3. A spouse may have an interest in the alcohol beverage license or permit of the other spouse if specified requirements are satisfied, including that the marriage is governed by a marital property agreement or prenuptial agreement and both spouses execute an affidavit swearing to a lack of involvement in the day-to-day operations of each respective business. A spouse who materially violates a representation in the affidavit may be required to forfeit not more than $1,000.
As discussed above, the bill also eliminates the authority of a winery to hold a retail license and provisions allowing this common interest.
Tied house restrictions
Current law prohibits a brewer, brewpub, or beer wholesaler from furnishing anything of value to a Class “B” licensee, but there are numerous exceptions to this prohibition.
The bill creates an exception under which a brewer, brewpub, or beer wholesaler may enter into a landlordtenant relationship with a Class “B” licensee if the same requirements are satisfied that are referenced in item 2, above, relating to interest restrictions and landlord-tenant relationships.
Production agreements
The bill specifies authority for a brewer, brewpub, winery, manufacturer, or rectifier (producer) to produce alcohol beverages by means of contract production, alternating proprietorship, or licensing agreement and further specifies certain requirements for and consequences of such an arrangement. These arrangements must be established by written agreement, which generally may be entered into only by producers holding the same type of producer’s permit.
The bill defines “contract production” as a contract, agreement, or business arrangement whereby a recipe producer or out-of-state recipe supplier provides consideration to a contract producer for the production, bottling, or labeling of alcohol beverages. In a contract production arrangement, the “contract producer” manufactures, bottles, or labels the alcohol beverages, which are purchased from the contract producer by the “recipe producer” or “out-of-state recipe supplier.” A recipe producer, with an exception, holds the same type of Wisconsin permit as the contract producer, while an out-of-state recipe supplier is a person located in another state that produces alcohol beverages in that state.
The bill specifies that alcohol beverages produced under a contract production arrangement between a contract producer and recipe producer count toward the production volume of the recipe producer, except they may not be considered for purposes of determining a producer’s retail sales authority (discussed above). The recipe producer is considered the producer for purposes of taxation and reporting to the division.
The bill defines an “alternating proprietorship” as an arrangement in which a host producer provides use of space and equipment, and may additionally provide personnel, to a guest producer for the production of alcohol beverages. In this arrangement, a “host producer” provides its production facility to a “guest producer” for the guest producer to use to produce the guest producer’s alcohol beverages. The bill specifies that alcohol beverages produced under an alternating proprietorship count toward the production volume of the guest producer, and the guest producer is considered the producer for purposes of taxation and reporting to the division.
The bill defines a “licensing agreement” as an agreement between a licensor and a producer for the production of alcohol beverages containing the name, symbol, or mark of the licensor. A producer may enter into a written licensing agreement with a licensor authorizing the producer-licensee to use the licensor’s trademark or name if the producer-licensee is entirely responsible for producing the alcohol beverages and for all related processing steps and regulatory requirements.
The bill also specifies that a producer entering into a contract production arrangement, alternating proprietorship arrangement, or licensing agreement does not act as an agent for or in the employ of another with respect to certain provisions of current law.
Common carrier shipments
The bill prohibits a common carrier from transporting or delivering alcohol beverages into or within this state, other than to an alcohol beverage licensee or permittee, unless the common carrier first obtains a permit from the division. This permit authorizes a common carrier only to transport or deliver into or within this state wine on behalf of a person holding a Wisconsin direct wine shipper’s permit, which generally may be an in-state or out-of-state winery, or on behalf of a person holding a fulfillment house permit (discussed below). A common carrier must pay an annual permit fee of $1,000. A common carrier that fails to obtain a permit prior to commencing delivery of alcohol beverages in this state is subject to a fine of not more than $10,000. A common carrier that ships alcohol beverages other than wine obtained from a direct wine shipper permittee or fulfillment house permittee is subject to a forfeiture of not more than $2,000, and the division must revoke the common carrier’s permit if the common carrier violates this prohibition in more than one month during a calendar year.
The bill also requires a common carrier that holds a common carrier permit to submit a monthly report to the division that includes all of the following information for each shipment of alcohol beverages during the preceding month: 1) the name and address of the manufacturer of the alcohol beverages; 2) the name and address of the consignor of the shipment, if different from the manufacturer; 3) the name and address of the consignee of the shipment; 4) the date of the shipment; 5) the type and quantity of alcohol beverages shipped to the consignee, as reported to the common carrier; and 6) the parcel tracking number for the shipment. The division must keep confidential the name and address of the consignee and the parcel tracking number, but other information in the reports is not confidential and is subject to the public records law. A common carrier required to submit reports under the bill must maintain for three years all records related to the reports. A common carrier that fails to submit a required report is subject to a forfeiture of not more than $2,000.
Fulfillment houses and direct wine shipping
Under current law, DOR may issue a direct wine shipper’s permit to any person that manufactures and bottles wine on premises covered by a winery permit, manufacturer’s permit, or rectifier’s permit issued by DOR; a winery license issued by another state; or a federal winery permit. A direct wine shipper’s permit issued by DOR authorizes the permittee to ship wine directly to an individual in this state who is of the legal drinking age, who acknowledges receipt of the wine shipped, and who is not intoxicated at the time of delivery.
