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Alcohol Regulatory Roundup: St. Patrick's Hangover Edition

While you guzzled green beer and nursed the subsequent hangover, politicians and other interested parties were busy creating or preventing regulatory headaches of their own. In this post-St. Paddy’s edition of the alcohol regulatory roundup we see what’s on tap for booze regulation around the nation:

National news: In a one-two punch, the federal legislature and the U.S. Supreme Court took actions that could severely hinder interstate sales of alcohol; first with the rejection of an appeal in the courts and the introduction of legislation that would allow states to protect businesses from out-of-state competition:

The Supreme Court announced last week that it would not review a decision made by the Fifth Circuit. The appeal made by Wine Country Gift Baskets was to review the case of Wine Country Gift Baskets v. Steen—a decision that upheld a Texas law that was clearly discriminatory and meant to protect Texas’s in-state liquor retailers from out-of-state competition. As Cato’s Ilya Shapiro writes, the point of the Commerce Clause was to protect free trade.

The Court held that, notwithstanding a provision in the 21st Amendment (which repealed prohibition) that allows states to regulate their own liquor industries, the Commerce Clause prohibits states from disrupting free trade by discriminating against out-of-state businesses in favor of in-state businesses. This interpretation of the Commerce Clause grew out of the common-sense understanding that, if left unchecked, state governments have strong incentives to protect in-state businesses (who are voters) at the expense of their (non-voting) out-of-state competitors.

Nevertheless, the Fifth Circuit decided to limit Granholm to wine producers. As is evident by the name, however, the Wine Country Gift Baskets.com case concerns a wine retailer. Yet Granholm explicitly said that states "may not enact laws that burden out-of-state producers or shippers simply to give a competitive advantage to in-state businesses.” It is dismaying that the Supreme Court didn't care about the Fifth Circuit’s neglect of this language.

Also, a coalition of Congressmen introduced the Community Alcohol Regulatory Effectiveness Act of 2011, or "CARE" Act, in the House.  The goal of the CARE Act of 2011 is to recognize and reaffirm that alcohol is different from other consumer products and that it should continue to be regulated by the states.A new version of last session's CARE act was introduced HR 1161 was introduced in the House. As my colleague Angela Logomasini and I have both written, the Comprehensive Alcohol Regulatory Effectiveness (aka the CARE act) would give states unprecedented, unwarranted powers to regulate wine in interstate commerce.

Colorado: While Hinkenlooper is catching flak for making the Colorado Department of Revenue alter recently revised rules that prevent bars and restaurants from selling low alcohol beer, republican legislators announced new legislation that would do away with the 3.2% ABV limit on beer, allowing grocery and convenience stores to sell full-strength beer.
Georgia: The Georgia state Senate this week passed legislation allowing local ballots to add a vote for Sunday sales. If the state House approves the bill local election can add the ballot measure to elections.

Connecticut: Sunday sales bill dead...again. The state's General Law Committee killed the measure Tuesday despite the fact that voters support 66 percent to 31 percent allowing liquor stores to open on Sunday (according to a recent Quinnipiac poll)

Kansas: Senate bill 54, which would allow alcohol sales in grocery, convenience and big box stores, could be up for a full Senate vote any day now. Current Kansas law allows only liquor stores to sell hard liquor and strong beer.  Opponents of the measure argue that grocery store sales could force about half of the state’s 766 liquor stores to close. Yet, a study by an economics professor at Kansas University says that the measure would have positive economic benefits, adding 15,000 jobs and $70million in tax revenue.

Maryland: With increasing support for change, 2011 might just be the year that Marylanders can finally have wine directly shipped to their homes.

Minnesota: Legislation that would allow Minnesota liquor stores to open on Sundays will get its first legislative hearing next Wednesday.  Minnesota is one of 14 states that ban liquor stores from being open on Sundays. Like Colorado, Minnesotans may purchase beer at grocery stores only if it 3.2% ABV or less. While the measure to liberate Sunday sales still has a long way to go the measure has made it farther than previous attempts already.

Texas: While wine and beer retailers may remain open on Sundays, liquor sales are banned in the state on Sundays. Senate bill 595 would give liquor stores the option of remaining open on Sundays and while some argue about the amount of revenue the measure would draw others, such as owners of stores carrying wine, beer, and liquor, argue that it would help them compete in the market. Additionally, Democratic Senator Rodney Ellis who supports SB 595 said it is a matter of principle: “From my vantage point, I don't think the government ought to be mandating when a business opens."

Utah: The Utah Senate passed SB 314 which changes when liquor can be served, increase liquor licenses for restaurants and bans mini-kegs. According to the sponsor of the bill, Senator John Valentine, the point was to encourage people to drink while they are eating.