AB304: Bill Text

“Class C” retail licenses

Under current law, a “Class C” license may be issued for a restaurant in which the sale of alcohol beverages accounts for less than 50 percent of gross receipts and that either does not have a barroom or has a barroom in which wine is the only intoxicating liquor sold. A “Class C” license authorizes the retail sale of wine by the glass or in an opened original container for consumption on the retail premises. A “Class C” license may not be issued to a foreign corporation or a foreign limited liability company.

The bill eliminates the limitation that a “Class C” license may be issued only for a restaurant. The bill also removes the prohibition on issuing a “Class C” license to a foreign corporation or foreign LLC.

Retailer purchases of beer from nonwholesaler

Under current law, with exceptions for certain sales of beer by brewers and brewpubs, a retail licensee may not purchase alcohol beverages from, or possess alcohol beverages purchased from, any person other than a wholesaler. If a retail licensee purchases or possesses beer in violation of this prohibition, the penalty that may be imposed is a fine of not more than $10,000 or imprisonment for not more than nine months or both.

The bill changes this penalty. If a retail licensee purchases or possesses beer in violation of the prohibition, the penalty that may be imposed (or must be imposed if item 3, below, applies) is one of the following:

1. If a Class “B” licensee purchases beer from a Class “A” licensee for resale or possesses beer purchased from a Class “A” licensee for resale, a fine of not more than $100.

2. If item 1 does not apply and the total volume of beer purchased or possessed in one month is 4,320 fluid ounces (15 cases) or less, a forfeiture of not more than $100.

3. If neither item 1 nor item 2 applies, a fine of not more than $10,000 or imprisonment for not more than nine months or both.

Cooperative wholesalers

Under current law, between October 1 and December 31, 2008, DOR was authorized to issue liquor wholesalers’ permits to small winery cooperatives (cooperative wholesalers). DOR was limited to issuing a total of six such permits. Only wineries certified by DOR as small wineries can be members of a cooperative wholesaler. A “small winery” is defined as a winery that produces and bottles less than 25,000 gallons of wine in a calendar year. The only alcohol beverage product a cooperative wholesaler can sell and distribute is the wine of its members, and this wine can be sold or distributed only to retailers or other wholesalers.

The bill changes the definition of a small winery so that a winery that produces and bottles in a calendar year less than 50,000 gallons of wine, rather than 25,000 gallons, may be a member of a cooperative wholesaler.

The bill also allows manufacturers and rectifiers that produce and bottle less than 50,000 gallons of intoxicating liquor in a calendar year to be members of a cooperative wholesaler. The cooperative wholesaler may sell and distribute the intoxicating liquor of its members. The bill allows for the formation of new cooperative wholesalers for approximately six months after the bill’s effective date, but the division may not issue new wholesalers’ permits that cause the total number of wholesalers’ permits issued to cooperative wholesalers to exceed six.

Eliminating the permit limit for manufacturers, rectifiers, and wholesalers

Under current law, DOR may not issue more than two manufacturers’ or rectifiers’ permits to any one person, and DOR may not issue more than two liquor wholesalers’ permits to any one person.

The bill eliminates this two-permit limit for manufacturers’ and rectifiers’ permits and liquor wholesalers’ permits.

Transfer of beer wholesaler’s permit to a different location

Current law specifies that most alcohol beverage licenses and permits may be transferred to a different location within the same municipality, but certain permits, including an intoxicating liquor wholesaler’s permit, may be transferred to a different location within the state.

The bill specifies that a beer wholesaler’s permit may be transferred to a different location within the state, not just within the same municipality.

Safe ride program

Current law imposes a safe ride program surcharge of $50 upon a person convicted of operating a vehicle while under the influence of an intoxicant, with a detectable amount of a restricted controlled substance in one’s blood, or with a prohibited alcohol concentration. The bill increases the amount of the safe ride program surcharge to $75.

The bill also requires a municipality to provide to a person initially issued a Class “B,” “Class B,” or “Class C” license information regarding the safe ride program.

Occupational taxes on alcohol beverages

Under current law, the state imposes an occupational tax on selling intoxicating liquor in this state. An occupational tax is also imposed upon the removal for consumption or sale of beer. However, no tax is imposed on the sale or shipment of beer by a brewer to a bottler or of intoxicating liquor in bulk between manufacturers, rectifiers, and wineries. A manufacturer that ships intoxicating liquor in bulk to a rectifier for the purpose of bottling or rectifying must affix a label or statement that the shipment is made for the purpose of bottling or rectifying.

