Alabama Senate Bill SB194 Introduced / Bill

                    SB194INTRODUCED
Page 0
N3G08T-1
By Senators Livingston, Singleton
RFD: Tourism
First Read: 11-Apr-23
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5 N3G08T-1 04/06/2023 PMG (L) tgw 2022-5161
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SYNOPSIS: 
Existing law makes no specific provisions
regarding the retail sale, wholesale, or tax on the
sale of low-alcohol by volume content beverages from
liquor. These beverages are not available for
distribution through beer and table wine wholesalers.
This bill would define a new category of ready
to drink mixed liquor beverages containing no more than
12.5 percent alcohol by volume called "mixed spirit
beverages." 
This bill would require all mixed spirit
beverages, other than those distributed by the
Alcoholic Beverage Control Board, to be distributed
through a licensed wholesaler and sold to licensed
retailers in Alabama for on-premises and off-premises
consumption.
This bill would require each importer and
manufacturer of mixed spirit beverages to designate
sales territories for each of its brands and enter into
an exclusive franchise agreement with a licensed
wholesaler for each sales territory.
This bill would set conditions and requirements
for franchise agreements between suppliers and
wholesale distributors of mixed spirit beverages,
including provisions for the modification, termination,
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cancellation, nonrenewal, or discontinuance of an
agreement.
This bill would provide for the levy of a
privilege or excise tax on mixed spirit beverages.
This bill would also make nonsubstantive,
technical revisions to update the existing code
language to current style.
A BILL
TO BE ENTITLED
AN ACT
Relating to alcoholic beverages; to amend Sections
28-3-1, 28-3A-3, 28-3A-21, and 28-3A-23, Code of Alabama 1975
and add Sections 28-3-208, 28-3A-9.1, and 28-3A-17.2 to the
Code of Alabama 1975; to define a new category of low-alcohol
content liquor beverages called mixed spirit beverages; to
require all mixed spirit beverages, other than those
distributed by the Alcoholic Beverage Control Board, to be
distributed through a licensed wholesaler; to levy taxes upon
the distribution of these beverages; to provide for licensure
of retailers of mixed spirit beverages and set a fee for
licensure; to add Chapter 8B to Title 28 of the Code of
Alabama 1975; to require licensed importers, manufacturers,
and suppliers of mixed spirit beverages to enter into
exclusive franchise agreements with wholesalers; to exempt
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from the wholesaler franchise laws mixed spirit beverages
distributed by the Alcoholic Beverage Control Board and sold
at retail at ABC stores; and to make nonsubstantive, technical
revisions to update the existing code language to current
style. 
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. The Legislature hereby finds and declares
that this act is enacted pursuant to the authority granted to
the state under the Twenty-First Amendment to the United
States Constitution, the powers reserved to the state under
the Tenth Amendment to the United States Constitution, and the
inherent powers of the state under the Constitution of Alabama
of 2022, in order to regulate the traffic of alcoholic
beverages and to substitute the regulations and oversight
established in this act for the application of federal and
state antitrust laws that otherwise would apply to any
potential anti-competitive effects of this title. For the
avoidance of doubt, the intent of the Legislature is to
maintain the uniform three-tier system of control over the
sale, purchase, taxation, transportation, manufacture,
consumption, and possession of alcoholic beverages in the
state to promote the health, safety, and welfare of residents
of this state by, among other purposes, ensuring the state
shall be able to register, audit, inspect, seize, recall, and
test alcoholic beverages shipped into, distributed, and sold
throughout this state; and this expression of the policy and
intent of the Legislature is intended to satisfy the clear
articulation test for state action immunity as has been
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established by the United States Supreme Court in California
Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc., et al.
Section 2. Section 28-3-1, Code of Alabama 1975, is
amended to read as follows:
"§28-3-1
As used in this title, the following words shall have
the following meanings unless the context clearly indicates
otherwise:
(1) ALCOHOLIC BEVERAGES. Any alcoholic, spirituous,
vinous, fermented, or other alcoholic beverage, or combination
of liquors and mixed liquor, a part of which is spirituous,
vinous, fermented, or otherwise alcoholic, and all drinks or
drinkable liquids, preparations , or mixtures intended for
beverage purposes, which contain one-half of one percent or
more of alcohol by volume , and shall include . The term
includes liquor, beer, and wine, and mixed spirit beverages .
(2) ASSOCIATION. A partnership, limited partnership, or
any form of unincorporated enterprise owned by two or more
persons.
(3) BEER, or MALT OR BREWED BEVERAGES. Any beer, lager
beer, ale, porter, malt or brewed beverage, or similar
fermented beverage containing one-half of one percent or more
of alcohol by volume and not in excess of thirteen and
nine-tenths 13.9 percent alcohol by volume, brewed or produced
from malt, wholly or in part, or from rice, grain of any kind,
bran, glucose, sugar, or molasses. A beer or malt or brewed
beverage may incorporate honey, fruit, fruit juice, fruit
concentrate, herbs, spices, or other flavorings during the
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fermentation process. The term does not include any product
defined as liquor, table wine, or wine.
(4) BOARD. The Alcoholic Beverage Control Board.
(5) BRANDY. All beverages that are an alcoholic
distillate from the fermented juice, mash, or wine of fruit,
or from the residue thereof, produced in such manner that the
distillate possesses the taste, aroma, and characteristics
generally attributed to the beverage, as bottled at not less
than 80 degree proof.
(6) CARTON. The package or container or containers in
which alcoholic beverages are originally packaged for shipment
to market by the manufacturer or its designated
representatives or the importer.
(7) CIDER. A fermented alcoholic beverage made from
apple juice and containing not more than 8.5 percent alcohol
by volume.
(8) CLUB.
a. Class I. A corporation or association organized or
formed in good faith by authority of law and which must have
at least 150 paid-up members. It must be the owner, lessee, or
occupant of an establishment operated solely for the objects
of a national, social, patriotic, political, or athletic
nature or the like, but not for pecuniary gain, and the
property as well as the advantages of which, belong to all the
members and which maintains an establishment provided with
special space and accommodations where, in consideration of
payment, food with or without lodging is habitually served.
The club shall hold regular meetings, continue its business
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through officers regularly elected, admit members by written
application, investigation, and ballot, and charge and collect
dues from elected members.
b. Class II. A corporation or association organized or
formed in good faith by authority of law and which must have
at least 100 paid-up members. It must be the owner, lessee, or
occupant of an establishment operated solely for the objects
of a national, social, patriotic, political, or athletic
nature or the like. The club shall hold regular meetings,
continue its business through officers regularly elected,
admit members by written application, investigation, and
ballot, and charge and collect dues from elected members.
(9) CONTAINER. The single bottle, can, keg, bag, or
other receptacle, but not a carton, in which alcoholic
beverages are originally packaged for the market by the
manufacturer or importer and from which the alcoholic beverage
is consumed by or dispensed to the public.
(10) CORPORATION. A corporation or joint stock
association organized under the laws of this state, the United
States, or any other state, territory , or foreign country, or
dependency.
(11) DELIVERY. The transportation of alcoholic
beverages directly from a retail licensee of the board to an
individual, pursuant to Section 28-1-4 and Section 28-3A-13.1.
(12) DELIVERY SERVICE LICENSE. A license issued by the
Alabama Alcoholic Beverage Control Board in accordance with
Section 28-3A-13.1 that authorizes the licensee, the
licensee's employees, or independent contractors under a
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contractual or business arrangement with the licensee to
transport and deliver alcoholic beverages.
(13) DRY COUNTY. Any county which by a majority of
those voting voted in the negative in an election heretofore
held under the applicable statutes at the time of the election
or may hereafter vote in the negative in an election or
special method referendum hereafter held in accordance with
Chapter 2, or held in accordance with the provisions of any
act hereafter enacted permitting such election.
(14) DRY MUNICIPALITY. Any municipality within a wet
county which has, by its governing body or by a majority of
those voting in a municipal election heretofore held in
accordance with the provisions of Section 28-2-22, or in a
municipal option election heretofore or hereafter held in
accordance with the provisions of Act 84-408, Acts of Alabama
1984, appearing as Chapter 2A, or any act hereafter enacted
permitting municipal option election, voted to exclude the
sale of alcoholic beverages within the corporate limits of the
municipality.
(15) EMPLOYEE. An individual to whom an employer is
required to issue a W-2 tax form under federal law.
