(1) All licensees, their agents, employees, and concessionaires must operate in compliance with the rules of other state and local agencies and abide by all:

(a) provisions of the laws of Montana and the United States related to alcoholic beverages;

(b) county and city or town ordinances related to alcoholic beverages;

(c) Indian alcoholic beverage laws applicable within the areas of Indian country, as defined by 18 USC 1151, provided a tribe having jurisdiction over such area of Indian country adopted an ordinance, certified by the Secretary of the Interior, and published in the Federal Register; and

(d) rules of the department relating to alcoholic beverages.

(2) Proof of violation by a licensee, a concessionaire, or the licensee's or concessionaire's agent or employee of any of the provisions of the above laws, ordinances, or rules is sufficient grounds for revocation or suspension of the license or termination of a concession agreement, and a licensee, a concessionaire, or both, may be reprimanded or assessed a civil penalty in accordance with 16-4-406, MCA.

(3) The department may use a range of progressive and proportional penalties for any combination of violations of any laws, ordinances, and rules. The progressive penalty schedule is not an exhaustive list of the grounds for administrative action. The schedule does not preclude the department's use of discretion to propose a penalty greater or less than those listed based upon aggravating or mitigating circumstances, non-exhaustive examples of which are described in (4) and (5). For purposes of determining penalties under the progressive penalty schedule, the department uses a three-year lookback. Proposed penalties are assessed based upon the date the violation occurs. For violations that occur over time, such as an undisclosed ownership interest, the violation date shall be the date the department issues its notice of proposed department action. The department may proceed to revoke or refuse to grant the renewal of a license, concession agreement, or both, only if a violation jeopardizes health, welfare, safety, or there is not a cure in place.

Progressive Penalty Schedule  

(4) Aggravating circumstances may result in the imposition of maximum monetary penalties, maximum suspension time or revocation, and will not bind the department to the progressive penalty schedule. Aggravating circumstances include, but are not limited to:

(a) no effort on the part of a licensee, a concessionaire, or both, to prevent a violation from occurring;

(b) a licensee's failure to report a violation at the time of renewal;

(c) involvement of a licensee, a location manager, a concessionaire, or a combination thereof, in the violation;

(d) recurring sales to underage or intoxicated persons;

(e) providing alcoholic beverages to a person under 18 years of age;

(f) lack of cooperation by a licensee, a location manager, a concessionaire, or a combination thereof, in an investigation;

(g) a violation's significant negative effect on the health, welfare, and safety of the community in which the licensee, the concessionaire, or both, operate; and

(h) those instances provided in 16-4-406, MCA. 

(5) Mitigating circumstances may result in the adjustment of monetary penalties, amount of suspension time, or revocation, and will not bind the department to the progressive penalty schedule. Mitigating circumstances include, but are not limited to:

(a) the admissions of either the licensee, a location manager, or concessionaire regarding violations of the code or a rule of the department prior to the department commencing investigation of the licensee or concessionaire; and

(b) those instances provided in 16-4-406, MCA.

(6) Nothing in this rule prevents the department from revoking, suspending, or refusing the renewal of a license, or a concession agreement, or both, if revocation, suspension, or refusing renewal is expressly allowed in law or rule with reference to a prohibited act. 

(1) The department or its duly authorized representative has the right at any time to make an examination of any premises licensed for the sale of alcoholic beverages and to check the books, records, and stock-in-trade, and to make an inventory of the latter. The department or its authorized representative may immediately seize and remove any alcoholic beverage kept in violation of law.

(2) Any authorized representative designated in (3) shall have immediate access to all parts of the licensed premises. Except as provided in 16-6-103, MCA, doors of licensed premises shall not be locked while persons other than the licensee or the licensee's employees are within or upon the licensed premises.

(3) The department designates as its authorized representative, for the purpose of carrying out 16-6-103, MCA, any member of a county sheriff's department or the police force of a city or town, provided the police force is organized pursuant to Title 7, chapter 32, part 41, MCA (metropolitan police law).

This rule has been repealed.

This rule has been repealed.

(1) Any alteration to licensed premises, other than a cosmetic change, must be approved by the department.

(a) An alteration that increases the premises' square footage must receive preapproval.

(b) An alteration that does not increase the premises' square footage must be submitted within seven days from its commencement.

(2) A licensee must submit a request to alter the premises and provide copies of the current and proposed floor plans.

(3) Upon receipt of the items in (2), the department will notify the licensee within seven business days of the approval or denial of the alteration request.

(4) The department's approval of an alteration request shall be valid for one year. An alteration not completed within one year must be resubmitted to the department for another approval.

(5) If the alteration prevents the licensee from continuing operations, the licensee shall request nonuse status pursuant to ARM 42.13.107.

(6) Upon completion of the alterations, the licensee is responsible for ensuring the department receives notification of building, health, and fire code approval for the premises.

(7) Upon receipt of the building, health, and fire code approvals, the department will arrange for an inspection of the premises by the Department of Justice.

(8) The department will review the Department of Justice's findings and, upon determining no issues are present, the department shall notify the licensee that the alteration is approved and any new addition is now part of the licensed premises. Prior to receiving this written approval, a licensee shall not operate in any area that has not been previously approved.

(9) Any alteration to licensed premises, other than a cosmetic change, without approval shall constitute a violation and may subject the licensee to administrative action.

(1) The department shall grant nonuse status to a licensee who:

(a) is issued a license without an approved premises as provided in 16-4-417, MCA; or

(b) is not operating a going establishment if the licensee submits a written verification documenting to the department's satisfaction how the nonuse is beyond the licensee's control and the request is received prior to exceeding 90 days of not operating a going establishment.

(2) Acceptable reasons for not operating a going establishment may include but are not limited to:

(a) the death of the licensee or the licensee's family member;

(b) a natural disaster;

(c) a department approved alteration is underway or is pending department approval; or

(d) the licensee lost possessory interest in the premises.

(3) The approved nonuse period shall not exceed one year.

(4) Prior to expiration of the approved nonuse period, the licensee shall resume operations and notify the department that operations have resumed.

(5) If a licensee fails to timely resume operations or provide the required notification, the department shall lapse the license pursuant to 16-3-310, MCA, and ARM 42.13.108.

(6) A licensee cannot resume operations of a license at premises where the licensee:

(a) was granted nonuse status for the license; and

(b) operated another license at the premises while the previous license was on nonuse status.

(7) The department shall deny a request for nonuse status if the licensee has been granted nonuse status for the license within the previous six months, unless the request is based upon reasons other than voluntary closure due to adverse economic conditions or a proposed sale of a license.

(8) A licensee may not purchase, sell, or otherwise provide alcoholic beverages while on nonuse status. This includes catering events and operating through a concession agreement. 

(1) A retail licensee shall operate the business as a going establishment unless the license has been approved for seasonal use pursuant to ARM 42.13.112 or approved for nonuse pursuant to ARM 42.13.107.

(2) The department shall lapse a license based upon a licensee's failure to operate a going establishment for a period exceeding 90 consecutive days unless the license is approved for seasonal use or is granted nonuse status.

(1) A brewery license, a beer wholesaler license, a winery license, or a table wine distributor license will be suspended or revoked or otherwise sanctioned under 16-4-406, MCA, if credible evidence demonstrates that a licensee extended credit to a retail licensee for more than seven days.

(2) A retailer's license will be suspended or revoked or otherwise sanctioned under 16-4-406, MCA, if credible evidence demonstrates that the retail licensee accepted credit extended by a brewer or a beer wholesaler for more than seven days for the purchase of beer.

(3) The first day of the seven-day credit period begins at 8:00 a.m. on the day after the delivery. 

(4) Criteria which demonstrates credit has been extended are:

(a) wholesaler delivered product to retailer;

(b) retailer or wholesaler does not have documentation of payment;

(c) wholesaler has been without payment for more than seven days; and

(d) wholesaler does not have documentation of efforts to collect payment; or

(e) (a), (b), (c), and the wholesaler has no documentation to show further product delivery was terminated.

(5) Criteria which demonstrates credit has been accepted are:

(a) wholesaler delivered product to retailer;

(b) retailer or wholesaler does not have documentation of payment;

(c) wholesaler has been without payment for more than seven days; and

(d) product has not been returned by retailer.

(6) When a license is sold and a debt to a beer and wine wholesaler remains unpaid, the debt becomes the obligation of the new owner of the license. Based on the seven-day credit limitation, the wholesaler may not sell to the new licensee until the previous debt is paid in full.

(a) in the fall the establishment must close at 2:00 a.m. and then set the clock back to 1:00 a.m.; and

(b) in the spring the establishment must close at 2:00 a.m. and then set the clock forward to 3:00 a.m.

The following definitions apply to this chapter:

(1) "Alteration" means a structural change or a modification to the premises other than a cosmetic change. Examples include adding a patio or removing a half wall.

