2023 Wisconsin Act 73

73,26gs Section 26gs. 125.545 (2) (a) 1. of the statutes is amended to read:

125.545 (2) (a) 1. A cooperative wholesaler may only be created as provided under s. 185.043 (2) and this section. Each cooperative wholesaler operating under authority of this section shall be organized under ch. 185 but shall be subject to the limitations on such cooperatives imposed by this section. Subject to subd. subds. 3. and 4., only small wineries and small manufacturers may be members of a cooperative wholesaler. The principal purpose of a cooperative wholesaler shall be to sell and distribute wine intoxicating liquor manufactured, blended, or mixed, and also bottled, by its members.

73,26gt Section 26gt. 125.545 (2) (a) 3. b. of the statutes is amended to read:

125.545 (2) (a) 3. b. The small winery is certified by the department division under sub. (6) (a) as a small winery.

73,26gu Section 26gu. 125.545 (2) (a) 4. of the statutes is created to read:

125.545 (2) (a) 4. A small manufacturer may become a member of a cooperative wholesaler only if the small manufacturer is certified by the division under sub. (6) (a) as a small manufacturer.

73,26gv Section 26gv. 125.545 (2) (b) of the statutes is amended to read:

125.545 (2) (b) In addition to the requirements specified in s. 185.31 for the board of directors of a cooperative wholesaler, a director representing a member that is a Wisconsin winery or Wisconsin manufacturer shall be either an owner or an employee of that Wisconsin winery or Wisconsin manufacturer. If any out-of-state winery or out-of-state manufacturer is a member of the cooperative wholesaler, at least one director shall be either an owner or an employee of an out-of-state winery or out-of-state manufacturer that is a member of the cooperative wholesaler.

73,26gw Section 26gw. 125.545 (2) (c) of the statutes is amended to read:

125.545 (2) (c) Notwithstanding any provision of ch. 185, a cooperative wholesaler may not employ any owner or employee of a member. However, an individual that is an owner or an employee of a member may act as a volunteer to assist that cooperative wholesaler in the sale and distribution of wine intoxicating liquor to retailers and other wholesalers in the manner authorized under this section.

73,26gx Section 26gx. 125.545 (3) (a) 1. of the statutes is amended to read:

125.545 (3) (a) 1. Within 7 days after filing its articles of incorporation under ch. 185, a cooperative wholesaler shall apply to the department division for a wholesaler’s permit under s. 125.54. The provisions of s. 125.04 (5) (c) and (6) shall apply to a cooperative wholesaler as if the cooperative wholesaler were a corporation or a limited liability company and, for each of these provisions, the department division shall determine whether the cooperative wholesaler is most similar to a corporation or a limited liability company in the context of that provision and apply that provision to the cooperative wholesaler accordingly.

73,26hb Section 26hb. 125.545 (3) (a) 2. of the statutes is amended to read:

125.545 (3) (a) 2. Notwithstanding s. 125.54 (6), the department division may issue not more than one wholesaler’s permit to any cooperative wholesaler. The department division may not issue more than a total of 6 wholesalers’ permits to cooperative wholesalers in this state. The department division may not issue any new wholesaler’s permit to a cooperative wholesaler after December 31, 2008, but may renew wholesalers’ permits that were initially issued to cooperative wholesalers prior to that date.

73,26hc Section 26hc. 125.545 (3) (a) 2. of the statutes, as affected by 2023 Wisconsin Act .... (this act), is amended to read:

125.545 (3) (a) 2. Notwithstanding s. 125.54 (6), the division may issue not more than one wholesaler’s permit to any cooperative wholesaler. The division may not issue more than a total of 6 wholesalers’ permits to cooperative wholesalers in this state. The Except as provided in subd. 2m., the division may not issue any new wholesaler’s permit to a cooperative wholesaler after December 31, 2008, but may renew wholesalers’ permits that were initially issued to cooperative wholesalers prior to that date.

73,26hd Section 26hd. 125.545 (3) (a) 2m. of the statutes is created to read:

125.545 (3) (a) 2m. The division may issue new wholesalers’ permits to cooperative wholesalers after the effective date of this subdivision .... [LRB inserts date], but not later than the first day of the 7th month beginning after the effective date of this subdivision .... [LRB inserts date], and may renew wholesalers’ permits that were initially issued to cooperative wholesalers during this period. The division may not issue new wholesalers’ permits under this subdivision that cause the total number of wholesalers’ permits issued to cooperative wholesalers in this state to exceed 6.

73,26he Section 26he. 125.545 (3) (b) of the statutes is amended to read:

125.545 (3) (b) 1. Notwithstanding s. 125.54 (1), and except as provided in subd. 3., a cooperative wholesaler issued a wholesaler’s permit under par. (a) is authorized to sell and distribute only wine intoxicating liquor. Except as provided in subd. 3., a cooperative wholesaler may not sell or distribute any alcohol beverages, or any other product, except wine intoxicating liquor.

2. A cooperative wholesaler shall purchase on consignment wine intoxicating liquor from its members to be resold to retailers and other wholesalers. Notwithstanding s. 125.69 (5), a cooperative wholesaler may not purchase wine intoxicating liquor from any person other than a member. A cooperative wholesaler may not resell or distribute wine intoxicating liquor unless it has been purchased on consignment from a member. Notwithstanding s. 125.54 (1), a cooperative wholesaler may not sell or distribute wine intoxicating liquor except to a retailer or to a wholesaler holding a permit under s. 125.54.

3. A cooperative wholesaler may purchase ancillary wine industry trade goods such as bottles, corks, and other supplies used by wineries or manufacturers in the bottling and sale of wine intoxicating liquor if such trade goods do not include any alcohol beverages. Any wine industry trade goods purchased by a cooperative wholesaler under this subdivision may be offered for resale to the cooperative wholesaler’s members or to any winery or manufacturer that was formerly a member of the cooperative wholesaler.

4. A cooperative wholesaler shall work with all of its members on evenhanded terms. Any preferential treatment by a cooperative wholesaler for the benefit of a member that is a Wisconsin winery or Wisconsin manufacturer, and any discrimination against a member that is an out-of-state winery or out-of-state manufacturer, is prohibited.

73,26hf Section 26hf. 125.545 (3) (c) of the statutes is amended to read:

125.545 (3) (c) Neither a cooperative wholesaler nor its members are subject to any restriction on dealings under s. 125.69 (1) between wholesalers and wineries or manufacturers. Except as provided in s. 125.54 (7) (e) and as otherwise provided in this section, all provisions of this chapter and ch. 139 that apply to a wholesaler issued a permit under s. 125.54 also apply to a cooperative wholesaler issued a permit under s. 125.54.

73,26hg Section 26hg. 125.545 (4) of the statutes is amended to read:

125.545 (4) Exclusive distribution. A member of a cooperative wholesaler may make its wine intoxicating liquor available for purchase by a retailer or another wholesaler only through the cooperative wholesaler of which it is a member. A member of a cooperative wholesaler may not sell its wine intoxicating liquor directly to any other wholesaler or directly to a retailer.

73,26hi Section 26hi. 125.545 (5) of the statutes is amended to read:

125.545 (5) Biennial reports. With each application for renewal of a wholesaler’s permit issued to a cooperative wholesaler, each cooperative wholesaler shall file with the department division, in the form and manner prescribed by the department division by rule, a biennial report that includes detailed information on its members, board of directors, and sale and distribution activities.

73,26hj Section 26hj. 125.545 (6) (title) and (a) 1. and 2. of the statutes are amended to read:

125.545 (6) (title) Department Division certification and rule making.

(a) 1. The department division shall, upon application, certify eligible applicants as small wineries and renew prior certifications of eligible applicants as small wineries.

2. Any winery seeking to become a member of, or to maintain its membership in, a cooperative wholesaler may apply to the department division for certification as a small winery. If the winery meets the definition of a small winery under this section, satisfies the requirement under sub. (2) (a) 3. a., and submits any other information that the department division determines is necessary to certify that the winery is operating as a small winery and is eligible for membership in a cooperative wholesaler, the department division shall certify the winery as a small winery. This certification shall remain valid for one year.

73,26hk Section 26hk. 125.545 (6) (a) 1. of the statutes, as affected by 2023 Wisconsin Act .... (this act), is amended to read:

125.545 (6) (a) 1. The division shall, upon application, certify eligible applicants as small wineries or small manufacturers and renew prior certifications of eligible applicants as small wineries or small manufacturers.

73,26hm Section 26hm. 125.545 (6) (a) 2m. of the statutes is created to read:

125.545 (6) (a) 2m. Any manufacturer seeking to become a member of, or to maintain its membership in, a cooperative wholesaler may apply to the division for certification as a small manufacturer. If the manufacturer meets the definition of a small manufacturer under this section and submits any other information that the division determines is necessary to certify that the manufacturer is operating as a small manufacturer and is eligible for membership in a cooperative wholesaler, the division shall certify the manufacturer as a small manufacturer. This certification shall remain valid for one year.

