Provides for the operation of home wine makers centers

In the end, this bill should give urban and suburban residents an outlet to produce a product that can be made by and enjoyed by families looking for activities that they can do together and/or to carry on the family tradition of wine making to future generations. Further, these facili- ties could be located in village centers near surrounding fruit farms to help revitalize such villages.

Summary of provisions

Section 1: 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 homemade wines always remain segregated.

Section 2: Amends Alcoholic Beverage control Law section 76-a to author- ize 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 homemade wines always remain segregated.

Section 3: Amends section 83 of the Alcoholic Beverage Control Law to requires the fee for a written consent letter authorizing a winery or farm winery to operate a home wine makers center to be $125.

Section 4: Amends section 90 of the Alcohol Beverage Control Law to add the new permit of Home Wine Making Centers.

Section 5: Adds a new Alcohol Beverage Control Law section 97-b licensed "home wine making centers" (centers). These licensed Centers will allow home wine makers to work independently from other home wine makers in the same facility so that they can make their own wines for home consumption as is permitted under federal law. (see 27 CFR 24.75 and www.ttb,gov/wine/faa.shtml (at W-A)).

This section also establishes the conditions that a licensed home wine makers center (Center) must satisfy to be licensed in this State. These are the same considerations that are used to satisfy federal law with regards to the production of wines for home consumption and not for resale. These centers can be free standing and not associated with a licensed winery or farm winery or located on the same premises if all segregation conditions are satisfied.

As per federal law and its rules and regulations, this section outlines what participating home wine makers must do to produce homemade 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(TT8). The TTB issues federal licenses for the production of commercial wine that may be sold to the general public. However, it does not license home wine making centers because the production of such wines is exempt by federal law and its rules and regulations because it is wine made for home consumption. (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/fag (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 and farm 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 consents to the issuance of such a license. The SLA should 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.

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 or have deemed them to be authorized since they are exempt from federal jurisdiction. Under feder- al regulations, New York can 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

This bill should help to facilitate the production of homemade wines. It encourages production of homemade 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. Further, technical assistance can be given to these hobbyist winemakers. 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 homemade wines produced by this State's residents and increase the demand for locally grown fruits.

For many urban and suburban residents, they often do not have enough space or adequate space to make homemade wines in their homes or apart- ments. Establishing Home winemakers centers would provide the kinds of facilities that these urban and suburban residents need to be able to make wines for their own home consumption. Such facilities could be located in rural areas (adding needed in employment in these econom- ically depressed areas of the State) and provide recreation for such individuals. Such centers could also be located in villages that are near local fruit farms or in urban areas that while close to these indi- viduals homes, would have ample space and equipment to make homemade wines.

In addition, this bill may help to encourage expansion of the grape growing and other fruit growing industries in this State. This is because it would increase the demand for locally grown grapes. Estab- lishing Home Wine Makers Centers (Centers) is one way to increase the demand for locally grown fruits. This idea came from apple and grape farmers in the Hudson Valley 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 homemade wines.

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.

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 winer- ies. 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 farm- ers 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 grow- er 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. Further, such center could be located in a smaller village center that is near local farms that produce fruit.

Legislative history

This bill while new, is a revision done so that it remains completely in the ABC Law so that this activity can be regulated by the State Liquor Authority.

S.7246B/A.10415B of 2008 - Passed Senate S.3495/A.2303 of 2009 - Referred to Agriculture S.4533-A/A.7971 - A Passed Senate

Fiscal implications

None.

Local fiscal implications

None.

Effective date

January 1, in the year succeeding the year this law shall become effec- tive.