ABL Dispatch

ABL Dispatch — The Latest Industry News from Washington

BY JOHN BODNOVICH, ABL EXECUTIVE DIRECTOR

We have now crossed the five-month mark since the unofficial start of COVID-19 business closures devastated so many onpremise businesses in states across the country. Wisconsin’s neighbor to the south, Illinois, saw its bars and taverns closed for 100 days. While other states were closed for shorter periods of time, some are reopening more slowly than others, putting a strain on bars, taverns, restaurants and other hospitality businesses that have been scraping and clawing to stay in business. There also seems to be a lot of arbitrary policymaking in states now, as governors, mayors and other officials grapple with how to slow coronavirus spread. Unfortunately, bars, taverns and restaurants find themselves in the crosshairs of many of these decisionmakers who are trying to “do something” — even if it is not based on any scientific evidence — to avoid the suggestion that they aren’t doing anything about COVID-19. This is leading to a patchwork of alcohol restrictions that are driving a stake through the heart of on-premise businesses everywhere. In Alabama, for example, bars cannot serve alcohol after 11 p.m. In Ohio, the cutoff is 10 p.m. In Puerto Rico, it is 7 p.m., even though food service is allowed until 10 p.m. The random nature of these regulations makes it challenging to create a uniform response or strategy. Some bars and their associations are turning to the courts and filing lawsuits to reopen with larger capacities, regular hours or indoor service. Others are working with state lawmakers to forge a path toward financial viability, supporting legislation that would allow them to regain a foothold. Public relations efforts also continue. Licensees point to limited (and nonuniform) contact tracing across the states as problematic when making policies that include sweeping limitations on bars. Without accurate and scientific data, and the public disclosure of that data, it is unclear what states are basing policy decisions on. And despite some bad actors, it appears from compliance check reports that the majority of bars are abiding state laws and regulations for social distancing and public health guidelines to prevent COVID-19 spread, including following Centers for Disease Control and Prevention (CDC) considerations. ABL continues to gather and share information with members, the public and policymakers, so that bars and taverns can reopen as soon as possible, and under reasonable modifications to save state economies and small businesses.

COVID-19 – PHASE 4 RELIEF

The last two months have been notable for what has not happened in Washington. Specifically, the House, Senate and administration have yet to coalesce around an additional COVID-19 relief package. The Senate left Washington the second week of August and will not return until after Labor Day. Earlier in August, House Majority Leader Steny Hoyer stated that — without a vote on a COVID relief package — the House of Representatives won’t reconvene until September 14 (though it now appears Speaker Nancy Pelosi may call the House back to vote only on United States Postal Service legislation). Unfortunately, with Congress home and focusing on political activities for the next few weeks, the best-case scenario for a COVID-19 deal is in September. Complicating matters is the need for Congress to pass legislation to fund the government before current funding runs out at the end of the fiscal year on September 30. There is now discussion about combining the two priorities and if that bill would be more of a collection of COVID-19 policy priorities as opposed to an expansive relief measure. For those keeping score at home, the Democrat-led House passed the $3 trillion Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act (H.R. 6800) on May 15. The Republican-led Senate introduced the $1 trillion Health, Economic Assistance, Liability Protection and Schools (HEALS) Act on July 27. The Senate bill is intended to be a starting point for Majority Leader Mitch McConnell and the White House in negotiations with the House. Phase 4 relief is to serve as follow-up legislation to the $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act that was enacted on March 27. Republican priorities for Phase 4 legislation include cutting unemployment benefits, providing tax cuts and assuring liability protections for businesses. Democrats are focused on extending jobless aid, providing rental and mortgage assistance, and bolstering election security.

COVID-19 – STANDALONE BILLS & ISSUES

Though the larger COVID bills have captured the attention of the national media, individual policy pieces are important markers of industry priorities, and are being worked on by ABL and other trade associations:

• Real Economic Support that Acknowledges Unique

Restaurant Assistance Needed to Survive (RESTAURANTS)

Act (H.R. 7197; S.R. 4012) – This legislation, which has

the support of the National Restaurant Association and the

Independent Restaurant Coalition, would create a $120 billion grant program for eating and drinking establishments with annual revenues of less than $1.5 million. It has bipartisan support in both houses, with 27 Senators and 177

House members cosponsoring the bill. • Safe to Work Act (S. 4317) – This bill would establish a temporary exclusive federal cause of action for personal injury and medical liability claims arising from actual, alleged, feared or potential exposure to the coronavirus between December 2019 and October 2024. It would govern any claim against nearly any defendant; preempt state laws, including common law, that more easily allow claims arising from coronavirus exposure; and require that plaintiffs satisfy each element of their claim by clear and convincing evidence. Defendants would not be liable if they undertook reasonable efforts to comply with applicable mandatory coronavirus standards and regulations in effect at the time of the alleged exposure. • Perishable Food & Beverages – ABL and 18 other national trade groups are uniting together under the banner of the Perishable Food and Beverage Coalition (PFBC), and are seeking relief for businesses that have suffered a loss to their food and beverage inventory as a result of the COVID-19 pandemic with a targeted, onetime business tax credit for unmerchantable inventory.

