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 May/June 2019


CALENDAR


2019 House Calendar (click to view PDF)

 

LEGAL


Tennessee Wine & Spirits Retailers Association v. Thomas…A decision from the U.S. Supreme Court to a question from the Tennessee Wine & Spirits Retailers Association asking the Court to hold that Tennessee’s durational-residency requirement for granting retail and wholesale alcohol licenses is protected under the Twenty-first Amendment, is expected by the end of the Court’s term in June 2019. Possible dates for the Supreme Court to release the opinion are: May​​ 28, June 3, June 10, June 17 or June 24.

 

NEWS


ABL Weighs-In on Fighting Drunk Driving with Technology…On March 14, the House Energy and Commerce Committee’s Consumer Protection and Commerce Subcommittee held a hearing entitled “Enhancing Vehicle Technology to Prevent Drunk Driving.” Witnesses included Joan Claybrook, Advocates for Highway and Auto Safety; Helen Witty, Mothers Against Drunk Driving; David Kelly, Coalition of Ignition Interlock Manufacturers; and Rob Strassburger, Automotive Coalition for Traffic Safety.

 

ABL submitted a letter encouraging Congress to support a comprehensive approach to fighting drunk driving by opposing any one-size-fits-all federal mandates for ignition interlocks – or any other singular technology. The letter was acknowledged by Subcommittee Chairwoman Jan Schakowsky (D-IL) during the hearing and placed into the record.

 

ABL Opposes USPS Shipping Equity Act…On May 3, Rep. Jack Speier (D-CA) reintroduced the USPS Shipping Equity Act (H.R. 2517).  This bill would allow the U.S. Postal Service (USPS) to ship alcohol directly to consumers.  The bill was introduced with 12 original cosponsors.  According to a press release from Rep. Speier’s office, it would “allow USPS to ship alcoholic beverages directly from licensed producers and retailers to consumers over the age of 21, in accordance with state and local shipping regulations.” ABL joined the National Beer Wholesalers Association and the Wine & Spirits Wholesalers of America on a letter to Congress urging them to oppose the legislation. As the letter points out:

 

Allowing the USPS to deliver alcohol would undermine these benefits of state regulation of alcohol by opening a channel of delivery through which potentially harmful foreign or domestic-sourced alcohol could enter U.S. commerce; creating easier access to alcohol for an underage consumer through unregulated deliveries; diminishing the ability of states and local governments to collect excise and sales tax revenue and preempting state laws with disregard for the 21st Amendment to the Constitution. 

 

Groups endorsing the bill include: WineAmerica, the Wine Institute, the American Craft Spirits Association, the United States Association of Cider Makers, the Kentucky Distillers’ Association, and the Distilled Spirits Council.

 

ABL Supports Main Street Certainty Act…Along with other members of the S-Corp Association, ABL has signed a business community letter in support of H.R. 216, the Main Street Certainty Act sponsored by Rep. Jason Smith (R-MO). The bill repeals the sunset of Section 199A of the Tax Cuts and Jobs Act, the 20-percent pass-through deduction.  Under the Tax Cuts & Jobs Act, the 199A deduction goes away after 2025, resulting in a significant tax hike on pass-through businesses beginning 2026. Rep. Henry Cuellar (D-TX) is the lead Democrat on the bill. 

 

Craft Beverage Modernization & Tax Reform Act Gains Cosponsors…The Craft Beverage Modernization and Tax Reform Act (CBMTRA) (S. 362) was reintroduced in the U.S. Senate on February 6, and in the House on February 13 (H.R. 1175), with support from a broad group of alcohol industry supplier-tier trade associations representing the beer, wine, spirits, and cider sectors. Thanks to a big push by the supplier-tier of the alcohol industry, the CBMTRA has garnered 56 Senator and 193 Representative cosponsors. The bill would make permanent the excise tax relief for alcohol producers and importers enacted in 2017. Should it fail, excise tax rates would revert to their pre-2017 levels. 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.

 

FDA Hearing on CBD Set for May 31…The Food and Drug Administration (FDA) has schedule its first public hearing on legalizing CBD in food and drinks and how to regulate the newly legalized cannabis product for May 31. The hearing will likely provide information on CBD's safety in food products and how the FDA might regulate manufacturing, marketing and labeling, per a notice in the Federal Register. CBD, short for cannabidiol, is a non-psychoactive compound found in the cannabis plant that purports to relax the body without altering the mind like THC. Congress legalized hemp-derived CBD in December 2018. The hearing comes at the urging of Congress, and with some large, potential CBD market entrants sitting on the sidelines due to the regulatory uncertainty surrounding the ingredient.

