Chapter 376
2004 -- S 2554
SUBSTITUTE B AS AMENDED
Enacted 07/03/04
A N A C T
RELATING
TO ALCOHOLIC BEVERAGES -- LICENSES
Introduced
By: Senator Maryellen Goodwin
Date
Introduced: February 11, 2004
It
is enacted by the General Assembly as follows:
SECTION
1. Section 3-5-11 of the General Laws in Chapter 3-5 entitled "Licenses
Generally"
is hereby amended to read as follows:
3-5-11.
Licensing of chain stores. -- (a) Licenses, except retailer's Class E,
Class B,
Class
B-H, Class B-L, Class B-M, and Class B-V licenses, authorized by this title
shall not be
granted,
issued, or transferred to or for the use of any "chain store
organization," which term shall
mean consist of any
chain of retail or wholesale business or business organizations, and more
specifically
defined herein,
including, without limitation, grocery stores, markets, department
stores,
and convenience stores, as well as retailers of alcoholic beverages, and which
include
chains
in which one or more stores are located outside of the state.
(b) What is a chain store organization is declared to be a question of fact,
and the
department
is empowered to determine finally whether any applicant for the issuance, grant
or
transfer
of a license is acting for or on behalf of a chain store organization or a
store unit of a
chain
store organization. The term "chain store organization" is defined to include,
but not limited
to:
(1)
Any group of one or more holders of Class A liquor licenses who engage in one
or
more
of the following practices with respect to the business conducted under such
licenses, either
directly
or indirectly, or have any direct or indirect beneficial interest in the
following practices:
(a)
Common, group, centralized or coordinated purchases of wholesale merchandise.
(b)
Common billing or utilization of the services of the same person or the same
entity in
the
management or operation of more than one liquor licensed business.
(c)
Participation in a coordinated or common advertisement with one or more liquor
licensed
business in any advertising media.
(d)
Coordinated or common planning or implementation of marketing strategies.
(e)
Participation in agreed upon or common pricing of products.
(f)
Any term or name identified as a chain or common entity.
(2)
Any group of one or more liquor license holders who share any of the following
common
features, either directly or indirectly or acquire any direct or indirect
beneficial interest
in
the following practices:
(a)
The same director of a corporation, member of a LLC, LLP, partner in a general
or
limited
partnership, trustee or beneficiary of a trust.
(b)
The same individual or corporate owners.
(3)
Any group of one or more license holders that is found to be a "chain
store
organization"
as a factual matter by the department, as a result of an evidentiary hearing in
connection
with any application for the issuance, grant or transfer of a license, or upon
the filing
of
a complaint by any member of the public.
(4)
Upon a finding of violation of this section, the department shall be empowered
to set
a
fine up to the amount of ten thousand dollars ($10,000) per violating licensee,
revoke the
license
of the violator, or suspend the license of the violator for a period of time to
be determined
by
the department. Additionally, the department shall issue a cease and desist order
against the
violating
chain store entity(s) and may further order the dissolution of the violating
chain store
entity(s).
SECTION
2. Chapter 3-5 of the General Laws entitled "Licenses Generally" is
hereby
amended
by adding thereto the following section:
3-5-11.1.
Liquor franchises prohibited. – (a) To promote the effective and
reasonable
control
and regulation of the Rhode Island alcoholic beverage industry and to help the
consumer
by
protecting their choices and ensuring equitable pricing. Class A liquor license
authorized by
this
title shall not be granted, issued, renewed or transferred to or for the use of
any liquor
franchisor
or franchisee. Class A liquor license holders are expressly prohibited from utilizing
the
provisions of the Franchise Investor Act, 19-28-1 et seq.
(b)
Any franchise agreements involving the retail sales of alcoholic beverages are
hereby
declared
null and void and illegal as of the effective date of this section.
(c)
Any franchise agreements involving the retail sales of alcoholic beverages
shall be
terminated
by the franchisor or the franchisee within thirty (30) days of the effective
date of this
section.
(d)
Upon finding of a violation of this section by either the franchisor or the
licensee, the
department
shall be empowered to set a fine up to the amount of ten thousand dollars
($10,000)
per
violating franchisor or licensee, revoke the license of the violator or suspend
the license of the
violator
for a period of time to be determined by the department. Additionally, the
department
shall
have the power to revoke or suspend the franchise registration in accordance
with section
19-28.1-18
and to order it to cease and desist from all operations that are violative of
the
provisions
of this section.
Notwithstanding
anything contained in this chapter to the contrary, this act shall not be
construed
as to prevent the utilization of duly licensed professionals rendering services
as
independent
contractors.
SECTION
3. This act shall take effect on April 1, 2005.
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LC02572/SUB
B
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