Introduced Version HOUSE BILL No. 1298 _____ DIGEST OF INTRODUCED BILL Citations Affected: IC 7.1-3. Synopsis: Sales and sampling at farmers' markets. Allows a county, city, or town to adopt an ordinance to allow the following at a farmers' market, subject to the consent of the operator of the farmers' market: (1) A small brewery, farm winery, or artisan distillery to serve complimentary samples of the alcoholic beverages (product) that they manufacture. (2) A small brewery or artisan distillery to sell their product in original containers. (Current law allows a farm winery to sell its wine by the bottle at a farmers' market.) Provides that the ordinance expires one year after it is adopted. Effective: July 1, 2022. Smaltz January 11, 2022, read first time and referred to Committee on Public Policy. 2022 IN 1298—LS 7163/DI 87 Introduced Second Regular Session of the 122nd General Assembly (2022) PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type. Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution. Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2021 Regular Session of the General Assembly. HOUSE BILL No. 1298 A BILL FOR AN ACT to amend the Indiana Code concerning alcohol and tobacco. Be it enacted by the General Assembly of the State of Indiana: 1 SECTION 1. IC 7.1-3-2-7, AS AMENDED BY P.L.194-2021, 2 SECTION 29, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE 3 JULY 1, 2022]: Sec. 7. The holder of a brewer's permit or an 4 out-of-state brewer holding either a primary source of supply permit or 5 an out-of-state brewer's permit may do the following: 6 (1) Manufacture beer. 7 (2) Place beer in containers or bottles. 8 (3) Transport beer. 9 (4) Sell and deliver beer to a person holding a beer wholesaler's 10 permit issued under IC 7.1-3-3. 11 (5) If the brewer manufactures, at all of the brewer's breweries 12 located in Indiana, an aggregate of not more than ninety thousand 13 (90,000) barrels of beer in a calendar year for sale or distribution 14 within Indiana, the permit holder may do the following: 15 (A) Sell and deliver a total of not more than thirty thousand 16 (30,000) barrels of beer in a calendar year to a person holding 17 a retailer or a dealer permit under this title. The total number 2022 IN 1298—LS 7163/DI 87 2 1 of barrels of beer that the permit holder may sell and deliver 2 under this clause in a calendar year may not exceed thirty 3 thousand (30,000) barrels of beer. 4 (B) Be the proprietor of a restaurant that is not subject to the 5 minimum gross food sales or the minimum projected food 6 sales set forth in 905 IAC 1-41-2. 7 (C) Hold a beer retailer's permit, a wine retailer's permit, or a 8 liquor retailer's permit for a restaurant established under clause 9 (B). 10 (D) Transfer beer directly from the brewery to the restaurant 11 by means of: 12 (i) bulk containers; or 13 (ii) a continuous flow system. 14 (E) Install a window between the brewery and an adjacent 15 restaurant that allows the public and the permittee to view both 16 premises. 17 (F) Install a doorway or other opening between the brewery 18 and an adjacent restaurant that provides the public and the 19 permittee with access to both premises. 20 (G) Sell the brewery's beer by the glass for consumption on the 21 premises. Brewers permitted to sell beer by the glass under 22 this clause must make food available for consumption on the 23 premises. A brewer may comply with the requirements of this 24 clause by doing any of the following: 25 (i) Allowing a vehicle of transportation that is a food 26 establishment (as defined in IC 16-18-2-137) to serve food 27 near the brewer's licensed premises. 28 (ii) Placing menus in the brewer's premises of restaurants 29 that will deliver food to the brewery. 30 (iii) Providing food prepared at the brewery. 31 (H) Sell and deliver beer to a consumer at the licensed 32 premises of the brewer or at the residence of the consumer. 33 Notwithstanding IC 7.1-1-3-20, the licensed premises may 34 include the brewery parking lot or an area adjacent to the 35 brewery that may only be used for the purpose of conveying 36 alcoholic beverages and other nonalcoholic items to a 37 customer subject to section 10 of this chapter, and may not be 38 used for point of sale purposes or any other purpose. The 39 delivery to a consumer may be made only in a quantity at any 40 one (1) time of not more than one-half (1/2) barrel, but the 41 beer may be contained in bottles or other permissible 42 containers. 