Hogan signs bills sought by Md.’s craft brewers

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ANNAPOLIS — Maryland’s craft brewers will have some room to grow under two bills signed into law by Gov. Larry Hogan Tuesday.

The bills expand caps on production for independent breweries and makes it easier to end relationships with area distributors. The pair of bills has been called a transformative moment for the industry.

Included in the package are provisions allowing craft brewers to increase the number of barrels of beer they can sell in taprooms from 2,000 to 5,000. The agreement would also eliminate a buyback provision that effectively required breweries with taprooms that exceed the 2,000-barrel limit to transfer beer to distributors and then repurchase it for sale in their establishment. That law takes effect July 1.

A separate bill that takes effect Jan. 1 makes significant changes to a 25-year-old law that craft brewers complained kept them locked into agreements with distributors even if those contracts were detrimental to their business.

Under the new law, brewers that make less than 20,000 barrels annually can give 45 days notice and buy their way out of the contract at fair market value. If the brewer and wholesaler cannot come to terms within 45 days they can go to arbitration.

“This is the transformative change sought by the industry for the last three years,” said Brad Rifkin, a lobbyist at Rifkin Weiner Livingston who represented the craft brewing industry.

The bills were two of 174 signed into law Tuesday by Hogan during his second bill-signing ceremony since the 2019 General Assembly session ended three weeks ago.

Included among the bills signed Tuesday were:

• A measure to increase transparency at the University System of Maryland following the death of football player Jordan McNair. Board of Regents meetings will be required to be live-streamed. The head of the board will be confirmed by the Senate and the board must provide 30 days notice to the governor and legislature on any plans to increase the salary or provide bonuses to the chancellor. The law is effective July 1.
• Legislation that provides enhanced incentives for federally designated enterprise zones around the state for job creation, cybersecurity, biotech. The law takes effect on June 1.
• Legislation that increases fees for state and local 9-1-1 operations. The bill doubles the state fee on phone lines, including cellular and voice-over-internet lines, to 50 cents per line per month. Local governments currently charge 75 cents per line. Those governments could also increase their charges by 75 cents a month, temporarily, to cover costs of 9-1-1 operations not covered by the existing fee. Sen. Cheryl Kagan, D-Montgomery County, said the new law will pave the way for next generation 9-1-1 upgrades that could one day allow for text and video communications.