BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
                              Senator Isadore Hall, III
                                        Chair
                                2015 - 2016  Regular 

          Bill No:           AB 776           Hearing Date:    7/14/2015
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          |Author:    |Cooper                                               |
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          |Version:   |4/15/2015     Amended                                |
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          |Urgency:   |No                     |Fiscal:      |Yes             |
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          |Consultant:|Arthur Terzakis                                      |
          |           |                                                     |
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          SUBJECT: Alcoholic beverage control:  beer manufacturer:   
          brewery event


            DIGEST:    This bill adds a new provision to the Alcoholic  
          Beverage Control (ABC) Act that enables a licensed beer  
          manufacturer to apply to the Department of ABC for a brewery  
          event permit which would grant the licensee the privilege of  
          selling beer it produces for consumption on property contiguous  
          and adjacent to its licensed premises for special events (up to  
          four such events in a calendar year).  

          ANALYSIS:
          
          Existing law:

          1)Establishes the Department of ABC and grants it exclusive  
            authority to regulate the licensing, enforcement, and  
            administration of the alcoholic beverage control laws.

          2)Authorizes a beer manufacturer to sell or serve all beer,  
            wines, and brandy, regardless of source, to guests during  
            private events held on the licensed beer manufacturer's  
            premises, as specified. 

          3)Authorizes a licensed winegrower to apply to the Department of  
            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 of ABC.  The law prohibits a wine  







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            sales event permit from being used more than two times a month  
            at a particular location and requires the winegrower to pay a  
            fee of $50 for the permit.   

          This bill:

          1)Allows a licensed beer manufacturer to apply to the Department  
            of ABC for a brewery event permit which would allow 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.  

          2)Limits the number of events authorized by a brewery event  
            permit to no more than four in any calendar year.  

          3)Stipulates that the fee for a brewery event permit issued  
            during the 2016 calendar year shall be one hundred ten dollars  
            ($110), and for a permit issued during the years thereafter,  
            the annual fee shall be calculated, as specified.  The permit  
            may be renewed annually at the same time as the licensee's  
            license and shall be transferable as a part of the license.

          4)Specifies that for each brewery event, consent for the sale of  
            beer must be obtained by the licensee from the Department of  
            ABC in the form of an event authorization issued by the  
            Department.  Also, provides that an event authorization shall  
            be subject to approval by the appropriate local law  
            enforcement agency and limits the fee for each event  
            authorization to no more than twenty-five dollars ($25).  

          5)Provides that all money collected as fees shall be deposited  
            in the ABC Fund for allocation, upon appropriation by the  
            Legislature.

          6)Makes it explicit that at all approved events, the licensee  
            may exercise only those privileges authorized by the  
            licensee's license and requires the licensee to comply with  
            all provisions of the ABC Act pertaining to the conduct of  
            on-sale premises.  Any 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. 

          7)Specifies that the Department of ABC may adopt any regulations  
            necessary for the administration of this bill. 








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          Background

          Purpose of AB 776.  According to the author's office, this bill  
          is intended to allow brewery owners to apply to the Department  
          of ABC for a temporary expansion of their permitted brewery  
          premises for special events.  The temporary permit for premises  
          expansion would be limited to only the property that is  
          immediately adjacent to, or contiguous to, the existing brewery  
          premises.  The author's office states that this bill will enable  
          breweries to hold special anniversary celebrations, new release  
          parties, or other special events where the expected crowd could  
          not be accommodated in the public areas of the brewery.  The  
          author's office points out that current law authorizes wineries  
          to apply for a similar temporary permit for special events -  
          this bill simply extends that privilege to breweries.


          Beer-Lovers Revolution.  According to the California Craft  
          Brewers Association, the craft brewing industry in California is  
          growing rapidly, supporting 50,000 jobs with an annual impact of  
          $6.5 billion to the state economy.  California's craft brewers  
          have won national and international acclaim, and beer  
          enthusiasts are eager to visit their favorite California craft  
          breweries for special events and product release days.  For  
          example, a recent survey conducted in Sonoma County around the  
          Russian River Brewing Company's release of "Pliny the Younger"  
          in 2013 found the event generated $2.4 million in economic  
          activity in the Santa Rosa region with about $1.4 million in  
          direct expenditures related to the event.


          Nationally, production of craft beer increased 18% during the  
          first six months of 2014, with a new craft brewery opening every  
          16 hours in the United States according to the Brewers  
          Association.  Given craft beer's popularity in California, this  
          state's industry growth is likely even faster than that - today,  
          California has over 480 craft brewers, the most of any state.


          Prior/Related Legislation
          
          AB 774 (Levine, 2015) allows a licensed beer manufacturer that  
          holds a certified farmers' market beer sales permit to provide  
          limited instructional tastings for consumers at a certified  








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          farmers' market, under specified conditions.   

          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.

          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.  

          ACR 116 (Chesbro, Resolution Chapter 43, Statutes of 2014)  
          proclaimed the month of April 2014 as California Craft Brewery  
          Month.

          AB 2134 (Chesbro, Chapter 149, Statutes of 2010) created a new  
          tied-house exception in the ABC Act that allows licensed brewers  
          to conduct and participate in events called "Beer Maker Dinners"  
          for consumers held at an on-sale retail licensed premises.  

          SB 1548 (Murray, Chapter 670, Statutes of 2006) authorized 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:                 Appropriation:  No    Fiscal  
          Com.:             Yes          Local:          No


            SUPPORT:  

          California Craft Brewers Association

          OPPOSITION:

          None received

           








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