2022 IN 1298—LS 7163/DI 87 3 1 (I) Sell the brewery's beer as authorized by this section for 2 carryout on Sunday in a quantity at any one (1) time of not 3 more than five hundred seventy-six (576) ounces. A brewer's 4 beer may be sold under this clause at any address for which the 5 brewer holds a brewer's permit issued under this chapter if the 6 address is located within the same city boundaries in which the 7 beer was manufactured. 8 (J) With the approval of the commission, participate: 9 (i) individually; or 10 (ii) with other permit holders under this chapter, holders of 11 artisan distiller's permits, holders of farm winery permits, or 12 any combination of holders described in this item; 13 in a trade show or an exposition at which products of each 14 permit holder participant are displayed, promoted, and sold. 15 All of the permit holders may occupy the same tent, structure, 16 or building. The commission may not grant to a holder of a 17 permit under this chapter approval under this clause to 18 participate in a trade show or exposition for more than 19 forty-five (45) days in a calendar year. 20 (K) Store or condition beer in a secure building that is: 21 (i) separate from the brewery; and 22 (ii) owned or leased by the permit holder. 23 (L) Transfer beer from a building described in clause (K) back 24 to the brewery. 25 (M) Sell or transfer beer directly to a beer wholesaler from a 26 building described in clause (K), but may not sell or transfer 27 beer from the building to any other permittee or a consumer. 28 The brewer shall maintain an adequate written record of the 29 beer transferred: 30 (i) between the brewery and the separate building; and 31 (ii) from the separate building to the wholesaler. 32 (N) Sell the brewery's beer to the holder of a supplemental 33 caterer's permit issued under IC 7.1-3-9.5 for on-premises 34 consumption only at an event that is held outdoors on property 35 that is contiguous to the brewery as approved by the 36 commission. 37 (O) Receive liquor from the holder of a distiller's permit issued 38 under IC 7.1-3-7 or the holder of an artisan distiller's permit 39 under IC 7.1-3-27 that is located in the same county as the 40 brewery for the purpose of carbonating and canning the liquor. 41 Upon the completion of canning of the liquor, the product 42 must be returned to the original production facility within 2022 IN 1298—LS 7163/DI 87 4 1 forty-eight (48) hours. The activity under this clause is not an 2 interest under IC 7.1-5-9. (P) 3 Sell the brewery's beer to consumers in an original 4 container and serve complimentary samples of the 5 brewery's beer at a farmers' market that is operated on a 6 nonprofit basis, if authorized by: 7 (i) an ordinance adopted by the legislative body of the 8 unit in which the farmers' market is conducted as 9 provided in section 7.3 of this chapter; and 10 (ii) the operator of the farmers' market. 11 (6) If the brewer's brewery manufactures more than ninety 12 thousand (90,000) barrels of beer in a calendar year for sale or 13 distribution within Indiana, the permit holder may own a portion 14 of the corporate stock of another brewery that: 15 (A) is located in the same county as the brewer's brewery; 16 (B) manufactures less than ninety thousand (90,000) barrels of 17 beer in a calendar year; and 18 (C) is the proprietor of a restaurant that operates under 19 subdivision (5). 20 (7) Provide complimentary samples of beer that are: 21 (A) produced by the brewer; and 22 (B) offered to consumers for consumption on the brewer's 23 premises. 24 (8) Own a portion of the corporate stock of a sports corporation 25 that: 26 (A) manages a minor league baseball stadium located in the 27 same county as the brewer's brewery; and 28 (B) holds a beer retailer's permit, a wine retailer's permit, or a 29 liquor retailer's permit for a restaurant located in that stadium. 30 (9) For beer described in IC 7.1-1-2-3(a)(4): 31 (A) may allow transportation to and consumption of the beer 32 on the licensed premises; and 33 (B) may not sell, offer to sell, or allow sale of the beer on the 34 licensed premises. 