February 8, 2019
2019 House Calendar (pdf)
March 1 – Debt Limit Suspension Ends
March 24-26 – ABL Annual Meeting – Las Vegas
SAVE THE DATE
2019 ABL Annual Meeting | March 24-26, 2019 | Las Vegas, Nevada
American Beverage Licensees (ABL) is returning to Las Vegas, Nevada for the 2019 ABL Annual Meeting, taking place March 24-26, 2019. The meeting will be held at Bally’s Las Vegas Hotel & Casino, and will include a program full of informative speakers, topical issue discussions, industry networking and a series of hospitality events. Marking the association’s 17th anniversary, the meeting program will examine the key issues of the day facing independent beverage retailers and explore what lies ahead in the ever-evolving beverage alcohol marketplace.
Additional information – including registration and room rates, speakers, schedules, and hospitality events – will be announced in the coming weeks and months. For the latest updates and information on the 2019 ABL Annual Meeting, be sure to visit the ABL website (www.ablusa.org).
The latest updates can also be found by following the #ABLMeeting19 hashtag on Facebook, Instagram and Twitter.
| H.R. 218
|| Death Tax Repeal Act
|| Rep. Jason Smith (R-MO-08)
| S. 215
|| Death Tax Repeal Act of 2019
|| Sen. John Thune (R-SD)
| H.R. 420
|| Regulate Marijuana Like Alcohol
|| Rep. Earl Blumenauer (D-OR-03)
| S. 420
|| Providing for the taxation &
regulation of marijuana products
|| Sen. Ron Wyden (D-OR)
| H.R. 582
|| Raise the Wage Act
|| Rep. Bobby Scott (D-VA-03)
| S. 150
|| Raise the Wage Act
|| Sen. Bernie Sanders (I-VT)
| H.R. 514
|| Abbas Stop Drunk Driving Act
|| Rep. Debbie Dingell (D-MI-12)
||Craft Beverage Modernization &
Tax Reform Act
||Sen. Ron Wyden (D-OR)
*as of 2/8/19
AG Nominee Opines on Cannabis; Music Licensing Consent Decrees
In sworn testimony before the Senate Judiciary Committee in January, Attorney General nominee William Barr stated that he disagrees with efforts by states to legalize marijuana but won’t “go after” marijuana companies in states that have legalized it based on the Obama administration’s policies.
“My approach to this would be not to upset settled expectations and the reliance interests that have arisen as a result of the Cole memoranda,” Barr told the Senate Judiciary Committee. “Investments have been made, so I don’t think it’s appropriate to upset those interests.”
The “Cole Memo” is 2013 guidance from then-Deputy Attorney General Jim Cole urging prosecutors not to interfere with state laws legalizing cannabis. It was rescinded in 2017 by then-Attorney General Jeff Sessions.
Barr added, “We should either have a federal law that prohibits marijuana everywhere, which I would support myself, because I think it’s a mistake to back off on marijuana. However, if we want a federal approach, if we want states to have their own laws, let’s get there, and let’s get there the right way.”
After his nomination hearing, Barr submitted written responses to “questions for the record” submitted by Senators. Sen. Richard Blumenthal (D-CT) asked “Can you commit that the
Department of Justice will work with Congress to develop an alternative framework prior to any action to terminate or modify the ASCAP and BMI consent decrees?”
Barr replied, “I commit that, if I am confirmed, the Department will stand ready, as always, to provide this Committee with technical assistance on any legislative proposal regarding music licensing. I also commit that, if confirmed, I will work with the Antitrust Division to ensure that this Committee is informed of the Division’s intentions a reasonable time before it takes any action to modify or terminate the decrees.”
The exchange comes as the Department of Justice is conducting a sweeping review of 1,300 antitrust consent decrees, including the ASCAP and BMI consent decrees. These decrees play a critical role in allowing Americans to hear their favorite songs, and Sen. Blumenthal has previously been on record expressing his concern that terminating the ASCAP and BMI consent decrees could undermine the Music Modernization Act and permit the accumulation and abuse of market power.
