BILL NUMBER: SB 778	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 23, 2012
	PASSED THE ASSEMBLY  AUGUST 22, 2012
	AMENDED IN ASSEMBLY  AUGUST 20, 2012
	AMENDED IN ASSEMBLY  JUNE 14, 2012
	AMENDED IN ASSEMBLY  MAY 21, 2012
	AMENDED IN SENATE  JANUARY 5, 2012
	AMENDED IN SENATE  JANUARY 4, 2012

INTRODUCED BY   Senator Padilla

                        FEBRUARY 18, 2011

   An act to add Sections 25600.1 and 25600.2 to the Business and
Professions Code, relating to alcoholic beverages.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 778, Padilla. Alcoholic beverages licensees: contests and
sweepstakes.
   The Alcoholic Beverage Control Act prohibits any licensee from
giving any premium, gift, or free goods in connection with the sale
or distribution of any alcoholic beverage, except as provided.
   This bill would permit an authorized licensee, as defined, to
conduct a consumer contest, as defined, and conduct or sponsor
consumer sweepstakes, as defined, offering the chance to win prizes,
if specified conditions are met.
   The Alcoholic Beverage Control Act provides that a violation of
any of its provisions for which another penalty or punishment is not
specifically provided is a misdemeanor. This bill would expand
existing crimes by imposing additional duties on a licensee under the
act, thus, the bill 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.


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

  SECTION 1.  Section 25600.1 is added to the Business and
Professions Code, to read:
   25600.1.  (a) An authorized licensee may conduct consumer
contests, subject to the following conditions:
   (1) (A) Entry or extra chances in a contest shall not be made
available via the purchase of an alcoholic beverage.
   (B) Entry into or participation in a contest shall be limited to
persons 21 years of age or older.
   (C) No contest shall involve consumption of alcoholic beverages by
a participant.
   (D) A contest may not be conducted for the benefit of any
permanent retail licensee.
   (2) (A) Closures, caps, cap liners, corks, labels, cartons, cases,
packaging, or other similar material shall not be used as an entry
to a contest or as a means of determining the amount or size of the
prize or the winner in a contest, except as provided in subparagraphs
(D) and (F).
   (B) The authorized licensee shall provide an alternative means of
entry that does not require a visit to a licensed premises.
   (C) Except as provided in subparagraph (D), removable entry forms
shall not be used on alcoholic beverage labels, containers,
packaging, cases, or cartons.
   (D) Removable entry forms that are neck hangers shall be used only
on bottles of wine or distilled spirits, and shall not require
purchase of the product. Removable neck hangers shall be used only if
other entry forms are available at the point of sale or if an
alternative means of entry is also available.
   (E) Entry forms may be provided through electronic or other media,
including point of sale.
   (F) Codes that may be scanned or electronically entered by a
consumer where the authorized licensee has permanently affixed the
codes as part of the original alcoholic beverage label, container,
packaging, case, or carton, and where the codes are not removable and
not required to be removed are permitted as a form of entry.
   (G) All permitted means of entry, including the use of electronic
or scanner codes, shall clearly indicate that no purchase is required
to enter.
   (3) A contest shall not provide for the instant or immediate
awarding of a prize or prizes. Instant or immediate notification to
the consumer that he or she is a winner is permissible.
   (4) Except for providing a means of entry, a contest authorized by
this section shall not be conducted at the premises of a retail
licensee or the premises of a winegrower or beer manufacturer
operating under a duplicate license for a branch office.
   (5) Alcoholic beverages or anything redeemable for alcoholic
beverages shall not be awarded as a contest prize. This paragraph
shall not prohibit a contest in which the prize is cash or cash
equivalent or the awarding of cash or cash equivalent.
   (6) A retail licensee shall not serve as the agent of an
authorized licensee by collecting or forwarding entries or awarding
prizes to, or redeeming prizes for, a contest winner.
   (7) A licensee that is not an authorized licensee shall not
directly or indirectly underwrite, share in, or contribute to, the
costs of a contest authorized by this section or serve as the agent
of an authorized licensee to collect or forward entries or to furnish
any prize to a contest winner.
   (8) (A) Advertising of a contest shall comply with the signage and
advertising restrictions contained in this chapter, Chapter 15
(commencing with Section 25500), and any regulations issued by the
department.
   (B) Advertising or promotion of a contest shall not identify or
refer to any retail licensee.
   (C) A retail licensee shall only advertise or promote a contest
authorized by this section in the manner specified in subparagraph
(A).
   (D) Advertising or promotion of a contest shall only be conducted
on the premises of a retail licensee when such advertisement or
promotion involves a minimum of three unaffiliated retail licensees.
For purposes of this subparagraph, "unaffiliated retail licensees"
shall not include any retail licensee owned or controlled in whole or
in part by an authorized licensee or any officer, director, or agent
of that licensee.
   (E) Placement of signs or other advertising of a contest in a
licensed retail premises shall not be conditioned upon the following:

   (i) The placement of any product within the licensed premises or
the restriction, in any way, of the purchase of a product by a
licensee, the removal of a product from the sales area of a licensed
premises, or the resetting or repositioning of a product within the
licensed premises.
   (ii) The purchase or sale of any product produced, imported,
distributed, represented, or promoted by an authorized licensee or
its agent.
   (F) An agreement, whether written or oral, entered into, by, and
between a retail licensee and an authorized licensee or its agent
that precludes the advertisement or promotion of a contest on the
premises of the retail licensee by another authorized licensee is
prohibited.
   (9) Contest prizes shall not be awarded to an authorized licensee,
retail licensee, or wholesale licensee or agent, officer, employee,
or family member of an authorized licensee, retail licensee, or
wholesale licensee. For the purposes of this paragraph, "family
member" means a spouse, parent, sibling, child, son-in-law,
daughter-in-law, and lineal descendants, including those by adoption.
An authorized licensee shall maintain all records pertaining to a
contest for three years following the completion of a contest. This
section shall not apply to contests conducted by an authorized
licensee as part of a sales incentive program for wholesale licensees
or their employees or an authorized licensee's employees.
   (b) Nothing in this section shall preclude licensees from
sponsoring contests as permitted by regulations of the department.
   (c) For purposes of this section:
   (1) (A) "Authorized licensee" means a winegrower, beer and wine
importer general, beer manufacturer, out-of-state beer manufacturer
certificate holder, distilled spirits manufacturer, distilled spirits
manufacturer's agent, distilled spirits importer general, distilled
spirits general rectifier, rectifier, out-of-state distilled spirits
shipper's certificate holder, brandy manufacturer, and brandy
importer. An authorized licensee may conduct a consumer contest
pursuant to this section regardless of whether the licensee holds any
additional license not included in this paragraph.
   (B) An "authorized licensee" shall not include a beer and wine
wholesaler, a beer and wine importer general, or distilled spirits
importer general that only holds a wholesaler's or retailer's license
as an additional license.
   (2) "Contest" means a game, contest, puzzle, or similar activity
that holds out or offers to participants the opportunity to receive
or compete for gifts, prizes, gratuities, or other things of value as
determined by skill, knowledge, or ability rather than upon random
selection. Skill, knowledge, or ability does not include the
consumption or use of alcoholic beverages.
   (d) Nothing in this section authorizes conducting any contest
where consumers are entitled to an allotment or accumulation of
points based on purchases made over a period of time that can be
redeemed for prizes, things of value, or additional contest entries.
   (e) A prize awarded for a contest conducted pursuant to this
section shall not be subject to the monetary limitation imposed by
Section 25600 or a regulation of the department.
   (f) An authorized licensee that violates this section, in addition
to any other penalty imposed by this division, may be prohibited by
the department from offering a contest to California residents for a
period of 12 months.
  SEC. 2.  Section 25600.2 is added to the Business and Professions
Code, to read:
   25600.2.  (a) An authorized licensee may conduct or sponsor
consumer sweepstakes, subject to the following conditions:
   (1) (A) No entry fee may be charged to participate in a
sweepstakes authorized by this subdivision. Entry or extra chances in
a sweepstakes shall not be made available via the purchase of an
alcoholic beverage.
   (B) Entry into or participation in a sweepstakes shall be limited
to persons 21 years of age or older.
   (C) No sweepstakes shall involve consumption of alcoholic
beverages by a participant.
   (D) Subject to subparagraph (B), any sweepstakes offered in
California shall be open to all residents of California.
   (E) A sweepstakes may not be conducted for the benefit of any
permanent retail license.
   (2) (A) Closures, caps, cap liners, corks, labels, cartons, cases,
packaging, or other similar material shall not be used as an entry
to a sweepstakes or as a means of determining the amount or size of
the prize or the winner in a sweepstakes, except as provided in
subparagraphs (D) and (F).
   (B) The authorized licensee shall provide an alternative means of
entry that does not require a visit to a licensed premises.
   (C) Except as provided in subparagraph (D), removable entry forms
shall not be used on alcoholic beverage labels, containers,
packaging, cases, or cartons.
   (D) Removable entry forms that are neck hangers shall be used only
on bottles of wine or distilled spirits, and shall not require
purchase of the product. Removable neck hangers shall be used only if
other entry forms are available at the point of sale or if an
alternative means of entry is also available.
   (E) Entry forms may be provided through electronic or other media,
including point of sale.
   (F) Codes that may be scanned or electronically entered by a
consumer where the authorized licensee has permanently affixed the
codes as part of the original alcoholic beverage label, container,
packaging, case, or carton, and where the codes are not removable and
not required to be removed are permitted as a form of entry.
   (G) All permitted means of entry, including the use of electronic
or scanner codes, shall clearly indicate that no purchase is required
to enter.
   (H) All sweepstakes entries shall provide the entrant with an
equal odds of winning.
   (3) A sweepstakes shall not provide for the instant or immediate
awarding of a prize or prizes. Instant or immediate notification to
the consumer that he or she is a winner is permissible.
   (4) Except for providing a means of entry, a sweepstakes
authorized by this section shall not be conducted at the premises of
a retail licensee or the premises of a winegrower or beer
manufacturer operating under a duplicate license for a branch office.

