AB 2000: Alcoholic beverages: tied-house restrictions: advertising.
- Session Year: 2017-2018
- House: Assembly
- Latest Version Date: 2018-09-18
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, unless otherwise limited, 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 specified stadiums located in the City of San Jose. The bill, with regard to a specified fully enclosed arena in San Jose, would expand the definition of on-sale retail licensee to include an owner, manager, or major tenant. 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 City of San Jose.
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 AB 2146 to be operative only if this bill and AB 2146 are enacted and this bill is enacted last.
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, unless otherwise limited, 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 specified stadiums located in the City of San Jose. The bill, with regard to a specified fully enclosed arena in San Jose, would expand the definition of on-sale retail licensee to include an owner, manager, or major tenant. 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 City of San Jose.
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 AB 2146 to be operative only if this bill and AB 2146 are enacted and this bill is enacted last.
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, unless otherwise limited, 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 specified stadiums located in the City of San Jose. The bill, with regard to a specified fully enclosed arena in San Jose, would expand the definition of on-sale retail licensee to include an owner, manager, or major tenant. 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 City of San Jose.
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 AB 2146 to be operative only if this bill and AB 2146 are enacted and this bill is enacted last.
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 that, unless otherwise limited, 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 specified stadiums located in the City of San Jose. The bill, with regard to a specified fully enclosed arena in San Jose, would expand the definition of on-sale retail licensee to include an owner, manager, or major tenant. 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 City of San Jose.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
The Alcoholic Beverage Control Act 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 specified stadiums located in the City of San Jose. 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 City of San Jose.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
The Alcoholic Beverage Control Act 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 located in the City of San Jose. 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 City of San Jose.
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.
(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 of at least 70,000 seats 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 located 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 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.
(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)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the City of Los Angeles.
(U)An outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the City of San Jose.
(V)An outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose.
(W)A fully enclosed arena with a fixed seating capacity in excess of 15,000 seats located in the City of San Jose.
(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. With respect to a fully enclosed arena described in subparagraph (W) of paragraph (1), advertising space or time shall be purchased only for interior advertising in connection with events conducted within the arena.
(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), (R), and (T) 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. 1.5.Section 25503.6 of the Business and Professions Code is amended to read:25503.6.(a)Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrowers license, a 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 of at least 70,000 seats 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 located 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 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.
(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)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the City of Los Angeles.
(U)An outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the City of San Jose.
(V)An outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose.
(W)A fully enclosed arena with a fixed seating capacity in excess of 15,000 seats located in the City of San Jose.
(X)An outdoor stadium with a fixed seating capacity of at least 43,000 seats located in the City of San Diego.
(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. With respect to a fully enclosed arena described in subparagraph (W) of paragraph (1), advertising space or time shall be purchased only for interior advertising in connection with events conducted within the arena.
(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), (R), and (T) 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.Section 25503.8 of the Business and Professions Code is amended to read:25503.8.(a)Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrowers license, a California winegrowers agent, a rectifier, a distilled spirits manufacturer, or a distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee if all of the following conditions are met:
(1)The on-sale licensee is the owner of any of the following:
(A)A fully enclosed auditorium or theater with a fixed seating capacity in excess of 6,000 seats, at least 60 percent of the use of which is for plays or musical concerts, not including sporting events.
(B)A motion picture studio facility at which public tours are conducted for at least four million people per year.
(C)A retail, entertainment development adjacent to, and under common ownership with, a theme park, amphitheater, and motion picture production studio.
(D)A theme or amusement park and the adjacent retail, dining, and entertainment area located in the City of Los Angeles, Los Angeles County, or Orange County.
(E)A fully enclosed theater, with box office sales and attendance by the public on a ticketed basis only, with a fixed seating capacity in excess of 6,000 seats, located in Los Angeles County within the area subject to the Los Angeles Sports and Entertainment District Specific Plan adopted by the City of Los Angeles pursuant to ordinance number 174225, as approved on September 6, 2001.
(2)The advertising space or time is purchased only in connection with one of the following:
(A)In the case of a fully enclosed auditorium or theater, in connection with sponsorship of plays or musical concerts to be held on the premises of the auditorium or theater owned by the on-sale licensee.
(B)In the case of a motion picture studio facility, in connection with sponsorship of the public tours or special events conducted at the studio facility.
(C)In the case of a retail, entertainment development, in connection with sponsorship of public tours or special events conducted at the development.
(D)In the case of a theme or amusement park and the adjacent retail, dining, and entertainment area, located in the City of Los Angeles, Los Angeles County, or Orange County, in connection with daily activities and events at the theme or amusement park and the adjacent retail, dining, and entertainment area.
(E)In the case of the fully enclosed theater described in subparagraph (E) of paragraph (1) of subdivision (a), in connection with events conducted at the theater.
(3)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 or marketed by the winegrower or California winegrowers agent, and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brand manufactured or marketed by the distilled spirits manufacturer or distilled spirits manufacturers agent purchasing the advertising space or time.
(b)Any purchase of advertising space or time conducted 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 California winegrowers agent, the rectifier, the distilled spirits manufacturer, or the distilled spirits manufacturers agent, and the on-sale licensee, which contract shall not in any way involve the holder of a wholesalers license.
(c)Any beer manufacturer, rectifier, distilled spirits manufacturer, distilled spirits manufacturers agent, holder of a winegrowers license, or California winegrowers agent, who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesalers license to fulfill 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 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.
(d)Any on-sale retail licensee, as described in subdivision (a), who solicits or coerces, directly or indirectly, a holder of a wholesalers license to solicit a beer manufacturer, rectifier, distilled spirits manufacturer, or distilled spirits manufacturers agent, holder of a winegrowers license, or California winegrowers agent to purchase advertising space or time pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(e)For the purposes of this section, beer manufacturer includes any holder of a beer manufacturers license, any holder of an out-of-state beer manufacturers certificate, or any holder of a beer and wine importers general license.
SEC. 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 City of San Jose.
SEC. 4.Section 1.5 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by both this bill and Assembly Bill 2146. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2019, (2) each bill amends Section 25503.6 of the Business and Professions Code, and (3) this bill is enacted after Assembly Bill 2146, in which case Section 1 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.
(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 of at least 70,000 seats 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 located 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 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.
(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)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the City of Los Angeles.
(U)An outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the City of San Jose.
(V)An outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose.
(W)A fully enclosed arena with a fixed seating capacity in excess of 15,000 seats located in the City of San Jose.
(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. With respect to a fully enclosed arena described in subparagraph (W) of paragraph (1), advertising space or time shall be purchased only for interior advertising in connection with events conducted within the arena.
(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), (R), and (T) 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. 1.5.Section 25503.6 of the Business and Professions Code is amended to read:25503.6.(a)Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrowers license, a 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 of at least 70,000 seats 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 located 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 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.
(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)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the City of Los Angeles.
(U)An outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the City of San Jose.
(V)An outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose.
(W)A fully enclosed arena with a fixed seating capacity in excess of 15,000 seats located in the City of San Jose.
(X)An outdoor stadium with a fixed seating capacity of at least 43,000 seats located in the City of San Diego.
(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. With respect to a fully enclosed arena described in subparagraph (W) of paragraph (1), advertising space or time shall be purchased only for interior advertising in connection with events conducted within the arena.
(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), (R), and (T) 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.Section 25503.8 of the Business and Professions Code is amended to read:25503.8.(a)Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrowers license, a California winegrowers agent, a rectifier, a distilled spirits manufacturer, or a distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee if all of the following conditions are met:
(1)The on-sale licensee is the owner of any of the following:
(A)A fully enclosed auditorium or theater with a fixed seating capacity in excess of 6,000 seats, at least 60 percent of the use of which is for plays or musical concerts, not including sporting events.
(B)A motion picture studio facility at which public tours are conducted for at least four million people per year.
(C)A retail, entertainment development adjacent to, and under common ownership with, a theme park, amphitheater, and motion picture production studio.
(D)A theme or amusement park and the adjacent retail, dining, and entertainment area located in the City of Los Angeles, Los Angeles County, or Orange County.
(E)A fully enclosed theater, with box office sales and attendance by the public on a ticketed basis only, with a fixed seating capacity in excess of 6,000 seats, located in Los Angeles County within the area subject to the Los Angeles Sports and Entertainment District Specific Plan adopted by the City of Los Angeles pursuant to ordinance number 174225, as approved on September 6, 2001.
(2)The advertising space or time is purchased only in connection with one of the following:
(A)In the case of a fully enclosed auditorium or theater, in connection with sponsorship of plays or musical concerts to be held on the premises of the auditorium or theater owned by the on-sale licensee.
(B)In the case of a motion picture studio facility, in connection with sponsorship of the public tours or special events conducted at the studio facility.
(C)In the case of a retail, entertainment development, in connection with sponsorship of public tours or special events conducted at the development.
(D)In the case of a theme or amusement park and the adjacent retail, dining, and entertainment area, located in the City of Los Angeles, Los Angeles County, or Orange County, in connection with daily activities and events at the theme or amusement park and the adjacent retail, dining, and entertainment area.
(E)In the case of the fully enclosed theater described in subparagraph (E) of paragraph (1) of subdivision (a), in connection with events conducted at the theater.
(3)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 or marketed by the winegrower or California winegrowers agent, and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brand manufactured or marketed by the distilled spirits manufacturer or distilled spirits manufacturers agent purchasing the advertising space or time.
(b)Any purchase of advertising space or time conducted 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 California winegrowers agent, the rectifier, the distilled spirits manufacturer, or the distilled spirits manufacturers agent, and the on-sale licensee, which contract shall not in any way involve the holder of a wholesalers license.
(c)Any beer manufacturer, rectifier, distilled spirits manufacturer, distilled spirits manufacturers agent, holder of a winegrowers license, or California winegrowers agent, who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesalers license to fulfill 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 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.
(d)Any on-sale retail licensee, as described in subdivision (a), who solicits or coerces, directly or indirectly, a holder of a wholesalers license to solicit a beer manufacturer, rectifier, distilled spirits manufacturer, or distilled spirits manufacturers agent, holder of a winegrowers license, or California winegrowers agent to purchase advertising space or time pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(e)For the purposes of this section, beer manufacturer includes any holder of a beer manufacturers license, any holder of an out-of-state beer manufacturers certificate, or any holder of a beer and wine importers general license.
SEC. 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 City of San Jose.
SEC. 4.Section 1.5 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by both this bill and Assembly Bill 2146. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2019, (2) each bill amends Section 25503.6 of the Business and Professions Code, and (3) this bill is enacted after Assembly Bill 2146, in which case Section 1 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.
(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 of at least 70,000 seats 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 located 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 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.
(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)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the City of Los Angeles.
(U)An outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the City of San Jose.
(V)An outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose.
(W)A fully enclosed arena with a fixed seating capacity in excess of 15,000 seats located in the City of San Jose.
(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. With respect to a fully enclosed arena described in subparagraph (W) of paragraph (1), advertising space or time shall be purchased only for interior advertising in connection with events conducted within the arena.
(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), (R), and (T) 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. 1.5.Section 25503.6 of the Business and Professions Code is amended to read:25503.6.(a)Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrowers license, a 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 of at least 70,000 seats 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 located 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 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.
(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)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the City of Los Angeles.
(U)An outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the City of San Jose.
(V)An outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose.
(W)A fully enclosed arena with a fixed seating capacity in excess of 15,000 seats located in the City of San Jose.
(X)An outdoor stadium with a fixed seating capacity of at least 43,000 seats located in the City of San Diego.
(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. With respect to a fully enclosed arena described in subparagraph (W) of paragraph (1), advertising space or time shall be purchased only for interior advertising in connection with events conducted within the arena.
(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), (R), and (T) 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.Section 25503.8 of the Business and Professions Code is amended to read:25503.8.(a)Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrowers license, a California winegrowers agent, a rectifier, a distilled spirits manufacturer, or a distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee if all of the following conditions are met:
(1)The on-sale licensee is the owner of any of the following:
(A)A fully enclosed auditorium or theater with a fixed seating capacity in excess of 6,000 seats, at least 60 percent of the use of which is for plays or musical concerts, not including sporting events.
(B)A motion picture studio facility at which public tours are conducted for at least four million people per year.
(C)A retail, entertainment development adjacent to, and under common ownership with, a theme park, amphitheater, and motion picture production studio.
(D)A theme or amusement park and the adjacent retail, dining, and entertainment area located in the City of Los Angeles, Los Angeles County, or Orange County.
(E)A fully enclosed theater, with box office sales and attendance by the public on a ticketed basis only, with a fixed seating capacity in excess of 6,000 seats, located in Los Angeles County within the area subject to the Los Angeles Sports and Entertainment District Specific Plan adopted by the City of Los Angeles pursuant to ordinance number 174225, as approved on September 6, 2001.
(2)The advertising space or time is purchased only in connection with one of the following:
(A)In the case of a fully enclosed auditorium or theater, in connection with sponsorship of plays or musical concerts to be held on the premises of the auditorium or theater owned by the on-sale licensee.
(B)In the case of a motion picture studio facility, in connection with sponsorship of the public tours or special events conducted at the studio facility.
(C)In the case of a retail, entertainment development, in connection with sponsorship of public tours or special events conducted at the development.
(D)In the case of a theme or amusement park and the adjacent retail, dining, and entertainment area, located in the City of Los Angeles, Los Angeles County, or Orange County, in connection with daily activities and events at the theme or amusement park and the adjacent retail, dining, and entertainment area.
(E)In the case of the fully enclosed theater described in subparagraph (E) of paragraph (1) of subdivision (a), in connection with events conducted at the theater.
(3)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 or marketed by the winegrower or California winegrowers agent, and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brand manufactured or marketed by the distilled spirits manufacturer or distilled spirits manufacturers agent purchasing the advertising space or time.
(b)Any purchase of advertising space or time conducted 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 California winegrowers agent, the rectifier, the distilled spirits manufacturer, or the distilled spirits manufacturers agent, and the on-sale licensee, which contract shall not in any way involve the holder of a wholesalers license.
(c)Any beer manufacturer, rectifier, distilled spirits manufacturer, distilled spirits manufacturers agent, holder of a winegrowers license, or California winegrowers agent, who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesalers license to fulfill 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 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.
(d)Any on-sale retail licensee, as described in subdivision (a), who solicits or coerces, directly or indirectly, a holder of a wholesalers license to solicit a beer manufacturer, rectifier, distilled spirits manufacturer, or distilled spirits manufacturers agent, holder of a winegrowers license, or California winegrowers agent to purchase advertising space or time pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(e)For the purposes of this section, beer manufacturer includes any holder of a beer manufacturers license, any holder of an out-of-state beer manufacturers certificate, or any holder of a beer and wine importers general license.
SEC. 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 City of San Jose.
SEC. 4.Section 1.5 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by both this bill and Assembly Bill 2146. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2019, (2) each bill amends Section 25503.6 of the Business and Professions Code, and (3) this bill is enacted after Assembly Bill 2146, in which case Section 1 of this bill shall not become operative.
SEC. 4.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.
(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 of at least 70,000 seats 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 located 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 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.
(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)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the City of Los Angeles.
(U)An outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the City of San Jose.
(V)An outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose.
(W)A fully enclosed arena with a fixed seating capacity in excess of 15,000 seats located in the City of San Jose.
(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. With respect to a fully enclosed arena described in subparagraph (W) of paragraph (1), advertising space or time shall be purchased only for interior advertising in connection with events conducted within the arena.
(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), (R), and (T) 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.Section 25503.8 of the Business and Professions Code is amended to read:25503.8.(a)Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrowers license, a California winegrowers agent, a rectifier, a distilled spirits manufacturer, or a distilled spirits manufacturers agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee if all of the following conditions are met:
(1)The on-sale licensee is the owner of any of the following:
(A)A fully enclosed auditorium or theater with a fixed seating capacity in excess of 6,000 seats, at least 60 percent of the use of which is for plays or musical concerts, not including sporting events.
(B)A motion picture studio facility at which public tours are conducted for at least four million people per year.
(C)A retail, entertainment development adjacent to, and under common ownership with, a theme park, amphitheater, and motion picture production studio.
(D)A theme or amusement park and the adjacent retail, dining, and entertainment area located in the City of Los Angeles, Los Angeles County, or Orange County.
(E)A fully enclosed theater, with box office sales and attendance by the public on a ticketed basis only, with a fixed seating capacity in excess of 6,000 seats, located in Los Angeles County within the area subject to the Los Angeles Sports and Entertainment District Specific Plan adopted by the City of Los Angeles pursuant to ordinance number 174225, as approved on September 6, 2001.
(F)A fully enclosed arena with a fixed seating capacity in excess of 15,000 seats located in Santa Clara County. With respect to the arena described in this subparagraph, advertising space may also be purchased from, or on behalf of, a lessee or manager of the arena.(2)The advertising space or time is purchased only in connection with one of the following:
(A)In the case of a fully enclosed auditorium or theater, in connection with sponsorship of plays or musical concerts to be held on the premises of the auditorium or theater owned by the on-sale licensee.
(B)In the case of a motion picture studio facility, in connection with sponsorship of the public tours or special events conducted at the studio facility.
(C)In the case of a retail, entertainment development, in connection with sponsorship of public tours or special events conducted at the development.
(D)In the case of a theme or amusement park and the adjacent retail, dining, and entertainment area, located in the City of Los Angeles, Los Angeles County, or Orange County, in connection with daily activities and events at the theme or amusement park and the adjacent retail, dining, and entertainment area.
(E)In the case of the fully enclosed theater described in subparagraph (E) of paragraph (1) of subdivision (a), in connection with events conducted at the theater.
(F)In the case of a fully enclosed arena described in subparagraph (F) of paragraph (1) of subdivision (a), interior advertising in connection with events conducted within the arena.(3)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 or marketed by the winegrower or California winegrowers agent, and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brand manufactured or marketed by the distilled spirits manufacturer or distilled spirits manufacturers agent purchasing the advertising space or time.
(b)Any purchase of advertising space or time conducted 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 California winegrowers agent, the rectifier, the distilled spirits manufacturer, or the distilled spirits manufacturers agent, and the on-sale licensee, which contract shall not in any way involve the holder of a wholesalers license.
(c)Any beer manufacturer, rectifier, distilled spirits manufacturer, distilled spirits manufacturers agent, holder of a winegrowers license, or California winegrowers agent, who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesalers license to fulfill 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 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.
(d)Any on-sale retail licensee, as described in subdivision (a), who solicits or coerces, directly or indirectly, a holder of a wholesalers license to solicit a beer manufacturer, rectifier, distilled spirits manufacturer, or distilled spirits manufacturers agent, holder of a winegrowers license, or California winegrowers agent to purchase advertising space or time pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(e)For the purposes of this section, beer manufacturer includes any holder of a beer manufacturers license, any holder of an out-of-state beer manufacturers certificate, or any holder of a beer and wine importers general license.
SEC. 2.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 City of San Jose.
SEC. 3.SEC. 4.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)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 of at least 70,000 seats 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 located 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 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.
(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)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the City of Los Angeles.
(U)An outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the City of San Jose.
(V)An outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose.
(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), (R), and (T) 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.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 City of San Jose.
SEC. 3.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)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 of at least 70,000 seats 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 located 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 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.
(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)An outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the City of Los Angeles.
(U)An outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the City of San Jose.
(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), (R), and (T) 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.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 City of San Jose.
SEC. 3.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
|
Date
|
Status
|
|---|---|
| Sep 18, 2018 | Chaptered by Secretary of State - Chapter 483, Statutes of 2018. |
| Sep 18, 2018 | Approved by the Governor. |
| Sep 10, 2018 | Enrolled and presented to the Governor at 3:30 p.m. |
| Aug 30, 2018 | Senate amendments concurred in. To Engrossing and Enrolling. |
| Aug 28, 2018 | From committee: That the Senate amendments be concurred in. (Ayes 17. Noes 0.) (August 28). |
| Aug 23, 2018 | Re-referred to Com. on G.O. pursuant to Assembly Rule 77.2. |
| Aug 22, 2018 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after August 24 pursuant to Assembly Rule 77. |
| Aug 22, 2018 | Read third time. Passed. Ordered to the Assembly. |
| Aug 20, 2018 | Read second time. Ordered to third reading. |
| Aug 16, 2018 | Read third time and amended. Ordered to second reading. |
| Aug 7, 2018 | Read second time. Ordered to third reading. |
| Aug 6, 2018 | From committee: Be ordered to second reading pursuant to Senate Rule 28.8. |
| Jun 26, 2018 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 13. Noes 0.) (June 26). Re-referred to Com. on APPR. |
| Jun 18, 2018 | 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 10, 2018 | Referred to Com. on G.O. |
| Apr 26, 2018 | In Senate. Read first time. To Com. on RLS. for assignment. |
| Apr 26, 2018 | Read third time. Passed. Ordered to the Senate. |
| Apr 19, 2018 | Read second time. Ordered to Consent Calendar. |
| Apr 18, 2018 | From committee: Do pass. To Consent Calendar. (Ayes 15. Noes 0.) (April 18). |
| Apr 5, 2018 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 21. Noes 0.) (April 4). Re-referred to Com. on APPR. |
| Mar 15, 2018 | Re-referred to Com. on G.O. |
| Mar 14, 2018 | From committee chair, with author's amendments: Amend, and re-refer to Com. on G.O. Read second time and amended. |
| Feb 12, 2018 | Referred to Com. on G.O. |
| Feb 2, 2018 | From printer. May be heard in committee March 4. |
| Feb 1, 2018 | Read first time. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Aug 30, 2018 | AB 2000 KALRA Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Aug 28, 2018 | With recommendation: That Senate amendments be concurred in. | Assembly Standing Committee on Governmental Organization |
Passed |
|
| Aug 22, 2018 | Assembly 3rd Reading AB2000 Kalra et al. By Wieckowski | Senate Floor |
Passed |
|
| Jun 26, 2018 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Governmental Organization |
Passed |
|
| Apr 26, 2018 | AB 2000 KALRA Consent Calendar Second Day Regular Session | Assembly Floor |
Passed |
|
| Apr 18, 2018 | Do pass. To Consent Calendar. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 4, 2018 | 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
|
|---|---|---|
| Alcohol Justice | ** Against | Aug 20, 2018 |
| San Francisco Giants | * Support | Aug 28, 2018 |
| San Jose Earthquakes | ** Support | Aug 20, 2018 |
| San Jose Earthquakes | * Support | Jun 26, 2018 |
| San Jose Giants | ** Support | Aug 20, 2018 |
| San Jose Giants | * Support | Jun 26, 2018 |
| San Jose Sharks LLC | * Support | Aug 28, 2018 |
CONCURRENCE IN SENATE AMENDMENTS
CSA2 Bill Id:AB 2000
Author:(Kalra)
As Amended Ver:August 16, 2018
Majority vote
ASSEMBLY: | 74-0 | (April 26, 2018) | SENATE: | 39-0 | (August 22, 2018) |
COMMITTEE VOTE: | 17-0 | (August 28, 2018) | RECOMMENDATION: | concur |
(G.O.)
Original Committee Reference: G.O.
SUMMARY: This bill extends an existing exception in the Alcoholic Beverage Control (ABC) Act (Act) pertaining to the general prohibition against advertising arrangements between retail, wholesale, and manufacturer licensees to include an outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the City of San Jose (San Jose Municipal Stadium – minor league baseball San Jose Giants), an outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose (Avaya Stadium – San Jose Earthquakes) and a fully enclosed arena (SAP Center) with a fixed seating capacity in excess of 15,000 seats located in the City of San Jose.
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 licenses at a fully enclosed arena with a fixed seating capacity in excess of 15,000 seats located in the City of San Jose (SAP Center - originally known as the San Jose Arena)
- Provide with regard to a specified fully enclosed arena in San Jose, would expand the definition of on-sale retail licensee to include an owner, manager, or major tenant. Advertising space or time shall be purchased only for interior advertising in connection with events conducted within the arena.
- Add coauthor.
- Add chaptering out language in case this bill and AB 2146 (Gloria) of the current legislative session are both enacted.
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 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. Generally, other than exceptions granted by the Legislature, the holder of one type of license is not permitted to do business as another type of licensee within the "three-tier" system.
- Prohibits, in general, 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.
FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS:
Purpose of the bill: According to the author's office, "tied-house exceptions to allow for alcohol-related advertising arrangements in stadiums and sports arenas have been widely granted without endangering the public's interest. AB 2000 extends an identical exception for the San Jose Municipal Stadium and Avaya Stadium in San Jose, putting them on par with other similar professional sports arenas and stadiums in California."
The author further argues that, "the bill would revise an existing exception for the SAP Center in San Jose to align with other exceptions and provide greater flexibility regardless of the arena's owner or vendor arrangement."
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.
Avaya Stadium: The Avaya Stadium is a large open-air soccer stadium located just outside of the downtown area of San Jose, immediately west of San Jose International Airport. The stadium is the home of the San Jose Earthquakes, a Major League Soccer team.
It officially opened on February 27, 2015 and has a seating capacity of 18,000. The stadium also hosts other sport events including rugby and football. The stadium has an architecturally forward design that provides fans an excellent soccer viewing experience. The stadium was constructed privately with no public money.
San Jose Municipal Stadium: The Historic Municipal Stadium was built as a Works Progress Administration project in 1941-42 at a cost of $80,000. It was one of the first stadiums to be built entirely of reinforced concrete. The first game featured the San Francisco Seals as the home team.
The current San Jose Municipal Stadium has a seating capacity of 4,200 and is the home of the minor league baseball San Jose Giants, the Advanced A league affiliate of the San Francisco Giants. The San Jose Giants play in the northern division of the California League. The stadium is also home to the San Jose State University Spartans college baseball team for some regular season games. The stadium also hosts concerts, weddings, dog shows, and many other local events.
In support: Supporters of this bill argue that this bill will place the San Jose Giants and San Jose Earthquakes on even footing with other teams in California that play in venues that have been granted exemptions and allow both teams to develop certain alcoholic beverage sponsorships with alcohol manufacturers and distributors.
In opposition: Alcohol Justice argues that, "California currently suffers more than $35 billion dollars in alcohol-related harm, and more than 10,500 alcohol related deaths annually. Before the legislature gives any more breaks to any segment of the alcohol industry, it should enact a 'Change of Harm' alcohol excise tax increase to help mitigate the harms and cost."
