BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 1323| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 1323 Author: Walters (R) Amended: 4/27/10 Vote: 21 SENATE GOVERNMENTAL ORG. COMMITTEE : 8-1, 4/13/10 AYES: Wright, Calderon, Denham, Oropeza, Padilla, Price, Wyland, Yee NOES: Florez NO VOTE RECORDED: Harman, Negrete McLeod SENATE APPROPRIATIONS COMMITTEE : 10-0, 5/3/10 AYES: Kehoe, Cox, Corbett, Denham, Leno, Price, Walters, Wolk, Wyland, Yee NO VOTE RECORDED: Alquist SUBJECT : Alcoholic beverage control: licensees SOURCE : Distilled Spirits Council of the United States DIGEST : This bill modifies an existing provision of the Alcoholic Beverage Control Act that allows, until January 1, 2014, a manufacturer, winegrower, rectifier, or distiller to provide their product offerings directly to consumers (free of charge) during invitation-only events, as specified, to additionally grant the same privilege to (1) a distilled spirits manufacturer's agent, (2) a holder of a distilled spirits importer's general license who does not also hold a distilled spirits wholesaler's license, (3) a holder of a distilled spirits rectifier's general CONTINUED SB 1323 Page 2 license, and (4) a holder of an out-of-state distilled spirit's shipper's certificate. 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. 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 law generally prohibits alcoholic beverage licensees from giving away any gift, premium or free goods in connection with the sale or distribution of alcoholic beverages. Existing law, until January 1, 2014, permits 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 over 21 years of age at an invitation-only event in connection with the sale or distribution of wine or distilled spirits, as specified. Existing law also authorizes the Department of ABC to impose a fee to cover the costs of administering such events. Comments This bill is intended to correct a minor oversight discovered since enactment of AB 2293 (De Leon), Chapter 638, Statutes of 2008. AB 2293 was introduced to allow distilled spirits manufacturers and winegrowers to provide their product offerings directly to consumers, by invitation only, within a controlled environment for which there is a caterer's permit authorization. The bill contained significant restrictive criteria in order to provide appropriate controls on promotional events. According to the bill's sponsor, the Distilled Spirits Council of the United States (DISCUS), the list of licensees authorized by AB 2293 to provide supplier hosted promotion and entertainment was not inclusive of all DISCUS SB 1323 Page 3 member companies. In fact, the sponsor claims that since enactment of AB 2293, certain licensees have not been able to secure a permit from the Department of ABC to hold an event. According to the sponsor, this bill is simply intended to correct this shortcoming and follow through on the original intent of AB 2293. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: Yes According to the Senate Appropriations Committee: Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund Enforcement/oversight unknown, less than $150Special* potentially offset by fee revenue * Alcoholic Beverage Control Fund SUPPORT : (Verified 5/4/10) Distilled Spirits Council of the United States (source) TSM:mw 5/4/10 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****