BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1323 (Walters)
Hearing Date: 05/03/2010 Amended: 04/27/2010
Consultant: Maureen Ortiz Policy Vote: GO 8-1
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BILL SUMMARY: SB 1323 expands the current authorization for
licensees under the Alcoholic Beverage Control Act to provide
their product free of charge to consumers during invitation-only
event.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Enforcement/oversight ----unknown, less than $150
potentially offset by fee revenue----- Special*
*Alcoholic Beverage Control Fund
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STAFF COMMENTS:
To be eligible to hold an event, licensees must pay an annual
renewal fee of $131, a caterer's permit fee of $10 (current
budget language will increase that fee to $25), and a $200 fee
per event. According to the Department of Alcoholic Beverage
Control (ABC), SB 1323 will give authority to about 500
additional licensees, however, it is not likely that all of
those licensees will apply for eligibility to hold an
invitation-only event. Fee revenue is expected to offset all
costs.
AB 2293 (De Leon), Chapter 638, Statutes of 2008, authorized a
manufacturer, winegrower, rectifier, or distiller or any
authorized agent of that person to provide, free of charge,
entertainment, food, and distilled spirits, wine, or
nonalcoholic beverages to consumers at an invitation-only event
in connection with the sale or distribution of wine or distilled
spirits. Several conditions were placed on these events
including the limitation of 400 attendees per event, a
prohibition of persons under age 21, and a maximum duration of
four hours. The authorization will sunset on January 1, 2014.
SB 1323 extends that same authorization to a distilled spirits
manufacturer's agent, a holder of a distilled spirits importer's
general license, a holder of a distilled spirits rectifier's
general license (who does not also hold a distilled spirits
wholesaler's license), and a holder of an out-of-state distilled
spirit's shipper's certificate to also provide their product
free of charge at invitational-only events with the same
conditions placed on those required under the provisions of AB
2293.
Existing law, known as the "tied-house" law, separates the
alcoholic beverage industry into three component parts, or
tiers, of manufacturer (including breweries, wineries and
distilleries), wholesaler, and retailer (both on-sale and
off-sale). Tied-house laws generally prohibit alcoholic
beverage licensees from giving away any gift, premium or free
goods in connection with the sale or distribution of alcoholic
beverages.