BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 557|
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UNFINISHED BUSINESS
Bill No: SB 557
Author: Hall (D)
Amended: 9/1/15
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE: 7-0, 4/28/15
AYES: Hall, Block, Hernandez, Hill, Hueso, Lara, McGuire
NO VOTE RECORDED: Berryhill, Gaines, Galgiani, Vidak
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/11/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
SENATE FLOOR: 39-0, 5/22/15
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block,
Cannella, De León, Fuller, Gaines, Galgiani, Hall, Hancock,
Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson, Lara, Leno,
Leyva, Liu, McGuire, Mendoza, Mitchell, Monning, Moorlach,
Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Runner, Stone,
Vidak, Wieckowski, Wolk
ASSEMBLY FLOOR: 80-0, 9/3/15 - See last page for vote
SUBJECT: Alcoholic beverages: tied-house restrictions:
advertising
SOURCE: Author
DIGEST: This bill extends an existing tied-house exception in
the Alcoholic Beverage Control (ABC) Act pertaining to the
general prohibition against advertising arrangements between
retail, wholesale and manufacturer licensees to include a
fairgrounds with a horse racetrack and equestrian and sports
facilities located in the County of San Diego.
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Assembly Amendments remove an earlier provision relating to the
deletion of a specified sunset provision in the ABC Act, insert
the tied-house exception for the Del Mar fairgrounds, and add
double-jointing language to avoid a chaptering out issue in the
event that both this bill and SB 462 (Wolk) are enacted into
law.
ANALYSIS:
Existing law:
1)Establishes the Department of ABC and grants it exclusive
authority to administer the provisions of the ABC 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
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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
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].
This bill:
1)Expands an existing "tied-house" exception in the ABC Act
pertaining to the general prohibition against advertising
arrangements between retail, wholesale and manufacturer
licensees to include a fairgrounds with a horse racetrack and
equestrian and sports facilities located in the County of San
Diego.
2)Makes legislative findings and declarations as to the
necessity of a special statute for the County of San Diego.
3)Contains double-jointing language to avoid chaptering out
issues in the event that both this bill and SB 462 (Wolk),
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also amending Section 25503.6 of the Business & Professions
Code, are enacted into law.
Background
The author's office notes that this bill will amend ABC
tied-house provisions to include the Del Mar Fairgrounds on the
list of exemptions in the law, thereby allowing the fairgrounds
to develop certain alcoholic beverage sponsorships with various
manufacturers and distributors. Additionally, the author's
office points out that existing law precludes any signage paid
for by an alcoholic beverage manufacturer or distributor unless
such an exception is created. Furthermore, the author's office
emphasizes that such an exemption would put the fairgrounds and
the racetrack on an even playing field with other arenas and
stadiums in California and help support efforts to make horse
racing and other events economically viable.
Related Legislation
SB 462 (Wolk, 2015) extends an existing "tied-house" exception
in the ABC 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 ABC Act that allows alcoholic beverage
licensees, as specified, to make monetary or alcoholic beverage
contributions to the Green Music Center under certain
conditions. (Pending on the Governor's Desk)
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
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According to the Assembly Appropriations Committee, minor and
absorbable enforcement costs to the Department of ABC.
SUPPORT: (Verified9/3/15)
Del Mar Fairgrounds
Del Mar Thoroughbred Club
Family Winemakers of California
OPPOSITION: (Verified9/3/15)
None received
ASSEMBLY FLOOR: 80-0, 9/3/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,
Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder,
Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina,
Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen,
Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
Prepared by:Arthur Terzakis / G.O. / (916) 651-1530
9/3/15 18:47:54
**** END ****
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