Related/Prior Legislation: AB 2146 (Gloria) of the current legislative session Extends an existing exception in the Act pertaining to the general prohibition against advertising arrangements between retail, wholesale, and manufacturer licensees to include an outdoor stadium with a fixed seating capacity of at least 43,000 seats located in the City of San Diego (Petco Park – San Diego Padres). (Pending on the Senate Floor)
SB 664 (Dodd), Chapter 486, Statutes of 2017. Extended an existing exception in the Act pertaining to the general prohibition against advertising arrangements between retail, wholesale, and manufacturer licensees to include an outdoor stadium (AT&T Park – the home of the San Francisco Giants) and an indoor arena (Chase Center – the future home of the Golden State Warriors) with specified seating capacities located in the City and County of San Francisco.
AB 1724 (Jones-Sawyer), Chapter 478, Statutes of 2017. Among other things, extended an existing exception in the 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).
SB 582 (Bradford), Chapter 672, Statutes of 2017. Allowed 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.
Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531 FN: 0005055
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 2000
Author:(Kalra)
As Amended Ver:August 16, 2018
Majority vote
ASSEMBLY: | 74-0 | (April 26, 2018) | SENATE: | 39-0 | (August 22, 2018) |
Original Committee Reference: G.O.
SUMMARY: This bill extends an existing exception in the Alcoholic Beverage Control (ABC) Act (Act) pertaining to the general prohibition against advertising arrangements between retail, wholesale, and manufacturer licensees to include an outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the City of San Jose (San Jose Municipal Stadium – minor league baseball San Jose Giants), an outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose (Avaya Stadium – San Jose Earthquakes) and a fully enclosed arena (SAP Center) with a fixed seating capacity in excess of 15,000 seats located in the City of San Jose.
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 licenses at a fully enclosed arena with a fixed seating capacity in excess of 15,000 seats located in the City of San Jose (SAP Center - originally known as the San Jose Arena)
- Provide with regard to a specified fully enclosed arena in San Jose, would expand the definition of on-sale retail licensee to include an owner, manager, or major tenant. Advertising space or time shall be purchased only for interior advertising in connection with events conducted within the arena.
- Add coauthor.
- Add chaptering out language in case this bill and AB 2146 (Gloria) of the current legislative session are both enacted.
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 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. Generally, other than exceptions granted by the Legislature, the holder of one type of license is not permitted to do business as another type of licensee within the "three-tier" system.
- Prohibits, in general, 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.
FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS:
Purpose of the bill: According to the author's office, "tied-house exceptions to allow for alcohol-related advertising arrangements in stadiums and sports arenas have been widely granted without endangering the public's interest. AB 2000 extends an identical exception for the San Jose Municipal Stadium and Avaya Stadium in San Jose, putting them on par with other similar professional sports arenas and stadiums in California."
The author further argues that, "the bill would revise an existing exception for the SAP Center in San Jose to align with other exceptions and provide greater flexibility regardless of the arena's owner or vendor arrangement."
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.
Avaya Stadium: The Avaya Stadium is a large open-air soccer stadium located just outside of the downtown area of San Jose, immediately west of San Jose International Airport. The stadium is the home of the San Jose Earthquakes, a Major League Soccer team.
It officially opened on February 27, 2015 and has a seating capacity of 18,000. The stadium also hosts other sport events including rugby and football. The stadium has an architecturally forward design that provides fans an excellent soccer viewing experience. The stadium was constructed privately with no public money.
San Jose Municipal Stadium: The Historic Municipal Stadium was built as a Works Progress Administration project in 1941-42 at a cost of $80,000. It was one of the first stadiums to be built entirely of reinforced concrete. The first game featured the San Francisco Seals as the home team.
The current San Jose Municipal Stadium has a seating capacity of 4,200 and is the home of the minor league baseball San Jose Giants, the Advanced A league affiliate of the San Francisco Giants. The San Jose Giants play in the northern division of the California League. The stadium is also home to the San Jose State University Spartans college baseball team for some regular season games. The stadium also hosts concerts, weddings, dog shows, and many other local events.
In support: Supporters of the bill argue that this bill will place the San Jose Giants and San Jose Earthquakes on even footing with other teams in California that play in venues that have been granted exemptions and allow both teams to develop certain alcoholic beverage sponsorships with alcohol manufacturers and distributors.
In opposition: Alcohol Justice argues that, "California currently suffers more than $35 billion dollars in alcohol-related harm, and more than 10,500 alcohol related deaths annually. Before the legislature gives any more breaks to any segment of the alcohol industry, it should enact a 'Change of Harm' alcohol excise tax increase to help mitigate the harms and cost."
Related/Prior Legislation: AB 2146 (Gloria) of the current legislative session Extends an existing exception in the Act pertaining to the general prohibition against advertising arrangements between retail, wholesale, and manufacturer licensees to include an outdoor stadium with a fixed seating capacity of at least 43,000 seats located in the City of San Diego (Petco Park – San Diego Padres). (Pending on the Senate Floor)
SB 664 (Dodd), Chapter 486, Statutes of 2017. Extended an existing exception in the Act pertaining to the general prohibition against advertising arrangements between retail, wholesale, and manufacturer licensees to include an outdoor stadium (AT&T Park – the home of the San Francisco Giants) and an indoor arena (Chase Center – the future home of the Golden State Warriors) with specified seating capacities located in the City and County of San Francisco.
AB 1724 (Jones-Sawyer), Chapter 478, Statutes of 2017. Among other things, extended an existing exception in the 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).
SB 582 (Bradford), Chapter 672, Statutes of 2017. Allowed 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.
Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531 FN: 0004628
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 2000
Amended: 8/16/18 in Senate
SENATE GOVERNMENTAL ORG. COMMITTEE: 13-0, 6/26/18
AYES: Dodd, Wilk, Bradford, Cannella, Gaines, Galgiani, Glazer, Hill, Hueso, Lara, Portantino, Vidak, Wiener
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 74-0, 4/26/18 (Consent) - See last page for vote
DIGEST: This bill 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 an outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the City of San Jose (San Jose Municipal Stadium – minor league baseball San Jose Giants), and an outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose (Avaya Stadium – San Jose Earthquakes).
Senate Floor Amendments of 8/16/18 add chaptering out language in case this bill and AB 2146 (Gloria) are both enacted.
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 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. Generally, other than exceptions granted by the Legislature, the holder of one type of license is not permitted to do business as another type of licensee within the “three-tier” system.
- Prohibits, in general, 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.
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 licenses at:
- An outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the city of San Jose (San Jose Municipal Stadium – minor league baseball San Jose Giants).
