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H0236...........................................................by BUSINESS WINE DISTRIBUTORS - Adds to existing law to require notice prior to the transfer of a distributor's business; to require consent of a vintner, winery, importer, or dealer to a transfer of a distributor's business under certain conditions; to prohibit certain conduct by vintners, wineries, importers or dealers; to provide for burdens of proof in legal actions or other dispute resolution proceedings; to provide that successors in interest to distributors shall be bound by the terms and conditions of an agreement in effect on the date of such succession; to provide that transferees shall be bound by the terms and conditions of an agreement in effect on the date of the transfer; and to provide a definition. 02/14 House intro - 1st rdg - to printing 02/15 Rpt prt - to Bus
|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-sixth Legislature First Regular Session - 2001 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 236 BY BUSINESS COMMITTEE 1 AN ACT 2 RELATING TO THE COUNTY OPTION KITCHEN AND TABLE WINE ACT; AMENDING CHAPTER 13, 3 TITLE 23, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 23-1328B, IDAHO 4 CODE, TO REQUIRE NOTICE PRIOR TO TRANSFER OF A DISTRIBUTOR'S BUSINESS, TO 5 REQUIRE THE CONSENT OF A VINTNER, WINERY, IMPORTER OR DEALER TO A TRANSFER 6 OF A DISTRIBUTOR'S BUSINESS UNDER CERTAIN CONDITIONS, TO PROHIBIT CERTAIN 7 CONDUCT BY VINTNERS, WINERIES, IMPORTERS OR DEALERS RELATING TO A TRANSFER 8 OF A DISTRIBUTOR'S BUSINESS, TO PROVIDE FOR BURDENS OF PROOF IN LEGAL 9 ACTIONS OR OTHER DISPUTE RESOLUTION PROCEEDINGS, TO PROVIDE THAT SUCCES- 10 SORS IN INTEREST TO DISTRIBUTORS SHALL BE BOUND BY THE TERMS AND CONDI- 11 TIONS OF AN AGREEMENT IN EFFECT ON THE DATE OF SUCH SUCCESSION, TO PROVIDE 12 THAT TRANSFEREES SHALL BE BOUND BY THE TERMS AND CONDITIONS OF AN AGREE- 13 MENT IN EFFECT ON THE DATE OF THE TRANSFER AND TO DEFINE THE TERM 14 "DESIGNATED MEMBER." 15 Be It Enacted by the Legislature of the State of Idaho: 16 SECTION 1. That Chapter 13, Title 23, Idaho Code, be, and the same is 17 hereby amended by the addition thereto of a NEW SECTION, to be known and des- 18 ignated as Section 23-1328B, Idaho Code, and to read as follows: 19 23-1328B. NOTICE OF TRANSFER OF DISTRIBUTOR'S BUSINESS -- CONSENT OF 20 VINTNER, WINERY, IMPORTER OR DEALER -- CONDITIONS UPON TRANSFER OR SUCCESSION 21 IN INTEREST. (1) A distributor who proposes to transfer the distributor's 22 business shall give written notice of such proposed transfer, at least thirty 23 (30) days prior to the date specified in the notice for completion of the 24 transfer, to any vintner, winery, importer or dealer with whom the distributor 25 has an agreement, whether written or oral, under which the distributor has the 26 right to purchase wine sold by the vintner, winery, importer or dealer and to 27 resell such wine within the state of Idaho. Provided however, except as other- 28 wise provided in subsection (2) of this section, in the event of a transfer to 29 a designated member, the designated member shall give written notice of the 30 transfer to the vintner, winery, importer or dealer within a reasonable time 31 after the transfer is completed. 32 (2) The written consent of the vintner, winery, importer or dealer shall 33 be required for a transfer of the distributor's business prior to the effec- 34 tive date of such transfer to a person other than a designated member. Pro- 35 vided however, written consent from a vintner, winery, importer or dealer 36 shall be required for a transfer of the distributor's business to a designated 37 member if any of the following conditions apply: 38 (a) The designated member has been convicted of a felony under the laws 39 of any state or the federal government, if such conviction would adversely 40 affect the good will or interests of the vintner, winery, importer or 41 dealer; 42 (b) The designated member has had a license for the sale of beer, wine or 43 any alcoholic beverage suspended or revoked by a regulatory agency of any 2 1 state or the federal government and such suspension or revocation inter- 2 rupted service by the designated member for a period of more than thirty 3 (30) days; 4 (c) The designated member is insolvent within the definition of 11 U.S.C. 5 section 101 or there has been a liquidation, dissolution or assignment for 6 the benefit of creditors of substantially all of the designated member's 7 business or assets, or an order for relief under 11 U.S.C. sections 701 8 through 766 has been entered with respect to the designated member; or 9 (d) A previous agreement between the designated member and the vintner, 10 winery, importer or dealer has been terminated, canceled or not renewed by 11 the vintner, winery, importer or dealer for good cause. 