This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives. STORAGE NAME: h1459c.SAT DATE: 3/29/2023 HOUSE OF REPRESENTATIVES STAFF ANALYSIS BILL #: HB 1459 Registration Fees for Malt Beverage Brands and Labels SPONSOR(S): Yeager TIED BILLS: IDEN./SIM. BILLS: SB 658 REFERENCE ACTION ANALYST STAFF DIRECTOR or BUDGET/POLICY CHIEF 1) Regulatory Reform & Economic Development Subcommittee 11 Y, 0 N Thompson Anstead 2) State Administration & Technology Appropriations Subcommittee 12 Y, 0 N Helpling Topp 3) Commerce Committee SUMMARY ANALYSIS In Florida, alcoholic beverages are regulated by the Beverage Law, which regulates the manufacture, distribution, and sale of wine, beer, and liquor by manufacturers, distributors, and vendors. The Division of Alcoholic Beverages and Tobacco (ABT) in the Department of Business and Professional Regulation (DBPR) administers and enforces the Beverage Law, which requires licenses for businesses in the industry and payment of various associated fees and taxes. Before doing business in Florida, manufacturers, brewers, bottlers, distributors, and importers of malt beverages must register with the ABT the brands or labels under which the malt beverages are to be sold or moved. Current law requires the ABT to charge a $30 fee per brand or label. The bill: Provides that the annual registration fee of $30 for each malt beverage brand and label only applies to a brand or label that is sold to a distributor, not to a brand or label that is kept in-house. Specifies that no other annual registration fee for a brand or label is authorized under the provision. The bill will have an indeterminate negative fiscal impact on state government, and no fiscal impact on local governments. The bill provides an effective date of July 1, 2023. STORAGE NAME: h1459c.SAT PAGE: 2 DATE: 3/29/2023 FULL ANALYSIS I. SUBSTANTIVE ANALYSIS A. EFFECT OF PROPOSED CHANGES: Current Situation Beverage Law In Florida, alcoholic beverages are regulated by the Beverage Law, 1 which regulates and licenses the manufacture, distribution, and sale of wine, beer, and liquor by manufacturers, distributors, and vendors. 2 The Division of Alcoholic Beverages and Tobacco (ABT) in the Department of Business and Professional Regulation (DBPR) administers and enforces the Beverage Law. 3 Three-Tier System In the United States, the regulation of alcohol since the repeal of Prohibition, has traditionally been based upon a “three-tier system.” The system requires separation of the manufacture, distribution, and sale of alcoholic beverages. The manufacturer creates the beverages, and the distributor obtains the beverages from the manufacturer to deliver to the vendor. The vendor makes the ultimate sale to the consumer. A manufacturer, distributor, or exporter may not be licensed as a vendor to sell directly to consumers. Generally, Florida has adopted the three-tier system. Exceptions to the three-tier regulatory system permit in-state wineries, 4 breweries, 5 and craft distilleries to be licensed as a vendor and sell directly to consumers under certain circumstances. 6 Brand and Label Registration Fee No manufacturer, brewer, bottler, distributor, or importer of malt beverages may sell or offer for sale in Florida, or move or cause to be moved within or into Florida, any malt beverages, without: 7 Qualifying to do business in the state and registering its name and the brands or labels under which the malt beverages are to be sold or moved; and Furnishing any samples and information as to content, quality, and formula of such malt beverages as the ABT may require. Each registrant must pay an annual registration fee of $30 for a brand or label. 8 Effect of Proposed Changes The bill provides that the annual registration fee of $30 for each malt beverage brand and label only applies to a brand or label that is sold to a distributor, not to a brand or label that is kept in-house. The bill also specifies that no other annual registration fee for a brand or label is authorized under the provision. B. SECTION DIRECTORY: Section 1: Amends s. 563.045, F.S., revising requirements for brand and label fees. 1 S. 561.01(6), F.S., provides that the “The Beverage Law” means chs. 561, 562, 563, 564, 565, 567, and 568, F.S. 2 See s. 561.14, F.S. 3 S. 561.02, F.S. 4 See s. 561.221(1), F.S. 5 See s. 561.221(2), F.S. 6 See s. 565.03, F.S. 7 S. 563.045(1), F.S. 8 S. 563.045(2), F.S. STORAGE NAME: h1459c.SAT PAGE: 3 DATE: 3/29/2023 Section 2: Provides an effective date of July 1, 2023. II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT A. FISCAL IMPACT ON STATE GOVERNMENT: 1. Revenues: The bill may cause an indeterminate decrease in brand and label fees collected by the ABT. The table below shows the last three fiscal years of revenue collected for brands/label registrations. 9 2020 2021 2022 Initial Malt Beverages Licenses $206,280 $239,730 $255,930 Malt Beverage License Renewals $98,580 $130,020 $131,820 These revenues include brand and label fees for all beverages. The reduction in revenue will be determined by the number of beverages that are kept in house, which is not currently tracked. 2. Expenditures: There will be minor adjustments to the online system for brand registration which is estimated to cost $16,000. 10 B. FISCAL IMPACT ON LOCAL GOVERNMENTS: 1. Revenues: None. 2. Expenditures: None. C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR: The bill may have a positive impact on craft brewers and brewpubs, who may pay less in brand and label fees to the ABT. D. FISCAL COMMENTS: None. III. COMMENTS A. CONSTITUTIONAL ISSUES: 1. Applicability of Municipality/County Mandates Provision: 9 Florida Department of Business and Professional Regulation, Agency Analysis of 2023 Senate Bill 658, p. 5 (Feb. 23, 2023). 10 Id. STORAGE NAME: h1459c.SAT PAGE: 4 DATE: 3/29/2023 Not applicable. This bill does not appear to affect county or municipal governments. 2. Other: None. B. RULE-MAKING AUTHORITY: None. C. DRAFTING ISSUES OR OTHER COMMENTS: None. IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES