BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1295 (Levine) - Craft distillers: licenses.
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|Version: July 16, 2015 |Policy Vote: G.O. 10 - 1 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 17, 2015 |Consultant: Jillian Kissee |
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This bill does not meet the criteria for referral to the
Suspense File.
Bill
Summary: This bill authorizes the Department of Alcoholic
Beverage Control (ABC) to issue a craft distiller's license to a
person that has facilities and equipment for the commercial
manufacture of distilled spirits.
Fiscal
Impact:
Unknown, potentially significant costs to the Department of
ABC offset by fee revenue. (Special fund)
Background: The Department of ABC has exclusive authority to administer
the provisions of the Alcoholic Beverage Control Act including
licensing individuals and businesses associated with the
manufacture, importation, and sale of alcoholic beverages in the
state.
Existing law permits a licensed distilled spirits manufacturer
AB 1295 (Levine) Page 1 of
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to conduct tastings of distilled spirits produced or bottled by,
or produced or bottled for, the licensee, on or off the
licensee's premises. Additionally, existing law makes it
explicit that no distilled spirits be sold or solicited for sale
in that portion of the premises where the distilled tasting is
being conducted.
Existing law also permits wineries to sell their products to
consumers on their licensed premises and directly to licensed,
on-sale and off-sale retailers (e.g., restaurants and liquor
stores). Existing law also provides for a brewpub-restaurant
license, issued to a bona fide public eating place, which
authorizes the sale of beer, wine, and distilled spirits for
consumption on the premises and the sale of beer produced by the
brewpub-restaurant licensee for consumption on the premises.
This bill will allow California's licensed craft distillers to
open restaurants on their licensed premises, as specified.
Currently, distillers in California are authorized to conduct
tastings (in limited quantities) on their licensed premises
however they're precluded from selling the products to consumers
- this bill will allow craft distillers to sell their products
directly to consumers. According to the author's office, this
bill is intended to provide greater licensing equity between
small craft distilled spirits manufacturers and beer and wine
producers.
Proposed Law:
This bill authorizes the Department of ABC to issue a craft
distiller's license to a person that has facilities and
equipment for the commercial manufacture of distilled spirits
and to be able to conduct tastings on or off the licensee's
premises. The bill establishes an original fee for the craft
distiller's license to be $600, and the annual fee to be $300,
in which fees are required to be deposited in the ABC Fund.
This bill authorizes a licensed craft distiller to sell all
beers, wines, brandies, or distilled spirits to consumers for
consumption at a bona fide eating place on the licensed premises
or on premises owned by the licensee, as specified. A licensed
AB 1295 (Levine) Page 2 of
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craft distiller would be able to sell up to three bottles per
day directly to a consumer who participates in a distilled
spirits tasting on the distiller's licensed premises. This bill
prohibits the issuance of a craft distiller's license to any
person, or any affiliated person, that manufactures more than
100,000 gallons of distilled spirits per year within or outside
the state.
Licensed craft distillers are required to report to the
department at the end of each fiscal year the amount of
distilled spirits produced by or for the licensee during the
previous fiscal year.
Related
Legislation: SB 639 (Calderon, 2009) would have created a new
on-sale tasting license to allow off-sale retail licensees to
furnish tastes of alcoholic beverages to consumers, as
specified. SB 639 failed passage in this Committee.
Staff
Comments: There are currently 104 distilled spirits
manufacturer's licenses that would be eligible to apply for the
new on-sale distilled tasting license. Licensees will be
required to pay an application fee of $600 and an annual renewal
fee of $300 for the craft distiller's license. The ABC
indicates that initial start-up costs to develop the program
will be absorbable. Ongoing costs for administration and
enforcement resulting from complaints or investigations will
potentially be offset by fee revenue.
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