Correct Errors, Inconsistencies and Conflicts in and to Revise the State's Liquor Laws

Last updated: Mar 8, 2020

Details about this bill
Category: Alcohol / Tobacco / Guns
Status: In Committee
Sponsor: Senator Louis Luchini, Senate 7 - Hancock County
Session: 129
Bill #: LD 2131

Position:

Monitoring.

Summary:

This bill is reported out by the Joint Standing Committee on Veterans and Legal Affairs pursuant to Resolve 2019, chapter 15, section 3. The committee has not taken a position on the substance of the bill and by reporting this bill out the committee is not suggesting and does not intend to suggest that it agrees or disagrees with any aspect of this bill. The committee is reporting the bill out for the sole purpose of obtaining a printed bill that can be referred to the committee for a public hearing and subsequent committee action in the normal course. The committee is taking this action to ensure clarity and transparency in the legislative review of the proposal.

The bill changes the headnote of the Maine Revised Statutes, Title 17, section 2003-A to clarify that this section of law prohibits public drinking.

The bill also makes a number of changes to Title 28-A, the State's liquor laws, to standardize the language used in those laws, to correct errors, conflicts, ambiguities, omissions and inconsistencies in those laws and to revise those laws, including by making the following changes.

1. It makes a number of changes to address ambiguities, inconsistencies and conflicts in the laws governing certificates of approval, including the following.

A. It restructures the definition of "certificate of approval holder," a term that includes persons with certificates of approval as well as persons with in-state manufacturing licenses, to add clarity and ensures the defined term is used correctly throughout the Title.
B. It resolves a conflict in the law by removing in-state manufacturers, that receive licenses, from a provision requiring persons engaged in certain activities to obtain certificates of approval.
C. It changes from a certificate of approval to a license the type of authority that a person that operates a special warehouse storage facility must obtain because the laws specific to certificate of approval holders generally do not apply to special warehouse storage facilities. It further clarifies which laws are applicable to licensed special warehouse storage facilities.
D. It removes ambiguities by clarifying which of the general qualification and application requirements for liquor licenses apply to applicants for a certificate of approval and by specifying that persons that have been issued certificates of approval are subject to administrative discipline for violating liquor laws and rules under Title 28-A, chapter 33 to the same extent as persons that have been issued licenses.
E. It removes a conflict in the law by repealing a provision requiring the Department of Administrative and Financial Services, Bureau of Alcoholic Beverages and Lottery Operations to deposit the yearly fees paid by certificate of approval holders into the General Fund because, under Title 28-A, section 83-B, the bureau is directed to deposit its net revenues in the General Fund.

 

2. It removes ambiguous language from the Title 28-A definitions section stating that only "responsible persons" or "persons of good reputation" may obtain certain types of liquor licenses but retains the general character requirements for licensure set forth in section 654.

3. It moves the definitions of "pool hall" and "minibar" into and the definitions of "club member," "hotel guest," "dining car," "passenger car" and "vessel" out of the subsection of law that provides definitions for the types of establishments eligible to obtain retail liquor licenses. It also ensures consistent use of these defined terms throughout the Title.

4. It replaces the word "club" with the word "center" in the statutes describing the requirements for licensure of indoor racquet centers, ice skating centers and curling centers to dispel confusion regarding whether the licensure requirements applicable to clubs apply to these centers. It also corrects several errors in the law that, in combination, suggest curling centers may be licensed to sell only wine and not spirits or malt liquor.

5. It makes a number of changes to the laws requiring that certain on-premises retail licensees either offer food to the public or sell a specific amount of food to the public to maintain their eligibility for a liquor license, including:

A. Replacing several duplicative definitions of "full course meal" with the substantively identical definition of "full meal" that also appears in current law and ensuring consistent use of this defined term throughout the Title;
B. Removing language regarding the service of meals from the definition of "hotel," because hotels are not required to sell meals to the public under existing law;
C. Removing a conflict in current law by specifying that a hotel with a Class I-A license is not required to have 10% of its gross annual income from the sale of food;
D. Clarifying that, to calculate whether a hotel that does not have a Class I-A license has satisfied the requirement that at least 10% of its gross annual income be from the sale of food, the hotel's income from the rental of rooms or from the sale of liquor in separately licensed minibars is not included. This new provision matches current practice and mirrors an existing provision of law that excludes income from the bowling business in calculating whether the bowling center has satisfied the requirement that at least 10% of its gross annual income be from the sale of food;
E. Clarifying that qualified catering services may be located in unincorporated places and filling an omission in current law by specifying that a licensed part-time qualified catering service that operates for no more than 3 months in a year in a municipality having a population of 20,001 to 30,000 persons must have a minimum annual gross income of $10,000 from the sale of food to the public;
F. Standardizing language regarding the Department of Administrative and Financial Services, Bureau of Alcoholic Beverages and Lottery Operations' assessment of whether an applicant for an initial on-premises retail license is likely to meet or an applicant for renewal of an on-premises retail license has met any applicable food-sales requirements; and
G. Establishing a new one-year grace period for an on-premises retail establishment that applies for license renewal but did not meet an applicable food-sales requirement during the previous year.

