Senate Bill S7591

2017-2018 Legislative Session

Authorizes retail licensees to purchase beer, wine or liquor by means of a business credit card

download bill text pdf

Archive: Last Bill Status - In Senate Committee Rules Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

View Actions

Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 20, 2018	committed to rules
May 22, 2018	advanced to third reading
May 16, 2018	2nd report cal.
May 15, 2018	1st report cal.1202
Jan 29, 2018	referred to investigations and government operations

Votes

- May 15, 2018 - Investigations And Government Operations Committee Vote
  S7591
  
  Aye
  
  9
  
  Nay
  
  0
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  
  0
  - - Investigations And Government Operations Committee Vote: May 15, 2018
      
      aye (9)
      
      Benjamin
      
      Carlucci
      
      Golden
      
      Hoylman-Sigal
      
      Kavanagh
      
      Lanza
      
      Murphy
      
      O'Mara
      
      Phillips

co-Sponsors

2017-S7591 (ACTIVE) - Details

See Assembly Version of this Bill:: A9688
Current Committee:: Senate Rules
Law Section:: Alcoholic Beverage Control Law
Laws Affected:: Amd §§101-aa & 101-aaa, ABC L
Versions Introduced in 2019-2020 Legislative Session:: S4241, A6701

2017-S7591 (ACTIVE) - Summary

Authorizes retail licensees to purchase beer, wine and liquor by means of a business credit card.

2017-S7591 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S7591

SPONSOR: LANZA
 
TITLE OF BILL:  An act to amend the alcoholic beverage control law, in
relation to authorizing retail licenses to purchase beer, wine or liquor
with a business credit card

 
PURPOSE OF THE BILL:

To allow licensed retailers to use business credit cards to purchase
wine, wine products, beer and liquor from licensed distributors and
wholesalers.

 
SUMMARY OF PROVISIONS:

Section 1 amends S 101-aa(1) of the Alcoholic Beverage Control Law to
establish the definition of "business credit card."

Section 2 amends § 101-aa(2) of the Alcoholic Beverage Control Law to
permit retail licensees to use business credit cards for the purchase of
wine and liquor. Further, it requires manufacturers and distributors to

use reasonable diligence to ensure that retail licensees do not use
personal credit cards for such purposes.

Section 3 adds new subdivision (3b) to § 101-aa of the Alcoholic Bever-
age Control Law to provide that retail licensees shall reimburse whole-
salers and manufacturers for credit card surcharges and fees resulting
from such transactions; and that the State Liquor Authority shall deter-
mine the rate and methodology for such reimbursements.

Section 4 amends S 101-aaa(1) of the Alcoholic Beverage Control Law to
establish the definition of "business credit card."

Section 5 amends § 101-aaa(2) of the Alcoholic Beverage Control Law to
permit retail licensees to use business credit cards for the purchase of
beer, cider, or wine products. Further, it requires manufacturers and
distributors to use reasonable diligence to ensure that retail licensees
do not use personal credit cards for such purposes.

Section 6 adds new subdivision (3b) to § 101-aaa of the Alcoholic Bever-
age Control Law to provide that retail licensees shall reimburse whole-
salers and manufacturers for credit card surcharges and fees resulting
from such transactions; and that the State Liquor Authority shall deter-
mine the rate and methodology for such reimbursements.

Section 7 establishes the effective date.

 
EXISTING LAW:

Under current law, retail licensees may only pay for the purchase of
liquor, wine, beer, cider, and wine products with cash, certified check,
money order, electronic funds transfer, bank officer's check or draft,
or check.

 
JUSTIFICATION:

Credit cards are basic tools of modern commerce, and are used regularly
throughout the world today. As such, alcohol beverage retailers should
be permitted to use to business credit cards to purchase products from
duly licensed alcohol beverage wholesalers and distributors. Allowing
licensed retailers to buy alcohol beverages from distributors using
credit cards will facilitate commercial transactions and improve
accountability through enhanced record-keeping, while preserving regula-
tory policy objectives such as credit limitations and tied-house
restrictions.

If a retailer uses a credit card to buy alcohol beverage inventory, the
wholesaler receives payment immediately. The wholesaler is not extending
credit to the retailer; rather, credit is extended by a financial insti-
tution that has no direct interest in the alcohol beverage industry. The
involvement of the third-party financial institution actually creates an
additional barrier between the retailer and the, wholesaler, effectively
alleviating the historical concerns behind these credit limitations.
Moreover, the involvement of the financial institution issuing the cred-
it card increases timely and effective accountability through independ-
ent, timely and effective record-keeping as to all credit card trans-
actions.  Hence,.as a matter of alcohol regulatory policy, the use of a
credit card in no way affords the wholesaler an opportunity to gain
undue influence with the retailer; the ensuing credit obligation owed by
the retailer is to the card-issuer, not the merchant selling the alcohol
inventory to the card holder.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect 90 days after enactment, with provisions.

2017-S7591 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7591
 
                             I N  S E N A T E
 
                             January 29, 2018
                                ___________
 
 Introduced  by  Sen.  LANZA  -- read twice and ordered printed, and when
   printed to be committed to the Committee on Investigations and Govern-
   ment Operations
 
 AN ACT to amend the alcoholic  beverage  control  law,  in  relation  to
   authorizing  retail  licenses  to purchase beer, wine or liquor with a
   business credit card

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subdivision 1 of section 101-aa of the alcoholic beverage
 control law is amended to add new paragraph g to read as follows:
   G. "BUSINESS CREDIT CARD" MEANS ANY CARD ISSUED PURSUANT TO AN  AGREE-
 MENT  THAT ALLOWS THE HOLDER THEREOF TO OBTAIN GOODS AND SERVICES ON THE
 CREDIT OF THE ISSUER, AND SUCH CARD WAS PROVIDED TO  A  RETAIL  LICENSEE
 FOR BUSINESS OR COMMERCIAL USE.
   § 2. Subdivision 2 of section 101-aa of the alcoholic beverage control
 law, as amended by chapter 242 of the laws of 2012, is amended and a new
 subdivision 3-a is added to read as follows:
   2.  No  manufacturer  or  wholesaler licensed under this chapter shall
 sell or deliver any liquor or wine to  any  retail  licensee  except  as
 provided for in this section:
   (a) for cash to be paid at the time of delivery; [or]
   (b)  on terms requiring payment by such retail licensee for such alco-
 holic beverages on or before the final payment date of the credit period
 for which delivery is made; OR
   (C) BY BUSINESS CREDIT CARD; PROVIDED THAT A  MANUFACTURER  OR  WHOLE-
 SALER  SHALL  EXERCISE  REASONABLE DILIGENCE TO ENSURE THE SALE COMPORTS
 WITH THE REQUIREMENTS OF THIS SECTION; AND, UPON EXERCISING  SUCH  DILI-
 GENCE, SHALL NOT BE FOUND TO HAVE VIOLATED THIS PARAGRAPH WHERE A RETAIL
 LICENSEE USES A CREDIT CARD OTHER THAN A BUSINESS CREDIT CARD.
   3-A.  WHERE  A RETAIL LICENSEE USES A BUSINESS CREDIT CARD PURSUANT TO
 THIS SECTION, SUCH RETAIL LICENSEE SHALL  REIMBURSE  THE  WHOLESALER  OR
 MANUFACTURER FOR CREDIT CARD SURCHARGES AND FEES INCURRED AS A RESULT OF
 THE TRANSACTION. THIS RATE SHALL BE DETERMINED ON AN ANNUAL BASIS BY THE
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD14524-01-8

 S. 7591                             2
 
 AUTHORITY BASED ON AN ASSESSMENT OF SURCHARGES AND FEES IMPOSED BY CRED-
 IT CARD ISSUERS, AND REIMBURSED IN A MANNER ESTABLISHED BY REGULATIONS.
   §  3.  Subdivision  1  of  section  101-aaa  of the alcoholic beverage
 control law is amended by adding a new paragraph h to read follows:
   H. "BUSINESS CREDIT CARD" MEANS ANY CARD ISSUED PURSUANT TO AN  AGREE-
 MENT  THAT ALLOWS THE HOLDER THEREOF TO OBTAIN GOODS AND SERVICES ON THE
 CREDIT OF THE ISSUER, AND SUCH CARD WAS PROVIDED TO  A  RETAIL  LICENSEE
 FOR BUSINESS OR COMMERCIAL USE.
   §  4.  Subdivision  2  of  section  101-aaa  of the alcoholic beverage
 control law, as amended by chapter 242 of the laws of 2012,  is  amended
 and a new subdivision 3-a is added to read as follows:
   2.  No  manufacturer  or  wholesaler licensed under this chapter shall
 sell or deliver any beer, cider or wine products to any retail  licensee
 except as provided for in this section:
   (a) for cash to be paid at the time of delivery; [or]
   (b)  on terms requiring payment by such retail licensee for such beer,
 cider, or wine products on or before the final payment date of any cred-
 it period within which delivery is made; OR
   (C) BY BUSINESS CREDIT CARD; PROVIDED THAT A  MANUFACTURER  OR  WHOLE-
 SALER  SHALL  EXERCISE  REASONABLE DILIGENCE TO ENSURE THE SALE COMPORTS
 WITH THE REQUIREMENTS OF THIS SECTION; AND, UPON EXERCISING  SUCH  DILI-
 GENCE, SHALL NOT BE FOUND TO HAVE VIOLATED THIS PARAGRAPH WHERE A RETAIL
 LICENSEE USES A CREDIT CARD OTHER THAN A BUSINESS CREDIT CARD.
   Provided, however, that the sale of wine products or cider to a retail
 licensee  by a wholesaler licensed under section fifty-eight, sixty-two,
 or seventy-eight of this chapter, or a licensed manufacturer  of  liquor
 or  wine  or  a  cider  producer's  license,  shall  be  governed by the
 provisions of section one hundred-one-aa of this article.
   3-A. WHERE A RETAIL LICENSEE USES A BUSINESS CREDIT CARD  PURSUANT  TO
 THIS  SECTION,  SUCH  RETAIL  LICENSEE SHALL REIMBURSE THE WHOLESALER OR
 MANUFACTURER FOR CREDIT CARD SURCHARGES AND FEES INCURRED AS A RESULT OF
 THE TRANSACTION. THIS RATE SHALL BE DETERMINED ON AN ANNUAL BASIS BY THE
 AUTHORITY BASED ON AN ASSESSMENT OF SURCHARGES AND FEES IMPOSED BY CRED-
 IT CARD ISSUERS, AND REIMBURSED IN A MANNER ESTABLISHED BY REGULATIONS.
   § 5. This act shall take effect on the one hundred twentieth day after
 it shall have become a law; provided, however, that effective immediate-
 ly, the addition, amendment and/or repeal  of  any  rule  or  regulation
 necessary  for  the implementation of this act on its effective date are
 authorized and directed to be made  and  completed  on  or  before  such
 effective date.

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Senate Bill S7591

Sponsored By

Archive: Last Bill Status - In Senate Committee Rules Committee

Actions

Votes

May 15, 2018 - Investigations And Government Operations Committee Vote

Investigations And Government Operations Committee Vote: May 15, 2018

co-Sponsors

2017-S7591 (ACTIVE) - Details

2017-S7591 (ACTIVE) - Summary

2017-S7591 (ACTIVE) - Sponsor Memo

2017-S7591 (ACTIVE) - Bill Text download pdf

Comments

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Sponsored By

Andrew J. Lanza

Archive: Last Bill Status - In Senate Committee Rules Committee

Actions

Votes

co-Sponsors

Terrence Murphy

Martin Malavé Dilan

Martin J. Golden

Luis R. Sepúlveda

2017-S7591 (ACTIVE) - Details

2017-S7591 (ACTIVE) - Summary

2017-S7591 (ACTIVE) - Sponsor Memo

2017-S7591 (ACTIVE) - Bill Text download pdf

Comments