BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 685 (McGuire) - Alcoholic beverage service: veterans' club license: beer and wine tasting ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: April 7, 2015 |Policy Vote: G.O. 11 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: May 28, 2015 |Consultant: Maureen Ortiz | | | | ----------------------------------------------------------------- SUSPENSE FILE. AS AMENDED. Bill 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. Fiscal Impact (as approved on May 28, 2015): Unknown, potentially $95,000 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. Staff 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 annually. SB 685 is intended to provide veterans' organizations with increased opportunities for fundraising in order to support programs that provide assistance to veterans. Author Amendments (as adopted on May 28, 2015): Strike the provisions authorizing veterans' organizations to serve members of the general public. -- END --