AB404 - Revises provisions relating to alcoholic beverages. (BDR 52-651)

- 83rd Session (2025) Assembly Bill No. 404–Assemblymembers Watts; Brown-May, Kasama, Nguyen and Torres-Fossett Joint Sponsor: Senator Nguyen CHAPTER.......... AN ACT relating to alcoholic beverages; authorizing a person who operates a brew pub to engage in certain activities concerning the sale of alcoholic beverages; revising provisions governing the conduct of certain investigations and hearings and the revocation and suspension of certain licenses relating to intoxicating liquor; revising the manner in which a payment from a retail liquor store to a wholesale dealer for delivery of certain alcoholic beverages must be made; requiring certain persons manufacturing liquor to preserve certain records for inspection and audit by the Department of Taxation; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law provides for the licensure and operation of brew pubs in this State. (NRS 369.180, 597.230) Existing law authorizes a person who operates one or more brew pubs to sell at retail malt beverages that are: (1) manufactured on or off the premises of any of the brew pubs for consumption on the premises; and (2) manufactured and sealed in packages on the premises of any of the brew pubs for consumption off the premises. (NRS 597.230) Section 2 of this bill additionally authorizes a person who operates one or more brew pubs to sell at retail any other alcoholic beverages if the person who operates such a brew pub has obtained any license or permit required to sell alcoholic beverages at retail in the jurisdiction in which the brew pub is located and purchases all such alcoholic beverages from a licensed wholesaler. Section 2 also authorizes such a person to sell alcoholic beverages, including, without limitation, malt beverages manufactured on or off the premises of one or more of the brew pubs at, with certain exceptions, not more than two retail liquor store locations under the common control of the person if: (1) the person has obtained any license or permit required to sell alcoholic beverages at retail in the jurisdiction in which the retail liquor store location is located; (2) the person purchases all such alcoholic beverages from a licensed wholesaler; (3) for a retail liquor store location for which the person obtained any license or permit required to sell alcoholic beverages at retail on or after January 1, 2025, the retail liquor store location is not located closer than 1,000 feet to a gaming establishment; and (4) the retail liquor store location is located within the same county as the brew pub, with certain exceptions. As an exception to the limit of two retail liquor store locations set forth in section 2, section 6 of this bill provides that a person who, on March 31, 2025, holds a license to operate a brew pub and any license or permit to operate three retail liquor store locations under the common control of the person is authorized to engage in the activities authorized by section 2 at the third location so long as the license for that location is not transferred to another person or location. Existing law: (1) prohibits a person who operates one or more brew pubs from manufacturing more than 40,000 barrels of malt beverages for all the brew pubs the person operates in this State in a calendar year; and (2) authorizes the person to manufacture and sell 20,000 barrels of malt beverages for all the brew pubs the – 2 – - 83rd Session (2025) person operates in this State provided such barrels are sold to a wholesaler located outside of this State. (NRS 597.230) Section 2 instead authorizes the person to sell the 20,000 barrels of malt beverages either to a wholesaler located outside of this State or, where allowable pursuant to applicable law, to persons residing in states outside of this State. Finally, section 2 requires a person who operates a brew pub and one or more commonly controlled retail liquor store locations to comply with certain requirements of the Department of Taxation relating to the recordkeeping and reporting of manufacturing, purchases and receipts of liquor with respect to the brew pub and each retail liquor store location. Existing law provides for the licensure of persons engaged in various activities relating to intoxicating liquor. (Chapter 369 of NRS) Existing law authorizes the board of county commissioners or the governing body of a city, as applicable, to investigate complaints against a licensee, conduct hearings and recommend to the Department of Taxation, under certain circumstances, the revocation or suspension of a license. (NRS 369.230-369.290) Sections 3.1-3.6 of this bill, in general, provide for the Department to also perform these functions in the same manner as a board of county commissioners or governing body of a city and