The Thirsty Beagle: SB 383 would flip Oklahoma's alcohol law script

Monday, May 16, 2016

SB 383 would flip Oklahoma's alcohol law script

You're probably a busy guy (or gal). Between keeping the lawn mowed, taking out the trash and trying to turn your children (if you have any) into productive and thoughtful human beings, you probably wouldn't have time to read all 276 pages and 198 sections of Senate Bill 383.

I, on the other hand, apparently don't have to worry about any of that stuff -- hope you turn out great son! -- because I did take the time to read over all 276 pages of the preliminary version of the bill.

To be clear, this bill -- a complete re-write of Oklahoma's alcohol laws -- is a long way from home. It hasn't even been formally introduced at this point. It must make it out of committees in both the Senate and House, then be approved by both the full Senate and House. Then be signed by the governor.

And even then, it only goes into effect if Senate Joint Resolution 68 is approved by a vote of the people in November. And even then, that assumes SJR 68 is passed through the Legislature and actually referred to the election ballot.

There's a good chance it could be changed before it's formally introduced. There's also a good chance it'll be changed after it's formally introduced. There's even a chance it won't be formally introduced at all this session.

Clearly, we're a long way from here to there. I also know that many key stakeholders are reviewing the bill and will most assuredly suggest changes. So take what I'm about to share with a grain of salt -- it could come out differently in the wash (how many cliches can I put in one sentence?).

At the very least, however, what I'm about to share provides a good idea of the direction we could be headed when it comes to our alcohol laws.

So, what is SB 383 all about? A majority of the 198 sections have to do with rules and licensing and the structure and duties of the ABLE Commission, etc. I would wager a guess that most of the bill would not interest the general public.

I'm going to focus on the parts that would interest the average alcoholic beverage consumer, and, frankly, that interested me. Let's dive in.

First and foremost, the bill goes into effect only if SJR 68 is passed. All but one section of the bill would then go into effect on Oct. 1, 2018. One section, Section 4, which would recreate the ABLE Commission, would go into effect one year earlier, on Oct. 1, 2017.

Possibly the biggest change as far as consumers are concerned would be the times and days when alcohol could be sold (Section 143). Retail sales of spirits, wine or beer could be conducted from 10 a.m. to 2 a.m., seven days a week -- Monday through Sunday -- and on election days, but not on Thanksgiving Day or Christmas Day.

And here's another biggie: The bill says nobody younger than 21 would be allowed in a liquor store, unless that person is accompanied by someone 21 or older (also Section 143). So, SB 383 would allow you to take your child into the liquor store with you.

(Blogger's note: Sen. Stephanie Bice responded to this post on Facebook this morning saying that days and times of sales will be changed and children in package stores will be changed. Like I've warned -- a lot can still change.)

We heard Sen. Stephanie Bice tell The Oklahoman a few weeks back that SB 383 would require anyone selling alcohol be at least 18 years old. That is in the bill, in Section 33, and it covers those working in licensed package stores; retail spirits, retail wine or retail beer establishments; brew pubs; mixed-beverage establishments; beer and wine establishments; bottle clubs; public events; or any establishment where alcoholic beverages are sold, mixed or served.

The bill would create a small brewer license (Section 14) that would allow for the sale of beer for either on- or off-premise consumption to consumers on the brewery premises, or on premises located contiguous to the brewery. It would also allow brewers to sell beer at trade shows or festivals, to serve up to 12 ounces of free samples and to hold a small brewer self-distribution license.

SB 383 would allow liquor stores to serve up to 2 ounces of free samples of spirits per day (Section 21A). It would allow grocery or convenience stores to sell wine not exceeding 15 percent ABV (Section 21B) and would allow grocery and convenience stores to sell beer not exceeding 8.99 percent ABV (Section 21C). So, no Bomb!, Hoptometrist or Territorial Reserve Oak Aged Imperial Stout, for example, would be allowed at the grocery store.

The bill would establish a brewpub license (Section 44) that would allow someone to manufacture, bottle, package and store beer on premise; sell beer to a distributor; sell beer for on- or off-premise consumption to consumers on the brewery premises, or premises located contiguous to the brewery; sell beer at trade shows or festivals; hold a mixed-beverage license, beer and wine license or caterer's license; and hold a brewpub self-distribution license. So you could do beer, food, wine, mixed drinks -- plus have the ability to sell your beer in other retail outlets.

Note as well that the small brewer license and the brewpub license both allow beer sales at trade shows or festivals. This puts brewers on level ground with winemakers, and will probably make stuff like the State Fair a lot more interesting for craft beer fans.

