BILL NUMBER: SB 362 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 28, 2010
AMENDED IN ASSEMBLY FEBRUARY 23, 2010
AMENDED IN ASSEMBLY JULY 6, 2009
AMENDED IN SENATE MAY 28, 2009
AMENDED IN SENATE MAY 20, 2009
INTRODUCED BY Senator Florez
FEBRUARY 25, 2009
An act to add Section 23356.4 to the Business and
Professions Code, to add Section 47060 to the Food and
Agricultural Code, and to add Sections 6075.5, 6363.9,
17158, 24316, and 32177.7 17158 and 24316 to the
Revenue and Taxation Code, relating to agriculture.
LEGISLATIVE COUNSEL'S DIGEST
SB 362, as amended, Florez. Agriculture: victory gardens
and microvintners garden growers : taxes:
exemptions. exclusion.
Existing law provides for the direct marketing of agricultural
produce, including through certified farmers' markets, field retail
stands, or farm stands, subject to specified conditions.
This bill would authorize a victory garden grower, as defined,
that files a notice with, and pays a $50 filing fee to, the county
agricultural commissioner to sell fruits, nuts, or vegetables that he
or she grows in his or her garden directly to the public, including
at a farmers' market, or to a retailer or distributor or others,
within a 15-mile radius from the garden. The license would be
effective upon the filing of the notice and payment of the fee and
would be renewable annually. A licensed victory garden grower would
be exempt from certain state laws and local ordinances, as specified.
Because this bill would impose new duties on local agencies, the
bill would impose a state-mandated local program.
A violation of any of these provisions would be a misdemeanor.
Because this bill would create a new crime, it would impose a
state-mandated local program.
The Alcoholic Beverage Control Act contains various provisions
regulating the application for, the issuance of, the suspension of,
and the conditions imposed upon, alcoholic beverage licenses by the
Department of Alcoholic Beverage Control.
This bill would authorize the issuance of an alcoholic beverage
license to a victory microvintner, as defined, authorizing the
licensee to engage in the manufacture and sale of wine using victory
garden grapes, subject to specified conditions.
The Alcoholic Beverage Control Act provides that a violation of
its provisions is a misdemeanor, unless otherwise specified. Because
this bill would create new crimes, the bill would impose a
state-mandated local program.
The Sales and Use Tax Law imposes a tax on retailers
measured by the gross receipts from the sale of tangible property
sold at retail in this state, or the storage, use, or other
consumption in this state of tangible personal property purchased
from a retailer for storage, use, or other consumption in this state,
and requires every person desiring to engage in or conduct business
as a seller within this state to obtain a seller's permit from the
State Board of Equalization. That law provides various exemptions
from those taxes. The Personal Income Tax Law and the
Corporation Tax Law provide for various exclusions from gross income
for the purposes of the taxes imposed by those laws. The
Alcoholic Beverage Tax Law imposes an excise tax, at specified rates,
for the privilege of selling or possessing for sale, beer, wine,
sparkling wine, sparkling cider, and distilled spirits. Existing law
authorizes cities and counties to license businesses within their
jurisdictions.
This bill would exempt from sales and use taxes the sale
of, or storage, use, or other consumption of, wine sold by a licensed
victory microvintner pursuant to that license, and would exempt the
licensee from the requirement to obtain a seller's permit or business
license or other state and local licenses and permits. This bill
would , for purposes of computing personal income and
corporation taxes, exclude from gross income any amounts received
from the sale of wine made pursuant to the license by a
licensed victory microvintner or from the sale of fruits,
nuts, or vegetables grown by a licensed victory garden grower
pursuant to the license. This bill would also exempt from
the alcoholic beverage excise tax the sale of that wine by a licensed
victory microvintner.
The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes
counties and cities to impose local sales and use taxes in conformity
with the Sales and Use Tax Law, and the Transactions and Use Tax Law
authorizes districts, as specified, to impose transactions and use
taxes in conformity with the Sales and Use Tax Law. Amendments to the
Sales and Use Tax Law relating to sales and use taxes, not
inconsistent with these laws, are incorporated into ordinances
imposing these taxes. Existing law requires the state to reimburse
counties and cities for revenue losses caused by the enactment of
sales and use tax exemptions.
This bill would provide that no appropriation is made and the
state shall not reimburse cities and counties for sales and use tax
revenues lost by them pursuant to this bill.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that with regard to certain mandates no
reimbursement is required by this act for a specified reason.
With regard to any other mandates, this bill would provide that,
if the Commission on State Mandates determines that the bill contains
costs so mandated by the state, reimbursement for those costs shall
be made pursuant to the statutory provisions noted above.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 23356.4 is added to the
Business and Professions Code, to read:
23356.4. (a) (1) Notwithstanding any other provision of this
division, the department may issue an alcoholic beverage license to a
victory microvintner pursuant to this section.
(2) For purposes of this section, a "victory microvintner" means a
person that makes wine obtained from grapes or other agricultural
products, but only if 75 percent or more of the grapes or other
agricultural products are grown by a victory garden grower, as
described in Section 47060 of the Food and Agricultural Code. If the
person is an individual or a partnership in which one or more persons
are individuals, those individuals shall be over 21 years of age.
(b) A license issued pursuant to this section shall authorize the
licensee to do any of the following:
(1) Engage in the manufacture of wine. The aggregate amount of
wine made per calendar year shall not exceed 200 gallons.
(2) Notwithstanding any other provision of this division, engage
in the sale of wine to authorized licensees or customers located
within a 15-mile radius of the victory microvintner's licensed
premises, including sales to authorized licensees or customers at
farmers' markets. A victory microvintner, or a retail licensee that
is not a victory microvintner, may directly offer samples of the
victory microvintner's wine at a farmers' market operating within a
15-mile radius of either the victory microvintner's licensed premises
or the victory garden that provides the grapes for the victory
microvintner's wine.
(c) All applicable labeling requirements, including, but not
limited to, the provisions of Article 3 (commencing with Section
25235) of Chapter 13, shall apply to wine produced by a licensed
victory microvintner. No additional label statement shall be required
respecting the 15-mile sale radius applicable to a particular
victory microvintner. However, a victory microvintner may add the
phrase "Microvintner," "Victory Microvintner," "California
Microvintner," or "California Victory Microvintner" to the wine
label, and, if such additional designation is added by the victory
microvintner, an optional additional geographic statement of origin
that reasonably identifies, with customary publicly recognized names,
the neighborhood or microlocality of the victory garden from which
the wine was made. Any such neighborhood or microlocality shall
conform reasonably closely with the 15-mile radius sale area
applicable to the victory microvintner as provided in this section.
(d) A licensed victory microvintner, or a retail licensee that is
not a victory microvintner, may conduct wine tastings on the licensed
premises of a victory microvintner. These tastings, if conducted
directly by a licensed victory microvintner, shall include only wines
produced by that victory microvintner and by other victory
microvintners located within the 15-mile radius of the licensed
premises where the tasting is conducted.
(e) If a license is issued pursuant to this section to a person
who is a taxpayer, as defined in Section 32005 of the Revenue and
Taxation Code, that person shall also be deemed to be the taxpayer
and file an appropriate bond for purposes of Part 14 (commencing with
Section 32001) of Division 2 of the Revenue and Taxation Code.
(f) (1) A licensed victory microvintner shall be exempt from any
state law and local county and city ordinance that requires a license
or permit to conduct the activities of a victory microvintner, or
that prohibits those activities, including, but not limited to, local
zoning and business license ordinances. However, a licensed victory
microvintner shall be subject to all other applicable state and local
laws relating to, but not limited to, health and safety, noise, and
prohibited poisons.
(2) The Legislature finds and declares that the encouragement and
development of local microvintners to serve their communities is a
matter of statewide interest and concern. It is, therefore, the
intent of the Legislature that this section shall supersede all
conflicting local laws and shall apply in charter cities.
SEC. 2. SECTION 1. Section 47060 is
added to the Food and Agricultural Code, to read:
47060. (a) Notwithstanding any other law, a person licensed as a
victory garden grower may, within a 15-mile radius from the garden,
sell fresh fruits, nuts, or vegetables that he or she grows in his or
her garden directly to the public, including at a farmers' market,
or to a retailer or distributor or others, including, but not limited
to, a grocer, market, school, or restaurant.
(b) For purposes of this section, a "victory garden grower" means
a person in this state who owns or leases a garden of a reasonable
size, not exceeding one acre in size, and grows fruits, nuts, or
vegetables, or any combination of these foods, in that garden. The
county agricultural commissioner may determine rules or guidelines of
general applicability addressing what is a reasonable size in his or
her county under the circumstances. However, no victory garden
grower shall be required to obtain the permission of the county
agricultural commissioner as a condition of obtaining or maintaining
a victory garden grower license, except for the notice and fee as
provided in subdivision (c).
(c) (1) In order to be licensed as a victory garden grower, the
grower shall file a notice, not exceeding one page in length, and
otherwise in a form as prescribed by the county agricultural
commissioner, along with a fifty-dollar ($50) filing fee, with the
county agricultural commissioner in the county in which the garden is
located. The license shall be effective upon the filing of the
notice and payment of the fee, and may be renewed annually by filing
another notice and paying the fifty-dollar ($50) filing fee.
(2) A photocopy of the notice, along with proof of payment of the
filing fee, which can be a photocopy of a check or money order or
other payment form, shall be prima facie evidence of the victory
garden grower's licenseholder status pursuant to this section, and
all persons shall be entitled to rely on that evidence. However, a
county agricultural commissioner may choose to issue, from time to
time, receipts or certificates evidencing the victory garden grower's
licenseholder status, and that receipt or certificate, if and when
issued, shall also be prima facie evidence of the victory garden
grower's licenseholder status pursuant to this section.
(d) (1) A licensed victory garden grower shall be exempt from any
state law and local county and city ordinance that requires a license
or permit to conduct the activities of a victory garden grower, or
that prohibits these activities, including, but not limited to, local
zoning and business license ordinances. However, except as provided
in subdivision (e), a licensed victory garden grower shall be subject
to all other applicable state and local laws relating to, but not
limited to, health and safety, noise, and prohibited poisons.
(2) The Legislature finds and declares that the encouragement and
development of community-based food gardens to serve their local
communities with locally grown foods is a matter of statewide
interest and concern. It is, therefore, the intent of the Legislature
that this section shall supersede all conflicting local laws and
shall apply in charter cities.
(e) The agricultural produce sold by a licensed victory garden
grower shall be exempt from size, standard pack, container, and
labeling requirements of state law. However, a county agricultural
commissioner may issue regulations or guidelines of general
applicability providing for point-of-sale identification of the
produce of a county's victory garden grower as "____ County Victory
Garden Produce" or "Victory Garden produce of ____ County," or
similar wording, and the identification regulations or guidelines
shall not impose any material or unreasonable cost or burden upon a
victory garden grower. In addition to the identification, a victory
garden grower may add an optional additional geographic statement of
origin for any victory garden produce, which reasonably identifies,
with customary publicly recognized names, the neighborhood or
microlocality of the victory garden. Any such neighborhood or
microlocality shall conform reasonably closely with the 15-mile
radius sale area applicable to the victory garden grower as provided
in this section.
SEC. 3. Section 6075.5 is added to the Revenue
and Taxation Code, to read:
6075.5. No permit shall be required under this part of any person
that engages in business in this state as a victory microvintner
issued a license pursuant to Section 23356.4 of the Business and
Professions Code, and who engages in no other taxable sales of
tangible personal property at retail.
SEC. 4. Section 6363.9 is added to the Revenue
and Taxation Code, to read:
6363.9. There are exempted from the taxes imposed by this part,
the gross receipts from the sale in this state of, and the storage,
use, or other consumption in this state of, wine made pursuant to the
license by a person licensed pursuant to Section 23356.4 of the
Business and Professions Code, that sells or stores, uses, or
otherwise consumes that wine.
SEC. 5. SEC. 2. Section 17158 is
added to the Revenue and Taxation Code, to read:
17158. Gross income shall not include any amount received during
the taxable year by a person licensed pursuant to Section
23356.4 of the Business and Professions Code from the sale of wine
made pursuant to the license, or by a person licensed
pursuant to Section 47060 of the Food and Agricultural Code from the
sale of fruits, nuts, or vegetables grown pursuant to the license.
SEC. 6. SEC. 3. Section 24316 is
added to the Revenue and Taxation Code, to read:
24316. Gross income shall not include any amount received during
the taxable year by a person licensed pursuant to Section
23356.4 of the Business and Professions Code from the sale of wine
made pursuant to the license, or by a person licensed
pursuant to Section 47060 of the Food and Agricultural Code from the
sale of fruits, nuts, or vegetables grown pursuant to the license.
SEC. 7. Section 32177.7 is added to the Revenue
and Taxation Code, to read:
32177.7. No tax shall be imposed by this part upon any wine sold
by a person licensed pursuant to Section 23356.4 of the Business and
Professions Code pursuant to the license.
SEC. 8. Notwithstanding Section 2230 of the
Revenue and Taxation Code, no appropriation is made by this act and
the state shall not reimburse any local agency for any sales and use
tax revenues lost by it under this act.
SEC. 9. SEC. 4. No reimbursement is
required by this act pursuant to Section 6 of Article XIII B of the
California Constitution for certain costs that may be incurred by a
local agency or school district because, in that regard, this act
creates a new crime or infraction, eliminates a crime or infraction,
or changes the penalty for a crime or infraction, within the meaning
of Section 17556 of the Government Code, or changes the definition of
a crime within the meaning of Section 6 of Article XIII B of the
California Constitution.
However, if the Commission on State Mandates determines that this
act contains other costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division 4 of
Title 2 of the Government Code.