BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 1896
                                                                  Page  1

          Date of Hearing:   April 28, 2010

                                Felipe Fuentes, Chair

                  AB 1896 (Jeffries) - As Amended:  April 19, 2010 

          Policy Committee:                              Governmental  
          Organization Vote:                            20 - 0 

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No


          This bill creates a new Internet wine licensing category.  
          Specifically, this bill: 

          1)Authorizes the issuance of a limited off-sale retail wine  
            license that would allow the licensee to sell wine only by  
            direct mail, the telephone, or the Internet.

          2)Requires the license applicant to pay an initial fee and an  
            annual renewal fee that is equal to the fee paid by off-sale  
            beer and wine licensees, $100 and $246 respectively. 

          3)Makes clarifying changes to the Alcoholic Beverage Control Act  
            concerning the use of passports and military identification as  
            proof of age. 

           FISCAL EFFECT  

          The Department of Alcoholic Beverage Control (ABC) is unable to  
          determine how many individuals will apply for this new license  
          or how much the new program will cost.  The current budget for  
          ABC is approximately $50 million and they receive roughly the  
          same amount in licensing revenue.  Based on the current ABC  
          budget and the current number of licensees, if this legislation  
          results in 1,500 new licensees (approximately a 2% increase), it  
          would cost the department approximately $1 million per year in  
          additional licensing and enforcement activities (Alcohol  
          Beverages Control Fund). ABC asserts that whatever the cost for  
          the program, their licensing fees will cover those costs. 



                                                                  AB 1896
                                                                  Page  2

           Purpose  . This measure authorizes ABC to issue an off-sale retail  
          wine license that would allow entrepreneurs who do not have a  
          physical store to sell directly to consumers.  According to the  
          author, this concept recognizes the realities of the changing  
          wine industry and the growing use of the Internet, direct mail,  
          and the telephone in purchasing products and services.  The bill  
          establishes a $100 initial fee with a $246 annual renewal fee  
          for this new limited off-sale internet retail wine license,  
          which is consistent with the current Beer and Wine Retailer  
          license fees.  The sponsor of the bill, ABC, asserts that the  
          fee revenue charged would cover the costs of administering the  
          new license. 
          Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916)