Bill Summary – FastDemocracy

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68th Legislature 2023                                                                                              HB 305.1
                                                 HOUSE BILL NO. 305
                INTRODUCED BY E. BUTTREY, K. ZOLNIKOV, L. JONES, M. HOPKINS, C. SPRUNGER
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  A BILL FOR AN ACT ENTITLED: “AN ACT GENERALLY REVISING ALCOHOL LICENSE LAWS RELATING
  TO MANUFACTURERS AND RETAILERS; ALLOWING A LIMITED EXCEPTION FOR LICENSED BREWERS,
  DISTILLERS, AND WINERIES TO HOLD RETAIL LICENSES; ALLOWING A LIMITED EXCEPTION FOR
  RETAIL LICENSEES TO HOLD A BREWER, DISTILLER, OR WINERY LICENSE; PROVIDING LIMITATIONS;
  PROVIDING DEFINITIONS; AMENDING SECTIONS 16-3-213, 16-3-214, 16-3-241, 16-3-242, 16-3-244, 16-3-
  311, 16-3-411, 16-4-311, AND 16-4-401, MCA; AND PROVIDING AN EFFECTIVE DATE.”
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  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
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          Section 1. Section 16-3-213, MCA, is amended to read:
          "16-3-213.    Brewers or beer importers not to retail beer -- small brewery exceptions. (1) Except
  as provided for small breweries in subsection (2) and except as provided in 16-4-401(10), it is unlawful for any
  brewer or breweries or beer importer to have or own any permit to sell or retail beer at any place or premises. It
  is the intention of this section to prohibit brewers and beer importers from engaging in the retail sale of beer.
  This section does not prohibit breweries from selling and delivering beer manufactured by them, in original
  packages, at either wholesale or retail.
          (2)       (a) For the purposes of this section, a "small brewery" is a brewery that has an annual
  nationwide production of not less than 100 barrels or more than 60,000 barrels, including:
          (i)       the production of all affiliated manufacturers; and
          (ii)      beer purchased from any other beer producer to be sold by the brewery.
          (b)       A small brewery may, at one location for each brewery license and at no more than three
  locations including affiliated manufacturers, provide samples of beer that were brewed and fermented on the
  premises in a sample room located on the licensed premises. The samples may be provided with or without
  charge between the hours of 10 a.m. and 8 p.m. No more than 48 ounces of malt beverage may be sold or
  given to each individual customer during a business day for consumption on the premises or in prepared
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68th Legislature 2023                                                                                             HB 305.1
  servings through curbside pickup, provided that the 48-ounce limit may not in any way limit a small brewery's
  sales as provided in 16-3-214(1)(a)(iii). No more than 2,000 barrels may be provided annually for on-premises
  sample room consumption, including all affiliated manufacturers.
          (3)      For the purposes of this section, "affiliated manufacturer" means a manufacturer of beer:
          (a)      that one or more members of the manufacturing entity have more than a majority share interest
  in or that controls directly or indirectly another beer manufacturing entity;
          (b)      for which the business operations conducted between or among entities are interrelated or
  interdependent to the extent that the net income of one entity cannot reasonably be determined without
  reference to operations of the other entity; or
          (c)      of which the brand names, products, recipes, merchandise, trade name, trademarks, labels, or
  logos are identical or nearly identical.
          (4)      For a licensed brewery holding complete ownership of a retail license pursuant to 16-4-401(10),
  beer that is manufactured and sold at the colocated premises is not subject to the limitations imposed by this
  section. Beer manufactured and sold at the colocated premises does count toward production levels for tax
  purposes."
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          Section 2. 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 to:
          (i)      a wholesaler;
          (ii)     licensed retailers if the brewer uses the brewer's own equipment, trucks, and employees to
  deliver the beer and if:
          (A)      individual deliveries, other than draught beer, are limited to the case equivalent of 8 barrels a
  day to each licensed retailer; and
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68th Legislature 2023                                                                                              HB 305.1
          (B)      the total amount of beer sold or delivered directly to all retailers does not exceed 10,000 barrels
  a year; or
          (iii)    the public, including curbside pickup between 8 a.m. and 2 a.m. in original packaging or
  growlers;
          (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 or
  to licensed retailers.
          (3)      A brewery may import or purchase, upon terms and conditions the department may require,
  necessary flavors and other nonbeverage ingredients containing alcohol for blending or manufacturing
  purposes.
