BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                  AB 1649|
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                                    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.
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          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  

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          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  : 

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                                                               AB 1649
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          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

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