BILL NUMBER: AB 2010 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 14, 2014
PASSED THE ASSEMBLY AUGUST 28, 2014
AMENDED IN SENATE AUGUST 11, 2014
AMENDED IN SENATE JUNE 12, 2014
INTRODUCED BY Assembly Member Gray
FEBRUARY 20, 2014
An act to amend Section 23104.2 of, and to repeal and add Section
23389 of, the Business and Professions Code, relating to alcoholic
beverages, and declaring the urgency thereof, to take effect
immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 2010, Gray. Alcoholic beverages: beer returns: product quality:
beer manufacturers: duplicate licenses.
Existing law, the Alcoholic Beverage Control Act, generally
permits a wholesaler or manufacturer to accept the return of beer
from a retailer only if the beer is returned in exchange for the
identical quantity and brand of beer. Existing law permits a credit
memorandum to be issued when a package is broken or damaged when the
return and corrections are completed within 15 days, as specified.
Existing law provides exceptions from this limitation, including
permitting the return of beer by a retailer to a seller, and by a
seller to a manufacturer or importer, if the beer is recalled or
presents a health or safety issue, as provided.
This bill would extend the exception provided for beer that is
recalled or presents a health and safety issue, as described above,
to beer that has product quality issues, subject to Department of
Alcoholic Beverage Control approval.
The Alcoholic Beverage Control Act is administered by the
Department of Alcoholic Beverage Control. Existing law requires a
license or permit to manufacture beer, unless the beer is
manufactured for personal or family use, under specified conditions.
A licensed beer manufacturer may sell beer to consumers at a branch
location. Existing law requires the department to issue a duplicate
license to a beer manufacturer if the beer manufacturer applies for a
duplicate license. Under existing law, for 30 days from the date of
the issuance of a duplicate license, retail sales of beer are
prohibited at a branch office for which the duplicate license was
issued. The act provides that a violation of its provisions is a
misdemeanor, unless otherwise specified.
This bill would, instead, allow the department to issue a
duplicate license at its discretion where specified privileges are to
be exercised at the branch office. The bill would prohibit the sale
or tasting of alcoholic beverages to consumers at more than 6 branch
office locations, and allow 2 of the branch office locations to be
bona fide eating places owned and operated by and for the beer
manufacturer, as provided. The bill would require the department to
issue a beer manufacturer temporary permit upon request and payment
of a $100 fee and would also authorize the department to issue a
duplicate license when specified privileges are not going to be
exercised at a branch office. The bill would eliminate the 30-day
prohibition on retail sales of beer for a branch office with a
duplicate license. Because the violation of a provision of a license
is punishable as a misdemeanor, the bill expands the definition of an
existing crime, thereby creating a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
This bill would declare that it is to take effect immediately as
an urgency statute.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 23104.2 of the Business and Professions Code is
amended to read:
23104.2. (a) Subject to the exceptions specified in subdivision
(b), a retail licensee may return beer to the wholesaler or
manufacturer from whom the retail licensee purchased the beer, or any
successor thereto, and the wholesaler, manufacturer, or successor
thereto may accept that return if the beer is returned in exchange
for the identical quantity and brand of beer. No wholesaler or
manufacturer, or any successor thereto, shall accept the return of
any beer from a retail licensee except when the beer delivered was
not the brand or size container ordered by the retail licensee or the
amount delivered was other than the amount ordered, in which case
the order may be corrected by the wholesaler or manufacturer who sold
the beer, or any successor thereto. If a package had been broken or
otherwise damaged prior to or at the time of actual delivery, a
credit memorandum may be issued for the returned package by the
wholesaler or manufacturer who sold the beer, or any successor
thereto, in lieu of exchange for an identical package when the return
and corrections are completed within 15 days from the date the beer
was delivered to the retail licensee.
(b) Notwithstanding subdivision (a), a wholesaler or manufacturer,
or any successor thereto, may accept the return of beer purchased
from that wholesaler, manufacturer, or successor thereto, as follows:
(1) (A) From a seasonal or temporary licensee if at the
termination of the period of the license the seasonal or temporary
licensee has beer remaining unsold, or from an annual licensee
operating on a temporary basis if at the termination of the temporary
period the annual licensee has beer remaining unsold.
