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AB-495 Alcoholic beverage control: distilled spirits: licensure.(2021-2022)

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Date Published: 08/12/2022 09:41 AM
AB495:v96#DOCUMENT

Amended  IN  Senate  August 11, 2022
Amended  IN  Senate  June 16, 2022
Amended  IN  Assembly  March 18, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 495

Introduced by Assembly Member Bigelow

February 09, 2021

An act to amend Sections 23771, 23772, and 24044 23771 and 23772 of the Business and Professions Code, relating to alcoholic beverages.


LEGISLATIVE COUNSEL'S DIGEST


AB 495, as amended, Bigelow. Alcoholic beverage control: distilled spirits: licensure.
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 prohibits the issuance of a distilled spirits license, except a distilled spirits manufacturer’s, a craft distiller’s, or a distilled spirits manufacturer’s agent’s license, to any person, or to any officer, director, employee, or agent of a person, that manufactures distilled spirits within or without this state. Existing law prohibits a person that holds any ownership or interest, as specified, in a craft distiller’s license, distilled spirits wholesaler’s license, rectifier’s license, or retailer’s license from also holding a distilled spirits manufacturer’s license or a distilled spirits manufacturer’s agent’s license.

This bill would also prohibit a person that holds a specified ownership or interest in an importer’s license from also holding a distilled spirits manufacturer’s license or a distilled spirits manufacturer’s agent’s license. The bill would except from the prohibitions described in the above paragraph a person holding a distilled spirits wholesaler’s license, or any officer, director, employee, or agent of the person, if that person has specified characteristics. The bill would require, in this regard, that the person be a manufacturer of beer with at least 2 manufacturing locations in California, that the person hold at least 2 beer and wine wholesale licenses in California, and that the person have an ownership interest in both an in-state and out-of-state distilled spirits manufacturer that imports and distributes only distilled spirits products that meet certain criteria. The bill would also make technical and conforming changes.

The Alcoholic Beverage Control Act allows licenses for the retail sale of alcoholic beverages to be issued for, or transferred to, premises that are to be constructed or are in the process of construction.

This bill would require a licensee transferring a license, as described above, to follow specified notification requirements.

Notwithstanding the prohibitions described in the above paragraph, this bill would authorize a person that manufactures or produces distilled spirits within or without California to hold a distilled spirits importer or wholesaler’s license if they meet prescribed requirements, including that the person be a manufacturer of beer with at least 2 manufacturing locations. The bill would authorize a person holding a distilled spirits importer or wholesaler’s license under these provisions to import and distribute distilled spirits products only if those products meet specified requirements, and would also make technical and conforming changes.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 23771 of the Business and Professions Code is amended to read:

23771.
 Except as provided in Sections 23771.5 and 23772, a distilled spirits license of any kind, except a distilled spirits manufacturer’s, a craft distiller’s, or a distilled spirits manufacturer’s agent’s license, shall not be issued to any person, or to any officer, director, employee, or agent of any person, that manufactures distilled spirits within or without this state.

SEC. 2.

 Section 23772 of the Business and Professions Code is amended to read:

23772.
 (a) A distilled spirits manufacturer’s or distilled spirits manufacturer’s agent’s license shall not be held by any person that holds any ownership or interest, directly or indirectly, by stock ownership, interlocking directors, trusteeship, loan, mortgage, or lien on any personal or real property, or otherwise, in any craft distiller’s, distilled spirits wholesaler’s, importer’s, rectifier’s, or retailer’s license.
(b) The provisions of subdivision (a) shall not apply to the financial or representative relationship between a manufacturer, winegrower, manufacturer’s agent, rectifier, distiller, bottler, importer, or wholesaler, or any officer, director, or agent of that person, and a person holding only one of the following types of licenses:
(1) On-sale general license for a bona fide club.
(2) Club license (issued under Article 4 (commencing at Section 23425) of Chapter 3).
(3) Veterans’ club license (issued under Article 5 (commencing at Section 23450) of Chapter 3).
(4) On-sale license for boats, trains, sleeping cars, or airplanes where the alcoholic beverages produced or sold by the manufacturer, winegrower, manufacturer’s agent, rectifier, bottler, importer, or wholesaler or any officer, director, or agent of that person are not sold, furnished, or given, directly or indirectly, to the on-sale licensee.

(c)The provisions of subdivision (a) and Section 23771 shall not apply to any person, or to any officer, director, employee, or agent of that person, that produces distilled spirits within or without this state, provided that the person holding the distilled spirits importer or wholesaler’s license has all of the following characteristics:

(1)They are a beer manufacturer with at least two manufacturing locations in this state.

(2)They hold at least two beer and wine wholesale licenses in this state.

(3)They have a direct or indirect ownership interest in both an in-state and out-of-state distilled spirits manufacturer.

(4)They import and distribute only distilled spirits products that meet any of the following criteria:

(A)The distilled spirits are manufactured or produced either within or without this state by an entity in which the licensee holds a direct or indirect interest.

(B)The distilled spirits are manufactured or produced under a written contract with another manufacturer within or without this state for an entity in which the licensee holds a direct or indirect interest.

(C)The distilled spirits are produced and bottled under a written contract with another manufacturer within or without this state for an entity in which the licensee holds a direct or indirect interest.

(c) (1) Notwithstanding subdivision (a) and Section 23771, any person that manufactures or produces distilled spirits within or without this state may hold a distilled spirits importer or wholesaler’s license if the person meets all of the following:
(A) They are a beer manufacturer with at least two manufacturing locations in this state or another state.
(B) They hold at least two beer and wine wholesale licenses in this state.
(C) They have a direct ownership interest in a distilled spirits manufacturer in this state or another state.
(D) As of July 1, 2022, they meet the requirements described in subparagraphs (A) to (C), inclusive.
(2) A person holding a distilled spirits importer or wholesaler’s license in accordance with paragraph (1) may import and distribute only distilled spirits products that meet any of the following criteria:
(A) The distilled spirits are manufactured or produced either within or without this state by an entity in which the licensee holds a direct interest.
(B) The distilled spirits are manufactured or produced under a written contract with another manufacturer within or without this state for an entity in which the licensee holds a direct interest.
(C) The distilled spirits are produced and bottled under a written contract with another manufacturer within or without this state for an entity in which the licensee holds a direct interest.

SEC. 3.Section 24044 of the Business and Professions Code is amended to read:
24044.

(a)Licenses for the retail sale of alcoholic beverages may be issued for or transferred to premises that are to be constructed or that are in the process of construction. Alcoholic beverages shall not be sold pursuant to the license until the premises have been completed.

(b)A licensee transferring a license to a premises pursuant to this section shall follow the notification requirements prescribed in Section 23985. Nothing in this section shall require an existing licensee to comply with the notification requirements if the construction is taking place on the existing premises of the existing license.