(2) "Building" means an enclosed structure with external walls and a roof. Separate structures or structures connected by skyways are not considered one building for licensing purposes.

(3) "Contiguous" means touching or sharing a common border.

(4) "Contract packaging" means blending, bottling, packing, and/or filling of a distilled spirits product by a domestic distilled spirits plant for another distilled spirits plant.

(5) "Cosmetic change" means a nonstructural change to the premises. Examples include painting, carpeting, and other interior decorating.

(6) "Coupons" are certificates or tickets entitling the holder to a specified right, as redemption for cash or gifts or reduced purchase price.

(7) "Distilled at the microdistillery" means the process of vaporization and subsequent condensation of a beverage containing ethyl alcohol that occurs at the licensed premises.

(8) "Distilled spirits" means alcoholic beverages that contain ethyl alcohol and generally are the result of distillation of fermented materials. Examples include whiskey, gin, vodka, cordials, liqueurs, and flavored brandies. Distilled spirits do not include alcoholic beverages that are defined as beer or wine by the Montana Alcoholic Beverage Code.

(9) "Distilled spirits plant" means a plant at which distilled spirits are manufactured, produced, aged, stored, packaged, or bottled.

(10) "Drink preparation area" means the bar area on the premises where alcoholic beverages are stored and prepared for on-premises consumption and from which alcoholic beverages may be sold for off-premises consumption.

(11) "Flavors and nonbeverage ingredients containing alcohol" means any intermediate product containing alcohol that is used in the production of beer.

(12) "Floor plan" means a diagram with measurements of the premises as seen from above.

(13) "Fortified wine" means wine that contains more than 16 percent, but not more than 24 percent, of alcohol by volume. Fortified wine constitutes liquor for distribution purposes.

(14) "Going establishment" means a business that:

(a) is open at least 20 hours per week for any four weeks in a 90-day period;

(b) maintains an inventory of at least ten cases of alcoholic beverages for each day that the establishment is open; and

(c) sells or provides a minimum of $50, calculated at cost, of alcoholic beverages each week the establishment is open.

(15) "Grocery store" means a self-service retail establishment where a variety of perishable and nonperishable food items and household goods are sold for use off the premises.

(16) "Industry member" is any person engaged in business as a manufacturer, importer, or wholesaler of alcoholic beverages.

(17) "Mitigating circumstances" means a justification for a violation that the department considers extenuating enough to warrant a reduction of the penalty that would otherwise be proposed.

(18) "Original packaging" means the sealed container in which a manufacturer packages its product for retail sale. It includes bottles, cans, kegs, and growlers, but does not include lines or piping carrying product from a manufacturer's premises to a retailer's premises.

(19) "Patio/deck" means an outdoor portion of the premises where the preparation, service, and consumption of alcoholic beverages is allowed.

(20) "Perimeter barrier" means a barrier enclosing the perimeter of the patio/deck. The barrier shall be constructed in a manner that impedes foot traffic and clearly defines the boundary of the exterior portion of the premises. The barrier shall be at least three feet high at all points and may have a single six-foot-wide entrance permitting public access from an unlicensed area to the patio/deck. Upon the department's determination that the barrier accomplishes its intended purpose, the barrier may:

(a) be constructed of materials such as lattice or wrought iron that do not form a solid structure;

(b) have a portion of it be water;

(c) have additional entrances permitting public access to the patio/deck; and

(d) be less than three feet in height.

(21) "Portable satellite vehicle" or "other movable satellite device" as used in 16-3-302, MCA, may include:

(a) self-propelled wheeled vehicles such as golf carts, concession vans or similar conveyances containing beverage dispensing and storage equipment; or

(b) wheeled devices such as concession wagons or vendors carts and other similar vehicles which may be towed, pushed or transported to a temporary site and which contains beverage dispensing and storage equipment; and

(c) fixed booths or stands in which portable beverage dispensing and storage equipment may be temporarily installed and removed after use.

(22) "Posted price" as it applies to liquor and fortified wine, means the wholesale price of liquor and fortified wine for sale to persons who hold liquor licenses as fixed and determined by the department.

(23) "Premises" means the area in the floor plan approved by the department on which the activities authorized under the license may be conducted.

(24) "Prepared-food business," as it applies to an on-premises beer license with a wine amendment, means a public eating establishment where the food is not made on-site.

(25) "Primary packaging" means the container that directly holds the alcoholic beverage. Examples of primary packaging include, but are not limited to, aluminum cans, glass bottles, kegs, and a box containing a plastic bladder or other soft flexible container of wine.

(26) "Purchase price" means the ordinary, dine-in menu price for beer and wine and food items.

(27) "Restaurant," as it applies to an on-premises beer license with a wine amendment, means a public eating establishment where food is made on-site.

(28) "Sale to an underage person" means a violation consisting of the unlawful sale, service, or delivery of an alcoholic beverage to a person under the age of 21.

(29) "Sample room" means the area of a manufacturer's premises where the service, sale, and on-premises consumption of alcoholic beverages are permitted.

(30) "Seasonal business" means a business closed for greater than 90 consecutive days due to climatic and other conditions. Examples include a dude ranch, resort, or park hotel.

(31) "Self-service of alcoholic beverages" means allowing persons other than the licensee or its employees to have access to alcoholic beverages prior to the licensee or its employees providing the alcoholic beverage to the person for on-premises consumption.

(32) "Service area" means the area on the premises where the service, sale, and on-premises consumption of alcoholic beverages are permitted. The service area includes any patio/deck and drink preparation area.

(33) "Service bar" means an area on a restaurant beer and wine licensee's premises where alcoholic beverages are stored and prepared for on-premises consumption.

(34) "Stand-alone beer and/or table wine business" means a business in which 95 percent of the business's annual gross income comes from the sale of beer, table wine, or both.

(1) The department may approve a license for use in a seasonal business to enable closures exceeding 90 consecutive days.

(2) To request approval, the licensee shall submit a written request that includes the:

(a) type of seasonal business;

(b) justification for operating seasonally; and

(c) general dates of operation.

(3) Once approved, a licensee shall notify the department prior to changing the general dates of operation.

(1) As a condition of holding a retail license, no retail licensee shall sell, offer for sale, or provide any beer, wine, or hard cider unless the label and primary packaging are in conformity with this rule and ARM 42.13.221.

(2) Alcoholic beverage products are a mature product category, restricted by law to only consumers age 21 and older and who are not intoxicated, and therefore should be marketed in a responsible and appropriate manner. The department, in its discretion and on a case-by-case basis, will not approve a beer, wine, or hard cider label or primary package that:

(a) blurs the distinction between an alcoholic and nonalcoholic product by utilizing labeling and/or primary packaging that emphasize features that are most commonly associated with nonalcoholic consumable products including, but not limited to:

(i) aerosol cans;

(ii) gelatin cups;

(iii) hollow candies; or

(iv) mason jars that contain fruit;

(b) uses flavors that are designed to target or particularly appeal to underage persons, such as:

(i) cotton candy; or

(ii) bubble gum; or

(c) contains graphics or elements that:

(i) are designed to target or particularly appeal to underage persons;

(ii) minimizes, fails to identify, or disguises that the product contains alcohol; or

(iii) alludes to or suggests irresponsible, excessive, or underage consumption; or

(d) is in powdered or crystalline form.

(3) The department will notify the winery, wine importer, brewer, or beer importer of any products that do not conform to the requirements in (2). The winery, wine importer, brewer, or beer importer must remove the product from the Montana market within 60 days of being notified by the department.

(1) Each product a brewer or beer importer desires to sell in the state of Montana must be approved by the department and conform to the provisions of ARM 42.13.201.

(2) A brewer of malted beverages who has an annual nationwide production of less than 10,000 barrels is exempt from the requirements in (3).

(3) In order to consider the product for approval, the department must receive copies of:

(a) the primary packaging unless a traditional container is used. Traditional containers include aluminum cans, glass bottles, kegs, and boxes that are typically associated with alcoholic beverages. Any change to the primary packaging must be approved by the department prior to entering the Montana market if a nontraditional container is used; and

(b) the Certificate of Label Approval for products that are regulated by the Alcohol and Tobacco Tax and Trade Bureau (TTB). Any change to the label that requires approval from the TTB must be approved by the department prior to the product entering the Montana market; or

(c) the label for products that are regulated by the U.S. Food and Drug Administration. Any changes to the label must be approved by the department prior to entering the Montana market.

(4) Beer containing more than 8.75 percent but not more than 14 percent alcohol by volume must:

(a) be approved by the department prior to being sold or distributed within the state;

(b) be made by the alcoholic fermentation of an infusion or decoction, or a combination of both, in potable brewing water, of malted cereal grain, in which the sugars used for fermentation of the alcoholic beverage are at least 75 percent derived from malted cereal grain measured as a percentage of the total dry weight of the fermentable ingredients; and

(c) note the alcohol content by volume on the label.

