ARIZONA STATE SENATE

RESEARCH STAFF

LUCIANA DAHDAH

LEGISLATIVE RESEARCH INTERN

 

KAITLYN NEFF

LEGISLATIVE RESEARCH ANALYST

WATER & AGRICULTURE COMMITTEE

Telephone: (602) 926-3171

 

 

TO:                  MEMBERS OF THE SENATE

                        WATER & AGRICULTURE

                        COMMITTEE

DATE:            March 13, 2019

SUBJECT:      Strike everything amendment to H.B. 2608, relating to Arizona wine; promotion; advisory council

 

Purpose

Establishes the Arizona Wine Promotional Subaccount (Subaccount) and the Arizona Wine Advisory Council (Council). Appropriates $100,000 in FY 2020 from the state General Fund (GF) to the Subaccount.

Background

Current statute authorizes the Arizona Department of Liquor Licenses and Control to issue licenses to allow the licensee to manufacture, sell or deal in spiritous liquor only at the place and in the matter provided in the license. License requirements vary based on in-state or out-of-state production (A.R.S. § 4-203).

An in-state licensed farm winery must be in Arizona and produce at least 200 gallons but not more than 40,000 gallons of wine annually (A.R.S. § 4-205.04).

The Office of Commodity Development and Promotion (Office), under the Arizona Department of Agriculture, provides funding from the Commodity Promotion Fund for programs to stimulate, educate, encourage and foster the production and consumption of Arizona agricultural products domestically and abroad (A.R.S. § 3-109.02).

H.B. 2608 appropriates $100,000 in FY 2020 from the state GF to the Subaccount.

Provisions

1.      Establishes the Subaccount in the Commodity Promotion Fund to promote, market and increase the production of all wine produced in Arizona and to promote the research and development of vinifera grapes in the state, including vitis vinifera and any hybrid of vitis vinifera.

2.      Appropriates $100,000 in FY 2020 from the state GF to the Subaccount.

3.      Requires the Subaccount to consist of legislative appropriations and monies collected based on promotional services provided to the Arizona wine industry and exempts the appropriations from lapsing.

4.      Authorizes the director (Director) of the AZDA to administer the Subaccount.

5.      Requires the Director to establish, by rule or order, a Council to assist and make recommendations to the Office to promote the wine industry in Arizona.

6.      Requires the Council to:

a)      advise the Office regarding expenditures from the Subaccount; and

b)      make recommendation to the Office to promote the wine industry in Arizona, including research, trade promotions, marketing, advertising and selling or disseminating wine produced in the state without charge.

7.      Requires the Council to consist of the following members appointed by the Director to serve for staggered two-year terms:

a)      three licensed members who represent farm wineries located in Arizona;

b)      one licensed member who represents a wholesaler; and

c)      one licensed member who represents a retailer.

8.      Requires each Council member, except for the wholesaler and retailer members, to be or have been engaged in the growing or wine producing industry that the member is appointed to represent and must either:

a)      derive a substantial portion of the member's income from the growing or wine-producing industry in Arizona; or

b)      have a substantial investment in growing vinifera grapes or producing wine from vinifera grapes in Arizona as an owner, lessee, partner or stockholder owning at least ten percent of the voting stock in a corporation engaged in growing vinifera grapes or producing wine from vinifera grapes; or

c)      be the manager or executive officer of a corporation engaged in growing vinifera grapes or producing wine from vinifera grapes.

9.      Requires each member of the Council to be an Arizona resident and be at least twenty-five years of age.

10.  Specifies that the Council members are not eligible to receive compensation or reimbursement of expenses.

11.  Specifies that the initial terms of the Council members are:

a)      three terms ending January 1, 2020; and

b)      two terms ending January 1, 2021.

12.  Terminates the Council on July 1, 2027.

13.  Defines vinifera grapes as the agricultural product known as vitis vinifera and any hybrid of vitis vinifera that retains the predominant characteristics of vitis vinifera.

14.  Directs the Office to submit an annual report of its promotional activities relating to the Arizona wine industry and expenditures from the Subaccount to the Governor, the President of the Senate and the Speaker of the House of Representatives on or before November 1, and to provide a copy to Arizona's Secretary of State.

15.  Requires the Director to make all subsequent appoints.

16.  Becomes effective on the general effective date.