Session of 1998
                   
HOUSE BILL No. 2887
         
By Committee on Federal and State Affairs
         
2-11
            9             AN ACT concerning alcoholic beverages; relating to the unlawful sale,
10             purchase and possession of alcoholic beverages; to provide for the
11             crime of unlawful shipments of beverage alcohol to Kansas consumers
12             under certain circumstances; to provide for registration and for pay-
13             ment of fees and taxes on authorized shipments; relating to out-of-
14             state shipper's licenses; amending K.S.A. 41-304 and 41-310 and
15             K.S.A. 1997 Supp. 41-311 and 41-727 and repealing the existing
16             sections.
17            
18       Be it enacted by the Legislature of the State of Kansas:
19           New Section 1. (a) An out-of-state shipper's license shall allow the
20       licensee to:
21           (1) Ship not more than 24 individual containers of nonregistered al-
22       coholic beverages of not more than one liter each to any household in
23       this state during any twelve-month period;
24           (2) ship only to an individual who is at least 21 years of age for such
25       individual's personal use and not for resale.
26           (b) Such licensee shall:
27           (1) Ensure than all shipping containers of alcoholic beverages
28       shipped pursuant to this section are conspicuously labeled with the words:
29       ``CONTAINS ALCOHOLIC BEVERAGES. ADULT (OVER 21) SIG-
30       NATURE REQUIRED FOR DELIVERY''; and are accompanied by a
31       bill of lading describing the contents of the shipping package;
32           (2) ensure that all shipments into this state are made by a duly li-
33       censed carrier and further ensure that such carriers comply with the re-
34       quirement to obtain an adult signature;
35           (3) file such reports as may be required by the alcoholic beverage
36       control on a quarterly basis concerning the amount, type and brand of
37       alcoholic beverages shipped pursuant to the license;
38           (4) file a quarterly report with the director of alcoholic beverage con-
39       trol showing the total number of bottles or cases shipped into the state,
40       the type of alcoholic beverage or cereal malt beverage shipped and the
41       name brands of such shipments;
42           (5) pay to the alcoholic beverage control on a quarterly basis all sales
43       and excise taxes due on sales to residents of this state during the preceding

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  1       quarter, the amount of such taxes to be calculated as if the sale took place
  2       at the location where the delivery is made;
  3           (6) maintain such records for at least three years as will permit the
  4       alcoholic beverage control to ascertain the truthfulness of the information
  5       filed and permit the alcoholic beverage control to perform an audit of
  6       the licensee's records upon reasonable request; and
  7           (7) be deemed to have consented to the personal jurisdiction of the
  8       alcoholic beverage control or any other state agency and the courts of this
  9       state concerning enforcement of this section and any related laws or rules
10       and regulations.
11           (c) This section shall be part of and supplemental to the Kansas liquor
12       control act.
13           New Sec. 2. (a) It is unlawful for any person domiciled outside the
14       state of Kansas to ship alcoholic beverages or cereal malt beverages to
15       Kansas consumers, except as otherwise provided by this act.
16           (b) It is unlawful for any manufacturer of alcoholic beverages domi-
17       ciled outside the state of Kansas to ship directly to any consumer less
18       than 21 years of age.
19           (c) Any person who makes, participates in, transports, imports or re-
20       ceives a shipment in violation of this act shall be guilty of a severity level
21       10, nonperson felony and further may be subject to a civil penalty of not
22       more than $500 for the first offense and $1,000 for each subsequent
23       offense.
24           (d) Where the person holds an out-of-state shipper's license, license
25       suspension or revocation may be in addition to or in lieu of the foregoing
26       penalties.
27           (e) Upon determination by the director that a manufacturer holding
28       a basic permit from the federal bureau of alcohol, tobacco and firearms
29       has made an illegal shipment to consumers in Kansas, the director shall
30       notify the bureau of alcohol, tobacco and firearms in writing and by cer-
31       tified mail of the director's official determination that state law has been
32       violated and request the bureau to take appropriate action.
33           (f) This section shall be part of and supplemental to the Kansas liquor
34       control act.
35           Sec. 3. K.S.A. 41-304 is hereby amended to read as follows: 41-304.
36       Licenses issued by the director shall be of the following classes: (a) Man-
37       ufacturer's license; (b) spirits distributor's license; (c) wine distributor's
38       license; (d) beer distributor's license; (e) retailer's license; (f) microbrew-
39       ery license; (g) farm winery license;   and (h) nonbeverage user's license;
40       and (i) out-of-state shipper's license.
41           Sec. 4. K.S.A. 41-310 is hereby amended to read as follows: 41-310.
42       (a) At the time application is made to the director for a license of any
43       class, the applicant shall pay the fee provided by this section.

