SESSION OF 2024
CONFERENCE COMMITTEE REPORT BRIEF
SENATE SUBSTITUTE FOR HOUSE BILL NO. 2 124
As Agreed to April 2, 2024
Brief*
Senate Sub. for HB 2124 would amend law pertaining to microbreweries. Among other
changes, the bill would permit microbreweries to self-distribute beer and hard cider up to certain
limits, lower the number of barrels per year a microbrewery may manufacture and store, and
require a study and report on licensed microbrewery compliance with state laws and rules and
regulations regarding the collection and remittance of alcoholic liquor enforcement and
gallonage taxes.
Study on Microbrewery Compliance
The bill would direct the Secretary of Revenue (Secretary) and the Director of the
Department of Revenue’s Division of Alcoholic Beverage Control (ABC) to each:
●Conduct a compliance study on licensed microbrewery compliance with state laws
and rules and regulations regarding the collection and remittance of:
○Alcoholic liquor enforcement taxes (Secretary);
○Alcoholic liquor gallonage taxes (Director of ABC); and
●On or before January 15, 2025, prepare and submit a report to the Governor and the
Legislature on the findings of such study, including any recommendations regarding
collection and remittance, monitoring, and ensuring compliance with applicable laws
and rules and regulations.
These provisions would expire on July 1, 2025.
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*Conference committee report briefs are prepared by the Legislative Research Department and do not express
legislative intent. No summary is prepared when the report is an agreement to disagree. Conference committee
report briefs may be accessed on the Internet at http://www.kslegislature.org/klrd
1 - 2124 Microbrewery Licenses
Annual Barrel Limit
The bill would lower the number of barrels of beer per calendar year a microbrewery
licensee could manufacture and store from 60,000 barrels to 30,000 barrels.
[Note: Continuing law provides that a microbrewery licensee may manufacture and store
up to 100,000 gallons of hard cider during the calendar year.]
Self-Distribution
Under the bill, a microbrewery licensee would be allowed to sell beer and hard cider
manufactured by such licensee to licensed beer and wine distributors, retailers, public venues,
clubs, drinking establishments, caterers, and temporary permit holders. The bill would limit the
total annual sales to:
●1,000 barrels of beer; and
●3,000 gallons of hard cider.
The bill would also allow a microbrewery licensee to sell beer and hard cider manufactured
by the licensee both on the licensed premises and off the licensed premises at special events
monitored and regulated by the ABC. [Note: This is similar to a provision currently applicable to
farm wineries under KSA 41-308a.]
Ownership Interest
The bill would permit a microbrewery or an owner, officer, stockholder, or director of a
microbrewery to have an interest in a licensed club, drinking establishment, or caterer, and the
limit on total annual sales would not apply to the distribution of beer or hard cider by a
microbrewery licensee to either:
●A drinking establishment or caterer licensed under the Club and Drinking
Establishment Act in which such microbrewery licensee holds a 25 percent or greater
ownership interest; or
●Another microbrewery licensee or a licensed microbrewery packaging and warehouse
facility in which such microbrewery licensee holds a 25 percent or greater ownership
interest.
Distributor Requirements
The bill would apply requirements for distributors under continuing law to microbreweries
and would also require the Secretary to include microbreweries in certain rules and regulations
applicable to manufacturers or distributors.
2 - 2124 The bill would specify that a microbrewery would be prohibited from selling or attempting to
sell any beer or hard cider within the state except to retailers licensed under the Kansas Liquor
Control Act or the Kansas Cereal Malt Beverage Act or a licensee under the Club and Drinking
Establishment Act. The bill would also require such sales be made within a geographic territory
described in a notice filed with the Director of ABC.
The bill would permit a distributor or microbrewery to buy back or exchange any beer or
cereal malt beverage (CMB) within 30 days of its expiration date at the original sales price.
Temporary Permits
The bill would allow a temporary permit holder to offer for sale, sell, and serve beer or hard
cider that is:
●Manufactured by a microbrewery licensee; and
●Purchased or acquired from a microbrewery licensee for consumption on licensed or
unlicensed premises, or other premises subject to a separate temporary permit that
may be open to the public and subject to terms of such permit.
Drinking Establishments
The bill would allow drinking establishments to acquire and sell beer from a microbrewery
licensed under the Kansas Liquor Control Act.
The bill would also allow a drinking establishment to acquire hard cider from a Kansas-
licensed microbrewery that possesses a federal wholesaler’s basic permit.
Technical and Conforming Amendments
The bill would remove provisions that expired on January 1, 2023, requiring a certain
percentage of the products utilized in the manufacture of hard cider by a microbrewery to be
grown in Kansas.
The bill would also make technical and conforming amendments throughout to implement
the provisions of the bill.
