AB 1724: Alcoholic beverages: licenses: suspension and revocation tied-house exception.
- Session Year: 2017-2018
- House: Assembly
- Latest Version Date: 2017-10-04
Existing law, the Alcoholic Beverage Control Act, regulates the application, issuance, and suspension of alcoholic beverage licenses by the Department of Alcoholic Beverage Control. Existing law requires the Chief of the Bureau of Food and Drug Inspection to notify the Department of Alcoholic Beverage Control of the conviction of any licensee of any violation of the California Pure Foods Act in connection with alcoholic beverages. Existing law requires the department to promptly investigate whether grounds exist for suspension or revocation of the license.
This bill would instead require the Director of the State Department of Public Health to notify the department of the conviction of any licensees of any violation of the Sherman Food, Drug, and Cosmetic Law in connection with alcoholic beverages.
The Alcoholic Beverage Control Act generally prohibits a manufacturer, winegrower, distiller, bottler, or wholesaler, among other licensees, or agents of these licensees, from paying a retailer for advertising. The act creates a variety of exceptions from this prohibition, including permitting specified licensees to purchase advertising space and time from, or on behalf of, an on-sale retail licensee that is an owner, manager, or major tenant of certain stadiums, parks, entertainment complexes, and arenas, subject to specified conditions. Existing law requires the purchase of advertising space or time in this context to be conducted pursuant to a written contract with the on-sale licensee, with a specified exception. Existing law makes it a crime for an on-sale licensee to coerce certain licensees to purchase advertising space or time, as specified.
This bill would expand the exceptions described above to allow beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturers agents to purchase advertising space and time, in connection with described events, from, or on behalf of, on-sale retail licensees, as described above, at a specified stadium in the City of Los Angeles. By expanding the definition of a crime, 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 Los Angeles.
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.
This bill would incorporate additional changes to Section 25503.6 of the Business and Professions Code proposed by SB 582 and SB 664 to be operative only if this bill and SB 582, this bill and SB 664, or all 3 bills are enacted and this bill is enacted last.
Existing law, the Alcoholic Beverage Control Act, regulates the application, issuance, and suspension of alcoholic beverage licenses by the Department of Alcoholic Beverage Control. Existing law requires the Chief of the Bureau of Food and Drug Inspection to notify the Department of Alcoholic Beverage Control of the conviction of any licensee of any violation of the California Pure Foods Act in connection with alcoholic beverages. Existing law requires the department to promptly investigate whether grounds exist for suspension or revocation of the license.
This bill would instead require the Director of the State Department of Public Health to notify the department of the conviction of any licensees of any violation of the Sherman Food, Drug, and Cosmetic Law in connection with alcoholic beverages.
The Alcoholic Beverage Control Act generally prohibits a manufacturer, winegrower, distiller, bottler, or wholesaler, among other licensees, or agents of these licensees, from paying a retailer for advertising. The act creates a variety of exceptions from this prohibition, including permitting specified licensees to purchase advertising space and time from, or on behalf of, an on-sale retail licensee that is an owner, manager, or major tenant of certain stadiums, parks, entertainment complexes, and arenas, subject to specified conditions. Existing law requires the purchase of advertising space or time in this context to be conducted pursuant to a written contract with the on-sale licensee, with a specified exception. Existing law makes it a crime for an on-sale licensee to coerce certain licensees to purchase advertising space or time, as specified.
This bill would expand the exceptions described above to allow beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturers agents to purchase advertising space and time, in connection with described events, from, or on behalf of, on-sale retail licensees, as described above, at a specified stadium in the City of Los Angeles. By expanding the definition of a crime, 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 Los Angeles.
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.
This bill would incorporate additional changes to Section 25503.6 of the Business and Professions Code proposed by SB 582 and SB 664 to be operative only if this bill and SB 582, this bill and SB 664, or all 3 bills are enacted and this bill is enacted last.
Existing law, the Alcoholic Beverage Control Act, regulates the application, issuance, and suspension of alcoholic beverage licenses by the Department of Alcoholic Beverage Control. Existing law requires the Chief of the Bureau of Food and Drug Inspection to notify the Department of Alcoholic Beverage Control of the conviction of any licensee of any violation of the California Pure Foods Act in connection with alcoholic beverages. Existing law requires the department to promptly investigate whether grounds exist for suspension or revocation of the license.
This bill would instead require the Director of the State Department of Public Health to notify the department of the conviction of any licensees of any violation of the Sherman Food, Drug, and Cosmetic Law in connection with alcoholic beverages.
The Alcoholic Beverage Control Act generally prohibits a manufacturer, winegrower, distiller, bottler, or wholesaler, among other licensees, or agents of these licensees, from paying a retailer for advertising. The act creates a variety of exceptions from this prohibition, including permitting specified licensees to purchase advertising space and time from, or on behalf of, an on-sale retail licensee that is an owner, manager, or major tenant of certain stadiums, parks, entertainment complexes, and arenas, subject to specified conditions. Existing law requires the purchase of advertising space or time in this context to be conducted pursuant to a written contract with the on-sale licensee, with a specified exception. Existing law makes it a crime for an on-sale licensee to coerce certain licensees to purchase advertising space or time, as specified.
This bill would expand the exceptions described above to allow beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturers agents to purchase advertising space and time, in connection with described events, from, or on behalf of, on-sale retail licensees, as described above, at a specified stadium complex located in the County City of Los Angeles. By expanding the definition of a crime, 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 Los Angeles.
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.
This bill would incorporate additional changes to Section 25503.6 of the Business and Professions Code proposed by SB 582 and SB 664 that would become operative if this bill and SB 582, this bill and SB 664, or all 3 bills are enacted and this bill is enacted last.This bill would incorporate additional changes to Section 25503.6 of the Business and Professions Code proposed SB 582 and SB 664 to be operative only if this bill and SB 582, this bill and SB 664, or all 3 bills are enacted and this bill is enacted last.
Existing law, the Alcoholic Beverage Control Act, regulates the application, issuance, and suspension of alcoholic beverage licenses by the Department of Alcoholic Beverage Control. Existing law requires the Chief of the Bureau of Food and Drug Inspection to notify the Department of Alcoholic Beverage Control of the conviction of any licensee of any violation of the California Pure Foods Act in connection with alcoholic beverages. Existing law requires the department to promptly investigate whether grounds exist for suspension or revocation of the license.
This bill would instead require the Director of the State Department of Public Health to notify the department of the conviction of any licensees of any violation of the Sherman Food, Drug, and Cosmetic Law in connection with alcoholic beverages.
The Alcoholic Beverage Control Act generally prohibits a manufacturer, winegrower, distiller, bottler, or wholesaler, among other licensees, or agents of these licensees, from paying a retailer for advertising. The act creates a variety of exceptions from this prohibition, including permitting specified licensees to purchase advertising space and time from, or on behalf of, an on-sale retail licensee that is an owner, manager, or major tenant of certain stadiums, parks, entertainment complexes, and arenas, subject to specified conditions. Existing law requires the purchase of advertising space or time in this context to be conducted pursuant to a written contract with the on-sale licensee, with a specified exception. Existing law makes it a crime for an on-sale licensee to coerce certain licensees to purchase advertising space or time, as specified.
This bill would expand the exceptions described above to allow beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturers agents to purchase advertising space and time, in connection with described events, from, or on behalf of, on-sale retail licensees, as described above, at a specified stadium complex located in the County of Los Angeles. By expanding the definition of a crime, 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 Los Angeles.
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.
This bill would incorporate additional changes to Section 25503.6 of the Business and Professions Code proposed by SB 582 and SB 664 that would become operative if this bill and SB 582, this bill and SB 664, or all 3 bills are enacted and this bill is enacted last.
Existing law, the Alcoholic Beverage Control Act, regulates the application, issuance, and suspension of alcoholic beverage licenses by the Department of Alcoholic Beverage Control. Existing law requires the Chief of the Bureau of Food and Drug Inspection to notify the Department of Alcoholic Beverage Control of the conviction of any licensee of any violation of the California Pure Foods Act in connection with alcoholic beverages. Existing law requires the department to promptly investigate whether grounds exist for suspension or revocation of the license.
This bill would instead require the Director of the State Department of Public Health to notify the department of the conviction of any licensees of any violation of the Sherman Food, Drug, and Cosmetic Law in connection with alcoholic beverages.
The Alcoholic Beverage Control Act generally prohibits a manufacturer, winegrower, distiller, bottler, or wholesaler, among other licensees, or agents of these licensees, from paying a retailer for advertising. The act creates a variety of exceptions from this prohibition, including permitting specified licensees to purchase advertising space and time from, or on behalf of, an on-sale retail licensee that is an owner, manager, or major tenant of certain stadiums, parks, entertainment complexes, and arenas, subject to specified conditions. Existing law requires the purchase of advertising space or time in this context to be conducted pursuant to a written contract with the on-sale licensee, with a specified exception. Existing law makes it a crime for an on-sale licensee to coerce certain licensees to purchase advertising space or time, as specified.
This bill would expand the exceptions described above to allow beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturers agents to purchase advertising space and time, in connection with described events, from, or on behalf of, on-sale retail licensees, as described above, at a specified stadium complex located in the County of Los Angeles. By expanding the definition of a crime, 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 Los Angeles.
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.
This bill would incorporate additional changes to Section 25503.6 of the Business and Professions Code proposed by SB 582 and SB 664 that would become operative if this bill and SB 582, this bill and SB 664, or all 3 bills are enacted and this bill is enacted last.
Existing law, the Alcoholic Beverage Control Act, regulates the application, issuance, and suspension of alcoholic beverage licenses by the Department of Alcoholic Beverage Control. Existing law requires the Chief of the Bureau of Food and Drug Inspection to notify the Department of Alcoholic Beverage Control of the conviction of any licensee of any violation of the California Pure Foods Act in connection with alcoholic beverages. Existing law requires the department to promptly investigate whether grounds exist for suspension or revocation of the license.
This bill would instead require the Director of the State Department of Public Health to notify the department of the conviction of any licensees of any violation of the Sherman Food, Drug, and Cosmetic Law in connection with alcoholic beverages.
The Director of the State Department of Public Health shall immediately notify the department of the conviction of any licensee of any violation of the Sherman Food, Drug, and Cosmetic Law in connection with alcoholic beverages. The department shall promptly cause an investigation to be made as to whether grounds exist for suspension or revocation of the license of such licensee.
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 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 seating 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 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.
(Q)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats in the City of Los Angeles.
(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 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 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 subparagraphs (O) and (Q) 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 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 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. 2.3.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 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 seating 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 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.
(Q)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats in the City of Los Angeles.
(R)An outdoor stadium with a fixed seating capacity of at least 40,000 seats located in the City and County of San Francisco.
(S)An indoor arena with a fixed seating capacity of at least 13,000 seats located in the City and County of San Francisco.
(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 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 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 subparagraphs (O), (Q), and (R) 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 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 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. 2.5.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 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)(i)A fully enclosed arena with a fixed seating capacity in excess of 18,000 seats located in Orange County or Los Angeles County.
(ii)An outdoor stadium located in Los Angeles County operated by a joint powers authority.
(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 seating 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 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.
(Q)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats in the City of Los Angeles.
(R)A stadium with a fixed seating capacity of at least 70,000 seats located in the City of Inglewood and a performance venue with a seating capacity of at least 5,000 seats adjacent to the 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. 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 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 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 subparagraphs (O) and (Q) 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 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 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. 2.7.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 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)(i)A fully enclosed arena with a fixed seating capacity in excess of 18,000 seats located in Orange County or Los Angeles County.
(ii)An outdoor stadium located in Los Angeles County operated by a joint powers authority.
(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 seating 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 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.
(Q)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats in the City of Los Angeles.
(R)An outdoor stadium with a fixed seating capacity of at least 40,000 seats located in the City and County of San Francisco.
(S)An indoor arena with a fixed seating capacity of at least 13,000 seats located in the City and County of San Francisco.
(T)A stadium with a fixed seating capacity of at least 70,000 seats located in the City of Inglewood and a performance venue with a seating capacity of at least 5,000 seats adjacent to the 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. 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 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 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 subparagraphs (O), (Q), and (R) 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 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 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. 3.The Legislature finds and declares that a special statute is necessary and that a general statute 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 Los Angeles.
SEC. 4.(a)Section 2.3 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by both this bill and Senate Bill 664. That section shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2018, (2) each bill amends Section 25503.6 of the Business and Professions Code, and (3) Senate Bill 582 is not enacted or as enacted does not amend that section, and (4) this bill is enacted after Senate Bill 664, in which case Sections 2, 2.5, and 2.7 of this bill shall not become operative.
(b)Section 2.5 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by both this bill and Senate Bill 582. That section shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2018, (2) each bill amends Section 25503.6 of the Business and Professions Code, (3) Senate Bill 664 is not enacted or as enacted does not amend that section, and (4) this bill is enacted after Senate Bill 582 in which case Sections 2, 2.3, and 2.7 of this bill shall not become operative.
(c)Section 2.7 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by this bill, Senate Bill 582, and Senate Bill 664. That section shall only become operative if (1) all three bills are enacted and become effective on or before January 1, 2018, (2) all three bills amend Section 25503.6 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 582 and Senate Bill 664, in which case Sections 2, 2.3, and 2.5 of this bill shall not become operative.
SEC. 5.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.
The Director of the State Department of Public Health shall immediately notify the department of the conviction of any licensee of any violation of the Sherman Food, Drug, and Cosmetic Law in connection with alcoholic beverages. The department shall promptly cause an investigation to be made as to whether grounds exist for suspension or revocation of the license of such licensee.
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 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 seating 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 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.
(Q)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats in the City of Los Angeles.
(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 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 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 subparagraphs (O) and (Q) 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 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 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. 2.3.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 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 seating 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 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.
(Q)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats in the City of Los Angeles.
(R)An outdoor stadium with a fixed seating capacity of at least 40,000 seats located in the City and County of San Francisco.
(S)An indoor arena with a fixed seating capacity of at least 13,000 seats located in the City and County of San Francisco.
(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 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 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 subparagraphs (O), (Q), and (R) 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 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 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. 2.5.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 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)(i)A fully enclosed arena with a fixed seating capacity in excess of 18,000 seats located in Orange County or Los Angeles County.
(ii)An outdoor stadium located in Los Angeles County operated by a joint powers authority.
(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 seating 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 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.
(Q)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats in the City of Los Angeles.
(R)A stadium with a fixed seating capacity of at least 70,000 seats located in the City of Inglewood and a performance venue with a seating capacity of at least 5,000 seats adjacent to the 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. 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 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 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 subparagraphs (O) and (Q) 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 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 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. 2.7.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 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)(i)A fully enclosed arena with a fixed seating capacity in excess of 18,000 seats located in Orange County or Los Angeles County.
(ii)An outdoor stadium located in Los Angeles County operated by a joint powers authority.
(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 seating 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 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.
(Q)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats in the City of Los Angeles.
(R)An outdoor stadium with a fixed seating capacity of at least 40,000 seats located in the City and County of San Francisco.
(S)An indoor arena with a fixed seating capacity of at least 13,000 seats located in the City and County of San Francisco.
(T)A stadium with a fixed seating capacity of at least 70,000 seats located in the City of Inglewood and a performance venue with a seating capacity of at least 5,000 seats adjacent to the 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. 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 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 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 subparagraphs (O), (Q), and (R) 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 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 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. 3.The Legislature finds and declares that a special statute is necessary and that a general statute 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 Los Angeles.
SEC. 4.(a)Section 2.3 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by both this bill and Senate Bill 664. That section shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2018, (2) each bill amends Section 25503.6 of the Business and Professions Code, and (3) Senate Bill 582 is not enacted or as enacted does not amend that section, and (4) this bill is enacted after Senate Bill 664, in which case Sections 2, 2.5, and 2.7 of this bill shall not become operative.
(b)Section 2.5 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by both this bill and Senate Bill 582. That section shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2018, (2) each bill amends Section 25503.6 of the Business and Professions Code, (3) Senate Bill 664 is not enacted or as enacted does not amend that section, and (4) this bill is enacted after Senate Bill 582 in which case Sections 2, 2.3, and 2.7 of this bill shall not become operative.
(c)Section 2.7 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by this bill, Senate Bill 582, and Senate Bill 664. That section shall only become operative if (1) all three bills are enacted and become effective on or before January 1, 2018, (2) all three bills amend Section 25503.6 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 582 and Senate Bill 664, in which case Sections 2, 2.3, and 2.5 of this bill shall not become operative.
SEC. 5.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.
The Director of the State Department of Public Health shall immediately notify the department of the conviction of any licensee of any violation of the Sherman Food, Drug, and Cosmetic Law in connection with alcoholic beverages. The department shall promptly cause an investigation to be made as to whether grounds exist for suspension or revocation of the license of such licensee.
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 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 seating 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 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.
(Q)(i)A stadium complex of not more than 11.2 acres that includes an outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the County of Los Angeles.(ii)In the event that the 11.2 acre stadium complex contains one or more separately licensed on-sale premises located outside of the stadium, the paid advertising space or time authorized by this section shall not be displayed in these separately licensed premises.(Q)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats in the City of Los Angeles.
(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 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 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 subparagraphs (O) and (Q) 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 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 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. 2.3.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 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 seating 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 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.
(Q)(i)A stadium complex of not more than 11.2 acres that includes an outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the County of Los Angeles.(ii)In the event that the 11.2 acre stadium complex contains one or more separately licensed on-sale premises located outside of the stadium, the paid advertising space or time authorized by this section shall not be displayed in these separately licensed premises.(Q)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats in the City of Los Angeles.
(R)An outdoor stadium with a fixed seating capacity of at least 40,000 seats located in the City and County of San Francisco.
(S)An indoor arena with a fixed seating capacity of at least 13,000 seats located in the City and County of San Francisco.
(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 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 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 subparagraphs (O), (Q), and (R) 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 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 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. 2.5.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 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)(i)A fully enclosed arena with a fixed seating capacity in excess of 18,000 seats located in Orange County or Los Angeles County.
(ii)An outdoor stadium located in Los Angeles County operated by a joint powers authority.
(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 seating 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 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.
(Q)(i)A stadium complex of not more than 11.2 acres that includes an outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the County of Los Angeles.(ii)In the event that the 11.2 acre stadium complex contains one or more separately licensed on-sale premises located outside of the stadium, the paid advertising space or time authorized by this section shall not be displayed in these separately licensed premises.(Q)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats in the City of Los Angeles.
(R)A stadium with a fixed seating capacity of at least 70,000 seats located in the City of Inglewood and a performance venue with a seating capacity of at least 5,000 seats adjacent to the 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. 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 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 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 subparagraphs (O) and (Q) 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 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 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. 2.7.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 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)(i)A fully enclosed arena with a fixed seating capacity in excess of 18,000 seats located in Orange County or Los Angeles County.
(ii)An outdoor stadium located in Los Angeles County operated by a joint powers authority.
(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 seating 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 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.
(Q)(i)A stadium complex of not more than 11.2 acres that includes an outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the County of Los Angeles.(ii)In the event that the 11.2 acre stadium complex contains one or more separately licensed on-sale premises located outside of the stadium, the paid advertising space or time authorized by this section shall not be displayed in these separately licensed premises.(Q)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats in the City of Los Angeles.
(R)An outdoor stadium with a fixed seating capacity of at least 40,000 seats located in the City and County of San Francisco.
(S)An indoor arena with a fixed seating capacity of at least 13,000 seats located in the City and County of San Francisco.
(T)A stadium with a fixed seating capacity of at least 70,000 seats located in the City of Inglewood and a performance venue with a seating capacity of at least 5,000 seats adjacent to the 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. 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 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 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 subparagraphs (O), (Q), and (R) 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 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 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. 3.(a)Section 2.3 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by both this bill and Senate Bill 664. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2018, (2) each bill amends Section 25503.6 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 664, in which case Sections 2, 2.5, and 2.7 of this bill shall not become operative.(b)Section 2.5 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by both this bill and Senate Bill 582. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2018, (2) each bill amends Section 25503.6 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 582, in which case Sections 2, 2.3, and 2.7 of this bill shall not become operative.(c)Section 2.7 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by this bill, Senate Bill 664, and Senate Bill 582. It shall only become operative if (1) all of the bills are enacted and become effective on or before January 1, 2018, (2) each bill amends Section 25503.6 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 664 and Senate Bill 582, in which case Sections 2, 2.3, and 2.5 of this bill shall not become operative. SEC. 4.SEC. 3.The Legislature finds and declares that a special statute is necessary and that a general statute 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 Los Angeles.
SEC. 4.(a)Section 2.3 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by both this bill and Senate Bill 664. That section shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2018, (2) each bill amends Section 25503.6 of the Business and Professions Code, and (3) Senate Bill 582 is not enacted or as enacted does not amend that section, and (4) this bill is enacted after Senate Bill 664, in which case Sections 2, 2.5, and 2.7 of this bill shall not become operative.
(b)Section 2.5 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by both this bill and Senate Bill 582. That section shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2018, (2) each bill amends Section 25503.6 of the Business and Professions Code, (3) Senate Bill 664 is not enacted or as enacted does not amend that section, and (4) this bill is enacted after Senate Bill 582 in which case Sections 2, 2.3, and 2.7 of this bill shall not become operative.
(c)Section 2.7 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by this bill, Senate Bill 582, and Senate Bill 664. That section shall only become operative if (1) all three bills are enacted and become effective on or before January 1, 2018, (2) all three bills amend Section 25503.6 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 582 and Senate Bill 664, in which case Sections 2, 2.3, and 2.5 of this bill shall not become operative.
SEC. 5.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.
The Director of the State Department of Public Health shall immediately notify the department of the conviction of any licensee of any violation of the Sherman Food, Drug, and Cosmetic Law in connection with alcoholic beverages. The department shall promptly cause an investigation to be made as to whether grounds exist for suspension or revocation of the license of such licensee.
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 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 seating 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 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.
(Q)(i)A stadium complex of not more than 11.2 acres that includes an outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the County of Los Angeles.
(ii)In the event that the 11.2 acre stadium complex contains one or more separately licensed on-sale premises located outside of the stadium, the paid advertising space or time authorized by this section shall not be displayed in these separately licensed premises.
(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 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 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 subparagraphs (O) and (Q) 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 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 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. 2.3.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 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 seating 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 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.
(Q)(i)A stadium complex of not more than 11.2 acres that includes an outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the County of Los Angeles.
(ii)In the event that the 11.2 acre stadium complex contains one or more separately licensed on-sale premises located outside of the stadium, the paid advertising space or time authorized by this section shall not be displayed in these separately licensed premises.
(R)An outdoor stadium with a fixed seating capacity of at least 40,000 seats located in the City of San Francisco.
(S)An indoor arena with a fixed seating capacity of at least 13,000 seats located in the City and County of San Francisco.
(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 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 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 subparagraphs (O), (Q), and (R) 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 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 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. 2.5.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 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 seating 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 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.
(Q)(i)A stadium complex of not more than 11.2 acres that includes an outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the County of Los Angeles.
(ii)In the event that the 11.2 acre stadium complex contains one or more separately licensed on-sale premises located outside of the stadium, the paid advertising space or time authorized by this section shall not be displayed in these separately licensed premises.
(R)A stadium with a fixed seating capacity of at least 70,000 seats located in the City of Inglewood and a performance venue with a seating capacity of at least 5,000 seats adjacent to the 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. 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 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 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 subparagraphs (O) and (Q) 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 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 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. 2.7.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 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 seating 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 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.
(Q)(i)A stadium complex of not more than 11.2 acres that includes an outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the County of Los Angeles.
(ii)In the event that the 11.2 acre stadium complex contains one or more separately licensed on-sale premises located outside of the stadium, the paid advertising space or time authorized by this section shall not be displayed in these separately licensed premises.
(R)An outdoor stadium with a fixed seating capacity of at least 40,000 seats located in the City of San Francisco.
(S)An indoor arena with a fixed seating capacity of at least 13,000 seats located in the City and County of San Francisco.
(T)A stadium with a fixed seating capacity of at least 70,000 seats located in the City of Inglewood and a performance venue with a seating capacity of at least 5,000 seats adjacent to the 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. 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 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 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 subparagraphs (O), (Q), and (R) 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 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 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. 3.(a)Section 2.3 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by both this bill and Senate Bill 664. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2018, (2) each bill amends Section 25503.6 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 664, in which case Sections 2, 2.5, and 2.7 of this bill shall not become operative.
(b)Section 2.5 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by both this bill and Senate Bill 582. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2018, (2) each bill amends Section 25503.6 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 582, in which case Sections 2, 2.3, and 2.7 of this bill shall not become operative.
(c)Section 2.7 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by this bill, Senate Bill 664, and Senate Bill 582. It shall only become operative if (1) all of the bills are enacted and become effective on or before January 1, 2018, (2) each bill amends Section 25503.6 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 664 and Senate Bill 582, in which case Sections 2, 2.3, and 2.5 of this bill shall not become operative.
SEC. 4.The Legislature finds and declares that a special statute is necessary and that a general statute 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 Los Angeles.
SEC. 5.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.
The Director of the State Department of Public Health shall immediately notify the department of the conviction of any licensee of any violation of the Sherman Food, Drug, and Cosmetic Law in connection with alcoholic beverages. The department shall promptly cause an investigation to be made as to whether grounds exist for suspension or revocation of the license of such licensee.
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 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 seating 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 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.
(Q)A stadium complex of not more than 11.2 acres that includes an outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the County of Los Angeles.
(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 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 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) subparagraphs (O) and (Q) 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 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 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. 2.3.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 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 seating 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 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.
(Q)A stadium complex of not more than 11.2 acres that includes an outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the County of Los Angeles.
(R)An outdoor stadium with a fixed seating capacity of at least 40,000 seats located in the City of San Francisco.
(S)An indoor arena with a fixed seating capacity of at least 13,000 seats located in the City and County of San Francisco.
(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 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 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) subparagraphs (O), (Q), and (R) 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 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 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. 2.5.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 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 seating 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 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.
(Q)A stadium complex of not more than 11.2 acres that includes an outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the County of Los Angeles.
(R)A stadium with a fixed seating capacity of at least 70,000 seats located in the City of Inglewood and a performance venue with a seating capacity of at least 5,000 seats adjacent to the 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. 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 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 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) subparagraphs (O) and (Q) 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 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 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. 2.7.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 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 seating 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 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.
(Q)A stadium complex of not more than 11.2 acres that includes an outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the County of Los Angeles.
(R)An outdoor stadium with a fixed seating capacity of at least 40,000 seats located in the City of San Francisco.
(S)An indoor arena with a fixed seating capacity of at least 13,000 seats located in the City and County of San Francisco.
(T)A stadium with a fixed seating capacity of at least 70,000 seats located in the City of Inglewood and a performance venue with a seating capacity of at least 5,000 seats adjacent to the 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. 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 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 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) subparagraphs (O), (Q), and (R) 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 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 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. 3.(a)Section 2.3 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by both this bill and Senate Bill 664. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2018, (2) each bill amends Section 25503.6 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 664, in which case Sections 2, 2.5, and 2.7 of this bill shall not become operative.
(b)Section 2.5 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by both this bill and Senate Bill 582. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2018, (2) each bill amends Section 25503.6 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 582, in which case Sections 2, 2.3, and 2.7 of this bill shall not become operative.
(c)Section 2.7 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by this bill, Senate Bill 664, and Senate Bill 582. It shall only become operative if (1) all of the bills are enacted and become effective on or before January 1, 2018, (2) each bill amends Section 25503.6 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 664 and Senate Bill 582, in which case Sections 2, 2.3, and 2.5 of this bill shall not become operative.
SEC. 4.The Legislature finds and declares that a special statute is necessary and that a general statute 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 Los Angeles.
SEC. 5.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.
The Chief of the Bureau of Food and Drug Inspection Director of the State Department of Public Health shall immediately notify the department of the conviction of any licensee of any violation of the California Pure Foods Act Sherman Food, Drug, and Cosmetic Law in connection with alcoholic beverages. The department shall promptly cause an investigation to be made as to whether grounds exist for suspension or revocation of the license of such licensee.
|
Date
|
Status
|
|---|---|
| Oct 4, 2017 | Chaptered by Secretary of State - Chapter 478, Statutes of 2017. |
| Oct 4, 2017 | Approved by the Governor. |
| Sep 25, 2017 | Enrolled and presented to the Governor at 12 p.m. |
| Sep 14, 2017 | Senate amendments concurred in. To Engrossing and Enrolling. |
| Sep 13, 2017 | From committee: That the Senate amendments be concurred in. (Ayes 16. Noes 0.) (September 13). |
| Sep 11, 2017 | Joint Rule 62(a), file notice suspended. |
| Sep 7, 2017 | Re-referred to Com. on G.O. pursuant to Assembly Rule 77.2. |
| Sep 5, 2017 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after September 7 pursuant to Assembly Rule 77. |
| Sep 5, 2017 | Read third time. Passed. Ordered to the Assembly. |
| Aug 30, 2017 | Read second time. Ordered to third reading. |
| Aug 29, 2017 | Read third time and amended. Ordered to second reading. |
| Aug 22, 2017 | Read second time. Ordered to third reading. |
| Aug 21, 2017 | From committee: Be ordered to second reading pursuant to Senate Rule 28.8. |
| Jul 17, 2017 | Read second time and amended. Re-referred to Com. on APPR. |
| Jul 13, 2017 | From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 13. Noes 0.) (July 11). |
| Jul 3, 2017 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on G.O. |
| May 18, 2017 | Referred to Com. on G.O. |
| May 4, 2017 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 4, 2017 | Read third time. Passed. Ordered to the Senate. (Ayes 76. Noes 0. Page 1396.) |
| Apr 27, 2017 | Read second time. Ordered to Consent Calendar. |
| Apr 26, 2017 | From committee: Do pass. To Consent Calendar. (Ayes 16. Noes 0.) (April 26). |
| Apr 19, 2017 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 20. Noes 0.) (April 19). Re-referred to Com. on APPR. |
| Mar 30, 2017 | Referred to Com. on G.O. |
| Mar 17, 2017 | From printer. May be heard in committee April 16. |
| Mar 16, 2017 | Read first time. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 14, 2017 | AB 1724 JONES-SAWYER Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Sep 13, 2017 | With recommendation: That Senate amendments be concurred in. | Assembly Standing Committee on Governmental Organization |
Passed |
|
| Sep 5, 2017 | Assembly 3rd Reading AB1724 Jones-Sawyer et al. By Dodd | Senate Floor |
Passed |
|
| Jul 11, 2017 | Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations] | Senate Standing Committee on Governmental Organization |
Passed |
|
| May 4, 2017 | AB 1724 G.O. Consent Calendar Second Day Regular Session | Assembly Floor |
Passed |
|
| Apr 26, 2017 | Do pass. To Consent Calendar. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 19, 2017 | Do pass and be re-referred to the Committee on [Appropriations] with recommendation: To Consent Calendar | Assembly 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
|
|---|---|---|
| Los Angeles Football Club | ** Support | Aug 30, 2017 |
CONCURRENCE IN SENATE AMENDMENTS
CSA2 Bill Id:AB 1724
Author:(Jones-Sawyer)
As Amended Ver:August 29, 2017
Majority vote
ASSEMBLY: | 76-0 | (May 04, 2017) | SENATE: | 38-0 | (September 05, 2017) |
COMMITTEE VOTE: | 16-0 | (September 13, 2017) | RECOMMENDATION: | concur |
(G.O.)
Original Committee Reference: G.O.
SUMMARY: Extends an existing 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 specified outdoor stadium located in the City of Los Angeles (Banc of California Stadium, the future home of the Los Angeles Football Club). This bill also makes minor code maintenance changes to an outdated section of the Act.
The Senate amendments:
- Allow beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturer's agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees at an outdoor stadium with a fixed seating capacity in excess of 20,000 seats in the City of Los Angeles.
- Provide that any purchase of advertising space or time by designated alcohol manufacturers relating to the specified outdoor stadium in the City of Los Angeles, may be conducted pursuant to a written contract with the owner, a long-term tenant of the stadium, or licensee of the stadium, whether or not the owner, long-term tenant, or licensee holds an on-sale license.
- Make legislative findings and declarations as to the necessity of a special statute for a special statute for the County of Los Angeles.
- Contain language that prevents this bill from chaptering out any other legislative changes made to Business and Professions Code Section 25503.6 (SB 582 (Bradford) and SB 664 (Dodd) both of the current legislative session).
- Change the bill's author from Committee on Governmental Organization to Assembly Member Jones-Sawyer.
