Bill Summary – FastDemocracy

WEST VIRGINIA LEGISLATURE
REGULAR SESSION
              Introduced Senate Bill 534
   By Senators Trump, Takubo, and Maroney [Introduced January 31, 2023; referred to the Committee on the Judiciary]
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  A BILL to amend and reenact §11-16-3, §11-16-6a, §11-16-8, and §11-16-9 of the Code of West
         Virginia, 1931, as amended; to amend and reenact §60-3A-8 of said code; to amend and
         reenact §60-4-3a, §60-4-3b, and §60-4-23 of said code; to amend and reenact §60-7-2 of
         said code; to amend said code by adding thereto three new sections, designated §60-7-2a,
         §60-7-6, and §60-7-8a; to amend said code by adding thereto a new section, designated
         §60-8-6g; and to amend and reenact §60-8A-5 of said code, all relating to nonintoxicating
         beer, nonintoxicating craft beer, cider, wine, and liquor license requirements; to promote
         tourism in the state by permitting authorized brewers, resident brewers, wineries, farm
         wineries, distilleries, mini-distilleries, and micro-distilleries a limited off-site retail privilege
        at private fair and festivals for off-premises consumption sales for nonintoxicating beer,
        nonintoxicating craft beer, cider, wine, and liquor manufactured by the brewers, resident
        brewers, wineries, farm wineries, distilleries, mini-distilleries, and micro-distilleries,
        requirements, requiring payment of taxes, fees and markups, and no license fee; clarifying
        the nonintoxicating beer growler requirements for contents and sealing; clarifying brewer
        and resident brewer place of manufacture requirements for additional places of
        manufacture based on manufacturing volume capacity; clarifying nonintoxicating beer
        license requirements for persons, trusts and fairs and festivals; clarifying retail liquor outlet
        license requirements for applicants; clarifying distilleries, mini-distilleries, and micro-
        distilleries requirements for fairs and festivals; clarifying that the statute applying to
        distilleries and mini-distilleries also applies to micro-distilleries; clarifying that exotic
        entertainment facility applicants and licensees are licensed as various private club license
        types and are charged the same private club license type license fee; clarifying exotic
        entertainment, licensure, and definitions; permitting dually licensed events, and a license
        fee; creating a private coliseum or center license, requirements, definition, use for dual
        licensing, and fee; clarifying dual licensing requirements and authorization for private fair
        and festivals, requirements, and no license fee; permitting private fairs and festivals to
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        conduct on-premises consumption sales with certain requirements; permitting private fairs
        and festivals to allow authorized brewers, resident brewers, wineries, farm wineries,
        distilleries, mini-distilleries, and micro-distilleries to conduct limited off-premises
        consumption retail sales with certain requirements from the private fair and festival’s
        licensed premises; amending the private fair and festival license and revising the license
        fee; and permitting a private wine restaurant to operate a separately licensed but
        connected wine specialty shop.
     Be it enacted by the Legislature of West Virginia:
                                     CHAPTER 11. TAXATION.
     ARTICLE 16. NONINTOXICATING BEER.
     §11-16-3. Definitions.
         For the purpose of this article, except where the context clearly requires differently:
         (1) "Brand" means a nonintoxicating beer product manufactured, brewed, mixed,
  concocted, blended, bottled, or otherwise produced, imported, or transshipped by a brewer or
  manufacturer, the labels of which have been registered and approved by the commissioner, that is
  being offered for sale or sold in West Virginia by a distributor who has been appointed in a valid
  franchise agreement or a valid amendment thereto.
         (2) "Brewer" or "manufacturer" means any person manufacturing, otherwise producing,
  importing, or transshipping nonintoxicating beer or nonintoxicating craft beer for sale at wholesale
  to any licensed distributor. Brewer or manufacturer may be used interchangeably throughout this
 article. A brewer may obtain only one brewer’s license for its nonintoxicating beer or
 nonintoxicating craft beer.
        (3) "Brewpub" means a place of manufacture of nonintoxicating beer or nonintoxicating
 craft beer owned by a resident brewer, subject to federal and state regulations and guidelines, a
 portion of which premises is designated for retail sales of nonintoxicating beer or nonintoxicating
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 craft beer by the resident brewer owning the brewpub.
         (4) "Class A retail license" means a retail license permitting the retail sale of liquor at a
 freestanding liquor retail outlet licensed pursuant to chapter 60 of this code.
         (5) "Class B retail license" means a retail license permitting the retail sale of liquor at a
 mixed retail liquor outlet licensed pursuant to chapter 60 of this code.
         (6) "Commissioner" means the West Virginia Alcohol Beverage Control Administration
 Commissioner.
