BILL NUMBER: AB 2426	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JULY 2, 2008
	AMENDED IN SENATE  JUNE 17, 2008
	AMENDED IN ASSEMBLY  APRIL 21, 2008
	AMENDED IN ASSEMBLY  APRIL 10, 2008

INTRODUCED BY   Assembly Member Cook

                        FEBRUARY 21, 2008

   An act to add Section 25503.41 to the Business and Professions
Code, relating to alcoholic beverages.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2426, as amended, Cook. Alcoholic beverages: tied-house
restrictions: brewpub restaurants.
   The Alcoholic Beverage Control Act contains limitations on sales
commonly known as "tied-house" restrictions, which generally prohibit
a manufacturer, winegrower, manufacturer's agent, California
winegrower's agent, rectifier, distiller, bottler, importer, or
wholesaler from owning any interest in an on-sale or off-sale
license, licensee, or licensed premises. Existing law contains
various exemptions from this restriction on tied interests.
   This bill would permit a person that operates an out-of-state
winery and produces a limited amount of distilled spirits in another
state to  obtain a brewpub-restaurant license  
hold an interest in no more than 12 brewpub-restaurant licenses 
, provided specified conditions are met.
   The Alcoholic Beverage Control Act provides that a violation of
specified tied-house provisions is punishable as a misdemeanor. This
bill, by including provisions that would be subject to those existing
criminal sanctions, would impose a state-mandated local program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 25503.41 is added to the Business and
Professions Code, to read:
   25503.41.  (a) Notwithstanding any other provision of this
division, any person that both operates a winery in another state and
produces distilled spirits in another state may  obtain a
brewpub-restaurant license, as authorized by Section 23396.3,
  hold an interest in no more than 12 brewpub-restaurant
licenses,  provided that all of the following conditions are
met:
   (1) The out-of-state distilling operations occur only on premises
where the licensee also conducts brewpub-restaurant operations, and
do not exceed 12,000 gallons of distilled spirits annually at any
licensed location.
   (2) The out-of-state winery operations occur only on premises
where the licensee also conducts brewpub-restaurant operations.
   (3) The distilled spirits and wine that are manufactured out of
state by the licensee are not imported into or sold in this state. If
the licensee imports beer into this state that is produced in its
out-of-state brewpub, it shall do so only through a licensed beer and
wine wholesaler.
   (b) The Legislature finds that it is necessary and proper to
require a separation between manufacturing interests, wholesale
interests, and retail interests in the production and distribution of
alcoholic beverages in order to prevent suppliers from dominating
local markets through vertical integration and to prevent excessive
sales of alcoholic beverages produced by overly aggressive marketing
techniques. The Legislature further finds that the exception
established by this section to the general prohibition against tied
interests must be limited to its expressed terms so as not to
undermine the general prohibition, and intends that this section be
construed accordingly.
  SEC. 2.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.