Bill Text: CA AB2913 | 2015-2016 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Alcoholic beverages: licensees: craft distillers: tied-house restrictions.

Spectrum: Slight Partisan Bill (Democrat 12-4)

Status: (Passed) 2016-09-21 - Chaptered by Secretary of State - Chapter 423, Statutes of 2016. [AB2913 Detail]

Download: California-2015-AB2913-Amended.html

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BILL NUMBER: AB 2913	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 13, 2016

INTRODUCED BY   Committee on Governmental Organization (Assembly
Members Gray (Chair), Bigelow (Vice Chair), Alejo, Bonta, Campos,
Cooley, Cooper, Daly, Gallagher, Gipson, Jones-Sawyer, Levine,
Linder, Maienschein, Salas, and Wilk)

                        MARCH 17, 2016

   An act to amend  Section 23355.3   Sections
23355.3, 25503.6, and 25503.8  of the Business and Professions
Code, relating to alcoholic beverages.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2913, as amended, Committee on Governmental Organization.
Alcoholic beverages:  licensees.   licensees:
tied-house restrictions. 
   The Alcoholic Beverage Control Act regulates the application for,
the issuance of, the suspension of, and the conditions imposed upon,
various alcoholic beverage licenses pursuant to which the licensees
may exercise specified privileges in the state. The act authorizes
licensees to sponsor or otherwise participate in an event conducted
by, and for the benefit of, a nonprofit organization in which retail
and nonretail licensees are involved as sponsors or participants,
subject to specified conditions.
   The act authorizes a nonretail licensee to advertise or
communicate sponsorship or participation in the event and provides
that advertising or communication may include, but is not limited to,
initiating, sharing, reposting, or otherwise forwarding a social
media post by a permanent retail licensee or a nonretail licensee, as
specified.
   This bill would delete the word "initiating" from that provision.
   The act also prohibits a retail licensee from receiving any
advertising, sale, or promotional benefit from any permanent retail
licensee in connection with the sponsorship or participation.
   This bill  instead  would  instead 
prohibit a nonretail licensee from receiving that advertising, sale,
or promotional benefit. 
   Existing law authorizes specified licensees, including distilled
spirits rectifiers, to purchase advertising space and time from, or
on behalf of, an on-sale retail licensee, under certain conditions,
if the on-sale retail licensee is the owner, manager, agent of the
owner, assignee of the owner's advertising rights, or major tenant of
specified facilities. 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 revise these authorizations to instead allow a
rectifier to purchase the above-described advertising space and time
and would include rectifiers as licensees subject to specified
criminal provisions. By expanding the definition of a crime, this
bill would impose a state-mandated local program.  
   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. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program:  no   yes  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 23355.3 of the Business and Professions Code is
amended to read:
   23355.3.  (a) A licensee may sponsor or otherwise participate in
an event conducted by, and for the benefit of, a nonprofit
organization in which retail and nonretail licensees are involved as
sponsors or participants, subject to all of the following conditions:

   (1) Except as otherwise provided in this section, any payment of
money or other consideration for sponsorship or participation in the
event shall be made only to the nonprofit organization conducting the
event.
   (2) Except as otherwise provided in this section, a nonretail
licensee shall not, directly or indirectly, pay money or provide any
other thing of value to a permanent retail licensee that is also a
sponsor of, or participant in, the event.
   (3) A nonretail licensee may donate alcoholic beverages to a
nonprofit only as otherwise authorized by Section 25503.9.
   (4) Except as otherwise provided by this division, a retail
licensee shall not give, sell, or furnish any alcoholic beverages to
the temporary licensee.
   (5) A nonretail or retail licensee may choose to participate in
any level of sponsorship, including at the name or principal sponsor
level. A nonprofit organization may choose to have one, or multiple,
name or principal sponsors.
   (6) (A) A nonretail licensee may advertise or communicate
sponsorship or participation in the event. This advertising or
communication may include, but is not limited to, sharing, reposting,
or otherwise forwarding a social media post by a permanent retail
licensee or a nonretail licensee if the advertisement or
communication does not contain the retail price of any alcoholic
beverage or otherwise promotes a retail licensee beyond its
sponsorship or participation in the event.
   (B) A nonretail licensee shall not pay or reimburse a permanent
licensee, directly or indirectly, for any advertising services,
including by way of social media. Except as otherwise permitted by
this section, a permanent retail licensee shall not accept any
payment or reimbursement, directly or indirectly, for any advertising
services offered by a nonretail licensee.
   (C) For the purposes of this subdivision, "social media" means a
service, platform, application, or site where users communicate and
share media, such as pictures, videos, music, and blogs, with other
users.
   (7) A nonretail licensee shall not require, directly or
indirectly, as a condition of sponsorship or participation in any
event under this section, that its products be sold or served
exclusively at the event. A nonretail licensee shall not receive,
directly or indirectly, any advertising, sale, or promotional benefit
from any permanent retail licensee in connection with the
sponsorship or participation. A permanent retail licensee shall not
offer or provide a nonretail licensee any advertising, sale, or
promotional benefit in connection with the sponsorship or
participation.
   (b) This section does not authorize a nonretail licensee to pay,
in whole or in part, any costs, including the cost of sponsorship, of
any retail licensee that is sponsoring or participating in a
nonprofit event.
   (c) A licensee that sponsors or participates in a nonprofit event
under this section shall keep detailed records of its sponsorship or
participation and shall maintain those records for a period of at
least three years. These records shall be provided to the department
upon request.
   (d) Nothing in this section shall be deemed to exempt the
nonprofit organization from obtaining any licenses or permits as may
be required to conduct the event.
   SEC. 2.    Section 25503.6 of the   Business
and Professions Code   is amended to read: 
   25503.6.  (a) Notwithstanding any other provision of this chapter,
a beer manufacturer, the holder of a winegrower's license, a
 distilled spirits  rectifier, a distilled spirits
manufacturer, or distilled spirits manufacturer's agent may purchase
advertising space and time from, or on behalf of, an on-sale retail
licensee subject to all of the following conditions:
   (1) The on-sale licensee is the owner, manager, agent of the
owner, assignee of the owner's advertising rights, or the major
tenant of the owner of any of the following:
   (A) An outdoor stadium or a fully enclosed arena with a fixed
seating capacity in excess of 10,000 seats located in Sacramento
County or Alameda County.
   (B) A fully enclosed arena with a fixed seating capacity in excess
of 18,000 seats located in Orange County or Los Angeles County.
   (C) An outdoor stadium or fully enclosed arena with a fixed
seating capacity in excess of 8,500 seats located in Kern County.
   (D) An exposition park of not less than 50 acres that includes an
outdoor stadium with a fixed seating capacity in excess of 8,000
seats and a fully enclosed arena with an attendance capacity in
excess of 4,500 people, located in San Bernardino County.
   (E) An outdoor stadium with a fixed seating capacity in excess of
10,000 seats located in Yolo County.
   (F) An outdoor stadium and a fully enclosed arena with fixed
seating capacities in excess of 10,000 seats located in Fresno
County.
   (G) An athletic and entertainment complex of not less than 50
acres that includes within its boundaries an outdoor stadium with a
fixed seating capacity of at least 8,000 seats and a second outdoor
stadium with a fixed seating capacity of at least 3,500 seats located
in Riverside County.
   (H) An outdoor stadium with a fixed seating capacity in excess of
1,500 seats located in Tulare County.
   (I) A motorsports entertainment complex of not less than 50 acres
that includes within its boundaries an outdoor speedway with a fixed
seating capacity of at least 50,000 seats, located in San Bernardino
County.
   (J) An exposition park, owned or operated by a bona fide nonprofit
organization, of not less than 400 acres with facilities including a
grandstand with a seating capacity of at least 8,000 people, at
least one exhibition hall greater than 100,000 square feet, and at
least four exhibition halls, each greater than 30,000 square feet,
located in the City of Pomona or the City of La Verne in Los Angeles
County.
   (K) An outdoor soccer stadium with a fixed seating capacity of at
least 25,000 seats, an outdoor tennis stadium with a fixed capacity
of at least 7,000 seats, an outdoor track and field facility with a
fixed seating capacity of at least 7,000 seats, and an indoor
velodrome with a fixed seating capacity of at least 2,000 seats, all
located within a sports and athletic complex built before January 1,
2005, in the City of Carson in Los Angeles County.
   (L) An outdoor professional sports facility with a fixed seating
capacity of at least 4,200 seats located in San Joaquin County.
   (M) A fully enclosed arena with a fixed seating capacity in excess
of 13,000 seats in the City of Inglewood.
   (N) (i) An outdoor stadium with a fixed seating capacity of at
