BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 683|
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UNFINISHED BUSINESS
Bill No: SB 683
Author: Wolk (D), et al.
Amended: 6/21/16
Vote: 21
PRIOR VOTES NOT RELEVANT
SENATE GOVERNMENTAL ORG. COMMITTEE: 11-0, 8/23/16 (pursuant to
Senate Rule 29.10)
AYES: Hall, Berryhill, Bates, Block, Gaines, Galgiani, Glazer,
Hill, Hueso, Lara, Vidak
NO VOTE RECORDED: Hernandez, McGuire
ASSEMBLY FLOOR: 78-0, 8/18/16 - See last page for vote
SUBJECT: Alcoholic beverage licenses: nonprofit sales
license
SOURCE: Author
DIGEST: This bill grants the Department of Alcoholic Beverage
Control (ABC) the authority to issue a special nonprofit sales
license to a nonprofit mutual benefit corporation associated
with the Department of Viticulture and Enology at the University
of California Davis (UC Davis) and permits the licensee to,
among other things, accept up to 20,000 gallons of wine produced
by UC Davis and sell the wine to consumers or to other licensees
authorized to sell wine.
Assembly Amendments gut and amend the contents of the bill
relating to the State Library and add language that allows the
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Department of ABC to issue a special license, with certain
privileges, to a nonprofit associated with the Department of
Viticulture and Enology at UC Davis.
ANALYSIS:
Existing law:
1)Establishes the Department of 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)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. This
is known as the "tied-house" law.
3)Prohibits, in general, an alcohol manufacturer, wholesaler, or
any officer, director, or agent of any such person from
owning, directly, or indirectly, any interest in any on-sale
license, or from providing anything of value to retailers, be
it free goods, services, or advertising.
4)Allows wineries, breweries, distilled spirits manufacturers,
and importers to donate their product(s) to certain nonprofit
organizations (e.g., fraternal orders, social organizations,
civic leagues, veterans' organizations, religious groups,
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horticultural organizations) for the purpose of assisting in
fund-raising efforts.
5)Allows students who are at least 18 years of age and enrolled
in degree granting programs in enology or brewing at
accredited public postsecondary educational institutions to
taste, but not consume, an alcoholic beverage for educational
purposes as part of the instruction in a course required for a
degree.
6)Allows nonprofit organizations that either promote home
brewing or home winemaking, or that are primarily composed of
home brewers or home winemakers, to sell beer or wine at
fundraising events subject to specified conditions, including
requiring an educational component to the event and limiting
the nonprofit organization to two such events that sell wine
or beer pursuant to this authorization per year.
7)Provides for 58 counties and 58 "classes" of counties - one
county to each class based on their 1970 Census populations.
(Government Code Section 28020)
This bill:
1)Authorizes the Department of ABC to issue a special nonprofit
sales license to a nonprofit mutual benefit corporation that
that has a board membership composed of the Dean of the
College of Agricultural and Environmental Sciences, the Chair
of the Department of Viticulture and Enology, and the Chair of
the Department of Food Services Technology of the public
university (UC Davis) located within the county of the 28th
class (Yolo County) that includes courses in viticulture and
enology in its curriculum.
2)Provides that the special nonprofit sales license authorizes
the licensee to do all of the following:
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a) Accept the transfer of, and take title to, up to 20,000
gallons of wine per year produced by the public university,
notwithstanding that the public university does not hold
any license issued pursuant to this division. Produced
includes wine donated to, or purchased by, the public
university for educational or experimental purposes and
that are thereafter treated or processed by the public
university.
b) Sell wine received pursuant to item #2(a) above, to
consumers for consumption off the licensed premises or to
other licensees authorized to sell wine.
c) Give licensees samples of the wine it sells, subject to
the tasting limitations in current law and any Department
of ABC regulations.
3)Provides that the special nonprofit sales license does not
authorize the licensee to purchase or otherwise obtain wine
from a licensee or other manufacturer or seller of wine,
except as specified in this bill.
4)Provides that a public university, as defined above, may
transfer wine produced by the public university to a special
nonprofit sales licensee.
5)Provides that the original fee for the special nonprofit sales
license shall be $500 and the annual renewal fee shall be
$100.
Background
Purpose of SB 683. According to the author's office, this bill
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is intended to create a special nonprofit sales license within
the ABC Act that will benefit the environment and the Department
of Viticulture and Enology at UC Davis. UC Davis, through its
College of Agricultural and Environmental Sciences, offers
undergraduate and graduate degrees in the areas of grape growing
and wine making. Currently, any product produced through the
program is discarded.
The author's office states that "creating a specific nonprofit
entity, separate from the university, will allow wine to be
marketed, with the proceeds remitted to the department that
created the product to support its mission of teaching, research
and extension. SB 683 will also help prevent unnecessary and
avoidable waste by allowing wine to be sold instead of
discarded."
Prior Legislation
AB 1989 (Chesbro, Chapter 239, Statutes of 2014) created a
narrow exception to existing ABC Act provisions relating to
consumption or possession of alcoholic beverages by underage
persons by allowing students who are at least 18 years of age
and enrolled in degree granting programs in enology or brewing
at accredited public postsecondary educational institutions to
taste, but not consume, an alcoholic beverage for educational
purposes as part of the instruction in a course required for a
degree.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Assembly Appropriations Committee, no
additional state costs.
SUPPORT: (Verified8/22/16)
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California Association of Winegrape Growers
Family Winemakers of California
Germain-Robin Distillery
Heitz Wine Cellars
Ironstone Vineyards
Long Meadow Ranch & Affiliates
Moulds Family Vineyard
Napa Valley Vintners
Napa Valley Grapegrowers
Paul Hobbs Winery
Ramey Wine Cellars
St. George Spirits, Inc.
The Wine Group
Treasury Wine Estates
Wente Family Estates
Wine Institute
OPPOSITION: (Verified8/22/16)
Alcohol Justice
California Alcohol Policy Alliance
ARGUMENTS IN SUPPORT: Proponents note that the UC Davis
Department of Viticulture and Enology has played a vital role in
providing the California wine industry and grape growers with
the knowledge and techniques to continuously improve winemaking
and farming methods. Their research has enabled California
grape growers and winemakers to produce some of the best wines
in the world. Allowing the university to recoup some of its
operational costs would result in more funds for research to the
benefit of the entire wine industry in California.
Proponents also contend that the current practice of disposing
of wine products is unsustainable from an environmental
point-of-view and that this bill makes fiscal sense. The
privilege of selling the wine, predominantly in bulk, would
enable the UC Davis Department of Viticulture and Enology to
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recoup some of the production costs it incurs and also funnel
excess revenue into support for teaching, research, and
extension.
ARGUMENTS IN OPPOSITION: Opponents claim that SB 683 will
expand the number of alcohol license types and, in turn,
increase the availability of alcohol. Opponents believe this
new license type opens the door to additional entities that
produce other alcohol products, thus creating greater problems
in more communities, which will negatively impact public health
and safety in California.
ASSEMBLY FLOOR: 78-0, 8/18/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth
Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto,
Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Holden,
Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder,
Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina,
Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen,
Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Harper, Roger Hernández
Prepared by:Arthur Terzakis / G.O. / (916) 651-1530
8/23/16 20:03:09
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