35 SECTION 2. IC 7.1-3-2-7.3 IS ADDED TO THE INDIANA CODE 36 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 37 1, 2022]: Sec. 7.3. (a) The legislative body (as defined in 38 IC 36-1-2-9) of: 39 (1) a county, in the case of a farmers' market conducted in the 40 unincorporated area of a county; or 41 (2) a city or town in which a farmers' market is conducted; 42 may adopt an ordinance that allows breweries to sell and serve 2022 IN 1298—LS 7163/DI 87 5 1 samples of beer manufactured by the breweries at farmers' 2 markets operated on a nonprofit basis as provided in section 3 7(5)(P) of this chapter, subject to the consent of the operator of the 4 farmers' market. 5 (b) An ordinance adopted under this section is subject to the 6 following: 7 (1) The ordinance is effective on the date the legislative body 8 submits a copy of the ordinance to the commission. 9 (2) The ordinance expires one (1) year after the date the 10 ordinance is adopted. 11 (c) Nothing in this section may be interpreted to require an 12 operator of a farmers' market to allow breweries to sell and serve 13 samples of beer at the farmers' market if an ordinance is adopted 14 under this section. 15 (d) A sample size of beer may not exceed two (2) ounces. A 16 permittee may allow a customer to sample not more than three (3) 17 samples per day. 18 SECTION 3. IC 7.1-3-12-5, AS AMENDED BY P.L.194-2021, 19 SECTION 42, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE 20 JULY 1, 2022]: Sec. 5. (a) The following apply to the holder of a farm 21 winery permit: 22 (1) A holder is entitled to manufacture wine and to place wine 23 produced by the permit holder's farm winery in bottles or other 24 permissible containers. 25 (2) A holder is entitled to serve complimentary samples of the 26 winery's wine on the licensed premises or an outside area that is 27 contiguous to the licensed premises, as approved by the 28 commission if each employee who serves wine on the licensed 29 premises: 30 (A) holds an employee's permit under IC 7.1-3-18-9; and 31 (B) completes a server training program approved by the 32 commission. 33 (3) A holder is entitled to sell the winery's wine on the licensed 34 premises to consumers either by: 35 (A) the glass; 36 (B) the bottle; 37 (C) a box that contains a bag designed for storing and 38 dispensing wine; 39 (D) any combination of receptacles listed in clauses (A) 40 through (C); or 41 (E) any other container permissible under federal law. 42 Notwithstanding IC 7.1-1-3-20, the licensed premises may 2022 IN 1298—LS 7163/DI 87 6 1 include the farm winery parking lot or an area adjacent to the farm 2 winery. The parking lot or an adjacent area may only be used for 3 the purpose of conveying alcoholic beverages and other 4 nonalcoholic items to a customer subject to section 5.5 of this 5 chapter, and may not be used for point of sale purposes or any 6 other purpose. 7 (4) A holder is entitled to: 8 (A) sell the winery's wine to consumers by the bottle at a 9 farmers' market that is operated on a nonprofit basis; and 10 (B) serve complimentary samples of the winery's wine at a 11 farmers' market that is operated on a nonprofit basis, if 12 authorized by: 13 (i) an ordinance adopted by the legislative body of the 14 unit in which the farmers' market is conducted as 15 provided in section 5.3 of this chapter; and 16 (ii) the operator of the farmers' market. 17 (5) A holder is entitled to sell wine by: 18 (A) the bottle; 19 (B) the can; 20 (C) a box that contains a bag designed for storing and 21 dispensing wine; 22 (D) bulk container; 23 (E) the case; or 24 (F) any combination of receptacles listed in clauses (A) 25 through (E); 26 to a person who is the holder of a permit to sell wine at wholesale. 27 (6) A holder is exempt from the provisions of IC 7.1-3-14. 28 (7) A holder is entitled to advertise the name and address of any 29 retailer or dealer who sells wine produced by the permit holder's 30 winery. 31 (8) A holder for wine described in IC 7.1-1-2-3(a)(4): 32 (A) may allow transportation to and consumption of the wine 33 on the licensed premises; and 34 (B) may not sell, offer to sell, or allow the sale of the wine on 35 the licensed premises. 36 (9) A holder is entitled to purchase and sell bulk wine as set forth 37 in this chapter. 38 (10) A holder is entitled to sell wine as authorized by this section 39 for carryout on Sunday. 