BILL ANALYSIS Ó SB 1531 Page 1 Date of Hearing: August 8, 2012 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair SB 1531 (Wolk) - As Amended: August 6, 2012 Policy Committee: Governmental Organization Vote: 15 - 0 Urgency: No State Mandated Local Program: Yes Reimbursable: No SUMMARY This bill provides a narrow tied-house exception that allows the Napa Valley Opera House (NVOH) to accept wine and monetary donations from wineries located within the Counties of Napa, Sonoma, Lake, and Mendocino. This exemption sunsets on January 1, 2018. FISCAL EFFECT There are no significant costs associated with this legislation. COMMENTS 1)Purpose . According to the author, this bill provides a narrow tied-house exception by allowing the NVOH to accept monetary contributions and alcoholic beverages from an alcohol licensee, specifically wineries in Napa, Sonoma, Lake and Mendocino counties. This tied-house exception is necessary because the NVOH also holds an on-sale retail license for a portion of its facility. The possession of this retail license prevents an alcohol licensee from providing charitable contributions (both monetary and product) to this non-profit opera house. In this case, NVOH has a limited Type 64 special on-sale general theater license for its entire facility. This allows them to serve alcoholic beverages to ticketholders during and two hours prior to and one hour after a theater performance. This exception will not allow them to sell donated wine during SB 1531 Page 2 that time, however, it will allow them to sell or serve wine in connection with fundraising activities as long as those activities do not take place during a performance. 2)Background . Under existing provisions of the ABC Act, alcoholic beverage manufacturers are prohibited, in general, from owning, directly, or indirectly, any interest in any on-sale license, or from providing anything of value to retailers, be it free goods, services, or advertising (tied-house law). This prohibition exists as part of California's long standing three-tier policy of alcoholic beverage laws that do not allow a particular entity (manufacturer) to give something of value to a member of another tier (retailer). Numerous exceptions to this restriction have been enacted through the years in specific instances where the Legislature determined that the public's interests were protected. However, the Legislature traditionally does not grant exemptions that favor the products of the entity seeking the exemption, or exemptions that unfairly compromise the role of the distributors. 3)Related Legislation . SB 131 (Wiggins), Chapter 638, Statutes of 2009 granted a tied-house exemption for an alcohol licensee to make monetary and alcoholic beverage contributions to the San Francisco Symphony, which is a nonprofit charitable corporation. Analysis Prepared by : Julie Salley-Gray / APPR. / (916) 319-2081