The bill specifies that no occupational tax is imposed on the sale or shipment of beer between brewers or on the sale or shipment of intoxicating liquor, whether in bulk or any state of packaging, between manufacturers, rectifiers, and wineries. The bill further specifies that a manufacturer or rectifier shipping intoxicating liquor to another manufacturer or rectifier, whether in bulk or in any state of packaging, must affix a label or statement that the shipment is a tax-exempt transfer.

Definition of fermented malt beverages

Under current law, alcohol beverages that do not meet the definition of fermented malt beverages are considered intoxicating liquor. “Fermented malt beverages” are defined as any beverage made by the alcohol fermentation of an infusion in potable water of barley malt and hops, with or without unmalted grains or decorticated and degerminated grains or sugar containing 0.5 percent or more of alcohol by volume.

The bill expands the definition of a fermented malt beverage to include any beverage that is recognized under federal regulations as beer, except sake or similar products.

Leaving restaurant with unfinished bottle of wine

Current law allows a restaurant holding a “Class B” or “Class C” retail license to allow a customer to take from the licensed premises an opened, unfinished bottle of wine if certain requirements are satisfied, including that, prior to the opened, partially consumed bottle of wine being removed from the licensed premises, the restaurant securely reinserts the cork into the bottle to the point where the top of the cork is even with the top of the bottle.

The bill allows an opened, unfinished bottle of wine to be removed from the restaurant if, among the other requirements, it is recapped with the original cap, rather than recorked.

The bill also allows, subject to the same requirements applicable to a retailer, an opened, unfinished bottle of wine to be removed from a restaurant at a full-service retail outlet of a brewer, winery, manufacturer, or rectifier if the full-service retail outlet is authorized to sell wine.

Permit fees

Under current law, with some exceptions, fees for alcohol beverage permits issued by DOR are not established by statute. DOR has established fees for some, but not all, permits issued by DOR.

The bill establishes an annual permit fee of $500 for any permit for which DOR has not previously established a fee.

Operators’ permits issued by the division

Under current law, municipalities issue operators’ licenses. An operator’s license is valid in the municipality that issued it. Although a person is not required to hold an operator’s license to provide alcohol beverages on retail licensed premises, a retail licensee may not be open for business unless the licensee, the designated agent of a corporate licensee, or a person who possesses an operator’s license or manager’s license is present and responsible for the acts of all persons providing alcohol beverages on the premises.

The bill requires the division to issue operators’ permits. An operator’s permit is subject to the same standards for issuance as an operator’s license and is the functional equivalent of an operator’s license except that an operator’s permit is valid throughout Wisconsin.

Transfers of retail liquor licenses from one municipality to another

Current law imposes a quota on the number of “Class B” liquor licenses that a municipality may issue. This quota is generally determined by a formula based on the number of licenses previously issued by the municipality and the municipality’s population. For purposes of the quota system, a reserve “Class B” license is a “Class B” liquor license first issued on or after December 1, 1997. Current law allows a municipality to transfer a reserve “Class B” liquor license to another municipality that is contiguous with, or within two miles of, the transferring municipality. The receiving municipality may then issue the license for a premises within that municipality. The quota of the transferring municipality is decreased, and the quota of the receiving municipality is increased, for each license transferred. A municipality may transfer no more than three reserve “Class B” licenses in this manner.

The bill eliminates the restriction that a municipality may only transfer a reserve “Class B” liquor license to a contiguous municipality or a municipality located within two miles of the transferring municipality. Instead, the bill allows a municipality to transfer a reserve “Class B” liquor license to another municipality located in the same county as the transferring municipality.

Retail closing hours during a national political convention

As discussed above, current law generally requires a Class “B” or “Class B” licensed retailer to be closed between the hours of 2 a.m. and 6 a.m. on weekdays and between 2:30 a.m. and 6 a.m. on Saturday and Sunday. The closing hours for a “Class C” licensed retailer are generally the same as those for a “Class B” licensed retailer. As discussed above, the bill establishes the same closing hours for a producer’s full-service retail outlets and prohibits retail sales of alcohol beverages during these hours on the producer’s production premises.

The bill creates a closing hour exception, during a 2024 national political convention in Milwaukee, for Class “B,” “Class B,” and “Class C” licensed retailers, and for producers’ full-service retail outlets and production premises, located in Kenosha, Racine, Walworth, Rock, Milwaukee, Waukesha, Jefferson, Dane, Ozaukee, Washington, Dodge, Columbia, Sheboygan, or Fond du Lac County. Under the bill, during the convention period, the closing hours are between 4 a.m. and 6 a.m. However, a municipality may designate a retailer or producer as ineligible or disqualified for the extended closing hour and may, by ordinance, opt out of the extended closing hour during the convention. The bill does not affect the hours during which a retailer or producer may make sales for off-premises consumption.

