Amended in Senate April 8, 2015

Senate Bill No. 462

Introduced by Senator Wolk

(Principal coauthor: Assembly Member Dodd)

(Coauthor: Senator McGuire)

(Coauthor: Assembly Member Levine)

February 25, 2015

An act to amend Section 25503.6 of, and to add Section 25503.34 to, the Business and Professions Code, relating to alcoholic beverages.

LEGISLATIVE COUNSEL’S DIGEST

SB 462, as amended, Wolk. Alcoholic beverages: tied house restrictions: Sonoma County.

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The

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begin insert (1) end insert begin insert   end insert begin insert The end insert Alcoholic Beverage Control Act generally prohibits a manufacturer, winegrower, distiller, bottler, or wholesaler, among other licensees, or agents of these licensees, from paying a retailer for advertising. The act creates a variety of exceptions from this prohibition, including permitting specified licensees to purchase advertising space and time from, or on behalf of, an on-sale retail licensee that is an owner, manager, or major tenant of certain stadiums, parks, entertainment complexes, and arenas, subject to specified conditions. Existing law requires the purchase of advertising space or time in this context to be conducted pursuant to a written contract with the on-sale licensee, with a specified exception. Existing law defines a beer manufacturer for these specific purposes as including any holder of an out-of-state beer manufacturer’s certificate or any holder of a beer and wine importer’s general license. begin insert 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

This bill would expand the exceptions described above to allow beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, or distilled spirits manufacturer’s agents to purchase advertising space and time from, or on behalf of, on-sale retail licensees, as described above, at a specified complex located begin delete in Sonoma County end delete begin insert on the campus of, and owned by, Sonoma State University end insert . The bill would permit the contract for purchasing space or time in this context to also be with an owner, begin delete long-term end delete begin insert long- end insert begin insert term end insert tenant of the venue, or licensee of the venue. The bill would begin insert also end insert include begin delete within the definition of beer manufacturer, for these purposes, a holder of a beer and wine wholesaler’s license end delete begin insert within the exceptions described above generally, as well as for the Sonoma State University complex specifically, beer and wine wholesalers that also hold an off-sale beer and wine retail license and only sell wine. By expanding the definition of a crime, this bill would impose a state-mandated local program end insert .

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Existing

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begin insert (2) end insert begin insert   end insert begin insert Existing end insert law permits specified alcoholic beverage licensees to donate money and sponsor events at certain sites and facilities.

This bill would permit a holder of a winegrower’s license, a beer manufacturer, as defined, a distilled spirits rectifier, a distilled spirits manufacturer, or distilled spirits manufacturer’s agent to donate wine, beer, or spirits, and make monetary contributions to a specified complex located begin delete in Sonoma County, end delete begin insert on the campus of, and owned by, Sonoma State University, end insert if certain conditions are met. begin insert The bill would also include within this authorization generally, as well as for the Sonoma State University complex specifically, beer and wine wholesalers that also hold an off-sale beer and wine retail license and only sell wine, as specified. end insert

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(3) 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.

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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:  begin delete no end delete begin insert yes end insert .

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

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,
begin insert a end insert begin insert beer and wine wholesaler that also holds an off-sale beer and
wine retail license and only sells wine, end insert 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.

(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.

(O) A complex of not more than 50 acres located begin delete in Sonoma
County end delete begin insert on the campus of, and owned by, Sonoma State University end insert
dedicated to presenting live artistic, musical, sports, food, beverage,
culinary, lifestyle, or other cultural and entertainment events and
performances begin delete that includes end delete begin insert with venues that include end insert 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 begin delete planned end delete
further outdoor begin delete facility end delete begin insert area end insert with a seating capacity of up to 10,000
seats. With respect to this begin delete venue, end delete begin insert complex, end insert advertising space and
time may also be purchased from or on behalf of the owner of the
complex, a begin delete long-term end delete begin insert long-term end insert tenant or licensee of the venue,
whether or not the owner, begin delete long-term end delete begin insert long-term end insert tenant, or licensee
holds an on-sale license.

