SB 557: Alcoholic beverages: tied-house restrictions: advertising.
- Session Year: 2015-2016
- House: Senate
- Latest Version Date: 2015-10-01
Existing law authorizes the holder of a winegrowers license, a beer manufacturer, a distilled spirits manufacturer, or a distilled spirits manufacturers agent, to purchase advertising space and time from, or on behalf of, an on-sale retail licensee, under certain conditions, if the on-sale retail licensee is the owner, manager, agent of the owner, assignee of the owners advertising rights, or major tenant of specified facilities.
This bill would expand the exceptions to existing law to allow beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturers agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees at a fairgrounds with a horse racetrack and equestrian and sports facilities located in the County of San Diego.
By creating new crimes this bill would impose a state-mandated local program.
This bill would make legislative findings and declarations as to the necessity of a special statute for the County of San Diego.
This bill would incorporate changes to Section 25503.6 of the Business and Professions Code proposed by both this bill and SB 462, which would become operative only if both bills are enacted and become effective on or before January 1, 2016, and this bill is chaptered last.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law authorizes the holder of a winegrowers license, a beer manufacturer, a distilled spirits manufacturer, or a distilled spirits manufacturers agent, to purchase advertising space and time from, or on behalf of, an on-sale retail licensee, under certain conditions, if the on-sale retail licensee is the owner, manager, agent of the owner, assignee of the owners advertising rights, or major tenant of specified facilities.
This bill would expand the exceptions to existing law to allow beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturers agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees at a fairgrounds with a horse racetrack and equestrian and sports facilities located in the County of San Diego.
By creating new crimes this bill would impose a state-mandated local program.
This bill would make legislative findings and declarations as to the necessity of a special statute for the County of San Diego.
This bill would incorporate changes to Section 25503.6 of the Business and Professions Code proposed by both this bill and SB 462, which would become operative only if both bills are enacted and become effective on or before January 1, 2016, and this bill is chaptered last.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law authorizes the holder of a winegrowers license, a beer manufacturer, a distilled spirits manufacturer, or a distilled spirits manufacturers agent, to purchase advertising space and time from, or on behalf of, an on-sale retail licensee, under certain conditions, if the on-sale retail licensee is the owner, manager, agent of the owner, assignee of the owners advertising rights, or major tenant of specified facilities.
This bill would expand the exceptions to existing law to allow beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturers agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees at a fairgrounds with a horse racetrack and equestrian and sports facilities located in the County of San Diego.
By creating new crimes this bill would impose a state-mandated local program.
This bill would make legislative findings and declarations as to the necessity of a special statute for the County of San Diego.
This bill would incorporate changes to Section 25503.6 of the Business and Professions Code proposed by both this bill and Senate Bill 462, which would become operative only if both bills are enacted and become effective on or before January 1, 2016, and this bill is chaptered last.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law authorizes the holder of a winegrowers license, a beer manufacturer, a distilled spirits manufacturer, or a distilled spirits manufacturers agent, to purchase advertising space and time from, or on behalf of, an on-sale retail licensee, under certain conditions, if the on-sale retail licensee is the owner, manager, agent of the owner, assignee of the owners advertising rights, or major tenant of specified facilities.
This bill would expand the exceptions to existing law to allow beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturers agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees at a fairgrounds with a horse racetrack and equestrian and sports facilities located in the County of San Diego.
By creating new crimes this bill would impose a state-mandated local program.
This bill would make legislative findings and declarations as to the necessity of a special statute for the County of San Diego.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
The Alcoholic Beverage Control Act includes tied-house restrictions, which prohibit specified licensees from furnishing, giving, or lending money or other thing of value, directly or indirectly, to a person engaged in operating, owning, or maintaining an off-sale licensed premises. Existing law authorizes, until January 1, 2016, the appearance of a person employed or engaged by an authorized licensee at a promotional event held at the premises of an off-sale retail licensee for the purposes of providing autographs, subject to specified conditions.
This bill would delete the sunset date of the above provision, thereby extending the provision indefinitely.
This bill would also make nonsubstantive changes to the act.
The Alcoholic Beverage Control Act includes tied-house restrictions, which prohibit specified licensees from furnishing, giving, or lending money or other thing of value, directly or indirectly, to a person engaged in operating, owning, or maintaining an off-sale licensed premises. Existing law authorizes, until January 1, 2016, the appearance of a person employed or engaged by an authorized licensee at a promotional event held at the premises of an off-sale retail licensee for the purposes of providing autographs, subject to specified conditions.
This bill would delete the sunset date of the above provision, thereby extending the provision indefinitely.
This bill would also make nonsubstantive changes to the act.
Existing law, known as tied-house restrictions, prohibits specified alcoholic beverage licensees from paying, crediting, or compensating a retailer for advertising or paying or giving anything of value for the privilege of placing a sign or advertisement with a retail licensee. Existing law authorizes, as an exception, a beer manufacturer, the holder of a winegrowers license, a distilled spirits rectifer, a distilled spirits manufacturer, or a distilled spirits manufacturers agent to purchase advertising space and time from, or on behalf of, on-sale retail licensees at certain facilities, as specified.
This bill would make nonsubstantive changes to this provision.
Existing law, known as tied-house restrictions, prohibits specified alcoholic beverage licensees from paying, crediting, or compensating a retailer for advertising or paying or giving anything of value for the privilege of placing a sign or advertisement with a retail licensee. Existing law authorizes, as an exception, a beer manufacturer, the holder of a winegrowers license, a distilled spirits rectifer, a distilled spirits manufacturer, or a distilled spirits manufacturers agent to purchase advertising space and time from, or on behalf of, on-sale retail licensees at certain facilities, as specified.
This bill would make nonsubstantive changes to this provision.
(a)Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee subject to all of the following conditions:
(1)The on-sale licensee is the owner, manager, agent of the owner, assignee of the owners advertising rights, or the major tenant of the owner of any of the following:
(A)An outdoor stadium or a fully enclosed arena with a fixed seating capacity in excess of 10,000 seats located in Sacramento County or Alameda County.
(B)A fully enclosed arena with a fixed seating capacity in excess of 18,000 seats located in Orange County or Los Angeles County.
(C)An outdoor stadium or fully enclosed arena with a fixed seating capacity in excess of 8,500 seats located in Kern County.
(D)An exposition park of not less than 50 acres that includes an outdoor stadium with a fixed seating capacity in excess of 8,000 seats and a fully enclosed arena with an attendance capacity in excess of 4,500 people, located in San Bernardino County.
(E)An outdoor stadium with a fixed seating capacity in excess of 10,000 seats located in Yolo County.
(F)An outdoor stadium and a fully enclosed arena with fixed seating capacities in excess of 10,000 seats located in Fresno County.
(G)An athletic and entertainment complex of not less than 50 acres that includes within its boundaries an outdoor stadium with a fixed seating capacity of at least 8,000 seats and a second outdoor stadium with a fixed seating capacity of at least 3,500 seats located in Riverside County.
(H)An outdoor stadium with a fixed seating capacity in excess of 1,500 seats located in Tulare County.
(I)A motorsports entertainment complex of not less than 50 acres that includes within its boundaries an outdoor speedway with a fixed seating capacity of at least 50,000 seats, located in San Bernardino County.
(J)An exposition park, owned or operated by a bona fide nonprofit organization, of not less than 400 acres with facilities including a grandstand with a seating capacity of at least 8,000 people, at least one exhibition hall greater than 100,000 square feet, and at least four exhibition halls, each greater than 30,000 square feet, located in the City of Pomona or the City of La Verne in Los Angeles County.
(K)An outdoor soccer stadium with a fixed seating capacity of at least 25,000 seats, an outdoor tennis stadium with a fixed capacity of at least 7,000 seats, an outdoor track and field facility with a fixed seating capacity of at least 7,000 seats, and an indoor velodrome with a fixed seating capacity of at least 2,000 seats, all located within a sports and athletic complex built before January 1, 2005, in the City of Carson in Los Angeles County.
(L)An outdoor professional sports facility with a fixed seating capacity of at least 4,200 seats located in San Joaquin County.
(M)A fully enclosed arena with a fixed seating capacity in excess of 13,000 seats in the City of Inglewood.
(N)(i)An outdoor stadium with a fixed seating capacity of at least 68,000 seats located in the City of Santa Clara.
(ii)A beer manufacturer, the holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, a major tenant of an outdoor stadium described in clause (i), provided the major tenant does not hold a retail license, and the advertising may include the placement of advertising in an on-sale licensed premises operated at the outdoor stadium.
(O)A fairgrounds with a horse racetrack and equestrian and sports facilities located in San Diego County.
(2)The outdoor stadium or fully enclosed arena described in paragraph (1) is not owned by a community college district.
(3)The advertising space or time is purchased only in connection with the events to be held on the premises of the exposition park, stadium, or arena owned by the on-sale licensee. With respect to an exposition park as described in subparagraph (J) of paragraph (1) that includes at least one hotel, the advertising space or time shall not be displayed on or in any hotel located in the exposition park, or purchased in connection with the operation of any hotel located in the exposition park.
(4)The on-sale licensee serves other brands of beer distributed by a competing beer wholesaler in addition to the brand manufactured or marketed by the beer manufacturer, other brands of wine distributed by a competing wine wholesaler in addition to the brand produced by the winegrower, and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brand manufactured or marketed by the distilled spirits rectifier, the distilled spirits manufacturer or the distilled spirits manufacturers agent that purchased the advertising space or time.
(b)Any purchase of advertising space or time pursuant to subdivision (a) shall be conducted pursuant to a written contract entered into by the beer manufacturer, the holder of the winegrowers license, the distilled spirits rectifier, the distilled spirits manufacturer, or the distilled spirits manufacturers agent and the on-sale licensee, or with respect to clause (ii) of subparagraph (N) of paragraph (1) of subdivision (a), the major tenant of the outdoor stadium.
(c)Any beer manufacturer or holder of a winegrowers license, any distilled spirits rectifier, any distilled spirits manufacturer, or any distilled spirits manufacturers agent who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesalers license to fulfill all or part of those contractual obligations entered into pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space, time, or costs involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(d)Any on-sale retail licensee, as described in subdivision (a), who, directly or indirectly, solicits or coerces a holder of a wholesalers license to solicit a beer manufacturer, a holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or a distilled spirits manufacturers agent to purchase advertising space or time pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(e)For the purposes of this section, beer manufacturer includes any holder of a beer manufacturers license, any holder of an out-of-state beer manufacturers certificate, or any holder of a beer and wine importers general license.
SEC. 1.5.Section 25503.6 of the Business and Professions Code is amended to read:25503.6.(a)Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee subject to all of the following conditions:
(1)The on-sale licensee is the owner, manager, agent of the owner, assignee of the owners advertising rights, or the major tenant of the owner of any of the following:
(A)An outdoor stadium or a fully enclosed arena with a fixed seating capacity in excess of 10,000 seats located in Sacramento County or Alameda County.
(B)A fully enclosed arena with a fixed seating capacity in excess of 18,000 seats located in Orange County or Los Angeles County.
(C)An outdoor stadium or fully enclosed arena with a fixed seating capacity in excess of 8,500 seats located in Kern County.
(D)An exposition park of not less than 50 acres that includes an outdoor stadium with a fixed seating capacity in excess of 8,000 seats and a fully enclosed arena with an attendance capacity in excess of 4,500 people, located in San Bernardino County.
(E)An outdoor stadium with a fixed seating capacity in excess of 10,000 seats located in Yolo County.
(F)An outdoor stadium and a fully enclosed arena with fixed seating capacities in excess of 10,000 seats located in Fresno County.
(G)An athletic and entertainment complex of not less than 50 acres that includes within its boundaries an outdoor stadium with a fixed seating capacity of at least 8,000 seats and a second outdoor stadium with a fixed seating capacity of at least 3,500 seats located in Riverside County.
(H)An outdoor stadium with a fixed seating capacity in excess of 1,500 seats located in Tulare County.
(I)A motorsports entertainment complex of not less than 50 acres that includes within its boundaries an outdoor speedway with a fixed seating capacity of at least 50,000 seats, located in San Bernardino County.
(J)An exposition park, owned or operated by a bona fide nonprofit organization, of not less than 400 acres with facilities including a grandstand with a seating capacity of at least 8,000 people, at least one exhibition hall greater than 100,000 square feet, and at least four exhibition halls, each greater than 30,000 square feet, located in the City of Pomona or the City of La Verne in Los Angeles County.
(K)An outdoor soccer stadium with a fixed seating capacity of at least 25,000 seats, an outdoor tennis stadium with a fixed capacity of at least 7,000 seats, an outdoor track and field facility with a fixed seating capacity of at least 7,000 seats, and an indoor velodrome with a fixed seating capacity of at least 2,000 seats, all located within a sports and athletic complex built before January 1, 2005, in the City of Carson in Los Angeles County.
(L)An outdoor professional sports facility with a fixed seating capacity of at least 4,200 seats located in San Joaquin County.
(M)A fully enclosed arena with a fixed seating capacity in excess of 13,000 seats in the City of Inglewood.
(N)(i)An outdoor stadium with a fixed seating capacity of at least 68,000 seats located in the City of Santa Clara.
(ii)A beer manufacturer, the holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, a major tenant of an outdoor stadium described in clause (i), provided the major tenant does not hold a retail license, and the advertising may include the placement of advertising in an on-sale licensed premises operated at the outdoor stadium.
(O)A complex of not more than 50 acres located on the campus of, and owned by, Sonoma State University dedicated to presenting live artistic, musical, sports, food, beverage, culinary, lifestyle, or other cultural and entertainment events and performances with venues that include a concert hall with a seating capacity of approximately 1,500 seats, a second concert hall with a seating capacity of up to 300 seats, an outdoor area with a seating capacity of up to 5,000 seats, and a further outdoor area with a seating capacity of up to 10,000 seats. With respect to this complex, advertising space and time may also be purchased from or on behalf of the owner of the complex, a long-term tenant or licensee of the venue, whether or not the owner, long-term tenant, or licensee holds an on-sale license.
