Senate Bill No. 632
(By Senator McCabe, Rowe and Mitchell)
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[Introduced February 18, 2002; referred to the Committee
on the Judiciary; and then to the Committee on Finance.]
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A BILL to amend and reenact sections two, five, eighteen, twenty
and twenty-eight, article eight, chapter sixty of the code of
West Virginia, one thousand nine hundred thirty-one, as
amended, all relating to redefining the term "wine" to exclude
certain products or beverages; allowing a tax credit to a
supplier for tax paid on wines exported from West Virginia;
amending the revocation or suspension of license provision;
imposing a monetary penalty on licensees for violation of any
provision of this article or any rule or order promulgated by
the commissioner; allowing sales between licensed wine
distributors pursuant to authorization by the primary source
of supply; imposing a wine label registration fee of fifteen
dollars for every registered wine supplier; and setting the
wine label registration fee for farm wineries at three
dollars.
Be it enacted by the Legislature of West Virginia:
That sections two, five, eighteen, twenty and twenty-eight,
article eight, chapter sixty of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended and
reenacted, all to read as follows:
ARTICLE 8. SALE OF WINES.
§60-8-2. Definitions.
Unless the context in which used clearly requires a different
meaning, as used in this article:
(1) "Commissioner" or "commission" means the West Virginia
alcohol beverage control commissioner.
(2) "Distributor" means any person whose principal place of
business is within the state of West Virginia, and who is engaged
in selling or distributing wine to retailers or private wine
restaurants and selling or distributing port, sherry and Madeira
wines to wine specialty shops under authority of this article and
actually maintains a warehouse in this state for the distribution
of wine.
(3) "Fortified wine" shall mean any wine to which brandy or
other alcohol has been added and shall include dessert wines which
are not fortified.
(4) "Grocery store" means any retail establishment, commonly
known as a grocery store, supermarket, delicatessen, caterer or
party supply store, where food, food products and supplies for the table are sold for consumption off the premises with average
monthly sales (exclusive of sales of wine) of not less than five
hundred dollars and an average monthly inventory (exclusive of
inventory of wine) of not less than three thousand dollars. The
term "grocery store" shall also include and mean a separate and
segregated portion of any other retail store which is dedicated
solely to the sale of food, food products and supplies for the
table for consumption off the premises with average monthly sales
with respect to such separate or segregated portion (exclusive of
sales of wine) of not less than three thousand dollars and an
average monthly inventory (exclusive of inventory of wine) of not
less than three thousand dollars.
(5) "Licensee" means the holder of a license granted under the
provisions of this article.
(6) "Private wine restaurant" means a restaurant which: (1)
(A) Is a partnership, limited partnership, corporation,
unincorporated association or other business entity which has as
its principal purpose the business of serving meals on its premises
to its members and their guests; (2) (B) is licensed under the
provisions of this article as to all of its premises or as to a
separate segregated portion of its premises to serve wine to its
members and their guests when such sale accompanies the serving of
food or meals; and (3) (C) admits only duly elected and approved
dues paying members and their guests while in the company of a member, and does not admit the general public.
(7) "Retailer" means any person licensed to sell wine at
retail to the public at his or her established place of business
for off-premises consumption and who is licensed to do so under
authority of this article.
(8) "Supplier" means any manufacturer, producer, processor,
distributor or supplier of wine who sells or offers to sell or
solicits or negotiates the sale of wine to any licensed West
Virginia distributor.
(9) "Tax" includes within its meaning interest, additions to
tax and penalties.
(10) "Taxpayer" means any person liable for any tax, interest,
additions to tax or penalty under the provisions of this article
and any person claiming a refund of tax.
(11) "Varietal wine" means any wine labeled according to the
grape variety from which such the wine is made.
(12) "Vintage wine" or "vintage-dated wine" means wines from
which the grapes used to produce such wine are harvested during a
particular year or wines produced from the grapes of a particular
harvest in a particular region of production.
(13) "Wine" means any alcoholic beverage obtained by the
natural fermentation of the natural content of grapes, other fruits
or honey or other agricultural products containing sugar and to
which no alcohol has been added and shall include table wine, and shall exclude fortified wine and shall also exclude any product
defined as or embraced within the definition of nonintoxicating
beer under the provisions of article sixteen, chapter eleven of
this code.
