BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 252
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          ASSEMBLY THIRD READING
          AB 252 (Charles Calderon)
          As Introduced  February 3, 2011
          Majority vote 

           GOVERNMENTAL ORGANIZATION 17-0  APPROPRIATIONS      15-0        
           
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          |Ayes:|Hall, Nestande, Atkins,   |Ayes:|Fuentes, Harkey,          |
          |     |Block, Blumenfield,       |     |Blumenfield, Bradford,    |
          |     |Chesbro, Cook, Galgiani,  |     |Charles Calderon, Campos, |
          |     |Garrick, Gatto, Hill,     |     |Davis, Donnelly, Gatto,   |
          |     |Jeffries, Ma, Perea, V.   |     |Hall, Hill, Lara,         |
          |     |Manuel Pérez, Silva,      |     |Mitchell, Nielsen, Norby, |
          |     |Torres                    |     |Solorio, Wagner           |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY  :  Provides for an additional authorization under the 
          Alcoholic Beverage Control Act (ABC Act) by allowing a distilled 
          spirits manufacturer's agent to provide their product free of 
          charge to consumers during invitation-only events, as defined.  
          Specifically,  this bill  modifies an existing provision of the 
          ABC 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 a distilled spirits manufacturer's agent.
           
          EXISTING LAW  :

          1)  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.

          2)  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.









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          3)  Permits until January 1, 2014, 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.

          4)  Authorizes ABC to impose a fee to cover the costs of 
          administering such events.

           FISCAL EFFECT  :  According to the Assembly Appropriations 
          Committee, there are currently 16 licensees who would be able to 
          take advantage of this expansion.  Costs associated with 
          including them in this tied-house exception would likely be 
          minor and absorbable within existing resources. 




           COMMENTS  :  According to the author, this bill is intended to 
          correct a minor oversight discovered since the enactment of AB 
          2293 (De León), Chapter 638, Statutes of 2008.  The bill allowed 
          distilled spirits manufacturers and winegrowers to provide their 
          product offerings free of charge to consumers, at an 
          invitation-only event, where a caterer's permit has been 
          authorized by ABC.  The bill contained restrictive criteria in 
          order to provide appropriate controls relating to these 
          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 (De León) to provide supplier hosted promotion and 
          entertainment events did not include all its member companies.  
          For example, the holder of a distilled spirits manufacturer's 
          agent license has not been able to secure a license from ABC to 
          participate in these promotional events.  DISCUS states, this 
          bill will correct this omission and will codify the original 
          intent of AB 2293 (De León).

          According to ABC, since the enactment of AB 2293 (De León) in 
          2009, only five event authorizations have been granted.  ABC has 
          not identified any enforcement problems and no disciplinary 
          action has been taken relating to these events.  The sponsor 
          states, the low number of invitation-only events is directly 








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          related to the criteria in AB 2293 (De León) that clearly 
          defines how these private parties must be operated by the 
          licensee.

           Prior legislation  :  SB 1323 (Walters) of 2010 would have 
          modified an existing provision of the ABC 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 license; and, 4) a holder 
          of an out-of-state distilled spirits shipper's certificate.  (SB 
          1323 (Walters) was held in Assembly Appropriations Committee.)  

          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.
           

          Analysis Prepared by  :    Eric Johnson / G. O. / (916) 319-2531 


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