BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Isadore Hall, III
Chair
2015 - 2016 Regular
Bill No: AB 866 Hearing Date: 5/10/2016
-----------------------------------------------------------------
|Author: |Eduardo Garcia |
|-----------+-----------------------------------------------------|
|Version: |3/30/2016 Amended |
-----------------------------------------------------------------
------------------------------------------------------------------
|Urgency: |Yes |Fiscal: |Yes |
------------------------------------------------------------------
-----------------------------------------------------------------
|Consultant:|Arthur Terzakis |
| | |
-----------------------------------------------------------------
SUBJECT: Alcoholic beverages: advertising: San Diego
DIGEST: This bill extends an existing tied-house exception in
the Alcoholic Beverage Control (ABC) Act pertaining to the
general prohibition against advertising arrangements between
retail, wholesale and manufacturer licensees to include an
outdoor stadium with a fixed seating capacity of at least 43,000
seats located in the City of San Diego (Petco Park - home of the
San Diego Padres Major League Baseball team).
ANALYSIS:
Existing law:
1)Establishes the Department of ABC and grants it exclusive
authority to administer the provisions of the ABC Act in
accordance with laws enacted by the Legislature. This
involves licensing individuals and businesses associated with
the manufacture, importation and sale of alcoholic beverages
in this state and the collection of license fees for this
purpose.
2)Separates the alcoholic beverage industry into three component
parts, or tiers (referred to as the "tied-house" law or
"three-tier" system), of manufacturer (including breweries,
wineries and distilleries), wholesaler, and retailer (both
on-sale and off-sale). The original policy rationale for this
body of law was to: (a) promote the state's interest in an
AB 866 (Eduardo Garcia) Page 2 of ?
orderly market; (b) prohibit the vertical integration and
dominance by a single producer in the market place; (c)
prohibit commercial bribery and to protect the public from
predatory marketing practices; and, (d) discourage and/or
prevent the intemperate use of alcoholic beverages.
Generally, other than exceptions granted by the Legislature,
the holder of one type of license is not permitted to do
business as another type of licensee within the "three-tier"
system.
3)Prohibits, in general, an alcohol manufacturer, wholesaler, or
any officer, director, or agent of any such person from
owning, directly, or indirectly, any interest in any on-sale
license, or from providing anything of value to retailers, be
it free goods, services, or advertising.
4)Prohibits paid advertising by winegrowers, beer manufacturers
and distilled spirits producers in cases where a retail
licensee also owns a sports or entertainment venue. Over the
years numerous exceptions to this prohibition have been added
to the ABC Act [e.g., Sleep Train Arena (formerly known as
ARCO Arena) in Sacramento, Oakland Coliseum in Oakland,
Arrowhead Pond Arena in Anaheim, Kern County Arena in
Bakersfield, the National Orange Show Event Center in San
Bernardino, California Speedway in Fontana, Grizzly Stadium in
downtown Fresno, Raley Field in West Sacramento, HP Pavilion
in San Jose, the Home Depot Center in the City of Carson, the
Forum in the City of Inglewood, Levi's Stadium in the City of
Santa Clara, and other venues].
This bill:
1)Extends an existing tied-house exception pertaining to the
general prohibition against advertising arrangements between
retail, wholesale and manufacturer licensees to include an
outdoor stadium with a fixed seating capacity of at least
43,000 seats located in the City of San Diego.
2)Contains an urgency clause to take effect immediately.
Background
Purpose of AB 866. According to the author's office, the home
of the San Diego Padres Major League Baseball team is Petco Park
which is located in downtown San Diego. This state of the art
AB 866 (Eduardo Garcia) Page 3 of ?
facility is owned by the City of San Diego and operated under
the auspices of the San Diego Padres Baseball Club LP, the
holder of the alcoholic beverage on-sale retail license. The
author's office notes that existing ABC laws contain numerous
exceptions to the general prohibition against advertising
arrangements between retail, wholesale and manufacturer
licensees. This bill will include Petco Park on the list of
exemptions in the law, thereby allowing the Padres LP to develop
certain alcoholic beverage sponsorships with various
manufacturers and distributors. The author's office emphasizes
that this exemption would put Petco Park on an even playing
field with other arenas and stadiums in California.
Additionally, the author's office notes that AB 866 contains an
urgency clause because Petco Park is hosting the 87th Major
League Baseball All-Star Week July 10-12, 2016.
Petco Park. Petco Park is a baseball park, but also known as a
venue for concerts, football, rugby sevens and other events. It
opened in 2004, replacing Jack Murphy/Qualcomm Stadium as the
home park of the San Diego Padres, the city's Major League
Baseball (MLB) franchise. The ballpark seats approximately
43,000 and is named after the pet supplies retailer Petco, which
is based in San Diego and paid for the naming rights. The
Padres previously shared Jack Murphy/Qualcomm Stadium with the
National Football League's San Diego Chargers. The construction
cost of over $450 million was partially funded by the Center
City Development Corporation and the San Diego Redevelopment
Agency. The ballpark was intended to be part of a comprehensive
plan to revitalize San Diego's aging downtown. The ballpark is
located across Harbor Drive from the San Diego Convention Center
and its main entrance behind home plate is located two blocks
from the downtown terminal of the San Diego Trolley light rail
system. The official address of Petco Park is 19 Tony Gwynn
Way, in honor of the eight-time National League batting champion
who wore that uniform number during his entire major league
career with the Padres. A 10-foot statue of Gwynn was unveiled
on the park grounds in July of 2007 - Gwynn passed in June of
2014 after battling salivary gland cancer. Gwynn's .338 career
batting average over 20 seasons is the highest since Ted
Williams (the "Splendid Splinter") retired from the Red Sox in
1960 with a .344 career batting average.
