”20-HB1081/SB0217 -Faison/Lundberg

Bill Description

Generally under present law:

(1) A brewer or manufacturer of beer is prohibited from having any financial or ownership interest, direct or indirect, in the business of or a building containing a wholesale or retail licensee, including furnishing or loaning any fixtures of any kind to a retail licensee, and such a brewer or manufacturer is prohibited from holding a wholesale or retail license; and
(2) A manufacturer operating as a retailer is prohibited from selling its beer directly to retailers that are located in a county other than the county in which the manufacturer is located. A transfer or sale by a manufacturer operating as a retailer to an off-site retailer's location constitutes a wholesale sale.

This bill provides, notwithstanding the above, that a manufacturer that has a total annual beer production of 50,000 gallons or less may obtain an additional self-distribution permit from the county or city where the manufacturer is located. This bill prohibits a county or city from issuing a self-distribution permit to a manufacturer that has entered into a distribution contract with a beer wholesaler if the terms of that contract include distribution rights for a county that is located, in whole or in part, within 100 miles of the licensed manufacturer where the beer being distributed, has been manufactured, produced, or bottled. Any manufacturer holding a self-distribution permit that enters into such a distribution contract with a wholesaler or whose total output in a calendar year exceeds 50,000 gallons must cease self-distributing its beer under this bill and must promptly surrender the manufacturer's self-distribution permit.

This bill limits a manufacturer holding a self-distribution permit to distributing no more than 7,000 gallons of beer manufactured, produced, or bottled on the manufacturer's premises to any individual retail permittee holding a permit issued under present law, for the sale, distribution, manufacture of beer, located within 100 miles of the manufacturer's premises where such beer has been manufactured, produced, or bottled.

This bill requires a manufacturer engaged in self-distribution under this bill to pay all taxes imposed upon a wholesaler that result from any direct sales from self-distribution. This bill prohibits the county or city from imposing an additional fee or charge for the issuance of a self-distribution permit under this bill, but authorizes the city and county to impose separate privilege tax pursuant present. A manufacturer engaged in self-distribution under this bill must register separately with the commissioner of revenue as a wholesaler.

TLRC Position

We approve and don't understand why any manufacturer of any product should be limited to where they can market their product; especially within the state.

TLRC Observed Process

Before it was taken up in the House. it failed in Senate State and Local Government Committee 3/5/2019

Present and not voting……………….1
Senators voting aye were: Briggs, Dickerson, Gardenhire, Jackson — 4.
Senators voting no were: Reeves, White, Yager — 3.
Senators present and not voting were: Yarbro — 1.

Vote Result: Failed

Score: +5

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