BILL ANALYSIS Ó
AB 776
Page 1
Date of Hearing: April 27, 2015
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Adam Gray, Chair
AB 776
(Cooper) - As Amended April 15, 2015
SUBJECT: Alcoholic beverage control: beer manufacturer:
brewery event
SUMMARY: Authorizes a licensed beer manufacturer to apply to
the Department of Alcoholic Beverage Control (ABC) for a brewery
event permit that allows the sale of beer produced by that beer
manufacturer for consumption on property contiguous and adjacent
to the licensed premises of the manufacturer, as provided.
Would allow up to 4 authorized events each calendar year.
Specifically, this bill:
1) Provides that a licensed beer manufacturer may apply to ABC
for a brewery event permit. A brewery event permit shall
authorize the sale of beer produced by the licensee for
consumption on property contiguous and adjacent to the licensed
premises owned or under the control of the licensee. The
property shall be secured and controlled by the licensee.
2) Provides that the fee for a brewery event permit for a
licensed beer manufacturer shall be one hundred ten dollars
($110) for a permit issued during the 2016 calendar year, and
for a permit issued during the years thereafter, the annual fee
shall be calculated, as defined. The permit may be renewed
AB 776
Page 2
annually at the same time as the licensee's license. A brewery
event permit shall be transferable as a part of the license.
3) Specifies that for each brewery event, consent for the sale
of beer at the brewery event shall be first obtained by the
licensee from ABC in the form of an event authorization issued
by the department. An event authorization shall be subject to
approval by the appropriate local law enforcement agency. The
fee for each event authorization shall not to exceed twenty-five
dollars ($25). The number of events authorized by a brewery
event permit shall not exceed 4 in any calendar year .
4) Provides that all money collected as fees shall be deposited
in the ABC Fund for allocation, upon appropriation by the
Legislature, as defined.
5) Provides that at all approved events, the licensee may
exercise only those privileges authorized by the licensee's
license and shall comply with all provisions of the Alcoholic
Beverage Control Act (Act) pertaining to the conduct of on-sale
premises and violation of those provisions may be grounds for
suspension or revocation of the licensee's license or permit, or
both, as though the violation occurred on the licensed premises.
6) Provides ABC may adopt any regulations it determines to be
necessary for the administration of this bill.
EXISTING LAW:
1) Establishes ABC and grants it exclusive authority to
administer the provisions of the Act in accordance with laws
enacted by the Legislature. This involves licensing individuals
AB 776
Page 3
and businesses associated with the manufacture, importation and
sale of alcoholic beverages in this state and the collection of
license fees or occupation taxes for this purpose.
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).
3) Allows a licensed winegrower to apply to the ABC for a wine
sales event permit that allows the sale of bottled wine produced
by that winegrower at specified events approved by the
department. Prohibits a wine sales event permit from being used
more than 2 times a month at a particular location, and requires
the winegrower to pay a fee of $50 for the permit.
4) Authorizes a licensed beer manufacturer, at the licensed
premises of production, to sell to consumers for consumption off
the premises beer that is produced and bottled by, or produced
and packaged for, that manufacturer.
5) Authorizes a licensed beer manufacturer to apply to ABC for
a certified farmers' market beer sales permit that allows the
licensee to sell packaged beer at a farmers' market, including
any area outside the footprint of the farmers' market, under
AB 776
Page 4
specified conditions.
6) Allows 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.
FISCAL EFFECT: Unknown.
COMMENTS:
Purpose of the bill : According to the author, the purpose of
this measure is to authorize ABC and local law enforcement to
review and consider approval of applications by beer
manufacturers for a "Brewery Event" permit to allow sales of
their beer to consumers for consumption on property that is
contiguous and adjacent to an existing licensed brewery premise.
Current law does not allow breweries who lease their facilities
from holding events in the adjacent area to brewery premises.
This bill is intended to allow for anniversary celebrations
and/or new beer release days where the crowd cannot be fully
accommodated in the public area, if any, of the licensed brewery
premises.
