BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 1649
                                                                  Page  1

          Date of Hearing:   April 21, 2010

                                Felipe Fuentes, Chair

                   AB 1649 (Chesbro) - As Amended:  March 15, 2010 

          Policy Committee:                              Governmental  
          Organization Vote:                            20 - 0 

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              


          This bill allows a winery to produce spirits of wine (a  
          byproduct of wine fermentation) under specified conditions  
          without having to additionally obtain a distilled spirits  
          manufacturer's license. Specifically, this bill: 

          1)Expands the authorized activities that a licensed winegrower  
            may conduct to include the production of spirits of wine,  
            provided those spirits of wine are either blended into wine  
            produced by the winegrower, sold to an industrial alcohol  
            dealer, or destroyed by the winegrower.

          2)Makes other conforming and clarifying changes with regard to a  
            licensed winegrower's authorization to sell wine and brandy. 

           FISCAL EFFECT  

          Any costs associated with this legislation would be minor and  
          absorbable within the Department of Alcoholic Beverage Control's  
          existing resources.


           1)Rationale  . According to the bill's sponsor, the Wine  
            Institute, while existing law authorizes a winery to produce  
            the spirits of wine byproduct it is unclear whether or not the  
            winery needs to obtain a Type 04 distilled manufacturer's  
            license to deal with this byproduct.  AB 1649 states a winery  
            does not need to purchase a separate distilled spirits  
            manufacturer's license when producing spirits of wine  
            (byproduct of wine fermentation) provided the spirits of wine  


                                                                  AB 1649
                                                                  Page  2

            are blended into the wine produced by the winegrower, are sold  
            to an industrial alcohol dealer, or are destroyed by the  

           2)Related Legislation  .  AB 1470 (Evans; Chapter 535, Statutes of  
            2009) removed the prohibition against licensed winegrowers or  
            brandy manufacturers from selling wine for consumption at a  
            branch office, essentially extending wine-by-the-glass  
            privileges to a duplicate license.

            AB 2004 (Evans; Chapter 127, Statutes of 2008) authorized a  
            licensed winegrower to sell wine to consumers for on-premises  

           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916)