(5) To obtain approval from the department for all beer or formula changes that meet the criteria in (4), the following documents are required:

(a) The brewer or beer importer must file a form, supplied by the department, attesting that the formula meets the requirements in (4).

(b) If the brewer or beer importer is required by federal law or regulations to file its formula with TTB, the brewer or beer importer is also required to send a copy of the formula filed with the TTB to the department.

(c) At the department's request and sole discretion, brewers or beer importers must file a formula for verification of its compliance with Montana statutes.

(d) All formulas filed with the department are protected by the privacy act and will not be released by the department unless otherwise required by law or by court order.

(6) The department will process the request and provide approval or denial in writing within 30 days of receipt of all required information.

(1) Each product a winery or wine importer desires to sell in the state of Montana must be approved by the department and conform to the provisions of ARM 42.13.201.

(2) In order to consider the product for approval, the department must receive copies of:

(a) a picture of the primary packaging unless a traditional container is used. Traditional containers include aluminum cans, glass bottles, kegs, and boxes that are typically associated with alcoholic beverages. Any changes to the primary packaging must be approved by the department prior to entering the Montana market if a nontraditional container is used; and

(b) the Certificate of Label Approval from the Alcohol and Tobacco Tax and Trade Bureau for wine over 7 percent alcohol by volume. Any changes to the label that require approval from the Alcohol and Tobacco Tax and Trade Bureau must be approved by the department prior to entering the Montana market; or

(c) the label, if the wine is less than 7 percent alcohol by volume. Any changes to the label must be approved by the department prior to entering the Montana market.

(3) The department will process the request and provide approval or denial to the winery or wine importer in writing within 30 days of receipt of all required information.

(1) Industry members authorized to do business in the state are allowed to offer coupons and direct offerings as set forth in regulation number 6.96 of the Tobacco Tax and Trade Bureau (TTB), United States Department of the Treasury as set forth in 27 CFR, as revised on April 1, 2005, and incorporated by reference as fully set forth as the regulations for consumer promotions. Copies may be obtained at the United States web site located at ttb.gov/other/regulations.shtml.

(2) Industry members may furnish to consumers coupons which are redeemable at a retail establishment as follows:

(a) all retailers within the market where the coupon offer is made may redeem such coupons; and

(b) an industry member does not reimburse a retailer for more than the face value of all coupons redeemed, plus a normal and customary handling fee for the redemption of coupons.

(3) Contest prizes, sweepstakes, refunds, premium offers, internet promotions, and like items may be offered by industry members directly to consumers. Officers, employees, and representatives of wholesalers or retailers are excluded from participation in these direct offerings.

(4) Conditions that must be met for all types of promotions include but are not limited to:

(a) the company offering the promotion must be a registered industry member authorized to do business in the state of Montana;

(b) alcohol may not be awarded as a prize or given away to participants;

(c) participants must be 21 years of age or older; and

(d) no purchase is necessary to participate in a sweepstakes or contest.

This rule has been repealed.

(1) Beer wholesalers and table wine distributors shall keep and maintain records at their place of business of all beer or table wine furnished or sold to retailers. These records must contain the following information:

(a) name and address of retailer;

(b) item that was sold or furnished;

(c) date item was sold or furnished;

(d) date item was delivered;

(e) cost of item sold;

(f) date wholesaler or distributor received retailer's payment; and

(g) from which warehouse or subwarehouse the item was delivered.

(2) Commercial records or invoices may be used if they contain the information listed in (1)(a) through (g).

(3) Beer wholesalers shall keep and maintain records at their place of business of visits to retailers within their assigned territory, as specified under Title 16, MCA, for department inspection.

(4) A beer wholesaler or a table wine distributor may use a common carrier to deliver beer or wine to a retail license in limited quantities. The department may inspect the books and records of the common carrier regarding the conveyance of alcoholic beverages within the state.

(a) Quantity is limited to three cases a day for each licensed retailer.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

(1) A foreign winery or importer, not otherwise licensed in Montana, desiring to ship table wine, sacramental wine, or hard cider to Montana must submit an application for registration specified in 16-4-107, MCA. The registration must be renewed annually by October 1 and be accompanied by the applicable registration fee shown in (3).

(2) Each product the foreign winery or importer desires to ship must conform to the provisions of ARM 42.13.201.

(3) For the first year, the registration fee is based on the total number of 9-liter cases the registrant intends to ship to Montana that year. For subsequent years, the registration fee is based on the total number of 9-liter cases the registrant actually shipped to Montana during the preceding year. The registration fee schedule is as follows:

(a) 0-60 9-liter cases = no charge;

(b) 61-500 9-liter cases = $100;

(c) 501-1000 9-liter cases = $200;

(d) 1001- 2000 9-liter cases = $300; or

(e) 2001 + 9-liter cases = $400.

(4) A winery that desires to ship table wine directly to consumers in Montana must also hold a current direct shipment endorsement, as specified in 16-4-1102, MCA. The direct shipment endorsement has an annual fee of $50.

(5) A winery must comply with all laws of the United States, Montana, Tribes, and local jurisdictions pertaining to the sale and shipment of alcoholic beverages, and may not ship table wine to any address in Montana where local or Tribal law prohibits the purchase or receipt of alcoholic beverages.

(6) Any winery or importer failing to renew or failing to file copies of its agreements of distributorship pursuant to 16-3-402, MCA, will be subject to cancellation or suspension as provided in 16-4-107, MCA.

(1) Each winery and table wine distributor shall pay any tax due and file a quarterly tax return on Form WIT, pursuant to 16-1-411 and 16-3-411, MCA. The form must be filed regardless of whether the winery or table wine distributor sold any table wine or hard cider during the quarter.

(2) Each winery and table wine distributor must file the return and pay tax on or before the 15th day of the month following the end of the quarter for table wine and hard cider sold in the previous quarter.

(3) Failure to file the return or pay the table wine tax and hard cider tax is sufficient cause for the assessment of penalties and interest in accordance with 15-1-216 and 16-1-411, MCA, and other penalties provided in 16-4-406, MCA.

(4) Sections (1) through (3) do not apply to a winery or wine importer that sells its products solely to table wine distributors.

(5) For purposes of this tax, a tax year begins on July 1, and a "quarter" means a tax reporting period which begins July 1, October 1, January 1, and April 1 of each tax year.

This rule has been repealed.

This rule has been repealed.

(1) In addition to all other alcoholic beverage licensing requirements, a winery shall:

(a) refrain from providing alcoholic beverages on the premises until the department approves a sample room;

(b) not possess any interest in real or personal property owned, occupied, or used by an alcoholic beverage retailer in the conduct of the retailer's business;

(c) store alcoholic beverages only on the premises;

(d) store on the premises only the alcoholic beverages for which the premises are licensed or those authorized under an approved alternating proprietor arrangement;

(e) sell and deliver its products to distributors or retailers only in original packaging;

(f) prevent the self-service of alcoholic beverages on the premises;

(g) prevent the consumption or possession of alcoholic beverages on the premises by persons who are under 21 years of age or actually, apparently, or obviously intoxicated;

(h) prevent the sale of alcoholic beverages for on-premises or off-premises consumption between 2 a.m. and 8 a.m.;

(i) prevent the consumption or possession of alcoholic beverages on the premises between 2 a.m. and 8 a.m. by removing all alcoholic beverages, other than those sold for off-premises consumption pursuant to (3), from individuals' possession by 2 a.m.;

(j) prevent the on-premises consumption of alcoholic beverages not sold or provided at the premises and those sold in original packaging for off-premises consumption;

(k) prevent the consumption of alcoholic beverages in the manufacturing area or storage area except as authorized by federal laws;

(l) maintain records documenting its business operations including, but not limited to the sale, production, storage, and processing of alcoholic beverages on the premises; and

(m) electronically file all required alcoholic beverage tax returns and pay any taxes owed as provided in law.

(2) A license to operate a winery is not a retail license.

(3) A winery may sell alcoholic beverages on its premises to a consumer for off-premises consumption under the following conditions:

(a) all alcoholic beverages must be in original packaging, prepared servings, or growlers;

(b) except as provided in (c), alcoholic beverages may only be sold in an approved sample room; and

(c) use curbside pickup, including a drive-through window, to sell alcoholic beverages that were ordered online or through the phone. 

(1) The following licensed entities shall pay any tax due and file a wine tax return on Form WIT for sacramental wine sold in Montana:

(a) sacramental wine licensees located outside Montana for sacramental wine sold to officials of churches or other established religious organizations;

(b) licensed wineries for sacramental wine containing not more than 16 percent alcohol by volume sold to licensed retailers and for sacramental wine containing not more than 24 percent alcohol by volume sold to sacramental wine licensees; and

(c) table wine distributors for sacramental wine containing not more than 16 percent alcohol by volume sold to licensed retailers and for sacramental wine containing not more than 24 percent alcohol by volume sold to sacramental wine licensees.