40 (11) A holder is entitled to sell and ship the farm winery's wine to 41 a person located in another state in accordance with the laws of 42 the other state. 2022 IN 1298—LS 7163/DI 87 7 1 (12) A holder is entitled to sell the farm winery's wine to the 2 holder of a supplemental caterer's permit issued under 3 IC 7.1-3-9.5 for on-premises consumption only at an event that is 4 held outdoors on property that is contiguous to the farm winery as 5 approved by the commission. 6 (13) A holder is entitled to be the proprietor of a restaurant that is 7 not subject to the minimum gross food sales or the minimum 8 projected food sales set forth in 905 IAC 1-41-2 and the gross 9 retail income requirements to sell carryout under IC 7.1-3-20-9.5. 10 A holder is entitled to conduct the following activities: 11 (A) Hold a beer retailer's permit, a wine retailer's permit, or a 12 liquor retailer's permit for a restaurant. 13 (B) Transfer wine directly from the farm winery to a restaurant 14 that the farm winery has an interest in by means of: 15 (i) bottles or cans; 16 (ii) bulk containers; or 17 (iii) a continuous flow system. 18 (C) Install a window between the farm winery and an adjacent 19 restaurant that allows the public and the holder of the permit 20 to view both premises. 21 (D) Install a doorway or other opening between the farm 22 winery and an adjacent restaurant that provides the public and 23 the holder of the permit with access to both the farm winery 24 and restaurant. 25 (14) A holder that does not distribute through an Indiana wine 26 wholesaler is entitled under the farm winery permit to sell and 27 deliver to a person holding a wine retailer or wine dealer permit 28 under this title a total of not more than three thousand (3,000) 29 gallons of the farm winery's wine in a calendar year, if the farm 30 winery has not sold in Indiana more than fifteen thousand 31 (15,000) gallons the previous calendar year. A holder that sells 32 and delivers under this subdivision shall comply with all 33 provisions applicable to a wholesaler in 905 IAC 1-5.1, 905 34 IAC 1-5.2, 905 IAC 1-21, 905 IAC 1-31, and 905 IAC 1-32.1. 35 (15) A holder must annually submit to the commission copies of 36 its Indiana and federal excise tax returns. 37 (b) With the approval of the commission, a holder of a permit under 38 this chapter may conduct business at not more than three (3) additional 39 locations that are separate from the winery. At the additional locations, 40 the holder of a permit may conduct any business that is authorized at 41 the first location, except for manufacturing wine or placing wine in 42 bottles or containers. 2022 IN 1298—LS 7163/DI 87 8 1 (c) A farm winery may transfer wine from a storage facility or an 2 additional location described in subsection (b). A farm winery may sell 3 or transfer wine directly to a wine wholesaler from a storage facility 4 separate from the farm winery or an additional location described in 5 subsection (b). A farm winery may not sell or transfer wine from a 6 storage facility to any other permittee or a consumer. The farm winery 7 shall maintain an adequate written record of wine transferred: 8 (1) between the farm winery and the storage facility; and 9 (2) from the storage facility to the wholesaler. 10 (d) With the approval of the commission, a holder of a permit under 11 this chapter may: 12 (1) individually; or 13 (2) with other permit holders under this chapter, holders of artisan 14 distiller's permits, holders of brewer's permits issued under 15 IC 7.1-3-2-2(b), or any combination of holders described in this 16 subdivision; 17 participate in a trade show or an exposition at which products of each 18 permit holder participant are displayed, promoted, and sold. All of the 19 permit holders may occupy the same tent, structure, or building. The 20 commission may not grant approval under this subsection to a holder 21 of a permit under this chapter for more than forty-five (45) days in a 22 calendar year. 23 SECTION 4. IC 7.1-3-12-5.3 IS ADDED TO THE INDIANA 24 CODE AS A NEW SECTION TO READ AS FOLLOWS 25 [EFFECTIVE JULY 1, 2022]: Sec. 5.3. (a) The legislative body (as 26 defined in IC 36-1-2-9) of: 27 (1) a county, in the case of a farmers' market conducted in the 28 unincorporated area of a county; or 29 (2) a city or town in which a farmers' market is conducted; 30 may adopt an ordinance allowing farm wineries to sell and serve 31 complimentary samples of wine manufactured by the farm winery 32 at a farmers' market operated on a nonprofit basis as provided in 33 section 5(a)(4) of this chapter, subject to the consent of the 34 operator of the farmers' market. 