SESSION OF 2021
SUPPLEMENTAL NOTE ON SUBSTITUTE FOR HOUSE
BILL NO. 2252
As Recommended by Senate Committee on
Federal and State Affairs

Brief*
Sub. for HB 2252 would amend and create law related
to fulfillment house licenses, farm winery licenses, electronic
submission of records by special order shipping license
holders, residency requirements for certain liquor licenses,
and licenses that can be held by an alcoholic liquor
manufacturer.

Fulfillment House Licenses
The bill would establish a new fulfillment house license
under the Liquor Control Act (LCA) to be issued by the
Director of Alcoholic Beverage Control (ABC).
The bill would amend the definition section of the LCA to
include the definition of “fulfillment house” as any location or
facility for any in-state or out-of-state entity that handles
logistics, including warehousing, packaging, order fulfillment,
or shipping services, on behalf of the holder of a special order
shipping license.
The fulfillment house license would allow the license
holder to warehouse, package, and ship alcoholic liquors
produced by and belonging to a Kansas special order
shipping licensee and would apply for each location that is
involved in the shipping process to Kansas residents.
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org
Fulfillment House License Application
The bill would clarify that before making or causing any
shipment of alcoholic liquor to Kansas residents, an applicant
for a fulfillment house license would be required to:
● Pay a $50 license fee for each of the locations
involved in the shipping process to Kansas
residents; and
● Provide any information required by rules and
regulations adopted by the Director and contained
in the application.
The bill would provide that such licenses would remain
valid for two years from the date specified on the license.
Fulfillment House Licensee Requirements
The bill would require a licensee to:
● Make reasonable efforts to confirm that any winery
for which the licensee ships has a Kansas special
order shipping license and may rely on the
representations of each such winery for such
assurance;
● Ensure that all containers of alcoholic liquors
shipped directly within the state are labeled with
the name, address, and license number of the
fulfillment house licensee;
● Ensure containers are labeled with the following
conspicuously printed statement: “SIGNATURE OF
PERSON AGE 21 OR OLDER REQUIRED FOR
DELIVERY”;
● Require the signature of a receiver over the age of
21 for all packages shipped; and

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 ● Ship all packages by a common carrier pursuant to
continuing law.
Electronic Records
The bill would require fulfillment house licensees to keep
records of all shipments for a three-year period and
electronically submit them to ABC on a monthly basis.
Reports submitted would be available as open records,
in accordance with the Kansas Open Records Act; however,
the bill would specify the names and addresses of
consignees must be redacted from the paragraphs open for
public inspection.
The bill would provide that confidentiality of the redacted
report information would expire on July 1, 2026, unless
reenacted pursuant to continuing law by the Legislature prior
to such date.
Record and Report Requirements
The bill would require the following information to be
maintained by the licensee as a record for a minimum of
three years after the shipment date:
● The name, address, and license number of the
special order shipping licensee for whom the
alcoholic liquor is being shipped;
● The name and license number of the express
company or common carrier used;
● The date of each shipment;
● The carrier tracking number;
● The name and address of the consignee of such
alcoholic liquors; and

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 ● The weight of the package and the product type of
alcoholic liquors shipped.
The bill would require such records to be submitted
monthly to the Director of ABC in the form and format
prescribed.
Penalty for Failure to Report
The bill would state willful failure, neglect, or refusal to
report any shipments would be subject to civil penalty of no
more than $100. The bill would further specify that after
notice and an opportunity for a hearing in accordance with the
Kansas Administrative Procedure Act (KAPA), the Director of
ABC could refuse to issue or renew, or could revoke, a
fulfillment house license upon a finding that the licensee has
failed to comply with the provisions of the bill.
The bill also would specify that an out-of-state license
holder would be deemed to have appointed the Secretary of
State as the resident agent and representative of the licensee
to accept service of process from the Secretary of Revenue,
the Director of ABC, and the courts concerning enforcement
of the provisions of the bill, state law, and any rules and
regulations adopted pursuant to those sections, and to accept
service of any notice or order provided for in the LCA.
Rules and Regulations Authority
The bill would direct the Secretary of Revenue to adopt
rules and regulations to implement, administer, and enforce
the provisions of the bill.
Technical and Conforming Amendments
The bill would include technical and conforming
amendments to ensure consistency in statutory phrasing.

