BILL ANALYSIS �
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THIRD READING
Bill No: AB 2609
Author: Nestande (R), et al.
Amended: 6/2/14 in Senate
Vote: 21
SENATE GOVERNMENTAL ORGANIZATION COMMITTEE : 8-0, 6/10/14
AYES: Correa, Cannella, De Le�n, Galgiani, Hernandez, Padilla,
Torres, Vidak
NO VOTE RECORDED: Berryhill, Lieu, Vacancy
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 73-0, 5/8/14 (Consent) - See last page for vote
SUBJECT : Alcoholic beverages: home brewers and home
winemakers
SOURCE : California Homebrewers Association
DIGEST : This bill adds a new provision to the Alcoholic
Beverage Control Act (ABC Act) that allows nonprofit
organizations established for the purpose of promoting home
brewing to serve beer at fundraising events subject to specified
conditions.
ANALYSIS :
Existing law:
1. Establishes the Department of Alcoholic Beverage Control
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(ABC) and grants it exclusive authority to administer the
provisions of the 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 for this purpose.
2. Authorizes a person over 21 years of age to manufacture beer
or wine (200 gallons per calendar year if there are two or
more adults in the household or 100 gallons if there is only
one adult in the household) for personal or family use, and
not for sale, without the need for a license or permit.
3. Authorizes the removal of beer or wine, manufactured for
personal or family use, from the premises where manufactured
only under the following circumstances: (a) for use,
including tasting by judges, in a bona fide competition or
exhibition; (b) for personal or family use; and (c) when
donated to a nonprofit organization for sale at fundraising
events conducted solely by and for the benefit of the
nonprofit and pursuant to a license issued by ABC to the
nonprofit entity. Explicitly prohibits nonprofit
organizations that promote home brewing or home winemaking or
are primarily composed of home brewers or home winemakers
from selling beer pursuant to this body of law.
4. Separates the alcoholic beverage industry into three
component parts of manufacturer, wholesaler, and retailer.
This is known as the "tied-house" law. This is 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. Generally,
other than exemptions granted by the Legislature, the holder
of one type of license is not permitted to do business as
another type of licensee within the "three-tier" system.
This bill:
1. Stipulates that a nonprofit organization established for the
purpose of promoting home production of beer shall be
eligible to serve beer at a fundraising event conducted
solely for the benefit of the nonprofit organization subject
to the following conditions:
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A. The beer that is served is donated by home brewers.
B. The nonprofit shall be issued no more than two
permits per calendar year by ABC for the serving of
beer.
C. The nonprofit must display a printed notice at the
event that home brewed beer is not a regulated product
subject to health and safety standards.
D. The event must have an educational component, as
specified.
E. Only bona fide members of the nonprofit may attend
the event and the nonprofit shall not solicit or sign up
individuals to be members on the day of the event at the
event premises.
F. If more than 50 members are expected to be in
attendance at the event, the nonprofit must provide ABC
with the number of members that have registered for the
event and the estimated number that will be in
attendance, 48 hours prior to the event.
2. Modifies existing law permitting the removal of home brewed
beer or wine from the site of production for use, including
tasting by judges, in a bona fide competition or exhibition,
to instead, allow for such removal for use, including in a
bona fide competition or judging or a bona fide exhibition or
tasting.
Background
According to the Senate Governmental Organization Committee,
this bill is intended to correct an unintended consequence of
enactment of AB 1425 (Chapter 463, Statutes of 2013). Among
other things, AB 1425 addressed a problem which had arisen
regarding home winemakers and the use of their home-made wine at
community (nonprofit) fundraisers. Specifically, ABC had
asserted that charging an admission fee to nonprofit sponsored
events, exhibitions or competitions was equivalent to selling
the tastings taking place. ABC's conclusion resulted in the
cancellation of the decades old Napa Classic home winemakers'
festival which was the major support for the Dry Creek Volunteer
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Fire Department.