For all you homebrewers out there, Section 52 offers an annual personal use permit for the production and possession of beer, fermented non-distilled cider or wine. The permit holder would be limited to possession of less than 200 gallons of each of those beverages.

More liquor store stuff: Section 68 says that no person could hold an interest in more than two liquor stores. It also allows liquor stores to sell anything available at a grocery or convenience store -- except for petroleum products -- so long as the sale of such items does not comprise more than 20 percent of total monthly sales. So, liquor stores couldn't become gas stations, and vice versa.

Last thing I'll go over are Sections 77 and 78 -- those deal with distribution of beer. The bill would require beer manufacturers to have written agreements with distributors designating specific territories within which those distributors may sell the brewer's designated brands (Section 77). Per Section 78, the brewer could only have one licensed distributor for each designated sales territory; distributors who are distributing low-point beer that now will become high-point beer would be compensated for losing the right to distribute the low-point beer; and low-point manufacturers would be allowed to continue distributing low-point beer in two distribution territories pending future legislative action.

(That last part I thought was interesting -- it seems to say that Budweiser, for example, could continue to distribute its own low-point beer, but perhaps would not be allowed to distribute its own high-point beer. If Budweiser opts not to sell low-point beer in Oklahoma anymore, which you would assume they would, that leaves them not distributing any of their own beer, which is what they got all worked up about in the first version of SJR 68. Maybe I'm reading it wrong? Either way, with the bill not going into effect until October 2018 at the earliest, that may give the Legislature enough time to strip Budweiser of self-distribution rights before any of this even matters. If not, I'm sure we'll hear about it from Anheuser-Busch. They have been known to be quite vocal when they are upset.)

So, those were the high points for me. I'll continue to look at the bill and convey anything else I see that is interesting. Please, please, please remember that this bill is subject to change.

Now, for your reading pleasure, please see a section-by-section summary of everything in the bill. Some of the more mundane stuff I didn't spell out. If you have questions about any particular section that is not spelled out, drop me a line in the comments and I'll look it up for you.

