FILED APRIL 15, 2010

Dear Client:

It's happened. Just days before the NBWA has its Spring Legislative Conference, The National Beer Wholesalers Association has had their bill filed, which seeks to give states more power in regulating and defending their alcohol laws, with the House of Representatives just minutes ago, BBD has learned. The CARE Act (Comprehensive Alcohol Regulatory Effectiveness Act) seeks to "support State based alcohol regulation, to clarify evidentiary rules for alcohol matters, to ensure the collection of all alcohol taxes, and for other purposes." The bill was introduced by Rep. Delahunt, a retiring House member from Massachusetts.
BBD brings you the bill here:

The bill seeks to achieve several objectives:

1. To make it clear to courts that Congress does "recognize that alcohol is different from other consumer products and that it should be regulated effectively by the States according to the laws thereof."

2. To "reaffirm and protect the primary authority of States to regulate alcoholic beverages."

3. To amend the Webb-Kenyon Act to say at the end: "It is the policy of Congress that each State or territory shall continue to have the primary authority to regulate alcoholic beverages."

4. And to make it clear that "silence on the part of Congress shall not be construed to impose any barrier under" the Commerce Clause "to the regulation by a State or territory of alcoholic beverages. However, State or territorial regulations may not facially discriminate, without justification, against out-of-state producers of alcoholic beverages in favor of in-state producers." This last part is a nod to Granholm, as the horse is out of the barn on that one. But it doesn't expand it either.

5. Presumption of validity. This part puts the burden of proof on direct shipping litigants instead of the states. "The State or territorial law shall be accorded a strong presumption of validity...The party challenging the State or territorial law shall in all phases of any such legal action bear the burden of proving its invalidity by clear and convincing evidence."

6. And finally, the act amends the Wilson Act, striking ''to the same extent'' and all that follows through ''Territory." This makes it clear that the Wilson Act won't impede a state's right to regulate alcohol.

While the bill will likely set wineries, distilleries, and brewers hair on fire. The brewers have been lobbying heavily against it, we hear.

The NBWA sent a communique to distributors this evening which says that they spent "considerable time" working with the Beer Institute but that it "ended without an agreement." The filing of this bill, says NBWA, is the "logical next step as we work to advance the number one public policy and industry agenda item you have identified: addressing three-tier challenges and deregulatory litigation against the states."

What you think? Ping me as usual:

Until tomorrow, Harry

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