Amended in Senate June 13, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 2913


Introduced by Committee on Governmental Organization (Assembly Members Gray (Chair), Bigelow (Vice Chair), Alejo, Bonta, Campos, Cooley, Cooper, Daly, Gallagher, Gipson, Jones-Sawyer, Levine, Linder, Maienschein, Salas, and Wilk)

March 17, 2016


An act to amendbegin delete Section 23355.3end deletebegin insert Sections 23355.3, 25503.6, and 25503.8end insert of the Business and Professions Code, relating to alcoholic beverages.

LEGISLATIVE COUNSEL’S DIGEST

AB 2913, as amended, Committee on Governmental Organization. Alcoholic beverages:begin delete licensees.end deletebegin insert licensees: tied-house restrictions.end insert

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. The act authorizes licensees to sponsor or otherwise participate in an event conducted by, and for the benefit of, a nonprofit organization in which retail and nonretail licensees are involved as sponsors or participants, subject to specified conditions.

The act authorizes a nonretail licensee to advertise or communicate sponsorship or participation in the event and provides that advertising or communication may include, but is not limited to, initiating, sharing, reposting, or otherwise forwarding a social media post by a permanent retail licensee or a nonretail licensee, as specified.

This bill would delete the word “initiating” from that provision.

The act also prohibits a retail licensee from receiving any advertising, sale, or promotional benefit from any permanent retail licensee in connection with the sponsorship or participation.

This billbegin delete insteadend delete wouldbegin insert insteadend insert prohibit a nonretail licensee from receiving that advertising, sale, or promotional benefit.

begin insert

Existing law authorizes specified licensees, including distilled spirits rectifiers, 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 crime for an on-sale licensee to coerce certain licensees to purchase advertising space or time, as specified.

end insert
begin insert

This bill would revise these authorizations to instead allow a rectifier to purchase the above-described advertising space and time and would include rectifiers as licensees subject to specified criminal provisions. By expanding the definition 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

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:

P2    1

SECTION 1.  

Section 23355.3 of the Business and Professions
2Code
is amended 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
5organization in which retail and nonretail licensees are involved
6as sponsors or participants, subject to all of the following
7conditions:

8(1) Except as otherwise provided in this section, any payment
9of money or other consideration for sponsorship or participation
10in the event shall be made only to the nonprofit organization
11conducting the event.

P3    1(2) Except as otherwise provided in this section, a nonretail
2licensee shall not, directly or indirectly, pay money or provide any
3other thing of value to a permanent retail licensee that is also a
4sponsor of, or participant in, the event.

5(3) A nonretail licensee may donate alcoholic beverages to a
6nonprofit only as otherwise authorized by Section 25503.9.

7(4) Except as otherwise provided by this division, a retail
8licensee shall not give, sell, or furnish any alcoholic beverages to
9the temporary licensee.

10(5) A nonretail or retail licensee may choose to participate in
11any level of sponsorship, including at the name or principal sponsor
12level. A nonprofit organization may choose to have one, or
13multiple, name or principal sponsors.

14(6) (A) A nonretail licensee may advertise or communicate
15sponsorship or participation in the event. This advertising or
16communication may include, but is not limited to, sharing,
17reposting, or otherwise forwarding a social media post by a
18permanent retail licensee or a nonretail licensee if the advertisement
19or communication does not contain the retail price of any alcoholic
20beverage or otherwise promotes a retail licensee beyond its
21sponsorship or participation in the event.

22(B) A nonretail licensee shall not pay or reimburse a permanent
23licensee, directly or indirectly, for any advertising services,
24including by way of social media. Except as otherwise permitted
25by this section, a permanent retail licensee shall not accept any
26payment or reimbursement, directly or indirectly, for any
27advertising services offered by a nonretail licensee.

28(C) For the purposes of this subdivision, “social media” means
29a service, platform, application, or site where users communicate
30and share media, such as pictures, videos, music, and blogs, with
31 other users.

32(7) A nonretail licensee shall not require, directly or indirectly,
33as a condition of sponsorship or participation in any event under
34this section, that its products be sold or served exclusively at the
35event. A nonretail licensee shall not receive, directly or indirectly,
36any advertising, sale, or promotional benefit from any permanent
37retail licensee in connection with the sponsorship or participation.
38A permanent retail licensee shall not offer or provide a nonretail
39licensee any advertising, sale, or promotional benefit in connection
40with the sponsorship or participation.

P4    1(b) This section does not authorize a nonretail licensee to pay,
2in whole or in part, any costs, including the cost of sponsorship,
3of any retail licensee that is sponsoring or participating in a
4nonprofit event.

5(c) A licensee that sponsors or participates in a nonprofit event
6under this section shall keep detailed records of its sponsorship or
7participation and shall maintain those records for a period of at
8least three years. These records shall be provided to the department
9 upon request.

10(d) Nothing in this section shall be deemed to exempt the
11nonprofit organization from obtaining any licenses or permits as
12may be required to conduct the event.

13begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 25503.6 of the end insertbegin insertBusiness and Professions Codeend insert
14
begin insert is amended to read:end insert

15

25503.6.  

(a) Notwithstanding any other provision of this
16chapter, a beer manufacturer, the holder of a winegrower’s license,
17abegin delete distilled spiritsend delete rectifier, a distilled spirits manufacturer, or
18distilled spirits manufacturer’s agent may purchase advertising
19space and time from, or on behalf of, an on-sale retail licensee
20subject to all of the following conditions:

21(1) The on-sale licensee is the owner, manager, agent of the
22owner, assignee of the owner’s advertising rights, or the major
23tenant of the owner of any of the following:

24(A) An outdoor stadium or a fully enclosed arena with a fixed
25seating capacity in excess of 10,000 seats located in Sacramento
26County or Alameda County.

27(B) A fully enclosed arena with a fixed seating capacity in
28excess of 18,000 seats located in Orange County or Los Angeles
29County.

30(C) An outdoor stadium or fully enclosed arena with a fixed
31seating capacity in excess of 8,500 seats located in Kern County.

32(D) An exposition park of not less than 50 acres that includes
33an outdoor stadium with a fixed seating capacity in excess of 8,000
34seats and a fully enclosed arena with an attendance capacity in
35excess of 4,500 people, located in San Bernardino County.

36(E) An outdoor stadium with a fixed seating capacity in excess
37of 10,000 seats located in Yolo County.

38(F) An outdoor stadium and a fully enclosed arena with fixed
39seating capacities in excess of 10,000 seats located in Fresno
40County.

P5    1(G) An athletic and entertainment complex of not less than 50
2acres that includes within its boundaries an outdoor stadium with
3a fixed seating capacity of at least 8,000 seats and a second outdoor
4stadium with a fixed seating capacity of at least 3,500 seats located
5in Riverside County.

6(H) An outdoor stadium with a fixed seating capacity in excess
7of 1,500 seats located in Tulare County.

8(I) A motorsports entertainment complex of not less than 50
9acres that includes within its boundaries an outdoor speedway with
10a fixed seating capacity of at least 50,000 seats, located in San
11Bernardino County.

12(J) An exposition park, owned or operated by a bona fide
13nonprofit organization, of not less than 400 acres with facilities
14including a grandstand with a seating capacity of at least 8,000
15people, at least one exhibition hall greater than 100,000 square
16feet, and at least four exhibition halls, each greater than 30,000
17square feet, located in the City of Pomona or the City of La Verne
18in Los Angeles County.

19(K) An outdoor soccer stadium with a fixed seating capacity of
20at least 25,000 seats, an outdoor tennis stadium with a fixed
21capacity of at least 7,000 seats, an outdoor track and field facility
22with a fixed seating capacity of at least 7,000 seats, and an indoor
23velodrome with a fixed seating capacity of at least 2,000 seats, all
24located within a sports and athletic complex built before January
251, 2005, in the City of Carson in Los Angeles County.

26(L) An outdoor professional sports facility with a fixed seating
27capacity of at least 4,200 seats located in San Joaquin County.

