Amended in Senate September 3, 2013

Amended in Assembly May 1, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 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 amended, 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.begin insert Existing law authorizes the Department of Alcoholic Beverage Control to impose a fee of up to $200 on licensees conducting events pursuant to the above-described authorization, as provided.end insert

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,begin insert would revise the conditions under which the event may be held, would establish the fee at $200,end insert would revise requirements for providing the department with information regarding these events, and would extend the repeal date for these provisions until Januarybegin insert 1,end insert 2018.

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:

P2    1

SECTION 1.  

Section 25600.5 of the Business and Professions
2Code
is amended to read:

3

25600.5.  

Notwithstanding any other provision of this division,
4a manufacturer of distilled spirits, distilled spirits manufacturer’s
5agent, winegrower, rectifier, or distiller, or its authorized unlicensed
6agent, may provide, free of charge, entertainment, food, and
7distilled spirits, wine, or nonalcoholic beverages to consumers at
8an invitation-only event in connection with the sale or distribution
9of wine or distilled spirits, subject to the following conditions:

10(a) No licensee, other than those specified in this section, may
11conduct or participate in any portion of an event authorized by this
12section. A licensee authorized to conduct an event pursuant to this
13section shall not be precluded from doing so on the basis of holding
14any other type of alcoholic beverage license.

15(b) An event authorized by this section shall be conducted on
16either the:

17(1) Premises for which a caterer’sbegin delete permitend delete authorization has been
18issued, except that any event held on the premises of a licensed
19winegrower shall not be authorized to provide any distilled spirits
20other than brandy.

21(2) Premises of a licensed hotel, except that any event held on
22the premises of the licensed hotel be held in an area that is not
23open to the general public. For purposes of this paragraph, “hotel”
24means any hotel, motel, resort, bed and breakfast inn, or other
P3    1similar transient lodging establishment, but it does not include any
2residential hotel as defined in Section 50519 of the Health and
3Safety Code.

4(c) Except as provided in paragraph (2) of subdivision (b), an
5event authorized by this section shall not be conducted on premises
6for which a permanent retail license has been issued.

7(d) Except for fair market value payments authorized pursuant
8to this section, abegin delete licensed catererend deletebegin insert retail licensee, including the
9licensed caterer or the licensed hotel,end insert
shall not receivebegin insert, nor shall
10the licensee conducting the event give,end insert
any other item of value or
11benefit in connection with events authorized by this section.

12(e) The person authorized by this section to provide, free of
13charge, entertainment, food, and beverages shall be present during
14the event.

15(f) The person authorized by this section to provide, free of
16charge, entertainment, food, and beverages shall have sole
17responsibility for providing payment for the entertainment, food,
18beverages, and rental fees at the event. Payments for entertainment,
19food, beverages, and rental fees shall not exceed fair market value.
20No other licensed person shall be authorized, under this section,
21to provide any portion of these payments.

22(g) Requests for attendance at the event shall be by invitation
23sent to consumers over 21 years of age at a specific address via
24mail or email, by telephone, or presented in person. Invitations or
25other advertisements of the event shall not be disseminated by any
26other means. Invitations shall not be sent by the authorized person
27or their authorized unlicensed agent inviting all of the employees
28of a retail licensee or a chain of retail licensees under common
29ownership to an authorized event.

30(h) Attendance at the event shall be limited to consumers who
31receive and accept an invitation to the event. Invited consumers
32may each invite one guest. All attendees shall be over 21 years of
33age. The total number of consumers and their guests allowed at
34any event authorized by this section shall not exceed 600 people.
35Admittance to the event shall be controlled by a list containing the
36names of consumers who accepted the invitation and their guests.
37The persons identified in this section shall be responsible for
38compliance.

P4    1(i) No premium, gift, free goods, or other thing of value may
2be given away in connection with the event, except as authorized
3by this division.

4(j) The duration of any event authorized by this section shall
5not exceed four hours.

6(k) (1) begin deleteA end deletebegin insertSubject to paragraph (3), a end insertperson authorized to
7conduct events pursuant to this section shall not conduct more than
812 events in a calendar year where the consumers and guests in
9attendance exceed 100 people, and not more than 24 events in a
10calendar year where the consumers and guests in attendance is 100
11people or fewer.