Craft Beverage Modernization & Tax Reform Act Reintroduced
The Craft Beverage Modernization and Tax Reform Act (CBMTRA) (S. 362) was reintroduced in the U.S. Senate on February 6, with support from a broad group of alcohol industry supplier-tier trade associations representing the beer, wine, spirits, and cider sectors.
The legislation was first introduced in 2015, reintroduced in 2017, and a version was included as a two-year provision in tax legislation passed in December 2017. The latest iteration, which is once again cosponsored by Senators Ron Wyden (D-OR) and Roy Blunt (R-MO), would make permanent the excise tax relief for alcohol producers and importers enacted in 2017.
Industry associations supporting the CBMTRA include Brewers Association, Beer Institute, WineAmerica, Wine Institute, Distilled Spirits Council, American Craft Spirits Association, and U.S. Association of Cider Makers. In the 115th Congress (2017-2018), the CBMTRA garnered 55 Senator and 305 Representative cosponsors.
Death Tax Repeal Act Reintroduced
Sen. John Thune (R-SD) and Rep. Jason Smith (R-MO) have reintroduced the Death Tax Repeal Act in the Senate (S. 215) and the House (H.R. 218). Both long-time champions of the effort to permanently repeal the estate or “death” tax, the legislation faces headwinds, particularly in the Democratically-controlled House. In the Senate, Sen. Bernie Sanders (I-VT) has proposed raising the tax’s top rate to 77 percent. ABL has supported permanent repeal and also permanent relief from the tax. Temporary relief was realized with the passage of the Tax Cuts and Jobs Act of 2017, which temporarily doubles the exemption amount for estate, gift and generation-skipping taxes from $5.6 million to $11.2 million per individual and $22.4 million per couple. This policy went into effect on January 1, 2018 and is good for tax years 2018 through 2025. Without further Congressional action, the exemption will sunset after 2025 and the top exemption will revert to the $5.6 million base (indexed for inflation.)
Drunk Driving Bill Introduced in House
On January 11, Rep. Debbie Dingell (D-MI) introduced the Abbas Stop Drunk Driving Act (H.R. 514), named after a Michigan family of five that was killed in January by a drunk driver. The legislation calls for the Department of Transportation to implement a federal motor vehicle safety standard that requires all new vehicles be equipped with an ignition interlock device within one year of the bill’s enactment. The bill currently has no cosponsors.
MIC Coalition Holds Reception on Music Licensing
Nearly 150 people joined the MIC Coalition for a reception on February 6, participating in the Third Annual “Open MIC” Night. This event presented a unique and memorable way for the MIC Coalition to tell its story to Capitol Hill and Administration staff and others within the digital music policy space. Throughout the evening, the Coalition featured soft policy advocacy in the form of key music licensing facts on the TV screens throughout the venue.
National Cannabis Roundtable Launched
On February 8, former House Speaker John Boehner announced the National Cannabis Roundtable, a cannabis industry-funded group to lobby for cannabis reform, including changes affecting medical research, banking and taxes. The group has seven founding companies, coalescing around the following mission:
• Remove federal restrictions that prohibit medical research involving cannabis. Encourage the development of solutions that will improve the lives of veterans and patients and
combat the opioid epidemic in the United States.
• Allow companies operating legally in the cannabis industry to utilize traditional institutions for transactions and access to financial markets.
• Correct flaws in the US tax code that serve as barriers to legal commerce in the cannabis industry and prohibit the development of solutions that can improve Americans’ lives.
• Build support for, and secure enactment of, federal legislation allowing states and territories to set and enforce their own laws governing cannabis.
