BILL ANALYSIS
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UNFINISHED BUSINESS
Bill No: SB 131
Author: Wiggins (D) and Yee (D)
Amended: 9/10/09
Vote: 27 - Urgency
SENATE FLOOR : 23-0 (FAIL), 9/12/09
AYES: Alquist, Calderon, Cedillo, Corbett, Correa,
DeSaulnier, Ducheny, Florez, Hancock, Kehoe, Leno, Liu,
Lowenthal, Oropeza, Padilla, Pavley, Price, Romero,
Simitian, Steinberg, Wiggins, Wolk, Yee
NO VOTE RECORDED: Aanestad, Ashburn, Benoit, Cogdill, Cox,
Denham, Dutton, Harman, Hollingsworth, Huff, Maldonado,
Negrete McLeod, Runner, Strickland, Walters, Wright,
Wyland
ASSEMBLY FLOOR : 73-1, 9/11/09 - See last page for vote
SUBJECT : Alcoholic beverages: tied-house restrictions:
symphony
associations
SOURCE : Author
DIGEST : Assembly Amendments delete the prior version
which made various technical and code maintenance changes
to an existing provision of the Alcoholic Beverage Control
Act, and instead add provisions that create a tied house
exemption for an alcohol licensee to make monetary and
alcoholic beverage contributions to a symphony association
that is a nonprofit charitable corporation or association,
CONTINUED
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as defined, and under specified conditions. The amendments
also add Senator Yee as author and add an urgency clause.
ANALYSIS :
Existing Law
1.Establishes the Department of Alcoholic Beverage Control
(ABC) and grants it exclusive authority to administer the
provisions of the Alcoholic Beverage Control Act (ABC
Act) in accordance with laws enacted by the Legislature.
This involves licensing individuals and businesses
associated with the manufacture, importation and sale of
alcoholic beverages in this state and the collection of
license fees or occupation taxes for this purpose.
2.States that the "Tied-house" Law or "three-tier" system
separates the alcoholic beverage industry into three
component parts of manufacture (first tier), wholesaler
(second tier), and retailer (third tier). The original
policy rationale for this body of law was to prohibit the
vertical integration of the alcohol industry and to
protect the public from predatory marketing practices..
3.Prohibits, in general, an alcohol manufacturer,
wholesaler, or any officer, director, or agent of any
such person from owning, directly, or indirectly, any
interest in any on-sale license, or from providing
anything of value to retailers, be it free goods,
services, or advertising (Tied House Law).
4.Allows an alcohol manufacturer, winegrower's agent,
holder of an importer's general license, distilled
spirits manufacturer's agent, distilled spirits
rectifiers general license to sponsor events promoted by,
and may purchase advertising space and time from, or on
behalf of, a live entertainment marketing company, as
specified.
5.Defines an "On-Sale" license as authorizing the sale of
all types of alcoholic beverages, namely, beer, wine and
distilled spirits, for consumption on the premises (such
as at a restaurant or bar).
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This bill:
1.Provides a beer manufacturer, holder of a winegrower's
license, a California winegrower's agent, a distilled
spirits manufacturer, holder of a distilled spirits
rectifiers general license, a distilled spirit's
manufacturer's agent, and a licensed retailer may make
monetary and alcoholic beverage contributions to a
symphony association that is a nonprofit charitable
corporation or association, as defined.
2.Provides that the symphony association has been
incorporated in the City and County of San Francisco by
and through its predecessor organizations for not less
than 99 years and produces not less than 175 musical
events open to the general public per symphony season.
3.States that the symphony association shall hold a retail
on-sale license in a portion of its premises and provided
that, no such gift shall be used in or for the benefit of
the symphony association's retail on-sale license.
4.States that the contribution shall not be conditioned
directly or indirectly, in any way, on the purchase,
sale, or distribution of any alcoholic beverage, as
defined.
5.Provides the contribution shall not be conditioned
directly or indirectly, in anyway, on the purchase, sale,
or distribution of any alcoholic beverage manufactured or
distributed by the beer manufacturer, holder of a
winegrower's license, California winegrower's agent,
distilled spirits manufacturer, holder of a distilled
spirits rectifiers general license, a distilled spirits
manufacturer's agent and licensed retailer by the
symphony association.
6.States the symphony association shall serve 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 a winegrower or California
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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.
7.Contains language (legislative findings and declarations)
relative to the necessity of requiring a separation
between manufacturing interests, wholesale interests and
retail interests.
8.Contains a December 31, 2014 sunset date.
Comments
According to the author's office, this bill provides a
narrow tied-house exception by allowing the San Francisco
Symphony (SFS) to accept monetary contributions and
alcoholic beverages from an alcohol licensee.
This tied-house exception is necessary because the SFS also
holds an on-sale retail license for a very small portion of
its facility. The possession of this retail license
prevents an alcohol licensee from providing charitable
contributions (both monetary and product) to this important
non-profit symphony.
The author's office states that the SFS has a long and
storied history in San Francisco, but in these tough
economic times it has become imperative to find ways of
improving their profitability through charitable
activities. This bill will ensure that the SFS continues
to set the highest possible standard for excellence in
musical performance at home and around the world;
enriching, serving, and shaping cultural life throughout
the spectrum of Bay Area communities while maintaining
financial stability.
Background
The SFS was founded in 1911, has a budget of $53.7 million
and is widely considered to be among the country's most
artistically adventurous and financially stable arts
institutions. Nearly 600,000 people hear 230 concerts and
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presentations of the SFS each year. Nearly 60,000 people
hear the SFS at no cost each season.
More than 11,000 individual donors from throughout the
region join businesses and foundations in supporting the
SFS. Throughout its history, the SFS has presented more
than 200 world premiers, commissioned more than 100 new
works, and received 12 awards from the American Society of
Composers, Authors, and Publishers for adventurous
programming and/or commitment to American music. Thousands
of free tickets to the SFS events are provided to a wide
variety of groups each season.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 9/10/09)
San Francisco Symphony
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,
Bradford, Brownley, Buchanan, Caballero, Charles
Calderon, Carter, Chesbro, Conway, Cook, Coto, Davis, De
La Torre, De Leon, Emmerson, Eng, Evans, Feuer, Fletcher,
Fong, Fuentes, Fuller, Furutani, Galgiani, Garrick,
Gilmore, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,
Huber, Huffman, Jeffries, Jones, Knight, Krekorian, Lieu,
Logue, Bonnie Lowenthal, Ma, Mendoza, Miller, Nava,
Nestande, Niello, John A. Perez, V. Manuel Perez,
Portantino, Ruskin, Salas, Silva, Skinner, Smyth,
Solorio, Audra Strickland, Swanson, Torlakson, Torres,
Torrico, Tran, Villines, Bass
NOES: Gaines
NO VOTE RECORDED: DeVore, Monning, Nielsen, Saldana,
Yamada, Vacancy
TSM:do 10/12/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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