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  1           (b) The annual fee for a manufacturer's license to manufacture al-
  2       cohol and spirits shall be $2,500.
  3           (c) The annual fee for a manufacturer's license to manufacture beer
  4       and cereal malt beverage shall be:
  5           (1) For 1 to 100 barrel daily capacity or any part thereof, $200.
  6           (2) For 100 to 150 barrel daily capacity, $400.
  7           (3) For 150 to 200 barrel daily capacity, $700.
  8           (4) For 200 to 300 barrel daily capacity, $1,000.
  9           (5) For 300 to 400 barrel daily capacity, $1,300.
10           (6) For 400 to 500 barrel daily capacity, $1,400.
11           (7) For 500 or more barrel daily capacity, $1,600.
12           As used in this subsection, ``daily capacity'' means the average daily
13       barrel production for the previous 12 months of manufacturing operation.
14       If no basis for comparison exists, the licensee shall pay in advance for the
15       first year's operation a fee of $1,000.
16           (d) The annual fee for a manufacturer's license to manufacture wine
17       shall be $500.
18           (e) The annual fee for a microbrewery license or a farm winery li-
19       cense shall be $250.
20           The annual fee for a winery outlet license shall be $50.
21           (f) The annual fee for a spirits distributor's license for the first and
22       each additional distributing place of business operated in this state by the
23       licensee and wholesaling and jobbing spirits shall be $1,000.
24           (g) The annual fee for a wine distributor's license for the first and
25       each additional distributing place of business operated in this state by the
26       licensee and wholesaling and jobbing wine shall be $1,000.
27           (h) The annual fee for a beer distributor's license, for the first and
28       each additional wholesale distributing place of business operated in this
29       state by the licensee and wholesaling or jobbing beer and cereal malt
30       beverage shall be $1,000.
31           (i) The annual fee for a nonbeverage user's license shall be:
32           (1) For class 1, $10.
33           (2) For class 2, $50.
34           (3) For class 3, $100.
35           (4) For class 4, $200.
36           (5) For class 5, $500.
37           (j) In addition to the license fees prescribed by subsections (b), (c),
38       (d), (f), (g), (h) and (i):
39           (1) Any city in which the licensed premises are located may levy and
40       collect an annual occupation or license tax on the licensee in an amount
41       not exceeding the amount of the annual license fee required to be paid
42       under this act to obtain the license, but no city shall impose an occupation
43       or privilege tax on the licensee in excess of that amount; and