Licensing exception for beer provided on brewery premises

Current law includes various licensing exceptions under which a person may provide alcohol beverages to the public without obtaining a license or permit. One exception allows the furnishing, by brewers, of beer free of charge to customers, visitors, and employees on the brewery premises if the beer is consumed on the brewery premises.

The bill removes from this exception the requirement that the beer be consumed on the brewery premises.

Retail licenses for, and underage persons at, axe throwing facilities

Current law generally prohibits the issuance of a Class “B” license for any premises where another business is conducted. Because a Class “B” license is a prerequisite for a “Class B” license, this provision also affects “Class B” licensed premises. There are, however, exceptions to the prohibition, including for a movie theater, a painting studio, and a “bowling center or recreation premises.”

The bill creates an exception allowing a Class “B” license to be issued for an axe throwing facility. The bill defines “axe throwing facility” as an establishment that provides customers with a venue to engage in the activity of axe throwing and that 1) derives at least 51 percent of its revenue from fees associated with axe throwing or 2) maintains at the venue at least five axe throwing lanes.

Under current law, with various exceptions, a person who is under 21 years of age and not accompanied by his or her parent, guardian, or spouse of legal drinking age (unaccompanied underage person) may not enter or be on any premises for which a retail license is issued. Among the various exceptions, an unaccompanied underage person may enter or be on a licensed premises that is a bowling center, movie theater, painting studio, golf course, or any of the following if certain criteria are met: billiard center, indoor golf simulator facility, indoor golf and baseball facility, athletic field, indoor or outdoor volleyball court, or private fishing farm.

The bill creates an additional exception allowing an unaccompanied underage person to enter or be on a Class “B” or “Class B” licensed premises that is an axe throwing facility.

Preparation and storage of premixed cocktails by “Class B” retailers

Under current law, a “Class B” license authorizes the retail sale of intoxicating liquor for consumption on the licensed premises or, if sold in a tamper-evident container sealed by the licensee, for consumption off the licensed premises (commonly referred to as “cocktails-to-go”). (See the Background section above for further discussion of a “Class B” licensee’s authorization and limitations.) Current law prohibits any person from refilling an original container that had previously been used for intoxicating liquor containing 21 percent or more of alcohol by volume and from possessing a refilled original container on “Class B” licensed premises.

Under current law, DOR may, by rule, prescribe the standard size, form, or character of any container in which intoxicating liquor is sold, but DOR may not set the size of containers in which distilled spirits are sold at a capacity greater than 1.75 liters. DOR’s rules prohibit, with exceptions, a manufacturer, rectifier, wholesaler, or retailer from possessing distilled spirits in a container that is more than 1.75 liters in capacity.

Also under current law, a person may not operate as a rectifier without holding a rectifier’s permit issued by DOR. A “rectifier” includes a producer engaged in blending, mixing, or bottling intoxicating liquor.

The bill provides express authority for a “Class B” licensee to prepare, store, and dispense mixed drinks prior to their retail sale for on-premises consumption or as a cocktail-to-go. However, there are some limitations on this authority. Under the bill, a “Class B” licensee may, on the licensed premises, prepare, store, and dispense mixed drinks, prior to such a retail sale, if all of the following apply: 1) the mixed drink is provided to the consumer in a glass or other container not exceeding 72 ounces in volume; 2) the mixed drink has not been stored for more than 48 hours; 3) if the mixed drink is stored in or dispensed from a container exceeding 1.75 liters in volume (bulk container), the bulk container does not exceed 5 gallons in volume and is labeled in compliance with the requirements set forth below; 4) the licensee has complied with the current law requirement that intoxicating liquor may be purchased only from a wholesaler; 5) the licensee has complied with the current law prohibition against refilling liquor bottles or possessing refilled liquor bottles and has also not stored the mixed drink in or dispensed the mixed drink from a wine bottle; and 6) the licensee has complied with any other applicable state or federal food safety regulation and also with any federal alcohol regulation, which currently imposes limitations on premixing cocktails and on activities involving distilled spirits in containers exceeding one gallon. The bill creates an exception to the current law limitation on a retailer’s possession of distilled spirits in a container exceeding 1.75 liters and specifies that a “Class B” licensee that prepares, stores, or dispenses mixed drinks in compliance with the bill’s requirements is not a rectifier.

