| 1 | | - | Assembly Bill No. 2991 CHAPTER 426An act to amend, repeal, and add Section 25509 of, and to add Section 25509.1 to, the Business and Professions Code, relating to alcoholic beverages. [ Approved by Governor September 22, 2024. Filed with Secretary of State September 22, 2024. ] LEGISLATIVE COUNSEL'S DIGESTAB 2991, Valencia. Alcoholic beverage control: retailer payments: electronic funds transfers.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 and generally makes a violation of the act a misdemeanor. Existing law imposes various restrictions on the hours of sale and delivery of alcoholic beverages.This bill would require, commencing January 1, 2026, a payment by a retailer licensee to a wholesaler licensee for delivery of beer, wine, or distilled spirits, to be made by electronic funds transfer, except as specified. The bill would require the wholesaler licensee to be responsible for selecting the third-party payment processor used to make an electronic funds transfer, as specified. The bill would make conforming changes to a tied-house restriction governing certain sales to retailers who make late payments, as specified. By imposing additional requirements on licensees under the act, the violation of which is 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.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 25509 of the Business and Professions Code is amended to read:25509. (a) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, a distilled spirits rectifier, a wine rectifier, a distilled spirits wholesaler, or a beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment for that beer, wine, or distilled spirits by the expiration of the 42nd day from date of delivery shall charge the retailer 1 percent of the unpaid balance for that beer, wine, and distilled spirits on the 43rd day from date of delivery and an additional 1 percent for each 30 days thereafter.(b) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, distilled spirits rectifier, a wine rectifier, distilled spirits wholesaler, or beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment in full by the expiration of the 30th day from date of delivery or who has not received payment of the 1 percent charge at the expiration of the 30th day from the day the charge became due shall thereafter sell beer, wine, or distilled spirits to that retailer either for cash or by receiving payment in advance of delivery until such time as all payments are received for the beer, wine, or distilled spirits sold and delivered to the said retailer more than 30 days previously.(c) The 42-day period and the 30-day period provided for in this section shall commence with the day immediately following the date of invoice and shall include all successive days including Sundays and holidays to and including the 42nd or 30th day as the case may be. When the 42nd day from date of invoice or the expiration of each additional 30-day period falls on Saturday, Sunday, or legal holiday, the next business day shall be deemed to be the expiration day.(d) All moneys received from a retailer in payment for any beer, wine, or distilled spirits sold and delivered to them shall be first applied to the payment of the oldest balance on beer, wine, or distilled spirits. All checks received for such payments shall be deposited for collection not later than the second business day following receipt of said check. A promissory note, postdated check, or check dishonored on presentation shall not be deemed payment.(e) In enacting the act that amends this section by adding this subdivision, the Legislature finds that it is necessary and proper to remove the retailer from financial or business obligations to suppliers or wholesalers by the extension of credit beyond the terms contained in this section. The Legislature further finds that the exception established by this section to the general prohibition against tied interests shall be limited to its express terms so as not to undermine the general prohibition, and intends that this section shall be construed accordingly.(f) This section shall remain in effect only until January 1, 2026, and as of that date is repealed.SEC. 2. Section 25509 is added to the Business and Professions Code, to read:25509. (a) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, a distilled spirits rectifier, a wine rectifier, a distilled spirits wholesaler, or a beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment for that beer, wine, or distilled spirits by the expiration of the 42nd day from date of delivery shall charge the retailer 1 percent of the unpaid balance for that beer, wine, and distilled spirits on the 43rd day from date of delivery and an additional 1 percent for each 30 days thereafter.(b) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, distilled spirits rectifier, a wine rectifier, distilled spirits wholesaler, or beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment in full by the expiration of the 30th day from date of delivery or who has not received payment of the 1 percent charge at the expiration of the 30th day from the day the charge became due shall thereafter sell beer, wine, or distilled spirits to that retailer by receiving payment in advance of delivery until such time as all payments are received for the beer, wine, or distilled spirits sold and delivered to the said retailer more than 30 days previously.(c) The 42-day period and the 30-day period provided for in this section shall commence with the day immediately following the date of invoice and shall include all successive days including Sundays and holidays to and including the 42nd or 30th day as the case may be. When the 42nd day from date of invoice or the expiration of each additional 30-day period falls on Saturday, Sunday, or legal holiday, the next business day shall be deemed to be the expiration day.(d) All moneys received from a retailer in payment for any beer, wine, or distilled spirits sold and delivered to them shall be first applied to the payment of the oldest balance on beer, wine, or distilled spirits. All checks received for such payments shall be deposited for collection not later than the second business day following receipt of said check. A promissory note, postdated check, or check dishonored on presentation shall not be deemed payment.(e) In enacting the act that amends this section by adding this subdivision, the Legislature finds that it is necessary and proper to remove the retailer from financial or business obligations to suppliers or wholesalers by the extension of credit beyond the terms contained in this section. The Legislature further finds that the exception established by this section to the general prohibition against tied interests shall be limited to its express terms so as not to undermine the general prohibition, and intends that this section shall be construed accordingly.(f) This section shall become operative on January 1, 2026.SEC. 3. Section 25509.1 is added to the Business and Professions Code, to read:25509.1. (a) Commencing January 1, 2026, and except as provided in subdivision (b) and paragraph (3) of subdivision (c), payment from a retailer licensee to a wholesaler licensee for delivery of beer, wine, or distilled spirits shall be made by electronic funds transfer in accordance with the following requirements:(1) The wholesaler licensee shall initiate the electronic funds transfer by initiating the withdrawal of funds from the retailer licensees bank account.(2) The electronic funds transfer shall occur by the expiration of the 30th day from the date of delivery of the beer, wine, or distilled spirits.(3) Any costs related to electronic payment services shall be paid by the party that incurred those costs.(A) Any service fees related to electronic payment transactions shall be applied in an equitable manner to each subscribing wholesaler and retailer and shall justifiably match the services they receive from the electronic payment service provider.(B) The wholesaler shall not pay, directly or indirectly, for electronic payment service fees incurred by a retailer.(C) The retailer shall not pay, directly or indirectly, for electronic payment service fees incurred by a wholesaler.(b) A payment may be made using cash, check, or money order only in the following instances:(1) If accepting payment following an electronic funds transfer of insufficient funds.(2) If the retailer licensee holds an interim operating permit pursuant to Section 24044.5 or a temporary permit pursuant to Section 24045.5.(3) During temporary service interruption of the third-party payment processor.(4) During the first 30 days following the issuance of a license to the retailer licensee.(c) (1) To maintain control of its ability to receive payment for delivery, a wholesaler licensee shall be responsible for selecting the third-party payment processor used to facilitate an electronic funds transfer pursuant to this section. The wholesaler and retailer may agree on the third-party payment processor. If the parties are unable to agree, the parties shall use the third-party payment processor used by the retailer as of July 1, 2025, to pay for wholesale alcohol purchases. If by July 1, 2025, the retailer does not use a third-party payment processor, the parties shall use the third-party payment processor selected by the wholesaler.(2) A wholesaler licensee shall not select a third-party payment processor that does not meet the requirements of this section or that requires more than 30 days notice from the wholesaler licensee to terminate the processors agreement with the wholesaler licensee.(3) Notwithstanding subdivision (a), a wholesaler may choose to accept credit card payments. If payment is made using a credit card, the retailer shall bear the cost of the transaction, so as to mitigate the value of secondary benefits realized by the retailer using the credit card.(d) A retailer shall not accept a rebate, incentive, or other thing of value from a third-party payment processor for a payment made pursuant to this section.(e) For purposes of this section, electronic funds transfer or EFT means the electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems.SEC. 4. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution. |
