Introduced Version






SENATE BILL No. 138

_____


DIGEST OF INTRODUCED BILL



Citations Affected: IC 7.1-1-3; IC 7.1-3; IC 7.1-4-4.1-13; IC 7.1-5-9-12.

Synopsis: Alcoholic beverage wholesalers. Allows a wholesaler or an affiliate of a wholesaler to provide or coordinate the transportation, distribution, or warehousing of alcoholic beverages on behalf of another wholesaler of alcoholic beverages of any type. Imposes an additional annual permit fee of $50,000 on a wholesaler or an affiliate of a wholesaler that, on behalf of another wholesaler in a permit year, provides or coordinates the transportation, distribution, or warehousing of any type of alcoholic beverage that the wholesaler is not authorized to wholesale under the wholesaler's permit.

Effective: July 1, 2012.





Kenley, Steele, Arnold, Taylor




    January 4, 2012, read first time and referred to Committee on Public Policy.







Introduced

Second Regular Session 117th General Assembly (2012)


PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2011 Regular Session of the General Assembly.

SENATE BILL No. 138



    A BILL FOR AN ACT to amend the Indiana Code concerning alcohol and tobacco.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 7.1-1-3-3.5; (12)IN0138.1.1. -->     SECTION 1. IC 7.1-1-3-3.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 3.5. "Affiliate" means a person that directly, or indirectly through one (1) or more intermediaries, controls, is controlled by, or is under common control with a specified person.
SOURCE: IC 7.1-1-3-22.5; (12)IN0138.1.2. -->     SECTION 2. IC 7.1-1-3-22.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 22.5. (a) "Logistic services" means providing or coordinating the:
        (1) transportation;
        (2) distribution; or
        (3) warehousing;
of alcoholic beverages.

     (b) The term does not include the sale of alcoholic beverages.
SOURCE: IC 7.1-1-3-23.8; (12)IN0138.1.3. -->     SECTION 3. IC 7.1-1-3-23.8 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 23.8. "Contracting wholesaler"

means a wholesaler that contracts to have logistic services performed by a wholesaler-carrier.

SOURCE: IC 7.1-1-3-48.5; (12)IN0138.1.4. -->     SECTION 4. IC 7.1-1-3-48.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 48.5. "Wholesaler-carrier" means:
        (1) a wholesaler of alcoholic beverages; or
        (2) an affiliate of a wholesaler of alcoholic beverages;
that holds a carrier's alcoholic permit under IC 7.1-3-18-1.

