HOUSE DOCKET, NO. 110        FILED ON: 1/7/2019

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 3549

 

The Commonwealth of Massachusetts

_________________

PRESENTED BY:

John J. Mahoney

_________________

To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act to promote economic development and market access for emerging businesses.

_______________

PETITION OF:

 

Name:

District/Address:

John J. Mahoney

13th Worcester

William M. Straus

10th Bristol

Joan B. Lovely

Second Essex

Diana DiZoglio

First Essex

Angelo J. Puppolo, Jr.

12th Hampden

Shawn Dooley

9th Norfolk

Hannah Kane

11th Worcester

Bradford Hill

4th Essex

William J. Driscoll, Jr.

7th Norfolk

Norman J. Orrall

12th Bristol

Kimberly N. Ferguson

1st Worcester

Steven Ultrino

33rd Middlesex

Paul K. Frost

7th Worcester

Nicholas A. Boldyga

3rd Hampden

David K. Muradian, Jr.

9th Worcester

Elizabeth A. Poirier

14th Bristol

Carole A. Fiola

6th Bristol

John C. Velis

4th Hampden

Paul A. Schmid, III

8th Bristol

Brian M. Ashe

2nd Hampden

Mathew J. Muratore

1st Plymouth

James Arciero

2nd Middlesex

Susan Williams Gifford

2nd Plymouth

Michael O. Moore

Second Worcester

Michael J. Soter

8th Worcester

Steven S. Howitt

4th Bristol

Michael J. Finn

6th Hampden

James T. Welch

Hampden

Daniel M. Donahue

16th Worcester

Mark J. Cusack

5th Norfolk

Claire D. Cronin

11th Plymouth

Christopher M. Markey

9th Bristol

Louis L. Kafka

8th Norfolk

José F. Tosado

9th Hampden

Dylan A. Fernandes

Barnstable, Dukes and Nantucket

Joseph W. McGonagle, Jr.

28th Middlesex

Daniel J. Hunt

13th Suffolk

Mary S. Keefe

15th Worcester

Marc T. Lombardo

22nd Middlesex

Jeffrey N. Roy

10th Norfolk

Paul W. Mark

2nd Berkshire

Bradley H. Jones, Jr.

20th Middlesex

Tackey Chan

2nd Norfolk

James J. O'Day

14th Worcester

Nick Collins

First Suffolk

Patrick Joseph Kearney

4th Plymouth

Joseph D. McKenna

18th Worcester

Angelo L. D'Emilia

8th Plymouth

Edward F. Coppinger

10th Suffolk

Daniel J. Ryan

2nd Suffolk

Thomas A. Golden, Jr.

16th Middlesex

Jennifer E. Benson

37th Middlesex

Michelle M. DuBois

10th Plymouth

Natalie M. Higgins

4th Worcester

Paul F. Tucker

7th Essex

Rady Mom

18th Middlesex

Michael S. Day

31st Middlesex

Shaunna L. O'Connell

3rd Bristol

Denise C. Garlick

13th Norfolk

Joseph F. Wagner

8th Hampden

Daniel R. Cullinane

12th Suffolk

Harold P. Naughton, Jr.

12th Worcester

Peter Capano

11th Essex

Donald R. Berthiaume, Jr.

5th Worcester

Ryan C. Fattman

Worcester and Norfolk

John Barrett, III

1st Berkshire

Jonathan D. Zlotnik

2nd Worcester

Angelo M. Scaccia

14th Suffolk

Paul McMurtry

11th Norfolk

Daniel Cahill

10th Essex

Alyson M. Sullivan

7th Plymouth

Paul Brodeur

32nd Middlesex

Kathleen R. LaNatra

12th Plymouth

Daniel R. Carey

2nd Hampshire

Tommy Vitolo

15th Norfolk

John J. Lawn, Jr.

10th Middlesex

Mindy Domb

3rd Hampshire

David Biele

4th Suffolk

Michael F. Rush

Norfolk and Suffolk

Gerard J. Cassidy

9th Plymouth

Donald H. Wong

9th Essex

Susannah M. Whipps

2nd Franklin

Bruce E. Tarr

First Essex and Middlesex

Thomas P. Walsh

12th Essex

John H. Rogers

12th Norfolk

Bruce J. Ayers

1st Norfolk

Frank A. Moran

17th Essex

RoseLee Vincent

16th Suffolk

Lori A. Ehrlich

8th Essex

Kevin G. Honan

17th Suffolk

Carlos González

10th Hampden


HOUSE DOCKET, NO. 110        FILED ON: 1/7/2019

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 3549

By Mr. Mahoney of Worcester, a petition (accompanied by bill, House, No. 3549) of John J. Mahoney and others for legislation to promote economic development and market access for emerging breweries.  Consumer Protection and Professional Licensure.

 

The Commonwealth of Massachusetts

 

_______________

In the One Hundred and Ninety-First General Court
(2019-2020)

_______________

 

An Act to promote economic development and market access for emerging businesses.

 

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1. Section 10A of chapter 23A of the General Laws, as appearing in the 2016 Official Edition, is hereby amended by inserting after the word “companies”, in line 7, the following words:- ; provided that such agricultural items shall include cereal grains, malted grains, hops, fruits, flowers, plants, vegetables, or pure juices from fruits, vegetables or plants, herbs, other natural flavoring materials or extracts derived from infusions, percolations, or maceration of such materials.

SECTION 2. Chapter 138 of the General Laws is hereby amended by inserting after section 25E the following section:-

Section 25E½. (a) Notwithstanding the provisions of section 25E, an emerging brewery may, without good cause shown, terminate the right to distribute any brands of malt beverages for any licensed wholesaler to whom such emerging brewery has made regular sales of such brands of malt beverages, subject to the provisions of this section.

