WEST virginia legislature
2017 regular session
House Bill 2820
By Delegates Howell, Hamrick, Paynter, Lewis, Arvon, Martin, Storch, frich, Blair, Upson and Walters
[Introduced March 8, 2017;
to the Committee on Government Organization then Finance.]
A BILL to repeal §60-1-4 of the Code of West Virginia,1931, as amended; to repeal §60-2-2, §60-2-3, §60-2-7, §60-2-9, and §60-2-10 of said code; to repeal §60-3-1, §60-3-2, §60-3-3, §60-3-4, §60-3-5, §60-3-6, §60-3-7, §60-3-8, §60-3-9, §60-3-10, §60-3-11, §60-3-12, §60-3-13, §60-3-14, §60-3-15, §60-3-16, §60-3-17, §60-3-18, §60-3-20, §60-3-21, §60-3-23, and §60-3-24 of said code; to amend and reenact §11-16-3 and §11-16-4 of said code; to amend said code by adding thereto a new article, designated §29-22D-1, §29-22D-2 and §29-22D-3; to amend and reenact §60-1-5 of said code; to amend and reenact §60-2-1 of said code, all relating to abolishing the Alcohol Beverage Control Commissioner; transferring its powers and duties to the State Lottery Commission; creating alcohol beverage distributors licenses; and creating a per case tax on alcohol.
Be it enacted by the Legislature of West Virginia:
That §60-1-4 of the Code of West Virginia, 1931, as amended, be repealed; that §60-2-2, §60-2-3, §60-2-7, §60-2-9, and 60-2-10 of said code be repealed; that §60-3-1, §60-3-2, §60-3-3, §60-3-4, §60-3-5, §60-3-6, §60-3-7, §60-3-8, §60-3-9, §60-3-10, §60-3-11, §60-3-12, §60-3-13, §60-3-14, §60-3-15, §60-3-16, §60-3-17, §60-3-18, §60-3-20, §60-3-21, §60-3-23, and §60-3-24 of said code be repealed; that §11-16-3 and§11-16-4 of said code be amended and reenacted; that said code be amended by adding thereto a new article, designated §29-22D-1, §29-22D-2 and §29-22D-3; that §60-1-5 of said code be amended and reenacted; and that §60-2-1 of said code be amended and reenacted, all to read as follows:
CHAPTER 11. TAXATION.
ARTICLE 16. NONINTOXICATING BEER.
For the purpose of this article, except where the context clearly requires differently:
(1) "Brand" means a nonintoxicating beer product manufactured, brewed, mixed, concocted, blended, bottled or otherwise produced, or imported or transhipped by a brewer or manufacturer, the labels of which have been registered and approved by the commissioner that is being offered for sale or sold in West Virginia by a distributor who has been appointed in a valid franchise agreement or a valid amendment thereto.
(2) "Brewer" or "manufacturer" means any person manufacturing, otherwise producing or importing or transhipping nonintoxicating beer or nonintoxicating craft beer for sale at wholesale to any licensed distributor. Brewer or manufacturer may be used interchangeably throughout this article. A brewer may obtain only one brewer's license for its nonintoxicating beer or nonintoxicating craft beer.
(3) "Brewpub" means a place of manufacture of nonintoxicating beer or nonintoxicating craft beer owned by a resident brewer, subject to federal and state regulations and guidelines, a portion of which premises are designated for retail sales of nonintoxicating beer or nonintoxicating craft beer by the resident brewer owning the brewpub.
(4) "Class A retail license" means a retail license permitting the retail sale of liquor at a freestanding liquor retail outlet licensed pursuant to chapter sixty of this code.
(5) "Class B retail license" means a retail license permitting the retail sale of liquor at a mixed retail liquor outlet licensed pursuant to chapter sixty of this code.
the West Virginia Alcohol Beverage Control
Commissioner the State Lottery Commission.