(14) "Wine specialty shop" means a retailer who shall deal
principally in the sale of table wine, certain fortified wines,
wine accessories and food or foodstuffs normally associated with
wine and: (1) (A) Who shall maintain a representative number of
such wines for sale in his inventory which are designated by label
as varietal wine, vintage, generic and/or according to region of
production and the inventory shall contain not less than fifteen
percent vintage or vintage-dated wine by actual bottle count; and
(2) (B) who, any other provisions of this code to the contrary
notwithstanding, may maintain an inventory of port, sherry and
Madiera wines having an alcoholic content of not more than
twenty-two percent alcohol by volume and which have been matured in
wooden barrels or casks.
§60-8-5. Refund or credit of taxes.
(a) The tax commissioner shall refund, or credit on a
subsequent supplier's return, any tax which has been erroneously or
illegally collected, or on wine exported from West Virginia for
which the tax imposed under this article has been paid.
(b) In the event that a licensee, as defined in this article,
while the owner of wine on which the tax imposed by this article has been paid, loses
such the wine through fire or casualty, other
than breakage occurring on the premises of the licensee because
such the wine has been declared by the alcohol beverage control
commissioner to be unfit for sale, and the amount of tax paid
exceeds fifty dollars, the tax commissioner shall refund the tax
paid. The alcohol beverage control commissioner shall promulgate
regulations establishing the procedure and nature of proof required
in case of any claim for refund or credit.
§60-8-18. Revocation or suspension of license; monetary penalty
procedure upon refusal, revocation or suspension.
(a) The commissioner may on his or her own motion, or shall on
the sworn complaint of any person, conduct an investigation to
determine if any provisions of this article or any rule or order
promulgated by the commissioner have been violated by any licensee.
The commissioner may suspend or revoke any licensee's license if he
the commissioner finds that such the licensee has violated any
provision of this article or any rule or order promulgated by the
commissioner,
or if he the commissioner finds the existence of any
ground on which a license could have been refused, if such the
licensee were then applying for a license, and if the commissioner
finds that a licensee has willfully violated any provision of this
article or any rule or order promulgated by the commissioner.
he
shall revoke such licensee's license The commissioner may:
(1) Revoke the licensee's license;
(2) Suspend the licensee's license;
(3) Place the licensee on probationary status for a period
not to exceed twelve months; and
(4) Impose a monetary penalty not more than one thousand
dollars for each violation where revocation is not imposed.
(b) Whenever any distributor fails or refuses to keep the bond
required by section twenty of this article in effect, such the
distributor's license shall be automatically suspended until such
the time as bond required by section twenty is furnished to the
commissioner, at which time such the suspension shall be vacated.
(c) Whenever the commissioner refuses to issue a license, or
suspends or revokes a license, or imposes a monetary penalty, he
the commissioner shall enter an order to that effect, and cause a
copy of the order to be served in person or by certified mail,
return receipt requested, on the licensee or applicant.
(d) Any applicant or licensee, as the case may be, adversely
affected by such the order shall have a right to a hearing thereon
before the commissioner, providing that demand in writing for such
the hearing is served upon the commissioner within ten days
following the receipt by such the applicant or licensee of the copy
of said the order. The service of such the demand for a hearing
upon the commissioner shall operate to suspend the execution of the
order with respect to which a hearing is being demanded, except an
order suspending a license under the provisions of subsection (b) of this section. The person demanding a hearing shall give
security for the cost of such the hearing in such the form and
amount as the commissioner may reasonably require. If the person
demanding such the hearing does not substantially prevail in such
the hearing or upon judicial review thereof as hereinafter
provided, then the costs of such the hearing shall be assessed
against him or her by the commissioner and may be collected by an
action at law or other proper remedy.
(e) The commissioner shall immediately set a date for such the
hearing and notify the person demanding such the hearing thereof,
which hearing shall be held within thirty days after receipt of
said the demand. At such the hearing the commissioner shall hear
evidence and thereafter enter an order supporting by findings of
facts, affirming, modifying or vacating the order, which order
shall be final unless vacated or modified upon judicial review
thereof.
(f) Such The hearing and the administrative procedure prior
to, during and following the hearing shall be governed by and in
accordance with the provisions of article five, chapter
twenty-nine-a of this code in like manner as if the provisions of
article five were set forth in extenso in this section.
(g) Any person adversely affected by an order entered
following such the hearing shall have the right of judicial review
thereof in accordance with the provisions of section four, article five, chapter twenty-nine-a of this code with like effect as if the
provisions of said section four were set forth in extenso herein.
