BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 1531
                                                                  Page  1

          Date of Hearing:   August 8, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    SB 1531 (Wolk) - As Amended:  August 6, 2012 

          Policy Committee:                              Governmental 
          Organization Vote:                            15 - 0 

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

           SUMMARY  

          This bill provides a narrow tied-house exception that allows the 
          Napa Valley Opera House (NVOH) to accept wine and monetary 
          donations from wineries located within the Counties of Napa, 
          Sonoma, Lake, and Mendocino. This exemption sunsets on January 
          1, 2018.

           FISCAL EFFECT  

          There are no significant costs associated with this legislation. 


           COMMENTS  

           1)Purpose  . According to the author, this bill provides a narrow 
            tied-house exception by allowing the NVOH to accept monetary 
            contributions and alcoholic beverages from an alcohol 
            licensee, specifically wineries in Napa, Sonoma, Lake and 
            Mendocino counties.

            This tied-house exception is necessary because the NVOH also 
            holds an on-sale retail license for a portion of its facility. 
             The possession of this retail license prevents an alcohol 
            licensee from providing charitable contributions (both 
            monetary and product) to this non-profit opera house.  

            In this case, NVOH has a limited Type 64 special on-sale 
            general theater license for its entire facility. This allows 
            them to serve alcoholic beverages to ticketholders during and 
            two hours prior to and one hour after a theater performance. 
            This exception will not allow them to sell donated wine during 








                                                                  SB 1531
                                                                  Page  2

            that time, however, it will allow them to sell or serve wine 
            in connection with fundraising activities as long as those 
            activities do not take place during a performance. 

           2)Background  .  Under existing provisions of the ABC Act, 
            alcoholic beverage manufacturers are prohibited, in general, 
            from owning, directly, or indirectly, any interest in any 
            on-sale license, or from providing anything of value to 
            retailers, be it free goods, services, or advertising 
            (tied-house law).  This prohibition exists as part of 
            California's long standing three-tier policy of alcoholic 
            beverage laws that do not allow a particular entity 
            (manufacturer) to give something of value to a member of 
            another tier (retailer).

            Numerous exceptions to this restriction have been enacted 
            through the years in specific instances where the Legislature 
            determined that the public's interests were protected.  
            However, the Legislature traditionally does not grant 
            exemptions that favor the products of the entity seeking the 
            exemption, or exemptions that unfairly compromise the role of 
            the distributors.

           3)Related Legislation  . SB 131 (Wiggins), Chapter 638, Statutes 
            of 2009 granted a tied-house exemption for an alcohol licensee 
            to make monetary and alcoholic beverage contributions to the 
            San Francisco Symphony, which is a nonprofit charitable 
            corporation.



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