The Alcoholic Beverage Control Act contains provisions for various types of licenses that permit licensees to furnish alcoholic beverages under designated circumstances, including an on-sale general license for a wine, food and art cultural museum and educational center located in the County of Napa that would authorize described persons to sell, furnish, or give alcoholic beverages for consumption on the premises and various off-sale privileges.

This bill would revise the provisions relating to ownership of any interest in the premises and license of a wine, food and art cultural museum and educational center and would authorize a similar on-sale general license for a wine and food cultural museum and educational center, located in the County of Sonoma, that would authorize described persons to sell, furnish, or give alcoholic beverages for consumption on the premises and various off-sale privileges.

This bill would make legislative findings and declarations as to the necessity of a special statute for the County of Sonoma.

The Alcoholic Beverage Control Act contains provisions for various types of licenses that permit licensees to furnish alcoholic beverages under designated circumstances, including an on-sale general license for a wine, food and art cultural museum and educational center located in the County of Napa that would authorize described persons to sell, furnish, or give alcoholic beverages for consumption on the premises and various off-sale privileges.

This bill would revise the provisions relating to ownership of any interest in the premises and license of a wine, food and art cultural museum and educational center and would authorize a similar on-sale general license for a wine and food cultural museum and educational center, located in the County of Sonoma, that would authorize described persons to sell, furnish, or give alcoholic beverages for consumption on the premises and various off-sale privileges.

This bill would make legislative findings and declarations as to the necessity of a special statute for the County of Sonoma.

The Alcoholic Beverage Control Act contains provisions for various types of licenses that permit licensees to furnish alcoholic beverages under designated circumstances, including an on-sale general license for a wine, food and art cultural museum and educational center located in the County of Napa that would authorize described persons to sell, furnish, or give alcoholic beverages for consumption on the premises and various off-sale privileges.

This bill would revise the provisions relating to ownership of any interest in the premises and license of a wine, food and art cultural museum and educational center and would authorize a similar on-sale general license for a wine and food cultural museum and educational center, located in the County of Sonoma, that would authorize described persons to sell, furnish, or give alcoholic beverages for consumption on the premises and various off-sale privileges.

This bill would make legislative findings and declarations as to the necessity of a special statute for the County of Sonoma.

 THIRD READING  

Bill No: AB 297

Author:

:

Vote:

SENATE GOVERNMENTAL ORG. COMMITTEE: 13-0, 6/27/17

AYES: Dodd, Berryhill, Bradford, Cannella, Gaines, Galgiani, Glazer, Hill, Hueso, Lara, Mendoza, Portantino, Vidak

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 69-0, 5/18/17 (Consent) - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST: This bill authorizes an on-sale general license for a wine and food cultural museum and educational center, located in the County of Sonoma. The license would allow the center to sell, furnish, or give alcoholic beverages for consumption on the premises and to have various off-sale privileges.

ANALYSIS:

Existing law:

1. Establishes the Department of Alcoholic Beverage Control (ABC) and grants it exclusive authority to administer the provisions of the ABC Act in accordance with laws enacted by the Legislature.
2. Provides, under the ABC Act, for the issuance of various alcoholic beverage licenses, including the imposition of fees, conditions, and restrictions in connection with the issuance of those licenses.
3. Separates the alcoholic beverage industry into three component parts, or tiers, of the manufacturer (including breweries, wineries, and distilleries), wholesaler, and retailer (both on-sale and off-sale). This is referred to as the “tied-house” law or “three-tier” system.
4. Provides an on-sale general license for a wine, food and art cultural museum and educational center located in the County of Napa. The license authorizes the center to sell, furnish, or give alcoholic beverages for consumption on the premises and to have off-sale privileges, as specified.