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| 1 | + | Enrolled August 31, 2024 Passed IN Senate August 27, 2024 Passed IN Assembly August 28, 2024 Amended IN Senate August 23, 2024 Amended IN Senate June 19, 2024 Amended IN Assembly May 09, 2024 CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION Assembly Bill No. 2991Introduced by Assembly Member Valencia(Coauthor: Assembly Member Jim Patterson)February 16, 2024An act to amend, repeal, and add Section 25509 of, and to add Section 25509.1 to, the Business and Professions Code, relating to alcoholic beverages.LEGISLATIVE COUNSEL'S DIGESTAB 2991, Valencia. Alcoholic beverage control: retailer payments: electronic funds transfers.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 and generally makes a violation of the act a misdemeanor. Existing law imposes various restrictions on the hours of sale and delivery of alcoholic beverages.This bill would require, commencing January 1, 2026, a payment by a retailer licensee to a wholesaler licensee for delivery of beer, wine, or distilled spirits, to be made by electronic funds transfer, except as specified. The bill would require the wholesaler licensee to be responsible for selecting the third-party payment processor used to make an electronic funds transfer, as specified. The bill would make conforming changes to a tied-house restriction governing certain sales to retailers who make late payments, as specified. By imposing additional requirements on licensees under the act, the violation of which is 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.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 25509 of the Business and Professions Code is amended to read:25509. (a) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, a distilled spirits rectifier, a wine rectifier, a distilled spirits wholesaler, or a beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment for that beer, wine, or distilled spirits by the expiration of the 42nd day from date of delivery shall charge the retailer 1 percent of the unpaid balance for that beer, wine, and distilled spirits on the 43rd day from date of delivery and an additional 1 percent for each 30 days thereafter.(b) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, distilled spirits rectifier, a wine rectifier, distilled spirits wholesaler, or beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment in full by the expiration of the 30th day from date of delivery or who has not received payment of the 1 percent charge at the expiration of the 30th day from the day the charge became due shall thereafter sell beer, wine, or distilled spirits to that retailer either for cash or by receiving payment in advance of delivery until such time as all payments are received for the beer, wine, or distilled spirits sold and delivered to the said retailer more than 30 days previously.(c) The 42-day period and the 30-day period provided for in this section shall commence with the day immediately following the date of invoice and shall include all successive days including Sundays and holidays to and including the 42nd or 30th day as the case may be. When the 42nd day from date of invoice or the expiration of each additional 30-day period falls on Saturday, Sunday, or legal holiday, the next business day shall be deemed to be the expiration day.(d) All moneys received from a retailer in payment for any beer, wine, or distilled spirits sold and delivered to them shall be first applied to the payment of the oldest balance on beer, wine, or distilled spirits. All checks received for such payments shall be deposited for collection not later than the second business day following receipt of said check. A promissory note, postdated check, or check dishonored on presentation shall not be deemed payment.(e) In enacting the act that amends this section by adding this subdivision, the Legislature finds that it is necessary and proper to remove the retailer from financial or business obligations to suppliers or wholesalers by the extension of credit beyond the terms contained in this section. The Legislature further finds that the exception established by this section to the general prohibition against tied interests shall be limited to its express terms so as not to undermine the general prohibition, and intends that this section shall be construed accordingly.(f) This section shall remain in effect only until January 1, 2026, and as of that date is repealed.SEC. 2. Section 25509 is added to the Business and Professions Code, to read:25509. (a) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, a distilled spirits rectifier, a wine rectifier, a distilled spirits wholesaler, or a beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment for that beer, wine, or distilled spirits by the expiration of the 42nd day from date of delivery shall charge the retailer 1 percent of the unpaid balance for that beer, wine, and distilled spirits on the 43rd day from date of delivery and an additional 1 percent for each 30 days thereafter.(b) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, distilled spirits rectifier, a wine rectifier, distilled spirits wholesaler, or beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment in full by the expiration of the 30th day from date of delivery or who has not received payment of the 1 percent charge at the expiration of the 30th day from the day the charge became due shall thereafter sell beer, wine, or distilled spirits to that retailer by receiving payment in advance of delivery until such time as all payments are received for the beer, wine, or distilled spirits sold and delivered to the said retailer more than 30 days previously.(c) The 42-day period and the 30-day period provided for in this section shall commence with the day immediately following the date of invoice and shall include all successive days including Sundays and holidays to and including the 42nd or 30th day as the case may be. When the 42nd day from date of invoice or the expiration of each additional 30-day period falls on Saturday, Sunday, or legal holiday, the next business day shall be deemed to be the expiration day.(d) All moneys received from a retailer in payment for any beer, wine, or distilled spirits sold and delivered to them shall be first applied to the payment of the oldest balance on beer, wine, or distilled spirits. All checks received for such payments shall be deposited for collection not later than the second business day following receipt of said check. A promissory note, postdated check, or check dishonored on presentation shall not be deemed payment.(e) In enacting the act that amends this section by adding this subdivision, the Legislature finds that it is necessary and proper to remove the retailer from financial or business obligations to suppliers or wholesalers by the extension of credit beyond the terms contained in this section. The Legislature further finds that the exception established by this section to the general prohibition against tied interests shall be limited to its express terms so as not to undermine the general prohibition, and intends that this section shall be construed accordingly.(f) This section shall become operative on January 1, 2026.SEC. 3. Section 25509.1 is added to the Business and Professions Code, to read:25509.1. (a) Commencing January 1, 2026, and except as provided in subdivision (b) and paragraph (3) of subdivision (c), payment from a retailer licensee to a wholesaler licensee for delivery of beer, wine, or distilled spirits shall be made by electronic funds transfer in accordance with the following requirements:(1) The wholesaler licensee shall initiate the electronic funds transfer by initiating the withdrawal of funds from the retailer licensees bank account.(2) The electronic funds transfer shall occur by the expiration of the 30th day from the date of delivery of the beer, wine, or distilled spirits.(3) Any costs related to electronic payment services shall be paid by the party that incurred those costs.(A) Any service fees related to electronic payment transactions shall be applied in an equitable manner to each subscribing wholesaler and retailer and shall justifiably match the services they receive from the electronic payment service provider.(B) The wholesaler shall not pay, directly or indirectly, for electronic payment service fees incurred by a retailer.(C) The retailer shall not pay, directly or indirectly, for electronic payment service fees incurred by a wholesaler.(b) A payment may be made using cash, check, or money order only in the following instances:(1) If accepting payment following an electronic funds transfer of insufficient funds.(2) If the retailer licensee holds an interim operating permit pursuant to Section 24044.5 or a temporary permit pursuant to Section 24045.5.(3) During temporary service interruption of the third-party payment processor.(4) During the first 30 days following the issuance of a license to the retailer licensee.(c) (1) To maintain control of its ability to receive payment for delivery, a wholesaler licensee shall be responsible for selecting the third-party payment processor used to facilitate an electronic funds transfer pursuant to this section. The wholesaler and retailer may agree on the third-party payment processor. If the parties are unable to agree, the parties shall use the third-party payment processor used by the retailer as of July 1, 2025, to pay for wholesale alcohol purchases. If by July 1, 2025, the retailer does not use a third-party payment processor, the parties shall use the third-party payment processor selected by the wholesaler.(2) A wholesaler licensee shall not select a third-party payment processor that does not meet the requirements of this section or that requires more than 30 days notice from the wholesaler licensee to terminate the processors agreement with the wholesaler licensee.(3) Notwithstanding subdivision (a), a wholesaler may choose to accept credit card payments. If payment is made using a credit card, the retailer shall bear the cost of the transaction, so as to mitigate the value of secondary benefits realized by the retailer using the credit card.(d) A retailer shall not accept a rebate, incentive, or other thing of value from a third-party payment processor for a payment made pursuant to this section.(e) For purposes of this section, electronic funds transfer or EFT means the electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems.SEC. 4. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution. |
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| 14 | 26 | | |
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| 15 | 27 | | LEGISLATIVE COUNSEL'S DIGEST |
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| 16 | 28 | | |
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| 17 | 29 | | ## LEGISLATIVE COUNSEL'S DIGEST |
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| 18 | 30 | | |
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| 19 | 31 | | AB 2991, Valencia. Alcoholic beverage control: retailer payments: electronic funds transfers. |
