Amended in Senate August 19, 2016

Amended in Senate June 13, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 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 amend Sections 23355.3, begin insert 23502, 23504, 23506, 23508, end insert 25503.6, and 25503.8 begin delete of end delete begin insert of, and to add Section 23771.5 to, end insert the Business and Professions Code, relating to alcoholic beverages.

LEGISLATIVE COUNSEL’S DIGEST

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

begin insert

(1) Existing law, the Craft Distillers Act of 2015, authorizes the Department of Alcoholic Beverage Control to issue a craft distiller’s license to manufacture distilled spirits, subject to specified conditions, including that the licensee manufacture no more than 100,000 gallons of distilled spirits per fiscal year, excluding brandy the craft distiller manufactures or has manufactured for them. Existing law allows these licensees to sell distilled spirits to specified consumers, to own interests in on-sale retail licenses, and to sell beer, wines, brandies, and distilled spirits to consumers for consumption on the premises of a bona fide eating place, as provided.

end insert begin insert

This bill, among other things related to the craft distiller’s license, would define “manufacture” for the purposes of the license, allow these licensees to produce, as defined, distilled spirits, and require a specified percentage of the 100,000 allowed gallons to be manufactured or produced by the licensee.

end insert begin delete

The

end delete

begin insert (2) end insert begin insert   end insert begin insert The end insert 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 bill would instead prohibit a nonretail licensee from receiving that advertising, sale, or promotional benefit.

begin delete

Existing

end delete

begin insert (3) end insert begin insert   end insert begin insert Existing end insert 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.

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.

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.

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

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

SECTION 1.  

Section 23355.3 of the Business and Professions
Code is amended to read:

23355.3.  

(a) A licensee may 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 all of the following
conditions:

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

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

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

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

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

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

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

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

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

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

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

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

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 23502 of the end insert begin insert Business and Professions Code end insert

begin insert is amended to read: end insert

23502.  

(a) The department may issue a craft distiller’s license
to a person that has facilities and equipment for the purposes of,
and is engaged in, the commercial manufacture of distilled spirits.
The craft distiller’s license authorizes the licensee to do all of the
following:

(1) Manufacture distilled spirits. begin delete A licensed craft distiller may
manufacture up to 100,000 gallons of distilled spirits per fiscal
year (July 1 through June 30), excluding brandy the craft distiller
manufactures or has manufactured for them pursuant to a brandy
manufacturer license, as reported to the department in the manner
prescribed by the department for the fiscal year prior to the date
of submitting an application for the license. end delete begin insert For purposes of this
article, “manufacture” means the actual distillation of distilled
spirits from naturally fermented materials or the redistillation of
distilled spirits obtained from another manufacturer of distilled
spirits. end insert

begin delete

(2) Package, rectify, mix, flavor, color, label, and export only
those distilled spirits manufactured by the licensee.

end delete begin insert

(2) Produce distilled spirits. For purposes of this article,
“produce” means to mix, color, flavor, or blend distilled spirits,
whether manufactured by the licensee or by another manufacturer
of distilled spirits.

end insert

(3) Only sell distilled spirits that are manufactured begin delete and packaged end delete
begin insert or produced end insert by the licensee solely to a wholesaler, manufacturer,
winegrower, manufacturer’s agent, or rectifier that holds a license
authorizing the sale of distilled spirits or to persons that take
delivery of those distilled spirits within this state for delivery or
use without the state.

(4) Deal in warehouse receipts.

begin insert

(5) Manufacture or produce up to 100,000 gallons of distilled
spirits per fiscal year (July 1 through June 30), excluding brandy
the craft distiller manufactures or has manufactured for them
pursuant to a brandy manufacturer license, as reported to the
department in the manner prescribed by the department for the
fiscal year prior to the date of submitting an application for the
license. At least 65 percent of the total volume of distilled spirits
manufactured or produced shall be actually manufactured by the
licensee. The volume of distilled spirits authorized by this
paragraph shall be calculated by adding the volume of distilled
spirits, less waste, drawn off the still with the volume of distilled
spirits obtained by the licensee from any other source that is not
redistilled by the licensee. For purposes of this paragraph,
“volume” means the liquid volume and shall not be based on proof
gallons or packaged goods.

end insert

(b) A craft distiller’s license shall not be issued to any person,
any officer, director, employee, or agent of such person, or any
person who is affiliated with, directly or indirectly, a person that
manufactures or has manufactured for them more than 100,000
gallons of distilled spirits per year within or without the state,
excluding brandy it manufactures or has manufactured for them
pursuant to a brandy manufacturer license, or to any person that
is affiliated with, directly or indirectly, a wholesaler.

