AN ACT CONCERNING THE EXTENSION OF CREDIT TO ALCOHOLIC LIQUOR RETAILERS FROM MANUFACTURERS AND WHOLESALERS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 30-48 of the 2014 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) No backer or permittee of one permit class shall be a backer or permittee of any other permit class except in the case of any class of airport, railroad, airline and boat permits, and except that: (1) A backer of a hotel or restaurant permit may be a backer of both such classes; (2) a holder or backer of a manufacturer permit for a brew pub, a restaurant permit or a cafe permit may be a holder or backer of any other or all of such classes; (3) a holder or backer of a restaurant permit may be a holder or backer of a bowling establishment permit; (4) a backer of a restaurant permit may be a backer of a coliseum permit or a coliseum concession permit, or both, when such restaurant is within a coliseum; (5) a backer of a hotel permit may be a backer of a coliseum permit or a coliseum concession permit, or both; (6) a backer of a coliseum permit may be a backer of a coliseum concession permit; (7) a backer of a coliseum concession permit may be a backer of a coliseum permit; (8) a backer of a grocery store beer permit may be a backer of a package store permit if such was the case on or before May 1, 1996; (9) a backer of a university permit may be a backer of a nonprofit theater permit; (10) subject to the discretion of the department, a backer of a permit provided for in section 30-33b, may be a backer of any other retail on-premise consumption permit, including those permits provided for in section 30-33b; (11) a backer of a nonprofit theater permit may be a holder or backer of a hotel permit; (12) a holder or backer of a restaurant permit may be a holder or backer of a special outing facility permit; (13) a backer of a concession permit may be a backer of a coliseum permit or a coliseum concession permit, or both; (14) a holder of an out-of-state winery shipper's permit for wine may be a holder of an in-state transporter's permit or an out-of-state entity wine festival permit issued pursuant to section 30-37m, or of both such permits; (15) a holder of an out-of-state shipper's permit for alcoholic liquor other than beer may be a holder of an in-state transporter's permit; and (16) a holder of a manufacturer's permit for a farm winery may be a holder of an in-state transporter's permit, a wine festival permit issued pursuant to section 30-37l, a farmers' market wine sales permit issued pursuant to subsection (a) of section 30-37o or of any combination of such permits. Any person may be a permittee of more than one permit. A person may be a permittee under a permit provided for in section 30-33b and a backer of any other retail on-premise consumption permit, including those permits provided for in section 30-33b. The operator of a racing or jai alai exhibition with pari-mutuel betting licensed by the Department of Consumer Protection may be a backer of any permit provided for in section 30-33b. No holder of a manufacturer permit for a brew pub and no spouse or child of such holder may be a holder or backer of more than three restaurant permits or cafe permits.

[(b) No permittee or backer thereof and no employee or agent of such permittee or backer shall borrow money or receive credit in any form for a period in excess of thirty days, directly or indirectly, from any manufacturer permittee, or backer thereof, or from any wholesaler permittee, or backer thereof, of alcoholic liquor or from any member of the family of such manufacturer permittee or backer thereof or from any stockholder in a corporation manufacturing or wholesaling such liquor, and no manufacturer permittee or backer thereof or wholesaler permittee or backer thereof or member of the family of either of such permittees or of any such backer, and no stockholder of a corporation manufacturing or wholesaling such liquor shall lend money or otherwise extend credit, directly or indirectly, to any such permittee or backer thereof or to the employee or agent of any such permittee or backer. A wholesaler permittee or backer, or a manufacturer permittee or backer, that has not received payment in full from a retailer permittee or backer within thirty days after the date such credit was extended to such retailer or backer or to an employee or agent of any such retailer or backer, shall give a written notice of obligation to such retailer within the five days following the expiration of the thirty-day period of credit. The notice of obligation shall state: The amount due; the date credit was extended; the date the thirty-day period ended, and that the retailer is in violation of this section. A retailer who disputes the accuracy of the "notice of obligation" shall, within the ten days following the expiration of the thirty-day period of credit, give a written response to notice of obligation to the department and give a copy to the wholesaler or manufacturer who sent the notice. The response shall state the retailer's basis for dispute and the amount, if any, admitted to be owed for more than thirty days; the copy forwarded to the wholesaler or manufacturer shall be accompanied by the amount admitted to be due, if any, and such payment shall be made and received without prejudice to the rights of either party in any civil action. Upon receipt of the retailer's response, the chairman of the commission or such chairman's designee shall conduct an informal hearing with the parties being given equal opportunity to appear and be heard. If the chairman or such chairman's designee determines that the notice of obligation is accurate, the department shall forthwith issue an order directing the wholesaler or manufacturer to promptly give all manufacturers and wholesalers engaged in the business of selling alcoholic liquor to retailers in this state, a "notice of delinquency". The notice of delinquency shall identify the delinquent retailer, and state the amount due and the date of the expiration of the thirty-day credit period. No wholesaler or manufacturer receiving a notice of delinquency shall extend credit by the sale of alcoholic liquor or otherwise to such delinquent retailer until after the manufacturer or wholesaler has received a "notice of satisfaction" from the sender of the notice of delinquency. If the chairman or such chairman's designee determines that the notice of obligation is inaccurate, the department shall forthwith issue an order prohibiting a notice of delinquency. The party for whom the determination by the chairman or such chairman's designee was adverse, shall promptly pay to the department a part of the cost of the proceedings as determined by the chairman or such chairman's designee, which shall not be less than fifty dollars. The department may suspend or revoke the permit of any permittee who, in bad faith, gives an incorrect notice of obligation, an incorrect response to notice of obligation, or an unauthorized notice of delinquency. If the department does not receive a response to the notice of obligation within such ten-day period, the delinquency shall be deemed to be admitted and the wholesaler or manufacturer who sent the notice of obligation shall, within the three days following the expiration of such ten-day period, give a notice of delinquency to the department and to all wholesalers and manufacturers engaged in the business of selling alcoholic liquor to retailers in this state. A notice of delinquency identifying a retailer who does not file a response within such ten-day period shall have the same effect as a notice of delinquency given by order of the chairman or such chairman's designee. A wholesaler permittee or manufacturer permittee that has given a notice of delinquency and that receives full payment for the credit extended, shall, within three days after the date of full payment, give a notice of satisfaction to the department and to all wholesalers and manufacturers to whom a notice of delinquency was sent. The prohibition against extension of credit to such retailer shall be void upon such full payment. The department may revoke or suspend any permit for a violation of this section. An appeal from an order of revocation or suspension issued in accordance with this section may be taken in accordance with section 30-60.]

[(c)] (b) If there is a proposed change or change in ownership of a retail permit premises, no application for a permit shall be approved until the applicant files with the department an affidavit executed by the seller of the retail permit premises stating that all obligations of the predecessor permittee for the purchase of alcoholic liquor at such permit premises have been paid or that such applicant did not receive direct or indirect consideration from the predecessor permittee. If a wholesaler permittee alleges the applicant received direct or indirect consideration from the predecessor permittee or that there remain outstanding liquor obligations, such wholesaler permittee may file with the department an affidavit, along with supporting documentation to establish receipt of such consideration or outstanding liquor obligations. The Commissioner of Consumer Protection, in the commissioner's sole discretion, shall determine whether a hearing is warranted on such allegations. The commissioner may waive the requirement of such seller's affidavit upon finding that (1) the predecessor permittee abandoned the premises prior to the filing of the application, and (2) such permittee did not receive any consideration, direct or indirect, for such permittee's abandonment. For the purposes of this subsection, "consideration" means the receipt of legal tender or goods or services for the purchase of alcoholic liquor remaining on the premises of the predecessor permittee, for which bills remain unpaid.

[(d)] (c) A permittee may file a designation of an authorized agent with the department to issue or receive all notices or documents provided for in this section. The permittee shall be responsible for the issuance or receipt of such notices or documents by the agent.

[(e) The period of credit permitted under this section shall be calculated as the time elapsing between the date of receipt of the alcoholic liquors by the purchaser and the date of full legal discharge of the purchaser through the payment of cash or its equivalent from all indebtedness arising from the transaction except that, if the last day for payment falls on a Saturday, Sunday or legal holiday, the last day for payment shall then be the next business day.]

Sec. 2. Section 30-38a of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

In all cases where two or more retail liquor permit premises are in common or cooperative ownership, or where a majority of the capital stock having voting privileges of corporations owning together two or more retail liquor permit premises is held by the same person or persons, the permittees thereof may transfer any alcoholic liquor from one such retail premise to another such retail premise, for the purpose of inventory equalization or other business convenience. [, except when such permittee is a delinquent retailer as said term is used in subsection (b) of section 30-48.]

Statement of Purpose:

To eliminate the thirty-day maximum by which manufacturer and wholesaler permittees may extend credit to retail permittees.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]