Session of 2023
House Substitute for SENATE BILL No. 116
By Committee on Federal and State Affairs
3-20
AN ACT concerning alcoholic beverages; relating to spirits distributors,
wine distributors and cereal malt beverage distributors; regulating
samples; relating to the special order shipping of wine; requiring
monthly remittance of gallonage taxes; amending the common
consumption area law to permit rather than require that roads be
blocked and to allow designation of such areas by signage; relating to
the Kansas cereal malt beverage act; allowing businesses to sell cereal
malt beverage by the drink on Sundays without requiring that 30% of
the gross receipts of such businesses be derived from the sale of food;
amending K.S.A. 41-306, 41-306a, 41-307, 41-350 and 41-2659 and
K.S.A. 2022 Supp. 41-2704 and repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 41-306 is hereby amended to read as follows: 41-
306. A spirits distributor's license, shall allow:
(a) The wholesale purchase, importation and storage of spirits, but all
such spirits so purchased or imported which are manufactured in the
United States shall be purchased from the primary American source of
supply or from another licensed spirits distributor, except that a licensed
spirits distributor may purchase confiscated spirits at a sheriff's sale.
(b) The sale of spirits to:
(1) Spirits distributors licensed in this state;
(2) retailers licensed in this state, except that such distributor shall
sell a brand of spirits only to those retailers whose licensed premises are
located in the geographic territory within which such distributor is
authorized to sell such brand, as designated in the notice or notices filed
with the director pursuant to K.S.A. 41-410, and amendments thereto; and
(3) such persons located outside such territory or outside this state as
permitted by law.
(c) The purchase of spirits in barrels, casks or other bulk containers
and the bottling thereof before resale, but all bottles or containers filled
with such spirits shall be sealed, labeled and otherwise made to comply
with all laws and rules and regulations governing the preparation and
bottling of spirits by manufacturers and with all federal rules, regulations
and laws.
(d) The storage and delivery to a retailer licensed under the Kansas
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liquor control act or a retailer licensed under K.S.A. 41-2702, and
amendments thereto, on the distributor's licensed premises, of alcoholic
liquor or cereal malt beverage of another licensed distributor authorized by
law to sell such alcoholic liquor or cereal malt beverage to such retailer, in
accordance with an agreement entered into with such other distributor and
approved by the director.
(e) The storage and delivery to a public venue licensed under the club
and drinking establishment act of alcoholic liquor purchased by the public
venue licensee from a retailer authorized by law to sell such alcoholic
liquor to such public venue licensee.
(f) The withdrawal of spirits from such licensee's inventory for use as
samples in the course of the business of the distributor or at industry
seminars. Samples may only be provided to persons licensed as a
distributor or a retailer under the Kansas liquor control act, and such
person's employees or to persons licensed under the club and drinking
establishment act and such persons' employees. Samples may be served on
the licensed premises of the licensee, or on the premises of a licensed
retailer, provided except that no sample shall be served on that portion of
the premises of a licensed retailer that is open to the public and where
sales of alcoholic liquor at retail are made. Only products that have not
been purchased from the distributor licensee by the retailer or club and
drinking establishment act licensee within the previous 12 months may be
provided for sampling pursuant to this subsection. No sample shall be
provided to any minor. Nothing in this subsection shall be construed to
permit the licensee to sell any alcoholic liquor for consumption on the
premises. The withdrawal of spirits shall be subject to the tax imposed by
K.S.A. 79-4101 et seq., and amendments thereto, based on the applicable
current posted bottle or case price. For purposes of providing samples
pursuant to this subsection other than at industry seminars or to the
licensee's employees, the term "sample" shall have the same meaning as
that term is defined in K.S.A. 41-2601, and amendments thereto this
subsection, "sample" means not more than three liters of distilled spirits.