(c) (1) The fee for an original craft distiller’s license issued
pursuant to this section shall be consistent with the distilled spirits
manufacturer’s license and shall be adjusted pursuant to
subdivisions (b) and (c) of Section 23320.

(2) The annual license fee for a craft distiller’s license shall be
consistent with the distilled spirits manufacturer’s license and shall
be adjusted pursuant to subdivisions (b) and (c) of Section 23320.

(3) All moneys collected as fees pursuant to this section shall
be deposited in the Alcohol Beverage Control Fund as provided
in Section 25761.

(d) A licensed craft distiller shall report to the department, at
the time of renewal in the manner prescribed by the department,
the amount of distilled spirits begin delete manufactured, end delete begin insert manufactured or
produced by the licensee specifying, as applicable, the respective
amounts of distilled spirits the licensed craft distiller has
manufactured itself, obtained from another manufacturer o end insert begin insert f
distilled spirits, and imported, end insert excluding brandy manufactured by
or for the licensee pursuant to a brandy manufacturer license,
during the previous fiscal year. If the report to the department
establishes that the licensee no longer qualifies to hold a craft
distiller’s begin delete license, end delete begin insert license because the licensee has either exceeded
the 100,000 gallon manufacture or production limitation as
specified in paragraph (5) of subdivision (a) or actually
manufactured less than 65 percent of the total volume of distilled
spirits as specified in paragraph (5) of subdivision (a), end insert the
department shall renew the license as a distilled spirits
manufacturer’s license.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 23504 of the end insert begin insert Business and Professions Code end insert

begin insert is amended to read: end insert

23504.  

Notwithstanding any other provision, a licensed craft
distiller may sell up to the equivalent of 2.25 liters in any
combination of prepackaged containers per day per consumer of
distilled spirits manufactured begin insert or produced end insert by the licensee at its
premises to a consumer attending an instructional tasting conducted
by the licensee on its licensed premises pursuant to subdivision
(c) of Section 23363.1.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 23506 of the end insert begin insert Business and Professions Code end insert

begin insert is amended to read: end insert

23506.  

(a) Notwithstanding any other provision of this
division, a licensed craft distiller or one or more of its direct or
indirect subsidiaries of which the licensed craft distiller owns not
less than a 51-percent interest, who manufactures or produces,
bottles, processes, imports, or sells distilled spirits under a craft
distiller’s license or any other license issued pursuant to this
division, or any officer or director of, or any person holding any
interest in, those persons may serve as an officer or director of,
and may hold the ownership of any interest or any financial or
representative relationship in, any on-sale license, or the business
conducted under that license, provided that, except in the case of
a holder of on-sale general licenses for airplanes and duplicate
on-sale general licenses for air common carriers, all of the
following conditions are met:

(1) The on-sale licensee purchases all alcoholic beverages sold
and served only from California wholesale licensees.

(2) The number of distilled spirits items by brand offered for
sale by the on-sale licensee that are manufactured, produced,
bottled, processed, imported, or sold by the licensed craft distiller
or by the subsidiary of which the licensed craft distiller owns not
less than 51 percent, or by any officer or director of, or by any
person holding any interest in, those persons does not exceed 15
percent of the total distilled spirits items by brand listed and offered
for sale by the on-sale licensee selling and serving that distilled
spirit. Notwithstanding paragraph (1), distilled spirits sold pursuant
to this provision may be purchased from a California licensed craft
distiller so long as the distilled spirits purchased are produced or
bottled by, or produced and packaged for, the same licensed craft
distiller that holds an interest in the on-sale license and such direct
sales do not involve more than two on-sale licenses in which the
licensed craft distiller or any person holding an interest in the
licensed craft distiller holds any interest, directly or indirectly,
either individually or in combination or together with each other
in the aggregate.

(3) None of the persons specified in this section may have any
of the interests specified in this section in more than two on-sale
licenses.