authorize the Department to revoke or suspend a license without receiving a recommendation from a board of county commissioners or governing body of a city. Existing law authorizes the Department, under certain circumstances, to issue a summary suspension of the license of a licensee if the Department finds that the licensee is violating any of the provisions of existing law governing intoxicating liquor. (NRS 369.280) Section 3.6 requires the Department, after issuing a summary suspension, to hold a hearing and render a decision regarding whether to issue a final order revoking or refusing to revoke the license of the licensee. Existing law requires all persons obtaining liquor under any license or permit and all retail liquor dealers to preserve for inspection and audit by the Department of Taxation and its agents, for a period of 4 years, all invoices and lists of liquors purchased or received, specifying certain information relating to those purchases and receipts. (NRS 369.520) Section 5 of this bill additionally imposes such recordkeeping requirements on all persons manufacturing liquor. Existing law prohibits a wholesale dealer from selling liquor to a retail liquor store under certain circumstances relating to the timing of payments for the delivery of that liquor. (NRS 369.485) Section 4 of this bill: (1) with certain exceptions, requires payment from a retail liquor store to a wholesale dealer for the delivery of beer, wine or distilled spirits to be made by electronic funds transfer; (2) requires the wholesale dealer to initiate the electronic funds transfer by initiating the withdrawal of funds from the bank account of the retail liquor store; (3) requires the electronic funds transfer to be completed not later than the expiration of the 30th day after the date of delivery of the beer, wine or distilled spirits; and (4) prohibits a wholesale dealer from paying or being required to pay, directly or indirectly, any fees incurred by the retail liquor store for such an electronic funds transfer. Section 4 also authorizes a retail liquor store to elect to pay for the delivery of beer, wine or distilled spirits by credit card. If a retail liquor store so elects, section 4 requires the retail liquor store to notify the wholesale dealer of the election. The retail liquor store is responsible for all costs associated with processing the credit card transaction. Finally, section 4 requires, at the time a wholesale dealer makes a delivery of beer, wine or distilled spirits to a retail liquor store: (1) the wholesale dealer and retail liquor store to review the invoice of the delivery for accuracy; and (2) if the invoice is accurate, the retail liquor store to sign the invoice to confirm the accuracy of the invoice. – 3 – - 83rd Session (2025) EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. (Deleted by amendment.) Sec. 2. NRS 597.230 is hereby amended to read as follows: 597.230 1. In any county, a person may operate a brew pub: (a) In any redevelopment area established in that county pursuant to chapter 279 of NRS; (b) In any historic district established in that county pursuant to NRS 384.005; (c) In any retail liquor store as that term is defined in NRS 369.090; or (d) In any other area in the county designated by the board of county commissioners for the operation of brew pubs. In a city which is located in that county, a person may operate a brew pub in any area in the city designated by the governing body of that city for the operation of brew pubs.  Except as otherwise provided in paragraph (e) of subsection 3, a person who operates one or more brew pubs may not manufacture more than 40,000 barrels of malt beverages for all the brew pubs he or she operates in this State in any calendar year. 2. The premises of any brew pub operated pursuant to this section must be conspicuously identified as a “brew pub.” 3. Except as otherwise provided in subsection 4, a person who operates one or more brew pubs pursuant to this section may, upon obtaining a license pursuant to chapter 369 of NRS and complying with any other applicable governmental requirements: (a) Manufacture and store malt beverages on the premises of one or more of the brew pubs and: (1) Sell and transport the malt beverages manufactured on the premises to a person holding a valid wholesale wine and liquor dealer’s license or wholesale beer dealer’s license issued pursuant to chapter 369 of NRS. (2) Donate for charitable or nonprofit purposes and, for the purposes of the donation, transport the malt beverages manufactured on the premises in accordance with the terms and conditions of a special permit for the transportation of the malt beverages obtained from the Department of Taxation pursuant to subsection 4 of NRS 369.450. (3) Transfer in bulk the malt beverages manufactured on the