AB 1294: Tied-house restrictions: advertising exceptions: County of Kings.
- Session Year: 2023-2024
- House: Assembly
- Latest Version Date: 2023-10-08
Current Status:
Passed
(2023-10-08: Chaptered by Secretary of State - Chapter 471, Statutes of 2023.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Enacted
What does this bill do?
This bill allows certain alcohol businesses (brewers, winemakers, distillers, importers, and similar license holders) to sponsor events and buy advertising from the owner of a wave basin facility in Kings County for activities held at a permanent retail business at that wave basin if the facility holds at least 9,000 people. Any sponsorship or advertising contract must be written, cannot force the retailer to buy or sell the sponsor’s products, and the retailer must offer competing beer, wine, and spirits brands for sale in good faith.
The summary is provided by generative AI which can make mistakes. For original language, please view the details in the table below.
Existing law, the Alcoholic Beverage Control Act, which is administered by the Department of Alcoholic Beverage Control, regulates the application, issuance, and suspension of alcoholic beverage licenses. Existing law, known as tied-house restrictions, generally prohibits specified licensees, or their officers, directors, or agents, from giving or lending money or a thing of value to a person operating, owning, or maintaining any on-sale premises where alcoholic beverages are sold. In this regard, existing law specifically prohibits paying a retailer for advertising. Existing law creates a variety of exceptions to this prohibition, as specified.
This bill would create an exception to tied-house restrictions that authorizes specified licensees to sponsor events promoted by, and purchase advertising space and time from or on behalf of, a company that owns a facility that includes a wave basin located in the County of Kings in connection with activities conducted on the premises of a permanent retail licensee located at a wave basin facility with a capacity of at least 9,000 individuals, subject to specified requirements.
This bill would make legislative findings and declarations as to the necessity of a special statute for the County of Kings.
Existing law, the Alcoholic Beverage Control Act, which is administered by the Department of Alcoholic Beverage Control, regulates the application, issuance, and suspension of alcoholic beverage licenses. Existing law, known as tied-house restrictions, generally prohibits specified licensees, or their officers, directors, or agents, from giving or lending money or a thing of value to a person operating, owning, or maintaining any on-sale premises where alcoholic beverages are sold. In this regard, existing law specifically prohibits paying a retailer for advertising. Existing law creates a variety of exceptions to this prohibition, as specified.
This bill would create an exception to tied-house restrictions that authorizes specified licensees to sponsor events promoted by, and purchase advertising space and time from or on behalf of, a company that owns a facility that includes a wave basin located in the County of Kings in connection with activities conducted on the premises of a permanent retail licensee located at a wave basin facility with a capacity of at least 9,000 individuals, subject to specified requirements.
This bill would make legislative findings and declarations as to the necessity of a special statute for the County of Kings.
Existing law, the Alcoholic Beverage Control Act, which is administered by the Department of Alcoholic Beverage Control, regulates the application, issuance, and suspension of alcoholic beverage licenses. Existing law, known as tied-house restrictions, generally prohibits specified licensees, or their officers, directors, or agents, from giving or lending money or a thing of value to a person operating, owning, or maintaining any on-sale premises where alcoholic beverages are sold. In this regard, existing law specifically prohibits paying a retailer for advertising. Existing law creates a variety of exceptions to this prohibition, as specified.
This bill would create an exception to tied-house restrictions that authorizes specified licensees to sponsor events promoted by, and purchase advertising space and time from or on behalf of, a company that owns a facility that includes a wave basin located in the County of Kings in connection with activities conducted on the premises of a permanent retail licensee located at a wave basin facility with a capacity of at least 9,000 individuals, subject to specified requirements.
This bill would make legislative findings and declarations as to the necessity of a special statute for the County of Kings.
Existing law, the Alcoholic Beverage Control Act, which is administered by the Department of Alcoholic Beverage Control, regulates the application, issuance, and suspension of alcoholic beverage licenses. Existing law, known as tied-house restrictions, generally prohibits specified licensees, or their officers, directors, or agents, from giving or lending money or a thing of value to a person operating, owning, or maintaining any on-sale premises where alcoholic beverages are sold. In this regard, existing law specifically prohibits paying a retailer for advertising. Existing law creates a variety of exceptions to this prohibition, as specified.
This bill would create an exception to tied-house restrictions that authorizes specified licensees to sponsor events promoted by, and purchase advertising space and time from or on behalf of, a company that owns a facility that includes a wave basin located in the County of Kings in connection with activities conducted on the premises of a permanent retail licensee located at the a wave basin facility, facility with a capacity of at least 9,000 individuals, subject to specified requirements.
This bill would make legislative findings and declarations as to the necessity of a special statute for the County of Kings.
Existing law, the Alcoholic Beverage Control Act, which is administered by the Department of Alcoholic Beverage Control, regulates the application, issuance, and suspension of alcoholic beverage licenses. Existing law, known as tied-house restrictions, generally prohibits specified licensees, or their officers, directors, or agents, from giving or lending money or a thing of value to a person operating, owning, or maintaining any on-sale premises where alcoholic beverages are sold. In this regard, existing law specifically prohibits paying a retailer for advertising. Existing law creates a variety of exceptions to this prohibition, as specified.
This bill would create an exception to tied-house restrictions that authorizes specified licensees to sponsor events promoted by, and purchase advertising space and time from or on behalf of, a company that owns a facility that includes a wave basin located in the County of Kern Kings in connection with activities conducted on the premises of a permanent retail licensee located at the wave basin facility, subject to specified requirements.
This bill would make legislative findings and declarations as to the necessity of a special statute for the County of Kern. Kings.
Existing law, the Alcoholic Beverage Control Act, which is administered by the Department of Alcoholic Beverage Control, regulates the application, issuance, and suspension of alcoholic beverage licenses. Existing law, known as tied-house restrictions, generally prohibits specified licensees, or their officers, directors, or agents, from giving or lending money or a thing of value to a person operating, owning, or maintaining any on-sale premises where alcoholic beverages are sold. In this regard, existing law specifically prohibits paying a retailer for advertising. Existing law creates a variety of exceptions to this prohibition, as specified.
This bill would create an exception to tied-house restrictions that authorizes specified licensees to sponsor events promoted by, and purchase advertising space and time from or on behalf of, a company that owns a facility that includes a wave basin located in the County of Kern in connection with activities conducted on the premises of a permanent retail licensee located at the wave basin facility, subject to specified requirements.
This bill would make legislative findings and declarations as to the necessity of a special statute for the County of Kern.
(a)Notwithstanding any other provision of this chapter, an authorized licensee may sponsor events promoted by, and purchase advertising space and time from or on behalf of, a company that owns a facility that includes a wave basin located in the County of Kings in connection with activities conducted on the premises of a permanent retail licensee located at the wave basin facility, if all of the following conditions are met:
(1)The premises of the permanent retail licensee includes a wave basin facility with a capacity of at least 9,000 individuals located in the County of Kings.
(2)The sponsorship or advertising space or time is purchased in connection with the sponsorship of activities that are held at the premises of a permanent retail licensee located at the wave basin facility.
(3)Any sponsorship or purchase of advertising space or time pursuant to this subdivision shall be accomplished by a written contract entered into by the authorized licensee and a company that owns a facility that includes a wave basin in the County of Kings.