28(M) A fully enclosed arena with a fixed seating capacity in
29excess of 13,000 seats in the City of Inglewood.

30(N) (i) An outdoor stadium with a fixed seating capacity of at
31least 68,000 seats located in the City of Santa Clara.

32(ii) A beer manufacturer, the holder of a winegrower’s license,
33abegin delete distilled spiritsend delete rectifier, a distilled spirits manufacturer, or
34distilled spirits manufacturer’s agent may purchase advertising
35space and time from, or on behalf of, a major tenant of an outdoor
36stadium described in clause (i), provided the major tenant does not
37hold a retail license, and the advertising may include the placement
38of advertising in an on-sale licensed premises operated at the
39outdoor stadium.

P6    1(O) A complex of not more than 50 acres located on the campus
2of, and owned by, Sonoma State University dedicated to presenting
3live artistic, musical, sports, food, beverage, culinary, lifestyle, or
4other cultural and entertainment events and performances with
5venues that include a concert hall with a seating capacity of
6approximately 1,500 seats, a second concert hall with a seating
7capacity of up to 300 seats, an outdoor area with a seating capacity
8of up to 5,000 seats, and a further outdoor area with a seating
9capacity of up to 10,000 seats. With respect to this complex,
10advertising space and time may also be purchased from or on behalf
11of the owner of the complex, a long-term tenant or licensee of the
12venue, whether or not the owner, long-term tenant, or licensee
13holds an on-sale license.

14(P) A fairgrounds with a horse racetrack and equestrian and
15sports facilities located in San Diego County.

16(2) The outdoor stadium or fully enclosed arena described in
17paragraph (1) is not owned by a community college district.

18(3) The advertising space or time is purchased only in connection
19with the events to be held on the premises of the exposition park,
20stadium, or arena owned by the on-sale licensee. With respect to
21an exposition park as described in subparagraph (J) of paragraph
22(1) that includes at least one hotel, the advertising space or time
23 shall not be displayed on or in any hotel located in the exposition
24park, or purchased in connection with the operation of any hotel
25located in the exposition park. With respect to the complex
26described in subparagraph (O) of paragraph (1), the advertising
27space or time shall be purchased only in connection with live
28artistic, musical, sports, food, beverage, culinary, lifestyle, or other
29cultural and entertainment events and performances to be held on
30the premises of the complex.

31(4) The on-sale licensee serves other brands of beer distributed
32by a competing beer wholesaler in addition to the brand
33manufactured or marketed by the beer manufacturer, other brands
34of wine distributed by a competing wine wholesaler in addition to
35the brand produced by the winegrower, and other brands of distilled
36spirits distributed by a competing distilled spirits wholesaler in
37addition to the brand manufactured or marketed by thebegin delete distilled
38spiritsend delete
rectifier, the distilled spirits manufacturer, or the distilled
39spirits manufacturer’s agent that purchased the advertising space
40or time.

P7    1(b) Any purchase of advertising space or time pursuant to
2subdivision (a) shall be conducted pursuant to a written contract
3entered into by the beer manufacturer, the holder of the
4winegrower’s license, thebegin delete distilled spiritsend delete rectifier, the distilled
5spirits manufacturer, or the distilled spirits manufacturer’s agent
6and any of the following:

7(1) The on-sale licensee.

8(2) With respect to clause (ii) of subparagraph (N) of paragraph
9(1) of subdivision (a), the major tenant of the outdoor stadium.

10(3) With respect to subparagraph (O) of paragraph (1) of
11subdivision (a), the owner, a long-term tenant of the complex, or
12licensee of the complex, whether or not the owner, long-term
13tenant, or licensee holds an on-sale license.

14(c) Any beer manufacturer or holder of a winegrower’s license,
15anybegin delete distilled spiritsend delete rectifier, any distilled spirits manufacturer, or
16any distilled spirits manufacturer’s agent who, through coercion
17or other illegal means, induces, directly or indirectly, a holder of
18a wholesaler’s license to fulfill all or part of those contractual
19obligations entered into pursuant to subdivision (a) or (b) shall be
20guilty of a misdemeanor and shall be punished by imprisonment
21in the county jail not exceeding six months, or by a fine in an
22amount equal to the entire value of the advertising space, time, or
23costs involved in the contract, whichever is greater, plus ten
24 thousand dollars ($10,000), or by both imprisonment and fine. The
25person shall also be subject to license revocation pursuant to
26Section 24200.