 

SAFE Act Passes Out of House Financial Services Committee…In late March, the House Financial Services Committee voted 45 to 15 to pass the Secure and Fair Enforcement (SAFE) Banking Act (H.R. 1595). Authored by U.S. Reps. Ed Perlmutter (D-CO) and Denny Heck (D-WA) and cosponsored by Reps. Warren Davidson (R-OH) and Steve Stivers (R-OH), the bill allows marijuana-related businesses in states with existing regulatory structures to access the banking system. As cannabis is currently considered illegal under the federal Controlled Substances Act, financial institutions providing banking services to legitimate and licensed marijuana businesses are subject to criminal prosecution. Since state and federal law are not aligned on the issue, cannabis businesses are forced to operate on a cash-only basis.

 

New Overtime Threshold Proposed…The U.S. Labor Department has announced its long-awaited proposed overtime threshold, raising the minimum salary exemption to $35,308 per year. Currently, employees with an annual salary below $23,660 must be paid overtime if they work more than 40 hours per week. Workers making less than the $35,308 threshold would automatically be eligible for time-and-a-half pay on hours worked beyond 40 each week. The department is seeking public comment on the proposal. The new proposal is below what the Obama administration proposed in 2017, $47,476 a year, which was eventually dismissed by a federal judge.

 

Pressure Growing to Raise Tobacco Age to 21…Thanks to an increasingly diverse and bipartisan coalition that includes Congressional leadership, tobacco and vaping companies, and an uptick in states passes similar laws, the effort to increase the federal age limit for buying tobacco products from 18 to 21 is growing. Senate Majority Leader Mitch McConnell (R-KY), as well as “tobacco state” Senator Tim Kaine (D-VA), have recently voiced their support, with McConnell introducing a bill on May to raise the federal age for purchasing tobacco products, including e-cigarettes, to 21.

 

The bill would make it illegal under federal law for retailers to sell tobacco and e-cigarettes products to anyone under age 21. It would also require states to enact their own laws raising the tobacco-purchasing age to 21 or risk not receiving federal substance abuse grants as soon as FY 2021. Six states have “Age 21” laws going into effect in July, with two more in 2020 and 2021, bringing the total to 14 state with 21-year-old purchase age. Juul and Altria are also supportive of moving the age to 21.

 

Bills to Ban Cashless Stores Introduced…U.S. Reps. David Cicilline (D-RI) and U.S. Rep. Donald Payne (D-NJ) have introduced bills that would force brick-and-mortar retail stores, including restaurants, to accept cash. The legislation comes amid growing backlash against retailers moving to only accept card or electronic payments that are believed by some to discriminate against lower income individuals. The Cash Should Always Be Honored Act (H.R. 2630), authored by Rep. Cicilline, would authorize the Federal Trade Commission to enforce the prohibition on cashless stores. Rep. Payne’s bill, the Payment Choice Act (H. R. 2650), allows consumers to sue stores that do not accept cash, and sets fines of $2,500 for a first offense and $5,000 for subsequent violations. Attorneys general could intervene in civil cases brought against offending companies.

 

Retail Trade Associations Pan Trump Tariff Plan…The National Retail Federation (NRF) and the Retail Industry Leaders Association (RILA) have criticized President Trump’s threat to raise tariffs on $200 billion in Chinese goods from 10% to 25%, arguing that the move will hurt American businesses and consumers, and disrupt U.S. businesses that have limited ability to ease the impact. A report from Trade Partnership found that increasing tariffs on $200 billion of goods to 25%, coupled with tariffs already in place and retaliation, would reduce U.S. employment by over 934,000 jobs, cost the average family of four $767 and reduce U.S. GDP by 0.37%, according to the NRF.

 

Senate Bill Would Protect Kombucha from Excise Tax…Sen. Ron Wyden (D-OR) has introduced legislation, the Keeping Our Manufacturers from Being Unfairly taxed while Championing Health Act (KOMBUCHA) (S. 926), that would eliminate excise taxes on Kombucha manufacturers’ products that contain more than 0.5% alcohol by raising the limit on ABV for kombucha to 1.25% and makes the product exempt from excise taxes imposed on alcoholic beverages like beer. Kombucha is a fermented product, created when sugar and yeast are combined. When kombucha is not kept cold, it continues to ferment, raising the alcohol level above 0.5% and making it subject to the excise tax. In the U.S. in 2018, kombucha was a $1.2 billion industry.

 

Aluminum Pricing Examination Act Re-Introduced…With the support of the Beer Institute, American Beverage Association, Brewers Association and Can Manufacturers Institute, U.S. Reps. Al Lawson (D-FL) and Ken Buck (R-CO) have reintroduced the Aluminum Pricing Examination (APEX) Act (H.R.1406). The bipartisan legislation would ensure a fair and free market for the pricing of aluminum and grant the Commodities Futures Trading Commission (CTFC) authority to conduct oversight of the aluminum market and investigate price setting, benchmarking and reporting entities.


 
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