BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                  SB 1323|
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                                 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  
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          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  







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          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

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