BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 623 (Williams)
Hearing Date: 7/11/2011 Amended: 4/6/2011
Consultant: Maureen Ortiz Policy Vote: GO 12-0
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BILL SUMMARY: AB 623 creates a new limited off-sale retail wine
license within the Alcoholic Beverage Control Act (ABC) that
permits licensees to sell wine to consumers via direct mail,
telephone, or the Internet.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Admin expenses -----unknown, not
significant------
offset by
fee revenue-------------- Special*
*Alcoholic Beverage Control Fund
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STAFF COMMENTS:
The original application for this license must be accompanied by
a fee of $100, with an annual renewal fee of $246. If the ABC
receives 500 applications for this new off-sale retail wine
license, revenue the first year will be $50,000 and ongoing
revenue for renewals would be $123,000. It is likely that an
unknown number of current licensees will opt to apply for this
new license in lieu of their existing one, creating a small
revenue loss offset partially with new revenue in the first
year. However, it is anticipated that revenue from the new
license will be sufficient to cover all administrative and
enforcement costs incurred by the Department of Alcohol and
Beverage Control.
The new license will not allow sales to be conducted from a
retail premise that is open to the public, and requires the sale
of wine to be only to consumers, not for resale, and in packages
AB 623 (Williams)
Page 1
or quantities of 52 gallons or less per sale, for consumption
off the premise where sold. AB 623 allows the Department of
Alcoholic Beverage Control to impose additional reasonable
conditions upon the licensees.
Staff recommends an amendment to clarify the author's intent to
limit sales of wine to 52 gallons or less per sale. Possible
language would be on page 2, line 16, after the word "resale" to
add a comma.
AB 623 also will allow holders of this new off-sale retail wine
license to donate and pour wine at nonprofit events.
The ABC currently issues what is known as a combination Type
17/Type 20 license that allows retailers to sell over the
Internet, but also requires that they sell to other retailers,
acting in good faith as a wholesaler. Consequently, retailers
who sell over the Internet using this type of license are
counted against the license concentration limitations thus
preventing other businesses from obtaining a license to operate
an establishment to sell alcoholic beverages. There are
currently about 1,500 licensees that hold the combination 17/20
license. It is unknown how many of those will opt to instead
apply for the new license authorized by this bill.
Existing law (B&P Code, Section 23779) prohibits the ABC from
issuing a wholesale license to any person who does not in good
faith actually carry on or intend to carry on a bona fide
wholesale business by sale to retail licensees of the alcoholic
beverage designated in the wholesale licenses. Further, the ABC
is authorized to revoke any wholesale license when the licensee
fails for a period of 45 days to actively and in good faith
engage in the wholesale business.
This bill is similar to an early version of AB 1896 (Jeffries)
in 2010, a bill that was later used for a different purpose.