 

6. It defines "spirits supplier," a previously undefined term, and standardizes the statutory language used to describe spirits suppliers throughout the State's liquor laws, including by removing references to spirits brokers that are now included in the "spirits supplier" definition. It also newly authorizes spirits suppliers to offer sweepstakes, games and contests inside packages of spirits under the same conditions that licensed Maine manufacturers, wholesale licensees and retail licensees may offer sweepstakes, games and contests inside packages of liquor.

7. It replaces the term "liquor," which is defined for purposes of the State's liquor laws to mean malt liquor, wine and spirits, with more specific terms in several statutes when all 3 types of alcohol are not intended to be included.

8. It removes unnecessary statutory references to fortified wine in statutes that govern wine generally, because "wine" is defined for purposes of the State's liquor laws to include fortified wine.

9. It resolves an inconsistency by providing that public service corporation licenses are issued to airline corporations, railroad corporations and vessel corporations and not the individual aircraft, dining cars, passenger cars and vessels that those corporations operate in the State. It also removes a duplicative statute governing public service corporations and standardizes the language used throughout the Title regarding public service corporations.

10. It clarifies an ambiguity in the law by specifying that the term "wholesale licensee" as used in the State's liquor laws means only a licensed in-state wholesaler of malt liquor or wine and not an out-of-state wholesaler of malt liquor or wine that has been issued a certificate of approval. It also extends the prohibition against a wholesale licensee selling to another wholesale licensee any malt liquor or wine that has not been purchased from a certificate of approval holder or a licensed special warehouse storage facility to a prohibition against a wholesale licensee selling such products to any purchaser, including a retail licensee.

11. It replaces the phrase "wholesale liquor provider" with the phrase "wholesale spirits provider" throughout the State's liquor laws to more accurately describe the scope of that entity's authority in the State. It also removes an inconsistency in the law by specifying that the wholesale spirits provider and the principal officers of the wholesale spirits provider may not hold or have a direct financial interest in an agency liquor store license or a license to manufacture any type of liquor in this State or another state.

12. It makes several changes to the laws governing hard cider to address ambiguities and omissions in those laws in a manner that matches current practice, including by making the following changes.

A. Although hard cider technically meets the definition of "wine" under existing law, it adds clarifying language expressly stating that hard cider is considered "wine" for purposes of the Title.
B. It clarifies that hard cider may be sold by retailers licensed to sell either malt liquor or wine for on-premises or off-premises consumption.
C. It provides that hard cider may be sold and distributed within the State by wholesale licensees authorized to sell and distribute either malt liquor or wine within the State.
D. It clarifies that hard cider is not subject to the general 60¢ per gallon excise tax on wine set forth in Title 28-A, section 1652, subsection 2. Hard cider products are instead subject only to the 35¢ per gallon excise tax on hard cider set forth in the same subsection.

 

13. It makes several changes to the laws governing low-alcohol spirits products to address ambiguities, inconsistencies and omissions in those laws, including by making the following changes.

A. It clarifies that products containing less than 1/2 of 1% of alcohol by volume are not considered low-alcohol spirits products, just as all products containing less than 1/2 of 1% of alcohol by volume are not considered liquor and thus not subject to regulation under the Title.
B. It newly specifies that licensed Maine distilleries, small distilleries and rectifiers are authorized to produce low-alcohol spirits products and that licensed Maine breweries, small breweries and tenant breweries are authorized to produce low-alcohol spirits products containing malt liquor. Current law already authorizes licensed Maine wineries and tenant wineries to produce low-alcohol spirits products that contain wine, because these products are included in the definition of "fortified wine."
C. It specifies that, as is current practice, low-alcohol spirits products may be sold and distributed within the State by wholesale licensees authorized to sell and distribute wine within the State.
D. It clarifies that, as is current practice, low-alcohol spirits products that qualify as fortified wine are not subject to the general 60¢ per gallon excise tax on wine under Title 28-A, section 1652, subsection 2. All low-alcohol spirits products are instead subject to a $1.24 per gallon excise tax under section 1652, subsection 1-A and a 30¢ per gallon low-alcohol spirits product tax under section 1365.

 

14. It replaces the phrase "alcoholic beverages," which is not defined for the purposes of the State's liquor laws, with the appropriate defined terms throughout the liquor laws.

15. It combines in a single section of statute the licensing fees for agency liquor stores that are currently listed in separate provisions. It also removes an ambiguity in the law by clarifying that, as is the current practice, agency liquor store licenses grant authority to sell not only spirits but also malt liquor and wine for off-premises consumption.

16. It clarifies that an applicant for a liquor license must possess all licenses, permits or approvals required under Title 22 for the applicant's underlying business before applying for the liquor license.

17. It removes inconsistencies in several provisions of the liquor laws regarding the types of establishments eligible to obtain auxiliary licenses, off-premises catering licenses and mobile service bar licenses. It also specifies that, as is current practice, when an on-premises retail licensee obtains an off-premises catering license, that license authorizes the licensee to conduct off-premises catering of only the same type or types of liquor that the licensee may sell pursuant to the licensee's underlying on-premises retail license.

18. It makes a number of changes to the laws governing liquor taste-testing events and product sampling activities to address ambiguities, inconsistencies and omissions in those laws, including the following.

A. It clarifies that the prohibitions against serving liquor to minors or to visibly intoxicated persons apply to all authorized liquor taste-testing and product sampling events.
B. It newly specifies who, other than a licensed sales representative, may pour samples at taste-testing and product sampling events. Under the bill, samples may also be poured by an employee of the off-premises or on-premises retailer where the taste-testing or product sampling event takes place or, where applicable, by the owner or employee of the licensed Maine manufacturer that produced the product being tasted or sampled.
C. It clarifies an ambiguity by specifying that, other than during an authorized taste-testing or product sampling event, an off-premises retail licensee has a duty to prevent the consumption of liquor on that retail licensee's premises.
D. It resolves a conflict in current law by providing that, when an authorized taste-testing event is held on a portion of the premises of an on-premises retail licensee, the bureau must temporarily suspend the authority of the on-premises retail licensee to sell liquor for on-premises consumption in the area designated for the taste-testing event. The on-premises retail licensee may nevertheless continue to sell liquor for on-premises consumption on the portion of its premises that falls outside the area designated for the taste-testing event.
E. It fills an omission in the law by specifying that an out-of-state manufacturer that is sponsored by a certificate of approval holder, wholesale licensee or spirits supplier to participate in a taste-testing event may provide for taste testing any spirits, wine or malt liquor produced by the sponsored manufacturer, even though those products are not currently listed for sale in the State.
F. It moves the statutory language granting licensed Maine liquor manufacturers the authority to sell their products at certain taste-testing events from the manufacturer licensing statute to the relevant taste-testing event statute for clarity and grants small distilleries new authority to self-distribute their spirits products for sale at these taste-testing events.
G. It restricts the types of individuals who may receive partial-bottle samples of spirits or wine under statutes authorizing sampling by retail licensees to the owner and supervisory or managerial employees of the retail licensee. This restriction exists in current law only for the receipt of partial-bottle samples of spirits by employees of agency liquor stores.

 

19. It corrects an error in current law that suggests on-premises retail licenses are issued to international air terminals and instead specifies that on-premises retail licenses may be issued to qualified establishments located within international air terminals.

20. It streamlines the process for disposal of spirits subject to a court's forfeiture order by newly authorizing the Department of Administrative and Financial Services, Bureau of Alcoholic Beverages and Lottery Operations or a wholesale spirits provider to choose, without obtaining an additional court order, to destroy the forfeited spirits rather than to restock and resell the forfeited spirits in agency liquor stores.

21. It makes a number of changes to the State's laws governing the administration and sale of spirits in the State to address errors and inconsistencies in those laws, including the following.

A. It amends conflicting provisions of law regarding the pricing of spirits to clarify that, as is current practice, the State Liquor and Lottery Commission establishes the retail price of spirits and the Department of Administrative and Financial Services, Bureau of Alcoholic Beverages and Lottery Operations establishes the wholesale price of spirits, which is the price that agency liquor stores pay to purchase spirits from the bureau.
B. It resolves a conflict in the laws governing the purchase of spirits by removing statutory language suggesting that agency liquor stores may purchase spirits from a wholesale spirits provider and retaining provisions of law correctly stating that agency liquor stores purchase spirits only from the bureau.
C. It amends statutory provisions incorrectly suggesting that any agency liquor store may sell or deliver spirits to on-premises retailers and clarifies that only agency liquor stores that are licensed as reselling agents may make these sales and deliveries.

 

22. It makes a number of additional changes to Title 28-A, section 1355-A, the statute governing the licensure of Maine liquor manufacturers, including the following.