12 (3) If the transferee is a designated member, a vintner, winery, importer 13 or dealer shall not interfere with, prevent or unreasonably delay the transfer 14 of the distributor's business. As used in this subsection, an unreasonable 15 delay means a delay of thirty (30) days or more following the service of 16 notice required in subsection (2) of this section and the receipt of all mate- 17 rial information reasonably requested by the vintner, winery, importer or 18 dealer for purposes of determining whether the transfer to the designated mem- 19 ber may require the consent of the vintner, winery, importer or dealer. If 20 such consent is required, a vintner, winery, importer or dealer may not with- 21 hold the consent or unreasonably interfere with the transfer of the 22 distributor's business if the designated member meets reasonable standards and 23 qualifications that are material and nondiscriminatory. 24 (4) If the transferee is not a designated member, a vintner, winery, 25 importer or dealer may not withhold consent or unreasonably interfere with or 26 delay the transfer of the distributor's business if the transferee meets rea- 27 sonable standards and qualifications that are material and nondiscriminatory. 28 As used in this section, unreasonable delay means a delay of thirty (30) days 29 or more following the receipt of all material information reasonably requested 30 by the vintner, winery, importer or dealer for purposes of determining whether 31 the transferee meets reasonable standards and qualifications. 32 (5) In any legal action or other dispute resolution proceeding between a 33 distributor and a vintner, winery, importer or dealer relating to the refusal 34 of the vintner, winery, importer or dealer to consent to the transfer of the 35 distributor's business, the distributor shall have the burden of proving that 36 the vintner, winery, importer or dealer withheld consent, interfered with or 37 delayed the proposed transfer of the distributor's business. Upon such prima 38 facie showing, the vintner, winery, importer or dealer shall have the burden 39 of proving that the proposed transferee does not meet reasonable standards and 40 qualifications. 41 (6) A transferee who continues to operate a distributor's business shall 42 have the benefit of, and be bound by, all terms and conditions of the agree- 43 ment with the vintner, winery, importer or dealer which are in effect on the 44 date of the transfer. 45 (7) With respect to wine, a successor to the interest of a vintner, win- 46 ery, importer or dealer, whether such interest is acquired by purchasing the 47 wine brand name or all or substantially all of the stock or assets of the sup- 48 plier of that wine or through the granting of the marketing rights to a par- 49 ticular brand or brands of wine, who continues to sell such brand or brands of 50 wine to distributors for resale within this state shall be bound by all terms 51 and conditions of each agreement with distributors which relate to such brand 52 or brands of wine and which are in effect on the date of the succession to 53 such interest. 54 (8) As used in this section, "designated member" means: 55 (a) The spouse, child, grandchild, parent or sibling of an individual who 3 1 owned an interest in a distributor; 2 (b) Any person who inherits an ownership interest in a distributor; 3 (c) The appointed and qualified personal representative or testamentary 4 trustee of a deceased individual owning an interest in a distributor; 5 (d) The person appointed by a court as the guardian or conservator of the 6 property of an incapacitated individual owning an interest in a distribu- 7 tor; or 8 (e) A person who has succeeded to the deceased individual's ownership 9 interest in the distributor pursuant to a written contract or instrument 10 which has been previously approved in writing by the vintner, winery, 11 importer or dealer.
STATEMENT OF PURPOSE RS 11042 This proposal provides the procedure by which a wine distributor may transfer the distributor's wine business to a successor distributor. The legislation provides for notice of a proposed transfer to be given to the wine supplier prior to a transfer and requires the supplier's consent to a transfer, which cannot be unreasonably withheld if the transferee meets reasonable standards and qualifications. The proposal provides, however, that in the case of certain transfers, such as to a spouse, child, parent, or brother or sister, consent to the transfer is not required except under certain specified circumstances. FISCAL NOTE There is no fiscal impact associated with this legislation CONTACT: Bill Roden Jeremy Pisca Idaho Beer & Wine Distributors Assn. (208) 336-7930 STATEMENT OF PURPOSE/FISCAL NOTE H 236