SOURCE: IC 7.1-3-3-5; (12)IN0138.1.5. -->     SECTION 5. IC 7.1-3-3-5, AS AMENDED BY P.L.94-2008, SECTION 28, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 5. (a) The holder of a beer wholesaler's permit may purchase and import from the primary source of supply, possess, and sell at wholesale, beer and flavored malt beverages manufactured within or without this state.
    (b) A beer wholesaler permittee may possess, transport, sell, and deliver beer to:
        (1) another beer wholesaler authorized by the brewer to sell the brand purchased;
        (2) an employee; or
        (3) a holder of a beer retailer's permit, beer dealer's permit, temporary beer permit, dining car permit, boat permit, airplane permit, or supplemental caterer's permit;
located within this state. Except as provided in IC 7.1-3-27, the sale, transportation, and delivery of beer shall be made only from inventory that has been located on the wholesaler's premises before the time of invoicing and delivery.
    (c) The beer wholesaler's bona fide regular employees may purchase beer from the wholesaler in:
        (1) bottles, cans, or any other type of permissible containers in an amount not to exceed forty-eight (48) pints; or
        (2) one (1) keg;
at any one (1) time.
    (d) The importation, transportation, possession, sale, and delivery of beer shall be subject to the rules of the commission and subject to the same restrictions provided in this title for a person holding a brewer's permit.
    (e) The holder of a beer wholesaler's permit may purchase, import, possess, transport, sell, and deliver any commodity listed in IC 7.1-3-10-5, unless prohibited by this title. However, a beer wholesaler may deliver flavored malt beverages only to the holder of one (1) of the following permits:
        (1) A beer wholesaler or wine wholesaler permit, if the wholesaler is authorized by the primary source of supply to sell the brand of flavored malt beverage purchased.
        (2) A wine retailer's permit, wine dealer's permit, temporary wine permit, dining car wine permit, boat permit, airplane permit, or supplemental caterer's permit.
    (f) A beer wholesaler may:
        (1) store beer for an out-of-state brewer described in IC 7.1-3-2-9 and deliver the stored beer to another beer wholesaler that the out-of-state brewer authorizes to sell the beer;
        (2) perform all necessary accounting and auditing functions associated with the services described in subdivision (1); and
        (3) receive a fee from an out-of-state brewer for the services described in subdivisions (1) through (2).
     (g) A beer wholesaler may perform logistic services for a reasonable fee on behalf of another wholesaler of any type of alcoholic beverage under IC 7.1-3-27.
SOURCE: IC 7.1-3-8-2; (12)IN0138.1.6. -->     SECTION 6. IC 7.1-3-8-2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 2. Premises Described in Application. (a) The premises to be used by an applicant for a liquor wholesaler's permit shall be described in the application for the permit and in the permit if it is issued. Except as provided in subsection (b), a liquor wholesaler shall not be entitled to keep or store liquor at a place other than the premises described in the application and the permit.
     (b) A holder of a wholesaler's permit of any type may perform logistic services on behalf of the holder of a liquor wholesaler's permit as provided in IC 7.1-3-27.
SOURCE: IC 7.1-3-8-3; (12)IN0138.1.7. -->     SECTION 7. IC 7.1-3-8-3, AS AMENDED BY P.L.94-2008, SECTION 31, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 3. (a) The holder of a liquor wholesaler's permit shall be entitled to sell liquor at wholesale.
    (b) A liquor wholesaler shall be entitled to purchase liquor within this state from a person who holds a distiller's permit, a rectifier's permit, or a liquor wholesaler's permit. A liquor wholesaler also may purchase liquor outside this state from the primary source of supply and, from that source, may transport and import liquor into this state.
    (c) A liquor wholesaler may sell, transport, and deliver liquor only to a person who, under this title, holds a:
        (1) liquor retailer's permit;
        (2) supplemental caterer's permit;
        (3) liquor dealer's permit; or
        (4) liquor wholesaler's permit.
Except as provided in IC 7.1-3-27, the sale, transportation, and delivery of liquor shall be made only from inventory that has been located on the wholesaler's premises before the time of invoicing and delivery, and only in permissible containers and is subject to the rules of the commission fixing the quantity which may be sold or delivered at any one (1) time.
    (d) A liquor wholesaler's bona fide regular employees may purchase liquor from the wholesaler in an amount not to exceed eighteen (18) liters.
     (e) A liquor wholesaler may perform logistic services for a reasonable fee on behalf of another wholesaler of any type of alcoholic beverage under IC 7.1-3-27.
SOURCE: IC 7.1-3-13-2.5; (12)IN0138.1.8. -->     SECTION 8. IC 7.1-3-13-2.5, AS AMENDED BY P.L.186-2011, SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 2.5. All premises to be used by an applicant for a wine wholesaler's permit must be described in the application for the permit and in the permit, if the permit is issued. Except as provided in IC 7.1-3-27, a wine wholesaler may not keep or store wine at any place other than the premises described in the wine wholesaler's application and permit. A person who holds a wine wholesaler's permit and who also holds a beer wholesaler's permit is not disqualified from using multiple premises for the storage of wine because the person holds a beer wholesaler's permit. The holder of a wine wholesaler's permit issued under IC 7.1-4-4.1-13(c) may enter into an agreement to:
        (1) locate the wine wholesaler's business within the licensed premises of a farm winery or a farm winery brandy distiller; or
        (2) use goods and services provided by a farm winery or a farm winery brandy distiller;
or both.
SOURCE: IC 7.1-3-13-3; (12)IN0138.1.9. -->     SECTION 9. IC 7.1-3-13-3, AS AMENDED BY P.L.165-2006, SECTION 25, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 3. (a) The holder of a wine wholesaler's permit may purchase, import, and transport wine, brandy, or flavored malt beverage from the primary source of supply. A wine wholesaler may export and transport wine, brandy, or flavored malt beverage by the bottle, barrel, cask, or other container, to points outside Indiana. A wine wholesaler is entitled to sell, furnish, and deliver wine or flavored malt beverage from inventory that has been located on the wholesaler's premises before the time of invoicing and delivery to a wine wholesaler, a wine retailer, a supplemental caterer, a temporary wine permittee, and a wine dealer, but not at retail. A wine wholesaler may