(4)An agreement for advertising authorized by this subdivision shall not be contingent upon or otherwise require, directly or indirectly, implicitly or explicitly, the permanent retail licensee at the wave basin facility to purchase or sell any alcoholic beverages or other products produced, manufactured, imported, distributed, or otherwise represented by the event sponsor or purchaser of the advertising space and time.
(5)The permanent retail licensee at the wave basin facility shall offer for sale, in a bona fide manner, other brands of beer, distilled spirits, and wine distributed by a competing wholesaler or manufacturer in addition to any brand manufactured, distributed, or owned by the authorized licensee sponsoring an event or purchasing advertising space or time pursuant to this subdivision.
(b)For purposes of this section, the following definitions apply:
(1)Authorized licensee means a beer manufacturer, winegrower, rectifier, wine rectifier, distilled spirits manufacturer, craft distiller, distilled spirits manufacturers agent, winegrowers agent, beer and wine importer, distilled spirits importer, distilled spirits importer general, beer and wine importer general, out-of-state distilled spirits shipper certificate holder, or out-of-state beer manufacturer certificate holder. Authorized licensee does not include any person who holds a distilled spirits importer license or distilled spirits importer general license together with a distilled spirits wholesalers license, or any person who holds a beer and wine importer license or beer and wine importer general license together with a beer and wine wholesalers license.
(2)Wave basin has the same meaning as defined in Section 115960.1 of the Health and Safety Code.
(c)The Legislature finds that it is necessary and proper to require a separation between 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 must 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 County of Kings.
(a)Notwithstanding any other provision of this chapter, an authorized licensee may sponsor events promoted by, and purchase advertising space and time from or on behalf of, a company that owns a facility that includes a wave basin located in the County of Kings in connection with activities conducted on the premises of a permanent retail licensee located at the wave basin facility, if all of the following conditions are met:
(1)The premises of the permanent retail licensee includes a wave basin facility with a capacity of at least 9,000 individuals located in the County of Kings.
(2)The sponsorship or advertising space or time is purchased in connection with the sponsorship of activities that are held at the premises of a permanent retail licensee located at the wave basin facility.
(3)Any sponsorship or purchase of advertising space or time pursuant to this subdivision shall be accomplished by a written contract entered into by the authorized licensee and a company that owns a facility that includes a wave basin in the County of Kings.
(4)An agreement for advertising authorized by this subdivision shall not be contingent upon or otherwise require, directly or indirectly, implicitly or explicitly, the permanent retail licensee at the wave basin facility to purchase or sell any alcoholic beverages or other products produced, manufactured, imported, distributed, or otherwise represented by the event sponsor or purchaser of the advertising space and time.
(5)The permanent retail licensee at the wave basin facility shall offer for sale, in a bona fide manner, other brands of beer, distilled spirits, and wine distributed by a competing wholesaler or manufacturer in addition to any brand manufactured, distributed, or owned by the authorized licensee sponsoring an event or purchasing advertising space or time pursuant to this subdivision.
(b)For purposes of this section, the following definitions apply:
(1)Authorized licensee means a beer manufacturer, winegrower, rectifier, wine rectifier, distilled spirits manufacturer, craft distiller, distilled spirits manufacturers agent, winegrowers agent, beer and wine importer, distilled spirits importer, distilled spirits importer general, beer and wine importer general, out-of-state distilled spirits shipper certificate holder, or out-of-state beer manufacturer certificate holder. Authorized licensee does not include any person who holds a distilled spirits importer license or distilled spirits importer general license together with a distilled spirits wholesalers license, or any person who holds a beer and wine importer license or beer and wine importer general license together with a beer and wine wholesalers license.
(2)Wave basin has the same meaning as defined in Section 115960.1 of the Health and Safety Code.
(c)The Legislature finds that it is necessary and proper to require a separation between 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 must 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 County of Kings.
(a)Notwithstanding any other provision of this chapter, an authorized licensee may sponsor events promoted by, and purchase advertising space and time from or on behalf of, a company that owns a facility that includes a wave basin located in the County of Kings in connection with activities conducted on the premises of a permanent retail licensee located at the wave basin facility, if all of the following conditions are met:
(1)The premises of the permanent retail licensee includes a wave basin facility with a capacity of at least 9,000 individuals located in the County of Kings.
(2)The sponsorship or advertising space or time is purchased in connection with the sponsorship of activities that are held at the premises of a permanent retail licensee located at the wave basin facility.
(3)Any sponsorship or purchase of advertising space or time pursuant to this subdivision shall be accomplished by a written contract entered into by the authorized licensee and a company that owns a facility that includes a wave basin in the County of Kings.
(4)An agreement for advertising authorized by this subdivision shall not be contingent upon or otherwise require, directly or indirectly, implicitly or explicitly, the permanent retail licensee at the wave basin facility to purchase or sell any alcoholic beverages or other products produced, manufactured, imported, distributed, or otherwise represented by the event sponsor or purchaser of the advertising space and time.
(5)The permanent retail licensee at the wave basin facility shall offer for sale, in a bona fide manner, other brands of beer, distilled spirits, and wine distributed by a competing wholesaler or manufacturer in addition to any brand manufactured, distributed, or owned by the authorized licensee sponsoring an event or purchasing advertising space or time pursuant to this subdivision.
(b)For purposes of this section, the following definitions apply:
(1)Authorized licensee means a beer manufacturer, winegrower, rectifier, wine rectifier, distilled spirits manufacturer, craft distiller, distilled spirits manufacturers agent, winegrowers agent, beer and wine importer, distilled spirits importer, distilled spirits importer general, beer and wine importer general, out-of-state distilled spirits shipper certificate holder, or out-of-state beer manufacturer certificate holder. Authorized licensee shall does not include any person who holds a distilled spirits importer license or distilled spirits importer general license together with a distilled spirits wholesalers license, or any person who holds a beer and wine importer license or beer and wine importer general license together with a beer and wine wholesalers license.
(2)Wave basin has the same meaning as defined in Section 115960.1 of the Health and Safety Code.
(c)The Legislature finds that it is necessary and proper to require a separation between 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 must 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 County of Kings.
(a)Notwithstanding any other provision of this chapter, an authorized licensee may sponsor events promoted by, and purchase advertising space and time from or on behalf of, a company that owns a facility that includes a wave basin located in the County of Kings in connection with activities conducted on the premises of a permanent retail licensee located at the wave basin facility, if all of the following conditions are met:
(1)The premises of the permanent retail licensee includes a wave basin facility with a capacity of at least 9,000 individuals located in the County of Kings.
(1)(2)The sponsorship or advertising space or time is purchased in connection with the sponsorship of activities that are held at the premises of a permanent retail licensee located at the wave basin facility.
(2)(3)Any sponsorship or purchase of advertising space or time pursuant to this subdivision shall be accomplished by a written contract entered into by the authorized licensee and a company that owns a facility that includes a wave basin in the County of Kings.
(3)(4)An agreement for advertising authorized by this subdivision shall not be contingent upon or otherwise require, directly or indirectly, implicitly or explicitly, the permanent retail licensee at the wave basin facility to purchase or sell any alcoholic beverages or other products produced, manufactured, imported, distributed, or otherwise represented by the event sponsor or purchaser of the advertising space and time.
(4)(5)The permanent retail licensee at the wave basin facility shall offer for sale, in a bona fide manner, other brands of beer, distilled spirits, and wine distributed by a competing wholesaler or manufacturer in addition to any brand manufactured, distributed, or owned by the authorized licensee sponsoring an event or purchasing advertising space or time pursuant to this subdivision.