73,26hn Section 26hn. 125.545 (6) (a) 3. of the statutes is amended to read:

125.545 (6) (a) 3. In certifying any winery under subd. 2., the department division shall classify the winery as either a Wisconsin winery or an out-of-state winery.

73,26ho Section 26ho. 125.545 (6) (a) 3m. of the statutes is created to read:

125.545 (6) (a) 3m. In certifying any manufacturer under subd. 2m., the division shall classify the manufacturer as either a Wisconsin manufacturer or an out-of-state manufacturer.

73,26hp Section 26hp. 125.545 (6) (a) 4. of the statutes is amended to read:

125.545 (6) (a) 4. The department division shall refuse to certify under this paragraph any winery that cannot demonstrate it holds all necessary permits for its operations or that the department division finds is otherwise not in full compliance with the laws of this state.

73,26hq Section 26hq. 125.545 (6) (a) 4. of the statutes, as affected by 2023 Wisconsin Act .... (this act), is amended to read:

125.545 (6) (a) 4. The division shall refuse to certify under this paragraph any winery or manufacturer that cannot demonstrate it holds all necessary permits for its operations or that the division finds is otherwise not in full compliance with the laws of this state.

73,26hr Section 26hr. 125.545 (6) (b) of the statutes is amended to read:

125.545 (6) (b) The department division shall promulgate rules to administer and enforce the requirements under this section.

73,26hs Section 26hs. 125.545 (7) of the statutes is amended to read:

125.545 (7) Penalties. (a) Any winery that sells or distributes its wine directly to a retailer, rather than through a wholesaler or cooperative wholesaler, is subject to a fine of not more than $10,000 and revocation of all of its permits by the department division under s. 125.12 (5).

(b) Any cooperative wholesaler that provides preferential treatment to a Wisconsin winery or discriminates against an out-of-state winery is subject to a fine of not more than $10,000 and revocation of its wholesaler’s permit by the department division under s. 125.12 (5).

73,26ht Section 26ht. 125.545 (7) of the statutes, as affected by 2023 Wisconsin Act .... (this act), is amended to read:

125.545 (7) Penalties. (a) Any winery or manufacturer that sells or distributes its wine intoxicating liquor directly to a retailer, rather than through a wholesaler or cooperative wholesaler, is subject to a fine of not more than $10,000 and revocation of all of its permits by the division under s. 125.12 (5).

(b) Any cooperative wholesaler that provides preferential treatment to a Wisconsin winery or Wisconsin manufacturer or discriminates against an out-of-state winery or out-of-state manufacturer is subject to a fine of not more than $10,000 and revocation of its wholesaler’s permit by the division under s. 125.12 (5).

73,26hu Section 26hu. 125.55 (1) of the statutes is amended to read:

125.55 (1) The department division may issue a combination manufacturer’s and rectifier’s permit.

73,26hv Section 26hv. 125.56 (2) (a) of the statutes is amended to read:

125.56 (2) (a) The department division shall issue sacramental wine permits to organized religious bodies authorizing them to purchase for their own use sacramental wine from any permittee under s. 125.52 (1), 125.53 or 125.54. A permit under this subsection does not authorize the resale of sacramental wine by the permittee.

73,26hw Section 26hw. 125.56 (2) (c) of the statutes is amended to read:

125.56 (2) (c) Shipments of sacramental wine shall be conspicuously labeled “for sacramental purposes” and shall meet any other requirements the department division prescribes by rule.

73,26hx Section 26hx. 125.56 (2) (d) of the statutes is amended to read:

125.56 (2) (d) A sacramental wine permit shall be issued free of charge by the department division and is not subject to s. 125.04 (11) (a).

73,26hy Section 26hy. 125.58 (1) of the statutes is amended to read:

125.58 (1) The department division shall issue out-of-state shippers’ permits which authorize persons located outside this state to sell or ship intoxicating liquor into this state. Except as provided under sub. subs. (4) and (5), intoxicating liquor may be shipped into this state only to a person holding a wholesaler’s permit under s. 125.54 or, if shipped from a manufacturer or rectifier in another state holding a permit under this section, to a person holding a manufacturer’s or rectifier’s permit under s. 125.52 or a winery permit under s. 125.53. Except as provided under sub. subs. (4) and (5), a separate out-of-state shipper’s permit is required for each location from which any intoxicating liquor is sold or shipped into this state, including the location from which the invoices are issued for the sales or shipments. Any person holding an out-of-state shipper’s permit issued under this section may solicit orders for sales or shipments by the permittee without obtaining the sales solicitation permit required by s. 125.65, but every agent, salesperson or other representative who solicits orders for sales or shipments by an out-of-state shipper shall first obtain a permit for soliciting orders under s. 125.65. No holder of an out-of-state shipper’s permit issued under this section may sell intoxicating liquor in this state or ship intoxicating liquor into this state unless the out-of-state shipper is the primary source of supply for that intoxicating liquor.

