A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ADDING ARTICLE 15 TO CHAPTER 6, TITLE 61 SO AS TO AUTHORIZE THE DEPARTMENT OF REVENUE TO ISSUE RETAIL ALCOHOLIC BEVERAGE CATERER LICENSES, TO PROVIDE REGULATIONS, TO PROVIDE THAT THE DEPARTMENT IS AUTHORIZED TO ISSUE CERTAIN ALCOHOLIC LIQUOR TEMPORARY PERMITS, AND TO ALLOW FOR CERTAIN CONTRACTS; BY AMENDING SECTION 61-4-160, RELATING TO DISCOUNT PRICING FOR ON-PREMISES CONSUMPTION, SO AS TO PROVIDE THAT UP TO TWELVE FUNCTIONS MAY BE SPONSORED EACH YEAR; AND BY REPEALING SECTION 61-6-2000 RELATING TO TEMPORARY PERMITS FOR NONPROFIT ORGANIZATIONS AND CRIMINAL BACKGROUND CHECKS.

 

Be it enacted by the General Assembly of the State of South Carolina:

 

SECTION 1.  Chapter 6, Title 61 of the S.C. Code is amended by adding:

 

Article 15

 

Caterer License

 

    Section 61-6-4800. For purposes of this article:

    (1) "Alcoholic beverages" means beer, wine, and alcoholic liquors by the drink as defined in Chapters 4 and 6, Title 61.

    (2) "Caterer" means a for-profit business that operates a restaurant or has a commercial kitchen facility and is hired by an event host to provide food and beverage services including, but not limited to, bartending services at a private event for a predetermined fee. Such caterer must be bona fide engaged primarily and substantially in the preparation and serving of meals.

    (3) "Private event" means an off-site event that is not open to the general public and that is temporary in nature. The premises of the private event must consist of the physical place where the caterer has been approved to provide food and beverage services according to the contract which grants the caterer the right to use the premises for the contracted purpose. A caterer may not utilize a license granted under this article to serve alcoholic beverages at a location which is otherwise the principal place of business of a licensee holding any other license to serve or sell beer, wine, or liquor for on- or off-premises consumption. For purposes of this item, an "off-site event" does not include private events held at the principal place of business of a caterer that operates a commercial kitchen facility designed and used for private event functions, provided such events are contracted for by a private host and are not open to the general public.

    (4)(a) "Commercial kitchen" means a kitchen:

           (i) the operation of which is contingent upon the possession of a permit as a retail food establishment pursuant to S.C. Code Regs. Section 61-25.8-301 and the regulations thereunder;

           (ii) from which dine-in, take-out, or delivered meals are prepared for consumption by members of the public; and

           (iii) in which appliances used in preparation of food are permanently affixed to the building in which it operates.

       (b) "Kitchen" does not include a kitchen that is:

           (i) a public food service establishment used for the preparation of takeout or delivery-only meals housed in portable structures that are movable from place to place by a tow or are self-propelled or otherwise axle-mounted and that include self-contained utilities including, but not limited to, gas, water, electricity, or liquid waste disposal;

           (ii) located within a residence; or

           (iii) shared with other persons or business entities.

 

    Section 61-6-4810. (A) The Department of Revenue is authorized to issue a retail alcoholic beverage caterer license subject to the licensing requirements of Chapters 4 and 6, Title 61.

    (B) Notwithstanding any other provision of law, the alcoholic beverage caterer license allows the licensee to do the following:

       (1) serve alcoholic beverages for on-premises consumption in conjunction with food service by the caterer of prepared meals which excludes the serving of snacks as the primary meal for the duration of the private event;

       (2) purchase beer and wine directly from a wholesaler;

       (3) purchase alcoholic liquor directly from a retail liquor store dealer with a wholesaler's basic permit issued pursuant to the Federal Alcohol Administration Act in any size except 1.75 liter-sized bottles;

       (4) transfer alcoholic beverages from a wholesaler or retailer to the licensee's principal place of business;

       (5) transfer alcoholic beverages directly to and from the licensee's principal place of business to an off-site event;

       (6) store alcoholic beverages at the licensee's principal place of business in a secure location that prevents access by anyone other than the licensee or the licensee's employees; and

       (7) take delivery of and store alcoholic beverages at the location of the off-site event in a secure location that prevents access by anyone other than the licensee or the licensee's employees for a period beginning three calendar days before the start of the event and ending at the conclusion of the event.

