senate Bill S4499

Amended

Relates to the shipment of alcoholic beverages into the state

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Sponsor

Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 07 / Apr / 2011
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 07 / Jun / 2011
    • REPORTED AND COMMITTED TO FINANCE
  • 15 / Jun / 2011
    • AMEND AND RECOMMIT TO FINANCE
  • 15 / Jun / 2011
    • PRINT NUMBER 4499A
  • 04 / Jan / 2012
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Summary

Relates to the shipment of alcoholic beverages into the state and requires the completion of a report by the primary source of supply before commencing such sale or shipment.

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Bill Details

See Assembly Version of this Bill:
A6884
Versions:
S4499
S4499A
Legislative Cycle:
2011-2012
Current Committee:
Senate Investigations And Government Operations
Law Section:
Alcoholic Beverage Control Law
Laws Affected:
Add ยง101-c, ABC L

Votes

7
0
7
Aye
0
Nay
1
aye with reservations
0
absent
0
excused
0
abstained
show Investigations and Government Operations committee vote details

Sponsor Memo

BILL NUMBER:S4499

TITLE OF BILL:
An act
to amend the alcoholic beverage control law, in relation to the shipment
of alcoholic beverages into the state

PURPOSE OF THE BILL:
This bill would amend the Alcoholic Beverage
Control Law to insure that alcoholic beverages distributed in this
state pass through those authorized to sell the product. This will
protect against counterfeit or "grey market" goods and would serve as
an enforcement tool in the collection of state excise taxes. This
would be accomplished by adding a new "primary source" statute that
would require the manufacturer of an alcoholic beverage to identity
the entities that are authorized to distribute, at wholesale, the
product in this state.

SUMMARY OF SPECIFIC PROVISIONS:
Section 1 of the bill would add a new
section 101-c to the Alcoholic Beverage Control Law. The subdivisions
of this new section would provide as follows:

Subdivision 1 defines the term "primary source of supply" as being the
manufacturer or brand owner of the alcoholic beverage, if it is
produced in the United States, or the exclusive importer, as
designated by the manufacturer, for products manufactured outside the
United States.

Subdivision 2 requires the "primary source of supply" to submit
documentation to the Authority which identifies the particular
product, the licensed wholesalers in this state authorized to sell
the product at wholesale, and the entities responsible for complying
with the state's brand label registration and price posting laws with
respect to the product.

Subdivision 3 requires that. the form containing the documentation
provided for in subdivision 2 must be filed, with certain exceptions,
at least 30 days before the product is shipped into, or sold in this
state.

Subdivision 4 requires that the form containing the documentation must
be amended when certain changes are made to the information that has
already been submitted.

Subdivision 5 addresses the manner (certified mail) by which the
documentation must be submitted to the Authority.

Subdivision 6 exempts those selling privately held wine and liquor and
out-of-state wineries shipping directing to consumers from compliance
with the provisions of the new section.

Subdivision 7 advises licensed wholesalers that they cannot sell an
alcoholic beverage unless they are listed as an authorized
distributor in the form submitted by the primary source of supply.


Subdivision 8 advised licensed retailers that they cannot buy an
alcoholic beverage unless it is purchased from a wholesaler who is
listed an authorized distributor in the form submitted by the primary
source of supply.

Subdivision 9 imposes limited record keeping requirements on the
primary source of supply with respect to the licensees in this state
who purchased alcoholic beverages from the primary source of supply.

Subdivision 10 gives rule making power to the Authority to assist in
the administration of this section.

Section 2 of the bill would make the new section effective immediately.

JUSTIFICATION:
There are substantial quantities of "grey market"
alcoholic beverages being imported into, or sold in this state. These
products are either counterfeit versions of the genuine alcoholic
beverage produced by the manufacturer, or the genuine product that
has been obtained by a wholesaler from a person who was not
authorized to distribute the product.

Both scenarios are a cause of concern. With respect to counterfeit
products, there is no assurance that the alcoholic beverage is safe
for human consumption. The product, because of its packaging, appears
to the consumer be the genuine product. However, the consumer will
have no idea that the product may be something of lesser quality or,
more importantly, something that may pose a serious, immediate health
risk to the consumer.

With respect to genuine products distributed by unauthorized
wholesalers, such activity undermines the "three tier system" in
place in this state. Sale of alcoholic beverages by such wholesalers
can result in unpaid excise taxes and a disruption in the orderly
distribution of alcoholic beverages, one of the stated purposes of
the Alcoholic Beverage Control Law.

Initially, those unfamiliar with the "primary source of supply"
concept may be concerned that it is an attempt to require
manufactures to have franchise agreements with wholesalers, thus
restricting the number of wholesalers who can sell the product. The
proposed statute specifically states that manufacturers are riot
required to limit the number of wholesalers that can market their
products. They need only identify the wholesalers who will be
carrying their products.

EXISTING LAW:
There is no current statute specifically addressing this
issue. Existing sections of the Alcoholic Beverage Control Law, with
respect to brand label registration and price posting, provide
limited means to track whether alcoholic beverages are being
distributed by authorized wholesalers.

PRIOR LEGISLATIVE HISTORY:
Similar intent to A.9815/S.6691 of 2009-2010.

FISCAL IMPLICATIONS:


Increased revenue from the collection of excise
taxes.

EFFECTIVE DATE:
This act shall take effect on the one hundred
eightieth day after it shall have become a law.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  4499

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                              April 7, 2011
                               ___________

Introduced  by  Sen.  MARCELLINO  -- read twice and ordered printed, and
  when printed to be committed to the Committee  on  Investigations  and
  Government Operations

AN  ACT  to amend the alcoholic beverage control law, in relation to the
  shipment of alcoholic beverages into the state

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  The alcoholic beverage control law is amended by adding a
new section 101-c to read as follows:
  S 101-C. PRIMARY SOURCE  OF  SUPPLY.  1.  FOR  THE  PURPOSES  OF  THIS
SECTION,  THE  "PRIMARY SOURCE OF SUPPLY" OF AN ALCOHOLIC BEVERAGE SHALL
MEAN THE MANUFACTURER OR BRAND OWNER IF LOCATED IN THE UNITED STATES OR,
IN THE CASE OF AN ALCOHOLIC BEVERAGE  MANUFACTURED  OUTSIDE  THE  UNITED
STATES, THE EXCLUSIVE DESIGNATED IMPORTER OF SUCH ALCOHOLIC BEVERAGE.
  2.  BEFORE  COMMENCING  THE SALE OR SHIPMENT OF ANY ALCOHOLIC BEVERAGE
INTO OR WITHIN THIS STATE, THE PRIMARY SOURCE OF SUPPLY OF SUCH ALCOHOL-
IC BEVERAGE SHALL SUBMIT TO THE AUTHORITY A COMPLETE  REPORT,  ON  FORMS
PRESCRIBED BY THE AUTHORITY, WHICH SHALL INCLUDE:
  (A) THE NAME OF THE PRIMARY SOURCE OF SUPPLY;
  (B)  A  LIST  OF  THE  NAMES OF THE LICENSED WHOLESALERS IN THIS STATE
DESIGNATED TO SELL THE ALCOHOLIC BEVERAGE:
  (I) SUCH LIST SHALL BE CONSISTENT WITH ANY LIST SUBMITTED PURSUANT  TO
PARAGRAPH (A) OF SUBDIVISION FOUR-A OF SECTION ONE HUNDRED ONE-B OF THIS
ARTICLE  RESTRICTING  THE  DISTRIBUTION  OF  SUCH  ALCOHOLIC BEVERAGE TO
CERTAIN WHOLESALERS;
  (II) THIS PARAGRAPH SHALL NOT REQUIRE THE PRIMARY SOURCE OF SUPPLY  TO
RESTRICT THE SALE OF ANY ALCOHOLIC BEVERAGE TO CERTAIN WHOLESALERS;
  (C)  THE  NAME  OF  THE  PERSON,  IF NOT THE PRIMARY SOURCE OF SUPPLY,
DESIGNATED TO FILE THE PRICE SCHEDULE FOR THE PRODUCT REQUIRED  PURSUANT
TO  PARAGRAPH  (A)  OF SUBDIVISION THREE OF SECTION ONE HUNDRED ONE-B OF
THIS ARTICLE;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10362-01-1

S. 4499                             2

  (D) THE NAME OF THE PERSON, IF  NOT  THE  PRIMARY  SOURCE  OF  SUPPLY,
DESIGNATED  TO  FILE  THE  APPLICATION  FOR REGISTRATION OF THE BRAND OR
TRADE NAME LABEL PURSUANT  TO  PARAGRAPH  (A)  OF  SUBDIVISION  FOUR  OF
SECTION ONE HUNDRED SEVEN-A OF THIS ARTICLE;
  (E)  THE  PRODUCTS TO BE SOLD IN, OR SHIPPED INTO, THIS STATE, INCLUD-
ING:
  (I) THE BRAND NAME;
  (II) CLASS TYPE;
  (III) FANCIFUL NAME.
  (F) CONFIRMATION OF COMPLIANCE WITH APPLICABLE  FEDERAL  AND/OR  STATE
LABELING  REQUIREMENTS,  SUCH AS TTB IDENTIFICATION NUMBER FOR THE BRAND
LABEL AND NEW YORK STATE DEPARTMENT OF AGRICULTURE AND MARKETS LABORATO-
RY ANALYSIS;
  (G) IN THE CASE OF AN IMPORTER, DOCUMENTATION  ESTABLISHING  THAT  THE
IMPORTER IS THE EXCLUSIVE IMPORTER FOR THE FOREIGN MANUFACTURER OR BRAND
OWNER OF THE PRODUCT FOR THE PURPOSE OF COMPLIANCE WITH THIS SECTION.
  3.  SUCH FORM SHALL BE SUBMITTED TO THE AUTHORITY AT LEAST THIRTY DAYS
BEFORE THE ALCOHOLIC BEVERAGES SET FORTH THEREIN  ARE  SHIPPED  INTO  OR
SOLD IN THIS STATE. FOR GOOD CAUSE SHOWN, AND FOR REASONS NOT INCONSIST-
ENT  WITH THE PURPOSE OF THIS CHAPTER, THE AUTHORITY, IN ITS DISCRETION,
MAY ALLOW FOR THE SUBMISSION OF A FORM LESS THAN THIRTY DAYS BEFORE  THE
ALCOHOLIC  BEVERAGES  SET FORTH THEREIN ARE SHIPPED INTO OR SOLD IN THIS
STATE.
  4. A NEW FORM MUST BE FILED IN THE EVENT THAT A  MANUFACTURER  CHANGES
ITS  DESIGNATED  IMPORTER OR WHOLESALERS PRIOR TO CONTINUING THE SALE OR
SHIPMENT OF ANY ALCOHOLIC BEVERAGE.
  5. ALL  FORMS  SHALL  BE  FILED  BY  CERTIFIED  MAIL,  RETURN  RECEIPT
REQUESTED AND SHALL TAKE EFFECT UPON RECEIPT OF THE FORM BY THE AUTHORI-
TY.
  6.  THE  PROVISIONS  OF THIS SECTION SHALL NOT APPLY TO PRIVATELY HELD
WINE OR LIQUOR BEING SOLD PURSUANT  TO  SECTION  NINETY-NINE-G  OF  THIS
CHAPTER  OR  TO  WINE SOLD PURSUANT TO A DIRECT INTERSTATE WINE SHIPPING
LICENSE ISSUED UNDER SECTION SEVENTY-NINE-C OF THIS CHAPTER.
  7. NO LICENSED WHOLESALER  SHALL  SELL  AN  ALCOHOLIC  BEVERAGE  TO  A
RETAILER  UNLESS  SUCH  WHOLESALER  HAS  BEEN  AUTHORIZED BY THE PRIMARY
SOURCE OF SUPPLY, PURSUANT TO SUBDIVISION TWO OF THIS SECTION,  TO  SELL
SUCH ALCOHOLIC BEVERAGE.
  8.  NO  RETAILER  SHALL PURCHASE AN ALCOHOLIC BEVERAGE OTHER THAN FROM
THE MANUFACTURER, IF LICENSED IN THIS STATE TO MANUFACTURE SUCH ALCOHOL-
IC BEVERAGE, OR FROM A WHOLESALER WHO HAS BEEN AUTHORIZED BY THE PRIMARY
SOURCE OF SUPPLY, PURSUANT TO SUBDIVISION TWO OF THIS SECTION,  TO  SELL
SUCH ALCOHOLIC BEVERAGE.
  9.  THE  PRIMARY SOURCE OF SUPPLY SHALL MAINTAIN RECORDS OF ALL TRANS-
ACTIONS WITH WHOLESALERS LICENSED WITHIN THIS STATE WHICH SHALL SHOW THE
NAMES, ADDRESSES AND LICENSE NUMBERS OF SUCH LICENSEES TOGETHER WITH THE
QUANTITY AND PRICE OF ALCOHOLIC BEVERAGES SOLD TO SUCH  LICENSEES.  SUCH
RECORDS  SHALL BE MAINTAINED FOR A PERIOD OF TWO YEARS AND SHALL BE MADE
AVAILABLE FOR INSPECTION BY THE AUTHORITY AND THE DEPARTMENT OF TAXATION
AND FINANCE.
  10. THE AUTHORITY IS HEREBY AUTHORIZED TO DO SUCH ACTS, PRESCRIBE SUCH
FORMS AND MAKE SUCH RULES, REGULATIONS AND ORDERS AS IT MAY DEEM  NECES-
SARY OR PROPER TO EFFECTUATE THE PROVISIONS OF THIS SECTION.
  S 2. This act shall take effect on the one hundred eightieth day after
it shall have become a law.

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