This bill:

1. Provides for an on-sale general license for a wine and food cultural museum and educational center and authorizes those persons to sell, furnish, or give alcoholic beverages for consumption on the premises and to have various off-sale privileges.
2. States that “a wine and food cultural museum and educational center” is a person that meets all the following conditions:
   1. The retail premises shall include an auditorium, exhibition gallery, teaching kitchen, and library and may be adjacent to a bona fide eating place, as defined.
   2. The premises is located in the County of Sonoma, operated by a nonprofit entity that is exempt from payment of income taxes as an organization described in Section 501(c)(3) of the Internal Revenue Code, and includes real estate improvements of a value of at least $10 million.
3. Provides that the Department of ABC shall upon request and qualification issue a licensee located in the County of Sonoma a duplicate of the original license for premises located on commonly owned, leased, or managed property contiguous to, or in close proximity, as defined, to the original licensed premises.
4. States that there shall be no limit as to the number of events held on a licensed premises or duplicate premises at which a person or persons issued caterer’s permits may sell alcoholic beverages so long as the on-sale general licensee surrenders its license privileges for any portion of the premises at which a catered event is held for the duration of the event.
5. Specifies that a licensee licensed under this bill shall not be included in the definition of “public premises” under Business and Professions Code, Section 23039.
6. Allows the license issued pursuant to this bill to be transferred to another qualified person, but not to another location.
7. Prohibits a licensee specified in this bill from purchasing alcoholic beverages for sale in this state other than from a wholesaler or winegrower licensee and allows licensees to donate wine to a person licensed under this bill.
8. Allows a manufacturer, winegrower, manufacturer’s agent, California winegrower’s agent, rectifier, distiller, bottler, or the holder of an importer’s general license to hold the ownership of any interest, directly or indirectly, in the premises and in the license, issued pursuant to this bill, to serve as an officer, director, employee, or agent of that licensee, and to sponsor or fund educational programs, special fundraising and promotional events, improvements in capital projects, and the development of exhibits or facilities of and for that licensee, as specified.
9. Requires an applicant for an original on-sale general license for a wine and food cultural museum and educational center to, at the time of filing the application for the license, accompany the application with a fee of $12,000. The annual renewal fee for a license issued pursuant to this bill shall be the same as the applicable renewal fee for an on-sale general license.
10. Requires an applicant for a duplicate on-sale general license for a wine and food cultural museum and educational center to, at the time of filing the application for the license, accompany the application with a fee equal to the license fee for an on-sale general license. The annual renewal fee for a duplicate license issued pursuant to this bill shall be the same as the applicable renewal fee for an on-sale general license.
11. Provides legislative findings and declarations as to the necessity of a special statute for the County of Sonoma.
12. Makes technical and non-substantive changes to existing law.

Background

Purpose of the bill. According to the author's office, “AB 297 extends the special Type 78 liquor license to the California Wine Center. This bill will strengthen the developing wine industry and culture in Sonoma County.”

Additionally, the author’s office states that, “the California Wine Center will be a key feature in the recently renovated Museum on the Square area of downtown Santa Rosa. Its presence will assist in revitalizing the community by bringing together experts in wine, leaders in the industry, wine industry employees, and tourists. The California Wine Center will also assist the wine industry by acting as a link between small and medium sized wineries and the increasingly demanding international export market. Further, the California Wine Center will function as a centrally located educational facility for the wine industry’s growing workforce. It will offer professional development classes and training for the various wine industry focused careers.”

Further, the author’s office contends that, "the City of Santa Rosa is entering a phase of robust tourism development and wine country tourism is booming. Sonoma County has the greatest potential for development in the tourism sector due to new infrastructure and transportation expansions. These advancements will allow more access to surrounding wine regions and ease vehicle load on the roads.”

Lastly, the author’s office adds that, “the 2015 Sonoma County Annual Tourism Report identifies multiple areas in which the California Wine Center could improve the economic strength of Santa Rosa through its development. Since 2006, tourism to Sonoma County has steadily increased along with tourist spending. As the wine industry continues to grow in Sonoma County, a single destination to coordinate wine country visits, facilitate communication between wineries, and support industry functions is becoming more necessary.”

The California Wine Center. The California Wine Center will be comprised of exhibition areas, a full-service à la carte food and beverage operation, meeting and event spaces with catering, and retail sale of wine and wine-related products.

With free admission, the California Wine Center will display and present artifacts and historical items to help tell the story of California’s wine industry from its earliest days to the present. The California Wine Center will also serve as a venue to educate and engage visitors and professionals on the future of the wine industry and especially the ever-increasing role of technology in wine cultivation, production, marketing, and distribution. Exhibition and education spaces will be complemented by wine tasting, meeting and event spaces designed for use by industry professionals, the community, and for other private events.