12(2) The limitation on events authorized by this section shall be
13by person, whether that person holds a single license or multiple
14licenses. If a person holds multiple licenses, the limitation shall
15be applied to the person holding the license, not by type of license.

begin delete

16(l) In addition to any other information required by the
17department, the licensee authorized to conduct an event pursuant
18to this section shall provide the department with all of the following
19information:

end delete
begin insert

20(3) A licensee authorized to conduct events pursuant to this
21section shall not conduct more than two events in a calendar year
22on the premises of any single licensed hotel or other licensed hotel
23under the same or common ownership.

end insert
begin insert

24(4) The licensee conducting the event shall not advertise any
25retail licensee. If the event is held on the premises of a retail
26licensee as permitted by this section, the licensee conducting the
27event may list the retailer’s name and address in the invitation
28and any related advertising for the sole purpose of identifying the
29location of the event. The listing of the retailer’s name and address
30shall be the only reference to the retail licensee and shall be
31relatively inconspicuous in relation to the invitation or
32advertisement as a whole. Pictures or illustrations of the retailer’s
33premises, or laudatory references to the retailer, shall not be
34permitted.

end insert
begin insert

35(5) (A) Other than as specifically authorized by this section,
36alcoholic beverage promotions of any sort shall not be conducted
37by any licensee in conjunction with an event held on the premises
38of a retail licensee pursuant to this section. This restriction includes
39any discounted drink specials offered by the retail licensee to
40consumers.

end insert
begin insert

P5    1(B) For purposes of this paragraph, “in conjunction with”
2means during an event and any period within 24 hours before and
324 hours following an event.

end insert
begin insert

4(6) A retail licensee shall conspicuously offer for sale alcoholic
5beverages other than the products produced, distributed, bottled,
6or otherwise offered for sale by the licensee conducting the event.

end insert
begin insert

7(l) At least 30 days prior to an event, the licensee, or its
8authorized unlicensed agent, authorized to conduct the event shall
9apply to the department for a permit authorizing the event. In
10addition to any other information required by the department, the
11licensee shall provide the department all of the following
12information:

end insert

13(1) The name of the company authorized to conduct the event.

14(2) The number of people planned to be in attendance.

15(3) The start and end times for the event.

16(4) The location of the event.

begin insert

17(5) The name of the caterer, if required, obtaining the caterer’s
18authorization for the event.

end insert

19(m) All alcoholic beverages provided pursuant to this section
20shall be purchased from the holder of the caterer’s permit or the
21licensed hotel, as applicable.

22(n) All alcoholic beverages served at an event authorized by
23this section shall be served in accordance with Sections 25631 and
2425632.

25(o) No person authorized to conduct an event pursuant to this
26section shall hold such an event at the same location more than
27eight times in a calendar year.

28(p) The person authorized to conduct an event under this section
29may provide attendees at the event with a free ride home. The free
30rides shall only constitute free ground transportation to attendees’
31homes or to hotels or motels where attendees are staying.

32(q) In addition to the prescribed fee imposed upon a licensed
33caterer to conduct an event authorized by this section,begin delete the
34department may also impose a fee upon a licensee authorized by
35this section to provide, free of charge, entertainment, food, and
36beverages at an authorized event. The fee shall be representative
37of the cost of administering and enforcing the provisions of this
38section, but shall not exceed two hundred dollars ($200) per event.end delete

39begin insert a fee of two hundred dollars ($200) shall be collected by the
40department from the licensee, or its authorized unlicensed agent,
P6    1authorized by this section to provide, free of charge, entertainment,
2and beverages at an authorized eventend insert
begin insert.end insert

begin insert

3(r) All licensees involved in events held pursuant to this section
4shall be responsible for compliance with this section, and with all
5other provisions of this division in connection with these events,
6and each may be subject to discipline for violation of this division.

end insert
begin delete

39 7(r)

end delete

8begin insert(s)end insert The Legislature finds and declares both of the following:

9(1) That it is necessary and proper to require a separation
10between manufacturing interests, wholesale interests, and retail
11interests in the production and distribution of alcoholic beverages
12in order to prevent suppliers from dominating local markets through
13vertical integration and to prevent excessive sales of alcoholic
14beverages produced by overly aggressive marketing techniques.

15(2) Any exception established by the Legislature to the general
16prohibition against tied interests must be limited to the express
17terms of the exception so as to not undermine the general
18prohibitions.

begin delete

11 19(s)

end delete

20begin insert(t)end insert This section shall remain in effect only until January 1, 2018,
21and as of that date is repealed, unless a later enacted statute, that
22is enacted before January 1, 2018, deletes or extends that date.

23

SEC. 2.  

No reimbursement is required by this act pursuant to
24Section 6 of Article XIII B of the California Constitution because
25the only costs that may be incurred by a local agency or school
26district will be incurred because this act creates a new crime or
27infraction, eliminates a crime or infraction, or changes the penalty
28for a crime or infraction, within the meaning of Section 17556 of
29the Government Code, or changes the definition of a crime within
30the meaning of Section 6 of Article XIII B of the California
31Constitution.



O

    97