(16) GENERAL WELFARE PURPOSES. All of the following:
a. The administration of public assistance as set out
in Sections 38-2-5 and 38-4-1.
b. Services, including supplementation and
supplementary services under the federal Social Security Act,
to or on behalf of persons to whom public assistance may be
given under Sections 38-2-5 and 38-4-1.
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c. Service to and on behalf of dependent, neglected, or
delinquent children.
d. Investigative and referral services to and on behalf
of needy persons.
(17) HEARING COMMISSION. A body appointed by the board
to hear and decide all contested license applications and all
disciplinary charges against any licensee for violation of
this title or the rules of the board.
(18) HOTEL. A building or buildings held out to the
public for housing accommodations of travelers or transients,
and shall include motel, but shall not include a rooming house
or boarding house.
(19) IMPORTER. Any person, association, or corporation
engaged in importing alcoholic beverages, liquor, wine, 	or
beer, or mixed spirit beverages manufactured outside of the
United States of America into this state or for sale or
distribution in this state, or to the board or to a licensee
of the board.
(20) INDEPENDENT CONTRACTOR. An individual to whom an
employer is required to issue a 1099 tax form under federal
law.
(21) KEG. A pressurized factory sealed container with a
capacity equal to or greater than five U.S. gallons, from
which beer is withdrawn by means of an external tap.
(22) LIQUOR. Any alcoholic, spirituous, vinous,
fermented, or other alcoholic beverage, or combination of
liquors and mixed liquor, a part of which is spirituous,
fermented, vinous, or otherwise alcoholic, and all drinks or
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drinkable liquids, preparations, or mixtures intended for
beverage purposes, which contain one-half of one percent or
more of alcohol by volume, except beer and table wine.
(23) LIQUOR STORE. A liquor store operated by the
board, where alcoholic beverages other than beer are
authorized to be sold in unopened containers.
(24) MANUFACTURER. Any person, association, or
corporation engaged in the producing, bottling, manufacturing,
distilling, fermenting, brewing, rectifying, or compounding of
alcoholic beverages, liquor, beer, or wine, or mixed spirit
beverages in this state or for sale or distribution in this
state or to the board or to a licensee of the board.
(25) MEAD. An alcoholic beverage produced by fermenting
a solution of honey and water with grain mash and containing
not more than 18 percent alcohol by volume.
(26) MEAL. A diversified selection of food some of
which is not susceptible of being consumed in the absence of
at least some articles of tableware and which cannot be
conveniently consumed while one is standing or walking about.
(27) MINOR. Any person under 21 years of age; provided,
however, in the event Section 28-1-5 , shall be repealed or
otherwise shall be no longer in effect, thereafter the
provisions of Section 26-1-1, shall govern.
(28) MIXED SPIRIT BEVERAGE. A single-serve beverage
containing liquor, packaged in a can or a container approved
by the board no larger than 16 ounces, and which contains no
more than 12.5 percent alcohol by volume. The term does not
include any beverage containing liquor over 16 ounces in size,
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or of more than 12.5 percent alcohol by volume.
(28)(29) MUNICIPALITY. Any incorporated city or town of
this state to include its police jurisdiction.
(29)(30) PERSON. Every natural person, association, or
corporation. Whenever used in a clause prescribing or imposing
a fine or imprisonment, or both, such term as applied to
association shall mean the partners or members thereof and as
applied to corporation shall mean the officers thereof, except
as to incorporated clubs the term person shall mean such
individual or individuals who, under the bylaws of such clubs,
shall have jurisdiction over the possession and sale of liquor
therein.
(30)(31) POPULATION. The population according to the
last preceding or any subsequent decennial census of the
United States, except where a municipality is incorporated
subsequent to the last census, in which event, its population
until the next decennial census shall be the population of the
municipality as determined by the judge of probate of the
county as the official population on the date of its
incorporation.
(31)(32) RESTAURANT. A reputable place licensed as a
restaurant, operated by a responsible person of good
reputation and habitually and principally used for the purpose
of preparing and serving meals for the public to consume on
the premises.
(32)(33) RETAILER. Any person licensed by the board to
engage in the retail sale of any alcoholic beverages to the
consumer.
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(33)(34) SALE or SELL. Any transfer of liquor, wine ,or
beer, or mixed spirit beverages for a consideration, and any
gift in connection with, or as a part of, a transfer of
property other than liquor, wine, or beer, or mixed spirit
beverages for a consideration.
(34)(35) SELLING PRICE. The total marked-up price of
spirituous or vinous liquors sold by the board, exclusive of
taxes levied thereon.
(35)(36) TABLE WINE. Except as otherwise provided in
this subdivision, any wine containing not more than 24 percent
alcohol by volume. Table wine does not include any wine
containing more than sixteen and one-half 16.5 percent alcohol
by volume that is made with herbs or flavors, except vermouth,
or is an imitation or other than standard wine. Table wine is
not liquor, spirituous, or vinous.
(36)(37) UNOPENED CONTAINER. A container containing
alcoholic beverages, which has not been opened or unsealed
subsequent to filling and sealing by the manufacturer or
importer.
(37)(38) WET COUNTY. Any county which by a majority of
those voting voted in the affirmative in an election
heretofore held in accordance with the statutes applicable at
the time of the election or may hereafter vote in the
affirmative in an election or special method referendum held
in accordance with Chapter 2, or other statutes applicable at
the time of the election.
(38)(39) WET MUNICIPALITY. Any municipality in a dry
county which by a majority of those voting voted in the
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affirmative in a municipal option election heretofore or
hereafter held in accordance with the provisions of Act
84-408, Acts of Alabama 1984, appearing as Chapter 2A of this
title, as amended, or any act hereafter enacted permitting
municipal option election, or any municipality which became
wet by vote of the governing body or by the voters of the
municipality heretofore or hereafter held under the special
method referendum provisions of Section 28-2-22, or as
hereafter provided, where the county has become dry subsequent
to the elected wet status of the municipality.
(39)(40) WHOLESALER. Any person licensed by the board
to engage in the sale and distribution of table wine ,and
beer, or mixed spirit beverages, or either of them any
combination thereof , within this state, at wholesale only, to
be sold by export or to retail licensees or other wholesale
licensees or others within this state lawfully authorized to
sell table wine,and beer, or mixed spirit beverages, or
either of them any combination thereof , for the purpose of
resale only.
(40)(41) WINE. All beverages made from the fermentation
of fruits, berries, or grapes, with or without added spirits,
and produced in accordance with the laws and regulations of
the United States, containing not more than 24 percent alcohol
by volume, and shall include all sparkling wines, carbonated
wines, special natural wines, rectified wines, vermouths,
vinous beverages, vinous liquors, and like products, including
restored or unrestored pure condensed juice."
Section 3. Section 28-3-208 is added to the Code of
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Alabama 1975, to read as follows:
§28-3-208
(a) Levy. There is hereby levied, in addition to the
license taxes provided for by this chapter and municipal and
county license taxes, a privilege or excise tax measured by
and graduated in accordance with the volume of sales of mixed
spirit beverages. The tax shall be an amount equal to
ninety-eight cents ($.98) per 12 fluid ounces or fractional
part thereof.
(b) Collection, Monthly Return, Remittance, Right to
Examine Books and Records.
(1)a. The tax levied by subsection (a) shall be added
to the sales price of all mixed spirit beverages and shall be
collected from the retail purchasers. The tax shall be
collected in the first instance from the wholesaler where
mixed spirit beverages are sold or handled by wholesale
licensees.
b. It shall be unlawful for any person who is required
to pay the tax in the first instance to fail or refuse to add
to the sales price and collect from the purchaser the required
amount of tax, it being the intent and purpose of this section
that the tax levied is in fact a levy on the retail purchaser.
The person who pays the tax in the first instance is acting as
an agent of the state for the collection and payment of the
tax and as such may not collect a tax on mixed spirit
beverages for any other level of government.
(2) The tax levied by subsection (a) shall be collected
by a monthly return, which shall be filed by wholesale
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licensees as follows: 
a. A monthly return shall be filed with the board on a
form as prescribed or approved by the board by rule not later
than the 15th day of the second month following the month of
receipt of mixed spirit beverages by the wholesaler, showing
receipts by the wholesaler from manufacturer, importer, or
other wholesaler licensees during the month of receipt and the
taxes due thereon at the rate of ninety cents ($.90) per 12
fluid ounces or fractional part thereof of mixed spirit
beverages purchased by the wholesaler licensee. The taxes due
under this paragraph shall be remitted to the board along with
the return. 
b. A monthly return shall be filed with the county or
municipality within which the mixed spirit beverage is sold at
retail not later than the 15th day of each month, showing
sales by wholesalers during the preceding month and the county
or municipality in which sold and the taxes due thereon at the
rate of eight cents ($.08) per 12 fluid ounces or fractional
part thereof. The taxes due under this paragraph shall be
remitted to the county or municipality along with the return.
(3) The board and the governing body of each county and
municipality served by the wholesaler may examine the books
and records of any person who sells, stores, or receives for
the purpose of distribution any mixed spirit beverages, to
determine the accuracy of any return required to be filed with
it.
(c) Disposition of proceeds. The proceeds of the tax
levied by subsection (a) and remitted by subsection (b) shall
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be paid and distributed as follows:
(1) Sixty-five cents ($.65) per 12 fluid ounces or
fractional part thereof of mixed spirit beverages taxes
remitted by wholesalers to the board shall be deposited by the
board to the State General Fund.
(2) Ten cents ($.10) per 12 fluid ounces or fractional
part thereof of mixed spirit beverages taxes remitted by
wholesalers to the board shall be retained by the board for
regulatory and administrative purposes.
(3) Fifteen cents ($.15) per 12 fluid ounces or
fractional part thereof of mixed spirit beverages taxes
remitted by wholesalers to the board shall be remitted by
wholesalers and divided equally between the board and the
Alabama State Law Enforcement Agency to be retained by each
for purposes of enforcement.
(4) Eight cents ($.08) per 12 fluid ounces or
fractional part thereof of mixed spirit beverages sold shall
be remitted by wholesalers either into the treasury of the
municipality in which the mixed spirit beverages were sold
within its corporate limits or, where sold outside the
corporate limits of any municipality, into the treasury of the
county in which the mixed spirit beverages were sold;
provided, where the taxes are timely paid to the county or
municipality, the tax due to the county or municipality shall
be discounted by two and one-half percent, which discount
shall be retained by the wholesaler for collecting the tax.
(d) Taxes exclusive. The taxes levied pursuant to this
section are exclusive and shall be in lieu of all other and
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additional taxes and licenses of the state, county, or
municipality imposed on or measured by the sale or volume of
sale of mixed spirit beverages; provided, however, nothing
contained in this section shall be construed to exempt the
retail sale of mixed spirit beverages from the levy of tax on
general retail sales by the state, county, or municipality in
the nature of, or in lieu of, a general sales tax.
(e) Trade between wholesalers exempt. The taxes levied
by subsection (a) shall not be imposed upon the sale, trade,
or barter of mixed spirit beverages by one licensed wholesaler
to another wholesaler licensed to sell and handle mixed spirit
beverages in this state, which transaction is hereby made
exempt from the tax; provided, however, the board may require
written reporting of any transaction in the form as the board
by rule may prescribe.
(f) County and municipal license fees.  Each county and
municipality may fix a reasonable privilege or license fee on
retailer, importer, and wholesaler licensees, for the purpose
of covering the cost of administration with respect to the
sale of mixed spirit beverages, but not to generate revenue;
provided, however, a county or municipality may not levy a
license or privilege tax or other charge for the privilege of
doing business as a mixed spirit beverages retailer, importer,
or wholesaler which exceeds one-half the amount of the state
license fee.
Section 4. Section 28-3A-3, Code of Alabama 1975, is
amended to read as follows:
"§28-3A-3
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(a)(1) Subject to this chapter and rules adopted
thereunder, the board may issue and renew licenses to
reputable and responsible persons for the following purposes:
(1)a. To manufacture, brew, distill, ferment, rectify,
bottle, or compound any or all alcoholic beverages within or
for sale within this state.
(2)b. To import any or all alcoholic beverages
manufactured outside the United States into this state or for
sale or distribution within this state.
(3)c. To distribute, wholesale, or act as jobber for
the sale of liquor.
(4)d. To distribute, wholesale, or act as jobber for
the sale of table wine and beer or either of them, to licensed
retailers within the state and others within this state
lawfully authorized to sell table wine or beer.
(5)e. To store or warehouse any or all alcoholic
beverages for transshipment inside and outside the state.
(6)f. To sell and dispense at retail in a lounge,
liquor and other alcoholic beverages.
(7)g. To sell and dispense at retail , in an
establishment habitually and principally used for the purpose
of providing meals for the public, liquor and other alcoholic
beverages for on-premises consumption.
(8)h. To sell liquor and wine at retail for
off-premises consumption.
(9)i. To sell and dispense at retail in a club, liquor
and other alcoholic beverages for on-premises consumption.
(10)j. To sell table wine at retail for off-premises
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consumption.
(11)k. To sell table wine at retail for on-premises and
off-premises consumption.
(12)l. To sell beer at retail for on-premises and
off-premises consumption.
(13)m. To sell beer at retail for off-premises
consumption.
n. To sell mixed spirit beverages at retail for
on-premises and off-premises consumption.
o. To sell mixed spirit beverages at retail for
off-premises consumption.
(14)p. To sell liquor and other alcoholic beverages at
retail by a retail common carrier with a passenger capacity of
at least 10 people.
(15)q. To sell any or all alcoholic beverages at retail
under special license issued conditioned upon terms and
conditions and for the period of time prescribed by the board.
(16)r. To sell any or all alcoholic beverages at retail
under a special event retail license issued for three days
upon the terms and conditions prescribed by the board.
(2) Provided, however, that the Notwithstanding
subdivision (1), licenses authorized under subdivision (1) may
not be issued in dry counties where traffic in alcoholic
beverages is not authorized by law ,therein except a wine
manufacturer license may be issued in a dry county pursuant to
Section 28-7-10.1. Provided the restriction of this
paragraphsubdivision shall not apply to the issuance of a
renewal of a license under subdivisions (1), (2), (3), (4),
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and (5)paragraphs (1)a., (1)b., (1)c., (1)d., or (1)e. where
the county or municipality was wet when the initial license
was issued and the county or municipality subsequently votes
dry; however, no importer or wholesaler licensee may sell or
distribute alcoholic beverages within a dry county, except in
a wet municipality therein, or within a dry municipality.
(b) The board is granted discretionary powers in acting
upon license applications under the provisions of this
chapter.
(c) Licenses issued under this chapter, unless revoked
or suspended in the manner provided in this chapter, shall be
valid for the license year which shall begin on the first day
of October of each year, unless otherwise established by this
chapter or by the board. Licenses may be issued at any time
during the year."
Section 5.Sections 28-3A-9.1 and 28-3A-17.2 are added
to the Code of Alabama 1975, to read as follows:
§28-3A-9.1
(a) Upon payment of the applicable fee for a mixed
spirit beverage wholesaler license as established in Section
28-3A-21, the board shall issue to a wholesaler licensed to
distribute beer or table wine as provided in Section 28-3A-9 a
mixed spirit beverage wholesaler license.
(b) A mixed spirit beverage wholesale license shall
authorize the licensee to do all of the following:
(1) Import and receive shipments of mixed spirit
beverages from outside the state from licensed manufacturers.
(2) Purchase mixed spirit beverages from licensed
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manufacturers or other licensed wholesalers within the state.
(3) Sell at wholesale or distribute mixed spirit
beverages to all licensees or other persons within this state
lawfully authorized to sell mixed spirit beverages within the
state.
(4) Export mixed spirit beverages from the state.
(c) Sales to all authorized persons shall be in
original packages or containers as prepared for the market by
the manufacturer.
(d)(1) Except as provided in subdivision (2), no person
shall sell at wholesale or distribute mixed spirit beverages
within this state or to licensees of the board unless the
person is issued by the board a wholesaler license to
distribute mixed spirit beverages.
(2) Notwithstanding this section, Section 28-3A-17.2,
or Chapter 8B, the board shall have the authority to act as a
wholesaler of mixed spirit beverages, provided the board, as a
wholesaler, shall only distribute mixed spirit beverages to
liquor stores operated by the board. 
§28-3A-17.2
(a) Upon payment of the limited mixed spirit beverage
expanded retail license fee as established in Section
28-3A-21, the board shall issue a limited mixed spirit
beverage expanded retail license to any person who holds and
possesses any of the following:
(1) A valid retail table wine license for on-premises
and off-premises consumption as provided for in Section
28-3A-14.
