Amended in Senate May 11, 2015

Amended in Senate April 8, 2015

Senate Bill No. 462

Introduced by Senator Wolk

(Principal coauthor: Assembly Member Dodd)

(Coauthor: Senator McGuire)

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(Coauthor: Assembly Member Levine)

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(Coauthors: Assembly Members Levine and Wood)

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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 begin delete beverages. end delete begin insert beverages, and declaring the urgency thereof, to take effect immediately. end insert

LEGISLATIVE COUNSEL’S DIGEST

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

(1) The 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. 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 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 on the campus of, and owned by, Sonoma State University. The bill would permit the contract for purchasing space or time in this context to also be with an owner, long-term tenant of the venue, or licensee of the venue. begin delete The bill would also include 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. end delete By expanding the definition of a crime, this bill would impose a state-mandated local program.

(2) Existing 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 on the campus of, and owned by, Sonoma State University, if certain conditions are met. begin delete 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 delete

(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.

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

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(4) This bill would declare that it is to take effect immediately as an urgency statute.

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Vote:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

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

(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 begin delete winegrower or the beer and wine
wholesaler that also holds an off-sale beer and wine retail license
and only sells wine, end delete begin insert winegrower, 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 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, begin delete the beer and wine wholesaler that also holds
an off-sale beer and wine retail license and only sells wine, end delete 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 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 begin delete manufacturer, any end delete begin insert manufacturer or end insert holder of a
winegrower’s license, begin delete any beer and wine wholesaler that also holds
an off-sale beer and wine retail license and only sells wine, end delete 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 delete a beer and wine wholesaler that also holds
an off-sale beer and wine retail license and only sells wine, end delete a
distilled spirits rectifier, a distilled spirits manufacturer, or a
distilled spirits manufacturer’s agent to purchase advertising space
or time pursuant to subdivision (a) or (b) shall be guilty of a
misdemeanor and shall be punished by imprisonment in the county
jail not exceeding six months, or by a fine in an amount equal to
the entire value of the advertising space or time involved in the
contract, whichever is greater, plus ten thousand dollars ($10,000),
or by both imprisonment and fine. The person shall also be subject
to license revocation pursuant to Section 24200.

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

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(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.

end insert

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

(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 delete the holder of
a beer and wine wholesaler that also holds an off-sale beer and
wine retail license and only sells wine, end delete the beer manufacturer, the
distilled spirits rectifier, the distilled spirits manufacturer, or the
distilled spirits manufacturer’s agent by the licensee of the
complex.

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(5) The permanent retail on-sale licensee in the complex shall:

end insert begin insert

(A) Serve other brands of beer distributed by a competing beer
wholesaler in addition to the brand manufactured or marketed by
a contributing beer manufacturer.

end insert begin insert

(B) Serve other brands of wine distributed by a competing wine
wholesaler in addition to the brand produced or distributed by a
contributing winegrower.

end insert begin insert

(C) Serve other brands of distilled spirits distributed by a
competing distilled spirits wholesaler in addition to the brand
manufactured or marketed by the contributing distilled spirits
manufacturer or distilled spirits manufacturer’s agent.

end insert begin delete

(5)

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begin insert (6) end insert  Except as provided in paragraph begin delete (6), end delete begin insert (7), end insert 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.

begin delete

(6)

end delete

begin insert (7) end insert  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 delete beer and wine wholesaler that also holds an off-sale
beer and wine retail license and only sells wine, end delete 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 begin delete between end delete begin insert among end insert 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 begin delete prohibition, end delete begin insert prohibition end insert
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, or any holder of
a beer and wine importer’s general license.

begin delete

(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.

end delete

SEC. 3.  

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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begin insert SEC. 4. end insert   

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

end insert begin insert

In order to allow the Green Music Center to continue to provide
performing arts and to authorize the receipt of donations to
facilitate that provision, it is necessary that this act take effect
immediately.

end insert