35 (b) An ordinance adopted under this section is subject to the 36 following: 37 (1) The ordinance is effective on the date the legislative body 38 submits a copy of the ordinance to the commission. 39 (2) The ordinance expires one (1) year after the date the 40 ordinance is adopted. 41 (c) Nothing in this section may be interpreted to require an 42 operator of a farmers' market to allow farm wineries to sell and 2022 IN 1298—LS 7163/DI 87 9 1 serve samples of wine at the farmers' market if an ordinance is 2 adopted under this section. 3 (d) A sample size of wine may not exceed one (1) ounce. A 4 permittee may allow a customer to sample not more than three (3) 5 samples per day. 6 SECTION 5. IC 7.1-3-27-8, AS AMENDED BY P.L.194-2021, 7 SECTION 59, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE 8 JULY 1, 2022]: Sec. 8. (a) The holder of an artisan distiller's permit 9 may do only the following: 10 (1) Manufacture liquor, including blending liquor purchased from 11 another manufacturer with liquor the artisan distiller 12 manufactures under section 11 of this chapter. 13 (2) Bottle liquor manufactured by the artisan distiller. 14 (3) Insert liquor manufactured by the artisan distiller into a 15 container. 16 (4) Store liquor manufactured by the artisan distiller, including at 17 a facility located within ten (10) miles of the artisan distiller's 18 distillery. 19 (5) Transport, sell, and deliver liquor manufactured by the artisan 20 distiller to: 21 (A) places outside Indiana; or 22 (B) the holder of a liquor wholesaler's permit under IC 7.1-3-8. 23 (6) Sell liquor manufactured by the artisan distiller to consumers 24 by the drink, bottle, container, or case from the licensed premises 25 of the distillery where the liquor was manufactured. 26 Notwithstanding IC 7.1-1-3-20, the licensed premises may 27 include the distillery parking lot or an area adjacent to the artisan 28 distillery. The parking lot or adjacent area may only be used for 29 the purpose of conveying alcoholic beverages and other 30 nonalcoholic items to a customer subject to section 8.1 of this 31 chapter and may not be used for point of sale purposes or any 32 other purpose. 33 (7) Serve complimentary samples of the liquor manufactured by 34 the artisan distiller to consumers on the premises of the distillery 35 where the liquor was manufactured. 36 (8) Sell liquor as authorized by this section for carryout on 37 Sunday in a quantity at any one (1) time of not more than four and 38 five-tenths (4.5) liters. 39 (9) With the approval of the commission, participate: 40 (A) individually; or 41 (B) with other permit holders under this chapter, holders of 42 farm winery permits, holders of brewer's permits issued under 2022 IN 1298—LS 7163/DI 87 10 1 IC 7.1-3-2-2(b), or any combination of holders described in 2 this clause; 3 in a trade show or an exposition at which products of each permit 4 holder participant are displayed, promoted, and sold. All of the 5 permit holders may occupy the same tent, structure, or building. 6 The commission may not grant to a holder of a permit under this 7 chapter approval under this subdivision to participate in a trade 8 show or exposition for more than forty-five (45) days in a 9 calendar year. 10 (10) Sell liquor manufactured by the artisan distiller in an 11 original container and serve complimentary samples of liquor 12 manufactured by the artisan distiller at a farmers' market 13 that is operated on a nonprofit basis, if authorized by: 14 (A) an ordinance adopted by the legislative body of the unit 15 in which the farmers' market is conducted as provided in 16 section 8.3 of this chapter; and 17 (B) the operator of the farmers' market. 18 (10) (11) Be the proprietor of a restaurant that is not subject to the 19 minimum gross food sales or the minimum projected food sales 20 set forth in 905 IAC 1-41-2 and the gross retail income 21 requirements to sell carryout under IC 7.1-3-20-9.5. A holder is 22 entitled to conduct the following activities: 23 (A) Hold a beer retailer's permit, a wine retailer's permit, or a 24 liquor retailer's permit for a restaurant. 