BILL NUMBER: AB 527 AMENDED
BILL TEXT
AMENDED IN SENATE SEPTEMBER 4, 2015
AMENDED IN ASSEMBLY MAY 4, 2015
AMENDED IN ASSEMBLY APRIL 29, 2015
INTRODUCED BY Assembly Member Dodd
FEBRUARY 23, 2015
An act to add and repeal Section 25503.40 to
of 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
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
authorize, until January 1, 2019, a beer manufacturer, as
described, holder of a winegrower's license, winegrower's agent,
holder of an any importer's
general license that does not also hold a wholesaler or
retail license as an additional license, as speci
fied, distilled spirits manufacturer, holder of a
distilled spirits any 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 any
importer's general license, distilled spirits
manufacturer, holder of a distilled spirits
any 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 any importer's general
license, distilled spirits manufacturer, holder of
a distilled spirits any 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.
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 any importer's general
license that does not also hold a wholesaler or retail
license as an additional license, unless the holder of the
importer's license holds one of the other authorized licenses
specified in this section, distilled spirits manufacturer,
holder of a distilled spirits any
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 or winegrower licenses.
(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. The live entertainment company promoting the event
shall affirmatively represent and warrant in writing to any retail
licensee operating as the retail licensee for such an event that the
live entertainment company promoting the event, including the subject
event, has not exceeded the permissible limit of three events in the
County of Napa for the year in which the event is being held and the
expected attendance for the event is in excess of 5,000 people per
day. Any retail licensee operating as the retail licensee for an
event in the County of Napa for an event with expected attendance of
more than 5,000 people per day shall provide the written
representation and warranty of the live entertainment company to the
department and affirmatively state when obtaining the authorization
for the event from the department that the event is being held
pursuant to the conditions of this section and that the live
entertainment company promoting the event, including the subject
event, has no t exceeded the permissible limit
of three events in the County of Napa for the year in which the event
is being held and the expected attendance for the event is in excess
of 5,000 people per day.
(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, and lawfully permitted to be
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
any importer's general
license, distilled spirits manufacturer, holder of a
distilled spirits any 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 any
importer's general license, distilled spirits
manufacturer, holder of a distilled spirits
any 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 any importer's
general license, distilled spirits manufacturer, holder of
a distilled spirits any 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 any importer's general
license, distilled spirits manufacturer, holder of
a distilled spirits any 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 any
importer's general license, distilled spirits
manufacturer, holder of a distilled spirits
any 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 any importer's
general license, distilled spirits manufacturer,
holder of a distilled spirits any
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 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 any importer's general
license, distilled spirits manufacturer, holder of
a distilled spirits any 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.
(i) This section shall remain in effect only until January 1,
2019, and as of that date is repealed unless a later enacted statute,
that is chaptered before January 1, 2019, deletes or extends that
date.
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. 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.