BILL NUMBER: AB 527	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 4, 2015
	AMENDED IN ASSEMBLY  APRIL 29, 2015

INTRODUCED BY   Assembly Member Dodd

                        FEBRUARY 23, 2015

   An act to add Section 25503.40 to the Business and Professions
Code, relating to alcoholic beverages.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 527, as amended, Dodd. Alcoholic beverage control: tied-house
restrictions: advertising.
   Existing law generally restricts certain alcoholic beverage
licensees, including manufacturers and winegrowers, from paying,
crediting, or compensating a retailer for advertising in connection
with the advertising and sale of alcoholic beverages. Existing law
expressly authorizes a beer manufacturer, holder of a winegrower's
license, winegrower's agent, holder of an importer's general license,
distilled spirits manufacturer, holder of a distilled spirits
 rectifiers   rectifier's  general license,
or a distilled spirits manufacturer's agent to sponsor events
promoted by or purchase advertising space and time from, or on behalf
of, a live entertainment marketing company that is a wholly owned
subsidiary of a live entertainment company that has its principal
place of business in the County of Los Angeles, as provided.
   This bill would expressly authorize a beer manufacturer, as
described, holder of a winegrower's license, winegrower's agent,
holder of an importer's general  license,  
license that does not also hold a wholesaler or retail license as an
additional license,  distilled spirits manufacturer, holder of a
distilled spirits  rectifiers   rectifier's
 general license, or a distilled spirits manufacturer's agent to
sponsor events promoted by or purchase advertising space and time
from, or on behalf of, a live entertainment marketing company that is
a wholly owned subsidiary of a live entertainment company that 
is not publicly traded and  has its principal place of business
in the County of Napa, under specified conditions. The bill would
also make a beer manufacturer, holder of a winegrower's license,
winegrower's agent, holder of an importer's general license,
distilled spirits manufacturer, holder of a distilled spirits
 rectifiers   rectifier's  general license,
or a distilled spirits manufacturer's agent who, through coercion or
other illegal means, induces the holder of a wholesaler's license to
fulfill those contractual obligations entered into pursuant to these
provisions guilty of a misdemeanor. The bill would additionally make
an on-sale retail licensee, as described, who solicits or coerces a
holder of a wholesaler's license to solicit a beer manufacturer,
holder of a winegrower's license, winegrower's agent, holder of an
importer's general license, distilled spirits manufacturer, holder of
a distilled spirits  rectifiers   rectifier's
 general license, or a distilled spirits manufacturer's agent to
purchase advertising time or space pursuant to these provisions
guilty of a misdemeanor.
   By creating a new crime, this bill would impose a state-mandated
local program.
   This bill would make legislative findings and declarations as to
the necessity of a special statute for the County of Napa.
   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.    The Legislature finds and declares both
of the following:  
   (a) The earthquake that struck Napa on August 24, 2014, was a
catastrophic event that resulted in economic hardship in the County
of Napa.  
   (b) It is in the best interests of the citizens of the County of
Napa that the exception, established by this law, to the tied-house
provisions of the Alcoholic Beverage Control Act be provided for the
benefit of the County of Napa. 
   SECTION 1.   SEC. 2.   Section 25503.40
is added to the Business and Professions Code, to read:
   25503.40.  (a) Notwithstanding any other law, a beer manufacturer,
holder of a winegrower's license, winegrower's agent, holder of an
importer's general  license,   license that does
not also hold a wholesaler or retail license as an additional
license,  distilled spirits manufacturer, holder of a distilled
spirits  rectifiers   rectifier's  general
license, or a distilled spirits manufacturer's agent may sponsor
events promoted by, and may purchase advertising space and time from,
or on behalf of, a live entertainment marketing company subject to
all of the following conditions:
   (1) (A) The live entertainment marketing company is a wholly owned
subsidiary of a live entertainment company that  is not publicly
traded and  has its principal place of business in the County
of Napa, that may also own interests, directly or indirectly, in
retail  licenses.   licenses or winegrower licen
  ses. 
   (B) The venue of the event is located within the County of Napa,
expected attendance of the event is at least 5,000 people per day,
and no more than three of these events are held in the County of Napa
each year.
   (2) The sponsorship and the advertising space or time is purchased
only in connection with the promotion of live artistic, musical,
sports, food, beverage, culinary, lifestyle, or other cultural
entertainment events at entertainment facilities, parks, fairgrounds,
auditoriums, arenas, or other areas or venues that are designed for,
or set up to be, lawfully used for live artistic, musical, sports,
food, beverage, culinary, lifestyle, or other cultural entertainment
events.
   (3) (A) Any on-sale licensee operating at a venue where live
artistic, musical, sports, food, beverage, culinary, lifestyle, or
other cultural entertainment events are performed pursuant to a
sponsorship described in this section or where advertising is
purchased as described in this section shall serve other brands of
beer, distilled spirits, and wine  distributed by a competing
wholesaler  in addition to any brand manufactured or distributed
by the sponsoring or advertising beer manufacturer, holder of a
winegrower's license, winegrower's agent, holder of an importer's
