BILL ANALYSIS Ó
AB 2913
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Date of Hearing: April 20, 2016
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Adam Gray, Chair
AB 2913
(Committee on Governmental Organization) - As Introduced March
17, 2016
SUBJECT: Alcoholic beverages: licensees
SUMMARY: The bill provides technical clean up to the Alcohol
Beverage Control Act (ABC Act) by permitting a licensee to
sponsor or otherwise participate in an event conducted by, and
for the benefit of, a nonprofit corporation in which retail and
nonretail licensees are involved as sponsors or participants.
EXISTING LAW:
1) Establishes 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 or occupation taxes for this purpose.
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2) Authorizes licensees, as specified, to sponsor or otherwise
participate in an event conducted by, and for the benefit of, a
nonprofit organization in which retail and nonretail licensees
are involved as sponsors or participants, subject to specified
conditions.
3) Authorizes a nonretail licensee to advertise or communicate
sponsorship or participation in the event and provides that
advertising or communication may include, but is not limited to,
initiating, sharing, reposting, or otherwise forwarding a social
media post by a permanent retail licensee or a nonretail
licensee, as specified.
4) Prohibits a retail licensee from receiving any advertising,
sale, or promotional benefit from any permanent retail licensee
in connection with the sponsorship or participation.
5) 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 distilleries), 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
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intemperate use of alcoholic beverages. Generally, other than
exceptions 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: Unknown
COMMENTS: This bill represents the annual Assembly Governmental
Organization Committee clean-up bill that makes clarifying,
technical and non-controversial changes to existing statute.
AB 2913 corrects a drafting error in AB 776 (Cooper), Chapter
519, Statutes of 2015. Among various provisions, the bill
authorized licensed alcoholic beverage manufacturers and
retailers to participate together in sponsoring and promoting
events conducted by, and for the benefit of, nonprofit
organizations, subject to certain conditions. Specifically, the
bill prohibited a "retail" licensee from receiving any
advertising, sale or promotional benefit from any permanent
retail licensee in connection with the sponsorship or
participation. This bill instead would prohibit a "nonretail"
licensee from receiving that advertising, sale, or promotional
benefit. In addition, the bill makes a clarifying change to the
manner upon which a nonretail licensee may advertise or
communicate sponsorship or participation in the event.
Prior legislation : AB 776 (Cooper), Chapter 519, Statutes of
2015. Among various provisions, allowed licensed alcoholic
beverage manufacturers and retailers to sponsor or otherwise
participate in an event conducted by, and for the benefit of, a
nonprofit organization that has acquired a specified alcoholic
beverages license, subject to specified conditions, including
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that a nonretail or retail licensee may choose to participate in
any level of sponsorship, as specified. The bill allowed for
communication of sponsorship or participation in these events
through social media.
AB 774 (Levine), Chapter 107, Statutes of 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 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 605 (Portantino) Chapter 230, Statutes of 2010. Authorized
ABC to issue to the holder of an "off-sale" retail license an
"instructional tasting license" for the purpose of furnishing
tastings of alcoholic beverages to consumers, subject to certain
limitations.
AB 2293 (De Leon) Chapter 638, Statutes of 2008. Permits
distilled spirits manufacturers and winegrowers to provide their
product offerings directly to consumers (free of charge) during
invitation-only events on premises for which a caterer's permit
authorization has been issued.
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REGISTERED SUPPORT / OPPOSITION:
Support
None on file
Opposition
None on file
Analysis Prepared by:Eric Johnson / G.O. / (916) 319-2531