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  1           (2) any township in which the licensed premises are located may levy
  2       and collect an annual occupation or license tax on the licensee in an
  3       amount not exceeding the amount of the annual license fee required to
  4       be paid under this act to obtain the license, but no township shall impose
  5       an occupation or privilege tax on the licensee in excess of that amount;
  6       the township board of the township is authorized to fix and impose the
  7       tax and the tax shall be paid by the licensee to the township treasurer,
  8       who shall issue a receipt therefor to the licensee and shall cause the tax
  9       paid to be placed in the general fund of the township.
10           (k) The annual fee for a retailer's license shall be $250.
11           (l) In addition to the license fee prescribed by subsection (k):
12           (1) Any city in which the licensed premises are located shall levy and
13       collect an annual occupation or license tax on the licensee in an amount
14       not less than $100 nor more than $300, but no other occupation or excise
15       tax or license fee shall be levied by any city against or collected from the
16       licensee; and
17           (2) any township in which the licensed premises are located shall levy
18       and collect an annual occupation or license tax on the licensee in an
19       amount not less than $100 nor more than $300; the township board of
20       the township is authorized to fix and impose the tax and the tax shall be
21       paid by the licensee to the township treasurer, who shall issue a receipt
22       therefor to the licensee and shall cause the tax paid to be placed in the
23       general fund of the township.
24           (m) The license year for a license shall commence on the date the
25       license is issued by the director and shall end one year after that date.
26           (n) The annual fee for a out-of-state shipper's license shall be $25.
27           Sec. 5. K.S.A. 1997 Supp. 41-311 is hereby amended to read as fol-
28       lows: 41-311. (a) The provisions of subsection (h) shall provide for the
29       qualifications for an out-of-state shipper's license. No license of any kind
30       shall be issued pursuant to the liquor control act to a person:
31           (1) Who has not been a citizen of the United States for at least 10
32       years, except that the spouse of a deceased retail licensee may receive
33       and renew a retail license notwithstanding the provisions of this subsec-
34       tion (a)(1) if such spouse is otherwise qualified to hold a retail license and
35       is a United States citizen or becomes a United States citizen within one
36       year after the deceased licensee's death;
37           (2) who has been convicted of a felony under the laws of this state,
38       any other state or the United States;
39           (3) who has had a license revoked for cause under the provisions of
40       this act or who has had any license issued under the cereal malt beverage
41       laws of any state revoked for cause except that a license may be issued to
42       a person whose license was revoked for the conviction of a misdemeanor
43       at any time after the lapse of 10 years following the date of the revocation;

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  1           (4) who has been convicted of being the keeper or is keeping a house
  2       of prostitution or has forfeited bond to appear in court to answer charges
  3       of being a keeper of a house of prostitution;
  4           (5) who has been convicted of being a proprietor of a gambling house,
  5       pandering or any other crime opposed to decency and morality or has
  6       forfeited bond to appear in court to answer charges for any of those
  7       crimes;
  8           (6) who is not at least 21 years of age;
  9           (7) who, other than as a member of the governing body of a city or
10       county, appoints or supervises any law enforcement officer, who is a law
11       enforcement official or who is an employee of the director;
12           (8) who intends to carry on the business authorized by the license as
13       agent of another;
14           (9) who at the time of application for renewal of any license issued
15       under this act would not be eligible for the license upon a first application,
16       except as provided by subsection (a)(12);
17           (10) who is the holder of a valid and existing license issued under
18       article 27 of chapter 41 of the Kansas Statutes Annotated unless the per-
19       son agrees to and does surrender the license to the officer issuing the
20       same upon the issuance to the person of a license under this act, except
21       that a retailer licensed pursuant to K.S.A. 41-2702 and amendments
22       thereto shall be eligible to receive a retailer's license under the Kansas
23       liquor control act;
24           (11) who does not own the premises for which a license is sought, or
25       does not have a written lease thereon for at least 3/4 of the period for
26       which the license is to be issued; or
27           (12) whose spouse would be ineligible to receive a license under this
28       act for any reason other than citizenship, residence requirements or age,
29       except that this subsection (a)(12) shall not apply in determining eligibility
30       for a renewal license.
31           (b) No retailer's license shall be issued to:
32           (1) A person who is not a resident of this state;
33           (2) a person who has not been a resident of this state for at least four
34       years immediately preceding the date of application;
35           (3) a person who has beneficial interest in the manufacture, prepa-
36       ration or wholesaling of alcoholic beverages;
37           (4) a person who has beneficial interest in any other retail establish-
38       ment licensed under this act, except that the spouse of a licensee may
39       own and hold a retailer's license for another retail establishment;
40           (5) a copartnership, unless all of the copartners are qualified to obtain
41       a license;
42           (6) a corporation; or
43           (7) a trust, if any grantor, beneficiary or trustee would be ineligible

