Amended in Senate September 4, 2015

Amended in Senate August 17, 2015

Amended in Assembly April 15, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 776


Introduced by Assembly Member Cooper

February 25, 2015


An act to amendbegin delete Section 25500end deletebegin insert Sections 25500 and 25666end insert of, and to add Sectionsbegin delete 23355.3 and 23399.65end deletebegin insert 23355.3, 23399.65, and 23402.5end insert to, the Business and Professions Code, relating to alcoholic beverages.

LEGISLATIVE COUNSEL’S DIGEST

AB 776, as amended, Cooper. Alcoholic beveragebegin delete control: licenses and tied-house restrictions.end deletebegin insert control.end insert

(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.

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

(2) The 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 $110begin insert for the 2016 calendar year, and thereafter as provided,end insert 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.

(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.

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.

begin insert

(4) The Alcoholic Beverage Control Act authorizes specified licensees to purchase alcoholic beverages for resale under specified circumstances. The act provides that a person convicted of a violation of its provisions is guilty of a misdemeanor unless another penalty or punishment is specifically provided.

end insert
begin insert

This bill would prohibit a retail licensee from purchasing beer from any beer manufacturer for the purpose of selling or offering to sell that beer under specified circumstances, including where the beer container contains the statement or is marked “Not Packaged for Resale”.

end insert
begin insert

By expanding the scope of a crime, this bill would impose a state-mandated local program.

end insert
begin insert

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.

end insert
begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert
begin insert

(5) Existing law requires the Department of Alcoholic Beverage Control, in any hearing on an accusation charging a licensee with a violation of specified provisions relating to minors, to produce the alleged minor for examination at the hearing unless he or she is unavailable as a witness because he or she is dead or unable to attend the hearing because of a then-existing physical or mental illness or infirmity, or unless the licensee has waived, in writing, the appearance of the minor. Existing law provides that when a minor is absent because of a then-existing physical or mental illness or infirmity, a reasonable continuance shall be granted to allow for the appearance of the minor if the administrative law judge finds that it is reasonably likely that the minor can be produced within a reasonable amount of time.

end insert
begin insert

This bill would state that the above provisions are not intended to preclude the continuance of a hearing because of the unavailability of a minor for any other reason pursuant to a specified provision.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: begin deleteno end deletebegin insertyesend insert.

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

P3    1

SECTION 1.  

Section 23355.3 is added to the Business and
2Professions Code
, to read:

3

23355.3.  

(a) A licensee may sponsor or otherwise participate
4in an event conducted by, and for the benefit of, a nonprofit
5organizationbegin delete that has obtained a temporary daily on-sale license
6or a temporary daily off-sale license under this division,end delete
in which
7retailbegin delete orend deletebegin insert andend insert nonretail licensees are involved as sponsors or
8participants, subject to all of the following conditions:

begin delete

9(1) Sponsorship or participation shall be pursuant to a written
10agreement.

end delete
begin delete

5 11(2)

end delete

12begin insert(1)end insert Except as otherwisebegin delete provided,end deletebegin insert provided in this section,end insert any
13paymentbegin insert of money or other considerationend insert for sponsorship or
14participationbegin insert in the eventend insert shall bebegin delete as moneys paidend deletebegin insert madeend insert only to the
P4    1nonprofit organizationbegin delete holding the temporary license.end deletebegin insert conducting
2the event.end insert

begin insert

3(2) Except as otherwise provided in this section, a nonretail
4licensee shall not, directly or indirectly, pay money or provide any
5other thing of value to a permanent retail licensee that is also a
6sponsor of, or participant in, the event.

end insert

7(3) A nonretail licensee may donate alcoholic beverages to a
8nonprofit only as otherwise authorized by Section 25503.9.

9(4) Except as otherwise provided by this division, a retail
10licensee shall not give, sell, or furnish any alcoholic beverages to
11the temporary licensee.

12(5) begin deleteThis subdivision shall not prohibit the establishment by the
13temporary daily licensee of different levels of sponsorship, where
14each sponsorship level provides different promotional benefits to
15a sponsor. All sponsorship agreements for the event shall be on
16identical terms. end delete
A nonretail or retail licensee may choose to
17participate in any level of sponsorship, including at the name or
18principal sponsor level. A nonprofit organization may choose to
19have one, or multiple, name or principal sponsors. begin delete Sponsorship or
20participation opportunities shall be made available to any retail
21and nonretail licensee wishing to sponsor or participate. end delete

begin delete

22(6) (A) Except as otherwise specified in this subdivision, any
23advertising or promotion of the event by the temporary daily
24licensee shall identify all sponsors. Sponsorship levels may specify
25how prominent the identification of each sponsor shall be, provided
26that all sponsors within each level are treated equally in the
27advertising or promotion.

end delete
begin delete

29 28(B)

end delete

29begin insert(6)end insertbegin insert(A)end insertbegin insertend insert A nonretail licensee maybegin delete communicate sponsorship,
30or participation, and share, repost, or otherwise forward a social
31media post by a retail licensee or nonretail licensee if the
32communication, sharing, reposting, or forwarding of the social
33media postend delete
begin insert advertise or communicate sponsorship or participation
34in the event. This advertising or communication may include, but
35is not limited to, initiating, sharing, reposting, or otherwise
36forwarding a social media post by a permanent retail licensee or
37a nonretail licensee if the advertisement or communicationend insert
does
38not contain the retail price of any alcoholic begin delete beverage. A nonretail
39licensee shall not pay or reimburse a retail licensee, directly or
40indirectly, for any social media advertising services. A retail
P5    1licensee shall not accept any payment or reimbursement, directly
2or indirectly, for any social media advertising services offered by
3a nonretail licensee. For the purposes of this paragraph, “social
4media” means a service, platform, or site where users communicate
5with one another and share media, such as pictures, videos, music,
6and blogs, with other users free of charge. end delete
begin insert beverage or otherwise
7promotes a retail licensee beyond its sponsorship or participation
8in the event.end insert

begin delete

9(7) A retail licensee shall conspicuously offer for sale alcoholic
10beverages other than the products produced, distributed, bottled,
11or otherwise offered for sale by any of the sponsors of the event.
12The retail licensee shall serve other brands of alcoholic beverages
13distributed by a competing wholesaler in addition to the brands
14manufactured or marketed by the nonretail licensee sponsoring or
15participating in the event.

end delete
begin insert

16(B) A nonretail licensee shall not pay or reimburse a permanent
17licensee, directly or indirectly, for any advertising services,
18including by way of social media. Except as otherwise permitted
19by this section, a permanent retail licensee shall not accept any
20payment or reimbursement, directly or indirectly, for any
21advertising services offered by a nonretail licensee.

end insert
begin insert

22(C) For the purposes of this subdivision, “social media” means
23a service, platform, application, or site where users communicate
24and share media, such as pictures, videos, music, and blogs, with
25other users.

end insert
begin insert

26(7) A nonretail licensee shall not require, directly or indirectly,
27as a condition of sponsorship or participation in any event under
28this section, that its products be sold or served exclusively at the
29event. A retail licensee shall not receive, directly or indirectly, any
30advertising, sale, or promotional benefit from any permanent retail
31licensee in connection with the sponsorship or participation. A
32permanent retail licensee shall not offer or provide a nonretail
33licensee any advertising, sale, or promotional benefit in connection
34with the sponsorship or participation.

end insert

35(b) begin deleteThe end deletebegin insertThis end insertsection does not authorize a nonretail licensee to
36pay, in whole or in part, any costs, including the cost of
37sponsorship, of any retail licensee that is sponsoring or participating
38in a nonprofit event.

39(c) A licensee that sponsors or participates in a nonprofit event
40under this section shall keep detailed records of its sponsorship or
P6    1participation and shall maintain those records for a period of at
2least three years. These records shall be provided to the department
3upon request.

begin insert

4(d) Nothing in this section shall be deemed to exempt the
5nonprofit organization from obtaining any licenses or permits as
6may be required to conduct the event.

end insert
7

SEC. 2.  

Section 23399.65 is added to the Business and
8Professions Code
, to read:

9

23399.65.  

