2012 -- H 7301

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LC00932

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO ALCOHOLIC BEVERAGES -- MANUFACTURING AND WHOLESALE

LICENSES

     Introduced By: Representatives Nunes, Tanzi, Marcello, Hearn, and Keable

     Date Introduced: February 01, 2012

     Referred To: House Corporations

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 3-6-1.1 and 3-6-1.2 of the General Laws in Chapter 3-6 entitled

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"Manufacturing and Wholesale Licenses" are hereby amended to read as follows:

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     3-6-1.1. Farmer-winery licenses -- Fee. -- (a) For the purpose of encouraging the

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development of domestic vineyards, the department shall issue a farmer-winery license to any

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applicant of the state and to applying partnerships and to applying corporations organized under

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the laws of any other state of the United States and admitted to do business in this state.

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      (b) A winegrower may operate a farmer's winery under any conditions the department

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may prescribe by regulation.

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      (c) A winegrower may import fruit, flowers, herbs, and vegetables to produce not more

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than seven thousand five hundred (7500) fifteen thousand (15,000) gallons of wine during his or

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her first year two (2) years of operation, not more than five thousand (5000) ten thousand

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(10,000) gallons during his or her second year third or fourth years of operation, not more than

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two thousand five hundred (2500) five thousand (5,000) gallons during his or her third year fifth

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and sixth years of operation and not more than one thousand (1000) two thousand (2,000) gallons

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per year thereafter.

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      (d) If a winegrower suffers crop failure in his or her vineyard in a particular year to the

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extent that the fruit yield from his or her vineyard that year is at least twenty-five percent (25%)

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below the average yield for the previous two (2) years, the winegrower may import fruit into the

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state during that year in an amount equal to the difference between the current year's yield and the

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average for the previous two (2) years. A winegrower shall not import unfermented juice, wine or

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alcohol into the state.

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      (e) A winegrower may sell wine or winery products under his or her label and fermented

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by him or her or another winegrower licensed by the state. He or she may sell wine or winery

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products:

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      (1) At wholesale to any person holding a valid license to manufacture alcoholic

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beverages;

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      (2) At wholesale to any person holding a valid wholesaler's and importer's license under

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sections 3-6-9 -- 3-6-11;

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      (3) At wholesale to any person holding a valid farmer-winery license under this section;

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      (4) At retail by the bottle to consumers for consumption off the winery premises;

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provided, however a winegrower shall not sell wine at retail for delivery off the site of the winery

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premises in Rhode Island directly to Rhode Island residents, except in the manner provided for

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like sales and shipment in section 3-4-8.

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      (5) At wholesale to any person in any state or territory in which the importation and sale

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of wine is not prohibited by law;

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      (6) At wholesale to any person in any foreign country;

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      (7) At wholesale to liquor dealers holding a valid license under the provisions of title 3;

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      (8) At wholesale to restaurants holding a valid license under the provisions of title 3; and

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      (9) At retail by the bottle or by the glass for consumption on the winery premises. ; and

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     (10) At retail by the bottle at a farmer’s market.

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      (f) A winegrower may not sell at retail to consumers any wine or winery product not

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fermented in the state and sold under the brand name of the winery.

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      (g) A winegrower may serve complimentary samples of wine produced by the winery

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where the wine is fermented in the state and sold under the winery brand name.

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      (h) All wines sold by a licensee shall be sold under any conditions and with any labels or

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other marks to identify the producer as the department may prescribe.

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      (i) Every applicant for a farmer-winery license shall, at the time of filing an application,

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pay a license fee based on a reasonable estimate of the amount of wine to be produced during the

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year covered by the license. Persons holding farmer-winery licenses shall report annually at the

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end of the year covered by the license the amount of wine produced during that year. If the total

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amount of wine produced during the year is less than the amount permitted by the fee already

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paid, the state shall reimburse the licensee for whatever fee was paid in excess. If the total amount

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of wine produced during the year exceeds the amount permitted by the fee already paid, the

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licensee shall pay whatever additional fee is owing.

