Provides that food processing establishments shall include the operation of home wine makers centers

Section 2: Adds a new Agriculture and Markets Law section 251-z-13 to establish the conditions that a licensed home wine makers center (Center) must satisfy to be licensed in this State and to satisfy federal law with regards to the production of wines for home consumption and not for resale.

As per federal law and its rules and regulations, this section outlines what participating home wine makers must do to produce home made wines at these Centers and continue to satisfy federal law to remain exempt from the regulation of the Alcohol and Tobacco Tax and Trade Bureau (TTB). The TTB issues federal licenses for the production of commercial wine that may be sold to the general public, but does not license home wine making centers because the production of such wines is exempt by federal law and its rules and regulations. (see 27 CFR 24.75 and www.ttb.gov/wine/faq. (at W-4))

This section also specifies what Centers and their employees may do and may not do to assist participating home wine makers who are making tax exempt wines at licensed Centers for home consumption and not for sale. These are the same standards articulated by the TTB to satisfy federal requirement to establish such Centers. (see www/ttb.gov/wine/faq (at W-4)).

This section authorizes such Centers to be established as free standing tax exempt (non-bonded) wine production facility for home wine makers. Further, this law permits wineries, fam1 wineries, and micro-wineries to obtain a license to operate a Center on the same premises or a premises adjacent to a winery as long as the State Liquor Authority (SLA) consents to the issuance of such a license. The SLA must consent to a winery application if all TTB criteria have been satisfied.

The law is very clear that the Center and winery may share equipment and be in the same building, but that wine produced at a commercial winery must always remain segregated from wine made for home consumption and stored in separate storage rooms. The law conforms to the standards established by federal law to establish a Center on the same or adjacent premises to a commercial winery as long as the wine is not commingled nor made and stored in the same storage room or part of the bonded winery. Home made wines, at no time, may enter the bonded portion of a winery building.

Section 3: Amends Alcoholic Beverage Control Law section 76 to authorize a winery to also operate on the same or adjacent premises a licensed Center as long as the criteria established in this law and federal law & rules and regulations are adhered to so that commercial and home made wines always remain segregated.

Section 4: Amends Alcoholic Beverage Control Law section 76-a to authorize a farm winery to also operate on the same or adjacent premises a licensed Center as long as the criteria established in this law and federal law & rules and regulations are adhered to so that commercial and home made wines always remain segregated.

Section 5: Amends Alcoholic Beverage Control Law section 76-f to authorize a micro-winery to also operate on the same or adjacent premises a licensed Center as long as the criteria established in this law and federal law & rules and regulations are adhered to so that commercial and home made wines always remain segregated.

Existing law

Federal law permits Centers to be established without the issuance of a federal TTB winery license because such activities are deemed to be home wine making activities which are exempt for federal wine licensing and registration requirements and taxation. Many states have adopted laws to allow for such Centers to be established. Under federal regulations, New York must adopt a law to authorize these Centers for them to be allowed to exist in this state. Many wine-making states, including California, Washington, and Oregon have adopted similar laws to permit the establishment of Centers in their own states.

Justification

One way to encourage expansion of the grape growing and other fruit growing industries in this State is to increase the demand for locally grown grapes. Establishing Home Wine Makers Centers (Centers) is one way to increase the demand for locally grown fruits. This idea came from apple and grape farmers who wanted to establish such a Center on their farm so that they could increase the sales of their apple and grape crops. In addition, income could be derived from the sale of wine making supplies and leasing storage space for the making of home made wines.

This bill facilitates the production of home made wines. It encourages production of home made wines by allowing many home wine makers to operate in a licensed facility where they can share wine making equipment, such as wine presses, pumps, filters, storage and bottling facilities, and laboratory facilities. This lowers the overhead costs for home wine making production. In addition, Center employees can give advice on the proper techniques to make wine so that wine quality increases.

Lowering the overhead costs to produce wine, supplying a place in which it is easy to make, store, and bottle, and making such wine in a place that has experts to obtain advice from to produce superior wines should all help to make it easier for home wine makers to make quality wines for home consumption. This, in turn, should increase the amount of home made wines produced by this State's residents and increase the demand for locally grown grapes.

Further, by encouraging home wine makers to use local grapes, this may increase the demand for and sales of New York's commercially produced wines because they use the same grape varieties as these home wine makers will use. New York produces many quality wines from un-California like grape varieties that are not commonly consumed by the wine drinking public (i.e. French-hybrid and lubrusca grape varieties). Encouraging local home wine makers to use French-hybrid and lubrusca grapes can get such vintners (who generally consume on average more commercial wine than the general public) to become accustomed to these grape varieties and thereby increase the sale of commercially produced wines from French-hybrid and lubrusca grape varieties.

It is hoped that by increasing the number of home wine makers, this will increase the "talent pool" of wine makers available for employment in commercial wineries. Many home wine makers have "graduated" to working either full-time or part-time in already established commercial wineries. Further, some have even gone on to establish their own commercial wineries to produce wines for commercial sale. It is important for the New York wine industry to increase the overall skill and depth of the number of wine makers available for use in this growing industry. Encouraging the growth of New York's wine industry will, in turn, increase the demand for New York State produced grapes and other fruits.

Another benefit of this bill is to authorize farms, wineries, farm wineries and micro-wineries to establish ancillary businesses on the same premises or premises adjacent to a farm or a winery to increase their overall profit margin. By enacting this bill into law, wineries could increase the utilization of their otherwise idle wine making equipment, increase sales of grapes that they grow or are grown by farmers associated with the winery, but are not being utilized by their commercial winery operation, and renting out underutilized space within their wineries to home wine makers.

For farmers without a winery, a Center could be established on such a farm. The benefit of such a Center to a farm operation is that the grower could more effectively market the sale of their agricultural produce to home wine makers at higher retail prices instead of lower wholesale or bulk prices.

The trend in New York's agricultural industry is that the more successful farms and agri-businesses are not concentrating in growing just one crop or operating one business, but diversifying their operations to increase over-all revenue generation and to sell their produce at retail as opposed to wholesale prices.

Legislative history

S.7246-B/A.10415-B of 2008

Fiscal implications

None.

Local fiscal implications

None.

Effective date

January 1, in the year succeeding the year this law shall become effective.