BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 782
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          CONCURRENCE IN SENATE AMENDMENTS
          AB 782 (Bocanegra)
          As Amended  June 19, 2003
          Majority vote
           
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          |ASSEMBLY:  |70-0 |(May 16, 2013)  |SENATE: |38-0 |(August 15,    |
          |           |     |                |        |     |2013)          |
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           Original Committee Reference:    G.O.  

           SUMMARY  :  Adds a provision to the Alcoholic Beverage Control Act  
          (ABC Act) to permit an on-sale retail licensee that obtained a  
          caterer's permit to return unused and unopened beer, purchased  
          for sale at the catered event, to the original selling licensee,  
          as specified.

           The Senate amendments :

          1)Permit an on-sale retail licensee, that purchases beer for  
            sale at an event for which a caterer's event permit has been  
            issued by the Department of Alcoholic Beverage Control (ABC),  
            to return the unused and unopened beer to the original selling  
            licensee at the conclusion of the catered event or upon  
            expiration of the catering authorization, as defined. 

          2)Require the on-sale retail licensee holding the catering  
            authorization to record and maintain a record of the inventory  
            of all unused and unopened beer to be returned at the  
            conclusion of the catering event.

          3)Require the original selling licensee to prepare an invoice of  
            the returned beer that references the original sales invoice,  
            as described.

          4)Make it explicit that any beer returned must be delivered to  
            the original selling licensee at the conclusion of the catered  
            event or upon expiration of the catering authorization.  The  
            original selling licensee may credit the account of the  
            on-sale retail licensee in an amount not to exceed the  
            original sales price of the returned beer, as defined.
           
          EXISTING LAW  :









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          1)Permits the return of beer for errors in delivery, health and  
            safety recalls and the identical exchange of out-of-code  
            products.  

          2)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.

          3)Allows an alcoholic beverage licensee to accept the return of  
            unsold and unopened beer from an organization that obtains a  
            temporary license.  Additionally, the licensee may credit the  
            account of the organization in an amount not to exceed the  
            original sales price of the returned beer, provided that the  
            beer has been paid for in full.

          4)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. 

          5)Defines an "on-sale" license as authorizing the sale of all  
            types of alcoholic beverages, namely:  beer, wine and  
            distilled spirits, for consumption on the premises (such as at  
            a restaurant or bar).  An "off-sale" license authorizes the  
            sale of all types of alcoholic beverages for consumption off  
            the premises in original, sealed containers.  

          6)Provides that a violation of any of its provisions for which  
            another penalty or punishment is not specifically provided is  
            a misdemeanor.
           
          AS PASSED BY THE ASSEMBLY  , this bill added a new provision to  
          the ABC Act that permits the return of unsold and unopened beer  
          from an organization that obtained a temporary license.  
           
          FISCAL EFFECT  :  According to the Senate Appropriations  
          Committee, pursuant to Senate Rule 28.8, negligible state costs.








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           COMMENTS  :  This bill, as amended in the Senate is consistent  
          with Assembly actions.

           Purpose of the bill  :  According to the author's office, only  
          specified holders of permanent retail licenses are able to  
          acquire a caterer's permit.  Due to the fact that they are  
          holders of permanent retail licenses, they are ineligible to  
          return unsold and unopened beer to an alcoholic beverage  
          licensee and have their account credited.  This measure is  
          intended to allow a caterer to return unsold and unopened beer  
          to a beer distributor or manufacturer for credit.  

          The author's office points out that often times it is difficult  
          to estimate the amount of beer that will be consumed at an event  
          which can lead to a situation whereby a caterer has  
          overestimated the amount of beer needed for any particular event  
          and is left with an excess of stock.  If the caterer cannot sell  
          the beer at future events or at its permanently licensed premise  
          and the beer expires or goes "out-of-code," the distributor or  
          manufacturer must exchange the out-of-code beer for fresh beer  
          and bear the cost of fresh inventory and also pay to have the  
          out-of-code beer destroyed.
                                           
          Prior legislation  :  SB 1393 (Negrete McLeod), Chapter 163,  
          Statutes of 2012.  Allowed an alcoholic beverage licensee to  
          accept the return of unsold and unopened beer from organizations  
          that obtain a particular license, as specified, and allowed the  
          return of beer that is recalled or that is considered to present  
          a health and safety issue by the manufacturer, importer, or  
          governmental entity if distributed, offered for sale, or sold in  
          the state.  Also, allowed for the exchange of beer or a credit  
          memorandum.

          SB 487 (Negrete McLeod) of 2011.  Would have added a new  
          provision to the ABC Act authorizing the return of unsold and  
          unopened beer from an organization that obtained a temporary  
          license.  This bill was held in the Assembly Governmental  
          Organization (G.O.) Committee at the author's request.

          AB 3071 (Governmental Organization 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  








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          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.


           Analysis Prepared by  :    Eric Johnson / G. O. / (916) 319-2531


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