Additionally, the California Wine Center will serve as a centrally located education center for area residents and others who wish to find employment in the wine industry or increase their opportunity for professional growth through education and certification. Located at the City of Santa Rosa’s primary transportation hub, and a short walk from the soon-to-open SMART rail station, the California Wine Center will be easily accessible to residents from across Sonoma County. A primary goal of the California Wine Center will be to educate and equip members of the community with the means to enter the wine industry workforce. This will be accomplished by providing free or reduced cost space to organizations that provide classes leading to industry certification, such as the Society of Wine Educators.

The California Wine Center will encompass 25,000 square feet on two floors. The lower level will include permanent and temporary exhibits, a 120 seat auditorium, several private event/flexible use spaces, offices and support areas. While the second floor will offer a wine focused marketplace and cafe with à la carte food service (with indoor and outdoor seating), retail sale of wine and wine-related items, additional private event/flexible use spaces, wine country visitor concierge services, and trade services for industry suppliers and buyers.

Additionally, the California Wine Center is forecasted to employ more than 60 full time workers, ranging from the executive suite to entry-level service positions.

Type 78 license. In 2000, SB 1511 (Chesbro, Chapter 231, Statutes of 2000) created a new license type, the Type 78, in the ABC Act. The Type 78 license is an on-sale general license that authorizes a wine, food and art cultural museum, and educational center located in Napa County to sell, furnish, or give alcoholic beverages for consumption on the licensed premises, and to have specified off-sale privileges.

Among several license qualifications, the Type 78 license requires that the center be operated by a non-profit entity. The non-profit is allowed to accept donated wine. This permits the non-profit entity to sell the donated alcohol for a profit and use the proceeds to support the operational costs of the center. The license also allows wine manufacturers to serve as officers and directors and permits wine manufacturers to give financial support to the Center, under specified conditions. The cost of obtaining a Type 78 license is twelve thousand dollars, and the annual renewal fee for the license is the same as an on-sale general license.

The Type 78 license was created specifically for the American Center for Wine, Food & the Arts (COPIA), a non-profit museum and educational center in downtown Napa, dedicated to wine, food and the arts of American culture.

This bill slightly modifies license parameters to provide that the California Wine Center in Santa Rosa is also eligible to receive a Type 78 license.

Related/Prior Legislation

SB 127 (Chesbro, Chapter 171, Statutes of 2005) made changes to an existing license category in the ABC Act for a wine, food and art cultural museum, and educational center located in Napa County. Among other things, the bill deleted an the provision of law that limited the center to the sale of no more than 6,000 cases of wine per calendar year labeled with and otherwise bearing only the name, logo, trademark and/or other proprietary art owned by the wine, food and cultural museum and educational center licensee.

SB 1511 (Chesbro, Chapter 231, Statutes of 2000) created an on-sale general license for a wine, food and art cultural museum, and educational center located in Napa County and authorizes the center to sell, furnish, or give alcoholic beverages for consumption on the licensed premises. The bill also authorized the licensee to have off-sale privileges as well, so long as no more than 6,000 cases per calendar year are sold of wine labeled with and otherwise bearing only the name, logo, trademark and/or other proprietary art owned by the center licensee. In no event may the wine sold off-sale bear a name, logo, trademark and/or other proprietary art or statement identifying any other licensee.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 7/10/17)

California Travel Association

City of Santa Rosa

Family Winemakers of California

Santa Rosa Metro Chamber

Supervisor Shirlee Zane, Third District, Sonoma County Board of Supervisors

Wine Institute

OPPOSITION: (Verified 7/10/17)

Alcohol Justice

ARGUMENTS IN SUPPORT: Proponents state that, “this license will be an important tool for the California Wine Center to attain viability and stability for the long term. Specifically, it will allow other ABC license holders to serve on its board and work in its operation without violating California's tied-house laws and will permit the nonprofit to accept donated alcoholic beverage product and use it to advance its mission through the sale on- or off-premise.”

ARGUMENTS IN OPPOSITION: Alcohol Justice writes that this “is a special interest bill to authorize alcohol service at one special location. Such authorizations should not be done in a haphazard manner, location by location. In addition, any increase in availability of alcohol inevitably leads to an increase in alcohol related harm.”

