NY State Senate Bill 2019-S3881C

Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Feb 11, 2020	print number 3881c
Feb 11, 2020	amend and recommit to investigations and government operations
Jan 08, 2020	referred to investigations and government operations
Jun 07, 2019	print number 3881b
Jun 07, 2019	amend and recommit to investigations and government operations
Apr 25, 2019	print number 3881a
Apr 25, 2019	amend and recommit to investigations and government operations
Feb 20, 2019	referred to investigations and government operations

2019-S3881 - Details

See Assembly Version of this Bill:: A5756
Current Committee:: Senate Investigations And Government Operations
Law Section:: Alcoholic Beverage Control Law
Laws Affected:: Amd §3, add §116-a, ABC L
Versions Introduced in 2021-2022 Legislative Session:: S703, A901

2019-S3881 - Summary

Requires that all wine and liquor sold in the state be received from a primary American source of supply; such a source shall be the manufacturer or its exclusive agent, when the wine or liquor can be secured from the manufacturer or its exclusive agent by a wholesaler in the United States; provides that primary American sources of supply shall register with the state liquor authority.

2019-S3881 - Sponsor Memo

                                
 
BILL NUMBER: S3881

SPONSOR: KAPLAN
 
TITLE OF BILL:  An act to amend the alcoholic beverage control law, in
relation to establishing a primary American source of supply for liquor
and wine sold in this state

 
PURPOSE:

This bill would require that all wine and liquor sold in the state be
received from a primary American source of supply.

 
SUMMARY OF PROVISIONS:

Section one defines the terms "Primary American source of supply,"
"private collection," and "wholesaler"

Section two amends the alcoholic beverage control law by adding a new
section 116-a.

Subdivision one of the new section requires that the primary American

source of supply shall file a registration application with the authori-
ty.

Subdivision two establishes that the authority shall only allow one
primary American source of supply to register any brand of liquor or
wine.

Subdivision three establishes that a primary American source of supply
shall file with the authority the names of authorized wholesalers for
each brand of liquor or wine sold in this state. If the primary American
source of supply is a wholesaler, it may list itself and other whole-
salers as an authorized wholesaler of the brand. If the primary American
source of supply does not list any authorized wholesalers, any licensed
wholesaler may purchase the liquor or wine from the primary American
source of supply and sell the brand in this state.

Subdivision four states that except as set forth in subdivisions seven
and eight of this section or shipments of wine or liquor from a private
collection made directly to a New York State resident for personal use,
no one shall ship or caused to be shipped into this state, nor shall any
wholesaler or retailer in this state receive, any liquor or wine unless
the primary American source of supply has registered such brand with the
authority, the registration is approved, and the brand is purchased from
the primary American source of supply.

Subdivision five states a wholesaler in the state shall not purchase,
receive or be in possession of liquor or wine unless the wholesaler
obtained it directly from a registered primary American source of
supply, a designated representative if the primary American source of
supply is outside this state, or an authorized wholesaler.

Subdivision six states that nothing in this section shall be deemed to
prohibit subsequent intrastate sales transfer, and invoicing of a brand
of liquor or wine between authorized wholesalers of that' brand subse-
quent to the purchase in this state from the primary ArAtgiqqan source
of supply.


Subdivision seven states that a wholesaler may bring liquor or wine into
the state if the wholesaler certifies to the satisfaction of the author-
ity that the brand of liquor or wine comes from a manufacturer or bott-
ler that cannot, or has not and will not appoint a primary American
source of supply.

Subdivision eight states the section will not apply to a brand of liquor
or wine owned exclusively by one retailer and sold exclusively by such
retailer within this state, or a product purchased by a wholesaler or
retailer from a private collection

Subdivision nine authorizes the authority to perform acts, prescribe
forms and make rules and regulations as it deems necessary including but
not limited to establishing a format for recording the primary American
source of supply and its designees.

Section three establishes the effective date.

 
JUSTIFICATION:

The proposed legislation would amend several provisions of the Alcoholic
Beverage Control ("ABC") law to create a "primary American source of
supply" of liquor and wine for distribution and sale of alcoholic bever-
ages in New York State. The legislation would direct the manufacturer or
owner of a liquor or wine to designate the primary American source of
supply and to file a registration application with the authority. The
enactment of a primary source law would provide greater accountability
for all wine and liquor distributed and sold in New York State.  Under a
primary American source statute, wholesalers may only buy wine and
liquor directly from the brand owner or manufacturer. The primary source
is the manufacturer of liquor or wine, or the source closest to the
manufacturer in the channel of commerce from whom the product can be
secured by New York wholesalers. Under New York State's current statuto-
ry framework, there is no restriction on wholesalers seeking sources of
wine and liquor other than from the direct primary source. These non-
primary sources encompass importers from other nations. This proposed
primary source legislation would make it unlawful for any wholesale
licensee to purchase wine or liquor from other than the primary source
of supply in the United States. The legislation requires brand owners,
distributors, owners, and retainers to keep and complete accurate
records of the sales chain, the size, and brand of products. These
provisions would also increase tax collections and ensure the integrity
of the products.

According to the New York State Law Revision Commission-the oldest
continuous agency in the common law world committed to law reform
through legislation-primary source laws give a state precise excise tax
assessment and collection. A study conducted by American Economics Group
estimated approximately $39.3 million additional tax collections annual-
ly. The New York State Law Revision Commission also asserts that a
primary source law, which would identify all wholesalers able to
distribute a manufacturer's brands, would decrease the potential for
lost revenues from inaccurate reporting.  Moreover, according to the
Commission, "By far the most compelling reason to impose a primary
source law or system involves the protection of the public's health and
safety." Both brand owners and industry professionals have voiced
concern that without a primary source law, a brand owner would not be
able to assure the purity and integrity of the product.
 
LEGISLATIVE HISTORY:

2018: A10737/S5437

 
FISCAL IMPLICATIONS:

Increase in tax revenue for the State.

 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law; provided, however, that effective immediately, the addi-
tion, 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.

2019-S3881 - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3881
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             February 20, 2019
                                ___________
 
 Introduced  by  Sen.  KAPLAN -- 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
   establishing  a  primary American source of supply for liquor and wine
   sold in this state

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.    Subdivision  35  of section 3 of the alcoholic beverage
 control law is amended, and two new subdivisions 23-a and 23-b are added
 to read as follows:
   23-A. "PRIMARY AMERICAN SOURCE OF SUPPLY" MEANS (A) A MANUFACTURER  OF
 LIQUOR  OR  WINE  OR  ITS  EXCLUSIVE  AGENT IN THE UNITED STATES IF SUCH
 LIQUOR OR WINE CAN BE SECURED DIRECTLY  FROM  THE  MANUFACTURER  OR  ITS
 EXCLUSIVE  AGENT  BY  A  WHOLESALER  IN THE UNITED STATES; OR (B) IF THE
 LIQUOR OR WINE CANNOT BE SECURED DIRECTLY FROM SUCH MANUFACTURER OR  ITS
 EXCLUSIVE  AGENT,  THE SOURCE CLOSEST TO SUCH MANUFACTURER IN THE UNITED
 STATES WHEN THE BRAND ENTERS THE STREAM OF COMMERCE SHALL BE THE PRIMARY
 AMERICAN SOURCE OF SUPPLY IN THE UNITED STATES.
   23-B. "PRIVATE  COLLECTION"  MEANS  (A)  BOTTLED  WINE  THAT  (I)  WAS
 PURCHASED  AT RETAIL OR AUCTION, (II) WAS OWNED BY A NON-LICENSED PERSON
 FOR AT LEAST TWO YEARS WITH PROOF OF PURCHASE, AND (III)  IS  NOT  PRICE
 POSTED  IN NEW YORK AT THE TIME OF SALE; OR (B) A BOTTLED LIQUOR THAT IS
 EITHER (I) NOT PRICE POSTED IN NEW YORK AT THE TIME OF SALE, (II) IS  NO
 LONGER  IN  PRODUCTION,  OR  (III) IS CONTAINED IN ITS ORIGINAL CERAMIC,
 LEAD, CRYSTAL OR SIMILAR COLLECTIBLE SPECIALTY  CONTAINER  WHICH  IS  NO
 LONGER BEING OFFERED FOR SALE.
   35.  "Wholesaler" means any person who sells at wholesale any beverage
 for the sale of which a license is required under the provisions of this
 chapter. AN "AUTHORIZED WHOLESALER" IS  A  WHOLESALER  AUTHORIZED  BY  A
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01255-02-9

