HOUSE BILL NO. 609

INTRODUCED BY C. HIBBARD

A BILL FOR AN ACT ENTITLED: "AN ACT ALLOWING OUT-OF-STATE SHIPPERS TO SHIP WINE DIRECTLY TO MONTANA RESIDENTS; REQUIRING THAT THE SIGNATURE OF A PERSON AT LEAST 21 YEARS OF AGE BE OBTAINED FOR THE DELIVERY OF WINE AND OTHER ALCOHOLIC BEVERAGES; PROVIDING A DEFINITION OF AN OUT-OF-STATE SHIPPER; REQUIRING AN OUT-OF-STATE SHIPPER TO OBTAIN A LICENSE TO SHIP; REQUIRING THE PAYMENT OF A LICENSE FEE AND ANNUAL RENEWAL FEE; REQUIRING THE PAYMENT OF WINE TAXES; AND AMENDING SECTION 16-6-301, MCA."

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

NEW SECTION. Section 1. Direct shipping of wine -- rules. (1) (a) Notwithstanding any other provision of this code and subject to the provisions of [sections 1 through 3 and 4], an out-of-state shipper may ship up to 120 bottles or 10 cases of wine during a 12-month period directly to a resident of Montana who is at least 21 years of age for the resident's personal use and not for resale.

(b) For the purposes of this section, an "out-of-state shipper" means a person licensed in another state as a wine producer, supplier, wholesaler, distributor, retailer, or an importer who obtains an out-of-state shipper's license as provided in [section 2].

(2) An out-of-state shipper, including a shipper of other alcoholic beverages, shall:

(a) ensure that all containers of wine and other alcoholic beverages shipped directly to a resident in this state are conspicuously labeled with the words "signature of person 21 years of age or older required for delivery";

(b) use common carriers that have a motor carrier certificate issued by the public service commission under the provisions of Title 69, chapter 12, part 3, for delivery of wine to Montana residents;

(c) report to the department within 30 days after the end of each calendar quarter:

(i) the total amount of wine, by type and brand, shipped in the state during the previous calendar quarter; and

(ii) the names and addresses of the recipients of wine and the amount delivered to each recipient during the previous calendar quarter;

(d) pay to the department within 30 days after the end of each calendar quarter all relevant excise taxes, as provided for in Title 16, chapter 1, part 4, imposed on the sale of wine sold in Montana in the previous quarter;

(e) consent to the jurisdiction of the department or another state agency and the Montana courts related to the enforcement of [sections 1 through 3 and 4].

(3) The department shall adopt rules related to the procedures for obtaining valid signatures for the delivery of alcoholic beverages.

NEW SECTION. Section 2. Application -- fee -- rules. (1) An out-of-state shipper desiring to engage in the business of shipping wine to residents of Montana shall file with the department an application for an out-of-state shipper's license. The application for license must be accompanied by a registration fee in the amount of $200.

(2) Each person obligated to file a return under [sections 1 through 3 and 4] is required to file an application for an out-of-state shipper's license.

(3) Each application for a license must be on a form prescribed by the department and must set forth the name under which the applicant intends to transact business, the location of the applicant's place or places of business, a true copy of its current wine license issued in its state of domicile, and other information that the department may require. The application must be filed by the out-of-state shipper if the shipper is a natural person, by a member or partner if the shipper is an association or partnership, or by a person authorized to sign the application if the out-of-state shipper is a corporation.

(4) An out-of-state shipper's license issued in a year expires on June 30 of the year. An out-of-state shipper may annually renew its license with the department by paying a $100 renewal fee and providing to the department a true copy of its current wine license issued in its state of domicile.

(5) A person who fails to comply with [sections 1 through 3 and 4] is subject to a fine of not less than $200 and not more than $500.

(6) The department shall adopt rules to provide procedures for the application for and provision of an out-of-state shipper's license.

NEW SECTION. Section 3. Revocation or suspension of license -- hearing -- notice -- appeal. (1) Subject to the provisions of subsection (2), the department may, for reasonable cause, revoke or suspend an out-of-state shipper's license held by a person who fails to comply with the provisions of [sections 1 through 3 and 4].

(2) The department shall provide written notice and an opportunity for a hearing on a proposed revocation or suspension. The hearing must be conducted informally and is not subject to the Montana Administrative Procedure Act.

(3) If an out-of-state shipper's license is revoked, the department may not issue a new certificate of registration except upon application accompanied by reasonable evidence of the intention of the applicant to comply with the provisions of [sections 1 through 3 and 4]. The department may require security in an amount reasonably necessary to ensure compliance with [sections 1 through 3 and 4] as a condition for the issuance of an out-of-state shipper's license to the applicant.

(4) A person aggrieved by the department's final decision to revoke an out-of-state shipper's license, as provided in subsection (1), may appeal the decision to the state tax appeal board within 30 days following the date on which the department issued its final decision.

(5) A decision of the state tax appeal board may be appealed to the district court.

NEW SECTION. Section 4. Returns -- payment -- authority of department. (1) An out-of-state shipper is required to pay the wine taxes imposed by this part for wine shipped into the state during the previous calendar quarter. Notwithstanding the provisions of this part the taxes are due and payable on or before the 30th day of the month following the end of the calendar quarter in which wine was shipped to Montana residents. Each out-of-state shipper shall file with the department a return, on a form provided by the department, and pay the tax for shipments made to residents during the preceding calendar quarter.

(2) The amount of the taxes must be calculated as if the sale were in Montana at the location where delivery is made. Taxes must be paid on each type of wine shipped into Montana as provided in this part.

(3) Each out-of-state shipper required to collect and pay to the department the taxes imposed by this part shall keep records, render statements, make returns, and comply with the provisions of [sections 1 through 3], this section, this part, and the rules prescribed by the department. Each return or statement must include the information required by the rules of the department.

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 does not prohibit:

(a) a person entering this state from another state or foreign country from having in the person's 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 wine purchased from a licensed out-of-state shipper as provided for in [sections 1 through 3];

(d) possession of alcoholic beverages by brewers, distillers, and other persons duly licensed by the United States for the manufacture of those alcoholic beverages;

(e) possession of proprietary or patent medicines or of any extracts, essences, tinctures, or preparations if the possession is authorized by this code; or

(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."

NEW SECTION. Section 6. Codification instruction. [Sections 1 through 3] 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 1 through 3].

(2) [Section 4] is intended to be codified as an integral part of Title 16, chapter 1, part 4, and the provisions of Title 16, chapter 1, part 4, apply to [section 4].

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