As Re-Referred to the Senate General Government Committee

135th General Assembly

Regular Session Sub. H. B. No. 86

2023-2024

Representative LaRe

Cosponsors: Representatives Carruthers, Stein, Miller, J., Schmidt, Brennan, Barhorst, Miller, A., Dell'Aquila, Abrams, Brewer, Creech, Cross, Forhan, Johnson, Jones, Kick, Lampton, Mathews, Richardson, Russo, Seitz, Somani, Swearingen, Thomas, C., Upchurch, Wiggam, Williams

A BILL

To amend sections 4301.17, 4301.171, 4303.041, 4303.184, and 4399.15 of the Revised Code to revise specified provisions of the liquor control laws.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 4301.17, 4301.171, 4303.041, 4303.184, and 4399.15 of the Revised Code be amended to read as follows:

Sec. 4301.17. (A)(1) Subject to local option as provided in sections 4301.32 to 4301.40 of the Revised Code, five state liquor stores or agencies may be established in each county. One additional store may be established in any county for each twenty thousand of population of that county or major fraction thereof in excess of the first forty thousand, according to the last preceding federal decennial census or according to the population estimates certified by the department of development between decennial censuses. A person engaged in a mercantile business may act as the agent for the division of liquor control for the sale of spirituous liquor in a municipal corporation, in the unincorporated area of a township, or in an area designated and approved as a resort area under section 4303.262 of the Revised Code. The division shall fix the compensation for such an agent in the manner it considers best, but the compensation shall not exceed seven per cent of the gross sales made by the agent in any one year.

(2) The division shall adopt rules in accordance with Chapter 119. of the Revised Code governing the allocation and equitable distribution of agency store contracts. The division shall comply with the rules when awarding a contract under division (A)(1) of this section.

(3) Pursuant to an agency store's contract, an agency store may be issued a D-1 permit to sell beer, a D-2 permit to sell wine and mixed beverages, and a D-5 permit to sell beer, wine, mixed beverages, and spirituous liquor.

(4) Pursuant to an agency store's contract, an agency store may be issued a D-3 permit to sell spirituous liquor if the agency store contains at least ten thousand square feet of sales floor area. A D-3 permit issued to an agency store shall not be transferred to a new location. The division shall revoke any D-3 permit issued to an agency store under division (A)(4) of this section if the agent no longer operates the agency store. The division shall not issue a D-3a permit to an agency store.

(5) An agency store to which a D-8 permit has been issued may allow the sale consumption of tasting samples of spirituous liquor in accordance with section 4301.171 of the Revised Code.

(6) An agency store may sell beer, wine, mixed beverages, and spirituous liquor only between the hours of nine a.m. and eleven p.m.

(B) When an agency contract is proposed, when an existing agency contract is assigned, when an existing agency proposes to relocate, or when an existing agency is relocated and assigned, before entering into any contract, consenting to any assignment, or consenting to any relocation, the division shall notify the legislative authority of the municipal corporation in which the agency store is to be located, or the board of county commissioners and the board of township trustees of the county and the township in which the agency store is to be located if the agency store is to be located outside the corporate limits of a municipal corporation, of the proposed contract, assignment, or relocation, and an opportunity shall be provided officials or employees of the municipal corporation or county and township for a complete hearing upon the advisability of entering into the contract or consenting to the assignment or relocation. When the division sends notice to the legislative authority of the political subdivision, the division shall notify, by certified mail or by personal service, the chief peace officer of the political subdivision, who may appear and testify, either in person or through a representative, at any hearing held on the advisability of entering into the contract or consenting to the assignment or relocation.

If the proposed agency store, the assignment of an agency contract, or the relocation of an agency store would be located within five hundred feet of a school, church, library, public playground, or township park, the division shall not enter into an agency contract until it has provided notice of the proposed contract to the authorities in control of the school, church, library, public playground, or township park and has provided those authorities with an opportunity for a complete hearing upon the advisability of entering into the contract. If an agency store so located is operating under an agency contract, the division may consent to relocation of the agency store or to the assignment of that contract to operate an agency store at the same location. The division may also consent to the assignment of an existing agency contract simultaneously with the relocation of the agency store. In any such assignment or relocation, the assignee and the location shall be subject to the same requirements that the existing location met at the time that the contract was first entered into as well as any additional requirements imposed by the division in rules adopted by the superintendent of liquor control. The division shall not consent to an assignment or relocation of an agency store until it has notified the authorities in control of the school, church, library, public playground, or township park and has provided those authorities with an opportunity for a complete hearing upon the advisability of consenting to the assignment or relocation.