25 (B) Transfer liquor directly from the artisan distillery to a 26 restaurant that the artisan distiller has an interest in by means 27 of: 28 (i) bottles; 29 (ii) bulk containers; or 30 (iii) a continuous flow system. 31 (C) Install a window between the artisan distillery and an 32 adjacent restaurant that allows the public and the holder of the 33 permit to view both premises. 34 (D) Install a doorway or other opening between the artisan 35 distillery and an adjacent restaurant that provides the public 36 and the holder of the permit with access to both the artisan 37 distillery and restaurant. 38 (11) (12) A holder that does not distribute through an Indiana 39 liquor wholesaler is entitled under the artisan distiller's permit to 40 sell and deliver to a person holding a liquor retailer or liquor 41 dealer permit under this title a total of not more than one thousand 42 (1,000) gallons of the artisan distillery's liquor in a calendar year, 2022 IN 1298—LS 7163/DI 87 11 1 if the artisan distiller has not sold in Indiana more than nine 2 thousand (9,000) gallons the previous calendar year. A holder that 3 sells and delivers under this subdivision shall comply with all 4 provisions applicable to a wholesaler in 905 IAC 1-5.1, 905 5 IAC 1-5.2, 905 IAC 1-21, 905 IAC 1-31, and 905 IAC 1-32.1. 6 (12) (13) A holder must annually submit to the commission 7 copies of its Indiana and federal excise tax returns. 8 (b) The holder of an artisan distiller's permit who provides samples 9 or sells liquor by the glass must furnish the minimum food 10 requirements prescribed by the commission. 11 (c) A storage facility used by an artisan distiller under subsection 12 (a)(4) must conform with federal laws, rules, and regulations. An 13 artisan distiller may transfer liquor from a separate storage facility back 14 to the artisan distillery. An artisan distiller may sell or transfer liquor 15 directly to a liquor wholesaler from a storage facility that is separate 16 from the artisan distillery. An artisan distiller may not sell or transfer 17 liquor from a storage facility to any other permittee or a consumer. The 18 artisan distiller shall maintain an adequate written record of the liquor 19 transferred: 20 (1) between the artisan distillery and the storage facility; and 21 (2) from the storage facility to the liquor wholesaler. 22 (d) The holder of an artisan distiller's permit may transport liquor to 23 and from a brewery located within the same county for the purposes of 24 carbonating and canning by the brewery. The activity under this 25 subsection is not an interest under IC 7.1-5-9. 26 (e) An artisan distiller who knowingly or intentionally violates this 27 section commits a Class B misdemeanor. 28 SECTION 6. IC 7.1-3-27-8.3 IS ADDED TO THE INDIANA 29 CODE AS A NEW SECTION TO READ AS FOLLOWS 30 [EFFECTIVE JULY 1, 2022]: Sec. 8.3. (a) The legislative body (as 31 defined in IC 36-1-2-9) of: 32 (1) a county, in the case of a farmers' market conducted in the 33 unincorporated area of a county; or 34 (2) a city or town in which a farmers' market is conducted; 35 may adopt an ordinance that allows artisan distillers to sell and 36 serve complimentary samples of liquor manufactured by the 37 artisan distilleries at a farmers' market operated on a nonprofit 38 basis as provided in section 8(a)(10) of this chapter, subject to the 39 consent of the operator of the farmers' market. 40 (b) An ordinance adopted under this section is subject to the 41 following: 42 (1) The ordinance is effective on the date the legislative body 2022 IN 1298—LS 7163/DI 87 12 1 submits a copy of the ordinance to the commission. 2 (2) The ordinance expires one (1) year after the date the 3 ordinance is adopted. 4 (c) Nothing in this section may be interpreted to require an 5 operator of a farmers' market to allow artisan distilleries to sell 6 and serve samples of liquor at the farmers' market if an ordinance 7 is adopted under this section. 8 (d) A sample size of liquor may not exceed four-tenths (0.4) 9 ounce. A permittee may allow a customer to sample not more than 10 two (2) liquor samples per day. 2022 IN 1298—LS 7163/DI 87