BILL NUMBER: AB 623	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 15, 2011
	AMENDED IN ASSEMBLY  APRIL 6, 2011
	AMENDED IN ASSEMBLY  MARCH 24, 2011

INTRODUCED BY   Assembly Member Williams
   (Coauthor: Assembly Member Chesbro)

                        FEBRUARY 16, 2011

   An act to amend Sections 23661.7, 24045.18, 25503.56, and 25503.9
of, and to add Section 23393.5 to, the Business and Professions Code,
relating to alcoholic beverages.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 623, as amended, Williams. Alcoholic beverage licensees:
limited off-sale retail wine license.
   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 provides for
various annual fees for the issuance of alcoholic beverage licenses
depending upon the type of license issued. The Alcoholic Beverage
Control Act provides that a violation of its provisions is a
misdemeanor, unless otherwise specified.
   This bill would authorize the department to issue a limited
off-sale retail wine license that would allow the licenseholder to
sell wine if certain conditions are met and would grant specified
privileges to the licenseholder, as provided. The bill would impose
an original fee and an annual renewal fee for the license, which
would be deposited in the Alcohol Beverage Control Fund. Because the
violation of a provision of the license is punishable as a
misdemeanor, the bill expands the definition of an existing crime,
thereby creating 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 23393.5 is added to the Business and
Professions Code, to read:
   23393.5.  (a) The department may issue a limited off-sale retail
wine license which authorizes the sale of wine by the licensee if all
of the following conditions are met:
   (1) Sales are restricted to those solicited and accepted via
direct mail, telephone, or the Internet.
   (2) Sales are not conducted from a retail premises open to the
public.
   (3) The licensee takes possession of and title to all wine sold by
the licensee.
   (4) All wine sold by the licensee are delivered to the purchaser
from the licensee's licensed premises or from a licensed public
warehouse.
   (b) The sale of wine shall only be to consumers and not for resale
 ,  in packages or quantities of 52 gallons or less per
sale, for consumption off the premise where sold.
   (c) The licensee shall comply with Section 23985, but is exempted
from Sections 23985.5 and 23986.
   (d) The department may impose reasonable conditions upon the
licensee as may be needed in the interest of public health, safety,
and welfare.
   (e) The application for the license shall be accompanied by an
original fee in an amount equivalent to that of an original off-sale
beer and wine license pursuant to Section 23954.5. The annual fee for
the license shall be an amount equivalent to that of a retail
package off-sale beer and wine license pursuant to Section 23320. All
moneys collected from the fees shall be deposited in the Alcoholic
Beverage Control Fund, pursuant to Section 25761.
  SEC. 2.  Section 23661.7 of the Business and Professions Code is
amended to read:
   23661.7.  (a) A person who has purchased wine from a licensed
winegrower, the holder of a beer and wine wholesaler's license and an
off-sale retail license that only sells wine, or the holder of a
limited off-sale retail wine license, has taken delivery of that wine
within this state for delivery or use without the state, and has
removed that wine from the state, may return all or any portion of
that wine to the premises of the licensee from whom the wine was
purchased. To make a return the purchaser need not obtain any license
in this state, and may return the wine in a vehicle owned or
controlled by the purchaser.
   (b) The provisions of Section 32175 of the Revenue and Taxation
Code shall apply to any wine so returned.
  SEC. 3.  Section 24045.18 of the Business and Professions Code is
amended to read:
   24045.18.  Notwithstanding any other provision of this division, a
beer and wine wholesaler that also holds an off-sale beer and wine
retail license and only sells wine or the holder of a limited
off-sale retail wine license may assist a nonprofit organization
holding a temporary wine license in conducting a winetasting. The
privilege granted under this section for a beer and wine wholesaler
that also holds an off-sale beer and wine retail license and only
sells wine or the holder of a limited off-sale retail wine license
shall apply only to wine produced for the donating licensee that is
labeled with a brand owned exclusively by the donating licensee and
shall include in the tasting only wine donated by the licensee to the
event.
