Amended in Assembly June 8, 2016

Amended in Senate May 12, 2016

Amended in Senate March 30, 2016

Amended in Assembly May 28, 2015

Amended in Assembly April 13, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 866

Introduced by Assembly Member Eduardo Garcia

(Principal coauthors: Senators Block and Hall)

February 26, 2015

An act to amend Section 25503.6 of the Business and Professions Code, relating to alcoholic beverages, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

AB 866, as amended, Eduardo Garcia. Alcoholic beverages: advertising: San Diego: Inglewood.

Existing law generally prohibits various licenseholders from providing money or any other thing of value to a person owning or operating an on-sale premises where alcoholic beverages are served, subject to specified exceptions. Existing law authorizes the holder of a winegrower’s license, a beer manufacturer, a distilled spirits rectifier, a distilled spirits manufacturer, and a distilled spirits manufacturer’s begin delete agent, end delete begin insert agent end insert to purchase advertising space and time from, or on behalf of, an on-sale retail licensee, under certain conditions, if the on-sale retail licensee is the owner, manager, agent of the owner, assignee of the owner’s advertising rights, or major tenant of specified facilities. Existing law makes it a misdemeanor to coerce or solicit licensees in connection with these provisions, as specified.

This bill would expand the facilities to which the exception described above would apply to include outdoor stadiums with specified seating capacities located in the Cities of San Diego and begin delete Inglewood. end delete begin insert Inglewood, as provided. end insert By expanding the scope of a crime, this bill 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.

This bill would make legislative findings and declarations as to the necessity of a special statute for the Cities of San Diego and Inglewood.

This bill would declare that it is to take effect immediately as an urgency statute.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

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

SECTION 1.  

Section 25503.6 of the Business and Professions
Code is amended to read:

25503.6.  

(a) Notwithstanding any other provision of this
chapter, a beer manufacturer, the holder of a winegrower’s license,
a distilled spirits rectifier, a distilled spirits manufacturer, or
distilled spirits manufacturer’s agent may purchase advertising
space and time from, or on behalf of, an on-sale retail licensee
subject to all of the following conditions:

(1) The on-sale licensee is the owner, manager, agent of the
owner, assignee of the owner’s advertising rights, or the major
tenant of the owner of any of the following:

(A) An outdoor stadium or a fully enclosed arena with a fixed
seating capacity in excess of 10,000 seats located in Sacramento
County or Alameda County.

(B) A fully enclosed arena with a fixed seating capacity in
excess of 18,000 seats located in Orange County or Los Angeles
County.

(C) An outdoor stadium or fully enclosed arena with a fixed
seating capacity in excess of 8,500 seats located in Kern County.

(D) An exposition park of not less than 50 acres that includes
an outdoor stadium with a fixed seating capacity in excess of 8,000
seats and a fully enclosed arena with an attendance capacity in
excess of 4,500 people, located in San Bernardino County.

(E) An outdoor stadium with a fixed seating capacity in excess
of 10,000 seats located in Yolo County.

(F) An outdoor stadium and a fully enclosed arena with fixed
seating capacities in excess of 10,000 seats located in Fresno
County.

(G) An athletic and entertainment complex of not less than 50
acres that includes within its boundaries an outdoor stadium with
a fixed seating capacity of at least 8,000 seats and a second outdoor
stadium with a fixed seating capacity of at least 3,500 seats located
in Riverside County.

(H) An outdoor stadium with a fixed seating capacity in excess
of 1,500 seats located in Tulare County.

(I) A motorsports entertainment complex of not less than 50
acres that includes within its boundaries an outdoor speedway with
a fixed seating capacity of at least 50,000 seats, located in San
Bernardino County.

(J) An exposition park, owned or operated by a bona fide
nonprofit organization, of not less than 400 acres with facilities
including a grandstand with a seating capacity of at least 8,000
people, at least one exhibition hall greater than 100,000 square
feet, and at least four exhibition halls, each greater than 30,000
square feet, located in the City of Pomona or the City of La Verne
in Los Angeles County.

(K) An outdoor soccer stadium with a fixed seating capacity of
at least 25,000 seats, an outdoor tennis stadium with a fixed
capacity of at least 7,000 seats, an outdoor track and field facility
with a fixed seating capacity of at least 7,000 seats, and an indoor
velodrome with a fixed seating capacity of at least 2,000 seats, all
located within a sports and athletic complex built before January
1, 2005, in the City of Carson in Los Angeles County.

(L) An outdoor professional sports facility with a fixed seating
capacity of at least 4,200 seats located in San Joaquin County.

(M) A fully enclosed arena with a fixed seating capacity in
excess of 13,000 seats in the City of Inglewood.

(N) (i) An outdoor stadium with a fixed seating capacity of at
least 68,000 seats located in the City of Santa Clara.

(ii) A beer manufacturer, the holder of a winegrower’s license,
a distilled spirits rectifier, a distilled spirits manufacturer, or
distilled spirits manufacturer’s agent may purchase advertising
space and time from, or on behalf of, a major tenant of an outdoor
stadium described in clause (i), provided the major tenant does not
hold a retail license, and the advertising may include the placement
of advertising in an on-sale licensed premises operated at the
outdoor stadium.

(O) A complex of not more than 50 acres located on the campus
of, and owned by, Sonoma State University dedicated to presenting
live artistic, musical, sports, food, beverage, culinary, lifestyle, or
other cultural and entertainment events and performances with
venues that include a concert hall with a seating capacity of
approximately 1,500 seats, a second concert hall with a seating
capacity of up to 300 seats, an outdoor area with a seating capacity
of up to 5,000 seats, and a further outdoor area with a seating
capacity of up to 10,000 seats. With respect to this complex,
advertising space and time may also be purchased from or on behalf
of the owner of the complex, a long-term tenant or licensee of the
venue, whether or not the owner, long-term tenant, or licensee
holds an on-sale license.

