Amended in Senate August 17, 2015

Amended in Assembly April 15, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 776

Introduced by Assembly Member Cooper

February 25, 2015

An act to begin delete add Section 23399.65 to end delete begin insert amend Section 25500 of, and to add Sections 23355.3 and 23399.65 to, end insert the Business and Professions Code, relating to alcoholic beverages.

LEGISLATIVE COUNSEL’S DIGEST

AB 776, as amended, Cooper. Alcoholic beverage control: begin delete beer manufacturer: brewery event. end delete begin insert licenses and tied-house restrictions. end insert

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(1) The Alcoholic Beverage Control Act regulates the application for, the issuance of, the suspension of, and the conditions imposed upon, various alcoholic beverage licenses pursuant to which the licensees may exercise specified privileges in the state.

end insert begin insert

This bill would authorize licensees to sponsor or otherwise participate in an event conducted by, and for the benefit of, a nonprofit organization that has acquired a specified alcoholic beverages license, subject to specified conditions, including that sponsorship or participation opportunities for the event be made available to any retail or nonretail licensee.

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The

end delete

begin insert (2) end insert begin insert   end insert begin insert The end insert Alcoholic Beverage Control Act authorizes a licensed winegrower to apply to the Department of Alcoholic Beverage Control for a wine sales event permit that allows the sale of bottled wine produced by that winegrower at specified events approved by the department. The act prohibits a wine sales event permit from being used more than 2 times a month at a particular location, and requires the winegrower to pay a fee of $50 for the permit. The act provides that moneys collected as fees pursuant to the act are to be deposited in the Alcohol Beverage Control Fund. These moneys are generally allocated to the Department of Alcoholic Beverage Control upon appropriation by the Legislature.

This bill would authorize a licensed beer manufacturer to apply to the department for a brewery event permit that allows the sale of beer produced by that beer manufacturer for consumption on property contiguous and adjacent to the licensed premises of the manufacturer, as provided. The bill would authorize a fee for a brewery event permit of $110 and an event authorization fee of not more than $25 for each approved event. The bill would allow up to 4 authorized events each calendar year.

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(3) Existing law, known as tied-house restrictions, generally prohibits a manufacturer, winegrower, manufacturer’s agent, rectifier, California winegrower’s agent, distiller, bottler, importer, and wholesaler, and any officer, director, or agent of any of those persons, from having specified relationships with an on-sale alcoholic beverage licensee, with limited exceptions. Existing law specifies that the Alcoholic Beverage Control Act does not prohibit holders of retail on-sale or off-sale licenses from purchasing advertising in any publication by specified alcoholic beverage licensees.

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This bill would specify that the act does not prohibit purchasing advertising in a publication published by a nonretail licensee, as defined, and would include Internet Web sites and social media feeds as types of publications for these purposes.

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Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert Section 23355.3 is added to the end insert begin insert Business and
Professions Code end insert begin insert , to read: end insert

begin insert

begin insert 23355.3. end insert   

(a) A licensee may sponsor or otherwise participate
in an event conducted by, and for the benefit of, a nonprofit
organization that has obtained a temporary daily on-sale license
or a temporary daily off-sale license under this division, in which
retail or nonretail licensees are involved as sponsors or
participants, subject to all of the following conditions:

(1) Sponsorship or participation shall be pursuant to a written
agreement.

(2) Except as otherwise provided, any payment for sponsorship
or participation shall be as moneys paid only to the nonprofit
organization holding the temporary license.

(3) A nonretail licensee may donate alcoholic beverages to a
nonprofit only as otherwise authorized by Section 25503.9.

(4) Except as otherwise provided by this division, a retail
licensee shall not give, sell, or furnish any alcoholic beverages to
the temporary licensee.