(P)A fairgrounds with a horse racetrack and equestrian and sports facilities located in San Diego County.
(2)The outdoor stadium or fully enclosed arena described in paragraph (1) is not owned by a community college district.
(3)The advertising space or time is purchased only in connection with the events to be held on the premises of the exposition park, stadium, or arena owned by the on-sale licensee. With respect to an exposition park as described in subparagraph (J) of paragraph (1) that includes at least one hotel, the advertising space or time shall not be displayed on or in any hotel located in the exposition park, or purchased in connection with the operation of any hotel located in the exposition park. With respect to the complex described in subparagraph (O) of paragraph (1), the advertising space or time shall be purchased only in connection with live artistic, musical, sports, food, beverage, culinary, lifestyle, or other cultural and entertainment events and performances to be held on the premises of the complex.
(4)The on-sale licensee serves other brands of beer distributed by a competing beer wholesaler in addition to the brand manufactured or marketed by the beer manufacturer, other brands of wine distributed by a competing wine wholesaler in addition to the brand produced by the winegrower, and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brand manufactured or marketed by the distilled spirits rectifier, the distilled spirits manufacturer, or the distilled spirits manufacturers agent that purchased the advertising space or time.
(b)Any purchase of advertising space or time pursuant to subdivision (a) shall be conducted pursuant to a written contract entered into by the beer manufacturer, the holder of the winegrowers license, the distilled spirits rectifier, the distilled spirits manufacturer, or the distilled spirits manufacturers agent and any of the following:
(1)The on-sale licensee.
(2)With respect to clause (ii) of subparagraph (N) of paragraph (1) of subdivision (a), the major tenant of the outdoor stadium.
(3)With respect to subparagraph (O) of paragraph (1) of subdivision (a), the owner, a long-term tenant of the complex, or licensee of the complex, whether or not the owner, long-term tenant, or licensee holds an on-sale license.
(c)Any beer manufacturer or holder of a winegrowers license, any distilled spirits rectifier, any distilled spirits manufacturer, or any distilled spirits manufacturers agent who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesalers license to fulfill all or part of those contractual obligations entered into pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space, time, or costs involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(d)Any on-sale retail licensee, as described in subdivision (a), who, directly or indirectly, solicits or coerces a holder of a wholesalers license to solicit a beer manufacturer, a holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or a distilled spirits manufacturers agent to purchase advertising space or time pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(e)For the purposes of this section, beer manufacturer includes any holder of a beer manufacturers license, any holder of an out-of-state beer manufacturers certificate, or any holder of a beer and wine importers general license.
(f)The Legislature finds that it is necessary and proper to require a separation among manufacturing interests, wholesale interests, and retail interests in the production and distribution of alcoholic beverages in order to prevent suppliers from dominating local markets through vertical integration and to prevent excessive sales of alcoholic beverages produced by overly aggressive marketing techniques. The Legislature further finds that the exceptions established by this section to the general prohibition against tied interests shall be limited to their express terms so as not to undermine the general prohibition and intends that this section be construed accordingly.
SEC. 2.The Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique conditions located in the County of San Diego.
SEC. 3.Section 1.5 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by this bill and Senate Bill 462. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 25503.6 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 462, in which case Section 25503.6 of the Business and Professions Code, as amended by Senate Bill 462, shall remain operative only until the operative date of this bill, at which time Section 1.5 of this bill shall become operative, and Section 1 of this bill shall not become operative.
SEC. 4.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee subject to all of the following conditions:
(1)The on-sale licensee is the owner, manager, agent of the owner, assignee of the owners advertising rights, or the major tenant of the owner of any of the following:
(A)An outdoor stadium or a fully enclosed arena with a fixed seating capacity in excess of 10,000 seats located in Sacramento County or Alameda County.
(B)A fully enclosed arena with a fixed seating capacity in excess of 18,000 seats located in Orange County or Los Angeles County.
(C)An outdoor stadium or fully enclosed arena with a fixed seating capacity in excess of 8,500 seats located in Kern County.
(D)An exposition park of not less than 50 acres that includes an outdoor stadium with a fixed seating capacity in excess of 8,000 seats and a fully enclosed arena with an attendance capacity in excess of 4,500 people, located in San Bernardino County.
(E)An outdoor stadium with a fixed seating capacity in excess of 10,000 seats located in Yolo County.
(F)An outdoor stadium and a fully enclosed arena with fixed seating capacities in excess of 10,000 seats located in Fresno County.
(G)An athletic and entertainment complex of not less than 50 acres that includes within its boundaries an outdoor stadium with a fixed seating capacity of at least 8,000 seats and a second outdoor stadium with a fixed seating capacity of at least 3,500 seats located in Riverside County.
(H)An outdoor stadium with a fixed seating capacity in excess of 1,500 seats located in Tulare County.
(I)A motorsports entertainment complex of not less than 50 acres that includes within its boundaries an outdoor speedway with a fixed seating capacity of at least 50,000 seats, located in San Bernardino County.
(J)An exposition park, owned or operated by a bona fide nonprofit organization, of not less than 400 acres with facilities including a grandstand with a seating capacity of at least 8,000 people, at least one exhibition hall greater than 100,000 square feet, and at least four exhibition halls, each greater than 30,000 square feet, located in the City of Pomona or the City of La Verne in Los Angeles County.
(K)An outdoor soccer stadium with a fixed seating capacity of at least 25,000 seats, an outdoor tennis stadium with a fixed capacity of at least 7,000 seats, an outdoor track and field facility with a fixed seating capacity of at least 7,000 seats, and an indoor velodrome with a fixed seating capacity of at least 2,000 seats, all located within a sports and athletic complex built before January 1, 2005, in the City of Carson in Los Angeles County.
(L)An outdoor professional sports facility with a fixed seating capacity of at least 4,200 seats located in San Joaquin County.
(M)A fully enclosed arena with a fixed seating capacity in excess of 13,000 seats in the City of Inglewood.
(N)(i)An outdoor stadium with a fixed seating capacity of at least 68,000 seats located in the City of Santa Clara.
(ii)A beer manufacturer, the holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, a major tenant of an outdoor stadium described in clause (i), provided the major tenant does not hold a retail license, and the advertising may include the placement of advertising in an on-sale licensed premises operated at the outdoor stadium.
(O)A fairgrounds with a horse racetrack and equestrian and sports facilities located in San Diego County.
(2)The outdoor stadium or fully enclosed arena described in paragraph (1) is not owned by a community college district.
(3)The advertising space or time is purchased only in connection with the events to be held on the premises of the exposition park, stadium, or arena owned by the on-sale licensee. With respect to an exposition park as described in subparagraph (J) of paragraph (1) that includes at least one hotel, the advertising space or time shall not be displayed on or in any hotel located in the exposition park, or purchased in connection with the operation of any hotel located in the exposition park.
(4)The on-sale licensee serves other brands of beer distributed by a competing beer wholesaler in addition to the brand manufactured or marketed by the beer manufacturer, other brands of wine distributed by a competing wine wholesaler in addition to the brand produced by the winegrower, and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brand manufactured or marketed by the distilled spirits rectifier, the distilled spirits manufacturer or the distilled spirits manufacturers agent that purchased the advertising space or time.
(b)Any purchase of advertising space or time pursuant to subdivision (a) shall be conducted pursuant to a written contract entered into by the beer manufacturer, the holder of the winegrowers license, the distilled spirits rectifier, the distilled spirits manufacturer, or the distilled spirits manufacturers agent and the on-sale licensee, or with respect to clause (ii) of subparagraph (N) of paragraph (1) of subdivision (a), the major tenant of the outdoor stadium.
(c)Any beer manufacturer or holder of a winegrowers license, any distilled spirits rectifier, any distilled spirits manufacturer, or any distilled spirits manufacturers agent who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesalers license to fulfill all or part of those contractual obligations entered into pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space, time, or costs involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(d)Any on-sale retail licensee, as described in subdivision (a), who, directly or indirectly, solicits or coerces a holder of a wholesalers license to solicit a beer manufacturer, a holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or a distilled spirits manufacturers agent to purchase advertising space or time pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(e)For the purposes of this section, beer manufacturer includes any holder of a beer manufacturers license, any holder of an out-of-state beer manufacturers certificate, or any holder of a beer and wine importers general license.
SEC. 1.5.Section 25503.6 of the Business and Professions Code is amended to read:25503.6.(a)Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee subject to all of the following conditions:
(1)The on-sale licensee is the owner, manager, agent of the owner, assignee of the owners advertising rights, or the major tenant of the owner of any of the following:
(A)An outdoor stadium or a fully enclosed arena with a fixed seating capacity in excess of 10,000 seats located in Sacramento County or Alameda County.
(B)A fully enclosed arena with a fixed seating capacity in excess of 18,000 seats located in Orange County or Los Angeles County.
(C)An outdoor stadium or fully enclosed arena with a fixed seating capacity in excess of 8,500 seats located in Kern County.
(D)An exposition park of not less than 50 acres that includes an outdoor stadium with a fixed seating capacity in excess of 8,000 seats and a fully enclosed arena with an attendance capacity in excess of 4,500 people, located in San Bernardino County.
(E)An outdoor stadium with a fixed seating capacity in excess of 10,000 seats located in Yolo County.
(F)An outdoor stadium and a fully enclosed arena with fixed seating capacities in excess of 10,000 seats located in Fresno County.
(G)An athletic and entertainment complex of not less than 50 acres that includes within its boundaries an outdoor stadium with a fixed seating capacity of at least 8,000 seats and a second outdoor stadium with a fixed seating capacity of at least 3,500 seats located in Riverside County.
(H)An outdoor stadium with a fixed seating capacity in excess of 1,500 seats located in Tulare County.
(I)A motorsports entertainment complex of not less than 50 acres that includes within its boundaries an outdoor speedway with a fixed seating capacity of at least 50,000 seats, located in San Bernardino County.
(J)An exposition park, owned or operated by a bona fide nonprofit organization, of not less than 400 acres with facilities including a grandstand with a seating capacity of at least 8,000 people, at least one exhibition hall greater than 100,000 square feet, and at least four exhibition halls, each greater than 30,000 square feet, located in the City of Pomona or the City of La Verne in Los Angeles County.
(K)An outdoor soccer stadium with a fixed seating capacity of at least 25,000 seats, an outdoor tennis stadium with a fixed capacity of at least 7,000 seats, an outdoor track and field facility with a fixed seating capacity of at least 7,000 seats, and an indoor velodrome with a fixed seating capacity of at least 2,000 seats, all located within a sports and athletic complex built before January 1, 2005, in the City of Carson in Los Angeles County.
(L)An outdoor professional sports facility with a fixed seating capacity of at least 4,200 seats located in San Joaquin County.
(M)A fully enclosed arena with a fixed seating capacity in excess of 13,000 seats in the City of Inglewood.
(N)(i)An outdoor stadium with a fixed seating capacity of at least 68,000 seats located in the City of Santa Clara.
(ii)A beer manufacturer, the holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, a major tenant of an outdoor stadium described in clause (i), provided the major tenant does not hold a retail license, and the advertising may include the placement of advertising in an on-sale licensed premises operated at the outdoor stadium.
(O)A complex of not more than 50 acres located on the campus of, and owned by, Sonoma State University dedicated to presenting live artistic, musical, sports, food, beverage, culinary, lifestyle, or other cultural and entertainment events and performances with venues that include a concert hall with a seating capacity of approximately 1,500 seats, a second concert hall with a seating capacity of up to 300 seats, an outdoor area with a seating capacity of up to 5,000 seats, and a further outdoor area with a seating capacity of up to 10,000 seats. With respect to this complex, advertising space and time may also be purchased from or on behalf of the owner of the complex, a long-term tenant or licensee of the venue, whether or not the owner, long-term tenant, or licensee holds an on-sale license.
(P)A fairgrounds with a horse racetrack and equestrian and sports facilities located in San Diego County.
(2)The outdoor stadium or fully enclosed arena described in paragraph (1) is not owned by a community college district.
(3)The advertising space or time is purchased only in connection with the events to be held on the premises of the exposition park, stadium, or arena owned by the on-sale licensee. With respect to an exposition park as described in subparagraph (J) of paragraph (1) that includes at least one hotel, the advertising space or time shall not be displayed on or in any hotel located in the exposition park, or purchased in connection with the operation of any hotel located in the exposition park. With respect to the complex described in subparagraph (O) of paragraph (1), the advertising space or time shall be purchased only in connection with live artistic, musical, sports, food, beverage, culinary, lifestyle, or other cultural and entertainment events and performances to be held on the premises of the complex.
(4)The on-sale licensee serves other brands of beer distributed by a competing beer wholesaler in addition to the brand manufactured or marketed by the beer manufacturer, other brands of wine distributed by a competing wine wholesaler in addition to the brand produced by the winegrower, and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brand manufactured or marketed by the distilled spirits rectifier, the distilled spirits manufacturer, or the distilled spirits manufacturers agent that purchased the advertising space or time.
(b)Any purchase of advertising space or time pursuant to subdivision (a) shall be conducted pursuant to a written contract entered into by the beer manufacturer, the holder of the winegrowers license, the distilled spirits rectifier, the distilled spirits manufacturer, or the distilled spirits manufacturers agent and any of the following:
(1)The on-sale licensee.
(2)With respect to clause (ii) of subparagraph (N) of paragraph (1) of subdivision (a), the major tenant of the outdoor stadium.
(3)With respect to subparagraph (O) of paragraph (1) of subdivision (a), the owner, a long-term tenant of the complex, or licensee of the complex, whether or not the owner, long-term tenant, or licensee holds an on-sale license.
(c)Any beer manufacturer or holder of a winegrowers license, any distilled spirits rectifier, any distilled spirits manufacturer, or any distilled spirits manufacturers agent who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesalers license to fulfill all or part of those contractual obligations entered into pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space, time, or costs involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(d)Any on-sale retail licensee, as described in subdivision (a), who, directly or indirectly, solicits or coerces a holder of a wholesalers license to solicit a beer manufacturer, a holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or a distilled spirits manufacturers agent to purchase advertising space or time pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(e)For the purposes of this section, beer manufacturer includes any holder of a beer manufacturers license, any holder of an out-of-state beer manufacturers certificate, or any holder of a beer and wine importers general license.
