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:

Date Added:

John J. Mahoney

13th Worcester

1/7/2019

William M. Straus

10th Bristol

1/11/2019

Joan B. Lovely

Second Essex

1/10/2019

Diana DiZoglio

First Essex

1/14/2019

Angelo J. Puppolo, Jr.

12th Hampden

1/14/2019

Shawn Dooley

9th Norfolk

1/14/2019

Hannah Kane

11th Worcester

1/14/2019

Bradford Hill

4th Essex

1/14/2019

William J. Driscoll, Jr.

7th Norfolk

1/15/2019

Norman J. Orrall

12th Bristol

1/15/2019

Kimberly N. Ferguson

1st Worcester

1/15/2019

Steven Ultrino

33rd Middlesex

1/15/2019

Paul K. Frost

7th Worcester

1/16/2019

Nicholas A. Boldyga

3rd Hampden

1/16/2019

David K. Muradian, Jr.

9th Worcester

1/17/2019

Elizabeth A. Poirier

14th Bristol

1/17/2019

Carole A. Fiola

6th Bristol

1/18/2019

John C. Velis

4th Hampden

1/30/2019

Paul A. Schmid, III

8th Bristol

1/23/2019

Brian M. Ashe

2nd Hampden

1/23/2019

Mathew J. Muratore

1st Plymouth

1/24/2019

James Arciero

2nd Middlesex

1/24/2019

Susan Williams Gifford

2nd Plymouth

1/24/2019

Michael O. Moore

Second Worcester

1/24/2019

Michael J. Soter

8th Worcester

1/24/2019

Steven S. Howitt

4th Bristol

1/24/2019

Michael J. Finn

6th Hampden

1/24/2019

James T. Welch

Hampden

1/24/2019

Daniel M. Donahue

16th Worcester

1/24/2019

Mark J. Cusack

5th Norfolk

1/24/2019

Claire D. Cronin

11th Plymouth

1/24/2019

Christopher M. Markey

9th Bristol

1/25/2019

Louis L. Kafka

8th Norfolk

1/25/2019

José F. Tosado

9th Hampden

1/28/2019

Dylan A. Fernandes

Barnstable, Dukes and Nantucket

1/28/2019

Joseph W. McGonagle, Jr.

28th Middlesex

1/28/2019

Daniel J. Hunt

13th Suffolk

1/28/2019

Mary S. Keefe

15th Worcester

1/28/2019

Marc T. Lombardo

22nd Middlesex

1/28/2019

Jeffrey N. Roy

10th Norfolk

1/28/2019

Paul W. Mark

2nd Berkshire

1/29/2019

Bradley H. Jones, Jr.

20th Middlesex

1/28/2019

Tackey Chan

2nd Norfolk

1/29/2019

James J. O'Day

14th Worcester

1/29/2019

Nick Collins

First Suffolk

1/29/2019

Patrick Joseph Kearney

4th Plymouth

2/1/2019

Joseph D. McKenna

18th Worcester

1/30/2019

Angelo L. D'Emilia

8th Plymouth

1/30/2019

Edward F. Coppinger

10th Suffolk

1/30/2019

Daniel J. Ryan

2nd Suffolk

1/30/2019

Thomas A. Golden, Jr.

16th Middlesex

1/31/2019

Jennifer E. Benson

37th Middlesex

1/31/2019

Michelle M. DuBois

10th Plymouth

1/31/2019

Natalie M. Higgins

4th Worcester

1/31/2019

Paul F. Tucker

7th Essex

1/31/2019

Rady Mom

18th Middlesex

1/31/2019

Michael S. Day

31st Middlesex

1/31/2019

Shaunna L. O'Connell

3rd Bristol

1/31/2019

Denise C. Garlick

13th Norfolk

1/31/2019

Joseph F. Wagner

8th Hampden

1/31/2019

Daniel R. Cullinane

12th Suffolk

1/31/2019

Harold P. Naughton, Jr.

12th Worcester

1/31/2019

Peter Capano

11th Essex

1/31/2019

Donald R. Berthiaume, Jr.

5th Worcester

1/31/2019

Ryan C. Fattman

Worcester and Norfolk

1/31/2019

John Barrett, III

1st Berkshire

1/31/2019

Jonathan D. Zlotnik

2nd Worcester

1/31/2019

Angelo M. Scaccia

14th Suffolk

1/31/2019

Paul McMurtry

11th Norfolk

2/1/2019

Daniel Cahill

10th Essex

2/1/2019

Alyson M. Sullivan

7th Plymouth

2/1/2019

Paul Brodeur

32nd Middlesex

2/1/2019

Kathleen R. LaNatra

12th Plymouth

2/1/2019

Daniel R. Carey

2nd Hampshire

2/1/2019

Tommy Vitolo

15th Norfolk

2/1/2019

John J. Lawn, Jr.

10th Middlesex

2/1/2019

Mindy Domb

3rd Hampshire

2/1/2019

David Biele

4th Suffolk

2/1/2019

Michael F. Rush

Norfolk and Suffolk

2/1/2019

Gerard J. Cassidy

9th Plymouth

2/1/2019

Donald H. Wong

9th Essex

2/1/2019

Susannah M. Whipps

2nd Franklin

2/1/2019

Bruce E. Tarr

First Essex and Middlesex

2/1/2019

Thomas P. Walsh

12th Essex

2/1/2019

John H. Rogers

12th Norfolk

2/1/2019

Bruce J. Ayers

1st Norfolk

2/1/2019

Frank A. Moran

17th Essex

2/1/2019

RoseLee Vincent

16th Suffolk

2/1/2019

Lori A. Ehrlich

8th Essex

2/1/2019

Kevin G. Honan

17th Suffolk

2/1/2019

Carlos González

10th Hampden

2/2/2019


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.