EXISTING LAW:
- Establishes the Department of Alcoholic Beverage Control (ABC) and grants it exclusive authority to administer the provisions of the 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.
- Existing law, known as the "Tied-house" law or "three-tier" system, separates the alcoholic beverage industry into three component parts of manufacturer (the first tier), wholesaler (the second tier), and retailer (the third tier). The original policy rationale for this body of law was to prohibit the vertical integration of the alcohol industry and to protect the public from predatory marketing practices.
- Prohibits, in general, a manufacturer, winegrower, manufacturer's agent, rectifier, distiller, bottler, importer, or wholesaler, or any officer, director or agent of any such person from owning, directly or indirectly, any interest in any on-sale license.
- Prohibits, in general, a manufacturer, winegrower, distiller, bottler, or wholesaler, among other licensees, or agents of these licensees, from paying a retailer for advertising.
- Provides a variety of exceptions from the advertising prohibition, including permitting specified licensees to purchase advertising space and time from, or on behalf of, an on-sale retail licensee that is an owner, manager, or major tenant of certain stadiums, parks, entertainment complexes, and arenas, subject to specified conditions.
- Requires the Chief of the Bureau of Food and Drug Inspection to notify ABC of the conviction of any licensee of any violation of the California Pure Foods Act in connection with alcoholic beverages. Also, requires ABC to promptly investigate whether grounds exist for suspension or revocation of the license.
- Establishes the Sherman Food, Drug, and Cosmetic Law, and provides for regulation under that law by the California Department of Public Health (CDPH) of the packaging and labeling of foods, drugs, devices, and cosmetics.
FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS:
Background
Purpose of the bill. The author's office states, "This bill will create a Tied-house exception for an outdoor stadium with a fixed seating capacity in excess of 20,000 seats in the City of Los Angeles, allowing for the Los Angeles Football Club to sell advertising space to alcoholic beverage manufacturers."
Further, according to the author's office, "the City of Los Angeles has worked tirelessly to bring a Major League Soccer team to the Los Angeles area, with final approval being secured by the City of Los Angeles' Planning Commission and full City Council in May 2016. This important project will bring in hundreds of local jobs, with an estimated economic impact of $3 billion. By granting this Tied-house exception, we'll ensure the viability of this project thus providing additional revenue for our region and state."
Tied-house laws. Tied-house laws generally prohibit suppliers and retailers from sharing common owners and legally restrict alcohol beverage suppliers' ability to gain control over retailers through indirect means. The original policy rationale for this body of law was to 1) promote the state's interest in an orderly market; 2) prohibit the vertical integration and dominance by a single producer in the marketplace; 3) prohibit commercial bribery and to protect the public from predatory marketing practices; and, 4) discourage and/or prevent the intemperate use of alcoholic beverages. These provisions prohibit a manufacturer from paying for advertising space at a stadium or sports arena where the facility is licensed to sell alcoholic beverages at events held at the stadium or arena.
Over the years numerous exceptions to this prohibition have been added to the ABC Act e.g. Levi's Stadium in Santa Clara, Oakland Coliseum in Oakland, Arrowhead Pond Arena in Anaheim, Kern County Arena in Bakersfield, the National Orange Show Events Center in San Bernardino, Auto Club Speedway, (formerly California Speedway) in Fontana, Grizzly Stadium in Fresno, Raley Field in West Sacramento, HP Pavilion in San Jose, StubHub Center (formerly the Home Depot Center) in Carson, and numerous other venues.
This bill puts the Banc of California Stadium on an even playing field with other arenas and stadiums in California.
Banc of California Stadium. Banc of California Stadium will be the future home of the Los Angeles Football Club, Major League Soccer's latest expansion team. The property is located within Exposition Park next to the Los Angeles Memorial Coliseum in South Los Angeles, at the former site of the Los Angeles Memorial Sports Arena. The stadium will be the centerpiece of a complex that will also include a large community plaza, restaurants, and retail.
Banc of California Stadium will be the first, new open-air stadium in Los Angeles since 1962 and will have a 22,000-seat capacity. The groundbreaking for the stadium took place on August 23, 2016. The Los Angeles Football Club is set to debut in the 2018 season. In addition to soccer games, the stadium will be used for concerts, festivals, and community events. The project is expected to generate over 1,200 new construction jobs and 1,800 full-time operational jobs. Further, it is projected that this development will add $129 million in annual economic activity from normal operations and $274 million in short-term economic investment through the construction of the stadium.
CDPH. CDPH regulates the production, manufacture, and sale of foods, drugs, medical devices and cosmetics in California pursuant to the Sherman Food, Drug, and Cosmetic Law. Within the CDPH, is the Food, Drug, and Radiation Safety Division of the Center for Environmental Health. The Food and Drug Branch's mission is to protect and improve the health of all California residents by assuring that foods, drugs, medical devices and certain other consumer products are safe and are not adulterated, misbranded nor falsely advertised; and that drugs and medical devices are effective.
Business and Professions Code Section 24204 contains outdated references. For example, there is no longer a "Bureau of Food and Drug Inspection" and the "California Pure Foods Act" was combined with the Sherman Food, Drug and Cosmetic Law in 1970. This bill is simply intended to replace these outdated references with the correct ones, by requiring the Director of the CDPH to notify the Department of ABC of the conviction of any licensee of any violation of the Sherman Food, Drug, and Cosmetic Law in connection with alcoholic beverages.
In support: The Los Angeles Football Club states that, "AB 1724 will allow them to both responsibly serve alcoholic beverages to its football fan-base and provide the stadium with much needed advertising revenue through our Tied-house exemption. This project is very important to the City of Los Angeles, which will see an estimated economic impact of over $3 billion annually. Further, the state will benefit as well with important sales tax and income tax generated by the fans and employees, and ultimately, because the stadium is on land leased from the state, the lease will at least $1.7 million annual park and state revenues."
Related legislation: SB 664 (Dodd) of the current legislative session, allows beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturer's agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees at an outdoor stadium (AT&T Park) and an indoor arena (Chase Center) with specified seating capacities located in the City and County of San Francisco.
SB 582 (Bradford) of the current legislative session, allows beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturer's agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees at a specified stadium (The Los Angeles Stadium at Hollywood Park) and performance venue located in the City of Inglewood.
SB 56 (Mendoza) of the current legislative session, among other things, authorizes ABC to issue a Sports Entertainment Facility Permit that would allow the permit holder to sell alcoholic beverages at a sports entertainment facility, as defined.
Prior legislation: SB 1105 (Mendoza) of 2016, among other things, would have authorized ABC to issue a general on-sale license for a sports entertainment facility bona fide public eating place that would allow the licensee to sell beer, wine, and distilled spirits at retail for consumption on the premises in a sports entertainment facility, as defined. (Never heard in Assembly Governmental Organization Committee)
AB 1971 (Cooper) of 2016, would have created a stand-alone Tied-house exception in the Act to allow holders of manufacturer licenses, as specified, to purchase advertising from retail licensees at outdoor stadiums and indoor arenas, subject to specified conditions. (Held on Senate inactive file)
AB 2096 (Low) of 2016, would have added leased premises to a specified condition in law that allows designated licensees to purchase advertising space or time from, or on behalf of, an on-sale retail licensee in connection with events which are held on the premises of an exposition park, stadium, or arena owned by the on-sale licensee. (Never heard in Assembly Governmental Organization Committee)
AB 866 (E. Garcia) of 2016, would have extended an existing Tied-house exception in the Act pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include outdoor stadiums with specified seating capacities located in the Cities of Inglewood and San Diego. (Held on Senate Inactive File)
AB 527 (Dodd), Chapter 517, Statutes of 2015, created 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.
SB 557 (Hall), Chapter 420, Statutes of 2015, extended an existing Tied-house exception 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 San Diego County.
SB 462 (Wolk), Chapter 315, Statutes of 2015, among other things, extended an existing Tied-house exception 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.
SB 133 (McGuire) of 2015, would have made similar minor code maintenance changes to an outdated section of the ABC Act. (Amended to address an issue related to transient occupancy taxes)
AB 600 (Bonta), Chapter 139, Statutes of 2014, extended an existing Tied-house exception 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).
SB 324 (Wright), Chapter 164, Statutes of 2013, extended an existing Tied-house exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include a fully enclosed arena with a fixed seating capacity in excess of 13,000 seats (the Forum) in the City of Inglewood.
SB 351 (Negrete-McLeod) of 2007, would have extended an existing Tied-house exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees so that alcoholic beverage manufacturers may purchase advertising from on-sale retail licensees in order to promote "safe ride home programs" at specified stadiums and arenas. (Held on Assembly inactive file)
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 located in San Joaquin County (Banner Island Ballpark).
AB 3046 (Chavez), Chapter 587, Statutes of 2006, extended an existing Tied-house exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to a fully enclosed arena with a fixed seating capacity in excess of 15,000 seats located in Santa Clara County (HP Pavilion).
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.
Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531 FN: 0002369
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 1724
Author:(Jones-Sawyer)
As Amended Ver:August 29, 2017
Majority vote
ASSEMBLY: | 76-0 | (May 4, 2017) | SENATE: | 38-0 | (September 5, 2017) |
Original Committee Reference: G.O.
SUMMARY: Extends an existing 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 specified outdoor stadium located in the City of Los Angeles (Banc of California Stadium, the future home of the Los Angeles Football Club). This bill also makes minor code maintenance changes to an outdated section of the Act.
The Senate amendments:
- Allow beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturer's agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees at an outdoor stadium with a fixed seating capacity in excess of 20,000 seats in the City of Los Angeles.
- Provide that any purchase of advertising space or time by designated alcohol manufacturers relating to the specified outdoor stadium in the City of Los Angeles, may be conducted pursuant to a written contract with the owner, a long-term tenant of the stadium, or licensee of the stadium, whether or not the owner, long-term tenant, or licensee holds an on-sale license.
- Make legislative findings and declarations as to the necessity of a special statute for a special statute for the County of Los Angeles.
- Contain language that prevents this bill from chaptering out any other legislative changes made to Business and Professions Code Section 25503.6 (SB 582 (Bradford) and SB 664 (Dodd) both of the current legislative session).
- Change the bill's author from Committee on Governmental Organization to Assembly Member Jones-Sawyer.
EXISTING LAW:
- Establishes the Department of Alcoholic Beverage Control (ABC) and grants it exclusive authority to administer the provisions of the 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.
- Existing law, known as the "Tied-house" law or "three-tier" system, separates the alcoholic beverage industry into three component parts of manufacturer (the first tier), wholesaler (the second tier), and retailer (the third tier). The original policy rationale for this body of law was to prohibit the vertical integration of the alcohol industry and to protect the public from predatory marketing practices.
- Prohibits, in general, a manufacturer, winegrower, manufacturer's agent, rectifier, distiller, bottler, importer, or wholesaler, or any officer, director or agent of any such person from owning, directly or indirectly, any interest in any on-sale license.
- Prohibits, in general, a manufacturer, winegrower, distiller, bottler, or wholesaler, among other licensees, or agents of these licensees, from paying a retailer for advertising.
- Provides a variety of exceptions from the advertising prohibition, including permitting specified licensees to purchase advertising space and time from, or on behalf of, an on-sale retail licensee that is an owner, manager, or major tenant of certain stadiums, parks, entertainment complexes, and arenas, subject to specified conditions.
- Requires the Chief of the Bureau of Food and Drug Inspection to notify ABC of the conviction of any licensee of any violation of the California Pure Foods Act in connection with alcoholic beverages. Also, requires ABC to promptly investigate whether grounds exist for suspension or revocation of the license.
- Establishes the Sherman Food, Drug, and Cosmetic Law, and provides for regulation under that law by the California Department of Public Health (CDPH) of the packaging and labeling of foods, drugs, devices, and cosmetics.
FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS: This bill, as amended in the Senate in inconsistent with Assembly actions.
Background
Purpose of the bill. The author's office states, "This bill will create a Tied-house exception for an outdoor stadium with a fixed seating capacity in excess of 20,000 seats in the City of Los Angeles, allowing for the Los Angeles Football Club to sell advertising space to alcoholic beverage manufacturers."
Further, according to the author's office, "the City of Los Angeles has worked tirelessly to bring a Major League Soccer team to the Los Angeles area, with final approval being secured by the City of Los Angeles' Planning Commission and full City Council in May 2016. This important project will bring in hundreds of local jobs, with an estimated economic impact of $3 billion. By granting this Tied-house exception, we'll ensure the viability of this project thus providing additional revenue for our region and state."
Tied-house laws. Tied-house laws generally prohibit suppliers and retailers from sharing common owners and legally restrict alcohol beverage suppliers' ability to gain control over retailers through indirect means. The original policy rationale for this body of law was to 1) promote the state's interest in an orderly market; 2) prohibit the vertical integration and dominance by a single producer in the marketplace; 3) prohibit commercial bribery and to protect the public from predatory marketing practices; and, 4) discourage and/or prevent the intemperate use of alcoholic beverages. These provisions prohibit a manufacturer from paying for advertising space at a stadium or sports arena where the facility is licensed to sell alcoholic beverages at events held at the stadium or arena.
Over the years numerous exceptions to this prohibition have been added to the ABC Act e.g. Levi's Stadium in Santa Clara, Oakland Coliseum in Oakland, Arrowhead Pond Arena in Anaheim, Kern County Arena in Bakersfield, the National Orange Show Events Center in San Bernardino, Auto Club Speedway, (formerly California Speedway) in Fontana, Grizzly Stadium in Fresno, Raley Field in West Sacramento, HP Pavilion in San Jose, StubHub Center (formerly the Home Depot Center) in Carson, and numerous other venues.
This bill puts the Banc of California Stadium on an even playing field with other arenas and stadiums in California.
Banc of California Stadium. Banc of California Stadium will be the future home of the Los Angeles Football Club, Major League Soccer's latest expansion team. The property is located within Exposition Park next to the Los Angeles Memorial Coliseum in South Los Angeles, at the former site of the Los Angeles Memorial Sports Arena. The stadium will be the centerpiece of a complex that will also include a large community plaza, restaurants, and retail.
Banc of California Stadium will be the first, new open-air stadium in Los Angeles since 1962 and will have a 22,000-seat capacity. The groundbreaking for the stadium took place on August 23, 2016. The Los Angeles Football Club is set to debut in the 2018 season. In addition to soccer games, the stadium will be used for concerts, festivals, and community events. The project is expected to generate over 1,200 new construction jobs and 1,800 full-time operational jobs. Further, it is projected that this development will add $129 million in annual economic activity from normal operations and $274 million in short-term economic investment through the construction of the stadium.
CDPH. CDPH regulates the production, manufacture, and sale of foods, drugs, medical devices and cosmetics in California pursuant to the Sherman Food, Drug, and Cosmetic Law. Within the CDPH, is the Food, Drug, and Radiation Safety Division of the Center for Environmental Health. The Food and Drug Branch's mission is to protect and improve the health of all California residents by assuring that foods, drugs, medical devices and certain other consumer products are safe and are not adulterated, misbranded nor falsely advertised; and that drugs and medical devices are effective.
Business and Professions Code Section 24204 contains outdated references. For example, there is no longer a "Bureau of Food and Drug Inspection" and the "California Pure Foods Act" was combined with the Sherman Food, Drug and Cosmetic Law in 1970. This bill is simply intended to replace these outdated references with the correct ones, by requiring the Director of the CDPH to notify the Department of ABC of the conviction of any licensee of any violation of the Sherman Food, Drug, and Cosmetic Law in connection with alcoholic beverages.
In support: The Los Angeles Football Club states that, "AB 1724 will allow them to both responsibly serve alcoholic beverages to its football fan-base and provide the stadium with much needed advertising revenue through our Tied-house exemption. This project is very important to the City of Los Angeles, which will see an estimated economic impact of over $3 billion annually. Further, the state will benefit as well with important sales tax and income tax generated by the fans and employees, and ultimately, because the stadium is on land leased from the state, the lease will at least $1.7 million annual park and state revenues."
Related legislation: SB 664 (Dodd) of the current legislative session, allows beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturer's agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees at an outdoor stadium (AT&T Park) and an indoor arena (Chase Center) with specified seating capacities located in the City and County of San Francisco.
SB 582 (Bradford) of the current legislative session, allows beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturer's agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees at a specified stadium (The Los Angeles Stadium at Hollywood Park) and performance venue located in the City of Inglewood.
SB 56 (Mendoza) of the current legislative session, among other things, authorizes ABC to issue a Sports Entertainment Facility Permit that would allow the permit holder to sell alcoholic beverages at a sports entertainment facility, as defined.
Prior legislation: SB 1105 (Mendoza) of 2016, among other things, would have authorized ABC to issue a general on-sale license for a sports entertainment facility bona fide public eating place that would allow the licensee to sell beer, wine, and distilled spirits at retail for consumption on the premises in a sports entertainment facility, as defined. (Never heard in Assembly Governmental Organization Committee)
AB 1971 (Cooper) of 2016, would have created a stand-alone Tied-house exception in the Act to allow holders of manufacturer licenses, as specified, to purchase advertising from retail licensees at outdoor stadiums and indoor arenas, subject to specified conditions. (Held on Senate inactive file)
AB 2096 (Low) of 2016, would have added leased premises to a specified condition in law that allows designated licensees to purchase advertising space or time from, or on behalf of, an on-sale retail licensee in connection with events which are held on the premises of an exposition park, stadium, or arena owned by the on-sale licensee. (Never heard in Assembly Governmental Organization Committee)
AB 866 (E. Garcia) of 2016, would have extended an existing Tied-house exception in the Act pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include outdoor stadiums with specified seating capacities located in the Cities of Inglewood and San Diego. (Held on Senate Inactive File)
AB 527 (Dodd), Chapter 517, Statutes of 2015, created 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.
SB 557 (Hall), Chapter 420, Statutes of 2015, extended an existing Tied-house exception 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 San Diego County.
SB 462 (Wolk), Chapter 315, Statutes of 2015, among other things, extended an existing Tied-house exception 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.
SB 133 (McGuire) of 2015, would have made similar minor code maintenance changes to an outdated section of the ABC Act. (Amended to address an issue related to transient occupancy taxes)
AB 600 (Bonta), Chapter 139, Statutes of 2014, extended an existing Tied-house exception 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).
SB 324 (Wright), Chapter 164, Statutes of 2013, extended an existing Tied-house exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include a fully enclosed arena with a fixed seating capacity in excess of 13,000 seats (the Forum) in the City of Inglewood.
SB 351 (Negrete-McLeod) of 2007, would have extended an existing Tied-house exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees so that alcoholic beverage manufacturers may purchase advertising from on-sale retail licensees in order to promote "safe ride home programs" at specified stadiums and arenas. (Held on Assembly inactive file)
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 located in San Joaquin County (Banner Island Ballpark).
AB 3046 (Chavez), Chapter 587, Statutes of 2006, extended an existing Tied-house exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to a fully enclosed arena with a fixed seating capacity in excess of 15,000 seats located in Santa Clara County (HP Pavilion).
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.
Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531 FN: 0001880
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 1724
:
SENATE GOVERNMENTAL ORG. COMMITTEE: 13-0, 7/11/17
AYES: Dodd, Berryhill, Bradford, Cannella, Gaines, Galgiani, Glazer, Hill, Hueso, Lara, Mendoza, Portantino, Vidak
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 76-0, 5/4/17 (Consent) - See last page for vote
SOURCE: Los Angeles Football Club
DIGEST: This bill extends an existing 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 specified outdoor stadium located in the City of Los Angeles (Banc of California Stadium, the future home of the Los Angeles Football Club). This bill also makes minor code maintenance changes to an outdated section of the ABC Act.
Senate Floor Amendments of 8/29/17 (1) strike language pertaining to a 11.2-acre stadium complex and instead specify that the exception in the ABC Act extends to an outdoor stadium with a fixed seating capacity in excess of 20,000 seats in the City of Los Angeles; and (2) update chaptering out language to incorporate additional changes to Section 25503.6 of the Business and Professions Code proposed by SB 582 (Bradford) and SB 664 (Dodd).
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.
- Separates the alcoholic beverage industry into three component parts, or tiers, of the manufacturer (including breweries, wineries, and distilleries), wholesaler, and retailer (both on-sale and off-sale). This is referred to as the “tied-house” law or “three-tier” system.
- Prohibits, in general, a manufacturer, winegrower, manufacturer's agent, rectifier, distiller, bottler, importer, or wholesaler, or any officer, director or agent of any such person from owning, directly or indirectly, any interest in any on-sale license.
- Prohibits, in general, a manufacturer, winegrower, distiller, bottler, or wholesaler, among other licensees, or agents of these licensees, from paying a retailer for advertising.
- Provides a variety of exceptions from the advertising prohibition, including permitting specified licensees to purchase advertising space and time from, or on behalf of, an on-sale retail licensee that is an owner, manager, or major tenant of certain stadiums, parks, fairs, entertainment complexes, and arenas, subject to specified conditions.
- Requires the Chief of the Bureau of Food and Drug Inspection to notify the Department of ABC of the conviction of any licensee of any violation of the California Pure Foods Act in connection with alcoholic beverages. Also, requires the Department of ABC to promptly investigate whether grounds exist for suspension or revocation of the license.
- Establishes the Sherman Food, Drug, and Cosmetic Law, and provides for regulation under that law by the California Department of Public Health (CDPH) of the packaging and labeling of foods, drugs, devices, and cosmetics.
This bill:
- Allows beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturer’s agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees at an outdoor stadium with a fixed seating capacity in excess of 20,000 seats in the City of Los Angeles.
- Provides that any purchase of advertising space or time by designated alcohol manufacturers relating to the specified outdoor stadium in the City of Los Angeles, may be conducted pursuant to a written contract with the owner, a long-term tenant of the stadium, or licensee of the stadium, whether or not the owner, long-term tenant, or licensee holds an on-sale license.