(B) For purposes of subparagraph (A), an annual licensee shall be
considered to be operating on a temporary basis if he or she operates
at seasonal resorts, including summer and winter resorts, or at
sporting or entertainment facilities, including racetracks, arenas,
concert halls, and convention centers. Temporary status shall be
deemed terminated when operations cease for 15 days or more. No
wholesaler or manufacturer, or successor thereto, shall accept the
return of beer from an annual licensee considered to be operating on
a temporary basis unless the licensee notifies that wholesaler or
manufacturer, or successor thereto, within 15 days of the date the
licensee's operations ceased.
(2) (A) Subject to subparagraph (B), a wholesaler or manufacturer,
or any successor thereto, may, with department approval, accept the
return of a brand of beer discontinued in a California market area or
a seasonal brand of beer from a retail licensee, provided that the
beer is exchanged for a quantity of beer of a brand produced or sold
by the same manufacturer with a value no greater than the original
sales price to the retail licensee of the returned beer. For purposes
of this subparagraph, "seasonal brand of beer" means a brand of
beer, as defined in Section 23006, that is brewed by a manufacturer
to commemorate a specific holiday season and is so identified by
appropriate product packaging and labeling.
(B) A discontinued brand of beer may not be reintroduced for a
period of 12 months in the same California market area in which a
return and exchange of that beer as described in subparagraph (A) has
taken place. A seasonal brand of beer may not be reintroduced for a
period of six months in the same California market area in which a
return and exchange of that beer as described in subparagraph (A) has
taken place.
(c) Notwithstanding subdivision (a), a wholesaler or manufacturer,
or any successor thereto, may accept the return of beer purchased
from that wholesaler or manufacturer, or any successor thereto, by
the holder of a retail license following the revocation of,
suspension of, voluntary surrender of, or failure to renew the retail
license.
(d) A wholesaler or manufacturer, or any successor thereto, may
credit the account of the retailer identified in subdivision (c) in
an amount not to exceed the original sales price to the retailer of
the returned beer, provided that the beer has been paid for in full.
(e) (1) Notwithstanding the 15-day time limit for the return of
beer described in subdivision (a), beer that is recalled or that is
considered by a manufacturer, importer, or governmental entity to
present health, safety, or product quality issues if distributed,
offered for sale, or sold in the state may be accepted for return at
anytime from a retailer and be picked up by the seller of beer. The
seller of beer may exchange the returned beer for identical product,
if safe inventory or quality-controlled product inventory is
available, issue a deferred exchange memorandum showing the beer was
picked up and is to be replaced when inventory is available, or issue
a credit memorandum to the retailer for the returned beer. The
seller of beer may exchange with the manufacturer or importer the
returned beer and the seller of beer's inventory that was recalled or
considered to present health, safety, or product quality issues. The
returned beer may be exchanged for identical product, if safe
inventory or quality-controlled product inventory is available, or
the seller of beer may elect to receive either a refund from or be
issued a credit memorandum by the manufacturer or importer for the
returned beer and seller of beer's inventory that was recalled or
considered to present health, safety, or product quality issues.
(2) Returns for manufacturer or importer product quality issues
pursuant to this subdivision are subject to department approval, and
shall not include the return of beer due to the aging of beer.
(f) Notwithstanding subdivision (a), a licensee may accept the
return of unsold and unopened beer from an organization that obtained
a temporary license pursuant to Section 24045 or 24045.1. 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.
(g) (1) Notwithstanding subdivision (a), an on-sale retail
licensee that purchases beer for sale at an event for which a
catering authorization is issued by the department pursuant to
Section 23399 may 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, provided the beer was
purchased for use or sale only at that event and the on-sale retail
licensee does not also provide any beer for use or sale at the event
from its permanent licensed premises. The on-sale retail licensee
holding the catering authorization shall record and maintain a record
of the inventory of all unused and unopened beer to be returned at
the conclusion of the catering event. The original selling licensee
shall prepare an invoice to reflect the returned beer that shall
reference the original sales invoice and shall provide the on-sale
retail licensee holding the catering authorization with a copy of the
invoice.
(2) Any beer returned pursuant to this subdivision must be
returned 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, provided the beer has been paid for in full.
SEC. 2. Section 23389 of the Business and Professions Code is
repealed.