- An outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose (Avaya Stadium – San Jose Earthquakes).
- Makes legislative findings and declarations as to the necessity of a special statute for the City of San Jose.
- Aligns the current exception for the SAP Center in San Jose with other similar exceptions.
Background
Purpose of the bill. According to the author’s office, “tied-house exceptions to allow for alcohol-related advertising arrangements in stadiums and sports arenas have been widely granted without endangering the public’s interest. AB 2000 extends an identical exception for the San Jose Municipal Stadium and Avaya Stadium in San Jose, putting them on par with other similar professional sports arenas and stadiums in California.”
The author further argues that, “the bill would revise an existing exception for the SAP center in San Jose to align with other exceptions and provide greater flexibility regardless of the arena’s owner or vendor arrangement.”
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.
Avaya Stadium. The Avaya Stadium is a large open-air soccer stadium located just outside of the downtown area of San Jose, immediately west of San Jose International Airport. The stadium is the home of the San Jose Earthquakes, a Major League Soccer team.
It officially opened on February 27, 2015 and has a seating capacity of 18,000. The stadium also hosts other sport events including rugby and football. The stadium has an architecturally forward design that provides fans an excellent soccer viewing experience. The stadium was constructed privately with no public money.
San Jose Municipal Stadium. The Historic Municipal Stadium was built as a Works Progress Administration project in 1941-42 at a cost of $80,000. It was one of the first stadiums to be built entirely of reinforced concrete. The first game featured the San Francisco Seals as the home team.
The current San Jose Municipal Stadium has a seating capacity of 4,200 and is the home of the minor league baseball San Jose Giants, the Advanced A league affiliate of the San Francisco Giants. The San Jose Giants play in the northern division of the California League. The stadium is also home to the San Jose State University Spartans college baseball team for some regular season games. The stadium also hosts concerts, weddings, dog shows, and many other local events.
Related/Prior Legislation
AB 2146 (Gloria, 2018) 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 an outdoor stadium with a fixed seating capacity of at least 43,000 seats located in the City of San Diego (Petco Park – San Diego Padres). (Pending on the Senate Floor)
SB 664 (Dodd, Chapter 486, Statutes of 2017) extended 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 an outdoor stadium (AT&T Park – the home of the San Francisco Giants) and an indoor arena (Chase Center – the future home of the Golden State Warriors) with specified seating capacities located in the City and County of San Francisco.
AB 1724 (Jones-Sawyer, Chapter 478, Statutes of 2017), among other things, extended an existing exception in the 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).
SB 582 (Bradford, Chapter 672, Statutes of 2017) allowed 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.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
San Jose Giants (source)
San Jose Earthquakes
San Jose Sharks
OPPOSITION: (Verified 8/14/18)
Alcohol Justice
ARGUMENTS IN SUPPORT: Supporters of the bill argue that this bill will place the San Jose Giants and San Jose Earthquakes on even footing with other teams in California that play in venues that have been granted exemptions and allow both teams to develop certain alcoholic beverage sponsorships with alcohol manufacturers and distributors.
ARGUMENTS IN OPPOSITION: Alcohol Justice argues that, “California currently suffers more than $35 billion dollars in alcohol-related harm, and more than 10,500 alcohol related deaths annually. Before the legislature gives any more breaks to any segment of the alcohol industry, it should enact a ‘Change of Harm’ alcohol excise tax increase to help mitigate the harms and cost.”
ASSEMBLY FLOOR: 74-0, 4/26/18
AYES: Acosta, Aguiar-Curry, Arambula, Baker, Berman, Bigelow, Bloom, Bonta, Brough, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Frazier, Friedman, Gallagher, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon
NO VOTE RECORDED: Travis Allen, Fong, Cristina Garcia, Rodriguez
8/20/18 10:46:36
**** END ****
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 2000
:
SENATE GOVERNMENTAL ORG. COMMITTEE: 13-0, 6/26/18
AYES: Dodd, Wilk, Bradford, Cannella, Gaines, Galgiani, Glazer, Hill, Hueso, Lara, Portantino, Vidak, Wiener
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 74-0, 4/26/18 (Consent) - See last page for vote
DIGEST: This bill 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 an outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the City of San Jose (San Jose Municipal Stadium – minor league baseball San Jose Giants), and an outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose (Avaya Stadium – San Jose Earthquakes).
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 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. Generally, other than exceptions granted by the Legislature, the holder of one type of license is not permitted to do business as another type of licensee within the “three-tier” system.
- Prohibits, in general, 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.
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 licenses at:
- An outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the city of San Jose (San Jose Municipal Stadium – minor league baseball San Jose Giants).
- An outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose (Avaya Stadium – San Jose Earthquakes).
- Makes legislative findings and declarations as to the necessity of a special statute for the City of San Jose.
- Aligns the current exception for the SAP Center in San Jose with other similar exceptions.
Background
Purpose of the bill. According to the author’s office, “tied-house exceptions to allow for alcohol-related advertising arrangements in stadiums and sports arenas have been widely granted without endangering the public’s interest. AB 2000 extends an identical exception for the San Jose Municipal Stadium and Avaya Stadium in San Jose, putting them on par with other similar professional sports arenas and stadiums in California.”
The author further argues that, “the bill would revise an existing exception for the SAP center in San Jose to align with other exceptions and provide greater flexibility regardless of the arena’s owner or vendor arrangement.”
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.
Avaya Stadium. The Avaya Stadium is a large open-air soccer stadium located just outside of the downtown area of San Jose, immediately west of San Jose International Airport. The stadium is the home of the San Jose Earthquakes, a Major League Soccer team.
It officially opened on February 27, 2015 and has a seating capacity of 18,000. The stadium also hosts other sport events including rugby and football. The stadium has an architecturally forward design that provides fans an excellent soccer viewing experience. The stadium was constructed privately with no public money.
San Jose Municipal Stadium. The Historic Municipal Stadium was built as a Works Progress Administration project in 1941-42 at a cost of $80,000. It was one of the first stadiums to be built entirely of reinforced concrete. The first game featured the San Francisco Seals as the home team.
The current San Jose Municipal Stadium has a seating capacity of 4,200 and is the home of the minor league baseball San Jose Giants, the Advanced A league affiliate of the San Francisco Giants. The San Jose Giants play in the northern division of the California League. The stadium is also home to the San Jose State University Spartans college baseball team for some regular season games. The stadium also hosts concerts, weddings, dog shows, and many other local events.
Related/Prior Legislation
AB 2146 (Gloria, 2018) 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 an outdoor stadium with a fixed seating capacity of at least 43,000 seats located in the City of San Diego (Petco Park – San Diego Padres). (Pending on the Senate Floor)
SB 664 (Dodd, Chapter 486, Statutes of 2017) extended 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 an outdoor stadium (AT&T Park – the home of the San Francisco Giants) and an indoor arena (Chase Center – the future home of the Golden State Warriors) with specified seating capacities located in the City and County of San Francisco.