(7) "Distributor" means and includes any person jobbing or distributing nonintoxicating beer or nonintoxicating craft beer to retailers at wholesale and whose warehouse and chief place of business shall be within this state. For purposes of a distributor only, the term "person" means and includes an individual, firm, trust, partnership, limited partnership, limited liability company, association or corporation. Any trust licensed as a distributor or any trust that is an owner of a distributor licensee, and the trustee or other persons in active control of the activities of the trust relating to the distributor license, is liable for acts of the trust or its beneficiaries relating to the distributor license that are unlawful acts or violations of article eleven of this chapter notwithstanding the liability of trustees in article ten, chapter forty-four-d of this code.
(8) "Franchise agreement" means the written agreement between a brewer and a distributor that is identical as to terms and conditions between the brewer and all its distributors, which agreement has been approved by the commissioner. The franchise agreement binds the parties so that a distributor, appointed by a brewer, may distribute all of the brewer's nonintoxicating beer products, brands or family of brands imported and offered for sale in West Virginia, including, but not limited to, existing brands, line extensions and new brands all in the brewer's assigned territory for the distributor. All brands and line extensions being imported or offered for sale in West Virginia must be listed by the brewer in the franchise agreement or a written amendment to the franchise agreement. A franchise agreement may be amended by mutual written agreement of the parties as approved by the commissioner with identical terms and conditions for a brewer and all of its distributors. Any approved amendment to the franchise agreement becomes a part of the franchise agreement. A brewer and a distributor may mutually agree in writing to cancel a franchise agreement. A distributor terminated by a brewer as provided in this article and the promulgated rules no longer has a valid franchise agreement. If a brewer has reached an agreement to cancel a distributor or has terminated a distributor, then a brewer may appoint a successor distributor who accedes to all the rights of the cancelled or terminated distributor.
(9) "Franchise distributor network" means the distributors who have entered into a binding written franchise agreement, identical as to terms and conditions, to distribute nonintoxicating beer products, brands and line extensions in an assigned territory for a brewer. A brewer may only have one franchise distributor network: Provided, That a brewer that has acquired the manufacturing, bottling or other production rights for the sale of nonintoxicating beer at wholesale from a selling brewer as specified in subdivision (2), subsection (a), section twenty-one of this article shall continue to maintain and be bound by the selling brewer's separate franchise distributor's network for any of its existing brands, line extensions and new brands.
(10) "Freestanding liquor retail outlet" means a retail outlet that sells only liquor, beer, nonintoxicating beer and other alcohol-related products, as defined pursuant to section four, article three-a, chapter sixty of this code.
(11) "Growler" means a container or jug that is made of glass, ceramic, metal or other material approved by the commissioner, that may be only thirty-two or sixty-four fluid ounces in size and must be capable of being securely sealed. The growler is utilized by an authorized licensee for purposes of off-premise sales only of nonintoxicating beer or nonintoxicating craft beer for personal consumption not on a licensed premise and not for resale. Notwithstanding any other provision of this code to the contrary, a securely sealed growler is not an open container under federal, state and local law. A growler with a broken seal is an open container under federal, state and local law unless it is located in an area of the motor vehicle physically separated from the passenger compartment. The secure sealing of a growler requires the use of a tamper-resistant seal, security tape or other material, as approved by the commissioner, placed on or over the growler's opening, which seal, security tape or other material is clearly marked with the date of the secure sealing by the authorized licensee who is selling the growler.
(12) "Line extension" means any nonintoxicating beer product that is an extension of brand or family of brands that is labeled, branded, advertised, marketed, promoted or offered for sale with the intent or purpose of being manufactured, imported, associated, contracted, affiliated or otherwise related to a brewer's existing brand through the use of a brewer, its subsidiaries, parent entities, contracted entities, affiliated entities or other related entities. In determining whether a nonintoxicating beer product is a line extension, the commissioner may consider, but is not limited to, the following factors: Name or partial name; trade name or partial trade name; logos; copyrights; trademarks or trade design; product codes; advertising promotion or pricing.