Sec. 1: Establishing the Oklahoma Alcoholic Beverages Control Act.
Sec. 2: Definitions; defining purpose of OABCA
Sec. 3: Definitions; defining the ABLE Commission, etc.
Sec. 4: Recreating the ABLE Commission
Sec. 5: Definitions; ABLE Commission
Sec. 6: Definitions; ABLE Commission
Sec. 7: Definitions; ABLE Commission
Sec. 8: Definitions; ABLE Commission
Sec. 9: Definitions; ABLE Commission
Sec. 10: Definitions; ABLE Commission
Sec. 11: Definitions; licensing
Sec. 12: Definitions; licensing
Sec. 13: Definitions; licensing and fees
Sec. 14: Small brewer license; can sell beer for either on- or off-premise consumption to consumer on the brewery premises, or on premises located contiguous thereto; can sell beer at trade shows or festivals; can serve up to 12 ounces of free samples of beer per day; can hold a small brewer self-distribution license
Sec. 15: Distiller license
Sec. 16: Winemaker license
Sec. 17: Winemaker self-distribution license
Sec. 18: Rectifier license
Sec. 19: Wine and spirits wholesale license
Sec. 20: Beer distributor license
Sec. 21A: Retail spirits license; can sell wine, spirits or beer; can serve up to 2 ounces of free samples of spirits per day
Sec. 21B: Retail wine license; can sell wine; cannot sell wine with an ABV in excess of 15 percent
Sec. 21C: Retail beer license; can sell beer; cannot sell beer with an ABV in excess of 8.99 percent
Sec. 22: Mixed beverage license
Sec. 23: Bottle club license
Sec. 24: Caterer license
Sec. 25: Caterer license
Sec. 26: Annual special event license
Sec. 27: Special event license
Sec. 28: Hotel beverage license
Sec. 29: Hotel beverage license
Sec. 30: Airline/railroad beverage license
Sec. 31: Airline/railroad beverage license
Sec. 32: Wholesaler's agent license
Sec. 33: Employee license; can work in licensed package store, retail spirits, retail wine or retail beer establishment, brew pub, mixed beverage establishment, beer and wine establishment, bottle club, public event or any establishment where alcohol or alcoholic beverage are sold, mixed or served; must be at least 18 years old.
Sec. 34: Industrial license
Sec. 35: Carrier license
Sec. 36: Private carrier license
Sec. 37: Bonded warehouse license
Sec. 38: Storage license
Sec. 39: Sacramental wine supplier license
Sec. 40: On-premises beer and wine license
Sec. 41: Charitable auction or charitable alcoholic beverage event license
Sec. 42: Mixed beverage/caterer combination license
Sec. 43: Small farm winery license
Sec. 44: Brewpub license; can manufacture, bottle, package and store beer on premises; can sell beer to distributor; can sell beer for on- or off-premise consumption to consumers on the brewery premises, or premises located contiguous thereto; can sell beer at trade shows or festivals; also can hold a mixed beverage license, beer and wine license or caterer's license; can hold a brewpub self-distribution license.
Sec. 45: Licensing, laws, ABLE Commission
Sec. 46: Additional hours license; can serve alcohol from 6 a.m. to 10 a.m.
Sec. 47: Licensing, rules for out-of-state alcoholic beverages
Sec. 48: Manufacturer's agent license
Sec. 49: Licensing rules
Sec. 50: Licensing/purchsing rules
Sec. 51: Licensing; proximity to churches and schools (300 feet); colleges or universities may waive requirement in certain circumstances; listing certain exceptions
Sec. 52: Annual personal use permit; can make, store, possess and transport for personal use beer, fermented non-distilled ciders and wine; total volume of each beverage made and possessed shall be less than 200 gallons; beverages cannot be sold or offered for sale.
Sec. 53: Publishing intent to apply for license
Sec. 54: Licesning rules
Sec. 55: License application process
Sec. 56: License application process
Sec. 57: Licensing rules
Sec. 58: Licensing rules
Sec. 59: Licensing rules
Sec. 60: Licensing rules
Sec. 61: Licensing denial
Sec. 62: Licensing denail, recourse
Sec. 63: ABLE Commission hearings
Sec. 64: Appeal of ABLE Commission order
Sec. 65: Licensing rules
Sec. 66: Display of licenses in conspicuous place
Sec. 67: Transfer of licenses
Sec. 68: Retail spirit license; no person may own any interest in more than two package stores; retail spirit license holder shall be permitted to sell at retail any item that may be purchased at a grocery store or convenience store, except for petroleum products, so long as such sales do not comprise more than 20 percent of the holder's monthly sales.
Sec. 69: Winemaker, small farm winery distribution, sales
Sec. 70: Suspending licenses due to natural disaster, civil disturbance
Sec. 71: General rules
Sec. 72: Packaging, labeling rules
Sec. 73: General, licensing rules
Sec. 74: Defining a keg; establishing rules for sale, return of kegs
Sec. 75: Out-of-state wine shipments
Sec. 76: Direct wine shipper's permit
Sec. 77: Sales and distribution of beer; written distributor agreements between manufacturers and distributors designating specific territories within which distributors may sell designated brands
Sec. 78: Beer distribution rules; manufacturer must enter into agreement with independent licensed distributor; can have only one licensed distributor for each designated sales territory; low-point beer distribtion; distribution of brand extensions (low-point beer changed to full-strength beer); establishing compensation/fair-market value rates for distributors losing distribution rights; allowing low-point manufacturers to continue distributing low-point beer in two territories pending future legislative action
Sec. 79: Distribution rules
Sec. 80: Distribution rules
Sec. 81: Terminating a distribution agreement