(5) This subdivision shall not prohibit the establishment by the
temporary daily licensee of different levels of sponsorship, where
each sponsorship level provides different promotional benefits to
a sponsor. All sponsorship agreements for the event shall be on
identical terms. A nonretail or retail licensee may choose to
participate in any level of sponsorship, including at the name or
principal sponsor level. A nonprofit organization may choose to
have one, or multiple, name or principal sponsors. Sponsorship
or participation opportunities shall be made available to any retail
and nonretail licensee wishing to sponsor or participate.

(6) (A) Except as otherwise specified in this subdivision, any
advertising or promotion of the event by the temporary daily
licensee shall identify all sponsors. Sponsorship levels may specify
how prominent the identification of each sponsor shall be, provided
that all sponsors within each level are treated equally in the
advertising or promotion.

(B) A nonretail licensee may communicate sponsorship, or
participation, and share, repost, or otherwise forward a social
media post by a retail licensee or nonretail licensee if the
communication, sharing, reposting, or forwarding of the social
media post does not contain the retail price of any alcoholic
beverage. A nonretail licensee shall not pay or reimburse a retail
licensee, directly or indirectly, for any social media advertising
services. A retail licensee shall not accept any payment or
reimbursement, directly or indirectly, for any social media
advertising services offered by a nonretail licensee. For the
purposes of this paragraph, “social media” means a service,
platform, or site where users communicate with one another and
share media, such as pictures, videos, music, and blogs, with other
users free of charge.

(7) A retail licensee shall conspicuously offer for sale alcoholic
beverages other than the products produced, distributed, bottled,
or otherwise offered for sale by any of the sponsors of the event.
The retail licensee shall serve other brands of alcoholic beverages
distributed by a competing wholesaler in addition to the brands
manufactured or marketed by the nonretail licensee sponsoring
or participating in the event.

(b) The section does not authorize a nonretail licensee to pay,
in whole or in part, any costs, including the cost of sponsorship,
of any retail licensee that is sponsoring or participating in a
nonprofit event.

(c) A licensee that sponsors or participates in a nonprofit event
under this section shall keep detailed records of its sponsorship
or participation and shall maintain those records for a period of
at least three years. These records shall be provided to the
department upon request.

end insert

begin delete SECTION 1. end delete
begin insert SEC. 2. end insert   

Section 23399.65 is added to the Business and
Professions Code, to read:

23399.65.  

(a) A licensed beer manufacturer may apply to the
department for a brewery event permit. A brewery event permit
shall authorize the sale of beer produced by the licensee pursuant
to Section 23357 for consumption on property contiguous and
adjacent to the licensed premises owned or under the control of
the licensee. The property shall be secured and controlled by the
licensee.

(b) (1) The fee for a brewery event permit for a licensed beer
manufacturer shall be one hundred ten dollars ($110) for a permit
issued during the 2016 calendar year, and for a permit issued during
the years thereafter, the annual fee shall be calculated pursuant to
subdivisions (b) and (c) of Section 23320. The permit may be
renewed annually at the same time as the licensee’s license. A
brewery event permit shall be transferable as a part of the license.

(2) For each brewery event, consent for the sale of beer pursuant
to subdivision (a) at the brewery event shall be first obtained by
the licensee from the department in the form of an event
authorization issued by the department. An event authorization
shall be subject to approval by the appropriate local law
enforcement agency. The fee for each event authorization shall
not begin delete to end delete exceed twenty-five dollars ($25). The number of events
authorized by a brewery event permit shall not exceed four in any
calendar year.

(3) All begin delete money end delete begin insert moneys end insert collected as fees pursuant to this
subdivision shall be deposited in the Alcohol Beverage Control
Fund, as described in Section 25761, for allocation, upon
appropriation by the Legislature, as provided in subdivision (d) of
that section.

(c) At all approved events, the licensee may exercise only those
privileges authorized by the licensee’s license and shall comply
with all provisions of the act pertaining to the conduct of on-sale
premises and violation of those provisions may be grounds for
suspension or revocation of the licensee’s license or permit, or
both, as though the violation occurred on the licensed premises.

(d) The department may adopt any regulations it determines to
be necessary for the administration of this section.