(a) A licensed beer manufacturer may apply to the
10department for a brewery event permit. A brewery event permit
11shall authorize the sale of beer produced by the licensee pursuant
12to Section 23357 for consumption on property contiguous and
13adjacent to the licensed premises owned or under the control of
14the licensee. The property shall be secured and controlled by the
15licensee.

16(b) (1) The fee for a brewery event permit for a licensed beer
17manufacturer shall be one hundred ten dollars ($110) for a permit
18issued during the 2016 calendar year, and for a permit issued during
19the years thereafter, the annual fee shall be calculated pursuant to
20subdivisions (b) and (c) of Section 23320. The permit may be
21renewed annually at the same time as the licensee’s license. A
22brewery event permit shall be transferable as a part of the license.

23(2) For each brewery event, consent for the sale of beer pursuant
24to subdivision (a) at the brewery event shall be first obtained by
25the licensee from the department in the form of an event
26authorization issued by the department. An event authorization
27shall be subject to approval by the appropriate local law
28enforcement agency. The fee for each event authorization shall
29not exceed twenty-five dollars ($25). The number of events
30authorized by a brewery event permit shall not exceed four in any
31calendar year.

32(3) All moneys collected as fees pursuant to this subdivision
33shall be deposited in the Alcohol Beverage Control Fund, as
34described in Section 25761, for allocation, upon appropriation by
35the Legislature, as provided in subdivision (d) of that section.

36(c) At all approved events, the licensee may exercise only those
37privileges authorized by the licensee’s license and shall comply
38with all provisions of the act pertaining to the conduct of on-sale
39begin delete premisesend deletebegin insert premises,end insert and violation of those provisions may be
40grounds for suspension or revocation of the licensee’s license or
P7    1permit, or both, as though the violation occurred on the licensed
2premises.

3(d) The department may adopt any regulations it determines to
4be necessary for the administration of this section.

5begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 23402.5 is added to the end insertbegin insertBusiness and
6Professions Code
end insert
begin insert, to read:end insert

begin insert
7

begin insert23402.5.end insert  

(a) A retail licensee shall not sell or offer for sale
8any beer that is purchased from a beer manufacturer at the beer
9manufacturer’s licensed premises under any of the following
10circumstances:

11(1) The beer manufacturer from which the beer is purchased
12has not filed a price schedule pursuant to Chapter 12 (commencing
13with Section 25000) for the sale of that beer in the county in which
14the retail licensee’s premises at which the beer is being sold or
15offered for sale is located.

16(2) The price at which the retailer purchases the beer is different
17from the price in the price schedule filed by the beer manufacturer
18pursuant to Chapter 12 (commencing with Section 25000) from
19which the beer is purchased.

20(3) The beer container contains the statement or is marked “Not
21Packaged for Resale”.

22(b) Nothing in this section creates any exception to the
23requirements of Chapter 12 (commencing with Section 25000).

end insert
24

begin deleteSEC. 3.end delete
25begin insertSEC. 4.end insert  

Section 25500 of the Business and Professions Code
26 is amended to read:

27

25500.  

(a) No manufacturer, winegrower, manufacturer’s
28agent, rectifier, California winegrower’s agent, distiller, bottler,
29importer, or wholesaler, or any officer, director, or agent of any
30such person shall:

31(1) Hold the ownership, directly or indirectly, of any interest in
32any on-sale license.

33(2) Furnish, give, or lend any money or other thing of value,
34directly or indirectly, to, or guarantee the repayment of any loan
35or the fulfillment of any financial obligation of, any person engaged
36in operating, owning, or maintaining any on-sale premises where
37alcoholic beverages are sold for consumption on the premises.

38(3) Own any interest, directly or indirectly, in the business,
39furniture, fixtures, refrigeration equipment, signs, except signs for
40interior use mentioned in subdivision (g) of Section 25503, or lease
P8    1in or of any premises operated or maintained under any on-sale
2license for the sale of alcoholic beverages for consumption on the
3premises where sold; or own any interest, directly or indirectly, in
4realty acquired after June 13, 1935, upon which on-sale premises
5are maintained unless the holding of the interest is permitted in
6accordance with rules of the department.

7(b) This section does not apply to the holding by one person of
8a wholesaler’s license and an on-sale license in counties not to
9exceed 15,000 population.

