BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 1480
                                                                  Page  1

          Date of Hearing:   August 4, 2010

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

           SB 1480 (Committee on Governmental Organization) - As Amended:   
                                   August 2, 2010 

          Policy Committee:                              Governmental  
          Organization Vote:                            18 - 0 

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          This bill makes technical and clarifying changes to the  
          Alcoholic Beverage Control Act. Specifically, this bill: 

          1)Deletes the requirement that the director of the Department of  
            Alcoholic Beverage Control (ABC) include recommendations for  
            legislation in the annual ABC report to the Legislature. 

          2)Streamlines a tied-house exception that allows winegrowers  
            under specific conditions to also hold an ownership interest  
            in an on-sale license.

          3)Extends ABC's authority to issue an interim operating permit  
            to a non-retail liquor license applicant. 

          4)Makes other technical, nonsubstantive changes to the Alcoholic  
            Beverage Control Act.  

           FISCAL EFFECT  

          1)Any costs associated with this legislation would be minor and  
            absorbable within existing resources. 

          2)Negligible non-reimbursable costs for prosecution and/or  
            incarceration, offset by fine revenue, for misdemeanor  
            violations of provisions associated with the tied-house  
            exception. 

           COMMENTS  









                                                                  SB 1480
                                                                  Page  2

           1)Rationale  . This bill represents the annual Senate Governmental  
            Organization Committee bill that makes technical, clarifying,  
            conforming, and non-controversial changes to the ABC Act.  

           2)Tied-House Laws  . California's tied-house laws separate the  
            alcoholic beverage industry into three component parts or  
            tiers of manufacturers (including breweries, wineries, and  
            distilleries), wholesalers, and retailers (both on-sale and  
            off-sale).  These tied-house laws restrict certain ownership  
            structures and business relationships within the alcoholic  
            beverage industry, and create a public policy model for the  
            following purposes:

                 To promote the State's interest in an orderly market.
                 To prohibit vertical integration and dominance by a  
               single producer.
                 To prohibit commercial bribery and protect the public  
               from predatory marketing practices.
                 To discourage or prevent the intemperate use of  
               alcoholic beverages.

            The Legislature has generally prohibited forms of  
            cross-ownership between manufacturers and retailers, and  
            discouraged manufacturers from providing anything of value -  
            free goods, services, or advertising - to distributors or  
            retailers. Numerous exceptions to these restrictions have been  
            enacted over the years in instances where the Legislature  
            determined that the public's interests are protected.

           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916)  
          319-2081