A. It restores the statutory authority of Maine bottlers and rectifiers to obtain licenses, which authority was unintentionally repealed through Public Law 2019, chapter 529. It also newly specifies the types of sampling activities that may occur on the premises of a licensed Maine bottler or rectifier under current practice.
B. It combines in one location several scattered provisions describing the authority of licensed Maine breweries, small breweries, wineries, small wineries, distilleries and small distilleries, at the manufacturing facility where their products are produced, to sell samples of those products to the public or offer samples of those products to the public at no cost. It newly clarifies that samples may not be served to minors or visibly intoxicated persons and that the area of the manufacturing facility where these samples are sold or offered need not be separate from and may be accessed by the same entrance as the area of the manufacturing facility that is licensed for on-premises retail sales.
C. It combines in one location several scattered provisions describing the authority of licensed Maine breweries, small breweries, wineries, small wineries, distilleries and small distilleries, at the manufacturing facility where their products are produced, to sell their products for off-premises consumption.
D. It moves the provision authorizing Maine breweries and small breweries to sell malt liquor for off-premises consumption in kegs from a generally applicable subsection of the statute to the subsection of the statute specifically applicable to breweries and small breweries.
E. It moves the provision requiring Maine small breweries and small wineries to keep and maintain records of their sales to retail licensees from a generally applicable subsection of the statute to the 2 subsections of the statute specifically applicable to small breweries and to small wineries.
F. It clarifies that, as is current practice, when calculating whether a licensed Maine manufacturing facility's one statutorily authorized establishment for on-premises sales has satisfied any applicable statutory requirement that 10% of its gross annual income be from the sale of food, income from the Maine manufacturer's sale of liquor samples or sale of liquor for off-premises consumption is not included.
G. It clarifies the language of the provision authorizing each licensed Maine brewery, small brewery, winery, small winery, distillery and small distillery to obtain one license to conduct on-premises retail sales per licensed manufacturing facility. It also relaxes the requirements applicable when a distillery or small distillery obtains this type of on-premises retail license by eliminating the requirements that the on-premises retail establishment be a Class A restaurant or Class A restaurant/lounge owned by the same person who owns the distillery or small distillery. Instead, under the bill a distillery or small distillery may obtain any type of on-premises retail license as long as the same person or persons holds a majority ownership interest in the on-premises retail license and the distillery or small distillery. These relaxed requirements match the requirements applicable under current law when a licensed brewery, small brewery, winery or small winery obtains this type of on-premises retail license.
H. It newly authorizes a licensed Maine manufacturer that has its one statutorily authorized licensed establishment for on-premises sales at a location separate from its manufacturing facility to conduct sales of its products for off-premises consumption at that separate licensed location. Under current law, a Maine manufacturer may conduct sales of its products for off-premises consumption at its one licensed establishment for on-premises sales only if the on-premises establishment is located at the manufacturing facility. Similarly, the bill newly specifies that the products that may be sold for off-premises consumption at the separate licensed location include, when the licensed Maine manufacturer is a brewery or a small brewery, malt liquor packaged in refillable containers, commonly referred to as growlers. Under current law, a brewery or small brewery may sell growlers at its one licensed establishment for on-premises sales only if that on-premises establishment is located at the brewery or small brewery.
I. It resolves a conflict in current law and conforms the law to current practice by specifying that, when a small distillery serves samples of its products at its manufacturing facility, it need not first send those products through the State's spirits warehouse and distribution system.
J. It clarifies an ambiguity in the law by explicitly stating that a licensed Maine small winery, which may under current law obtain licenses to conduct off-premises retail sales at up to 2 additional locations other than the manufacturing facility, must pay a $50 license fee for each of those additional locations. It similarly clarifies that a licensed small distillery, which may under current law also obtain licenses to conduct off-premises retail sales at up to 2 additional locations other than the manufacturing facility, must pay a $100 license fee for each of those additional locations.
K. It corrects an omission in the law and matches current practice by specifying that a tenant brewery or tenant winery seeking licensure may pay the reduced license fee for a small brewery or small winery if it qualifies as a small brewery or small winery. Otherwise, the tenant brewery or tenant winery must pay the higher brewery or winery license fee.

 

23. It reorganizes, clarifies and removes inconsistencies in the laws governing the importation of liquor into and the transportation of liquor within the State. It also changes the units of measurement applicable to spirits and wine in these provisions from quarts and gallons to liters, which is the unit of measurement typically used when referring to spirits and wine products, and it changes the unit of measurement applicable to malt liquor from gallons to fluid ounces, which is the unit of measurement typically used when referring to malt liquor products.

24. It corrects scattered typographical, cross-reference and drafting errors in the Title, including by removing all gendered pronouns as required by Public Law 2019, chapter 475, section 52.