(b) Notwithstanding any other provision of this division, a
begin delete licensed craft distiller end delete begin insert licensee end insert that has an interest in one or more
on-sale retail licenses pursuant to this section may continue to hold
that interest in the event the licensee no longer qualifies as a craft
distiller, provided that the interest was begin delete first obtained end delete begin insert held, or an
application was pending, end insert at a time when the licensee did hold a
craft distiller’s license pursuant to Section 23502. begin insert Nothing in this
subdivision is intended to prevent the department from denying a
pending application for any reason other than the change in license
of the licensee. end insert

begin delete

(c) A craft distiller licensee may sell all beers, wines, brandies,
or distilled spirits to consumers for consumption on the premises
in a bona fide eating place as defined in Section 23038, which is
located on the licensed premises or on premises owned by the
licensee that are contiguous licensed premises and which is
operated by and for the licensee, provided that any alcoholic
beverage products not manufactured or produced by the licensee
must be purchased from a licensed wholesaler. Beer, wine, and
brandy may be used in the preparation of food and beverages in
the bona fide public eating place for consumption on the premises.

end delete

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 23508 of the end insert begin insert Business and Professions Code end insert

begin insert is amended to read: end insert

23508.  

(a) A licensed craft distiller may also have upon its
licensed premises all beers, wines, and distilled spirits, regardless
of source, for sale or service only to guests during private events
or private functions not open to the general public. Alcoholic
beverage products sold at the premises that are not manufactured
or produced and bottled by, or manufactured or produced and
packaged for, the licensed craft distiller shall be purchased by the
licensed craft distiller only from a licensed wholesaler.

begin insert

(b) A licensed craft distiller may sell all beers, wines, brandies,
or distilled spirits to consumers for consumption on the premises
in a bona fide eating place as defined in Section 23038, which is
located on the licensed premises or on premises owned by the
licensee that are contiguous licensed premises and which is
operated by and for the licensee, provided that any alcoholic
beverage products not manufactured or produced by the licensee
must be purchased from a licensed wholesaler. Beer, wine, and
brandy may be used in the preparation of food and beverages in
the bona fide public eating place for consumption on the premises.

end insert begin delete

(b)

end delete

begin insert (c) end insert  Notwithstanding any other provision of this division, in the
event that the licensee no longer qualifies as a craft distiller due
to the amount of distilled spirits reported pursuant to Section
23502, the licensee may continue to hold the privileges granted
by this section.

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 23771.5 is added to the end insert begin insert Business and
Professions Code end insert begin insert , to read: end insert

begin insert

begin insert 23771.5. end insert   

Section 23771 does not prevent a licensed craft
distiller from holding a distilled spirits license authorizing the
importing of distilled spirits, provided, however, that any distilled
spirits imported by the licensee shall only be used by the licensee
to manufacture or produce distilled spirits pursuant to Section
23502.

end insert

begin delete SEC. 2. end delete

begin insert SEC. 7. end insert   

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 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 begin insert seating end insert
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 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.

(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 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 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 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 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.

begin delete SEC. 3. end delete

begin insert SEC. 8. end insert   

Section 25503.8 of the Business and Professions Code
is amended to read:

25503.8.  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(3) 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 or marketed by the winegrower or California
winegrower’s agent, 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 manufacturer or
distilled spirits manufacturer’s agent purchasing the advertising
space or time.

(b) Any 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, the holder of the
winegrower’s license, the California winegrower’s agent, the
rectifier, the distilled spirits manufacturer, or the distilled spirits
manufacturer’s agent, and the on-sale licensee, which contract
shall not in any way involve the holder of a wholesaler’s license.

(c) Any beer manufacturer, rectifier, distilled spirits
manufacturer, distilled spirits manufacturer’s agent, holder of a
winegrower’s license, or California winegrower’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) 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.

(d) Any on-sale retail licensee, as described in subdivision (a),
who solicits or coerces, directly or indirectly, a holder of a
wholesaler’s license to solicit a beer manufacturer, rectifier,
distilled spirits manufacturer, or distilled spirits manufacturer’s
agent, holder of a winegrower’s license, or California winegrower’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.

begin delete SEC. 4. end delete

begin insert SEC. 9. end 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.