(13) "Nonintoxicating beer" means all natural cereal malt beverages or products of the brewing industry commonly referred to as beer, lager beer, ale and all other mixtures and preparations produced by the brewing industry, including malt coolers and nonintoxicating craft beers with no caffeine infusion or any additives masking or altering the alcohol effect containing at least one half of one percent alcohol by volume, but not more than nine and six-tenths of alcohol by weight, or twelve percent by volume, whichever is greater. The word "liquor" as used in chapter sixty of this code does not include or embrace nonintoxicating beer nor any of the beverages, products, mixtures or preparations included within this definition.
(14) "Nonintoxicating beer sampling event" means an event approved by the commissioner for a Class A retail licensee to hold a nonintoxicating beer sampling authorized pursuant to section eleven-a of this article.
(15) "Nonintoxicating beer sampling day" means any days and hours of the week where Class A retail licensees may sell nonintoxicating beer pursuant to section eleven-a and subdivision (1), subsection (a), section eighteen of this article, and is approved, in writing, by the commissioner to conduct a nonintoxicating beer sampling event.
(16) "Nonintoxicating craft beer" means any beverage obtained by the natural fermentation of barley, malt, hops or any other similar product or substitute and containing not less than one half of one percent by volume and not more than twelve percent alcohol by volume or nine and six-tenths percent alcohol by weight with no caffeine infusion or any additives masking or altering the alcohol effect.
(17) "Original container" means the container used by a resident brewer or brewer at the place of manufacturing, bottling or otherwise producing nonintoxicating beer or nonintoxicating craft beer for sale at wholesale.
(18) "Person" means and includes an individual, firm, partnership, limited partnership, limited liability company, association or corporation.
(19) "Private club" means a license issued pursuant to article seven, chapter sixty of this code.
(20) "Resident brewer" means any brewer or manufacturer of nonintoxicating beer or nonintoxicating craft beer whose principal place of business and manufacture is located in the state of West Virginia and which does not brew or manufacture more than twenty-five thousand barrels of nonintoxicating beer or nonintoxicating craft beer annually, and does not self-distribute more than ten thousand barrels thereof in the state of West Virginia annually.
(21) "Retailer" means any person selling, serving, or otherwise dispensing nonintoxicating beer and all products regulated by this article, including, but not limited to, malt coolers at his or her established and licensed place of business.
(22) "Tax Commissioner" means the Tax Commissioner of the State of West Virginia or the commissioner's designee.
Alcohol Beverage Control Commissioner State Lottery Commission;
administrators, employees and agents; administration and enforcement expenses.
The Alcohol Beverage
Control Commissioner described under the provisions of article two, chapter
sixty of this code The State Lottery Commission shall have sole
responsibility for the administration of this article, except for those
responsibilities expressly vested in the Tax Commissioner under sections
thirteen, fourteen and fifteen of this article.
All acts heretofore
performed by the
nonintoxicating beer Alcohol Beverage Control Commissioner
under previous proceedings of this article are hereby again ratified and
confirmed, and the commissioner lottery commission shall succeed
to the same position previously maintained by the nonintoxicating beer Alcohol
Beverage Control Commissioner in all proceedings and official acts
instituted and perfected under the provisions of this article prior to the
effective date of this section.
lottery commission shall appoint an adequate number of competent persons
to serve as administrators, employees and agents of the commissioner lottery
commission for the purpose of keeping all necessary accounts and records
required under the provisions of this article; investigating the books,
accounts, records and other papers of retailers, distributors and brewers;
investigating applicants for license and the places of business of retailers,
distributors and brewers; procuring evidence with respect to violations of the
provisions of this article, and particularly for use at hearings held by the commissioner
lottery commission and on proceedings instituted in court for the
purpose of revoking or suspending licenses hereunder; and such administrators,
employees and agents shall perform such other duties as the commissioner
lottery commission may direct. Such administrators, employees and agents
shall have the right to enter any licensed premises in the state in the
performance of their duties at any hour of the day or night when beer is being
sold or consumed on such licensed premises. Refusal by any licensee or by any
employee of a licensee to permit such administrators, employees or agents to
enter the licensed premises shall be an additional cause for revocation or
suspension of the license of such licensee by the commissioner lottery
commission. The compensation of such administrators, employees and agents
shall be fixed by the commissioner lottery commission: Provided,
That the commissioner lottery commission may employ up to eleven
special investigators who shall be nonclassified exempt employees of the
(c) Services rendered the
state by clerks, sheriffs, commissioners in chancery and special commissioners,
designated by the court, and court reporters and stenographers performing services
commissioner lottery commission and fees of witnesses
summoned on behalf of the state in proceedings to revoke or suspend retailer's
licenses shall be treated as part of the expenses of administration and
enforcement, and such officers and said other persons shall be paid the same
fees and charges as would be chargeable for like services performed for an
individual; and the compensation of such clerks, sheriffs and other persons
shall be paid out of the amount allocated for the expense of administration
enforcement, after the amount of such fees and other charges shall be certified
by the court to the Auditor.
