BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1649| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ CONSENT Bill No: AB 1649 Author: Chesbro (D) Amended: 3/15/10 in Assembly Vote: 21 SENATE GOVERNMENTAL ORG. COMMITTEE : 6-0, 6/9/10 AYES: Wright, Negrete McLeod, Padilla, Price, Wyland, Yee NO VOTE RECORDED: Harman, Calderon, Denham, Florez, Oropeza SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 ASSEMBLY FLOOR : 77-0, 5/3/10 - See last page for vote SUBJECT : Alcoholic beverage licensees: winegrowers SOURCE : Wine Institute DIGEST : This bill allows licensed winegrowers to produce spirits of wine (a byproduct of wine fermentation) under specified conditions without having to additionally obtain a distilled spirits manufacturer's license. ANALYSIS : Existing law establishes the Department of Alcoholic Beverage Control (ABC) and grants it exclusive authority to administer the provisions of the ABC Act in accordance with laws enacted by the Legislature. This involves licensing individuals and businesses associated with the manufacture, importation and sale of alcoholic beverages in this state and the collection of license fees. CONTINUED AB 1649 Page 2 Existing law defines "distilled spirits manufacturer" to mean any person who produces distilled spirits from naturally fermented materials or in any other manner. Existing law authorizes a licensed winegrower to conduct specified activities, including authorizing a licensed winegrower to sell wine and brandy for consumption to consumers for on-premises consumption, as specified. Existing law authorizes an on-sale beer and wine public premises licensee and a licensed winegrower who exercises his or her license privileges at specified locations to allow a person who has purchased and partially consumed a bottle of wine to remove the partially consumed bottle from the premises upon departure. This bill: 1. Adds clarity to the definition of "distilled spirits manufacturer," within the ABC Act, by stipulating that a distilled spirits manufacturer shall not include a winegrower that produces spirits of wine, provided the spirits of wine are blended into wine produced by the winegrower, are sold to an industrial alcohol dealer, or are destroyed by the winegrower. 2. Expands the privileges afforded a licensed winegrower to include the production of spirits of wine and blending those spirits of wine into wine produced by the winegrower or selling those spirits of wine to an industrial alcohol dealer. 3. Makes clarifying changes with respect to a licensed winegrower's authorization to sell only their own wine or brandy by the glass or bottle that is produced under their original or duplicate license. Prior/Related Legislation AB 1470 (Evans) Chapter 535, Statutes of 2009, authorizes winegrowers to sell wine for consumption at a "branch office," warehouse, or an off-site cellar, and removed the CONTINUED AB 1649 Page 3 requirement that the Department of ABC issue a "duplicate" license "forthwith." Also, authorizes an on-sale beer and wine public premises licensee to allow a person who has purchased and partially consumed a bottle of wine to remove the partially consumed bottle from the premises upon departure. AB 2004 (Evans) Chapter 127, Statutes of 2008, authorizes a winery to sell wine for consumption on the winery's grounds, such as at a picnic area within the boundaries of the winery. Also, grants any winegrower the same privilege that is currently available to any on-sale licensee which maintains a restaurant, which permits the licensee to allow a patron to remove from the premises upon departure, a bottle of wine that has been opened (partially consumed). FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 6/22/10) Wine Institute (source) Family Winemakers of California ARGUMENTS IN SUPPORT : 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 spirits manufacturer's license to deal with this byproduct. The sponsor points out that many wineries use reverse osmosis, or the spinning cone technique, to reduce the alcohol content in their wines. This measure would simply clarify that 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 are blended into the wine produced by the winegrower, are sold to an industrial alcohol dealer, or are destroyed by the winegrower. This measure would also make minor clarifying changes to the newly enacted wine-by-the-glass law. ASSEMBLY FLOOR : CONTINUED AB 1649 Page 4 AYES: Adams, Ammiano, Anderson, Arambula, Bass, Beall, Bill Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield, Bradford, Brownley, Buchanan, Caballero, Charles Calderon, Carter, Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon, DeVore, Emmerson, Eng, Evans, Feuer, Fletcher, Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick, Gilmore, Hagman, Harkey, Hayashi, Hernandez, Hill, Huber, Huffman, Jeffries, Jones, Knight, Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza, Miller, Monning, Nava, Nestande, Niello, Nielsen, Norby, V. Manuel Perez, Portantino, Ruskin, Salas, Saldana, Silva, Skinner, Smyth, Solorio, Audra Strickland, Swanson, Torlakson, Torres, Torrico, Tran, Villines, Yamada NO VOTE RECORDED: Hall, John A. Perez, Vacancy TSM:do 6/22/10 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED