BILL ANALYSIS Ó
SB 462
Page 1
SENATE THIRD READING
SB
462 (Wolk)
As Amended May 11, 2015
2/3 vote. Urgency
SENATE VOTE: 36-0
------------------------------------------------------------------
|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Governmental |19-0 |Gray, Linder, | |
|Organization | |Achadjian, Alejo, | |
| | |Bigelow, Campos, | |
| | |Cooley, Cooper, Daly, | |
| | |Cristina Garcia, | |
| | |Eduardo Garcia, | |
| | |Jones-Sawyer, Levine, | |
| | |Mayes, Perea, Salas, | |
| | |Steinorth, Waldron, | |
| | |Wilk | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |17-0 |Gomez, Bigelow, | |
| | |Bloom, Bonta, | |
| | |Calderon, Chang, | |
| | |Daly, Eggman, | |
| | |Gallagher, | |
SB 462
Page 2
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | |Holden, Jones, Quirk, | |
| | |Rendon, Wagner, | |
| | |Weber, Wood | |
| | | | |
| | | | |
------------------------------------------------------------------
SUMMARY: Extends an existing tied-house exception in the
Alcoholic Beverage Control Act (Act) pertaining to the general
prohibition against advertising arrangements between retail,
wholesale and manufacturer licensees to include a specified
entertainment complex, known as the Green Music Center, located
on the campus of Sonoma State University. Additionally, this
bill adds a new section of law to the Act that allows alcoholic
beverage licensees, as specified, to make monetary or alcoholic
beverage contributions to the Green Music Center under certain
conditions. Specifically, this bill:
1)Expands an existing "tied-house" exception in the Act
pertaining to the general prohibition against advertising
arrangements between retail, wholesale and manufacturer
licensees to include a complex of not more than 50 acres
located on the campus of Sonoma State University, in Sonoma
County.
2)Provides that, 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.
3)Makes it explicit that the advertising space or time shall be
SB 462
Page 3
purchased only in connection with live, artistic, musical,
sports, food, beverage, culinary, or other cultural
entertainment events and performances to be held on the
premises of the complex.
4)Creates a new section of law in the Act that allows alcoholic
beverage licensees, as specified, to make monetary or
alcoholic beverage 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 the following conditions are
met:
a) The permanent retail on-sale licensee in the complex is
a nonprofit charitable corporation or association;
b) The complex is not more than 50 acres located on the
campus of , and owned by, Sonoma State University, in
Sonoma County, 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 5,000 seats and a further
outdoor area with a seating capacity of 10,000 seats;
c) The complex has a permanent retail on-sale license that
is a long-term tenant of the complex;
d) The donated alcoholic beverages 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;
SB 462
Page 4
e) 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 the license by
the licensee of the complex;
f) The donated alcoholic beverages may only be used or sold
in connection with fund raising activities held on or off
the permanent licensed premises; and,
g) The permanent retail on-sale licensee in the complex
must serve other brands of beer, wine or distilled spirits,
distributed by competing wholesaler entities in addition to
the brand that is donated.
5)Allows the complex to acknowledge and thank a donating
alcoholic beverage licensee in event programs, on the
complex's Internet Web site, and on stage during an event or
program.
6)Contains legislative findings with respect to the exceptions
established by this bill to the general prohibition against
tied house interests.
7)Contains an urgency clause to take effect immediately.
8)Makes other minor, conforming, and technical changes.
EXISTING LAW:
SB 462
Page 5
1)Establishes the Department of Alcoholic Beverage Control (ABC)
and grants it exclusive authority to administer the provisions
of the Act in accordance with laws enacted by the Legislature.
This involves licensing individuals and businesses associated
with the manufacture, importation and sale of alcoholic
beverages in this state and the collection of license fees for
this purpose.
2)Separates the alcoholic beverage industry into three component
parts, or tiers (referred to as the "tied-house" law or
"three-tier" system), of manufacturer (including breweries,
wineries and distilleries), wholesaler, and retailer (both
on-sale and off-sale). The original policy rationale for this
body of law was to: a) promote the state's interest in an
orderly market; b) prohibit the vertical integration and
dominance by a single producer in the market place; c)
prohibit commercial bribery and to protect the public from
predatory marketing practices; and, d) discourage and/or
prevent the intemperate use of alcoholic beverages.
Generally, other than exceptions granted by the Legislature,
the holder of one type of license is not permitted to do
business as another type of licensee within the "three-tier"
system.
3)Prohibits, in general, an alcohol manufacturer, wholesaler, or
any officer, director, or agent of any such person from
owning, directly, or indirectly, any interest in any on-sale
license, or from providing anything of value to retailers, be
it free goods, services, or advertising.
