Senate Approves Hatch Internet Alcohol Sales Bill

(May 21, 1999) The Senate adopted Sen. Hatch's Internet alcohol sales bill, the Twenty-First Amendment Enforcement Act. The Hatch bill was approved as an amendment offered by Sen. Byrd to  the juvenile crime bill on Tuesday, May 18. The juvenile crime bill, as amended, then passed the Senate on May 20.

Sen. Orrin Hatch (R-UT) introduced S 577 IS, the Twenty-First Amendment Enforcement Act, on March 10, 1999. The Senate Judiciary Committee, which Sen. Hatch chairs, held are hearing on the subject on March 9.

The bill is designed to deal with the consequences of new distribution channels for the sale of alcohol, including the Internet and direct mail. The bill is not limited to the Internet. In fact, the word Internet does not even appear in the bill. Rather, it addresses the interstate sale of alcohol. There are several consequences of the growth of new distribution channels for the sale of alcohol. First and foremost, alcohol is more available to minors. Hence, it was attached to the juvenile crime bill. In addition, the new methods of selling alcohol enable distributors to avoid paying state and local taxes, as well as avoid complying with state quality control laws.

The Senate Judiciary Committee held a hearing on March 9, 1999 at which it heard testimony on the growing problem of minors purchasing alcohol over the Internet. Rep. Juanita McDonald (D-CA), who represents Los Angeles, called the phenomenon "cyber-booze for minors." An 18 year old high school student representing MADD said that Internet alcohol sales could "turn Federal Express and UPS into bartenders." Wayne Klein, Assistant Attorney General for the State of Utah, testified that the "existence of the alcohol direct selling industry is a frontal challenge to the entire concept of states exercising their police powers."

Nothing in Sen. Hatch's bill prohibits the sale of alcohol on the Internet. However, if an Internet distributor of alcohol sells into a state in violation of that state's alcohol laws, the bill makes it much easier for that state to bring a legal action to stop the illegal activity. It creates federal jurisdiction, and  provides for injunctive relief, among other things.

Sen. Hatch's bill was attached to the juvenile crime bill (S 254, the Violent and Repeat Juvenile Offender Accountability and Rehabilitation Act of 1999) as an amendment offered by Sen. Robert Byrd (D-WV). The amendment was adopted in a roll call vote of 80 to 17. (See table below.)

Among the Senators who voted against the amendment were Dianne Feinstein (D-CA) and Barbara Boxer (D-CA), whose state is home to many small wineries whose most important method of distribution is the Internet.

Sen. Hatch

"This amendment is designed to prevent unlawful access to alcohol by our children," Sen. Hatch said in a press release after the vote. "If a thirteen year old is capable of ordering beer or wine and having it delivered merely by borrowing a credit card and making a few clicks with a mouse, there is something wrong with the level of control that is being exercised over these sales and we must do something to address this problem."

"I am a strong supporter of e-commerce but in light of the power given state governments pursuant to the 21st Amendment, the sale of alcohol cannot be equated with the sale of a sweater or shirt," Sen. Hatch added. "We need to foster growth in electronic commerce, but we also need to make sure that state alcohol laws are respected."

S 254, the Violent and Repeat Juvenile Offender Accountability and Rehabilitation Act, as amended, was approved by the Senate on Thursday night, May 20, on a roll call vote of 73 to 25. (Vote No. 140)