(A60, R74, S619)
AN ACT TO AMEND SECTION 61-4-720, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE SALE OF WINE BY A WINERY LOCATED IN THIS STATE, SO AS TO ESTABLISH CERTAIN REQUIREMENTS AND LIMITATIONS; BY ADDING SECTION 61-4-748 SO AS TO ALLOW CERTAIN WINERIES TO OBTAIN SATELLITE LOCATION CERTIFICATES; TO AMEND SECTION 61-4-770, RELATING TO LIMITATIONS ON THE SALE OF WINES ABOVE A CERTAIN PERCENTAGE OF ALCOHOL, SO AS TO INCREASE THE LIMIT; TO AMEND SECTION 61-6-1035, RELATING TO THE SAMPLING OF WINES, SO AS TO INCREASE THE ALLOWED ALCOHOL PERCENTAGE BY VOLUME; TO AMEND SECTIONS 61-6-1640 AND 61-6-1650, BOTH RELATING TO THE SAMPLING OF WINE, SO AS TO INCREASE THE ALLOWED ALCOHOL PERCENTAGE BY VOLUME; TO AMEND SECTION 61-6-1540, RELATING TO THE SALE OF WINES BY A RETAIL DEALER, SO AS TO INCREASE THE ALLOWED ALCOHOL PERCENTAGE BY VOLUME; BY ADDING SECTION 61-6-1155 SO AS TO AUTHORIZE AN ALCOHOLIC LIQUOR PRODUCER, MANUFACTURER, OR MICRO-DISTILLER TO SELL LIQUORS DISTILLED AT THEIR LICENSED PREMISES FOR ON-PREMISES CONSUMPTION; AND TO AMEND SECTIONS 61-6-1140 AND 61-6-1150, BOTH RELATING TASTING AND RETAIL SALES AT THE LICENSED PREMISES OF A MICRO-DISTILLERY, SO AS TO PROVIDE CERTAIN LIMITATIONS AND REQUIREMENTS FOR THE PRICING OF TASTINGS AND TO PROVIDE AN EXCEPTION FOR CERTAIN MICRO-DISTILLERIES.
Be it enacted by the General Assembly of the State of South Carolina:
Findings and purpose
SECTION 1. The General Assembly finds and declares that:
(A) The State has a substantial interest in regulating alcoholic liquors and other beverages containing alcohol; the activities of manufacturers, importers, wholesalers, and retailers; and the influences that affect the consumption levels of alcoholic liquors and other beverages containing alcohol by the people of the State.
(B) The State has a substantial interest in exercising its police power to promote the public health, safety, and welfare of the State by regulating the business of manufacturing, distributing, and retail sales of alcoholic liquors and other beverages containing alcohol in the manner and to the extent allowed by law to promote and preserve public health and safety through legitimate, nonprotectionist measures, which include regulating and controlling alcoholic beverage transactions in this State and the means and manner in which licensed micro-distilleries and alcoholic liquor manufacturers may sell alcoholic beverages to the state's qualifying consumers.
(C) Selling alcoholic liquors from manufacturers outside the State directly to residents of this State poses a serious threat to the state's efforts to prevent underage drinking, to state revenue collections, and to the public health and safety of the state's residents.
(D) By this act, the General Assembly intends to promote the public health, safety, and welfare of residents of this State with laws intended to strictly regulate alcoholic liquors and other beverages containing alcohol by preserving and promoting a robust, stable system of distribution of beverages containing alcohol to the public that does not provide for economic protectionism. Excessive use of alcoholic liquors and other beverages containing alcohol has wide-ranging deleterious health effects, including death. The General Assembly acknowledges that, according to the United States Centers for Disease Control, during the period from 2011 to 2015, an average of one thousand six hundred seventy-nine of this state's residents suffered alcohol attributed deaths due to excessive alcohol use and the rate of binge drinking in this State is ranked among the highest in the nation. The General Assembly acknowledges that, according to the National Highway Traffic Safety Administration, this State had two hundred eighty-five alcohol-impaired driving fatalities in 2019, which accounted for twenty-eight percent of the total traffic fatalities in the State. Attributed deaths due to alcohol-impaired driving in this State is ranked among the highest in the nation.
