BILL ANALYSIS Ó AB 2172 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 2172 (Jones) As Amended June 8, 2016 Majority vote -------------------------------------------------------------------- |ASSEMBLY: |76-0 |(April 28, |SENATE: |36-0 |(August 18, | | | |2016) | | |2016) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: G.O. SUMMARY: 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. The Senate amendments: 1)Provide beer may be removed from the premises where made in connection with a bona fide home brewed beer competition that is held on the premises of an authorized licensee. Homebrewers may exchange containers of home brewed beer during a bona fide home brewed beer competition. 2)Provide home brewed beer made by the club members may be consumed by club members while on the licensed premises during AB 2172 Page 2 the club meeting or by competition organizers, competition judges, and competition stewards on licensed premises during a bona fide home brewed beer competition. 3)Provide 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)Provide the authorized licensee shall designate, by signage or other item, which tables within the licensed premises shall be used by club members during a bona fide home brewed beer competition. 5)Make technical and clarifying changes. EXISTING LAW: 1)Establishes Department of Alcoholic Beverage Control (ABC) and grants it exclusive authority to administer the provisions of the Alcoholic Beverage Control Act (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 from the premises where made for personal or family use, for specified purposes, AB 2172 Page 3 a) For use, including in a bona fide competition or judging or a bona fide exhibition or tasting. b) For personal or family use. c) When donated to a nonprofit organization, as specified. d) Beer or wine may only be provided or served to the public within a clearly identified area that includes, but is not limited to, a physical barrier with a monitored point of entry. Beer or wine produced by a licensed beer manufacturer or winegrower shall not be provided or served to the public within this area. 4)Provides that beer or wine may be donated to a nonprofit organization for sale at fundraising events conducted solely by and for the benefit of the nonprofit organization. The beer and wine donated may be sold by the nonprofit organization only for consumption on the premises of the fundraising event, under a license issued by ABC to the nonprofit organization. The donated and sold beer and wine shall bear a label identifying its producer and stating that the beer or wine is homemade and not available for sale or for consumption off the licensed premises. The beer or wine is not required to comply with other labeling requirements, as specified. 5)Specifies that a nonprofit organization established for the purpose of promoting home production of beer or wine, or whose membership is composed primarily of home brewers or home winemakers, shall not be eligible to sell beer. 6)Allows nonprofit organizations established for the purpose of promoting home brewing to serve beer at fundraising events subject to specified conditions. Only bona fide members of the nonprofit organization may attend the event. AB 2172 Page 4 7)Existing law, known as the "tied-house" law, separates the alcoholic beverage industry into three component parts of manufacturer, wholesaler, and retailer. The original policy rationale for this body of law was to prohibit the vertical integration of the alcohol industry and to protect the public from predatory marketing practices. 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. FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. COMMENTS: Purpose of the bill: 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. 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. AB 2172 Page 5 Proponents claim that virtually all of the 815 homebrew supply shops operating in the United States were started by 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. Prior legislation: AB 2609 (Nestande), Chapter 239, Statutes of 2014. Added a new provision to the ABC Act that allows nonprofit organizations established for the purpose of promoting home brewing to serve beer at fundraising events subject to specified conditions; and provides that home brewed beer or wine may only be provided or served within a clearly identified area. AB 1425 (Governmental Organization Committee), Chapter 463, 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. Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531 FN: 0003700 AB 2172 Page 6