(2) Failure to file the required return or pay the tax is sufficient cause for the assessment of penalties and interest in accordance with 15-1-216 and 16-1-411, MCA, and other penalties provided in 16-4-406, MCA.

This rule has been repealed.

This rule has been repealed.

(1) In addition to all other alcoholic beverage licensing requirements, a brewery shall:

(a) not possess any interest in real or personal property owned, occupied, or used by an alcoholic beverage retailer in the conduct of the retailer's business;

(b) store alcoholic beverages only on the premises;

(c) store on the premises only the alcoholic beverages for which the premises are licensed or those authorized under an approved alternating proprietor arrangement;

(d) prevent the consumption of alcoholic beverages in the manufacturing area or storage area except as authorized by federal law;

(e) sell and deliver its products to wholesalers and retailers only in original packaging;

(f) maintain records documenting its business operations including, but not limited to, the sale, production, storage, and processing of alcoholic beverages on the premises; and

(g) electronically file all required alcoholic beverage tax returns and pay any taxes owed as provided in law.

(2) A license to operate a brewery is not a retail license.

(3) In addition to all other requirements, a brewery with an annual nationwide production of less than 100 barrels shall:

(a) refrain from providing alcoholic beverages on the premises until the department approves a sample room;

(b) only provide samples without charge;

(c) prevent the self-service of alcoholic beverages on the premises;

(d) prevent the consumption or possession of alcoholic beverages on the premises by persons who are under 21 years of age or actually, apparently, or obviously intoxicated;

(e) prevent the on-premises consumption of alcoholic beverages not sold or provided at the premises and those sold for off-premises consumption pursuant to (f);

(f) sell all alcoholic beverages on its premises to a consumer for off-premises consumption under the following conditions:

(i) the alcoholic beverages must be sold in an approved sample room;

(ii) the alcoholic beverages must be in original packaging, prepared servings, or growlers only;

(iii) the sale of alcoholic beverages is prohibited between 2 a.m. and 8 a.m.; and

(g) subject to, and in addition to the off-premises consumption sales conditions in (f), a brewery may use curbside pickup, including a drive-through window, to sell alcoholic beverages that were ordered online or through the phone.

(4) In addition to all other requirements, a small brewery with an annual nationwide production of not less than 100 barrels or more than 60,000 barrels that operates a sample room shall:

(a) refrain from providing alcoholic beverages on the premises until the department approves a sample room;

(b) provide with or without charge no more than 48 ounces of alcoholic beverages to any individual for on-premises consumption or prepared servings through curbside pickup, including a drive-through window, during a business day;

(c) provide not more than 2,000 barrels of beer annually for on-premises consumption, including the premises of any affiliated manufacturers as defined in 16-3-213, MCA;

(d) prevent the sale of alcoholic beverages for on-premises consumption between 8 p.m. and 10 a.m.;

(e) prevent the consumption or possession of alcoholic beverages on the premises between 9 p.m. and 10 a.m. by removing all alcoholic beverages other than those sold for off-premises consumption pursuant to (h) from individuals' possession by 9 p.m.;

(f)  prevent the self-service of alcoholic beverages on the premises;

(g)  prevent the consumption or possession of alcoholic beverages on the premises by persons who are under 21 years of age or actually, apparently, or obviously intoxicated;

(h)  sell alcoholic beverages on its premises to a consumer for off-premises consumption under the following conditions:

(i) the alcoholic beverages must be sold in an approved sample room;

(ii)  all alcoholic beverages sold must be in original packaging, prepared servings, or growlers;

(iii)  the sale of alcoholic beverages is prohibited between 2 a.m. and 8 a.m.;

(iv)  the sale of alcoholic beverages in prepared servings is prohibited between 8 p.m. and 10 a.m.; and

(i) subject to, and in addition to the off-premises consumption sales conditions in (h), a brewery may use curbside pickup, including a drive-through window, to sell alcoholic beverages that were ordered online or through the phone.

(5) In addition to all other requirements, a brewery with an annual nationwide production of 60,000 barrels or more may only sell beer in original packaging to a licensed beer distributor. Selling or providing alcoholic beverages to consumers for consumption on the premises and selling alcoholic beverages to retailers is prohibited.

This rule has been repealed.

(1) A brewery licensed by the department and located in Montana that uses flavors and other nonbeverage ingredients containing alcohol in their blending and manufacturing processes is required to request such products through the department on a form supplied by the department.

(2) The department will process the request and notify the supplier, specified by the brewery, of the quantities and sizes of the various flavors and nonbeverage ingredients containing alcohol to be delivered to the brewery.

(3) For beer with alcohol content of 6 percent or less alcohol by volume, flavors and other nonbeverage ingredients containing alcohol may contribute no more than 49 percent of the overall alcohol content of the finished product.

(4) For beer with an alcohol content of more than 6 percent alcohol by volume, no more than 1.5 percent of the volume of the finished product may consist of alcohol derived from added flavors and other nonbeverage ingredients containing alcohol.

(5) All brewery beer formulas, for beer containing flavors and other nonbeverage ingredients containing alcohol, must be approved by the Alcohol and Tobacco Tax and Trade Bureau (TTB), prior to state approval. Brewers requesting label approval by the state, for beer containing flavors and other nonbeverage ingredients containing alcohol, must include a copy of their TTB formula approval letter.

(6) The brewery must keep all flavors and nonbeverage ingredients containing alcohol on its licensed premises.

(7) Flavors and nonbeverage ingredients containing alcohol can only be used for blending and manufacturing purposes and may not be resold, transferred, or given away. A brewery must receive approval from the department to destroy or dispose of any flavors or nonbeverage ingredients containing alcohol.

(8) A brewery must document and maintain records at their place of business of all flavors and nonbeverage ingredients containing alcohol used for blending and manufacturing purposes. The department may make an examination of any brewery's records and otherwise check the accuracy of the alcohol content of any malt beverage manufactured by the brewery.

(1) Section 16-1-406, MCA, requires each barrel of beer sold in Montana to be taxed.  This tax is based upon the total number of barrels of beer produced by a brewer in a year. For purposes of this tax, "year" means the department's fiscal year which begins on July 1 of each calendar year and ends on June 30 of the following calendar year. "Annual" or "annually" are synonymous with the department's "year."

For purposes of this tax, a tax year begins on July 1, and a "quarter" means a tax reporting period beginning July 1, October 1, January 1, and April 1 of each tax year.

(2) The brewer production increments and graduated per barrel tax rates provided in 16-1-406, MCA, correspond to a brewer's reported annual production regardless of whether the beer is produced nationally or internationally.

(a) For the purposes of production reporting and calculating taxes owed, a brewer who has produced 10,000 barrels of beer or less in the preceding year will begin the next year at the $1.30 per barrel tax rate. The quarter after the brewer exceeds a production increment, the per barrel tax rate will increase to the next production increment amount. For example, if the 5,001st barrel is produced during the first quarter, the tax rate will be $1.30 for all of the first quarter. The per barrel tax rate will increase to $2.30 beginning with the second quarter and will continue at that rate for the remainder of the year or until the quarter after the next production increment is exceeded.

(b) For the purposes of production reporting and calculating taxes owed, a brewer who has produced 10,001 barrels of beer or more in the preceding year will begin the next year at the $4.30 per barrel tax rate. 

(c) For the purposes of production reporting and calculating taxes owed, a new brewer will begin the year at the $1.30 per barrel tax rate. The quarter after the new brewer exceeds a production increment, the per barrel tax rate will increase to the next production increment amount. If a new brewer produces more than 10,000 barrels in the first quarter of the year, all its production will be taxed at the $4.30 per barrel tax rate for the year.

(3) A brewer must notify both the department and its wholesalers, in writing, by the end of the quarter when a production increment is exceeded, resulting in the brewer moving to the next production increment.

(1) A brewery or beer wholesaler shall pay any beer taxes due and file a quarterly tax return with the department on Form BET, pursuant to 16-1-406, MCA. The form must be filed regardless of whether the brewery or beer wholesaler sold any beer during the quarter. 

(2) A brewery or beer wholesaler must pay the beer tax and file the required return on or before the 15th day of the month following the end of the quarter for beer sold during the previous quarter.

(3) Failure to file the required return or pay the beer tax is sufficient cause for the assessment of penalties and interest in accordance with 15-1-216 and 16-1-406, MCA, and other penalties provided in 16-4-406, MCA.

(4) Sections (1) through (3) do not apply to a brewery or beer importer that sells its products solely to a beer wholesaler.

(5) For purposes of this tax, a tax year begins on July 1, and a "quarter" means a tax reporting period which begins July 1, October 1, January 1, and April 1 of each tax year.

