BILL NUMBER: SB 1323 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 7, 2010
AMENDED IN SENATE MARCH 25, 2010
INTRODUCED BY Senator Walters
FEBRUARY 19, 2010
An act to amend Sections 25503 and Section
25600.5 of the Business and Professions Code, relating to
alcoholic beverages.
LEGISLATIVE COUNSEL'S DIGEST
SB 1323, as amended, Walters. Alcoholic beverage control:
licensees: tied-house restrictions. licensees.
Existing law, known as tied-house restrictions, prohibits a
manufacturer, winegrower, manufacturer's agent, rectifier, California
winegrower's agent, distiller, bottler, importer, and wholesaler,
and any officer, director, or agent of any of those persons, from
having specified relationships or conducting specified business with
alcoholic beverages licensees of specified types.
This bill would revise the prohibition to require that the
manufacturer, winegrower, manufacturer's agent, rectifier, California
winegrower's agent, distiller, bottler, importer, and wholesaler,
and any officer, director, or agent of any of those persons,
knowingly engage in the specified prohibited behavior.
Existing provisions of the Alcoholic Beverage Control Act
generally prohibit manufacturers, winegrowers, bottlers, importers,
wholesalers, and others from performing certain activities, with
specified exceptions. Existing law, until January 1, 2014, permits a
manufacturer, winegrower, rectifier, or distiller, or any authorized
agent of that person to provide, free of charge, entertainment, food,
and distilled spirits, wine, or nonalcoholic beverages to consumers
over 21 years of age at an invitation-only event in connection with
the sale or distribution of wine or distilled spirits, as specified.
This bill would additionally permit a distilled spirits
manufacturing agent, holder of a distilled spirits importer's general
license, holder of a distilled spirits rectifier's general license,
or a holder of an out-of-state distilled spirits shipper's
certificate, or any authorized agent of that licenseholder, to
provide entertainment, food, and distilled spirits, wine, and
nonalcoholic beverages at an event described above.
The Alcoholic Beverage Control Act provides that a violation of
specified provisions of the act is punishable as a misdemeanor. This
bill, by expanding the definition of an existing crime, 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: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 25503 of the Business and
Professions Code is amended to read:
25503. No manufacturer, winegrower, manufacturer's agent,
California winegrower's agent, rectifier, distiller, bottler,
importer, or wholesaler, or any officer, director, or agent of any
such person, shall knowingly do any of the following:
(a) Directly or indirectly, deliver the possession of any
alcoholic beverages to any on- or off-sale licensee under an
agreement of consignment whereby title to the alcoholic beverages is
retained by the seller or whereby the licensee receiving the
alcoholic beverages has the right at any time prior to sale to
relinquish possession to or return them to the original seller.
(b) Directly or indirectly, give any licensee or any person any
alcoholic beverages as free goods as a part of any sale or
transaction involving alcoholic beverages.
(c) Give secret rebates or make any secret concessions to any
licensee or the employees or agents of any licensee, and no licensee
shall request or knowingly accept from another licensee secret
rebates or secret concessions.
(d) Give or furnish, directly or indirectly, to any employee of
any holder of a retail on-sale or off-sale license only anything of
value for the purpose or with the intent to solicit, acquire, or
obtain the help or assistance of the employee to encourage or promote
either the purchase or the sale of the alcoholic beverage sold or
manufactured by the licensee giving or furnishing anything of value,
and any employee who accepts or acquires anything of value contrary
to the provisions of this subdivision is guilty of a misdemeanor.
(e) Willfully or knowingly discriminate, in the same trading area,
either directly or indirectly, in the price of any brand of
distilled spirits sold to different retail licensees purchasing under
like terms and conditions.
(f) Pay, credit, or compensate a retailer or retailers for
advertising, display, or distribution service in connection with the
advertising and sale of distilled spirits.
(g) Furnish, give, lend, or rent, directly or indirectly, to any
person any decorations, paintings, or signs, other than signs
advertising their own products as permitted by Section 25611.1.
(h) Pay money or give or furnish anything of value for the
privilege of placing or painting a sign or advertisement, or window
display, on or in any premises selling alcoholic beverages at retail.
