AB 431 — Revises provisions governing alcoholic beverages. (BDR 52-1018)

(ReprintedAssembly withBill amendmentsNo. adopted on May 25, 2017) SECOND REPRINT A.B.

431431–Assemblywoman ABustamante SSEMBLYAdams BILLJoint NOSponsor: .

431–ASSEMBLYWOMANSenator BUSTAMANTESettelmeyer ACHAPTER.......... DAMS M ARCH 27, 2017 ____________ JOINT SPONSOR :

SENATOR SETTELMEYER ____________ Referred to Committee on Commerce and Labor SUMMARY—Revises provisions governing alcoholic beverages.

(BDR 52-1018) FISCAL NOTE:

Effect on Local Government:

No.

Effect on the State:

Yes.

~ EXPLANATION – Matter in bolded italics is new;

matter between brackets [omitted material] is material to be omitted.

Section 4 additionally authorizes a person who operates one or more brew pubs in thethis State to transport malt beverages atto a licensed person for the purpose of selling special event inas thisan State.event that lasts not longer than 1 calendar day and that occurs ata a farmers’ market or at an event designated as a county fair.

Section 3.5 of this bill defines a special event as an event that lasts not longer than 1 calendar day and that occurs at a farmers’ market or at an event designated as a county fair.

- *AB431_R2* – 2 – Section 9.5 of this bill requires the Department of Taxation to adopt and enforce regulations necessary to monitor the quantity of malt beverages manufactured pursuant to section 4.

Section 10 of this bill specifies that a person licensed to operate a brew pub may not engage in any other activity not authorized pursuant to section 4 for which a license is required unless the person holds thethed license for that activity.

Existing law authorizes a winery that is federally bonded and permitted by the Alcohol and Tobacco Tax and Trade Bureau of the United States Department of thehethe Treasury and that obtains a winemaker’s license from this State to:

(NRS 369.200, 597.240) Under federal regulations, an alternating proprietorship is the operation of one or more wineries by proprietors who use the same premises.

§ 24.136) Section 4.5 of this billbillroprietors specifically authorizes operation of a winery by an alternating proprietorship of not more than four proprietors that are federally bonded and permitted and that obtain ata winemaker’s license from this State to operate a winery in this State.

(Chapters 369 and 597 of NRS) Sections 1 and 9 of this bill include - 79th Session (2017) – 2 – breweries, brew pubs and craft distilleries located in this State within the definition of “supplier” and, thus, impose on such breweries, brew pubs and craft distilleries exempts certain smaller suppliers from the requirement to allow a wholesaler aill period of 60 days to correct any failure to comply with the terms of a franchise agreement between the supplier and the wholesaler.

Section 3 of this bill revises certain prohibitions imposed on a supplier by prohibiting a supplier from engaging in certain conduct in relation to a wholesaler who sells, distributes, markets, advertisesadvExisting orlaw promotesprohibits thea wholesale dealer of alcoholic beverages producedfrom byinvesting themoney, supplier.directly or indirectly in a retail liquor store.

Existing(NRS law369.485) prohibitsSection a12 wholesale dealer of alcoholic beverages from investing this bill prohibits the wholesale dealer from making such an investment through aofa subsidiary or agent.

EXPLANATION – Matter in bolded italics is new;

matter between brackets [omitted material] is material to be omitted.

Except as otherwise provided in subsection 4, if more than one franchise for the same brand or brands of malt beverages, distilled spirits and wines, or all of them, is granted to different wholesalers in this state, it is a violation of NRS 597.120 to 597.180, inclusive, for any supplier to discriminate between such - *AB431_R2* – 3 – wholesalers with respect to any of the terms, provisions and conditions of these franchises.

- 79th Session (2017) – 3 – 3.

[A] Except as otherwise provided in this subsection, a wholesaler may, within 60 days after he or she receives a notice required pursuant to NRS 597.155, correct any failure to comply with the terms, provisions and conditions of the franchise alleged by theless supplier.than 2,000 barrels of malt beverages, less than 250 cases oflls distilled spirits or less than 2,000 cases of wine in this State in any calendar year, or who operates a winery pursuant to NRS 597.240.

This subsection does not apply to a supplier who sells less than 2,000 barrels of malt beverages, less than 250 cases of distilled spirits or less than 2,000 cases of wine in this State in any calendar year, or who operates a winery pursuant to NRS 597.240.

Require a wholesaler to report to the supplier any of the wholesaler’s financial information associated with the purchase, sale or distribution of an alcoholic beverage of any other supplier;

- *AB431_R2* – 4 – [3.] 7.

- 79th Session (2017) – 4 – [5.] 9.

Discriminate against, penalize or otherwise retaliate against a wholesaler because the wholesaler raises, alleges or otherwise brings to the attention of the Department of Taxation an actual, potential or perceived violation of this chapter;

“Distillation” means the process of producing or purifying spirituousspi5.tuo“Engage liquorin” byincludes successiveparticipation evaporationin anda condensation.business as an owner or partner, or through a subsidiary, affiliate, ownership equity or in any other manner.

5.

“Engage in” includes participation in a business as an owner or partner, or through a subsidiary, affiliate, ownership equity or in any other manner.

- *AB431_R2* – 5 – 7.

- 79th Session (2017) – 5 – (1) A farmers’ market, as defined in NRS 244.336;

10.[10.] 11.ppl“Wine”as thasmetheng meaningd toascribedRS to7.it0.in NRS 369.140.

“Supplier” has the meaning ascribed to it in NRS 597.140.

[10.] 11.

“Wine” has the meaning ascribed to it in NRS 369.140.