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begin insert SEC. 3. end insert   

end insert

begin insert Section 25500 of the end insert begin insert Business and Professions Code end insert
begin insert is amended to read: end insert

25500.  

(a) No manufacturer, winegrower, manufacturer’s
agent, rectifier, California winegrower’s agent, distiller, bottler,
importer, or wholesaler, or any officer, director, or agent of any
such person shall:

(1) Hold the ownership, directly or indirectly, of any interest in
any on-sale license.

(2) Furnish, give, or lend any money or other thing of value,
directly or indirectly, to, or guarantee the repayment of any loan
or the fulfillment of any financial obligation of, any person engaged
in operating, owning, or maintaining any on-sale premises where
alcoholic beverages are sold for consumption on the premises.

(3) Own any interest, directly or indirectly, in the business,
furniture, fixtures, refrigeration equipment, signs, except signs for
interior use mentioned in subdivision (g) of Section 25503, or lease
in or of any premises operated or maintained under any on-sale
license for the sale of alcoholic beverages for consumption on the
premises where sold; or own any interest, directly or indirectly, in
realty acquired after June 13, 1935, upon which on-sale premises
are maintained unless the holding of the interest is permitted in
accordance with rules of the department.

(b) This section does not apply to the holding by one person of
a wholesaler’s license and an on-sale license in counties not to
exceed 15,000 population.

(c) This section does not apply to the financial or representative
relationship between a manufacturer, winegrower, manufacturer’s
agent, rectifier, California winegrower’s agent, distiller, bottler,
importer, or wholesaler, or any officer, director, or agent of such
person, and a person holding only one of the following types of
licenses:

(1) On-sale general license for a bona fide club.

(2) Club license issued under Article 4 (commencing with
Section 23425) of Chapter 3.

(3) Veterans’ club license issued under Article 5 (commencing
with Section 23450) of Chapter 3.

(4) On-sale license for boats, trains, sleeping cars, or airplanes
where the alcoholic beverages produced or sold by the
manufacturer, winegrower, manufacturer’s agent, rectifier,
California winegrower’s agent, bottler, importer, or wholesaler or
any officer, director, or agent of the person are not sold, furnished,
or given, directly or indirectly to the on-sale licensee.

(d) This section does not apply to an employee of a licensee
referred to in subdivision (a) who is a nonadministrative and
nonsupervisorial employee.

(e) Notwithstanding any other provision of this division or
regulation of the department, this section does not apply to an
employee of a licensee referred to in subdivision (a) who is the
spouse of an on-sale licensee, so long as the on-sale licensee does
not purchase, offer for sale, or promote, regardless of source, any
of the brands of alcoholic beverages that are produced, bottled,
processed, imported, rectified, distributed, represented, or sold by
any licensee referred to in subdivision (a) that employs the spouse
of the on-sale licensee.

(f)  begin insert (1) end insert begin insert   end insert Nothing in this division prohibits the holder of any retail
on-sale or off-sale license from begin delete purchasing, for fair consideration, end delete
begin insert purchasing end insert advertising in any publication published by begin delete any
manufacturer, winegrower, manufacturer’s agent, rectifier,
California winegrower’s agent, distiller, bottler, importer, or
wholesaler, or any person who directly or indirectly holds the
ownership of any interest in the premises of the retail licensee. end delete begin insert a
nonretail licensee. end insert

begin insert

(2) For purposes of this subdivision:

end insert begin insert

(A) “Nonretail licensee” means any manufacturer, winegrower,
manufacturer’s agent, rectifier, California winegrower’s agent,
distiller, bottler, importer, or wholesaler, or any person who does
not directly or indirectly hold the ownership of any interest in a
retail license.

end insert begin insert

(B) “Publication published by a nonretail licensee” includes
Internet Web sites and social media feeds operated and maintained
by or for a nonretail licensee under an account or Internet Web
site address owned by the nonretail licensee.

end insert