(f)The Legislature finds that it is necessary and proper to require a separation among manufacturing interests, wholesale interests, and retail interests in the production and distribution of alcoholic beverages in order to prevent suppliers from dominating local markets through vertical integration and to prevent excessive sales of alcoholic beverages produced by overly aggressive marketing techniques. The Legislature further finds that the exceptions established by this section to the general prohibition against tied interests shall be limited to their express terms so as not to undermine the general prohibition and intends that this section be construed accordingly.
SEC. 2.The Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique conditions located in the County of San Diego.
SEC. 3.Section 1.5 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by this bill and Senate Bill 462. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 25503.6 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 462, in which case Section 25503.6 of the Business and Professions Code, as amended by Senate Bill 462, shall remain operative only until the operative date of this bill, at which time Section 1.5 of this bill shall become operative, and Section 1 of this bill shall not become operative.
SEC. 4.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee subject to all of the following conditions:
(1)The on-sale licensee is the owner, manager, agent of the owner, assignee of the owners advertising rights, or the major tenant of the owner of any of the following:
(A)An outdoor stadium or a fully enclosed arena with a fixed seating capacity in excess of 10,000 seats located in Sacramento County or Alameda County.
(B)A fully enclosed arena with a fixed seating capacity in excess of 18,000 seats located in Orange County or Los Angeles County.
(C)An outdoor stadium or fully enclosed arena with a fixed seating capacity in excess of 8,500 seats located in Kern County.
(D)An exposition park of not less than 50 acres that includes an outdoor stadium with a fixed seating capacity in excess of 8,000 seats and a fully enclosed arena with an attendance capacity in excess of 4,500 people, located in San Bernardino County.
(E)An outdoor stadium with a fixed seating capacity in excess of 10,000 seats located in Yolo County.
(F)An outdoor stadium and a fully enclosed arena with fixed seating capacities in excess of 10,000 seats located in Fresno County.
(G)An athletic and entertainment complex of not less than 50 acres that includes within its boundaries an outdoor stadium with a fixed seating capacity of at least 8,000 seats and a second outdoor stadium with a fixed seating capacity of at least 3,500 seats located in Riverside County.
(H)An outdoor stadium with a fixed seating capacity in excess of 1,500 seats located in Tulare County.
(I)A motorsports entertainment complex of not less than 50 acres that includes within its boundaries an outdoor speedway with a fixed seating capacity of at least 50,000 seats, located in San Bernardino County.
(J)An exposition park, owned or operated by a bona fide nonprofit organization, of not less than 400 acres with facilities including a grandstand with a seating capacity of at least 8,000 people, at least one exhibition hall greater than 100,000 square feet, and at least four exhibition halls, each greater than 30,000 square feet, located in the City of Pomona or the City of La Verne in Los Angeles County.
(K)An outdoor soccer stadium with a fixed seating capacity of at least 25,000 seats, an outdoor tennis stadium with a fixed capacity of at least 7,000 seats, an outdoor track and field facility with a fixed seating capacity of at least 7,000 seats, and an indoor velodrome with a fixed seating capacity of at least 2,000 seats, all located within a sports and athletic complex built before January 1, 2005, in the City of Carson in Los Angeles County.
(L)An outdoor professional sports facility with a fixed seating capacity of at least 4,200 seats located in San Joaquin County.
(M)A fully enclosed arena with a fixed seating capacity in excess of 13,000 seats in the City of Inglewood.
(N)(i)An outdoor stadium with a fixed seating capacity of at least 68,000 seats located in the City of Santa Clara.
(ii)A beer manufacturer, the holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, a major tenant of an outdoor stadium described in clause (i), provided the major tenant does not hold a retail license, and the advertising may include the placement of advertising in an on-sale licensed premises operated at the outdoor stadium.
(O)A fairgrounds with a horse racetrack and equestrian and sports facilities located in San Diego County.
(2)The outdoor stadium or fully enclosed arena described in paragraph (1) is not owned by a community college district.
(3)The advertising space or time is purchased only in connection with the events to be held on the premises of the exposition park, stadium, or arena owned by the on-sale licensee. With respect to an exposition park as described in subparagraph (J) of paragraph (1) that includes at least one hotel, the advertising space or time shall not be displayed on or in any hotel located in the exposition park, or purchased in connection with the operation of any hotel located in the exposition park.
(4)The on-sale licensee serves other brands of beer distributed by a competing beer wholesaler in addition to the brand manufactured or marketed by the beer manufacturer, other brands of wine distributed by a competing wine wholesaler in addition to the brand produced by the winegrower, and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brand manufactured or marketed by the distilled spirits rectifier, the distilled spirits manufacturer or the distilled spirits manufacturers agent that purchased the advertising space or time.
(b)Any purchase of advertising space or time pursuant to subdivision (a) shall be conducted pursuant to a written contract entered into by the beer manufacturer, the holder of the winegrowers license, the distilled spirits rectifier, the distilled spirits manufacturer, or the distilled spirits manufacturers agent and the on-sale licensee, or with respect to clause (ii) of subparagraph (N) of paragraph (1) of subdivision (a), the major tenant of the outdoor stadium.
(c)Any beer manufacturer or holder of a winegrowers license, any distilled spirits rectifier, any distilled spirits manufacturer, or any distilled spirits manufacturers agent who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesalers license to fulfill all or part of those contractual obligations entered into pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space, time, or costs involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(d)Any on-sale retail licensee, as described in subdivision (a), who, directly or indirectly, solicits or coerces a holder of a wholesalers license to solicit a beer manufacturer, a holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or a distilled spirits manufacturers agent to purchase advertising space or time pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(e)For the purposes of this section, beer manufacturer includes any holder of a beer manufacturers license, any holder of an out-of-state beer manufacturers certificate, or any holder of a beer and wine importers general license.
SEC. 1.5.Section 25503.6 of the Business and Professions Code is amended to read:25503.6.(a)Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee subject to all of the following conditions:
(1)The on-sale licensee is the owner, manager, agent of the owner, assignee of the owners advertising rights, or the major tenant of the owner of any of the following:
(A)An outdoor stadium or a fully enclosed arena with a fixed seating capacity in excess of 10,000 seats located in Sacramento County or Alameda County.
(B)A fully enclosed arena with a fixed seating capacity in excess of 18,000 seats located in Orange County or Los Angeles County.
(C)An outdoor stadium or fully enclosed arena with a fixed seating capacity in excess of 8,500 seats located in Kern County.
(D)An exposition park of not less than 50 acres that includes an outdoor stadium with a fixed seating capacity in excess of 8,000 seats and a fully enclosed arena with an attendance capacity in excess of 4,500 people, located in San Bernardino County.
(E)An outdoor stadium with a fixed seating capacity in excess of 10,000 seats located in Yolo County.
(F)An outdoor stadium and a fully enclosed arena with fixed seating capacities in excess of 10,000 seats located in Fresno County.
(G)An athletic and entertainment complex of not less than 50 acres that includes within its boundaries an outdoor stadium with a fixed seating capacity of at least 8,000 seats and a second outdoor stadium with a fixed seating capacity of at least 3,500 seats located within in Riverside County.
(H)An outdoor stadium with a fixed seating capacity in excess of 1,500 seats located in Tulare County.
(I)A motorsports entertainment complex of not less than 50 acres that includes within its boundaries an outdoor speedway with a fixed seating capacity of at least 50,000 seats, located within in San Bernardino County.
(J)An exposition park, owned or operated by a bona fide nonprofit organization, of not less than 400 acres with facilities including a grandstand with a seating capacity of at least 8,000 people, at least one exhibition hall greater than 100,000 square feet, and at least four exhibition halls, each greater than 30,000 square feet, located in the City of Pomona or the City of La Verne in Los Angeles County.
(K)An outdoor soccer stadium with a fixed seating capacity of at least 25,000 seats, an outdoor tennis stadium with a fixed capacity of at least 7,000 seats, an outdoor track and field facility with a fixed seating capacity of at least 7,000 seats, and an indoor velodrome with a fixed seating capacity of at least 2,000 seats, all located within a sports and athletic complex built before January 1, 2005, within in the City of Carson in Los Angeles County.
(L)An outdoor professional sports facility with a fixed seating capacity of at least 4,200 seats located within in San Joaquin County.
(M)A fully enclosed arena with a fixed seating capacity in excess of 13,000 seats in the City of Inglewood.
(N)(i)An outdoor stadium with a fixed seating capacity of at least 68,000 seats located in the City of Santa Clara.
(ii)A beer manufacturer, the holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, a major tenant of an outdoor stadium described in clause (i), provided the major tenant does not hold a retail license, and the advertising may include the placement of advertising in an on-sale licensed premises operated at the outdoor stadium.
(O)A complex of not more than 50 acres located on the campus of, and owned by, Sonoma State University dedicated to presenting live artistic, musical, sports, food, beverage, culinary, lifestyle, or other cultural and entertainment events and performances with venues that include a concert hall with a seating capacity of approximately 1,500 seats, a second concert hall with a seating capacity of up to 300 seats, an outdoor area with a seating capacity of up to 5,000 seats, and a further outdoor area with a seating capacity of up to 10,000 seats. With respect to this complex, advertising space and time may also be purchased from or on behalf of the owner of the complex, a long-term tenant or licensee of the venue, whether or not the owner, long-term tenant, or licensee holds an on-sale license.
(P)A fairgrounds with a horse racetrack and equestrian and sports facilities located in San Diego County.
(2)The outdoor stadium or fully enclosed arena described in paragraph (1) is not owned by a community college district.
(3)The advertising space or time is purchased only in connection with the events to be held on the premises of the exposition park, stadium, or arena owned by the on-sale licensee. With respect to an exposition park as described in subparagraph (J) of paragraph (1) that includes at least one hotel, the advertising space or time shall not be displayed on or in any hotel located in the exposition park, or purchased in connection with the operation of any hotel located in the exposition park. With respect to the complex described in subparagraph (O) of paragraph (1), the advertising space or time shall be purchased only in connection with live artistic, musical, sports, food, beverage, culinary, lifestyle, or other cultural and entertainment events and performances to be held on the premises of the complex.
(4)The on-sale licensee serves other brands of beer distributed by a competing beer wholesaler in addition to the brand manufactured or marketed by the beer manufacturer, other brands of wine distributed by a competing wine wholesaler in addition to the brand produced by the winegrower, and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brand manufactured or marketed by the distilled spirits rectifier, the distilled spirits manufacturer manufacturer, or the distilled spirits manufacturers agent that purchased the advertising space or time.
(b)Any purchase of advertising space or time pursuant to subdivision (a) shall be conducted pursuant to a written contract entered into by the beer manufacturer, the holder of the winegrowers license, the distilled spirits rectifier, the distilled spirits manufacturer, or the distilled spirits manufacturers agent and the on-sale licensee, or with respect to clause (ii) of subparagraph (N) of paragraph (1) of subdivision (a), the major tenant of the outdoor stadium. any of the following:
(1)The on-sale licensee.
(2)With respect to clause (ii) of subparagraph (N) of paragraph (1) of subdivision (a), the major tenant of the outdoor stadium.
(3)With respect to subparagraph (O) of paragraph (1) of subdivision (a), the owner, a long-term tenant of the complex, or licensee of the complex, whether or not the owner, long-term tenant, or licensee holds an on-sale license.
(c)Any beer manufacturer or holder of a winegrowers license, any distilled spirits rectifier, any distilled spirits manufacturer, or any distilled spirits manufacturers agent who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesalers license to fulfill all or part of those contractual obligations entered into pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space, time, or costs involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(d)Any on-sale retail licensee, as described in subdivision (a), who, directly or indirectly, solicits or coerces a holder of a wholesalers license to solicit a beer manufacturer, a holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or a distilled spirits manufacturers agent to purchase advertising space or time pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(e)For the purposes of this section, beer manufacturer includes any holder of a beer manufacturers license, any holder of an out-of-state beer manufacturers certificate, or any holder of a beer and wine importers general license.
(f)The Legislature finds that it is necessary and proper to require a separation among manufacturing interests, wholesale interests, and retail interests in the production and distribution of alcoholic beverages in order to prevent suppliers from dominating local markets through vertical integration and to prevent excessive sales of alcoholic beverages produced by overly aggressive marketing techniques. The Legislature further finds that the exceptions established by this section to the general prohibition against tied interests shall be limited to their express terms so as not to undermine the general prohibition and intends that this section be construed accordingly.
SEC. 2.The Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique conditions located in the County of San Diego.
SEC. 3.Section 1.5 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by this bill and Senate Bill 462. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 25503.6 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 462, in which case Section 25503.6 of the Business and Professions Code, as amended by Senate Bill 462, shall remain operative only until the operative date of this bill, at which time Section 1.5 of this bill shall become operative, and Section 1 of this bill shall not become operative.
SEC. 3.SEC. 4.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)A person employed or engaged by an authorized licensee may appear at a promotional event at the premises of an off-sale retail licensee for the purposes of providing autographs to consumers at the promotional event only under the following conditions:
(1)A purchase from the off-sale retail licensee is not required.
(2)A fee is not charged to attend the promotional event.
(3)Autographing may only be provided on consumer advertising specialities given by the authorized licensee to a consumer or on any item provided by the consumer.
(4)The promotional event does not exceed four hours in duration.
(5)There are no more than two promotional events per calendar year involving the same authorized licensee at a single premises of an off-sale retail licensee.
(6)The off-sale retail licensee may advertise the promotional event to be held at its licensed premises.
(7)An authorized licensee may advertise in advance of the promotional event only in publications of the authorized licensee, subject to the following conditions:
(A)The advertising only lists the name and address of the off-sale retail licensee, the name of the alcoholic beverage product being featured at the promotional event, and the time, date, and location of the off-sale retail licensee location where the promotional event is being held.
