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H0049......................................................by STATE AFFAIRS
WINE - Amends, adds to and repeals existing law to revise provisions
relating to the sale of certain products by licensed wineries; to provide
for the use of a retail wine outlet by two or more wineries; and to provide
for wine product sales at sponsored events.
01/24 House intro - 1st rdg - to printing
01/25 Rpt prt - to St Aff
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature First Regular Session - 2007
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 49
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO WINE; AMENDING SECTION 23-1303, IDAHO CODE, TO REVISE A DEFINI-
3 TION; AMENDING SECTION 23-1306, IDAHO CODE, TO REVISE PROVISIONS RELATING
4 TO THE SALE OF CERTAIN PRODUCTS BY LICENSED WINERIES; AMENDING SECTION
5 23-1325, IDAHO CODE, TO PROVIDE FOR THE USE OF A RETAIL WINE OUTLET BY TWO
6 OR MORE WINERIES AND TO MAKE TECHNICAL CORRECTIONS; AND AMENDING CHAPTER
7 13, TITLE 23, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 23-1338, IDAHO
8 CODE, TO PROVIDE FOR WINE PRODUCT SALES AT SPONSORED EVENTS.
9 Be It Enacted by the Legislature of the State of Idaho:
10 SECTION 1. That Section 23-1303, Idaho Code, be, and the same is hereby
11 amended to read as follows:
12 23-1303. DEFINITIONS. The following terms as used in this chapter are
13 hereby defined as follows:
14 (a) "Table wine" shall mean any alcoholic beverage containing not more
15 than sixteen percent (16%) alcohol by volume obtained by the fermentation of
16 the natural sugar content of fruits or other agricultural products containing
17 sugar whether or not other ingredients are added.
18 (b) "Director" means the director of the Idaho state police.
19 (c) "Dessert wine" means only those beverages that are designated or
20 labeled, pursuant to the federal alcohol administration act, as "sherry,"
21 "madeira" or "port," which contain more than sixteen percent (16%) alcohol by
22 volume, but do not exceed twenty-one percent (21%) alcohol by volume meet the
23 definition of wine and are derived in part from added grape brandy or alcohol,
24 and are in excess of sixteen percent (16%) alcohol by volume but not in excess
25 of twenty-four percent (24%) alcohol by volume. Dessert wine as defined herein
26 shall not be deemed to be a spirit based beverage for the purposes of subsec-
27 tion (p) of this section.
28 (d) "Retail wine license" means a license issued by the director, autho-
29 rizing a person to sell table wine and/or dessert wine at retail for consump-
30 tion off the licensed premises.
31 (e) "Wine distributor's license" means a license issued by the director
32 to a person authorizing such person to distribute table wine or dessert wine
33 to retailers within the state of Idaho.
34 (f) "Wine importer's license" means a license issued by the director to a
35 person authorizing such person to import table wine or dessert wine into the
36 state of Idaho and to sell and distribute such wines to a distributor.
37 (g) "Retailer" means a person to whom a retail wine license has been
38 issued.
39 (h) "Distributor" means a person to whom a wine distributor's license has
40 been issued.
41 (i) "Importer" means a person to whom a wine importer's license has been
42 issued.
43 (j) "Winery" means a place, premises or establishment within the state of
2
1 Idaho for the manufacture or bottling of table wine or dessert wine for sale.
2 (k) "Winery license" means a license issued by the director authorizing a
3 person to maintain a winery.
4 (l) "Vintner" means a person who manufactures, bottles, or sells table
5 wine or dessert wine to importers for resale within this state other than a
6 licensed "winery" as herein defined.
7 (m) "Person" includes an individual, firm, copartnership, association,
8 corporation, or any group or combination acting as a unit, and includes the
9 plural as well as the singular unless the intent to give a more limited mean-
10 ing is disclosed by the context in which it is used.
11 (n) "Wine by the drink license" means a license to sell table wine or
12 dessert wine by the individual glass or opened bottle at retail, for consump-
13 tion on the premises only.
14 (o) "Domestic produced product" means wine at least seventy-five percent
15 (75%) of which by volume is derived from fruit or agricultural products grown
16 in Idaho.
17 (p) "Low proof spirit beverages" means any alcoholic beverage containing
18 not more than fourteen percent (14%) alcohol by volume obtained by distilla-
19 tion mixed with drinkable water, fruit juices and/or other ingredients in
20 solution. These products shall be considered and taxed as wine. Spirit based
21 beverages exceeding fourteen percent (14%) alcohol by volume shall be consid-
22 ered as liquor and sold only through the state liquor dispensary system.
