Bill Text: CA AB1295 | 2015-2016 | Regular Session | Chaptered
Bill Title: Craft distillers: licenses.
Sponsorship: Slight Partisan Bill (Democrat 21-8)
Status: (Passed) 2015-10-08 - Chaptered by Secretary of State - Chapter 640, Statutes of 2015. [AB1295 Detail]
Download: California-2015-AB1295-Chaptered.html
BILL NUMBER: AB 1295 CHAPTERED
BILL TEXT
CHAPTER 640
FILED WITH SECRETARY OF STATE OCTOBER 8, 2015
APPROVED BY GOVERNOR OCTOBER 8, 2015
PASSED THE SENATE SEPTEMBER 9, 2015
PASSED THE ASSEMBLY SEPTEMBER 11, 2015
AMENDED IN SENATE SEPTEMBER 4, 2015
AMENDED IN SENATE JULY 16, 2015
AMENDED IN SENATE JULY 13, 2015
AMENDED IN SENATE JUNE 30, 2015
INTRODUCED BY Assembly Members Levine, Achadjian, Bloom, Chang,
Dahle, Daly, Eggman, Beth Gaines, Cristina Garcia, Gomez, Gordon,
Gray, Roger Hern�ndez, Jones, Jones-Sawyer, Nazarian, Perea, and
Quirk
(Coauthors: Assembly Members Bigelow, Ch�vez, Dodd, Gallagher,
Maienschein, McCarty, and Mark Stone)
(Coauthors: Senators Hancock, Hill, Wieckowski, and Wolk)
FEBRUARY 27, 2015
An act to amend Sections 23363.1, 23771, and 23772 of, and to add
Article 6 (commencing with Section 23500) to Chapter 3 of Division 9
of, the Business and Professions Code, relating to alcoholic
beverages.
LEGISLATIVE COUNSEL'S DIGEST
AB 1295, Levine. Craft distillers: licenses.
The Alcoholic Beverage Control Act contains various provisions
regulating the application for, the issuance of, the suspension of,
and the conditions imposed upon, alcoholic beverage licenses by the
Department of Alcoholic Beverage Control. Existing law provides for
various annual fees for the issuance of alcoholic beverage licenses,
depending upon the type of license issued.
This bill, the Craft Distillers Act of 2015, would authorize the
department to issue a craft distiller's license to manufacture
distilled spirits, subject to specified conditions, including that
the licensee manufacture no more than 100,000 gallons of distilled
spirits per fiscal year, excluding brandy the craft distiller
manufactures or has manufactured for them. The bill would allow the
craft distiller's licensee to sell distilled spirits to specified
consumers, to own interests in on-sale retail licenses, and to sell
beer, wines, brandies, and distilled spirits to consumers for
consumption on the premises of a bona fide eating place, as provided.
The bill would impose an original fee and an annual renewal fee for
the license, which would be deposited in the Alcohol Beverage Control
Fund.
The Alcoholic Beverage Control Act authorizes a licensed distilled
spirits manufacturer to conduct tastings of distilled spirits
produced or bottled by, or produced or bottled for, the licensee, on
the licensed premises, under specified conditions, including that
tasting not be given in the form of a cocktail or mixed drink.
This bill would extend that authorization to a licensed craft
distiller and would revise the tasting conditions by allowing a
tasting to be given in the form of a cocktail or mixed drink.
Existing law prohibits a distilled spirits manufacturer's or
distilled spirits manufacturer's agent's license from being held by a
person that holds any ownership or interest in any distilled spirits
wholesaler's, rectifier's, or retailer's license, as specified.
This bill would additionally prohibit a distilled spirits
manufacturer's or distilled spirits manufacturer's agent's license
from being held by a person that holds any ownership or interest in a
craft distiller's license.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 23363.1 of the Business and Professions Code is
amended to read:
23363.1. (a) A distilled spirits manufacturer's license or a
craft distiller's license authorizes the licensee to conduct tastings
of distilled spirits produced or bottled by, or produced or bottled
for, the licensee, on or off the licensee's premises.
(b) (1) Distilled spirits tastings may be conducted by the
licensee off the licensee's premises only for an event sponsored by a
nonprofit organization. A distilled spirits manufacturer shall not
sell or solicit sales of distilled spirits at an event. The
sponsoring organization shall first obtain a permit from the
department.
(2) For purposes of this subdivision, "nonprofit organization"
does not include any community college or other institution of higher
learning, as defined in the Education Code, nor does it include any
officially recognized club, fraternity, or sorority, whether or not
that entity is located on or off the institution's campus.
(c) Tastings on the licensee's premises shall be subject to the
following conditions:
(1) The total volume of tastings of distilled spirits shall not
exceed one and one-half ounces per individual per day.
