BILL NUMBER: AB 3071 CHAPTERED 09/28/08 CHAPTER 508 FILED WITH SECRETARY OF STATE SEPTEMBER 28, 2008 APPROVED BY GOVERNOR SEPTEMBER 28, 2008 PASSED THE SENATE AUGUST 27, 2008 PASSED THE ASSEMBLY AUGUST 31, 2008 AMENDED IN SENATE AUGUST 19, 2008 AMENDED IN SENATE JUNE 19, 2008 AMENDED IN ASSEMBLY APRIL 3, 2008 INTRODUCED BY Committee on Governmental Organization (Torrico (Chair), Charles Calderon, Davis, De Leon, Evans, Jeffries, Levine, Mendoza, Portantino, Price, Soto, and Tran) MARCH 13, 2008 An act to amend Sections 23039, 23104.2, 25608, and 25663 of, to add Section 23405.3 to, and to repeal Section 25667 of, the Business and Professions Code, relating to alcoholic beverages. LEGISLATIVE COUNSEL'S DIGEST AB 3071, Committee on Governmental Organization. Alcoholic beverages. The Alcoholic Beverage Control Act contains various provisions regulating the application for, the issuance of, the suspension of, and the conditions imposed upon, alcoholic beverage licenses by the Department of Alcoholic Beverage Control. Existing law defines "public premises" and provides that public premises does not include railroad dining or club cars, passenger ships, airplanes, bona fide clubs, after the clubs have been lawfully operated for not less than one year, historic units of the state park system, premises being operated under a temporary on-sale beer license, on-sale beer licensed stadia, auditoria, fairgrounds, or racetracks, or nonprofit theater companies. This bill would exempt winegrowers' premises from the definition of "public premises." Existing law allows a retail licensee to return beer to the wholesaler or manufacturer from whom the retail licensee purchased the beer within 15 days from the date the beer was delivered, as provided. This bill would allow for the return of beer recalled for health or safety issues at anytime. Existing law generally prohibits the sale or consumption of alcoholic beverages at a public schoolhouse or any grounds thereof. Existing law provides that this prohibition does not apply if the alcoholic beverage is acquired, possessed, or used in connection with a course of instruction given at the school and the person has been authorized to acquire, possess, or use it by the governing body or other administrative head of the school. This bill would provide that the prohibition against the sale or consumption of alcoholic beverages on the grounds of a public schoolhouse does not apply if the alcoholic beverage is beer or wine acquired, possessed, used, sold, or consumed only in connection with "special events," as defined, held at the facilities of a public community college. Existing law does not prohibit the service of any alcoholic beverage by any person between 18 and 21 years of age in any bona fide eating place licensed for the on-sale of alcoholic beverages if certain conditions exist. This bill would define "service" for purposes of this provision to include the delivery, presentation, opening, or pouring of an alcoholic beverage to customers. Existing law requires any corporation, limited partnership, or limited liability company holding a license to manufacture, distill, rectify, or sell alcoholic beverages to report any change in the ownership, management, or control of the entity to Department of Alcoholic Beverage Control. This bill would extend the reporting requirement to any corporation, limited partnership, or limited liability company that holds, directly or indirectly, 10% or more of the ownership of a license to manufacture, distill, rectify, or sell alcoholic beverages. This bill would also make technical and conforming changes. This bill would impose a state-mandated local program by changing the definition of an existing crime. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 23039 of the Business and Professions Code is amended to read: 23039. (a) "Public premises" means: (1) Premises licensed with any type of license other than an on-sale beer license, and maintained and operated for the selling or serving of alcoholic beverages to the public for consumption on the premises, and in which food shall not be sold or served to the public as in a bona fide public eating place, but upon which premises food products may be sold or served incidentally to the sale or service of alcoholic beverages, in accordance with rules prescribed by the department. (2) Premises licensed with an on-sale beer license, in which food shall not be sold or served to the public as in a bona fide public eating place, and in which sandwiches, salads, desserts, and similar short orders shall not be sold and served, in accordance with rules prescribed by the department. (b) "Public premises" does not include railroad dining or club cars, passenger ships, airplanes, or bona fide clubs after the clubs have been lawfully operated for not less than one year; nor does it include historic units of the state park system, premises being operated under a temporary on-sale beer license other than permitted pursuant to Section 24045.5, or on-sale beer licensed stadia, auditoria, fairgrounds, or racetracks; nor does it include nonprofit theater companies licensed pursuant to Section 24045.7; nor does it include winegrowers' premises. SEC. 2. Section 23104.2 of the Business and Professions Code is amended to read: 23104.2. (a) Subject to the exceptions specified in subdivision (b), a retail licensee may return beer to the wholesaler or manufacturer from whom the retail licensee purchased the beer, or any successor thereto, and the wholesaler, manufacturer, or successor thereto may accept that return if the beer is returned in exchange for the identical quantity and brand of beer. No wholesaler or manufacturer, or any successor thereto, shall accept the return of any beer from a retail licensee except when the beer delivered was not the brand or size container ordered by the retail licensee or the amount delivered was other than the amount ordered, in which case the order may be corrected by the wholesaler or manufacturer who sold the beer, or any successor thereto. If a package had been broken or otherwise damaged prior to or at the time of actual delivery, a credit memorandum may be issued for the returned package by the wholesaler or manufacturer who sold the beer, or any successor thereto, in lieu of exchange for an identical package when the return and corrections are completed within 15 days from the date the beer was delivered to the retail licensee. (b) Notwithstanding subdivision (a), a wholesaler or manufacturer, or any successor thereto, may accept the return of beer purchased from that wholesaler, manufacturer, or successor thereto, as follows: (1) (A) From a seasonal or temporary licensee if at the termination of the period of the license the seasonal or temporary licensee has beer remaining unsold, or from an annual licensee operating on a temporary basis if at the termination of the temporary period the annual licensee has beer remaining unsold. (B) For purposes of subparagraph (A), an annual licensee shall be considered to be operating on a temporary basis if he or she operates at seasonal resorts, including summer and winter resorts, or at sporting or entertainment facilities, including racetracks, arenas, concert halls, and convention centers. Temporary status shall be deemed terminated when operations cease for 15 days or more. No wholesaler or manufacturer, or successor thereto, shall accept the return of beer from an annual licensee considered to be operating on a temporary basis unless the licensee notifies that wholesaler or manufacturer, or successor thereto, within 15 days of the date the licensee's operations ceased. (2) (A) Subject to subparagraph (B), a wholesaler or manufacturer, or any successor thereto, may, with department approval, accept the return of a brand of beer discontinued in a California market area or a seasonal brand of beer from a retail licensee, provided that the beer is exchanged for a quantity of beer of a brand produced or sold by the same manufacturer with a value no greater than the original sales price to the retail licensee of the returned beer. For purposes of this subparagraph, "seasonal brand of beer" means a brand of beer, as defined in Section 23006, that is brewed by a manufacturer to commemorate a specific holiday season and is so identified by appropriate product packaging and labeling. (B) A discontinued brand of beer may not be reintroduced for a period of 12 months in the same California market area in which a return and exchange of that beer as described in subparagraph (A) has taken place. A seasonal brand of beer may not be reintroduced for a period of six months in the same California market area in which a return and exchange of that beer as described in subparagraph (A) has taken place. (c) Notwithstanding subdivision (a), a wholesaler or manufacturer, or any successor thereto, may accept the return of beer purchased from that wholesaler or manufacturer, or any successor thereto, by the holder of a retail license following the revocation of, suspension of, voluntary surrender of, or failure to renew the retail license. (d) A wholesaler or manufacturer, or any successor thereto, may credit the account of the retailer identified in subdivision (c) in an amount not to exceed the original sales price to the retailer of the returned beer, provided that the beer has been paid for in full. (e) Notwithstanding the 15-day time limit for the return of beer described in subdivision (a), beer that is recalled for health or safety issues may be accepted for return at anytime from a retailer and be picked up by the seller of beer. The seller of beer may exchange the returned beer for identical product, if safe inventory is available, issue a deferred exchange memorandum showing the beer was picked up and is to be replaced when inventory is available, or