  SEC. 4.  Section 25503.56 of the Business and Professions Code is
amended to read:
   25503.56.  (a) An authorized licensee, or a designated
representative of an authorized licensee acting as an agent of the
authorized licensee, may conduct, on the area specified by paragraph
(1) of subdivision (c) of Section 23396.6, an instructional tasting
event for consumers on the subject of wine, beer, or distilled
spirits, including, but not limited to, the history, nature, values,
and characteristics of wine, beer, or distilled spirits, and the
methods of presenting and serving wine, beer, or distilled spirits.
   (1) (A) Except as provided in subparagraph (B), the instructional
tasting event may include the serving of alcoholic beverages to an
attendee of legal drinking age. An instructional tasting event on the
subject of wine or distilled spirits shall be limited to not more
than three tastings per person per day. A single tasting of distilled
spirits shall not exceed one-fourth of one ounce and a single
tasting of wine shall not exceed one ounce. An instructional tasting
event on the subject of beer shall be limited to not more than the
tasting of eight ounces of beer per person per day. The wine, beer,
or distilled spirits tasted shall be limited to the products that are
authorized to be sold by the authorized licensee and the
licenseholder under its off-sale license.
   (B) A beer and wine wholesaler may conduct an instructional
tasting event but shall not serve tastes of beer unless the beer and
wine wholesaler also holds a beer manufacturer's license, an
out-of-state beer manufacturer's certificate, or more than six
distilled spirits wholesaler's licenses.
   (C) No charge of any sort shall be made for the tastings. Except
for the purposes of Section 23985, the serving of tastings shall not
be deemed a sale of products pursuant to this division.
   (D) A person under 21 years of age shall not serve wine, beer, or
distilled spirits at the instructional tasting event.
   (E) All tastes shall be served by an employee of the authorized
licensee, the designated representative of the authorized licensee,
or by an employee of the designated representative of the authorized
licensee.
   (F) An authorized licensee, or a designated representative of an
authorized licensee, shall either supply the wine or distilled
spirits to be tasted during the instructional tasting event or
purchase the wine or distilled spirits from the licenseholder at the
original invoiced cost. An authorized licensee, or a designated
representative of an authorized licensee, shall purchase beer to be
tasted during the instructional tasting event from the licenseholder
at the original invoiced cost.
   (G) Any unused wine, beer, or distilled spirits remaining from the
tasting shall be removed from the off-sale licensed premises by the
authorized licensee or its designated representative.
   (2) If the instructional tasting event is conducted by a
designated representative of an authorized licensee, the designated
representative shall not be owned, controlled, or employed directly
or indirectly by the licenseholder on whose premises the
instructional tasting event is held.
   (3) An instructional tasting event shall be limited to a single
type of alcoholic beverage. For purposes of this paragraph, "type of
alcoholic beverage" means distilled spirits, wine, or beer.
   (b) For purposes of this section:
   (1) "Authorized licensee" means a winegrower, California
winegrower's agent, beer and wine importer general, beer and wine
wholesaler, wine rectifier, distilled spirits manufacturer, distilled
spirits manufacturer's agent, distilled spirits importer general,
distilled spirits rectifier, distilled spirits general rectifier,
rectifier, out-of-state distilled spirits shipper's certificate
holder, distilled spirits wholesaler, brandy manufacturer, brandy
importer, California brandy wholesaler, beer manufacturer, or an
out-of-state beer manufacturer certificate holder. "Authorized
licensee" shall not include an entity that solely holds a combination
of a beer and wine wholesale license and an off-sale beer and wine
retail license or holds those licenses solely in combination with any
license not listed in this paragraph, or holds a limited off-sale
retail wine license.
   (2) "Licenseholder" means an off-sale retail licensee issued an
instructional tasting license pursuant to Section 23396.6.
   (3) "Location" means the total contiguous area encompassed by the
off-sale and on-sale licenses.