 S. 3881                             2
 
 PRIMARY AMERICAN SOURCE OF SUPPLY TO CARRY A SPECIFIC BRAND OF LIQUOR OR
 WINE IN THIS STATE.
   §  2.  The  alcoholic  beverage control law is amended by adding a new
 section 116-a to read as follows:
   § 116-A. PRIMARY AMERICAN SOURCE OF SUPPLY. 1.  THE  PRIMARY  AMERICAN
 SOURCE  OF  SUPPLY  AT  THE TIME THE WINE OR LIQUOR BECOMES SUITABLE FOR
 WHOLESALE OR RETAIL SALE IN NEW YORK OR A WHOLESALER LICENSED UNDER THIS
 CHAPTER WHO HAS BEEN APPOINTED ITS EXCLUSIVE  AGENT  FOR  SUCH  PURPOSE,
 SHALL  FILE  A  REGISTRATION  APPLICATION  WITH  THE  AUTHORITY ON FORMS
 PROVIDED BY THE AUTHORITY. EACH BRAND OF SUCH LIQUOR OR  WINE  SHALL  BE
 INDIVIDUALLY LISTED ON SUCH REGISTRATION.
   2.  THE  AUTHORITY  SHALL  ALLOW  ONLY  ONE PRIMARY AMERICAN SOURCE OF
 SUPPLY TO REGISTER ANY BRAND OF LIQUOR OR  WINE.  THE  PRIMARY  AMERICAN
 SOURCE  OF  SUPPLY  MAY CHANGE THE EXCLUSIVE AGENT ACTING AND CANCEL ANY
 AUTHORITY GRANTED TO A PRIOR AGENT BY FILING A  NEW  AUTHORIZATION  WITH
 THE  AUTHORITY  NOT  LESS  THAN  FORTY DAYS BEFORE THE NEW AUTHORIZATION
 BECOMES EFFECTIVE.
   3. A PRIMARY AMERICAN SOURCE OF SUPPLY OR ITS  EXCLUSIVE  AGENT  SHALL
 FILE  WITH THE AUTHORITY THE NAMES OF EACH AUTHORIZED WHOLESALER PERMIT-
 TED TO SELL EACH BRAND OF LIQUOR OR WINE SOLD  IN  THIS  STATE.  IF  THE
 PRIMARY  AMERICAN  SOURCE  OF SUPPLY IS A WHOLESALER, IT MAY LIST ITSELF
 AND OTHER WHOLESALERS AS A WHOLESALER AUTHORIZED TO SELL THE BRAND.  THE
 FILING  OF  A  WHOLESALE  PRICE  POSTING, IN ACCORDANCE WITH SECTION ONE
 HUNDRED ONE-B OF THIS ARTICLE,  LISTING  THE  NAMES  OF  THE  AUTHORIZED
 WHOLESALERS  SHALL  BE  DEEMED  COMPLIANCE  WITH  THIS  REQUIREMENT. THE
 AUTHORIZED WHOLESALERS MAY BE CHANGED AT ANY TIME AT  OR  PRIOR  TO  THE
 TIME  A WHOLESALE PRICE POSTING IS TO BE FILED PURSUANT TO SUCH SECTION.
 IF THE PRIMARY AMERICAN SOURCE OF SUPPLY DOES NOT  LIST  ANY  AUTHORIZED
 WHOLESALERS,  ANY  LICENSED  WHOLESALER  MAY PURCHASE THE LIQUOR OR WINE
 FROM THE PRIMARY AMERICAN SOURCE OF SUPPLY AND SELL THE  BRAND  IN  THIS
 STATE.
   4. EXCEPT AS SET FORTH IN SUBDIVISIONS SEVEN AND EIGHT OF THIS SECTION
 OR  SHIPMENTS  OF WINE OR LIQUOR FROM A PRIVATE COLLECTION MADE DIRECTLY
 TO A RESIDENT OF NEW YORK FOR PERSONAL USE PURSUANT TO  SECTIONS  SEVEN-
 TY-NINE-C AND SEVENTY-NINE-D OF THIS CHAPTER, NO ONE SHALL SHIP OR CAUSE
 TO  BE  SHIPPED INTO THIS STATE, NOR SHALL ANY WHOLESALER OR RETAILER IN
 THIS STATE RECEIVE, ANY LIQUOR  OR  WINE  UNLESS  THE  PRIMARY  AMERICAN
 SOURCE  OF  SUPPLY FOR SUCH LIQUOR OR WINE (I) HAS REGISTERED SUCH BRAND
 WITH THE AUTHORITY, (II) SUCH REGISTRATION  HAS  BEEN  APPROVED  BY  THE
 AUTHORITY,  AND  (III)  THE BRAND IS PURCHASED FROM THE PRIMARY AMERICAN
 SOURCE OF SUPPLY OR AN AUTHORIZED WHOLESALER.
   5. EXCEPT AS SET  FORTH  IN  SUBDIVISIONS  SEVEN  AND  EIGHT  OF  THIS
 SECTION, A WHOLESALER IN THIS STATE SHALL NOT PURCHASE, RECEIVE OR BE IN
 POSSESSION  OF  ANY  LIQUOR  OR  WINE UNLESS THE WHOLESALER OBTAINED THE
 LIQUOR OR WINE DIRECTLY FROM (I) A REGISTERED PRIMARY AMERICAN SOURCE OF
 SUPPLY, (II) A DESIGNATED REPRESENTATIVE OF THE PRIMARY AMERICAN  SOURCE
 OF  SUPPLY  IF  THE  PRIMARY  AMERICAN  SOURCE OF SUPPLY IS OUTSIDE THIS
 STATE, OR (III) AN AUTHORIZED WHOLESALER.
   6. NOTHING IN THIS SECTION SHALL  BE  DEEMED  TO  PROHIBIT  SUBSEQUENT
 INTRASTATE  SALES,  TRANSFER, AND INVOICING OF A BRAND OF LIQUOR OR WINE
 BETWEEN AUTHORIZED WHOLESALERS OF THAT BRAND SUBSEQUENT TO THE  PURCHASE
 IN THIS STATE FROM THE PRIMARY AMERICAN SOURCE OF SUPPLY.
   7. THE AUTHORITY SHALL ALLOW A WHOLESALER TO BRING LIQUOR OR WINE INTO
 THIS  STATE  IF  THE  WHOLESALER  CERTIFIES  TO  THE SATISFACTION OF THE
 AUTHORITY THAT THE BRAND OF LIQUOR OR WINE COMES FROM A MANUFACTURER  OR

 S. 3881                             3
 
 BOTTLER  THAT CANNOT, OR HAS NOT AND WILL NOT APPOINT A PRIMARY AMERICAN
 SOURCE OF SUPPLY.
   8. THIS SECTION SHALL NOT APPLY TO (I) A BRAND OF LIQUOR OR WINE OWNED
 EXCLUSIVELY  BY ONE RETAILER AND SOLD AT RETAIL WITHIN THIS STATE EXCLU-
 SIVELY BY SUCH RETAILER; OR (II) A PRODUCT PURCHASED BY A WHOLESALER  OR
 RETAILER  FROM  A PRIVATE COLLECTION IN ACCORDANCE WITH SECTIONS EIGHTY-
 FIVE AND NINETY-NINE-G OF THIS CHAPTER CONSISTENT WITH THE RULES,  REGU-
 LATIONS, ORDERS AND ADVISORIES ESTABLISHED BY THE AUTHORITY.
   9.  THE AUTHORITY IS AUTHORIZED TO PERFORM SUCH ACTS, PRESCRIBE FORMS,
 AND MAKE RULES, REGULATIONS, ORDERS AND ADVISORIES AS IT MAY DEEM NECES-
 SARY OR PROPER TO  FULLY  EFFECTUATE  THE  PROVISIONS  OF  THIS  SECTION
 INCLUDING,  BUT  NOT LIMITED TO, ESTABLISHING A FORMAT FOR RECORDING THE
 PRIMARY AMERICAN SOURCE OF SUPPLY AND ITS DESIGNEES.
   § 3. This act shall take effect on the ninetieth day  after  it  shall
 have  become  a  law; provided, however, that effective immediately, 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.

co-Sponsors

2019-S3881A - Details

See Assembly Version of this Bill:: A5756
Current Committee:: Senate Investigations And Government Operations
Law Section:: Alcoholic Beverage Control Law
Laws Affected:: Amd §3, add §116-a, ABC L
Versions Introduced in 2021-2022 Legislative Session:: S703, A901

2019-S3881A - Summary

Requires that all wine and liquor sold in the state be received from a primary American source of supply; such a source shall be the manufacturer or its exclusive agent, when the wine or liquor can be secured from the manufacturer or its exclusive agent by a wholesaler in the United States; provides that primary American sources of supply shall register with the state liquor authority.