(2) Tastings shall only include the products that are authorized
to be produced or bottled by or for the licensee.
(3) A person under 21 years of age shall not serve tastes of
distilled spirits.
(d) Notwithstanding Section 25600, the licensee may provide
distilled spirits without charge for any tastings conducted pursuant
to this section. The licensee may charge for tastings conducted by
the licensee on its licensed premises.
(e) This section shall not relieve the holder of a distilled
spirits manufacturer's license of any civil or criminal liability
arising out of a violation of Section 25602.
SEC. 2. Article 6 (commencing with Section 23500) is added to
Chapter 3 of Division 9 of the Business and Professions Code, to
read:
Article 6. Craft Distiller's Licenses
23500. This act shall be known, and may be referenced as, the
Craft Distillers Act of 2015.
23501. The Legislature hereby finds and declares all of the
following:
(a) The regulation and licensing of the sale of alcoholic
beverages in this state has operated for over 80 years under what is
commonly referred to as the "three-tier system," which generally
prohibits vertical integration within the distilled spirits industry.
This system has helped in protecting against undue marketing
influences within the distilled spirits industry and assisted the
goals of promoting temperance and reasonable regulation of the sale
of distilled spirits within the state. In addition, this system has
helped create thousands of jobs and billions of dollars in economic
development within California.
(b) Small craft distillers have begun to operate in this state,
and these craft distillers have begun to increase employment and
provide jobs and economic development in various locations within the
state.
(c) It is the intent of the Legislature, in enacting this act, to
encourage the development of the craft distilling industry within the
state by enacting various limited exemptions to the general
provisions of the three-tier system, while also continuing to uphold
and support the three-tier system as the appropriate mechanism for
regulating and licensing the sale of distilled spirits in California.
23502. (a) The department may issue a craft distiller's license
to a person that has facilities and equipment for the purposes of,
and is engaged in, the commercial manufacture of distilled spirits.
The craft distiller's license authorizes the licensee to do all of
the following:
(1) Manufacture distilled spirits. A licensed craft distiller may
manufacture up to 100,000 gallons of distilled spirits per fiscal
year (July 1 through June 30), excluding brandy the craft distiller
manufactures or has manufactured for them pursuant to a brandy
manufacturer license, as reported to the department in the manner
prescribed by the department for the fiscal year prior to the date of
submitting an application for the license.
(2) Package, rectify, mix, flavor, color, label, and export only
those distilled spirits manufactured by the licensee.
(3) Only sell distilled spirits that are manufactured and packaged
by the licensee solely to a wholesaler, manufacturer, winegrower,
manufacturer's agent, or rectifier that holds a license authorizing
the sale of distilled spirits or to persons that take delivery of
those distilled spirits within this state for delivery or use without
the state.
(4) Deal in warehouse receipts.
(b) A craft distiller's license shall not be issued to any person,
any officer, director, employee, or agent of such person, or any
person who is affiliated with, directly or indirectly, a person that
manufactures or has manufactured for them more than 100,000 gallons
of distilled spirits per year within or without the state, excluding
brandy it manufactures or has manufactured for them pursuant to a
brandy manufacturer license, or to any person that is affiliated
with, directly or indirectly, a wholesaler.
(c) (1) The fee for an original craft distiller's license issued
pursuant to this section shall be consistent with the distilled
spirits manufacturer's license and shall be adjusted pursuant to
subdivisions (b) and (c) of Section 23320.
(2) The annual license fee for a craft distiller's license shall
be consistent with the distilled spirits manufacturer's license and
shall be adjusted pursuant to subdivisions (b) and (c) of Section
23320.
(3) All moneys collected as fees pursuant to this section shall be
deposited in the Alcohol Beverage Control Fund as provided in
Section 25761.
(d) A licensed craft distiller shall report to the department, at
the time of renewal in the manner prescribed by the department, the
amount of distilled spirits manufactured, excluding brandy
manufactured by or for the licensee pursuant to a brandy manufacturer
license, during the previous fiscal year. If the report to the
department establishes that the licensee no longer qualifies to hold
a craft distiller's license, the department shall renew the license
as a distilled spirits manufacturer's license.
23504. Notwithstanding any other provision, a licensed craft
distiller may sell up to the equivalent of 2.25 liters in any
combination of prepackaged containers per day per consumer of
distilled spirits manufactured by the licensee at its premises to a
consumer attending an instructional tasting conducted by the licensee
on its licensed premises pursuant to subdivision (c) of Section
23363.1.