10(c) This section does not apply to the financial or representative
11relationship between a manufacturer, winegrower, manufacturer’s
12agent, rectifier, California winegrower’s agent, distiller, bottler,
13importer, or wholesaler, or any officer, director, or agent of such
14person, and a person holding only one of the following types of
15licenses:

16(1) On-sale general license for a bona fide club.

17(2) Club license issued under Article 4 (commencing with
18Section 23425) of Chapter 3.

19(3) Veterans’ club license issued under Article 5 (commencing
20 with Section 23450) of Chapter 3.

21(4) On-sale license for boats, trains, sleeping cars, or airplanes
22where the alcoholic beverages produced or sold by the
23manufacturer, winegrower, manufacturer’s agent, rectifier,
24California winegrower’s agent, bottler, importer, or wholesaler or
25any officer, director, or agent of the person are not sold, furnished,
26or given, directly or indirectly to the on-sale licensee.

27(d) This section does not apply to an employee of a licensee
28referred to in subdivision (a) who is a nonadministrative and
29nonsupervisorial employee.

30(e) Notwithstanding any other provision of this division or
31regulation of the department, this section does not apply to an
32employee of a licensee referred to in subdivision (a) who is the
33spouse of an on-sale licensee, so long as the on-sale licensee does
34not purchase, offer for sale, or promote, regardless of source, any
35of the brands of alcoholic beverages that are produced, bottled,
36processed, imported, rectified, distributed, represented, or sold by
37any licensee referred to in subdivision (a) that employs the spouse
38of the on-sale licensee.

P9    1(f) (1) Nothing in this division prohibits the holder of any retail
2on-sale or off-sale license from purchasing advertising in any
3publication published by a nonretail licensee.

4(2) For purposes of this subdivision:

5(A) “Nonretail licensee” means any manufacturer, winegrower,
6manufacturer’s agent, rectifier, California winegrower’s agent,
7distiller, bottler, importer, or wholesaler, or any person who does
8not directly or indirectly hold the ownership of any interest in a
9retail license.

10(B) “Publication published by a nonretail licensee” includes
11Internet Web sites and social media feeds operated and maintained
12by or for a nonretail licensee under an account or Internet Web
13site address owned by the nonretail licensee.

14begin insert

begin insertSEC. 5.end insert  

end insert

begin insertSection 25666 of the end insertbegin insertBusiness and Professions Codeend insert
15begin insert is amended to read:end insert

16

25666.  

begin insert(a)end insertbegin insertend insert In any hearing on an accusation charging a licensee
17with a violation of Sections 25658, 25663, and 25665, the
18department shall produce the alleged minor for examination at the
19hearing unless he or she is unavailable as a witness because he or
20she is dead or unable to attend the hearing because of a
21then-existing physical or mental illness or infirmity, or unless the
22licensee has waived, in writing, the appearance of the minor. When
23a minor is absent because of a then-existing physical or mental
24illness or infirmity, a reasonable continuance shall be granted to
25allow for the appearance of the minor if the administrative law
26judge finds that it is reasonably likely that the minor can be
27produced within a reasonable amount of time.begin delete Nothing in this
28section shall prevent the department from taking testimony of the
29minor as provided in Section 11511 of the Government Code.end delete

begin insert

30(b) (1) Nothing in this section shall prevent the department
31from taking testimony of the minor as provided in Section 11511
32of the Government Code.

end insert
begin insert

33(2) This section is not intended to preclude the continuance of
34a hearing because of the unavailability of a minor for any other
35reason pursuant to Section 11524 of the Government Code.

end insert
36begin insert

begin insertSEC. 6.end insert  

end insert
begin insert

No reimbursement is required by this act pursuant to
37Section 6 of Article XIII B of the California Constitution because
38the only costs that may be incurred by a local agency or school
39district will be incurred because this act creates a new crime or
40infraction, eliminates a crime or infraction, or changes the penalty
P10   1for a crime or infraction, within the meaning of Section 17556 of
2the Government Code, or changes the definition of a crime within
3the meaning of Section 6 of Article XIII B of the California
4Constitution.

end insert


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