(B)The listing of the off-sale retail licensees name and address is the only reference to the off-sale retail licensee in the advertisement and is relatively inconspicuous in relation to the advertisement as a whole, and the advertisement does not contain any pictures or illustrations of the off-sale retail licensees premises or laudatory references to the off-sale retail licensee.
(8)A wholesaler does not directly or indirectly underwrite, share in, or contribute to any costs related to the promotional event, except that a beer and wine wholesaler that holds at least six distilled spirits wholesaler licenses may directly or indirectly underwrite, share in, or contribute to any costs related to a promotional event for which the wholesaler employs or engages the person providing autographs to consumers at the promotional event.
(9)The authorized licensee notifies the department in writing of the promotional event at least 30 days in advance of the promotional event.
(10)The authorized licensee maintains records necessary to establish its compliance with this section.
(b)For purposes of this section, authorized licensee means a manufacturer, winegrower, manufacturers agent, California winegrowers agent, rectifier, importer, brandy manufacturer, brandy importer, or wholesaler.
SEC. 2.SECTION 1.Section 25503.6 of the Business and Professions Code is amended to read:25503.6.(a)Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee subject to all of the following conditions:
(1)The on-sale licensee is the owner, manager, agent of the owner, assignee of the owners advertising rights, or the major tenant of the owner of any of the following:
(A)An outdoor stadium or a fully enclosed arena with a fixed seating capacity in excess of 10,000 seats located in Sacramento County or Alameda County.
(B)A fully enclosed arena with a fixed seating capacity in excess of 18,000 seats located in Orange County or Los Angeles County.
(C)An outdoor stadium or fully enclosed arena with a fixed seating capacity in excess of 8,500 seats located in Kern County.
(D)An exposition park of not less than 50 acres that includes an outdoor stadium with a fixed seating capacity in excess of 8,000 seats and a fully enclosed arena with an attendance capacity in excess of 4,500 people, located in San Bernardino County.
(E)An outdoor stadium with a fixed seating capacity in excess of 10,000 seats located in Yolo County.
(F)An outdoor stadium and a fully enclosed arena with fixed seating capacities in excess of 10,000 seats located in Fresno County.
(G)An athletic and entertainment complex of not less than 50 acres that includes within its boundaries an outdoor stadium with a fixed seating capacity of at least 8,000 seats and a second outdoor stadium with a fixed seating capacity of at least 3,500 seats located in Riverside County.
(H)An outdoor stadium with a fixed seating capacity in excess of 1,500 seats located in Tulare County.
(I)A motorsports entertainment complex of not less than 50 acres that includes within its boundaries an outdoor speedway with a fixed seating capacity of at least 50,000 seats, located in San Bernardino County.
(J)An exposition park, owned or operated by a bona fide nonprofit organization, of not less than 400 acres with facilities including a grandstand with a seating capacity of at least 8,000 people, at least one exhibition hall greater than 100,000 square feet, and at least four exhibition halls, each greater than 30,000 square feet, located in the City of Pomona or the City of La Verne in Los Angeles County.
(K)An outdoor soccer stadium with a fixed seating capacity of at least 25,000 seats, an outdoor tennis stadium with a fixed capacity of at least 7,000 seats, an outdoor track and field facility with a fixed seating capacity of at least 7,000 seats, and an indoor velodrome with a fixed seating capacity of at least 2,000 seats, all located within a sports and athletic complex built before January 1, 2005, in the City of Carson in Los Angeles County.
(L)An outdoor professional sports facility with a fixed seating capacity of at least 4,200 seats located in San Joaquin County.
(M)A fully enclosed arena with a fixed seating capacity in excess of 13,000 seats in the City of Inglewood.
(N)(i)An outdoor stadium with a fixed seating capacity of at least 68,000 seats located in the City of Santa Clara.
(ii)A beer manufacturer, the holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, a major tenant of an outdoor stadium described in clause (i), provided the major tenant does not hold a retail license, and the advertising may include the placement of advertising in an on-sale licensed premises operated at the outdoor stadium.
(O)A fairgrounds with a horse racetrack and equestrian and sports facilities located in San Diego County.
(2)The outdoor stadium or fully enclosed arena described in paragraph (1) is not owned by a community college district.
(3)The advertising space or time is purchased only in connection with the events to be held on the premises of the exposition park, stadium, or arena owned by the on-sale licensee. With respect to an exposition park as described in subparagraph (J) of paragraph (1) that includes at least one hotel, the advertising space or time shall not be displayed on or in any hotel located in the exposition park, or purchased in connection with the operation of any hotel located in the exposition park.
(4)The on-sale licensee serves other brands of beer distributed by a competing beer wholesaler in addition to the brand manufactured or marketed by the beer manufacturer, other brands of wine distributed by a competing wine wholesaler in addition to the brand produced by the winegrower, and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brand manufactured or marketed by the distilled spirits rectifier, the distilled spirits manufacturer or the distilled spirits manufacturers agent that purchased the advertising space or time.
(b)Any purchase of advertising space or time pursuant to subdivision (a) shall be conducted pursuant to a written contract entered into by the beer manufacturer, the holder of the winegrowers license, the distilled spirits rectifier, the distilled spirits manufacturer, or the distilled spirits manufacturers agent and the on-sale licensee, or with respect to clause (ii) of subparagraph (N) of paragraph (1) of subdivision (a), the major tenant of the outdoor stadium.
(c)Any beer manufacturer or holder of a winegrowers license, any distilled spirits rectifier, any distilled spirits manufacturer, or any distilled spirits manufacturers agent who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesalers license to fulfill all or part of those contractual obligations entered into pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space, time, or costs involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(d)Any on-sale retail licensee, as described in subdivision (a), who, directly or indirectly, solicits or coerces a holder of a wholesalers license to solicit a beer manufacturer, a holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or a distilled spirits manufacturers agent to purchase advertising space or time pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(e)For the purposes of this section, beer manufacturer includes any holder of a beer manufacturers license, any holder of an out-of-state beer manufacturers certificate, or any holder of a beer and wine importers general license.
SEC. 2.The Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique conditions located in the County of San Diego.
SEC. 3.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)A person employed or engaged by an authorized licensee may appear at a promotional event at the premises of an off-sale retail licensee for the purposes of providing autographs to consumers at the promotional event only under the following conditions:
(1)A purchase from the off-sale retail licensee is not required.
(2)A fee is not charged to attend the promotional event.
(3)Autographing may only be provided on consumer advertising specialities given by the authorized licensee to a consumer or on any item provided by the consumer.
(4)The promotional event does not exceed four hours in duration.
(5)There are no more than two promotional events per calendar year involving the same authorized licensee at a single premises of an off-sale retail licensee.
(6)The off-sale retail licensee may advertise the promotional event to be held at its licensed premises.
(7)An authorized licensee may advertise in advance of the promotional event only in publications of the authorized licensee, subject to the following conditions:
(A)The advertising only lists the name and address of the off-sale retail licensee, the name of the alcoholic beverage product being featured at the promotional event, and the time, date, and location of the off-sale retail licensee location where the promotional event is being held.
(B)The listing of the off-sale retail licensees name and address is the only reference to the off-sale retail licensee in the advertisement and is relatively inconspicuous in relation to the advertisement as a whole, and the advertisement does not contain any pictures or illustrations of the off-sale retail licensees premises or laudatory references to the off-sale retail licensee.
(8)A wholesaler does not directly or indirectly underwrite, share in, or contribute to any costs related to the promotional event, except that a beer and wine wholesaler that holds at least six distilled spirits wholesaler licenses may directly or indirectly underwrite, share in, or contribute to any costs related to a promotional event for which the wholesaler employs or engages the person providing autographs to consumers at the promotional event.
(9)The authorized licensee notifies the department in writing of the promotional event at least 30 days in advance of the promotional event.
(10)The authorized licensee maintains records necessary to establish its compliance with this section.
(b)For purposes of this section, authorized licensee means a manufacturer, winegrower, manufacturers agent, California winegrowers agent, rectifier, importer, brandy manufacturer, brandy importer, or wholesaler.
(c)This section shall remain in effect only until January 1, 2016, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2016, deletes or extends that date.
SECTION 1.SEC. 2.Section 25503.6 of the Business and Professions Code is amended to read:25503.6.(a)Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee subject to all of the following conditions:
(1)The on-sale licensee is the owner, manager, agent of the owner, assignee of the owners advertising rights, or the major tenant of the owner of any of the following:
(A)An outdoor stadium or a fully enclosed arena with a fixed seating capacity in excess of 10,000 seats located in Sacramento County or Alameda County.
(B)A fully enclosed arena with a fixed seating capacity in excess of 18,000 seats located in Orange County or Los Angeles County.
(C)An outdoor stadium or fully enclosed arena with a fixed seating capacity in excess of 8,500 seats located in Kern County.
(D)An exposition park of not less than 50 acres that includes an outdoor stadium with a fixed seating capacity in excess of 8,000 seats and a fully enclosed arena with an attendance capacity in excess of 4,500 people, located in San Bernardino County.
(E)An outdoor stadium with a fixed seating capacity in excess of 10,000 seats located in Yolo County.
(F)An outdoor stadium and a fully enclosed arena with fixed seating capacities in excess of 10,000 seats located in Fresno County.
(G)An athletic and entertainment complex of not less than 50 acres that includes within its boundaries an outdoor stadium with a fixed seating capacity of at least 8,000 seats and a second outdoor stadium with a fixed seating capacity of at least 3,500 seats located in Riverside County.
(H)An outdoor stadium with a fixed seating capacity in excess of 1,500 seats located in Tulare County.
(I)A motorsports entertainment complex of not less than 50 acres that includes within its boundaries an outdoor speedway with a fixed seating capacity of at least 50,000 seats, located in San Bernardino County.
(J)An exposition park, owned or operated by a bona fide nonprofit organization, of not less than 400 acres with facilities including a grandstand with a seating capacity of at least 8,000 people, at least one exhibition hall greater than 100,000 square feet, and at least four exhibition halls, each greater than 30,000 square feet, located in the City of Pomona or the City of La Verne in Los Angeles County.
(K)An outdoor soccer stadium with a fixed seating capacity of at least 25,000 seats, an outdoor tennis stadium with a fixed capacity of at least 7,000 seats, an outdoor track and field facility with a fixed seating capacity of at least 7,000 seats, and an indoor velodrome with a fixed seating capacity of at least 2,000 seats, all located within a sports and athletic complex built before January 1, 2005, in the City of Carson in Los Angeles County.
(L)An outdoor professional sports facility with a fixed seating capacity of at least 4,200 seats located in San Joaquin County.
(M)A fully enclosed arena with a fixed seating capacity in excess of 13,000 seats in the City of Inglewood.
(N)(i)An outdoor stadium with a fixed seating capacity of at least 68,000 seats located in the City of Santa Clara.
(ii)A beer manufacturer, the holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, a major tenant of an outdoor stadium described in clause (i), provided the major tenant does not hold a retail license, and the advertising may include the placement of advertising in an on-sale licensed premises operated at the outdoor stadium.
(2)The outdoor stadium or fully enclosed arena described in paragraph (1) is not owned by a community college district.
(3)The advertising space or time is purchased only in connection with the events to be held on the premises of the exposition park, stadium, or arena owned by the on-sale licensee. With respect to an exposition park as described in subparagraph (J) of paragraph (1) that includes at least one hotel, the advertising space or time shall not be displayed on or in any hotel located in the exposition park, or purchased in connection with the operation of any hotel located in the exposition park.
(4)The on-sale licensee serves other brands of beer distributed by a competing beer wholesaler in addition to the brand manufactured or marketed by the beer manufacturer, other brands of wine distributed by a competing wine wholesaler in addition to the brand produced by the winegrower, and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brand manufactured or marketed by the distilled spirits rectifier, the distilled spirits manufacturer or the distilled spirits manufacturers agent that purchased the advertising space or time.
(b)Any purchase of advertising space or time pursuant to subdivision (a) shall be conducted pursuant to a written contract entered into by the beer manufacturer, the holder of the winegrowers license, the distilled spirits rectifier, the distilled spirits manufacturer, or the distilled spirits manufacturers agent and the on-sale licensee, or with respect to clause (ii) of subparagraph (N) of paragraph (1) of subdivision (a), the major tenant of the outdoor stadium.
(c)Any beer manufacturer or holder of a winegrowers license, any distilled spirits rectifier, any distilled spirits manufacturer, or any distilled spirits manufacturers agent who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesalers license to fulfill all or part of those contractual obligations entered into pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space, time, or costs involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(d)Any on-sale retail licensee, as described in subdivision (a), who, directly or indirectly, solicits or coerces a holder of a wholesalers license to solicit a beer manufacturer, a holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or a distilled spirits manufacturers agent to purchase advertising space or time pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(e)For the purposes of this section, beer manufacturer includes any holder of a beer manufacturers license, any holder of an out-of-state beer manufacturers certificate, or any holder of a beer and wine importers general license.
(a)Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee subject to all of the following conditions:
(1)The on-sale licensee is the owner, manager, agent of the owner, assignee of the owners advertising rights, or the major tenant of the owner of any of the following:
(A)An outdoor stadium or a fully enclosed arena with a fixed seating capacity in excess of 10,000 seats located in Sacramento County or Alameda County.
(B)A fully enclosed arena with a fixed seating capacity in excess of 18,000 seats located in Orange County or Los Angeles County.
(C)An outdoor stadium or fully enclosed arena with a fixed seating capacity in excess of 8,500 seats located in Kern County.
(D)An exposition park of not less than 50 acres that includes an outdoor stadium with a fixed seating capacity in excess of 8,000 seats and a fully enclosed arena with an attendance capacity in excess of 4,500 people, located in San Bernardino County.
(E)An outdoor stadium with a fixed seating capacity in excess of 10,000 seats located in Yolo County.
(F)An outdoor stadium and a fully enclosed arena with fixed seating capacities in excess of 10,000 seats located in Fresno County.