   (5) Alcoholic beverages or anything redeemable for alcoholic
beverages shall not be awarded as a sweepstakes prize. This paragraph
shall not prohibit a sweepstakes in which the prize is cash or cash
equivalent or the awarding of cash or cash equivalent .
   (6) A retail licensee shall not serve as the agent of an
authorized licensee by collecting or forwarding entries or awarding
prizes to, or redeeming prizes for, a sweepstakes winner. The
matching of entries with numbers or pictures on the point-of-sale
materials at retail licensed premises is permitted only if entrants
are also offered the opportunity to use an alternative means to
determine prize-winning status. An authorized licensee may furnish
and maintain a deposit box on a retail licensed premises for the
collection and forwarding of sweepstakes entry forms.
   (7) A licensee that is not an authorized licensee shall not
directly or indirectly underwrite, share in, or contribute to, the
costs of a sweepstakes authorized by this section or serve as the
agent of an authorized licensee to collect or forward entries or to
furnish any prize to a sweepstakes winner.
   (8) (A) Advertising of a sweepstakes shall comply with the signage
and advertising restrictions contained in this chapter, Chapter 15
(commencing with Section 25500), and any regulations issued by the
department.
   (B) Advertising or promotion of a sweepstakes shall not identify
or refer to any retail licensee.
   (C) A retail licensee shall only advertise or promote a
sweepstakes authorized by this section in the manner specified in
subparagraph (A).
   (D) Advertising or promotion of a sweepstakes shall only be
conducted on the premises of a retail licensee when such
advertisement or promotion involves a minimum of three unaffiliated
retail licensees. For purposes of this subparagraph, "unaffiliated
retail licensees" shall not include any retail licensee owned or
controlled in whole or in part by an authorized licensee or any
officer, director, or agent of that licensee.
   (E) Placement of signs or other advertising of a sweepstakes in a
licensed retail premises shall not be conditioned upon the following:

   (i) The placement of any product within the licensed premises or
the restriction, in any way, of the purchase of a product by a
licensee, the removal of a product from the sales area of a licensed
premises, or the resetting or repositioning of a product within the
licensed premises.
   (ii) The purchase or sale of any product produced, imported,
distributed, represented, or promoted by an authorized licensee or
its agent.
   (F) An agreement, whether written or oral, entered into, by, and
between a retail licensee and an authorized licensee that precludes
the advertisement or promotion of a sweepstakes on the premises of
the retail licensee by another authorized licensee or its agent is
prohibited.
   (9) Sweepstakes prizes shall not be awarded to an authorized
licensee, retail licensee, or wholesale licensee or agent, officer,
employee, or family member of an authorized licensee, retail
licensee, or wholesale licensee. For the purposes of this paragraph,
"family member" means a spouse, parent, sibling, child, son-in-law,
daughter-in-law, and lineal descendants, including those by adoption.
An authorized licensee shall maintain all records pertaining to a
sweepstakes for three years following the completion of a
sweepstakes.
   (b) For purposes of this section:
   (1) (A) "Authorized licensee" means a winegrower, beer and wine
importer general, beer manufacturer, out-of-state beer manufacturer
certificate holder, distilled spirits manufacturer, distilled spirits
manufacturer's agent, distilled spirits importer general, distilled
spirits general rectifier, rectifier, out-of-state distilled spirits
shipper's certificate holder, brandy manufacturer, and brandy
importer. An authorized licensee may conduct, sponsor, or participate
in a sweepstakes pursuant to this section regardless of whether the
licensee holds any additional license not included in this paragraph.

   (B) An "authorized licensee" shall not include a beer and wine
wholesaler, a beer and wine importer general, or distilled spirits
importer general that only holds a wholesaler's or retailer's license
as an additional license.
   (2) "Sweepstakes" means a procedure, activity, or event for the
distribution of anything of value by lot, chance, or random selection
where the odds for winning a prize are equal for each entry.
   (c) Nothing in this section authorizes conducting sweepstakes
where consumers are entitled to an allotment or accumulation of
points based on purchases made over a period of time that can be
redeemed for prizes, things of value, or additional sweepstakes
entries.
   (d) A prize awarded for a sweepstakes conducted pursuant to this
section shall not be subject to the monetary limitation imposed by
Section 25600 or a regulation of the department.
   (e) An authorized licensee that violates this section, in addition
to any other penalty imposed by this division, may be prohibited by
the department from offering a sweepstakes to California residents
for a period of 12 months.
  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.