California Legislature—2013–14 Regular Session

Assembly Bill No. 1116

Introduced by Assembly Member Hall

February 22, 2013

An act to amend Section 25600.5 of the Business and Professions Code, relating to alcoholic beverages.

LEGISLATIVE COUNSEL’S DIGEST

AB 1116, as introduced, Hall. Alcoholic beverages: licensees.

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 specified licensees, or any authorized agent of those persons to provide, free of charge, entertainment, food, and distilled spirits, wine, or nonalcoholic beverages to a limited number of consumers over 21 years of age at an invitation-only event, held on specified premises, in connection with the sale or distribution of wine or distilled spirits, as provided.

This bill would authorize the holding of these events on the premises of a licensed hotel, as defined, would expand the number of consumers that may attend these events, and would remove the repeal date for these provisions.

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 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, 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
begin delete premises end delete begin insert either the: end insert

begin insert (1) end insert begin insert   end insert begin insert Premises end insert 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.

begin insert

(2) Premises of a licensed hotel, except that any event held on
the premises of the licensed hotel be held in an area that is not
open to the general public. For purposes of this paragraph, “hotel”
means any hotel, motel, resort, bed and breakfast inn, or other
similar transient lodging establishment, but it does not include
any residential hotel as defined in Section 50519 of the Health and
Safety Code.

end insert

(c)  begin delete No end delete begin insert Except as provided in paragraph (2) of subdivision (b),
a end insert begin insert n end insert event authorized by this section shall begin insert not end insert 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 begin delete 400 end delete begin insert 600 end insert
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 begin insert or the
licensed hotel, as applicable end insert .

(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.

begin delete

(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.

end delete

SEC. 2.  

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.