BILL ANALYSIS                                                                                                                                                                                                    Ó



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          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          2172 (Jones)


          As Amended  June 8, 2016


          Majority vote


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          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  








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            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, 










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             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.








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          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.  








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          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








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