Tennessee Governor Bill Haslam Expected To Sign Wine-In-Grocery Bill

(Nashville, TN) Tennessee Governor Bill Haslam is expected to sign the wine in grocery stores bill this week.

The governor’s office has the signing ceremony set for just after 11am Thursday morning.

Voters will decide by referendum if they’ll allow the sales in their own towns and cities across Tennessee.

In addition to allowing retailers and wholesalers to sell wine, liquor stores can sell beer and drinking related items such as mixers.

WBIR-TV reports the bill-signing ceremony is listed on the governor’s public schedule.

The change would not go into effect until July, 2016.

Read the House bill HERE.

Some specifics:

This amendment creates the retail food store wine licenses, to be issued by the alcoholic beverages commission. A retail food store license will authorize the licensee to sell wine, of an alcoholic content not to exceed 18 percent by volume, for off premises consumption. A retail food store that is licensed to sell beer may also be licensed to sell win under this amendment. The qualifications for issuance of a retail food store wine license will be:

(1) The store must be an establishment that is open to the public and that derives at least 20 percent of its sales taxable sales from retail sales of food and food ingredients other than food and food ingredients sold as prepared food, alcoholic beverages, candy, dietary supplements and tobacco. This requirement must be maintained throughout the period of licensure and failure to maintain this requirement, after receiving a one-year period within which to do so, will result in suspension or revocation the license;
(2) The store must have retail floor space of at least 1,200 square feet;
(3) The store must be located in a county or municipality where the sale of wine in retail food stores has been authorized by a local option election and that have full time law enforcement through a police or sheriff’s department;
(4) Individual applicants for licensure must be at least 21 years of age and not have been convicted of a felony that would disqualify the applicant from eligibility for issuance of an alcoholic wholesaler or retailer license under present law;
(5) No licensee, nor any entity having an interest in a license greater than 10 percent, shall have any interest in a business licensed to engage in the sale or distribution of alcoholic beverages, including wine and beer. A retail food store wine licensee will not be prohibited from having more than one such license, however, a retail food store wine licensee will not be permitted to combine its purchasing power with other licensees;
(6) Payment of a $400 application fee and a $850 annual license fee;
(7) Submit a certificate signed by the chief executive of the local government where the store is located, which states that the applicant is not disqualified based on a past criminal conviction and that the applicant is compliant with local zoning ordinances. This requirement will be waived if the certificate is not issued within 60 days of an application being submitted or upon submission of a court order indicating that denial of a certificate was unreasonable; and
(8) The store must not be located in a shopping center where the owner has restricted the sale of alcoholic beverages at the shopping center.

An applicant who is denied a license may appeal the denial to chancery court.

This amendment generally applies the laws that are applicable to the licensure and regulation of package retailers and wholesalers to retail food store wine license holders. This amendment specifically exempts retail food store wine licensees from the following provisions of present law that apply to retail package stores:

(1) The prohibition against selling intoxicating liquors at retail in connection with any wholesale business;
(2) The requirement that retail package stores be located on a ground floor;
(3) The requirement that any person employed in the storage, sale or distribution of alcoholic beverages be a citizen of the United States;
(4) The prohibition against sales for on premises consumption; and
(5) The restrictions against non-resident ownership of interests in retail package stores.

Retail food stores will be prohibited from conducting wine tastings on their premises.

This amendment requires retail food stores that make wine sales to verify that wine purchasers are adults by requiring the presentation of identification prior to making a wine sale. A violation of the identification requirement will be a Class A misdemeanor.

This amendment prohibits retail food store wine licensees from storing wine off their licensed premises and requires that wine deliveries be made by licensed wholesalers. Employees of wholesalers, wineries, manufacturers and nonresident sellers will be prohibited from assisting with the shelving or display of wine in retail food stores. This amendment further requires that retail food store wine licensees designate a manager who has obtained a manager’s permit from the commission to oversee the orders and deliveries of wine from the wholesaler.

This amendment prohibits retail food store wine licensees from keeping unsealed bottles of wine on their premises, except for areas that may be licensed to sell for on premises consumption.

Municipal governments will be authorized to impose an inspection fee on retail food store wine licensees to the same extent that municipal governments are authorized to set inspection fees for retail package stores under present law. Local governments will not be permitted to limit the number of retail food store wine licenses issued within their jurisdictions.