NTSB Renews Call for States to Adopt 0.05 BAC Limit
On February 4, the National Transportation Safety Board (NTSB) announced its 2019 – 2020 Most Wanted List of Transportation Safety Improvements. Of the ten items on the list, NTSB calls to “End Alcohol and Other Drug Impairment.” The NTSB states, “We want to continue to see states adopt per se BAC limits of 0.05 percent or below, as well as broaden their use of other effective countermeasures, like ignition interlock devices and high-visibility enforcement.
“Impairment in transportation is not limited to just alcohol; it also includes impairment by other drugs—legal or illicit. We want a national drug testing standard for passenger vehicles and stronger screening and toxicology testing in commercial transportation.”
First issued in 1990, the NTSB Most Wanted List of Transportation Safety Improvements serves as the agency’s primary advocacy tool to help save lives, prevent injuries, and reduce property damage resulting from transportation accidents. The NTSB first called for states to adopt per se BAC limits of 0.05 BAC in 2013. ABL staff testified before the NTSB on alcohol impaired driving in 2012.
Regulate Marijuana Like Alcohol Act Reintroduced
Rep. Earl Blumenauer (D-OR) has reintroduced the Regulate Marijuana Like Alcohol Act (H.R. 420), which would legalize marijuana by removing it from the Controlled Substances Act (CSA) and allow for a nationally regulated industry under the oversight of the Bureau of Alcohol, Tobacco, Firearms and Explosives. Blumenauer, a leading voice for marijuana policy reform, last year authored a comprehensive blueprint for marijuana legalization in the 116th Congress.
On February 7, Sen. Ron Wyden (D-OR) followed suit by introducing (S. 420), which would de- schedule marijuana by removing it from the Controlled Substances Act (CSA), establish a federal excise tax on legal sales and create a system of permits for businesses to engage in cannabis commerce.
TTB Announces 2019 Trade Practice Seminars
The Alcohol and Tobacco Tax and Trade Bureau (TTB) has announced that it will conduct four trade practice seminars in 2019 geared towards alcohol beverage industry members or their representatives. These seminars will address issues to include inducement and tied-house rules, and other federal alcohol regulations. Officials from applicable state regulatory agencies will also participate in these seminars to talk about trade practice enforcement from their state's perspective.
To register, click on the appropriate session below and follow the instructions on the registration page. Registration will close when TTB reaches capacity, or one week prior to the seminar, whichever comes first. Space is limited. NOTE: The morning and afternoon sessions are identical. Please only register for one.
TTB Digging Out of Label Approval Backlog
The Alcohol and Tobacco Tax and Trade Bureau (TTB) is getting back to work following the 35-day partial federal government shutdown. Label approval and other enforcement activities were put on hold during the government closure, and now TTB workers are wading through roughly 10,000 label approval requests that have been submitted since January 1. Last year, the TTB processed more than 192,000 labels. Label approval periods can last more than 40 days under the current workload and given the lost time. Just 54 of TTB’s over 470 employees were on the job during the shutdown. If the legislators and the President fail to act, the government could shut down once again on February 15.
Lobbying...More than $3.4 billion was spent on lobbying in 2018 by about 12,000 companies, trade associations, nonprofits, state and local governments, according to Bloomberg Government. The median lobbying expenditure in 2018 was $68,000.
Minimum Wage...Democrats have introduced the Raise the Wage Act (H.R. 582; S. 150) which would gradually raise the current $7.25 federal wage floor to $15 by 2024 and erase low-wage mandates for tipped and other workers. They argue that the current $7.25 minimum wage, set in July 2009, hasn’t kept pace with inflation. The House bill has 196 cosponsors.
ADA Lawsuits...The number of ADA Title III lawsuits filed in federal court in 2018 hit a record high of 10,163 – up 34% from 7,663 in 2017. When tracking began in 2013, the number of federal filings was 2,722.
Industry Employment...According to the Bureau of Labor Statistics, in January, employment in leisure and hospitality rose by 74,000. Within the industry, job gains occurred in food services and drinking places (+37,000) and in amusements, gambling, and recreation (+32,000). Over the past year, leisure and hospitality has added 410,000 jobs.