- Makes legislative findings and declarations as to the necessity of a special statute for a special statute for the County of Los Angeles.
- Contains language that prevents this bill from chaptering out any other legislative changes made to Section 25503.6 of the Business and Professions Code.
- Strikes outdated references to the "Chief of the Bureau of Food and Drug Inspection" as well as the "California Pure Foods Act," and instead requires the Director of the CDPH to notify the Department of ABC of the conviction of any licensee of a Sherman Food, Drug, and Cosmetic Law violation in connection with alcoholic beverages.
Background
Tied-house laws. Tied-house laws generally prohibit suppliers and retailers from sharing common owners and legally restrict alcohol beverage suppliers’ ability to gain control over retailers through indirect means. The original policy rationale for this body of law was to (1) promote the state’s interest in an orderly market; (2) prohibit the vertical integration and dominance by a single producer in the marketplace; (3) prohibit commercial bribery and to protect the public from predatory marketing practices; and, (4) discourage and/or prevent the intemperate use of alcoholic beverages. These provisions prohibit a manufacturer from paying for advertising space at a stadium or sports arena where the facility is licensed to sell alcoholic beverages at events held at the stadium or arena.
Over the years numerous exceptions to this prohibition have been added to the ABC Act e.g. Levi’s Stadium in Santa Clara, Oakland Coliseum in Oakland, Arrowhead Pond Arena in Anaheim, Kern County Arena in Bakersfield, the National Orange Show Events Center in San Bernardino, Auto Club Speedway, (formerly California Speedway) in Fontana, Grizzly Stadium in Fresno, Raley Field in West Sacramento, HP Pavilion in San Jose, StubHub Center (formerly the Home Depot Center) in Carson, and numerous other venues.
AB 1724 puts the Banc of California Stadium on an even playing field with other arenas and stadiums in California.
Banc of California Stadium. Banc of California Stadium will be the future home of the Los Angeles Football Club, Major League Soccer’s latest expansion team. The property is located within Exposition Park next to the Los Angeles Memorial Coliseum in South Los Angeles, at the former site of the Los Angeles Memorial Sports Arena. The stadium will be the centerpiece of a complex that will also include a large community plaza, restaurants, and retail.
Banc of California Stadium will be the first, new open-air stadium in Los Angeles since 1962 and will have a 22,000-seat capacity. The groundbreaking for the stadium took place on August 23, 2016. The Los Angeles Football Club is set to debut in the 2018 season. In addition to soccer games, the stadium will be used for concerts, festivals, and community events. The project is expected to generate over 1,200 new construction jobs and 1,800 full-time operational jobs. Further, it is projected that this development will add $129 million in annual economic activity from normal operations and $274 million in short-term economic investment through the construction of the stadium.
CDPH. CDPH regulates the production, manufacture, and sale of foods, drugs, medical devices and cosmetics in California pursuant to the Sherman Food, Drug, and Cosmetic Law. Within the CDPH, is the Food, Drug, and Radiation Safety Division of the Center for Environmental Health. The Food and Drug Branch’s mission is to protect and improve the health of all California residents by assuring that foods, drugs, medical devices and certain other consumer products are safe and are not adulterated, misbranded nor falsely advertised; and that drugs and medical devices are effective.
Business and Professions Code Section 24204 contains outdated references. For example, there is no longer a “Bureau of Food and Drug Inspection” and the “California Pure Foods Act” was combined with the Sherman Food, Drug and Cosmetic Law in 1970. This bill is simply intended to replace these outdated references with the correct ones, by requiring the Director of the CDPH to notify the Department of ABC of the conviction of any licensee of any violation of the Sherman Food, Drug, and Cosmetic Law in connection with alcoholic beverages.
Comments
Purpose of the bill. The author’s office states, “this bill will create a tied-house exception for an outdoor stadium with a fixed seating capacity in excess of 20,000 seats in the City of Los Angeles, allowing for the Los Angeles Football Club to sell advertising space to alcoholic beverage manufacturers.”
Further, according to the author’s office, “the City of Los Angeles has worked tirelessly to bring a Major League Soccer team to the Los Angeles area, with final approval being secured by the City of Los Angeles’ Planning Commission and full City Council in May 2016. This important project will bring in hundreds of local jobs, with an estimated economic impact of $3 billion. By granting this tied-house exception, we’ll ensure the viability of this project thus providing additional revenue for our region and state.”
Related/Prior Legislation
SB 664 (Dodd, 2017) allows beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturer’s agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees at an outdoor stadium (AT&T Park) and an indoor arena (Chase Center) with specified seating capacities located in the City and County of San Francisco. (Pending on the Assembly Floor)
SB 582 (Bradford, 2017) allows beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturer’s agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees at a specified stadium (The Los Angeles Stadium at Hollywood Park) and performance venue located in the City of Inglewood. (Pending on the Assembly Floor)
SB 56 (Mendoza, 2017), among other things, authorizes the Department of ABC to issue a Sports Entertainment Facility Permit that would allow the permitholder to sell alcoholic beverages at a sports entertainment facility, as defined. (Pending in Senate Governmental Organization Committee)
SB 1105 (Mendoza, 2016), among other things, would have authorized the Department of ABC to issue a general on-sale license for a sports entertainment facility bona fide public eating place that would allow the licensee to sell beer, wine, and distilled spirits at retail for consumption on the premises in a sports entertainment facility, as defined. (Never heard in Assembly Governmental Organization Committee)
AB 1971 (Cooper, 2016) would have created a stand-alone tied-house exception in the ABC Act to allow holders of manufacturer licenses, as specified, to purchase advertising from retail licensees at outdoor stadiums and indoor arenas, subject to specified conditions. (Held on Senate inactive file)
AB 2096 (Low, 2016) would have added leased premises to a specified condition in law that allows designated licensees to purchase advertising space or time from, or on behalf of, an on-sale retail licensee in connection with events which are held on the premises of an exposition park, stadium, or arena owned by the on-sale licensee. (Never heard in Assembly Governmental Organization Committee)
AB 866 (E. Garcia, 2016) would have extended 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 outdoor stadiums with specified seating capacities located in the Cities of Inglewood and San Diego. (Held on Senate Inactive File)
AB 527 (Dodd, Chapter 517, Statutes of 2015) created a new tied-house exception in the ABC 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.
SB 557 (Hall, Chapter 420, Statutes of 2015) extended an existing tied-house exception 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 San Diego County.
SB 462 (Wolk, Chapter 315, Statutes of 2015), among other things, extended an existing tied-house exception 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.
SB 133 (McGuire, 2015) would have made similar minor code maintenance changes to an outdated section of the ABC Act. (Amended to address an issue related to transient occupancy taxes)
AB 600 (Bonta, Chapter 139, Statutes of 2014) extended an existing tied-house exception 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).
SB 324 (Wright, Chapter 164, Statutes of 2013) extended an existing tied-house exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include a fully enclosed arena with a fixed seating capacity in excess of 13,000 seats (the Forum) in the City of Inglewood.
SB 351 (Negrete-McLeod, 2007) would have extended an existing tied-house exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees so that alcoholic beverage manufacturers may purchase advertising from on-sale retail licensees in order to promote “safe ride home programs” at specified stadiums and arenas. (Held on Assembly inactive file)
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 located in San Joaquin County (Banner Island Ballpark).
AB 3046 (Chavez, Chapter 587, Statutes of 2006) extended an existing tied-house exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to a fully enclosed arena with a fixed seating capacity in excess of 15,000 seats located in Santa Clara County (HP Pavilion).
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.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
Los Angeles Football Club (source)
OPPOSITION: (Verified 8/30/17)
None received
ARGUMENTS IN SUPPORT: The Los Angeles Football Club states that, “AB 1724 will allow them to both responsibly serve alcoholic beverages to its football fan-base and provide the stadium with much needed advertising revenue through our tied-house exemption. This project is very important to the City of Los Angeles, which will see an estimated economic impact of over $3 billion annually. Further, the state will benefit as well with important sales tax and income tax generated by the fans and employees, and ultimately, because the stadium is on land leased from the state, the lease will at least $1.7 million annual park and state revenues.”
ASSEMBLY FLOOR: 76-0, 5/4/17
AYES: Acosta, Aguiar-Curry, Arambula, Baker, Berman, Bloom, Bocanegra, Bonta, Brough, Burke, Caballero, Calderon, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon
NO VOTE RECORDED: Travis Allen, Bigelow, Cristina Garcia, Patterson
8/30/17 13:39:54
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 1724
:
SENATE GOVERNMENTAL ORG. COMMITTEE: 13-0, 7/11/17
AYES: Dodd, Berryhill, Bradford, Cannella, Gaines, Galgiani, Glazer, Hill, Hueso, Lara, Mendoza, Portantino, Vidak
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 76-0, 5/4/17 (Consent) - See last page for vote
SOURCE: Los Angeles Football Club
DIGEST: This bill extends an existing 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 specified stadium complex located in the County of Los Angeles (Banc of California Stadium, the future home of the Los Angeles Football Club). This bill also makes minor code maintenance changes to an outdated section of the ABC Act.
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.
- Separates the alcoholic beverage industry into three component parts, or tiers, of the manufacturer (including breweries, wineries, and distilleries), wholesaler, and retailer (both on-sale and off-sale). This is referred to as the “tied-house” law or “three-tier” system.
- Prohibits, in general, a manufacturer, winegrower, manufacturer's agent, rectifier, distiller, bottler, importer, or wholesaler, or any officer, director or agent of any such person from owning, directly or indirectly, any interest in any on-sale license.
- Prohibits, in general, a manufacturer, winegrower, distiller, bottler, or wholesaler, among other licensees, or agents of these licensees, from paying a retailer for advertising.
- Provides a variety of exceptions from the advertising prohibition, including permitting specified licensees to purchase advertising space and time from, or on behalf of, an on-sale retail licensee that is an owner, manager, or major tenant of certain stadiums, parks, fairs, entertainment complexes, and arenas, subject to specified conditions.
- Requires the Chief of the Bureau of Food and Drug Inspection to notify the Department of ABC of the conviction of any licensee of any violation of the California Pure Foods Act in connection with alcoholic beverages. Also, requires the Department of ABC to promptly investigate whether grounds exist for suspension or revocation of the license.
- Establishes the Sherman Food, Drug, and Cosmetic Law, and provides for regulation under that law by the California Department of Public Health (CDPH) of the packaging and labeling of foods, drugs, devices, and cosmetics.
This bill:
- Allows beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturer’s agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees at a stadium complex of not more than 11.2 acres that includes an outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the County of Los Angeles.
- Provides that any purchase of advertising space or time by designated alcohol manufacturers relating to the specified outdoor stadium in the County of Los Angeles, may be conducted pursuant to a written contract with 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.
- Makes legislative findings and declarations as to the necessity of a special statute for a special statute for the County of Los Angeles.
- Contains language that prevents this bill from chaptering out any other legislative changes made to Section 25503.6 of the Business and Professions Code.