AB 1425 allowed beer or wine made for personal or family use to
be donated to a non-profit organization for sale at a
fundraising event conducted solely by and for the benefit of the
nonprofit organization and only for consumption on the premises
of the fundraising event under a license issued by ABC to the
nonprofit. AB 1425 also imposed various labeling requirements
on the donated beer or wine and stipulated that the label
identify its producer and state that the beer or wine is
homemade and not available for sale or for consumption off the
licensed premises. Furthermore, AB 1425 excluded from this
authorization nonprofit organizations that either promote home
brewing or home winemaking or that are primarily composed of
home brewers or home winemakers.
The Senate Governmental Organization Committee further asserts
that, as currently drafted, this bill may not necessarily fix
the problem but could instead turn home brew events into
businesses and allow for an unregulated product (home brewed
beer) to be sold. Additionally, several provisions of this bill
may be difficult if not impossible for ABC to verify and
enforce. For example, this bill provides that only bona fide
members of the nonprofit may attend the event and the nonprofit
shall not solicit or sign up individuals to be members on the
day of the event at the event premises. Furthermore, this bill
states that if more than 50 members are expected to be in
attendance at such an event, the nonprofit must provide ABC with
the number of members that have registered for the event and the
estimated number that will be in attendance, 48 hours prior to
the event.
Comments
According to the author's office, this bill is intended to
revise the description regarding the authorized removal of home
brewed beer from the home for use at a competition, judging,
exhibition, or tasting. It also seeks to provide express
authorization for nonprofit home brew associations to host
annual or semi-annual events for their members to gather and
participate in exhibitions, judgings, tastings or competitions.
Additionally, this bill limits the number of permits that can be
issued for such events to two per each nonprofit, per calendar
year. This bill also requires an educational component per
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event, and provides that the entity sponsoring the event must
display a printed notice at the event stipulating that the home
brewed beer is not subject to certain health and safety
standards pertaining to manufactured beverages.
The author's office points out that prior to the passage of AB
1425 (as referenced in Background), the California Homebrewers
Association (CHA) held an annual event for their members to
gather and share their craft. These events featured judging,
tastings, educational components, and provided members the
opportunity to expand their knowledge about home brewed beer.
CHA had been issued permits by ABC to host such events.
Unfortunately, in light of the enactment of AB 1425, the
Southern California Home Brew Festival had to be cancelled this
year. The author's office also notes that existing law might
prevent the 2015 National Homebrewers Conference, scheduled in
San Diego, from being held.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 6/25/14)
California Homebrewers Association (source)
American Homebrewers Association
OPPOSITION : (Verified 6/25/14)
Alcohol Justice
ARGUMENTS IN SUPPORT : The California Homebrewers Association
(CHA) states that "the passage of AB 1425 of last year dealt a
devastating blow to our organization when the unintended
consequences of that law led to the cancellation of the 24th
year of the Southern California Homebrewers Festival." The CHA
believes that passage of AB 2609 will clarify the law to allow
sharing between homebrew clubs as had been possible since the
1980s.
The American Homebrewers Association (AHA) states that "if AB
2609 is not passed, the AHA may be forced to cancel the 37th
Annual National Homebrewers Conference planned to be held in San
Diego in 2015. The National Homebrewers Conference is annually
the largest gathering of homebrewers in the world and is
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expected to draw 4000-5000 attendees in 2015, generating
approximately $8 million dollars for the local economy."
ARGUMENTS IN OPPOSITION : Alcohol Justice argues that "AB 2609
will expand the availability of alcoholic products while eroding
the three-tier system which provides public health and safety
protections. Evidence shows that increased availability of
alcoholic beverages is correlated with an increase in alcohol
related harm."
ASSEMBLY FLOOR : 73-0, 5/8/14
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Grove, Hagman, Harkey, Roger Hern�ndez, Holden, Jones,
Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein,
Medina, Melendez, Mullin, Muratsuchi, Nazarian, Nestande,
Olsen, Pan, Patterson, Perea, Quirk, Quirk-Silva, Rendon,
Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Wagner,
Waldron, Weber, Wieckowski, Wilk, Williams, Yamada, John A.
P�rez
NO VOTE RECORDED: Eggman, Gorell, Gray, Hall, Mansoor, V.
Manuel P�rez, Vacancy
MW:d:n 6/25/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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