issue a credit memorandum to the retailer for the returned beer. SEC. 3. Section 25608 of the Business and Professions Code is amended to read: 25608. (a) Every person who possesses, consumes, sells, gives, or delivers to any other person, any alcoholic beverage in or on any public schoolhouse or any of the grounds thereof, is guilty of a misdemeanor. This section does not, however, make it unlawful for any person to acquire, possess, or use any alcoholic beverage in or on any public schoolhouse, or on any grounds thereof, if any of the following applies: (1) The alcoholic beverage possessed, consumed, or sold, pursuant to a license obtained under this division, is wine that is produced by a bonded winery owned or operated as part of an instructional program in viticulture and enology. (2) The alcoholic beverage is acquired, possessed, or used in connection with a course of instruction given at the school and the person has been authorized to acquire, possess, or use it by the governing body or other administrative head of the school. (3) The public schoolhouse is surplus school property and the grounds thereof are leased to a lessee which is a general law city with a population of less than 50,000, or the public schoolhouse is surplus school property and the grounds thereof are located in an unincorporated area and are leased to a lessee which is a civic organization, and the property is to be used for community center purposes and no public school education is to be conducted thereon by either the lessor or the lessee and the property is not being used by persons under the age of 21 years for recreational purposes at any time during which alcoholic beverages are being sold or consumed on the premises. (4) The alcoholic beverages are acquired, possessed, or used during events at a college-owned or college-operated veterans stadium with a capacity of over 12,000 people, located in a county with a population of over six million people. As used in this subdivision, "events" mean football games sponsored by a college, other than a public community college, or other events sponsored by noncollege groups. (5) The alcoholic beverages are acquired, possessed, or used during an event not sponsored by any college at a performing arts facility built on property owned by a community college district and leased to a nonprofit organization which is a public benefit corporation formed under Part 2 (commencing with Section 5110) of Division 2 of Title 1 of the Corporations Code. As used in this subdivision, "performing arts facility" means an auditorium with more than 300 permanent seats. (6) The alcoholic beverage is wine for sacramental or other religious purposes and is used only during authorized religious services held on or before January 1, 1995. (7) The alcoholic beverages are acquired, possessed, or used during an event at a community center owned by a community services district and the event is not held at a time when students are attending a public school-sponsored activity at the center. (8) The alcoholic beverage is wine which is acquired, possessed, or used during an event sponsored by a community college district or an organization operated for the benefit of the community college district where the college district maintains both an instructional program in viticulture on no less than five acres of land owned by the district and an instructional program in enology, which includes sales and marketing. (9) The alcoholic beverage is acquired, possessed, or used at a professional minor league baseball game conducted at the stadium of a community college located in a county with a population of less than 250,000 inhabitants, and the baseball game is conducted pursuant to a contract between the community college district and a professional sports organization. (10) The alcoholic beverages are acquired, possessed, or used during events at a college-owned or college-operated stadium or other facility. As used in this subdivision, "events" means fundraisers held to benefit a nonprofit corporation that has obtained a license pursuant to this division for the event. "Events" does not include football games or other athletic contests sponsored by any college or public community college. This subdivision shall not apply to any public education facility in which any grade from kindergarten to grade 12, inclusive, is schooled. (11) The alcoholic beverages are possessed, consumed, or sold, pursuant to a license obtained under this division, for an event during the weekend or at other times when pupils are not on the grounds of an overnight retreat facility owned and operated by a county office of education in a county of the 18th class. (12) The grounds of the public schoolhouse on which the alcoholic beverage is acquired, possessed, used, or consumed is property that has been developed and is used for residential facilities or housing that is offered for rent, lease, or