         (7) "Distributor" means and includes any person jobbing or distributing nonintoxicating
 beer or nonintoxicating craft beer to retailers at wholesale and whose warehouse and chief place
 of business shall be within this state. For purposes of a distributor only, the term "person" means
 and includes an individual, firm, trust, partnership, limited partnership, limited liability company,
 association, or corporation. Any trust licensed as a distributor or any trust that is an owner of a
 distributor licensee, and the trustee or other persons in active control of the activities of the trust
 relating to the distributor license, is liable for acts of the trust or its beneficiaries relating to the
 distributor license that are unlawful acts or violations of §11-16-1 et seq. of this code
 notwithstanding the liability of trustees in §44D-10-1 et seq. of this code.
         (8) "Franchise agreement" means the written agreement between a brewer and a
 distributor that is identical as to terms and conditions between the brewer and all its distributors,
 which agreement has been approved by the commissioner. The franchise agreement binds the
 parties so that a distributor, appointed by a brewer, may distribute all of the brewer’s
 nonintoxicating beer products, brands, or family of brands imported and offered for sale in West
 Virginia, including, but not limited to, existing brands, line extensions, and new brands all in the
 brewer’s assigned territory for the distributor. All brands and line extensions being imported or
 offered for sale in West Virginia must be listed by the brewer in the franchise agreement or a
 written amendment to the franchise agreement. A franchise agreement may be amended by
 mutual written agreement of the parties as approved by the commissioner with identical terms and
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 conditions for a brewer and all of its distributors. Any approved amendment to the franchise
 agreement becomes a part of the franchise agreement. A brewer and a distributor may mutually
 agree in writing to cancel a franchise agreement. A distributor terminated by a brewer as provided
 in this article and the promulgated rules no longer has a valid franchise agreement. If a brewer has
 reached an agreement to cancel a distributor or has terminated a distributor, then a brewer may
 appoint a successor distributor who accedes to all the rights of the cancelled or terminated
 distributor.
         (9) "Franchise distributor network" means the distributors who have entered into a binding
 written franchise agreement, identical as to terms and conditions, to distribute nonintoxicating
 beer products, brands, and line extensions in an assigned territory for a brewer. A brewer may only
 have one franchise distributor network: Provided, That a brewer that has acquired the
 manufacturing, bottling, or other production rights for the sale of nonintoxicating beer at wholesale
 from a selling brewer as specified in §11-16-21(a)(2) of this code shall continue to maintain and be
 bound by the selling brewer’s separate franchise distributor’s network for any of its existing
 brands, line extensions, and new brands.
         (10) "Freestanding liquor retail outlet" means a retail outlet that sells only liquor, wine, beer,
 nonintoxicating beer, and other alcohol-related products, as defined pursuant to §60-3A-4 of this
 code.
         (11) "Growler" means a container or jug that is made of glass, ceramic, metal, or other
 material approved by the commissioner, that may be no larger than 128 fluid ounces in size and
 must be capable of being securely sealed. The growler is utilized by an authorized licensee for
 purposes of off-premise sales only of nonintoxicating beer or nonintoxicating craft beer for
 personal consumption not on a licensed premise and not for resale. The nonintoxicating beer or
 nonintoxicating craft beer served and sold in a sealed growler may include ice or water mixed with
 the nonintoxicating beer or nonintoxicating craft beer to create a frozen nonintoxicating beer or
 nonintoxicating craft beer beverage. Any frozen nonintoxicating beer or nonintoxicating craft beer
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 beverage machine used for filling growlers shall be sanitized daily and shall be under the control of
 the licensee in the secure area, and served to the patron by the licensee from the secure area.
 Notwithstanding any other provision of this code to the contrary, a securely sealed growler is not
 an open container under federal, state, and local law. A growler with a broken seal is an open
 container under federal, state, and local law unless it is located in an area of the motor vehicle
 physically separated from the passenger compartment. The secure sealing of a growler requires
 the use of a tamper-resistant tamper-evident seal, security tape, or other material, as approved by
 the commissioner, placed on or over the growler’s opening, which seal, security tape or other
 material is clearly marked with the date of the secure sealing by the authorized licensee who is
 selling the growler.
        (12) "Line extension" means any nonintoxicating beer product that is an extension of brand
 or family of brands that is labeled, branded, advertised, marketed, promoted, or offered for sale
 with the intent or purpose of being manufactured, imported, associated, contracted, affiliated, or
 otherwise related to a brewer’s existing brand through the use of a brewer, its subsidiaries, parent
 entities, contracted entities, affiliated entities, or other related entities. In determining whether a
 nonintoxicating beer product is a line extension, the commissioner may consider, but is not limited
 to, the following factors: Name or partial name; trade name or partial trade name; logos;
 copyrights; trademarks or trade design; product codes; advertising promotion; or pricing.