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| 20 | 32 | | |
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| 21 | 33 | | 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 and generally makes a violation of the act a misdemeanor. Existing law imposes various restrictions on the hours of sale and delivery of alcoholic beverages.This bill would require, commencing January 1, 2026, a payment by a retailer licensee to a wholesaler licensee for delivery of beer, wine, or distilled spirits, to be made by electronic funds transfer, except as specified. The bill would require the wholesaler licensee to be responsible for selecting the third-party payment processor used to make an electronic funds transfer, as specified. The bill would make conforming changes to a tied-house restriction governing certain sales to retailers who make late payments, as specified. By imposing additional requirements on licensees under the act, the violation of which is 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. |
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| 22 | 34 | | |
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| 23 | 35 | | 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 and generally makes a violation of the act a misdemeanor. Existing law imposes various restrictions on the hours of sale and delivery of alcoholic beverages. |
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| 24 | 36 | | |
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| 25 | 37 | | This bill would require, commencing January 1, 2026, a payment by a retailer licensee to a wholesaler licensee for delivery of beer, wine, or distilled spirits, to be made by electronic funds transfer, except as specified. The bill would require the wholesaler licensee to be responsible for selecting the third-party payment processor used to make an electronic funds transfer, as specified. The bill would make conforming changes to a tied-house restriction governing certain sales to retailers who make late payments, as specified. By imposing additional requirements on licensees under the act, the violation of which is a crime, this bill would impose a state-mandated local program. |
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| 26 | 38 | | |
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| 27 | 39 | | 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. |
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| 28 | 40 | | |
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| 29 | 41 | | This bill would provide that no reimbursement is required by this act for a specified reason. |
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| 30 | 42 | | |
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| 31 | 43 | | ## Digest Key |
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| 32 | 44 | | |
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| 33 | 45 | | ## Bill Text |
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| 34 | 46 | | |
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| 35 | 47 | | The people of the State of California do enact as follows:SECTION 1. Section 25509 of the Business and Professions Code is amended to read:25509. (a) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, a distilled spirits rectifier, a wine rectifier, a distilled spirits wholesaler, or a beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment for that beer, wine, or distilled spirits by the expiration of the 42nd day from date of delivery shall charge the retailer 1 percent of the unpaid balance for that beer, wine, and distilled spirits on the 43rd day from date of delivery and an additional 1 percent for each 30 days thereafter.(b) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, distilled spirits rectifier, a wine rectifier, distilled spirits wholesaler, or beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment in full by the expiration of the 30th day from date of delivery or who has not received payment of the 1 percent charge at the expiration of the 30th day from the day the charge became due shall thereafter sell beer, wine, or distilled spirits to that retailer either for cash or by receiving payment in advance of delivery until such time as all payments are received for the beer, wine, or distilled spirits sold and delivered to the said retailer more than 30 days previously.(c) The 42-day period and the 30-day period provided for in this section shall commence with the day immediately following the date of invoice and shall include all successive days including Sundays and holidays to and including the 42nd or 30th day as the case may be. When the 42nd day from date of invoice or the expiration of each additional 30-day period falls on Saturday, Sunday, or legal holiday, the next business day shall be deemed to be the expiration day.(d) All moneys received from a retailer in payment for any beer, wine, or distilled spirits sold and delivered to them shall be first applied to the payment of the oldest balance on beer, wine, or distilled spirits. All checks received for such payments shall be deposited for collection not later than the second business day following receipt of said check. A promissory note, postdated check, or check dishonored on presentation shall not be deemed payment.(e) In enacting the act that amends this section by adding this subdivision, the Legislature finds that it is necessary and proper to remove the retailer from financial or business obligations to suppliers or wholesalers by the extension of credit beyond the terms contained in this section. The Legislature further finds that the exception established by this section to the general prohibition against tied interests shall be limited to its express terms so as not to undermine the general prohibition, and intends that this section shall be construed accordingly.(f) This section shall remain in effect only until January 1, 2026, and as of that date is repealed.SEC. 2. Section 25509 is added to the Business and Professions Code, to read:25509. (a) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, a distilled spirits rectifier, a wine rectifier, a distilled spirits wholesaler, or a beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment for that beer, wine, or distilled spirits by the expiration of the 42nd day from date of delivery shall charge the retailer 1 percent of the unpaid balance for that beer, wine, and distilled spirits on the 43rd day from date of delivery and an additional 1 percent for each 30 days thereafter.(b) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, distilled spirits rectifier, a wine rectifier, distilled spirits wholesaler, or beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment in full by the expiration of the 30th day from date of delivery or who has not received payment of the 1 percent charge at the expiration of the 30th day from the day the charge became due shall thereafter sell beer, wine, or distilled spirits to that retailer by receiving payment in advance of delivery until such time as all payments are received for the beer, wine, or distilled spirits sold and delivered to the said retailer more than 30 days previously.(c) The 42-day period and the 30-day period provided for in this section shall commence with the day immediately following the date of invoice and shall include all successive days including Sundays and holidays to and including the 42nd or 30th day as the case may be. When the 42nd day from date of invoice or the expiration of each additional 30-day period falls on Saturday, Sunday, or legal holiday, the next business day shall be deemed to be the expiration day.(d) All moneys received from a retailer in payment for any beer, wine, or distilled spirits sold and delivered to them shall be first applied to the payment of the oldest balance on beer, wine, or distilled spirits. All checks received for such payments shall be deposited for collection not later than the second business day following receipt of said check. A promissory note, postdated check, or check dishonored on presentation shall not be deemed payment.(e) In enacting the act that amends this section by adding this subdivision, the Legislature finds that it is necessary and proper to remove the retailer from financial or business obligations to suppliers or wholesalers by the extension of credit beyond the terms contained in this section. The Legislature further finds that the exception established by this section to the general prohibition against tied interests shall be limited to its express terms so as not to undermine the general prohibition, and intends that this section shall be construed accordingly.(f) This section shall become operative on January 1, 2026.SEC. 3. Section 25509.1 is added to the Business and Professions Code, to read:25509.1. (a) Commencing January 1, 2026, and except as provided in subdivision (b) and paragraph (3) of subdivision (c), payment from a retailer licensee to a wholesaler licensee for delivery of beer, wine, or distilled spirits shall be made by electronic funds transfer in accordance with the following requirements:(1) The wholesaler licensee shall initiate the electronic funds transfer by initiating the withdrawal of funds from the retailer licensees bank account.(2) The electronic funds transfer shall occur by the expiration of the 30th day from the date of delivery of the beer, wine, or distilled spirits.(3) Any costs related to electronic payment services shall be paid by the party that incurred those costs.(A) Any service fees related to electronic payment transactions shall be applied in an equitable manner to each subscribing wholesaler and retailer and shall justifiably match the services they receive from the electronic payment service provider.(B) The wholesaler shall not pay, directly or indirectly, for electronic payment service fees incurred by a retailer.(C) The retailer shall not pay, directly or indirectly, for electronic payment service fees incurred by a wholesaler.(b) A payment may be made using cash, check, or money order only in the following instances:(1) If accepting payment following an electronic funds transfer of insufficient funds.(2) If the retailer licensee holds an interim operating permit pursuant to Section 24044.5 or a temporary permit pursuant to Section 24045.5.(3) During temporary service interruption of the third-party payment processor.(4) During the first 30 days following the issuance of a license to the retailer licensee.(c) (1) To maintain control of its ability to receive payment for delivery, a wholesaler licensee shall be responsible for selecting the third-party payment processor used to facilitate an electronic funds transfer pursuant to this section. The wholesaler and retailer may agree on the third-party payment processor. If the parties are unable to agree, the parties shall use the third-party payment processor used by the retailer as of July 1, 2025, to pay for wholesale alcohol purchases. If by July 1, 2025, the retailer does not use a third-party payment processor, the parties shall use the third-party payment processor selected by the wholesaler.(2) A wholesaler licensee shall not select a third-party payment processor that does not meet the requirements of this section or that requires more than 30 days notice from the wholesaler licensee to terminate the processors agreement with the wholesaler licensee.(3) Notwithstanding subdivision (a), a wholesaler may choose to accept credit card payments. If payment is made using a credit card, the retailer shall bear the cost of the transaction, so as to mitigate the value of secondary benefits realized by the retailer using the credit card.(d) A retailer shall not accept a rebate, incentive, or other thing of value from a third-party payment processor for a payment made pursuant to this section.(e) For purposes of this section, electronic funds transfer or EFT means the electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems.SEC. 4. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution. |
