BILL ANALYSIS �
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
AB 517 (Hall) continued
Page 2
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)
AB 517 (Hall) continued
Page 3
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