4)Prohibits paid advertising by winegrowers, beer manufacturers
and distilled spirits producers in cases where a retail
licensee also owns a sports or entertainment venue. Over the
years numerous exceptions to this prohibition have been added
to the ABC Act [e.g., Sleep Train Arena (formerly known as
SB 462
Page 6
ARCO Arena) in Sacramento, Oakland Coliseum in Oakland,
Arrowhead Pond Arena in Anaheim, Kern County Arena in
Bakersfield, the National Orange Show Event Center in San
Bernardino, California Speedway in Fontana, Grizzly Stadium in
downtown Fresno, Raley Field in West Sacramento, HP Pavilion
in San Jose, the Home Depot Center in the City of Carson,
Levi's Stadium in the City of Santa Clara, and other venues].
5)Allows wineries, breweries, distilled spirits manufacturers,
and importers to donate their product(s) to certain nonprofit
organizations (e.g., fraternal orders, social organizations,
civic leagues, veterans' organizations, religious groups,
horticultural organizations) for the purpose of assisting in
fund-raising efforts.
6)Provides a narrow tied-house exception for certain alcoholic
beverage licensees to make monetary and alcoholic beverage
contributions to a symphony association (the San Francisco
Symphony) that is a nonprofit charitable corporation or
association, under specified conditions. The symphony
association must hold a retail on-sale license in a portion of
its premises and no such gift shall be used in or for the
benefit of the symphony association's retail on-sale license.
Additionally, the symphony association must sell or serve
competing brands of beer, wine, and spirits in addition to
brands produced or marketed by the donating licensees.
(Business and Professions (B & P) Code Section 25503.31)
7)Provides a narrow tied-house exception for the holder of a
winegrower's license whose licensed premises of production are
located within the Counties of Lake, Mendocino, Napa, or
Sonoma to donate wine and make monetary contributions to an
opera house (the Napa Opera House) that is a nonprofit
charitable corporation provided certain conditions are met.
The opera house must hold a permanent retail on-sale license
and no such donation or monetary contribution shall be used in
SB 462
Page 7
or for the benefit of the permanent retail on-sale licensee.
In addition, donated wine may only be used or sold in
connection with fundraising activities held on or off the
permanent licensed premises. Additionally, the opera house is
allowed to acknowledge and thank donating winegrowers on the
opera house's Internet Web site, event programs and on stage
during an event. (B & P Code Section 25503.32)
FISCAL EFFECT: According to the Assembly Appropriations
Committee, minor and absorbable enforcement costs to ABC.
COMMENTS:
Purpose of the bill. The author's office states that as with
any performing arts venue, sponsorships and fund raising are
critical components to the viability of the programs offered at
the Green Center. Being located in Sonoma County, the local
wine and beer community has been very supportive of the Green
Center and would like to donate money or product and/or provide
sponsorship for various activities. This bill allows certain
alcoholic beverage producers to donate wine, beer, or spirits
and also make monetary contributions to the Green Center, if
certain conditions are met. The Green Center, in turn, would be
allowed to sell those donated alcoholic beverages to patrons at
fund raising events. The author's office emphasizes that the
Legislature in past years has granted similar ABC privileges to
the San Francisco Symphony and the Napa Opera House.
The author's office notes that the second component of this bill
SB 462
Page 8
relates to existing tied-house laws and the general prohibition
against advertising arrangements between retail, wholesale and
manufacturer licensees. The author's office points out that in
order to allow local wineries and other producers and
wholesalers of alcoholic beverages to pay for advertising at
Green Center events, it is necessary to carve an exemption in
the law. Over the years, numerous such exceptions have been
incorporated into the ABC Act (see "existing law" item 4 above.)
Thus, this bill amends ABC tied-house provisions to include the
Green Music Center complex on the list of exemptions in the law,
thereby allowing the Center to develop certain alcoholic
beverage sponsorships with various manufacturers and
distributors.
Donald and Maureen Green Music Center. According to the
author's office, the Green Music Center is a focal point for
arts in Sonoma County, presenting year-round programming of
premier classical, contemporary, jazz, chamber and world music
artists in concert. The Green Music Center complex, located on
the campus of Sonoma State University, includes a 1,400+-seat
concert hall (Weill Hall), an intimate 240+ seat second concert
hall (Schroeder Hall), as well as an outdoor area with seating
for up to 5,000. Patrons seated on Weill Lawn are offered a
number of distinct experiences including a full-service gourmet
meal on the dining terrace, table seating, or lawn seating where
purchased food or picnics can be enjoyed.
Prior Legislation. SB 1531 (Wolk), Chapter 334, Statutes of
2012, authorized, until January 1, 2018, the Napa Valley Opera
House to accept wine and monetary donations from wineries
located within the Counties of Napa, Sonoma, Lake, and Mendocino
under specified conditions.
SB 131 (Wiggins), Chapter 638, Statutes of 2009, authorized
alcoholic beverage licensees, until December 31, 2014, to make
monetary or alcoholic beverage contributions to the San
SB 462
Page 9
Francisco Symphony under specified conditions.
Analysis Prepared by:
Eric Johnson / G.O. / (916) 319-2531 FN:
0001550