You asked for a section-by-section analysis of a proposal to amend An Act Concerning the Direct Shipment of Wine to State Residents (SB 122).

SECTION 1 (AMENDS § 30-16)

• Eliminates the ability of a manufacturer liquor permittee to obtain a wholesaler permit. Under the bill, a holder of a manufacturer permit may manufacture alcoholic beverages and sell their products to wholesalers.

• Eliminates the limited manufacturer liquor permit for apple brandy and eau-de-vie.

• Allows the holder of a limited permit for farm wineries to make all types of brandies, including grappa, eau-de-vie, and brandies distilled from grapes (e. g. grappa) or other fruit products (e. g. apple brandy).

• Limits the amount a farm winery may, with its affiliates, produce and remain eligible for a liquor permit to 100,000 gallons of wine, brandy, grappa, or eau-de-vie per calendar year. Defines “affiliate” for this purpose as a person, corporation, partnership, or other legal entity that directly, or indirectly, through one or more intermediaries or family members, controls, or is controlled by, or is under the common control with, a farm winery.

• Eliminates a farm winery’s ability to sell to retailers in sealed containers of up to 15 gallons. Instead, it allows farm wineries to obtain a wholesaler permit.

• Allows farm wineries to offer free samples of another farm winery’s products, if the samples are provided to the farm winery free of charge.

• Eliminates a farm winery’s ability to sell wine manufactured by another in-state farm winery.

• Current law requires, as a condition of holding a farm winery permit, a farm winery to produce in the state an average crop of fruit equal to at least 25% of the fruit used to make its wine. The bill instead requires farm wineries to have at least five acres in production at its premises and requires wineries to use fruit grown in the state or within 100 miles of its premises equal to at least 25% of the fruit used to make its products.

Sections 2 & 3 (Amends §§ 30-18 & 30-18a)

• Allows out-of-state shippers for other than beer and out-of-state small winery shippers to ship wine directly to consumers in Connecticut if:

1. the consumer is at least 21 years old,

2. the wine is shipped for the consumer’s personal use and not for resale, and

3. the shipper does not send more than 60 gallons per year to any one state resident.

• Authorizes the Department of Consumer Protection and the Department of Revenue Services to adopt regulations “for the direct shipment of wine” to Connecticut residents by out-of-state shippers for other than beer and out-of-state smaller winery shippers. Requires the regulations to include procedures and requirements to assure compliance with the shipping requirements.

(COMMENT 1: The provision concerning out-of-state shippers for other than beer (CGS § 30-18) has an incorrect reference on line 103. COMMENT 2: It is not clear how the two agencies are to adopt a single regulation. )

Section 4 (NEW)

Prohibits anyone authorized by the Liquor Control Act to ship or deliver any type of alcoholic liquor to a Connecticut resident from:

• shipping to any address where the sale of alcoholic liquor is prohibited by local option,

• shipping wine unless the brand is registered in accordance with state law requiring all brands to be registered, and

• shipping wine unless the shipper has “registered” with the Department of Revenue Services. (COMMENT: The law imposing the alcoholic beverage tax requires manufacturers and wholesalers to obtain a “distributor license” from DRS. The apparent intent is to require these shippers to obtain a distributor license as required by CGS § 12-436. )

Requires anyone authorized by the Liquor Control Act to ship or delivery any type of alcoholic liquor to a Connecticut resident to:

• ensure that the shipping labels on all containers of wine shipped to state residents conspicuously state “CONTAINS ALCOHOLIC LIQUOR: SIGNATURE OF A PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY,”

• obtain the signature of someone at least 21 years old when delivering to any address,

• pay all sales and excise taxes due on sales to Connecticut residents calculated as if the sale were at the location where delivery is made,

• maintain a separate and complete record of all sales and shipments to each state resident on a ledger sheet, or similar form, which readily presents a chronological account of the shipper’s dealings with each state resident. The proposal requires the ledger to be reported on request to DCP and DRS but exempts it from disclosure under the Freedom of Information Act,

• allow DCP and DRS, either separately or jointly, to audit the shipper’s records on request,

• consent to the jurisdiction of state agencies and state courts for any matter or action relating to enforcement of the Liquor Control Act (COMMENT: The proposal does not have comparable provisions for enforcement of the alcoholic beverage and sales tax laws. ), and

• hold an in-state transporter’s permit or make shipments through a business holding one.

Section 5 (Amends § 30-19f)

• requires holders of an in-state transporter’s permit to ensure that the shipping labels the proposal requires shippers to place on the packages are on the packages.

• requires holders of an in-state transporter’s permit to obtain the signature of someone 21 or older upon delivery.

• prohibits delivering to an address where liquor sales are prohibited by local option.

• makes a violation of its requirements and prohibition by an in-state transporter a criminal penalty punishable by a fine of up to $ 2,000 for each offense. The law authorizes DCP to suspend, revoke, or refuse to grant or renew a permit to sell liquor if it has reasonable cause to believe, among other things, that the applicant or permittee has violated any provision of the Liquor Control Act or its implementing regulations (CGS § 30-47). It is not clear if this provision, which relates to permits to sell liquor, applies to permits to transport liquor.

Section 6 (Amends CGS § 30-48)

• Allows out-of-state shippers for other than beer and out-of-state small winery shippers to be the backers or permittees of in-state transporter’s permits.

• Allows farm wineries to be the backers or permittees of in-state transporter’s permits.

Section 7 (Amends CGS § 30-63)

• Eliminates the $ 3 brand registration fee for Connecticut manufacturers and instead requires every in- and out-of-state business to pay $ 100 to register a brand. Registrations are valid for three years. The law prohibits manufacturers, wholesalers, and out-of-state shippers from selling, offering to sell, shipping, transporting, or delivering any type of alcoholic liquor unless the name of the brand, trade name, or other distinctive characteristic is registered with, and approved by, DCP.

Section 8 (Amends CGS § 12-436(b))

Approximately doubles the limit on how much alcoholic liquor an individual may import from five gallons in a 60-day period to 60 gallons in a calendar year.

(COMMENT: The proposal does not change the requirement in current law that an individual is responsible for paying the excise and sales taxes before importing alcoholic liquor. This apparently conflicts with the proposal’s provision making the out-of-state shipper responsible for paying the taxes. )

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