Sec. 2. K.S.A. 41-306a is hereby amended to read as follows: 41-
306a. A wine distributor's license shall allow:
(a) The wholesale purchase, importation and storage of wine, but all
wine so purchased or imported which is manufactured in the United States
shall be purchased from the primary American source of supply or from
another licensed wine distributor, except that a licensed wine distributor
may purchase confiscated wine at a sheriff's sale.
(b) The sale of wine to:
(1) Wine distributors licensed in this state;
(2) retailers licensed in this state, except that such distributor shall
sell a brand of wine only to those retailers whose licensed premises are
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located in the geographic territory within which such distributor is
authorized to sell such brand, as designated in the notice or notices filed
with the director pursuant to K.S.A. 41-410, and amendments thereto; and
(3) such persons located outside such territory or outside this state as
permitted by law.
(c) The sale of wine, but only in barrels, casks and other bulk
containers, to:
(1) Licensed caterers; and
(2) public venues, clubs and drinking establishments licensed in this
state, except that such distributor shall sell a brand of wine only to such
public venues, clubs and drinking establishments the licensed premises of
which are located in the geographic territory within which such distributor
is authorized to sell such brand, as designated in the notice or notices filed
with the director pursuant to K.S.A. 41-410, and amendments thereto.
(d) The purchase of wine in barrels, casks or other bulk containers
and the bottling thereof before resale, but all bottles or containers filled
with such wine shall be sealed, labeled and otherwise made to comply with
all laws and rules and regulations governing the preparation and bottling of
wine by manufacturers and with all federal rules, regulations and laws.
(e) The storage and delivery to a retailer licensed under the Kansas
liquor control act or a retailer licensed under K.S.A. 41-2702, and
amendments thereto, on the distributor's licensed premises, of alcoholic
liquor or cereal malt beverage of another licensed distributor authorized by
law to sell such alcoholic liquor or cereal malt beverage to such retailer, in
accordance with an agreement entered into with such other distributor and
approved by the director.
(f) The withdrawal of wine from such licensee's inventory for use as
samples in the course of the business of the distributor or at industry
seminars. Samples may only be provided to persons licensed as a
distributor or a retailer under the Kansas liquor control act, and such
person's employees, or to persons licensed under the club and drinking
establishment act, and such person's employees. Samples may be served
on the licensed premises of the licensee, or on the premises of a licensed
retailer, provided no sample shall be served on that portion of the premises
of a licensed retailer that is open to the public and where sales of alcoholic
liquor at retail are made. Samples may be served on the premises of a
licensee holding a license issued under the club and drinking establishment
act, provided no sample shall be served on that portion of the premises that
is open to the public and where sales of alcoholic liquor are made. Only
products that have not been purchased from the distributor licensee by the
retailer or club and drinking establishment licensee within the previous 12
months may be provided for sampling pursuant to this subsection. No
sample shall be provided to any minor. Nothing in this subsection shall be
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construed to permit the licensee to sell any alcoholic liquor for
consumption on the premises. The withdrawal of wine shall be subject to
the tax imposed by K.S.A. 79-4101 et seq., and amendments thereto, based
on the applicable current posted bottle or case price. For purposes of
providing samples pursuant to this subsection other than at industry
seminars or to the licensee's employees, the term of this subsection,
"sample" shall have the same meaning as that term is defined in K.S.A. 41-
2601, and amendments thereto means not more than three liters of any
brand of wine.
(g) This section shall be a part of and supplemental to the Kansas
liquor control act.
Sec. 3. K.S.A. 41-307 is hereby amended to read as follows: 41-307.
A beer distributor's license shall allow:
(a) The wholesale purchase, importation and storage of beer.
(b) The sale of beer to:
(1) Licensed caterers;
(2) beer distributors licensed in this state;
(3) retailers, public venues, clubs and drinking establishments,
licensed in this state, except that such distributor shall sell a brand of beer
only to those retailers, public venues, clubs and drinking establishments of
which the licensed premises are located in the geographic territory within
which such distributor is authorized to sell such brand, as designated in the
notice or notices filed with the director pursuant to K.S.A. 41-410, and
amendments thereto; and
(4) such persons located outside such territory or outside this state as
permitted by law.