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  1       to receive a license under this act for any reason, except that the provi-
  2       sions of subsection (a)(6) shall not apply in determining whether a ben-
  3       eficiary would be eligible for a license.
  4           (c) No manufacturer's license shall be issued to:
  5           (1) A corporation, if any officer or director thereof, or any stockholder
  6       owning in the aggregate more than 25% of the stock of the corporation
  7       would be ineligible to receive a manufacturer's license for any reason
  8       other than citizenship and residence requirements;
  9           (2) a copartnership, unless all of the copartners shall have been res-
10       idents of this state for at least five years immediately preceding the date
11       of application and unless all the members of the copartnership would be
12       eligible to receive a manufacturer's license under this act;
13           (3) a trust, if any grantor, beneficiary or trustee would be ineligible
14       to receive a license under this act for any reason, except that the provi-
15       sions of subsection (a)(6) shall not apply in determining whether a ben-
16       eficiary would be eligible for a license;
17           (4) an individual who is not a resident of this state; or
18           (5) an individual who has not been a resident of this state for at least
19       five years immediately preceding the date of application.
20           (d) No distributor's license shall be issued to:
21           (1) A corporation, if any officer, director or stockholder of the cor-
22       poration would be ineligible to receive a distributor's license for any rea-
23       son. It shall be unlawful for any stockholder of a corporation licensed as
24       a distributor to transfer any stock in the corporation to any person who
25       would be ineligible to receive a distributor's license for any reason, and
26       any such transfer shall be null and void, except that: (A) If any stockholder
27       owning stock in the corporation dies and an heir or devisee to whom stock
28       of the corporation descends by descent and distribution or by will is in-
29       eligible to receive a distributor's license, the legal representatives of the
30       deceased stockholder's estate and the ineligible heir or devisee shall have
31       14 months from the date of the death of the stockholder within which to
32       sell the stock to a person eligible to receive a distributor's license, any
33       such sale by a legal representative to be made in accordance with the
34       provisions of the probate code; or (B) if the stock in any such corporation
35       is the subject of any trust and any trustee or beneficiary of the trust who
36       is 21 years of age or older is ineligible to receive a distributor's license,
37       the trustee, within 14 months after the effective date of the trust, shall
38       sell the stock to a person eligible to receive a distributor's license and
39       hold and disburse the proceeds in accordance with the terms of the trust.
40       If any legal representatives, heirs, devisees or trustees fail, refuse or ne-
41       glect to sell any stock as required by this subsection, the stock shall revert
42       to and become the property of the corporation, and the corporation shall
43       pay to the legal representatives, heirs, devisees or trustees the book value

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  1       of the stock. During the period of 14 months prescribed by this subsec-
  2       tion, the corporation shall not be denied a distributor's license or have its
  3       distributor's license revoked if the corporation meets all of the other
  4       requirements necessary to have a distributor's license;
  5           (2) a copartnership, unless all of the copartners are eligible to receive
  6       a distributor's license;
  7           (3) a trust, if any grantor, beneficiary or trustee would be ineligible
  8       to receive a license under this act for any reason, except that the provi-
  9       sions of subsection (a)(6) shall not apply in determining whether a ben-
10       eficiary would be eligible for a license;
11           (4) an individual who is not a resident of this state; or
12           (5) an individual who has not been a resident of this state for at least
13       10 years immediately preceding the date of application, except that:
14           (A) A wholesaler of cereal malt beverages properly licensed on Sep-
15       tember 1, 1948, shall be eligible for a beer distributor's license; and
16           (B) a person who has been a resident of the state for at least one year
17       immediately preceding the date of application shall be eligible for a beer
18       distributor's license.
19           (e) No nonbeverage user's license shall be issued to a corporation, if
20       any officer, manager or director of the corporation or any stockholder
21       owning in the aggregate more than 25% of the stock of the corporation
22       would be ineligible to receive a nonbeverage user's license for any reason
23       other than citizenship and residence requirements.
24           (f) No microbrewery license or farm winery license shall be issued to
25       a:
26           (1) Person who is not a resident of this state;
27           (2) person who has not been a resident of this state for at least four
28       years immediately preceding the date of application;
29           (3) person who has beneficial interest in the manufacture, prepara-
30       tion or wholesaling of alcoholic beverages other than that produced by
31       such brewery or winery;
32           (4) person, copartnership or association which has beneficial interest
33       in any retailer licensed under this act or under K.S.A. 41-2702 and amend-
34       ments thereto;
35           (5) copartnership, unless all of the copartners are qualified to obtain
36       a license;
37           (6) corporation, unless stockholders owning in the aggregate 50% or
38       more of the stock of the corporation would be eligible to receive such
39       license and all other stockholders would be eligible to receive such license
40       except for reason of citizenship or residency; or
41           (7) a trust, if any grantor, beneficiary or trustee would be ineligible
42       to receive a license under this act for any reason, except that the provi-
43       sions of subsection (a)(6) shall not apply in determining whether a ben-