Current law, with limited exceptions, prohibits a person from shipping alcohol beverages into this state unless the person holds an out-of-state shipper’s permit issued by DOR and the alcohol beverages are shipped to an in-state wholesaler. However, one exception allows an out-of-state winery to ship wine directly to a consumer in this state if the winery holds a direct wine shipper’s permit.
The bill requires a person operating a fulfillment house to obtain from the division a fulfillment house permit for each location that is involved in the process of shipping wine to Wisconsin residents. A “fulfillment house” is defined as any entity, whether located in this state or elsewhere, that handles logistics, including warehousing, packaging, order fulfillment, or shipping services, on behalf of a direct wine shipper permittee for wine that is eligible to be shipped to individuals in this state. A person holding a fulfillment house permit may provide services only for the warehousing, packaging, order fulfillment, and shipment of alcohol beverages produced by and belonging to a direct wine shipper permittee.
Under the bill, a fulfillment house permittee must ensure that all containers of wine shipped directly to an individual in this state are labeled with all of the following information: 1) the words “CONTAINS ALCOHOL: SIGNATURE OF PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY”; 2) the name, address, and permit number of the fulfillment house permittee; and 3) the name, address, and permit number of the direct wine shipper permittee on whose behalf the wine is shipped.
The bill prohibits a fulfillment house permittee from shipping into this state wine from any person not holding a direct wine shipper’s permit. A fulfillment house permittee may ship wine into this state only by using a common carrier that holds a common carrier permit issued by the division. Prior to shipping wine to an individual in this state, a fulfillment house permittee must verify the validity of the direct wine shipper’s permit and common carrier permit associated with the direct-to-consumer shipment. A fulfillment house that fails to obtain a required fulfillment house permit is subject to a fine of not more than $10,000. A fulfillment house that ships alcohol beverages other than wine obtained from a direct wine shipper permittee is subject to a forfeiture of not more than $2,000. The division must revoke the permit of a fulfillment house that violates this prohibition in more than one month during a calendar year.
The bill requires a fulfillment house permittee to submit a monthly report to the division that includes all of the following information for each shipment of alcohol beverages during the preceding month: 1) the name and address of the manufacturer of the alcohol beverages; 2) the name and address of the consignor of the shipment, if different from the manufacturer; 3) the name and address of the consignee of the shipment; 4) the date of the shipment; 5) the type and quantity of alcohol beverages shipped to the consignee; and 6) the parcel tracking number for the shipment. The division must keep confidential the name and address of the consignee and the parcel tracking number, but other information in the reports is not confidential and is subject to the public records law. A fulfillment house required to submit reports under the bill must maintain for three years all records related to the reports. A fulfillment house that fails to submit a required report is subject to a forfeiture of not more than $2,000.
The bill allows a direct wine shipper permittee (including a Wisconsin winery holding such a permit) to arrange with a fulfillment house to ship wine on the direct wine shipper permittee’s behalf only if the fulfillment house holds a fulfillment house permit. The bill also requires a direct wine shipper permittee to use a common carrier holding a common carrier permit in shipping any container of wine directly to an individual in this state.
The bill also creates a fulfillment house exception to the current law provision that generally prohibits any person from shipping alcohol beverages into this state unless the person holds an out-of-state shipper’s permit issued by DOR and the alcohol beverages are shipped to an in-state wholesaler.
The bill also specifies that a direct wine shipper permittee may ship directly to an individual in this state only wine manufactured or bottled by the permittee.
Jurisdiction over out-of-state permittees; violation of another state’s law
Current law provides for the issuance of the following alcohol beverage permits to persons located outside this state: 1) an out-of-state beer shipper’s permit; 2) an out-of-state liquor shipper’s permit; and 3) a direct wine shipper’s permit. Subject to various restrictions, an out-of-state beer shipper’s permit authorizes a person located outside this state to ship beer into this state to a person holding a beer wholesaler’s permit. An out-of-state liquor shipper’s permit, subject to various restrictions, authorizes a person located outside this state to ship intoxicating liquor into this state to a person holding a liquor wholesaler’s permit, a manufacturer’s or rectifier’s permit, or a winery permit. As discussed more fully above, a direct wine shipper’s permit authorizes direct-to-consumer wine shipments from in-state or out-of-state wineries to individuals in this state.
The bill requires holders of out-of-state beer shippers’ permits, out-of-state liquor shippers’ permits, and direct wine shippers’ permits who are located outside of this state to consent to jurisdiction in this state for proceedings to enforce this state’s alcohol beverage laws. These permittees must also accept service of process for proceedings in this state to enforce this state’s alcohol beverage laws. To this end, these permittees must satisfy specified requirements relating to appointing and maintaining in this state an agent for service of process. The bill also includes other provisions relating to requirements imposed on these permittees.
The bill also authorizes the division to revoke or suspend an alcohol beverage license or permit if the licensee or permittee ships alcohol beverages into another state in violation of that state’s law.
