Revision: Jan. 26, 2009, midnight
HB 636-FN - AS INTRODUCED
2009 SESSION
03/05
HOUSE BILL 636-FN
AN ACT relative to direct shipment of alcoholic beverages.
COMMITTEE: Commerce and Consumer Affairs
This bill limits direct shipment provisions to the sale of wine and authorizes in-state wine manufacturers to sell by direct shipment.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
09-0684
03/05
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Nine
AN ACT relative to direct shipment of alcoholic beverages.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Definitions; Direct Shipper. Amend RSA 175:1, XXIX-a. to read as follows:
XXIX-a. “Direct shipper” means any [licensee outside the state of New Hampshire] out-of-state United States winery in compliance with its local licensing statutes and in possession of a Federal basic permit as a bonded winery who accepts orders placed [from New Hampshire,] by mail, telephone, Internet, or any electronic or other means, for [liquor or beverages] wine produced under its Federal basic permit as a bonded winery, and who ships, packages for shipment, or facilitates in any way shipment of said [liquor or beverages] wine by a third party or common carrier to a New Hampshire location.
2 Direct Shippers. Amend RSA 175:2, II to read as follows:
II. The commission shall not be liable for injuries or damages arising from [liquor or beverage] wine sold by direct shippers.
3 Transportation of Liquor. Amend RSA 175:6, I-II to read as follows:
I. No person shall transport liquor in this state in a greater quantity than 3 quarts, unless said liquor was purchased from a state store, [from a direct shipper,] from a holder of a combination or retail wine license in accordance with RSA 178:18[,] and RSA 178:19, or from a winery holding a limited winery special sales license in accordance with RSA 178:8. Provided, however, that the commission in its discretion may grant to an individual, upon application, a license to transport for a specific journey liquor not purchased at a state store for the person’s own personal use, in a quantity not to exceed 3 gallons. Quantities exceeding 3 gallons may be transferred with a license issued by the commission providing a fee of 25 percent of the entire value of the product is paid to the commission. It shall be lawful for common carriers to transport liquor to state stores, to state warehouses, to licensees under this title, to purchasers of liquor at state stores, and from manufacturers to state warehouses, state stores, and to the state line for transportation outside the state; for licensees under this title to transport liquor from state stores to their place of business; and for manufacturers to transport within the state to state warehouses and state stores and to the state line for transportation outside the state.
II. Upon written authorization from the commission it shall be lawful for any out-of-state wholesaler of liquor or any licensed liquor vendor, wine vendor, liquor manufacturer rectifier, or [domestic] wine manufacturer to pick up from, transport, and deliver liquor or table wines, as applicable, to any commission warehouse, to any other licensed warehouse, to the state line, or to their place of business.
4 Wine Manufacturer License. Amend RSA 178:8, II-IV to read as follows:
II. Each wine manufacturer [of domestic wines in this state] shall have the right to sell and to transport and deliver wines manufactured by it directly to the holders of on-premises or off-premises licenses issued by the commission, or to consumers over 21 years of age in packages clearly marked “Alcoholic Beverages, adult signature (over 21 years of age) required.” Sales to any consumer or consumer’s address or licensee shall not exceed 108 liters of wine in any calendar year. No [domestic] wine manufactured in this state by any manufacturer shall be sold or delivered in this state in any manner which is inconsistent with the provisions of this title.
III. Each wine manufacturer shall have the right to sell at retail or wholesale at its winery for off-premises consumption any of its wines, subject to the limits in paragraph II. Visitors at said premises may be provided with reasonable samples of wine for tasting. Pursuant to rules adopted by the commission, a wine manufacturer may transport its products to a farmers’ market, and may sell such products at retail in the original container.
IV. Each wine manufacturer shall maintain records and prepare reports for the commission which shall indicate the sales made under this section and shall pay to the commission monthly a fee equal to [5] 8 percent of such sales on or before the tenth day of the month following the sale.
5 Liquor and Wine Vendor License. Amend RSA 178:9, IV to read as follows:
IV. Liquor and wine vendor licensees may designate a liquor and wine representative as the sole supplier of its [domestic,] table[,] or fortified wine.
