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SB-973 Alcoholic beverages: annual license fees: surcharge: distilled spirits manufacturers: free or discounted rides.(2017-2018)

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Date Published: 09/24/2018 09:00 PM
SB973:v93#DOCUMENT

Senate Bill No. 973
CHAPTER 689

An act to amend Sections 23320.5 and 25600 of the Business and Professions Code, relating to alcoholic beverages.

[ Approved by Governor  September 22, 2018. Filed with Secretary of State  September 22, 2018. ]

LEGISLATIVE COUNSEL'S DIGEST


SB 973, Dodd. Alcoholic beverages: annual license fees: surcharge: distilled spirits manufacturers: free or discounted rides.
(1) Existing law, the Alcoholic Beverage Control Act, which is administered by the Department of Alcoholic Beverage Control, regulates the application, issuance, and suspension of alcoholic beverage licenses. Existing law prescribes the annual fees to be charged for each type of license. Existing law requires the department to collect an annual surcharge of $5 in addition to these fees, for deposit in the Motor Vehicle Account in the State Transportation Fund, to be used for the Department of the California Highway Patrol’s Designated Driver Program upon appropriation.
This bill would increase this surcharge to $10 and would require the Department of California Highway Patrol to prioritize the expenditure of funds received from the imposition of the surcharge for the California Highway Patrol’s Designated Driver Program’s outreach and education activities in, and adjacent to, individual events or venues, as specified.
(2) Existing law, the Alcoholic Beverage Control Act, prohibits a licensee from giving a premium, gift, or free goods in connection with the sale and distribution of any alcoholic beverage, except as provided. Existing law authorizes a beer manufacturer, as defined, to provide consumers free or discounted rides, as specified, for the purpose of furthering public safety, but prohibits the beer manufacturer from conditioning a free or discounted ride upon the purchase of an alcoholic beverage. Existing law prohibits a beer and wine wholesaler from directly or indirectly underwriting, sharing in, or contributing to, the costs of free or discounted rides or from serving as an agent of a beer manufacturer to provide free or discounted rides to consumers. Unless otherwise specified, a violation of the act is a misdemeanor.
This bill would also authorize a distilled spirits manufacturer, as defined, to provide consumers free or discounted rides, as specified, for the purpose of furthering public safety, and would prohibit the distilled spirits manufacturer from conditioning a free or discounted ride upon the purchase of an alcoholic beverage. The bill would prohibit a distilled spirits importer general, as described, from directly or indirectly underwriting, sharing in, or contributing to, the costs of free or discounted rides or from serving as an agent of a distilled spirits manufacturer to provide free or discounted rides to consumers.
By expanding the scope of an existing crime, the bill would impose 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 incorporate additional changes to Section 25600 of the Business and Professions Code proposed by AB 3264 to be operative only if this bill and AB 3264 are enacted and this bill is enacted last.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 23320.5 of the Business and Professions Code is amended to read:

23320.5.
 (a) In addition to the annual fees provided for in Section 23320, the department shall collect a surcharge of ten dollars ($10).
(b) (1) All money collected from the surcharge described in subdivision (a) shall be deposited in the Motor Vehicle Account in the State Transportation Fund, and shall be used for the Department of the California Highway Patrol’s Designated Driver Program, when appropriated to the Department of the California Highway Patrol for that purpose.
(2) The Department of California Highway Patrol shall prioritize the expenditure of funds received pursuant to this subdivision for the Designated Driver Program’s outreach and education activities in, and adjacent to, individual events or venues, including, but not limited to, stadiums, parks, entertainment complexes, and arenas.

SEC. 2.

 Section 25600 of the Business and Professions Code is amended to read:

25600.
 (a) (1) No licensee shall, directly or indirectly, give any premium, gift, or free goods in connection with the sale or distribution of any alcoholic beverage, except as provided by rules that shall be adopted by the department to implement this section or as authorized by this division.
(2) (A) Notwithstanding paragraph (1), for purposes of this section, a refund to, or exchange of products for, a dissatisfied consumer by a licensee authorized to sell to consumers shall not be deemed a premium, gift, or free goods given in connection with the sale or distribution of an alcoholic beverage.
(B) A winegrower may advertise or otherwise offer consumers a guarantee of product satisfaction only in newsletters or other publications of the winegrower or at the winegrower’s premises. A winegrower may refund to a dissatisfied consumer the entire purchase price of wine produced by that winegrower and sold to that consumer, regardless of where the wine was purchased.
(b) (1) Except as provided in paragraph (2), no rule of the department may permit a licensee to give any premium, gift, or free goods of greater than inconsequential value in connection with the sale or distribution of beer. With respect to beer, premiums, gifts, or free goods, including advertising specialties that have no significant utilitarian value other than advertising, shall be deemed to have greater than inconsequential value if they cost more than twenty-five cents ($0.25) per unit, or cost more than fifteen dollars ($15) in the aggregate for all those items given by a single supplier to a single retail premises per calendar year.
(2) (A) No rule of the department may impose a dollar limit for consumer advertising specialties furnished by a beer manufacturer to the general public other than three dollars ($3) per unit original cost to the beer manufacturer who purchased it.
(B) With respect to beer, a beer manufacturer may give consumer advertising specialties to the general public that do not exceed three dollars ($3) per unit original cost to the beer manufacturer who purchased it. For purposes of this paragraph, “beer manufacturer” includes a holder of a beer manufacturer’s license, a holder of an out-of-state beer manufacturer’s certificate, an out-of-state vendor that holds a certificate of compliance, or a holder of a beer and wine importer’s general license. A licensee authorized to give consumer advertising specialties pursuant to this paragraph shall not be precluded from doing so on the basis of holding any other type of alcoholic beverage license.
(C) A beer manufacturer, as defined in subparagraph (B) of paragraph (2) shall not require a beer wholesaler to fund the purchase of consumer advertising specialties that beer manufacturers are permitted to give under paragraph (2).
(D) Consumer advertising specialties furnished by a beer manufacturer are intended only for adults of legal drinking age. Coin banks, toys, balloons, magic tricks, miniature bottles or cans, confections, dolls, or other items that appeal to minors or underage drinkers may not be used in connection with the merchandising of beer.
(c) With respect to distilled spirits and wines, a licensee may furnish, give, rent, loan, or sell advertising specialties to a retailer, provided those items bear conspicuous advertising required of a sign and the total value of all retailer advertising specialties furnished by a supplier, directly or indirectly, to a retailer do not exceed fifty dollars ($50) per brand in any one calendar year per retail premises. The value of a retailer advertising specialty is the actual cost of that item to the supplier who initially purchased it, excluding transportation and installation costs. The furnishing or giving of any retailer advertising specialty shall not be conditioned upon the purchase of the supplier’s product. Retail advertising specialties given or furnished free of charge may not be sold by the retail licensee. No rule of the department may impose a dollar limit for consumer advertising specialties furnished by a distilled spirits supplier to a retailer or to the general public of less than five dollars ($5) per unit original cost to the supplier who purchased it.
(d) (1) Notwithstanding any other provision of this division, a beer manufacturer or distilled spirits manufacturer may provide directly to consumers free or discounted rides through taxicabs, transportation network companies, or any other ride service for the purpose of furthering public safety. The free or discounted rides may be provided by vouchers, codes, or any other method to deliver the free or discounted ride. A free or discounted ride, or the provision of a voucher, code, or other method of delivery, shall not be conditioned upon the purchase of an alcoholic beverage. A beer and wine wholesaler or distilled spirits importer general that holds a wholesaler’s or retailer’s license only as an additional license shall not directly or indirectly underwrite, share in, or contribute to, the costs of free or discounted rides or serve as an agent of a beer manufacturer or distilled spirits manufacturer to provide free or discounted rides to consumers. Nothing in this provision authorizes a beer manufacturer or distilled spirits manufacturer to provide a gift or anything of value directly or indirectly to a retail licensee.
(2) For purposes of this section:
(A) “Beer manufacturer” has the same meaning as defined in subparagraph (B) of paragraph (2) of subdivision (b).
(B) “Distilled spirits manufacturer” means a distilled spirits manufacturer, holder of a distilled spirits rectifier’s general license, distilled spirits manufacturer’s agent, brandy manufacturer, holder of an out-of-state distilled spirits shipper’s certificate, holder of a distilled spirits importer general’s license, or craft distiller.

SEC. 2.5.

 Section 25600 of the Business and Professions Code is amended to read:

25600.
 (a) (1) No licensee shall, directly or indirectly, give any premium, gift, or free goods in connection with the sale or distribution of any alcoholic beverage, except as provided by rules that shall be adopted by the department to implement this section or as authorized by this division.
(2) (A) Notwithstanding paragraph (1), for purposes of this section, a refund to, or exchange of products for, a dissatisfied consumer by a licensee authorized to sell to consumers shall not be deemed a premium, gift, or free goods given in connection with the sale or distribution of an alcoholic beverage.
(B) A winegrower may advertise or otherwise offer consumers a guarantee of product satisfaction only in newsletters or other publications of the winegrower or at the winegrower’s premises. A winegrower may refund to a dissatisfied consumer the entire purchase price of wine produced by that winegrower and sold to that consumer, regardless of where the wine was purchased.
(b) (1) Except as provided in paragraph (2), no rule of the department may permit a licensee to give any premium, gift, or free goods of greater than inconsequential value in connection with the sale or distribution of beer. With respect to beer, premiums, gifts, or free goods, including advertising specialties that have no significant utilitarian value other than advertising, shall be deemed to have greater than inconsequential value if they cost more than twenty-five cents ($0.25) per unit, or cost more than fifteen dollars ($15) in the aggregate for all those items given by a single supplier to a single retail premises per calendar year.
(2) (A) No rule of the department may impose a dollar limit for consumer advertising specialties furnished by a beer manufacturer to the general public other than three dollars ($3) per unit original cost to the beer manufacturer who purchased it.
(B) With respect to beer, a beer manufacturer may give consumer advertising specialties to the general public that do not exceed three dollars ($3) per unit original cost to the beer manufacturer who purchased it. For purposes of this paragraph, “beer manufacturer” includes a holder of a beer manufacturer’s license, a holder of an out-of-state beer manufacturer’s certificate, an out-of-state vendor that holds a certificate of compliance, or a holder of a beer and wine importer’s general license. A licensee authorized to give consumer advertising specialties pursuant to this paragraph shall not be precluded from doing so on the basis of holding any other type of alcoholic beverage license.
(C) A beer manufacturer, as defined in subparagraph (B) of paragraph (2) shall not require a beer wholesaler to fund the purchase of consumer advertising specialties that beer manufacturers are permitted to give under paragraph (2).
(D) Consumer advertising specialties furnished by a beer manufacturer are intended only for adults of legal drinking age. Coin banks, toys, balloons, magic tricks, miniature bottles or cans, confections, dolls, or other items that appeal to minors or underage drinkers may not be used in connection with the merchandising of beer.
(c) With respect to distilled spirits and wines, a licensee may furnish, give, rent, loan, or sell advertising specialties to a retailer, provided those items bear conspicuous advertising required of a sign and the total value of all retailer advertising specialties furnished by a supplier, directly or indirectly, to a retailer do not exceed fifty dollars ($50) per brand in any one calendar year per retail premises. The value of a retailer advertising specialty is the actual cost of that item to the supplier who initially purchased it, excluding transportation and installation costs. The furnishing or giving of any retailer advertising specialty shall not be conditioned upon the purchase of the supplier’s product. Retail advertising specialties given or furnished free of charge may not be sold by the retail licensee. No rule of the department may impose a dollar limit for consumer advertising specialties furnished by a distilled spirits supplier to a retailer or to the general public of less than five dollars ($5) per unit original cost to the supplier who purchased it. A rule or decision of the department may not approve glassware as an authorized retailer advertising specialty for distilled spirits or wine under this section.
(d) (1) Notwithstanding any other provision of this division, a beer manufacturer or distilled spirits manufacturer may provide directly to consumers free or discounted rides through taxicabs, transportation network companies, or any other ride service for the purpose of furthering public safety. The free or discounted rides may be provided by vouchers, codes, or any other method to deliver the free or discounted ride. A free or discounted ride, or the provision of a voucher, code, or other method of delivery, shall not be conditioned upon the purchase of an alcoholic beverage. A beer and wine wholesaler or distilled spirits importer general that holds a wholesaler’s or retailer’s license only as an additional license shall not directly or indirectly underwrite, share in, or contribute to, the costs of free or discounted rides or serve as an agent of a beer manufacturer or distilled spirits manufacturer to provide free or discounted rides to consumers. Nothing in this provision authorizes a beer manufacturer or distilled spirits manufacturer to provide a gift or anything of value directly or indirectly to a retail licensee.
(2) For purposes of this section:
(A) “Beer manufacturer” has the same meaning as defined in subparagraph (B) of paragraph (2) of subdivision (b).
(B) “Distilled spirits manufacturer” means a distilled spirits manufacturer, holder of a distilled spirits rectifier’s general license, distilled spirits manufacturer’s agent, brandy manufacturer, holder of an out-of-state distilled spirits shipper’s certificate, holder of a distilled spirits importer general’s license, or craft distiller.
(C) “Glassware” means a single-service glass container or nonglass container capable of holding no more than 23 ounces of liquid volume or a decanter, chalice, infusion jar, or similar container of any size and made of any material.

SEC. 3.

 Section 2.5 of this bill incorporates amendments to Section 25600 of the Business and Professions Code proposed by both this bill and Assembly Bill 3264. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2019, (2) each bill amends Section 25600 of the Business and Professions Code, and (3) this bill is enacted after Assembly Bill 3264, in which case Section 2 of this bill shall not become operative.

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.