Any hearing provided for in this division shall be held in the central office of the division, except that upon written request of the legislative authority of the municipal corporation, the board of county commissioners, the board of township trustees, or the authorities in control of the school, church, library, public playground, or township park, the hearing shall be held in the county seat of the county where the proposed agency store is to be located.

(C) All agency contracts entered into by the division pursuant to this section shall be in writing and shall contain a clause providing for the termination of the contract at will by the division upon its giving ninety days' notice in writing to the agent of its intention to do so. Any agency contract may include a clause requiring the agent to report to the appropriate law enforcement agency the name and address of any individual under twenty-one years of age who attempts to make an illegal purchase.

The division shall issue a C-1 and C-2 permit to each agent who prior to November 1, 1994, had not been issued both of these permits, notwithstanding the population quota restrictions contained in section 4303.29 of the Revised Code or in any rule of the liquor control commission and notwithstanding the requirements of section 4303.31 of the Revised Code. The location of a C-1 or C-2 permit issued to such an agent shall not be transferred. The division shall revoke any C-1 or C-2 permit issued to an agent under this paragraph if the agent no longer operates an agency store.

The division may enter into agreements with the department of development to implement a minority loan program to provide low-interest loans to minority business enterprises, as defined in section 122.71 of the Revised Code, that are awarded liquor agency contracts or assignments.

(D) If the division closes a state liquor store and replaces that store with an agency store, any employees of the division employed at that state liquor store who lose their jobs at that store as a result shall be given preference by the agent who operates the agency store in filling any vacancies that occur among the agent's employees, if that preference does not conflict with the agent's obligations pursuant to a collective bargaining agreement.

If the division closes a state liquor store and replaces the store with an agency store, any employees of the division employed at the state liquor store who lose their jobs at that store as a result may displace other employees as provided in sections 124.321 to 124.328 of the Revised Code. If an employee cannot displace other employees and is laid off, the employee shall be reinstated in another job as provided in sections 124.321 to 124.328 of the Revised Code, except that the employee's rights of reinstatement in a job at a state liquor store shall continue for a period of two years after the date of the employee's layoff and shall apply to jobs at state liquor stores located in the employee's layoff jurisdiction and any layoff jurisdiction adjacent to the employee's layoff jurisdiction.

(E) The division shall require every agent to give bond with surety to the satisfaction of the division, in the amount the division fixes, conditioned for the faithful performance of the agent's duties as prescribed by the division.

Sec. 4301.171. (A) As used in this section:

(1) "Broker" and "solicitor" have the same meanings as in rules adopted by the superintendent of liquor control under section 4303.25 of the Revised Code.

(2) "Tasting sample" means a small amount of spirituous liquor that is provided in a serving of not more than a quarter ounce of spirituous liquor and, if provided, not more than one ounce of nonalcoholic mixer to an authorized purchaser person and that allows the purchaser person to determine, by tasting only, the quality and character of the beverage.

(3) "Trade marketing company" means a company that solicits the purchase of beer and intoxicating liquor and educates the public about beer and intoxicating liquor.

(4) "Trade marketing professional" means an individual who is an employee of, or is under contract with, a trade marketing company and who has successfully completed a training program described in section 4301.253 of the Revised Code.

(B) Notwithstanding section 4301.24 of the Revised Code, an agency store to which a D-8 permit has been issued may allow a trade marketing professional, broker, or solicitor to offer for sale tasting samples of spirituous liquor when conducted in accordance with this section. A tasting sample shall not be sold provided for the purpose of general consumption.

(C) Tasting samples of spirituous liquor may be offered for sale at an agency store by a trade marketing professional, broker, or solicitor if all of the following apply:

(1) The tasting samples are sold provided only in the area of the agency store in which spirituous liquor is sold and that area is open to the public.

(2) The tasting samples are sold provided only by the trade marketing professional, broker, or solicitor.

(3) The spirituous liquor is registered under division (A)(8) of section 4301.10 of the Revised Code.

(4) Not less than ten business days prior to the salesampling, the trade marketing professional, broker, or solicitor has provided written notice to the division of liquor control of the date and time of the sampling, and of the type and brand of spirituous liquor to be sampled at the agency store.

(D) A sale The provision of tasting samples of spirituous liquor is subject to rules adopted by the superintendent of liquor control or the liquor control commission.

(E) An offering for sale of tasting samples of spirituous liquor shall be limited to a period of not more than two hours.

