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Senate passes bill clarifying LLP status for wine, spirit wholesalers and beer distributors
Summary
Senate Bill 1031 clarifies that wine and spirit wholesaler licenses held by beer distributors may form limited liability partnerships; supporters said the change protects existing businesses after an ABLE commission decision created uncertainty. The measure passed 25-20.
Senator Daniels introduced Senate Bill 1031, saying the bill reaffirms that wine and spirit wholesaler licenses held by beer distributors may form limited liability partnerships (LLPs) and that clarification is needed after the Alcoholic Beverage Laws Enforcement Commission (ABLE) reversed prior license treatment.
Supporters said the measure protects existing wholesalers and distributors that relied on earlier licensing practice and would otherwise face costly restructuring; opponents raised constitutional and competitive concerns. The Senate passed the bill 25-20.
Daniels told the Senate that ABLE’s reversal had placed longstanding LLPs in “limbo,” and that wholesalers and distributors had relied on past approvals. He listed potential business consequences if existing LLPs were forced to reorganize: renegotiated supplier contracts, new federal permits, insurance changes, updated filings with the secretary of state, new ABLE applications, and other administrative and financial burdens.
Senators questioned whether changing statute in advance of pending litigation involving retail licenses was appropriate. Senator Standridge and others asked whether the measure was a request bill, whether litigation might render the statute moot, and whether the attorney general’s position had been considered. Daniels said wholesalers and distributors are not parties to the retail litigation and argued the Legislature should avoid forcing these businesses into court.
Questions also addressed whether the change would disadvantage small, independent retailers. Daniels said if existing wholesalers left the state or restructured, supply options could be reduced and prices could rise for small stores.
The bill’s author said he had worked with industry groups and that the measure is intended to protect businesses that had been properly licensed and were operating in the state. A roll call produced 25 ayes and 20 nays; the clerk noted Senator Thompson asked to be shown as not voting for reasons of personal interest.
Senate Bill 1031 now moves forward following its passage on third reading.
