BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           1323 (Walters)
          
          Hearing Date:  05/03/2010           Amended: 04/27/2010
          Consultant:  Maureen Ortiz      Policy Vote: GO 8-1
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          ____
          BILL SUMMARY:   SB 1323 expands the current authorization for  
          licensees under the Alcoholic Beverage Control Act to provide  
          their product free of charge to consumers during invitation-only  
          event.
          _________________________________________________________________ 
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2010-11      2011-12       2012-13     Fund
                                                                  
          Enforcement/oversight            ----unknown, less than $150
                                                                  
          potentially offset by fee revenue-----         Special*

          *Alcoholic Beverage Control Fund
          _________________________________________________________________ 
          ____
          STAFF COMMENTS: 
          
          To be eligible to hold an event, licensees must pay an annual  
          renewal fee of $131, a caterer's permit fee of $10 (current  
          budget language will increase that fee to $25), and a $200 fee  
          per event.  According to the Department of Alcoholic Beverage  
          Control (ABC), SB 1323 will give authority to about 500  
          additional licensees, however, it is not likely that all of  
          those licensees will apply for eligibility to hold an  
          invitation-only event.  Fee revenue is expected to offset all  
          costs.

          AB 2293 (De Leon), Chapter 638, Statutes of 2008, authorized a  
          manufacturer, winegrower, rectifier, or distiller or any  
          authorized agent of that person to provide, free of charge,  
          entertainment, food, and distilled spirits, wine, or  
          nonalcoholic beverages to consumers at an invitation-only event  
          in connection with the sale or distribution of wine or distilled  
          spirits.  Several conditions were placed on these events  
          including the limitation of 400 attendees per event, a  










          prohibition of persons under age 21, and a maximum duration of  
          four hours.  The authorization will sunset on January 1, 2014.

          SB 1323 extends that same authorization to a distilled spirits  
          manufacturer's agent, a holder of a distilled spirits importer's  
          general license, a holder of a distilled spirits rectifier's  
          general license (who does not also hold a distilled spirits  
          wholesaler's license), and a holder of an out-of-state distilled  
          spirit's shipper's certificate to also provide their product  
          free of charge at invitational-only events with the same  
          conditions placed on those required under the provisions of AB  
          2293.

          Existing law, known as the "tied-house" law, separates the  
          alcoholic beverage industry into three component parts, or  
          tiers, of manufacturer (including breweries, wineries and  
          distilleries), wholesaler, and retailer (both on-sale and  
          off-sale).  Tied-house laws generally prohibit alcoholic  
          beverage licensees from giving away any gift, premium or free  
          goods in connection with the sale or distribution of alcoholic  
          beverages.