Connecticut Seal

General Assembly

File No. 68

    January Session, 2017

House Bill No. 5928

House of Representatives, March 16, 2017

The Committee on General Law reported through REP. BARAM of the 15th Dist., Chairperson of the Committee on the part of the House, that the bill ought to pass.

AN ACT ESTABLISHING A MANUFACTURER PERMIT FOR FARM BREWERIES.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Subsections (f) and (g) of section 30-16 of the general statutes are repealed and the following is substituted in lieu thereof (Effective from passage):

(f) (1) A manufacturer permit for a farm brewery shall be in all respects the same as a manufacturer permit, except that the scope of operations of the holder shall be limited to the production of not more than fifty thousand gallons of beer in a calendar year. As used in this section, "farm brewery" means any place or premises that is located on a farm in the state in which beer is manufactured and sold.

(2) Such permit shall, at the single principal premises of the farm brewery, authorize (A) the sale of sealed bottles or other sealed containers of beer brewed on such premises to the holder of a wholesaler permit issued pursuant to section 30-17; (B) the offering and tasting of free samples of beer manufactured by the farm brewery permittee, dispensed out of bottles or other sealed containers to visitors and prospective retail customers for consumption on the premises of the farm brewery permittee; (C) the sale at retail from the premises of not more than nine liters of such beer to any person per day, in sealed bottles or other sealed containers, for consumption off the premises; and (D) the sale at retail from the premises of beer by the glass and bottle to visitors on the premises of the farm brewery permittee for consumption on the premises. Notwithstanding the provisions of subparagraphs (A) to (D), inclusive, of this subdivision, a town may, by ordinance or zoning regulation, prohibit any such offering, tasting or selling at retail at premises within such town for which a manufacturer permit for a farm brewery has been issued.

(3) The farm brewery permittee shall use not less than twenty-five per cent of a combination of hops, barley, cereal grains, honey, flowers or other fermentables grown or malted within the state of Connecticut in the manufacture of the farm brewery permittee's beer for the first year of issuance for any such permit and not less than fifty per cent of such hops, barley, cereal grains, honey, flowers or other fermentables in the manufacture of the farm brewery permittee's beer for the second and any subsequent year of issuance for any such permit. Any such beer may be advertised and sold by the farm brewery permittee as "Connecticut Craft Beer".

(4) A holder of a manufacturer permit for a farm brewery may sell beer manufactured from such brewery at a farmers' market, as defined in section 22-6r, that is operated as a nonprofit enterprise or association, provided such farmers' market invites such holder to sell beer at such farmers' market and such holder has a farmers' market beer sales permit issued by the Commissioner of Consumer Protection in accordance with the provisions of subsection (a) of section 30-37o.

(5) The annual fee for a manufacturer permit for a farm brewery shall be three hundred dollars.

[(f)] (g) A manufacturer permit for a brew pub shall allow: (1) The manufacture, storage and bottling of beer, (2) the retail sale of alcoholic liquor to be consumed on the premises with or without the sale of food, (3) the selling at retail from the premises of sealed bottles or other sealed containers of beer brewed on such premises for consumption off the premises, and (4) the sale of sealed bottles or other sealed containers of beer brewed on such premises to the holder of a wholesaler permit issued pursuant to subsection (b) of section 30-17, provided that the holder of a manufacturer permit for a brew pub produces at least five thousand gallons of beer on the premises annually. Such selling at retail from the premises of sealed bottles or other sealed containers shall comply with the provisions of subsection (d) of section 30-91, as amended by this act, and shall permit not more than nine liters of beer to be sold to any person on any day on which such sale is authorized under the provisions of subsection (d) of section 30-91, as amended by this act. The annual fee for a manufacturer permit for a brew pub shall be three hundred dollars.

[(g)] (h) A manufacturer permit for beer and brew pub shall be in all respects the same as a manufacturer permit for beer, as defined in subsection (b) of this section, and shall allow those additional permissible uses specified in the manufacturer permit for a brew pub, as defined in subsection [(f)] (g) of this section, provided the holder of a manufacturer permit for beer and brew pub produces at least five thousand gallons of beer on the premises annually. The annual fee for a manufacturer permit for beer and brew pub shall be one thousand five hundred dollars.

Sec. 2. Subsection (c) of section 30-37j of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(c) Notwithstanding the provisions of subsection (a) of section 30-48, a backer or holder of a caterer liquor permit may be a backer or holder of any other permit issued under the provisions of this chapter, including, but not limited to, a manufacturer permit for a brew pub issued under subsection [(f)] (g) of section 30-16, as amended by this act, or a manufacturer permit for beer and brew pub issued under subsection [(g)] (h) of section 30-16, as amended by this act, except that a backer or holder of a caterer liquor permit may not be a backer or holder of any other manufacturer permit issued under section 30-16, as amended by this act, or a wholesaler permit issued under section 30-17.

Sec. 3. Section 30-37r of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) The Commissioner of Consumer Protection shall issue a farmers' market beer sales permit to a holder of: (1) A manufacturer permit for beer issued pursuant to subsection (b) of section 30-16, (2) a manufacturer permit for a brew pub issued pursuant to subsection [(f)] (g) of section 30-16, as amended by this act, [or] (3) a manufacturer permit for beer and brew pub issued pursuant to subsection [(g)] (h) of section 30-16, as amended by this act, or (4) a manufacturer permit for a farm brewery issued pursuant to subsection (f) of section 30-16, as amended by this act.

(b) A farmers' market beer sales permit shall authorize the sale of beer manufactured by the holder of a permit specified in subdivision (1), (2), [or] (3) or (4) of subsection (a) of this section for an unlimited number of appearances at a farmers' market at not more than three farmers' market locations per year, provided such permit holder: (1) Has an invitation from such farmers' market to sell beer at such farmers' market, (2) sells only sealed bottles of beer for off-premises consumption at such farmers' market, (3) is present, or has an authorized representative present, at the time of sale of any such beer at such farmers' market, and (4) does not sell more than five liters of such beer per day to any one person at such farmers' market. A farmers' market beer sales permit shall be valid for a period of one year from the date of issuance. The annual fee for a farmers' market beer sales permit shall be two hundred fifty dollars. There shall be a one-hundred-dollar nonrefundable filing fee for any such permit.

(c) Any town or municipality may, by ordinance or zoning regulation, prohibit the sale of beer by the holder of a farmers' market beer sales permit at a farmers' market held in such town or municipality.

Sec. 4. Subsection (a) of section 30-62c of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) The holder of an alcoholic liquor permit issued by the Department of Consumer Protection pursuant to subsections (b) to [(g)] (h), inclusive, of section 30-16, as amended by this act, or an agent of such permit holder, shall furnish potable water without charge to any person on the permit premises requesting such water or shall offer nonalcoholic beverages for sale to such person.

Sec. 5. Subsection (d) of section 30-91 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(d) The sale or dispensing of alcoholic liquor in places operating under package store permits, drug store permits, manufacturer permits for beer, manufacturer permits for beer and brew pubs, manufacturer permits for a farm brewery or grocery store beer permits shall be unlawful on Thanksgiving Day, New Year's Day or Christmas; and such sale or dispensing of alcoholic liquor in places operating under package store permits, drug store permits, manufacturer permits for beer, manufacturer permits for beer and brew pubs, manufacturer permits for a farm brewery and grocery store beer permits shall be unlawful on Sunday before ten o'clock a.m. and after six o'clock p.m. and on any other day before eight o'clock a.m. and after ten o'clock p.m. It shall be unlawful for the holder of a manufacturer permit for a brew pub to sell beer for consumption off the premises on the days or hours prohibited by this subsection. Any town may, by a vote of a town meeting or by ordinance, reduce the number of hours during which such sale shall be permissible.

This act shall take effect as follows and shall amend the following sections:

Section 1

from passage

30-16(f) and (g)

Sec. 2

from passage

30-37j(c)

Sec. 3

from passage

30-37r

Sec. 4

from passage

30-62c(a)

Sec. 5

from passage

30-91(d)

GL

Joint Favorable

 

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.


OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 18

FY 19

FY 20

Department of Revenue Services

GF - Revenue Gain

Minimal

Minimal

Minimal

Consumer Protection, Dept.