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| 36 | 48 | | |
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| 37 | 49 | | The people of the State of California do enact as follows: |
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| 38 | 50 | | |
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| 39 | 51 | | ## The people of the State of California do enact as follows: |
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| 40 | 52 | | |
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| 41 | 53 | | SECTION 1. Section 25509 of the Business and Professions Code is amended to read:25509. (a) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, a distilled spirits rectifier, a wine rectifier, a distilled spirits wholesaler, or a beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment for that beer, wine, or distilled spirits by the expiration of the 42nd day from date of delivery shall charge the retailer 1 percent of the unpaid balance for that beer, wine, and distilled spirits on the 43rd day from date of delivery and an additional 1 percent for each 30 days thereafter.(b) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, distilled spirits rectifier, a wine rectifier, distilled spirits wholesaler, or beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment in full by the expiration of the 30th day from date of delivery or who has not received payment of the 1 percent charge at the expiration of the 30th day from the day the charge became due shall thereafter sell beer, wine, or distilled spirits to that retailer either for cash or by receiving payment in advance of delivery until such time as all payments are received for the beer, wine, or distilled spirits sold and delivered to the said retailer more than 30 days previously.(c) The 42-day period and the 30-day period provided for in this section shall commence with the day immediately following the date of invoice and shall include all successive days including Sundays and holidays to and including the 42nd or 30th day as the case may be. When the 42nd day from date of invoice or the expiration of each additional 30-day period falls on Saturday, Sunday, or legal holiday, the next business day shall be deemed to be the expiration day.(d) All moneys received from a retailer in payment for any beer, wine, or distilled spirits sold and delivered to them shall be first applied to the payment of the oldest balance on beer, wine, or distilled spirits. All checks received for such payments shall be deposited for collection not later than the second business day following receipt of said check. A promissory note, postdated check, or check dishonored on presentation shall not be deemed payment.(e) In enacting the act that amends this section by adding this subdivision, the Legislature finds that it is necessary and proper to remove the retailer from financial or business obligations to suppliers or wholesalers by the extension of credit beyond the terms contained in this section. The Legislature further finds that the exception established by this section to the general prohibition against tied interests shall be limited to its express terms so as not to undermine the general prohibition, and intends that this section shall be construed accordingly.(f) This section shall remain in effect only until January 1, 2026, and as of that date is repealed. |
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| 42 | 54 | | |
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| 43 | 55 | | SECTION 1. Section 25509 of the Business and Professions Code is amended to read: |
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| 44 | 56 | | |
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| 45 | 57 | | ### SECTION 1. |
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| 46 | 58 | | |
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| 47 | 59 | | 25509. (a) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, a distilled spirits rectifier, a wine rectifier, a distilled spirits wholesaler, or a beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment for that beer, wine, or distilled spirits by the expiration of the 42nd day from date of delivery shall charge the retailer 1 percent of the unpaid balance for that beer, wine, and distilled spirits on the 43rd day from date of delivery and an additional 1 percent for each 30 days thereafter.(b) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, distilled spirits rectifier, a wine rectifier, distilled spirits wholesaler, or beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment in full by the expiration of the 30th day from date of delivery or who has not received payment of the 1 percent charge at the expiration of the 30th day from the day the charge became due shall thereafter sell beer, wine, or distilled spirits to that retailer either for cash or by receiving payment in advance of delivery until such time as all payments are received for the beer, wine, or distilled spirits sold and delivered to the said retailer more than 30 days previously.(c) The 42-day period and the 30-day period provided for in this section shall commence with the day immediately following the date of invoice and shall include all successive days including Sundays and holidays to and including the 42nd or 30th day as the case may be. When the 42nd day from date of invoice or the expiration of each additional 30-day period falls on Saturday, Sunday, or legal holiday, the next business day shall be deemed to be the expiration day.(d) All moneys received from a retailer in payment for any beer, wine, or distilled spirits sold and delivered to them shall be first applied to the payment of the oldest balance on beer, wine, or distilled spirits. All checks received for such payments shall be deposited for collection not later than the second business day following receipt of said check. A promissory note, postdated check, or check dishonored on presentation shall not be deemed payment.(e) In enacting the act that amends this section by adding this subdivision, the Legislature finds that it is necessary and proper to remove the retailer from financial or business obligations to suppliers or wholesalers by the extension of credit beyond the terms contained in this section. The Legislature further finds that the exception established by this section to the general prohibition against tied interests shall be limited to its express terms so as not to undermine the general prohibition, and intends that this section shall be construed accordingly.(f) This section shall remain in effect only until January 1, 2026, and as of that date is repealed. |
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| 48 | 60 | | |
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| 49 | 61 | | 25509. (a) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, a distilled spirits rectifier, a wine rectifier, a distilled spirits wholesaler, or a beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment for that beer, wine, or distilled spirits by the expiration of the 42nd day from date of delivery shall charge the retailer 1 percent of the unpaid balance for that beer, wine, and distilled spirits on the 43rd day from date of delivery and an additional 1 percent for each 30 days thereafter.(b) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, distilled spirits rectifier, a wine rectifier, distilled spirits wholesaler, or beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment in full by the expiration of the 30th day from date of delivery or who has not received payment of the 1 percent charge at the expiration of the 30th day from the day the charge became due shall thereafter sell beer, wine, or distilled spirits to that retailer either for cash or by receiving payment in advance of delivery until such time as all payments are received for the beer, wine, or distilled spirits sold and delivered to the said retailer more than 30 days previously.(c) The 42-day period and the 30-day period provided for in this section shall commence with the day immediately following the date of invoice and shall include all successive days including Sundays and holidays to and including the 42nd or 30th day as the case may be. When the 42nd day from date of invoice or the expiration of each additional 30-day period falls on Saturday, Sunday, or legal holiday, the next business day shall be deemed to be the expiration day.(d) All moneys received from a retailer in payment for any beer, wine, or distilled spirits sold and delivered to them shall be first applied to the payment of the oldest balance on beer, wine, or distilled spirits. All checks received for such payments shall be deposited for collection not later than the second business day following receipt of said check. A promissory note, postdated check, or check dishonored on presentation shall not be deemed payment.(e) In enacting the act that amends this section by adding this subdivision, the Legislature finds that it is necessary and proper to remove the retailer from financial or business obligations to suppliers or wholesalers by the extension of credit beyond the terms contained in this section. The Legislature further finds that the exception established by this section to the general prohibition against tied interests shall be limited to its express terms so as not to undermine the general prohibition, and intends that this section shall be construed accordingly.(f) This section shall remain in effect only until January 1, 2026, and as of that date is repealed. |