(h) The judgment of a circuit court reviewing the order of the
commissioner shall be final unless reversed, vacated or modified on
appeal to the supreme court of appeals in accordance with the
provisions of section one, article six, chapter twenty-nine-a of
this code.
(i) Legal counsel and services for the commissioner in all
such proceedings in any circuit court and the supreme court of
appeals shall be provided by the attorney general or his or her
assistants and in any proceedings in any circuit court by the
prosecuting attorney of that county as well, all without additional
compensation.
(j) Any monetary penalty assessed and collected by the
commissioner shall be deposited in the state treasury and credited
to the "wine license special fund."
§60-8-20. Unlawful acts generally.
It shall be unlawful:
(a) For a distributor to sell or deliver wine purchased or
acquired from any source other than a person registered under the
provisions of section six, article eight, chapter sixty of this
code, or for a retailer to sell or deliver wine purchased or
acquired from any source other than a licensed distributor or a
farm winery as defined in section five-a, article one of this chapter;
(b) Unless otherwise specifically provided for by the
provisions of this article, for a licensee under this article to
acquire, transport, possess for sale, or sell wine other than in
the original package;
(c) For a licensee, his servants, agents or employees to sell,
furnish or give wine to any person less than twenty-one years of
age, or to a mental incompetent, or person who is physically
incapacitated due to the consumption of alcoholic liquor or the use
of drugs;
(d) For a licensee to permit a person who is less than
eighteen years of age to sell, furnish or give wine to any person;
(e) For a distributor to sell or deliver any brand of wine
purchased or acquired from any source other than the primary source
of supply of the wine which granted the distributor the right to
sell such the brand at wholesale. For the purposes of this
article, "primary source of supply" means the vintner of the wine,
the importer of a foreign wine who imports the wine into the United
States, the owner of a wine at the time it becomes a marketable
product, the bottler of a wine, or an agent specifically authorized
by any of the above-enumerated persons to make a sale of the wine
to a West Virginia distributor: Provided, That no retailer shall
sell or deliver wine purchased or acquired from any source other
than a distributor licensed as such in this state: Provided, however, That nothing herein shall be deemed considered to prohibit
sales of convenience between distributors licensed in this state
wherein one such distributor sells, transfers or delivers to
another such distributor a particular brand or brands for sale at
wholesale, of which brand or brands such the other distributor may
be temporarily out of stock has been duly authorized to sell at
wholesale by the primary source of supply: Provided, That no West
Virginia licensed distributor may authorize another West Virginia
licensed distributor to sell at wholesale. The commissioner shall
promulgate such rules or regulations as may be necessary to carry
this subsection into effect;
(f) For a person to violate any reasonable rule or regulation
promulgated by the commissioner under this article;
(g) Nothing in this article, nor any rule or regulation of the
commissioner, shall prevent or be deemed considered to prohibit any
licensee from employing any person who is at least eighteen years
of age to serve in any licensee's lawful employment, including the
sale or delivery of wine under the provisions of this article.
With the prior approval of the commissioner, a licensee whose
principal business is the sale of food or consumer goods or the
providing of recreational activities, including, but not limited
to, nationally franchised fast food outlets, family-oriented
restaurants, bowling alleys, drug stores, discount stores, grocery
stores, and convenience stores, may employ persons who are less than eighteen years of age but at least sixteen years of age:
Provided, That such the person's duties shall not include the sale
or delivery of nonintoxicating beer or alcoholic liquors:
Provided, however, That the authorization to employ such persons
under the age of eighteen years shall be clearly indicated on the
licensee's license.
§60-8-28. Registration of labels.
Every distributor supplier and farm winery offering wine for
sale under this article shall register with the tax commissioner
each label offered for sale in the state. Every supplier shall pay
a fee of fifteen dollars and every farm winery shall pay a fee of
three dollars for the registration of such the label. No wine may
be sold under this article unless its label has been registered.
NOTE: The purpose of this bill is to redefine the term wine
to exclude sake, marsala and vermouth from the definition of wine;
to allow a tax credit to the supplier for tax paid wines exported
from West Virginia; to impose a monetary penalty on licensees for
violation of this article or any rule or order promulgated by the
commissioner; to amend the violations section to allow sales
between licensed wine distributors pursuant to authorization by the
primary source of supply; and to set a wine label registration fee
of $15 for every supplier and $3 for every farm winery.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
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