- Strikes outdated references to the "Chief of the Bureau of Food and Drug Inspection" as well as the "California Pure Foods Act," and instead requires the Director of the CDPH to notify the Department of ABC of the conviction of any licensee of a Sherman Food, Drug, and Cosmetic Law violation in connection with alcoholic beverages.
Background
Tied-house laws. Tied-house laws generally prohibit suppliers and retailers from sharing common owners and legally restrict alcohol beverage suppliers’ ability to gain control over retailers through indirect means. The original policy rationale for this body of law was to (1) promote the state’s interest in an orderly market; (2) prohibit the vertical integration and dominance by a single producer in the marketplace; (3) prohibit commercial bribery and to protect the public from predatory marketing practices; and, (4) discourage and/or prevent the intemperate use of alcoholic beverages. These provisions prohibit a manufacturer from paying for advertising space at a stadium or sports arena where the facility is licensed to sell alcoholic beverages at events held at the stadium or arena.
Over the years numerous exceptions to this prohibition have been added to the ABC Act e.g. Levi’s Stadium in Santa Clara, Oakland Coliseum in Oakland, Arrowhead Pond Arena in Anaheim, Kern County Arena in Bakersfield, the National Orange Show Events Center in San Bernardino, Auto Club Speedway, (formerly California Speedway) in Fontana, Grizzly Stadium in Fresno, Raley Field in West Sacramento, HP Pavilion in San Jose, StubHub Center (formerly the Home Depot Center) in Carson, and numerous other venues.
AB 1724 puts the Banc of California Stadium on an even playing field with other arenas and stadiums in California.
Banc of California Stadium. Banc of California Stadium will be the future home of the Los Angeles Football Club, Major League Soccer’s latest expansion team. The property is located within Exposition Park next to the Los Angeles Memorial Coliseum in South Los Angeles, at the former site of the Los Angeles Memorial Sports Arena. The stadium will be the centerpiece of a complex that will also include a large community plaza, restaurants, and retail.
Banc of California Stadium will be the first, new open-air stadium in Los Angeles since 1962 and will have a 22,000-seat capacity. The groundbreaking for the stadium took place on August 23, 2016. The Los Angeles Football Club is set to debut in the 2018 season. In addition to soccer games, the stadium will be used for concerts, festivals, and community events. The project is expected to generate over 1,200 new construction jobs and 1,800 full-time operational jobs. Further, it is projected that this development will add $129 million in annual economic activity from normal operations and $274 million in short-term economic investment through the construction of the stadium.
CDPH. CDPH regulates the production, manufacture, and sale of foods, drugs, medical devices and cosmetics in California pursuant to the Sherman Food, Drug, and Cosmetic Law. Within the CDPH, is the Food, Drug, and Radiation Safety Division of the Center for Environmental Health. The Food and Drug Branch’s mission is to protect and improve the health of all California residents by assuring that foods, drugs, medical devices and certain other consumer products are safe and are not adulterated, misbranded nor falsely advertised; and that drugs and medical devices are effective.
Business and Professions Code Section 24204 contains outdated references. For example, there is no longer a “Bureau of Food and Drug Inspection” and the “California Pure Foods Act” was combined with the Sherman Food, Drug and Cosmetic Law in 1970. This bill is simply intended to replace these outdated references with the correct ones, by requiring the Director of the CDPH to notify the Department of ABC of the conviction of any licensee of any violation of the Sherman Food, Drug, and Cosmetic Law in connection with alcoholic beverages.
Comments
Purpose of the bill. The author’s office states, “this bill will create a tied-house exception for an 11.2-acre outdoor stadium complex in Los Angeles County, allowing for the Los Angeles Football Club to sell advertising space to alcoholic beverage manufacturers.”
Further, according to the author’s office, “the City of Los Angeles has worked tirelessly to bring a Major League Soccer team to the Los Angeles area, with final approval being secured by the City of Los Angeles’ Planning Commission and full City Council in May 2016. This important project will bring in hundreds of local jobs, with an estimated economic impact of $3 billion. By granting this tied-house exception, we’ll ensure the viability of this project thus providing additional revenue for our region and state.”
Related/Prior Legislation
SB 664 (Dodd, 2017) allows beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturer’s agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees at an outdoor stadium (AT&T Park) and an indoor arena (Chase Center) with specified seating capacities located in the City and County of San Francisco. (Pending on the Assembly Floor)
SB 582 (Bradford, 2017) allows beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturer’s agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees at a specified stadium (The Los Angeles Stadium at Hollywood Park) and performance venue located in the City of Inglewood. (Pending on the Assembly Floor)
SB 56 (Mendoza, 2017), among other things, authorizes the Department of ABC to issue a Sports Entertainment Facility Permit that would allow the permitholder to sell alcoholic beverages at a sports entertainment facility, as defined. (Pending in Senate Governmental Organization Committee)
SB 1105 (Mendoza, 2016), among other things, would have authorized the Department of ABC to issue a general on-sale license for a sports entertainment facility bona fide public eating place that would allow the licensee to sell beer, wine, and distilled spirits at retail for consumption on the premises in a sports entertainment facility, as defined. (Never heard in Assembly Governmental Organization Committee)
AB 1971 (Cooper, 2016) would have created a stand-alone tied-house exception in the ABC Act to allow holders of manufacturer licenses, as specified, to purchase advertising from retail licensees at outdoor stadiums and indoor arenas, subject to specified conditions. (Held on Senate inactive file)
AB 2096 (Low, 2016) would have added leased premises to a specified condition in law that allows designated licensees to purchase advertising space or time from, or on behalf of, an on-sale retail licensee in connection with events which are held on the premises of an exposition park, stadium, or arena owned by the on-sale licensee. (Never heard in Assembly Governmental Organization Committee)
AB 866 (E. Garcia, 2016) would have extended 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 outdoor stadiums with specified seating capacities located in the Cities of Inglewood and San Diego. (Held on Senate Inactive File)
AB 527 (Dodd, Chapter 517, Statutes of 2015) created a new tied-house exception in the ABC 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.
SB 557 (Hall, Chapter 420, Statutes of 2015) extended an existing tied-house exception 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 San Diego County.
SB 462 (Wolk, Chapter 315, Statutes of 2015), among other things, extended an existing tied-house exception 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.
SB 133 (McGuire, 2015) would have made similar minor code maintenance changes to an outdated section of the ABC Act. (Amended to address an issue related to transient occupancy taxes)
AB 600 (Bonta, Chapter 139, Statutes of 2014) extended an existing tied-house exception 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).
SB 324 (Wright, Chapter 164, Statutes of 2013) extended an existing tied-house exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include a fully enclosed arena with a fixed seating capacity in excess of 13,000 seats (the Forum) in the City of Inglewood.
SB 351 (Negrete-McLeod, 2007) would have extended an existing tied-house exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees so that alcoholic beverage manufacturers may purchase advertising from on-sale retail licensees in order to promote “safe ride home programs” at specified stadiums and arenas. (Held on Assembly inactive file)
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 located in San Joaquin County (Stockton Arena).
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 located in San Joaquin County (Banner Island Ballpark).
AB 3046 (Chavez, Chapter 587, Statutes of 2006) extended an existing tied-house exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to a fully enclosed arena with a fixed seating capacity in excess of 15,000 seats located in Santa Clara County (HP Pavilion).
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.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
Los Angeles Football Club (source)
OPPOSITION: (Verified 8/22/17)
None received
ARGUMENTS IN SUPPORT: The Los Angeles Football Club states that, “AB 1724 will allow them to both responsibly serve alcoholic beverages to its football fan-base and provide the stadium with much needed advertising revenue through our tied-house exemption. This project is very important to the City of Los Angeles, which will see an estimated economic impact of over $3 billion annually. Further, the state will benefit as well with important sales tax and income tax generated by the fans and employees, and ultimately, because the stadium is on land leased from the state, the lease will at least $1.7 million annual park and state revenues.”
ASSEMBLY FLOOR: 76-0, 5/4/17
AYES: Acosta, Aguiar-Curry, Arambula, Baker, Berman, Bloom, Bocanegra, Bonta, Brough, Burke, Caballero, Calderon, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon
NO VOTE RECORDED: Travis Allen, Bigelow, Cristina Garcia, Patterson
8/22/17 16:14:26
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Bill Dodd
Chair
2017 - 2018 Regular
Bill No: 1724 Hearing Date: 7/11/2017
Author: | , et al. | ||
Version: | 7/3/2017 Amended | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Naomi Padron | ||
SUBJECT: Alcoholic beverages: licenses: suspension and revocation tied-house exception
DIGEST: This bill extends an existing 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 specified stadium complex located in the County of Los Angeles (Banc of California Stadium, the future home of the Los Angeles Football Club). This bill also makes minor code maintenance changes to an outdated section of the ABC Act.
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, of the manufacturer (including breweries, wineries, and distilleries), wholesaler, and retailer (both on-sale and off-sale). This is referred to as the “tied-house” law or “three-tier” system.
- Prohibits, in general, a manufacturer, winegrower, manufacturer's agent, rectifier, distiller, bottler, importer, or wholesaler, or any officer, director or agent of any such person from owning, directly or indirectly, any interest in any on-sale license.
- Prohibits, in general, a manufacturer, winegrower, distiller, bottler, or wholesaler, among other licensees, or agents of these licensees, from paying a retailer for advertising.
- Provides a variety of exceptions from the advertising prohibition, including permitting specified licensees to purchase advertising space and time from, or on behalf of, an on-sale retail licensee that is an owner, manager, or major tenant of certain stadiums, parks, fairs, entertainment complexes, and arenas, subject to specified conditions.
- Requires the Chief of the Bureau of Food and Drug Inspection to notify the Department of ABC of the conviction of any licensee of any violation of the California Pure Foods Act in connection with alcoholic beverages. Also, requires the Department of ABC to promptly investigate whether grounds exist for suspension or revocation of the license.
- Establishes the Sherman Food, Drug, and Cosmetic Law, and provides for regulation under that law by the State Department of Public Health of the packaging and labeling of foods, drugs, devices, and cosmetics.
This bill:
- Allows beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturer’s agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees at a stadium complex of not more than 11.2 acres that includes an outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the County of Los Angeles (Banc of California Stadium, the future home of the Los Angeles Football Club).
- Provides that any purchase of advertising space or time by designated alcohol manufacturers relating to the specified outdoor stadium in the County of Los Angeles, may be conducted pursuant to a written contract with 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.
- Makes legislative findings and declarations as to the necessity of a special statute for a special statute for the County of Los Angeles.
- Contains language that prevents this bill from chaptering out any other legislative changes made to Section 25503.6 of the Business and Professions Code.
- Strikes outdated references to the "Chief of the Bureau of Food and Drug Inspection" as well as the "California Pure Foods Act," and instead requires the Director of the State Department of Public Health to notify the Department of ABC of the conviction of any licensee of a Sherman Food, Drug, and Cosmetic Law violation in connection with alcoholic beverages.
Background
Purpose of the bill. The author’s office states, “this bill will create a tied-house exception for an 11.2-acre outdoor stadium complex in Los Angeles County, allowing for the Los Angeles Football Club to sell advertising space to alcoholic beverage manufacturers.”
