BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 32
                                                                  Page  1

          Date of Hearing:   August 17, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                      SB 32 (Leno) - As Amended:  May 26, 2011 

          Policy Committee:                              Governmental 
          Organization Vote:                            14 - 0 

          Urgency:     Yes                  State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill modifies the definition of rectifier to exclude from 
          the definition any on-sale licensee who infuses distilled 
          spirits or wine products with colors and flavors or blends 
          distilled spirits and/or wine, as long as those alcoholic drinks 
          are only sold for consumption on the premises. 

           FISCAL EFFECT  

          There are no significant costs associated with this legislation.

           COMMENTS  

           1)Rationale  . The purpose of this bill is to update the law to 
            allow bars and restaurants to infuse their drinks with colors 
            and flavors. Examples of infused drinks include fruit flavored 
            vodka or homemade sangria. Under current law the Department of 
            Alcoholic Beverage Control (ABC) has determined that on-sale 
            licensees who blend or infuse drinks are violating tied-house 
            laws by also acting as a rectifier. This bill would modify the 
            definition of rectifier to make it clear that it does not 
            include these types of drinks.

           2)Rectifier  . Under current law, a rectifier is someone who 
            colors, flavors, or otherwise processes distilled spirits by 
            distillation, blending, percolating, or other processes.  

           3)The tied-house law  refers to the statutory restriction on 
            cross-ownership among the three tiers of the alcohol industry: 
            manufacturers, distributors/wholesalers, and retailers. The 
            Legislature has generally prohibited forms of cross-ownership 








                                                                  SB 32
                                                                  Page  2

            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