Amended in Senate September 4, 2015

Amended in Senate August 18, 2015

Amended in Assembly May 13, 2015

Amended in Assembly April 28, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 1320


Introduced by Assembly Member Maienschein

February 27, 2015


An act to add Section 25503.36 to the Business and Professions Code, relating to alcoholic beverages, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

AB 1320, as amended, Maienschein. Alcoholic beverages: tied-house restrictions: advertising.

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.

This bill would expressly authorizebegin delete a holder of a beer manufacturer license, holder of an out-of-state beer manufacturer’s certificate, holder of a winegrower’s license, winegrower’s agent, holder of a rectifier license, distilled spirits manufacturer, holder of a distilled spirits rectifier’s general license, distilled spirits manufacturer’s agent, or holder of a beer and wine importer’s general license or distilled spirits importer’s general license, as described,end deletebegin insert an authorized licenseeend insertbegin insert, as defined,end insert to sponsor events promoted by or purchase advertising space and time from, or on behalf of, a live entertainment marketing companybegin delete that conducts entertainment events solely atend deletebegin insert in connection with events organized and conducted by the live entertainment marketing company atend insert the San Diego County Fairgrounds, under specified conditions. The bill would also makebegin delete 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 agentend deletebegin insert an authorized licenseeend insert 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 solicitbegin delete 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 agentend deletebegin insert an authorized licenseeend insert to purchase advertising time or space pursuant to these provisions guilty of a misdemeanor. The bill would make a related statement of findings.

By creating new crimesbegin insert,end insert this bill would impose a state-mandated local program.

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

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

Vote: 23. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

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

P3    1

SECTION 1.  

Section 25503.36 is added to the Business and
2Professions Code
, to read:

3

25503.36.  

(a) Notwithstanding any other provision of this
4division, begin delete a holder of a beer manufacturer license, holder of an
5out-of-state beer manufacturer’s certificate, holder of a
6winegrower’s license, winegrower’s agent, holder of a rectifier
7license, distilled spirits manufacturer, holder of a distilled spirits
8rectifier’s general license, distilled spirits manufacturer’s agent,
9or holder of a beer and wine importer’s general license or distilled
10spirits importer’s general license that, unless it holds one of the
11other authorized licenses specified in this section, does not also
12hold a wholesale or retail license as an additional license,end delete
begin insert an
13authorized licenseeend insert
may sponsor events promoted by, and may
14purchase advertising space and time from, or on behalf of, a live
15entertainment marketing companybegin insert in connection with events
16organized and conducted by the live entertainment marketing
17company on the premises of a permanent retail licensee located
18at the San Diego County Fairgrounds, located in the City of Del
19Mar in the County of San Diego,end insert
subject to all of the following
20conditions:

21(1) The live entertainment marketing company operates and
22promotes live artistic, musical, sports, or cultural entertainment
23events only.

24(2) begin deleteAll of the live artistic, musical, sports, or cultural
25entertainment events are conducted at the San Diego County
26Fairgrounds, located in the City of Del Mar in the County of San
27Diego, and theend delete
begin insert Theend insert events willbegin delete typically occurend deletebegin insert take placeend insert over a
28period of no more than four consecutive days during which
29approximately 100 acts will perform before approximately 20,000
30or more patrons. begin deleteThe live entertainment marketing company shall
31not conduct more than three of these types of events within a
32calendar year.end delete

33(3) The live entertainment marketing company is a Delaware
34limited liability company that is under common ownership,
35management, or control by a private equity firm that may also have
P4    1common ownership, management, or control of a licensed
2California winery, provided the winery represents not more than
325 percent of the assets under common ownership, management,
4or control by the private equity firm or its subsidiaries, and the
5live entertainment marketing company exercises no control over
6the operations of the winery.begin insert Any authorized licensee sponsoring
7an event or purchasing advertising space or time, pursuant to this
8section, shall obtain written verification of compliance with this
9subdivision prior to such sponsorship or the purchase of
10advertising space or time.end insert

11(4) Any on-sale licensee operating at begin delete a venue where live artistic,
12musical, sports, or cultural entertainment events are performed
13pursuant to a sponsorship described in this section or where
14advertising is purchased as described in this sectionend delete
begin insert the San Diego
15County Fairgroundsend insert
shall serve other brands of beer, distilled
16spirits, and wine distributed by a competing wholesalerbegin insert or
17manufacturerend insert
in addition to any brandbegin delete manufactured or distributed
18by the owning, sponsoring, or advertising beer manufacturer, holder
19of a winegrower’s license, winegrower’s agent, holder of an
20importer’s general license, distilled spirits manufacturer, holder
21of a distilled spirits rectifier’s general license, or a distilled spirits
22manufacturer’s agent.end delete
begin insert manufactured, distributed, or owned by the
23authorized licensee sponsoring an event or purchasing advertising
24space or time pursuant to this section. end insert

25(5) An agreementbegin delete for the sponsorship of, or for the purchase of
26advertising space and time during, a live artistic, musical, sports,
27or cultural entertainment eventend delete
begin insert pursuant to this sectionend insert shall not
28be conditioned directly or indirectlybegin delete, in any way,end delete on the purchase,
29sale, or distribution of any alcoholic beverage manufactured or
30distributed bybegin delete the owning, advertising, or sponsoring beer
31manufacturer, holder of a winegrower’s license, winegrower’s
32agent, holder of an importer’s general license, distilled spirits
33manufacturer, holder of a distilled spirits rectifier’s general license,
34or a distilled spirits manufacturer’s agent by the live entertainment
35company described in this section.end delete
begin insert any authorized licensee
36sponsoring or purchasing advertising space or time pursuant to
37this section. end insert

38(b) Any sponsorship of events or purchase of advertising space
39or time conducted pursuant to subdivision (a) shall be conducted
40pursuant to a written contract entered into by the begin delete beer manufacturer,
P5    1holder of a winegrower’s license, winegrower’s agent, holder of
2an importer’s general license, distilled spirits manufacturer, holder
3of a distilled spirits rectifier’s general license, or a distilled spirits
4manufacturer’s agentend delete
begin insert authorized licenseeend insert and the live entertainment
5marketing company.