ASSEMBLY FLOOR: 69-0, 5/18/17

AYES: Acosta, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bocanegra, Bonta, Brough, Burke, Caballero, Cervantes, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Eggman, Flora, Fong, Gallagher, Cristina Garcia, Eduardo Garcia, Gomez, Gonzalez Fletcher, Gray, Grayson, Harper, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood

NO VOTE RECORDED: Aguiar-Curry, Calderon, Chau, Frazier, Friedman, Gipson, Gloria, Holden, Mullin, Santiago, Rendon

Prepared by:

7/12/17 11:28:46

**** END ****

SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION

Senator Bill Dodd

Chair

2017 - 2018 Regular

Bill No: 297 Hearing Date: 6/27/2017

SUBJECT: Alcoholic beverages: licenses: wine and food cultural museum and educational center

DIGEST: This bill authorizes an on-sale general license for a wine and food cultural museum and educational center, located in the County of Sonoma. The license would allow the center to sell, furnish, or give alcoholic beverages for consumption on the premises and to have various off-sale privileges.

ANALYSIS:

Existing law:

1. Establishes the Department of Alcoholic Beverage Control (ABC) and grants it exclusive authority to administer the provisions of the ABC Act in accordance with laws enacted by the Legislature.
2. Provides, under the ABC Act, for the issuance of various alcoholic beverage licenses, including the imposition of fees, conditions, and restrictions in connection with the issuance of those licenses.
3. Separates the alcoholic beverage industry into three component parts, or tiers, of the manufacturer (including breweries, wineries, and distilleries), wholesaler, and retailer (both on-sale and off-sale). This is referred to as the “tied-house” law or “three-tier” system.
4. Provides an on-sale general license for a wine, food and art cultural museum and educational center located in the County of Napa. The license authorizes the center to sell, furnish, or give alcoholic beverages for consumption on the premises and to have off-sale privileges, as specified.

This bill:

1. Provides for an on-sale general license for a wine and food cultural museum and educational center and authorizes those persons to sell, furnish, or give alcoholic beverages for consumption on the premises and to have various off-sale privileges.
2. States that “a wine and food cultural museum and educational center” is a person that meets all the following conditions:
   1. The retail premises shall include an auditorium, exhibition gallery, teaching kitchen, and library and may be adjacent to a bona fide eating place, as defined.
   2. The premises is located in the County of Sonoma, operated by a nonprofit entity that is exempt from payment of income taxes as an organization described in Section 501(c)(3) of the Internal Revenue Code, and includes real estate improvements of a value of at least $10 million.
3. Provides that the Department of ABC shall upon request and qualification issue a licensee located in the County of Sonoma a duplicate of the original license for premises located on commonly owned, leased, or managed property contiguous to, or in close proximity, as defined, to the original licensed premises.
4. States that there shall be no limit as to the number of events held on a licensed premises or duplicate premises at which a person or persons issued caterer’s permits may sell alcoholic beverages so long as the on-sale general licensee surrenders its license privileges for any portion of the premises at which a catered event is held for the duration of the event.
5. Specifies that a licensee licensed under this bill shall not be included in the definition of “public premises” under Business and Professions Code, Section 23039.
6. Allows the license issued pursuant to this bill to be transferred to another qualified person, but not to another location.
7. Prohibits a licensee specified in this bill from purchasing alcoholic beverages for sale in this state other than from a wholesaler or winegrower licensee and allows licensees to donate wine to a person licensed under this bill.
8. Allows a manufacturer, winegrower, manufacturer’s agent, California winegrower’s agent, rectifier, distiller, bottler, or the holder of an importer’s general license to hold the ownership of any interest, directly or indirectly, in the premises and in the license, issued pursuant to this bill, to serve as an officer, director, employee, or agent of that licensee, and to sponsor or fund educational programs, special fundraising and promotional events, improvements in capital projects, and the development of exhibits or facilities of and for that licensee, as specified.
9. Requires an applicant for an original on-sale general license for a wine and food cultural museum and educational center to, at the time of filing the application for the license, accompany the application with a fee of $12,000. The annual renewal fee for a license issued pursuant to this bill shall be the same as the applicable renewal fee for an on-sale general license.
10. Requires an applicant for a duplicate on-sale general license for a wine and food cultural museum and educational center to, at the time of filing the application for the license, accompany the application with a fee equal to the license fee for an on-sale general license. The annual renewal fee for a duplicate license issued pursuant to this bill shall be the same as the applicable renewal fee for an on-sale general license.
11. Provides legislative findings and declarations as to the necessity of a special statute for the County of Sonoma.
12. Makes technical and non-substantive changes to existing law.