AB 776
Page 5
The author states California's craft brewing industry is rapidly
growing and contributing to this state's vibrant economy. In
2013, the craft brewing industry contributed over $5.5 billion
to our state's economy and supported more than 44,000 in-state
jobs.
Currently, wineries are allowed to apply to the ABC for a
temporary permit for premise expansion for special events. This
bill merely allows breweries to have the same privilege. The
extension would be limited to only the property that is
immediately adjacent to, or contiguous to, the existing brewery
premise including customer parking spaces. Craft breweries
would like to be able to accommodate all of their customers for
designated special events.
In support : The California Craft Brewers Association writes,
"California craft brewers continue to win national and global
beer contests and remain at the cutting edge of brewing. Similar
to wine tourism, beer enthusiasts worldwide are eager to visit
their favorite California craft breweries for special events
such as anniversaries or special product release days.
Beer tourism is an established phenomenon resulting in economic
benefits to our state's hospitality and consumer services
sectors. For example, a 2013 survey by the Sonoma County
Economic Development Board found that Russian River Brewing
Company's release of Pliny the Younger brought $2.4 million in
economic activity to the Santa Rosa area with about $1.4 million
AB 776
Page 6
in direct expenditures related to the event.
This measure would help to address and promote beer tourism by
establishing a limited and conditional permit for "Brewery
Events" to help accommodate special events up to four times a
year. The bill would authorize ABC and local law enforcement to
review and consider approval of applications by beer
manufacturers for a permit to allow sales of beer to consumers
for consumption on property controlled by the brewery that is
contiguous and adjacent to an existing licensed brewery premise.
This permit is subject to conditions established by ABC and
local law enforcement.
Related legislation : AB 774 (Levine) of 2015, would allow a
permitted licensed beer manufacturer to conduct instructional
tastings on the subject of beer at a CFM, under specified
conditions. (Pending in Assembly Appropriations Committee)
Prior legislation : AB 2004 (Chesbro), Chapter 806, Statutes of
2014. Authorized a licensed beer manufacturer to apply to ABC
for a certified farmers' market beer sales permit, which allows
the licensee to sell packaged beer at a farmers' market,
including any specified area, under certain conditions. The
bill also allowed a beer manufacturer to sell beer and wine on
their own premises during private events.
AB 776
Page 7
AB 2134 (Chesbro), Chapter 149, Statutes of 2010. Allowed
licensed brewers to conduct and participates in events called
"Beer Maker Dinners" for consumers held at an on-sale retail
licensed premise.
AB 605 (Portantino), Chapter 230, Statutes of 2010. Among other
things, authorized ABC to issue to the holder of an "off-sale"
retail license an "instructional tasting license" for the
purpose of furnishing tastings of alcoholic beverages to
consumers, subject to certain limitations.
SB 1548 (Murray), Chapter 670, Statutes of 2006. Authorized
beer manufacturers and wholesalers to offer beer samples (not to
exceed 8 ounces per person, per day) to individuals of legal
drinking age at on-sale retail licensed premises under specified
conditions.
AB 1407 (Wesson), Chapter 699, Statutes of 1999. Modifies the
ABC Act relating to wine auction sales, event permits, and the
manner by which a manufacturer or distributor may stock or
rotate their products at off-sale establishments.
AB 776
Page 8
AB 81 (Wright), Chapter 103, Statutes of 1997. Enabled
licensees with "on-sale" general licenses to apply to ABC for an
event permit which would authorize the licensee to sell beer,
wine or other distilled spirits for consumption on property
adjacent to the licensed premises or property owned or
controlled by the licensee once per quarter or up to four times
per year. Requires that any event authorization by ABC will be
subject to approval by the appropriate local law enforcement
agency.
REGISTERED SUPPORT / OPPOSITION:
Support
California Craft Brewers Association
Opposition
None on file
Analysis Prepared by:Eric Johnson / G.O. / (916) 319-2531
AB 776
Page 9