(1) In addition to all other alcoholic beverage licensing requirements, a distillery shall:

(a) not sell, deliver, or provide any alcoholic beverages until the licensee has obtained a certificate of label approval or an exemption from label approval from the Alcohol and Tobacco Tax and Trade Bureau and product approval from the department;

(b) not possess any interest in real or personal property owned, occupied, or used by an alcoholic beverage retailer in the conduct of the retailer's business;

(c) store alcoholic beverages only on the premises;

(d) store on the premises only the alcoholic beverages for which the premises are licensed or those authorized under an approved alternating proprietor arrangement;

(e) sell and deliver its product in Montana only in original packaging and to the department; and

(f) maintain records documenting its business operations including, but not limited to, the sale, production, storage, and processing of alcoholic beverages on the premises.

(2) A license to operate a distillery is not a retail license.

(3) In addition to all other requirements, a microdistillery shall:

(a) electronically file all required alcoholic beverage tax returns and pay any taxes owed as provided in law;

(b) only transfer alcoholic beverages from a manufacturing area or storage area to a sample room in original packaging;

(c) prevent the consumption of alcoholic beverages in the manufacturing area or storage area except as authorized by federal law;

(d) prevent the self-service of alcoholic beverages on the premises;

(e) prevent the consumption or possession of alcoholic beverages on the premises by persons who are under 21 years of age or actually, apparently, or obviously intoxicated;

(f) prevent the on-premises consumption of alcoholic beverages not sold or provided at the premises and those sold in original packaging for off-premises consumption;

(g) only provide alcoholic beverages to consumers at a microdistillery for on-premises or off-premises consumption that have been produced at the microdistillery. For purposes of this requirement only, an alcoholic beverage is considered to have been produced at a microdistillery only if:

(i) on a quarterly basis, at least 90 percent of the liquor provided at the microdistillery for on-premises or off-premises consumption was distilled at the microdistillery; and

(ii) all liquor provided at the microdistillery for on-premises and off-premises consumption contains alcohol that was distilled at the microdistillery;

(h) notify the department of the percentage of alcohol distilled at the microdistillery for each liquor product prior to providing the product to consumers at the microdistillery for on-premises or off-premises consumption. The microdistillery shall notify the department of any changes to the percentages on file with the department prior to providing the changed product to consumers.

(4) In addition to all other requirements, a microdistillery that operates a sample room shall:

(a) refrain from providing alcoholic beverages to consumers for on-premises consumption until a sample room is approved by the department;

(b) prevent the consumption or possession of alcoholic beverages outside of an approved sample room and any approved patio/deck;

(c) prevent the consumption or possession of alcoholic beverages on the premises between 8 p.m. and 10 a.m. by removing all alcoholic beverages other than those�sold for off-premises consumption pursuant to (5)�from individuals' possession by 8 p.m.; and

(d) regardless of the liquor product's alcohol content, provide no more than a combined total of 2 ounces of liquor products approved for labeling or exempt from labeling for on-premises consumption or prepared servings for�curbside pickup�to any individual during a business day.

(5) In addition to all other requirements, a microdistillery that conducts off-premises sales shall:

(a) sell alcoholic beverages only in original packaging;

(b) sell alcoholic beverages only in an approved sample room except for curbside pickup, including a drive-through window, that were ordered online or through the phone;

(c) sell no more than 1.75 liters of liquor product approved for labeling or exempt from labeling in one day to an individual;

(d) sell alcoholic beverages for off-premises consumption only between 8 a.m. and 2 a.m.; and

(e) deliver alcoholic beverages only to the department or an agency liquor store; the delivery of alcoholic beverages to consumers off-site is prohibited.

�

(1) The department will provide each distillery with a standard quotation and specification form to report the necessary information for each product the distillery desires to sell in Montana.

(2) The distillery will advise the department the cost per case FOB Helena, Montana that the distillery intends to sell the product to the department.

(3) The distillery will provide the department with the total number of proof gallons manufactured, distilled, rectified, bottled, or processed, and sold nationwide to determine the distillery's tax and mark-up brackets.

(4) The department will generate the posted price per bottle from the distillery's case cost. The posted price includes the distillery's case cost delivered to Helena, Montana, the department's current freight rate to agency liquor stores, the state's mark-up, liquor excise tax and liquor license tax, rounded to the nearest five-cent increment.

(5) The posted price will remain the price until a revised form is submitted and approved by the department. A revised quote for regular listed products shall be submitted not less than 60 days prior to the effective date of the department's quarterly price book.

(6) Products offered by a distillery will be listed in an inventory class based on the criteria in accordance with ARM 42.11.406.

(1) Each microdistillery shall electronically file with the department a monthly Excise and License Tax Return, as required by 16-1-424, MCA, reporting the following information:

(a) the total number of gallons distilled during the preceding calendar month to verify the distillery qualifies as a microdistillery based on its production level;

(b) the total number of bottles transferred to the sample room for on-premises consumption with or without charge at the distillery;

(c) the total number of bottles sold to consumers at retail for off-premises consumption; and

(d) the total amount of liquor excise tax and liquor license tax due for the month being reported.

(2) All product provided to a consumer by the microdistillery must have a standard quotation and specification form on file with the department. If no form is provided to the department or, at the department's discretion, if the form provided is or appears to be incomplete or inaccurate, the department may determine the per-bottle liquor excise tax and liquor license tax that the distillery must pay. The liquor excise tax and liquor license tax will be determined by using the higher of:

(a) the retail selling price set by the microdistillery as the posted price; or

(b) an average cost for products within the same category and size by other domestic distilleries that sell product to the department.

(3) The department will notify the microdistillery of the posted price per bottle, the per-bottle liquor excise tax, and the liquor license tax amounts as determined in (2).

(4) The return must be accompanied by payment of the tax pursuant to 16-1-424, MCA, on or before the 15th day of each month for liquor sold during the previous month.

This rule has been repealed.

(1) A distillery licensed by the department and located in Montana may procure bulk distilled spirits from another distilled spirits plant by requesting such products through the department on a form supplied by the department. The distillery may only use the acquired distilled spirits:

(a) to distill, rectify, blend, or manufacture its own distilled spirits; or

(b) for contract packaging purposes.

(2) A distillery may only obtain distilled spirits from sources authorized by the federal government, such as an entity that holds a basic permit or industrial permit.

(3) The department will process the request and notify the distilled spirits plant, specified by the distillery, of the quantities, proof, types, and sizes of distilled spirits to be delivered to the distillery.

(4) The distillery must keep all distilled spirits acquired from another distilled spirits plant at the distillery and must receive preapproval from the department to destroy or otherwise dispose of any distilled spirits the distillery acquired from another distilled spirits plant.

(5) A distillery must document and maintain records at its place of business for all distilled spirits acquired from another distilled spirits plant and document how it was used. The department may make an examination of any such records at any time.

(1) A distillery delivering product to an agency liquor store pursuant to 16-4-311, MCA, shall report each delivery through the department's online reporting system within two business days of the delivery.

(2) The distillery shall maintain at its place of business a bill of lading signed by the individual at the agency liquor store who accepted the delivery. A duplicate copy of the bill of lading shall be given to the agency liquor store. The bill of lading shall contain the:

(a) date of delivery;

(b) agency liquor store number;

(c) number of cases of each product;

(d) product number;

(e) name of the distillery employee who made the delivery; and

(f) name of the agency liquor store employee who accepted the delivery.

(3) A distillery may only make deliveries of products for which a standard price quotation and specification form is on file with the department.

(4) A distillery may deliver product only upon an agency liquor store's request.

(5) The department shall pay the distillery within 15 days from the close of the month in which the distillery reports the delivery. The payment shall be:

(a) the cost per case, based on the product's standard price quotation and specification form on file with the department at the time the product is delivered; and

(b) beginning July 1, 2018, the department's freight rate per case at the time the product is delivered.

The following definitions apply to this subchapter:

(1) "Acceptable forms of identification" include:

(a) state driver license or identification card;

(b) Canadian driver license or identification card;

(c) passport;

(d) tribal identification card; and

(e) any form of government issued identification.

(2) "Combined exam score" means the overall score of an exam administered by a private training provider where the Montana portion of the exam is weighted as 50 percent of the overall exam score.

(3) "House policies" means a company policy that dictates how a certain situation, activity, or process should be handled.

(4) "Incident log" means a document that tracks situations occurring on the licensed premises.

(5) "Private training provider" means a private business that provides responsible alcohol sales and service training using a program that is approved by the department.

(6) "Proof of training document" means a document stating the program name, training date, participant's name, and participant's date of birth, that is issued to a participant who obtained a score of 80 percent or more on the exam.

(7) "State trainer" means an individual that is approved by the department to provide responsible alcohol sales and service training using the department's curriculum.

(8) "Training records" means records submitted to the department by a private training provider that include the program name, training date, whether training was online or in person, and each participant's name, date of birth, and combined exam score.