23 (q) "Wine" includes table wine and dessert wine, unless the context
24 requires otherwise.
25 (r) "Theater" means a room, place or outside structure for performances
26 or readings of dramatic literature, plays or dramatic representations of an
27 art form not in violation of any provision of Idaho law.
28 (s) "Live performance" means a performance occurring in a theater and not
29 otherwise in violation of any provision of Idaho law.
30 (t) All other words and phrases used in this chapter, the definitions of
31 which are not herein given, shall be given their ordinary and commonly under-
32 stood and accepted meanings.
33 SECTION 2. That Section 23-1306, Idaho Code, be, and the same is hereby
34 amended to read as follows:
35 23-1306. LICENSES REQUIRED -- APPLICATION -- ISSUANCE OR REFUSAL. Before
36 any person shall manufacture, import into this state, manufacture, bottle or
37 broker for resale within this state, possess for resale, or distribute or sell
38 wine within the state of Idaho, he shall apply to the director for a license
39 to so do. The application form shall be prescribed and furnished by the direc-
40 tor and require that the applicant therein show that he possesses all of the
41 qualifications and none of the disqualifications of a licensee. A person may
42 apply for and receive a license as both a distributor and importer, if other-
43 wise qualified therefor, and shall pay the license fee required pursuant to
44 this chapter for each license. A winery licensed under this chapter shall also
45 be considered as holding, for the purposes of selling a product processed and
46 bottled by or for that winery, a current retail wine license and wine by the
47 drink license for the licensed premises and for use at functions and events
48 identified in section 23-1338, Idaho Code, and a current wine distributor's
49 and importer's license, without further application or fee. If the director is
50 satisfied that the applicant possesses the qualifications and none of the dis-
51 qualifications for such license, he shall issue a license for each classifica-
52 tion applied for, subject to the restrictions of and upon the conditions spec-
53 ified in this act chapter. The license or licenses issued shall be at all
3
1 times prominently displayed in the place of business of the licensee. If the
2 director determines that the applicant is not properly qualified, he shall
3 refuse to issue a license and shall forthwith so notify the applicant and
4 shall return to the applicant with such notification, three-fourths (3/4) of
5 the license fee remitted with the application. A separate retail wine by the
6 drink license, and wine distributor's license shall be required for each prem-
7 ises. Provided, however, nothing herein shall prohibit a distributor or
8 retailer or wine by the drink licensee from possessing licenses for more than
9 one (1) premises.
10 SECTION 3. That Section 23-1325, Idaho Code, be, and the same is hereby
11 amended to read as follows:
12 23-1325. FINANCIAL INTEREST IN OR AID TO RETAILERS PROHIBITED -- CERTAIN
13 AID PERMITTED. (1) It shall be unlawful for any importer, distributor, vintner
14 or winery, directly or indirectly, or through an affiliate, subsidiary, offi-
15 cer, director, agent or employee:
16 (a) To have any financial interest in any licensed retailer's business,
17 or to own or control any real property upon which a licensed retailer con-
18 ducts his business, except such property as shall have been so owned or
19 controlled continuously for more than one (1) year prior to July 1, 1975;
20 or
21 (b) To aid or assist any licensed retailer by giving such retailer, or
22 any employee thereof, any discounts, premiums or rebates in connection
23 with any sale of wine; or
24 (c) To aid or assist any retailer by furnishing, giving, renting, lending
25 or selling any equipment, signs, supplies, wine menus or wine lists, ser-
26 vices, or other thing of value which may be used in conducting the
27 retailer's retail wine business, except as expressly permitted by this
28 chapter; or
29 (d) To enter into any lease or other agreement with any retail licensee
30 to control the product or products sold by such retailer; or
31 (e) To provide for any rental or other charge to be paid to or by the
32 retailer for product display or advertising display space.
33 (2) An importer, distributor, vintner or winery as an incident to mer-
34 chandising in the ordinary course of business, and if available to all
35 licensed retailers without discrimination, may sell to a retailer equipment,
36 supplies or clothing which may be used in conducting the retailer's retail
37 wine business. A winery, vintner, importer or distributor may not sell such
38 equipment or supplies at a price, or under terms, intended or designed to
39 encourage or induce the retailer to use products of the seller to the exclu-
40 sion of the products of other wineries, vintners, importers or distributors.
41 In no event shall the sales price of such equipment or supplies be less than
42 the reasonable value of such equipment or supplies.
