BILL ANALYSIS                                                                                                                                                                                                    

                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 685 (McGuire) - Alcoholic beverage service:  veterans' club  
          license:  beer and wine tasting
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          |Version: April 7, 2015          |Policy Vote: G.O. 11 - 0        |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: April 27, 2015    |Consultant: Maureen Ortiz       |
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          This bill meets the criteria for referral to the Suspense File.


          Summary:   SB 685 authorizes the holder of a veterans' club  
          license to serve and sell beer and wine to members of the  
          general public within the licensed establishment as part of a  
          beer tasting, wine tasting, or beer and wine tasting event.


           Potentially over $200,000 annually for enforcement activities  
            (Special Fund)

          The Department of Alcoholic Beverage Control (ABC) indicates  


          SB 685 (McGuire)                                       Page 1 of  
          that this bill will result in increased enforcement costs  
          without any increase in fee revenue.  Exact costs will be  
          dependent on the number of wine and beer tasting events held and  
          the number of complaints received.  For instance, in FY 2013/14  
          the ABC received 23 complaints ranging from allegations such as  
          gambling, disorderly, obviously intoxicated, sales to minors,  
          and sales to non-members.  Of the 23 complaints, 9 required  
          extensive investigative and administrative time.  The total cost  
          to handle those 23 complaints was $230,715.  SB 685 does not  
          limit the number of events that each veteran's club can hold.

          Background:  The Department of Alcoholic Beverage Control currently  
          provides licenses for several types of clubs and organizations  
          including a veterans' club, golf club, swimming club, horse  
          riding club, beach and athletic club, handball or racquetball  
          club, nonprofit mobile homeowners social club, national  
          fraternal organizations, rod and gun club, peace officers and  
          firefighters associations, nonprofit social and religious club,  
          and many others.
          The existing veterans' club license, Type 52, was first  
          established during World War 2 and was developed to allow  
          veterans organizations to operate as a club house for members  
          and their guests. There are currently 317 of these licensees  
          which are authorized to sell and serve alcoholic beverages only  
          to bona fide members of the veterans' organization and their  
          guests for consumption with the licensed establishment.

          Proposed Law:  
            SB 685 expands the privileges of the holder of a veterans'  
          club license by creating a new provision in the ABC Act that  
          authorizes the licensee, as part of a beer tasting, wine  
          tasting, or beer and wine tasting event, to sell and serve beer  
          and wine, or food, for consumption within the licensed  
          establishment to members of the general public, as well as to  
          the members of the veterans' organization and their guests.

          Comments:  Holders of a veterans' club license pay a $100  
          initial application fee and $100 annually to renew.   The Type  


          SB 685 (McGuire)                                       Page 2 of  
          52 licenses have limited privileges and are meant to allow the  
          operation of a club house, not a restaurant or bar.   While the  
          existing Type 52 license restricts the serving and sale of  
          alcoholic beverages to members of the veterans' club and their  
          guests, these organizations are currently able to obtain an  
          additional catering permit (Type 58) which would allow them to  
          sell alcoholic beverages at special events.  The fee for a  
          catering permit for a holder of a club license Type 52 ranges  
          from $572-$876 depending on population.  With a catering permit,  
          holders of a Type 52 license may conduct an unlimited number of  
          events each year.  Another existing option for these clubs to  
          use as a fundraising tool is to obtain a special one day license  
          from ABC to fundraise and sell to the general public at their  
          clubhouse by temporarily surrendering their original license.   
          Providing an exemption to veterans' clubs could result in  
          revenue loss to the ABC ranging from $176,337 to $270,881  
          SB 685 is intended to provide veterans' organizations with  
          increased opportunities for fundraising in order to support  
          programs that provide assistance to veterans.

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