BILL NUMBER: AB 1116 CHAPTERED
BILL TEXT
CHAPTER 461
FILED WITH SECRETARY OF STATE OCTOBER 1, 2013
APPROVED BY GOVERNOR OCTOBER 1, 2013
PASSED THE SENATE SEPTEMBER 10, 2013
PASSED THE ASSEMBLY SEPTEMBER 11, 2013
AMENDED IN SENATE SEPTEMBER 6, 2013
AMENDED IN SENATE SEPTEMBER 3, 2013
AMENDED IN ASSEMBLY MAY 1, 2013
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, 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. 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.
This bill would authorize the holding of these events on the
premises of a hotel, as defined, would include in the authorization
out-of-state distilled spirits shipper's certificate holders, would
expand the number of consumers that may attend these events, would
revise the conditions under which the event may be held, would
establish the fee at $200, would revise requirements for providing
the department with information regarding these events, and would
extend the repeal date for these provisions until January 1, 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.
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, out-of-state distilled spirits shipper's certificate holder,
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
either the:
(1) Premises for which a caterer's 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.
(2) Premises of a hotel holding an on-sale beer and wine or
on-sale general license, except an event shall not be conducted in
the lobby area of a hotel or in any portion of a hotel that is
identified, promoted, or otherwise designated by the hotel as a club,
nightclub, or other similar entertainment venue. 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.
(c) A hotel where the event authorized by this section is being
conducted shall maintain, during all times while exercising its
license privileges, other areas within the licensed premises that
shall be made readily available to the public not attending the
authorized event.
(d) Except as provided in paragraph (2) of subdivision (b), an
event authorized by this section shall not be conducted on premises
for which a permanent retail license has been issued.
(e) Except for fair market value payments authorized pursuant to
this section, a retail licensee, including the licensed caterer or
the licensed hotel, shall not receive, nor shall the licensee
conducting the event give, any other item of value or benefit in
connection with events authorized by this section.
(f) The person authorized by this section to provide, free of
charge, entertainment, food, and beverages shall be present during
the event.
(g) 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.
(h) 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 email, 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.
(i) 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 600 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.
(j) 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.
(k) The duration of any event authorized by this section shall not
exceed four hours.
(l) (1) Subject to paragraph (3), 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.
(3) A licensee authorized to conduct events pursuant to this
section shall not conduct more than two events in a calendar year on
the premises of any single licensed hotel or other licensed hotel
under the same or common ownership.
(4) The licensee conducting the event shall not advertise any
retail licensee. If the event is held on the premises of a retail
licensee as permitted by this section, the licensee conducting the
event may list the retailer's name and address in the invitation and
any related advertising for the sole purpose of identifying the
location of the event. The listing of the retailer's name and address
shall be the only reference to the retail licensee and shall be
relatively inconspicuous in relation to the invitation or
advertisement as a whole. Pictures or illustrations of the retailer's
premises, or laudatory references to the retailer, shall not be
permitted.
(5) (A) Other than as specifically authorized by this section,
alcoholic beverage promotions of any sort shall not be conducted by
any licensee in conjunction with an event held on the premises of a
retail licensee pursuant to this section. This restriction includes
any discounted drink specials offered by the retail licensee to
consumers.
(B) For purposes of this paragraph, "in conjunction with" means
during an event and any period within 24 hours before and 24 hours
following an event.
(6) A retail licensee shall conspicuously offer for sale alcoholic
beverages other than the products produced, distributed, bottled, or
otherwise offered for sale by the licensee conducting the event.
(m) At least 30 days prior to an event, the licensee, or its
authorized unlicensed agent, authorized to conduct the event shall
apply to the department for a permit authorizing the event. In
addition to any other information required by the department, the
licensee shall provide 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.
(5) The name of the caterer, if required, obtaining the caterer's
authorization for the event.
(n) All alcoholic beverages provided pursuant to this section
shall be purchased from the holder of the caterer's permit or the
licensed hotel, as applicable.
(o) All alcoholic beverages served at an event authorized by this
section shall be served in accordance with Sections 25631 and 25632.
(p) 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.
(q) 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.
(r) In addition to the prescribed fee imposed upon a licensed
caterer to conduct an event authorized by this section, a fee of two
hundred dollars ($200) shall be collected by the department from the
licensee, or its authorized unlicensed agent, authorized by this
section to provide, free of charge, entertainment, and beverages at
an authorized event.
(s) All licensees involved in events held pursuant to this section
shall be responsible for compliance with this section, and with all
other provisions of this division in connection with these events,
and each may be subject to discipline for violation of this division.
(t) 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.
(u) This section shall remain in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2018, deletes or extends
that date.
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.