Legislative Update: Maryland’s Reform on Tap Act Dies; Massachusetts Senate Revives Franchise Law Reform Bill

Maryland House Committee Kills Reform on Tap Act

Attempts to reform Maryland’s alcoholic beverage laws died Friday in a House committee as lawmakers voted 17-4 to reject Comptroller Peter Franchot’s Reform on Tap Act, the Baltimore Sun reported.

Franchot, the state’s top alcohol regulator, had championed the brewery-friendly legislation, which would have allowed beer companies to sell an unlimited amount of their product via their taprooms. The bill would have also reworked the state’s franchise laws to enable brewers to break their wholesaler partnerships.

However, the House Economic Matters Committee was unmoved, and some members were turned off by Franchot’s heated rhetoric.

In a Facebook post, Franchot responded to the death of the Reform on Tap Act by calling it “more business as usual in Annapolis.”

“Aside from the lobbyists who did what they’re hired to do, today’s big winner is the Commonwealth of Virginia, who will most assuredly use this display by the Legislature to recruit our brewers to cross state lines,” he wrote.

Franchot wrote that he had only just begun to fight for the state’s brewers and vowed to “spend the rest of my career — if that’s what it takes — to give them, their employees and their families a fair chance to succeed.”

“I look forward to taking this issue into every contested primary and general election in our state this year — into every county, district and precinct,” he wrote. “And I look forward to coming back to Annapolis in 2019 and making the case for good beer, good jobs and good times in the state we love.”

Franchot offered the Reform on Tap Act after last year’s contentious legislative session in which lawmakers increased the amount of beer the state’s brewers could sell directly to consumers via their tasting rooms from 500 barrels to 3,000 barrels. However, the new law featured a controversial requirement forcing the state’s brewers to buy back the final 1,000 barrels from their wholesalers, which many brewers opposed. The law also imposed stricter taproom hours that require new breweries to close at 10 p.m.

After the passage of that law — which was driven by Diageo’s plan to open a Guinness brewery and taproom in Baltimore County — Franchot created a task force to review the state’s alcoholic beverage laws, but he excluded lawmakers from the process.

Following last week’s vote, the committee rejected a bill — offered primarily as a symbolic gesture to critics of last year’s legislation — that would have rolled back many of last year’s changes.

The committee also expressed its displeasure with Franchot by unanimously passing a measure to review whether the comptroller’s office should remain the state’s alcohol regulator.

Del. Luke Clippinger told the Sun that Franchot championing the Reform on Tap legislation didn’t help brewers’ cause.

“The comptroller has screwed this up for them in the worst possible way,” he told the Sun.

Massachusetts Franchise Law Reform Bill Advances

Massachusetts’ franchise law reform debate isn’t over yet.

After the Legislature’s Joint Committee on Consumer Protection and Professional Licensure failed to advance a trio of reform bills last month, Sen. Barbara L’Italien prompted the full Senate to pull her bill out of legislative limbo, the Boston Globe reported.

Under Senate Bill 136 — dubbed the “act restoring contract rights to craft brewers” — any alcohol manufacturer, importer or wholesaler would be allowed to terminate a contract as long as they can show “good cause.”

The legislation has since been referred to the Senate Ways and Means Committee, giving the bill a shot at a vote in the Senate.

“From Hudson to Worcester to Plymouth, small craft breweries are revitalizing Massachusetts communities and fueling the economy — but this emerging industry faces barriers,” L’Italien wrote on social media. “My bill will fix that.”

Hearing Set in North Carolina Franchise Law Suit

A hearing is slated for Tuesday, March 20, in two North Carolina breweries’ constitutional challenge to a state law that requires beer companies producing more than 25,000 barrels annually to contract with a wholesaler.

Olde Mecklenburg and NoDa breweries, acting under the Craft Freedom LLC banner, filed the lawsuit last May accusing the state of North Carolina of engaging in “economic protectionism.” That action followed lawmakers stripping a provision out of a bill that that would have increased the self-distribution production cap to 200,000 barrels annually as well as allowing smaller brewers to more easily break their contracts with their wholesale partners.

The state of North Carolina has filed to dismiss the suit with prejudice and transfer the case to a three-judge panel of the Superior Court, the Carolina Journal reported.

Bill to Delay Utah .05 BAC Law Fails

An attempt to delay the start of Utah’s .05 blood-alcohol content law — set to go into effect December 31 — has failed, according to Salt Lake City Weekly.

Rep. Karen Kwan offered House Bill 345, which would have stalled implementation of the new law until December 30, 2019, giving lawmakers more time to reach a consensus on penalties associated with the law. However, the measure was voted down in a House committee.

When the law takes effect in December, Utah will be the first state in the nation with a .05 DUI limit.

Connecticut Brewers Support Bill to Lift Taproom Sales Limits

Connecticut craft brewers are asking lawmakers to support House Bill 5035, which would remove a limit on direct-to-consumer taproom sales. Currently, brewers are only allowed to sell nine liters of beer directly to consumers via their taprooms each day.

Armada Brewing owner John Kraszewski told Connecticut News Junkie that the limit amounts to him only being able to sell “about 21, 16 oz. cans” to consumers at his East Haven taproom.

Kraszewski and other brewers expressed concerns that consumers are spending their money at breweries in neighboring states without taproom sales limits.

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