6 Direct Shippers. Amend RSA 178:27 to read as follows:
178:27 Direct Shippers.
I.(a) Notwithstanding any other provision of law to the contrary, any person currently licensed in its state of domicile as a [beverage manufacturer, importer, wholesaler, or retailer] winery and holding a Federal basic permit as a bonded winery shall apply for a direct shipper permit from the commission and pay the direct shipper permit license fee.
(b) Applicants for a direct shipper permit shall be exempt from the provision of RSA 178:1, I requiring registration with the secretary of state, if the applicant is duly organized and registered to do business under the laws of the state in which the applicant is domiciled.
II. A direct shipper may ship wine directly to New Hampshire consumers over 21 years of age or licensees in packages clearly marked “Alcoholic Beverages, adult signature (over 21 years of age) required.” All shipments from direct shippers into the state shall be made by a licensed carrier and such carriers are required to obtain an adult signature. Direct shippers or carriers shall not ship into areas of the state where alcohol beverages may not be lawfully sold. [Liquor and wine that has been registered for sale to the commission with the commission during the previous 2 months may be direct shipped only if the shipper offers to sell a matching amount to the commission at wholesale.] Shipments of any other products shall be considered unlicensed shipments under the provisions of RSA 178:1, I.
III. [No direct shipper shall ship more than 60 individual containers of not more than one liter each of liquor and wine to any one licensee in New Hampshire or to any consumer or consumer’s address in New Hampshire in any calendar year. Furthermore, in the event any manufacturer or wholesaler direct shipper wishes to ship more than a total of 1,200 individual containers of not more than one liter each of any particular liquor or wine directly to any combination of licensees and/or consumers in New Hampshire, the shipper shall offer to sell a matching amount to the commission or beer distributor at wholesale prices] Sales to any consumer or consumer’s address or licensee shall not exceed 108 liters of wine in any calendar year.
IV. [No direct shipper shall ship more than 27 gallons of beer or beverage in individual containers of not more than one liter to any consumer’s address in New Hampshire in any calendar year. No direct shipper shall ship beer or beverage to a New Hampshire licensee.] The commission is authorized to collect information from direct shippers and carriers necessary to assure compliance with this section.
V. Direct shippers shall file invoices for each shipment with the liquor commission showing the retail price of the product, and shall pay a fee of 8 percent of the retail price for shipments of [liquor,] wine[, beer, or beverage] to the commission. Such filings shall be monthly, and arrive at the commission no later than the tenth of the month following shipment. Direct shippers shall maintain records for at least 3 years which will permit the commission to ascertain the truthfulness of the information filed and permit the commission to perform an audit of the direct shippers’ filings upon reasonable request. Wholesale shipments of any liquor or wine shall be permitted only in accordance with RSA 175:6.
VI. The liquor commission shall adopt rules, pursuant to RSA 541-A, relative to:
(a) The application procedures and form for the direct shipper permit authorized under paragraph I.
(b) The signature form or other identification procedures to be used by direct shippers to ensure that consumers to which liquor and beverage are being shipped are over 21 years of age.
(c) Filings of direct shippers under paragraph V.
VII. Notwithstanding the provisions of RSA 179:58, any person holding a direct shippers permit under this section who ships [liquor,] any alcoholic product other than wine, or who ships wine[, or beer] to a person under 21 years of age, shall be guilty of a class B felony and shall have such permit permanently revoked.
VIII. Upon notification by authorities in another state which imposes a reciprocal enforcement policy, a New Hampshire licensee proved to be making illegal direct shipments to consumers and licensees in said state shall be subject to action by the liquor commission. Such actions may include fines and suspension and revocation of New Hampshire liquor licenses.
7 Wine Manufacturer License Fees. RSA 178:29, V(a) is repealed and reenacted to read as follows:
(a) Wine manufacturers, $250.
8 New Subparagraph; Direct Shippers Permit License Fee. Amend RSA 178:29, V by inserting after subparagraph (e) the following new subparagraph:
(f) Direct shippers permit, $250.