    (C) Notwithstanding any other provision of law, a wholesaler in the case of beer and wine and retail liquor stores who hold a Class B wholesaler's permit from the federal Alcohol and Tobacco Tax and Trade Bureau (TTB) in the case of liquor may offer credit or a refund for unused, unopened, and undamaged alcoholic beverages to a holder of an alcoholic beverage caterer license, provided that the licensee has not transferred the alcoholic beverages from the off-site event to the licensee's principal place of business and stored these beverages at that location for more than seventy-two hours after the termination of the off-site event.

    (D) An employee of the caterer may not serve or deliver to a purchaser alcohol in a business where these sales are authorized unless the employee is eighteen years of age or older. Nothing contained in this subsection may be construed as allowing bartenders under the age of twenty-one.

    (E) Any licensee, employee, or agent of caterer holding an alcoholic beverage catering license is prohibited from selling, making available for sale, or permitting the consumption of alcoholic liquor as defined in Section 61-6-20 on the premises of the off-site event and their principal place of business between the hours of two o'clock a.m. and ten o'clock a.m. Selling, making available for sale, or permitting the consumption of beer and wine as defined in Section 61-4-10 is permitted six days a week, twenty-four hours a day except from twelve o'clock a.m. to eleven fifty-nine p.m. on Sundays. A violation of this subsection is violation against the establishment's license.

    (F) Notwithstanding any other provision of law, any licensee, employee, or agent of a caterer holding an alcoholic beverage catering license is prohibited from selling, making available for sale, or permitting the consumption of alcoholic beverages on Sunday unless the off-site event is located in a county or municipality that has conducted a favorable referendum allowing the sale and consumption of alcoholic liquors by the drink on Sunday under the referendum provisions of Section 61-6-2010. A violation of this subsection is a violation against the establishment's license.

    (G) A caterer duly licensed under this section who serves alcoholic beverages for on-premises consumption at off-site events which take place after five o'clock p.m. is required to maintain a liquor liability insurance policy or a general liability insurance policy with a liquor liability endorsement pursuant to the provisions of Section 61-2-145.

    (H) The department shall add the liquor liability insurance requirement to applications for alcoholic beverage catering licenses, provided that such licensees sell alcoholic beverages for on-premises consumption at off-site events which take place after five o'clock p.m. Each applicant or person renewing his license or permit to whom this requirement applies shall provide the department with documentation of a liquor liability insurance policy or a general liability insurance policy with a liquor liability endorsement in the required amounts.

    (I) Each insurer writing liquor liability insurance policies or general liability insurance policies with a liquor liability endorsement to a person licensed or permitted under this section must notify the department in a manner prescribed by department regulation of the lapse or termination of the liquor liability insurance policy or the general liability insurance policy with a liquor liability endorsement.

    (J) A caterer seeking to obtain an alcoholic beverage caterer license must apply for a license and pay a filing fee of three hundred dollars which is not refundable. The applicant must pay to the department two thousand three hundred dollars biennially for the alcoholic beverage caterer license. A caterer who initially applies for a permit after the first day of a permit period must pay permit fees in accordance with the schedule provided in Section 61-6-1810(C) and abide by the provisions of Section 61-6-120.

    (K) The applicant shall notify the State Law Enforcement Division that alcoholic beverages will be served at the site at least twenty-four hours before the off-site event.

    (L)(1) Notwithstanding Section 12-33-245 or any other provision of law, a holder of an alcoholic-beverage caterer license issued under this section may collect and remit liquor-by-the-drink excise tax and applicable sales and use tax on alcoholic beverages sold as part of an inclusive bar package, provided:

           (a) the package price is a fixed charge per guest;

           (b) taxes must be computed based on either actual consumption or a reasonable per-guest drink-allocation method, calculated with reference to the number of guests and the types and quantities of alcoholic beverages prepared and served at the event, in accordance with the event contract.  A caterer electing the per-guest drink-allocation method shall retain copies of the event contract and supporting records used to determine the tax due for a period of no less than three years after the date the return is filed, in accordance with Section 12-54-240;

           (c) for purposes of this subsection, a "drink" means one serving for on-premises consumption consisting of twelve fluid ounces of beer, five fluid ounces of wine, or one and one-half fluid ounces of distilled spirits, whether served alone or in a mixed beverage; and

           (d) this subsection applies only to licensed caterers under this section and does not authorize inclusive or discounted pricing for restaurants, hotels, nonprofit private clubs, or other on-premises licensees governed by Sections 61-4-160 or 61-6-4550.

       (2) The Department of Revenue may promulgate regulations establishing default drink-equivalent ratios, allocation tables, and recordkeeping requirements for licensed caterers electing to use the inclusive-package method.

    (M) Nothing in this section authorizes the holder of an alcoholic beverage caterer license to sell beer, wine, or liquor at retail for off-premises consumption.

    (N) Unless otherwise specified, violations of this section are subject to the penalties provided in Chapter 4, Title 61. Violations of the requirements of Chapters 3, 4, and 6, Title 61 are a violation of this section and subject to the respective penalties of those chapters.

 

    Section 61-6-4820. (A) In addition to the licenses authorized pursuant to the provisions of Subarticle 1, Article 5 of this chapter, the department is authorized to issue the following alcoholic liquors temporary permits, subject to the restrictions of this section:

       (1) special event permits, which may be issued to a for-profit business who holds a valid caterer license, as defined in Section 61-6-4800, a food service establishment who holds a valid business liquor-by-the-drink-license, as defined in Section 61-6-1610, and provides food and beverage service at the fair or special function, or a nonprofit organization, as defined in Section 61-6-20, which authorizes the licensee to sell alcoholic liquors for on-premises consumption for a period not to exceed twenty-four hours at a single event only at the fair or special function for which the alcoholic liquors special event license has been granted; and

       (2) the permit holder may sell tickets for the event. Notwithstanding another provision of this article, the issuance of this permit authorizes the permit holder to purchase alcoholic liquors from licensed retail dealers in the same manner that a person with a biennial license issued pursuant to Subarticle 1, Article 5 of this chapter purchases its alcoholic liquors. The department shall charge a nonrefundable filing fee of thirty-five dollars for processing each event on the application. The temporary license application must include a statement by the applicant as to the nature and date of the special function at which the alcoholic liquors are to be sold. The department in its discretion may specify the terms and conditions of the license, pursuant to existing statutes and regulations governing these applications. The department may issue permits running for a period not exceeding fifteen days for a nonrefundable fee of fifty dollars per day.

    (B) The department shall require the applicant to:

       (1) obtain a criminal records check conducted by the State Law Enforcement Division within ninety days prior to an application. The department shall deny the application if the criminal records check is not submitted with the application and filing fee or if it was obtained more than ninety days before; and

       (2) complete the law enforcement notification provision contained in an application form and submit it with the application. The law enforcement notification provision shall be prepared by the department for inclusion in the application and, at a minimum, must contain sufficient information to inform the department that either the chief of police, if the event is located within the city limits, or the county sheriff has been notified of the temporary permit application and given an opportunity to object.

    (C) The department may issue up to twenty-five temporary permits to sell alcoholic liquors on one application for special functions in a twelve-month period for the same applicant. This does not prohibit the applicant from applying for additional special permits within the same twelve-month period.

    (D) The applicant shall notify the State Law Enforcement Division that alcoholic liquors will be served at the site at least twenty-four hours before the fair or special function.

 

    Section 61-6-4830. The holder of a valid caterer license, as defined in Section 61-6-4800, or a valid business liquor-by-the-drink license, as defined in Section 61-6-1610, may contract with an event host to provide for the sale and on-premises consumption of beer, wine, and liquor at their licensed premises. Event hosts may charge an entry fee to the event to raise money for charitable purposes and cover the costs of food, beverages, entertainment, and other services provided by the license holder. The event host is not required to obtain a special temporary event permit, as defined by Sections 61-4-550 and 61-6-4820.

 

SECTION 2.  Section 61-4-160 of the S.C. Code is amended to read:

 

    Section 61-4-160.  No person who holds a biennial permit to sell beer or wine for on-premises consumption may advertise, sell, or dispense these beverages for free, at a price less than one-half of the price regularly charged, or on a two or more for the price of one basis. Beer or wine may be sold at a price less than the price regularly charged from four o'clock p.m. until eight o'clock p.m. only. The prohibition against dispensing the beverages for free does not apply to dispensing to a customer on an individual basis, to a fraternal organization in the course of its fund-raising activities, to a person attending a private function on premises for which a biennial permit has been issued, or to a customer attending a function sponsored by the person who holds a biennial permit. However, no more than two twelve functions may be sponsored each year, and must be authorized by the department. A person who violates this section is guilty of a misdemeanor and, upon conviction, must be fined not less than one hundred dollars or imprisoned not less than three months, in the discretion of the court.

    A person found guilty of a violation of Section 61-6-4550 and this section may not be sentenced under both sections for the same offense.

 

SECTION 3.  Section 61-6-2000 of the S.C. Code is repealed.

 

SECTION 4.  This act takes effect upon approval by the Governor.

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