(G)An athletic and entertainment complex of not less than 50 acres that includes within its boundaries an outdoor stadium with a fixed seating capacity of at least 8,000 seats and a second outdoor stadium with a fixed seating capacity of at least 3,500 seats located within in Riverside County.
(H)An outdoor stadium with a fixed seating capacity in excess of 1,500 seats located in Tulare County.
(I)A motorsports entertainment complex of not less than 50 acres that includes within its boundaries an outdoor speedway with a fixed seating capacity of at least 50,000 seats, located within in San Bernardino County.
(J)An exposition park, owned or operated by a bona fide nonprofit organization, of not less than 400 acres with facilities including a grandstand with a seating capacity of at least 8,000 people, at least one exhibition hall greater than 100,000 square feet, and at least four exhibition halls, each greater than 30,000 square feet, located in the City of Pomona or the City of La Verne in Los Angeles County.
(K)An outdoor soccer stadium with a fixed seating capacity of at least 25,000 seats, an outdoor tennis stadium with a fixed capacity of at least 7,000 seats, an outdoor track and field facility with a fixed seating capacity of at least 7,000 seats, and an indoor velodrome with a fixed seating capacity of at least 2,000 seats, all located within a sports and athletic complex built before January 1, 2005, within in the City of Carson in Los Angeles County.
(L)An outdoor professional sports facility with a fixed seating capacity of at least 4,200 seats located within in San Joaquin County.
(M)A fully enclosed arena with a fixed seating capacity in excess of 13,000 seats in the City of Inglewood.
(N)(i)An outdoor stadium with a fixed seating capacity of at least 68,000 seats located in the City of Santa Clara.
(ii)A beer manufacturer, the holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, a major tenant of an outdoor stadium described in clause (i), provided the major tenant does not hold a retail license, and the advertising may include the placement of advertising in an on-sale licensed premises operated at the outdoor stadium.
(2)The outdoor stadium or fully enclosed arena described in paragraph (1) is not owned by a community college district.
(3)The advertising space or time is purchased only in connection with the events to be held on the premises of the exposition park, stadium, or arena owned by the on-sale licensee. With respect to an exposition park as described in subparagraph (J) of paragraph (1) that includes at least one hotel, the advertising space or time shall not be displayed on or in any hotel located in the exposition park, or purchased in connection with the operation of any hotel located in the exposition park.
(4)The on-sale licensee serves other brands of beer distributed by a competing beer wholesaler in addition to the brand manufactured or marketed by the beer manufacturer, other brands of wine distributed by a competing wine wholesaler in addition to the brand produced by the winegrower, and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brand manufactured or marketed by the distilled spirits rectifier, the distilled spirits manufacturer or the distilled spirits manufacturers agent that purchased the advertising space or time.
(b)Any purchase of advertising space or time pursuant to subdivision (a) shall be conducted pursuant to a written contract entered into by the beer manufacturer, the holder of the winegrowers license, the distilled spirits rectifier, the distilled spirits manufacturer, or the distilled spirits manufacturers agent and the on-sale licensee, or with respect to clause (ii) of subparagraph (N) of paragraph (1) of subdivision (a), the major tenant of the outdoor stadium.
(c)Any beer manufacturer or holder of a winegrowers license, any distilled spirits rectifier, any distilled spirits manufacturer, or any distilled spirits manufacturers agent who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesalers license to fulfill all or part of those contractual obligations entered into pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space, time, or costs involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(d)Any on-sale retail licensee, as described in subdivision (a), who, directly or indirectly, solicits or coerces a holder of a wholesalers license to solicit a beer manufacturer, a holder of a winegrowers license, a distilled spirits rectifier, a distilled spirits manufacturer, or a distilled spirits manufacturers agent to purchase advertising space or time pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(e)For the purposes of this section, beer manufacturer includes any holder of a beer manufacturers license, any holder of an out-of-state beer manufacturers certificate, or any holder of a beer and wine importers general license.
|
Date
|
Status
|
|---|---|
| Jun 29, 2015 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on G.O. |
| Oct 1, 2015 | Chaptered by Secretary of State. Chapter 420, Statutes of 2015. |
| Oct 1, 2015 | Approved by the Governor. |
| Sep 11, 2015 | Enrolled and presented to the Governor at 5 p.m. |
| Sep 8, 2015 | Assembly amendments concurred in. (Ayes 40. Noes 0.) Ordered to engrossing and enrolling. |
| Sep 8, 2015 | Assembly amendments concurred in. (Ayes 40. Noes 0. Page 2563.) Ordered to engrossing and enrolling. |
| Sep 3, 2015 | Read third time. Passed. (Ayes 80. Noes 0. Page 2846.) Ordered to the Senate. |
| Sep 3, 2015 | Read third time. Passed. Ordered to the Senate. |
| Sep 3, 2015 | In Senate. Concurrence in Assembly amendments pending. |
| Sep 1, 2015 | Read third time and amended. |
| Sep 1, 2015 | Ordered to third reading. |
| Aug 27, 2015 | Ordered to third reading. |
| Aug 27, 2015 | From consent calendar on motion of Assembly Member Cristina Garcia. |
| Aug 20, 2015 | Read second time. Ordered to consent calendar. |
| Aug 19, 2015 | From committee: Do pass. Ordered to consent calendar. (Ayes 17. Noes 0.) (August 19). |
| Jul 9, 2015 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 19. Noes 0.) (July 8). Re-referred to Com. on APPR. |
| Feb 26, 2015 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
| Jun 11, 2015 | Referred to Com. on G.O. |
| May 22, 2015 | Read third time. Passed. (Ayes 39. Noes 0.) Ordered to the Assembly. |
| May 22, 2015 | Read third time. Passed. (Ayes 39. Noes 0. Page 1062.) Ordered to the Assembly. |
| May 22, 2015 | In Assembly. Read first time. Held at Desk. |
| May 12, 2015 | Read second time. Ordered to third reading. |
| May 11, 2015 | From committee: Do pass. (Ayes 7. Noes 0.) (May 11). |
| May 11, 2015 | From committee: Do pass. (Ayes 7. Noes 0. Page 960.) (May 11). |
| May 1, 2015 | Set for hearing May 11. |
| Apr 28, 2015 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 7. Noes 0. Page 796.) (April 28). Re-referred to Com. on APPR. |
| Apr 16, 2015 | Set for hearing April 28. |
| Apr 9, 2015 | Re-referred to Com. on G.O. |
| Apr 6, 2015 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS. |
| Mar 12, 2015 | Referred to Com. on RLS. |
| Feb 27, 2015 | From printer. May be acted upon on or after March 29. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 8, 2015 | Unfinished Business SB557 Hall Concurrence | Senate Floor |
Passed |
|
| Sep 3, 2015 | SB 557 Hall Senate Third Reading By GRAY | Assembly Floor |
Passed |
|
| Aug 19, 2015 | Do pass. To Consent Calendar. | Assembly Standing Committee on Appropriations |
Passed |
|
| Jul 8, 2015 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Governmental Organization |
Passed |
|
| May 22, 2015 | Senate 3rd Reading SB557 Hall | Senate Floor |
Passed |
|
| May 11, 2015 | Do pass | Senate Standing Committee on Appropriations |
Passed |
|
| Apr 28, 2015 | Do pass, but first be re-referred to the Committee on [Appropriations] with the recommendation: To Consent Calendar | Senate Standing Committee on Governmental Organization |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| 22nd DAA | * Support | Jul 8, 2015 |
| Del Mar Fairgrounds | ** Support | Sep 3, 2015 |
| Del Mar Thoroughbred Club | ** Support | Sep 3, 2015 |
| Distilled Spirits Council Of The United States | ** Support | May 22, 2015 |
| Family Winemakers Of California | ** Support | Sep 3, 2015 |
| Southern Wine & Spirits Wholesalers, Inc. | ** Support | May 22, 2015 |
| Wine Institute | ** Support | May 22, 2015 |
| Youngs Market Company | ** Support | May 22, 2015 |
SB 557
Page 4
|
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
UNFINISHED BUSINESS
Bill No: SB 557
Amended: 9/1/15
SENATE GOVERNMENTAL ORG. COMMITTEE: 7-0, 4/28/15
AYES: Hall, Block, Hernandez, Hill, Hueso, Lara, McGuire
NO VOTE RECORDED: Berryhill, Gaines, Galgiani, Vidak
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/11/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
SENATE FLOOR: 39-0, 5/22/15
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block, Cannella, De León, Fuller, Gaines, Galgiani, Hall, Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson, Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning, Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Runner, Stone, Vidak, Wieckowski, Wolk
ASSEMBLY FLOOR: 80-0, 9/3/15 - See last page for vote
SUBJECT: Alcoholic beverages: tied-house restrictions: advertising
DIGEST: This bill extends an existing “tied-house” exception in the Alcoholic Beverage Control (ABC) Act pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include a fairgrounds with a horse racetrack and equestrian and sports facilities located in the County of San Diego.
Assembly Amendments remove an earlier provision relating to the deletion of a specified sunset provision in the ABC Act, insert the tied-house exception for the Del Mar fairgrounds, and add double-jointing language to avoid a chaptering out issue in the event that both this bill and SB 462 (Wolk) are enacted into law.
Existing law:
Establishes the Department of ABC and grants it exclusive authority to administer the provisions of the ABC Act in accordance with laws enacted by the Legislature. This involves licensing individuals and businesses associated with the manufacture, importation and sale of alcoholic beverages in this state and the collection of license fees for this purpose.
Separates the alcoholic beverage industry into three component parts, or tiers (referred to as the “tied-house” law or “three-tier” system), of manufacturer (including breweries, wineries and distilleries), wholesaler, and retailer (both on-sale and off-sale). The original policy rationale for this body of law was to: (a) promote the state’s interest in an orderly market; (b) prohibit the vertical integration and dominance by a single producer in the market place; (c) prohibit commercial bribery and to protect the public from predatory marketing practices; and, (d) discourage and/or prevent the intemperate use of alcoholic beverages. Generally, other than exceptions granted by the Legislature, the holder of one type of license is not permitted to do business as another type of licensee within the “three-tier” system.
Prohibits, in general, an alcohol manufacturer, wholesaler, or any officer, director, or agent of any such person from owning, directly, or indirectly, any interest in any on-sale license, or from providing anything of value to retailers, be it free goods, services, or advertising.
Prohibits paid advertising by winegrowers, beer manufacturers and distilled spirits producers in cases where a retail licensee also owns a sports or entertainment venue. Over the years, numerous exceptions to this prohibition have been added to the ABC Act [e.g., Sleep Train Arena (formerly known as ARCO Arena) in Sacramento, Oakland Coliseum in Oakland, Arrowhead Pond Arena in Anaheim, Kern County Arena in Bakersfield, the National Orange Show Event Center in San Bernardino, California Speedway in Fontana, Grizzly Stadium in downtown Fresno, Raley Field in West Sacramento, HP Pavilion in San Jose, the Home Depot Center in the City of Carson, Levi’s Stadium in the City of Santa Clara, and other venues].
This bill:
Expands an existing “tied-house” exception in the ABC Act pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include a fairgrounds with a horse racetrack and equestrian and sports facilities located in the County of San Diego.
Makes legislative findings and declarations as to the necessity of a special statute for the County of San Diego.
Contains double-jointing language to avoid chaptering out issues in the event that both this bill and SB 462 (Wolk), also amending Section 25503.6 of the Business & Professions Code, are enacted into law.
Background
The author's office notes that this bill will amend ABC tied-house provisions to include the Del Mar Fairgrounds on the list of exemptions in the law, thereby allowing the fairgrounds to develop certain alcoholic beverage sponsorships with various manufacturers and distributors. Additionally, the author's office points out that existing law precludes any signage paid for by an alcoholic beverage manufacturer or distributor unless such an exception is created. Furthermore, the author’s office emphasizes that such an exemption would put the fairgrounds and the racetrack on an even playing field with other arenas and stadiums in California and help support efforts to make horse racing and other events economically viable.
Related Legislation
SB 462 (Wolk, 2015) extends an existing “tied-house” exception in the ABC Act pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include a specified entertainment complex, known as the Green Music Center, located on the campus of Sonoma State University. Additionally, this bill adds a new section of law to the ABC Act that allows alcoholic beverage licensees, as specified, to make monetary or alcoholic beverage contributions to the Green Music Center under certain conditions. (Pending on the Governor’s Desk)
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes
According to the Assembly Appropriations Committee, minor and
absorbable enforcement costs to the Department of ABC.
Del Mar Fairgrounds
Del Mar Thoroughbred Club
Family Winemakers of California
None received
ASSEMBLY FLOOR: 80-0, 9/3/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
Prepared by: Arthur Terzakis / G.O. / (916) 651-1530
9/3/15 18:47:54
**** END ****
SB 557
Page 4
SENATE THIRD READING
SB 557
(Hall)
As Amended September 1, 2015
Majority vote
SENATE VOTE: 39-0
Committee |
Votes |
Ayes |
Noes |
Governmental Organization |
19-0 |
Gray, Linder, Achadjian, Alejo, Bigelow, Campos, Cooley, Cooper, Daly, Cristina Garcia, Eduardo Garcia, Jones-Sawyer, Levine, Mayes, Perea, Salas, Steinorth, Waldron, Wilk |
|
Appropriations |
17-0 |
Gomez, Bigelow, Bloom, Bonta, Calderon, Chang, Daly, Eggman, Gallagher, Eduardo Garcia, Holden, Jones, Quirk, Rendon, Wagner, Weber, Wood |
|
SUMMARY: Extends an existing tied-house exception in the Alcoholic Beverage Control Act (Act) pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include a fairgrounds with a horse racetrack and equestrian and sports facilities (Del Mar Fairgrounds) in San Diego County. Specifically, this bill:
Allows a beer manufacturer, the holder of a winegrower's license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturer's agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee at a fairgrounds (22nd District Agricultural Association (DAA)) with a horse racetrack and equestrian and sports facilities located in San Diego County, subject to specified conditions.
Make legislative findings and declarations as to the necessity of a special statute for the County of San Diego.
Make relating technical amendments.
