January 23, 1998



Mr. President:

    The Business, Labor, and Economic Development Committee reports a favorable recommendation on S.B. 73, BEER INDUSTRY DISTRIBUTION ACT, by Senator L. Blackham, with the following amendments:
1.    Page 1, Line 10:    After "REMEDIES;" delete "ADDRESSING APPLICABILITY;"


2.    Page 1, Line 11:    After "SEVERABILITY;" delete "AND" and after "DATE" insert "; AND PROVIDING A COORDINATION CLAUSE"

3.    Page 1, Line 18:    After line 18 insert " 32A-11a-105.5, Utah Code Annotated 1953"


4.    Page 1, Line 24:    Delete line 24

5.     Page 2, Line 7:    After "suppliers" delete "and" and insert ","

6.    Page 2, Line 8:    After "wholesalers" insert ", and retailers"

7.    Page 2, Line 17:    After "means any" insert "written"

8.    Page 2, Line 21:    After "(b)" insert:
        "A separate agreement between a supplier and a wholesaler that relates to the relationship between the supplier and the wholesaler or the duties of either of them under a distributorship agreement is considered to be part of the distributorship agreement for purposes of this chapter.
        (c)"

9.    Page 2, Line 26:    After line 26 insert:
        "(5) "Retailer" means a person subject to license under Chapter 10, Beer Retailer Licenses."

10.    Page 2, Line 27:    Delete "(5)" and insert "(6)"

11.    Page 2, Line 29:    Delete "(6)" and insert "(7)"

12.    Page 2, Line 31:    Delete "(7)" and insert "(8)"

13.    Page 4, Line 9:    After "more than" delete "20%" and insert "10%"

14.    Page 4, Line 15:    Delete line 15 and after line 15 delete "order involving" and insert "engages in intentional"

15.    Page 4, Line 25:    After "owner;" delete "and"

16.    Page 4, Line 26:    After "(b)" insert:
        "the offending owner was not materially involved in the management of the affected party; and
        (c)"

17.    Page 6, Line 5:    After line 5 insert:
        "Section 6. Section 32A-11a-105.5 is enacted to read:
         32A-11a-105.5. Prohibited conduct of wholesaler.
         (1) A wholesaler may not:
         (a) induce, coerce, or attempt to induce or coerce, any retailer to engage in any illegal act or course of conduct;
         (b) impose a requirement that is discriminatory by its terms or in the methods of enforcement as compared to requirements imposed by the wholesaler on similarly situated retailers;
         (c) prohibit a retailer from selling the product of any other wholesaler;
         (d) fix or maintain the price at which a retailer may resell beer;
         (e) require any retailer to accept delivery of any beer or any other item that is not voluntarily ordered by the retailer;
        (f) restrict or inhibit, directly or indirectly, the right of a retailer to participate in an organization representing interests of retailers for any lawful purpose;
        (g) require a retailer to participate in or contribute to any local,         regional, or national advertising fund or other promotional activity;
         (h) retaliate against a retailer that files a complaint with the department or the applicable federal agency regarding an alleged violation by the wholesaler of a state or federal law or administrative rule;
         (i) refuse to deliver beer products carried by the wholesaler to a properly licensed retailer who resides with the wholesaler's sales territory:
         (i) in reasonable quantities; and
         (ii) within a reasonable time after receipt of the retailer's order.
         (2) Notwithstanding Subsection (1)(i), the wholesaler may refuse to deliver products if the refusal is due to:
         (a) the retailer's failure to pay the wholesaler pursuant to Subsection 32A-12-603(17);
         (b) an unforeseeable event beyond the wholesaler's control;
         (c) a work stoppage or delay due to a strike or labor problem;
         (d) a bona fide shortage of materials; or
         (e) a freight embargo. "

18.    Page 6, Line 11:    After "the owner of" delete "a 10% or more" and insert "an"

19.    Page 6, Line 23:    After "supplier shall" delete "pay the wholesaler" and insert "be liable to the wholesaler for the laid-in cost of inventory of the affected brands plus any diminution in"

20.    Page 6, Line 27:    After "(2)(a)" delete "Either" and insert "A distributorship agreement may require that any or all disputes between a supplier and a wholesaler be submitted to binding arbitration. In the absence of an applicable arbitration provision in the distributorship agreement, either"

21.    Page 7, Line 3:    After "Subsection (2)(a)" insert "and the other party agrees to submit the matter to arbitration"
    
22.    Page 7, Line 26:    After "wholesalers to" insert
        ": (i) execute a new distributorship agreement; and
        (ii)"
23.    Page 7, Line 27:    Delete "(i)" and insert "(A)"

24.    Page 7, Line 28:    Delete "(ii)" and insert "(B)"

25.    Page 7, Line 30:    Delete "(iii)" and insert "(C)" and after "one year to" insert ": (I) execute a new distributorship agreement; and (II)"

26.    Page 8, Line 21:    After "(ii)" delete "neither party elects" and insert "the parties do not agree to submit the matter to"

27.    Page 9, Line 12-16:    Delete lines 12 through 16

28.    Page 9, Line 22:    After line 22 insert:
        "Section 15. Coordinating clause.
         It is the intent of the Legislature that the Office of Legislative Research and General Counsel, as part of enrolling, shall:
         (1) renumber the sections as whole numbers; and
         (2) correspondingly change the cross references to the sections renumbered by this coordinating clause."

         Renumber remaining sections accordingly.
        
        Respectfully,



        Steven Poulton
        Committee Chair



Voting: 5-0-1
3 SB0073.SC2 scarter/MCP PO/MCP 9:11 AM