(F) For purposes of offering for sale tasting samples of spirituous liquor, a trade marketing professional, broker, or solicitor shall purchase the spirituous liquor from the agency store at the current retail price. An authorized purchaser person shall not be charged not less than fifty cents for each a tasting sample of spirituous liquor. When the sale of tasting samples sampling of spirituous liquor at an agency store is completed, any bottles of spirituous liquor used to provide tasting samples that are not empty shall be marked as "sample" and removed from the agency store by the trade marketing professional, broker, or solicitor, as applicable.

(G) No trade marketing professional, broker, or solicitor shall do any of the following:

(1) Advertise the offering for sale of tasting samples of spirituous liquor other than at the agency store where the tasting samples will be offered or as provided in section 4301.245 of the Revised Code;

(2) Solicit orders or make sales of offer tasting samples of spirituous liquor for in quantities greater than those specified in division (G)(3) of this section;

(3) Allow any authorized purchaser person to consume more than four tasting samples of spirituous liquor per day.

(H) The purchase consumption of a tasting sample of spirituous liquor shall not be contingent upon the purchase of any other product from an agency store.

(I) No employee of an agency store that allows the sale consumption of tasting samples of spirituous liquor shall purchase or consume a tasting sample while on duty.

(J) If an employee of an agency store that allows the sale consumption of tasting samples of spirituous liquor consumes a tasting sample of spirituous liquor, the employee shall not perform the employee's duties and responsibilities at the agency store on the day the tasting sample is consumed.

(K) No person under twenty-one years of age shall consume a tasting sample of spirituous liquor.

(L) Not more than ten events at which the sale of tasting samples of spirituous liquor are offered shall occur at an agency store in a calendar month provided that:

(1) Not more than two events shall occur in the same day; and

(2) There is not less than one hour between the end of one event and the beginning of the next event.

(M) No trade marketing professional, trade marketing company, broker, solicitor, owner or operator of an agency store, or an agent or employee of the owner or operator shall violate this section or any rules adopted by the superintendent or the commission for the purposes of this section.

Sec. 4303.041. (A) An (A)(1) Except as provided in division (A)(2) of this section, an A-3a permit may be issued to a distiller that manufactures less than one hundred thousand gallons of spirituous liquor per year. An

(2) An A-3a permit holder issued an A-3a permit prior to the effective date of this amendment may manufacture any amount of spirituous liquor per year on and after the effective date of this amendment, regardless of whether the permit premises location or ownership of the permit premises is transferred and the permit holder is issued a new A-3a permit.

(3) An A-3a permit holder may sell to a personal consumer, in sealed containers for consumption off the premises where manufactured, spirituous liquor that the permit holder manufactures, but sales to the personal consumer may occur only by an in-person transaction at the permit premises. The A-3a permit holder shall not ship, send, or use an H permit holder to deliver spirituous liquor to the personal consumer.

"Distiller" means a person in this state who mashes, ferments, distills, and ages spirituous liquor.

(B)(1) Except as otherwise provided in this section, no A-3a permit shall be issued unless the sale of spirituous liquor by the glass for consumption on the premises or by the package for consumption off the premises is authorized in the election precinct in which the A-3a permit is proposed to be located.

(2) Division (B)(1) of this section does not prohibit the issuance of an A-3a permit to an applicant for such a permit who has filed an application with the division of liquor control before March 22, 2012.

(C)(1) An A-3a permit holder may offer for sale tasting samples of spirituous liquor. The A-3a permit holder shall not serve more than four tasting samples of spirituous liquor per person per day. A tasting sample shall not exceed a quarter ounce. Tasting samples shall be only for the purpose of allowing a purchaser to determine, by tasting only, the quality and character of the spirituous liquor. The tasting samples shall be offered for sale in accordance with rules adopted by the division of liquor control.

(2) An A-3a permit holder shall sell not more than three liters of spirituous liquor per day from the permit premises to the same personal consumer.

An A-3a permit holder may sell spirituous liquor in sealed containers for consumption off the premises where manufactured as an independent contractor under agreement, by virtue of the permit, with the division of liquor control. The price at which the A-3a permit holder shall sell each spirituous liquor product to a personal consumer is to be determined by the division of liquor control. For an A-3a permit holder to purchase and then offer spirituous liquor for retail sale, the spirituous liquor need not first leave the physical possession of the A-3a permit holder to be so registered. The spirituous liquor that the A-3a permit holder buys from the division of liquor control shall be maintained in a separate area of the permit premises for sale to personal consumers. The A-3a permit holder shall sell such spirituous liquor in sealed containers for consumption off the premises where manufactured as an independent contractor by virtue of the permit issued by the division of liquor control, but the permit holder shall not be compensated as provided in division (A)(1) of section 4301.17 of the Revised Code. Each A-3a permit holder shall be subject to audit by the division of liquor control.