Incorporate language contained in SB 462, to avoid a chaptering problem.
EXISTING LAW:
Establishes the Department of Alcoholic Beverage Control (ABC) and grants it exclusive authority to administer the provisions of the ABC Act in accordance with laws enacted by the Legislature. This involves licensing individuals and businesses associated with the manufacture, importation and sale of alcoholic beverages in this state and the collection of license fees for this purpose.
Prohibits, in general, an alcohol manufacturer, wholesaler, or any officer, director, or agent of any such person from owning, directly, or indirectly, any interest in any on-sale license, or from providing anything of value to retailers, be it free goods, services, or advertising.
Prohibits paid advertising by winegrowers, beer manufacturers and distilled spirits producers in cases where a retail licensee also owns a sports or entertainment venue. Over the years numerous exceptions to this prohibition have been added to the ABC Act [e.g., Sleep Train Arena (formerly known as ARCO Arena) in Sacramento, Oakland Coliseum in Oakland, Arrowhead Pond Arena in Anaheim, Kern County Arena in Bakersfield, the National Orange Show Event Center in San Bernardino, California Speedway in Fontana, Grizzly Stadium in downtown Fresno, Raley Field in West Sacramento, HP Pavilion in San Jose, the Home Depot Center in the City of Carson, Levi's Stadium in the City of Santa Clara, and other venues].
Provides a narrow tied-house exception that expressly authorizes, under specified conditions, a beer manufacturer, holder of a winegrower’s license, California winegrower’s agent, distilled spirits manufacturer, holder of a distilled spirits rectifiers general license, or a distilled spirits manufacturer’s agent to purchase advertising space or time from a fully enclosed venue (ClubNokia) with box office sales and attendance by the public on a ticket basis only, with a patronage capacity in excess of 2,000, but not more than 3,000, located in Los Angeles County within the area subject to the Los Angeles Sports and Entertainment District Specific Plan adopted by the City on September 6, 2001, where the owner of the venue is not the on-sale retail licensee. (Business & Professions Code Section 25503.42)
Defines a state-supported fair organization as any fair that conducts an annual fair and submits an annual statement of operations to the CDFA. The generic term of "fairs" refers to District Agricultural Associations (DAA's), county fairs, citrus fairs, and the California State Fair.
FISCAL EFFECT: According to the Assembly Appropriations Committee, minor and absorbable enforcement costs to ABC.
COMMENTS:
Purpose of the bill: The author's office notes that this measure would amend ABC tied-house provisions to include the Del Mar Fairgrounds on the list of exemptions in the law, thereby allowing the fairgrounds to develop certain alcoholic beverage sponsorships with various manufacturers and distributors. The author's office points out that existing law precludes any signage paid for by an alcoholic beverage manufacturer or distributor unless such an exception is created. The author’s office emphasizes that such an exemption would put the fairgrounds and the racetrack on an even playing field with other arenas and stadiums in California and help support efforts to make horse racing and other events economically viable.
This Tied-house exemption is narrowly crafted and similar to those granted to the Los Angeles Forum in the City of Inglewood, the Los Angeles County Fair in Los Angeles County, the National Orange Show in San Bernardino, a theme or amusement park located in Orange County (Disneyland), the California Speedway in Fontana, the Indian Wells Tennis Club in Riverside County, non-profit theatre organizations, and maritime museums, among others.
Background: The network of California fairs includes 77 fair organizations divided into four categories: 52 DAA's - state government entities, 22 county fairs – County government or not-for-profit organizations, 2 citrus fruit fairs - not-for-profit organizations and the California Exposition and State Fair (Cal Expo) – a state agency. California's 77 fairs are located throughout the Golden State and host fairs from early spring to the fall of each year.
The California Department of Food & Agriculture (CDFA) is responsible for the oversight of California's agricultural industry, including the network of California fairs. The Division of Fairs and Expositions (F&E), provides fiscal and policy oversight of the network of California fairs and ensures the best use of available funding and services.
An annual fair is just one of many year-round activities for fair organizations in California. Fair officials must facilitate use of the fairgrounds for interim events sponsored by community groups and private entities as well as manage ongoing maintenance and capital improvement projects. As a result, the fair network creates the opportunity for small-to medium-sized businesses and nonprofit community groups to make money from these year-round activities. These interim events further boost jobs, incomes and tax revenues in every county throughout the state. While the California fair network makes it possible for this economic activity to occur, fair organizations are public, not-for-profit entities that exist to promote industries of the state and provide a community gathering place. They do not receive state general fund monies in support of these efforts.
Tied-house law: Tied-House Law refers to the statutory scheme restricting any cross-ownership among the three independent tiers of the alcohol industry: a) manufacturers; b) distributors/wholesalers; and, c) retailers. The term "Tied-House" refers to a practice which was common in this country prior to prohibition, and is still occurring in England today, where a bar or "public house" is tied to the products of a particular manufacturer. The original rationale for
Tied-house restrictions are in place to promote the state's interest in maintaining an orderly market, to prohibit the vertical integration of the alcohol industry, to protect the public from predatory marketing practices, and to prevent the intemperate consumption of alcoholic beverages. In order to further these policy goals, the Legislature has generally prohibited forms of cross-ownership between manufacturers and retailers, and discouraged manufacturers from providing anything of value to distributors or retailers, be it free goods, services or advertising.
Numerous exceptions to these restrictions have been enacted through the years in those specific instances where the Legislature determined that the public's interests were protected. Generally, the business community is interested in removing unnecessary business regulations and creating conditions that facilitate investment and expansion opportunities for companies that have some degree of ownership in multiple segments of the industry. However, the Legislature traditionally does not grant exemptions that favors the products of the entity seeking the exemption, or exemptions that unfairly compromise the role of the distributors.
Related legislation: AB 527 (Dodd) of the current legislative session. Creates a new tied-house exception in the Act that authorizes certain alcoholic beverage licensees to sponsor a limited number of events promoted by or to purchase advertising space and time from, or on behalf of, a live entertainment marketing company that conducts live artistic, musical, sports, food, beverage, culinary, or other cultural entertainment events at venues located solely in the County of Napa, under specified conditions. (Pending on Senate Floor)
Prior legislation: SB 600 (Bonta), Chapter 139, Statutes of 2014. Extends an existing "Tied-house" exception in the ABC Act pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include an outdoor stadium with a fixed seating capacity of at least 68,000 seats located in the City of Santa Clara (Levi's Stadium – San Francisco 49ers new stadium).
SB 324 (Wright), Chapter 164, Statutes of 2013. Provided a "Tied-house" exception to the ABC Act pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees and the Los Angeles Forum in the City of Inglewood.
AB 776 (Aghazarian), Chapter 221, Statutes of 2007. Created a new "Tied-house" exception by authorizing a beer manufacturer to sponsor or purchase advertising space and time from, or on behalf of, an off-sale retail licensee that is an owner or co-owner of a professional sports team (California Cougars indoor soccer team) that plays its home games, in an arena with a fixed seating capacity of 10,000 seats (Stockton Arena) located in San Joaquin County.
AB 663 (Galgiani), Chapter 745, Statutes of 2007. Extended an existing "Tied-house" exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include an outdoor professional sports facility with a fixed seating capacity of at least 4,200 (Banner Island Ballpark) located in San Joaquin County.
AB 1442 (Horton), Chapter 617, Statutes of 2005. Extended an existing "Tied-house" exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to the Home Depot Center, a sports and athletic complex within the City of Carson in Los Angeles and the Nokia Theater, located within the Los Angeles Sports and Entertainment District, adjacent to Staples Center.
AB 3085 (Governmental Organization Committee), Chapter 437, Statutes of 2004. Provided the Los Angeles County Fair with an exemption from tied-house laws so that so that alcohol manufacturers may purchase advertising from, or on behalf of, the on-sale licensees at this venue.
Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531 FN: 0001789
SB 557
Page 4
SENATE THIRD READING
SB 557
(Hall)
As Amended June 29, 2015
Majority vote
SENATE VOTE: 39-0
Committee |
Votes |
Ayes |
Noes |
Governmental Organization |
19-0 |
Gray, Linder, Achadjian, Alejo, Bigelow, Campos, Cooley, Cooper, Daly, Cristina Garcia, Eduardo Garcia, Jones-Sawyer, Levine, Mayes, Perea, Salas, Steinorth, Waldron, Wilk |
|
Appropriations |
17-0 |
Gomez, Bigelow, Bloom, Bonta, Calderon, Chang, Daly, Eggman, Gallagher, Eduardo Garcia, Holden, Jones, Quirk, Rendon, Wagner, Weber, Wood |
|
SUMMARY: Extends an existing tied-house exception in the Alcoholic Beverage Control Act (Act) pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include a fairgrounds with a horse racetrack and equestrian and sports facilities (Del Mar Fairgrounds) in San Diego County. Specifically, this bill:
Allows a beer manufacturer, the holder of a winegrower's license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturer's agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee at a fairgrounds (22nd District Agricultural Association) with a horse racetrack and equestrian and sports facilities located in San Diego County, subject to specified conditions.
Make legislative findings and declarations as to the necessity of a special statute for the County of San Diego.
EXISTING LAW:
Establishes the Department of Alcoholic Beverage Control (ABC) and grants it exclusive authority to administer the provisions of the ABC Act in accordance with laws enacted by the Legislature. This involves licensing individuals and businesses associated with the manufacture, importation and sale of alcoholic beverages in this state and the collection of license fees for this purpose.
Prohibits, in general, an alcohol manufacturer, wholesaler, or any officer, director, or agent of any such person from owning, directly, or indirectly, any interest in any on-sale license, or from providing anything of value to retailers, be it free goods, services, or advertising.
Prohibits paid advertising by winegrowers, beer manufacturers and distilled spirits producers in cases where a retail licensee also owns a sports or entertainment venue. Over the years numerous exceptions to this prohibition have been added to the ABC Act [e.g., Sleep Train Arena (formerly known as ARCO Arena) in Sacramento, Oakland Coliseum in Oakland, Arrowhead Pond Arena in Anaheim, Kern County Arena in Bakersfield, the National Orange Show Event Center in San Bernardino, California Speedway in Fontana, Grizzly Stadium in downtown Fresno, Raley Field in West Sacramento, HP Pavilion in San Jose, the Home Depot Center in the City of Carson, Levi's Stadium in the City of Santa Clara, and other venues].
Provides a narrow tied-house exception that expressly authorizes, under specified conditions, a beer manufacturer, holder of a winegrower's license, California winegrower's agent, distilled spirits manufacturer, holder of a distilled spirits rectifiers general license, or a distilled spirits manufacturer's agent to purchase advertising space or time from a fully enclosed venue (ClubNokia) with box office sales and attendance by the public on a ticket basis only, with a patronage capacity in excess of 2,000, but not more than 3,000, located in Los Angeles County within the area subject to the Los Angeles Sports and Entertainment District Specific Plan adopted by the City of Los Angeles on September 6, 2001, where the owner of the venue is not the on-sale retail licensee. (Business and Professions Code Section 25503.42)
Defines a state-supported fair organization as any fair that conducts an annual fair and submits an annual statement of operations to the CDFA. The generic term of "fairs" refers to District Agricultural Associations (DAA's), county fairs, citrus fairs, and the California State Fair.
FISCAL EFFECT: According to the Assembly Appropriations Committee, minor and absorbable enforcement costs to ABC.
COMMENTS:
Purpose of the bill: The author's office notes that this measure would amend ABC tied-house provisions to include the Del Mar Fairgrounds on the list of exemptions in the law, thereby allowing the fairgrounds to develop certain alcoholic beverage sponsorships with various manufacturers and distributors. The author's office points out that existing law precludes any signage paid for by an alcoholic beverage manufacturer or distributor unless such an exception is created. The author's office emphasizes that such an exemption would put the fairgrounds and the racetrack on an even playing field with other arenas and stadiums in California and help support efforts to make horse racing and other events economically viable.
This Tied-house exemption is narrowly crafted and similar to those granted to the Los Angeles Forum in the City of Inglewood, the Los Angeles County Fair in Los Angeles County, the National Orange Show in San Bernardino, a theme or amusement park located in Orange County (Disneyland), the California Speedway in Fontana, the Indian Wells Tennis Club in Riverside County, non-profit theatre organizations, and maritime museums, among others.
Background: The network of California fairs includes 77 fair organizations divided into four categories: 52 DAA's – state government entities, 22 county fairs – County government or not-for-profit organizations, 2 citrus fruit fairs – not-for-profit organizations and the California Exposition and State Fair (Cal Expo) – a state agency. California's 77 fairs are located throughout the Golden State and host fairs from early spring to the fall of each year.
The California Department of Food and Agriculture (CDFA) is responsible for the oversight of California's agricultural industry, including the network of California fairs. The Division of Fairs and Expositions (F&E), provides fiscal and policy oversight of the network of California fairs and ensures the best use of available funding and services.
An annual fair is just one of many year-round activities for fair organizations in California. Fair officials must facilitate use of the fairgrounds for interim events sponsored by community groups and private entities as well as manage ongoing maintenance and capital improvement projects. As a result, the fair network creates the opportunity for small-to medium-sized businesses and nonprofit community groups to make money from these year-round activities. These interim events further boost jobs, incomes and tax revenues in every county throughout the state. While the California fair network makes it possible for this economic activity to occur, fair organizations are public, not-for-profit entities that exist to promote industries of the state and provide a community gathering place. They do not receive state general fund monies in support of these efforts.
Tied-house law: Tied-House Law refers to the statutory scheme restricting any cross-ownership among the three independent tiers of the alcohol industry: a) manufacturers; b) distributors/wholesalers; and, c) retailers. The term "Tied-House" refers to a practice which was common in this country prior to prohibition, and is still occurring in England today, where a bar or "public house" is tied to the products of a particular manufacturer. The original rationale for Tied-house restrictions are in place to promote the state's interest in maintaining an orderly market, to prohibit the vertical integration of the alcohol industry, to protect the public from predatory marketing practices, and to prevent the intemperate consumption of alcoholic beverages. In order to further these policy goals, the Legislature has generally prohibited forms of cross-ownership between manufacturers and retailers, and discouraged manufacturers from providing anything of value to distributors or retailers, be it free goods, services or advertising.