(c) The sale of cereal malt beverage to:
(1) Beer distributors licensed in this state;
(2) clubs and drinking establishments, licensed in this state, and
retailers licensed under K.S.A. 41-2702, and amendments thereto, except
that such distributor shall sell a brand of cereal malt beverage only to those
such clubs, drinking establishments and retailers of which the licensed
premises are located in the geographic territory within which such
distributor is authorized to sell such brand, as designated in the notice or
notices filed with the director pursuant to K.S.A. 41-410, and amendments
thereto;
(3) retailers; and
(4) such persons located outside such territory or outside this state as
permitted by law.
(d) The sale of beer containing not more than 6% alcohol by volume
to cereal malt beverage retailers licensed pursuant to K.S.A. 41-2702, and
amendments thereto.
(e) The purchase of cereal malt beverage in kegs or other bulk
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containers and the bottling or canning thereof in accordance with law.
(f) The storage and delivery to a retailer licensed under the Kansas
liquor control act or a retailer licensed under K.S.A. 41-2702, and
amendments thereto, on the distributor's licensed premises, of alcoholic
liquor or cereal malt beverage of another licensed distributor authorized by
law to sell such alcoholic liquor or cereal malt beverage to such retailer, in
accordance with an agreement entered into with such other distributor and
approved by the director.
(g) The storage and delivery, with proper invoicing in accordance
with rules and regulations adopted by the secretary, on the premises of a
public venue licensee, of beer sold to or available for purchase by the
public venue during an event.
(h) The withdrawal of beer or cereal malt beverage from such
licensee's inventory for use as samples in the course of the business of the
distributor or at industry seminars. Samples may only be provided to
persons licensed as a distributor or a retailer under the Kansas liquor
control act, and such person's employees, or to persons licensed under the
club and drinking establishment act, and such person's employees.
Samples may be served on the licensed premises of the licensee, or on the
premises of a licensed retailer, provided no sample shall be served on that
portion of the premises of a licensed retailer that is open to the public and
where sales of alcoholic liquor at retail are made. Samples may be served
on the premises of a licensee holding a license issued under the club and
drinking establishment act, provided no sample shall be served on that
portion of the premises that is open to the public and where sales of
alcoholic liquor are made. Only products that have not been purchased
from the distributor licensee by the retailer or club and drinking
establishment act licensee within the previous 12 months may be provided
for sampling pursuant to this subsection. No sample shall be provided to
any minor. Nothing in this subsection shall be construed to permit the
licensee to sell any alcoholic liquor for consumption on the premises. The
withdrawal of beer or cereal malt beverage shall be subject to the tax
imposed by K.S.A. 79-4101 et seq., and amendments thereto, based on the
applicable current posted bottle or case price. For purposes of providing
samples pursuant to this subsection other than at industry seminars or to
the licensee's employees, the term this subsection, "sample" shall have the
same meaning as that term is defined in K.S.A. 41-2601, and amendments
thereto means not more than three gallons of any brand of beer or cereal
malt beverage.
Sec. 4. On and after July 1, 2023, K.S.A. 41-350 is hereby amended
to read as follows: 41-350. (a) For the purposes of this act, the term
"winery" means any maker or producer of wine whether in this state or in
any other state, who holds a valid federal basic wine manufacturing
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permit. The terms "director" and "secretary" have the meaning ascribed to
these terms mean the same as defined in K.S.A. 41-102, and amendments
thereto.
(b) Any winery may be authorized to make direct shipments of wine
to consumers in this state upon obtaining a special order shipping license
from the secretary pursuant to this act.
(1) A special order shipping license shall only be issued to a winery
upon compliance with all applicable provisions of this act and the
regulations promulgated pursuant to this act, and upon payment of a
license fee in the amount of $100. The license term for a special order
shipping license shall commence on the date specified on the license and
shall end two years after that date.
(2) A special order shipping license shall entitle the winery to ship
wine upon order directly to consumers for personal or household use in
this state. The purchaser shall pay the purchase price and all shipping costs
directly to the permit holder. Enforcement taxes collected herein shall be
paid solely on the purchase price and not on the shipping costs.
(c) No holder of a special order shipping license shall be permitted to
ship in excess of 12 standard cases of wine of one brand or a combination
of brands into this state to any one consumer or address per calendar year.
(d) (1) Before accepting an order from a consumer in this state, the
holder of a special order shipping license shall require that the person
placing the order to state affirmatively that he or she such person is 21
years of age or older and shall verify the age of such person placing the
order either by the physical examination of an approved government
issued form of identification or by utilizing an internet based age and
identification service approved by the director of alcoholic beverage
control, or the director's designee.
(2) Every shipment of wine by the holder of a special order shipping
license shall be clearly marked '"Alcoholic Beverages, Adult Signature
Required'" and the carrier delivering such shipment shall be responsible
for obtaining the signature of an adult who is at least 21 years of age as a
condition of delivery.
(e) A special order shipping license shall not authorize the shipment
of any wine to any premises licensed to sell alcoholic beverages pursuant
to this act or the club and drinking establishment act.
(f) The failure to comply strictly with the requirements of this act and
rules and regulations promulgated pursuant to this act shall be grounds for
the revocation of a special order shipping license or other disciplinary
action by the director. After notice and an opportunity for hearing in
accordance with the provisions of the Kansas administrative procedure act,
the director may refuse to issue or renew or may revoke a shipping permit
upon a finding that the permit holder has failed to comply with any
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provision of this section or K.S.A. 41-501 et seq., and amendments
thereto, or any rules and regulations adopted pursuant to such statutes.
Upon revocation of a special order shipping license for shipment of wine
to a person not of legal age as required herein such winery shall not be
issued any special order shipping license pursuant to this act for a period
of one year from the date of revocation.
(g) The holder of a special order shipping license shall collect all
gallonage taxes imposed by K.S.A. 41-501 et seq., and amendments
thereto, shall on a quarterly monthly basis electronically remit such taxes
in a manner prescribed by the secretary and shall accompany such
remittance with any reports, documentation or other information as may be
required by the secretary. In addition, an applicant for and a holder of a
special order shipping license, as a condition of receiving and holding a
valid license, shall:
(1) Collect and pay the applicable Kansas enforcement tax on each
sale shipped to a consumer in Kansas imposed by K.S.A. 79-4101 et seq.,
and amendments thereto;
(2) accompany each remittance with such sales tax reports,
documentation and other information as may be required by the director of
taxation; and
(3) if the holder of the license is an out-of-state shipper, the licensee
shall be deemed to have appointed the secretary of state as the resident
agent and representative of the licensee to accept service of process from
the secretary of revenue, the director and the courts of this state concerning
enforcement of this section, K.S.A. 41-501 et seq., and amendments
thereto, and any related laws and rules and regulations and to accept
service of any notice or order provided for in the liquor control act.
(h) The secretary of revenue may adopt rules and regulations to
implement, administer and enforce the provisions of this section.
(i) This section shall be a part of and supplemental to the Kansas
liquor control act.
Sec. 5. On and after July 1, 2023, K.S.A. 41-2659 is hereby amended
to read as follows: 41-2659. (a) (1) A city or a county may establish one or
more common consumption areas within the limits of the city or within the
unincorporated portion of the county, as applicable, by ordinance or
resolution, respectively, and authorize the possession and consumption of
alcoholic liquor or cereal malt beverage within the common consumption
area. The ordinance or resolution shall designate the boundaries of any
common consumption area and prescribe the times during which alcoholic
liquor or cereal malt beverage may be consumed therein. The ordinance or
resolution shall may require that any public street or roadway that lies
within a common consumption area shall be blocked from motorized
traffic during the hours in which alcoholic liquor or cereal malt beverage is
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consumed.
(2) The city or county shall immediately notify the director of the
division of alcoholic beverage control of the establishment of a common
consumption area and submit a copy of the ordinance or resolution along
with such notice.
(b) A common consumption area permit shall allow the consumption
of alcoholic liquor or cereal malt beverage in any area designated by such
permit. The director may issue common consumption area permits to the
city or county or any one person who shall be a resident of Kansas or an
organization that has its principal place of business in Kansas and that has
been approved by the respective city or county, in accordance with rules
and regulations adopted by the secretary of revenue.
(c) Applications for common consumption area permits shall be
submitted to the director, subject to the following:
(1) A copy of any ordinance or resolution promulgated in accordance
with subsection (a) shall accompany any application for a common
consumption area permit.
(2) Each application shall be accompanied by a non-refundable
permit fee of $100. All permit fees collected by the director pursuant to
this section shall be remitted to the state treasurer in accordance with the
provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of
each such remittance, the state treasurer shall deposit the entire amount in
the state treasury to the credit of the state general fund.
(3) A common consumption area permit shall be issued for a period
of not to exceed one year. A common consumption area permit shall not be
transferable or assignable.
(d) Any licensee immediately adjacent to, or located within a
common consumption area may request that the licensee's licensed
premises participate in the common consumption area for the duration of
the common consumption area permit. Such a request shall be made upon
forms prescribed by the director.
(e) (1) Any licensee who has requested and received permission to
participate in the common consumption area may allow its legal patrons to
remove alcoholic liquor or cereal malt beverage purchased from the
licensee into the premises described by the common consumption area
permit. All alcoholic liquor and cereal malt beverage removed from a
licensed premises in such fashion shall be served in a container that
displays the licensee's trade name or logo or other identifying mark that is
unique to the licensee.
(2) In addition to their licensed premises, one or more licensees that
have requested and received permission to participate in a common
consumption area may offer for sale, sell and serve alcoholic liquor or
cereal malt beverage for consumption from one non-contiguous service
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area within the common consumption area, as designated and approved by
the common consumption area permit holder. The licensee shall
prominently display a copy of its drinking establishment license and the
approval of the common consumption area permit holder at its non-
contiguous service area.
(f) (1) Each licensee within a common consumption area shall be
liable for violations of all liquor laws governing the sale and consumption
of alcoholic liquor or cereal malt beverage that occur on the licensee's
premises.
(2) Each common consumption area permit holder shall be liable for
violations that occur off the licensee's premises, but within the common
consumption area identified in the permit. No permit holder shall permit
any person to remove any open container of alcoholic liquor or cereal malt
beverage from the boundaries of the common consumption area.
(g) (1) For the purposes of this section, "common consumption area"
means a defined indoor or outdoor area not otherwise subject to a license
issued pursuant to the Kansas liquor control act or the club and drinking
establishment act where the possession and consumption of alcoholic
liquor or cereal malt beverage is allowed pursuant to a common
consumption area permit.
(2) The boundaries of any common consumption area must be clearly
marked using a physical barrier or any apparent line of demarcation. Every
common consumption area shall have signs conspicuously posted
identifying the boundaries of such area in a size and manner that provides
notice to persons entering or leaving the area.
(h) The secretary shall adopt rules and regulations to implement this
section.
(i) This section shall be a part of and supplemental to the club and
drinking establishment act.
Sec. 6. K.S.A. 2022 Supp. 41-2704 is hereby amended to read as
follows: 41-2704. (a) In addition to and consistent with the requirements
of the Kansas cereal malt beverage act, the board of county commissioners
of any county or the governing body of any city may prescribe hours of
closing, standards of conduct and rules and regulations concerning the
moral, sanitary and health conditions of places licensed pursuant to this act
and may establish zones within which no such place may be located.
(b) Within any city where the days of sale at retail of cereal malt
beverage in the original package have not been expanded as provided by
K.S.A. 41-2911, and amendments thereto, or have been so expanded and
subsequently restricted as provided by K.S.A. 41-2911, and amendments
thereto, no cereal malt beverages or beer containing not more than 6%
alcohol by volume may be sold:
(1) Between the hours of 12 midnight and 6 a.m.; or
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(2) on Sunday, except in a place of business which that is licensed to
sell cereal malt beverage for consumption on the premises, which derives
not less than 30% of its gross receipts from the sale of food for
consumption on the licensed premises and which that is located in a
county where such sales on Sunday have been authorized by resolution of
the board of county commissioners of the county or in a city where such
sales on Sunday have been authorized by ordinance of the governing body
of the city.
(c) Within any city where the days of sale at retail of cereal malt
beverage in the original package have been expanded as provided by
K.S.A. 41-2911, and amendments thereto, and have not been subsequently
restricted as provided in K.S.A. 41-2911, and amendments thereto, no
person shall sell at retail cereal malt beverage or beer containing not more
than 6% alcohol by volume:
(1) Between the hours of 12 midnight and 6 a.m.;
(2) in the original package not earlier than 9 a.m. and not later than 8
p.m. on Sunday;
(3) on Easter Sunday; or
(4) for consumption on the licensed premises on Sunday, except in a
place of business which that is licensed to sell cereal malt beverage for
consumption on the premises, which derives not less than 30% of its gross
receipts from the sale of food for consumption on the licensed premises
and which that is located in a county where such sales on Sunday have
been authorized by resolution of the board of county commissioners of the
county or in a city where such sales on Sunday have been authorized by
ordinance of the governing body of the city.
(d) No private rooms or closed booths shall be operated in a place of
business, but this provision shall not apply if the licensed premises also are
licensed as a club pursuant to the club and drinking establishment act.
(e) Each place of business shall be open to the public and to law
enforcement officers at all times during business hours, except that a
premises licensed as a club pursuant to the club and drinking establishment
act shall be open to law enforcement officers and not to the public.
(f) Except as otherwise provided by this subsection, no licensee shall
permit a person under the legal age for consumption of cereal malt
beverage or beer containing not more than 6% alcohol by volume to
consume or purchase any cereal malt beverage in or about a place of
business. A licensee's employee who is not less than 18 years of age may
dispense or sell cereal malt beverage or beer containing not more than 6%
alcohol by volume, if:
(1) The licensee's place of business is licensed only to sell at retail
cereal malt beverage or beer containing not more than 6% alcohol by
volume in the original package and not for consumption on the premises;
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or
(2) the licensee's place of business is a licensed food service
establishment, as defined by K.S.A. 36-501, and amendments thereto, and
not less than 50% of the gross receipts from the licensee's place of
business is derived from the sale of food for consumption on the premises
of the licensed place of business.
(g) No person shall have any alcoholic liquor, except beer containing
not more than 6% alcohol by volume, in such person's possession while in
a place of business, unless the premises are currently licensed as a club or
drinking establishment pursuant to the club and drinking establishment act
or the business is a farm winery licensed pursuant to K.S.A. 41-316, and
amendments thereto, or a producer licensed pursuant to K.S.A. 41-355,
and amendments thereto.
(h) Cereal malt beverages may be sold on premises that are licensed
pursuant to both the Kansas cereal malt beverage act and the club and
drinking establishment act at any time when alcoholic liquor is allowed by
law to be served on the premises.
Sec. 7. K.S.A. 41-306, 41-306a and 41-307 and K.S.A. 2022 Supp.
41-2704 are hereby repealed.
Sec. 8. On and after July 1, 2023, K.S.A. 41-350 and 41-2659 are
hereby repealed.
Sec. 9. This act shall take effect and be in force from and after its
publication in the Kansas register.
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