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)
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|COMMITTEE VOTE: |18-0 |(August 28, 2014) |RECOMMENDATION: |concur |
|(G.O.) | | | | |
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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.
AB 2004
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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 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.
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
AB 2004
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packaged for, that manufacturer.
3)Grants licensed beer manufacturers the following privileges: 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
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jurisdiction of the health departments in each 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 :
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.
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
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Page 5
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: 0005556