AB 1724 (Jones-Sawyer, Chapter 478, Statutes of 2017), among other things, extended an existing exception in the 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).
SB 582 (Bradford, Chapter 672, Statutes of 2017) allowed 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.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
San Jose Giants (source)
San Jose Earthquakes
San Jose Sharks
Alcohol Justice
ARGUMENTS IN SUPPORT: Supporters of the bill argue that this bill will place the San Jose Giants and San Jose Earthquakes on even footing with other teams in California that play in venues that have been granted exemptions and allow both teams to develop certain alcoholic beverage sponsorships with alcohol manufacturers and distributors.
ARGUMENTS IN OPPOSITION: Alcohol Justice argues that, “California currently suffers more than $35 billion dollars in alcohol-related harm, and more than 10,500 alcohol related deaths annually. Before the legislature gives any more breaks to any segment of the alcohol industry, it should enact a ‘Change of Harm’ alcohol excise tax increase to help mitigate the harms and cost.”
ASSEMBLY FLOOR: 74-0, 4/26/18
AYES: Acosta, Aguiar-Curry, Arambula, Baker, Berman, Bigelow, Bloom, Bonta, Brough, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Frazier, Friedman, Gallagher, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon
NO VOTE RECORDED: Travis Allen, Fong, Cristina Garcia, Rodriguez
8/8/18 10:21:44
**** END ****
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Bill Dodd
Chair
2017 - 2018 Regular
Bill No: 2000 Hearing Date: 6/26/2018
Author: | , et al. | ||
Version: | Amended | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Felipe Lopez | ||
SUBJECT: Alcoholic beverages: tied-house restrictions: advertising
DIGEST: This bill 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 an outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the City of San Jose (San Jose Municipal Stadium – minor league baseball San Jose Giants), and an outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose (Avaya Stadium – San Jose Earthquakes).
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 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. Generally, other than exceptions granted by the Legislature, the holder of one type of license is not permitted to do business as another type of licensee within the “three-tier” system.
- Prohibits, in general, 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.
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 licenses at:
- An outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the city of San Jose (San Jose Municipal Stadium – minor league baseball San Jose Giants).
- An outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose (Avaya Stadium – San Jose Earthquakes).
- Makes legislative findings and declarations as to the necessity of a special statute for the City of San Jose.
- Aligns the current exception for the SAP Center in San Jose with other similar exceptions.
Background
Purpose of the bill. According to the author’s office, “tied-house exceptions to allow for alcohol-related advertising arrangements in stadiums and sports arenas have been widely granted without endangering the public’s interest. AB 2000 extends an identical exception for the San Jose Municipal Stadium and Avaya Stadium in San Jose, putting them on par with other similar professional sports arenas and stadiums in California.”
The author further argues that, “the bill would revise an existing exception for the SAP center in San Jose to align with other exceptions and provide greater flexibility regardless of the arena’s owner or vendor arrangement.”
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.
Avaya Stadium. The Avaya Stadium is a large open-air soccer stadium located just outside of the downtown area of San Jose, immediately west of San Jose International Airport. The stadium is the home of the San Jose Earthquakes, a Major League Soccer team.
It officially opened on February 27, 2015 and has a seating capacity of 18,000. The stadium also hosts other sport events including rugby and football. The stadium has an architecturally forward design that provides fans an excellent soccer viewing experience. The stadium was constructed privately with no public money.
San Jose Municipal Stadium. The Historic Municipal Stadium was built as a Works Progress Administration project in 1941-42 at a cost of $80,000. It was one of the first stadiums to be built entirely of reinforced concrete. The first game featured the San Francisco Seals as the home team.
The current San Jose Municipal Stadium has a seating capacity of 4,200 and is the home of the minor league baseball San Jose Giants, the Advanced A league affiliate of the San Francisco Giants. The San Jose Giants play in the northern division of the California League. The stadium is also home to the San Jose State University Spartans college baseball team for some regular season games. The stadium also hosts concerts, weddings, dog shows, and many other local events.
Prior/Related Legislation
AB 2146 (Gloria, 2018) 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 an outdoor stadium with a fixed seating capacity of at least 43,000 seats located in the City of San Diego (Petco Park – San Diego Padres). (Pending in Senate Appropriations Committee)
SB 664 (Dodd, Chapter 486, Statutes of 2017) extended 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 an outdoor stadium (AT&T Park – the home of the San Francisco Giants) and an indoor arena (Chase Center – the future home of the Golden State Warriors) with specified seating capacities located in the City and County of San Francisco.
AB 1724 (Jones-Sawyer, Chapter 478, Statutes of 2017), among other things, extended an existing exception in the 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).
SB 582 (Bradford, Chapter 672, Statutes of 2017) allowed 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 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 the 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. (Placed on the 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 the 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. (Placed on the 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.
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. (Placed on the 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:
San Jose Giants (Source)
San Jose Earthquakes
San Jose Sharks
OPPOSITION:
Alcohol Justice
ARGUMENTS IN SUPPORT: Supporters of the bill argue that this bill will place the San Jose Giants and San Jose Earthquakes on even footing with other teams in California that play in venues that have been granted exemptions and allow both teams to develop certain alcoholic beverage sponsorships with alcohol manufacturers and distributors.
ARGUMENTS IN OPPOSITION: Alcohol Justice argues that, “California currently suffers more than $35 billion dollars in alcohol-related harm, and more than 10,500 alcohol related deaths annually. Before the legislature gives any more breaks to any segment of the alcohol industry, it should enact a ‘Change of Harm’ alcohol excise tax increase to help mitigate the harms and cost.”
Date of Hearing: April 18, 2018
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez Fletcher, Chair
ABPCA Bill Id:AB 2000
Author:(Kalra) – As Amended Ver:March 14, 2018
Policy Committee: | Governmental Organization | Vote: | 21 - 0 |
|
| ||
|
|
Urgency: No State Mandated Local Program: Yes Reimbursable: No
SUMMARY:
The bill extends an exception in the Alcoholic Beverage Control (ABC) Act to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees. Specifically, the bill extends the exception to two outdoor stadiums with specified seating capacities both located in the City of San Jose.
FISCAL EFFECT:
No additional state costs.
COMMENTS:
- Background. Current "tied-house" law, also called “three-tier” law, is designed to prevent vertical integration between alcohol producers, wholesalers, and retailers. Generally, any cross ownership between the three tiers is prohibited, and manufactures are not allowed to provide anything of value to distributors or retailers, such as free goods, services, or advertising.