Numerous exceptions to these restrictions have been enacted through the years in those specific instances where the Legislature determined that the public's interests were protected. Generally, the business community is interested in removing unnecessary business regulations and creating conditions that facilitate investment and expansion opportunities for companies that have some degree of ownership in multiple segments of the industry. However, the Legislature traditionally does not grant exemptions that favors the products of the entity seeking the exemption, or exemptions that unfairly compromise the role of the distributors.
Related legislation: AB 527 (Dodd) of the current legislative session. Creates a new tied-house exception in the Act that authorizes certain alcoholic beverage licensees to sponsor a limited number of events promoted by or to purchase advertising space and time from, or on behalf of, a live entertainment marketing company that conducts live artistic, musical, sports, food, beverage, culinary, or other cultural entertainment events at venues located solely in the County of Napa, under specified conditions. (Pending on Senate Floor)
Prior legislation: SB 600 (Bonta), Chapter 139, Statutes of 2014. Extends an existing "Tied-house" exception in the ABC Act pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include an outdoor stadium with a fixed seating capacity of at least 68,000 seats located in the City of Santa Clara (Levi's Stadium – San Francisco 49ers new stadium).
SB 324 (Wright), Chapter 164, Statutes of 2013. Provided a "Tied-house" exception to the ABC Act pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees and the Los Angeles Forum in the City of Inglewood.
AB 776 (Aghazarian), Chapter 221, Statutes of 2007. Created a new "Tied-house" exception by authorizing a beer manufacturer to sponsor or purchase advertising space and time from, or on behalf of, an off-sale retail licensee that is an owner or co-owner of a professional sports team (California Cougars indoor soccer team) that plays its home games, in an arena with a fixed seating capacity of 10,000 seats (Stockton Arena) located in San Joaquin County.
AB 663 (Galgiani), Chapter 745, Statutes of 2007. Extended an existing "Tied-house" exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include an outdoor professional sports facility with a fixed seating capacity of at least 4,200 (Banner Island Ballpark) located in San Joaquin County.
AB 1442 (Horton), Chapter 617, Statutes of 2005. Extended an existing 'Tied-house" exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to the Home Depot Center, a sports and athletic complex within the City of Carson in Los Angeles and the Nokia Theater, located within the Los Angeles Sports and Entertainment District, adjacent to Staples Center.
AB 3085 (Governmental Organization Committee), Chapter 437, Statutes of 2004. Provided the Los Angeles County Fair with an exemption from tied-house laws so that so that alcohol manufacturers may purchase advertising from, or on behalf of, the on-sale licensees at this venue.
Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531 FN: 0001586
Date of Hearing: August 19, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
SB 557
(Hall) – As Amended June 29, 2015
Policy Committee: |
Governmental Organization |
Vote: |
19 - 0 |
Urgency: No State Mandated Local Program: Yes Reimbursable: >
SUMMARY:
This bill creates a tied-house exception to the Alcoholic Beverage Control Act to allow alcohol manufacturers and their agents to purchase advertising space and time from the Del Mar Fairgrounds in San Diego County.
FISCAL EFFECT:
Minor and absorbable enforcement costs to the Department of Alcoholic Beverage Control.
COMMENTS:
Purpose. According to the author, this bill will allow the Del Mar Fairgrounds to develop alcoholic beverage sponsorships with manufacturers and distributors. The author claims allowing alcoholic beverage advertising at the fairgrounds and racetrack will allow Del Mar to compete with other arenas and stadiums, helping improve the economic viability of horse racing and other events at the facilities.
Analysis Prepared by: Joel Tashjian / APPR. / (916) 319-2081
SB 557
Page 4
Date of Hearing: July 8, 2015
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Adam Gray, Chair
SB 557
(Hall) – As Amended June 29, 2015
SENATE VOTE: 39-0
SUBJECT: Alcoholic beverages: tied-house restrictions: advertising.
SUMMARY: Extends an existing tied-house exception in the Alcoholic Beverage Control Act (Act) pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include a fairgrounds with a horse racetrack and equestrian and sports facilities (Del Mar Fairgrounds) in San Diego County. Specifically, this bill:
1) Allows a beer manufacturer, the holder of a winegrower’s license, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturer’s agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee at a fairgrounds (22nd District Agricultural Association) with a horse racetrack and equestrian and sports facilities located in San Diego County, subject to specified conditions.
2) Make legislative findings and declarations as to the necessity of a special statute for the County of San Diego.
EXISTING LAW:
1) Establishes the Department of Alcoholic Beverage Control (ABC) and grants it exclusive authority to administer the provisions of the ABC Act in accordance with laws enacted by the Legislature. This involves licensing individuals and businesses associated with the manufacture, importation and sale of alcoholic beverages in this state and the collection of license fees for this purpose.
2) Prohibits, in general, an alcohol manufacturer, wholesaler, or any officer, director, or agent of any such person from owning, directly, or indirectly, any interest in any on-sale license, or from providing anything of value to retailers, be it free goods, services, or advertising.
3) Prohibits paid advertising by winegrowers, beer manufacturers and distilled spirits producers in cases where a retail licensee also owns a sports or entertainment venue. Over the years numerous exceptions to this prohibition have been added to the ABC Act [e.g., Sleep Train Arena (formerly known as ARCO Arena) in Sacramento, Oakland Coliseum in Oakland, Arrowhead Pond Arena in Anaheim, Kern County Arena in Bakersfield, the National Orange Show Event Center in San Bernardino, California Speedway in Fontana, Grizzly Stadium in downtown Fresno, Raley Field in West Sacramento, HP Pavilion in San Jose, the Home Depot Center in the City of Carson, Levi’s Stadium in the City of Santa Clara, and other venues].
4) Provides a narrow tied-house exception that expressly authorizes, under specified conditions, a beer manufacturer, holder of a winegrower’s license, California winegrower’s agent, distilled spirits manufacturer, holder of a distilled spirits rectifiers general license, or a distilled spirits manufacturer’s agent to purchase advertising space or time from a fully enclosed venue (ClubNokia) with box office sales and attendance by the public on a ticket basis only, with a patronage capacity in excess of 2,000, but not more than 3,000, located in Los Angeles County within the area subject to the Los Angeles Sports and Entertainment District Specific Plan adopted by the City on September 6, 2001, where the owner of the venue is not the on-sale retail licensee. (Business & Professions Code Section 25503.42)
5) Defines a state-supported fair organization as any fair that conducts an annual fair and submits an annual statement of operations to the CDFA. The generic term of "fairs" refers to District Agricultural Associations (DAA's), county fairs, citrus fairs, and the California State Fair.
FISCAL EFFECT: Unknown
COMMENTS:
Purpose of the bill: The author’s office notes that this measure would amend ABC tied-house provisions to include the Del Mar Fairgrounds on the list of exemptions in the law, thereby allowing the fairgrounds to develop certain alcoholic beverage sponsorships with various manufacturers and distributors. The author’s office points out that existing law precludes any signage paid for by an alcoholic beverage manufacturer or distributor unless such an exception is created. The author’s office emphasizes that such an exemption would put the fairgrounds and the racetrack on an even playing field with other arenas and stadiums in California and help support efforts to make horse racing and other events economically viable.
This Tied-house exemption is narrowly crafted and similar to those granted to the Los Angeles Forum in the City of Inglewood, the Los Angeles County Fair in Los Angeles County, the National Orange Show in San Bernardino, a theme or amusement park located in Orange County (Disneyland), the California Speedway in Fontana, the Indian Wells Tennis Club in Riverside County, non-profit theatre organizations, and maritime museums, among others.
Background: The network of California fairs includes 77 fair organizations divided into four categories: 52 DAA's - state government entities, 22 county fairs - County government or not-for-profit organizations, 2 citrus fruit fairs - not-for-profit organizations and the California Exposition and State Fair (Cal Expo) - a state agency. California’s 77 fairs are located throughout the Golden State and host fairs from early spring to the fall of each year.
The California Department of Food & Agriculture (CDFA) is responsible for the oversight of California's agricultural industry, including the network of California fairs. The Division of Fairs and Expositions (F&E), provides fiscal and policy oversight of the network of California fairs and ensures the best use of available funding and services.
An annual fair is just one of many year-round activities for fair organizations in California. Fair officials must facilitate use of the fairgrounds for interim events sponsored by community groups and private entities as well as manage ongoing maintenance and capital improvement projects. As a result, the fair network creates the opportunity for small-to medium-sized businesses and nonprofit community groups to make money from these year-round activities. These interim events further boost jobs, incomes and tax revenues in every county throughout the state. While the California fair network makes it possible for this economic activity to occur, fair organizations are public, not-for-profit entities that exist to promote industries of the state and provide a community gathering place. They do not receive state general fund monies in support of these efforts.
Tied-house law: Tied-House Law refers to the statutory scheme restricting any cross-ownership among the three independent tiers of the alcohol industry: a) manufacturers; b) distributors/wholesalers; and, c) retailers. The term "Tied-House" refers to a practice which was common in this country prior to prohibition, and is still occurring in England today, where a bar or "public house" is tied to the products of a particular manufacturer. The original rationale for
Tied-house restrictions are in place to promote the state's interest in maintaining an orderly market, to prohibit the vertical integration of the alcohol industry, to protect the public from predatory marketing practices, and to prevent the intemperate consumption of alcoholic beverages. In order to further these policy goals, the Legislature has generally prohibited forms of cross-ownership between manufacturers and retailers, and discouraged manufacturers from providing anything of value to distributors or retailers, be it free goods, services or advertising.
Numerous exceptions to these restrictions have been enacted through the years in those specific instances where the Legislature determined that the public's interests were protected. Generally, the business community is interested in removing unnecessary business regulations and creating conditions that facilitate investment and expansion opportunities for companies that have some degree of ownership in multiple segments of the industry. However, the Legislature traditionally does not grant exemptions that favors the products of the entity seeking the exemption, or exemptions that unfairly compromise the role of the distributors.
In support: According to the 22nd DAA, current law prohibits the fair from being able to sell sponsorship-marketing rights to alcoholic beverage manufacturers for events on the fairgrounds and from accepting money from alcoholic beverage manufacturers in exchange for marketing products on the premises. The revenue from these sponsorship agreements enables the DAA to function and provide services for the public, including facility maintenance and holding an annual fair. This bill is needed to continue to facilitate events of general public interest where alcohol is sold and the fair is allowed to receive money for sponsorship and advertising from alcohol manufacturers.
Related legislation: AB 527 (Dodd) of 2015. Would allow alcohol manufacturers and distributors to sponsor events or purchase advertising space and time from, or on behalf of, a live entertainment marketing company that is a wholly owned subsidiary of a live entertainment company that has its principal place of business in the County of Napa, under specified conditions. (Pending in Senate Appropriations Committee)
Prior legislation: SB 600 (Bonta), Chapter 139, Statutes of 2014. Extends an existing “Tied-house” exception in the ABC Act pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include an outdoor stadium with a fixed seating capacity of at least 68,000 seats located in the City of Santa Clara (Levi’s Stadium – San Francisco 49ers new stadium).
SB 324 (Wright), Chapter 164, Statutes of 2013. Provided a "Tied-house" exception to the ABC Act pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees and the Los Angeles Forum in the City of Inglewood.
AB 776 (Aghazarian) Chapter 221, Statutes of 2007. Created a new "Tied-house" exception by authorizing a beer manufacturer to sponsor or purchase advertising space and time from, or on behalf of, an off-sale retail licensee that is an owner or co-owner of a professional sports team (California Cougars indoor soccer team) that plays its home games, in an arena with a fixed seating capacity of 10,000 seats (Stockton Arena) located in San Joaquin County.
AB 663 (Galgiani) Chapter 745, Statutes of 2007. Extended an existing “Tied-house” exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include an outdoor professional sports facility with a fixed seating capacity of at least 4,200 (Banner Island Ballpark) located in San Joaquin County.
AB 1442 (Horton) Chapter 617, Statutes of 2005. Extended an existing “Tied-house” exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to the Home Depot Center, a sports and athletic complex within the City of Carson in Los Angeles and the Nokia Theater, located within the Los Angeles Sports and Entertainment District, adjacent to Staples Center.
AB 3085 (Governmental Organization Committee), Chapter 437, Statutes of 2004. Provided the Los Angeles County Fair with an exemption from tied-house laws so that so that alcohol manufacturers may purchase advertising from, or on behalf of, the on-sale licensees at this venue.
SB 1647 (Perata) Chapter 275, Statutes of 2004. Extended an existing "Tied-house" exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licenses to the Oakland Coliseum in Alameda County.
SB 1189 (Costa) Chapter 47, Statutes of 2002. Extended an existing "Tied-house" exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licenses to the Visalia Oaks Stadium in Visalia and the California Speedway in Fontana.
REGISTERED SUPPORT / OPPOSITION:
Support
Del Mar Fairgrounds (22nd District Agricultural Association)
Del Mar Thoroughbred Club
Family Winemakers of California
Opposition
None on file
Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531
SB 557
Page 4
|
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
THIRD READING
Bill No: SB 557
Amended: 4/6/15
SENATE GOVERNMENTAL ORG. COMMITTEE: 7-0, 4/28/15
AYES: Hall, Block, Hernandez, Hill, Hueso, Lara, McGuire
NO VOTE RECORDED: Berryhill, Gaines, Galgiani, Vidak
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/11/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
SUBJECT: Alcoholic beverages: advertising: promotions
DIGEST: This bill deletes the January 1, 2016 repeal of an existing provision of the Alcoholic Beverage Control (ABC) Act that authorizes wine, beer, and spirits producers to participate in promotional events held at off-sale retail licensed locations for the purpose of providing autographs on bottles or other items to consumers, subject to certain conditions.