SEC. 3. Section 23389 is added to the Business and Professions
Code, to read:
23389. (a) The department may issue to a beer manufacturer a
duplicate of its original license for a location or locations other
than its licensed premises of production or manufacture. A duplicate
license issued by the department authorizes the maintenance and
operation of each branch office by the beer manufacturer and shall
only have the license privileges set forth in this section. The fee
for each duplicate license, regardless of type, shall be as specified
in Section 23320.
(b) Subject to the limitations set forth in this section, a
licensed beer manufacturer may exercise all of the privileges under
its manufacturer's license at branch offices licensed by the
department, except for production or manufacture; sales to consumers
for consumption on or off the branch office premises, except as
provided for in subdivision (c); and the sale of beer and wine to
consumers for consumption on the branch office premises where a bona
fide public eating place is owned and operated by and for the beer
manufacturer, except as provided for in subdivision (c).
(c) (1) A beer manufacturer shall not sell any alcoholic beverages
to consumers for consumption on or off the licensed premises, or
provide authorized tastings to consumers, at more than six branch
office locations, regardless of how many beer manufacturer licenses
are held by the beer manufacturer either alone or under common
ownership with any other licensed beer manufacturer, and no more than
two of the six branch locations may be bona fide public eating
places owned and operated by and for the beer manufacturer. A branch
office location authorized to sell an alcoholic beverage or provide a
tasting to consumers for consumption on or off the licensed premises
or that is a bona fide public eating place owned and operated by and
for the beer manufacturer before the effective date of the act
adding this section, shall be counted against the limit imposed by
this subdivision.
(2) A branch office location where consumer tastings or sales for
on- or off- premises consumption are authorized shall not sell or
serve any alcoholic beverages other than beer that is produced and
bottled by, or produced and packaged for, the beer manufacturer.
(3) A branch office location where the sale of beer and wine to
consumers for consumption on the premises of a bona fide public
eating place is authorized shall not sell or serve alcoholic
beverages other than the following:
(A) Beer and wine that is produced and bottled by, or produced and
packaged for, the beer manufacturer.
(B) Beer and wine that is purchased by the beer manufacturer from
a licensed wholesaler that is not owned, either alone or under common
ownership, by the beer manufacturer.
(d) In order to obtain a duplicate license for a branch location
or locations with the privileges described in subdivision (c), a beer
manufacturer shall submit any application forms as the department
may require. Upon request, and upon payment by the beer manufacturer
of a fee of one hundred dollars ($100), the department shall issue to
a beer manufacturer a beer manufacturer temporary permit for use at
a branch office location during the period the application for a
duplicate license with privileges pursuant to subdivision (c) is
pending. The beer manufacturer temporary permit shall authorize the
beer manufacturer to exercise all of the privileges under the
duplicate license except for those privileges described in
subdivision (c).
(e) A beer manufacturer temporary permit shall be effective for a
period of 120 days and may be extended at the discretion of the
department for additional 120-day periods as necessary and upon
payment of an additional fee of one hundred dollars ($100).
(f) In order to obtain a duplicate license for a branch office
location or locations without the privileges described in subdivision
(c), a beer manufacturer shall submit all application forms as the
department may require, and the department shall issue that duplicate
license forthwith; provided, however, that any duplicate license
issued forthwith by the department shall be contingent on the beer
manufacturer consenting to the imposition of a condition that the
beer manufacturer shall make no changes in the character or mode of
operation of the branch office premises that would directly or
indirectly expand the privileges under the duplicate license, such as
to include those privileges described in subdivision (c), without
notice to and approval by the department. If the department receives
any protest concerning the issuance of the duplicate license
forthwith under this subdivision, the protest shall be considered as
an accusation against the licensee and a hearing had thereon as if an
accusation had been filed. Any proposed changes in the character or
mode of operation of the branch office premises that would directly
or indirectly expand the privileges under the duplicate license, such
as to include those privileges described in subdivision (c), shall
require reapplication and reissuance of the duplicate license
pursuant to subdivision (d).
(g) Notwithstanding the provisions of any other section of this
division, a beer manufacturer may continue to exercise privileges at
all of its licensed branch offices that were in existence and
authorized by the department prior to the effective date of the act
adding this section, including any privileges resulting from any
renewal or transfer of the duplicate licenses for the branch
locations, that it was authorized to exercise prior to that date.
SEC. 4. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
SEC. 5. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
In order to bolster California's economy and to aid struggling
businesses in this economically stagnant time, it is necessary for
this act to take effect immediately.