Amends TCA Title 57.

Present law generally authorizes licensed winery direct shippers to make sales and delivery of wine by common carrier to the citizens of Tennessee over the age of 21 who have purchased the wine directly from the winery direct shipper. This bill adds that a winery direct shipper may only ship wine sold under a brand name owned by or licensed to the winery, which is either: (1) Produced by the winery; (2) Produced exclusively for the winery under an existing written contract with the winery; or (3) Produced and bottled exclusively for the winery. Under present law, an applicant for a winery direct shipper's license must pay a $300 application fee, execute consent to venue of enforcement actions in Tennessee, and acknowledge that it will only contract with common carriers who verify, in-person that customers are over 21 years of age. Additionally, a license will not be issued prior to payment of a $150 annual license fee. This bill makes the requirements that are applicable to issuance of a winery direct shipper's license also applicable to renewal of a license. This bill adds to present law by specifying that a fulfillment house is ineligible for licensure or renewal of a winery direct shipper's license. For purposes of the limitation on licensure, this bill defines "fulfillment house" to mean an in- or out-of-state entity, other than a winery, that handles logistics on behalf of the holder of a winery direct shipper's license for products the winery direct shipper is eligible to ship to residents in this state. This bill authorizes the alcoholic beverage commission to: (1) Require a licensed winery direct shipper to provide periodic reports to the commission; and (2) Request information or records that the commission may deem necessary to enforce the law applicable to winery direct shippers to be included in such reports. This bill also adds general prohibitions under the alcoholic beverage laws against: (1) The shipment of wine into Tennessee, unless the wine is shipped directly from the premises of a licensed winery direct shipper; and (2) The holder of any license or permit pertaining to alcoholic beverages using the services of a fulfillment house in its operations. This bill authorizes the alcoholic beverage commission to adopt rules and conduct investigations and audits for enforcing and preventing violations of (1) or (2). A licensee or permittee found to be in violation of (1) or (2) may be subject to a fine, suspension, or revocation of its license or permit. This bill prohibits the alcoholic beverage commission from issuing a license or permit to an in- or out-of-state entity operating as a fulfillment house in this state or in another state. ON APRIL 8, 2021, THE HOUSE ADOPTED AMENDMENT #2 AND PASSED HOUSE BILL 742, AS AMENDED. AMENDMENT #2 revises various provisions of this bill, as follows: (1) Specifies that a farm winery may be a winery direct shipper; (2) Adds, in regard to the requirement that the wine be produced by the winery (described above in the bill summary) that the provision includes wine manufactured in a manner authorized under present law pursuant to the Grape and Wine Law; (3) Adds recordkeeping and quarterly reporting requirements for winery direct shippers. These requirements replace this bill's authorization for the alcoholic beverage commission to require periodic reporting from winery direct shippers; (4) Requires winery direct shippers to only ship, or have shipped, wine from either their licensed winery direct shipper location or a licensed fulfillment house location; (5) Authorizes, under circumstances specified in the full text of this amendment, two or more licensed winery direct shippers to make sales and shipments of wine in conjunction and coordination with each other; (6) Specifies that the requirements for winery direct shippers apply to winery direct shippers whether the wine is shipped from the winery direct shipper or a licensed fulfillment house; (7) Redefines "fulfillment house" to specify that, in addition to not including a winery, the term also does not include a farm winery, wholesaler, non-resident seller, or common carrier and adds that a fulfillment house must take physical possession of a winery direct shipper's wine; (8) Authorizes the winery direct shipper and the fulfillment house to transport the wine to the fulfillment house, and specifies that it is lawful for a common carrier to transport the wine to a fulfillment house; (9) Removes this bill's prohibitions on: wine being shipped into this state, unless such wine is shipped directly from the premises of a licensed winery direct shipper; and the holder of any license or permit pertaining to alcoholic beverages using the services of a fulfillment house in its operations; (10) Creates a fulfillment house license for the shipment of wine into this state. This amendment establishes the requirements for such a license and the conduct of such a business, including: establishing a $300 application fee, a $300 annual license fee, and an additional $50.00 for each separate location where it takes physical possession of wine before making or causing a shipment into, within, or outside of this state; specifying the licensee may only provide services related to shipment of wine produced by and belonging to a winery direct shipper licensee into or within this state according to the requirements of this section; and requiring each fulfillment house licensee to ensure that all containers of wine shipped directly to a person are labeled with a notice that the signature of a person aged 21 or older is required. A fulfillment house licensee who commits a violation will be subject to fines and action against the license; (11) Specifies that a fulfillment house license authorizes the licensee to only ship wine into or within this state for licensed winery direct shippers and any other activity into or within this state is unlawful; (12) Prohibits a fulfillment house licensee from shipping wine into or within this state from, or on behalf of unlicensed direct shippers, either in-state or out-of-state; and (13) Makes the provisions of this bill concerning fulfillment houses effective January 1, 2022, and the other provisions effective upon becoming a law.