(E) This act has been enacted pursuant to the authority granted to the State by the Twenty-first Amendment to the Constitution of the United States, the powers reserved to the states under the Tenth Amendment to the United States Constitution, and the inherent powers of the State under the Constitution of the State of South Carolina, 1895, and the statutes promulgated thereunder. It is the intent of the General Assembly that this act do all of the following:
(1) further regulate and control transactions in this State as to beverages containing alcohol under the control and supervision of the Department of Revenue;
(2) strictly regulate alcoholic beverage transactions by fostering moderation and responsibility in the use and consumption of beverages containing alcohol;
(3) promote and assure the public's interest in fair and efficient distribution and quality control of alcoholic beverages in this State;
(4) promote orderly marketing of alcoholic beverages;
(5) prevent unfair business practices, discrimination, and undue control of one segment of the alcoholic beverage industry by any other segment;
(6) foster vigorous and healthy competition in the alcoholic beverage industry and protect the interests of consumers against fraud and misleading practices in the sale of alcoholic beverages, and avoid problems associated with indiscriminate price cutting and excessive advertising of alcoholic beverages;
(7) provide for an orderly system of public revenues by facilitating the collection and accountability of this State and local excise taxes;
(8) facilitate the collection of state and local revenue;
(9) maintain trade stability and provide for the continuation of control and orderly processing by the State over the regulation of alcoholic beverage manufacturing locations and the process of selling alcoholic beverages to the state's consumers;
(10) ensure that the Department of Revenue and State Law Enforcement Division are able to monitor licensed operations through on-site inspections to confirm compliance with state law and that any alcoholic beverages shipped into, distributed, and sold throughout this State:
(a) have been registered for sale in this State with the Department of Revenue, as prescribed by law;
(b) are not subject to a government-mandated or supplier-initiated recall;
(c) are not counterfeit;
(d) are labeled in conformance with applicable laws, rules, and regulations;
(e) can be inspected and tested by the Department of Revenue or the State Law Enforcement Division; and
(f) are not prohibited by this State;
(11) promote and maintain a sound, stable, and viable three-tier system of distribution of beverages containing alcohol to the public; and
(12) ensure that statutes and regulations relating to alcoholic beverages exist to serve the interests of the State of South Carolina and its citizens rather than to serve or protect the interests of market participants by adopting protectionist measures with no demonstrable connection to the state's legitimate interests in regulating alcoholic beverages.
Winery authorized to sell wine in state, requirements and limitations
SECTION 2. Section 61-4-720 of the 1976 Code is amended to read:
"Section 61-4-720. (A) Notwithstanding another provision of law, a licensed winery located in this State is authorized to sell wine with an alcohol content of sixteen and one-half percent, or less, on the winery premises and deliver or ship this wine to consumer homes in or outside the State so long as:
(1) the licensed winery is the primary American source of supply for the wine sold; or
(2) the wine is produced on its licensed premises.
(B) For wine that is not produced on its licensed premises in the State pursuant to subsection (A)(2), but for which the winery is the primary American source of supply under subsection (A)(1), the winery may not sell more than twenty-four bottles of wine each month directly to a resident of this State for such resident's personal use and not for resale.
(C) These wineries are authorized to provide, with or without cost, wine tasting samples to prospective customers."
Certain wineries eligible for satellite location certificates
SECTION 3. Chapter 4, Title 61 of the 1976 Code is amended by adding:
"Section 61-4-748. (A) Notwithstanding any other provision of law, rule, or regulation to the contrary, the holder of a valid winery license that, on or after January 1, 2021, invests four hundred million dollars in this State in a Tier III or Tier IV county, as designated by the Department of Revenue pursuant to Section 12-6-3360(B), at the time of the public announcement of the project or upon reaching such investment and job requirement thresholds, and creates at least three hundred new jobs in this State, is eligible for a manufacturer's satellite certificate to establish up to three wholly owned satellite locations for tasting and sale of wine produced or imported as the primary American source of supply, provided that:
(1) before commencing operations at any wholly owned satellite location, the holder of a valid winery license must first have satisfied all applicable investment and job requirement thresholds;
(2) a winery producing or bottling at least ten million gallons of wine and alcoholic beverages per calendar year in this State may operate one tasting-room premises;
(3) a winery producing or bottling at least twenty million gallons of wine and alcoholic beverages per calendar year in this State may operate two tasting-room premises;
(4) a winery producing or bottling at least thirty million gallons of wine and alcoholic beverages per calendar year in this State may operate three tasting-room premises;
(5) the winery submits, and the department approves, separate applications for each tasting-room premises to be issued a permit, as provided by Sections 61-2-90 and 61-2-140(C);
(6) the winery must pay a biennial tasting-room permit fee of five thousand dollars per tasting-room premises;
(7) no more than one tasting-room premises shall be permitted in any one county of this State;
(8) the winery may conduct tastings of or sell only wine that is (a) produced or bottled by the winery within or outside of this State, (b) produced for or produced and packaged for the winery within or outside of this State and sold under a brand name owned by the winery, or (c) wine for which the winery is the exclusive agent in the United States of an out-of-state vintner;
(9) the winery must sell wine for off-premises consumption at a tasting-room premises at a price approximating retail prices generally charged for identical wine in the county where the tasting-room premises is located;
(10) the winery must charge a consumer a tasting fee to participate in a tasting or the consumer may not purchase any wine for off-premises consumption;
(11) the winery shall remit applicable sales, use, and other state taxes and local taxes for each tasting-room premises. The winery shall maintain adequate records for each tasting-room premises to ensure the collection of these taxes;
(12) all wine to be handled, tasted, or sold at a tasting-room premises must be purchased from licensed wholesalers and transported and delivered to the licensed tasting-room premises only by licensed South Carolina wholesalers;
(13) the winery must maintain all liability insurance required pursuant to Section 61-2-145; and
(14) tastings and sales shall not be offered or made to, or allowed to be offered, made to, or consumed by an intoxicated person or a person who is under the age of twenty-one.
