BILL ANALYSIS Ó SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION Senator Isadore Hall, III Chair 2015 - 2016 Regular Bill No: AB 2172 Hearing Date: 6/28/2016 ----------------------------------------------------------------- |Author: |Jones | |-----------+-----------------------------------------------------| |Version: |6/8/2016 Amended | ----------------------------------------------------------------- ------------------------------------------------------------------ |Urgency: |No |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Arthur Terzakis | | | | ----------------------------------------------------------------- SUBJECT: Homebrewery clubs: meetings: competitions DIGEST: This bill permits the removal and use of home brewed beer in connection with a homebrewers club meeting or home brewed beer competition that is held on the premises of an authorized licensee. ANALYSIS: Existing law: 1)Establishes the Department of Alcoholic Beverage Control (ABC) and grants it exclusive authority to administer the provisions of the ABC Act in accordance with laws enacted by the Legislature. This involves licensing individuals and businesses associated with the manufacture, importation and sale of alcoholic beverages in this state and the collection of license fees for this purpose. 2)Authorizes a person over 21 years of age to manufacture beer or wine (200 gallons per calendar year if there are two or more adults in the household or 100 gallons if there is only one adult in the household) for personal or family use, and not for sale, without the need for a license or permit. 3)Authorizes the removal of beer or wine, manufactured for personal or family use, from the premises where manufactured only under the following circumstances: (1) for use, including AB 2172 (Jones) Page 2 of ? tasting by judges, in a bona fide competition or exhibition; (2) for personal or family use; and, (3) when donated to a nonprofit organization for sale at fundraising events conducted solely by and for the benefit of the nonprofit and pursuant to a license issued by ABC to the nonprofit entity, and subject to specified conditions. 4)Separates the alcoholic beverage industry into three component parts or tiers (referred to as the "tied-house" law or "three-tier" system), of manufacturer (including breweries, wineries and distillers), wholesaler, and retailer (both on-sale and off-sale). The original policy rationale for this body of law was to: (a) promote the state's interest in an orderly market; (b) prohibit the vertical integration and dominance by a single producer in the market place; (c) prohibit commercial bribery and to protect the public from predatory marketing practices; and, (d) discourage and/or prevent the intemperate use of alcoholic beverages. Generally, other than exemptions granted by the Legislature, the holder of one type of license is not permitted to do business as another type of licensee within the "three-tier" system. 5)Defines an "on-sale" licensee as authorizing the sale of all types of alcoholic beverages: namely, beer, wine and distilled spirits, for consumption on the premises (such as at a restaurant or bar. An "off-sale" license authorizes the sale of all types of alcoholic beverages for consumption off the premises in original, sealed containers. This bill: 1)Permits beer manufactured for personal or family use by a person over the age of 21 to be removed from the premises where the beer was made for a homebrewers club meeting or bona fide home brewed beer competition that is held on the premises of an authorized licensee. 2)Provides that homebrewers may exchange containers of home brewed beer during the club meeting or beer competition. Also, permits home brewed beer made by the club members to be consumed by club members while on the licensed premises during the club meeting or by competition organizers, judges, and stewards on licensed premises during a bona fide home brewed beer competition. AB 2172 (Jones) Page 3 of ? 3)Makes it explicit that patrons of the authorized licensee that are not club members, competition organizers, competition judges, or competition stewards shall not consume any home brewed beer. 4)Stipulates that the authorized licensee must designate which tables within the licensed premises will be used by club members during the club meeting or beer competition. 5)Defines "authorized licensee" as a licensee that holds an on-sale beer license, an on-sale beer and wine license for a bona fide public eating place, an on-sale beer and wine for public premises license, an on-sale general license for a bona fide eating place, a club license, a veterans' club license, an on-sale general brew pub license, an on-sale general license for public premises, a beer manufacturer's license, or a small beer manufacturer's license. Background Purpose of AB 2172. The author's office states that this bill is intended to give home brew clubs the ability to conduct meetings and competitions in licensed establishments and share their home brewed beer amongst themselves at such meetings. The author's office believes that allowing homebrew clubs to meet at licensed establishments (such as brewpubs) not only gives these clubs alternative meeting options, it also provides a significant financial benefit to licensed establishments in light of the fact that homebrewers are some of the biggest supporters of craft beer. Prior/Related Legislation AB 2609 (Nestande, Chapter 239, Statutes of 2014) authorized the removal and use of home brewed beer or homemade wine in connection with a bona fide competition or judging or a bona fide exhibition or tasting. The bill also allowed nonprofit organizations that promote home brewing to serve beer at fundraising events subject to specified conditions, including requiring an educational component to the event and limiting the nonprofit organization to two of these types of events that serve beer pursuant to this authorization per year. AB 1425 (Governmental Organization Committee, Chapter 463, AB 2172 (Jones) Page 4 of ? Statutes of 2013) among other things, allowed beer or wine made for personal or family use to be donated to a non-profit organization and used at a fundraising event conducted solely by and solely for the benefit of the nonprofit organization and only for consumption on the premises of the fundraising event, provided that a license is issued by the ABC. SB 607 (Wiggins, Chapter 28, Statutes of 2008) authorized a person to manufacture wine for personal or family use in an amount not to exceed 100 or 200 gallons per household per calendar year without the need for a license or permit, as provided. Also, authorized the removal of wine, manufactured for personal or family use, from the premises where manufactured for use, including use at organized affairs, exhibitions or competitions, such as homemakers' contests, tastings, or judgings. FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No SUPPORT: American Homebrewers Association California Homebrewers Association (sponsor) And, letters from homebrewers throughout the State OPPOSITION: None received ARGUMENTS IN SUPPORT: Proponents note that there are currently over 150,000 homebrewers in California, with well over 200 organized clubs meeting on a regular basis. Proponents state that home brewing is a hobby that has seen rapid growth nationwide for more than a decade and the participants in this hobby are primarily well educated members of the middle to upper-middle class, including many that have started small businesses in this country. Proponents also point out that part of the challenge in home brewing is to elicit feedback from others regarding the quality of the beer being produced. Proponents claim that virtually all of the 815 homebrew supply shops operating in the United States were started by AB 2172 (Jones) Page 5 of ? homebrewers, and most of this nation's 4000 small, independent breweries were founded by homebrewers. Proponents emphasize that a vibrant home brewing community supports these small businesses, as well as the farmers that grow the barley and hops used to make beer.