Further, according to the author’s office, “the City of Los Angeles has worked tirelessly to bring a Major League Soccer team to the Los Angeles area, with final approval being secured by the City of Los Angeles’ Planning Commission and full City Council in May 2016. This important project will bring in hundreds of local jobs, with an estimated economic impact of $3 billion. By granting this tied-house exception, we’ll ensure the viability of this project thus providing additional revenue for our region and state.”
Tied-house laws. Tied-house laws generally prohibit suppliers and retailers from sharing common owners and legally restrict alcohol beverage suppliers’ ability to gain control over retailers through indirect means. 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 marketplace; (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. These provisions prohibit a manufacturer from paying for advertising space at a stadium or sports arena where the facility is licensed to sell alcoholic beverages at events held at the stadium or arena.
Over the years numerous exceptions to this prohibition have been added to the ABC Act e.g. Levi’s Stadium in Santa Clara, Oakland Coliseum in Oakland, Arrowhead Pond Arena in Anaheim, Kern County Arena in Bakersfield, the National Orange Show Events Center in San Bernardino, Auto Club Speedway, (formerly California Speedway) in Fontana, Grizzly Stadium in Fresno, Raley Field in West Sacramento, HP Pavilion in San Jose, StubHub Center (formerly the Home Depot Center) in Carson, and numerous other venues.
AB 1724 would put the Banc of California Stadium on an even playing field with other arenas and stadiums in California.
Banc of California Stadium. Banc of California Stadium will be the future home of the Los Angeles Football Club, Major League Soccer’s latest expansion team. The property is located within Exposition Park next to the Los Angeles Memorial Coliseum in South Los Angeles, at the former site of the Los Angeles Memorial Sports Arena. The stadium will be the centerpiece of a complex that will also include a large community plaza, restaurants, and retail.
Banc of California Stadium will be the first, new open-air stadium in Los Angeles since 1962 and will have a 22,000-seat capacity. The groundbreaking for the stadium took place on August 23, 2016. The Los Angeles Football Club is set to debut in the 2018 season. In addition to soccer games, the stadium will be used for concerts, festivals, and community events. The project is expected to generate over 1,200 new construction jobs and 1,800 full-time operational jobs. Further, it is projected that this development will add $129 million in annual economic activity from normal operations and $274 million in short-term economic investment through the construction of the stadium.
California Department of Public Health (CDPH). CDPH regulates the production, manufacture, and sale of foods, drugs, medical devices and cosmetics in California pursuant to the Sherman Food, Drug, and Cosmetic Law. Within the CDPH, is the Food, Drug, and Radiation Safety Division of the Center for Environmental Health. The Food and Drug Branch’s mission is to protect and improve the health of all California residents by assuring that foods, drugs, medical devices and certain other consumer products are safe and are not adulterated, misbranded nor falsely advertised; and that drugs and medical devices are effective.
Business and Professions Code Section 24204 contains outdated references. For example, there is no longer a “Bureau of Food and Drug Inspection” and the “California Pure Foods Act” was combined with the Sherman Food, Drug and Cosmetic Law in 1970. This bill is simply intended to replace these outdated references with the correct ones, by requiring the Director of the CDPH to notify the Department of ABC of the conviction of any licensee of any violation of the Sherman Food, Drug, and Cosmetic Law in connection with alcoholic beverages.
Proposed author’s amendments. In order to limit the scope of the bill, the author’s office has proposed to amend AB 1724 in committee to add subsection (i) after (Q) on line 15, page 5 as follows:
(i) In the event that the 11.2 acre stadium complex contains one or more separately licensed on-sale locations located outside of the stadium, the paid advertising space or time authorized by this section shall not be displayed in these separately licensed locations.
Prior/Related Legislation
SB 664 (Dodd, 2017) would allow beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturer’s agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees at an outdoor stadium (AT&T Park) and an indoor arena (Chase Center) with specified seating capacities located in the City and County of San Francisco. (Pending in the Assembly Appropriations Committee)
SB 582 (Bradford, 2017) would allow beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturer’s agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees at a specified stadium (The Los Angeles Stadium at Hollywood Park) and performance venue located in the City of Inglewood. (Pending in the Assembly Appropriations Committee)
SB 56 (Mendoza, 2017) among other things, would authorize the Department of ABC to issue a Sports Entertainment Facility Permit that would allow the permitholder to sell alcoholic beverages at a sports entertainment facility, as defined. (Pending in Senate Governmental Organization Committee)
SB 1105 (Mendoza, 2016) among other things, would have authorized the Department of ABC to issue a general on-sale license for a sports entertainment facility bona fide public eating place that would allow the licensee to sell beer, wine, and distilled spirits at retail for consumption on the premises in a sports entertainment facility, as defined. (Never heard in Assembly Governmental Organization Committee)
AB 1971 (Cooper, 2016) would have created a stand-alone tied-house exception in the ABC Act to allow holders of manufacturer licenses, as specified, to purchase advertising from retail licensees at outdoor stadiums and indoor arenas, subject to specified conditions. (Held on Senate inactive file)
AB 2096 (Low, 2016) would have added leased premises to a specified condition in law that allows designated licensees to purchase advertising space or time from, or on behalf of, an on-sale retail licensee in connection with events which are held on the premises of an exposition park, stadium, or arena owned by the on-sale licensee. (Never heard in Assembly Governmental Organization Committee)
AB 866 (E. Garcia, 2016) would have extended 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 outdoor stadiums with specified seating capacities located in the Cities of Inglewood and San Diego. (Held on Senate Inactive File)
AB 527 (Dodd, Chapter 517, Statutes of 2015) created a new tied-house exception in the ABC 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.
SB 557 (Hall, Chapter 420, Statutes of 2015) extended an existing tied-house exception 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 San Diego County.
SB 462 (Wolk, Chapter 315, Statutes of 2015) among other things, extended an existing tied-house exception 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.
SB 133 (McGuire, 2015) would have made similar minor code maintenance changes to an outdated section of the ABC Act. (Amended to address an issue related to transient occupancy taxes)
AB 600 (Bonta, Chapter 139, Statutes of 2014) extended an existing tied-house exception 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).
SB 324 (Wright, Chapter 164, Statutes of 2013) extended an existing tied-house exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include a fully enclosed arena with a fixed seating capacity in excess of 13,000 seats (the Forum) in the City of Inglewood.
SB 351 (Negrete-McLeod, 2007) would have extended an existing tied-house exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees so that alcoholic beverage manufacturers may purchase advertising from on-sale retail licensees in order to promote “safe ride home programs” at specified stadiums and arenas. (Held on Assembly inactive file)
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 located in San Joaquin County (Stockton Arena).
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 located in San Joaquin County (Banner Island Ballpark).
AB 3046 (Chavez, Chapter 587, Statutes of 2006) extended an existing tied-house exception pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to a fully enclosed arena with a fixed seating capacity in excess of 15,000 seats located in Santa Clara County (HP Pavilion).
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.
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 licensees to an outdoor stadium or a fully enclosed stadium, with a fixed seating capacity in excess of 10,000 seats located in Alameda County (Oakland Coliseum).
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
SUPPORT:
Los Angeles Football Club (Source)
OPPOSITION:
None received
ARGUMENTS IN SUPPORT: The Los Angeles Football Club states that, “AB 1724 will allow them to both responsibly serve alcoholic beverages to its football fan-base and provide the stadium with much needed advertising revenue through our tied-house exemption. This project is very important to the City of Los Angeles, which will see an estimated economic impact of over $3 billion annually. Further, the state will benefit as well with important sales tax and income tax generated by the fans and employees, and ultimately, because the stadium is on land leased from the state, the lease will at least $1.7 million annual park and state revenues.”
Date of Hearing: April 26, 2017
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez Fletcher, Chair
ABPCA Bill Id:AB 1724
Author:(Committee on Governmental Organization) – As Introduced Ver:March 16, 2017
Policy Committee: | Governmental Organization | Vote: | 20 - 0 |
|
| ||
|
|
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill strikes references to the "Chief of the Bureau of Food and Drug Inspection" as well as the "California Pure Foods Act," and instead requires the Director of the State Department of Public Health to notify the Department of Alcoholic Beverage Control (ABC) of the conviction of any licensee of any violation of the Sherman Food, Drug, and Cosmetic Law in connection with alcoholic beverage
FISCAL EFFECT:
No additional state costs.
COMMENTS:
Background and Purpose. Existing law contains outdated references. For example, there is no longer a “Bureau of Food and Drug Inspection” and the “California Pure Foods Act” referenced by the statute was combined with the Sherman Food, Drug and Cosmetic Law in 1970. This bill is simply intended to replace the outdated references with the correct ones. The author points out that it is timely to update this antiquated code section to reflect current circumstances and remove any confusion.
Analysis Prepared by: Luke Reidenbach / APPR. / (916) 319-2081
Date of Hearing: April 19, 2017
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Adam Gray, Chair
ABPCA Bill Id:AB 1724 (
Author:Committee on Governmental Organization) – As Introduced Ver:March 16, 2017
SUBJECT: Alcoholic beverages: licenses: suspension and revocation
SUMMARY: Makes minor code maintenance changes to an outdated section of the Alcoholic Beverage Control Act (Act) to reflect current circumstances. Specifically, this bill:
1) Strikes references to the "Chief of the Bureau of Food and Drug Inspection" as well as the "California Pure Foods Act," neither of which exist any longer, and, instead requires the Director of the State Department of Public Health to notify the Department of Alcoholic Beverage Control (ABC) of the conviction of any licensee of any violation of the Sherman Food, Drug, and Cosmetic Law in connection with alcoholic beverages.
EXISTING LAW:
- Establishes ABC and grants it exclusive authority to administer the provisions of the 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.
- Requires the Chief of the Bureau of Food and Drug Inspection to notify ABC of the conviction of any licensee of any violation of the California Pure Foods Act in connection with alcoholic beverages. Also, requires ABC to promptly investigate whether grounds exist for suspension or revocation of the license.
- Establishes the Sherman Food, Drug, and Cosmetic Law, and provides for regulation under that law by DPH of the packaging and labeling of foods, drugs, devices, and cosmetics.
FISCAL EFFECT: Unknown
COMMENTS:
Purpose of the bill: The author’s office notes that existing law (Section 24204 of the Business and Professions Code) contains outdated references. For example, there is no longer a “Bureau of Food and Drug Inspection” and the “California Pure Foods Act” referenced by the statute was combined with the Sherman Food, Drug and Cosmetic Law in 1970. This bill is simply intended to replace the outdated references with the correct ones.
The author points out that it is timely to update this antiquated code section to reflect current circumstances and remove any confusion.
REGISTERED SUPPORT / OPPOSITION:
Support
None on file
Opposition
None on file
Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531
Discussed in Hearing
3MIN
Assembly Floor
2MIN
Senate Floor
2MIN
Senate Standing Committee on Governmental Organization
Bill Author
Bill Co-Author(s):