sale exclusively to faculty or staff of a public school or community college. (13) The grounds of a public schoolhouse on which the alcoholic beverage is acquired, possessed, used, or consumed is property of a community college that is leased, licensed, or otherwise provided for use as a water conservation demonstration garden and community passive recreation resource by a joint powers agency comprised of public agencies, including the community college, and the event at which the alcoholic beverage is acquired, possessed, used, or consumed is conducted pursuant to a written policy adopted by the governing body of the joint powers agency and no public funds are used for the purchase or provision of the alcoholic beverage. (14) The alcoholic beverage is beer or wine acquired, possessed, used, sold, or consumed only in connection with a course of instruction, sponsored dinner, or meal demonstration given as part of a culinary arts program at a campus of a California community college and the person has been authorized to acquire, possess, use, sell, or consume the beer or wine by the governing body or other administrative head of the school. (15) The alcoholic beverages are possessed, consumed, or sold, pursuant to a license or permit obtained under this division for special events held at the facilities of a public community college, located in a county of the first class or a county of the fourth class, during the special event. As used in this subdivision, "special event" means festivals, shows, private parties, concerts, theatrical productions, and other events held on the premises of the public community college, pursuant to a license or permit, and for which the principal attendees are members of the general public or invited guests and not students of the public community college. (b) Any person convicted of a violation of this section shall, in addition to the penalty imposed for the misdemeanor, be barred from having or receiving any privilege of the use of public school property which is accorded by Article 2 (commencing with Section 82537) of Chapter 8 of Part 49 of the Education Code. SEC. 4. Section 25663 of the Business and Professions Code is amended to read: 25663. (a) Except as provided in subdivision (c), no licensee that sells or serves alcoholic beverages for consumption on the premises shall employ any person under 21 years of age for the purpose of preparing or serving alcoholic beverages. Every person who employs or uses the services of any person under the age of 21 years in or on that portion of any premises, during business hours, which are primarily designed and used for the sale and service of alcoholic beverages for consumption on the premises is guilty of a misdemeanor. (b) Any off-sale licensee who employs or uses the services of any person under the age of 18 years for the sale of alcoholic beverages shall be subject to suspension or revocation of his or her license, except that a person under the age of 18 years may be employed or used for those purposes if that person is under the continuous supervision of a person 21 years of age or older. (c) Any person between 18 and 21 years of age employed in any bona fide public eating place, as defined in Sections 23038 and 23038.1, which is licensed for the on-sale of alcoholic beverages, may serve alcoholic beverages to consumers only under the following circumstances: such service occurs in an area primarily designed and used for the sale and service of food for consumption on the premises; and the primary duties of the employee shall be the service of meals to guests, with the service of alcoholic beverages being incidental to such duties. For purposes of this subdivision, "serve" or "service" includes the delivery, presentation, opening, or pouring of an alcoholic beverage. SEC. 5. Section 23405.3 is added to the Business and Professions Code, to read: 23405.3. If a corporation, limited partnership, or limited liability company holds, directly or indirectly, 10 percent or more of the ownership of a license issued under this division, the licensee shall report any change in the ownership, management, or control of that corporation, limited partnership, or limited liability company, in the same manner as would be required by Sections 23405, 23405.1, and 23405.2, if the corporation, limited partnership, or limited liability company were itself the licensee. SEC.6 Section 25667 of the Business and Professions Code is repealed. SEC. 7. The Legislature finds and declares that, because of the unique circumstances in the county of the first class and in the county of the fourth class, that are applicable only to those counties, a statute of general applicability cannot be enacted within the meaning of subdivision (b) of Section 16 of Article IV of the California Constitution, and, therefore, this special statute is necessary. SEC. 8. 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.