ANALYSIS:
Existing law:
Establishes the Department of ABC and grants it exclusive authority to administer the provisions of the ABC Act in accordance with laws enacted by the Legislature. This involves licensing individuals and businesses associated with the manufacture, importation and sale of alcoholic beverages in this state and the collection of license fees for this purpose.
Separates the alcoholic beverage industry into three component parts, or tiers, (referred to as the “tied-house” law or “three-tier” system), of manufacturer (including breweries, wineries and distilleries), wholesaler, and retailer (both on-sale and off-sale). The original policy rationale for this body of law was to: (a) promote the state’s interest in an orderly market; (b) prohibit the vertical integration and dominance by a single producer in the market place; (c) prohibit commercial bribery and to protect the public from predatory marketing practices; and, (d) discourage and/or prevent the intemperate use of alcoholic beverages. Generally, other than exceptions granted by the Legislature, the holder of one type of license is not permitted to do business as another type of licensee within the “three-tier” system.
Provides that no licensee shall, directly or indirectly, give any premium, gift, free goods, or other thing of value in connection with the sale, distribution, or sale and distribution of alcoholic beverages, and no retailer shall, directly or indirectly, receive any premium, gift, free goods or other thing of value from a supplier of alcoholic beverages, except as authorized by the Department of ABC.
Authorizes, until January 1, 2016, the appearance of a person employed or engaged by an authorized licensee at a promotional event held at the premises of an off-sale retail licensee for the purposes of providing autographs, subject to specified conditions.
This bill:
Deletes the January 1, 2016 sunset date referenced above relating to autographing alcoholic beverage bottles, thereby extending this privilege indefinitely.
Makes technical changes to existing provisions of law that prohibit paid advertising by winegrowers, beer manufacturers and distilled spirits producers in cases where a retail licensee also owns a sports or entertainment venue.
Background
Purpose of SB 557. For several years, the Department of ABC had taken the position that supplier promotional appearances are “things of value” and that autographing alcoholic beverage bottles and other items constituted a “premium, gift or free goods” in violation of the ABC Act. In 2012, AB 2184 (Hall) was enacted which authorized alcoholic beverage suppliers to participate in promotional events held at off-sale licensed premises involving autographs.
AB 2184 also established conditions under which a celebrity brand owner or a winemaker or a brewer may go about autographing bottles and other products for consumers at such promotional events. Key components of this law include the following: (a) consumers may not be required to purchase anything from the retailer to get an autograph; (b) no fee to attend the event; (c) the event may not exceed four hours in duration; (d) no more than two such events may be held per calendar year at any single location of an off-sale retailer; (e) the licensee must provide notification to the Department of ABC at least 30 days prior to the event; (f) the retailer where the autographing will occur may advertise the event but the brand owner who will be doing the autographing may not; and, (g) the licensee must maintain records establishing compliance. Additionally, AB 2184 included a January 1, 2016 sunset clause.
The author of SB 557 notes that AB 2184 of 2012 provided a service that many consumers enjoy – namely, collectibles. Also, AB 2184 granted licensed suppliers the authority to engage in brand awareness events involving autographs at licensed off-sale retail establishments.
The author of SB 557 believes that in light of the fact that the Department of ABC has not reported any problems with AB 2184 of 2012, it makes sense to remove the sunset, thereby extending the bottle signing privilege indefinitely.
Prior Legislation
AB 2184 (Hall, Chapter 480, Statutes of 2012) created, until January 1, 2016, a new tied-house exception in the ABC Act that authorized wine, beer, and spirits producers to participate in promotional events held at off-sale retail licensed locations for the purpose of providing autographs on bottles or other items to consumers, subject to certain conditions.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
According to the Senate Appropriations Committee, potentially $95,000 annually for one personnel year in the Trade Enforcement Unit at the Department of ABC (Special).
SUPPORT:
(Verified 5/11/15)
Distilled Spirits Council of the United States
Family Winemakers of California
Southern Wine & Spirits Wholesalers, Inc.
Wine Institute
Young’s Market Company
OPPOSITION: (Verified 5/11/15)
None received
ARGUMENTS IN SUPPORT: Proponents point out that existing law (AB 2184 of 2012) provided alcoholic beverage producers a valuable tool to help build brand awareness and loyalty by means of promotional events and autographs. Proponents emphasize that “sunsets provide a trial period to evaluate the efficacy of a new statute. Since passage of AB 2184 in 2012, the lack of enforcement actions by the Department of ABC underscores the effectiveness of the statute’s built-in safeguards.”
Prepared by: Arthur Terzakis / G.O. / (916) 651-1530
5/13/15 16:55:45
**** END ****
SB 557 (Hall) Page 3 of 3
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 557 (Hall) - Alcoholic beverages: advertising: promotions
|
|
Version: April 6, 2015 |
Policy Vote: G.O. 7 - 0 |
Urgency: No |
Mandate: No |
Hearing Date: May 11, 2015 |
Consultant: Maureen Ortiz |
This bill does not meet the criteria for referral to the Suspense File.
Bill Summary:
SB 557 eliminates the sunset on the tied-house exemption in the Alcoholic Beverage Control Act that authorizes wine, beer and spirits producers to participate in promotional events held at an off-sale retail licensed location for the purpose of providing autographs to consumers.
Fiscal Impact:
Potentially $95,000 annually for one PY in the Trade Enforcement Unit at the Department of Alcoholic Beverage Control (Special).
According to the ABC, there are currently 7,825 authorized licensees that will be allowed to hold up to two events per calendar year at 28,555 off-sale retail licensed premises statewide. Investigations involve monitoring the events, reviewing records, conducting interviews and other duties.
Background:
Existing law, known as the “tied-house” law, separates the alcoholic beverage industry into three component parts, or tiers, of manufacturer (including breweries, wineries and distilleries), wholesaler, and retailer (both on-sale and off-sale).
Existing law also provides that no licensee shall, directly or indirectly, give any premium, gift, free goods, or other thing of value in connection with the sale, distribution, or sale and distribution of alcoholic beverages, and no retailer shall, directly or indirectly, receive any premium, gift, free goods or other thing of value from a supplier of alcoholic beverages, except as authorized by the Department of Alcoholic Beverage Control.
Existing law defines an “on-sale” license as authorizing the sale of all types of alcoholic beverages; namely, beer, wine and distilled spirits, for consumption on the premises (such as at a restaurant or bar). An “off-sale” license authorizes the sale of all types of alcoholic beverages for consumption off the premises in original, sealed containers.
Proposed Law:
SB 557 does the following:
Eliminates the January 1, 2016 sunset which authorizes the appearance of a person employed or engaged by an “authorized licensee,” as defined, at a promotional event held at the premises of an off-sale retail licensee for the purpose of providing autographs only under the following conditions:
A fee is not charged to attend the event and a purchase from the off-sale retail licensee is not required.
The promotional event does not exceed 4 hours in duration and there are no more than two such events per calendar year involving the same authorized licensee at a single premise of an off-sale licensee.
Autographing may only be provided on consumer advertising specialties given by the authorized licensee to a consumer or on any item provided by the consumer.
The off-sale retail licensee may advertise the promotional event, but only in publications of the authorized licensee, subject to specified conditions.
A wholesaler may not directly or indirectly underwrite, share in, or contribute to any costs related to the promotional event, other than for a promotional event for which the wholesaler employs or engages the person providing autographs to consumers at the event.
The authorized licensee must notify the ABC in writing of the event at least 30 days in advance and maintain records necessary to establish compliance with this law.
Defines “authorized licensee” to mean a manufacturer, winegrower, manufacturer’s agent, California winegrower’s agent, rectifier, importer, brandy manufacturer, brandy importer, or wholesaler.
Related Legislation:
AB 2184 (Hall, Chapter 480, Statutes of 2012), until January 1, 2016, created a new tied-house exemption in the ABC Act that authorized wine, beer and spirts producers to participate in promotional events held at off-sale retail licensed locations for the purpose of providing autographs to consumers.
Staff Comments:
It has become more and more common for individuals in the entertainment industry in particular to acquire an ownership interest in a brand of distilled spirits or to create a new spirits line and then arrange to have those brands distributed in the normal and lawful distribution system established by ABC laws. Additionally, those individuals will often promote the product at the retail point of sale through personal appearances which may include bottle signing events in licensed premises which carry the product. Examples of “celebrities” who have garnered an ownership interest in distilled spirits include: Dan Ackroyd, Crystal Head Vodka; Sean “P. Ditty” Combs, Ciroc Vodka (primary owner Diageo); Sammy Hagar, Cabo Wabo Tequila (primary owner Gruppo Campari); Donald Trump, Trump Vodka; Danny DeVito, Danny DeVito’s Limoncello; and, Jay-Z, Armadale Vodka.
The Department of ABC has taken the position that the appearance of any public personality, with an ownership interest in an alcoholic beverage product, at a licensed retail premises to autograph bottles of his or her product, constitutes a “thing of value” in violation of current tied-house provisions of the ABC Act – the department considers the autographed bottle a “premium.”
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SB 557 (Hall) Page 3 of 3
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Isadore Hall, III
Chair
2015 - 2016 Regular
Bill No: SB 557 Hearing Date: 4/28/2015
Author: |
Hall |
||
Version: |
4/6/2015 |
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Urgency: |
No |
Fiscal: |
Yes |
Consultant: |
Arthur Terzakis |
||
SUBJECT: Alcoholic beverages: advertising: promotions
DIGEST: This bill deletes the January 1, 2016 repeal of an existing provision of the Alcoholic Beverage Control (ABC) Act that authorizes wine, beer and spirits producers to participate in promotional events held at off-sale retail licensed locations for the purpose of providing autographs on bottles or other items to consumers, subject to certain conditions.
ANALYSIS:
Existing law:
Establishes the Department of ABC and grants it exclusive authority to administer the provisions of the ABC Act in accordance with laws enacted by the Legislature. This involves licensing individuals and businesses associated with the manufacture, importation and sale of alcoholic beverages in this state and the collection of license fees for this purpose.
(Referred to as the “tied-house” law or “three-tier” system), separates the alcoholic beverage industry into three component parts, or tiers, of manufacturer (including breweries, wineries and distilleries), wholesaler, and retailer (both on-sale and off-sale). The original policy rationale for this body of law was to: (a) promote the state’s interest in an orderly market; (b) prohibit the vertical integration and dominance by a single producer in the market place; (c) prohibit commercial bribery and to protect the public from predatory marketing practices; and, (d) discourage and/or prevent the intemperate use of alcoholic beverages. Generally, other than exceptions granted by the Legislature, the holder of one type of license is not permitted to do business as another type of licensee within the “three-tier” system.
Provides that no licensee shall, directly or indirectly, give any premium, gift, free goods, or other thing of value in connection with the sale, distribution, or sale and distribution of alcoholic beverages, and no retailer shall, directly or indirectly, receive any premium, gift, free goods or other thing of value from a supplier of alcoholic beverages, except as authorized by the Department of ABC.
Authorizes, until January 1, 2016, the appearance of a person employed or engaged by an authorized licensee at a promotional event held at the premises of an off-sale retail licensee for the purposes of providing autographs, subject to specified conditions.
This bill:
Deletes the January 1, 2016 sunset date referenced above relating to autographing alcoholic beverage bottles, thereby extending this privilege indefinitely.
Also, makes technical changes to existing provisions of law that prohibit paid advertising by winegrowers, beer manufacturers and distilled spirits producers in cases where a retail licensee also owns a sports or entertainment venue.
Background
Purpose of SB 557: For several years the Department of ABC had taken the position that supplier promotional appearances are “things of value” and that autographing alcoholic beverage bottles and other items constituted a “premium, gift or free goods” in violation of the ABC Act. In 2012, AB 2184 (Hall) was enacted which authorized alcoholic beverage suppliers to participate in promotional events held at off-sale licensed premises involving autographs.
AB 2184 also established conditions under which a celebrity brand owner or a winemaker or a brewer may go about autographing bottles and other products for consumers at such promotional events. Key components of this law include the following: (a) consumers may not be required to purchase anything from the retailer to get an autograph; (b) no fee to attend the event; (c) the event may not exceed 4-hours in duration; (d) no more than 2 such events may be held per calendar year at any single location of an off-sale retailer; (e) the licensee must provide notification to ABC at least 30 days prior to the event; (f) the retailer where the autographing will occur may advertise the event but the brand owner who will be doing the autographing may not; and, (g) the licensee must maintain records establishing compliance. Additionally, AB 2184 included a January 1, 2016 sunset clause.
The author of SB 557 notes that AB 2184 of 2012 provided a service that many consumers enjoy – namely, collectibles. Also, AB 2184 granted licensed suppliers the authority to engage in brand awareness events involving autographs at licensed off-sale retail establishments.
The author of SB 557 believes that in light of the fact that ABC has not reported any problems with AB 2184 of 2012, it makes sense to remove the sunset, thereby extending the bottle signing privilege indefinitely.
Prior/Related Legislation
AB 2184 (Hall), Chapter 480, Statutes of 2012. Created, until January 1, 2016, a new tied-house exception in the ABC Act that authorized wine, beer and spirits producers to participate in promotional events held at off-sale retail licensed locations for the purpose of providing autographs on bottles or other items to consumers, subject to certain conditions.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
SUPPORT:
Distilled Spirits Council of the United States
Family Winemakers of California
Southern Wine & Spirits Wholesalers, Inc.
Wine Institute
Young’s Market Company
OPPOSITION:
None received
ARGUMENTS IN SUPPORT: Proponents point out that existing law (AB 2184 of 2012) provided alcoholic beverage producers a valuable tool to help build brand awareness and loyalty by means of promotional events and autographs. Proponents emphasize that “sunsets provide a trial period to evaluate the efficacy of a new statute. Since passage of AB 2184 in 2012, the lack of enforcement actions by the Department of ABC underscores the effectiveness of the statute’s built-in safeguards.”
Discussed in Hearing
2MIN
Senate Floor
35SEC
Assembly Floor
1MIN
Assembly Floor
2MIN
Assembly Standing Committee on Governmental Organization
1MIN
Senate Floor
1MIN
Senate Standing Committee on Appropriations
Bill Author
Bill Co-Author(s):