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Farm Winery Licenses
The bill would allow farm wineries, in accordance with
federal law, to:
● Transfer or receive wine in a bulk container or
packaged wine in bond to any bonded premises;
● Transfer or receive wine in a bulk container in bond
to a distilled spirits plant;
● Receive distilled spirits in a bulk container; and
● Produce fortified wine with the addition of wine
spirits to domestic wine if the added spirits are
produced from the same kind of fruit used to
produce the wine.
Under the bill, a farm winery licensee may import wine
from outside Kansas for use in the production of its domestic
table wine and domestic fortified wine. The bill would require
such imports of wine to be reported on forms prescribed by
the Director of ABC.
The bill would specify farm wineries could not transfer
wine in a bulk container to the premises of a brewery.
Additionally, the bill would allow a farm winery,
microdistillery, microbrewery, or the holder of a federal
distilled spirits plant permit to receive and transfer alcoholic
liquor in a bulk container from any manufacturer or supplier of
liquor or cereal malt beverage, licensed in any state, for
packaging in cans or bottles.
Any terms not defined in state law would have the same
meaning as in the definitions found in federal law.
The bill would also remove provisions generally
requiring farm wineries and microbreweries to use at least 30

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percent Kansas-grown products in the manufacture of
domestic wine and hard cider, respectively.

Electronic Submission of Records by Special Order
Shipping License Holders
The bill would amend provisions in law related to the
effective date of special order shipping licenses by specifying
the license term begins on the date listed on the license.
Current law specifies such license terms begin on the date
the license is issued.
The bill would also amend law related to the payment of
gallonage taxes by licensees and would require such taxes to
be paid electronically on a quarterly basis to the ABC, Kansas
Department of Revenue (KDOR), rather than annually, as in
current law.
[Note: These provisions are identical to those included in
2020 SB 432.]

Residency Requirements for Certain Liquor Licenses
The bill would amend the LCA by removing the
residency requirement for liquor license applicants and their
spouses, including a prohibition on license issuance to
residents who have not been a resident of Kansas for a full
year, corporations not organized under the laws of Kansas,
and persons who are not a resident of the county in which the
premises sought to be licensed are located. The bill would
also amend the current requirement to fingerprint all out of
state applicants by making it optional if the applicant’s identity
is unclear.
The bill would specifically remove residency
requirements for the following liquor licenses:
● Retailer;

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 ● Manufacturer;
● Distributor;
● Microbrewery;
● Microdistillery; and
● Farm Winery.
Retailer License
The bill would remove a requirement that retailer’s
licenses may not be issued to:
● A person who is not a resident of the county in
which the place of business covered by the license
is located; or
● A person who has not been a resident of such
county for at least six months; and
● A person who has not been a resident of Kansas
for at least one year immediately preceding
application for a retailer’s license.
Manufacturer License
The bill would require, for copartnership applicants for a
manufacturer license, all of the copartners to be individually
eligible to receive a manufacturer’s license.
Resident Agent
The bill would also specify that if the applicant is not a
Kansas resident, no license would be issued until the
applicant has appointed a citizen of the United States who is
a resident of Kansas as the applicant’s agent and has filed

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certain documentation. Such agent would be required to meet
certain qualifications as required by continuing law.
Nonresident Application Documentation
The bill would further provide the Director of ABC could
require applicants, who are not residents of Kansas on the
date of application, to submit certain documentation, submit
to a criminal history record check as provided in continuing
law, and appoint a process agent who is a U.S. citizen and a
resident of Kansas to accept service of process for legal
proceedings.
Current law requires the Director of ABC to require such
documentation and background check for such applicants, or
applicants who have not been a resident of Kansas for at
least one year immediately preceding the date of application
submission.

Licenses Held by Alcoholic Liquor Manufacturers
The bill would amend the Club and Drinking
Establishment Act to allow any person who has a beneficial
interest in a manufacturer licensed pursuant to the LCA to be
issued one drinking establishment license.
Current law prohibits manufacturers and others from
influencing, coercing, or attempting to influence or coerce
drinking establishment licensees from purchasing particular
brands or kinds of alcoholic liquor or purchasing alcoholic
liquor from a specific distributor. The bill would create an
exemption from those provisions for manufacturers holding
drinking establishment licenses with respect to purchases
made by such a drinking establishment.


