BILL ANALYSIS Ó SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION Senator Isadore Hall, III Chair 2015 - 2016 Regular Bill No: AB 776 Hearing Date: 7/14/2015 ----------------------------------------------------------------- |Author: |Cooper | |-----------+-----------------------------------------------------| |Version: |4/15/2015 Amended | ----------------------------------------------------------------- ------------------------------------------------------------------ |Urgency: |No |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Arthur Terzakis | | | | ----------------------------------------------------------------- SUBJECT: Alcoholic beverage control: beer manufacturer: brewery event DIGEST: This bill adds a new provision to the Alcoholic Beverage Control (ABC) Act that enables a licensed beer manufacturer to apply to the Department of ABC for a brewery event permit which would grant the licensee the privilege of selling beer it produces for consumption on property contiguous and adjacent to its licensed premises for special events (up to four such events in a calendar year). ANALYSIS: Existing law: 1)Establishes the Department of ABC and grants it exclusive authority to regulate the licensing, enforcement, and administration of the alcoholic beverage control laws. 2)Authorizes a beer manufacturer to sell or serve all beer, wines, and brandy, regardless of source, to guests during private events held on the licensed beer manufacturer's premises, as specified. 3)Authorizes a licensed winegrower to apply to the Department of ABC for a wine sales event permit that allows the sale of bottled wine produced by that winegrower at specified events approved by the Department of ABC. The law prohibits a wine AB 776 (Cooper) Page 2 of ? sales event permit from being used more than two times a month at a particular location and requires the winegrower to pay a fee of $50 for the permit. This bill: 1)Allows a licensed beer manufacturer to apply to the Department of ABC for a brewery event permit which would allow the sale of beer produced by the licensee for consumption on property contiguous and adjacent to the licensed premises owned or under the control of the licensee. 2)Limits the number of events authorized by a brewery event permit to no more than four in any calendar year. 3)Stipulates that the fee for a brewery event permit issued during the 2016 calendar year shall be one hundred ten dollars ($110), and for a permit issued during the years thereafter, the annual fee shall be calculated, as specified. The permit may be renewed annually at the same time as the licensee's license and shall be transferable as a part of the license. 4)Specifies that for each brewery event, consent for the sale of beer must be obtained by the licensee from the Department of ABC in the form of an event authorization issued by the Department. Also, provides that an event authorization shall be subject to approval by the appropriate local law enforcement agency and limits the fee for each event authorization to no more than twenty-five dollars ($25). 5)Provides that all money collected as fees shall be deposited in the ABC Fund for allocation, upon appropriation by the Legislature. 6)Makes it explicit that at all approved events, the licensee may exercise only those privileges authorized by the licensee's license and requires the licensee to comply with all provisions of the ABC Act pertaining to the conduct of on-sale premises. Any violation of those provisions may be grounds for suspension or revocation of the licensee's license or permit, or both, as though the violation occurred on the licensed premises. 7)Specifies that the Department of ABC may adopt any regulations necessary for the administration of this bill. AB 776 (Cooper) Page 3 of ? Background Purpose of AB 776. According to the author's office, this bill is intended to allow brewery owners to apply to the Department of ABC for a temporary expansion of their permitted brewery premises for special events. The temporary permit for premises expansion would be limited to only the property that is immediately adjacent to, or contiguous to, the existing brewery premises. The author's office states that this bill will enable breweries to hold special anniversary celebrations, new release parties, or other special events where the expected crowd could not be accommodated in the public areas of the brewery. The author's office points out that current law authorizes wineries to apply for a similar temporary permit for special events - this bill simply extends that privilege to breweries. Beer-Lovers Revolution. According to the California Craft Brewers Association, the craft brewing industry in California is growing rapidly, supporting 50,000 jobs with an annual impact of $6.5 billion to the state economy. California's craft brewers have won national and international acclaim, and beer enthusiasts are eager to visit their favorite California craft breweries for special events and product release days. For example, a recent survey conducted in Sonoma County around the Russian River Brewing Company's release of "Pliny the Younger" in 2013 found the event generated $2.4 million in economic activity in the Santa Rosa region with about $1.4 million in direct expenditures related to the event. Nationally, production of craft beer increased 18% during the first six months of 2014, with a new craft brewery opening every 16 hours in the United States according to the Brewers Association. Given craft beer's popularity in California, this state's industry growth is likely even faster than that - today, California has over 480 craft brewers, the most of any state. Prior/Related Legislation AB 774 (Levine, 2015) allows a licensed beer manufacturer that holds a certified farmers' market beer sales permit to provide limited instructional tastings for consumers at a certified AB 776 (Cooper) Page 4 of ? farmers' market, under specified conditions. AB 2488 (Levine, Chapter 98, Statutes of 2014) expanded an existing privilege in the ABC Act relating to the sale of wine by a licensed winegrower at certified farmers' markets to also allow a licensed winegrower the privilege of conducting limited wine tastings for consumers at farmers' markets under certain circumstances. AB 2004 (Chesbro, Chapter 806, Statutes of 2014), among other things, authorized a licensed beer manufacturer to apply to the Department of ABC for a "certified farmers' market beer sales permit" for the purpose of allowing the licensee to sell packaged beer at a farmers' market, including any area outside the footprint of the farmers' market, under specified conditions. ACR 116 (Chesbro, Resolution Chapter 43, Statutes of 2014) proclaimed the month of April 2014 as California Craft Brewery Month. AB 2134 (Chesbro, Chapter 149, Statutes of 2010) created a new tied-house exception in the ABC Act that allows licensed brewers to conduct and participate in events called "Beer Maker Dinners" for consumers held at an on-sale retail licensed premises. SB 1548 (Murray, Chapter 670, Statutes of 2006) authorized beer manufacturers and wholesalers to offer beer samples (not to exceed eight ounces per person, per day) to individuals of legal drinking age at on-sale retail licensed premises under specified conditions. FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No SUPPORT: California Craft Brewers Association OPPOSITION: None received AB 776 (Cooper) Page 5 of ?