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| 50 | 62 | | |
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| 51 | 63 | | 25509. (a) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, a distilled spirits rectifier, a wine rectifier, a distilled spirits wholesaler, or a beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment for that beer, wine, or distilled spirits by the expiration of the 42nd day from date of delivery shall charge the retailer 1 percent of the unpaid balance for that beer, wine, and distilled spirits on the 43rd day from date of delivery and an additional 1 percent for each 30 days thereafter.(b) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, distilled spirits rectifier, a wine rectifier, distilled spirits wholesaler, or beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment in full by the expiration of the 30th day from date of delivery or who has not received payment of the 1 percent charge at the expiration of the 30th day from the day the charge became due shall thereafter sell beer, wine, or distilled spirits to that retailer either for cash or by receiving payment in advance of delivery until such time as all payments are received for the beer, wine, or distilled spirits sold and delivered to the said retailer more than 30 days previously.(c) The 42-day period and the 30-day period provided for in this section shall commence with the day immediately following the date of invoice and shall include all successive days including Sundays and holidays to and including the 42nd or 30th day as the case may be. When the 42nd day from date of invoice or the expiration of each additional 30-day period falls on Saturday, Sunday, or legal holiday, the next business day shall be deemed to be the expiration day.(d) All moneys received from a retailer in payment for any beer, wine, or distilled spirits sold and delivered to them shall be first applied to the payment of the oldest balance on beer, wine, or distilled spirits. All checks received for such payments shall be deposited for collection not later than the second business day following receipt of said check. A promissory note, postdated check, or check dishonored on presentation shall not be deemed payment.(e) In enacting the act that amends this section by adding this subdivision, the Legislature finds that it is necessary and proper to remove the retailer from financial or business obligations to suppliers or wholesalers by the extension of credit beyond the terms contained in this section. The Legislature further finds that the exception established by this section to the general prohibition against tied interests shall be limited to its express terms so as not to undermine the general prohibition, and intends that this section shall be construed accordingly.(f) This section shall remain in effect only until January 1, 2026, and as of that date is repealed. |
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| 52 | 64 | | |
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| 53 | 65 | | |
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| 54 | 66 | | |
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| 55 | 67 | | 25509. (a) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, a distilled spirits rectifier, a wine rectifier, a distilled spirits wholesaler, or a beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment for that beer, wine, or distilled spirits by the expiration of the 42nd day from date of delivery shall charge the retailer 1 percent of the unpaid balance for that beer, wine, and distilled spirits on the 43rd day from date of delivery and an additional 1 percent for each 30 days thereafter. |
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| 56 | 68 | | |
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| 57 | 69 | | (b) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, distilled spirits rectifier, a wine rectifier, distilled spirits wholesaler, or beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment in full by the expiration of the 30th day from date of delivery or who has not received payment of the 1 percent charge at the expiration of the 30th day from the day the charge became due shall thereafter sell beer, wine, or distilled spirits to that retailer either for cash or by receiving payment in advance of delivery until such time as all payments are received for the beer, wine, or distilled spirits sold and delivered to the said retailer more than 30 days previously. |
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| 58 | 70 | | |
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| 59 | 71 | | (c) The 42-day period and the 30-day period provided for in this section shall commence with the day immediately following the date of invoice and shall include all successive days including Sundays and holidays to and including the 42nd or 30th day as the case may be. When the 42nd day from date of invoice or the expiration of each additional 30-day period falls on Saturday, Sunday, or legal holiday, the next business day shall be deemed to be the expiration day. |
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| 60 | 72 | | |
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| 61 | 73 | | (d) All moneys received from a retailer in payment for any beer, wine, or distilled spirits sold and delivered to them shall be first applied to the payment of the oldest balance on beer, wine, or distilled spirits. All checks received for such payments shall be deposited for collection not later than the second business day following receipt of said check. A promissory note, postdated check, or check dishonored on presentation shall not be deemed payment. |
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| 62 | 74 | | |
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| 63 | 75 | | (e) In enacting the act that amends this section by adding this subdivision, the Legislature finds that it is necessary and proper to remove the retailer from financial or business obligations to suppliers or wholesalers by the extension of credit beyond the terms contained in this section. The Legislature further finds that the exception established by this section to the general prohibition against tied interests shall be limited to its express terms so as not to undermine the general prohibition, and intends that this section shall be construed accordingly. |
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| 64 | 76 | | |
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| 65 | 77 | | (f) This section shall remain in effect only until January 1, 2026, and as of that date is repealed. |
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| 66 | 78 | | |
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| 67 | 79 | | SEC. 2. Section 25509 is added to the Business and Professions Code, to read:25509. (a) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, a distilled spirits rectifier, a wine rectifier, a distilled spirits wholesaler, or a beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment for that beer, wine, or distilled spirits by the expiration of the 42nd day from date of delivery shall charge the retailer 1 percent of the unpaid balance for that beer, wine, and distilled spirits on the 43rd day from date of delivery and an additional 1 percent for each 30 days thereafter.(b) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, distilled spirits rectifier, a wine rectifier, distilled spirits wholesaler, or beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment in full by the expiration of the 30th day from date of delivery or who has not received payment of the 1 percent charge at the expiration of the 30th day from the day the charge became due shall thereafter sell beer, wine, or distilled spirits to that retailer by receiving payment in advance of delivery until such time as all payments are received for the beer, wine, or distilled spirits sold and delivered to the said retailer more than 30 days previously.(c) The 42-day period and the 30-day period provided for in this section shall commence with the day immediately following the date of invoice and shall include all successive days including Sundays and holidays to and including the 42nd or 30th day as the case may be. When the 42nd day from date of invoice or the expiration of each additional 30-day period falls on Saturday, Sunday, or legal holiday, the next business day shall be deemed to be the expiration day.(d) All moneys received from a retailer in payment for any beer, wine, or distilled spirits sold and delivered to them shall be first applied to the payment of the oldest balance on beer, wine, or distilled spirits. All checks received for such payments shall be deposited for collection not later than the second business day following receipt of said check. A promissory note, postdated check, or check dishonored on presentation shall not be deemed payment.(e) In enacting the act that amends this section by adding this subdivision, the Legislature finds that it is necessary and proper to remove the retailer from financial or business obligations to suppliers or wholesalers by the extension of credit beyond the terms contained in this section. The Legislature further finds that the exception established by this section to the general prohibition against tied interests shall be limited to its express terms so as not to undermine the general prohibition, and intends that this section shall be construed accordingly.(f) This section shall become operative on January 1, 2026. |
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| 68 | 80 | | |
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| 69 | 81 | | SEC. 2. Section 25509 is added to the Business and Professions Code, to read: |
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| 70 | 82 | | |
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| 71 | 83 | | ### SEC. 2. |
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| 72 | 84 | | |