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(2) A valid retail table wine license for off-premises
consumption as provided for in Section 28-3A-15.
(3) A valid retail beer license for on-premises and
off-premises consumption as provided for in Section 28-3A-16.
(4) A valid retail beer license for off-premises
consumption as provided for in Section 28-3A-17.
(b) Upon written request to the board and without
payment of any additional fee, the board shall issue a limited
mixed spirit beverage expanded retail license to any person
who holds and possesses any of the following:
(1) A valid lounge retail liquor license as provided
for in Section 28-3A-11.
(2) A valid club liquor license as provided for in
Section 28-3A-12.
(3) A valid restaurant retail liquor license as
provided for in Section 28-3A-13.
(4) A special events retail license as provided for in
Section 28-3A-20.
(c) A license issued under this section shall authorize
the licensee to purchase mixed spirit beverages from a
licensed mixed spirit beverage wholesaler and sell the mixed
spirit beverages at retail, commensurate with the privileges
granted to a licensee to sell at retail beer and table wine.
(d) The board shall retain all limited mixed spirit
beverage expanded retail license fees collected. The board may
use collected fees for regulatory and administrative purposes
as determined by the board, including for the purposes of
establishing and maintaining a cost of evidence fund to assist
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in regulatory functions of the board.
(e) Upon payment of a limited mixed spirit beverage
expanded retail license fee, there shall be no additional
licensing or administrative requirements, including no
requirement for additional background checks, imposed by a
municipality, a county, or the state for licensees for the
sale of mixed spirit beverages.
Section 6. Sections 28-3A-21 and 28-3A-23, Code of
Alabama 1975, are amended to read as follows:
"§28-3A-21
(a) The following annual license fees are levied and
prescribed for licenses issued and renewed by the board
pursuant to the authority contained in this chapter:
(1) Manufacturer license, license fee of five hundred
dollars ($500).
(2) Importer license, license fee of five hundred
dollars ($500).
(3) Liquor wholesale license, license fee of five
hundred dollars ($500).
(4) Wholesaler Beer wholesaler license, beer license
fee of five hundred fifty dollars ($550) or wine license fee
of five hundred fifty dollars ($550); license fee for beer and
wine of seven hundred fifty dollars ($750); plus two hundred
dollars ($200) for each warehouse in addition to the principal
warehouse.
(5) Wine wholesaler license, license fee of five
hundred fifty dollars ($550) plus two hundred dollars ($200)
for each warehouse in addition to the principal warehouse.
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(6) Mixed spirit beverage wholesaler license, license
fee of five hundred fifty dollars ($550) plus two hundred
dollars ($200) for each warehouse in addition to the principal
warehouse.
(7) Beer, wine, and mixed spirit beverage wholesaler
license, license fee of one thousand dollars ($1,000) plus two
hundred dollars ($200) for each warehouse in addition to the
principal warehouse.
(5)(8) Warehouse license, license fee of two hundred
dollars ($200).
(6)(9) Lounge retail liquor license, license fee of
three hundred dollars ($300).
(7)(10) Restaurant retail liquor license, license fee
of three hundred dollars ($300).
(8)(11) Club liquor license, Class I license fee of
three hundred dollars ($300), Class II license fee of seven
hundred fifty dollars ($750).
(9)(12) Retail table wine license for off-premises
consumption, license fee of one hundred fifty dollars ($150).
(10)(13) Retail table wine license for on-premises and
off-premises consumption, license fee of one hundred fifty
dollars ($150).
(11)(14) Retail beer license for on-premises and
off-premises consumption, license fee of one hundred fifty
dollars ($150).
(12)(15) Retail beer license for off-premises
consumption, license fee of one hundred fifty dollars ($150).
(13)(16) Retail common carrier liquor license, license
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fee of one hundred fifty dollars ($150) for each railroad,
airline, bus line, ship line, vessel , or other common carrier
entity with a vehicle passenger capacity of at least 10
people.
(14)(17) Special retail license, license fee of one
hundred dollars ($100) for 30 days or less; license fee of two
hundred fifty dollars ($250) for more than 30 days.
(15)(18) Special events retail license, license fee of
one hundred fifty dollars ($150).
(19) Limited mixed spirit beverage expanded retail
license, license fee of five hundred dollars ($500).
(b) The license fees levied and fixed by this section
shall be paid before the license is issued or renewed.
(c) In addition to the foregoing filing fee and license
taxes or fees,levied and fixed by this section, any county or
municipality in which the sale of alcoholic beverages is
permitted shall be authorized to may fix and levy privileges
or license taxes on any of the foregoing licenses located or
operated therein, conditioned on a permit or license being
issued by the board.
(d) No county or municipality shall have any authority
to levy a license or tax of any nature on any liquor store."
"§28-3A-23
(a) No license prescribed in this code chapter shall be
issued or renewed until the provisions of this code title have
been complied with and the filing and license fees other than
those levied by a municipality are paid to the board.
(b) Licenses shall be granted and issued by the board
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only to reputable individuals, to associations whose members
are reputable individuals, or to reputable corporations
organized under the laws of this state or duly qualified
thereunder to do business in Alabama, or, in the case of
manufacturers, duly registered under the laws of Alabama, and
then only when it appears that all officers and directors of
the corporation are reputable individuals.
(c)(1) In addition to all other requirements, an
applicant for a license under this section shall submit to the
board a form, sworn to by the applicant, providing written
consent from the applicant for the release of criminal history
background information. The form shall also require the
applicant's name, date of birth, and Social Security number
for completion of a criminal history background check.
(2) An applicant shall provide the board with two
complete functional sets of fingerprints, either cards or
electronic, properly executed by a criminal justice agency or
an individual properly trained in fingerprinting techniques.
The fingerprints and form shall be submitted by the board to
the State Bureau of Investigations, or any entity contracted
with, for the purposes of furnishing criminal background
checks. The State Bureau of Investigations or contracted
entity shall forward a copy of the applicant's prints to the
Federal Bureau of Investigation for a national criminal
background check. The applicant shall pay all costs associated
with the background checks required by this section.
(3) For purposes of this section, the term "applicant"
shall include every person who has any proprietary or profit
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interest of 10 percent or more in the licensed establishment,
but shall not include any public corporation whose shares are
traded on a recognized stock exchange.
(4) The board shall keep information received pursuant
to this section confidential, except that information received
and relied upon in denying the issuance of a license in this
state may be disclosed as may be necessary to support the
denial or when subpoenaed from a court.
(d) Every license issued under this code chapter shall
be constantly and conspicuously displayed on the licensed
premises.
(e) Each retail liquor license application must be
approved by the governing authority of the municipality if the
retailer is located in a municipality, or by the county
commission if the retailer is located in the county and
outside the limits of the municipality , before the board shall
have authority to grant the license.
(f) Any retailer may be granted licenses to maintain,
operate, or conduct any number of places for the sale of
alcoholic beverages, but a separate license must be secured
for each place where alcoholic beverages are sold. No retail
license issued under this code chapter shall be used for more
than one premises, nor for separate types of operation on the
same premises. Provided, however, any such licensed retail
operation existing on May 14, 2009, and operating based on
dual licenses, both a club or lounge license and a restaurant
license, on the same premises shall be exempt from the
requirement of the preceding sentence and may continue to
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operate under such dual licenses. Any rule adopted by the
board relating to the requirements concerning dual licenses,
both a club or lounge license and a restaurant license, shall
not apply to any retail operation existing on May 14, 2009.
The aforementioned rules shall include, but not be limited to,
the maintenance of separate books, separate entrances, and
separate inventories. Each premises must have a separate
retail license. Where more than one retail operation is
located within the same building, each operation under a
separate or different ownership is required to obtain a
separate retail license; and where more than one type of
retail operation located within the same building is operated
by the same licensee, the licensee must have a license for
each type of retail operation. Provided, there shall be no
licenses issued by the board for the sale of liquor, beer, or
wine by rolling stores.
(g) No retailer shall sell any alcoholic beverages for
consumption on the licensed premises except in a room or rooms
or place on the licensed premises at all times accessible to
the use and accommodation of the general public; but this
section shall not be interpreted to prevent a hotel or club
licensee from selling alcoholic beverages in any room of the
hotel or club house occupied by a bona fide registered guest
or member or private party entitled to purchase the same.