(D) The fee for the A-3a permit is two dollars per fifty-gallon barrel.

(E) The holder of an A-3a permit may also exercise the same privileges as the holder of an A-3 permit.

Sec. 4303.184. (A) Subject to division (B) of this section, a D-8 permit may be issued to any of the following:

(1) An agency store;

(2) The holder of a C-1, C-2, or C-2x permit issued to a retail store that has any of the following characteristics:

(a) The store has at least five thousand five hundred square feet of floor area, and it generates more than sixty per cent of its sales in general merchandise items and food for consumption off the premises where sold.

(b) The store is located in a municipal corporation or township with a population of five thousand or less, has at least four thousand five hundred square feet of floor area, and generates more than sixty per cent of its sales in general merchandise items and food for consumption off the premises where sold.

(c) Wine constitutes at least sixty per cent of the value of the store's inventory.

(3) The holder of both a C-1 and C-2 permit, or the holder of a C-2x permit, issued to a retail store that is located within a municipal corporation or township with a population of fifteen thousand or less.

(B) A D-8 permit may be issued to the holder of a C-1, C-2, or C-2x permit only if the premises of the permit holder are located in a precinct, or at a particular location in a precinct, in which the sale of beer, wine, or mixed beverages is permitted for consumption off the premises where sold. Sales under a D-8 permit are not affected by whether sales for consumption on the premises where sold are permitted in the precinct or at the particular location where the D-8 premises are located.

(C)(1) The holder of a D-8 permit described in division (A)(2) or (3) of this section may sell tasting samples of beer, wine, and mixed beverages, but not spirituous liquor, at retail, for consumption on the premises where sold in an amount not to exceed two ounces or another amount designated by rule of the liquor control commission. A tasting sample shall not be sold for general consumption.

(2) The holder of a D-8 permit described in division (A)(1) of this section may allow the sale consumption of tasting samples of spirituous liquor in accordance with section 4301.171 of the Revised Code.

(3) No D-8 permit holder described in division (A)(2) or (3) of this section shall allow any authorized purchaser to consume more than four tasting samples of beer, wine, or mixed beverages, or any combination of beer, wine, or mixed beverages, per day.

(D)(1) Notwithstanding sections 4303.11 and 4303.121 of the Revised Code, the holder of a D-8 permit described in division (A)(2) or (3) of this section may sell beer that is dispensed from containers that have a capacity equal to or greater than five and one-sixth gallons if all of the following conditions are met:

(a) A product registration fee for the beer has been paid as required in division (A)(8)(b) of section 4301.10 of the Revised Code.

(b) The beer is dispensed only in glass containers whose capacity does not exceed one gallon and not for consumption on the premises where sold.

(c) The containers are sealed, marked, and transported in accordance with division (E) of section 4301.62 of the Revised Code.

(d) The containers have been cleaned immediately before being filled in accordance with rule 4301:1-1-28 of the Administrative Code.

(2) Beer that is sold and dispensed under division (D)(1) of this section is subject to both of the following:

(a) All applicable rules adopted by the liquor control commission, including, but not limited to, rule 4301:1-1-27 and rule 4301:1-1-72 of the Administrative Code;

(b) All applicable federal laws and regulations.

(E) The privileges authorized for the holder of a D-8 permit described in division (A)(2) or (3) of this section may only be exercised in conjunction with and during the hours of operation authorized by a C-1, C-2, C-2x, or D-6 permit.

(F) A D-8 permit shall not be transferred to another location.

(G) The fee for the D-8 permit is five hundred dollars.

Sec. 4399.15. No person, for the purpose of sale, shall adulterate spirituous liquor, alcoholic liquor, or beer used or intended for drink or medicinal or mechanical purposes, with cocculus indicus, vitriol, grains of paradise, opium, alum, capsicum, copperas, laurel water, logwood, Brazilwood, cochineal, sugar of lead, aloes, glucose, tannic acid, or any other substance that is poisonous or injurious to health, or with a substance not a necessary ingredient in the manufacture of the spirituous liquor, alcoholic liquor, or beer, or sell, offer, or keep for sale spirituous liquor, alcoholic liquor, or beer that is so adulterated.

In addition to the penalties provided in division (E) of section 4399.99 of the Revised Code, a person convicted of violating this section shall pay all necessary costs and expenses incurred in inspecting and analyzing spirituous liquor, alcoholic liquor, or beer that is so adulterated, sold, kept, or offered for sale.

Section 2. That existing sections 4301.17, 4301.171, 4303.041, 4303.184, and 4399.15 of the Revised Code are hereby repealed.