Date Requested: January 23, 2015
Time Requested: 01:00 PM
Agency: Alcohol Beverage Control Administration
CBD Number: Version: Bill Number: Resolution Number:
2491 Introduced SB297
CBD Subject: Alcoholic Liquors and Beers


FUND(S):

General

Sources of Revenue:

General Fund

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    Generally, the bill is a good attempt to permit Class A Tavern licensees (on-premises sales), brewpubs (on-premises sales) and a Class B licensees (off-premises sales) to sell growlers of any nonintoxicating beer or nonintoxicating craft beer for consumers to take home.
    
    The bill additionally attempts to include private clubs in the authority to sell growlers but it does not include any corresponding code changes to Chapter 60, Article 7.
    
    The bill adds terms and phrases inconsistent with existing code language and many terms are not defined or are not fully explained.
    
    The term a Class G License endorsement is not needed and is confusing. A clearer "Class G retail license" definition is needed consistent with Chapter 11, Article 16.
    
    The consumer definition is not needed if the above definition is reworded.
    
    A clearer definition of growler is needed with respect to being a sealed container, the sealing process, and that such growler when sealed is not an open container.
    
    The bill rewords the quantities that a resident brewer and a distributor may sell.
    
    The bill creates a new code section 11-16-6b which permits Class A license and private clubs (again there is no edit to Chapter 60, Article 7 of the code) and Class B licensees to obtain a Class G retail license but creates no standard for this license and no inspection requirement.
    
    The bill states that the draught beer dispensing must be sanitary and secure but the bill does not state who determines this standard the WVABCA or the health department or both. The bill appears to require the licensee to clean the growler if it is not clean but does not specifically state that requirement. The bill adds that the draught beer system must only be available to the licensee's employees or agents and they are the only ones who may dispense the beer. The bill does not clarify what is a sealed growler under the law.
    
    The bill includes a $60 fee for adding the ability to sell growlers.
    
    Current law permits brewpubs owned by resident brewers to sell growlers without any additional fee and this bill removes that ability.
    
    As drafted the bill is incomplete.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2015
Increase/Decrease
(use"-")
2016
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 41,265 41,265 41,265
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 70,740 70,740 70,740


Explanation of above estimates (including long-range effect):


    The bill does not state how the $60 fee developed.
    
    The WVABCA currently permits a licensed private club to sell up to 2 bottles of unopened wine to go when someone had at least a $15 meal at the private club and the fee for this similar license is $100.
    The fee should be consistent and account for the numerous licensees obtaining a Class G retail license and further account for costs of inspection, Class G licensure, and enforcement.
    
    The number of WVABCA licensees, if the bill were reworded to correctly include all Class A (Taverns - on-premises), Class B licensees (off-premises), brewpubs and private clubs, affected by the growler privilege would be approximately 4716 licensees.
    
    Using the bill's $60 fee, the potential revenue, if 100% of such licenses were licensed for a Class G retail license, could be $282,960.
    
    Obviously not every licensee would take this benefit and some licensees may not be able to meet the statutory requirements for employees or securing the area. Here are some number assuming a smaller percentage of licensees utilize the growler privilege:
    
    25% = 1179 * $60 = $70,740
    
    50% = 2358 * $60 = $141,480
    
    However there could also be new entrants applying for licensure as a result of the growler privilege.
    
    Further the WVABCA would have added expense of inspecting such licensees to determine if they have sealed growlers, a sanitary area, a secure area and etc. Costs could be an Agent's time to inspect and complete paperwork, office staff review, and approval and also the expense to travel to inspect the premises. Costs could be $30 - $40 a license with some licensees being less cost. The cost breakdownusing an average cost of $35:
    
    100% = 4716 * $35 = $165,060
    
    50% = 2358 * $35 = $ 82,530
    
    25% = 1179 * $35 = $ 41,265
    
    Additionally, the bill could actually spur beer sales and tax revenue collected from the beer barrel tax and sales and municipal taxes.
    
    Lastly, the numbers, as indicated above, are not speculative but are presented as an example.



Memorandum


    The bill is a good first draft to permit "sealed" growler sales from on-premises licensees, off-premises licensees and private clubs.
    
    As noted above, the bill could be clearer and reworded to be consistent with both Chapter 11, Article 16 and Chapter 60 of the code.
    
    The bill does not even address specific code sections in Chapter 11, Article 16 and Chapter 60 where there it is illegal to have an open container, the draught beer being dispensed or selling and carrying off beer where prohibited.
    
    More details are needed as noted above and perhaps a review of other states' treatment of growlers sales.



    Person submitting Fiscal Note: Anoop Bhasin, General Counsel on behalf of WVABCA
    Email Address: Anoop.K.Bhasin@wv.gov