Sec. 82: Operation and maintenance of a brewpub
Sec. 83: Small brewer; choosing to use distributor or self-distribute to retailers; can sell directly to consumers if holding a brewpub license; can serve samples of beer between 10 a.m. and 2 a.m.
Sec. 84: Retailers and brewpubs authorized to sell beer for off-premise consumption; must sell beer in package/container it was received in
Sec. 85: Beer distributor may withdraw beer for quality control purposes
Sec. 86: Manufacture/sale/distribution rules
Sec. 87: Retailer; sale of alcoholic beverage with promotional items
Sec. 88: Retail alcohol sales; cannot be sold for less than 6 percent mark-up; some exceptions
Sec. 89: Relationship between certain license holders and retailers
Sec. 90: Relationship between certain license holders and package stores, manufacturers and wholesalers
Sec. 91: Relationship between certain license holders
Sec. 92: Interactive entertainment facility rules
Sec. 93: Preventing discrimination in alcoholic beverage prices
Sec. 94: Sale of alcoholic beverages by the individual drink for on-premise consumption
Sec. 95: Prohibition of some alcohol sales between 2 a.m. and 10 a.m.
Sec. 96: Prohibition of some alcohol sales between 2 a.m. and 10 a.m.
Sec. 97: Bottle club rules
Sec. 98: Rights of municipalities to enact certain ordinances
Sec. 99: Rights of municipalities/counties to suspend/revoke licenses
Sec. 100: Rights of municipalities/counties to create new zoning classifications
Sec. 101: Rights of municipalities to levy occupational tax
Sec. 102: Rights of counties to levy occupational tax
Sec. 103: Duty of entities to enforce OABCA
Sec. 104: Levy/imposition of excise tax
Sec. 105: Excise tax rules
Sec. 106: Excise tax exemptions/conditions
Sec. 107: Revenue from excise tax; general fund; revolving funds
Sec. 108: Gross receipt tax
Sec. 109: Gross receipt tax; general fund
Sec. 110: Mixed beverage tax permit; Oklahoma Tax Commission
Sec. 111: Tax reporting rules
Sec. 112: Oklahoma Tax Commission; stamps; excise tax
Sec. 113: Payment of excise tax by brewer or beer distributor
Sec. 114: Wholesaler/distributor reports to Oklahoma Tax Commission
Sec. 115: Wholesaler/distributor permits
Sec. 116: Wholesaler/distributor permits
Sec. 117: Remedy/penalty for tax evasion/avoidance
Sec. 118: Examination of licensed premises by ABLE, Oklahoma Tax Commission
Sec. 119: Seizure of alcoholic beverage upon which taxes have not been paid
Sec. 120: Sale of seized alcoholic beverages
Sec. 121: Penalty for possession of certain alcoholic beverages
Sec. 122: Sale/shipment/delivery of certain alcoholic beverage in packages
Sec. 123: Record-keeping requirements
Sec. 124: Non-resident seller reporting requirements
Sec. 125: Manufacturer reporting requirements
Sec. 126: Alcoholic beverage transport reporting requirements
Sec. 127: Tax liability rules
Sec. 128: Reporting requirements
Sec. 129: Record-keeping requirements
Sec. 130: County excise board; revenue projection estimates
Sec. 131: State treasury; control fund; revolving fund
Sec. 132: State treasury; revolving fund
Sec. 133: Labeling rules
Sec. 134: Labeling rules
Sec. 135: Labeling rules
Sec. 136: Refilling containers; infusing drinks
Sec. 137: Tax liability rules
Sec. 138: Reporting requirements
Sec. 139: Tax rules
Sec. 140: Possession of contraband alcoholic beverages
Sec. 141: Illegal sale, delivery or furnishment of alcoholic beverages
Sec. 142: General rules for licensees
Sec. 143: Rules for retail spirits, retail wine and retail beer license holders; sales must occur between 10 a.m. and 2 a.m., Monday through Sunday; not permitted on Thanksgiving Day or Christmas Day; can be permitted to sell on election days; no retail spirits licensee shall allow any person younger than 21 into the premises, unless accompanied by a person who it at least 21 years old.
Sec. 144: Rules for wholesaler licensees
Sec. 145: General rules for licensees
Sec. 146: Rules for bottle club licensees
Sec. 147: Rules for special event or caterer licensees
Sec. 148: Rules for retail wine or retail beer licensees
Sec. 149: General rules for licensees
Sec. 150: General rules
Sec. 151: Public safety/law enforcement rules
Sec. 152: Rules on erasing/destroying serial numbers/labels required by OABCA
Sec. 153: Operating without a license
Sec. 154: Rules prohibiting those younger than 21 from an enclosed or separate lounge or bar area
Sec. 155: Operating a whiskey still or distilling without a license
Sec. 156: Filing false tax documents
Sec. 157: Engaging in activity, acts or transactions with license
Sec. 158: Illegal purchase, sale or delivery of alcoholic beverages
Sec. 159: Penalty for misrepresenting age in order to obtain alcoholic beverages
Sec. 160: Penalty for selling or furnishing alcohol to underaged persons
Sec. 161: Penalty for selling or furnishing alcohol to an insane, mentally deficient or intoxicated person
Sec. 162: Rule on payment of U.S. liquor dealer tax
Sec. 163: Rule on package stores selling alcoholic beverage at improper times
Sec. 164: Rule on licensee permitting a person to be drunk or intoxicated on licensee's premises
Sec. 165: Rule on general violation of OABCA
Sec. 166: Law enforcement rules
Sec. 167: Rules on search warrants, seizures
Sec. 168: Rules on investigation, law enforcement, procurement of records
Sec. 169: Repealer
Sec. 170-195: Recodification
Sec. 196: Provisions of the act are severable
Sec. 197: The act shall only become effective upon passage of SJR 68
Sec. 198: Section 4 of the act shall become effective Oct. 1, 2017; sections 1 through 3 and 5 through 195 shall become effective Oct. 1, 2018.

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