(b)For purposes of this section, the following definitions apply:
(1)Authorized licensee means a beer manufacturer, winegrower, rectifier, wine rectifier, distilled spirits manufacturer, craft distiller, distilled spirits manufacturers agent, winegrowers agent, beer and wine importer, distilled spirits importer, distilled spirits importer general, beer and wine importer general, out-of-state distilled spirits shipper certificate holder, or out-of-state beer manufacturer certificate holder. Authorized licensee shall not include any person who holds a distilled spirits importer license or distilled spirits importer general license together with a distilled spirits wholesalers license, or any person who holds a beer and wine importer license or beer and wine importer general license together with a beer and wine wholesalers license.
(2)Wave basin has the same meaning as defined in Section 115960.1 of the Health and Safety Code.
(c)The Legislature finds that it is necessary and proper to require a separation between 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 must 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 County of Kings.
(a)Notwithstanding any other provision of this chapter, an authorized licensee may sponsor events promoted by, and purchase advertising space and time from or on behalf of, a company that owns a facility that includes a wave basin located in the County of Kern Kings in connection with activities conducted on the premises of a permanent retail licensee located at the wave basin facility, if all of the following conditions are met:
(1)The sponsorship or advertising space or time is purchased in connection with the sponsorship of activities that are held at the premises of a permanent retail licensee located at the wave basin facility.
(2)Any sponsorship or purchase of advertising space or time pursuant to this subdivision shall be accomplished by a written contract entered into by the authorized licensee and a company that owns a facility that includes a wave basin in the County of Kern. Kings.
(3)An agreement for advertising authorized by this subdivision shall not be contingent upon or otherwise require, directly or indirectly, implicitly or explicitly, the permanent retail licensee at the wave basin facility to purchase or sell any alcoholic beverages or other products produced, manufactured, imported, distributed, or otherwise represented by the event sponsor or purchaser of the advertising space and time.
(4)The permanent retail licensee at the wave basin facility shall offer for sale, in a bona fide manner, other brands of beer, distilled spirits, and wine distributed by a competing wholesaler or manufacturer in addition to any brand manufactured, distributed, or owned by the authorized licensee sponsoring an event or purchasing advertising space or time pursuant to this subdivision.
(b)For purposes of this section, the following definitions apply:
(1)Authorized licensee means a beer manufacturer, winegrower, rectifier, wine rectifier, distilled spirits manufacturer, craft distiller, distilled spirits manufacturers agent, winegrowers agent, beer and wine importer, distilled spirits importer, distilled spirits importer general, beer and wine importer general, or out-of-state beer manufacturer certificate holder.
(2)Wave basin has the same meaning as defined in Section 115960.1 of the Health and Safety Code.
(c)The Legislature finds that it is necessary and proper to require a separation between 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 must 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 County of Kern. Kings.
CORRECTIONS: HeadingLine 1. DigestPage 1.(a)Notwithstanding any other provision of this chapter, an authorized licensee may sponsor events promoted by, and purchase advertising space and time from or on behalf of, a company that owns a facility that includes a wave basin located in the County of Kern in connection with activities conducted on the premises of a permanent retail licensee located at the wave basin facility, if all of the following conditions are met:
(1)The sponsorship or advertising space or time is purchased in connection with the sponsorship of activities that are held at the premises of a permanent retail licensee located at the wave basin facility.
(2)Any sponsorship or purchase of advertising space or time pursuant to this subdivision shall be accomplished by a written contract entered into by the authorized licensee and a company that owns a facility that includes a wave basin in the County of Kern.
(3)An agreement for advertising authorized by this subdivision shall not be contingent upon or otherwise require, directly or indirectly, implicitly or explicitly, the permanent retail licensee at the wave basin facility to purchase or sell any alcoholic beverages or other products produced, manufactured, imported, distributed, or otherwise represented by the event sponsor or purchaser of the advertising space and time.
(4)The permanent retail licensee at the wave basin facility shall offer for sale, in a bona fide manner, other brands of beer, distilled spirits, and wine distributed by a competing wholesaler or manufacturer in addition to any brand manufactured, distributed, or owned by the authorized licensee sponsoring an event or purchasing advertising space or time pursuant to this subdivision.
(b)For purposes of this section, the following definitions apply:
(1)Authorized licensee means a beer manufacturer, winegrower, rectifier, wine rectifier, distilled spirits manufacturer, craft distiller, distilled spirits manufacturers agent, winegrowers agent, beer and wine importer, distilled spirits importer, distilled spirits importer general, beer and wine importer general, or out-of-state beer manufacturer certificate holder.
(2)Wave basin has the same meaning as defined in Section 115960.1 of the Health and Safety Code.
(c)The Legislature finds that it is necessary and proper to require a separation between 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 must 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 County of Kern.
|
Date
|
Status
|
|---|---|
| Oct 8, 2023 | Chaptered by Secretary of State - Chapter 471, Statutes of 2023. |
| Oct 8, 2023 | Approved by the Governor. |
| Sep 15, 2023 | Enrolled and presented to the Governor at 4 p.m. |
| Sep 11, 2023 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 79. Noes 0. Page 3173.). |
| Sep 7, 2023 | Assembly Rule 77 suspended. (Page 3011.) |
| Sep 6, 2023 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after September 8 pursuant to Assembly Rule 77. |
| Sep 6, 2023 | Read third time. Passed. Ordered to the Assembly. (Ayes 40. Noes 0. Page 2390.). |
| Jul 11, 2023 | Read second time. Ordered to third reading. |
| Jul 10, 2023 | Read third time and amended. Ordered to second reading. |
| Jun 27, 2023 | Read second time. Ordered to third reading. |
| Jun 26, 2023 | From committee: Be ordered to second reading pursuant to Senate Rule 28.8. |
| Jun 13, 2023 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 14. Noes 0.) (June 13). Re-referred to Com. on APPR. |
| May 31, 2023 | 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 17, 2023 | Referred to Com. on G.O. |
| May 4, 2023 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 4, 2023 | Read third time. Passed. Ordered to the Senate. (Ayes 75. Noes 0. Page 1463.) |
| Apr 27, 2023 | Read second time. Ordered to Consent Calendar. |
| Apr 26, 2023 | From committee: Do pass. To Consent Calendar. (Ayes 16. Noes 0.) (April 26). |
| Apr 20, 2023 | Measure version as amended on March 23 corrected. |
| Apr 13, 2023 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 19. Noes 0.) (April 12). Re-referred to Com. on APPR. |
| Mar 27, 2023 | Re-referred to Com. on G.O. |
| Mar 23, 2023 | From committee chair, with author's amendments: Amend, and re-refer to Com. on G.O. Read second time and amended. |
| Mar 22, 2023 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Mar 9, 2023 | Referred to Com. on G.O. |
| Feb 17, 2023 | From printer. May be heard in committee March 19. |
| Feb 16, 2023 | Read first time. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 11, 2023 | AB 1294 Boerner Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Sep 6, 2023 | Assembly 3rd Reading AB1294 Boerner et al. By Hurtado | Senate Floor |
Passed |
|
| Jun 13, 2023 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Governmental Organization |
Passed |
|
| May 4, 2023 | AB 1294 Boerner Consent Calendar Second Day Regular Session | Assembly Floor |
Passed |
|
| Apr 26, 2023 | Do pass. To Consent Calendar. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 12, 2023 | Do pass and be re-referred to the Committee on [Appropriations] | 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 | |
| Kelly Slater Wave Company | * Support | Apr 12, 2023 |
| World Surf League | ** Support | |
| World Surf League | * Support | Apr 12, 2023 |
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 1294
Author:(Boerner)
As Amended Ver:July 10, 2023
Majority vote
SUMMARY
This bill authorizes specified licensees to sponsor events promoted by, and purchase advertising space and time from or on behalf of, a company that owns a facility that includes a wave basin located in the County of Kings (Surf Ranch) in connection with activities conducted on the premises of a permanent retail licensee located at the wave basin facility, as specified
Senate Amendments
- Clarify that the premises of the permanent retail licensee includes a wave basin facility with a capacity of at least 9,000 individuals located in the County of Kings.
