BILL NUMBER: SB 1480	INTRODUCED
	BILL TEXT


INTRODUCED BY   Committee on Governmental Organization (Senators
Wright (Chair), Calderon, Denham, Florez, Harman, Negrete McLeod,
Oropeza, Padilla, Price, Wyland, and Yee)

                        MARCH 8, 2010

   An act to amend Section 25503.15 of the Business and Professions
Code, relating to alcoholic beverages.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1480, as introduced, Committee on Governmental Organization.
Alcoholic beverages: tied-house restrictions.
   Existing provisions of the Alcoholic Beverage Control Act, known
as "tied-house" restrictions, generally prohibit a winegrower from
having an ownership interest in an on-sale alcoholic beverage
license, with limited exceptions. Among other exemptions, existing
law exempts from the tied-house restrictions any licensed winegrower
who meets specified conditions, including that the winegrower, or his
or her officer, director, or agent, enters into an undertaking,
approved by the Department of Alcoholic Beverage Control, that makes
specified statements regarding the sale or furnishing of wine by the
winegrower, or any officer, director, or agent of the winegrower.
   This bill would retain the requirement that the winegrower, or
officer, director, or agent meet the specified conditions regarding
the sale or furnishing of wine under the circumstances described
above, but would eliminate the requirement that statements describing
these conditions be made pursuant to an undertaking approved by the
department.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section 25503.15 of the Business and Professions Code
is amended to read:
   25503.15.  (a) Notwithstanding any other provision of this
division, a winegrower who manufactures, produces, bottles,
processes, imports, or sells wine only, or any officer, director, or
agent of that person, may hold the ownership of any interest in any
on-sale license,  or the business conducted under that
license, provided that the person or the officer, director, or agent
of that person, shall have entered into an undertaking approved by
the department stating both of the following   if both
of the following conditions exist  :
   (1)  That neither   Neither   
that person  ,  nor any officer, director, or agent of that
person  shall sell or furnish   , sells or
furnishes  to the holder of the license any wine, or 
permit   permits  the sale pursuant to that license
of any wine, manufactured, produced, wholesaled, bottled, processed,
imported, or sold by that person or that person's principal for as
long as that ownership continues.
   (2)  That neither   Neither   
that person  ,  nor any officer, director, or agent of that
person  shall enter   , enters  into any
collusive scheme  ,  whereby he or she unfairly sells or
promotes, in his or her on-sale businesses, the wine of another
winegrower who manufactures, produces, bottles, processes, imports,
or sells wine only, in return for his or her wine being unfairly sold
or promoted in the on-sale businesses of that winegrower.
   (b) Notwithstanding any other provision of this division, any
licensed winegrower or any winegrower who has a wholesale license, or
any officer, director, or agent of that person, may hold, directly
or indirectly, the ownership of any interest in an on-sale license,
provided that each of the following conditions is met:
   (1) The on-sale licensed premises are licensed as a bona fide
public eating place as defined in Section 23038, or as a bona fide
bed and breakfast inn as defined in Section 24045.11.
   (2) The on-sale licensed premises purchases all alcoholic
beverages sold and served at the on-sale licensed premises only from
California wholesale licensees, other than the licensed winegrower
who has a wholesale license and an interest in an on-sale license,
unless one of the following conditions is met:
   (A) The wine purchased is produced or bottled by, or produced and
packaged for, the same licensed winegrower that holds an interest in
the on-sale license.
   (B) The wine is produced or bottled by, and is purchased from, a
licensed winegrower who sells no more than 125,000 gallons of wine
per year for distribution in this state under all brands or trade
names owned by that winegrower.
   (C) The wine is purchased by an on-sale licensee in whose on-sale
license a licensed winegrower holds an interest, provided that the
winegrower sells no more than 125,000 gallons of wine per year for
distribution in this state under all brands or trade names owned by
that winegrower.
   (3) The licensed winegrower and any officer, director, or agent of
that person, whether individually or in the aggregate, do not sell
and serve the wine products produced or bottled under any brand or
trade name owned by that winegrower through more than two on-sale
licensed premises in which any of them holds an ownership interest.
   (4) The number of wine items by brand offered for sale by the
on-sale licensed premises that are produced, bottled, processed,
imported, or sold by the licensed winegrower or by any person holding
any interest in the winegrower does not exceed 15 percent of the
total wine items by brand listed and offered for sale in the licensed
bona fide public eating place selling and serving that wine. This
paragraph does not apply to a bona fide bed and breakfast inn.
   (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.