Background

Purpose of the bill. According to the author's office, “AB 297 extends the special Type 78 liquor license to the California Wine Center. This bill will strengthen the developing wine industry and culture in Sonoma County.”

Additionally, the author’s office states that, “the California Wine Center will be a key feature in the recently renovated Museum on the Square area of downtown Santa Rosa. Its presence will assist in revitalizing the community by bringing together experts in wine, leaders in the industry, wine industry employees, and tourists. The California Wine Center will also assist the wine industry by acting as a link between small and medium sized wineries and the increasingly demanding international export market. Further, the California Wine Center will function as a centrally located educational facility for the wine industry’s growing workforce. It will offer professional development classes and training for the various wine industry focused careers.”

Further, the author’s office contends that, "the City of Santa Rosa is entering a phase of robust tourism development and wine country tourism is booming. Sonoma County has the greatest potential for development in the tourism sector due to new infrastructure and transportation expansions. These advancements will allow more access to surrounding wine regions and ease vehicle load on the roads.”

Lastly, the author’s office adds that, “the 2015 Sonoma County Annual Tourism Report identifies multiple areas in which the California Wine Center could improve the economic strength of Santa Rosa through its development. Since 2006, tourism to Sonoma County has steadily increased along with tourist spending. As the wine industry continues to grow in Sonoma County, a single destination to coordinate wine country visits, facilitate communication between wineries, and support industry functions is becoming more necessary.”

The California Wine Center. The California Wine Center will be comprised of exhibition areas, a full-service à la carte food and beverage operation, meeting and event spaces with catering, and retail sale of wine and wine-related products.

With free admission, the California Wine Center will display and present artifacts and historical items to help tell the story of California’s wine industry from its earliest days to the present. The California Wine Center will also serve as a venue to educate and engage visitors and professionals on the future of the wine industry and especially the ever-increasing role of technology in wine cultivation, production, marketing, and distribution. Exhibition and education spaces will be complemented by wine tasting, meeting and event spaces designed for use by industry professionals, the community, and for other private events.

Additionally, the California Wine Center will serve as a centrally located education center for area residents and others who wish to find employment in the wine industry or increase their opportunity for professional growth through education and certification. Located at the City of Santa Rosa’s primary transportation hub, and a short walk from the soon-to-open SMART rail station, the California Wine Center will be easily accessible to residents from across Sonoma County. A primary goal of the California Wine Center will be to educate and equip members of the community with the means to enter the wine industry workforce. This will be accomplished by providing free or reduced cost space to organizations that provide classes leading to industry certification, such as the Society of Wine Educators.

The California Wine Center will encompass 25,000 square feet on two floors. The lower level will include permanent and temporary exhibits, a 120 seat auditorium, several private event/flexible use spaces, offices and support areas. While the second floor will offer a wine focused marketplace and cafe with à la carte food service (with indoor and outdoor seating), retail sale of wine and wine-related items, additional private event/flexible use spaces, wine country visitor concierge services, and trade services for industry suppliers and buyers.

Additionally, the California Wine Center is forecasted to employ more than 60 full time workers, ranging from the executive suite to entry-level service positions.

Type 78 license. In 2000, SB 1511 (Chesbro) created a new license type, the Type 78, in the ABC Act. The Type 78 license is an on-sale general license that authorizes a wine, food and art cultural museum, and educational center located in Napa County to sell, furnish, or give alcoholic beverages for consumption on the licensed premises, and to have specified off-sale privileges.

Among several license qualifications, the Type 78 license requires that the center be operated by a non-profit entity. The non-profit is allowed to accept donated wine. This permits the non-profit entity to sell the donated alcohol for a profit and use the proceeds to support the operational costs of the center. The license also allows wine manufacturers to serve as officers and directors and permits wine manufacturers to give financial support to the Center, under specified conditions. The cost of obtaining a Type 78 license is twelve thousand dollars, and the annual renewal fee for the license is the same as an on-sale general license.

The Type 78 license was created specifically for the American Center for Wine, Food & the Arts (COPIA), a non-profit museum and educational center in downtown Napa, dedicated to wine, food and the arts of American culture.

This bill slightly modifies license parameters to provide that the California Wine Center in Santa Rosa is also eligible to receive a Type 78 license.