Under the bill, the division must prescribe the form of the label to be used by “Class B” licensees for bulk containers in which mixed drinks are stored or from which they are dispensed. This form must require the licensee to disclose on the label that the container holds a batch of premixed drinks and the date and time the batch was prepared; the “expiration date” of the batch (the date and time that is 48 hours after the batch was prepared); the words “contains alcohol”; the name of the person who prepared the batch; and the ingredients of the batch, unless the label contains a recipe title and the recipe, with a complete ingredient list, is maintained on the licensed premises and available for inspection.

Because this bill creates a new crime or revises a penalty for an existing crime, the Joint Review Committee on Criminal Penalties may be requested to prepare a report.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

AB304,,4 The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB304,1 Section 1. 15.433 (2) of the statutes is created to read:

AB304,,6 15.433 (2) Division of alcohol beverages. (a) There is created a division of alcohol beverages attached to the department of revenue under s. 15.03. The administrator of the division shall be appointed outside the classified service. The administrator of the division shall be nominated by the secretary of revenue and with the advice and consent of the senate appointed, to serve at the pleasure of the secretary of revenue.

AB304,,7 (b) There is created within the division of alcohol beverages separate bureaus dedicated to enforcement, legal services, and education and community outreach, with each bureau headed by a director who reports to, and serves at the pleasure of, the division administrator.

AB304,2 Section 2. 19.42 (13) (q) of the statutes is created to read:

AB304,,9 19.42 (13) (q) The administrator and employees of the division of alcohol beverages.

AB304,3 Section 3. 20.923 (4) (c) 7. of the statutes is created to read:

AB304,,11 20.923 (4) (c) 7. Revenue, department of; division of alcohol beverages: administrator.

AB304,4 Section 4. 125.02 (1g) of the statutes is created to read:

AB304,,13 125.02 (1g) “Axe throwing facility” means an establishment that provides customers with a venue to engage in the activity of axe throwing and that either derives at least 51 percent of its revenue from fees associated with axe throwing or maintains at the venue at least 5 axe throwing lanes.

AB304,5 Section 5. 125.02 (5g) of the statutes is created to read:

AB304,,15 125.02 (5g) “Division” means the division of alcohol beverages in the department.

AB304,6 Section 6. 125.02 (6) of the statutes is renumbered 125.02 (6) (intro.) and amended to read:

AB304,,17 125.02 (6) (intro.) “Fermented malt beverages” means any of the following:

AB304,,18 (a) Any beverage made by the alcohol fermentation of an infusion in potable water of barley malt and hops, with or without unmalted grains or decorticated and degerminated grains or sugar containing 0.5 percent or more of alcohol by volume.

AB304,7 Section 7. 125.02 (6) (b) of the statutes is created to read:

AB304,,20 125.02 (6) (b) Any beverage recognized by the federal department of the treasury as beer under 27 CFR part 25, except sake or similar products.

AB304,8 Section 8. 125.02 (6d) of the statutes is created to read:

AB304,,22 125.02 (6d) “Fulfillment house” means any entity, whether located in this state or elsewhere, that handles logistics, including warehousing, packaging, order fulfillment, or shipping services, on behalf of a person holding a direct wine shipper’s permit under s. 125.535 for wine that is eligible to be shipped to individuals in this state.

AB304,9 Section 9. 125.02 (6g) of the statutes is created to read:

AB304,,24 125.02 (6g) “Full-service retail sales” means retail sales of fermented malt beverages or intoxicating liquor, for on-premises or off-premises consumption, or the provision of taste samples of fermented malt beverages or intoxicating liquor, or any combination of these activities.

AB304,10 Section 10. 125.02 (12) of the statutes is amended to read:

AB304,,26 125.02 (12) “Peace officer” means a sheriff, undersheriff, deputy sheriff, police officer, constable, marshal, deputy marshal or any employee of the department division or of the department of justice authorized to act under this chapter.

AB304,11 Section 11. 125.02 (13) of the statutes is amended to read:

AB304,,28 125.02 (13) Except as provided in ss. 125.27 (6) and 125.51 (5) (g), “permit” means any permit issued by the department division under this chapter.

AB304,12 Section 12. 125.02 (14m) of the statutes is amended to read:

AB304,,30 125.02 (14m) “Premises” means the area described in a license or permit, excluding a permit issued under s. 125.175.