Conference Committee Action
The Conference Committee agreed to retain all provisions of Senate Sub. for HB 2124 and
add new provisions directing the Secretary and Director of ABC to study and report on licensed
microbrewery compliance with state laws and rules and regulations regarding the collection and
remittance of alcoholic liquor enforcement and gallonage taxes.
3 - 2124 Background
Senate Sub. for HB 2124, as recommended by the Senate Committee on Federal and
State Affairs, contained the provisions of SB 511. The Conference Committee retained the
provisions of Senate Sub. for HB 2124 and added provisions directing the Secretary and
Director of ABC to study and report on licensed microbrewery compliance with state laws and
rules and regulations regarding the collection and remittance of alcoholic liquor enforcement
and gallonage taxes.
[Note: As passed by the House, HB 2124 would have amended provisions in the Kansas
Cereal Malt Beverage Act concerning on-premises sales of CMB to remove the 30 percent food
sales requirement for Sunday sales. These provisions were added to 2023 House Sub. for SB
116.]
SB 511 (Microbreweries)
SB 511 was introduced by the Senate Committee on Federal and State Affairs at the
request of a representative of the Kansas Craft Brewers Guild, Inc.
Senate Committee on Federal and State Affairs
In the Senate Committee hearing, proponent testimony was provided by representatives
of Americans for Prosperity and three microbreweries. The conferees generally stated the bill
would remove barriers for microbreweries to sell directly to retailers and help improve growth
and sustainability for microbreweries, especially in rural communities. The conferees also noted
that the provisions of the bill are modeled after provisions permitting farm wineries to sell directly
to retailers, and 41 other states permit direct sales in some form.
Written-only proponent testimony was provided by representatives of Great Plains
Biosciences Group, LLC; the Greater Topeka Chamber; Kansas Craft Brewers Guild, Inc.;
Leavenworth-Lansing Chamber of Commerce; Republic County Economic Development; and 11
microbreweries.
Neutral testimony was provided by a representative of the ABC. The conferee discussed
concerns that the bill would blur the lines of the three-tier system used to regulate alcohol and
allow any microbrewery to self-distribute in Kansas because the U.S. Supreme Court has held
that in-state and out-of-state licensees cannot be treated differently (Granholm v. Heald, 544
U.S. 406 (2005)). Further, the conferee stated one of the reasons that farm wineries were
authorized to self-distribute was to promote agritourism because 60 percent of products utilized
in the manufacture of the wine was required to be grown in Kansas. [Note: There is no
requirement for Kansas products to be utilized in current law. The Kansas-grown products
requirement expired on January 1, 2023.]
Opponent testimony was provided by representatives of the Kansas Association of
Beverage Retailers and Kansas Beer Wholesalers Association. The conferees generally stated
the bill would be a major departure from the three-tier system used to regulate alcohol, allow
large brewers to control the market, and open the door to liquor laws being drafted by courts
instead of the Legislature. The conferees also expressed concerns about microbreweries acting
as distributors without having to comply with the same requirements as distributor licensees.
4 - 2124 Written-only opponent testimony was provided by a representative of the Kansas Wine and
Spirits Wholesalers Association.
The Senate Committee amended the bill to:
●Decrease the number of barrels of beer per calendar year a microbrewery licensee
may manufacture and store from 60,000 barrels to 30,000 barrels [Note: The
Conference Committee retained the amendment.];
●Limit a microbrewery’s total annual sales of beer and hard cider to retailers, public
venues, clubs, drinking establishments, caterers, and temporary permit holders to
1,000 barrels of beer and 3,000 gallons of hard cider [Note: The Conference
Committee retained the amendment.];
●Provide exceptions to the limit on total annual sales for microbrewery licensees that
hold a 25 percent or greater ownership interest in drinking establishments, caterers,
licensed microbrewery packaging, and warehouse facilities, or other microbrewery
licensees [Note: The Conference Committee retained the amendment.];
●Subject microbrewery licensees to requirements for distributors under continuing law
[Note: The Conference Committee retained the amendment.];
●Permit distributors and microbreweries to buy back or exchange any beer or CMB
within 30 days of its expiration date and at the original sales price [Note: The
Conference Committee retained the amendment.]; and
●Make technical and conforming amendments [Note: The Conference Committee
retained the amendment.].
Fiscal Information
According to the fiscal note prepared by the Division of the Budget on SB 511, as
introduced, the Department of Revenue indicates that ABC and the Division of Taxation would
use existing resources to update forms, publications, and handbooks.
Microbrewery; beer; cider; self-distribution; Division of Alcoholic Beverage Control; Secretary of Revenue; alcoholic liquor
enforcement tax; gallonage tax
ccrb_hb2124_01_040224.odt
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