BILL ANALYSIS Ó
AB 774
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
774 (Levine)
As Amended May 28, 2015
Majority vote
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|ASSEMBLY: |79-0 |(May 11, 2015) |SENATE: |37-0 |(June 25, 2015) |
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Original Committee Reference: G.O.
SUMMARY: Provides that a certified farmers' market beer sales
permit shall also authorize an instructional tasting event on
the subject of beer at a certified farmers' market (CFM),
including any permitted community event area adjacent to, and
operated in conjunction with, a certified farmers' market,
located within the county or an adjacent county of the physical
location of the licensed beer manufacturer, under specified
conditions.
The Senate amendments:
1)Clarify that the community event area shall be adjacent to,
and operated in conjunction with, the CFM and the procedures
for conducting the instructional beer tastings.
2)Make a conforming change.
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EXISTING LAW:
1) Establishes the Department of Alcoholic Beverage Control
(ABC) and grants it exclusive authority to regulate the
licensing, enforcement, and administration of the alcoholic
beverage control laws.
2) Provides for certified farmers' markets which are operated
in accordance with regulations established in the California
Administrative Code pertaining to direct marketing and are
governed by law under the California Department of Food and
Agriculture (CDFA). These rules are enforced by County
Agriculture Commissioners in the counties in which the market
operates. The markets also fall under the jurisdiction of
the health departments in each county in which a market
operates.
3) Authorizes the Department of ABC to issue special temporary
licenses and permits to various entities for limited purposes
including a certified farmers' market sales permit that
authorizes a licensed winegrower to sell "wine" produced and
bottled by the winegrower at certified farmers' market
locations. The farmers' market wine sales permit may be
issued for up to 12 months but shall not be valid for more
than one day a week at any single specified farmers' market
location. The law also allows a winegrower to hold more than
one certified farmers' market wine sales permit and requires
the Department of ABC to notify local agencies and
enforcement entities of the permits. Additionally, the law
grants the licensed winegrower the privilege of conducting
limited "wine" tastings for consumers at farmers' markets
under certain circumstances. Furthermore, the law prohibits
the licensed winegrower from selling more than 5,000 gallons
of wine annually pursuant to all certified farmers' markets
sales permits held by any single winegrower.
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4) Authorizes a licensed beer manufacturer to apply to the
Department of ABC for a certified farmers' market "beer"
sales permit that grants the beer manufacturer the privilege
of selling beer, that has been produced by the beer
manufacturer, at a certified farmers' market, including any
permitted community event area adjacent to, and operated in
conjunction with, a certified farmers' market, as specified.
The farmers' market sales permit may be issued for up to 12
months but shall not be valid for more than one day a week at
any single specified farmers' market or community event
location. The law also prohibits the licensed beer
manufacturer from selling more than 5,000 gallons of beer
annually pursuant to all certified farmers' markets permits
held by any single beer manufacturer. Additionally, the
farmers' market sales permit is subject to the respective
discretion and managerial control of a certified farmers'
market or community event operator and existing regulations
governed by law under the CDFA.
5) Authorizes specified nonprofit corporations that have not
been issued a license authorizing the sale of wine to receive
and possess wine donated to that nonprofit corporation, if
the nonprofit corporation has submitted a license application
to sell wine with the Department of ABC.
6) Permits a winegrower, beer manufacturer, or a beer and wine
wholesaler to instruct licensees and their employees on the
subject of wine or beer, including, but not limited to, the
history, nature, values, and characteristics of those
beverages, as provided.
7) Permits an on-sale retail licensee of wine or distilled
spirits to conduct "instructional" consumer tastings on the
licensed retail premise provided the following conditions are
met: a) no more than 1/4 ounce of distilled spirits is
offered in one tasting; b) no more than one ounce of wine is
offered in one tasting; and, c) no more than three tastings
are offered to an individual in one day. An instruction may
include the history, nature, values and characteristics of
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the product being offered, and the methods of presenting and
serving the product.
8) Authorizes beer manufacturers and wholesalers to offer beer
samples (not to exceed eight ounces per person, per day) to
individuals of legal drinking age at on-sale retail licensed
premises under specified conditions.
9) Permits a licensed winegrower, manufacturer, importer, or
wholesaler to provide samples of the alcoholic beverages,
which are authorized to be sold by the licensee in accordance
with rules prescribed by the Department of ABC. A retail
licensee, however, is not authorized to provide any free
samples of alcoholic beverages.
