Bill Text: CA AB2177 | 2023-2024 | Regular Session | Chaptered
Bill Title: Winegrowers: spirits of wine.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2024-07-02 - Chaptered by Secretary of State - Chapter 61, Statutes of 2024. [AB2177 Detail]
Download: California-2023-AB2177-Chaptered.html
Assembly Bill
No. 2177
CHAPTER 61
An act to amend Sections 23358 and 23502 of the Business and Professions Code, relating to alcoholic beverages.
[
Approved by
Governor
July 02, 2024.
Filed with
Secretary of State
July 02, 2024.
]
LEGISLATIVE COUNSEL'S DIGEST
AB 2177, McKinnor.
Winegrowers: spirits of wine.
Existing law, the Alcoholic Beverage Control Act, which is administered by the Department of Alcoholic Beverage Control, regulates the application, issuance, and suspension of alcoholic beverage licenses. Existing law provides for the licensure and regulation of winegrowers and establishes the privileges that a winegrower may exercise. Existing law authorizes a winegrower, among other things, to produce spirits of wine and blend those spirits of wine into wine produced by the winegrower or sell those spirits of wine to an industrial alcohol dealer or a distilled spirits manufacturer.
This bill would additionally authorize a winegrower to sell the spirits of wine that the winegrower produces to any person holding a license authorizing the manufacture or rectification of distilled spirits.
Existing law
provides for the licensure and regulation of craft distillers and authorizes a craft distiller to, among other things, manufacture and produce distilled spirits. Existing law defines “produce” for this purpose to mean “to mix, color, flavor, or blend distilled spirits, whether manufactured by the licensee or by another manufacturer of distilled spirits.”
This bill would expand this definition to include spirits of wine produced by a winegrower, as described above.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 23358 of the Business and Professions Code is amended to read:23358.
(a) Licensed winegrowers, notwithstanding any other provisions of this division, may also exercise the following privileges:(1) Sell wine and brandy to any person holding a license authorizing the sale of wine or brandy.
(2) Sell wine and brandy to consumers for consumption off the premises where sold.
(3) Sell wine to consumers for consumption on the premises.
(4) Sell all beers, wines, and brandies, regardless of source, 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 to the licensed premises and which is operated by and for the licensee. At such a bona fide public eating place, beer, wine, and brandy may be used in the preparation of food and beverages to be consumed on the premises.
(5) (A) Permit consumers to leave the premises with open containers of alcoholic beverages for consumption off the premises within an entertainment zone if all of the following conditions are satisfied:
(i) The premises is located within the entertainment zone.
(ii) Consumption of that type of alcoholic beverage is authorized by the ordinance creating the entertainment zone.
(iii) Open alcohol containers only leave the premises during the hours allowed by the
ordinance establishing the entertainment zone.
(iv) Patrons with open containers exit the premises directly into an entertainment zone.
(v) All alcoholic beverages in the entertainment zone are purchased only at a licensed premises located within the entertainment zone.
(vi) The premises expressly prohibits open containers or closed containers of alcoholic beverages acquired outside their premises.
(vii) Delivery of alcoholic beverages to consumers within the entertainment zone by the licensee or by any third-party delivery service is expressly prohibited unless the delivery is to a residential building or private business that is not a licensee.
(viii) No alcoholic beverages purchased at
the licensed premises may leave the premises in an open glass or metal container for consumption in an entertainment zone.
(ix) The licensee annually submits their notice of intent to participate in an open container entertainment zone to the department.
(B) This paragraph does not require a licensee to sell any alcoholic beverage for consumption off the premises within an entertainment zone.
(C) Licensees whose privileges are restricted due to operating conditions or other statutory restrictions may be prohibited from exercising entertainment zone privileges that are contrary to their operating conditions. For purposes of this paragraph, any restrictions on the exercise of off-sale privileges shall apply to the removal of alcoholic beverages from the licensed premises for consumption in the entertainment zone.
(6) Produce spirits of wine and blend those spirits of wine into wine produced by the winegrower or sell those spirits of wine to an industrial alcohol dealer or any person holding a license authorizing the manufacture or rectification of distilled spirits.
(b) A winegrower may also have upon the premises all beers, wines, and brandies, 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 produced and bottled by, or produced and packaged for, the winegrower shall be purchased by the winegrower only from a licensed wholesaler.
(c) A winegrower shall actually produce on the winegrower’s licensed premises by conversion of grapes, berries, or other fruit, into wine, not less than 50
percent of all wines sold to consumers on the winegrower’s licensed premises and any licensed branch premises.
(d) The department may, if it shall determine for good cause that the granting of any such privilege would be contrary to public welfare or morals, deny the right to exercise any on-sale privilege authorized by this section in either a bona fide eating place the main entrance to which is within 200 feet of a school or church, or on the licensed winery premises, or both.
(e) Nothing in this section or in Section 23390 is intended to alter, diminish, replace, or eliminate the authority of a county, city, or city and county from exercising land use regulatory authority by law to the extent the authority may restrict, but not eliminate, privileges afforded by these sections.
SEC. 2.
Section 23502 of the Business and Professions Code is amended to read: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. For purposes of this article, “manufacture” means the actual distillation of distilled spirits from naturally fermented materials or the redistillation of distilled spirits obtained from another manufacturer of distilled spirits.
(2) Produce distilled spirits. For purposes of this article, “produce” means to mix, color, flavor, or blend distilled spirits, whether manufactured by the licensee or by
another manufacturer of distilled spirits, including spirits of wine produced by a winegrower pursuant to paragraph (6) of subdivision (a) of Section 23358.
(3) Only sell distilled spirits that are manufactured or produced 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.
(5) Manufacture or produce up to 150,000 gallons of distilled spirits per fiscal year (July 1 through June 30), excluding brandy the craft distiller manufactures or has manufactured for it 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. At least 65 percent of the total volume of distilled spirits manufactured or produced shall be actually manufactured by the licensee. The volume of distilled spirits authorized by this paragraph shall be calculated by adding the volume of distilled spirits, less waste, drawn off the still with the volume of distilled spirits obtained by the licensee from any other source that is not redistilled by the licensee. For purposes of this paragraph, “volume” means the liquid volume and shall not be based on proof gallons or packaged goods.
(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 150,000 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) 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 or produced by the licensee specifying, as applicable, the respective amounts of distilled spirits the licensed craft distiller has manufactured itself, obtained from another manufacturer of distilled spirits, and imported, 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 because the licensee has either exceeded the 150,000 gallon manufacture or production limitation as specified in
paragraph (5) of subdivision (a) or actually manufactured less than 65 percent of the total volume of distilled spirits as specified in paragraph (5) of subdivision (a), the department shall renew the license as a distilled spirits manufacturer’s license.
