BILL ANALYSIS
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THIRD READING
Bill No: SJR 34
Author: Padilla (D) and Wiggins (D) et al
Amended: As introduced
Vote: 21
WITHOUT REFERENCE TO COMMITTEE OR FILE
SUBJECT : California wines: sales
SOURCE : California Association of Winegrape Growers
Family Winemakers of California
Napa Valley Vintners Association
Specialty Wine Retailers Association
Wine Institute
DIGEST : This Resolution urges the United States Congress
to defeat House Resolution (HR) 5034 in order to protect
and preserve the ability of California wineries, and all
wineries in the United States, to ship wine directly to
consumers without discrimination between in-state and
out-of-state wine producers.
ANALYSIS : Currently, 37 states and the District of
Columbia allow direct shipping of wine from winegrowers to
consumers. To reach consumers in other states, many
California wineries use direct marketing and shipping of
their wines throughout the country. In California and
across the nation these sales are appropriately regulated
by laws that comply with Granholm v. Heald . This 2005
landmark U.S. Supreme Court case reaffirmed states' rights
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under the 21st Amendment to the U.S. Constitution to
regulate wine as long as they do not discriminate between
in-state producers and out-of-state producers, and ruled
that these rights do not supersede other provisions of the
Constitution.
HR 5034, the Comprehensive Alcohol Regulatory Effectiveness
Act of 2010, was introduced in Congress on April 15, 2010.
HR 5034 restricts legal challenges to state laws governing
the interstate shipment of wine, severely limit consumer
choice of California wine throughout the nation and imperil
market access for California wineries that cannot secure
wholesale distribution.
Existing federal law allows direct interstate shipment of
wine to adult consumers in conformance with any state
requirements. Granholm v. Heald reaffirmed that states
cannot discriminate in setting alcohol policy that affects
interstate commerce.
According to the author's office, HR 5034 would likely
impede the direct shipment of wine to out-of-state
consumers.
This resolution:
1. Urges Congress to defeat HR 5034.
2. Provides findings highlighting the importance of the
wine industry to California.
3. Provides findings about current law already ensuring
appropriate permitting and regulation of wine
distribution.
4. Highlights the important of protections against
discrimination again out-of-state producers.
Prior/Related Legislation
SJR 30 (Chesbro), Resolution Chapter 79, Statutes of 2006,
encourages the Governors and Legislatures of each state in
the United States to enact legislation that provides for
uniform direct-to-consumer wine sales between the states
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that minimizing the expense and complexity of shipping wine
from wineries directly to consumers. Passed the Senate
Floor 38-0, on 4/27/06.
SB 118 (Chesbro), Chapter 157, Statutes of 2005, modifies
California law to comply with the recent Supreme Court
decision which struck down Michigan and New York state laws
that restricted direct sales across state lines by wineries
to consumers. Passed the Senate Floor 28-1, on 8/18/05.
AB 611 (Cortese), Chapter 394, Statutes of 1994, encourages
the adoption of reciprocal wine shipping privileges in
other states and to improve fairness and equity for small,
family vintners and winegrowers of California by
authorizing this formula for the direct shipment of wine to
an individual in this state.
FISCAL EFFECT : Fiscal Com.: No
SUPPORT : (Verified 6/16/10)
California Association of Winegrape Growers (co-source)
Family Winemakers of California (co-source)
Napa Valley Vintners Association (co-source)
Specialty Wine Retailers Association (co-source)
Wine Institute (co-source)
California Farm Bureau Federation
Cellarmasters Home Wine Club of Los Angeles
Independent Grape Growers of the Paso Robles Area
Paso Robles Wine Country Alliance
Sonoma County Vintners Association
Suisun Valley Vintners and Growers Association
Temecula Valley Winegrowers Association
www.WinePress.US
ARGUMENTS IN SUPPORT : According to the Family Winemakers
of California (FWC), "SJR 34 is an important response to
H.R. 5034, which has been introduced in the wake of
litigation to overturn facially neutral, but discriminatory
wine shipping laws enacted by states after the Granholm v.
Heald decision in 2005. Promoted by the National Beer
Wholesalers Association with support from the Wine and
Spirits Wholesalers of America, H.R. 5034 sets the stage
for another round of state legislative wars that could
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foster economic protectionism by setting different rules
for out-of-state producers. It strengthens the wholesale
tier to the detriment of producers and, more importantly,
consumers in California and across the country.
"If enacted H.R. 5034 also slams the door shut on legal
challenges to discriminatory statutes by creating new
justifications for states to utilize and shifts the burden
of proof to the plaintiff. The bill drastically alters the
legal landscape of dormant Commerce Clause and 21st
Amendment jurisprudence. FWC recently prevailed in its
challenge to a Massachusetts statute that arbitrarily set a
production cap to control access to the state's wine
market. H.R. 5034 would have made our challenge
unwinnable.
"California is the largest wine market in the country and
has promoted more consumer choice in wine. The state saw
the wisdom of opening its borders to any winery in the
United States with passage and enactment of SB 118
(Chesbro) in 2005. SJR 34 urges Congress to preserve the
increased consumer choice and wine commerce that has
developed since Granholm. Most wine producers n America
are small, work on tight margins, and do not want to see
new markets closed or made uncompetitive due to
discriminatory legislation.
TSM:do 6/16/10 Senate Floor Analyses
SUPPORT/OPPOSITION:
SEE ABOVE
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