The commission will not issue any retail food store wine licenses prior to July 1, 2016, although the commission may begin processing applications prior to that date. Prior to July 1, 2017, no retail food store wine license will be issued to any applicant for a location that is within 500 feet of an existing retail package store licensee, unless the licensee consents to the issuance of the license.

RESPONSIBLE VENDOR TRAINING PROGRAM FOR WINE AND PACKAGE RETAILERS

Under present law, the responsible vendor program is a program whereby retailers who sell beer for off premises consumption may register and have their employees who sell beer directly to consumers trained in how to avoid making sales to minors and intoxicated persons. A retailer who achieves responsible vendor status is not subject to having the retailers beer permit revoked or suspended in the event that a trained clerk makes a sale to a minor, although the retailer may be subject to a civil penalty of $1,000 and have their responsible vendor status removed.

This amendment requires all retail food stores that are licensed to sell wine and all package stores to participate in a responsible vendor training program for wine and liquor, which will be similar to the responsible vendor program under present law for employees of businesses that sell beer. A retail food store that participated in the responsible vendor program for beer will not be required to also participate in the responsible vendor program for wine and liquor. The annual fee for participation in the program will vary depending on the number of clerks from a law of $150 for 0-15 clerks to a high of $450 for 151-200 clerks plus $50 for each additional 50 clerks over 200.

Responsible vendor training will not be required for any clerk who holds an alcoholic beverage server’s permit.

RETAIL PACKAGE STORES

Present law imposes various requirements on businesses that are licensed to sell liquor and wine for off premises consumption. This amendment changes, modifies and adds to those requirements as follows:

(1) This amendment replaces the present law requirement that retail package stores not sell alcoholic beverages to a known minor with a requirement that retail package store clerks must require customers to present identification before purchasing alcoholic beverages. This is the same requirement as will apply to retail food store wine licensees. A violation of this requirement will be a Class A misdemeanor;
(2) Beginning July 1, 2014, this amendment replaces the present law prohibition against retail package stores selling anything other than wine and liquor with authorization for retail package stores to sell beer and other retail items related to or incidental to the use, consumption, dispensing, or storage of alcoholic beverages, together with merchandise and supplies related to special events or parties. A retail package store licensee will not be required to obtain another permit or license in order to sell beer. This authorization will not apply until July 1, 2017, for any retail package store that objects to extending a license to a retail food store that is located within 500 feet of the package store;
(3) This amendment removes the three percent cap on the service fee that retail package stores may charge customers for check cashing services;
(4) This amendment authorizes retail package stores to provide consulting services related to their products, merchandise and supplies and to supply, deliver and set up such items at locations away from their retail premises;
(5) This amendment adds a requirement that, in order to renew a retail package store license, the licensee must maintain at least 65 percent of their sales from alcoholic beverages, including wine and beer. A licensee who does not meet this requirement will be given one year to comply before the person’s retail package store license is suspended or revoked;
(6) This amendment authorizes retail package stores to have two entrances rather than one main entrance;
(7) This amendment modifies the commission’s authority to regulate the advertising, signs and displays, posters or designs intended to advertise any alcoholic beverage or the place where the same is sold by limiting such regulatory authority to that which is in accordance with federal regulations only;
(8) This amendment expands on the present law qualifications for a retail package store license. Generally, this bill adds requirements for licensure that ameliorate the opportunity for conflicts of interest amongst various levels of the three tiered system and between licensees and licensing authorities, as well as ensuring that felons, minors and straw men are not licensed; and
(9) This amendment removes the present law prohibition against one person receiving more than one retail package store license, subject to certain conditions. In a municipality or county where two or more retail package store licenses have been issued, no licensee shall hold more than 50 percent of the licenses issued in the jurisdiction. Until January 1, 2019, no retail package store license will be issued for premises that are located within 1,500 feet of an existing licensee’s establishment, unless the existing licensee consents to the permit or the applicant is buying-out the existing licensee’s business.

This amendment authorizes suppliers to provide, through a licensed wholesaler, products for tasting purposes by a retail licensee.

MANAGER’S PERMIT

This amendment requires the commission to issue permits for persons who will be in actual control of alcohol, wine or beer operations of a retail package store, a retail food store wine licensee, or a winery. Generally, in order to receive a manager’s permit, an applicant must be an adult, not have had any recent criminal convictions or administrative discipline that would indicate that the person is unsuited to control a supply of alcoholic beverages, have training and pay a fee of up to $200. A manager’s permit will be valid for five years.

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