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SB-620 Distilled spirits and beer: direct shipper permits.(2021-2022)

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Date Published: 03/11/2021 09:00 PM
SB620:v98#DOCUMENT

Amended  IN  Senate  March 11, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 620


Introduced by Senator Allen

February 18, 2021


An act to amend Section 23363.1 of add Sections 23661.4 and 23661.8 to the Business and Professions Code, relating to alcoholic beverages.


LEGISLATIVE COUNSEL'S DIGEST


SB 620, as amended, Allen. Distilled spirits: tastings. Distilled spirits and beer: direct shipper permits.

Existing law, the Alcoholic Beverage Control Act, authorizes distilled spirits tastings to be conducted by a distilled spirits manufacturer’s licensee or a craft distiller’s licensee off the licensee’s premises only for an event sponsored by a nonprofit organization. The act provides that a violation of its provisions is a misdemeanor, unless otherwise specified.

This bill would require a nonprofit organization sponsoring the event to keep the permit, or a copy of the permit, at the location of the tasting. By expanding the definition of an existing crime, the bill would impose a state-mandated local program.

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. The Alcoholic Beverage Control Act authorizes a person licensed in California or any other state as a winegrower who obtains a wine direct shipper permit to sell and ship wine directly to a resident of California, who is 21 years of age or older, for the resident’s personal use and not for resale.
This bill would authorize a person licensed in California as a distilled spirits manufacturer or craft distiller, a holder of a federal basic permit to import distilled spirits issued by the Federal Alcohol and Tobacco Tax and Trade Bureau and a license to import distilled spirits issued by this state or any other state, or a person licensed in any other state as a distilled spirits producer, who obtains a distilled spirits direct shipper permit, to sell and ship distilled spirits directly to a resident of California, who is 21 years of age or older, for the resident’s personal use and not for resale. The bill would impose various obligations on distilled spirits direct shipper permitholders before they could begin shipping, including obtaining a seller’s permit or registering with the State Board of Equalization. The bill would prohibit sales and shipments of distilled spirits directly to consumers in California from distilled spirits producers who do not possess a distilled spirits direct shipper permit. The bill would provide that a person who knowingly makes, participates in, transports, imports, or receives such a shipment would be guilty of a misdemeanor. By expanding the definition of a crime, this bill would impose a state-mandated local program.
This bill would also authorize a person licensed in this state or any other state as a beer manufacturer, regardless of the specific type of license, who obtains a beer direct shipper permit to sell and ship beer directly to a resident of California, who is 21 years of age or older, for the resident’s personal use and not for resale. The bill would create an analogous set of obligations and rights for the direct shipping of beer as those described above in connection with the direct shipping of distilled spirits. The bill would provide that a person who knowingly makes, participates in, transports, imports, or receives such a shipment would be guilty of a misdemeanor. By expanding the definition of a crime, this 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.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 Section 23661.4 is added to the Business and Professions Code, to read:

23661.4.
 (a) (1) Notwithstanding any law, rule, or regulation to the contrary, any person licensed in this state as a distilled spirits manufacturer or craft distiller or in any other state as a distilled spirits producer, or a holder of a federal basic permit to import distilled spirits issued by the Federal Alcohol and Tobacco Tax and Trade Bureau and a license to import distilled spirits issued by this state or any other state, who obtains a distilled spirits direct shipper permit pursuant to this section, may sell and ship distilled spirits directly to a resident of California, who is 21 years of age or older, for the resident’s personal use and not for resale.
(2) Before sending any shipment to a resident of California, the distilled spirits direct shipper permitholder shall do all of the following:
(A) File an application with the department.
(B) Pay the application fee as specified in subdivision (a) of Section 23320 if the distilled spirits producer or importer is not currently licensed by the department.
(C) Provide the department its current California alcoholic beverage license number or a true copy of its alcoholic beverage license issued by another state.
(D) Obtain from the department a distilled spirits direct shipper permit.
(E) Obtain a seller’s permit or register with the State Board of Equalization pursuant to Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code.
(b) A distilled spirits direct shipper permit authorizes the permitholder to do all of the following:
(1) Sell and ship distilled spirits to any person 21 years of age or older for their personal use and not for resale.
(2) Ship distilled spirits directly to a resident in this state only in containers that are conspicuously labeled with the words: “CONTAINS ALCOHOL: SIGNATURE OF PERSON AGE 21 YEARS OR OLDER REQUIRED FOR DELIVERY.”
(3) Ship distilled spirits only if the permitholder requires the carrier to obtain the signature of any individual 21 years of age or older before delivering any distilled spirits shipped to an individual in this state.
(4) Ship distilled spirits only if the permitholder requires the carrier to obtain the signature of any individual 21 years of age or older before delivering any distilled spirits shipped to an individual in this state.
(5) If the permitholder is located outside of this state, pay to the State Board of Equalization all sales and use taxes and excise taxes on sales to residents of California under the distilled spirits direct shipper permit. For excise tax purposes, all distilled spirits sold pursuant to a direct shipper permit shall be deemed to be distilled spirits sold in this state.
(6) If located within this state, provide the department any necessary additional information not currently provided to ensure compliance with this section.
(7) Permit the department or the State Board of Equalization to perform an audit of the distilled spirits direct shipper permitholder’s records upon request.
(8) Be deemed to have consented to the jurisdiction of the department or any other state agency and the California courts concerning enforcement of this section and any related laws, rules, or regulations.
(c) A distilled spirits shipper permitholder located outside of the state may annually renew its permit with the department by paying an annual fee as specified in subdivision (b) of Section 23320 and adjusted pursuant to subdivisions (d) and (e) of Section 23320 and providing the department with a true copy of its current alcoholic beverage license issued by another state. A distilled spirits direct shipper permitholder located in California shall renew its distilled spirits direct shipper permit in conjunction with its master license. For purposes of this section, “master license” means a distilled spirits manufacturer or craft distiller license, or a distilled spirits general importer or distilled sprits importer license, issued by the department.
(d) The department and the State Board of Equalization may promulgate rules and regulations to effectuate the purposes of this law.
(e) The department may enforce the requirements of this section by administrative proceedings to suspend or revoke the distilled spirits direct shipper permit, and the department may accept payment of an offer in compromise in lieu of suspension as provided by this division. Any hearing held pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code against a permitholder outside of California shall be held in the City of Sacramento.
(f) Sales and shipments of distilled spirits directly to consumers in California from distilled spirits producers or importers who do not possess a current distilled spirits direct shipper permit from the department are prohibited. Any person who knowingly makes, participates in, transports, imports, or receives such a shipment is guilty of a misdemeanor pursuant to Section 25617.

SEC. 2.

 Section 23661.8 is added to the Business and Professions Code, to read:

23661.8.
 (a) (1) Notwithstanding any law, rule, or regulation to the contrary, any person licensed in this state or any other state as a beer manufacturer, regardless of specific type of license, who obtains a beer direct shipper permit pursuant to this section may sell and ship beer directly to a resident of California, who is 21 years of age or older, for the resident’s personal use and not for resale.
(2) Before sending any shipment to a resident of California, the beer direct shipper permitholder shall do all of the following:
(A) File an application with the department.
(B) Pay the application fee as specified in subdivision (a) of Section 23320 if the beer manufacturer is not currently licensed by the department.
(C) Provide the department its California alcoholic beverage license number or a true copy of its current alcoholic beverage license issued by another state.
(D) Obtain from the department a beer direct shipper permit.
(E) Obtain a seller’s permit or register with the State Board of Equalization pursuant to Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code.
(b) A beer direct shipper permit authorizes the permitholder to do all of the following:
(1) Sell and ship beer to any person 21 years of age or older for their personal use and not for resale.
(2) Ship beer directly to a resident in this state only in containers that are conspicuously labeled with the words: “CONTAINS ALCOHOL: SIGNATURE OF PERSON AGE 21 YEARS OR OLDER REQUIRED FOR DELIVERY.”
(3) Ship beer only if the permitholder requires the carrier to obtain the signature of any individual 21 years of age or older before delivering any beer shipped to an individual in this state.
(4) If the permitholder is located outside of this state, report to the department no later than January 31 of each year, the total amount of beer shipped into the state during the preceding calendar year under the beer direct shipper permit.
(5) If the permitholder is located outside of this state, pay to the State Board of Equalization all sales and use taxes, and excise taxes on sales to residents of California under the beer direct shipper permit. For excise tax purposes, all beer sold pursuant to a direct shipper permit shall be deemed to be beer sold in this state.
(6) If located within this state, provide the department any necessary additional information not currently provided to ensure compliance with this section.
(7) Permit the department or the State Board of Equalization to perform an audit of the beer direct shipper permitholder’s records upon request.
(8) Be deemed to have consented to the jurisdiction of the department or any other state agency and the California courts concerning enforcement of this section and any related laws, rules, or regulations.
(c) A beer direct shipper permitholder located outside of the state may annually renew its permit with the department by paying an annual fee as specified in subdivision (b) of Section 23320, and adjusted pursuant to subdivisions (d) and (e) of Section 23320, and providing the department with a true copy of its current alcoholic beverage license issued by another state. A beer direct shipper permitholder located in California shall renew its beer direct shipper permit in conjunction with its master license. For purposes of this section, “master license” means a beer manufacturer’s license, regardless of specific type of license, issued by the department.
(d) The department and the State Board of Equalization may promulgate rules and regulations to effectuate the purposes of this law.
(e) The department may enforce the requirements of this section by administrative proceedings to suspend or revoke the beer direct shipper permit, and the department may accept payment of an offer in compromise in lieu of suspension as provided by this division. Any hearing held pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code against a permitholder outside of California shall be held in the City of Sacramento.
(f) Sales and shipments of beer direct to consumers in California from beer manufacturers who do not possess a current beer direct shipper permit from the department are prohibited. Any person who knowingly makes, participates in, transports, imports, or receives such a shipment is guilty of a misdemeanor pursuant to Section 25617.

SECTION 1.Section 23363.1 of the Business and Professions Code is amended to read:
23363.1.

(a)A distilled spirits manufacturer’s license or a craft distiller’s license authorizes the licensee to conduct tastings of distilled spirits produced or bottled by, or produced or bottled for, the licensee, on or off the licensee’s premises.

(b)(1)Distilled spirits tastings may be conducted by the licensee off the licensee’s premises only for an event sponsored by a nonprofit organization. A distilled spirits manufacturer shall not sell or solicit sales of distilled spirits at an event. The sponsoring organization shall first obtain a permit from the department.

(2)For purposes of this subdivision, “nonprofit organization” does not include any community college or other institution of higher learning, as defined in the Education Code, nor does it include any officially recognized club, fraternity, or sorority, whether or not that entity is located on or off the institution’s campus.

(c)Tastings on the licensee’s premises shall be subject to the following conditions:

(1)The total volume of tastings of distilled spirits shall not exceed one and one-half ounces per individual per day.

(2)Tastings shall only include the products that are authorized to be produced or bottled by or for the licensee.

(3)A person under 21 years of age shall not serve tastes of distilled spirits.

(d)The nonprofit organization sponsoring the event shall keep the permit, or a copy of the permit, at the location of the tasting.

(e)Notwithstanding Section 25600, the licensee may provide distilled spirits without charge for any tastings conducted pursuant to this section. The licensee may charge for tastings conducted by the licensee on its licensed premises.

(f)This section shall not relieve the holder of a craft distiller’s license or a distilled spirits manufacturer’s license of any civil or criminal liability arising out of a violation of Section 25602.

SEC. 2.SEC. 3.

 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.