- Clarify that the "Authorized licensee" shall not include any person who holds a distilled spirits importer license or distilled spirits importer general license together with a distilled spirits wholesaler's license, or any person who holds a beer and wine importer license or beer and wine importer general license together with a beer and wine wholesaler's license.
- Make technical and clarifying changes.
- Add Senator Hurtado as coauthor.
COMMENTS
Background.
Surf Ranch and the World Surf League (WSL). Professional surfing is organized worldwide by the WSL, which has its headquarters in Santa Monica, California. Recent innovations and technological advances in artificial wave generation have made it possible to recreate the experience of surfing an ocean wave in newly constructed land locked wave basins. The Kelly Slater Wave Company's Surf Ranch in Lemoore, California, is the state's only wave basin that is currently in use. A 700-meter-long man-made lake at the Surf Ranch can simulate the ocean waves.
Surf Ranch is best known for producing long, powerful waves that allow for barreling, lots of turns, and airs. It can generate lefts or rights that can be surfed for up to a minute, making it the longest wave pool of its type. The wave can be "experts only" at 6.5 feet on the face (2 meters), but it can also be downsized and slowed down to suit beginner and intermediate surfers. Twelve different wave types can be produced at the Surf Ranch. Surf Ranch can generate one high performance waves every 4 minutes. The wave has a few different sections when it is at its peak power.
The venue has quickly become an emerging tourism destination for surfers and is a major stop on WSL's professional surfing tour. The best surfers from around the world compete at Surf Ranch and the event is streamed live on WSL's digital platform to millions of viewers across the globe. Surf Ranch also hosts small surf competitions throughout the year and is often used as a venue for private events. Recently, the reality TV show "Ultimate Surfer" was filmed at Surf Ranch and premiered on ABC in 2021.
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 of 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 any facility where the facility is licensed to sell alcoholic beverages.
Over the years, several exceptions to this prohibition have been added to a number of stadiums, arenas, entertainment complexes, and exposition parks. Some examples are Levi's Stadium in Santa Clara, the Oakland Coliseum in Oakland, Arrowhead Pond Arena in Anaheim, Kern County Arena in Bakersfield, the National Orange Show Events Center in San Bernardino, the Auto Club Speedway, (formerly California Speedway) in Fontana, the Grizzly Stadium in Fresno, Raley Field in West Sacramento, the HP Pavilion in San Jose, the StubHub Center (formerly the Home Depot Center) in Carson, and several other venues.
Related exemptions also exist for several venues at universities and colleges, including the Los Angeles Memorial Coliseum, which is home to the University of Southern California's football team; Savemart Stadium at California State University, Fresno; and the Green Music Center and the Sonoma State arts complex on the campus of California State University, Sonoma.
Related Legislation. SB 392 (Bradford) of the current legislative session authorizes specified licensees to purchase advertising space and rime from, or on behalf of, an on-sale licensee that is the owner, manager, or major tenant of a fully enclosed arena with a seating capacity of at least 18,000 seats located in the City of Inglewood (Intuit Dome), as specified. (Pending on the Assembly Floor)
AB 840 (Addis) of the current legislative session authorizes specified alcoholic beverage licensees to purchase advertising space and time from, or on behalf of, an on-sale licensee that is the owner, manager, or major tenant at various facilities situated on California State University (CSU) campuses and three facilities located at St. Mary's College of California, as specified. Additionally, would expand the exception applicable to a motorsports entertainment complex located in the County of San Bernardino, by reducing the minimum fixed seating capacity from 50,000 to 25,000. (Concurrence in Senate amendments pending)
According to the Author
According to the author's office, "Surf Ranch in Kings County is a major stop on World Surf League's professional surfing tour. That event attracts up to 5,000 spectators and is streamed live to a global audience of surf fans. Every year, the California Legislature awards tied-house advertising exceptions to a variety of professional sporting venues such as baseball and football stadiums and basketball arenas. AB 1294 would simply provide a similar exception for a venue that is home to professional surfing. The exception will provide an important source of revenue to sustain Surf Ranch's operations, grow the tourism economy in a remote part of the state, and promote the sport of surfing."
Arguments in Support
According to the World Surf League, "recently Surf Ranch made the decision to bring the facility's food and beverage service in-house for quality control purposes, upgrading its kitchen facilities and bringing on an executive chef developing cuisine featuring locally sourced produce and ingredients. Part of this decision included obtaining a retail liquor license from ABC. Now that Surf Ranch has a retail liquor license, the venue is precluded from engaging in advertising contracts with alcohol manufacturer licensees, restricting its ability to promote the sport of surfing and tourism in the region and in the industry. AB 1294 would create a narrow exception to the tied-house prohibitions by permitting an authorized licensee to purchase advertising space and time from a retail license holder, if the retail license holder is a company that owns a facility that includes a wave basin in the County of Kings in connection with activities conducted at the wave basin facility."
Arguments in Opposition
According to Alcohol Justice, "we continue to remain concerned with the impact of alcohol sponsorships on sports, especially since the brands most likely to sponsor events are already the brands favored by youth. Absent any assurance that events at this facility will not be televise or will be televised in a manner conscientious of not advertising alcohol to youth, we feel this tied-house exemption still threatens to create harm."
FISCAL COMMENTS
According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.
VOTES:
ASM GOVERNMENTAL ORGANIZATION: 19-0-3
YES: Santiago, Lackey, Aguiar-Curry, Berman, Cervantes, Megan Dahle, Davies, Gipson, Jones-Sawyer, Low, Mathis, McCarty, McKinnor, Quirk-Silva, Ramos, Robert Rivas, Blanca Rubio, Ta, Villapudua
ABS, ABST OR NV: Bryan, Garcia, Jim Patterson
ASM APPROPRIATIONS: 16-0-0
YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Robert Rivas, Sanchez, Weber, Wilson
ASSEMBLY FLOOR: 75-0-5
YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Ward, Weber, Wilson, Wood, Zbur, Rendon
ABS, ABST OR NV: Flora, McKinnor, Muratsuchi, Wallis, Wicks
SENATE FLOOR: 40-0-0
YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk
UPDATED
VERSION: July 10, 2023
CONSULTANT: Eric Johnson / G.O. / (916) 319-2531 FN: 0001844
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 1294 |
THIRD READING
Bill No: AB 1294
Author: Boerner (D), et al.
Amended: 7/10/23 in Senate
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE: 14-0, 6/13/23
AYES: Dodd, Wilk, Alvarado-Gil, Archuleta, Ashby, Bradford, Glazer, Nguyen, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto
NO VOTE RECORDED: Jones
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 75-0, 5/4/23 (Consent) - See last page for vote
SUBJECT: Tied-house restrictions: advertising exceptions: County of Kings
SOURCE: Author
DIGEST: This bill authorizes specified licensees to sponsor events promoted by, and purchase advertising space and time from or on behalf of, a company that owns a facility that includes a wave basin located in the County of Kings (Surf Ranch) in connection with activities conducted on the premises of a permanent retail licensee located at the wave basin facility, as specified.