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     3-6-1.2. Brewpub manufacturer's license. -- (a) A brewpub manufacturer's license shall

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authorize the holder to establish and operate a brewpub within this state. The brewpub

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manufacturer's license shall authorize the retail sale of the beverages manufactured on the

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location for consumption on the premises. The license shall not authorize the retail sale of

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beverages from any location other than the location set forth in the license. A brewpub may sell at

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retail alcoholic beverages produced on the premises by the half-gallon bottle known as a

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"growler" to consumers for off the premises consumption to be sold pursuant to the laws

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governing retail Class A establishments.

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      (b) The license shall also authorize the sale at wholesale at the licensed place by the

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manufacturer of the product of his or her licensed plant as well as beverages produced for the

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brewpub and sold under the brewpub's name to a holder of a wholesaler's license and the

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transportation and delivery from the place of sale to the licensed wholesaler or to a common

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carrier for that delivery.

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      (c) The brewpub manufacturer's license further authorizes the sale of beverages

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manufactured on the premises to any person holding a valid wholesaler's and importer's license

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under section 3-6-9 or 3-6-11.

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     (d) The brewpub manufacturer’s license shall further authorize the sale of beverages at

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any farmer’s market.

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      (d)(e) The annual fee for the license is one thousand dollars ($1,000) for a brewpub

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producing more than fifty thousand (50,000) gallons per year and five hundred dollars ($500) per

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year for a brewpub producing less than fifty thousand (50,000) gallons per year. The annual fee is

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prorated to the year ending December 1 in every calendar year and paid to the division of taxation

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and turned over to the general treasurer for the use of the state.

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     SECTION 2. Chapter 3-6 of the General Laws entitled "Manufacturing and Wholesale

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Licenses" is hereby amended by adding thereto the following section:

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     3-6-1.3. Farmer-brewery licenses. -- (a) For the purpose of encouraging the

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development of domestic farms, the department shall issue a farmer-brewery license to any

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applicant who is both a citizen and resident of the state and to applying partnerships composed

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solely of such individuals, and to applying corporations or other types of entities organized under

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the laws of the state or organized under the laws of any other state of the United States and

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admitted to do business in the state unless:

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     (1) Such person does not comply with the application procedures required by the

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department; or

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     (2) The department determines that such person is not of responsible character; or

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     (3) A place of worship or school located within five hundred feet (500’) of the brewery

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premises has objected to issuance of the license; or

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     (4) The department determines that the applicant retains or owns an interest, directly or

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indirectly, in more than one business licensed hereunder; or

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     (5) The applicant has not furnished the requisite license fee or bond; or

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     (6) The department determines that the owners, or corporate officials of the applicant do

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not meet the foregoing requirements, or that the manager or agent intended to conduct the farmer-

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brewery business on the applicant’s behalf does not meet such requirements, or that such owners

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or officials, agent or manager remain undisclosed.

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     (b) The department may, on its own motion, and shall upon the written request of any

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applicant who has been refused a farmer-brewery license or has been refused transfer or renewal

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of such a license, hold an evidentiary hearing, notice of which shall be mailed to the applicant at

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the address given in the application. The department shall present its reasons for refusing

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issuance. The applicant may appear in person or by counsel, may cross-examine witnesses and

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may present evidence. The hearing shall be stenographically or sound recorded. If the hearing is

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conducted by an examiner, the examiner shall report on the hearing to the department. The

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department shall decide within thirty (30) days of the completion of the hearing whether to issue

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the farmer-brewery license or grant the transfer or renewal. If the department refuses the license,

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transfer or renewal, notice in writing of the refusal shall be mailed to the applicant. In all such

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cases, the department shall keep on file a statement in the form of an opinion of the reasons for

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the refusal, and shall furnish a copy thereof to the applicant.

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     (c) Any applicant who has appeared before the department at such a hearing and who has

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been refused a farmer-brewery license or the transfer or renewal of such a license may appeal to

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the superior court of the county where the applicant resides or has its principal place of business

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within the state.

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     (d) Every applicant for an original brewery license or for a transfer of such a license

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shall, within seven (7) days after filing an application with the department, send written notice of

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his application by registered mail, return receipt requested, to:

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     (1) Each school which offers instruction and training to children of compulsory school

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age which is located within a radius of five hundred feet (500’) from the premises on which the

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brewery is to be operated; and

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     (2) Each place of worship is located within a radius of five hundred feet (500’) from such

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premises.

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     The notice shall also state that the place of worship or school has the right to object to the

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issuance or transfer of the brewery license. If the authorities in charge of any such school or place

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of worship complain to the commission in writing that a brewery license has been issued or

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transferred without the mailing of the requisite notice, and that they object to such issuance or

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transfer, the department shall hold a hearing to determine whether the requisite notice was mailed.

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If after a hearing the department determines that notice was not mailed as required, then the

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department shall cancel the farmer-brewery license unless such school or place of worship had

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actual notice, prior to issuance or transfer, of the application and of the right to object, or such

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school or department did not complain after actual notification of the application and of the right

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to object.

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     Any farmer-brewer aggrieved by the cancellation of its license or any school or place of

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worship aggrieved by the department’s refusal to cancel such a license may appeal as provided

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herein.

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     (e) A farmer-brewer may operate a farmer’s brewery under such conditions as the

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department may prescribe by regulation.

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     (f) A farmer-brewer may import malt, cereal grains fermentable, sugars and hops, but

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may not import malt beverages or alcohol into the state.

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     (g) A farmer-brewer may sell malt beverages or malt beverage products:

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     (1) At wholesale to any person holding a valid wholesaler’s license to manufacture

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alcoholic beverages;

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     (2) At wholesale to any person holding a valid wholesaler’s and importer’s license;

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     (3) At wholesale to any person holding a valid farmer-brewer license under this section;

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     (4) At wholesale in kegs, casks, barrels or bottles to any person holding a license to sell

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and, for the sole purpose of resale in containers in which the product was delivered, to any person

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holding a license to sell; provided that the total annual sales to such licensees shall not exceed

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fifty thousand (50,000) gallons;

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     (5) At wholesale to churches and religious societies, educational institutions, incorporated

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hospitals, homes for the aged or manufactures of food products;

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     (6) At retail by the bottle to consumers for consumption off the brewery premises;

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     (7) At wholesale to any person in any state in which the importation and sale of malt

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beverages is not prohibited by law;

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     (8) At wholesale to any person in any foreign country; and

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     (9) At retail at any farmer’s market.

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     (h) A farmer-brewer may not sell at retail to consumers any malt beverage or malt

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beverage product not produced by the brewery or produced for the brewery and sold under the

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brewery brand name.

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     (i) A farmer-brewer may be licensed by a local licensing authority to sell malt beverages

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for consumption on the brewery premises in accordance with such regulations as the department

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may prescribe.

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     (j) All malt beverages sold by a licensee hereunder shall be sold and delivered in such

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manner and under such conditions and with such labels or other marks to identify the producer as

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the department may prescribe.

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     (k) Every farmer-brewer under this section shall keep such records as the department may

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prescribe, and shall file with the department, whenever and as often as it may require copies of

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such records. The department shall at all times, through its designated officers or agents, have

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access to all books, records or other documents of every licensed farmer-brewer relating to the

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licensee’s brewery business.

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     (l) The annual fee for the license is one thousand dollars ($1,000) for a farmer-brewer

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producing more than fifty thousand (50,000) gallons per year and five hundred dollars ($500) per

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year for a farmer-brewer producing less than fifty thousand (50,000) gallons per year. The annual

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fee is prorated to the year ending December 1 in every calendar year and paid to the division of

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taxation to be turned over to the general treasurer for the general fund.

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     SECTION 3. This act shall take effect upon passage.

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LC00932

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO ALCOHOLIC BEVERAGES -- MANUFACTURING AND WHOLESALE

LICENSES

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     This act would allow brewers and winegrowers to sell their products at farmer’s markets

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and would also increase the amounts of ingredients that may imported to produce double the

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amounts of wine currently allowable during the first years of operation. This act would also

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establish a farmer-brewer license.

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     This act would take effect upon passage.

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LC00932

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