However, over the years numerous exceptions to this prohibition have been added for arenas and stadiums. These exceptions allow teams to develop sponsorships with alcohol manufactures and distributors. Recent exceptions have been enacted for Los Angeles Stadium at Hollywood Park, the Los Angeles Memorial Coliseum, AT&T Park, the Chase Center Chase Center, and Levi’s Stadium. As a result of these exceptions, an owner in one tier (Bud Light, for example) may pay a retail licensee (Santa Clara Stadium Authority, for example) for displaying advertising.
- Purpose. According to supporters, AB 2000 will allow teams using the Avaya Stadium, home of the San Jose Earthquakes, and the San Jose Municipal Stadium, home to the minor league baseball team San Jose Giants, to develop sponsorships with alcohol manufacturers and distributors. The author’s office argues this would put these two stadiums on an even playing field with other arenas and stadiums in California.
- Related legislation. AB 2146 (Gloria), of the 2017-18 Legislative Session, creates a similar exception for the Petco Park in San Diego. AB 2146 is also being heard today in this committee.
Analysis Prepared by: Luke Reidenbach / APPR. / (916) 319-2081
Date of Hearing: April 4, 2018
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Adam Gray, Chair
ABPCA Bill Id:AB 2000 (
Author:Kalra) – As Amended Ver:March 14, 2018
SUBJECT: Alcoholic beverages: tied-house restrictions: advertising
SUMMARY: Would extend 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 an outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the City of San Jose (San Jose Municipal Stadium – minor league baseball San Jose Giants), and an outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose (Avaya Stadium – San Jose Earthquakes). Specifically, this bill:
1) 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) An outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the City of San Jose.
b) An outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose.
2) Makes legislative findings and declarations as to the necessity of a special statute for the City of San Jose.
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 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. Generally, other than exceptions granted by the Legislature, the holder of one type of license is not permitted to do business as another type of licensee within the “three-tier” system.
- Prohibits, in general, 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.
FISCAL EFFECT: Unknown
COMMENTS:
Tied-house law: Tied-house law refers to the statutory scheme restricting any cross-ownership among the three independent tiers of the alcohol industry: 1) manufacturers; 2) distributors/ wholesalers; and, 3) retailers. The term "Tied-house" refers to a practice which was common in this country prior to prohibition, and is still occurring in England today, where a bar or "public house" is tied to the products of a particular manufacturer.
The original rationale for Tied-house restrictions are in place to promote the state's interest in maintaining an orderly market, to prohibit the vertical integration of the alcohol industry, to protect the public from predatory marketing practices, and to prevent the intemperate consumption of alcoholic beverages. In order to further these policy goals, the Legislature has generally prohibited forms of cross-ownership between manufacturers and retailers, and discouraged manufacturers from providing anything of value to distributors or retailers, be it free goods, services or advertising.
Numerous exceptions to these restrictions have been enacted through the years in those specific instances where the Legislature determined that the public's interests were protected. Generally, the business community is interested in removing unnecessary business regulations and creating conditions that facilitate investment and expansion opportunities for companies that have some degree of ownership in multiple segments of the industry. However, the Legislature traditionally does not grant exemptions that favors the products of the entity seeking the exemption, or exemptions that unfairly compromise the role of the distributors.
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 many other venues.
Purpose of the bill. The author's office notes that this measure would amend ABC tied-house provisions to include Avaya Stadium, home of the San Jose Earthquakes and San Jose Municipal Stadium, who's primary tenant is the minor league baseball San Jose Giants (Advanced A league affiliate of the San Francisco Giants) to the list of exemptions in the law, thereby allowing the teams to develop certain alcoholic beverage sponsorships with specified alcohol manufacturers and distributors.
The author's office points out that existing law prohibits an alcohol supplier or wholesaler from directly or indirectly paying a retailer to advertise (signage) the supplier's brands unless a Tied-house exemption is granted. The author's office notes that existing ABC laws contain numerous exceptions to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees. The author's office emphasizes this bill would put Avaya Stadium and San Jose Municipal Stadium on an even playing field with other arenas and stadiums in California.
Additional background:
Avaya Stadium. The Avaya Stadium is a large open-air soccer stadium located just outside of the downtown area of San Jose, immediately west of San Jose International Airport. The stadium officially opened for business on February 27, 2015, has a seating capacity of 18,000 and is the home the San Jose Earthquakes, a Major League Soccer (MLS) team. The stadium also hosts other sport events including rugby and football. The stadium has an architecturally forward design that provides fans an excellent soccer viewing experience. The stadium was constructed privately with no public money.
San Jose Municipal Stadium. The Historic Municipal Stadium was built as a Works Progress Administration project in 1941-42 at a cost of $80,000. It was one of the first stadiums to be built entirely of reinforced concrete. The first game featured the San Francisco Seals as the home team.
The current San Jose Municipal Stadium has a seating capacity of 4,200 and is the home of the minor league baseball San Jose Giants, the Advanced A league affiliate of the San Francisco Giants. The San Jose Giants play in the northern division of the California League. The stadium is also home to the San Jose State University Spartans college baseball team for some regular season games. The stadium also hosts concerts, weddings, dog shows, and many other local events.
Related legislation. AB 2146 (Gloria) of 2018. Would extend an existing exception in the Act pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include an outdoor stadium (Petco Park – San Diego Padres) with a fixed seating capacity of at least 43,000 seats located in the City of San Diego. (Pending in Assembly G.O. Committee)
Prior legislation. SB 582 (Bradford), Chapter 672, Statutes of 2017. Extends an existing exception in the Act pertaining to the general prohibition against advertising arrangements between retail, wholesale, and manufacturer licensees to include a specified stadium (The Los Angeles Stadium at Hollywood Park), and venue located in the City of Inglewood, and a specified outdoor stadium of at least 70,000 seats in Los Angeles County (The Los Angeles Memorial Coliseum).
SB 664 (Dodd), Chapter 486, Statutes of 2017. Extends an existing exception in the Act pertaining to the general prohibition against advertising arrangements between retail, wholesale and manufacturer licensees to include an outdoor stadium (AT&T Park – San Francisco Giants) and an indoor arena (Chase Center – Golden State Warriors) with specified seating capacities located in the City and County of San Francisco.
AB 1724 (Jones-Sawyer), Chapter 478, Statutes of 2017. Extends an existing exception in the 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).
REGISTERED SUPPORT / OPPOSITION:
Support
San Jose Earthquakes
San Jose Giants
Opposition
Alcohol Justice
Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531
Discussed in Hearing
1MIN
Assembly Floor
1MIN
Assembly Standing Committee on Governmental Organization
1MIN
Senate Floor
2MIN
Senate Standing Committee on Governmental Organization
Bill Author
Bill Co-Author(s):