CHAPTER 29. MISCELLANEOUS BOARDS AND OFFICERS.
Article 22D. alcohol beverage, beer and wine administration; distibutor licenses; tax on alcohol beverages.
§29-22D-1. Transfer of duties of alcohol beverage control commissioner to State Lottery Commission.
On July 1, 2017, the State Lottery Commission shall begin exercising all powers and duties formerly exercised by the alcohol beverage control commissioner under the provisions of article sixteen, chapter eleven and chapter sixty of this code.
§29-22D-2. Licenses for distributors of alcohol beverages.
(a) Beginning July 1, 2017, all alcohol beverages may only be distributed to retailors by licensed alcohol beverage distributors: Provided, That no liquor may be sold by distributors until all liquor still in the possession of the alcohol beverage control commissioner or its successors has been sold. Initially, all persons who have contracted with the alcohol beverage control commission to supply alcohol beverages which the commission sold to retailers are automatically licensed as distributors under this section. In addition, persons presently licensed to distribute beer or wine may choose to become licensed distributors of alcohol beverages with no further requirements.
(b) The lottery director shall by legislative rule promulgated under the provisions of article three, chapter twenty-nine-a of this code and approved by the Legislature establish the requirements to be licensed as an alcohol beverage distributor. All alcohol beverage distributor licenses shall be issued by the director.
§29-22D-3. Per case tax on all alcohol beverages.
(a) There is hereby levied a tax of twenty-eight percent of the value of every case of alcohol beverages distributed by distributors to retailors.
(b) The State Tax Commissioner shall determine how such tax shall be collected and be paid to the state. The proceeds of the tax shall be placed in the General Revenue Fund of the state.
CHAPTER 60. STATE CONTROL OF ALCOHOLIC LIQUORS.
ARTICLE 1. GENERAL PROVISIONS.
For the purposes of this chapter:
shall means ethyl alcohol whatever its origin and shall include
synthetic ethyl alcohol but not denatured alcohol.
"Beer" means any beverage obtained by the fermentation of barley, malt, hops or any other similar product or substitute, and containing more alcohol than that of nonintoxicating beer.
"Nonintoxicating beer" means any beverage obtained by the fermentation of barley, malt, hops or similar products or substitute and containing not more alcohol than that specified by section two, article sixteen, chapter eleven of this code.
"Wine" means any alcoholic beverage obtained by the fermentation of the natural content of fruits, or other agricultural products, containing sugar.
"Spirits" means any alcoholic beverage obtained by distillation and mixed with potable water and other substances in solution and includes brandy, rum, whiskey, cordials and gin.
"Alcoholic liquor" includes alcohol, beer, wine and spirits and any liquid or solid capable of being used as a beverage, but shall not include nonintoxicating beer.
"Original package" means any closed or sealed container or receptacle used for holding alcoholic liquor.
"Sale" means any transfer, exchange or barter in any manner or by any means, for a consideration, and shall include all sales made by principal, proprietor, agent or employee.
"Selling" includes solicitation or receipt of orders; possession for sale; and possession with intent to sell.
"Person" means an individual, firm, partnership, limited partnership, corporation or voluntary association.