Prior/Related Legislation

SB 127 (Chesbro, Chapter 171, Statutes of 2005) made changes to an existing license category in the ABC Act for a wine, food and art cultural museum, and educational center located in Napa County. Among other things, the bill deleted an the provision of law that limited the center to the sale of no more than 6,000 cases of wine per calendar year labeled with and otherwise bearing only the name, logo, trademark and/or other proprietary art owned by the wine, food and cultural museum and educational center licensee.

SB 1511 (Chesbro, Chapter 231, Statutes of 2000) created an on-sale general license for a wine, food and art cultural museum, and educational center located in Napa County and authorizes the center to sell, furnish, or give alcoholic beverages for consumption on the licensed premises. The bill also authorized the licensee to have off-sale privileges as well, so long as no more than 6,000 cases per calendar year are sold of wine labeled with and otherwise bearing only the name, logo, trademark and/or other proprietary art owned by the center licensee. In no event may the wine sold off-sale bear a name, logo, trademark and/or other proprietary art or statement identifying any other licensee.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT:

California Travel Association

City of Santa Rosa

Family Winemakers of California

Santa Rosa Metro Chamber

Supervisor Shirlee Zane, Third District, Sonoma County Board of Supervisors

Wine Institute

OPPOSITION:

Alcohol Justice

ARGUMENTS IN SUPPORT: Proponents state that, “this license will be an important tool for the California Wine Center to attain viability and stability for the long term. Specifically, it will allow other ABC license holders to serve on its board and work in its operation without violating California's tied-house laws and will permit the nonprofit to accept donated alcoholic beverage product and use it to advance its mission through the sale on- or off-premise.”

ARGUMENTS IN OPPOSITION: Alcohol Justice writes that this “is a special interest bill to authorize alcohol service at one special location. Such authorizations should not be done in a haphazard manner, location by location. In addition, any increase in availability of alcohol inevitably leads to an increase in alcohol related harm.”

Date of Hearing: May 10, 2017

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 297

Author:(Levine) – As Introduced Ver:February 6, 2017

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill authorizes the California Wine Center, a non-profit entity in Sonoma County, to sell, furnish, or give alcoholic beverages for consumption on the premises and off-sale privileges, as specified.

FISCAL EFFECT:

No additional state costs.

COMMENTS:

Background and Purpose. SB 1511 of 2000 (Chesbro), Chapter 231, Statutes of 2000, created a new license category (Type 78) for the Copia: American Center for Wine, Food and the Arts museum and educational center located in Napa County. As a result, Copia could sell, furnish, or give alcoholic beverages for consumption on the licensed premises. This newly created Type 78 license can provide a range of privileges to eligible nonprofits, such as "tied-house" exception that permitted wine suppliers to give financial support to the licensee, and the ability for the nonprofit to sell donated wine and use the proceeds to support the organizational costs of the organization.

According to the author’s office, AB 297 will extend the same privileges for the Type 78 license to the California Wine Center in Sonoma County. This Center will be a key feature in the recently renovated Museum on the Square area of downtown Santa Rosa, and the author notes that its presence will assist in revitalizes the community by bringing together experts in wine, leaders in the industry, and tourists.

Analysis Prepared by: Luke Reidenbach / APPR. / (916) 319-2081

Date of Hearing: April 27, 2017

ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION

Adam Gray, Chair

ABPCA Bill Id:AB 297 (

Author:Levine) – As Introduced Ver:February 6, 2017

SUBJECT: Alcoholic beverages: licenses: wine and food cultural museum and educational center

SUMMARY: Would authorize the California Wine Center, a non-profit entity located in County of Sonoma to sell, furnish, or give alcoholic beverages for consumption on the premises and off-sale privileges, as specified. Specifically, this bill:

1) Provides for an on-sale general license for a wine and food cultural museum and educational center and authorizes those persons to sell, furnish, or give alcoholic beverages for consumption on the premises and off-sale privileges, as described.

2) States “a wine and food cultural museum and educational center” is a person that meets all the following conditions:

(a) The retail premises shall include an auditorium, exhibition gallery, teaching kitchen, and library and may be adjacent to a bona fide eating-place as defined in Business and Professions Code Section 23038.

(b) The premises is located in the County of Sonoma, operated by a nonprofit entity that is exempt from payment of income taxes as an organization described in B & P Section 501(c)(3) of the Internal Revenue Code, and includes real estate improvements of a value of at least ten million dollars ($10,000,000).