43 (3) Notwithstanding the provisions of subsection (2) of this section, a
44 vintner, winery, importer or distributor, as an incident to merchandising in
45 the ordinary course of business, and if available to all retailers without
46 discrimination, may lend, give, furnish or sell to a retailer, the following
47 items:
48 (a) Those services, equipment, brochures and recipes authorized under the
49 provisions of sections 23-1325A and 23-1325B, Idaho Code;
50 (b) Signs, posters, placards, designs, devices, decorations or graphic
51 displays bearing advertising matter and for use in windows or elsewhere in
52 the interior of a retail establishment. The importer, distributor, vintner
53 or winery shall not directly or indirectly pay or credit the retailer for
4
1 displaying such materials or for any expense incidental to their opera-
2 tion;
3 (c) Newspaper cuts, mats or engraved blocks for use in retailer's adver-
4 tisements;
5 (d) Items such as sports schedules, posters, calendars, informational
6 pamphlets, decals and other similar materials for display at the point of
7 sale which bear brand advertising for wine prominently displayed thereon,
8 and which items are intended for use by the retailer's customers off the
9 licensed premises and which items are made available to the retailer's
10 customers for such purpose.;
11 (e) Temporary signs or banners displaying a vintner's, winery's or
12 distributor's name, trademark or label, which signs may be permitted to be
13 temporarily displayed on the exterior portion of the retailer premises in
14 connection with a special event, in accordance with such rules relating
15 thereto as may be established by the director.
16 (4) A distributor may perform services incident to or in connection with
17 the stocking, rotation and restocking of wine sold and delivered to such
18 licensed retailer on or in such licensed retailer's storeroom, salesroom
19 shelves or refrigerating units, including the marking or remarking of contain-
20 ers of such wine to indicate the selling price as established by the retailer
21 and to the arranging, rearranging, or relocating of advertising displays
22 referred to in this section. A distributor may, with the permission of the
23 retailer and in accordance with space allocations directed by the retailer,
24 set, remove, replace, reset or relocate all wine upon shelves of the retailer.
25 Labor performed or schematics prepared by the distributor relating to conduct
26 authorized pursuant to the provisions of this paragraph subsection (4) shall
27 not constitute prohibited conduct.
28 (5) An importer, distributor, vintner or winery may furnish or give to a
29 retailer authorized to sell wine for consumption on the licensed premises, for
30 sampling purposes only, a container of wine, containing not more than sixty-
31 four (64) ounces, not currently being sold by the retailer, and which con-
32 tainer is clearly marked "NOT FOR SALE--FOR SAMPLING PURPOSES ONLY."
33 (6) A licensed winery may aid or assist a licensed retail wine outlet
34 which retails exclusively the wine product of that winery and which outlet is
35 wholly owned and operated by that winery. Two (2) or more wineries may use the
36 same location for their respective retail wine outlets provided each outlet
37 holds a separate retail wine license or wine by the drink license.
38 (7) Every violation of the provisions of this section by an importer,
39 distributor, vintner or winery in which a licensed retailer shall have activ-
40 ely participated shall constitute a violation on the part of such licensed
41 retailer.
42 SECTION 4. That Chapter 13, Title 23, Idaho Code, be, and the same is
43 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
44 ignated as Section 23-1338, Idaho Code, and to read as follows:
45 23-1338. WINE PRODUCT SALES -- SPONSORED EVENTS. Any person who is the
46 holder of an Idaho winery license is authorized to sell any wine product of
47 that winery at events of seven (7) days duration or less sponsored by any
48 group, organization, person or political subdivision. Each participating win-
49 ery must make its own arrangements with the sponsoring group, organization,
50 person or political subdivision. Sales under the authority of this section may
51 occur only in counties that permit the sale of wine in accordance with section
52 23-1304, Idaho Code, and those sales must comply with all applicable limita-
53 tions and requirements regarding day and hour of sale and age and condition of
5
1 purchasers.
STATEMENT OF PURPOSE
RS 16608C1
The purpose of this legislation is to:
(1) Modify the definition of a "Dessert Wine".
(2) Revise provisions relating to the sale of certain
products by licensed wineries.
(3) Allow two or more wineries to use the same location for
their retail sales.
(4) Allow for wine sales at sponsored events.
FISCAL IMPACT
There is no fiscal impact to the General Fund.
Contact
Name: Rep. Darrell Bolz
Phone: 332-1000
Sen. Patti Anne Lodge
STATEMENT OF PURPOSE/FISCAL NOTE H 49