9 Free Drinks. Amend RSA 179:44, II to read as follows:
II. Notwithstanding [the above] paragraph I, beverage manufacturers, beverage vendors, brew pubs, wholesale distributors and their liquor or wine vendors, their liquor and wine representatives, [domestic] wine manufacturers, and on-premises and off-premises licensees may conduct beverage, liquor, or wine tasting, as applicable, on licensed premises. Liquor, beverage, or wine tasting shall be conducted only during such hours as are authorized by the commission for the sale of the product on the premises.
10 Repeal. RSA 175:1, LXVII, relative to the definition of domestic wine, is repealed.
11 Effective Date. This act shall take effect July 1, 2009.
LBAO
09-0684
01/23/09
HB 636-FN - FISCAL NOTE
AN ACT relative to direct shipment of alcoholic beverages.
FISCAL IMPACT:
The Liquor Commission states this bill will have an indeterminable fiscal impact on state general fund revenue in FY 2010 and each year thereafter. The Judicial Branch, the Judicial Council, the Department of Corrections, and the New Hampshire Association of Counties state this bill may increase state and county expenditures by an indeterminable amount in FY 2010 and each year thereafter. There will be no fiscal impact on local expenditures or county and local revenue.
METHODOLOGY:
The Liquor Commission states this bill limits direct shipment provisions to the sale of wine, authorizes in-state wine manufacturers to sell by direct shipment, and excludes importers of wine products from outside the United States from direct shipping into New Hampshire. The Commission states the bill would increase the tax on direct shipments of liquor from 8 percent to 25 percent and would change the direct ship permit from being a free permit to requiring a $250 fee. The Commission assumes approximately half of the 1,072 direct shippers will not seek a shipper permit with a $250 fee. The Commission estimates the shipper permit fee may increase revenue by $134,000 ($250 permit fee * 536 shipper permits). The Commission is unable to determine the overall fiscal impact the changes in this bill will have on revenue.
The Judicial Branch states the parts of this bill that amend the penalty provisions for violations of the statutes governing alcoholic beverages would potentially have a fiscal impact on the Branch. The Branch states though the bill amends the language of RSA 178:27, VII, it does not change the penalty from a class B felony. The Branch states this should have no fiscal impact on the Branch as there have been no charges for violating RSA 178:27, VII brought since the statute was enacted in 2003. The Branch states the violations of RSA 175:6 has not resulted in any felony charges and only 20 misdemeanor charges. Therefore the impact to the Branch is an unspecified misdemeanor charge. The Branch states the cost of an unspecified misdemeanor case is $35.75 in FY 2010 and each year thereafter. The Branch has no information to estimate how many charges would be brought as a result of the changes contained in the bill to
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01/23/09
determine the fiscal impact on expenditures. However, if a single case were to be appealed to the New Hampshire Supreme Court, the fiscal impact would be in excess of $10,000.
The Judicial Council states this bill may result in an indeterminable increase in general fund expenditures. The Council states if an individual is found to be indigent, the flat fee of $756.24 per felony is charged by a public defender or contract attorney. If an assigned counsel attorney is used, the fee is $60 per hour with a cap of $4,100 for a felony charge. The Council also states additional costs could be incurred if an appeal is filed. The public defender, contract attorney and assigned counsel rates for Supreme Court appeals is $2,000 per case, with many assigned counsel attorneys seeking permission to exceed the fee cap. Requests to exceed the fee cap are seldom granted. Finally, expenditures would increase if services other than counsel are requested and approved by the court during the defense of a case or during an appeal.
The Department of Corrections states the average annual cost of incarcerating an individual in the general prison population for the fiscal year ending June 30, 2008 was $32,753. The cost to supervise an individual by the Department’s division of field services for the fiscal year ending June 30, 2008 was $779. The Department states this bill may increase expenditures by an indeterminable amount, but is unable to predict the number of individuals that might be impacted.
The New Hampshire Association of Counties states to the extent an individual is prosecuted, convicted, and sentenced to incarceration, the counties may have increased expenditures. The Association is unable to determine the number of individuals who might be detained or incarcerated as a result of this bill. The average cost to incarcerate an individual in a county facility is $30,165 a year.