BILL ANALYSIS Ó
SB 796
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Date of Hearing: August 19, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
SB 796
(Committee on Governmental Organization) - As Amended July 9,
2015
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|Policy |Governmental Organization |Vote:|18 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill makes the following changes to the Alcoholic Beverage
Control Act:
1)Specifies the Department of Alcoholic Beverage Control (ABC)
is not required to qualify for a license a person who is an
investor in a private equity fund that holds an interest in an
alcoholic beverage license, so long as the person is a passive
investor who holds no more than a 10% interest in the private
equity fund.
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2)Deletes the January 1, 2016, sunset date for a provision
authorizing alcoholic beverage manufacturers to participate in
promotional events at off-sale retail licensed locations for
the purpose of providing autographs on bottles or other items
to consumers.
3)Prohibits a beer manufacturer, regardless of the number of
beer manufacturer licenses that it owns, either alone or under
common ownership with any other beer manufacturers, officers,
directors, employees, or agents of that manufacturer that is
operating as an on-sale retailer, from exercising, either
alone or in common, retail privileges at more than six
locations.
4)Authorizes inclusion of alcoholic beverages as an incidental
part of a contest prize package.
FISCAL EFFECT:
1)Potentially $95,000 annually (Special Fund) to maintain staff
position at ABC to continue monitoring autograph events at
off-sale retail license locations outlined in item (2) above.
2)Minor and absorbable costs to ABC for the remaining
provisions.
COMMENTS:
Purpose. According to the authors, ABC is currently required to
make a thorough investigation of all individuals who have an
interest in an alcoholic beverage license, unless the interest
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holder is a publicly traded company. The authors contend
investors in private equity funds do not have day-to-day
involvement or influence over the portfolio companies, including
ABC-licensed businesses. This bill exempts passive investors in
private equity funds that hold interests in licenses, easing the
burden on ABC to conduct investigations that do little to
advance the overall intent of the law.
The other provisions in the bill are intended to permit or
extend non-controversial practices with respect to promotional
events and prizes, and ensure beer manufacturers are able to
maintain on-sale retail privileges and are not forced to divest
licensed businesses as their production grows beyond 60,000
barrels per year.
ABC indicates it currently has one position dedicated to
collecting data and enforcing promotional events for the purpose
of providing autographs on bottles or other items to consumers,
and will continue to seek this position after the sunset date is
removed.
Analysis Prepared by:Joel Tashjian / APPR. / (916)
319-2081
SB 796
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