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  1       eficiary would be eligible for a license.
  2           (g) The provisions of subsections (b)(1), (b)(2), (c)(3), (c)(4), (d)(3),
  3       (d)(4), (f)(1) and (f)(2) shall not apply in determining eligibility for the
  4       10th, or a subsequent, consecutive renewal of a license if the applicant
  5       has appointed a citizen of the United States who is a resident of Kansas
  6       as the applicant's agent and filed with the director a duly authenticated
  7       copy of a duly executed power of attorney, authorizing the agent to accept
  8       service of process from the director and the courts of this state and to
  9       exercise full authority, control and responsibility for the conduct of all
10       business and transactions within the state relative to alcoholic liquor and
11       the business licensed. The agent must be satisfactory to and approved by
12       the director, except that the director shall not approve as an agent any
13       person who:
14           (1) Has been convicted of a felony under the laws of this state, any
15       other state or the United States;
16           (2) has had a license issued under the alcoholic liquor or cereal malt
17       beverage laws of this or any other state revoked for cause, except that a
18       person may be appointed as an agent if the person's license was revoked
19       for the conviction of a misdemeanor and 10 years have lapsed since the
20       date of the revocation;
21           (3) has been convicted of being the keeper or is keeping a house of
22       prostitution or has forfeited bond to appear in court to answer charges of
23       being a keeper of a house of prostitution;
24           (4) has been convicted of being a proprietor of a gambling house,
25       pandering or any other crime opposed to decency and morality or has
26       forfeited bond to appear in court to answer charges for any of those
27       crimes; or
28           (5) is less than 21 years of age.
29           (h) No out-of-state shipper's license shall be issued to any person un-
30       less such person is currently licensed in such person's state of domicile as
31       an alcoholic beverage manufacturer and provides the director with a true
32       and correct copy of such license annually.
33           Sec. 6. K.S.A. 1997 Supp. 41-727 is hereby amended to read as fol-
34       lows: 41-727. (a) Except with regard to serving of alcoholic liquor or cereal
35       malt beverage as permitted by K.S.A. 41-308a, 41-308b, 41-2610 or 41-
36       2704, and amendments thereto, no person under 21 years of age shall:
37       (1) Possess, consume, obtain, purchase or attempt to obtain or purchase
38       alcoholic liquor or cereal malt beverage except as authorized by law; or
39       (2) purchase, obtain or attempt to purchase or obtain alcoholic liquor or
40       cereal malt beverage from out-of-state sources or licensed out-of-state
41       shippers, whether by mail, telephone or the electronic means.
42           (b) Violation of this section by a person 18 or more years of age but
43       less than 21 years of age is a class C misdemeanor for which the minimum

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  1       fine is $200.
  2           (c) Any person less than 18 years of age who violates this section is a
  3       juvenile offender under the Kansas juvenile justice code. Upon adjudi-
  4       cation thereof and as a condition of disposition, the court shall require
  5       the offender to pay a fine of not less than $200 nor more than $500.
  6           (d) In addition to any other penalty provided for a violation of this
  7       section, the court may order the offender to do either or both of the
  8       following:
  9           (1) Perform 40 hours of public service; or
10           (2) attend and satisfactorily complete a suitable educational or train-
11       ing program dealing with the effects of alcohol or other chemical sub-
12       stances when ingested by humans.
13           (e) This section shall not apply to the possession and consumption of
14       cereal malt beverage by a person under the legal age for consumption of
15       cereal malt beverage when such possession and consumption is permitted
16       and supervised, and such beverage is furnished, by the person's parent
17       or legal guardian.
18           (f) Any city ordinance or county resolution prohibiting the acts pro-
19       hibited by this section shall provide a minimum penalty which is not less
20       than the minimum penalty prescribed by this section.
21           (g) This section shall be part of and supplemental to the Kansas liquor
22       control act.
23           Sec. 7. K.S.A. 41-304 and 41-310 and K.S.A. 1997 Supp. 41-311 and
24       41-727 are hereby repealed.
25           Sec. 8. This act shall take effect and be in force from and after its
26       publication in the statute book.
27      
28