10)Prohibits any licensee from giving any premium, gift, or
free goods in connection with the sale or distribution of any
alcoholic beverage, except as specifically authorized. The
ABC Act provides that a violation of any of its provisions
for which another penalty or punishment is not specifically
provided is a misdemeanor.
11)Defines "community event" to mean an event that is civic,
political, public, or educational nature, including state and
county fairs, city festivals, circuses, and other public
gathering events approved by the local enforcement agency.
(Health and Safety Code Section 113755)
AS PASSED BY THE ASSEMBLY, this bill allowed a licensed beer
manufacturer that holds a certified farmers' market beer sales
permit to conduct instructional beer tastings for consumers at
the certified farmers' market, and specifies the manner in which
the tasting may be conducted.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
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COMMENTS: This bill as amended in the Senate is consistent with
Assembly actions.
Purpose of the bill. Currently, a licensed winegrower and a
licensed beer manufacturer may apply for a permit, from the
Department of ABC, to sell wine or beer at a certified farmers'
market under specified conditions. In addition, the law grants
a licensed winegrower, but not a licensed beer manufacturer, the
privilege of also conducting instructional wine tastings for
consumers at a farmers' market, as specified. This bill is
intended to expand the privileges of a licensed beer
manufacturer that holds a certified farmers' market beer sales
permit by allowing the licensee to conduct instructional beer
tastings at the certified farmers' market in a specified manner
and with certain limitations.
According to the author's office, very few craft brewers sell
beer at farmers' markets in part because consumers are
accustomed to sampling craft beer before purchasing. The
author's office believes that this bill will help foster
relationships between local brewers and consumers - enabling the
brewers to build their brands by affiliating with farmers'
markets. The author's office also points out that this bill
amends existing law to allow nonprofits to receive beer
donations from breweries to assist them in their fundraising
activities. Currently, nonprofits may receive wine donations
for these purposes.
The craft beer industry. According to industry sources,
California currently has more craft breweries than any other
state in the country. In fact, California has more than twice
as many craft breweries as Colorado - the state with the next
highest number. An average of one in every five craft beers
produced in the United States comes from California. According
to the California Craft Brewers Association, which represents
approximately 350 independently owned craft breweries producing
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98% of the craft beer volume in California, in 2013, the craft
brewing industry contributed over $5.5 billion to California's
economy and supported 44,000 in-state jobs.
In support: Proponents state that this bill promotes buy local
programs by providing conditional authorization to craft
breweries to conduct instructional tastings of craft beer at
farmers' market events. Proponents point out that any tasting
event is subject to authorization and managerial control of the
operator of the certified farmers' market and adjacent community
event areas; and at all times the "tasting event area" shall be
separated from the remainder of the market by a wall, fence, or
temporary barrier. Proponents emphasize this bill places
certain conditions on the licensed beer manufacturer to ensure
responsible conduct that are similar to those imposed upon
licensed winegrowers that offer wine tastings at farmers'
markets.
In opposition: Opponents believe that daytime tastings, with
little or no monitoring, in a family-friendly setting, are
inappropriate and potentially dangerous. Opponents state that,
as currently drafted, there is no mechanism to effectively
monitor the tasting limit of eight ounces of beer per person per
day. Opponents contend that this bill "will negatively impact
public health by allowing alcohol producers to give away free
beer where families shop for nutritious vegetables, fruit and
meat." Additionally, opponents claim that the most recent
amendments to this bill could conceivably allow for consumption
of beer at fairs, craft and home shows, downtown civic and
celebratory parades, etc.
Prior Legislation: AB 2488 (Levine), Chapter 98, Statutes of
2014, expanded an existing privilege in the ABC Act relating to
the sale of wine by a licensed winegrower at certified farmers'
markets to also allow a licensed winegrower the privilege of
conducting limited wine tastings for consumers at farmers'
markets under certain circumstances.
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AB 2004 (Chesbro), Chapter 806, Statutes of 2014, among other
things, authorized a licensed beer manufacturer to apply to the
Department of ABC for a "certified farmers' market beer sales
permit" for the purpose of allowing the licensee to sell
packaged beer at a farmers' market, including any area outside
the footprint of the farmers' market, under specified
conditions.
AB 520 (Chesbro), Chapter 777, Statutes of 2014, expanded the
types of licensees that may provide instructional tastings
events regarding wine or distilled spirits at on-sale retail
licensed premises and placed additional restrictions on the
instructional tastings events, including restrictions on the
types of advertising that may be conducted prior to the
instructional tasting event.
Analysis Prepared by:
Eric Johnson / G.O. / (916) 319-2531 FN:
0001090