Rhode Island SB 517: AN ACT RELATING TO ALCOHOLIC BEVERAGES -- LENDING OR BORROWING MONEY OR RECEIPT OF CREDIT BY LICENSEES (Prohibits the lending or borrowing of money or receipt of credit by delinquent licensees among manufacturers, wholesalers and retailers of alcoholic beverages as regulated by the department of business regulation (DBR).)

Bill Text

2019 -- S 0517
========
LC001745
========
S T A T E O F R H O D E I S L A N D
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2019
____________

A N A C T
RELATING TO ALCOHOLIC BEVERAGES -- LENDING OR BORROWING MONEY OR
RECEIPT OF CREDIT BY LICENSEES
Introduced By: Senator Sandra Cano
Date Introduced: February 27, 2019
Referred To: Senate Special Legislation and Veterans Affairs

It is enacted by the General Assembly as follows:
SECTION 1. Title 3 of the General Laws entitled "ALCOHOLIC BEVERAGES" is 1
hereby amended by adding thereto the following chapter: 2
CHAPTER 7.1 3
LENDING OR BORROWING MONEY OR RECEIPT OF CREDIT BY LICENSEES 4
3-7.1-1. Prohibition of le nding or borrowing mone y. 5
It shall be unlawful for any licensee under this title to lend or borrow money, directly or 6
indirectly, to or from any other licensee under this title. 7
3-7.1-2. Prohibition of re ce ipt of cre dit. 8
(a) It shall be unlawful for any licensee under this title to receive or extend credit, directly 9
or indirectly, for alcoholic beverages sold or delivered to any licensee engaged in the sale of 10
alcoholic beverages except in the usual course of business and for a period of not more than sixty 11
(60) days. 12
(b) The credit period shall be calculated from the date of the delivery of the alcoholic 13
beverages to the purchaser to the date when the purchaser discharges in full the indebtedness for 14
which the credit was extended. If any licensee does not discharge in full any such indebtedness 15
within the sixty (60) day period, the indebtedness shall be overdue and such licensee shall be 16
delinquent within the meaning of this section. 17
(c) Within three (3) days after a licensee becomes delinquent, the licensee who extended 18

LC001745 - Page 2 of 5
the credit shall mail a letter of notice by certified mail to the director of the department of 1
business regulation and a copy thereof to the delinquent licensee. The letter of notice shall be in 2
forms provided by the department of business regulation. The notice shall contain the name of the 3
delinquent licensee, the date of delivery of the alcoholic beverages and the amount of the 4
indebtedness remaining undischarged. 5
(d) Within five (5) days after receipt of such a letter of notice, the department of business 6
regulation shall post the name and address only of the delinquent licensee on a delinquent list 7
containing the names and addresses of all delinquent licensees. Such posting shall constitute 8
notice to all licensees of the delinquency of such licensee. 9
(e) The posting list shall be available for inspection by any licensee or its duly authorized 10
agent only. 11
(f) Nothing in this chapter shall require any manufacturer, winegrower or wholesaler to 12
extend credit to any licensee. 13
3-7.1-3. Prohibition of acquis ition of bus ine s s inte re s t in lice ns e e . 14
It shall be unlawful for any manufacturer, wholesaler or importer of alcoholic beverages, 15
or any winegrower not holding a license under § 3-6-1.1, to acquire, retain or own, directly or 16
indirectly, any interest in the business of any licensee under this title, or for any winegrower 17
licensed under § 3-6-1.1 to acquire, retain or own, directly or indirectly, any interest in the 18
business of any other licensee under this title, or for any manufacturer of alcoholic beverages or 19
any winegrower to acquire, retain or own, directly or indirectly, any interest in the business of 20
any licensee under this title. 21
3-7.1-4. Nonpayme nt of lice ns e e due to unfore s e e n circums tance s -- He aring. 22
(a) If a licensee is seriously damaged in its business by riot, insurrection, civil 23
disturbance, fire, explosion or by an act of God, so-called, the licensee may file an application 24
with the department of business regulation requesting that the provisions of § 3-7.1-2 be 25
suspended as to it for a reasonable period. The department of business regulation shall set down 26
the application for hearing within twenty-one (21) days and shall notify all licensees engaged in 27
selling to said applicant of the hearing and give all interested parties the right to be heard. 28
(b) Pending such hearing, the department of business regulation may, after an 29
investigation and determination that the facts as stated by the licensee in its application would 30
constitute reasonable grounds for relief, order that such licensee shall not be posted as delinquent. 31
After hearing, if the department of business regulation finds it is in the public interest to do so, it 32
may suspend the application of § 3-7.1-2 with respect to the applicant for such period as the 33
director may consider to be reasonable and in the public interest. Such action shall not deprive 34

LC001745 - Page 3 of 5
creditors of all legal rights available to them for the collection of the indebtedness and shall be 1
contingent on such terms and conditions as the department of business regulation shall determine. 2
3-7.1-5. Sa