(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. begin insert With respect to the complex
described in subparagraph (O) of paragraph (1), end insert begin insert 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 end insert begin insert . end insert

(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 begin insert or the beer and wine
wholesaler that also holds an off-sale beer and wine retail license
and only sells wine end insert , 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 begin delete manufacturer end delete begin insert manufacturer, end insert 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, begin insert the beer and wine wholesaler that also holds
an off-sale beer and wine retail license and only sells wine, end insert the
distilled spirits 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 begin delete long-term end delete begin insert long-term end insert tenant of the
begin delete venue, end delete begin insert complex, end insert or licensee of the begin delete venue, end delete begin insert complex, end insert whether or not
the owner, begin delete long-term end delete begin insert long-term end insert tenant, or licensee holds an on-sale
license.

(c) Any beer begin delete manufacturer or end delete begin insert manufacturer, any end insert holder of a
winegrower’s license, begin insert any beer and wine wholesaler that also
holds an off-sale beer and wine retail license and only sells wine, end insert
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, begin insert a beer and wine wholesaler that also holds
an off-sale beer and wine retail license and only sells wine, end insert 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, begin delete any holder of a beer
and wine wholesaler’s license, end delete or any holder of a beer and wine
importer’s general license.

SEC. 2.  

Section 25503.34 is added to the Business and
Professions Code, to read:

25503.34.  

(a) A holder of a winegrower’s license, begin insert a beer and
wine wholesaler that also holds an off-sale beer and wine retail
license and only sells wine, end insert a beer manufacturer as defined in
subdivision (d), a distilled spirits rectifier, a distilled spirits
manufacturer, or distilled spirits manufacturer’s agent may donate
wine, beer, or spirits, and make monetary contributions to a
complex dedicated to the presentation of live artistic, musical,
sports, food, beverage, culinary, lifestyle, or other cultural
entertainment events or performances, if all of the following
conditions are met:

(1) The permanent retail on-sale licensee in the complex is a
nonprofit charitable corporation or association exempt from
payment of income taxes under the provisions of the Internal
Revenue Code and Chapter 4 (commencing with Section 23701)
of Part 11 of Division 2 of the Revenue and Taxation Code.

(2) The complex is of not more than 50 acres located begin delete in Sonoma
County end delete begin insert on the campus of, and owned by, Sonoma State University end insert
dedicated to presenting live artistic, musical, sports, food, beverage,
culinary, lifestyle, or other cultural and entertainment events and
performances begin delete that includes end delete begin insert with venues that include end insert 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 begin delete planned end delete
further outdoor begin delete facility end delete begin insert area end insert with a seating capacity of up to 10,000
seats.

(3) The complex has a permanent retail on-sale license that is
a long-term tenant of the complex.

(4) The donation or monetary contribution 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 holder of a winegrower’s license, begin insert the holder of
a beer and wine wholesaler that also holds an off-sale beer and
wine retail license and only sells wine, end insert the beer manufacturer, the
distilled spirits rectifier, the distilled spirits manufacturer, or the
distilled spirits manufacturer’s agent by the licensee of the
complex.

(5) Except as provided in paragraph (6), donated wine, beer, or
spirits shall not be used or sold by the permanent retail licensee
and a monetary contribution shall not be used in, or for the benefit
of, the permanent retail on-sale licensee.

(6) Donated wine, beer, or spirits may only be used or sold in
connection with fundraising activities held on or off the permanent
licensed premises. Fundraising activities held in any area included
in the licensed premises during which donated wine, beer, or spirits
is used or sold shall not take place at the complex while the
permanent retail licensee is exercising its license privileges and
shall only be conducted pursuant to a temporary license issued by
the department, provided however, that the permanent licensee
shall surrender its license during the fundraising only for those
areas of the complex where the fundraising activities are being
presented and may continue to operate under its permanent license
in other areas covered by the license where the fundraising is not
taking place.

(b) The complex may acknowledge and thank a donating
winegrower, begin insert end insert begin insert beer and wine wholesaler that also holds an off-sale
beer and wine retail license and only sells wine, end insert beer manufacturer
as defined in subdivision (d), distilled spirits rectifier, distilled
spirits manufacturer, or distilled spirits manufacturer’s agent in
the complex’s event programs, on the complex’s Internet Web
site, and on stage at the permanent licensed premises during an
event or performance.

(c) 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
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.

(d) 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, begin delete any holder of a
beer and wine wholesaler’s license, end delete or any holder of a beer and
wine importer’s general license.

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(e) The privilege granted by this section to a beer and wine
wholesaler that also holds an off-sale beer and wine retail license
and only sells wine shall apply only to wine produced for the
donating licensee that is labeled with a brand owned exclusively
by the donating licensee.

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begin insert SEC. 3. end insert   

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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.

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