6(c) Anybegin delete beer manufacturer, holder of a winegrower’s license,
7winegrower’s agent, holder of an importer’s general license,
8distilled spirits manufacturer, holder of a distilled spirits rectifier’s
9general license, or a distilled spirits manufacturer’s agentend delete

10begin insert authorized licenseeend insert who, through coercion or other illegal means,
11induces, directly or indirectly, a holder of a wholesaler’s license
12to fulfill those contractual obligations entered into pursuant to
13subdivision (a) shall be guilty of a misdemeanor and shall be
14punished by imprisonment in the county jail not exceeding six
15months, or by a fine in an amount equal to the entire value of the
16advertising space or time involved in the contract, whichever is
17greater, plus ten thousand dollars ($10,000), or by both
18imprisonment and fine. The person shall also be subject to license
19suspension or revocation pursuant to Section 24200.

20(d) Any on-sale retail licensee who, directly or indirectly, solicits
21or coerces a holder of a wholesaler’s license to solicitbegin delete a beer
22manufacturer, holder of a winegrower’s license, winegrower’s
23agent, holder of an importer’s general license, distilled spirits
24manufacturer, holder of a distilled spirits rectifier’s general license,
25or a distilled spirits manufacturer’s agentend delete
begin insert an authorized licenseeend insert
26 to purchase advertising time or space pursuant to subdivision (a)
27shall be guilty of a misdemeanor and shall be punished by
28imprisonment in the county jail not exceeding six months, or by
29a fine in an amount equal to the entire value of the advertising
30space or time involved in the contract, whichever is greater, plus
31ten thousand dollars ($10,000), or by both imprisonment and fine.
32The person shall also be subject to license suspension or revocation
33pursuant to Section 24200.

34(e) Nothing in this section shall authorize the purchasing of
35advertising space or time directly from, or on behalf of, any on-sale
36licensee except as expressly authorized by this section or any other
37provision of this division.

38(f) Nothing in this section shall authorizebegin delete a beer manufacturer,
39holder of a winegrower’s license, winegrower’s agent, holder of
40an importer’s general license, distilled spirits manufacturer, holder
P6    1of a distilled spirits rectifier’s general license, or a distilled spirits
2manufacturer’s agentend delete
begin insert an authorized licenseeend insert to furnish, give, or
3lend anything of value to an on-sale retail licensee described in
4subdivision (a) except as expressly authorized by this section or
5any other provision of this division.

begin insert

6(g) For purposes of this section, the following definitions shall
7apply:

end insert
begin insert

8(1) “Authorized licensee” means the following licensees: beer
9manufacturer, out-of-state beer manufacturer’s certificate,
10winegrower, winegrower’s agent, importer, rectifier, distilled
11spirits manufacturer, distilled spirits rectifier general, distilled
12spirits manufacturer’s agent.

end insert
begin insert

13(2) Except for a licensee that holds only a beer and wine
14importer general license or a distilled spirits importer general
15license, “importer” does not include the holder of any importer
16license that does not also hold at least one other license specified
17as an authorized licensee.

end insert
begin delete

18(g)

end delete

19begin insert(h)end insert The Legislature finds that it is necessary and proper to
20require a separation between manufacturing interests, wholesale
21interests, and retail interests in the production and distribution of
22alcoholic beverages in order to prevent suppliers from dominating
23local markets through vertical integration and to prevent excessive
24sales of alcoholic beverages produced by overly aggressive
25marketing techniques. The Legislature further finds that the
26exception established by this section to the general prohibition
27against tied interests must be limited to its expressed terms so as
28not to undermine the general prohibition, and intends that this
29section be construed accordingly.

30

SEC. 2.  

The Legislature finds and declares that a special law
31is necessary and that a general law cannot be made applicable
32within the meaning of Section 16 of Article IV of the California
33Constitution because of the unique conditions located in the County
34of San Diego.

35

SEC. 3.  

No reimbursement is required by this act pursuant to
36Section 6 of Article XIII B of the California Constitution because
37the only costs that may be incurred by a local agency or school
38district will be incurred because this act creates a new crime or
39infraction, eliminates a crime or infraction, or changes the penalty
40for a crime or infraction, within the meaning of Section 17556 of
P7    1the Government Code, or changes the definition of a crime within
2the meaning of Section 6 of Article XIII B of the California
3Constitution.

4

SEC. 4.  

This act is an urgency statute necessary for the
5immediate preservation of the public peace, health, or safety within
6the meaning of Article IV of the Constitution and shall go into
7immediate effect. The facts constituting the necessity are:

8In order to allow for the sponsoring of events within the County
9of San Diego as soon as possible, it is necessary that this act take
10effect immediately.



O

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