"Manufacture" means to distill, rectify, ferment, brew, make, mix, concoct, process, blend, bottle or fill an original package with any alcoholic liquor.
"Manufacturer" means any person engaged in the manufacture of any alcoholic liquor, and among others includes a distiller, a rectifier, a wine maker and a brewer.
"Brewery" means an establishment where beer is manufactured or in any way prepared.
"Winery" means an establishment where wine is manufactured or in any way prepared.
"Distillery" means an establishment where alcoholic liquor other than wine or beer is manufactured or in any way prepared.
"Public place" means any place, building or conveyance to which the public has, or is permitted to have access, including restaurants, soda fountains, hotel dining rooms, lobbies and corridors of hotels and any highway, street, lane, park or place of public resort or amusement: Provided, That the term "public place" shall not mean or include any of the above-named places or any portion or portions thereof which qualify and are licensed under the provisions of this chapter to sell alcoholic liquors for consumption on the premises: Provided, however, That the term "public place" shall not mean or include any legally demarcated area designated solely for the consumption of beverages and freshly prepared food that directly connects and adjoins any portion or portions of a premises that qualifies and is licensed under the provisions of this chapter to sell alcoholic liquors for consumption thereupon: Provided further, That the term "public place" shall also not include a facility constructed primarily for the use of a Division I college that is a member of the National Collegiate Athletic Association, or its successor, and used as a football, basketball, baseball, soccer or other Division I sports stadium which holds a special license to sell wine pursuant to the provisions of section three, article eight of this chapter, in the designated areas of sale and consumption of wine and other restrictions established by that section and the terms of the special license issued thereunder.
liquor store means a store established and operated by the commission under
this chapter for the sale of alcoholic liquor in the original package for
consumption off the premises. "An agency"
means a drugstore, grocery store or general store designated by the commission
as a retail distributor of alcoholic liquor for the West Virginia Alcohol
Beverage Control Commissioner. "Department"
means the organization through which the commission exercises powers imposed
upon it by this chapter.
or "commission" means the
West Virginia Alcohol Beverage Control
Commissioner State Lottery Commission.
"Intoxicated" means having one's faculties impaired by alcohol or other drugs to the point where physical or mental control or both are markedly diminished.
"Powdered alcohol" means an alcohol manufactured in a powder or crystalline form for either direct use or reconstitution as an alcoholic liquor or food. For purposes of this chapter, powdered alcohol excludes any material intended for industrial purposes.
ARTICLE 2. ALCOHOL BEVERAGE CONTROL COMMISSIONER abolished.
§60-2-1. Office created;
powers and functions generally; office of
liquor control alcohol
beverage control commissioner abolished and powers transferred.
(a) To accomplish the purposes of this chapter there is hereby created the office of West Virginia Alcohol Beverage Control Commissioner. The commissioner shall have and is hereby granted all of the powers and authority and shall perform all of the functions and services heretofore vested in and performed by the West Virginia liquor control commissioner. The office of the West Virginia liquor control commissioner is hereby abolished. Wherever in this chapter and elsewhere in law reference is made to the West Virginia liquor control commissioner or liquor control commission such reference shall henceforth be construed and understood to mean the West Virginia Alcohol Beverage Control Commissioner. All parts and provisions of this chapter rendered meaningless and inapplicable by the provisions hereof are hereby modified and amended so that the provisions of this chapter will be consistent and harmonious in their entirety.
(b) On July 1, 2017, the entity of alcohol beverage control commissioner is hereby abolished and shall cease to exercise any functions contained in this chapter and article sixteen, chapter eleven of this code. All powers and duties formerly exercised by the commissioner are hereby transferred to, and shall be exercised by the State Lottery Commission. Any references in this chapter and article sixteen, chapter eleven of this code to the alcohol beverage control commissioner shall be read as the lottery commission.
NOTE: The purpose of this bill is to abolish the Alcohol Beverage Control Commissioner; transferring its powers and duties to the State Lottery Commission; creating alcohol beverage distributors licenses; and creating a per case tax on alcohol.
Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.