BILL ANALYSIS
SB 1480
Page 1
Date of Hearing: June 30, 2010
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Joe Coto, Chair
SB 1480 (Committee on Governmental Organization) - As Amended:
June 14, 2010
SENATE VOTE : 33-0
SUBJECT : Alcoholic beverages: tied-house restrictions.
SUMMARY : Makes a clarifying change to the Alcoholic Beverage
Control Act (Act) by granting the Department of Alcoholic
Beverage Control (ABC) the authority to, in its discretion,
issue an interim retail permit to an applicant for any retail
license to operate the premises during the period an application
for a license at the premises is pending, subject to specified
conditions. This bill also makes technical, non-substantive
changes to existing law. Specifically, this bill :
1)Retains a requirement that the winegrower meet the specified
conditions regarding the sale or furnishing of wine under
specified circumstances, but would eliminate the requirement
that statements describing these conditions be made pursuant
to an "undertaking approved by ABC. Additionally, this
proposal would make other minor technical changes to this
section of law. In summary, these changes are intended to
streamline, simplify and provide for a more conforming
tied-house exception without materially impacting its effect.
2)Deletes an ABC reporting requirement relating to legislative
recommendations to improve the ability of the department to
expeditiously and effectively administer this division.
3)Clarify that the holder of an event permit, as defined, shall
not be authorized more than four days total per calendar year
4)Revises the authorization of ABC to, in its discretion, issue
an interim operating permit to an applicant for any license to
operate the premises during the period an application for a
license at the premises is pending, subject to specified
conditions applicable to all licensees or retail licensees
only.
5)Makes technical, non-substantive changes to reflect existing
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law.
EXISTING LAW :
1)Establishes ABC and grants it the exclusive authority to
administer the provisions of the Act in accordance with laws
enacted by the Legislature.
2)Provides as an exception to tied-house restrictions that a
winegrower who deals in wine only may hold an ownership
interest in any on-sale license, provided that the winegrower
has entered into an "undertaking" approved by ABC not to sell
or furnish his or her wine to the holder of the license for as
long as the winegrower's ownership interest in the license
continues, or to enter into any collusive scheme to unfairly
sell or promote the wine of another winegrower in his or her
retail businesses in return for the same treatment in the
retail businesses of the other winegrower.
3)Provides that a licensed winegrower may hold an ownership
interest in an on-sale license, if certain conditions are met,
including that the licensed on-sale premises are operated as a
bona fide eating place or a bona fide bed and breakfast inn;
any alcoholic beverage sold and served at the on-sale licensed
premises is purchased only from a California wholesale
licensee, except as specified; the winegrower and any officer,
director, or agent of that person, whether individually or in
the aggregate, do not sell and serve wine products produced or
bottled under any brand or trade name owned by that winegrower
through more than 2 on-sale licensed premises in which any of
them holds an ownership interest; and, in the case of a bona
fide public eating place, wine produced by the winegrower does
not exceed a specified percentage of the wine items offered
for sale in the on-sale premises.
4)Authorizes the issuance of an event permit to any licensee
under either an on-sale general license, or an on-sale beer
and wine license, authorizing the sale of beer, wine, and
distilled spirits at specified events only for consumption on
property adjacent to the licensed premises and owned or under
the control of the licensee, as specified. Existing law
provides that these specified events may be held no more
frequently than four days in any single calendar year.
5)Requires the director of ABC to make an annual report to the
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Legislature on the department's activities, which includes
recommendations for legislation to improve the department's
abilities to administer the act.
6)Provides for the issuance of licenses for which various annual
fees are charged depending upon the type of license issued.
Existing law authorizes ABC to annually adjust the fees
charged commencing with the 2010 calendar year by an amount
not to exceed an inflation factor based on the Consumer Price
Index.
7)Authorizes the ABC, in its discretion, to issue an interim
retail permit to an applicant for any retail license to
operate the premises during the period an application for a
license at the premises is pending, subject to specified
conditions.
FISCAL EFFECT : Unknown.
COMMENTS :
This bill represents the annual Senate Governmental Organization
Committee bill that makes technical, clarifying, conforming, and
non-controversial changes to the ABC Act.
Current law provides as an exception to tied-house restrictions
that a winegrower who deals in wine only may hold an ownership
interest in any on-sale license, provided that the winegrower
has entered into an "undertaking" approved by the Department of
ABC not to sell or furnish his or her wine to the holder of the
license for as long as the winegrower's ownership interest in
the license continues, or to enter into any collusive scheme to
unfairly sell or promote the wine of another winegrower in his
or her retail businesses in return for the same treatment in the
retail businesses of the other winegrower.
Current law also provides that a licensed winegrower may hold an
ownership interest in an on-sale license, if certain conditions
are met, including that the licensed on-sale premises are
operated as a bona fide eating place or a bona fide bed and
breakfast inn; any alcoholic beverage sold and served at the
on-sale licensed premises is purchased only from a California
wholesale licensee, except as specified; the winegrower and any
officer, director, or agent of that person, whether individually
or in the aggregate, do not sell and serve wine products
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produced or bottled under any brand or trade name owned by that
winegrower through more than 2 on-sale licensed premises
in which any of them holds an ownership interest; and, in the
case of a bona fide public eating place, wine produced by the
winegrower does not exceed a specified percentage of the wine
items offered for sale in the on-sale premises.
This bill retains the requirement that the winegrower meet the
specified conditions regarding the sale or furnishing of wine
under the circumstances described above, but eliminates the
requirement that statements describing these conditions be made
pursuant to an "undertaking approved by the Department of ABC."
Additionally, this bill makes other minor technical changes to
this section of law intended to streamline, simplify and provide
for a more conforming tied-house exception without materially
impacting its effect.
In addition, SB 1480 codifies current law by authorizing ABC to,
in its discretion, issue an interim operating permit to an
applicant for any license to operate during the period an
application for a license at the premises is pending, subject to
specified conditions applicable to all licensees or retail
licensees only. Currently, when a retail license is being
protested, the ABC can issue an interim retail permit to be
effective until the matter is settled via the judicial process.
Unfortunately, though, the ABC cannot issue an interim permit if
the application is for a non-retail license (winery, wholesaler,
etc.) This bill would give ABC the same latitude and
discretion, in terms of interim operation, for retail and
non-retail licenses while protest matters are being considered.
Lastly, this bill makes a minor clarifying change, as well as
code maintenance changes, to existing provisions of the
Alcoholic Beverage Control Act in order to reduce paperwork
requirements of the ABC.
Prior/Related Legislation: AB 1579 (Assembly G.O. Committee) of
2009, contained identical language to that contained in this
bill relating to interim operating permits. AB 1579 was placed
on the Senate Inactive file at the end of the 2009 legislative
year.
SB 359 (Rainey) Chapter 529, Statutes of 1997. Modified an
existing tied-house exception that permits a licensed winegrower
to hold an ownership interest in an on-sale license, if certain
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conditions are met, to include a winegrower who has a wholesale
license to sell wine only.
SB 1211 (Harman), Chapter 348, Statutes of 2008. Expanded an
existing provision of the ABC Act to authorize the issuance of a
"caterer's permit" to any licensee under an "on-sale beer and
wine license."
AB 111 (Koretz), Chapter 62, Statutes of 2005. Authorized ABC
to issue special event permits for the sale of wine, beer, or
distilled spirits for four total days each year, rather than the
existing limit of one day per calendar quarter.
SB 1376 (Thompson) Chapter 318, Statutes of 1994. Among other
things, created a tied-house exception applicable to winegrowers
owning restaurants or bed and breakfast inns, provided certain
conditions are met.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531