The tax credit would provide relief for small businesses faced with imminent and permanent closure; help ensure greater financial certainty; assist with employee retention; and bring financial relief to affected businesses.

• Supporting America’s Restaurant Workers Act (S.4319) –

This legislation would temporarily increase the business meal deduction from 50% to 100% for expenses for food and beverages provided by a restaurant through

December 31, 2020. ABL is working with the American

Distilled Spirits Alliance to support this legislation. • Continuing Small Business Recovery and Paycheck

Protection Program (CSBRPPP) Act (S.4321) – This bill would expand small business access to the proposed PPP second draw by changing the eligibility requirement that businesses must demonstrate a gross revenue reduction of at least 50%. • PPP Loan Forgiveness – ABL is joining other likeminded trade associations to make clear to Congress that loan forgiveness under the PPP should be tax-free as intended in the CARES Act. By making this clear in future

COVID-19 relief legislation, Congress would be restoring congressional intent and avoiding a surprise $100 billion tax hike on millions of Main Street businesses.

• Jumpstarting our Businesses’ Success (JOBS) Credit Act

of 2020 (H.R. 6776) – This legislation would provide businesses with a financial incentive to keep employees on the payroll when their operations are suspended due to COVID-19-related forced closures or when their gross receipts significantly declined compared to last year. On Aug. 13, ABL submitted comments opposing the 2020 Dietary Guidelines Advisory Committee (DGAC) recommendation that the federal government change longstanding guidance on moderate consumption of alcohol, recommending the daily guideline for men be reduced from up to two drinks per day to up to one drink per day. From the comments, “ABL and its members are committed to the responsible sale and service of alcohol products to legal consumers. Retail beverage licensees are trained professionals. They have built their businesses and customer service around established guidance on moderate consumption of alcohol, including the recommended daily guideline of up to two drinks per day for men and to up to one drink per day for women. This approach has worked well, and provides consumers and industry alike with simple, commonsense parameters for moderate alcohol consumption.”

ABL CALLS FOR END OF TARIFFS ON ALCOHOL

ABL joined with 16 other alcohol industry trade associations to submit comments to the United States Trade Representative (USTR) in opposition to the U.S. government’s proposal to impose tariffs on distilled spirits, wine and beer imported from the European Union and the United Kingdom. From the comments, “Beverage alcohol sectors on both sides of the Atlantic have suffered enough. These tariffs are exacerbating the incredible burden hospitality businesses are experiencing with the widespread closures of bars and restaurants due to COVID-19.”

Since October 18, 2019, the U.S. has imposed a 25% tariff on imports of single malt scotch whisky; single malt Irish whiskey from northern Ireland; liqueurs and cordials from Germany, Ireland, Italy, Spain and the United Kingdom; and certain wines from France, Germany, Spain and the United Kingdom.

ABL SPEAKS AT MUSIC LICENSING WORKSHOP

ABL Executive Director John Bodnovich was featured as a speaker at a Department of Justice (DOJ) virtual public workshop on July 29, wherein music licensing stakeholders discussed competition in the licensing of public performance rights in the music industry. ABL shared the views of beverage licensees who purchase licenses from the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music Inc. (BMI), and the implications for antitrust law enforcement of music distribution should the consent decrees for those two entities be terminated or modified.

ABL and other likeminded organizations recently submitted comments to the DOJ on the matter, echoing the observations expressed by Senate Judiciary Committee Chairman Lindsey Graham, who noted, “The antitrust protections of the decrees have allowed businesses to innovate and expand music offerings, which has generated greater revenue for songwriters.” In the same letter, he also pointed out that “the American consumer currently enjoys the world’s most vibrant music market” and that the “current market is functioning rather well.”TLW ABL is the voice of America’s beer, wine and spirits retailers in Washington, D.C. ABL represents the TLW and its many members, as well as thousands of other on- and off-premise retailers of beverage alcohol across the United States.