73,26hz Section 26hz. 125.58 (2) of the statutes is renumbered 125.58 (2) (a).

73,26jb Section 26jb. 125.58 (2) (b) and (c) of the statutes are created to read:

125.58 (2) (b) 1. Unless the permittee or agent of the permittee appointed under s. 125.04 (6) is a resident of this state, or unless the permittee maintains a registered agent in this state under s. 180.0501, 180.1507, 183.0105, or 183.1007, a permittee under this section shall appoint and continually engage the services of an agent in this state to act as agent for the service of process on whom all processes, and any action or proceeding against the permittee concerning or arising out of the enforcement of any provision of this chapter or ch. 139, may be served in any manner authorized by law. That service shall constitute legal and valid service of process on the permittee. The permittee shall provide to the division, in the form and manner prescribed by the division, the name, address, phone number, and proof of the appointment and availability of the agent.

2. The permittee shall provide notice to the division 30 calendar days before termination of the authority of an agent under subd. 1. and shall provide proof to the satisfaction of the division of the appointment of a new agent no less than 5 calendar days before the termination of an existing agent appointment. In the event an agent terminates an agency appointment, the permittee shall notify the division of that termination within 5 calendar days and shall include proof to the satisfaction of the division of the appointment of a new agent.

3. If a permittee fails to maintain an agent in this state after a permit is issued under this section, the permittee is considered to have appointed the department of financial institutions as the permittee’s agent, and the permittee may be proceeded against in courts of this state by service of process upon the department of financial institutions.

(c) The application for a permit under this section shall include a provision that the permittee agrees to do all of the following:

1. File reports, provide records, and allow inspections and examinations to the extent provided in s. 125.025 and ch. 139.

2. Pay the expenses reasonably attributable to inspections and examinations made by the division at the premises of the permittee located outside this state.

3. Accept service of process and consent to jurisdiction in any proceeding in this state to enforce the provisions of this chapter or ch. 139.

73,26jc Section 26jc. 125.58 (5) of the statutes is created to read:

125.58 (5) A fulfillment house located outside this state that holds a permit under s. 125.23 may ship wine into this state as provided in s. 125.23 and is not required to hold an out-of-state shipper’s permit under this section.

73,26jd Section 26jd. 125.60 (1) of the statutes is amended to read:

125.60 (1) The department division may issue a wholesale alcohol permit which authorizes the permittee to sell ethyl alcohol of 190 proof or more to persons holding permits or licenses issued under s. 125.61 or 125.62. Nothing in this section requires manufacturers, rectifiers and wholesalers holding permits issued under s. 125.52 (1) or 125.54 to obtain a wholesale alcohol permit.

73,26je Section 26je. 125.61 (1) of the statutes is amended to read:

125.61 (1) The department division may issue a medicinal alcohol permit which authorizes the permittee to purchase and use alcohol for medicinal purposes only. The permit may be issued only to persons who prove to the department division that they use alcohol for medicinal purposes.

73,26jf Section 26jf. 125.61 (3) of the statutes is amended to read:

125.61 (3) Shipments of medicinal alcohol shall be conspicuously labeled “for medicinal purposes” and shall meet other requirements which the department division prescribes by rule.

73,26jg Section 26jg. 125.61 (4) of the statutes is amended to read:

125.61 (4) A medicinal permit shall be issued free of charge by the department division and is not subject to s. 125.04 (11) (a).

73,26jh Section 26jh. 125.62 (1) of the statutes is amended to read:

125.62 (1) The department division may issue an industrial alcohol permit which authorizes the permittee to purchase and use alcohol for industrial purposes only. Such permits may be issued only to persons who prove to the department division that they use alcohol for industrial purposes.

73,26ji Section 26ji. 125.62 (3) of the statutes is amended to read:

125.62 (3) Shipments of industrial alcohol shall be conspicuously labeled “for industrial purposes” and shall meet other requirements which the department division prescribes by rule.

73,26jk Section 26jk. 125.63 (1) of the statutes is amended to read:

125.63 (1) The department division may issue an industrial wine permit which authorizes the purchase and use of wine for industrial purposes only. An industrial wine permit may be issued only to persons who prove to the department division that they use wine for industrial purposes.

73,26jm Section 26jm. 125.63 (3) of the statutes is amended to read: