EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb1377*
HOUSE BILL 1377
A2 4lr2989
CF SB 1002
By: Delegate Pippy
Introduced and read first time: February 9, 2024
Assigned to: Economic Matters
A BILL ENTITLED
AN ACT concerning 1
Frederick County – Alcoholic Beverages – Brewery and Distillery Licenses 2
FOR the purpose of establishing in Frederick County a Class DBR brewery license and a 3
Class DDS distillery license; authorizing the Board of License Commissioners for 4
Frederick County to issue to the holder of a certain brewery license a Class DBR 5
license, which authorizes the holder to sell certain amounts of beer for on–premises 6
consumption; authorizing the Board of License Commissioners for Frederick County 7
to issue to the holder of a certain distillery license a Class DDS license, which 8
authorizes the holder to sell certain amounts of alcoholic beverages for on–premises 9
consumption; and generally relating to brewery and distillery licenses in Frederick 10
County. 11
BY repealing and reenacting, without amendments, 12
Article – Alcoholic Beverages and Cannabis 13
Section 2–202(a), (e), and (i), 2–207(b), (f), and (g), and 20–102 14
Annotated Code of Maryland 15
(2016 Volume and 2023 Supplement) 16
BY repealing and reenacting, with amendments, 17
Article – Alcoholic Beverages and Cannabis 18
Section 20–401 19
Annotated Code of Maryland 20
(2016 Volume and 2023 Supplement) 21
BY adding to 22
Article – Alcoholic Beverages and Cannabis 23
Section 20–407 and 20–408 24
Annotated Code of Maryland 25
(2016 Volume and 2023 Supplement) 26
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 27 2 HOUSE BILL 1377
That the Laws of Maryland read as follows: 1
Article – Alcoholic Beverages and Cannabis 2
2–202. 3
(a) There is a Class 1 distillery license. 4
(e) Subject to subsection (f) of this section, a license holder may conduct the 5
activities specified in subsections (c)(5) and (i)(2) of this section from 10 a.m. to 10 p.m. each 6
day. 7
(i) (1) A local licensing board may grant an on–site consumption permit for 8
use at the location of the Class 1 distillery license to a holder of a Class 1 distillery license. 9
(2) (i) The permit authorizes the holder to sell mixed drinks made from 10
liquor that the holder produces that is mixed with other nonalcoholic ingredients for 11
on–premises consumption. 12
(ii) The holder may not use more than an aggregate of 7,750 gallons 13
annually of liquor the holder produces for mixed drinks sold under subparagraph (i) of this 14
paragraph. 15
(3) A local licensing board: 16
(i) may establish and charge a permit fee; and 17
(ii) shall require the permit holder to: 18
1. comply with the alcohol awareness requirements under § 19
4–505 of this article; and 20
2. abide by all applicable trade practice restrictions. 21
2–207. 22
(b) There is a Class 5 brewery license. 23
(f) (1) (i) A local licensing board may grant an on–site consumption permit 24
to an applicant that holds a Class 5 brewery license and, subject to paragraph (5) of this 25
subsection, a Class D beer license. 26
(ii) On request, a local licensing board may grant an applicant a 27
conditional on–site consumption permit or a conditional Class D beer license. 28
(iii) The conditional permit or conditional license shall become 29
effective after the applicant: 30 HOUSE BILL 1377 3
1. files a completed brewer’s notice form with the U.S. 1
Department of Treasury; 2
2. obtains a Class 5 brewery license; and 3
3. fulfills any other obligation required by law that the local 4
licensing board identifies. 5
(2) Subject to the maximum volume limit under paragraph (4) of this 6
subsection, a Class D beer license or an equivalent license under paragraph (5) of this 7
subsection entitles the holder to sell to an individual who has attained the legal drinking 8
age, for on–premises consumption at the brewery: 9
(i) beer: 10
1. of which the holder of the Class 5 license is the brand 11
owner; and 12
2. that is fermented and brewed entirely by the license 13
holder at a location authorized by this section; 14
(ii) beer that is fermented and brewed entirely at the brewery under 15
contract with a brand owner who does not possess a Class 5 license; and 16
(iii) subject to paragraph (3) of this subsection, beer brewed at a 17
location other than the Class 5 brewery if: 18
1. the brand owner of the beer is the holder of the Class 5 19
license or an affiliate of the holder of the Class 5 license; 20
2. the number of barrels of the beer sold for on–premises 21
consumption under the Class D beer license or an equivalent license or an on–site 22
consumption permit in a calendar year does not exceed the greater of: 23
A. 25% of the total number of barrels of beer sold for 24
on–premises consumption under the Class D license or an equivalent license or an on–site 25
consumption permit in that calendar year; or 26
B. 1.2% of total finished production under the Class 5 27
brewery license; and 28
3. A. the license holder contracts with or on behalf of a 29
holder of a manufacturer’s license or nonresident dealer’s permit; or 30
B. the beer is manufactured by an affiliate of the license 31
holder. 32 4 HOUSE BILL 1377
(3) (i) This paragraph applies to a Class 5 brewery with more than 1
1,000,000 barrels of finished production annually, alone or in combination with its 2
affiliates. 3
(ii) Beer that is delivered to the Class 5 brewery in finished form 4
may be sold for on–premises consumption under paragraph (2)(iii)2 of this subsection only 5
if it is purchased from a licensed wholesaler. 6
(4) The total amount of beer sold each year for on–premises consumption 7
under this subsection may not exceed 5,000 barrels. 8
(5) Before a local licensing board that does not issue a Class D beer license 9
may grant an on–site consumption permit, the local licensing board shall: 10
(i) establish an equivalent license; and 11
(ii) require the applicant to obtain that equivalent license. 12
(6) A local licensing board may charge a fee for granting an on–site 13
consumption permit. 14
(7) A local licensing board shall require the holder of an on–site 15
consumption permit or a Class D beer license or an equivalent license under paragraph (5) 16
of this subsection to: 17
(i) comply with the alcohol awareness requirements under § 4–505 18
of this article; and 19
(ii) abide by all applicable trade practice restrictions. 20
(g) (1) This subsection does not apply to: 21
(i) the holder of a Class 5 brewery license that held an on–site 22
consumption permit and a Class D license or an equivalent license on or before April 1, 23
2017, and any transferee of those licenses; 24
(ii) an individual who held a minority interest in an on–site 25
consumption permit and a Class D license or an equivalent license on or before April 1, 26
2017, and then obtains by transfer a majority interest in the same license or permit; 27
(iii) a location in the State for which a completed brewer’s notice form 28
was filed with the U. S. Department of Treasury on or before April 1, 2017; 29
(iv) a permit issued under § 2–140 of this title; and 30
(v) a guided tour during which: 31 HOUSE BILL 1377 5
1. samples of beer are served under subsection (c)(5) of this 1
section; or 2
2. beer is sold for off–premises consumption under 3
subsection (c)(6) of this section. 4
(2) This subsection applies to: 5
(i) a holder of a Class 5 brewery license who: 6
1. after April 1, 2017, obtains an on–site consumption permit 7
and a Class D beer license or equivalent license for on–premises consumption; or 8
2. not holding a minority interest in an on–site consumption 9
permit and a Class D license or an equivalent license on or before April 1, 2017, obtains a 10
majority interest by transfer in an on–site consumption permit and a Class D license or an 11
equivalent license; and 12
(ii) notwithstanding paragraph (1)(iii) of this subsection, a 13
manufacturer of beer with more than 1,000,000 barrels of finished production annually 14
alone or in combination with its affiliates. 15
(3) Notwithstanding any provision in Division II of this article, the sales 16
and serving privileges of an on–site consumption permit and a Class D license or an 17
equivalent license may be exercised only from 10 a.m. to 10 p.m. Monday through Sunday. 18
20–102. 19
This title applies only in Frederick County. 20
20–401. 21
(a) The following sections of Title 2, Subtitle 2 (“Manufacturer’s Licenses”) of 22
Division I of this article apply in the county without exception or variation: 23
(1) § 2–201 (“Issuance by Comptroller”); 24
(2) [§ 2–202 (“Class 1 distillery license”); 25
(3)] § 2–203 (“Class 9 limited distillery license”); 26
[(4)] (3) § 2–204 (“Class 2 rectifying license”); 27
[(5) § 2–207 (“Class 5 brewery license”); 28
(6)] (4) § 2–210 (“Class 8 farm brewery license”); 29 6 HOUSE BILL 1377
[(7)] (5) § 2–211 (“Residency requirement”); 1
[(8)] (6) § 2–212 (“Additional licenses”); 2
[(9)] (7) § 2–213 (“Additional fees”); 3
[(10)] (8) § 2–214 (“Sale or delivery restricted”); 4
[(11)] (9) § 2–215 (“Beer sale on credit to retail dealer prohibited”); 5
[(12)] (10) § 2–216 (“Interaction between manufacturing entities and 6
retailers”); 7
[(13)] (11) § 2–217 (“Distribution of alcoholic beverages — Prohibited 8
practices”); and 9
[(14)] (12) § 2–218 (“Restrictive agreements between producers and 10
retailers — Prohibited”). 11
(b) The following sections of Title 2, Subtitle 2 (“Manufacturer’s Licenses”) of 12
Division I of this article apply in the county: 13
(1) § 2–202 (“CLASS 1 DISTILLERY LICENSE ”), SUBJECT TO § 20–408 14
OF THIS SUBTITLE; 15
(2) § 2–205 (“Class 3 winery license”), subject to § 20–403 of this subtitle; 16
[(2)] (3) § 2–206 (“Class 4 limited winery license”), subject to § 20–404 of 17
this subtitle; 18
[(3)] (4) § 2–207 (“CLASS 5 BREWERY LICENSE”), SUBJECT TO § 19
20–407 OF THIS SUBTITLE ; 20
(5) § 2–208 (“Class 6 pub–brewery license”), subject to § 20–405 of this 21
subtitle; and 22
[(4)] (6) § 2–209 (“Class 7 micro–brewery license”), subject to § 20–406 of 23
this subtitle. 24
20–407. 25
(A) THERE IS A CLASS DBR LICENSE. 26
(B) THE LICENSE MAY BE ISSUED TO A HOLDER OF A CLASS 5 BREWERY 27 HOUSE BILL 1377 7
LICENSE. 1
(C) THE LICENSE SERVES AS THE ON–PREMISES CONSUMPTION PERMIT 2
REQUIRED UNDER §§ 2–207(F) AND (G) OF THIS ARTICLE. 3
(D) THE LICENSE HOLDER MA Y SELL: 4
(1) FOOD AND NONALCOHOLI C BEVERAGES; AND 5
(2) BEER BREWED AT THE B REWERY FOR ON – AND OFF–PREMISES 6
CONSUMPTION TO THE EXTENT THE LICENSE HOLDER I S ALLOWED UNDER THE 7
LICENSE HOLDER ’S CLASS 5 BREWERY LICENSE . 8
(E) THE BOARD SHALL ADOPT REG ULATIONS TO CARRY OU T THIS SECTION 9
AND TO SET THE ANNUA L LICENSE FEE. 10
20–408. 11
(A) THERE IS A CLASS DDS LICENSE. 12
(B) THE LICENSE MAY BE ISSUED TO A HOLDER OF A CLASS 1 DISTILLERY 13
LICENSE. 14
(C) THE LICENSE SERVES AS THE ON–PREMISES CONSUMPTION PERMIT 15
REQUIRED UNDER §§ 2–202(E) AND (I) OF THIS ARTICLE. 16
(D) THE LICENSE HOLDER MA Y SELL: 17
(1) FOOD AND NONALCOHOLI C BEVERAGES; AND 18
(2) BRANDY, RUM, WHISKEY, ALCOHOL, AND NEUTRAL SPIRITS THAT 19
ARE DISTILLED , RECTIFIED, BLENDED, AND BOTTLED AT THE D ISTILLERY FOR 20
ON– AND OFF–PREMISES CONSUMPTION TO THE EXTENT THE LICENSE HOLDER I S 21
ALLOWED UNDER THE LICENSE HOLDER ’S CLASS 1 DISTILLERY LICENSE . 22
(E) THE BOARD SHALL ADOPT REG ULATIONS TO CARRY OU T THIS SECTION 23
AND TO SET THE ANNUA L LICENSE FEE. 24
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 25
1, 2024. 26