(P) A fairgrounds with a horse racetrack and equestrian and
sports facilities located in San Diego County.

(Q) An outdoor stadium with a fixed seating capacity of at least
43,000 seats located in the City of San begin delete Diego. end delete begin insert Diego, as follows: end insert

begin insert

(i) A beer manufacturer, the holder of a winegrower’s license,
a distilled spirits rectifier, or a distilled spirits manufacturer may
purchase advertising space and time from the owner or a major
tenant of the stadium described in this subparagraph, provided
the owner or major tenant does not hold a retail license.

end insert begin insert

(ii) The terms of the agreement shall not include an inducement
for the owner or major tenant of the stadium to require its on-sale
licensee to purchase the brands of the advertiser or to exclude
brands for sale at the facility other than those of the advertiser.

end insert begin insert

(iii) No revenue from the advertising agreement shall be shared
or provided, directly or indirectly, with the on-sale licensee
providing alcoholic beverage and food services at the stadium.

end insert

(R) An outdoor stadium with a fixed seating capacity of at least
70,000 seats located in the City of begin delete Inglewood. end delete begin insert Inglewood, as
follows: end insert

begin insert

(i) A beer manufacturer, the holder of a winegrower’s license,
a distilled spirits rectifier, or a distilled spirits manufacturer may
purchase advertising space and time from the owner or a major
tenant of the stadium described in this subparagraph, provided
the owner or major tenant does not hold a retail license.

end insert begin insert

(ii) The terms of the agreement shall not include an inducement
for the owner or major tenant of the stadium to require its on-sale
licensee to purchase the brands of the advertiser or to exclude
brands for sale at the facility other than those of the advertiser.

end insert begin insert

(iii) No revenue from the advertising agreement shall be shared
or provided, directly or indirectly, with the on-sale licensee
providing alcoholic beverage and food services at the stadium.

end insert

(2) The outdoor stadium or fully enclosed arena described in
paragraph (1) is not owned by a community college district.

(3) The advertising space or time is purchased only in connection
with the events to be held on the premises of the exposition park,
stadium, or arena owned by the on-sale licensee. With respect to
an exposition park as described in subparagraph (J) of paragraph
(1) that includes at least one hotel, the advertising space or time
shall not be displayed on or in any hotel located in the exposition
park, or purchased in connection with the operation of any hotel
located in the exposition park. With respect to the complex
described in subparagraph (O) of paragraph (1), the advertising
space or time shall be purchased only in connection with live
artistic, musical, sports, food, beverage, culinary, lifestyle, or other
cultural and entertainment events and performances to be held on
the premises of the complex.

(4) The on-sale licensee serves other brands of beer distributed
by a competing beer wholesaler in addition to the brand
manufactured or marketed by the beer manufacturer, other brands
of wine distributed by a competing wine wholesaler in addition to
the brand produced by the winegrower, and other brands of distilled
spirits distributed by a competing distilled spirits wholesaler in
addition to the brand manufactured or marketed by the distilled
spirits rectifier, the distilled spirits manufacturer, or the distilled
spirits manufacturer’s agent that purchased the advertising space
or time.

(b) Any purchase of advertising space or time pursuant to
subdivision (a) shall be conducted pursuant to a written contract
entered into by the beer manufacturer, the holder of the
winegrower’s license, the distilled spirits rectifier, the distilled
spirits manufacturer, or the distilled spirits manufacturer’s agent
and any of the following:

(1) The on-sale licensee.

(2) With respect to clause (ii) of subparagraph (N) of paragraph
(1) of subdivision (a), the major tenant of the outdoor stadium.

(3) With respect to subparagraph (O) of paragraph (1) of
subdivision (a), the owner, a long-term tenant of the complex, or
licensee of the complex, whether or not the owner, long-term
tenant, or licensee holds an on-sale license.

(c) Any beer manufacturer or holder of a winegrower’s license,
any distilled spirits rectifier, any distilled spirits manufacturer, or
any 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 all or part of those contractual
obligations entered into pursuant to subdivision (a) or (b) 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, time, or
costs 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 revocation pursuant to
Section 24200.

(d) Any on-sale retail licensee, as described in subdivision (a),
who, directly or indirectly, solicits or coerces a holder of a
wholesaler’s license to solicit a beer manufacturer, a holder of a
winegrower’s license, a distilled spirits rectifier, a distilled spirits
manufacturer, or a distilled spirits manufacturer’s agent to purchase
advertising space or time pursuant to subdivision (a) or (b) 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 revocation pursuant to Section
24200.

(e) For the purposes of this section, “beer manufacturer” includes
any holder of a beer manufacturer’s license, any holder of an
out-of-state beer manufacturer’s certificate, or any holder of a beer
and wine importer’s general license.

(f) The Legislature finds that it is necessary and proper to require
a separation among 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. The Legislature further finds that the exceptions
established by this section to the general prohibition against tied
interests shall be limited to their express terms so as not to
undermine the general prohibition and intends that this section be
construed accordingly.

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.

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 Cities
of San Diego and Inglewood.

SEC. 4.  

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

In order to ensure the fair and efficient application of the
alcoholic beverage control licensing laws with respect to eligible
facilities in the Cities of San Diego and Inglewood, it is necessary
that this act take immediate effect.