BILL ANALYSIS �
AB 2004
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2004 (Chesbro)
As Amended August 13, 2014
Majority vote
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|ASSEMBLY: | |(April 24, |SENATE: |36-0 |(August 18, |
| | |2014) | | |2014) |
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(vote not relevant)
Original Committee Reference: G.O.
SUMMARY : Authorizes a licensed beer manufacturer to apply to
the Department of Alcoholic Beverage Control (ABC) for a
certified farmers' market beer sales permit which allows the
licensee to sell packaged beer at a farmers' market, including
any specified area, under certain conditions; and expands a
licensed beer manufacturer's privileges under the Alcoholic
Beverage Control Act (ABC Act) by authorizing a beer
manufacturer to sell or serve all beers and wines, regardless of
source, to guests during private events held on the licensed
beer manufacturer's premises.
The Senate amendments delete the Assembly version of the bill,
and instead:
1)Authorizes a beer manufacturer to have upon the licensed
premises, or on premises owned by the manufacturer that are
contiguous to the licensed premises and are operated by and
for the manufacturer all beers and wines, regardless of
source, for sale or service only to guests during private
events not open to the general public. In addition, imposes
the following requirements on the beer manufacturer:
a) The alcoholic beverages sold at the premises that are
not produced and bottled by, or produced and packaged for,
the beer manufacturer must be purchased by the beer
manufacturer only from a licensed wholesaler.
b) All alcoholic beverages sold or served must be produced
by a licensee authorized to manufacture the product.
2)Authorizes a licensed beer manufacturer to apply to ABC for a
certified farmers' market beer sales permit that grants the
AB 2004
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beer manufacturer the privilege of selling beer, that has been
produced by the beer manufacturer, at a certified farmers'
market, including any permitted community event area adjacent
to, and operated in conjunction with, a certified farmers'
market, as specified. Also, imposes the following conditions
on the beer manufacturer:
a) Subjects the permit to the respective discretion and
managerial control of a certified farmers' market or
community event operator and existing regulations governed
by law under CDFA.
b) Issues the permit for up to 12 months but validates it
for no more than one day a week at any single specified
farmers' market or community event location. Allows a beer
manufacturer to hold more than one permit.
c) Prohibits the licensed beer manufacturer from selling
more than 5,000 gallons of beer annually pursuant to all
certified farmers' markets permits held by any single beer
manufacturer.
d) Requires the licensed beer manufacturer to maintain
records of annual beer sales made pursuant to all farmers'
market beer sales permits issued.
3)Requires ABC to notify the local entity and applicable law
enforcement agency where the certified farmers' market or
community event is to be held of the issuance of the permit.
4)Establishes a $50 permit which is subject to adjustment
pursuant to the ABC Act.
EXISTING LAW :
1)Establishes ABC and grants it exclusive authority to
administer the provisions of the ABC Act in accordance with
laws enacted by the Legislature.
2)Authorizes a licensed beer manufacturer, at the licensed
premises of production, to sell to consumers for consumption
off the premises beer that is produced and bottled by, or
produced and packaged for, that manufacturer.
3)Grants licensed beer manufacturers the following privileges:
AB 2004
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a) selling beer to any person holding a license authorizing
the sale of beer; b) selling beer to consumers for consumption
on the manufacturer's licensed premises or on premises owned
by the manufacturer which are contiguous to the licensed
premises and which are operated by and for the manufacturer;
and c) selling beer and wine, regardless of source, to
consumers for consumption at a bona fide public eating place
on the manufacturer's licensed premises or at a bona fide
public eating place on premises owned by the manufacturer
which are contiguous to the licensed premises and which are
operated by and for the manufacturer.
4)Provides that licensed beer manufacturers and holders of
out-of-state beer manufacturer's certificates may be issued
and may hold retail package off-sale beer and wine licenses.
Stipulates that alcoholic beverages produced or sold at or
from the off-sale premises which are not produced and bottled
by, or produced and packaged for, the beer manufacturer must
be purchased by the beer manufacturer only from a licensed
wholesaler.
5)Authorizes ABC to issue special temporary licenses and permits
to various entities for limited purposes including a certified
farmers' market sales permit that authorizes a licensee under
a winegrower's license, a member of the licensee's family who
is 21 years of age or older, or an employee of the licensee to
sell wine produced and bottled by the winegrower at certified
farmers' market locations. The farmers' market sales permit
may be issued for up to 12 months but shall not be valid for
more than one day a week at any single specified farmers'
market location. Allows a winegrower to hold more than one
certified farmers' market sales permit and requires ABC to
notify local agencies and enforcement entities of the permits.
Prohibits the licensed winegrower from selling more than
5,000 gallons of wine annually pursuant to all certified
farmers' markets sales permits held by any single winegrower.
6)Provides for certified farmers' markets which are operated in
accordance with regulations established in the Administrative
Code pertaining to direct marketing and are governed by law
under the Department of Food and Agriculture (CDFA). These
rules are enforced by county agriculture commissioners in the
counties in which the market operates. The markets also fall
under the jurisdiction of the health departments in each
AB 2004
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county in which a market operates.
AS PASSED BY THE ASSEMBLY , this bill required ABC to include in
its annual report to the Legislature the number of active field
agents employed by it and the number and type of enforcement
activities conducted by it and by local law enforcement agencies
in conjunction with ABC by license type and by region or county.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : This bill was substantially amended in the Senate and
the Assembly-approved provisions of this bill were deleted.
This bill is inconsistent with Assembly actions.
Background: According to industry sources, California currently
has more craft breweries (approximately 440) than any other
state in the country. In fact, California has more than twice
as many craft breweries as Colorado - the state with the next
highest number. An average of one in every five craft beers
produced in the United States comes from California. In 2012,
the California craft brewery industry had an annual impact of
$4.7 billion on the state's economy and supported well over
45,000 jobs. Additionally, the state's craft brewery industry
generated over $850 million in federal, state, and local
revenues in 2012.
Purpose of the bill: According to the author's office, this
bill allows beer manufacturers to sell beer and wine regardless
of the source at private events such as weddings as long as the
beer and wine is purchased through a distributor. This
privilege of selling wine and beer from other brewers at private
events is the same privilege that currently is enjoyed by
wineries. As the popularity and number of craft breweries
grows, the demand for private events, such as weddings, at these
venues is becoming much more prevalent. This bill provides
craft brewers parity with the privileges currently enjoyed by
the wine industry. Additionally, this bill allows the sale of
packaged beer at certified farmers markets including any
community event adjacent to and operated in conjunction with the
farmers market. The beer manufacturer must be located within
the county or an adjacent county to the farmers market. The
beer must be for off premises consumption and does not permit
tasting or sampling the product prior to purchase.
AB 2004
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In support: The California Craft Brewers Association states
that certified farmers' markets require products sold within
their event boundaries to be 100% grown and produced on the
property owned by the farmer or manufacturer. Products that
cannot meet this criterion must be sold in an area adjacent to
the farmers' market called a 'community event' area. While most
craft brewers cannot meet the certified farmers' market criteria
there may be the rare instance where one does in fact grow all
the ingredients (i.e., grain and hops) on their own property.
As such, this bill reflects the necessary authority under both
circumstances."
Analysis Prepared by : Eric Johnson / G.O. / (916) 319-2531
FN: 0004955