general license, distilled spirits manufacturer, holder of a
distilled spirits  rectifiers   rectifier's
 general license, or a distilled spirits manufacturer's agent.
   (B) Any on-sale retail licensee owned by the live entertainment
company described in paragraph (1) shall serve other brands of beer,
distilled spirits, and wine distributed by a competing  
wholesaler  in addition to any brand manufactured or
distributed by the sponsoring or advertising beer manufacturer,
holder of a winegrower's license, winegrower's agent, holder of an
importer's general license, distilled spirits manufacturer, holder of
a distilled spirits  rectifiers   rectifier's
 general license, or a distilled spirits manufacturer's agent.
   (4) (A) Advertising space or time purchased pursuant to this
section shall not be placed in any on-sale licensed premises where
the on-sale retail licensee is owned directly or indirectly by the
live entertainment company, or any of its subsidiaries, described in
paragraph (1).
   (B) Sponsorship provided pursuant to this section shall not be
allowed if the event or activity is held at or in any on-sale
licensed premises where the on-sale retail licensee is owned by the
live entertainment company, or any of its subsidiaries, described in
paragraph (1).
   (5) An agreement for the sponsorship of, or for the purchase of
advertising space and time during, a live artistic, musical, sports,
food, beverage, culinary, lifestyle, or other cultural entertainment
event shall not be conditioned directly or indirectly, in any way, on
the purchase, sale, or distribution of any alcoholic beverage
manufactured or distributed by the advertising or sponsoring beer
manufacturer, holder of a winegrower's license, winegrower's agent,
holder of an importer's general license, distilled spirits
manufacturer, holder of a distilled spirits  rectifiers
  rectifier's  general license, or a distilled
spirits manufacturer's agent by the live entertainment company
described in paragraph (1) or by any on-sale retail licensee that is
owned  directly or indirectly  by the live entertainment
company.
   (b) Any sponsorship of events or purchase of advertising space or
time conducted pursuant to subdivision (a) shall be conducted
pursuant to a written contract entered into by the beer manufacturer,
holder of a winegrower's license, winegrower's agent, holder of an
importer's general license, distilled spirits manufacturer, holder of
a distilled spirits  rectifiers   rectifier's
 general license, or a distilled spirits manufacturer's agent
and the live entertainment marketing company.
   (c) Any beer manufacturer, holder of a winegrower's license,
winegrower's agent, holder of an importer's general license,
distilled spirits manufacturer, holder of a distilled spirits
 rectifiers   rectifier's  general license,
or a distilled spirits manufacturer's agent who, through coercion or
other illegal means, induces, directly or indirectly, a holder of a
wholesaler's license to fulfill those contractual obligations entered
into pursuant to subdivision (a) shall be guilty of a misdemeanor
and shall be punished by imprisonment in the county jail not
exceeding six months, or by a fine in an amount equal to the entire
value of the advertising space or time involved in the contract,
whichever is greater, plus ten thousand dollars ($10,000), or by both
imprisonment and fine. The person shall also be subject to license
 suspension or  revocation pursuant to Section 24200.
   (d) Any on-sale retail licensee who, directly or indirectly,
solicits or coerces a holder of a wholesaler's license to solicit a
beer manufacturer, holder of a winegrower's license, winegrower's
agent, holder of an importer's general license, distilled spirits
manufacturer, holder of a distilled spirits  rectifiers
  rectifier's  general license, or a distilled
spirits manufacturer's agent to purchase advertising time or space
pursuant to subdivision (a) shall be guilty of a misdemeanor and
shall be punished by imprisonment in the county jail not exceeding
six months, or by a fine in an amount equal to the entire value of
the advertising space or time involved in the contract, whichever is
greater, plus ten thousand dollars ($10,000), or by both imprisonment
and fine. The person shall also be subject to license 
suspension or  revocation pursuant to Section 24200.
   (e) For purposes of this section, "beer manufacturer" includes a
holder of a beer manufacturer's license, a holder of an out-of-state
beer manufacturer's certificate, or a holder of a beer and wine
importer's general  license.   license that does
not also hold a wholesaler or retail license as an additional
license. 
   (f) Nothing in this section shall authorize the purchasing of
advertising space or time directly from, or on behalf of, any on-sale
retail licensee.
   (g) Nothing in this section shall authorize a beer manufacturer,
holder of a winegrower's license, winegrower's agent, holder of an
importer's general license, distilled spirits manufacturer, holder of
a distilled spirits  rectifiers   rectifier's
 general license, or a distilled spirits manufacturer's agent to
furnish, give, or lend anything of value to an on-sale retail
licensee described in subdivision (a) except as expressly authorized
by this section or any other provision of this division.
   (h) The Legislature finds and declares both of the following:
   (1) 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 shall be limited to the express
terms of the exception so as not to undermine the general
prohibition.
   SEC. 2.   SEC. 3.   The Legislature
finds and declares that a special law is necessary and that a general
law cannot be made applicable within the meaning of Section 16 of
Article IV of the California Constitution because of the unique
conditions located in the County of Napa.
   SEC. 3.   SEC. 4.   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.