Senate Floor Amendments of 7/10/23 add Senator Hurtado as coauthor.
ANALYSIS:
Existing law:
- Establishes the Department of Alcoholic Beverage Control (ABC) and grants it exclusive authority to administer the provisions of the ABC Act in accordance with laws enacted by the Legislature. This involves licensing individuals and businesses associated with the manufacture, importation, and sale of alcoholic beverages 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:
- Authorizes an alcohol licensee to sponsor events promoted by, and purchase advertising space and time from or on behalf of, a company that owns a facility that includes a wave basin located in the County of Kings (Surf Ranch) in connection with activities at the wave basin, as specified.
- Requires that the sponsorship or purchase of advertising space or time is purchased in connection with the sponsorship of activities that are held at the premises.
- Requires that any sponsorship or purchase of advertising space or time to be accomplished by a written contract.
- Prohibits any agreement for advertising to be contingent upon or otherwise require the licensee to purchase or sell any alcoholic beverages or other products produced, manufactured, imported, distributed, or otherwise represented by the event sponsor or purchaser of the advertising space and time.
- Requires the licensee to offer for sale other brands of beer, distilled spirits, and wine distributed by a competing wholesaler or manufacturer in addition to any brand manufactured, distributed, or owned by the authorized licensee sponsoring an event or purchasing advertising space or time pursuant to the provisions of this bill.
Background
Author Statement. According to the author’s office, “Surf Ranch in Kings County is a major stop on World Surf League’s professional surfing tour. That event attracts up to 5,000 spectators and is streamed live to a global audience of surf fans. Every year, the California Legislature awards tied-house advertising exceptions to a variety of professional sporting venues such as baseball and football stadiums and basketball arenas. AB 1294 would simply provide a similar exception for a venue that is home to professional surfing. The exception will provide an important source of revenue to sustain Surf Ranch’s operations, grow the tourism economy in a remote part of the state, and promote the sport of surfing.”
Surf Ranch and the World Surf League. Professional surfing is organized worldwide by the World Surf League (WSL), which has its headquarters in Santa Monica, California. Recent innovations and technological advances in artificial wave generation have made it possible to recreate the experience of surfing an ocean wave in newly constructed land locked wave basins. The Kelly Slater Wave Company’s Surf Ranch in Lemoore, California, is the state’s only wave basin that is currently in use. A 700-meter-long man-made lake at the Surf Ranch can simulate the ocean waves.
Surf Ranch is best known for producing long, powerful waves that allow for barreling, lots of turns, and airs. It can generate lefts or rights that can be surfed for up to a minute, making it the longest wave pool of its type. The wave can be “experts only” at 6.5 feet on the face, but it can also be downsized and slowed down to suit beginner and intermediate surfers. Twelve different wave types can be produced at the Surf Ranch. Surf Ranch can generate one high performance wave every four minutes. The wave has a different sections when it is at its peak power.
Surf Ranch has become an emerging tourist destination for surfers and is a major stop on the WSL’s professional surfing tour. The best surfers from around the world compete at Surf Ranch and the event is streamed live on WSL’s digital platform to viewers across the globe. Surf Ranch also hosts small surf competitions throughout the year and is often used as a venue for private events.
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 any facility where the facility is licensed to sell alcoholic beverages. Over the years, numerous exceptions to this prohibition have been added to a number of stadiums, parks, entertainment complexes, and arenas. Some examples are Levi’s Stadium in Santa Clara, Oakland Coliseum in Oakland, Honda Center 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, Sutter Health Park in West Sacramento, SAP Center in San Jose, Dignity Health in Carson, and numerous other venues.
Related/Prior Legislation
SB 392 (Bradford, 2023) authorizes specified licensees to purchase advertising space and rime from, or on behalf of, an on-sale licensee that is the owner, manager, or major tenant of a fully enclosed arena with a seating capacity of at least 18,000 seats located in the City of Inglewood (Intuit Dome), as specified. (Pending on the Assembly Floor)
AB 840 (Addis, 2023) authorizes specified licensees to purchase advertising space and time from, or on behalf of, an on-sale licensee that is the owner, manager, or major tenants at various facilities that are situated on California State University campuses located in the Counties of San Luis Obispo, Fresno, Monterey, Orange, Santa Clara, and Los Angeles, as specified. (Pending in the Senate Appropriations Committee)
SB 1280 (Hueso, Chapter 304, Statutes of 2022) authorized specified licensees to purchase advertising space and time from, or on behalf of, an on-sale licensee that is the owner, manager, or major tenant at specified facilities on the campus of San Diego State University.
AB 98 (Kalra, Chapter 267, Statutes of 2022) authorized specified licensees to purchase advertising space and time from, or on behalf of, an on-sale licensee that is the owner, manager, or major tenant of a fully enclosed arena with a fixed capacity in excess of 4,000 seats located in the City of San Jose (Tech CU Arena).
AB 1323 (Haney, Chapter 271, Statutes of 2022) authorized specified licensees to purchase advertising space and time from, or on behalf of, an on-sale licensee that is the owner, manager, or major tenant of an on-sale retail licensed premises configured with theatrical seating of at least 1,600 seats but no more than 2,400 seats in the City and County of San Francisco (Curran Theater), as specified.
AB 1330 (Mayes, Chapter 272, Statutes 2022) authorized specified licensees to purchase advertising space and time from, or on behalf of, an on-sale licensee that is the owner, manager, or major tenant at a fully enclosed arena with a fixed capacity in excess of 10,000 seats located in the County of Riverside (Acrisure Arena).
SB 386 (Umberg, Chapter 309, Statutes of 2021) authorized specified alcohol licensees to sponsor events promoted by, and to purchase advertising space and time from, or on behalf, an on-sale licensee that is the owner, operator agent of the operator, or sole assignee or the operator’s advertising rights of a mixed-use district located in the County of Orange (ocV!BE), as specified.
AB 3139 (Gray, Chapter 175, Statutes of 2020), among other things, extended a current tied-house exception to the Orpheum and Golden Gate Theater in the City and County of San Francisco.
AB 1782 (Muratsuchi, Chapter 162, Statutes of 2018) established surfing as the official state sport.
AB 2000 (Kalra, Chapter 483, Statutes of 2018) extended an existing exception in the ABC 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).
AB 2146 (Gloria, Chapter 487, Statutes of 2018) extended an existing exception in the ABC Act pertaining to the general prohibition against advertising arrangements between retail, wholesale, and manufacturer licensees to include an outdoor stadium with a fixed seating capacity of at least 43,000 seats located in the City of San Diego (Petco Park – San Diego Padres).
SB 664 (Dodd, Chapter 486, Statutes of 2017) extended an existing exception in the 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 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: No Fiscal Com.: Yes Local: No
SUPPORT: (Verified 7/11/23)
World Surf League
OPPOSITION: (Verified 7/11/23)
Alcohol Justice
ARGUMENTS IN SUPPORT: According to the World Surf League, “recently Surf Ranch made the decision to bring the facility’s food and beverage service in-house for quality control purposes, upgrading its kitchen facilities and bringing on an executive chef developing cuisine featuring locally sourced produce and ingredients. Part of this decision included obtaining a retail liquor license from ABC. Now that Surf Ranch has a retail liquor license, the venue is precluded from engaging in advertising contracts with alcohol manufacturer licensees, restricting its ability to promote the sport of surfing and tourism in the region and in the industry. AB 1294 would create a narrow exception to the tied-house prohibitions by permitting an authorized licensee to purchase advertising space and time from a retail license holder, if the retail license holder is a company that owns a facility that includes a wave basin in the County of Kings in connection with activities conducted at the wave basin facility.”
ARGUMENTS IN OPPOSITION: According to Alcohol Justice, “we continue to remain concerned with the impact of alcohol sponsorships on sports, especially since the brands most likely to sponsor events are already the brands favored by youth. Absent any assurance that events at this facility will not be televise or will be televised in a manner conscientious of not advertising alcohol to youth, we feel this tied-house exemption still threatens to create harm.”
ASSEMBLY FLOOR: 75-0, 5/4/23
AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Ward, Weber, Wilson, Wood, Zbur, Rendon
NO VOTE RECORDED: Flora, McKinnor, Muratsuchi, Wallis, Wicks
Prepared by: Felipe Lopez / G.O. / (916) 651-1530
7/12/23 14:03:38
**** END ****
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 1294 |
THIRD READING
Bill No: AB 1294
Author: Boerner (D), et al.
Amended: 5/31/23 in Senate
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE: 14-0, 6/13/23
AYES: Dodd, Wilk, Alvarado-Gil, Archuleta, Ashby, Bradford, Glazer, Nguyen, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto
NO VOTE RECORDED: Jones
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 75-0, 5/4/23 (Consent) - See last page for vote
SUBJECT: Tied-house restrictions: advertising exceptions: County of Kings
SOURCE: Author
DIGEST: This bill authorizes specified licensees to sponsor events promoted by, and purchase advertising space and time from or on behalf of, a company that owns a facility that includes a wave basin located in the County of Kings (Surf Ranch) in connection with activities conducted on the premises of a permanent retail licensee located at the wave basin facility, as specified.
ANALYSIS:
Existing law:
- Establishes the Department of Alcoholic Beverage Control (ABC) and grants it exclusive authority to administer the provisions of the ABC Act in accordance with laws enacted by the Legislature. This involves licensing individuals and businesses associated with the manufacture, importation, and sale of alcoholic beverages 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:
- Authorizes an alcohol licensee to sponsor events promoted by, and purchase advertising space and time from or on behalf of, a company that owns a facility that includes a wave basin located in the County of Kings (Surf Ranch) in connection with activities at the wave basin, as specified.
- Requires that the sponsorship or purchase of advertising space or time is purchased in connection with the sponsorship of activities that are held at the premises.
- Requires that any sponsorship or purchase of advertising space or time to be accomplished by a written contract.
- Prohibits any agreement for advertising to be contingent upon or otherwise require the licensee to purchase or sell any alcoholic beverages or other products produced, manufactured, imported, distributed, or otherwise represented by the event sponsor or purchaser of the advertising space and time.
- Requires the licensee to offer for sale other brands of beer, distilled spirits, and wine distributed by a competing wholesaler or manufacturer in addition to any brand manufactured, distributed, or owned by the authorized licensee sponsoring an event or purchasing advertising space or time pursuant to the provisions of this bill.
Background
Author Statement. According to the author’s office, “Surf Ranch in Kings County is a major stop on World Surf League’s professional surfing tour. That event attracts up to 5,000 spectators and is streamed live to a global audience of surf fans. Every year, the California Legislature awards tied-house advertising exceptions to a variety of professional sporting venues such as baseball and football stadiums and basketball arenas. AB 1294 would simply provide a similar exception for a venue that is home to professional surfing. The exception will provide an important source of revenue to sustain Surf Ranch’s operations, grow the tourism economy in a remote part of the state, and promote the sport of surfing.”
Surf Ranch and the World Surf League. Professional surfing is organized worldwide by the World Surf League (WSL), which has its headquarters in Santa Monica, California. Recent innovations and technological advances in artificial wave generation have made it possible to recreate the experience of surfing an ocean wave in newly constructed land locked wave basins. The Kelly Slater Wave Company’s Surf Ranch in Lemoore, California, is the state’s only wave basin that is currently in use. A 700-meter-long man-made lake at the Surf Ranch can simulate the ocean waves.
Surf Ranch is best known for producing long, powerful waves that allow for barreling, lots of turns, and airs. It can generate lefts or rights that can be surfed for up to a minute, making it the longest wave pool of its type. The wave can be “experts only” at 6.5 feet on the face, but it can also be downsized and slowed down to suit beginner and intermediate surfers. Twelve different wave types can be produced at the Surf Ranch. Surf Ranch can generate one high performance wave every four minutes. The wave has a different sections when it is at its peak power.
Surf Ranch has become an emerging tourist destination for surfers and is a major stop on the WSL’s professional surfing tour. The best surfers from around the world compete at Surf Ranch and the event is streamed live on WSL’s digital platform to viewers across the globe. Surf Ranch also hosts small surf competitions throughout the year and is often used as a venue for private events.
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 any facility where the facility is licensed to sell alcoholic beverages. Over the years, numerous exceptions to this prohibition have been added to a number of stadiums, parks, entertainment complexes, and arenas. Some examples are Levi’s Stadium in Santa Clara, Oakland Coliseum in Oakland, Honda Center 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, Sutter Health Park in West Sacramento, SAP Center in San Jose, Dignity Health in Carson, and numerous other venues.
Related/Prior Legislation
SB 392 (Bradford, 2023) authorizes specified licensees to purchase advertising space and rime from, or on behalf of, an on-sale licensee that is the owner, manager, or major tenant of a fully enclosed arena with a seating capacity of at least 18,000 seats located in the City of Inglewood (Intuit Dome), as specified. (Pending in the Assembly Governmental Organization Committee)
AB 840 (Addis, 2023) authorizes specified licensees to purchase advertising space and time from, or on behalf of, an on-sale licensee that is the owner, manager, or major tenants at various facilities that are situated on California State University campuses located in the Counties of San Luis Obispo, Fresno, Monterey, Orange, Santa Clara, and Los Angeles, as specified. (Pending in the Senate Governmental Organization Committee)
SB 1280 (Hueso, Chapter 304, Statutes of 2022) authorized specified licensees to purchase advertising space and time from, or on behalf of, an on-sale licensee that is the owner, manager, or major tenant at specified facilities on the campus of San Diego State University.
AB 98 (Kalra, Chapter 267, Statutes of 2022) authorized specified licensees to purchase advertising space and time from, or on behalf of, an on-sale licensee that is the owner, manager, or major tenant of a fully enclosed arena with a fixed capacity in excess of 4,000 seats located in the City of San Jose (Tech CU Arena).
AB 1323 (Haney, Chapter 271, Statutes of 2022) authorized specified licensees to purchase advertising space and time from, or on behalf of, an on-sale licensee that is the owner, manager, or major tenant of an on-sale retail licensed premises configured with theatrical seating of at least 1,600 seats but no more than 2,400 seats in the City and County of San Francisco (Curran Theater), as specified.
AB 1330 (Mayes, Chapter 272, Statutes 2022) authorized specified licensees to purchase advertising space and time from, or on behalf of, an on-sale licensee that is the owner, manager, or major tenant at a fully enclosed arena with a fixed capacity in excess of 10,000 seats located in the County of Riverside (Acrisure Arena).