sell, furnish, and deliver brandy from inventory that has been located on the wholesaler's premises before the time of invoicing and delivery, but not at retail, only to a person who holds a liquor retailer's permit, a supplemental caterer's permit, or a liquor dealer's permit. However, a wine wholesaler may not sell wine, flavored malt beverage, or brandy from inventory located on the wholesaler's premises that the wine wholesaler is warehousing on behalf of another alcoholic beverage wholesaler under IC 7.1-3-27. A holder of a wine wholesaler's permit may sell wine to the wine wholesaler's bona fide regular employees.
    (b) A wine wholesaler
may perform logistic services for a reasonable fee on behalf of another wholesaler of any type of alcoholic beverage under IC 7.1-3-27.
    (b) (c) As used in this section, "brandy" means:
        (1) any alcoholic distillate described in 27 CFR 5.22(d) as in effect on January 1, 1983; or
        (2) a beverage product that:
            (A) is prepared from a liquid described in subdivision (1);
            (B) is classified as a cordial or liqueur as defined in 27 CFR 5.22(h) as in effect on January 1, 1997; and
            (C) meets the following requirements:
                (i) At least sixty-six and two-thirds percent (66 2/3%) of the product's alcohol content is composed of a substance described in subdivision (1).
                (ii) The product's label makes no reference to any distilled spirit other than brandy.
                (iii) The product's alcohol content is not less than sixteen percent (16%) by volume or thirty-two (32) degrees proof.
                (iv) The product contains dairy cream.
                (v) The product's sugar, dextrose, or levulose content is at least twenty percent (20%) of the product's weight.
                (vi) The product contains caramel coloring.
    (c) (d) Nothing in this section allows a wine wholesaler to sell, give, purchase, transport, or export beer (as defined in IC 7.1-1-3-6) unless the wine wholesaler:
         (1) also holds a beer wholesaler's permit under IC 7.1-3-3-1; or
        (2) performs logistic services on behalf of another wholesaler under IC 7.1-3-27.

    (d) (e) A wine wholesaler that also holds a liquor wholesaler's permit under IC 7.1-3-8 may not:
        (1) hold a beer wholesaler's permit under IC 7.1-3-3;
        (2) possess, sell, or transport beer, except as provided in

IC 7.1-3-27; or
        (3) sell more than one million (1,000,000) gallons of flavored malt beverage during a calendar year.

SOURCE: IC 7.1-3-27; (12)IN0138.1.10. -->     SECTION 10. IC 7.1-3-27 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]:
     Chapter 27. Logistic Services
    Sec. 1. Notwithstanding any other law, a wholesaler-carrier may perform logistic services with regard to any type of alcoholic beverage that the contracting wholesaler is permitted by this title to wholesale.
    Sec. 2. A wholesaler-carrier may not be required by the commission to apply for or maintain a permit other than a wholesaler permit or a carrier's alcoholic permit.
    Sec. 3. A wholesaler-carrier that provides logistic services for any type of alcoholic beverage that the wholesaler-carrier is not authorized to wholesale under the wholesaler-carrier's wholesaler permit must pay the permit fee established in IC 7.1-4-4.1-13(d).
    Sec. 4. A wholesaler-carrier may not warehouse the alcoholic beverage of a contracting wholesaler at a place other than the premises described in the wholesaler application and permit of the wholesaler-carrier.

SOURCE: IC 7.1-4-4.1-13; (12)IN0138.1.11. -->     SECTION 11. IC 7.1-4-4.1-13, AS AMENDED BY P.L.165-2006, SECTION 35, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 13. (a) This section applies to the following permits:
        (1) Beer wholesaler's permit.
        (2) Malt wholesaler's permit.
        (3) Liquor wholesaler's permit.
        (4) Wine wholesaler's permit.
    (b) Except as provided in subsection (c), a permit fee of two thousand dollars ($2,000) is annually imposed for the issuance of each of the permits described in subsection (a).
    (c) A permit fee of one hundred dollars ($100) is annually imposed for the issuance of a wine wholesaler's permit to a permit applicant who:
        (1) has never previously held a wine wholesaler's permit and anticipates selling less than twelve thousand (12,000) gallons of wine and brandy in a year; or
        (2) previously held a wine wholesaler's permit and certifies to the commission that the permit applicant sold less than twelve thousand (12,000) gallons of wine and brandy in the previous

year.
     (d) If a wholesaler-carrier performs or intends to perform logistic services on behalf of a contracting wholesaler under IC 7.1-3-27 in a permit year for any type of alcoholic beverage that the wholesaler-carrier is not authorized to wholesale under the wholesaler-carrier's wholesaler permit, an additional permit fee of fifty thousand dollars ($50,000) is imposed on the wholesaler-carrier for the issuance of a permit described in subsection (a).

SOURCE: IC 7.1-5-9-12; (12)IN0138.1.12. -->     SECTION 12. IC 7.1-5-9-12 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 12. Use of Another's Warehouse Prohibited. Except as provided under IC 7.1-3-27, it is unlawful for a holder of a brewer's permit, beer or liquor wholesaler's permit, or a beer or liquor retailer's permit, to own, operate, maintain on his the permittee's own account, patronize, use, or employ a warehouse, storage, or depot, owned or operated by another person for the storage or keeping of an alcoholic beverage except at the plant or premises which is covered by his the permittee's permit.