27(d) Any on-sale retail licensee, as described in subdivision (a),
28who, directly or indirectly, solicits or coerces a holder of a
29wholesaler’s license to solicit a beer manufacturer, a holder of a
30winegrower’s license, abegin delete distilled spiritsend delete rectifier, a distilled spirits
31manufacturer, or a distilled spirits manufacturer’s agent to purchase
32advertising space or time pursuant to subdivision (a) or (b) shall
33be guilty of a misdemeanor and shall be punished by imprisonment
34in the county jail not exceeding six months, or by a fine in an
35amount equal to the entire value of the advertising space or time
36involved in the contract, whichever is greater, plus ten thousand
37dollars ($10,000), or by both imprisonment and fine. The person
38 shall also be subject to license revocation pursuant to Section
3924200.

P8    1(e) For the purposes of this section, “beer manufacturer” includes
2any holder of a beer manufacturer’s license, any holder of an
3out-of-state beer manufacturer’s certificate, or any holder of a beer
4and wine importer’s general license.

5(f) The Legislature finds that it is necessary and proper to require
6a separation among manufacturing interests, wholesale interests,
7and retail interests in the production and distribution of alcoholic
8beverages in order to prevent suppliers from dominating local
9markets through vertical integration and to prevent excessive sales
10of alcoholic beverages produced by overly aggressive marketing
11techniques. The Legislature further finds that the exceptions
12established by this section to the general prohibition against tied
13interests shall be limited to their express terms so as not to
14undermine the general prohibition and intends that this section be
15construed accordingly.

16begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 25503.8 of the end insertbegin insertBusiness and Professions Codeend insert
17
begin insert is amended to read:end insert

18

25503.8.  

(a) Notwithstanding any other provision of this
19chapter, a beer manufacturer, the holder of a winegrower’s license,
20a California winegrower’s agent, abegin delete distilled spiritsend delete rectifier, a
21distilled spirits manufacturer, or a distilled spirits manufacturer’s
22agent may purchase advertising space and time from, or on behalf
23of, an on-sale retail licensee if all of the following conditions are
24met:

25(1) The on-sale licensee is the owner of any of the following:

26(A) A fully enclosed auditorium or theater with a fixed seating
27capacity in excess of 6,000 seats, at least 60 percent of the use of
28which is for plays or musical concerts, not including sporting
29events.

30(B) A motion picture studio facility at which public tours are
31conducted for at least four million people per year.

32(C) A retail, entertainment development adjacent to, and under
33common ownership with, a theme park, amphitheater, and motion
34picture production studio.

35(D) A theme or amusement park and the adjacent retail, dining,
36and entertainment area located in the City of Los Angeles, Los
37Angeles County, or Orange County.

38(E) A fully enclosed theater, with box office sales and attendance
39by the public on a ticketed basis only, with a fixed seating capacity
40in excess of 6,000 seats, located in Los Angeles County within the
P9    1area subject to the Los Angeles Sports and Entertainment District
2Specific Plan adopted by the City of Los Angeles pursuant to
3ordinance number 174225, as approved on September 6, 2001.

4(F) A fully enclosed arena with a fixed seating capacity in excess
5of 15,000 seats located in Santa Clara County. With respect to the
6arena described in this subparagraph, advertising space may also
7be purchased from, or on behalf of, a lessee or manager of the
8arena.

9(2) The advertising space or time is purchased only in connection
10with one of the following:

11(A) In the case of a fully enclosed auditorium or theater, in
12connection with sponsorship of plays or musical concerts to be
13held on the premises of the auditorium or theater owned by the
14on-sale licensee.

15(B) In the case of a motion picture studio facility, in connection
16with sponsorship of the public tours or special events conducted
17at the studio facility.

