BILL ANALYSIS                                                                                                                                                                                                    Ó






                                                       Bill No:  AB 
          517
          
                 SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
                       Senator Roderick D. Wright, Chair
                           2011-2012 Regular Session
                                 Staff Analysis



          AB 517  Author:  Hall
          As Introduced:  February 15, 2011
          Hearing Date:  June 28, 2011
          Consultant:  Art Terzakis


                                     SUBJECT  
                              Alcoholic Beverages 

                                   DESCRIPTION
           
          AB 517 adds a new provision to the Alcoholic Beverage 
          Control Act (ABC) that permits wholesalers and 
          manufacturers to accept the return of unsold and unopened 
          beer from an organization that obtained a temporary 
          license.  Specifically, this measure:

          1.  Authorizes an alcoholic beverage wholesaler or 
            manufacturer to accept the return of unsold and unopened 
            beer purchased from that wholesaler or manufacturer by an 
            organization that has obtained a temporary daily license. 
               

          2.  Permits the licensee to credit the account of the 
            organization in an amount not to exceed the original 
            sales price of the returned beer, provided that the beer 
            was paid for in full.

          3.  Also, adds clarity to an existing provision of law 
            relating to the reintroduction of discontinued/seasonal 
            brands of beer in the same California market area in 
            which a return and exchange of that beer has taken place. 


                                   EXISTING LAW





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           Existing law permits the return of beer for errors in 
          delivery, health and safety recalls and the identical 
          exchange of out-of-code products.  

          Existing law also authorizes a wholesaler or manufacturer 
          of beer to accept the return of quantities of discontinued 
          or seasonal brands of beer from a retail licensee, provided 
          that the returned beer is exchanged for a quantity of beer 
          of a brand produced or sold by the same manufacturer with a 
          value not greater than the original sales price to the 
          retail licensee of the returned beer.

          Existing law authorizes the ABC to issue special licenses 
          for the sale of beer or wine on a temporary basis (usually 
          one to three days) for premises temporarily occupied by the 
          licensee for a picnic, social gathering, or similar 
          occasion at a fee equal to the actual cost of issuing the 
          license, but not to exceed $25 per day.  Also, under 
          existing law, ABC may, in its discretion, issue on a 
          temporary basis a daily on-sale general license and the fee 
          for such license shall be $25 per day.  

                                    BACKGROUND
           
           Purpose of AB 517  : According to the author's office, this 
          measure has been introduced on behalf of beer distributors 
          in California who have experienced increasing demands to 
          accept the return of unsold or unopened beer from 
          nonprofits that are the holders of temporary on-sale 
          licenses (issued for special events, fundraisers, parties, 
          etc.).  Currently, holders of such licenses may choose to 
          keep the unopened and unused beer for a future event for 
          which another temporary license may be issued. However, 
          they have no legal option to sell or dispose of the beer in 
          their possession at the expiration of their daily license.  
          AB 517 would permit the return of unsold and unopened beer 
          by daily licensees to the licensee from whom the beer was 
          purchased.  

                            PRIOR/RELATED LEGISLATION
           
           SB 487 (Negrete McLeod) 2011-12 Session.   Would add a new 
          provision to the ABC Act that permits the return of unsold 
          and unopened beer from an organization that obtained a 
          temporary license.  (Pending in Assembly G.O. Committee)
           




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          SB 192 (Negrete McLeod) 2009-10 Session.   Identical to SB 
          487 of 2011.  (Gutted in the Assembly - relating to career 
          technical education - in late August and held in Rules 
          Committee) 
           
          AB 3071 (Assembly G.O. Committee) Chapter 508, Statutes of 
          2008.   Among other things, authorized beer that is recalled 
          for health or safety issues to be accepted for return at 
          any time from a retailer and be picked up by the seller of 
          beer.  Also, permitted the seller of beer to exchange the 
          returned beer for identical product, issue a deferred 
          exchange memorandum showing the beer was picked-up and is 
          to be replaced when inventory is available, or issue a 
          credit to the retailer for the returned beer.  

           SB 1035 (Perata) Chapter 657, Statutes of 2001.   Allowed a 
          person in possession of a stock of lawfully acquired 
          alcoholic beverages following the revocation or voluntary 
          surrender of, or failure to renew, an alcoholic beverage 
          license to sell that stock to licensees, as authorized by 
          the Department of ABC.

           SB 452 (Maddy) Chapter 273, Statutes of 1998.   Among other 
          things, authorized a wholesaler or manufacturer of beer to 
          accept the return of discontinued or seasonal brands of 
          beer from a retail licensee, provided that the returned 
          beer is exchanged for a quantity of beer of a brand 
          produced or sold by the same manufacturer with a value not 
          greater than the original sales price to the retail 
          licensee of the returned beer.

           SUPPORT:   None on file as of June 24, 2011.
           OPPOSE:  None on file as of June 24, 2011.

           FISCAL COMMITTEE:   Senate Appropriations Committee