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| 73 | 85 | | 25509. (a) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, a distilled spirits rectifier, a wine rectifier, a distilled spirits wholesaler, or a beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment for that beer, wine, or distilled spirits by the expiration of the 42nd day from date of delivery shall charge the retailer 1 percent of the unpaid balance for that beer, wine, and distilled spirits on the 43rd day from date of delivery and an additional 1 percent for each 30 days thereafter.(b) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, distilled spirits rectifier, a wine rectifier, distilled spirits wholesaler, or beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment in full by the expiration of the 30th day from date of delivery or who has not received payment of the 1 percent charge at the expiration of the 30th day from the day the charge became due shall thereafter sell beer, wine, or distilled spirits to that retailer by receiving payment in advance of delivery until such time as all payments are received for the beer, wine, or distilled spirits sold and delivered to the said retailer more than 30 days previously.(c) The 42-day period and the 30-day period provided for in this section shall commence with the day immediately following the date of invoice and shall include all successive days including Sundays and holidays to and including the 42nd or 30th day as the case may be. When the 42nd day from date of invoice or the expiration of each additional 30-day period falls on Saturday, Sunday, or legal holiday, the next business day shall be deemed to be the expiration day.(d) All moneys received from a retailer in payment for any beer, wine, or distilled spirits sold and delivered to them shall be first applied to the payment of the oldest balance on beer, wine, or distilled spirits. All checks received for such payments shall be deposited for collection not later than the second business day following receipt of said check. A promissory note, postdated check, or check dishonored on presentation shall not be deemed payment.(e) In enacting the act that amends this section by adding this subdivision, the Legislature finds that it is necessary and proper to remove the retailer from financial or business obligations to suppliers or wholesalers by the extension of credit beyond the terms contained in this section. The Legislature further finds that the exception established by this section to the general prohibition against tied interests shall be limited to its express terms so as not to undermine the general prohibition, and intends that this section shall be construed accordingly.(f) This section shall become operative on January 1, 2026. |
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| 74 | 86 | | |
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| 75 | 87 | | 25509. (a) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, a distilled spirits rectifier, a wine rectifier, a distilled spirits wholesaler, or a beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment for that beer, wine, or distilled spirits by the expiration of the 42nd day from date of delivery shall charge the retailer 1 percent of the unpaid balance for that beer, wine, and distilled spirits on the 43rd day from date of delivery and an additional 1 percent for each 30 days thereafter.(b) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, distilled spirits rectifier, a wine rectifier, distilled spirits wholesaler, or beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment in full by the expiration of the 30th day from date of delivery or who has not received payment of the 1 percent charge at the expiration of the 30th day from the day the charge became due shall thereafter sell beer, wine, or distilled spirits to that retailer by receiving payment in advance of delivery until such time as all payments are received for the beer, wine, or distilled spirits sold and delivered to the said retailer more than 30 days previously.(c) The 42-day period and the 30-day period provided for in this section shall commence with the day immediately following the date of invoice and shall include all successive days including Sundays and holidays to and including the 42nd or 30th day as the case may be. When the 42nd day from date of invoice or the expiration of each additional 30-day period falls on Saturday, Sunday, or legal holiday, the next business day shall be deemed to be the expiration day.(d) All moneys received from a retailer in payment for any beer, wine, or distilled spirits sold and delivered to them shall be first applied to the payment of the oldest balance on beer, wine, or distilled spirits. All checks received for such payments shall be deposited for collection not later than the second business day following receipt of said check. A promissory note, postdated check, or check dishonored on presentation shall not be deemed payment.(e) In enacting the act that amends this section by adding this subdivision, the Legislature finds that it is necessary and proper to remove the retailer from financial or business obligations to suppliers or wholesalers by the extension of credit beyond the terms contained in this section. The Legislature further finds that the exception established by this section to the general prohibition against tied interests shall be limited to its express terms so as not to undermine the general prohibition, and intends that this section shall be construed accordingly.(f) This section shall become operative on January 1, 2026. |
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| 76 | 88 | | |
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| 77 | 89 | | 25509. (a) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, a distilled spirits rectifier, a wine rectifier, a distilled spirits wholesaler, or a beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment for that beer, wine, or distilled spirits by the expiration of the 42nd day from date of delivery shall charge the retailer 1 percent of the unpaid balance for that beer, wine, and distilled spirits on the 43rd day from date of delivery and an additional 1 percent for each 30 days thereafter.(b) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, distilled spirits rectifier, a wine rectifier, distilled spirits wholesaler, or beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment in full by the expiration of the 30th day from date of delivery or who has not received payment of the 1 percent charge at the expiration of the 30th day from the day the charge became due shall thereafter sell beer, wine, or distilled spirits to that retailer by receiving payment in advance of delivery until such time as all payments are received for the beer, wine, or distilled spirits sold and delivered to the said retailer more than 30 days previously.(c) The 42-day period and the 30-day period provided for in this section shall commence with the day immediately following the date of invoice and shall include all successive days including Sundays and holidays to and including the 42nd or 30th day as the case may be. When the 42nd day from date of invoice or the expiration of each additional 30-day period falls on Saturday, Sunday, or legal holiday, the next business day shall be deemed to be the expiration day.(d) All moneys received from a retailer in payment for any beer, wine, or distilled spirits sold and delivered to them shall be first applied to the payment of the oldest balance on beer, wine, or distilled spirits. All checks received for such payments shall be deposited for collection not later than the second business day following receipt of said check. A promissory note, postdated check, or check dishonored on presentation shall not be deemed payment.(e) In enacting the act that amends this section by adding this subdivision, the Legislature finds that it is necessary and proper to remove the retailer from financial or business obligations to suppliers or wholesalers by the extension of credit beyond the terms contained in this section. The Legislature further finds that the exception established by this section to the general prohibition against tied interests shall be limited to its express terms so as not to undermine the general prohibition, and intends that this section shall be construed accordingly.(f) This section shall become operative on January 1, 2026. |
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| 78 | 90 | | |
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| 79 | 91 | | |
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| 80 | 92 | | |
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| 81 | 93 | | 25509. (a) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, a distilled spirits rectifier, a wine rectifier, a distilled spirits wholesaler, or a beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment for that beer, wine, or distilled spirits by the expiration of the 42nd day from date of delivery shall charge the retailer 1 percent of the unpaid balance for that beer, wine, and distilled spirits on the 43rd day from date of delivery and an additional 1 percent for each 30 days thereafter. |
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| 82 | 94 | | |
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| 83 | 95 | | (b) A distilled spirits manufacturer, a brandy manufacturer, a beer manufacturer, a winegrower, a wine blender, distilled spirits rectifier, a wine rectifier, distilled spirits wholesaler, or beer and wine wholesaler who sold and delivered beer, wine, or distilled spirits to a retailer and who did not receive payment in full by the expiration of the 30th day from date of delivery or who has not received payment of the 1 percent charge at the expiration of the 30th day from the day the charge became due shall thereafter sell beer, wine, or distilled spirits to that retailer by receiving payment in advance of delivery until such time as all payments are received for the beer, wine, or distilled spirits sold and delivered to the said retailer more than 30 days previously. |
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| 84 | 96 | | |
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| 85 | 97 | | (c) The 42-day period and the 30-day period provided for in this section shall commence with the day immediately following the date of invoice and shall include all successive days including Sundays and holidays to and including the 42nd or 30th day as the case may be. When the 42nd day from date of invoice or the expiration of each additional 30-day period falls on Saturday, Sunday, or legal holiday, the next business day shall be deemed to be the expiration day. |
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| 86 | 98 | | |
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| 87 | 99 | | (d) All moneys received from a retailer in payment for any beer, wine, or distilled spirits sold and delivered to them shall be first applied to the payment of the oldest balance on beer, wine, or distilled spirits. All checks received for such payments shall be deposited for collection not later than the second business day following receipt of said check. A promissory note, postdated check, or check dishonored on presentation shall not be deemed payment. |
