BILL ANALYSIS
AB 1896
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Date of Hearing: April 28, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
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
SUMMARY
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.
COMMENTS
AB 1896
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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)
319-2081