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COMMITTEE REPORT
April 30, 2003
S. 228
S. Printed 4/30/03--H.
Read the first time February 20, 2003.
To whom was referred a Bill (S. 228) to amend Chapter 6, Title 61, Code of Laws of South Carolina, 1976, relating to the Alcohol Beverage Control Act, so as to add Section 61-6-710, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass:
JAMES H. HARRISON for Committee.
REVENUE IMPACT 1/
This bill is expected to increase alcoholic liquor licenses within the general fund by $3,900 in FY 2003-04.
Explanation
This bill creates a Special Food Manufacturer's License (SFML) to be issued by the Department of Revenue (DOR) at a cost of $1,200 biennially. A non-refundable application fee of $100 is assessed for each location. Proceeds would go to the general fund. The SFML is required for those manufacturers of sauces and marinades that include an alcoholic beverage ingredient by agreement with the beverage manufacturer. It will permit the licensee to purchase the alcoholic beverage directly from the manufacturer in containers of greater volume than are sold to a retail consumer.
Based on a review by DOR, only one manufacturer is marketing sauces or marinades with alcoholic beverage ingredients. The BEA estimates the market could support approximately two additional manufacturers in the initial year. Combined license and application fees for a total of three manufacturers would yield $3,900. Thus, this bill is expected to raise alcoholic liquor license fees within the general fund by a total of $3,900 in FY 2003-04.
Approved By:
William C. Gillespie
Board of Economic Advisors
1/ This statement meets the requirement of Section 2-7-71 for a state revenue impact, Section 2-7-76 for a local revenue impact, and Section 6-1-85(B) for an estimate of the shift in local property tax incidence.
TO AMEND CHAPTER 6, TITLE 61, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE ALCOHOL BEVERAGE CONTROL ACT, SO AS TO ADD SECTION 61-6-710, ESTABLISHING A SPECIAL FOOD MANUFACTURER'S LICENSE TO BE ISSUED BY THE DEPARTMENT OF REVENUE FOR A PERSON WHO MANUFACTURES FOOD ITEMS SUCH AS SAUCES AND MARINADES IN WHICH THERE IS AN ALCOHOLIC BEVERAGE INGREDIENT AND WHO DOES SO UNDER AN AGREEMENT WITH THE ALCOHOLIC BEVERAGE MANUFACTURER, AND TO ALLOW THE PURCHASE OF THE ALCOHOLIC BEVERAGE IN CONTAINERS HOLDING QUANTITIES GREATER THAN THE QUANTITIES SOLD TO THE CONSUMER, AND TO PROVIDE THAT THE DEPARTMENT MUST ESTABLISH THE FORM OF APPLICATION AND CONDITIONS FOR ISSUANCE OF THE LICENSE; TO AMEND SECTION 12-33-210, AS AMENDED, RELATING TO THE TAXES ON LICENSES ISSUED UNDER TITLE 61, SO AS TO INCLUDE A TAX FOR THE SPECIAL FOOD MANUFACTURER'S LICENSE; TO AMEND SECTION 61-2-175, RELATING TO SHIPPING ALCOHOLIC BEVERAGES INTO THE STATE, SO AS TO PROVIDE THAT ALCOHOLIC BEVERAGES MAY BE SHIPPED DIRECTLY TO A RESIDENT WHO HOLDS A SPECIAL FOOD MANUFACTURER'S LICENSE; TO AMEND SECTION 61-6-2900, RELATING TO THE SHIPMENT OR TRANSFER OF IMPORTED ALCOHOLIC BEVERAGES, SO AS TO PROVIDE THE ALCOHOLIC BEVERAGES MAY BE SHIPPED TO A PERSON HOLDING A SPECIAL FOOD MANUFACTURER'S LICENSE; AND TO AMEND SECTION 61-6-4050, RELATING TO THE PURCHASE OF ALCOHOLIC LIQUORS FROM LICENSED RETAIL DEALERS SO AS TO ADD ALCOHOLIC LIQUORS PURCHASED PURSUANT TO A SPECIAL FOOD MANUFACTURER'S LICENSE.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The 1976 Code is amended by adding:
"Section 61-6-710. Notwithstanding any other provision of this title, a person who manufactures in this State food items such as sauces and marinades in which there is an alcoholic beverage ingredient and who does so under an agreement with the alcoholic beverage manufacturer must apply for a special food manufacturer's license from the department, in accordance with Section 61-2-100, to purchase the alcoholic beverage directly from the manufacturer in containers holding greater quantities of liquor than are sold to a retail consumer. The department must establish the form of the application for the special food manufacturer's license."