Comments. Although the stated purpose of this bill is to
provide an exemption for Petco Park, Qualcomm Stadium seats
AB 866 (Eduardo Garcia) Page 4 of ?
approximately 70,000 and therefore meets the exemption threshold
of 43,000 fixed seats at an outdoor stadium in the City of San
Diego thus making it eligible for the same exemption.
Author's amendments. The author will offer the following
amendments in committee on Tuesday, May 10, 2016:
1. Add Senator Hall and Senator Hueso as co-authors.
2. On page 5, between lines 11 & 12, add, (R) an outdoor
stadium with a fixed seating capacity of at least 70,000
seats located in the City of Inglewood. (new stadium for
the Los Angeles Rams National Football League team)
Prior/Related Legislation
AB 1767 (Bigelow, 2016) expands the specified conditions under
which designated alcoholic beverage licensees may purchase
advertising space or time in connection with events held on the
premises of an exposition, park, stadium or arena owned by the
on-sale licensee to include circumstances in which the premises
are "leased" by the on-sale licensee. (Pending in Assembly
Appropriations Committee)
SB 557 (Hall, Chapter 420, Statutes of 2015) extended an
existing tied-house exception pertaining to the general
prohibition against advertising arrangements between retail,
wholesale and manufacturer licensees to include a fairgrounds
with a horse racetrack and equestrian and sports facilities
located in the County of San Diego.
SB 462 (Wolk, Chapter 315, Statutes of 2015) among other things,
extended an existing tied-house exception pertaining to the
general prohibition against advertising arrangements between
retail, wholesale and manufacturer licensees to include a
specified entertainment complex, known as the Green Music
Center, located on the campus of Sonoma State University.
AB 600 (Bonta, Chapter 139, Statutes of 2014) extended an
existing tied-house exception pertaining to the general
prohibition against advertising arrangements between retail,
wholesale and manufacturer licensees to include an outdoor
stadium with a fixed seating capacity of at least 68,000 seats
located in the City of Santa Clara (Levi's Stadium - new home of
the San Francisco 49ers).
AB 866 (Eduardo Garcia) Page 5 of ?
SB 324 (Wright, Chapter 164, Statutes of 2013) extended an
existing tied-house exception pertaining to the general
prohibition against advertising arrangements between retail,
wholesale and manufacturer licensees to include a fully enclosed
arena with a fixed seating capacity in excess of 13,000 seats
(the Forum) in the City of Inglewood.
SB 351 (Negrete-McLeod, 2007) would have extended an existing
tied-house exception pertaining to the general prohibition
against advertising arrangements between retail, wholesale and
manufacturer licensees so that alcoholic beverage manufacturers
may purchase advertising from on-sale retail licensees in order
to promote "safe ride home programs" at specified stadiums and
arenas. (Placed on Assembly inactive file)
AB 776 (Aghazarian, Chapter 221, Statutes of 2007) created a new
tied-house exception by authorizing a beer manufacturer to
sponsor or purchase advertising space and time from, or on
behalf of, an off-sale retail licensee that is an owner or
co-owner of a professional sports team (California Cougars
indoor soccer team) that plays its home games, in an arena with
a fixed seating capacity of 10,000 seats (Stockton Arena)
located in San Joaquin County.
AB 663 (Galgiani, Chapter 745, Statutes of 2007) extended an
existing tied-house exception pertaining to the general
prohibition against advertising arrangements between retail,
wholesale and manufacturer licensees to include an outdoor
professional sports facility with a fixed seating capacity of at
least 4,200 (Banner Island Ballpark - home of the Stockton Ports
Class A baseball team) located in San Joaquin County.
AB 3046 (Chavez, Chapter 587, Statutes of 2006) extended an
existing tied-house exception pertaining to the general
prohibition against advertising arrangements between retail,
wholesale and manufacturer licensees to the HP Pavilion in Santa
Clara County.
AB 1442 (Horton, Chapter 617, Statutes of 2005) extended an
existing tied-house exception pertaining to the general
prohibition against advertising arrangements between retail,
wholesale and manufacturer licensees to the Home Depot Center, a
sports and athletic complex within the City of Carson in Los
Angeles and the Nokia Theater, located within the Los Angeles
AB 866 (Eduardo Garcia) Page 6 of ?
Sports and Entertainment District, adjacent to STAPLES Center.
SB 1647 (Perata, Chapter 275, Statutes of 2004) extended an
existing tied-house exception pertaining to the general
prohibition against advertising arrangements between retail,
wholesale and manufacturer licensees to the Oakland Coliseum in
Alameda County.
SB 1189 (Costa, Chapter 47, Statutes of 2002) extended an
existing tied-house exception pertaining to the general
prohibition against advertising arrangements between retail,
wholesale and manufacturer licensees to the Visalia Oaks Stadium
in Visalia and the California Speedway in Fontana.
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: Yes
SUPPORT:
San Diego Padres
OPPOSITION:
None received