3) Provides the Department of Alcoholic Beverage Control (ABC) shall upon request and qualification issue a licensee located in the County of Sonoma a duplicate of the original license for a premises located on commonly owned, leased, or managed property contiguous to, or in close proximity to the original licensed premises, as defined.

4) States there shall be no limit as to the number of events held on a licensed premises or duplicate premises at which a person or persons issued caterer’s permits under B & P Section 23399 may sell alcoholic beverages so long as the on-sale general licensee surrenders its license privileges for any portion of the premises at which a catered event is held for the duration of the event. A licensee licensed under this section shall not be included in the definition of “public premises”, as defined.

5) States a license issued pursuant to this bill may be transferred to another person, qualified but not to another location. A licensee specified in bill shall purchase no alcoholic beverages for sale in this state other than from a wholesaler or winegrower licensee. Licensees may donate wine to a person licensed under this bill.

6) Provides a manufacturer, winegrower, manufacturer’s agent, California winegrower’s agent, rectifier, distiller, bottler, or the holder of an importer’s general license may hold the ownership of any interest, directly or indirectly, in the premises and in the license issued pursuant to this bill, may serve as an officer, director, employee, or agent of that licensee, and may sponsor or fund educational programs, special fundraising and promotional events, improvements in capital projects, and the development of exhibits or facilities of and for that licensee as defined.

7) Provides an applicant for an original on-sale general license for a wine, food and art cultural museum, and educational center or for an original on-sale general license for a wine and food cultural museum and educational center shall, at the time of filing the application for the license, accompany the application with a fee of twelve thousand dollars ($12,000), as specified.

8) States an applicant for a duplicate on-sale general license for a wine, food and art cultural museum, and educational center or for a duplicate on-sale general license for a wine and food cultural museum and educational center shall, at the time of filing the application for the license, accompany the application with a fee equal to the license fee for an on-sale general license.

EXISTING LAW:

1) Establishes ABC and grants it exclusive authority to administer the provisions of the Alcoholic Beverage Control Act (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 or occupation taxes for this purpose.

2) Contains provisions for various types of licenses that permit licensees to furnish alcoholic beverages under designated circumstances.

3) Existing law, known as the "tied-house" law, separates the alcoholic beverage industry into three component parts of manufacturer, wholesaler, and retailer. 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.

4) Provides a general tied-house exception to allow licensed winemakers to hold an ownership interest or any financial relationship in no more than two on-sale establishments provided that certain conditions are met (e.g., the on-sale licensee purchases all alcoholic beverages from a California wholesaler and the number of wine items by brand listed and offered for sale by the on-sale licensee which are produced by the winegrower does not exceed 15 percent.)

5) Provides an on-sale general license for a wine, food and art cultural museum and educational center located in the County of Napa (American Center for Wine, Food and the Arts - COPIA) to sell, furnish, or give alcoholic beverages for consumption on the premises and various off-sale privileges.

FISCAL EFFECT: Unknown

COMMENTS:

Background. The privileges of a license are expressly limited to those conferred by the specific type of license involved for the premises and time period covered by the license. Retail licenses are commonly classified by the kind of alcoholic beverage sold and the nature of the premises involved. Included in the beverage category are general licenses (covering all alcoholic beverages, i.e., distilled spirits, wine, and beer); beer licenses; and beer and wine licenses. The two most common California retail premises that require ABC licenses are: (1) “Off-sale” establishments (e.g., grocery stores, liquor stores, convenience stores), in which alcoholic beverages are sold to consumers in sealed packages for consumption off the premises; and (2) “On-sale” establishments (e.g., restaurants, hotels, cafeterias, nightclubs, bars, and cafes), in which alcoholic beverages are sold primarily for consumption on the premises. Other retailers who require ABC licenses include caterers who sell alcoholic beverages to their customers; holders of special charitable or fundraising event licenses; public conveyances serving alcoholic beverages; and nonprofit clubs established for fraternal, civic, patriotic, benevolent, or other purposes and granted the specific privilege of possessing an ABC license.

“Tied-house” restrictions date back to Prohibition and are principally designed to encourage temperance by discouraging a supplier from owning or having an interest in (and thereby controlling or influencing) retail outlets. A person who has an interest (whether as owner, officer, director, or agent) in a licensed business in the manufacturing or wholesale tier of the alcoholic beverage industry may be prohibited from also having an interest in a licensed business in the retail tier, including an interest in any on-sale or off-sale license.