SB 386 (Umberg, Chapter 309, Statutes of 2021) authorized specified alcohol licensees to sponsor events promoted by, and to purchase advertising space and time from, or on behalf, an on-sale licensee that is the owner, operator agent of the operator, or sole assignee or the operator’s advertising rights of a mixed-use district located in the County of Orange (ocV!BE), as specified.
AB 3139 (Gray, Chapter 175, Statutes of 2020), among other things, extended a current tied-house exception to the Orpheum and Golden Gate Theater in the City and County of San Francisco.
AB 1782 (Muratsuchi, Chapter 162, Statutes of 2018) established surfing as the official state sport.
AB 2000 (Kalra, Chapter 483, Statutes of 2018) extended an existing exception in the ABC 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).
AB 2146 (Gloria, Chapter 487, Statutes of 2018) extended an existing exception in the ABC Act pertaining to the general prohibition against advertising arrangements between retail, wholesale, and manufacturer licensees to include an outdoor stadium with a fixed seating capacity of at least 43,000 seats located in the City of San Diego (Petco Park – San Diego Padres).
SB 664 (Dodd, Chapter 486, Statutes of 2017) extended an existing exception in the 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 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: No Fiscal Com.: Yes Local: No
SUPPORT: (Verified 6/26/23)
World Surf League
OPPOSITION: (Verified 6/26/23)
Alcohol Justice
ARGUMENTS IN SUPPORT: According to the World Surf League, “recently Surf Ranch made the decision to bring the facility’s food and beverage service in-house for quality control purposes, upgrading its kitchen facilities and bringing on an executive chef developing cuisine featuring locally sourced produce and ingredients. Part of this decision included obtaining a retail liquor license from ABC. Now that Surf Ranch has a retail liquor license, the venue is precluded from engaging in advertising contracts with alcohol manufacturer licensees, restricting its ability to promote the sport of surfing and tourism in the region and in the industry. AB 1294 would create a narrow exception to the tied-house prohibitions by permitting an authorized licensee to purchase advertising space and time from a retail license holder, if the retail license holder is a company that owns a facility that includes a wave basin in the County of Kings in connection with activities conducted at the wave basin facility.”
ARGUMENTS IN OPPOSITION: According to Alcohol Justice, “we continue to remain concerned with the impact of alcohol sponsorships on sports, especially since the brands most likely to sponsor events are already the brands favored by youth. Absent any assurance that events at this facility will not be televise or will be televised in a manner conscientious of not advertising alcohol to youth, we feel this tied-house exemption still threatens to create harm.”
ASSEMBLY FLOOR: 75-0, 5/4/23
AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Ward, Weber, Wilson, Wood, Zbur, Rendon
NO VOTE RECORDED: Flora, McKinnor, Muratsuchi, Wallis, Wicks
Prepared by: Felipe Lopez / G.O. / (916) 651-1530
6/28/23 11:06:30
**** END ****
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Bill Dodd
Chair
2023 - 2024 Regular
Bill No: 1294 Hearing Date: 6/13/2023
Author: | , et al. | ||
Version: | 5/31/2023 Amended | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Felipe Lopez | ||
SUBJECT: Tied-house restrictions: advertising exceptions: County of Kings
DIGEST: This bill authorizes specified licensees to sponsor events promoted by, and purchase advertising space and time from or on behalf of, a company that owns a facility that includes a wave basin located in the County of Kings (Surf Ranch) in connection with activities conducted on the premises of a permanent retail licensee located at the wave basin facility, as specified.
ANALYSIS:
Existing law:
- Establishes the Department of Alcoholic Beverage Control (ABC) and grants it exclusive authority to administer the provisions of the ABC Act in accordance with laws enacted by the Legislature. This involves licensing individuals and businesses associated with the manufacture, importation, and sale of alcoholic beverages 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:
- Authorizes an alcohol licensee to sponsor events promoted by, and purchase advertising space and time from or on behalf of, a company that owns a facility that includes a wave basin located in the County of Kings (Surf Ranch) in connection with activities at the wave basin, as specified.
- Requires that the sponsorship or purchase of advertising space or time is purchased in connection with the sponsorship of activities that are held at the premises.
- Requires that any sponsorship or purchase of advertising space or time to be accomplished by a written contract.
- Prohibits any agreement for advertising to be contingent upon or otherwise require the licensee to purchase or sell any alcoholic beverages or other products produced, manufactured, imported, distributed, or otherwise represented by the event sponsor or purchaser of the advertising space and time.
- Requires the licensee to offer for sale other brands of beer, distilled spirits, and wine distributed by a competing wholesaler or manufacturer in addition to any brand manufactured, distributed, or owned by the authorized licensee sponsoring an event or purchasing advertising space or time pursuant to the provisions of this bill.
Background
Author Statement. According to the author’s office, “Surf Ranch in Kings County is a major stop on World Surf League’s professional surfing tour. That event attracts up to 5,000 spectators and is streamed live to a global audience of surf fans. Every year, the California Legislature awards tied-house advertising exceptions to a variety of professional sporting venues such as baseball and football stadiums and basketball arenas. AB 1294 would simply provide a similar exception for a venue that is home to professional surfing. The exception will provide an important source of revenue to sustain Surf Ranch’s operations, grow the tourism economy in a remote part of the state, and promote the sport of surfing.”
Surf Ranch and the World Surf League. Professional surfing is organized worldwide by the World Surf League (WSL), which has its headquarters in Santa Monica, California. Recent innovations and technological advances in artificial wave generation have made it possible to recreate the experience of surfing an ocean wave in newly constructed land locked wave basins. The Kelly Slater Wave Company’s Surf Ranch in Lemoore, California, is the state’s only wave basin that is currently in use. A 700-meter-long man-made lake at the Surf Ranch can simulate the ocean waves.
Surf Ranch is best known for producing long, powerful waves that allow for barreling, lots of turns, and airs. It can generate lefts or rights that can be surfed for up to a minute, making it the longest wave pool of its type. The wave can be “experts only” at 6.5 feet on the face, but it can also be downsized and slowed down to suit beginner and intermediate surfers. Twelve different wave types can be produced at the Surf Ranch. Surf Ranch can generate one high performance wave every four minutes. The wave has a different sections when it is at its peak power.
Surf Ranch has become an emerging tourist destination for surfers and is a major stop on the WSL’s professional surfing tour. The best surfers from around the world compete at Surf Ranch and the event is streamed live on WSL’s digital platform to viewers across the globe. Surf Ranch also hosts small surf competitions throughout the year and is often used as a venue for private events.
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 any facility where the facility is licensed to sell alcoholic beverages. Over the years, numerous exceptions to this prohibition have been added to a number of stadiums, parks, entertainment complexes, and arenas. Some examples are Levi’s Stadium in Santa Clara, Oakland Coliseum in Oakland, Honda Center 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, Sutter Health Park in West Sacramento, SAP Center in San Jose, Dignity Health in Carson, and numerous other venues.