least 68,000 seats located in the City of Santa Clara.
   (ii) A beer manufacturer, the holder of a winegrower's license, a
 distilled spirits  rectifier, a distilled spirits
manufacturer, or distilled spirits manufacturer's agent may purchase
advertising space and time from, or on behalf of, a major tenant of
an outdoor stadium described in clause (i), provided the major tenant
does not hold a retail license, and the advertising may include the
placement of advertising in an on-sale licensed premises operated at
the outdoor stadium.
   (O) A complex of not more than 50 acres located on the campus of,
and owned by, Sonoma State University dedicated to presenting live
artistic, musical, sports, food, beverage, culinary, lifestyle, or
other cultural and entertainment events and performances with venues
that include a concert hall with a seating capacity of approximately
1,500 seats, a second concert hall with a seating capacity of up to
300 seats, an outdoor area with a seating capacity of up to 5,000
seats, and a further outdoor area with a seating capacity of up to
10,000 seats. With respect to this complex, advertising space and
time may also be purchased from or on behalf of the owner of the
complex, a long-term tenant or licensee of the venue, whether or not
the owner, long-term tenant, or licensee holds an on-sale license.
   (P) A fairgrounds with a horse racetrack and equestrian and sports
facilities located in San Diego County.
   (2) The outdoor stadium or fully enclosed arena described in
paragraph (1) is not owned by a community college district.
   (3) The advertising space or time is purchased only in connection
with the events to be held on the premises of the exposition park,
stadium, or arena owned by the on-sale licensee. With respect to an
exposition park as described in subparagraph (J) of paragraph (1)
that includes at least one hotel, the advertising space or time shall
not be displayed on or in any hotel located in the exposition park,
or purchased in connection with the operation of any hotel located in
the exposition park. With respect to the complex described in
subparagraph (O) of paragraph (1), the advertising space or time
shall be purchased only in connection with live artistic, musical,
sports, food, beverage, culinary, lifestyle, or other cultural and
entertainment events and performances to be held on the premises of
the complex.
   (4) The on-sale licensee serves other brands of beer distributed
by a competing beer wholesaler in addition to the brand manufactured
or marketed by the beer manufacturer, other brands of wine
distributed by a competing wine wholesaler in addition to the brand
produced by the winegrower, and other brands of distilled spirits
distributed by a competing distilled spirits wholesaler in addition
to the brand manufactured or marketed by the  distilled
spirits  rectifier, the distilled spirits manufacturer, or
the distilled spirits manufacturer's 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 winegrower's
license, the  distilled spirits  rectifier, the
distilled spirits manufacturer, or the distilled spirits manufacturer'
s agent and any of the following:
   (1) The on-sale licensee.
   (2) With respect to clause (ii) of subparagraph (N) of paragraph
(1) of subdivision (a), the major tenant of the outdoor stadium.
   (3) With respect to subparagraph (O) of paragraph (1) of
subdivision (a), the owner, a long-term tenant of the complex, or
licensee of the complex, whether or not the owner, long-term tenant,
or licensee holds an on-sale license.
   (c) Any beer manufacturer or holder of a winegrower's license, any
 distilled spirits  rectifier, any distilled
spirits manufacturer, or any distilled spirits manufacturer's agent
who, through coercion or other illegal means, induces, directly or
indirectly, a holder of a wholesaler's 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
wholesaler's license to solicit a beer manufacturer, a holder of a
winegrower's license, a distilled spirits 
rectifier, a distilled spirits manufacturer, or a distilled spirits
manufacturer's 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 manufacturer's license, any holder of an
out-of-state beer manufacturer's certificate, or any holder of a beer
and wine importer's general license.
   (f) The Legislature finds that it is necessary and proper to
require a separation among manufacturing interests, wholesale
interests, and retail interests in the production and distribution of
alcoholic beverages in order to prevent suppliers from dominating
local markets through vertical integration and to prevent excessive
sales of alcoholic beverages produced by overly aggressive marketing
techniques. The Legislature further finds that the exceptions
established by this section to the general prohibition against tied
interests shall be limited to their express terms so as not to
undermine the general prohibition and intends that this section be
construed accordingly.
   SEC. 3.    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 winegrower's license, a
California winegrower's agent, a  distilled spirits 
rectifier, a distilled spirits manufacturer, or a distilled spirits
manufacturer's 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 winegrower's
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 manufacturer's 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 winegrower's
license, the California winegrower's agent,  the rectifier,
 the distilled spirits manufacturer, or the distilled spirits
manufacturer's agent, and the on-sale licensee, which contract shall
not in any way involve the holder of a wholesaler's license.
   (c) Any beer manufacturer,  rectifier,  distilled spirits
manufacturer, distilled spirits manufacturer's agent, holder of a
winegrower's license, or California winegrower's agent, who, through
coercion or other illegal means, induces, directly or indirectly, a
holder of a wholesaler's 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
wholesaler's license to solicit a beer manufacturer,  rectifier,
 distilled spirits manufacturer, or distilled spirits
manufacturer's agent, holder of a winegrower's license, or California
winegrower's 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 manufacturer's license, any holder of an
out-of-state beer manufacturer's certificate, or any holder of a beer
and wine importer's general license.
   SEC. 4.    No reimbursement is required by this act
pursuant to Section 6 of Article XIII B 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 XIII B of the
California Constitution.