(h) All beer, except draft or keg beer, sold by
retailers must be sold or dispensed in bottles, cans, or other
containers not to exceed 25.4 ounces. All wine sold by
retailers for off-premises consumption must be sold or
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dispensed in bottles or other containers in accordance with
the standards of fill specified in the then effective
standards of fill for wine prescribed by the U.S. Treasury
Department.
(i) Draft or keg beer may be sold or dispensed within
this state within those counties in which and in the manner in
which the sale of draft or keg beer was authorized by law on
September 30, 1980, or in which the sale of draft or keg beer
is hereafter authorized by law. In rural communities with a
predominantly foreign population, after the payment of the tax
imposed by this title, draft or keg beer may be sold or
dispensed by special permit from the board, when, in the
judgment of the board, the use and consumption of draft or keg
beer is in accordance with the habit and customs of the people
of any such rural community. The board may grant to any civic
center authority or its franchisee or concessionaire, to which
the board may have issued or may simultaneously issue a retail
license under the provisions of this code, a revocable
temporary permit to sell or dispense in any part of its civic
center, for consumption therein, draft or keg beer. Either
such permit shall be promptly revoked by the board if, in its
judgment, the same tends to create intemperance or is
prejudicial to the welfare, health, peace, temperance, and
safety of the people of the community or of the state.
(j) No importer shall sell alcoholic beverages to any
person other than a wholesaler licensee, or sell to a
wholesaler licensee any brand or brands of alcoholic beverages
for sale or distribution in this state, except where the
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importer has been granted written authorization from the
manufacturer thereof to import and sell the brand or brands to
be sold in this state, which authorization is on file with the
board.
(k) No wholesaler shall maintain or operate any place
where sales are made other than that for which the wholesale
license is granted; provided, however, a wholesaler may be
licensed to sell and distribute liquor, wine, and beer, and
mixed spirit beverages . No wholesaler shall maintain any place
for the storage of liquor, wine, or beer, or mixed spirit
beverages unless the same has been approved by the board. No
wholesaler license shall be issued for any premises in any
part of which there is operated any retail license for the
sale of alcoholic beverages.
(l) Licenses issued under this code chapter may not be
assigned. The board may transfer any license from one person
to another, or from one place to another within the same
governing jurisdiction, or both, as the board may determine;
but no transfers shall be made to a person who would not have
been eligible to receive the license originally, nor for the
transaction of business at a place for which the license could
not originally have been issued lawfully.
(m) Every applicant for a transfer of a license shall
file a written application with the board within such time as
the board shall fix in its rules. Whenever any license is
transferred, there shall be collected a filing fee of fifty
dollars ($50), to be paid to the board, and the board shall
pay the fee into the State Treasury to the credit of the Beer
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Tax and License Fund of the board.
(n) In the event that any person to whom a license has
been issued under the terms of this code chapter becomes
insolvent, makes an assignment for the benefit of creditors,
or is adjudicated as bankrupt by either voluntary or
involuntary action, the license of the person shall
immediately terminate and be cancelled without any action on
the part of the board, and there shall be no refund made, or
credit given, for the unused portion of the license fee for
the remainder of the license year for which the license was
granted. Thereafter, no license shall be issued by the board
for the premises, wherein the license was conducted, to any
assignee, committee, trustee, receiver, or successor of the
licensee until a hearing has been held by the board as in the
case of a new application for license. In all such cases, the
board shall have the sole and final discretion as to the
propriety of the issuance of a license for the premises,
including the time it shall issue , and the period for which it
shall be issued, and shall have the further power to impose
conditions under which the licensed premises shall be
conducted."
Section 7. Mixed spirit beverages, as defined in
Section 28-3-1, Code of Alabama 1975, shall be marketed in a
responsible and appropriate manner. The Alcoholic Beverage
Control Board may exercise its discretion to deny labels it
considers objectionable. All labels must conform to rules of
the board regarding advertising, product placement, and
package warning signage. The board, on a case by case basis,
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may require certain products that, as labeled, pose a risk of
misleading or deceiving the public to believe that the
products are non-alcoholic products, to be sold only at liquor
stores, as defined in Section 28-3-1, Code of Alabama 1975, or
establishments that maintain a lounge retail liquor – Class I
or Class II license. 
Section 8. Chapter 8B, commencing with Section 28-8B-1,
is added to Title 28 of the Code of Alabama 1975, to read as
follows:
Chapter 8B
§28-8B-1
(a) The Legislature hereby finds and declares that this
chapter is enacted pursuant to the authority granted to the
state under the Twenty-First Amendment to the United States
Constitution, the powers reserved to the state under the Tenth
Amendment to the United States Constitution, and the inherent
powers of the state under the Constitution of Alabama of 2022,
in order to regulate the traffic of alcoholic beverages and to
substitute the regulations and oversight established in this
chapter for the application of federal and state antitrust
laws that otherwise would apply to any potential
anti-competitive effects of this title. For the avoidance of
doubt, the intent of the Legislature is to maintain the
uniform three-tier system of control over the sale, purchase,
taxation, transportation, manufacture, consumption, and
possession of alcoholic beverages in the state to promote the
health, safety, and welfare of residents of this state by,
among other purposes, ensuring the state shall be able to
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register, audit, inspect, seize, recall, and test alcoholic
beverages shipped into, distributed, and sold throughout this
state; and this expression of the policy and intent of the
Legislature is intended to satisfy the clear articulation test
for state action immunity as has been established by the
United States Supreme Court in California Retail Liquor
Dealers Assn. v. Midcal Aluminum, Inc., et al.
(b) If any provision of this chapter, or its
application to any person or circumstance, is determined by a
court to be invalid or unconstitutional, that provision shall
be stricken and the remaining provisions shall be construed in
accordance with the intent of the Legislature to further limit
rather than expand commerce in alcoholic beverages, including
by prohibiting any commerce in alcoholic beverages not
expressly authorized, and to enhance strict regulatory control
over taxation, distribution, and sale of alcoholic beverages
through the existing uniform system of regulation of alcoholic
beverages.
§28-8B-2
As used in this chapter, the following terms have the
following meanings:
(1) AGREEMENT. Any agreement between a wholesaler and a
supplier, whether oral or written, whereby a wholesaler is
granted the right to purchase and sell a brand or brands of
mixed spirit beverages sold by a supplier.
(2) ANCILLARY BUSINESS. A business owned by a
wholesaler, or by a substantial partner of a wholesaler, the
primary business of which is directly related to the
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transporting, storing, or marketing of the brand or brands of
mixed spirit beverages of a supplier with whom the wholesaler
has an agreement; or a business owned by a wholesaler, a
substantial stockholder of a wholesaler, or a substantial
partner of a wholesaler that recycles empty beverage
containers.
(3) DESIGNATED MEMBER. The spouse, child, grandchild,
parent, brother, or sister of a deceased individual who owned
an interest, including a controlling interest, in a
wholesaler; or any person who inherits the deceased
individual's ownership interest in the wholesaler under the
terms of the deceased individual's will, or under the laws of
intestate succession of this state; or any person who or
entity which has otherwise by designation in writing by the
deceased individual, succeeded the deceased individual in the
wholesaler's business, or has succeeded to the deceased
individual's ownership interest in the wholesaler pursuant to
a written contract or instrument; and also includes the
appointed and qualified personal representative and the
testamentary trustee of a deceased individual owning an
ownership interest in a wholesaler. Designated member also
includes a person appointed by the court as the guardian or
conservator of the property of an incapacitated individual
owning an ownership interest in a wholesaler.
(4) GOOD FAITH. Honesty in fact and the observance of
reasonable commercial standards of fair dealing in the trade,
as defined in and interpreted under the Uniform Commercial
Code, Section 7-2-103, Code of Alabama 1975.
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(5) REASONABLE QUALIFICATIONS. The standard of the
reasonable criteria established and consistently used by the
respective supplier for Alabama wholesalers that entered into,
continued, or renewed an agreement with the supplier during a
period of 24 months prior to the proposed transfer of the
wholesaler's business, or for Alabama wholesalers who have
changed managers or designated managers during a period of 24
months prior to the proposed change in manager or successor
manager of the wholesaler's business.
(6) RETALIATORY ACTION. Includes, but is not limited
to, the refusal to continue an agreement, or a material
reduction in the quality of service or in the quantity of
products available to a wholesaler under an agreement, which
refusal or reduction is not made in good faith.
(7) SALES TERRITORY. An area of exclusive sales
responsibility for the brand or brands of mixed spirit
beverages sold by a supplier as designated by an agreement.
(8) SUBSTANTIAL STOCKHOLDER or SUBSTANTIAL PARTNER. A
stockholder of or partner in the wholesaler who owns an
interest of 25 percent or more of the partnership or of the
capital stock of a corporate wholesaler.
(9) SUPPLIER. A manufacturer or importer of mixed
spirit beverages licensed by the board.
(10) TRANSFER OF WHOLESALER'S BUSINESS. The voluntary
sale, assignment, or other transfer of all or control of the
business, or all or substantially all of the assets of the
wholesaler, or all or control of the capital stock of the
wholesaler, including without limitation the sale or other
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transfer of capital stock or assets by merger, consolidation,
or dissolution, or of the capital stock of the parent
corporation, or of the capital stock or beneficial ownership
of any other entity owning or controlling the wholesaler.
(11) WHOLESALER. A wholesaler of mixed spirit beverages
licensed by the board.
§28-8B-3
(a) This chapter does not apply to regulation of beer
or wine franchises.
(b) Nothing in this chapter shall be deemed to repeal
or amend any existing beer or wine franchise laws. This
chapter is intended to provide franchise regulation for mixed
spirit beverages, and to leave in effect and unchanged any
local or state franchise laws existing on the effective date
of this act.
(c) Notwithstanding this chapter, including Section
28-8B-4, the board shall have the authority to purchase mixed
spirit beverages directly from the manufacturer and sell these
products to retail customers. This will maintain the
anti-monopoly goals of the three-tier system.  The board is
exempt from the operation of this chapter or any other
franchise law; provided, the board, as a wholesaler, shall
only distribute mixed spirit beverages to liquor stores.
§28-8B-4
(a) Each supplier of mixed spirit beverages licensed by
the board to sell its mixed spirit beverages within the State
of Alabama shall sell its mixed spirit beverages only through
wholesaler licensees of the board and shall grant in writing
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to each of its wholesalers an exclusive sales territory in
accordance with Chapter 8. 
(b) A licensed retailer may not purchase mixed spirit
beverages from any entity other than the licensed wholesaler
designated by the manufacturer of the mixed spirit beverages.
§28-8B-5
A supplier shall not do any of the following:
(1) Fail to provide each wholesaler of the supplier's
brand or brands with a written agreement that contains in
total the supplier's agreement with each wholesaler and
designates a specific exclusive sales territory. No part of
this chapter shall prevent a supplier from appointing, one
time for a period not to exceed 90 days, a wholesaler to
temporarily service a sales territory not designated to
another wholesaler, until such time as a wholesaler is
appointed by the supplier; and the wholesaler who is
designated to service the sales territory during this period
of temporary service shall not be in violation of this
chapter, and, with respect to the temporary service territory,
shall not have any of the rights provided under Sections
28-8B-7 and 28-8B-9.
(2) Fix, maintain, or establish the price at which a
wholesaler shall sell any mixed spirit beverages.
(3) Enter into an additional agreement with any other
wholesaler for, or to sell to any other wholesaler, the same
brand or brands of mixed spirit beverages in the same
territory or any portion thereof, or to sell directly to any
retailer in this state.
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(4) Coerce, or attempt to coerce, any wholesaler to
accept delivery of any mixed spirit beverages or other
commodity which has not been ordered by the wholesaler.
Provided, however, a supplier may impose reasonable inventory
requirements upon a wholesaler if the requirements are made in
good faith and are generally applied to other similarly
situated wholesalers having an agreement with the supplier.
(5) Coerce, or attempt to coerce, any wholesaler to
accept delivery of any mixed spirit beverages or other
commodity ordered by a wholesaler if the order was cancelled
by the wholesaler.
(6) Coerce, or attempt to coerce, any wholesaler to do
any illegal act or to violate any law or any regulation by
threatening to amend, modify, cancel, terminate, or refuse to
review any agreement existing between the supplier and
wholesaler.
(7) Require a wholesaler to assent to any condition,
stipulation, or provision limiting the wholesaler's right to
sell the brand or brands of mixed spirit beverages or other
products of any other supplier unless the acquisition of the
brand or brands or products of another supplier would
materially impair or adversely affect the wholesaler's quality
of service, sales, or ability to compete effectively in
representing the brand or brands of the supplier presently
being sold by the wholesaler. The supplier shall have the
burden of proving that such acquisition of such other brand or
brands or products would have such effect.
(8) Require a wholesaler to purchase one or more brands
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of mixed spirit beverages or other products in order for the
wholesaler to purchase another brand or brands of mixed spirit
beverages for any reason. 
(9) Request a wholesaler to submit audited profit and
loss statements, balance sheets, or financial records as a
condition of renewal or continuation of an agreement.
(10) Withhold delivery of mixed spirit beverages
ordered by a wholesaler or change a wholesaler's quota of a
brand or brands if the withholding or change is not made in
good faith.
(11) Require a wholesaler by any means directly to
participate in or contribute to any local or national
advertising fund controlled directly or indirectly by a
supplier.
(12) Take any retaliatory action against a wholesaler
that files a complaint regarding an alleged violation by the
supplier of federal, state, or local law or an administrative
rule.
(13) Require or prohibit, without just and reasonable
cause, any change in the manager or successor manager of any
wholesaler who has been approved by the supplier. Should a
wholesaler change an approved manager or successor manager, a
supplier shall not require or prohibit the change unless the
person selected by the wholesaler fails to meet the
nondiscriminatory, material, and reasonable standards and
qualifications for managers of Alabama wholesalers of the
supplier which previously have been consistently applied to
Alabama wholesalers by the supplier. The supplier shall have
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the burden of proving that a person fails to meet the
standards and qualifications which are nondiscriminatory,
material, and reasonable and have been consistently applied to
Alabama wholesalers.
(14) Upon written notice of intent to transfer the
wholesaler's business, interfere with, prevent, or
unreasonably delay, for longer than 30 days after the receipt
of the notice, the transfer of the wholesaler's business if
the proposed transferee is a designated member.
(15) Upon written notice of intent to transfer the
wholesaler's business to a person other than a designated
member, withhold consent to or approval of or unreasonably
delay, for longer than 30 days after receipt of the notice,
the transfer of a wholesaler's business if the proposed
transferee meets the nondiscriminatory, material, and
reasonable qualifications and standards required by the
supplier for Alabama wholesalers. The supplier shall have the
burden of proving that the proposed transferee does not meet
such standards and qualifications which are nondiscriminatory,
material, and reasonable and have been consistently applied to
Alabama wholesalers.
(16) Restrict or inhibit, directly or indirectly, the
right of free association among wholesalers for any lawful
purpose.
§28-8B-6
A wholesaler shall not do any of the following:
(1) Fail to devote reasonable efforts and resources,
within its supplier-designated sales territory, to the sale
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and distribution of all of the supplier's brands of mixed
spirit beverages which the wholesaler has been granted the
right to sell or distribute.
(2)a. Except as provided in paragraph b., sell or
deliver mixed spirit beverages to a retail licensee located
outside the sales territory designated to the wholesaler by
the supplier of a particular brand or brands of mixed spirit
beverages.
b. Notwithstanding paragraph a., during periods of
temporary service interruptions impacting a particular sales
territory, a wholesaler who normally services the impacted
sales territory shall file with the board and give to the
affected supplier written notice designating the specific
licensed wholesaler or wholesalers, not disapproved by the
supplier, who will service the sales territory during the
period of temporary service interruption and the approximate
length of time for the service interruption. Each wholesaler
designated to temporarily service the sales territory shall be
a wholesaler who has a current written agreement with the
supplier for the brand or brands affected. When the temporary
service interruption is over, the wholesaler who normally
services the sales territory shall notify in writing the
board, the supplier, and the wholesaler, or wholesalers,
servicing the sales territory on a temporary basis of this
fact, and any wholesaler servicing the sales territory on a
temporary basis shall cease servicing the sales territory upon
receipt of notice. A wholesaler who is designated to service
the impacted sales territory during the period of temporary
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service shall not be in violation of this chapter, and, with
respect to the temporary service territory, shall not have any
of the rights provided under Sections 28-8B-7 and 28-8B-9.