SEC. 2. SECTION 1. Section 25600.5
of the Business and Professions Code is amended to read:
25600.5. Notwithstanding any other provision of this division, a
manufacturer of distilled spirits, distilled spirits manufacturer's
agent, holder of a distilled spirits importer's general license,
holder of a distilled spirits rectifier's general license, holder of
an out-of-state distilled spirits shipper's certificate, winegrower,
rectifier, or distiller, or its authorized unlicensed agent, may
provide, free of charge, entertainment, food, and distilled spirits,
wine, or nonalcoholic beverages to consumers at an invitation-only
event in connection with the sale or distribution of wine or
distilled spirits, subject to the following conditions:
(a) No licensee, other than those specified in this section, may
conduct or participate in any portion of an event authorized by this
section. A licensee authorized to conduct an event pursuant to this
section shall not be precluded from doing so on the basis of holding
any other type of alcoholic beverage license.
(b) An event authorized by this section shall be conducted on
premises for which a caterer's permit authorization has been issued,
except that any event held on the premises of a licensed winegrower
shall not be authorized to provide any distilled spirits other than
brandy.
(c) No event authorized by this section shall be conducted on
premises for which a permanent retail license has been issued.
(d) Except for fair market value payments authorized pursuant to
this section, a licensed caterer shall not receive any other item of
value or benefit in connection with events authorized by this
section.
(e) The person authorized by this section to provide, free of
charge, entertainment, food, and beverages shall be present during
the event.
(f) The person authorized by this section to provide, free of
charge, entertainment, food, and beverages shall have sole
responsibility for providing payment for the entertainment, food,
beverages, and rental fees at the event. Payments for entertainment,
food, beverages, and rental fees shall not exceed fair market value.
No other licensed person shall be authorized, under this section, to
provide any portion of these payments.
(g) Requests for attendance at the event shall be by invitation
sent to consumers over 21 years of age at a specific address via mail
or e-mail, by telephone, or presented in person. Invitations or
other advertisements of the event shall not be disseminated by any
other means. Invitations shall not be sent by the authorized person
or their authorized unlicensed agent inviting all of the employees of
a retail licensee or a chain of retail licensees under common
ownership to an authorized event.
(h) Attendance at the event shall be limited to consumers who
receive and accept an invitation to the event. Invited consumers may
each invite one guest. All attendees shall be over 21 years of age.
The total number of consumers and their guests allowed at any event
authorized by this section shall not exceed 400 people. Admittance to
the event shall be controlled by a list containing the names of
consumers who accepted the invitation and their guests. The persons
identified in this section shall be responsible for compliance.
(i) No premium, gift, free goods, or other thing of value may be
given away in connection with the event, except as authorized by this
division.
(j) The duration of any event authorized by this section shall not
exceed four hours.
(k) (1) A person authorized to conduct events pursuant to this
section shall not conduct more than 12 events in a calendar year
where the consumers and guests in attendance exceed 100 people, and
not more than 24 events in a calendar year where the consumers and
guests in attendance is 100 people or fewer.
(2) The limitation on events authorized by this section shall be
by person, whether that person holds a single license or multiple
licenses. If a person holds multiple licenses, the limitation shall
be applied to the person holding the license, not by type of license.
(l) When applying for a caterer's permit authorization, the person
authorized to conduct an event pursuant to this section shall
include, in addition to any information required by the department,
all of the following information:
(1) The name of the company authorized to conduct the event.
(2) The number of people planned to be in attendance.
(3) The start and end times for the event.
(4) The location of the event.
(m) All alcoholic beverages provided pursuant to this section
shall be purchased from the holder of the caterer's permit.
(n) All alcoholic beverages served at an event authorized by this
section shall be served in accordance with Sections 25631 and 25632.
(o) No person authorized to conduct an event pursuant to this
section shall hold such an event at the same location more than eight
times in a calendar year.
(p) The person authorized to conduct an event under this section
may provide attendees at the event with a free ride home. The free
rides shall only constitute free ground transportation to attendees'
homes or to hotels or motels where attendees are staying.
(q) In addition to the prescribed fee imposed upon a licensed
caterer to conduct an event authorized by this section, the
department may also impose a fee upon a licensee authorized by this
section to provide, free of charge, entertainment, food, and
beverages at an authorized event. The fee shall be representative of
the cost of administering and enforcing the provisions of this
section, but shall not exceed two hundred dollars ($200) per event.
(r) The Legislature finds and declares both of the following:
(1) 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.
(2) Any exception established by the Legislature to the general
prohibition against tied interests must be limited to the express
terms of the exception so as to not undermine the general
prohibitions.
(s) This section shall remain in effect until January 1, 2014, and
as of that date is repealed, unless a later enacted statute that is
enacted before January 1, 2014, deletes or extends that date.
SEC. 3. 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.