Consumption of alcohol beverages in a public place
Under current law, an owner or other person in charge of a public place may not permit the consumption of alcohol beverages on the premises of the public place unless the person has an appropriate retail license. Current law does not define “public place” for purposes of this provision, but current law defines “premises” as the area described in an alcohol beverage license or permit. There are various exceptions to this prohibition, including for county parks, athletic fields and stadiums, and churches, and also for municipalities and clubs.
The bill specifies that, for purposes of this prohibition, a “public place” includes a venue, location, open space, room, or establishment that is 1) accessible and available to the public to rent for an event or social gathering; 2) held out for rent to the public for an event or social gathering; or 3) made available for rent to a member of the public for an event or social gathering. However, a public place does not include any of the following: 1) a room in a hotel, motel, or bed and breakfast that is used for overnight accommodations; 2) vacation rental property, or other property of temporary lodging, that is used for overnight accommodations if the property is furnished with sufficient beds for all adult guests to sleep; 3) a campsite on a campground; 4) a parking lot, driveway, or yard where vehicles may be parked on the same day as a professional or collegiate sporting event or other ticketed event open to the public; or 5) property within a local professional football stadium or baseball park district if the property is used in connection with, and on the same day as, a professional football or baseball game, or other ticketed event open to the public, held at the football stadium or baseball park.
The bill also allows an owner or other person in charge of a public place to permit the consumption of alcohol beverages if the person has obtained a no-sale event venue permit issued by the division (discussed below). The bill further clarifies that the public place prohibition discussed above applies on all property, not just on licensed premises.
No-sale event venue permit
The bill creates a no-sale event venue permit issued by the division to property owners authorizing the permittee to rent or lease real property for use as an event venue at which beer and wine are consumed on no more than six days per year and one day per month. A permittee may not sell or otherwise provide alcohol beverages to the renter or lessee of the event venue or a guest or attendee of the event, nor may the permittee allow any person to possess distilled spirits on the event venue when the event venue is being used by a renter or lessee. Subject to certain restrictions, a no-sale event venue permit authorizes the permittee to do any of the following: 1) allow the renter or lessee of the event venue to bring the renter’s or lessee’s own beer and wine onto the event venue and serve it to guests without charge; 2) allow the guests of the renter or lessee to bring beer and wine onto the event venue to be consumed by the guests without charge; 3) allow the renter or lessee to obtain temporary Class “B” and “Class B” licenses for an event held on the event venue and sell beer and wine under the temporary licenses on the event venue; or 4) allow the renter or lessee to contract with a licensed caterer for the caterer to provide beer and wine to the renter or lessee and guests without charge on the event venue. If the renter or lessee contracts with a caterer, the renter or lessee and guests may not bring alcohol beverages onto the event venue. The renter or lessee must first purchase the beer and wine in a face-to-face transaction on the caterer’s retail licensed premises. The caterer may then deliver and serve the alcohol beverages at the event venue, but service must be performed by licensed bartenders.
Under the bill, the lessee or renter of an event venue may not sell any alcohol beverages to guests or attendees of an event on the event venue, including charging admission for an event at which alcohol beverages are served, unless the lessee or renter has obtained a temporary retail license. The lessee or renter may not allow any person to possess distilled spirits on the event venue. If there are 20 or more people on the event venue, service of beer and wine must be performed by a licensed bartender.
A no-sale event venue permit may be issued to a person who holds a retail license but may not be issued to a person who holds a permit as a brewer, brewpub, winery, manufacturer or rectifier, beer wholesaler, liquor wholesaler, out-of-state beer shipper, or out-of-state liquor shipper.
Quota exception for certain persons opting out of no-sale event venue permit
Current law imposes a quota on the number of “Class B” 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. Current law also provides a limited number of quota exceptions.
The bill creates a quota exception for an event venue that the division has certified as meeting specified criteria. Under the bill, a “qualifying event venue” is defined as real property that is rented or leased for use as an event venue for private events, and, under the definition, in the prior 12-month period, there must have been at least five events held at the venue at which at least 50 invited guests attended and the venue owner must have received at least $20,000 in revenue from renting or leasing the venue for these events. Upon application, the division must certify an owner of a qualifying event venue as eligible for the quota exception if 1) the venue is and has been in operation for the 12-month period preceding the application; 2) the venue has not been a retail licensed premises during this 12-month period; 3) the venue owner has not applied for a no-sale event venue permit; 4) the venue owner provides documentation that the municipality in which the venue is located has reached its liquor license quota; 5) the venue owner provides documentation showing, and the division confirms, that the venue meets the definition of a qualifying event venue and has been in operation as described in item 1 above; and 6) the venue owner provides notice to the division within 60 days after the bill’s effective date that the owner is applying for a “Class B” license and is not seeking a no-sale event venue permit. The division must act on an application for certification within 30 days of the application. A municipality may issue for a certified venue an above-quota “Class B” license under this quota exception only if the license application is received by approximately six months after the bill’s effective date. In general, if a “Class B” license issued under this quota exception is revoked or not renewed, the municipality may not reissue the license. However, the municipality may reissue the license under certain circumstances if the event venue property or business is sold.
“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.”