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| 88 | 100 | | |
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| 89 | 101 | | (e) In enacting the act that amends this section by adding this subdivision, the Legislature finds that it is necessary and proper to remove the retailer from financial or business obligations to suppliers or wholesalers by the extension of credit beyond the terms contained in this section. The Legislature further finds that the exception established by this section to the general prohibition against tied interests shall be limited to its express terms so as not to undermine the general prohibition, and intends that this section shall be construed accordingly. |
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| 90 | 102 | | |
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| 91 | 103 | | (f) This section shall become operative on January 1, 2026. |
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| 92 | 104 | | |
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| 93 | 105 | | SEC. 3. Section 25509.1 is added to the Business and Professions Code, to read:25509.1. (a) Commencing January 1, 2026, and except as provided in subdivision (b) and paragraph (3) of subdivision (c), payment from a retailer licensee to a wholesaler licensee for delivery of beer, wine, or distilled spirits shall be made by electronic funds transfer in accordance with the following requirements:(1) The wholesaler licensee shall initiate the electronic funds transfer by initiating the withdrawal of funds from the retailer licensees bank account.(2) The electronic funds transfer shall occur by the expiration of the 30th day from the date of delivery of the beer, wine, or distilled spirits.(3) Any costs related to electronic payment services shall be paid by the party that incurred those costs.(A) Any service fees related to electronic payment transactions shall be applied in an equitable manner to each subscribing wholesaler and retailer and shall justifiably match the services they receive from the electronic payment service provider.(B) The wholesaler shall not pay, directly or indirectly, for electronic payment service fees incurred by a retailer.(C) The retailer shall not pay, directly or indirectly, for electronic payment service fees incurred by a wholesaler.(b) A payment may be made using cash, check, or money order only in the following instances:(1) If accepting payment following an electronic funds transfer of insufficient funds.(2) If the retailer licensee holds an interim operating permit pursuant to Section 24044.5 or a temporary permit pursuant to Section 24045.5.(3) During temporary service interruption of the third-party payment processor.(4) During the first 30 days following the issuance of a license to the retailer licensee.(c) (1) To maintain control of its ability to receive payment for delivery, a wholesaler licensee shall be responsible for selecting the third-party payment processor used to facilitate an electronic funds transfer pursuant to this section. The wholesaler and retailer may agree on the third-party payment processor. If the parties are unable to agree, the parties shall use the third-party payment processor used by the retailer as of July 1, 2025, to pay for wholesale alcohol purchases. If by July 1, 2025, the retailer does not use a third-party payment processor, the parties shall use the third-party payment processor selected by the wholesaler.(2) A wholesaler licensee shall not select a third-party payment processor that does not meet the requirements of this section or that requires more than 30 days notice from the wholesaler licensee to terminate the processors agreement with the wholesaler licensee.(3) Notwithstanding subdivision (a), a wholesaler may choose to accept credit card payments. If payment is made using a credit card, the retailer shall bear the cost of the transaction, so as to mitigate the value of secondary benefits realized by the retailer using the credit card.(d) A retailer shall not accept a rebate, incentive, or other thing of value from a third-party payment processor for a payment made pursuant to this section.(e) For purposes of this section, electronic funds transfer or EFT means the electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems. |
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| 94 | 106 | | |
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| 95 | 107 | | SEC. 3. Section 25509.1 is added to the Business and Professions Code, to read: |
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| 96 | 108 | | |
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| 97 | 109 | | ### SEC. 3. |
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| 98 | 110 | | |
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| 99 | 111 | | 25509.1. (a) Commencing January 1, 2026, and except as provided in subdivision (b) and paragraph (3) of subdivision (c), payment from a retailer licensee to a wholesaler licensee for delivery of beer, wine, or distilled spirits shall be made by electronic funds transfer in accordance with the following requirements:(1) The wholesaler licensee shall initiate the electronic funds transfer by initiating the withdrawal of funds from the retailer licensees bank account.(2) The electronic funds transfer shall occur by the expiration of the 30th day from the date of delivery of the beer, wine, or distilled spirits.(3) Any costs related to electronic payment services shall be paid by the party that incurred those costs.(A) Any service fees related to electronic payment transactions shall be applied in an equitable manner to each subscribing wholesaler and retailer and shall justifiably match the services they receive from the electronic payment service provider.(B) The wholesaler shall not pay, directly or indirectly, for electronic payment service fees incurred by a retailer.(C) The retailer shall not pay, directly or indirectly, for electronic payment service fees incurred by a wholesaler.(b) A payment may be made using cash, check, or money order only in the following instances:(1) If accepting payment following an electronic funds transfer of insufficient funds.(2) If the retailer licensee holds an interim operating permit pursuant to Section 24044.5 or a temporary permit pursuant to Section 24045.5.(3) During temporary service interruption of the third-party payment processor.(4) During the first 30 days following the issuance of a license to the retailer licensee.(c) (1) To maintain control of its ability to receive payment for delivery, a wholesaler licensee shall be responsible for selecting the third-party payment processor used to facilitate an electronic funds transfer pursuant to this section. The wholesaler and retailer may agree on the third-party payment processor. If the parties are unable to agree, the parties shall use the third-party payment processor used by the retailer as of July 1, 2025, to pay for wholesale alcohol purchases. If by July 1, 2025, the retailer does not use a third-party payment processor, the parties shall use the third-party payment processor selected by the wholesaler.(2) A wholesaler licensee shall not select a third-party payment processor that does not meet the requirements of this section or that requires more than 30 days notice from the wholesaler licensee to terminate the processors agreement with the wholesaler licensee.(3) Notwithstanding subdivision (a), a wholesaler may choose to accept credit card payments. If payment is made using a credit card, the retailer shall bear the cost of the transaction, so as to mitigate the value of secondary benefits realized by the retailer using the credit card.(d) A retailer shall not accept a rebate, incentive, or other thing of value from a third-party payment processor for a payment made pursuant to this section.(e) For purposes of this section, electronic funds transfer or EFT means the electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems. |
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| 100 | 112 | | |
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| 101 | 113 | | 25509.1. (a) Commencing January 1, 2026, and except as provided in subdivision (b) and paragraph (3) of subdivision (c), payment from a retailer licensee to a wholesaler licensee for delivery of beer, wine, or distilled spirits shall be made by electronic funds transfer in accordance with the following requirements:(1) The wholesaler licensee shall initiate the electronic funds transfer by initiating the withdrawal of funds from the retailer licensees bank account.(2) The electronic funds transfer shall occur by the expiration of the 30th day from the date of delivery of the beer, wine, or distilled spirits.(3) Any costs related to electronic payment services shall be paid by the party that incurred those costs.(A) Any service fees related to electronic payment transactions shall be applied in an equitable manner to each subscribing wholesaler and retailer and shall justifiably match the services they receive from the electronic payment service provider.(B) The wholesaler shall not pay, directly or indirectly, for electronic payment service fees incurred by a retailer.(C) The retailer shall not pay, directly or indirectly, for electronic payment service fees incurred by a wholesaler.(b) A payment may be made using cash, check, or money order only in the following instances:(1) If accepting payment following an electronic funds transfer of insufficient funds.(2) If the retailer licensee holds an interim operating permit pursuant to Section 24044.5 or a temporary permit pursuant to Section 24045.5.(3) During temporary service interruption of the third-party payment processor.(4) During the first 30 days following the issuance of a license to the retailer licensee.(c) (1) To maintain control of its ability to receive payment for delivery, a wholesaler licensee shall be responsible for selecting the third-party payment processor used to facilitate an electronic funds transfer pursuant to this section. The wholesaler and retailer may agree on the third-party payment processor. If the parties are unable to agree, the parties shall use the third-party payment processor used by the retailer as of July 1, 2025, to pay for wholesale alcohol purchases. If by July 1, 2025, the retailer does not use a third-party payment processor, the parties shall use the third-party payment processor selected by the wholesaler.(2) A wholesaler licensee shall not select a third-party payment processor that does not meet the requirements of this section or that requires more than 30 days notice from the wholesaler licensee to terminate the processors agreement with the wholesaler licensee.(3) Notwithstanding subdivision (a), a wholesaler may choose to accept credit card payments. If payment is made using a credit card, the retailer shall bear the cost of the transaction, so as to mitigate the value of secondary benefits realized by the retailer using the credit card.(d) A retailer shall not accept a rebate, incentive, or other thing of value from a third-party payment processor for a payment made pursuant to this section.(e) For purposes of this section, electronic funds transfer or EFT means the electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems. |