premises: – 4 – - 83rd Session (2025) (I) To a person holding a valid wholesale wine and liquor dealer’s license or wholesale beer dealer’s license issued pursuant to chapter 369 of NRS for the purpose of transferring in bulk the malt beverages to an estate distillery for the purpose of distillation and blending, which transfer is taxable only as provided in NRS 597.237; or (II) If there is no wholesaler who is able or willing to accept and transfer in bulk the malt beverages pursuant to sub- subparagraph (I), to a person holding a valid license to operate an estate distillery issued pursuant to chapter 369 of NRS for the purpose of distillation and blending, which transfer is taxable only as provided in NRS 597.237 and must be performed in accordance with the terms and conditions of a special permit for the transportation of the malt beverages obtained from the Department of Taxation pursuant to subsection 4 of NRS 369.450. (b) Manufacture and store malt beverages on the premises of one or more of the brew pubs and transport the malt beverages manufactured on the premises to a retailer, other than a person who operates a brew pub pursuant to this section, that holds a valid license pursuant to chapter 369 of NRS for the purpose of selling the malt beverages at a special event in accordance with the terms and conditions of a special permit for the transportation of the malt beverages obtained from the Department of Taxation pursuant to subsection 4 of NRS 369.450. For the purposes of this paragraph, the person who operates one or more brew pubs shall not obtain more than 20 such special permits for the transportation of the malt beverages from the Department of Taxation pursuant to subsection 4 of NRS 369.450 within a calendar year. (c) Sell at retail, not for resale, malt beverages manufactured on or off the premises of one or more of the brew pubs for consumption on the premises. (d) Sell at retail, not for resale, in packages sealed on the premises of one or more of the brew pubs, malt beverages, including malt beverages in unpasteurized form, manufactured on the premises for consumption off the premises. (e) Sell at retail alcoholic beverages other than those described in paragraph (c) if the person: (1) Has obtained any license or permit required to sell alcoholic beverages at retail in the jurisdiction in which the brew pub is located; and (2) Purchases all such alcoholic beverages from a licensed wholesaler in compliance with the provisions of NRS 369.487 and 369.488. – 5 – - 83rd Session (2025) (f) Sell alcoholic beverages, including, without limitation, malt beverages manufactured on or off the premises of one or more of the brew pubs, at not more than two retail liquor store locations under the common control of the person if: (1) The person has obtained any license or permit required to sell alcoholic beverages at retail in the jurisdiction in which the retail liquor store location is located; (2) The person purchases all such alcoholic beverages from a licensed wholesaler in compliance with the provisions of NRS 369.487 and 369.488; (3) For a retail liquor store location for which the person obtained any license or permit required to sell alcoholic beverages at retail on or after January 1, 2025, the retail liquor store location is not located closer than 1,000 feet to an establishment licensed pursuant to chapter 463 of NRS; and (4) The retail liquor store location is located within the same county as the brew pub, unless the brew pub is located in a county whose population is less than 100,000. (g) In a calendar year, in addition to the amount of malt beverages which may be manufactured pursuant to subsection 1, manufacture and sell 20,000 barrels of malt beverages for all the brew pubs he or she operates in this State provided such barrels are sold either to a wholesaler located outside of this State [,] or, where allowable pursuant to applicable law, to persons residing in states outside of this State, subject to such periodic auditing as the Department of Taxation shall require by regulation. 4. The amount of malt beverages sold pursuant to paragraphs (b), (c) and (d) of subsection 3 must not exceed a total of 5,000 barrels in any calendar year. Of the 5,000 barrels, not more than 1,000 barrels may be sold in kegs. 5. A person who operates a brew pub and one or more commonly controlled retail liquor store locations shall: (a) Comply with the provisions of NRS 369.520 with respect to the brew pub and each commonly controlled retail liquor store location; and (b) In addition to making any reports required pursuant to rules made by the Department of Taxation pursuant to NRS 369.360, submit to the Department of Taxation each month a report of sales of malt beverages manufactured at ea [Text truncated for display. Full text available on LegiScan.]