2019-S3881A - Sponsor Memo

                                
 
BILL NUMBER: S3881A

SPONSOR: KAPLAN
 
TITLE OF BILL:  An act to amend the alcoholic beverage control law, in
relation to establishing a primary American source of supply for liquor
and wine sold in this state

 
PURPOSE:

This bill would require that all wine and liquor sold in the state be
received from a primary American source of supply.

 
SUMMARY OF PROVISIONS:

Section one defines the terms "Primary American source of supply,"
"private collection," and "wholesaler"

Section two amends the alcoholic beverage control law by adding a new
section 116-a.

Subdivision one of the new section requires that the primary American

source of supply shall file a registration application with the authori-
ty.

Subdivision two establishes that the authority shall only allow one
primary American source of supply to register any brand of liquor or
wine.

Subdivision three establishes that a primary American source of supply
shall file with the authority the names of authorized wholesalers for
each brand of liquor or wine sold in this state. If the primary American
source of supply is a wholesaler, it may list itself and other whole-
salers as an authorized wholesaler of the brand. If the primary American
source of supply does not list any authorized wholesalers, any licensed
wholesaler may purchase the liquor or wine from the primary American
source of supply and sell the brand in this state.

Subdivision four states that except as set forth in subdivisions seven
and eight of this section or shipments of wine or liquor from a private
collection made directly to a New York State resident for personal use,
no one shall ship or caused to be shipped into this state, nor shall any
wholesaler or retailer in this state receive, any liquor or wine unless
the primary American source of supply has registered such brand with the
authority, the registration is approved, and the brand is purchased from
the primary American source of supply.

Subdivision five states a wholesaler in the state shall not purchase,
receive or be in possession of liquor or wine unless the wholesaler
According to the New York State Law Revision Commission-the oldest
continuous agency in the common law world committed to law reform
through legislation-primary source laws give a state precise excise tax
assessment and collection. A study conducted by American Economics Group
estimated approximately $39.3 million additional tax collections annual-
ly. The New York State Law Revision Commission also asserts that a
primary source law, which would identify all wholesalers able to
distribute a manufacturer's brands, would decrease the potential for
lost revenues from inaccurate reporting.  Moreover, according to the
Commission, "By far the most compelling reason to impose a primary
source law or system involves the protection of the public's health and
safety." Both brand owners and industry professionals have voiced
concern that without a primary source law, a brand owner would not be
able to assure the purity and integrity of the product.

 
LEGISLATIVE HISTORY:

2018: A10737/55437

 
FISCAL IMPLICATIONS:
Increase in tax revenue for the State.

 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law; provided, however, that effective immediately, the addi-
tion, 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.

2019-S3881A - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  3881--A
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             February 20, 2019
                                ___________
 
 Introduced  by  Sen.  KAPLAN -- read twice and ordered printed, and when
   printed to be committed to the Committee on Investigations and Govern-
   ment  Operations  --  committee  discharged,  bill  amended,   ordered
   reprinted as amended and recommitted to said committee
 
 AN  ACT  to  amend  the  alcoholic  beverage control law, in relation to
   establishing a primary American source of supply for liquor  and  wine
   sold in this state
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1.   Subdivision 35 of section 3  of  the  alcoholic  beverage
 control law is amended, and two new subdivisions 23-a and 23-b are added
 to read as follows:
   23-A.  "PRIMARY AMERICAN SOURCE OF SUPPLY" MEANS (A) A MANUFACTURER OF
 LIQUOR OR WINE OR ITS EXCLUSIVE AGENT  IN  THE  UNITED  STATES  IF  SUCH
 LIQUOR  OR  WINE  CAN  BE  SECURED DIRECTLY FROM THE MANUFACTURER OR ITS
 EXCLUSIVE AGENT BY A WHOLESALER IN THE UNITED  STATES;  OR  (B)  IF  THE
 LIQUOR  OR WINE CANNOT BE SECURED DIRECTLY FROM SUCH MANUFACTURER OR ITS
 EXCLUSIVE AGENT, THE SOURCE CLOSEST TO SUCH MANUFACTURER IN  THE  UNITED
 STATES WHEN THE BRAND ENTERS THE STREAM OF COMMERCE SHALL BE THE PRIMARY
 AMERICAN SOURCE OF SUPPLY IN THE UNITED STATES.
   23-B.  "PRIVATE  COLLECTION"  MEANS  (A)  BOTTLED  WINE  THAT  (I) WAS
 PURCHASED AT RETAIL OR AUCTION, (II) IS AT MINIMUM A VINTAGE  TEN  YEARS
 OLD  AT  THE  TIME OF SALE, AND (III) WAS OWNED BY A NON-LICENSED PERSON
 WITH PROOF OF PURCHASE, OR (IV) IS NOT PRICE POSTED IN NEW YORK  AT  THE
 TIME OF SALE; OR (B) A BOTTLED LIQUOR THAT IS EITHER (I) NOT PRICE POST-
 ED  IN NEW YORK AT THE TIME OF SALE, (II) IS NO LONGER IN PRODUCTION, OR
 (III) IS CONTAINED IN ITS ORIGINAL CERAMIC,  LEAD,  CRYSTAL  OR  SIMILAR
 COLLECTIBLE  SPECIALTY  CONTAINER  WHICH  IS NO LONGER BEING OFFERED FOR
 SALE, OR (IV) WAS BOTTLED TEN YEARS PRIOR TO THE DATE OF SALE.
   35. "Wholesaler" means any person who sells at wholesale any  beverage
 for the sale of which a license is required under the provisions of this
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD01255-07-9

 S. 3881--A                          2
 
 chapter.  AN  "AUTHORIZED  WHOLESALER"  IS  A WHOLESALER AUTHORIZED BY A
 PRIMARY AMERICAN SOURCE OF SUPPLY TO CARRY A SPECIFIC BRAND OF LIQUOR OR
 WINE IN THIS STATE.
   §  2.  The  alcoholic  beverage control law is amended by adding a new
 section 116-a to read as follows:
   § 116-A. PRIMARY AMERICAN SOURCE OF SUPPLY. 1.  THE  PRIMARY  AMERICAN
 SOURCE  OF  SUPPLY  AT  THE TIME THE WINE OR LIQUOR BECOMES SUITABLE FOR
 WHOLESALE OR RETAIL SALE IN NEW YORK OR A WHOLESALER LICENSED UNDER THIS
 CHAPTER WHO HAS BEEN APPOINTED ITS EXCLUSIVE  AGENT  FOR  SUCH  PURPOSE,
 SHALL  FILE  A  REGISTRATION  APPLICATION  WITH  THE  AUTHORITY ON FORMS
 PROVIDED BY THE AUTHORITY. EACH BRAND OF SUCH LIQUOR OR  WINE  SHALL  BE
 INDIVIDUALLY LISTED ON SUCH REGISTRATION.
   2.  THE  AUTHORITY  SHALL  ALLOW  ONLY  ONE PRIMARY AMERICAN SOURCE OF
 SUPPLY TO REGISTER ANY BRAND OF LIQUOR OR  WINE.  THE  PRIMARY  AMERICAN
 SOURCE  OF  SUPPLY  MAY CHANGE THE EXCLUSIVE AGENT ACTING AND CANCEL ANY
 AUTHORITY GRANTED TO A PRIOR AGENT BY FILING A  NEW  AUTHORIZATION  WITH
 THE  AUTHORITY  NOT  LESS  THAN  FORTY DAYS BEFORE THE NEW AUTHORIZATION
 BECOMES EFFECTIVE.
   3. A PRIMARY AMERICAN SOURCE OF SUPPLY OR ITS  EXCLUSIVE  AGENT  SHALL
 FILE  WITH THE AUTHORITY THE NAMES OF EACH AUTHORIZED WHOLESALER PERMIT-
 TED TO SELL EACH BRAND OF LIQUOR OR WINE SOLD  IN  THIS  STATE.  IF  THE
 PRIMARY  AMERICAN  SOURCE  OF SUPPLY IS A WHOLESALER, IT MAY LIST ITSELF
 AND OTHER WHOLESALERS AS A WHOLESALER AUTHORIZED TO SELL THE BRAND.  THE
 FILING  OF  A  WHOLESALE  PRICE  POSTING, IN ACCORDANCE WITH SECTION ONE
 HUNDRED ONE-B OF THIS ARTICLE,  LISTING  THE  NAMES  OF  THE  AUTHORIZED
 WHOLESALERS  SHALL  BE  DEEMED  COMPLIANCE  WITH  THIS  REQUIREMENT. THE
 AUTHORIZED WHOLESALERS MAY BE CHANGED AT ANY TIME AT  OR  PRIOR  TO  THE
 TIME  A WHOLESALE PRICE POSTING IS TO BE FILED PURSUANT TO SUCH SECTION.
 IF THE PRIMARY AMERICAN SOURCE OF SUPPLY DOES NOT  LIST  ANY  AUTHORIZED
 WHOLESALERS,  ANY  LICENSED  WHOLESALER  MAY PURCHASE THE LIQUOR OR WINE
 FROM THE PRIMARY AMERICAN SOURCE OF SUPPLY AND SELL THE  BRAND  IN  THIS
 STATE.
   4. EXCEPT AS SET FORTH IN SUBDIVISIONS SEVEN AND EIGHT OF THIS SECTION
 OR  SHIPMENTS  OF WINE OR LIQUOR FROM A PRIVATE COLLECTION MADE DIRECTLY
 TO A RESIDENT OF NEW YORK, NO ONE SHALL SHIP OR CAUSE TO BE SHIPPED INTO
 THIS STATE, NOR SHALL ANY WHOLESALER OR RETAILER IN THIS STATE  RECEIVE,
 ANY LIQUOR OR WINE UNLESS THE PRIMARY AMERICAN SOURCE OF SUPPLY FOR SUCH
 LIQUOR  OR  WINE  (I) HAS REGISTERED SUCH BRAND WITH THE AUTHORITY, (II)
 SUCH REGISTRATION HAS BEEN APPROVED BY  THE  AUTHORITY,  AND  (III)  THE
 BRAND  IS  PURCHASED  FROM  THE  PRIMARY AMERICAN SOURCE OF SUPPLY OR AN
 AUTHORIZED WHOLESALER.
   5. EXCEPT AS SET  FORTH  IN  SUBDIVISIONS  SEVEN  AND  EIGHT  OF  THIS
 SECTION, A WHOLESALER IN THIS STATE SHALL NOT PURCHASE, RECEIVE OR BE IN
 POSSESSION  OF  ANY  LIQUOR  OR  WINE UNLESS THE WHOLESALER OBTAINED THE
 LIQUOR OR WINE DIRECTLY FROM (I) A REGISTERED PRIMARY AMERICAN SOURCE OF
 SUPPLY, (II) A DESIGNATED REPRESENTATIVE OF THE PRIMARY AMERICAN  SOURCE
 OF  SUPPLY  IF  THE  PRIMARY  AMERICAN  SOURCE OF SUPPLY IS OUTSIDE THIS
 STATE, OR (III) AN AUTHORIZED WHOLESALER.
   6. NOTHING IN THIS SECTION SHALL  BE  DEEMED  TO  PROHIBIT  SUBSEQUENT
 INTRASTATE  SALES,  TRANSFER, AND INVOICING OF A BRAND OF LIQUOR OR WINE
 BETWEEN AUTHORIZED WHOLESALERS OF THAT BRAND SUBSEQUENT TO THE  PURCHASE
 IN THIS STATE FROM THE PRIMARY AMERICAN SOURCE OF SUPPLY.
   7. THE AUTHORITY SHALL ALLOW A WHOLESALER TO BRING LIQUOR OR WINE INTO
 THIS  STATE  IF  THE  WHOLESALER  CERTIFIES  TO  THE SATISFACTION OF THE
 AUTHORITY THAT THE BRAND OF LIQUOR OR WINE COMES FROM A MANUFACTURER  OR

 S. 3881--A                          3
 
 BOTTLER  THAT CANNOT, OR HAS NOT AND WILL NOT APPOINT A PRIMARY AMERICAN
 SOURCE OF SUPPLY.
   8. THIS SECTION SHALL NOT APPLY TO (I) A BRAND OF LIQUOR OR WINE OWNED
 EXCLUSIVELY  BY ONE RETAILER AND SOLD AT RETAIL WITHIN THIS STATE EXCLU-
 SIVELY BY SUCH RETAILER; OR (II) A PRODUCT PURCHASED BY A WHOLESALER  OR
 RETAILER  FROM  A PRIVATE COLLECTION IN ACCORDANCE WITH SECTIONS EIGHTY-
 FIVE AND NINETY-NINE-G OF THIS CHAPTER CONSISTENT WITH THE RULES,  REGU-
 LATIONS, ORDERS AND ADVISORIES ESTABLISHED BY THE AUTHORITY.
   9.  THE AUTHORITY IS AUTHORIZED TO PERFORM SUCH ACTS, PRESCRIBE FORMS,
 AND MAKE RULES, REGULATIONS, ORDERS AND ADVISORIES AS IT MAY DEEM NECES-
 SARY OR PROPER TO  FULLY  EFFECTUATE  THE  PROVISIONS  OF  THIS  SECTION
 INCLUDING,  BUT  NOT LIMITED TO, ESTABLISHING A FORMAT FOR RECORDING THE
 PRIMARY AMERICAN SOURCE OF SUPPLY AND ITS DESIGNEES.
   § 3. This act shall take effect on the ninetieth day  after  it  shall
 have  become  a  law; provided, however, that effective immediately, 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.

co-Sponsors

2019-S3881B - Details

See Assembly Version of this Bill:: A5756
Current Committee:: Senate Investigations And Government Operations
Law Section:: Alcoholic Beverage Control Law
Laws Affected:: Amd §3, add §116-a, ABC L
Versions Introduced in 2021-2022 Legislative Session:: S703, A901

2019-S3881B - Summary

Requires that all wine and liquor sold in the state be received from a primary American source of supply; such a source shall be the manufacturer or its exclusive agent, when the wine or liquor can be secured from the manufacturer or its exclusive agent by a wholesaler in the United States; provides that primary American sources of supply shall register with the state liquor authority.

2019-S3881B - Sponsor Memo

                                
 
BILL NUMBER: S3881B

SPONSOR: KAPLAN
 
TITLE OF BILL:  An act to amend the alcoholic beverage control law, in
relation to establishing a primary American source of supply for liquor
and wine sold in this state

 
PURPOSE:

This bill would require that all wine and liquor sold in the state be
received from a primary American source of supply.

 
SUMMARY OF PROVISIONS:

Section one defines the terms "Primary American source of supply,"
"private collection," and "wholesaler"

Section two amends the alcoholic beverage control law by adding a new
section 116-a.

Subdivision one of the new section requires that the primary American

source of supply shall file a registration application with the authori-
ty.

Subdivision two establishes that the authority shall only allow one
primary American source of supply to register any brand of liquor or
wine.

Subdivision three establishes that a primary American source of supply
shall file with the authority the names of authorized wholesalers for
each brand of liquor or wine sold in this state. If the primary American
source of supply is a wholesaler, it may list itself and other whole-
salers as an authorized wholesaler of the brand. If the primary American
source of supply does not list any authorized wholesalers, any licensed
wholesaler may purchase the liquor or wine from the primary American
source of supply and sell the brand in this state.

Subdivision four states that except as set forth in subdivisions seven
and eight of this section or shipments of wine or liquor from a private
collection-made-directly to-a New York-State-resident for personal use,
no one shall ship or caused to be shipped into this state, nor shall any
wholesaler or retailer in this state receive, any liquor or wine unless
the primary American source of supply has registered such brand with the
authority, the registration is approved, and the brand is purchased from
the primary American source of supply.

Subdivision five states a wholesaler in the state shall not purchase,
receive or be in possession of liquor or wine unless the wholesaler
obtained it directly from a registered primary American source of
supply, a designated representative if the primary American source of
supply is outside this state, or an authorized wholesaler.

Subdivision six states that nothing in this section shall be deemed to
prohibit subsequent intrastate sales transfer, and invoicing of a brand
of liquor or wine between authorized wholesalers of that brand subse-
quent to the purchase in this state from the primary American source of
supply.


Subdivision seven states that a wholesaler may bring liquor or wine into
the state if the wholesaler certifies to the satisfaction of the author-
ity that the brand of liquor or wine comes from a manufacturer or bott-
ler that cannot, or has not and will not appoint a primary American
source of supply.

Subdivision eight states the section will not apply to a brand of liquor
or wine owned exclusively by one retailer and sold exclusively by such
retailer within this state, or a product purchased by a wholesaler or
retailer from a private collection Subdivision nine authorizes the
authority to perform acts, prescribe forms and make rules and regu-
lations as it deems necessary including but not limited to establishing
a format for recording the primary American source of supply and its
designees.

Section three establishes the effective date.

 
JUSTIFICATION:

The proposed legislation would amend several provisions of the Alcoholic
Beverage Control ("ABC") law to create a "primary American source of
supply" of liquor and wine for distribution and sale of alcoholic bever-
ages in New York State. The legislation would direct the manufacturer or
owner of a liquor or wine to designate the primary American source of
supply and to file a registration application with the authority. The
enactment of a primary source law would provide greater accountability
for all wine and liquor distributed and sold in New York State.

Under a primary American source statute, wholesalers may only buy wine
and liquor directly from the brand owner or manufacturer. The primary
source is the manufacturer of liquor or wine, or the source closest to
the manufacturer in the channel of commerce from whom the product can be
secured by New York wholesalers. Under New York State's current statuto-
ry framework, there is no restriction on wholesalers seeking sources of
wine and liquor other than from the direct primary source. These non-
primary sources encompass importers from other nations. This proposed
primary source legislation would make it unlawful for any wholesale
licensee to purchase wine or liquor from other than the primary source
of supply in the United States. The legislation requires brand owners,
distributors, owners, and retainers to keep and complete accurate
records of the sales chain, the size, and brand of products. These
provisions would also increase tax collections and ensure the integrity
of the products.

According to the New York State Law Revision Commission-the oldest
continuous agency in the common law world committed to law reform
through legislation-primary source laws give a state precise excise tax
assessment and collection. A study conducted by American Economics Group
estimated approximately $39.3 million additional tax collections annual-
ly. The New York State Law Revision Commission also asserts that a
primary source law, which would identify all wholesalers able to
distribute a manufacturer's brands, would decrease the potential for
lost revenues from inaccurate reporting. Moreover, according to the
Commission, "By far the most compelling reason to impose a primary
source law or system involves the protection of the public's health and
safety." Both brand owners and industry professionals have voiced
concern that without a primary source law, a brand owner would not be
able to assure the purity and integrity of the product.
 
LEGISLATIVE HISTORY:

2018: A10737/S5437

 
FISCAL IMPLICATIONS:

Increase in tax revenue for the State.

 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law; provided, however, that effective immediately, the addi-
tion, 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.

2019-S3881B - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  3881--B
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             February 20, 2019
                                ___________
 
 Introduced  by Sens. KAPLAN, GAUGHRAN -- read twice and ordered printed,
   and when printed to be committed to the  Committee  on  Investigations
   and  Government  Operations  --  committee  discharged,  bill amended,
   ordered reprinted as amended and  recommitted  to  said  committee  --
   committee  discharged,  bill amended, ordered reprinted as amended and
   recommitted to said committee
 
 AN ACT to amend the alcoholic  beverage  control  law,  in  relation  to
   establishing  a  primary American source of supply for liquor and wine
   sold in this state
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.    Subdivision  35  of section 3 of the alcoholic beverage
 control law is amended and two new subdivisions 23-a and 23-b are  added
 to read as follows:
   23-A.  "PRIMARY AMERICAN SOURCE OF SUPPLY" MEANS (A) A MANUFACTURER OF
 LIQUOR OR WINE OR ITS EXCLUSIVE AGENT  IN  THE  UNITED  STATES  IF  SUCH
 LIQUOR  OR  WINE  CAN  BE  SECURED DIRECTLY FROM THE MANUFACTURER OR ITS
 EXCLUSIVE AGENT BY A WHOLESALER IN THE UNITED  STATES;  OR  (B)  IF  THE
 LIQUOR  OR WINE CANNOT BE SECURED DIRECTLY FROM SUCH MANUFACTURER OR ITS
 EXCLUSIVE AGENT, THE SOURCE CLOSEST TO SUCH MANUFACTURER IN  THE  UNITED
 STATES WHEN THE BRAND ENTERS THE STREAM OF COMMERCE SHALL BE THE PRIMARY
 AMERICAN SOURCE OF SUPPLY IN THE UNITED STATES.
   23-B.  "PRIVATE  COLLECTION"  MEANS  (A)  BOTTLED  WINE  THAT  (I) WAS
 PURCHASED AT RETAIL OR AUCTION, (II) IS AT MINIMUM A VINTAGE  TEN  YEARS
 OLD  AT  THE TIME OF SALE, OR IF SPARKLING WINE, IS A MINIMUM VINTAGE OF
 FIFTEEN YEARS OLD AT THE TIME OF SALE, AND (III) WAS OWNED BY A  NON-LI-
 CENSED PERSON WITH PROOF OF PURCHASE, OR (IV) IS NOT PRICE POSTED IN NEW
 YORK AT THE TIME OF SALE; OR (B) A BOTTLED LIQUOR THAT IS EITHER (I) NOT
 PRICE  POSTED  IN  NEW  YORK  AT  THE TIME OF SALE, (II) IS NO LONGER IN
 PRODUCTION, OR (III) IS CONTAINED IN ITS ORIGINAL CERAMIC, LEAD, CRYSTAL
 OR SIMILAR COLLECTIBLE SPECIALTY CONTAINER  WHICH  IS  NO  LONGER  BEING
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD01255-09-9

 S. 3881--B                          2
 
 OFFERED  FOR  SALE,  OR  (IV) WAS BOTTLED TEN YEARS PRIOR TO THE DATE OF
 SALE.
   35.  "Wholesaler" means any person who sells at wholesale any beverage
 for the sale of which a license is required under the provisions of this
 chapter. AN "AUTHORIZED WHOLESALER" IS  A  WHOLESALER  AUTHORIZED  BY  A
 PRIMARY AMERICAN SOURCE OF SUPPLY TO CARRY A SPECIFIC BRAND OF LIQUOR OR
 WINE IN THIS STATE.
   §  2.  The  alcoholic  beverage control law is amended by adding a new
 section 116-a to read as follows:
   § 116-A. PRIMARY AMERICAN SOURCE OF SUPPLY. 1.  THE  PRIMARY  AMERICAN
 SOURCE  OF  SUPPLY  AT  THE TIME THE WINE OR LIQUOR BECOMES SUITABLE FOR
 WHOLESALE OR RETAIL SALE IN NEW YORK OR A WHOLESALER LICENSED UNDER THIS
 CHAPTER WHO HAS BEEN APPOINTED ITS EXCLUSIVE  AGENT  FOR  SUCH  PURPOSE,
 SHALL  FILE  A  REGISTRATION  APPLICATION  WITH  THE  AUTHORITY ON FORMS
 PROVIDED BY THE AUTHORITY. EACH BRAND OF SUCH LIQUOR OR  WINE  SHALL  BE
 INDIVIDUALLY LISTED ON SUCH REGISTRATION.
   2.  THE  AUTHORITY  SHALL  ALLOW  ONLY  ONE PRIMARY AMERICAN SOURCE OF
 SUPPLY TO REGISTER ANY BRAND OF LIQUOR OR  WINE.  THE  PRIMARY  AMERICAN
 SOURCE  OF  SUPPLY  MAY CHANGE THE EXCLUSIVE AGENT ACTING AND CANCEL ANY
 AUTHORITY GRANTED TO A PRIOR AGENT BY FILING A  NEW  AUTHORIZATION  WITH
 THE  AUTHORITY  NOT  LESS  THAN  FORTY DAYS BEFORE THE NEW AUTHORIZATION
 BECOMES EFFECTIVE.
   3. A PRIMARY AMERICAN SOURCE OF SUPPLY OR ITS  EXCLUSIVE  AGENT  SHALL
 FILE  WITH THE AUTHORITY THE NAMES OF EACH AUTHORIZED WHOLESALER PERMIT-
 TED TO SELL EACH BRAND OF LIQUOR OR WINE SOLD  IN  THIS  STATE.  IF  THE
 PRIMARY  AMERICAN  SOURCE  OF SUPPLY IS A WHOLESALER, IT MAY LIST ITSELF
 AND OTHER WHOLESALERS AS A WHOLESALER AUTHORIZED TO SELL THE BRAND.  THE
 FILING  OF  A  WHOLESALE  PRICE  POSTING, IN ACCORDANCE WITH SECTION ONE
 HUNDRED ONE-B OF THIS ARTICLE,  LISTING  THE  NAMES  OF  THE  AUTHORIZED
 WHOLESALERS  SHALL  BE  DEEMED  COMPLIANCE  WITH  THIS  REQUIREMENT. THE
 AUTHORIZED WHOLESALERS MAY BE CHANGED AT ANY TIME AT  OR  PRIOR  TO  THE
 TIME  A WHOLESALE PRICE POSTING IS TO BE FILED PURSUANT TO SUCH SECTION.
 IF THE PRIMARY AMERICAN SOURCE OF SUPPLY DOES NOT  LIST  ANY  AUTHORIZED
 WHOLESALERS,  ANY  LICENSED  WHOLESALER  MAY PURCHASE THE LIQUOR OR WINE
 FROM THE PRIMARY AMERICAN SOURCE OF SUPPLY AND SELL THE  BRAND  IN  THIS
 STATE.
   4. EXCEPT AS SET FORTH IN SUBDIVISIONS SEVEN AND EIGHT OF THIS SECTION
 OR  SHIPMENTS  OF WINE OR LIQUOR FROM A PRIVATE COLLECTION MADE DIRECTLY
 TO A RESIDENT OF NEW YORK, NO ONE SHALL SHIP OR CAUSE TO BE SHIPPED INTO
 THIS STATE, NOR SHALL ANY WHOLESALER OR RETAILER IN THIS STATE  RECEIVE,
 ANY LIQUOR OR WINE UNLESS THE PRIMARY AMERICAN SOURCE OF SUPPLY FOR SUCH
 LIQUOR  OR  WINE  (I) HAS REGISTERED SUCH BRAND WITH THE AUTHORITY, (II)
 SUCH REGISTRATION HAS BEEN APPROVED BY  THE  AUTHORITY,  AND  (III)  THE
 BRAND  IS  PURCHASED  FROM  THE  PRIMARY AMERICAN SOURCE OF SUPPLY OR AN
 AUTHORIZED WHOLESALER.
   5. EXCEPT AS SET  FORTH  IN  SUBDIVISIONS  SEVEN  AND  EIGHT  OF  THIS
 SECTION, A WHOLESALER IN THIS STATE SHALL NOT PURCHASE, RECEIVE OR BE IN
 POSSESSION  OF  ANY  LIQUOR  OR  WINE UNLESS THE WHOLESALER OBTAINED THE
 LIQUOR OR WINE DIRECTLY FROM (I) A REGISTERED PRIMARY AMERICAN SOURCE OF
 SUPPLY, (II) A DESIGNATED REPRESENTATIVE OF THE PRIMARY AMERICAN  SOURCE
 OF  SUPPLY  IF  THE  PRIMARY  AMERICAN  SOURCE OF SUPPLY IS OUTSIDE THIS
 STATE, OR (III) AN AUTHORIZED WHOLESALER.
   6. NOTHING IN THIS SECTION SHALL  BE  DEEMED  TO  PROHIBIT  SUBSEQUENT
 INTRASTATE  SALES,  TRANSFER, AND INVOICING OF A BRAND OF LIQUOR OR WINE
 BETWEEN AUTHORIZED WHOLESALERS OF THAT BRAND SUBSEQUENT TO THE  PURCHASE
 IN THIS STATE FROM THE PRIMARY AMERICAN SOURCE OF SUPPLY.

 S. 3881--B                          3
 
   7. THE AUTHORITY SHALL ALLOW A WHOLESALER TO BRING LIQUOR OR WINE INTO
 THIS  STATE  IF  THE  WHOLESALER  CERTIFIES  TO  THE SATISFACTION OF THE
 AUTHORITY THAT THE BRAND OF LIQUOR OR WINE COMES FROM A MANUFACTURER  OR
 BOTTLER  THAT CANNOT, OR HAS NOT AND WILL NOT APPOINT A PRIMARY AMERICAN
 SOURCE OF SUPPLY.
   8. THIS SECTION SHALL NOT APPLY TO (I) A BRAND OF LIQUOR OR WINE OWNED
 EXCLUSIVELY  BY ONE RETAILER AND SOLD AT RETAIL WITHIN THIS STATE EXCLU-
 SIVELY BY SUCH RETAILER; OR (II) A PRODUCT PURCHASED BY A WHOLESALER  OR
 RETAILER  FROM  A PRIVATE COLLECTION IN ACCORDANCE WITH SECTIONS EIGHTY-
 FIVE AND NINETY-NINE-G OF THIS CHAPTER CONSISTENT WITH THE RULES,  REGU-
 LATIONS, ORDERS AND ADVISORIES ESTABLISHED BY THE AUTHORITY.
   9.  THE AUTHORITY IS AUTHORIZED TO PERFORM SUCH ACTS, PRESCRIBE FORMS,
 AND MAKE RULES, REGULATIONS, ORDERS AND ADVISORIES AS IT MAY DEEM NECES-
 SARY OR PROPER TO  FULLY  EFFECTUATE  THE  PROVISIONS  OF  THIS  SECTION
 INCLUDING,  BUT  NOT LIMITED TO, ESTABLISHING A FORMAT FOR RECORDING THE
 PRIMARY AMERICAN SOURCE OF SUPPLY AND ITS DESIGNEES.
   § 3. This act shall take effect on the ninetieth day  after  it  shall
 have  become  a  law; provided, however, that effective immediately, 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.

co-Sponsors

2019-S3881C (ACTIVE) - Details

See Assembly Version of this Bill:: A5756
Current Committee:: Senate Investigations And Government Operations
Law Section:: Alcoholic Beverage Control Law
Laws Affected:: Amd §3, add §116-a, ABC L
Versions Introduced in 2021-2022 Legislative Session:: S703, A901

2019-S3881C (ACTIVE) - Summary

Requires that all wine and liquor sold in the state be received from a primary American source of supply; such a source shall be the manufacturer or its exclusive agent, when the wine or liquor can be secured from the manufacturer or its exclusive agent by a wholesaler in the United States; provides that primary American sources of supply shall register with the state liquor authority.

2019-S3881C (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S3881C

SPONSOR: KAPLAN
 
TITLE OF BILL:

An act to amend the alcoholic beverage control law, in relation to
establishing a primary American source of supply for liquor and wine
sold in this state

 
PURPOSE:

This bill would require that all wine and liquor sold in the state be
received from a primary American source of supply.

 
SUMMARY OF PROVISIONS:

Section one defines the terms "Primary American source of supply,"
"private collection," "negociant," and "wholesaler"

Section two amends the alcoholic beverage control law by adding a new
section 116-a.  Subdivision one of the new section requires that the

primary American source of supply shall file a registration application
with the authority and that for wines purchased through a negociant, the
primary American source of supply shall file a separate form provided by
the authority.

Subdivision two establishes that the authority shall only allow one
primary American source of supply to register any brand of liquor or
wine, with the exception of wines purchased through a negociant.

Subdivision three establishes that a primary American source of supply
shall file with the authority the names of authorized wholesalers for
each brand of liquor or wine sold in this state. If the primary American
source of supply is a wholesaler, it may list itself and other whole-
salers as an authorized wholesaler of the brand. If the primary American
source of supply does not list any authorized wholesalers, any licensed
wholesaler may purchase the liquor or wine from the primary American
source of supply and sell the brand in this state.

Subdivision four states that except as set forth in subdivisions seven
and eight of this section or shipments of wine or liquor from a private
collection made directly to a New York State resident for personal use,
no one shall ship or caused to be shipped into this state, nor shall any
wholesaler or retailer in this state receive, any liquor or wine unless
the primary American source of supply has registered such brand with the
authority, the registration is approved, and the brand is purchased from
the primary American source of supply.

Subdivision five states a wholesaler in the state shall not purchase,
receive or be in possession of liquor or wine unless the wholesaler
obtained it directly from a registered primary American source of
supply, a designated representative if the primary American source of
supply is outside this state, an authorized wholesaler, or a negociant.

Subdivision six states that nothing in this section shall be deemed to
prohibit subsequent intrastate sales transfer, and invoicing of a brand
of liquor or wine between authorized wholesalers of that brand subse-
quent to the purchase in this state from the primary American source of
supply.
Subdivision seven states that a wholesaler may bring liquor or wine into
the state if the wholesaler certifies to the satisfaction of the author-
ity that the brand of liquor or wine comes from a manufacturer or bott-
ler that cannot, or has not and will not appoint a primary American
source of supply.

Subdivision eight states the section will not apply to a brand of liquor
or wine owned exclusively by one retailer and sold exclusively by such
retailer within this state, or a product purchased by a wholesaler or
retailer from a private collection

Subdivision nine authorizes the authority to perform acts, prescribe
forms and make rules and regulations as it deems necessary including but
not limited to establishing a format for recording the primary American
source of supply and its designees.

Section three establishes the effective date.

 
JUSTIFICATION:

The proposed legislation would amend several provisions of the Alcoholic
Beverage Control ("ABC") law to create a "primary American source of
supply" of liquor and wine for distribution and sale of alcoholic bever-
ages in New York State. The legislation would direct the manufacturer or
owner of a liquor or wine to designate the primary American source of
supply and to file a registration application with the authority. The
enactment of a primary source law would provide greater accountability
for all wine and liquor distributed and sold in New York State.

Under a primary American source statute, wholesalers may only buy wine
and liquor directly from the brand owner or manufacturer. The primary
source is the manufacturer of liquor or wine, or the source closest to
the manufacturer in the channel of commerce from whom the product can be
secured by New York wholesalers. Under New York State's current statuto-
ry framework, there is no restriction on wholesalers seeking sources of
wine and liquor other than from the direct primary source. These non-
primary sources encompass importers from other nations. This proposed
primary source legislation would make it unlawful for any wholesale
licensee to purchase wine or liquor from other than the primary source
of supply in the United States. The legislation requires brand owners,
distributors, owners, and retainers to keep and complete accurate
records of the sales chain, the size, and brand of products. These
provisions would also increase tax collections and ensure the integrity
of the products.

According to the New York State Law Revision Commission-the oldest
continuous agency in the common law world committed to law reform
through legislation-primary source laws give a state precise excise tax
assessment and collection. A study conducted by American Economics Group
estimated approximately $39.3 million additional tax collections annual-
ly. The New York State Law Revision Commission also asserts that a
primary source law, which would identify all wholesalers able to
distribute a manufacturer's brands, would decrease the potential for
lost revenues from inaccurate reporting.  Moreover, according to the
Commission, "By far the most compelling reason to impose a primary
source law or system involves the protection of the public's health and
safety." Both brand owners and industry professionals have voiced

concern that without a primary source law, a brand owner would not be
able to assure the purity and integrity of the product.

 
LEGISLATIVE HISTORY:

2018: A10737/S5437

 
FISCAL IMPLICATIONS:

Increase in tax revenue for the State.

 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law; provided, however, that effective immediately, the addi-
tion, 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.

2019-S3881C (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  3881--C
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             February 20, 2019
                                ___________
 
 Introduced  by  Sens. KAPLAN, GAUGHRAN, THOMAS -- read twice and ordered
   printed, and when printed to be committed to the Committee on Investi-
   gations  and  Government  Operations  --  committee  discharged,  bill
   amended,  ordered reprinted as amended and recommitted to said commit-
   tee --  committee  discharged,  bill  amended,  ordered  reprinted  as
   amended  and  recommitted  to  said  committee  --  recommitted to the
   Committee on Investigations and Government  Operations  in  accordance
   with  Senate  Rule  6,  sec.  8 -- committee discharged, bill amended,
   ordered reprinted as amended and recommitted to said committee
 
 AN ACT to amend the alcoholic  beverage  control  law,  in  relation  to
   establishing  a  primary American source of supply for liquor and wine
   sold in this state
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.    Subdivision  35  of section 3 of the alcoholic beverage
 control law is amended and three new subdivisions 23-a,  23-b  and  23-c
 are added to read as follows:
   23-A.  "PRIMARY AMERICAN SOURCE OF SUPPLY" MEANS (A) A MANUFACTURER OF
 LIQUOR OR WINE OR ITS EXCLUSIVE AGENT  IN  THE  UNITED  STATES  IF  SUCH
 LIQUOR  OR  WINE  CAN  BE  SECURED DIRECTLY FROM THE MANUFACTURER OR ITS
 EXCLUSIVE AGENT BY A WHOLESALER IN THE UNITED  STATES;  OR  (B)  IF  THE
 LIQUOR  OR WINE CANNOT BE SECURED DIRECTLY FROM SUCH MANUFACTURER OR ITS
 EXCLUSIVE AGENT, THE SOURCE CLOSEST TO SUCH MANUFACTURER IN  THE  UNITED
 STATES WHEN THE BRAND ENTERS THE STREAM OF COMMERCE SHALL BE THE PRIMARY
 AMERICAN SOURCE OF SUPPLY IN THE UNITED STATES.
   23-B.  "PRIVATE  COLLECTION"  MEANS  (A)  BOTTLED  WINE  THAT  (I) WAS
 PURCHASED AT RETAIL OR AUCTION, (II) IS AT MINIMUM A VINTAGE  TEN  YEARS
 OLD  AT  THE TIME OF SALE, OR IF SPARKLING WINE, IS A MINIMUM VINTAGE OF
 FIFTEEN YEARS OLD AT THE TIME OF SALE, AND (III) WAS OWNED BY A  NON-LI-
 CENSED PERSON WITH PROOF OF PURCHASE, OR (IV) IS NOT PRICE POSTED IN NEW
 YORK AT THE TIME OF SALE; OR (B) A BOTTLED LIQUOR THAT IS EITHER (I) NOT
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD01255-11-0

 S. 3881--C                          2
 
 PRICE  POSTED  IN  NEW  YORK  AT  THE TIME OF SALE, (II) IS NO LONGER IN
 PRODUCTION, OR (III) IS CONTAINED IN ITS ORIGINAL CERAMIC, LEAD, CRYSTAL
 OR SIMILAR COLLECTIBLE SPECIALTY CONTAINER  WHICH  IS  NO  LONGER  BEING
 OFFERED  FOR  SALE,  OR  (IV) WAS BOTTLED TEN YEARS PRIOR TO THE DATE OF
 SALE.
   23-C. "NEGOCIANT" MEANS THIRD-PARTY WINE MERCHANTS BASED IN FRANCE WHO
 PURCHASE STOCK DIRECTLY FROM THE PRODUCER WITH THE AUTHORIZATION TO MASS
 DISTRIBUTE AROUND THE WORLD ON A NON-EXCLUSIVE BASIS TO  ANY  AUTHORIZED
 WHOLESALER  TO  ALLOW  THE  RESALE  OF THE WINES INTO AS MANY MARKETS AS
 POSSIBLE.
   35. "Wholesaler" means any person who sells at wholesale any  beverage
 for the sale of which a license is required under the provisions of this
 chapter.  AN  "AUTHORIZED  WHOLESALER"  IS  A WHOLESALER AUTHORIZED BY A
 PRIMARY AMERICAN SOURCE OF SUPPLY TO CARRY A SPECIFIC BRAND OF LIQUOR OR
 WINE IN THIS STATE.
   § 2. The alcoholic beverage control law is amended  by  adding  a  new
 section 116-a to read as follows:
   §  116-A. PRIMARY AMERICAN SOURCE OF SUPPLY. 1. (A) THE PRIMARY AMERI-
 CAN SOURCE OF SUPPLY AT THE TIME THE WINE OR LIQUOR BECOMES SUITABLE FOR
 WHOLESALE OR RETAIL SALE IN NEW YORK OR A WHOLESALER LICENSED UNDER THIS
 CHAPTER WHO HAS BEEN APPOINTED ITS EXCLUSIVE  AGENT  FOR  SUCH  PURPOSE,
 SHALL  FILE  A FORM PROVIDED BY THE AUTHORITY. EACH BRAND OF SUCH LIQUOR
 OR WINE SHALL BE INDIVIDUALLY LISTED ON SUCH REGISTRATION.
   (B) FOR WINES PURCHASED THROUGH  A  NEGOCIANT,  THE  PRIMARY  AMERICAN
 SOURCE OF SUPPLY IS ANY WHOLESALER LICENSED UNDER THIS CHAPTER WHO SHALL
 FILE A FORM PROVIDED BY THE AUTHORITY.
   2.    WITH  THE  EXCEPTION OF WINES PURCHASED THROUGH A NEGOCIANT, THE
 AUTHORITY SHALL ALLOW ONLY ONE PRIMARY  AMERICAN  SOURCE  OF  SUPPLY  TO
 REGISTER  ANY  BRAND  OF  LIQUOR OR WINE. THE PRIMARY AMERICAN SOURCE OF
 SUPPLY MAY CHANGE THE EXCLUSIVE AGENT ACTING AND  CANCEL  ANY  AUTHORITY
 GRANTED TO A PRIOR AGENT BY FILING A NEW AUTHORIZATION WITH THE AUTHORI-
 TY  NOT LESS THAN FORTY DAYS BEFORE THE NEW AUTHORIZATION BECOMES EFFEC-
 TIVE.
   3. A PRIMARY AMERICAN SOURCE OF SUPPLY OR ITS  EXCLUSIVE  AGENT  SHALL
 FILE  WITH THE AUTHORITY THE NAMES OF EACH AUTHORIZED WHOLESALER PERMIT-
 TED TO SELL EACH BRAND OF LIQUOR OR WINE SOLD  IN  THIS  STATE.  IF  THE
 PRIMARY  AMERICAN  SOURCE  OF SUPPLY IS A WHOLESALER, IT MAY LIST ITSELF
 AND OTHER WHOLESALERS AS A WHOLESALER AUTHORIZED TO SELL THE BRAND.  THE
 FILING  OF  A  WHOLESALE  PRICE  POSTING, IN ACCORDANCE WITH SECTION ONE
 HUNDRED ONE-B OF THIS ARTICLE,  LISTING  THE  NAMES  OF  THE  AUTHORIZED
 WHOLESALERS  SHALL  BE  DEEMED  COMPLIANCE  WITH  THIS  REQUIREMENT. THE
 AUTHORIZED WHOLESALERS MAY BE CHANGED AT ANY TIME AT  OR  PRIOR  TO  THE
 TIME  A WHOLESALE PRICE POSTING IS TO BE FILED PURSUANT TO SUCH SECTION.
 IF THE PRIMARY AMERICAN SOURCE OF SUPPLY DOES NOT  LIST  ANY  AUTHORIZED
 WHOLESALERS,  ANY  LICENSED  WHOLESALER  MAY PURCHASE THE LIQUOR OR WINE
 FROM THE PRIMARY AMERICAN SOURCE OF SUPPLY AND SELL THE  BRAND  IN  THIS
 STATE.
   4. EXCEPT AS SET FORTH IN SUBDIVISIONS SEVEN AND EIGHT OF THIS SECTION
 OR  SHIPMENTS  OF WINE OR LIQUOR FROM A PRIVATE COLLECTION MADE DIRECTLY
 TO A RESIDENT OF NEW YORK, NO ONE SHALL SHIP OR CAUSE TO BE SHIPPED INTO
 THIS STATE, NOR SHALL ANY WHOLESALER OR RETAILER IN THIS STATE  RECEIVE,
 ANY LIQUOR OR WINE UNLESS THE PRIMARY AMERICAN SOURCE OF SUPPLY FOR SUCH
 LIQUOR  OR  WINE  (I) HAS REGISTERED SUCH BRAND WITH THE AUTHORITY, (II)
 SUCH REGISTRATION HAS BEEN APPROVED BY  THE  AUTHORITY,  AND  (III)  THE
 BRAND  IS  PURCHASED  FROM  THE  PRIMARY AMERICAN SOURCE OF SUPPLY OR AN
 AUTHORIZED WHOLESALER.

 S. 3881--C                          3
 
   5. EXCEPT AS SET  FORTH  IN  SUBDIVISIONS  SEVEN  AND  EIGHT  OF  THIS
 SECTION, A WHOLESALER IN THIS STATE SHALL NOT PURCHASE, RECEIVE OR BE IN
 POSSESSION  OF  ANY  LIQUOR  OR  WINE UNLESS THE WHOLESALER OBTAINED THE
 LIQUOR OR WINE DIRECTLY FROM (I) A REGISTERED PRIMARY AMERICAN SOURCE OF
 SUPPLY,  (II) A DESIGNATED REPRESENTATIVE OF THE PRIMARY AMERICAN SOURCE
 OF SUPPLY IF THE PRIMARY AMERICAN  SOURCE  OF  SUPPLY  IS  OUTSIDE  THIS
 STATE, (III) AN AUTHORIZED WHOLESALER OR (IV) A NEGOCIANT.
   6.  NOTHING  IN  THIS  SECTION  SHALL BE DEEMED TO PROHIBIT SUBSEQUENT
 INTRASTATE SALES, TRANSFER, AND INVOICING OF A BRAND OF LIQUOR  OR  WINE
 BETWEEN  AUTHORIZED WHOLESALERS OF THAT BRAND SUBSEQUENT TO THE PURCHASE
 IN THIS STATE FROM THE PRIMARY AMERICAN SOURCE OF SUPPLY.
   7. THE AUTHORITY SHALL ALLOW A WHOLESALER TO BRING LIQUOR OR WINE INTO
 THIS STATE IF THE  WHOLESALER  CERTIFIES  TO  THE  SATISFACTION  OF  THE
 AUTHORITY  THAT THE BRAND OF LIQUOR OR WINE COMES FROM A MANUFACTURER OR
 BOTTLER THAT CANNOT, OR HAS NOT AND WILL NOT APPOINT A PRIMARY  AMERICAN
 SOURCE OF SUPPLY.
   8. THIS SECTION SHALL NOT APPLY TO (I) A BRAND OF LIQUOR OR WINE OWNED
 EXCLUSIVELY  BY ONE RETAILER AND SOLD AT RETAIL WITHIN THIS STATE EXCLU-
 SIVELY BY SUCH RETAILER; OR (II) A PRODUCT PURCHASED BY A WHOLESALER  OR
 RETAILER  FROM  A PRIVATE COLLECTION IN ACCORDANCE WITH SECTIONS EIGHTY-
 FIVE AND NINETY-NINE-G OF THIS CHAPTER CONSISTENT WITH THE RULES,  REGU-
 LATIONS, ORDERS AND ADVISORIES ESTABLISHED BY THE AUTHORITY.
   9.  THE AUTHORITY IS AUTHORIZED TO PERFORM SUCH ACTS, PRESCRIBE FORMS,
 AND MAKE RULES, REGULATIONS, ORDERS AND ADVISORIES AS IT MAY DEEM NECES-
 SARY OR PROPER TO  FULLY  EFFECTUATE  THE  PROVISIONS  OF  THIS  SECTION
 INCLUDING,  BUT  NOT LIMITED TO, ESTABLISHING A FORMAT FOR RECORDING THE
 PRIMARY AMERICAN SOURCE OF SUPPLY AND ITS DESIGNEES.
   § 3. This act shall take effect on the ninetieth day  after  it  shall
 have  become  a  law; provided, however, that effective immediately, 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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