Amended in Senate April 6, 2015

Senate Bill No. 557

Introduced by Senator Hall

February 26, 2015

An act to amend begin delete Section end delete begin insert Sections 25502.2 and end insert 25503.6 of the Business and Professions Code, relating to alcoholic beverages.

LEGISLATIVE COUNSEL’S DIGEST

SB 557, as amended, Hall. Alcoholic begin delete beverages. end delete begin insert beverages: advertising: promotions. end insert

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The Alcoholic Beverage Control Act includes tied-house restrictions, which prohibit specified licensees from furnishing, giving, or lending money or other thing of value, directly or indirectly, to a person engaged in operating, owning, or maintaining an off-sale licensed premises. Existing law authorizes, until January 1, 2016, the appearance of a person employed or engaged by an authorized licensee at a promotional event held at the premises of an off-sale retail licensee for the purposes of providing autographs, subject to specified conditions.

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This bill would delete the sunset date of the above provision, thereby extending the provision indefinitely.

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This bill would also make nonsubstantive changes to the act.

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Existing law, known as tied-house restrictions, prohibits specified alcoholic beverage licensees from paying, crediting, or compensating a retailer for advertising or paying or giving anything of value for the privilege of placing a sign or advertisement with a retail licensee. Existing law authorizes, as an exception, a beer manufacturer, the holder of a winegrower’s license, a distilled spirits rectifer, a distilled spirits manufacturer, or a distilled spirits manufacturer’s agent to purchase advertising space and time from, or on behalf of, on-sale retail licensees at certain facilities, as specified.

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This bill would make nonsubstantive changes to this provision.

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

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

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begin insert SECTION 1. end insert   

end insert

begin insert Section 25502.2 of the end insert begin insert Business and Professions
Code end insert begin insert is amended to read: end insert

25502.2.  

(a) A person employed or engaged by an authorized
licensee may appear at a promotional event at the premises of an
off-sale retail licensee for the purposes of providing autographs
to consumers at the promotional event only under the following
conditions:

(1) A purchase from the off-sale retail licensee is not required.

(2) A fee is not charged to attend the promotional event.

(3) Autographing may only be provided on consumer advertising
specialities given by the authorized licensee to a consumer or on
any item provided by the consumer.

(4) The promotional event does not exceed four hours in
duration.

(5) There are no more than two promotional events per calendar
year involving the same authorized licensee at a single premises
of an off-sale retail licensee.

(6) The off-sale retail licensee may advertise the promotional
event to be held at its licensed premises.

(7) An authorized licensee may advertise in advance of the
promotional event only in publications of the authorized licensee,
subject to the following conditions:

(A) The advertising only lists the name and address of the
off-sale retail licensee, the name of the alcoholic beverage product
being featured at the promotional event, and the time, date, and
location of the off-sale retail licensee location where the
promotional event is being held.

(B) The listing of the off-sale retail licensee’s name and address
is the only reference to the off-sale retail licensee in the
advertisement and is relatively inconspicuous in relation to the
advertisement as a whole, and the advertisement does not contain
any pictures or illustrations of the off-sale retail licensee’s premises
or laudatory references to the off-sale retail licensee.

(8) A wholesaler does not directly or indirectly underwrite,
share in, or contribute to any costs related to the promotional event,
except that a beer and wine wholesaler that holds at least six
distilled spirits wholesaler licenses may directly or indirectly
underwrite, share in, or contribute to any costs related to a
promotional event for which the wholesaler employs or engages
the person providing autographs to consumers at the promotional
event.

(9) The authorized licensee notifies the department in writing
of the promotional event at least 30 days in advance of the
promotional event.

(10) The authorized licensee maintains records necessary to
establish its compliance with this section.

(b) For purposes of this section, “authorized licensee” means a
manufacturer, winegrower, manufacturer’s agent, California
winegrower’s agent, rectifier, importer, brandy manufacturer,
brandy importer, or wholesaler.

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(c) This section shall remain in effect only until January 1, 2016,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2016, deletes or extends that date.

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begin delete SECTION 1. end delete
begin insert SEC. 2. 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 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
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
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 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.

(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.

(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 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, the distilled spirits rectifier, the distilled
spirits manufacturer, or the distilled spirits manufacturer’s agent
and the on-sale licensee, or with respect to clause (ii) of
subparagraph (N) of paragraph (1) of subdivision (a), the major
tenant of the outdoor stadium.

(c) Any beer manufacturer or holder of a winegrower’s license,
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, 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.