(1) The department shall:

(a) develop a curriculum meeting the requirements of ARM 42.13.907;

(b) update the curriculum following each legislative session;

(c) conduct a full review of the curriculum every five years;

(d) issue determinations on state trainer applications within 30 days of the recruitment period closing;

(e) facilitate the training of state trainers;

(f) provide training materials;

(g) grade exams; and

(h) issue proof of training documents.

(2) A state trainer shall:

(a) provide a minimum of three hours of training utilizing the department's curriculum;

(b) adhere to the department's curriculum delivery requirements;

(c) establish the time and location of training sessions;

(d) administer an exam provided by the department;

(e) submit the attendance roster and all completed exams to the department within two weeks of a training session; and

(f) abide by all applicable laws, regulations, and policies concerning the confidentiality of participants' information.

(3) The department shall not compensate state trainers for providing training. State trainers may charge participants up to $15 per person for each training session.

This rule has been repealed.

(1) The department shall:

(a) issue determinations on private training program applications within 45 days;

(b) publish providers' contact information on the department's web site;

(c) provide notice of new legislation impacting curriculum within 30 days of passage;

(d) evaluate program effectiveness, including consideration of the percentage of program participants who sell to underage or intoxicated persons; and

(e) notify the provider of any required changes based upon program deficiencies.

(2) A private training provider shall:

(a) provide a minimum of three hours of training utilizing the provider's approved curriculum;

(b) update its curriculum within 30 days of receiving notice of new legislation;

(c) submit updated curriculum to the department for review and only utilize updated curriculum upon receipt of departmental approval;

(d) establish the time and location of training sessions;

(e) administer an exam that includes a Montana portion provided by the department and questions based upon the curriculum content requirements set forth in ARM 42.13.907;

(f) grade exams;

(g) issue proof of training documents;

(h) submit training records to the department on a monthly basis in the form prescribed by the department; and

(i) abide by all applicable laws, regulations, and policies concerning the confidentiality of participant's personal information.

(3) Upon determining that an approved program is ineffective or that the provider failed to adhere to any requirement in (2), the department shall notify the provider and the provider shall cease instructing the program. The provider may apply to have a new program approved under the application process.

(4) The department shall not compensate private training providers for providing training. The providers may charge participants for the training session.

(1) The department, in its sole discretion, may approve an application for an individual to be a state trainer.

(2) To apply to be a state trainer, an applicant must:

(a) possess a minimum of one year combined experience in:

(i) law enforcement;

(ii) communications;

(iii) public relations;

(iv) healthcare; or

(v) education;

(b) serve on a drug- or alcohol-related coalition;

(c) have endured an alcohol-related life-changing experience; or

(d) possess experience equivalent to the criteria above, as approved by the department.

(3) In addition to the requirements in (2), an applicant must:

(a) possess a minimum of one year experience in public speaking;

(b) be a high school graduate or possess the GED equivalent;

(c) be at least 21 years of age; and

(d) have no alcohol-related convictions within the past five years.

(4) Upon the department's approval of an application, the applicant must attend the department's training and pass the exam with a minimum score of 90 percent to be certified as a state trainer.

(5) A state trainer shall retain certification unless it is revoked or suspended by the department or withdrawn by the trainer. The department may revoke or suspend certification upon determining that the trainer is unsuitable.

(1) The department, in its sole discretion, has the authority to approve a private training provider's program.

(2) A private training provider's program must adhere to the curriculum requirements set forth in ARM 42.13.907.

(3) An applicant seeking to provide in-classroom training must submit:

(a) the curriculum, including the Montana specific training supplement;

(b) classroom materials used by the trainer and participants;

(c) instructional aids, including videos or other visual components;

(d) sample proof of training document; and

(e) the exam, its answers, and an explanation of how the combined exam score will be calculated.

(4) An applicant seeking to provide online training must:

(a) make the program available to the department in its online format;

(b) incorporate videos, scenarios, or games into the program;

(c) provide a sample proof of training document; and

(d) submit the exam, its answers, and an explanation of how the combined exam score will be calculated.

(5) A private training program shall retain its approval status for five years unless it is revoked or suspended by the department or withdrawn by the training provider. Upon expiration of the five-year term, the provider may apply to have its program reapproved under the application process.

(1) In addition to the requirements in 16-4-1006, MCA, the curriculum must cover the:

(a) effects of alcohol on the body, including behavioral cues and absorption rates;

(b) standard drink sizes and equivalency;

(c) methods to identify underage or intoxicated persons and prevent sales thereto;

(d) strategies used by underage persons to obtain alcohol;

(e) acceptable forms of identification;

(f) actions that can be taken to prevent an alcohol-related incident from occurring;

(g) maintenance of documentation that may affect liability, including an incident log and house policies; and

(h) techniques for denying alcohol sales.

(1) An alternating proprietor arrangement occurs when a tenant manufacturer utilizes the licensed premises and equipment of a host manufacturer to produce and/or package alcoholic beverages.

(2) The tenant must be licensed by the department to manufacture the alcoholic beverages to be produced and/or packaged.

(3) The tenant and host must seek the department's approval for each alternating proprietor arrangement necessitating approval by the Alcohol and Tobacco Tax and Trade Bureau.

(4) To apply, the tenant and host shall submit a complete application to the department that includes:

(a) documentation of Alcohol and Tobacco Tax and Trade Bureau approval;

(b) a description of the areas and equipment to be used by the tenant;

(c) a copy of the host's floor plan identifying the areas to be used by the tenant; and

(d) a copy of the executed agreement between the tenant and host.

(5) The department shall notify the tenant and host in writing of its approval or denial of the alternating proprietor arrangement within 15 business days of receiving all requested information.

(6) The tenant and host shall notify the department in writing within ten business days of receiving notice from the Alcohol and Tobacco Tax and Trade Bureau that approval for an existing alternating proprietor arrangement has been revoked.

(7) All regulations set forth in Title 27 of the Code of Federal Regulations, in effect on October 5, 2015, addressing alternating proprietor arrangements are adopted by reference, except where the provisions of those regulations may be contrary to or inconsistent with the provisions of Montana law or department rule. Copies may be obtained from the United States Treasury at www.ttb.gov. Failure to comply with those regulations shall constitute a violation of this rule and may subject the tenant and host to administrative action, including revocation of their manufacturing licenses.

(8) The tenant shall maintain possession, title, and control over all raw materials and its product on the host's premises.

(9) The tenant's product must be separate and identifiable from the products of all other tenants and the host at all stages of production and through removal of the product from the host's premises.

(10) The tenant and host shall keep separate records of their respective production and removals. The department may make an examination of any records kept by the tenant and host.

(11) The host is prohibited from selling, providing, or distributing the tenant's product, with or without charge, in the host's sample room, on its licensed premises, or elsewhere.

(12) The tenant must adhere to all applicable distribution requirements set forth in the Montana Alcoholic Beverage Code.

(13) In addition to all other requirements imposed by this rule, where the tenant is a brewery:

(a) for purposes of the tax imposed by 16-1-406, MCA:

(i) wholesalers shall pay the tax due on beer purchased from the tenant; and

(ii) the tenant shall pay the tax due on beer sold directly to consumers and retailers;

(b) for purposes of the tax imposed by 16-1-406, MCA, the small brewery 60,000 barrel production cap in 16-3-213 and 16-3-214, MCA, all beer produced by a tenant at a host's premises shall be considered as part of the tenant's annual nationwide production; and

(c) a tenant with an annual nationwide production between 100 and 60,000 barrels may provide, with or without charge, beer in its sample room only if the beer was brewed and fermented at its premises. This restriction includes a prohibition against a tenant providing beer in its sample room that was brewed or fermented at a host's premises. A tenant that brewed and fermented beer at its premises and packaged the beer at a host's premises may provide that beer, with or without charge, in the tenant's sample room.

(14) In addition to all other requirements imposed by this rule, where the tenant is a winery:

(a) for purposes of the tax imposed by 16-1-411, MCA:

(i) wholesalers shall pay the tax due on wine purchased from the tenant; and

(ii) the tenant shall pay the tax due on wine sold directly to consumers and retailers; and

(b) a tenant may provide, with or without charge, wine for consumption on its licensed premises that was produced and/or packaged at its premises or a host's premises.

(15) In addition to all other requirements imposed by this rule, where the tenant is a distillery:

(a) for purposes of the taxes imposed by 16-1-401 and 16-1-404, MCA, agency liquor stores shall pay the tax due on liquor purchased from the department;

(b) for purposes of the taxes imposed by 16-1-401 and 16-1-404, MCA, and the microdistillery 200,000 proof gallon production cap set forth in 16-4-310, MCA, all liquor produced by a tenant at a host's premises shall be considered liquor produced by the tenant; and

(c) a tenant distillery with an annual production of 200,000 proof gallons or less may provide, with or without charge, liquor in its sample room only if the liquor was produced at its premises. This restriction includes a prohibition against a tenant distillery providing liquor in its sample room that was produced at a host's premises, subject to the production exception in ARM 42.13.802.