Prior/Related Legislation
SB 392 (Bradford, 2023) authorizes specified licensees to purchase advertising space and rime from, or on behalf of, an on-sale licensee that is the owner, manager, or major tenant of a fully enclosed arena with a seating capacity of at least 18,000 seats located in the City of Inglewood (Intuit Dome), as specified. (Pending in the Assembly Governmental Organization Committee)
AB 840 (Addis, 2023) authorizes specified licensees to purchase advertising space and time from, or on behalf of, an on-sale licensee that is the owner, manager, or major tenants at various facilities that are situated on California State University campuses located in the Counties of San Luis Obispo, Fresno, Monterey, Orange, Santa Clara, and Los Angeles, as specified. (Pending in the Senate Governmental Organization Committee)
SB 1280 (Hueso, Chapter 304, Statutes of 2022) authorizes specified licensees to purchase advertising space and time from, or on behalf of, an on-sale licensee that is the owner, manager, or major tenant at specified facilities on the campus of San Diego State University.
AB 98 (Kalra, Chapter 267, Statutes of 2022) authorizes specified licensees to purchase advertising space and time from, or on behalf of, an on-sale licensee that is the owner, manager, or major tenant of a fully enclosed arena with a fixed capacity in excess of 4,000 seats located in the City of San Jose (Tech CU Arena).
AB 1323 (Haney, Chapter 271, Statutes of 2022) authorizes specified licensees to purchase advertising space and time from, or on behalf of, an on-sale licensee that is the owner, manager, or major tenant of an on-sale retail licensed premises configured with theatrical seating of at least 1,600 seats but no more than 2,400 seats in the City and County of San Francisco (Curran Theater), as specified.
AB 1330 (Mayes, Chapter 272, Statutes 2022) authorizes specified licensees to purchase advertising space and time from, or on behalf of, an on-sale licensee that is the owner, manager, or major tenant at a fully enclosed arena with a fixed capacity in excess of 10,000 seats located in the County of Riverside (Acrisure Arena).
SB 386 (Umberg, Chapter 309, Statutes of 2021) authorizes specified alcohol licensees to sponsor events promoted by, and to purchase advertising space and time from, or on behalf, an on-sale licensee that is the owner, operator agent of the operator, or sole assignee or the operator’s advertising rights of a mixed-use district located in the County of Orange (ocV!BE), as specified.
AB 3139 (Gray, Chapter 175, Statutes of 2020) among other things, extended a current tied-house exception to the Orpheum and Golden Gate Theater in the City and County of San Francisco.
AB 2000 (Kalra, Chapter 483, Statutes of 2018) extended an existing exception in the ABC 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).
AB 2146 (Gloria, Chapter 487, Statutes of 2018) extended an existing exception in the ABC Act pertaining to the general prohibition against advertising arrangements between retail, wholesale, and manufacturer licensees to include an outdoor stadium with a fixed seating capacity of at least 43,000 seats located in the City of San Diego (Petco Park – San Diego Padres).
SB 664 (Dodd, Chapter 486, Statutes of 2017) extended an existing exception in the 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 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).
AB 1782 (Muratsuchi, Chapter 162, Statutes of 2018) established surfing as the official state sport.
SB 582 (Bradford, Chapter 672, Statutes of 2017) allows beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturer’s agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees at a specified stadium (The Los Angeles Stadium at Hollywood Park) and performance venue located in the City of Inglewood.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
SUPPORT:
World Surf League
OPPOSITION:
Alcohol Justice
ARGUMENTS IN SUPPORT: According to the World Surf League, “recently Surf Ranch made the decision to bring the facility’s food and beverage service in-house for quality control purposes, upgrading its kitchen facilities and bringing on an executive chef developing cuisine featuring locally sourced produce and ingredients. Part of this decision included obtaining a retail liquor license from ABC. Now that Surf Ranch has a retail liquor license, the venue is precluded from engaging in advertising contracts with alcohol manufacturer licensees, restricting its ability to promote the sport of surfing and tourism in the region and in the industry. AB 1294 would create a narrow exception to the tied-house prohibitions by permitting an authorized licensee to purchase advertising space and time from a retail license holder, if the retail license holder is a company that owns a facility that includes a wave basin in the County of Kings in connection with activities conducted at the wave basin facility.”
ARGUMENTS IN OPPOSITION: According to Alcohol Justice, “we continue to remain concerned with the impact of alcohol sponsorships on sports, especially since the brands most likely to sponsor events are already the brands favored by youth. Absent any assurance that events at this facility will not be televise or will be televised in a manner conscientious of not advertising alcohol to youth, we feel this tied-house exemption still threatens to create harm.”
Date of Hearing: April 26, 2023
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Chris Holden, Chair
ABPCA Bill Id:AB 1294
Author:(Boerner Horvath) – As Amended Ver:March 23, 2023
Policy Committee: | Governmental Organization | Vote: | 19 - 0 |
|
| ||
|
|
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill creates a tied-house exception, which authorizes specified licensees regulated by the Department of Alcoholic Beverage Control (ABC) to sponsor events promoted by, and purchase advertising space and time from, a company that owns a facility that includes a wave basin located in the County of Kings in connection with an on-premises permanent retail licensee.
FISCAL EFFECT:
Minor and absorbable costs to ABC for enforcement.
This committee sees a wide array of bills that propose to modify the scope of alcohol laws. Generally, advertising tied-house exceptions such as those proposed by this bill do not generate major new enforcement workload for ABC, but taken together, these proposals could lead to significant new costs and future budget requests. In this case, however, similar tied-house exceptions for other sporting venues have not resulted in significant workload.
COMMENTS:
- Purpose. According to the author, Surf Ranch in Kings County “is a major stop on the World Surf League’s professional surfing tour, attracting up to 5,000 spectators and streamed live to a global audience.” The author contends this bill will “simply provide a similar advertising exception for a venue that has become a home for professional surfing” as that provided to other professional sporting venues like football stadiums and basketball arenas.
- Support and Opposition. This bill is supported by the World Surf League, which notes Surf Ranch recently decided “to bring the facility’s food and beverage service in-house for quality control purposes.” Since this decision required Surf Ranch to obtain a liquor license from ABC, the facility “is prohibited from entering into advertising contracts with alcohol manufacturers. As a result, it is limited in its ability to promote surfing and tourism in the region and within the industry.”
This bill is opposed by Alcohol Justice, which continues “to remain concerned with the impact of alcohol sponsorships on sports, especially since the brands most likely to sponsor events are already the brands favored by youth.”
- Tied-house Law. California’s tied-house law prevents the vertical integration of the alcohol industry by keeping the manufacturer, wholesaler, and retailer separated. Generally, one type of license holder is not permitted to do business as another type of licensee, and licensees are prohibited from directly or indirectly giving away anything of value, such as free goods, services, or advertising, in connection with the sale or distribution of an alcoholic beverage.
- Another Exception. Over the years, numerous exceptions to this tied-house prohibition have been added for arenas and stadiums, such as those for Chase Center and Petco Park, allowing sponsorship deals with alcohol manufacturers and distributors. Current exceptions also exist for numerous facilities serving or on the premises of California’s colleges, such as the Los Angeles Memorial Coliseum (home to USC football) and a multi-building arts complex at Sonoma State University. This bill adds to the exception the Kelly Slater Wave Company’s Surf Ranch in Lemoore, California.
- Related Legislation. AB 840 (Addis) provides a similar tied-house exception to specified facilities situated on specified California State University campuses located in the counties of San Luis Obispo, Fresno, Sacramento, Monterey, Orange, Santa Clara, and Los Angeles. AB 840 is pending hearing in this committee.
Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081
Discussed in Hearing
1MIN
Assembly Floor
1MIN
Senate Floor
7MIN
Senate Standing Committee on Governmental Organization
6MIN
Assembly Standing Committee on Governmental Organization
Bill Author