SECTION 2. Section 12-33-210 of the 1976 Code, as last amended by Act 144 of 1995, is further amended to read:
"Section 12-33-210. The biennial license taxes on licenses granted under Title 61, in addition to all other license taxes, are as follows:
(1) manufacturer's license: fifty thousand dollars;
(2) wholesaler's license: twenty thousand dollars; and
(3) retail dealer's license: one thousand and two hundred dollars.; and
(4) special food manufacturer's license: one thousand two hundred dollars.
Each applicant shall must pay a filing fee of one hundred dollars which must accompany the initial application for each location and is not refundable.
A person who applies for a license after the first day of a license period shall must pay license fees in accordance with the schedule provided in Section 61-6-1810(C)."
SECTION 3. Section 61-2-175(A) of the 1976 Code, as added by Act 98 of 1997, is amended to read:
"(A) Any person or corporate entity (including partnerships) located in another state or country who knowingly and intentionally ships, causes to be shipped, or accepts for shipment any beer, wine, or alcoholic liquors directly to any resident of this State who does not hold a valid producer's, manufacturer's, or wholesaler's, or special food manufacturer's license or producer representative's certificate of registration issued by the State of South Carolina is in violation of this title."
SECTION 4. Section 61-6-2900 of the 1976 Code, as added by Act 415 of 1996, is amended to read:
"Section 61-6-2900. Alcoholic liquors must be shipped or moved from a point outside this State to a point inside the State only by railroad companies, steamship companies, express companies, or truck companies authorized to do business in the State as common carriers by the Department of Public Safety, by wholesalers licensed by the department or by registered producers in their own trucks. Alcoholic liquors must be shipped or moved only to the warehouse of the food manufacturer licensed pursuant to Section 61-6-710, or the registered producer in care of the producer representative who is registered to handle the property of the registered producer originating the shipment. The shipment of alcoholic liquors must be either stored in the warehouse of the food manufacturer licensed pursuant to Section 61-1-710 or in a licensed warehouse of the registered producer or, after delivery to the producer representative is complete, may then be shipped to a licensed wholesaler by common carriers described in this section, by wholesalers licensed by the department or by registered producers in their own trucks. Shipments of alcoholic liquors from a licensed producer's warehouse to a licensed South Carolina wholesaler may be made in a vehicle owned or operated by the wholesaler. If alcoholic liquors are stored in the warehouse of a registered producer, or after delivery to the producer representative is complete, they may be shipped to a licensed wholesaler or to a point outside this State. Before any shipment or transfer, the food manufacturer or producer representative, as appropriate, must apply to the department, on forms prescribed by the department, for permission to ship or transfer the alcoholic liquors, and the food manufacturer or producer representative must have received a certificate of approval of the shipment or transfer."
SECTION 5. Section 61-6-4050 of the 1976 Code, as added by Act 415 of 1996, is amended to read:
"Section 61-6-4050. It is unlawful for a person to purchase or otherwise procure alcoholic liquors other than those purchased from licensed retail dealers in the State or those purchased pursuant to a special food manufacturer's license in Section 61-6-710. A person who violates this section is guilty of a misdemeanor and, upon conviction, must be punished as follows:
(a) for a first offense, by a fine of one hundred dollars or imprisonment for thirty days;
(b) for a second offense, by a fine of two hundred dollars or imprisonment for sixty days; and
(c) for a third or subsequent offense, by a fine of three hundred dollars or imprisonment for ninety days."
SECTION 6. This act takes effect upon approval by the Governor and applies to special food manufacturing licenses applied for on or after July 1, 2002.
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