Purpose of the bill. SB 1511 of 2000 (Chesbro) created a new license category (Type 78) in the Act for the American Center for Wine, Food and the Arts (COPIA), a non-profit entity located in Napa County. The bill allowed the Center to sell, furnish, or give alcoholic beverages for consumption on the licensed premises. The bill provided a "tied-house" exception for wine suppliers to serve as officers and directors of the Center license and permits wine suppliers to give financial support to the licensee. This special license was deemed necessary because the Act denies access to persons under 21 years of age on public retail premises that do not offer meals. The bill also allowed a non-profit organization to accept alcoholic beverage donations. The nonprofit organization could then sell the donated alcohol for a profit and use the proceeds to support the operational costs of the organization. The new license category was tailored to stay within the existing framework of the ABC Act.

According to the author's office, AB 297 would extend the specified privileges for the Type 78 license to the California Wine Center in Sonoma County (Center). The Center will be a key feature in the recently renovated Museum on the Square area of downtown Santa Rosa. Its presence will assist in revitalizing the community by bringing together experts in wine, leaders in the industry, wine industry employees and tourists.

The author states, "Santa Rosa is entering a phase of robust tourism development and wine country tourism is booming. Sonoma County has the greatest potential for development in the tourism sector due to new infrastructure and transportation expansions. These advancements will allow more access to surrounding wine regions and ease vehicle load on the roads. The Center will also assist the wine industry by acting as a link between small and medium sized wineries and the increasingly demanding international export market. Further, the Center will function as a centrally located educational facility for the wine industry’s growing workforce. It will offer professional development classes and trainings for the various wine industry focused careers. This bill will help to strengthen and further the developing wine industry and culture in Sonoma County."

The author further adds that the 2015 Sonoma County Annual Tourism Report identifies multiple areas in which the Center will improve the economic strength of Santa Rosa through its development. Since 2003, tourism to Sonoma County has steadily increased along with tourist spending. As the wine industry continues to grow in Sonoma County, a single destination to coordinate wine country visits, facilitate communication between wineries, and support industry functions is becoming more necessary.

In support. Proponents note this bill will be an important tool for the California Wine Center to attain viability and stability for the long term. Specifically, it will allow other ABC license holders to serve on its board and work in its operation without violating California's tied-house laws and will permit the nonprofit to accept donated alcoholic beverage product and use it to advance its mission through sale and/or service on- or off- premise. The timing of the development and launch of the California Wine Center is fortuitous. As we struggle with ways to protect our agricultural lands and preserve the rural character of our most notable wine-grape regions, the California Wine Center will play an important role.

In opposition. Alcohol Justice states, "California already suffers more than $35 billion dollars in alcohol-related harm with 10,500 alcohol-related deaths annually. If AB 297 is passed and signed into law, it will negatively impact public health and safety and increases the potential of alcohol-related problems."

Prior legislation. SB 127 (Chesbro), Chapter 171, Statutes of 2005. Deleted an existing provision of law that limits "COPIA" to the sale of no more than 6,000 cases of wine per calendar year labeled with and otherwise bearing only the name, logo, trademark and/or other proprietary art owned by the wine, food and cultural museum and educational center licensee. The bill also deleted an existing provision that specifies that such wine bear a name, logo, trademark and/or other proprietary art or statement identifying any other licensee.

SB 1511 (Chesbro), Chapter 231, Statutes of 2000. Provides an on-sale general license for a wine, food and art cultural museum and educational center (COPIA) that authorizes described persons to sell, furnish, or give alcoholic beverages for consumption on the premises and various off-sale privileges. Such off-sale privileges are limited to the sale of no more than 6,000 cases per calendar year of wine labeled with and otherwise bearing only the name, logo, trademark and/or other proprietary art owned by the wine, food, and art cultural museum and educational center licensee. Furthermore, the law provides that in no event shall such wine bear a name, logo, trademark and/or other proprietary art or statement identifying any other licensee.

REGISTERED SUPPORT / OPPOSITION:

Support

California Travel Association

City of Santa Rosa

Family Winemakers of California

Santa Rosa Metro Chamber

Sonoma County Board of Supervisors

Wine Institute

Opposition

Alcohol Justice

Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531