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 The bill would specify that if a drinking establishment
licensee also holds a manufacturer’s license:
● The licensed premises specified in the drinking
establishment license would be required to be
separate from, and could be not more than two
miles by the road usually traveled from, the
licensed premises specified in the manufacturer’s
license;
● The drinking establishment could not sell alcoholic
liquor manufactured by such manufacturer’s
licensee to the exclusion of other alcoholic liquor;
● All beer and cereal malt beverage sold by the
drinking establishment would be required to be
acquired from a licensed distributor or retailer; and
● All wine and spirits sold by the drinking
establishment would be required to be acquired
from a licensed retailer or farm winery who
possesses a federal wholesaler’s basic permit.
Background
The bill contains provisions of HB 2552, SB 253 (with an
amendment added by the Senate Committee), SB 258, HB
2057, and HB 2212.

HB 2552 (Fulfillment House Licenses)
The bill was introduced by the House Committee on
Federal and State Affairs at the request of Representative
Miller.


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House Committee on Federal and Senate Affairs
In the House Committee hearing on February 19, 2021,
representatives of the Kansas Association of Beverage
Retailers and the Kansas Wine and Spirits Wholesalers
Association testified as proponents of the bill, stating the bill
would help ABC identify and regulate unlawful shipments and
help bring shippers into compliance. Written-only proponent
testimony was submitted by representatives of Americans for
Prosperity and the League of Kansas Municipalities.
The Director of ABC provided neutral testimony on the
bill. No other testimony was provided.
The House Committee amended the bill to:
● Reduce the fulfillment house license fee from $100
to $50;
● Clarify that a fulfillment house must pay a separate
fee for each location involved in the shipping
process to Kansas residents;
● Remove certain required label information;
● Remove specific information required in the
application, and providing that the Director could
specify application information in rules and
regulations; and
● Change the date the license would commence.
Senate Committee on Federal and State Affairs
In the Senate Committee hearing on March 10, 2021,
representatives of the Kansas Association of Beverage
Retailers, the Kansas Restaurant and Hospitality Association,
and the Kansas Wine and Spirits Wholesalers Association
testified as proponents of the bill, stating the bill would help

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ABC identify and regulate unlawful shipments and help bring
shippers into compliance.
The Director of ABC provided neutral testimony on the
bill. No other testimony was provided.
The Senate Committee amended the bill by inserting the
contents of SB 253 (farm wineries and winery outlets), SB
258 (license terms and electronic records and payments by
special order shipping licensees), HB 2057 (licenses held by
an alcoholic liquor manufacturer), HB 2212 (eliminating
residency requirements for certain liquor licenses), and
removing the general 30 percent Kansas products
requirement for domestic wine and hard cider.
Fiscal Information
According to the fiscal note prepared by the Division of
the Budget on HB 2552 as introduced, KDOR estimates the
bill would increase expenditures by $56,000 from the State
General Fund for FY 2022 for system updates and 760 hours
would be needed to make changes to forms, websites, and
the Public One Stop Service Engine System and to create a
handbook. The agency estimates the bill would increase
revenues to the Liquor Control Act License Fund by $5,000
for FY 2022 for 50 licenses at $100 per license. [Note: The
House Committee reduced the license fee to $50.] Any fiscal
effect associated with the bill is not reflected in The FY 2022
Governor’s Budget Report.

SB 253 (Farm Wineries, Bulk Wine and Fortified Wine)
The bill was introduced by the Senate Committee on
Federal and State Affairs at the request of a representative of
the Kansas Wine and Spirits Wholesaler Association.


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Senate Committee on Federal and State Affairs
In the Senate Committee hearing on February 25, 2021,
on the bill, representatives of BevHub LLC, the Kansas Grape
Growers and Winemakers Association, and the Kansas
Viticulture and Farm Winery Association, and one private
citizen provided proponent testimony. The proponents
generally stated that the bill would clarify, in state law, the
authority given to farm wineries under federal law.
The Director of ABC provided neutral testimony on the
bill. No other testimony was provided.
The Senate Committee amended the bill to make farm
wineries, microdistilleries, and microbreweries eligible to
apply for an annual packaging and warehousing facility
permit. The Senate Committee further amended the bill to
remove provisions requiring farm wineries and
microbreweries to use at least 30 percent Kansas-grown
products in the manufacture of domestic wine and hard cider.
Fiscal Information
According to the fiscal note prepared by the Division of
Budget on SB 253 as introduced, KDOR has indicated
enactment of the bill would have no fiscal effect.

SB 258 – Special Order Shipping Licenses
The bill was introduced by the Senate Committee on
Federal and State Affairs at the request of Senator Alley on
behalf of the Director of ABC.
Senate Committee on Federal and State Affairs
In the Senate Committee hearing on March 10, 2