23506. (a) Notwithstanding any other provision of this division,
a licensed craft distiller or one or more of its direct or indirect
subsidiaries of which the licensed craft distiller owns not less than
a 51-percent interest, who manufactures or produces, bottles,
processes, imports, or sells distilled spirits under a craft
distiller's license or any other license issued pursuant to this
division, or any officer or director of, or any person holding any
interest in, those persons may serve as an officer or director of,
and may hold the ownership of any interest or any financial or
representative relationship in, any on-sale license, or the business
conducted under that license, provided that, except in the case of a
holder of on-sale general licenses for airplanes and duplicate
on-sale general licenses for air common carriers, all of the
following conditions are met:
(1) The on-sale licensee purchases all alcoholic beverages sold
and served only from California wholesale licensees.
(2) The number of distilled spirits items by brand offered for
sale by the on-sale licensee that are manufactured, produced,
bottled, processed, imported, or sold by the licensed craft distiller
or by the subsidiary of which the licensed craft distiller owns not
less than 51 percent, or by any officer or director of, or by any
person holding any interest in, those persons does not exceed 15
percent of the total distilled spirits items by brand listed and
offered for sale by the on-sale licensee selling and serving that
distilled spirit. Notwithstanding paragraph (1), distilled spirits
sold pursuant to this provision may be purchased from a California
licensed craft distiller so long as the distilled spirits purchased
are produced or bottled by, or produced and packaged for, the same
licensed craft distiller that holds an interest in the on-sale
license and such direct sales do not involve more than two on-sale
licenses in which the licensed craft distiller or any person holding
an interest in the licensed craft distiller holds any interest,
directly or indirectly, either individually or in combination or
together with each other in the aggregate.
(3) None of the persons specified in this section may have any of
the interests specified in this section in more than two on-sale
licenses.
(b) Notwithstanding any other provision of this division, a
licensed craft distiller that has an interest in one or more on-sale
retail licenses pursuant to this section may continue to hold that
interest in the event the licensee no longer qualifies as a craft
distiller, provided that the interest was first obtained at a time
when the licensee did hold a craft distiller's license pursuant to
Section 23502.
(c) A craft distiller licensee may sell all beers, wines,
brandies, or distilled spirits to consumers for consumption on the
premises in a bona fide eating place as defined in Section 23038,
which is located on the licensed premises or on premises owned by the
licensee that are contiguous licensed premises and which is operated
by and for the licensee, provided that any alcoholic beverage
products not manufactured or produced by the licensee must be
purchased from a licensed wholesaler. Beer, wine, and brandy may be
used in the preparation of food and beverages in the bona fide public
eating place for consumption on the premises.
23508. (a) A licensed craft distiller may also have upon its
licensed premises all beers, wines, and distilled spirits, regardless
of source, for sale or service only to guests during private events
or private functions not open to the general public. Alcoholic
beverage products sold at the premises that are not manufactured or
produced and bottled by, or manufactured or produced and packaged
for, the licensed craft distiller shall be purchased by the licensed
craft distiller only from a licensed wholesaler.
(b) Notwithstanding any other provision of this division, in the
event that the licensee no longer qualifies as a craft distiller due
to the amount of distilled spirits reported pursuant to Section
23502, the licensee may continue to hold the privileges granted by
this section.
SEC. 3. Section 23771 of the Business and Professions Code is
amended to read:
23771. A distilled spirits license of any kind, except a
distilled spirits manufacturer's, a craft distiller's, or a distilled
spirits manufacturer's agent's license, shall not be issued to any
person, or to any officer, director, employee, or agent of any person
that manufactures distilled spirits within or without this state.
SEC. 4. Section 23772 of the Business and Professions Code is
amended to read:
23772. (a) A distilled spirits manufacturer's or distilled
spirits manufacturer's agent's license shall not be held by any
person that holds any ownership or interest, directly or indirectly,
by stock ownership, interlocking directors, trusteeship, loan,
mortgage, or lien on any personal or real property, or otherwise, in
any craft distiller's, distilled spirits wholesaler's, rectifier's,
or retailer's license.
(b) The provisions of this section shall not apply to the
financial or representative relationship between a manufacturer,
winegrower, manufacturer's agent, rectifier, distiller, bottler,
importer, or wholesaler, or any officer, director, or agent of that
person, and a person holding only one of the following types of
licenses:
(1) On-sale general license for a bona fide club.
(2) Club license (issued under Article 4 (commencing at Section
23425) of Chapter 3).
(3) Veterans' club license (issued under Article 5 (commencing at
Section 23450) of Chapter 3).
(4) On-sale license for boats, trains, sleeping cars, or airplanes
where the alcoholic beverages produced or sold by the manufacturer,
winegrower, manufacturer's agent, rectifier, bottler, importer, or
wholesaler or any officer, director, or agent of that person are not
sold, furnished, or given, directly or indirectly, to the on-sale
licensee.
