BILL NUMBER: SB 937 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 7, 2011
INTRODUCED BY Committee on Governmental Organization (Senators
Wright (Chair), Anderson, Berryhill, Calderon, Cannella, Corbett, De
León, Evans, Hernandez, Padilla, Strickland, Wyland, and Yee)
MARCH 21, 2011
An act to amend Sections 23800 and 25503.56
23817.5 of the Business and Professions Code, relating to
alcoholic beverages.
LEGISLATIVE COUNSEL'S DIGEST
SB 937, as amended, Committee on Governmental Organization.
Alcoholic beverages: licenses.
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. The Alcoholic Beverage
Control Act authorizes the Department of Alcoholic Beverage Control
to impose reasonable conditions in certain situations on
the exercise of retail privileges under the act. Existing
law also authorizes the department to issue to the holder of any
off-sale retail license an instructional tasting license that would
allow the licenseholder to allow an authorized licensee, as defined,
or designated representative of that licensee, to conduct, on a
designated portion of, or contiguous to, an existing licensed
premises, an instructional tasting event at which tastes of alcoholic
beverages may be served to consumers, as provided.
This bill would make technical, nonsubstantive changes to
these provisions a technical, nonsubstantive change
to the provision authorizing the Department of Alcoholic Beverage
Control to impose reasonable conditions .
Existing law requires a retail off-sale beer and wine replacement
license to be issued upon application when specified conditions
exist.
This bill would instead authorize a retail off-sale beer and wine
replacement license to be issued under specified circumstances. This
bill would also prohibit the issuance of a replacement license under
specified circumstances.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 23800 of the Business and Professions Code is
amended to read:
23800. The department may place reasonable conditions upon retail
licensees or upon any licensee in the exercise of retail privileges
in the following situations:
(a) If grounds exist for the denial of an application for a
license or where a protest against the issuance of a license is filed
and if the department finds that those grounds may be removed by the
imposition of those conditions.
(b) Where findings are made by the department which would justify
a suspension or revocation of a license, and where the imposition of
a condition is reasonably related to those findings. In the case of a
suspension, the conditions may be in lieu of or in addition to the
suspension.
(c) Where the department issues an order suspending or revoking
only a portion of the privileges to be exercised under the license.
(d) Where findings are made by the department that the licensee
has failed to correct objectionable conditions within a reasonable
time after receipt of notice to make corrections given pursuant to
subdivision (e) of Section 24200, or subdivision (a) or (b) of
Section 24200.1.
(e) (1) At the time of transfer of a license pursuant to Section
24070, 24071.1, or 24071.2, and upon written notice to the licensee,
the department may adopt conditions that the department determines
are reasonable pursuant to its investigation or that are requested by
the local governing body, or its designated subordinate officer or
agency, in whose jurisdiction the license is located. The request for
conditions shall be supported by substantial evidence that the
problems either on the premises or in the immediate vicinity
identified by the local governing body or its designated subordinate
officer or agency will be mitigated by the conditions. Upon receipt
of the request for conditions, the department shall either adopt the
conditions requested or notify the local governing body, or its
designated subordinate officer or agency, in writing of its
determination that there is not substantial evidence that the problem
exists or that the conditions would not mitigate the problems
identified. The department may adopt conditions only when the request
is filed. Any request for conditions from the local governing body
or its designated subordinate officer or agency pursuant to this
provision shall be filed with the department within the time
authorized for a local law enforcement agency to file a protest or
proposed conditions pursuant to Section 23987.
(2) If the license to be transferred subject to paragraph (1) is
located in an area of undue concentration as defined in Section
23958.4, the period within which the local governing body or its
designated subordinate officer or agency may submit a written request
for conditions shall be 40 days after the mailing of the notices
required by Section 23987. For purposes of this provision only, undue
concentration shall be established when the requirements of both
paragraph (1) of subdivision (a) and either paragraph (2) or
paragraph (3) of subdivision (a) of Section 23958.4 exist. Pursuant
to Section 23987, the department may extend the 40-day period for a
period not to exceed an additional 20 days upon the written request
of any local law enforcement agency or local government entity with
jurisdiction. Nothing in this paragraph is intended to reduce the
burden of the local governing body or its designated subordinate
officer or agency to support any request for conditions as required
by paragraph (1). Notwithstanding Section 23987, the department may
not transfer any license subject to this paragraph until after the
time period permitted to request conditions as specified in this
paragraph.
(f) At the time of a transfer of a license pursuant to Article 5
(commencing with Section 24070) of Chapter 6.
SEC. 2. 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.
(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. 2. Section 23817.5 of the Business
and Professions Code is amended to read:
23817.5. (a) (1) The number of premises for which an off-sale
beer and wine license is issued shall be limited to one for each
2,500, or fraction thereof, inhabitants of the city or county in
which the premises are situated. No additional off-sale beer and wine
license, other than a renewal or transfer or as permitted by Section
23821, shall be issued in any city or county where the number of
premises for which all off-sale beer and wine licenses are issued is
more than one for each 2,500, or fraction thereof, inhabitants of the
city or county.
(2) The number of premises for which an off-sale beer and wine
license is issued in a city and county, in combination with the
number of premises for which an off-sale general license is issued in
a city and county, shall be limited to one for each 1,250, or
fraction thereof, inhabitants of the city and county in which the
premises are situated. No additional off-sale beer and wine license,
other than a renewal or transfer or as permitted by Section 23821,
shall be issued in any city and county where the number of premises
for which all off-sale beer and wine licenses in combination with
off-sale general licenses are issued is more than one for each 1,250,
or fraction thereof, inhabitants of the city and county.
(b) (1) Notwithstanding subdivision (a), a
retail off-sale beer and wine replacement license shall be
issued upon application when all of the following conditions exist:
(1) The replacement license is only for use at a premises which
was licensed and operated within the past 90 days.
(2) The prior licensee abandoned the premises or the original
license is subject to a bankruptcy proceeding and the prior licensee
has no right to operate at that location. For purposes of this
paragraph, "abandoned" means that the prior license has not been
transferred to a new location and the prior licensee is not
exercising dominion or control over the premises. "Abandoned" does
not mean a license which has been voluntarily surrendered pursuant to
department rule.
(3) The application for a replacement license shall be accompanied
by a fee of one hundred dollars ($100).
(c) The following limitations shall apply to the issuance of a
replacement license:
(1) The replacement license shall not be transferred to another
premises.
(2) All conditions imposed on the original license shall apply to
the replacement license.
(3) The original
license shall be canceled by operation of law upon the issuance of
the replacement license may be issued at a premises
that was operated under an existing off-sale beer and wine license no
less than 90 days prior to the date of application for the
replacement license, provided that the existing licensee is subject
to a bankruptcy proceeding and the existing licensee has no right to
operate at the premises, or has abandoned the premises of that
license.
(2) A replacement license shall not be
issued if the existing license has been, or is in the process of
being, transferred, or if the existing license has been
canceled by the licensee or surrendered by the licensee pursuant to
department rule.
(3) An application for a replacement
license shall be accompanied by a fee of one hundred dollars ($100)
and all conditions imposed upon the existing off-sale beer and wine
license at the premises shall be imposed upon the replacement
license.
(4) Upon issuance of the replacement
license, the off-sale beer and wine license existing at the premises
shall be canceled by operation of law. A replacement license shall
not be transferred to another premises .