18(C) In the case of a retail, entertainment development, in
19connection with sponsorship of public tours or special events
20conducted at the development.

21(D) In the case of a theme or amusement park and the adjacent
22retail, dining, and entertainment area, located in the City of Los
23Angeles, Los Angeles County, or Orange County, in connection
24with daily activities and events at the theme or amusement park
25and the adjacent retail, dining, and entertainment area.

26(E) In the case of the fully enclosed theater described in
27subparagraph (E) of paragraph (1) of subdivision (a), in connection
28with events conducted at the theater.

29(F) In the case of a fully enclosed arena described in
30subparagraph (F) of paragraph (1) of subdivision (a), interior
31advertising in connection with events conducted within the arena.

32(3) The on-sale licensee serves other brands of beer distributed
33by a competing beer wholesaler in addition to the brand
34manufactured or marketed by the beer manufacturer, other brands
35of wine distributed by a competing wine wholesaler in addition to
36the brand produced or marketed by the winegrower or California
37winegrower’s agent, and other brands of distilled spirits distributed
38by a competing distilled spirits wholesaler in addition to the brand
39manufactured or marketed by the distilled spirits manufacturer or
P10   1distilled spirits manufacturer’s agent purchasing the advertising
2space or time.

3(b) Any purchase of advertising space or time conducted
4pursuant to subdivision (a) shall be conducted pursuant to a written
5contract entered into by the beer manufacturer, the holder of the
6winegrower’s license, the California winegrower’s agent,begin insert the
7rectifier,end insert
the distilled spirits manufacturer, or the distilled spirits
8manufacturer’s agent, and the on-sale licensee, which contract
9shall not in any way involve the holder of a wholesaler’s license.

10(c) Any beer manufacturer,begin insert rectifier,end insert distilled spirits
11manufacturer, distilled spirits manufacturer’s agent, holder of a
12winegrower’s license, or California winegrower’s agent, who,
13through coercion or other illegal means, induces, directly or
14indirectly, a holder of a wholesaler’s license to fulfill those
15contractual obligations entered into pursuant to subdivision (a) or
16(b) shall be guilty of a misdemeanor and shall be punished by
17imprisonment in the county jail not exceeding six months, or by
18a fine in an amount equal to the entire value of the advertising
19space or time involved in the contract, whichever is greater, plus
20ten thousand dollars ($10,000), or by both imprisonment and fine.
21The person shall also be subject to license revocation pursuant to
22Section 24200.

23(d) Any on-sale retail licensee, as described in subdivision (a),
24who solicits or coerces, directly or indirectly, a holder of a
25wholesaler’s license to solicit a beer manufacturer,begin insert rectifier,end insert
26 distilled spirits manufacturer, or distilled spirits manufacturer’s
27agent, holder of a winegrower’s license, or California winegrower’s
28agent to purchase advertising space or time pursuant to subdivision
29(a) or (b) shall be guilty of a misdemeanor and shall be punished
30by imprisonment in the county jail not exceeding six months, or
31by a fine in an amount equal to the entire value of the advertising
32space or time involved in the contract, whichever is greater, plus
33ten thousand dollars ($10,000), or by both imprisonment and fine.
34The person shall also be subject to license revocation pursuant to
35Section 24200.

36(e) For the purposes of this section, “beer manufacturer” includes
37any holder of a beer manufacturer’s license, any holder of an
38out-of-state beer manufacturer’s certificate, or any holder of a beer
39and wine importer’s general license.

P11   1begin insert

begin insertSEC. 4.end insert  

end insert
begin insert

No reimbursement is required by this act pursuant to
2Section 6 of Article XIII B of the California Constitution because
3the only costs that may be incurred by a local agency or school
4district will be incurred because this act creates a new crime or
5infraction, eliminates a crime or infraction, or changes the penalty
6for a crime or infraction, within the meaning of Section 17556 of
7the Government Code, or changes the definition of a crime within
8the meaning of Section 6 of Article XIII B of the California
9Constitution.

end insert


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