          (4)      An additional license fee may not be imposed on a brewery providing its own products on its
  licensed premises for consumption on the premises.
          (5)      This section does not prohibit a licensed brewer from shipping and selling beer directly to a
  wholesaler in this state under the provisions of 16-3-230.
          (6)      For a licensed brewery holding complete ownership of a retail license pursuant to 16-4-401(10),
  beer that is manufactured and sold at the colocated premises does not count towards the 10,000-barrel self-
  distribution limit imposed by subsection (1)(a)(ii)(B). Beer manufactured and sold at the colocated premises
  does count toward production levels for tax purposes."
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          Section 3. Section 16-3-241, MCA, is amended to read:
          "16-3-241.       Furnishing of fixtures or interior advertising matter to retailers by brewers, beer
  importers, and wholesalers unlawful -- exceptions. (1) (a) It Except as provided in subsection (3), it is
  unlawful for any brewer, beer importer, or wholesaler to lease, furnish, give, or pay for any premises, furniture,
  fixtures, equipment, or any other advertising matter or any other property to a retail licensee, used or to be used
  in the dispensation of beer in and about the interior of the place of business of the licensed retailer, or to
  furnish, give, or pay for any repairs, improvements, or painting on or within the premises.
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68th Legislature 2023                                                                                                HB 305.1
          (b)      It is lawful for a brewer, beer importer, or wholesaler to furnish, give, or loan to a retail licensee:
          (i)      bottle openers, can openers, trays, tap handles, menus, apparel, coasters, glassware, cups,
  napkins, or other functional advertising matter that does not exceed $300 in value in any 1 calendar year to any
  one retail establishment for display use within the interior of the retail establishment;
          (ii)     not more than six illuminated or electrical signs, neon signs, lamps, or lighted clocks for each
  brand of beer in any 1 calendar year to any one retailer for display use within the interior of the retailer's place
  of business. These signs, displays, lamps, or lighted clocks may bear the name, brand name, trade name,
  trademark, or other designation indicating the name of the manufacturer of beer and the place of manufacture.
  Any beer advertised must be available for sale on the retailer's premises at the time the displays are used
  unless the displays are the property of the retailer or, if supplied by a brewer, beer importer, or wholesaler, a
  display has been in the retailer's possession for more than 9 months.
          (iii)    permanent or temporary advertising matter of a decorative nature, excluding items described in
  subsection (1)(b)(ii) but including nonelectric clocks, mirrors, banners, flags, and pennants; and
          (iv)     maintenance or repair services on draft beer equipment to keep it sanitary and in good working
  condition.
          (2)      A wholesaler may furnish portable equipment used for the temporary cooling, handling, and
  dispensing of beer to a special permittee or a retailer for use:
          (a)      in catering an event that is off the permittee's or retailer's regular premises; or
          (b)      up to three times a year, on a retailer's regular premises, for a period not to exceed 72 hours.
          (3)      A licensed brewery holding complete ownership of a retail license pursuant to 16-4-401(10) is
  not subject to the limitations of subsection (1)(a) for the licensed brewery's retail-licensed premises."
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          Section 4. Section 16-3-242, MCA, is amended to read:
          "16-3-242.    Financial interest in retailers prohibited. (1) A brewer, beer importer, or wholesaler may
  not advance or loan money to or furnish money for or pay for or on behalf of any retailer any license or tax that
  may be required to be paid for any retailer. A brewer, beer importer, or wholesaler 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 is considered to have a financial interest within the meaning of this section if:
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68th Legislature 2023                                                                                             HB 305.1
          (1)(a)   the brewer, beer importer, or wholesaler owns or holds any interest in or a lien or mortgage
  against the retailer or the retailer's premises;
          (2)(b)   the brewer, beer importer, or wholesaler is under any contract with a retailer concerning future
  purchases or the sale of merchandise by one from or to the other; or
          (3)(c)   any retailer holds an interest, as a stockholder or otherwise, in the business of the wholesaler.