(16) An alternating proprietor arrangement may only be conducted in accordance with the provisions of this rule. Failure to abide by the provisions of this rule may subject the tenant and host to administrative action, including revocation of their manufacturing licenses.

(1) Contract manufacturing occurs when a manufacturer utilizes its licensed premises and equipment to produce and/or package alcoholic beverages for another manufacturer to sell, called the client.

(2) The contract manufacturer and the client must be licensed by the department to manufacture the alcoholic beverages to be produced and/or packaged.

(3) The contract manufacturer and client must seek the department's approval prior to engaging in a contract manufacturing arrangement. To apply, the contract manufacturer and client shall submit a complete application to the department.

(4) The department shall notify the contract manufacturer and client in writing of its approval or denial of the contract manufacturing arrangement within 15 business days of receiving all requested information.

(5) The sale and distribution of alcoholic beverages manufactured by the contract manufacturer may only be conducted as follows:

(a) a contract manufacturer is prohibited from selling, providing, or distributing the product, with or without charge, in the contract manufacturer's sample room, on its licensed premises, or elsewhere;

(b) the contract manufacturer may only sell the product to the client; and

(c) once the client holds title to the product, the client must adhere to all applicable distribution requirements in the Montana Alcoholic Beverage Code, the same as though the client produced the product.

(6) The contract manufacturer and client shall maintain control over their separate business records at all times. The department may make an examination of the records of the contract manufacturer or client.

(7) In addition to all other requirements imposed by this rule, where the client is a brewery:

(a) for purposes of the tax imposed by 16-1-406, MCA:

(i) wholesalers shall pay the tax due on beer purchased from the client; and

(iii) the client shall pay the tax due on beer sold directly to consumers and retailers;

(b) for purposes of the tax imposed by 16-1-406, MCA, the small brewery 60,000 barrel production cap set forth in 16-3-213 and 16-3-214, MCA, all beer produced by the contract manufacturer for the client shall be considered as part of the client's annual nationwide production; and

(c) a client with an annual nationwide production between 100 and 60,000 barrels may provide, with or without charge, beer in its sample room only if the beer was brewed and fermented at its premises. This restriction includes a prohibition against a client providing beer in its sample room that was brewed or fermented at a contract manufacturer's premises. A client that brewed and fermented beer at its premises and then had the beer packaged at a contract manufacturer's premises may provide that beer, with or without charge, in the client's sample room.

(8) In addition to all other requirements imposed by this rule, where the client is a winery:

(a) for purposes of the tax imposed by 16-1-411, MCA:

(i) wholesalers shall pay the tax due on wine purchased from the client; and

(ii) the client shall pay the tax due on wine sold directly to consumers and retailers; and

(b) the client may provide, with or without charge, wine for consumption on its licensed premises only if the wine was produced by the client. This restriction includes a prohibition against the client providing wine that was produced by a contract manufacturer. A client that produced the wine at its premises and then had the wine packaged at a contract manufacturer's premises may provide that wine, with or without charge, for consumption on its licensed premises.

(9) In addition to all other requirements imposed by this rule, where the client is a distillery:

(a) for purposes of the taxes imposed by 16-1-401 and 16-1-404, MCA, agency liquor stores shall pay the tax due on liquor purchased from the department;

(b) for purposes of the taxes imposed by 16-1-401 and 16-1-404, MCA, and the microdistillery 200,000 proof gallon production cap set forth in 16-4-310, MCA, all liquor produced by a contract manufacturer for the client shall be considered as part of the client's annual nationwide production; and

(c) a client with an annual production of 200,000 proof gallons or less may provide, with or without charge, liquor in its sample room only if the liquor was produced at its premises. This restriction includes a prohibition against a client providing liquor in its sample room that was produced at a contract manufacturer's premises, subject to the production exception in ARM 42.13.802.

(10) Except as provided in (11), a contract manufacturing arrangement may only be conducted in accordance with the provisions of this rule. Failure to abide by the provisions of this rule may subject the contract manufacturer and client to administrative action, including revocation of their manufacturing licenses.

(11) The department may approve a contract manufacturing arrangement that does not fit within the bounds of this rule only if the proposed arrangement is not prohibited by federal and state alcoholic beverage regulations. This may include a contract manufacturing arrangement where the client is not located in Montana.

(1) In addition to all other alcoholic beverage licensing requirements, an all-beverages licensee shall:

(a) only purchase and possess on the premises liquor and fortified wine from an agency liquor store, beer from a beer wholesaler or brewery, and table wine from a table wine distributor or winery, except as permitted under 16-4-213 and 16-6-306, MCA, and described in (5);

(b) store alcoholic beverages only on the premises or in an approved noncontiguous alcoholic beverage storage area or resort alternate alcoholic beverage storage facility, as applicable;

(c) offer liquor, beer, and wine for on-premises consumption;

(d) prevent the self-service of alcoholic beverages on the premises;

(e) prevent the sale of alcoholic beverages for on-premises or off-premises consumption between 2 a.m. and 8 a.m.;

(f) prevent the consumption or possession of alcoholic beverages on the premises between 2 a.m. and 8 a.m. by removing all alcoholic beverages other than those sold for off-premises consumption pursuant to (2) from individuals' possession by 2 a.m.;

(g) prevent the consumption or possession of alcoholic beverages on the premises by persons who are under 21 years of age or actually, apparently, or obviously intoxicated; and

(h) prevent the on-premises consumption of alcoholic beverages not sold or provided at the premises and those sold in original packaging, prepared servings, or growlers for off-premises consumption, except as described in (5).

(2) An all-beverages licensee may sell alcoholic beverages for off-premises consumption under the following conditions:

(a) alcoholic beverages must be sold in original packaging, prepared servings filled at the time of sale, or growlers of beer or table wine filled at the time of sale; and

(b) the sale of alcoholic beverages must occur on the premises, except as provided in (3) and (4).

(3)  An all-beverages licensee may use curbside pickup, including a drive-through window, to sell alcoholic beverages that were ordered online or through the phone.

(4)  An all-beverages licensee may deliver alcoholic beverages to a customer off-site under the following conditions:

(a)  the licensee must apply for, and be issued, a delivery endorsement from the department. The application fee for the delivery endorsement is $200;

(b)  alcoholic beverage delivery is limited to beer and wine in original packaging. The delivery of liquor is prohibited;

(c)  the licensee may deliver alcoholic beverages if the delivery includes food purchased from and prepared by the licensee. The purchase price of the delivered beer and wine may not exceed the purchase price of the delivered food; and

(d)  the licensee must use its employees who are 21 years of age or older for all food deliveries that include alcoholic beverages.  Third-party delivery companies are prohibited.

(5) An all-beverages licensee may open and serve wine from a sealed bottle that was brought on to the premises by a patron and may charge a corkage fee.

(1) In addition to all other alcoholic beverage licensing requirements, a restaurant beer and wine licensee shall:

(a) only purchase and possess on the premises fortified wine from an agency liquor store, beer from a beer wholesaler or brewery, and table wine from a table wine distributor or winery, except as permitted under 16-6-306, MCA, and described in (5);

(b) store alcoholic beverages only on the premises or in an approved noncontiguous alcoholic beverage storage area;

(c) offer beer and wine for on-premises consumption;

(d) serve beer and wine only to patrons who order food;

(e) state alcoholic beverage sales on the food bill;

(f) obtain at least 65 percent of its annual gross income from the sale of food, excluding the sale of nonalcoholic beverages;

(g) prevent the self-service of alcoholic beverages on the premises;

(h) prevent the sale of alcoholic beverages between 11 p.m. and 11 a.m.;

(i) prevent the consumption or possession of alcoholic beverages on the premises between 11 p.m. and 11 a.m. by removing all alcoholic beverages from individuals' possession by 11 p.m. other than those sold for off-premises consumption pursuant to (2);

(j) prevent the consumption or possession of alcoholic beverages on the premises by persons who are under 21 years of age or actually, apparently, or obviously intoxicated; and

(k) prevent the consumption of alcoholic beverages that were not purchased at the premises, except as described in (5).

(2)  A restaurant beer and wine licensee may sell alcoholic beverages for off-premises consumption under the following conditions:

(a)  food must be included in the purchase and the alcoholic beverages stated on the customer's bill;

(b)  alcoholic beverages must be sold in original packaging, prepared servings, or growlers filled at the time of sale; and

(c)  the sale of alcoholic beverages must occur on the premises, except for curbside pickup, including a drive-through window, that were ordered online or through the phone.

(3)  A restaurant beer and wine licensee may deliver alcoholic beverages to a customer off-site under the following conditions:

(a) the licensee must apply for, and be issued, a delivery endorsement from the department. The application fee for the delivery endorsement is $200;

(b) alcoholic beverage delivery is limited to beer and wine in original packaging;

(c) the delivery must include food purchased from and prepared by the licensee. The purchase price of the delivered beer and wine may not exceed the purchase price of the delivered food; and

(d) the licensee must use its employees who are 21 years of age or older for all food deliveries that include alcoholic beverages.  Third-party delivery companies are prohibited.