(B) In addition to the provisions set forth in subsection (A), a winery holding one or more tasting-room permits must not provide or sell to an individual consumer at a tasting-room premises:
(1) more than ten ounces of wine in one day for on-premises consumption, including any samples offered and consumed; or
(2) more than the equivalent of six 750-milliliter bottles of wine each calendar month to an individual consumer for off-premises consumption and not for resale.
(C) Tasting rooms authorized in this section must close to the public at 5:30 p.m. and may not open to the public until 8:00 a.m.
(D) Each tasting-room permit application is subject to protest, as provided for in Section 61-4-525 for beer and wine permit applications.
(E) The holder of a tasting-room permit who violates a provision of this section is subject to the penalties specified in Section 61-4-250.
(F) Nothing in this section shall be construed so as to prohibit or restrict a winery that also holds a brewery, micro-distillery, or liquor manufacturer's license from applying for or holding any license or permit that is available to other licensed breweries, micro-distilleries, or liquor manufacturers in this State and that allows the tasting or sales of beer or alcoholic liquors.
(G) Authorization by this section of sales and tastings at a tasting-room premises is expressly intended for the promotion of education regarding production of wine in the State and not to create competition between producers and retailers."
Alcohol content limitations on sale of wines
SECTION 4. Section 61-4-770 of the 1976 Code is amended to read:
"Section 61-4-770. Wines containing more than sixteen and one-half percent of alcohol by volume may be sold only in licensed alcoholic liquor stores or in establishments licensed to sell and permit consumption of alcoholic liquors by the drink."
Alcohol content limitations of wine sampling in retail alcoholic liquor stores
SECTION 5. Section 61-6-1035 of the 1976 Code is amended to read:
"Section 61-6-1035. Notwithstanding the provisions of Section 61-6-1500, the sampling of wines containing over sixteen and one-half percent by volume of alcohol, cordials, and other distilled spirits sold in a retail alcoholic liquor store is authorized if the sampling is conducted as follows:
(1) No sample may be offered from more than four products at one time.
(2) The sample is limited to products from no more than one wholesaler at one time.
(3) No more than one bottle of each of the four products to be sampled may be opened.
(4) The sampling must be held in a designated tasting area of the retail liquor store and all open bottles must be visible at all times. All open bottles must be removed at the conclusion of the tasting.
(5) Samples must be less than one-half ounce for each product sampled.
(6) No person may be served more than one sample of each product.
(7) No sampling may be offered for longer than four hours.
(8) At least ten days before the sampling, a letter detailing the specific date and hours of the sampling must be mailed first class to the South Carolina Law Enforcement Division. The letter must include a copy of a certificate of liability insurance for the manufacturer, the retail establishment, or its agent, conducting the tastings.
(9) No sample may be offered to, or allowed to be consumed by, an intoxicated person or a person under the age of twenty-one years. This person must not be allowed to loiter on the store premises.
(10) The tastings must be conducted by the manufacturer, retailer, or an agent of the manufacturer or retailer, and must not be conducted by a wholesaler, an employee of a wholesaler, or an agent of a wholesaler.
(11) No retail alcoholic liquor store may offer more than one sampling per day.
(12) All product samples used for tastings must be purchased by the retailer from a South Carolina Licensed Wholesaler as required by Section 61-6-100(3).
(13) All associated costs for the tasting must be paid for by the manufacturer, the retailer, or its agent, conducting the tasting.
(14) Mixers, which must be nonalcoholic and carry zero percent of alcohol by weight, may be provided in conjunction with the tasting, but the mixers must be provided free of charge.
(15) Store mixers used, but not sold, in conjunction with tastings."
Alcohol content limitations of wine samplings in certain locations
SECTION 6. Section 61-6-1640 of the 1976 Code is amended to read:
"Section 61-6-1640. Notwithstanding the provisions of this subarticle or any other provision of law, an establishment licensed pursuant to Article 5 of this chapter is authorized to conduct samplings of wines in excess of sixteen and one-half percent alcohol, cordials, and distilled spirits, if the sampling is conducted as follows:
(1) the establishment must have a permanent seating capacity of fifty or more persons;
(2) samples may not be offered from more than four products at any one time;
(3) the sampling must be held in the bar area of a licensed establishment and all open bottles must be visible at all times. All open bottles must be removed at the conclusion of the tasting;