   (c) Notwithstanding subparagraph (E) of paragraph (1) of
subdivision (a), a licenseholder may conduct an instructional tasting
event that includes the serving of tastings only when an authorized
licensee or its designated representative are unable to conduct an
instructional tasting event previously advertised pursuant to this
section and scheduled by the authorized licensee or its designated
representative, provided the licenseholder supplies the wine, beer,
or distilled spirits used in the instructional tasting event and
provides or pays for a person to serve the wine, beer, or distilled
spirits. Instructional tasting events conducted by a licenseholder
pursuant to this subdivision are subject to the provisions of this
section and Section 23396.6.
   (d) No more than one authorized licensee, or its designated
representative, may conduct an instructional tasting event that
includes the serving of tastes of wine, beer, or distilled spirits at
any one individual licensed premises of a licenseholder per day.
   (e) A licenseholder that also holds an on-sale beer and wine
license, an on-sale beer and wine eating place license, or an on-sale
general license shall not allow an authorized licensee, or its
designated representative, to conduct an instructional tasting event
on the same day and at the same location as any instructional tasting
event held pursuant to subdivision (b) of Section 23386, Section
25503.4, subdivision (c) of Section 25503.5, or Section 25503.55.
   (f) A licenseholder shall not condition the allowance of an
instructional tasting event upon the use of a particular designated
representative of an authorized licensee.
   (g) (1) In addition to any point of sale advertising or other
advertising items allowed under this division or under rules of the
department, an authorized licensee or its designated representative,
in his or her absolute discretion and with permission of the
licenseholder upon whose premises the instructional tasting event
will be held, may list in an advertisement to the general public the
name and address of the licenseholder, the names of the alcoholic
beverages being featured at the instructional tasting event, and the
time, date, and location of, and other information about, the
instructional tasting event, provided that both of the following
apply:
   (A) The advertisement does not contain the retail price of the
alcoholic beverages.
   (B) The listing of the licenseholder's name and address is the
only reference to the licenseholder in the advertisement.
   (2) Pictures or illustrations of the licenseholder's licensed
premises and laudatory references to the licenseholder in these
advertisements are not authorized. Nothing in this section shall
authorize an authorized licensee or its designated representative to
share in the costs, if any, of the licenseholder.
   (h) A licenseholder may advertise an instructional tasting event
to the general public. The costs of this advertising shall be borne
solely by the licenseholder. Advertising permitted by this
subdivision includes flyers, newspaper ads, Internet communications,
and interior signage.
   (i) Except as otherwise provided in this division or rules of the
department, no premium, gift, free goods, or other thing of value
shall be given away by an authorized licensee or its designated
representative in connection with an instructional tasting event that
includes tastings of an alcoholic beverage.
   (j) The licenseholder or the authorized licensee or its designated
representative are authorized to perform set up and break down of
the instructional tasting event area. The authorized licensee or its
designated representative may provide, free of charge to the
licenseholder, the equipment, materials, and utensils as may be
required for use in connection with the instructional tasting event.
   (k) (1) A licenseholder shall not require, or enter into a
collusive scheme with an authorized licensee or its designated
representative to conduct one or more instructional tasting events as
a condition of the licenseholder carrying or continuing to carry a
brand or brands of the authorized licensee or as a condition for
display or other merchandising plan which is based on an agreement to
provide shelf space. An authorized licensee or its designated
representative shall not require any preferential treatment or
benefit from, or enter into a collusive scheme with, a licenseholder
as a condition of conducting one or more instructional tasting
events, require a licenseholder to carry or continue to carry a brand
or brands of the authorized licensee as a condition of conducting
one or more instructional tasting events, or condition display or
other merchandising plans that are based on agreements for the
provision of shelf space on the conducting of one or more
instructional tasting events. Any agreement, whether written or oral,
entered into by and between a licenseholder and an authorized
licensee or its designated representative that precludes the
conducting of instructional tasting events on the premises of the
licenseholder by any other authorized licensee is prohibited. A
licenseholder or authorized licensee, or its designated
representative, shall not use an instructional tasting event to
circumvent any other requirements of this division.
   (2) In addition to any other remedies available under this
division, upon a finding by the department of a failure to comply
with this subdivision, the department shall suspend the instructional
tasting license of the licenseholder and the privilege of the
authorized licensee to conduct instructional events for not less than
six months but for no more than one year.