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| 102 | 114 | | |
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| 103 | 115 | | 25509.1. (a) Commencing January 1, 2026, and except as provided in subdivision (b) and paragraph (3) of subdivision (c), payment from a retailer licensee to a wholesaler licensee for delivery of beer, wine, or distilled spirits shall be made by electronic funds transfer in accordance with the following requirements:(1) The wholesaler licensee shall initiate the electronic funds transfer by initiating the withdrawal of funds from the retailer licensees bank account.(2) The electronic funds transfer shall occur by the expiration of the 30th day from the date of delivery of the beer, wine, or distilled spirits.(3) Any costs related to electronic payment services shall be paid by the party that incurred those costs.(A) Any service fees related to electronic payment transactions shall be applied in an equitable manner to each subscribing wholesaler and retailer and shall justifiably match the services they receive from the electronic payment service provider.(B) The wholesaler shall not pay, directly or indirectly, for electronic payment service fees incurred by a retailer.(C) The retailer shall not pay, directly or indirectly, for electronic payment service fees incurred by a wholesaler.(b) A payment may be made using cash, check, or money order only in the following instances:(1) If accepting payment following an electronic funds transfer of insufficient funds.(2) If the retailer licensee holds an interim operating permit pursuant to Section 24044.5 or a temporary permit pursuant to Section 24045.5.(3) During temporary service interruption of the third-party payment processor.(4) During the first 30 days following the issuance of a license to the retailer licensee.(c) (1) To maintain control of its ability to receive payment for delivery, a wholesaler licensee shall be responsible for selecting the third-party payment processor used to facilitate an electronic funds transfer pursuant to this section. The wholesaler and retailer may agree on the third-party payment processor. If the parties are unable to agree, the parties shall use the third-party payment processor used by the retailer as of July 1, 2025, to pay for wholesale alcohol purchases. If by July 1, 2025, the retailer does not use a third-party payment processor, the parties shall use the third-party payment processor selected by the wholesaler.(2) A wholesaler licensee shall not select a third-party payment processor that does not meet the requirements of this section or that requires more than 30 days notice from the wholesaler licensee to terminate the processors agreement with the wholesaler licensee.(3) Notwithstanding subdivision (a), a wholesaler may choose to accept credit card payments. If payment is made using a credit card, the retailer shall bear the cost of the transaction, so as to mitigate the value of secondary benefits realized by the retailer using the credit card.(d) A retailer shall not accept a rebate, incentive, or other thing of value from a third-party payment processor for a payment made pursuant to this section.(e) For purposes of this section, electronic funds transfer or EFT means the electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems. |
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| 104 | 116 | | |
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| 105 | 117 | | |
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| 106 | 118 | | |
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| 107 | 119 | | 25509.1. (a) Commencing January 1, 2026, and except as provided in subdivision (b) and paragraph (3) of subdivision (c), payment from a retailer licensee to a wholesaler licensee for delivery of beer, wine, or distilled spirits shall be made by electronic funds transfer in accordance with the following requirements: |
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| 108 | 120 | | |
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| 109 | 121 | | (1) The wholesaler licensee shall initiate the electronic funds transfer by initiating the withdrawal of funds from the retailer licensees bank account. |
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| 110 | 122 | | |
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| 111 | 123 | | (2) The electronic funds transfer shall occur by the expiration of the 30th day from the date of delivery of the beer, wine, or distilled spirits. |
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| 112 | 124 | | |
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| 113 | 125 | | (3) Any costs related to electronic payment services shall be paid by the party that incurred those costs. |
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| 114 | 126 | | |
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| 115 | 127 | | (A) Any service fees related to electronic payment transactions shall be applied in an equitable manner to each subscribing wholesaler and retailer and shall justifiably match the services they receive from the electronic payment service provider. |
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| 116 | 128 | | |
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| 117 | 129 | | (B) The wholesaler shall not pay, directly or indirectly, for electronic payment service fees incurred by a retailer. |
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| 118 | 130 | | |
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| 119 | 131 | | (C) The retailer shall not pay, directly or indirectly, for electronic payment service fees incurred by a wholesaler. |
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| 120 | 132 | | |
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| 121 | 133 | | (b) A payment may be made using cash, check, or money order only in the following instances: |
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| 122 | 134 | | |
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| 123 | 135 | | (1) If accepting payment following an electronic funds transfer of insufficient funds. |
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| 124 | 136 | | |
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| 125 | 137 | | (2) If the retailer licensee holds an interim operating permit pursuant to Section 24044.5 or a temporary permit pursuant to Section 24045.5. |
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| 126 | 138 | | |
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| 127 | 139 | | (3) During temporary service interruption of the third-party payment processor. |
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| 128 | 140 | | |
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| 129 | 141 | | (4) During the first 30 days following the issuance of a license to the retailer licensee. |
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| 130 | 142 | | |
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| 131 | 143 | | (c) (1) To maintain control of its ability to receive payment for delivery, a wholesaler licensee shall be responsible for selecting the third-party payment processor used to facilitate an electronic funds transfer pursuant to this section. The wholesaler and retailer may agree on the third-party payment processor. If the parties are unable to agree, the parties shall use the third-party payment processor used by the retailer as of July 1, 2025, to pay for wholesale alcohol purchases. If by July 1, 2025, the retailer does not use a third-party payment processor, the parties shall use the third-party payment processor selected by the wholesaler. |
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| 132 | 144 | | |
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| 133 | 145 | | (2) A wholesaler licensee shall not select a third-party payment processor that does not meet the requirements of this section or that requires more than 30 days notice from the wholesaler licensee to terminate the processors agreement with the wholesaler licensee. |
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| 134 | 146 | | |
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| 135 | 147 | | (3) Notwithstanding subdivision (a), a wholesaler may choose to accept credit card payments. If payment is made using a credit card, the retailer shall bear the cost of the transaction, so as to mitigate the value of secondary benefits realized by the retailer using the credit card. |
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| 136 | 148 | | |
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| 137 | 149 | | (d) A retailer shall not accept a rebate, incentive, or other thing of value from a third-party payment processor for a payment made pursuant to this section. |
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| 138 | 150 | | |
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| 139 | 151 | | (e) For purposes of this section, electronic funds transfer or EFT means the electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems. |
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| 140 | 152 | | |
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| 141 | 153 | | SEC. 4. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution. |
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| 142 | 154 | | |
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| 143 | 155 | | SEC. 4. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution. |
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| 144 | 156 | | |
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| 145 | 157 | | SEC. 4. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution. |
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| 146 | 158 | | |
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| 147 | 159 | | ### SEC. 4. |
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