          (2)      A licensed brewery holding complete ownership of a retail license pursuant to 16-4-401(10) is
  not subject to the limitations of this section for the licensed brewery's retail-licensed premises"
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          Section 5. Section 16-3-244, MCA, is amended to read:
          "16-3-244.    Beer advertising limitations. It (1) Except as provided in subsection (2), it is lawful to
  advertise beer, as defined and regulated, subject to the restrictions on brewers and beer importers contained in
  16-3-241 of this code and subject to the following restrictions on retailers. A retail licensee may not display or
  permit to be displayed on the exterior portion or surface of the retailer's place of business or on the exterior
  portion or surface of any building of which the place of business is a part or on any premises adjacent to the
  place of business, whether any of the premises are owned or leased by the retailer, any sign, poster, or
  advertisement bearing the name, brand name, trade name, trademark, or other designation indicating the
  manufacturer, brewer, beer importer, wholesaler, or place of manufacture of any beer, unless it is on a
  marquee, board, or other space used for temporary advertisements and is not displayed for more than 10 days
  per display period.
          (2)      A licensed brewery holding complete ownership of a retail license pursuant to 16-4-401(10) is
  not subject to the restrictions in subsection (1) at the colocated premises for products manufactured by the
  licensed brewery."
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          Section 6. Section 16-3-311, MCA, is amended to read:
          "16-3-311.    Suitable premises for licensed retail establishments. (1) (a) A licensed retailer may
  use a part of a building as premises licensed for on-premises consumption of alcoholic beverages. The licensed
  retailer must demonstrate that it has adequate control over all alcoholic beverages to prevent self-service,
  service to underage persons, and service to persons who are actually or apparently intoxicated. Except as
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68th Legislature 2023                                                                                            HB 305.1
  provided in subsection subsections (8) and (10), the premises must be separated from the rest of the building
  by permanent walls but may have inside access to the rest of the building at all times even if the businesses or
  uses in the other part of the building are unrelated to the operation of the premises in which the alcoholic
  beverages are served. If the premises are located in a portion of a building, the licensed retailer must be able to
  demonstrate that there are adequate safeguards in place to prevent public access to alcoholic beverages after
  hours, either by the presence of a lockable door or other security features such as rolling gates, locking
  cabinets, tap locks, or key card access.
          (b)      A resort retail all-beverages licensee or a retail all-beverages licensee within the boundaries of
  a resort area may also utilize an alternate alcoholic beverage storage facility as allowed in 16-4-213(8).
          (2)      A licensee may alter the approved floorplan of the premises. The alteration must be consistent
  with the requirements of subsection (1)(a). A licensee shall provide a copy of the revised floorplan with the
  proposed alteration for the licensed premises to the department within 7 days of beginning the alteration.
  Department approval may not be unreasonably withheld. If the completed alteration differs from the approved
  alteration due to modifications required for approval by other state or local government entities, such as
  compliance with fire or building codes, the department must be notified, but preapproval is not required for
  these modifications. An alteration for the purposes of this section is any structural change in a premises that
  does not increase the square footage of the existing approved premises. An alteration that increases the
  square footage of the existing approved premises must be approved by the department prior to beginning the
  alteration. A cosmetic change, such as painting, carpeting, or other interior decorating, is not considered an
  alteration under this section.
          (3)      The interior portion of the licensed premises must be a continuous area that is under the
  control of the licensee and not interrupted by any area in which the licensee does not have adequate control,
  and includes multiple floors on the premises and common areas necessarily shared by multiple building tenants
  in order to allow patrons to access other tenant businesses or private dwellings in the same building, including
  but not limited to entryways, hallways, stairwells, and elevators.
          (4)      The premises may include one or more exterior patios or decks as long as sufficient physical
  safeguards are in place to ensure proper service and consumption of alcoholic beverages. An additional
  perimeter barrier may not be required if an existing boundary naturally defines the outdoor service area and
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68th Legislature 2023                                                                                             HB 305.1
  impedes foot traffic.
           (5)     Premises suitability does not include a minimum number of seats.
           (6)     A licensed retailer may apply to the department to have a noncontiguous storage area that is
  under the control of the licensed retailer approved for onsite alcoholic beverage storage separate from its
  service area as long as the licensed retailer demonstrates that there are adequate safeguards in place to
  prevent public access to alcoholic beverages after hours, either by the presence of a lockable door or other
  security features such as rolling gates, locking cabinets, tap locks, or key card access. The application fee is
  $100.
           (7)     A licensed retailer operating within a hotel or similar short-term lodging facility may apply to the
  department to allow for the delivery of alcoholic beverages to guests of accommodation units, and the
  prestocking of alcoholic beverages in accommodation units is allowed for the accommodation units within the
  property as long as the p