(4) In addition to the requirements in (1) through (3), any restaurant for which a restaurant beer and wine license was not in effect as of April 9, 2009, shall:

(a) serve an evening dinner meal at least four days a week for at least two hours a day between 5 p.m. and 11 p.m.; and

(b) sell the majority of its food and drinks, excluding any carry-out business, in nondisposable containers.

(5) A restaurant beer and wine licensee may open and serve wine from a sealed bottle that was brought on to the premises by a patron and may charge a corkage fee.

(1) In addition to all other alcoholic beverage licensing requirements, an on-premises consumption beer licensee shall:

(a) only purchase and possess on the premises beer from a beer wholesaler or brewery, except as permitted under 16-6-306, MCA, and described in (6);

(b) store alcoholic beverages only on the premises or in an approved noncontiguous alcoholic beverage storage area;

(c) offer beer for on-premises consumption;

(d) prevent the self-service of alcoholic beverages on the premises;

(e) prevent the sale of alcoholic beverages for on-premises or off-premises consumption between 2 a.m. and 8 a.m.;

(f) prevent the consumption or possession of alcoholic beverages on the premises between 2 a.m. and 8 a.m., by removing all alcoholic beverages other than those sold for off-premises consumption pursuant to (3) from individuals' possession by 2 a.m.;

(g) prevent the consumption or possession of alcoholic beverages on the premises by persons who are under 21 years of age or actually, apparently, or obviously intoxicated; and

(h) prevent the on-premises consumption of alcoholic beverages not sold or provided at the premises and those sold for off-premises consumption pursuant to (3).

(2) In addition to the requirements and exceptions in (1), an on-premises consumption beer licensee with a wine amendment shall:

(a) only purchase and possess on the premises fortified wine from an agency liquor store and table wine from a table wine distributor or winery, except as described in (6);

(b) offer wine for on-premises consumption; and

(c) operate a restaurant or prepared-food business on the premises.

(3) An on-premises consumption beer licensee and an on-premises consumption beer licensee with a wine amendment may sell alcoholic beverages for off-premises consumption under the following conditions:

(a) alcoholic beverages must be sold in original packaging, prepared servings filled at the time of sale, or growlers of beer or table wine filled at the time of sale; and

(b) except as provided in (5) and (6), the sale of alcoholic beverages must occur on the premises.

(4) An on-premises consumption beer licensee and an on-premises consumption beer licensee with a wine amendment may use curbside pickup, including a drive-through window, to sell alcoholic beverages that were ordered online or through the phone.

(5) An on-premises consumption beer licensee and an on-premises consumption beer licensee with a wine amendment may deliver alcoholic beverages to a customer off-site under the following conditions:

(a) the licensee must apply for, and be issued, a delivery endorsement from the department. The application fee for the delivery endorsement is $200;

(b) alcoholic beverage delivery is limited to beer and wine - depending on the license amendment - in original packaging;

(c) the licensee may deliver alcoholic beverages if the delivery includes food purchased from and prepared by the licensee. The purchase price of the delivered beer and wine - depending on the license amendment - may not exceed the purchase price of the delivered food; and

(d) the licensee must use its employees who are 21 years of age or older for all food deliveries that include alcoholic beverages. Third-party delivery companies are prohibited.

(6) An on-premises consumption beer licensee and an on-premises consumption beer licensee with a wine amendment may open and serve wine from a sealed bottle that was brought on to the premises by a patron and may charge a corkage fee.

(1) In addition to all other alcoholic beverage licensing requirements, an off-premises consumption beer and table wine licensee shall:

(a) only purchase and possess on the premises beer from a beer wholesaler or brewery and table wine from a table wine distributor or winery;

(b) store beer and/or table wine only on the premises or in an approved noncontiguous alcoholic beverage storage area;

(c) sell beer and/or table wine for off-premises consumption only in their original packages;

(d) operate as a stand-alone beer and/or table wine business, grocery store, or drugstore licensed as a pharmacy; and

(e) prevent the sale of alcoholic beverages between 2 a.m. and 8 a.m.

(2) The sale of alcoholic beverages must occur on the premises. An off-premises consumption beer and/or table wine licensee may use curbside pickup, including a drive-through window, to sell alcoholic beverages that were ordered online or through the phone.

(3) In addition to the requirements in (1), an off-premises consumption beer and/or table wine licensee that operates in a grocery store shall maintain groceries with a retail value of at least $3,000 at all times. The inventory must include at least three different types of items in each of the following categories: meats, vegetables, fruits, baked goods, dairy, and household supplies. For example, three different types of items in the dairy category would be cheese, milk, and butter, but skim milk, chocolate milk, and whole milk would not be considered as three different types of items in the dairy category.

(4) The delivery of alcoholic beverages by an off-premises consumption beer and table wine licensee to the consumer off-site is prohibited. 

(1) A licensee who uses an ACS at the licensee's licensed premises, as provided in 16-6-103, MCA, shall notify the department using a form provided by the department:

(a) at least three business days prior to the licensee implementing the ACS; and

(b) no later than July 1 of the renewal period after the licensee ceases using the ACS.

(2) Notification information shall include:

(a) the date of activation, or deactivation, of the ACS; and

(b) acknowledgment from a local law enforcement agency with jurisdiction over the licensed premises that the agency was notified.

(3) A licensee is in violation of this rule and is subject to administrative action if the licensee fails to:

(a) notify the department and local law enforcement prior to implementing an ACS;

(b) notify the department and local law enforcement when the licensee ceases to use an ACS; or

(c) provide immediate access to the licensed premises pursuant to 16-6-103, MCA.

(1) In addition to all other alcoholic beverage licensing requirements, a beer wholesaler and table wine distributor shall:

(a) maintain a fixed place of business, sufficient capital, and the facilities, storehouse, receiving house, or warehouse for the receiving, storing, and handling of beer, table wine, and sacramental wine in large quantities for distribution and sale;

(b) receive beer, table wine, and sacramental wine from an importer, brewery, winery, wholesaler, or distributor only if:

(i) the importer, brewery, winery, wholesaler, or distributor is licensed by or registered with the department;

(ii) all product labels have been approved by the department; and

(iii) an agreement of distributorship agreement is in place between the manufacturer or importer and the wholesaler or distributor;

(c) store beer, table wine, and sacramental wine only on the premises of its principal place of business or the premises of its licensed subwarehouse;

(d) except as provided in 16-3-219 and 16-3-418, MCA, deliver alcoholic beverages using its own employees, trucks, and equipment;

(e) sell beer, table wine, and sacramental wine only in its original packaging;

(f) sell and deliver beer, table wine, and sacramental wine under its Montana license only to other licensed wholesalers or distributors, licensed alcoholic beverage retailers, catered events of a licensed alcoholic beverage retailer, agency liquor stores, special events for a special permit holder, and approved noncontiguous alcoholic beverage storage areas or resort alternate alcoholic beverage storage facilities. This does not in any way prohibit the licensee from operating in compliance with other state or federal law;

(g) prevent the consumption of alcoholic beverages on the premises of its principal place of business and the premises of any licensed subwarehouse;

(h) not possess any interest in real or personal property owned, occupied, or used by an alcoholic beverage retailer in the conduct of the retailer's business; and

(i) electronically file all required alcoholic beverage tax returns and pay any taxes owed as provided in law.

(2) A beer wholesaler and/or table wine distributor shall only sell product under a bona fide sale. It shall not sell product on consignment, under conditional sale, with the privilege of return, or in a sale involving acquisition of other products.

(3) A beer wholesaler and/or table wine distributor shall only exchange or accept product returned from an alcoholic beverage retailer, wholesaler, or distributor for ordinary and usual commercial reasons, such as defective product, a delivery error, and discontinued product or business. It shall not accept product returned based upon the product being overstocked, slow moving, or seasonal. 

(1) A common carrier that delivers shipments identified as containing alcoholic beverages to a person or entity in the state shall maintain those shipping records for 30 months and, upon request from the department, report such deliveries to the department as provided in (2).

(2) Reports must be filed electronically on a form provided by the department on or before the 15th day of each January, April, July, and October for deliveries made during the previous quarter, and include the following information about each delivery:

(a) name and address of the consignor of the alcoholic beverages;

(b) name and address of the consignee of the alcoholic beverages;

(c) date of delivery;

(d) weight of the package; and

(e) freight tracking information for the shipment.

(3) If the department determines that a reported delivery transaction violates the Alcoholic Beverage Code or a rule of the department, then the department will notify the common carrier of the basis of the violation so the carrier may take the appropriate action to cease further deliveries of alcoholic beverages in Montana from that consignor until otherwise notified by the department.