Amended in Assembly April 28, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1320

Introduced by Assembly Member Maienschein

February 27, 2015

begin delete An act to amend Section 25503.6 of the Business and Professions Code, relating to alcoholic beverages. end delete begin insert An act to add Section 25503.36 to the Business and Professions Code, relating to alcoholic beverages. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1320, as amended, Maienschein. begin delete Alcoholic beverages: tied-house restrictions: fairgrounds. end delete begin insert Alcoholic beverages: tied-house restrictions: advertising. end insert

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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.

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This bill would expressly authorize a beer manufacturer, holder of a winegrower’s license, winegrower’s agent, holder of an importer’s general license, as described, 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 conducts entertainment events solely at the San Diego County Fairgrounds, under specified conditions. The bill would also make 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 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 importer’s general license, distilled spirits manufacturer, holder of a distilled spirits 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. The bill would make a related statement of findings.

end insert begin insert

By creating new crimes this bill would impose a state-mandated local program.

end insert begin insert

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

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 delete

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 rectifiers 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, specified entities, including certain parks, entertainment complexes, and outdoor stadiums, as provided.

end delete begin delete

This bill would expressly authorize 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 rectifiers general license, or a distilled spirits manufacturer’s agent to sponsor events promoted by or own, sponsor, conduct, or purchase advertising space and time from, or on behalf of, an on-sale retail licensee that is the owner, manager, agent of the owner, assignee of the owner’s advertising rights, or major tenant of a state- or county-owned fairground, under specified conditions. The bill would also make 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 rectifiers 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 importer’s general license, distilled spirits manufacturer, holder of a distilled spirits rectifiers general license, or a distilled spirits manufacturer’s agent to purchase advertising time or space pursuant to these provisions guilty of a misdemeanor.

end delete begin delete

By creating new crimes, this bill would impose a state-mandated local program.

end delete begin delete

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 delete begin delete

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

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

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 25503.36 is added to the end insert begin insert Business and
Professions Code end insert begin insert , to read: end insert

begin insert

begin insert 25503.36. end insert   

(a) Notwithstanding any other law, a beer
manufacturer, holder of a winegrower’s license, winegrower’s
agent, holder of an importer’s general license that does not also
hold a wholesale or retail license as an additional license, distilled
spirits manufacturer, holder of a distilled spirits 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) The live entertainment marketing company operates and
promotes live artistic, musical, sports, or cultural entertainment
events only.

(2) All of the live artistic, musical, sports, or cultural
entertainment events are conducted at the San Diego County
Fairgrounds, located in the City of Del Mar in the County of San
Diego, and the events will typically occur over a period of three
or more consecutive days during which approximately 100 acts
will perform before approximately 20,000 or more patrons. The
live entertainment marketing company shall not conduct more than
three of these types of events within a calendar year.

(3) The live entertainment marketing company is a Delaware
limited liability company that is under common ownership,
management, or control by a private equity firm that may also
have common ownership, management, or control of a licensed
California winery, provided the winery represents not more than
25 percent of the assets under common ownership, management,
or control by the private equity firm or its subsidiaries, and the
live entertainment marketing company exercises no control over
the operations of the winery.

(4) Any on-sale licensee operating at a venue where live artistic,
musical, sports, or 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 owning, sponsoring, or advertising 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.

(5) An agreement for the sponsorship of, or for the purchase of
advertising space and time during, a live artistic, musical, sports,
or 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 owning,
advertising, or sponsoring 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 by the live entertainment company described
in this section.

(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 importer’s general license, distilled spirits
manufacturer, holder of a distilled spirits 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 importer’s general license,
distilled spirits manufacturer, holder of a distilled spirits 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 importer’s general license, distilled spirits
manufacturer, holder of a distilled spirits 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.

(f) Nothing in this section shall authorize the purchasing of
advertising space or time directly from, or on behalf of, any on-sale
licensee except as expressly authorized by this section or any other
provision of this division.

(g) Nothing in this section shall authorize 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 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 that 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. The Legislature further finds that the
exception established by this section to the general prohibition
against tied interests must be limited to its expressed terms so as
not to undermine the general prohibition, and intends that this
section be construed accordingly.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert begin insert

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 San Diego.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert begin insert

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.

end insert

begin delete

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
within 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 within 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, within 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 within 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.

(O) A state- or county-owned fairground.

(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.

(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.

(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 the on-sale licensee, or with respect to clause (ii) of
subparagraph (N) of paragraph (1) of subdivision (a), the major
tenant of the outdoor stadium.

(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.

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.

end delete