(3)a. Transfer the wholesaler's business without giving
the supplier written notice of intent to transfer the
wholesaler's business, and, where required by this section,
without receiving the supplier's approval for the proposed
transfer.
b. The consent or approval of the supplier shall not be
required of any transfer of the wholesaler's business to a
designated member, or any transfer of less than control of the
wholesaler's business. Provided, however, that the wholesaler
shall give the supplier written notice of any change in
ownership of the wholesaler.
§28-8B-7
(a) Notwithstanding any agreement and except as
otherwise provided for in this chapter, a supplier shall not
amend or modify an agreement; cause a wholesaler to resign
from an agreement; or cancel, terminate, fail to renew, or
refuse to continue under an agreement, unless, in any of the
foregoing cases, the supplier has complied with all of the
following:
(1) Has satisfied the applicable notice requirements of
subsection (c).
(2) Has acted in good faith.
(3) Has good cause for the amendment, modification,
cancellation, termination, nonrenewal, discontinuance, or
forced resignation.
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(b) For each amendment, modification, termination,
cancellation, nonrenewal, or discontinuance, the supplier
shall have the burden of proving that it has acted in good
faith, that the notice requirements under this section have
been complied with, and that there was good cause for the
amendment, modification, termination, cancellation,
nonrenewal, or discontinuance.
(c) Notwithstanding any agreement and except as
otherwise provided in this section, and in addition to the
time limits set forth in subdivision (d)(5), the supplier
shall furnish written notice of the amendment, modification,
termination, cancellation, nonrenewal, or discontinuance of an
agreement to the wholesaler not less than 60 days before the
effective date of the amendment, modification, termination,
cancellation, nonrenewal, or discontinuance. The notice shall
be by certified mail and shall contain all of the following:
(1) A statement of intention to amend, modify,
terminate, cancel, not renew, or discontinue the agreement.
(2) A statement of the reason for the amendment,
modification, termination, cancellation, nonrenewal, or
discontinuance.
(3) The date on which the amendment, modification,
termination, cancellation, nonrenewal, or discontinuance takes
effect.
(d) Notwithstanding any agreement, good cause shall
exist for the purposes of a termination, cancellation,
nonrenewal, or discontinuance under subdivision (a)(3) when
all of the following occur:
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(1) There is a failure by the wholesaler to comply with
a provision of the agreement which is both reasonable and of
material significance to the business relationship between the
wholesaler and the supplier.
(2) The supplier first acquired knowledge of the
failure described in subdivision (1) of this subsection not
more than 18 months before the date notification was given
pursuant to subdivision (a)(1).
(3) The wholesaler was given notice by the supplier of
failure to comply with the agreement.
(4) The wholesaler was afforded a reasonable
opportunity to assert good faith efforts to comply with the
agreement within the time limits as provided for in
subdivision (5).
(5) The wholesaler has been afforded 30 days in which
to submit a plan of corrective action to comply with the
agreement and an additional 120 days to cure the noncompliance
in accordance with the plan.
(e) Notwithstanding subsections (a) and (c), a supplier
may terminate, cancel, fail to renew, or discontinue an
agreement immediately upon written notice given in the manner
and containing information required by subsection (c) if any
of the following occur:
(1) Insolvency of the wholesaler, the filing of any
petition by or against the wholesaler under any bankruptcy or
receivership law, or the assignment for the benefit of
creditors or dissolution or liquidation of the wholesaler
which materially affects the wholesaler's ability to remain in
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business.
(2) Revocation or suspension of the wholesaler's state
or federal license by the appropriate regulatory agency
whereby the wholesaler cannot service the wholesaler's sales
territory for more than 61 days.
(3)a. The wholesaler, or partner or individual who owns
10 percent or more of the partnership or stock of a corporate
wholesaler, has been convicted of a felony under federal or
any state law which reasonably may adversely affect the good
will or the interest of the wholesaler or supplier.
b. Notwithstanding paragraph a., an existing
stockholder or stockholders, or partner or partners, or a
designated member or members subject to this chapter shall
have the right to purchase the partnership interest or the
stock of the offending partner or stockholder prior to the
conviction of the offending partner or stockholder. This
subdivision shall not apply if the sale is completed prior to
conviction.
(f) Notwithstanding subsections (a), (c), and (e), upon
not less than 15 days' prior written notice given in the
manner and containing the information required by subsection
(c), a supplier may terminate, cancel, fail to renew, or
discontinue an agreement if any of the following events occur:
(1) There was intentional fraudulent conduct relating
to a material matter on the part of the wholesaler in dealings
with the supplier; provides, however, the supplier shall have
the burden of proving intentional fraudulent conduct relating
to a material matter on the part of the wholesaler.
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(2) The wholesaler failed to confine to the designated
sales territory its sales of a brand or brands to retailers,
provided this subdivision does not apply if there is a dispute
between two or more wholesalers as to the boundaries of the
assigned territory and the boundary cannot be determined by a
reading of the description contained in the agreements between
the suppliers and the wholesalers.
(3) A wholesaler who has failed to pay for mixed spirit
beverages ordered and delivered in accordance with established
terms with the supplier fails to make full payment within two
business days after receipt of written notice of the
delinquency and demand for immediate payment from the
supplier.
(4) A wholesaler intentionally has made a transfer of
wholesaler's business, other than a transfer to a designated
member or pursuant to a loan agreement or debt instrument,
without prior written notice to the supplier, and has failed,
within 30 days from the receipt of written notice from the
supplier of its intent to terminate on the ground of such
transfer, to reverse the transfer of wholesaler's business.
(5) A wholesaler intentionally has made a transfer of
wholesaler's business other than a transfer to a designated
member, although the wholesaler, prior to the transfer, has
received from the supplier a timely notice of disapproval of
the transfer in accordance with this section.
(6) The wholesaler intentionally ceases, or ceases for
more than a period of 61 days, to carry on business with
respect to any of the supplier's brand or brands previously
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serviced by the wholesaler in its territory designated by the
supplier, unless the cessation is due to force majeure or to a
labor dispute and the wholesaler has made good faith efforts
to overcome such events. This subdivision shall affect only
that brand or brands with respect to which the wholesaler
ceased to carry on business.
(g) Notwithstanding subsections (a), (c), (e), and (f),
a supplier may terminate, cancel, not renew, or discontinue an
agreement upon not less than 30 days' prior written notice if
the supplier discontinues production or discontinues
distribution in this state of all brands sold by the supplier
to the wholesaler. Provided, however, nothing in this section
shall prohibit a supplier from doing either of the following:
(1) Upon not less than 30 days' notice, discontinuing
the distribution of any particular brand of mixed spirit
beverages.
(2) Conducting test marketing of a new brand of mixed
spirit beverages or of a brand of mixed spirit beverages which
is not currently being sold in this state, if the supplier has
notified the board in writing of its plan to test market. The
notice shall describe the market area in which the test shall
be conducted, the name or names of the wholesaler or
wholesalers who will be selling the mixed spirit beverages,
the name or names of the brand of mixed spirit beverages being
tested, and the period of time not to exceed 18 months during
which the testing will take place.
§28-8B-8 
(a) Upon written notice of intent to transfer the
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wholesaler's business, any individual owning, or deceased
individual who owned, an interest in a wholesaler may transfer
the wholesaler's business to a designated member, or any other
person who meets the nondiscriminatory, material, and
reasonable qualifications and standards required by the
supplier for Alabama wholesalers. The consent or approval of
the supplier shall not be required of any transfer of the
wholesaler's business, including the assignment of
wholesaler's rights under the agreement, to a designated
member or shall not be withheld or unreasonably delayed to a
proposed transferee, other than a designated member, who meets
the nondiscriminatory, material, and reasonable qualifications
and standards. Provided, however, the supplier shall have the
burden of proving that the proposed transferee fails to meet
the qualifications and standards which are nondiscriminatory,
material, and reasonable and consistently applied to Alabama
wholesalers by the supplier. Provided, the designated member
or transferee shall in no event be qualified as a transferee
without the prior written approval or consent of the supplier,
where the proposed transferee shall have been involved in any
of the following:
(1) Insolvency filing of any voluntary or involuntary
petition under any bankruptcy or receivership law, or
execution of an assignment for the benefit of creditors.
(2) Revocation or suspension of an alcoholic beverage
license by the regulatory agency of the U.S. government or any
state, whereby service was interrupted for more than 61 days.
(3) Conviction of a felony under federal law, or the
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laws of any state which reasonably may adversely affect the
good will or interest of the wholesaler or supplier.
(4) The involuntary termination, cancellation,
nonrenewal, or discontinuance by a supplier of an agreement
for good cause.
(b) The supplier shall not interfere with, prevent, or
unreasonably delay the transfer of the wholesaler's business,
including an assignment of the wholesaler's rights under the
agreement, if the proposed transferee is a designated member,
or if the transferee other than a designated member meets the
nondiscriminatory, material, and reasonable qualifications
required by the supplier for Alabama wholesalers. Where the
transferee is other than a designated member, the supplier, in
good faith and for good cause related to the reasonable
qualifications, may refuse to accept the transfer of the
wholesaler's business or the assignment of the wholesaler's
rights under the agreement. The supplier shall have the burden
of proving that it has acted in good faith and that there was
good cause for failure to accept or consent to the transfer of
the wholesaler's business or the assignment of the
wholesaler's rights under the agreement.
§28-8B-9
(a) Except as otherwise provided for in this chapter, a
supplier that has amended, modified, cancelled, terminated, or
refused to renew any agreement; or has caused a wholesaler to
resign from any agreement; or has interfered with, prevented,
or unreasonably delayed, or where required by this chapter,
has withheld or unreasonably delayed consent to or approval
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of, any assignment or transfer of a wholesaler's business,
shall pay the wholesaler reasonable compensation for the
diminished value of the wholesaler's business, including any
ancillary business which has been negatively affected by the
act of the supplier. The value of the wholesaler's business or
ancillary business shall include, but not be limited to, any
good will. Provided, however, nothing contained in this
chapter shall give rise to a claim against the supplier or
wholesaler by any proposed purchaser of the wholesaler's
business.
(b) Should either party, at any time, determine that
mutual agreement on the amount of reasonable compensation
cannot be reached, the supplier or the wholesaler may send by
certified mail, return receipt requested, written notice to
the other party declaring its intention to proceed with
arbitration. Arbitration shall proceed only by mutual
agreement by both parties.
(c) Not more than 10 business days after the notice to
enter into arbitration has been delivered, the other party
shall send written notice to the requesting party declaring
its intention either to proceed or not to proceed with
arbitration. Should the other party fail to respond within the
10 business days, it shall be conclusively presumed that the
party shall have agreed to arbitration.
(d) The matter of determining the amount of
compensation, by agreement of the parties, may be submitted to
a three-member arbitration panel consisting of one
representative selected by the supplier but unassociated with
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the affected supplier; one wholesaler representative selected
by the wholesaler but unassociated with the wholesaler; and an
impartial arbitrator chosen as provided in this section.
(e) Not more than 10 business days after mutual
agreement of both parties has been reached to arbitrate, each
party shall designate, in writing, its one arbitrator
representative and the party initiating arbitration shall
request, in writing, a list of five arbitrators from the
American Arbitration Association or its successor and request
that the list shall be mailed to each party by certified mail,
return receipt requested. Not more than 10 business days after
the receipt of the list of five choices, the wholesaler
arbitrator and the supplier arbitrator shall strike and
disqualify up to two names each from the list. Should either
party fail to respond within 10 business days or should more
than one name remain after the strikes, the American
Arbitration Association shall make the selection of the
impartial arbitrator from the names not stricken from the
list.
(f) Not more than 30 days after the final selection of
the arbitration panel is made, the arbitration panel shall
convene to decide the dispute. The panel shall conclude the
arbitration within 20 days after the arbitration panel
convenes and shall render a decision by majority vote of the
arbitrators within 20 days from the conclusion of the
arbitration. The award of the arbitration panel shall be final
and binding on the parties as to the amount of compensation
for the diminished value.
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(g) The cost of the impartial arbitrator, the
stenographer, and the meeting site shall be equally divided
between the wholesaler and the supplier. All other costs shall
be paid by the party incurring them.
(h) After both parties have agreed to arbitrate, should
either party, except by mutual agreement, fail to abide by the
time limitations as prescribed in subsections (c), (e), and
(f), or fail or refuse to make the selection of any
arbitrators, or fail to participate in the arbitration
hearings, the other party shall make the selection of its
arbitrator and proceed to arbitration. The party who has
failed or refused to comply as prescribed in this section
shall be considered to be in default. Any party considered to
be in default pursuant to this subsection shall have waived
any and all rights the party would have had in the arbitration
and shall be considered to have consented to the determination
of the arbitration panel. 
§28-8B-10
(a) A wholesaler may not waive any of the rights
granted in this chapter, and the provisions of any agreement
which would have such an effect shall be void. Nothing in this
chapter shall be construed to limit or prohibit good faith
dispute settlements voluntarily entered into by the parties.
(b) A transferee of a wholesaler that continues in
business as a wholesaler shall have the benefit of and be
bound by all terms and conditions of the agreement with the
supplier in effect on the date of the transfer; provided,
however, a transfer of a wholesaler's business which requires
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a supplier's consent or approval but is disapproved by the
supplier shall be void.
(c) A successor to a supplier that continues in
business as a supplier shall be bound by all terms and
conditions of each agreement of the supplier in effect on the
date of succession.
§28-8B-11
(a)(1) If a supplier engages in conduct prohibited
under this chapter, a wholesaler with which the supplier has
an agreement may maintain a civil action against the supplier
to recover actual damages reasonably incurred as the result of
the prohibited conduct.
(2) If a wholesaler engages in conduct prohibited under
this chapter, a supplier with which the wholesaler has an
agreement may maintain a civil action against the wholesaler
to recover actual damages reasonably incurred as the result of
the prohibited conduct.
(b)(1) A supplier that violates any provision of this
chapter shall be liable for all actual damages and all court
costs and, in the court's discretion, reasonable attorney fees
incurred by a wholesaler as a result of that violation.
(2) A wholesaler that violates any provision of this
chapter shall be liable for all actual damages and all court
costs and, in the court's discretion, reasonable attorney fees
incurred by the supplier as a result of that violation.
(c)(1) This chapter imposes upon a supplier the duty to
deal fairly and in good faith with a wholesaler that has
entered into an agreement with the supplier to purchase and
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sell a brand or brands of mixed spirit beverages sold by the
supplier. Except as otherwise provided in this chapter, a
court may award exemplary or punitive damages, as well as
actual damages, court costs, and reasonable attorney fees to a
wholesaler who has been damaged by the action or the failure
to act of a supplier if the court, upon proof thereof by clear
and convincing evidence as defined in Section 6-11-20, finds
that a supplier has intentionally, consciously, or
deliberately acted in bad faith or failed to act in good faith
in any of the following:
a. Effecting an amendment, modification, termination,
cancellation, or nonrenewal of any agreement.
b. Unreasonably interfering with, preventing, or
unreasonably delaying the transfer of the wholesaler's
business where approval of the proposed transferee is not
required by this chapter.
c. Unreasonably withholding its consent to or approval
of any assignment, transfer, or sale of a wholesaler's
business, where approval of the proposed transferee is
required by this chapter.
(2) The actions or failure to act on the part of the
supplier, as listed in subdivision (1), shall constitute bad
faith.
(d) A supplier or wholesaler may bring an action for
declaratory judgment for determination of any controversy
arising pursuant to this chapter.
(e) Upon proper application to the court, a supplier or
wholesaler may obtain injunctive relief against any violation
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of this chapter. If the court grants injunctive relief or
issues a temporary restraining order, bond shall not be
required to be posted.
(f) The remedies provided by this section are
nonexclusive.
(g) Any legal action taken under this chapter, or in a
dispute arising out of an agreement or breach thereof, or over
the provisions of an agreement shall be filed in any state
court located in a county in which the supplier and wholesaler
have a territorial agreement in Alabama.
Section 9. If any provision of this act, or its
application to any person or circumstance, is determined by a
court to be invalid or unconstitutional, that provision shall
be stricken and the remaining provisions shall be construed in
accordance with the intent of the Legislature to further limit
rather than expand commerce in alcoholic beverages, including
by prohibiting any commerce in alcoholic beverages not
expressly authorized, and to enhance strict regulatory control
over taxation, distribution, and sale of alcoholic beverages
through the existing uniform system of regulation of alcoholic
beverages.
Section 10. This act shall become effective April 1,
2024, following its passage and approval by the Governor, or
its otherwise becoming law.
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