations and restrictions contained in this code, a brewer who manufactures less than 60,000 barrels of beer a year, upon payment of the annual license fee imposed by 16-4-501 and upon presenting satisfactory evidence to the department as required by 16-4-101, must be licensed by the department, in accordance with the provisions of this code and rules prescribed by the department, to:
(a) sell and deliver beer from its storage depot or brewery located in Montana to:
(i) a wholesaler; or
(ii) any retail licensees who are entitled to purchase beer from a brewer under this code; or
(iii) the public; or
(b) provide its own products for consumption on its licensed premises without charge or, if it is a small brewery, provide its own products at a sample room as provided in 16-3-213; or
(c) do any one or more of the acts of sale and delivery of beer as provided in this code.
(2) A brewery may not use a common carrier for delivery of the brewery's product to the public.
(2)(3) An additional license fee may not be imposed on a brewery providing its own products on its licensed premises
for consumption on the premises.
(3)(4) This section does not prohibit a brewer located outside of Montana from shipping and selling beer directly to a
wholesaler in this state under the provisions of 16-3-230."
Section 5. 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, a person or the person's agents or employees may not:
(a) expose or keep an alcoholic beverage for sale;
(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 an alcoholic beverage.
(2) A person may not have or keep any alcoholic beverage that has not been purchased within the state of Montana.
(3) This section code does not prohibit:
(a) a person entering this state from another state or foreign country from having in the person's actual physical possession an amount not to exceed 3 gallons of alcoholic beverage that was purchased in another state or foreign country;
(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) possession of beer or wine purchased from an out-of-state brewery or winery if the person possessing the beer or wine holds a connoisseur's license as provided for in [section 7];
(c)(d) possession of alcoholic beverages by brewers, distillers, and other persons duly licensed by the United States for
the manufacture of those alcoholic beverages;
(d)(e) possession of proprietary or patent medicines or of any extracts, essences, tinctures, or preparations if the
possession is authorized by this code; or
(e)(f) possession by a sheriff or bailiff of alcoholic beverages seized under execution or other judicial or extrajudicial
process or sales under executions or other judicial or extrajudicial process to the department or a licensee.
(4) Except as provided in this code, a person or the person's agents or employees 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."
Section 6. Section 16-6-302, MCA, is amended to read:
"16-6-302. Penalty for sale Sale of alcoholic beverage without license -- sale or importation in violation of code --
penalty. (1) For the purposes of this section "person" means an individual, partnership, corporation, company, firm,
society, association, joint stock company, trust, or other entity capable of holding a legal or beneficial interest in property,
but does not include a state or agency of a state.
(2) Any A person who has not been issued a license under this code who sells or keeps for sale in Montana any alcoholic
beverage is guilty of a felony commits a criminal offense and upon conviction thereof is punishable by a fine of not less
than $1,000 or more than to exceed $5,000 or by imprisonment in the state prison for not less than 1 or more than 5 years or
by both such the fine and imprisonment.
(3) A person in the business of selling alcoholic beverages in another state or country who imports or distributes alcoholic beverages in violation of this code commits a civil offense.
(4) A person convicted under subsection (3):
(a) for a first offense, must be mailed a certified letter by the department ordering that person to cease and desist any shipments of alcoholic beverages to any person in Montana;
(b) for a second offense, shall be fined a civil penalty not to exceed $5,000;
(c) for a third offense, shall be fined a civil penalty not to exceed $10,000; and
(d) for a fourth or subsequent offense, shall be fined a civil penalty not to exceed $50,000."
Section 7. Connoisseur's licenses -- application -- fees. (1) A person in this state desiring to receive direct shipments of beer only, wine only, or both beer and wine from an out-of-state brewery or winery for the person's own consumption and not for resale shall file with the department an application for a connoisseur's license. The application must be accompanied by a registration fee in the amount of:
(a) $50 for a beer connoisseur's license;
(b) $50 for a wine connoisseur's license; or
(c) $100 for a beer and wine connoisseur's license.
(2) Each application for a license must be on a form prescribed by the department and must set forth the name of the applicant, the applicant's home or business address, proof that the applicant is at least 21 years of age, and other information that the department may require.
(3) A connoisseur's license expires on June 30 of each calendar year. A licensee may annually renew a license with the department by paying a $25 renewal fee for a beer connoisseur's license or a wine connoisseur's license and a $50 renewal fee for a beer and wine connoisseur's license.
(4) The holder of a connoisseur's license may not sell beer or wine to the public.
(5) The department shall adopt rules to provide procedures for the application for and the provision of a connoisseur's license.
Section 8. Payment of taxes -- authority of department. (1) A person holding a connoisseur's license shall pay, on June 30 and December 31, the beer and wine taxes imposed by Title 16, chapter 1, part 4, on beer or wine that is received by direct shipment from an out-of-state brewery or winery during the previous 6-month period.
(2) Each holder of a connoisseur's license shall file with the department a return, on a form provided by the department, and pay the tax for shipments received.
Section 9. Direct shipment of beer or wine -- limitations. (1) Subject to the provisions of [section 7], the holder of a connoisseur's license may receive up to 144 bottles or 12 cases of wine or 288 bottles or 12 cases of beer from an out-of-state brewery or winery during a 12-month period for personal use and not for resale. A person wishing to receive both wine and beer under this section must possess a beer and wine connoisseur's license.
(2) A licensee under this section shall forward to the out-of-state brewery or winery a distinctive address label, provided by the department, clearly identifying any package that is shipped as a legal direct-shipment package to the holder of a connoisseur's license.
(3) A licensee shall report to the department, on June 30 and December 31, the total amount of beer or wine received from an out-of-state brewery or winery and pay all applicable excise taxes, as provided for in Title 16, chapter 1, part 4, imposed on the receipt of beer or wine during the previous 6 months.
Section 10. Out-of-state brewery or winery registration -- limitation on shipping -- penalty. (1) Each out-of-state brewery or winery desiring to ship beer or wine to a person holding a connoisseur's license shall register with the department on forms provided by the department.
(2) The annual limit on out-of-state shipments to all connoisseur's license holders is:
(a) 1,440 bottles or 60 cases of beer for breweries; and
(b) 720 bottles or 60 cases of wine for wineries.
(3) For any shipment into the state that exceeds the limits provided for in subsection (2), the out-of-state brewery or winery shall distribute the brewery's or winery's product through a licensed wholesale distributor.
(4) An out-of-state brewery or winery that violates the provisions of this section is subject to the penalties provided for in 16-6-302.
Section 11. Penalty for noncompliance. (1) Except as provided in [section 10], a person who violates the provisions of [sections 7 through 11] commits a civil offense.
(2) A person convicted under subsection (1):
(a) for a first offense, must be mailed a certified letter by the department ordering that person to cease and desist committing the violation;
(b) for a second offense, shall be fined a civil penalty not to exceed $500; and
(c) for a third or subsequent offense, shall be fined a civil penalty not to exceed $2,500.
Section 12. Codification instruction. [Sections 7 through 11] are intended to be codified as an integral part of Title 16, chapter 4, and the provisions of Title 16, chapter 4, apply to [sections 7 through 11].
Section 13. Effective dates. (1) Except as provided in subsection (2), [this act] is effective on passage and approval.
(2) [Sections 7 through 11] are effective October 1, 2001.
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