July 24, 2012

LEGISLATIVE UPDATES

The 2012 legislative sessions are winding down in many states, but there are some updates from our “hot” states.
New Jersey: Only 33 Licenses Issued After Two Months
While the new shipping law went into effect May 1, onerous requirements are putting the brakes on winery registrations for shipper licenses. The NJ alcohol regulators reported that only 33 wineries had applied for shippers’ licenses as of July 6. This is far slower than Maryland, which had issued nearly 400 winery shippers’ licenses within two months of the availability of registration forms.
As previously reported, New Jersey added these requirements after the legislative process. The new rules have had an understandably chilling effect on wineries, some of which need to file as a foreign corporation, secure a registered agent, and pay annual NJ corporate income tax. Industry representatives are working with state regulators to assist them as they attempt to find workable solutions to these unexpected barriers.
Massachusetts: Down to the Wire with House Bill 1029
HB 1029, a positive direct shipping bill, was put on a second “extension order” in May for consideration later in the year. But industry representatives warn that the bill will be shelved unless it moves by the end of this month. There appears to be support for the bill if it can get a vote in the Assembly and Senate. But a squabble over unrelated bills stymies progress.
Pennsylvania: Bills Still Alive, But With Faults
Two bills are still under consideration, but both include an excessive tax structure despite continued negotiations. The bills tack on 6% sales plus 18% flood tax to a wine’s retail price. The shipping bills are separate and distinct from a package of privatization bills.
US House Resolution 1161: Little Activity
The wine wholesalers – represented by the Wine & Spirits Wholesalers of America — removed its support for the bill, which has not had a hearing in the U.S. House Judiciary Committee, or a Senate companion bill. Opposition came from many corners: more than 150 organizations opposed the bill, major news outlets carried negative editorials and Op Ed pieces, and tens of thousands of you sent letters to Congress using www.freethegrapes.org. (Thank you!)
The National Beer Wholesalers Association has not formally withdrawn their support for HR 1161.
United States Postal Service Bill
A bill to allow direct shipments through the postal service passed the U.S. Senate but is held up in the House.