For purposes of this section, an emerging brewery shall mean any entity that (1) is authorized to sell malt beverages to wholesalers in the commonwealth, hereinafter referred to in this section as a “brewery”, (2) is privately owned and operated, and (3) directly or indirectly, produced less than 100,000 barrels, also measured as 1,377,778 case equivalents, of malt beverages in the 12-month period immediately preceding the date of the written notice of termination of the right to distribute any brands of malt beverages required by this section; provided however, that an emerging brewery shall include: (1) an officer or director of an emerging brewery, and (2) an affiliate of such emerging brewery, regardless of whether the affiliation is corporate or by management, direction, or control.

For purposes of calculating the volume of production for the purposes of this section, an emerging brewery shall include the volume of products that are malt beverages as defined in section 1 or are determined to be malt beverages for the purpose of federal or state law and are produced by (1) the emerging brewery, (2) an officer or director of such emerging brewery, and (3) an affiliate of such emerging brewery, regardless of whether the affiliation is corporate or by management, direction, or control.

For the purposes of this section, a barrel shall be 31 U.S. gallons and a case equivalent shall be 2.25 U.S. gallons. For the purposes of this section, the volume produced under contract by a brewery shall be calculated in the volume of the agent brewery for whom the volume of brands is produced, and not in the volume of brands produced by the contracted brewery.  

(b) (1) No termination of the right to distribute shall be effective until the wholesaler being terminated has received both written notice and full compensation as specified in this section. An emerging brewery shall provide the wholesaler with not less than 90 days written notice of the termination of the right to distribute, which written notice shall identify the successor wholesaler who will begin servicing the affected territory.

(2) Upon any termination of the right to distribute pursuant to this section, the wholesaler shall sell and the emerging brewery or the wholesaler newly assigned to distribute the brands being terminated shall repurchase the wholesaler's inventory and sales and marketing materials. 

(c) (1) The emerging brewery shall cause to be paid to the affected wholesaler, as full compensation for termination of the right to distribute the brands of an emerging brewery, an amount not less than the laid-in cost of the inventory plus the laid-in cost of the sales and marketing material plus the fair market value of the distribution rights for the brands which are being terminated by the emerging brewery. 

(2) For the purposes of this section, “fair market value” shall mean the price that the wholesaler’s business that is related to the terminated brands of the emerging brewery would sell for in an arms length transaction between a willing buyer and a willing seller as of the date the notice was received by the wholesaler being terminated under paragraph (1) of subsection (b), with neither being required to act, and both having reasonable knowledge of the relevant facts. 

(d) (1) Any dispute whether a brewery is an emerging brewery within the meaning of this section shall be determined by the alcoholic beverages control commission, which either the emerging brewery or the wholesaler may request within 90 days of either party claiming rights under this section. The commission shall issue a decision within 90 days of receipt of any request to determine this issue. The commission may award the prevailing party its attorney’s fees regarding the issue of whether a brewery is an emerging brewery.

(2) If the emerging brewery and the affected wholesaler cannot agree on the compensation due to the affected wholesaler under subsection (c) within the 90 days following the emerging brewery notice of its termination of the right to distribute any brands of malt beverages, either the affected wholesaler or the emerging brewery may request that the amount of compensation be determined by final binding arbitration conducted in the commonwealth, applying the laws of the commonwealth according to the arbitration process below.

(e) (1) Arbitrations under this section shall be administered by the American Arbitration Association or its successor organization. The commercial arbitration rules of the American Arbitration Association or its successor organization shall govern the arbitration. Arbitrations shall be conducted before a panel of 3 arbitrators. Within 15 days after the commencement of arbitration, each party shall select one person to act as arbitrator, and the two so selected shall select a third arbitrator within 30 days of the commencement of the arbitration. If any arbitrator is not selected within 45 days after notice of the arbitration being filed, such arbitrators shall be selected by the nearest office of the American Arbitration Association or its successor organization. All arbitrators shall serve as neutral, independent and impartial arbitrators.

(2) The arbitration proceeding shall conclude not later than 90 days after the date of the notice of intent to arbitrate is transmitted to the other party, unless the parties agree to extend the time by agreement or the arbitrator extends the time for good cause shown. Any arbitration held pursuant to this section shall be in lieu of all other remedies and procedures. The costs of the arbitrators and any other costs of the arbitration shall be equally divided by the parties engaged in the arbitration. Each party shall bear all other expenses related to the arbitration. The panel of arbitrators shall render a written, reasoned decision not later than 30 days after the conclusion of the arbitration proceeding, unless the parties agree to extend the time by agreement or the arbitrators extend the time for good cause shown.

(3) The arbitration decision shall be subject to judicial review pursuant to chapter 30A.  Any arbitration decision issued under this section may be enforced by commencing a civil action in any court of competent jurisdiction in the commonwealth.

(4) Any party duly notified of an arbitration involving its rights that fails to participate in an arbitration proceeding held pursuant to this section waives all rights it would have had in the arbitration and is considered to have consented to the determination of the panel of arbitrators.

SECTION 3. Said chapter 138 of the General Laws is hereby further amended by adding the following section:-

Section 79. If any provision of this chapter 138, or its application to any person or circumstance, is determined by a court to be invalid or unconstitutional, the remaining provisions shall be construed in accordance with the intent of the general court to further limit rather than to expand commerce in alcoholic beverages, to enhance strict regulatory control over taxation, distribution and sale of alcoholic beverages through the three-tier regulatory system imposed by this chapter upon all alcoholic beverages including malt beverages.