        (13) "Manager" means an individual who is the applicant’s or licensee’s on-premises
 employee, member, partner, shareholder, director, or officer who meets the licensure
 requirements of §11-16-1 et seq. of this code and rules promulgated thereunder who actively
 manages, conducts, and carries on the day-to-day operations of the applicant or licensee with full
 and apparent authority or actual authority to act on behalf of the applicant or licensee. Such duties
 include but are not limited to: Coordinating staffing; reviewing and approving payroll; ordering and
 paying for inventory, such as nonintoxicating beer, wine, and liquor, as applicable; and managing
 security staff, security systems, video and other security equipment; and any further acts or
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  actions involved in managing the affairs of the business, on behalf of owners, partners, members,
  shareholders, officers, or directors.
         (14) "Nonintoxicating beer" means all natural cereal malt beverages or products of the
  brewing industry commonly referred to as beer, lager beer, ale and all other mixtures and
  preparations produced by the brewing industry, including malt coolers and nonintoxicating craft
  beers with no caffeine infusion or any additives masking or altering the alcohol effect containing at
  least one half of one percent alcohol by volume, but not more than 11.9 percent of alcohol by
 weight, or 15 percent alcohol by volume, whichever is greater. The word "liquor" as used in chapter
 60 of this code does not include or embrace nonintoxicating beer nor any of the beverages,
 products, mixtures, or preparations included within this definition.
        (15) "Nonintoxicating beer floor plan extension" means a temporary one-day extension of
 an existing Class A licensee’s floor plan to a contiguous, adjoining and bounded area, such as a
 parking lot or outdoor area, which shall for the temporary period encompass the licensee’s
 licensed premises; further the license shall be endorsed or approved by the county or municipality
 where the license is located; the license shall be in good standing with the commissioner, and
 further such temporary event shall cease on or before midnight of the approved temporary one-
 day event.
        (16) "Nonintoxicating beer sampling event" means an event approved by the
 commissioner for a Class A retail licensee to hold a nonintoxicating beer sampling authorized
 pursuant to §11-16-11a of this code.
        (17) "Nonintoxicating beer sampling day" means any days and hours of the week where
 Class A retail licensees may sell nonintoxicating beer pursuant to §11-16-11a and §11-16-18(a)(1)
 of this code, and is approved, in writing, by the commissioner to conduct a nonintoxicating beer
 sampling event.
        (18) "Nonintoxicating craft beer" means any beverage obtained by the natural fermentation
 of barley, malt, hops, or any other similar product or substitute and containing not less than one
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 half of one percent by volume and not more than 15 percent alcohol by volume or 11.9 percent
 alcohol by weight with no caffeine infusion or any additives masking or altering the alcohol effect.
         (19) "Original container" means the container used by a resident brewer or brewer at the
 place of manufacturing, bottling, or otherwise producing nonintoxicating beer or nonintoxicating
 craft beer for sale at wholesale.
         (20) "Person" means and includes an individual, firm, trust, partnership, limited
 partnership, limited liability company, association, or corporation. Any trust listed on a license
 application or that is an owner of a licensee, must list the trustee or other persons in active control
 of the activities of the trust relating to the license, and is liable for acts of the trust or its
 beneficiaries relating to the license that are unlawful acts or violations of §11-16-1 et seq. of this
 code notwithstanding the liability of trustees in §44D-10-1 et seq. of this code. A trust must further
 provide a true and correct written and executed copy of the trust instrument to the commissioner
 for his or her review. The trust instrument is confidential, not a public record and not available for
 release pursuant to the West Virginia Freedom of Information Act set forth in §29B-1-1 et seq. of
 this code.
         (21) "Private club" means a license issued pursuant to §60-7-1 et seq. of this code.
         (22) "Resident brewer" means any brewer or manufacturer of nonintoxicating beer or
 nonintoxicating craft beer whose principal place of business and manufacture is located in the
 State of West Virginia; which may also have multiple manufacturing locations located in West
 Virginia as set forth in §11-16-9 of the code; and which does not brew or manufacture more than
 25,000 barrels of nonintoxicating beer or nonintoxicating craft beer annually at all manufacturing
 locations, and does not self-distribute more than 10,000 barrels thereof in the State of West
 Virginia annually from all manufacturing locations.
         (23) "Retailer" means any person selling, serving, or otherwise dispensing nonintoxicating
 beer and all products regulated by this article, including, but not limited to, malt coolers at his or her
 established and licensed place of business.
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         (24) "Tax Commissioner" means the Tax Commissioner of the State of West Virginia or the
 commissioner’s designee.
      §11-16-6a. Brewer and resident brewer license to manufacture, sell, and provide complimentary samples.
          (a) Legislative findings. — The Legislature hereby finds that it is in th