GF - Revenue Gain

300

600

less than 1,200

Note: GF=General Fund

Municipal Impact: None

Explanation

This bill results in minimal revenue gain in sales tax and alcoholic beverages tax, along with permitting fee revenue, by creating a farm brewery manufacturing permit. The actual revenue gain is dependent upon (1) the number of establishments that would qualify for the permit and (2) the size of the establishment's production.

It is anticipated that most of the revenue gain would occur in FY 20 and beyond due to the nature of the cultivation of associated crops. The bill requires a farm to grow at least 25% of the hops and barley it uses in the manufacturing process within the first year of the issuance of the permit, and 50% for the second year and beyond. One farm is currently producing at or near this level and another may be approaching it. However, such crops take multiple years to cultivate. There may be a lag in the time needed for additional farms to meet the required production thresholds in the bill.

To the extent that additional farms are currently producing at or near this level, the timing of the fiscal impact may occur sooner than FY 20.

The impacts to the sales tax listed above would also result in corresponding impacts to the Municipal Revenue Sharing Account and the Special Transportation Fund.1

Additionally the bill results in a revenue gain of $300 in FY 18 and $600 in FY 19, based on one currently operating farm brewery, another in development, and a permit fee of $300. In FY 20, the revenue gain may rise to $1,200 if there are two additional permittees.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.

1Current law transfers 0.5 percentage point of the Sales Tax into the Municipal Revenue Sharing Account and the Special Transportation Fund each in FY 18 and beyond.

OLR Bill Analysis

HB 5928

AN ACT ESTABLISHING A MANUFACTURER PERMIT FOR FARM BREWERIES.

SUMMARY

This bill establishes a farm brewery manufacturer permit, which allows for, among other things, the manufacture, storage, bottling, and wholesale distribution and sale of beer manufactured at any place or premises located on a farm. A permittee may only produce up to 50,000 gallons of beer annually.

Under the bill, permittees may sell their beer on-premises and, if they obtain the requisite permit, at farmers' markets (see COMMENT). A permit also allows for the offering and tasting of free samples, and retail sales for both on- and off-premises consumption, though a town may prohibit the activity by ordinance or zoning regulation.

The bill requires permittees to use a certain amount of hops, barley, and other fermentable grown or malted in the state. After fulfilling these requirements, permittees may then advertise and sell their product as “Connecticut Craft Beer.” The bill also sets the annual fee for a farm brewery manufacturer permit at $300.

EFFECTIVE DATE: Upon passage

SCOPE OF A FARM BREWERY MANUFACTURER PERMIT

The bill allows a permittee, from his or her single principal premises, to:

PRODUCT CONTENT REQUIREMENT

The bill requires permittees to use a certain amount of hops, barley, and other fermentable grown or malted in the state. In the first year of a permit's issuance, a farm brewery manufacturer permittee must use at least 25% of a combination of hops, barley, cereal grains, honey, flowers, or other fermentables grown or malted within the state when brewing his or her beer. The permittee must increase this amount to at least 50% each subsequent year. Any such beer may be advertised and sold by the farm brewery as “Connecticut Craft Beer.”

FARMERS' MARKET SALES

The bill allows a farm brewery permittee to sell the beer he or she manufactures at a farmers' market run by a nonprofit organization. To do so, the farmers' market must invite the permittee to sell his or her beer there and the permittee must obtain a farmers' market beer sales permit from the Department of Consumer Protection.

By law, a farmers' market beer sales permit allows permittees to attend an unlimited number of appearances at a farmers' market, at up to three farmers' market locations each year. Permittees may sell up to five liters of beer per person per day at a farmers' market, and they may only sell sealed bottles for off-premises consumption. The nonrefundable filing fee is $100, and the annual fee for this permit is $250.

COMMENT

Conflicting Statutes

The law prohibits holders of one class of permit from also holding a permit of another class, unless they are specifically allowed by statute to do so (CGS 30-48(a)). For example, a manufacturing class permittee cannot also hold a retail class permit unless the law makes an exception.

Although the bill allows a farm brewery permittee to obtain a farmers' market beer sales permit, it does not make the corresponding change to the statute specifying the brewery may hold both permits.

COMMITTEE ACTION

General Law Committee

Joint Favorable

Yea

17

Nay

0

(03/07/2017)

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