   (l) 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 exception
established by this section to the general prohibition against tied
interests must be limited to its express terms so as not to undermine
the general prohibition, and intends that this section be construed
accordingly.
  SEC. 5.  Section 25503.9 of the Business and Professions Code is
amended to read:
   25503.9.  (a) Nothing in this division prohibits a winegrower, a
beer and wine wholesaler that also holds an off-sale beer and wine
retail license and only sells wine, or the holder of a limited
off-sale retail wine license from giving or selling wine, a beer
manufacturer from giving or selling beer, a distilled spirits
manufacturer, rectifier, or a distilled spirits manufacturer's agent
from giving or selling distilled spirits, or an importer general
licensee from giving or selling beer, wine, or distilled spirits at
prices other than those contained in schedules filed with the
department, to any of the following:
   (1) A nonprofit charitable corporation or association exempt from
payment of income taxes under the provisions of the Internal Revenue
Code of the United States and Chapter 4 (commencing with Section
23701) of Part 11 of Division 2 of the Revenue and Taxation Code.
   (2) A nonprofit incorporated trade association that is exempt from
payment of income taxes under the provisions of the Internal Revenue
Code of the United States and Chapter 4 (commencing with Section
23701) of Part 11 of Division 2 of the Revenue and Taxation Code, and
the members of which trade association are licensed under this
division. However, the wine, beer, and distilled spirits shall be
used solely for a convention or meeting of the nonprofit incorporated
trade association.
   (3) A nonprofit corporation or association that is exempt from
payment of income taxes under the provisions of the Internal Revenue
Code of the United States and is defined as a tax exempt organization
under Section 23701a, 23701b, 23701d, 23701e, 23701f, 23701g,
23701i, 23701k, 23701  l  , 23701r, or 23701w of the Revenue
and Taxation Code. Wine, beer, and distilled spirits given or sold
by a winegrower, beer manufacturer, distilled spirits manufacturer,
distilled spirits manufacturer's agent, or importer general licensee
pursuant to this subdivision may be furnished only in connection with
public service or fundraising activities including picnics, parades,
fairs, amateur sporting events, agricultural exhibitions, or similar
events.
   (b) Nothing in this division prohibits a winegrower, a beer and
wine wholesaler that also holds an off-sale beer and wine retail
license and only sells wine, or the holder of a limited off-sale
retail wine license from giving or selling wine, a beer manufacturer
from giving or selling beer, a distilled spirits manufacturer,
rectifier, or a distilled spirits manufacturer's agent from giving or
selling distilled spirits, or a beer and wine wholesaler that also
holds an importer's license from giving or selling beer, wine, or
distilled spirits at prices other than those contained in schedules
filed with the department, to any of the following:
   (1) A nonprofit charitable corporation or association exempt from
payment of income taxes under the provisions of the Internal Revenue
Code of the United States and Chapter 4 (commencing with Section
23701) of Part 11 of Division 2 of the Revenue and Taxation Code.
   (2) A nonprofit incorporated trade association that is exempt from
payment of income taxes under the provisions of the Internal Revenue
Code of the United States and Chapter 4 (commencing with Section
23701) of Part 11 of Division 2 of the Revenue and Taxation Code, and
the members of which trade association are licensed under this
division. However, the wine, beer, and distilled spirits shall be
used solely for a convention or meeting of the nonprofit incorporated
trade association.
   (3) A nonprofit corporation or association that is exempt from
payment of income taxes under the provisions of the Internal Revenue
Code of the United States and is defined as a tax exempt organization
under Section 23701a, 23701d, 23701e, 23701f, or 23701r of the
Revenue and Taxation Code. Wine, beer, and distilled spirits given or
sold by a winegrower, beer manufacturer, distilled spirits
manufacturer, distilled spirits manufacturer's agent, or licensed
importer pursuant to this subdivision may be furnished only in
connection with public service or fundraising activities including
picnics, parades, fairs, amateur sporting events, agricultural
exhibitions, or similar events.
  SEC. 6.  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.