Intellectual Property...The Senate Judiciary Committee has reinstated its subcommittee dedicated to addressing intellectual property issues. Sens. Thom Tillis (R-NC) and Chris Coons (D-DE) will lead the Senate Judiciary Intellectual Property Subcommittee as chairman and ranking member, respectively. Its jurisdiction includes the U.S. Patent and Trademark Office, the U.S. Copyright Office, and federal government functions related to patents, copyrights, trademarks, and trade secrets.
Trade & Tariffs...The Distilled Spirits Council (DISCUS) joined 45 other business trade groups in sending a letter on January 23 to Commerce Secretary Wilbur Ross and US Trade Representative Robert Lighthizer asking the US government to lift “tariffs on steel and aluminum imports” and remove “all retaliatory tariffs on trade among the parties.” Christine LoCascio, DISCUS senior vice president for international affairs, said: “US spirits have been a target of the trade wars – with American whiskey the only US agricultural product subject to retaliatory tariffs by all of the retaliating trade partners.
Trump Salary...President Donald Trump donated his salary from the third-quarter of 2018 to the National Institute on Alcohol Abuse and Alcoholism, the federal agency charged with researching alcoholism and alcohol-related problems. The President’s older brother, Fred Jr., struggled with alcoholism.
Tennessee Wine & Spirits Retailers Association v. Blair (U.S. Supreme Court)
On January 16, 2019, the Supreme Court heard oral arguments in Tennessee Wine & Spirits Retailers Association v. Blair. The specific question of the case is: whether the 21st Amendment empowers states, consistent with the dormant commerce clause, to regulate liquor sales by granting retail or wholesale licenses only to individuals or entities that have resided in-state for a specified time.
Attorneys on behalf of TWSRA and a group of 35 state attorneys general defended the Constitutional right of states to set alcohol policy, and the unique nature of alcohol as it relates to the Dormant Commerce Clause and 21st Amendment. Throughout the arguments, Justices asked informed questions that demonstrated their understanding of the history of alcohol commerce, practical alcohol regulatory policy and other issues addressed in more than a dozen amicus briefs filed on behalf of TWSRA, including ABL’s.
The Court also recognized and cited the “unquestionably legitimate” Three-Tier System and discussed potentially troublesome implications of adopting remedies suggested by the respondents, including a wave of litigation over state alcohol policy that could undermine the entire alcohol regulatory system.
Tennessee law requires an applicant for a retail license to have been a resident of Tennessee for at least the two-year period. To renew such a license. the law requires Tennessee residency for at least ten consecutive years. Previously, a district court in Tennessee ruled that these durational residency requirements violate the dormant Commerce Clause. This decision was upheld by the U.S. Court of Appeals for the 6th Circuit before it was appealed to and granted a hearing by the U.S. Supreme Court.
Should the Supreme Court uphold the 6th Circuit decision, its ruling could be narrow, sweeping or somewhere in between as it relates to the interplay of the “dormant” Commerce Clause and the 21st Amendment. A broad ruling against 21st Amendment authority could potentially make vulnerable and/or invite challenges to any state alcohol laws that are perceived to discriminate against the economic interest of out-of-state parties (e.g. retail direct-to-consumer shipping; license limitations; franchise laws and other laws that require physical presence.)
ABL’s brief to the Supreme Court explained that the state’s residency requirements are lawful under the 21st Amendment and further the State’s legitimate interests as part of its multi-step and comprehensive Three-Tier regulatory system. The ABL brief states, “By requiring distribution to occur through entities with sufficient connections to a State, that State can best enforce its own alcohol regulations.” The brief further notes that the physical presence of in-state wholesalers and retailers allows for states to more easily inspect those entities and facilitates enforcement of “laws designed for orderly market conditions and public safety.”
A decision is expected by the end of the Court’s term in June 2019.