BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 1531|
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UNFINISHED BUSINESS
Bill No: SB 1531
Author: Wolk (D)
Amended: 8/20/12
Vote: 21
SENATE FLOOR : Not relevant
ASSEMBLY FLOOR : 78-0, 8/22/12 - See last page for vote
SUBJECT : Alcoholic beverages: tied-house restrictions
SOURCE : Author
DIGEST : 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.
Assembly Amendments delete the Senate version of this bill
which related to the determination of the number of retail
alcohol licenses and replace it with the above language.
ANALYSIS :
Existing law :
1. Establishes the Department of Alcoholic Beverage Control
(ABC) and grants it exclusive authority to administer
the provisions of the Alcoholic Beverage Control Act
CONTINUED
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(ABC Act) in accordance with laws enacted by the
Legislature. This involves licensing individuals and
businesses associated with the manufacture, importation
and sale of alcoholic beverages in this state and the
collection of license fees or occupation taxes for this
purpose.
2. States that the "Tied-house" Law or "three-tier" system
separates the alcoholic beverage industry into three
component parts of manufacture (first tier), wholesaler
(second tier), and retailer (third tier). The original
policy rationale for this body of law was to prohibit
the vertical integration of the alcohol industry and to
protect the public from predatory marketing practices.
3. Prohibits, in general, an alcohol manufacturer,
wholesaler, or any officer, director, or agent of any
such person 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.
4. Allows wineries, breweries, distilled spirits
manufacturers, and importers to donate their product(s)
to certain nonprofit organizations (e.g., fraternal
orders, social organizations, civic leagues, veterans'
organizations, religious groups, horticultural
organizations) for the purpose of assisting in
fund-raising efforts.
5. Provides a tied-house exemption for an alcohol licensee
to make monetary and alcoholic beverage contributions to
a symphony association (San Francisco Symphony) that is
a nonprofit charitable corporation or association, under
specified conditions. The symphony association shall
hold a retail on-sale license in a portion of its
premises and no such gift shall be used in or for the
benefit of the symphony association's retail on-sale
license, as specified.
This bill:
1. Provides that a holder of a winegrower's license whose
licensed premises of production are located within the
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County of Napa may donate wine to an opera house, if all
the following conditions are met:
A. The opera house is a nonprofit charitable
corporation or association exempt from payment of
income taxes under the provisions of the Internal
Revenue Code of the United States, as defined.
B. The opera house has been incorporated in the
City and County of Napa and produces not less than
150 events open to the general public per year.
C. The opera house holds a retail on-sale license.
D. The donation or monetary donation shall not be
conditioned directly or indirectly, in any way, on
the purchase, sale, or distribution of any
alcoholic beverage manufactured or distributed by
the holder of a winegrower's license by the opera
house.
E. The on-sale retail licensee may sell the donated
wine and shall sell or serve other brands of wine
in addition to brands produced or marketed by the
donating winegrower.
F. The opera house may acknowledge and thank a
donating winegrower in the opera house's event
programs, on the opera house's Internet Web site,
and on stage during an event.
2. Contains language (legislative findings and
declarations) relative to the necessity of requiring a
separation between manufacturing interests, wholesale
interests and retail interests.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/22/12)
Napa Valley Opera House
Napa Valley Vintners
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ARGUMENTS IN SUPPORT : According to the author's office,
this bill provides a narrow Tied-house exception by
allowing the Napa Valley Opera House (NVOH) to accept wine
donated by local wineries located within the County of
Napa, under specified conditions. While the NVOH maintains
a license to sell alcoholic beverages, it is prohibited
from selling donated wine under the ABC Act. Like many
other non-profit organizations, NVOH has experienced an
economic downturn in recent years and is pursuing an avenue
to raise funds and support the long-term viability of arts
in the Napa community.
Writing in support, the Napa Valley Opera House states,
"the NVOH is in the heart of the Wine country and it's a
natural fit for wineries to want to support our
programming. Often the wineries are not in the position to
offer financial support, and they choose to donate wine to
the NVOH. This bill would allow the NVOH to sell the
donated wine it receives from our local wineries."
Tied-house laws restrict the NVOH from selling the donated
wine. The NVOH presents a wide variety of performing arts
programming, as well as supporting schools and the local
non-profit community by making their theater available for
fundraising events and activities.
ASSEMBLY FLOOR : 78-0, 8/22/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Block, Blumenfield, Bonilla, Bradford, Brownley,
Buchanan, Butler, Charles Calderon, Campos, Carter,
Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Gorell,
Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Hill,
Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara,
Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller,
Mitchell, Monning, Morrell, Nestande, Nielsen, Norby,
Olsen, Pan, Perea, V. Manuel P�rez, Portantino, Silva,
Skinner, Smyth, Solorio, Swanson, Torres, Valadao,
Wagner, Wieckowski, Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Bill Berryhill, Roger Hern�ndez
DLW:dm 8/23/12 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
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