BILL NUMBER: AJR 11	ENROLLED
	BILL TEXT

	ADOPTED IN SENATE  JULY 11, 2011
	ADOPTED IN ASSEMBLY  JUNE 28, 2011

INTRODUCED BY   Assembly Members Chesbro, Achadjian, Allen, Bill
Berryhill, Conway, Dickinson, Huber, Huffman, Bonnie Lowenthal,
Monning, Olsen, and Smyth

                        MAY 16, 2011

   Relative to California wines.


	LEGISLATIVE COUNSEL'S DIGEST


   AJR 11, Chesbro. California wines: sales.
   This measure would urge Congress to defeat H.R. 1161 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 or unnecessary limitation between in-state and
out-of-state wine producers.



   WHEREAS, California is the fourth largest wine producing region in
the world, after France, Italy, and Spain; and
   WHEREAS, California has 3,400 bonded wineries; and
   WHEREAS, California has 4,600 winegrape growers; and
   WHEREAS, California has 535,000 acres of winegrapes; and
   WHEREAS, California winegrowers ship over 199.6 million cases,
representing some 475 million gallons of wine, to the United States'
wine market; and
   WHEREAS, The California wine industry creates more than 330,000
jobs, billions of dollars in economic impact, and preserves
agricultural land and family farms; and
   WHEREAS, The California wine industry generates higher taxes than
most industries because, as a regulated industry, it pays excise
taxes to the state and federal government on every gallon of wine;
and
   WHEREAS, The California wine industry has an annual impact of
$61.5 billion on the state's economy and produces the number one
finished agricultural product in the state; and
   WHEREAS, The economic impact of the United States' wine industry
on the national economy is $121.8 billion annually; and
   WHEREAS, California's wine industry attracts 20.7 million tourists
annually to all regions of California and generates wine-related
tourism expenditures of $2.1 billion; and
   WHEREAS, Currently 37 states and the District of Columbia allow
direct shipping of wine from winegrowers to consumers; and
   WHEREAS, The innovation and entrepreneurial spirit of small
California wineries drives the entire industry to improve and
progress; and
   WHEREAS, In order to reach consumers in other states, many
California wineries have turned to direct marketing and shipping of
their wines; and
   WHEREAS, Since 1985 California has pioneered consumer access to
wine through reciprocal and permit shipping to alleviate scarcity at
the retail level of California wines; and
   WHEREAS, Over the past 11 years, consolidation trends within the
wholesale tier have made it difficult for California wineries to
achieve adequate distribution, and, as a result, have limited
consumer choice; and
   WHEREAS, California wineries have offered voluntarily to have
their direct marketing and shipping permitted and regulated by other
states to ensure that those states collect the same taxes that wines
sold through the three-tier system must pay, that direct deliveries
would be made only to adults, and that direct deliveries are not made
in "dry" areas, as defined under the laws of each state; and
   WHEREAS, The California wine industry has developed comprehensive
model direct shipping legislation to address all of the concerns
expressed by state alcohol regulators across the country, which has
been validated by Federal Trade Commission studies and a law report
by the Maryland Comptroller; and
   WHEREAS, California has enacted a law to open direct shipping of
wine from other states to its own residents without limitation
through a simple permit system to comply with the decision in
Granholm v. Heald (2005) 544 U.S. 460; and
   WHEREAS, States' rights to regulate wine and alcohol granted by
the 21st Amendment to the United States Constitution have always been
subject to constitutional limitation and judicial review; and
   WHEREAS, Court decisions over the last 40 years balance state
authority to regulate alcohol with the framer's belief that the
nation would only succeed if interstate commerce thrived; and
   WHEREAS, The Commerce Clause has been applied judiciously by the
courts to foster national economic goals while preserving
nondiscriminatory state authority; and
   WHEREAS, The landmark 2005 United States Supreme Court case,
Granholm v. Heald (2005) 544 U.S. 460, reaffirmed states' rights
under the 21st Amendment to the United States Constitution to
regulate wine as long as they do not discriminate between in-state
producers and out-of-state producers, and correctly ruled that these
rights do not supersede other provisions of the Constitution; and
   WHEREAS, H.R. 1161 would severely limit consumer choice in
California wine throughout the nation as direct-to-consumer laws are
narrowed or repealed; and
   WHEREAS, H.R. 1161 would imperil market access for California
wineries that cannot secure effective wholesale distribution; and
   WHEREAS, H.R. 1161 would stunt competition among the nation's over
7,000 wine producers as markets are artificially constrained and
access is limited; and
   WHEREAS, H.R. 1161 would reverse decades of long-established
jurisprudence that has balanced interstate commerce concerns with
state regulatory authority and fostered a dramatic growth in wine
production, sales, and tax revenue; and
   WHEREAS, H.R. 1161 would damage markets by sanctioning
discriminatory state laws that would require judicial challenges
spanning several years; and
   WHEREAS, H.R. 1161 would frustrate legitimate challenges to
facially neutral, but nonetheless discriminatory, state laws like the
landmark Massachusetts production cap case, Family Winemakers of
California v. Jenkins (2010) 592 F.3d 1; and
   WHEREAS, H.R. 1161 would be an unprecedented shift in the
relationship between federal and state authority over wine; now,
therefore, be it
   Resolved by the Assembly and the Senate of the State of
California, jointly, That the Legislature hereby respectfully urges
Congress to protect and preserve the ability of California wineries,
as well as all American wineries, to ship wine directly to consumers
without discrimination or unnecessary limitation between in-state and
out-of-state wine producers; and be it further
   Resolved, That the Legislature urges the defeat of H.R. 1161; and
be it further
   Resolved, That the Chief Clerk of the Assembly transmit copies of
this resolution to the President and Vice President of the United
States, to the Speaker of the House of Representatives, to the
President pro Tempore of the United States Senate, and to each
Senator and Representative from California in the Congress of the
United States.