BILL NUMBER: AB 1604 CHAPTERED 09/13/00 CHAPTER 424 FILED WITH SECRETARY OF STATE SEPTEMBER 13, 2000 APPROVED BY GOVERNOR SEPTEMBER 12, 2000 PASSED THE ASSEMBLY AUGUST 21, 2000 PASSED THE SENATE JULY 6, 2000 AMENDED IN SENATE MAY 30, 2000 INTRODUCED BY Assembly Member Wesson FEBRUARY 26, 1999 An act to amend Section 25503.8 of the Business and Professions Code, relating to alcoholic beverages, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 1604, Wesson. Alcoholic beverage licensees: "tied-house" restrictions: advertising restrictions. Existing provisions of the Alcoholic Beverage Control Act known as "tied-house" restrictions generally prohibit certain alcoholic beverage licensees from holding an interest in various other alcoholic beverage licensees. Existing law generally prohibits a manufacturer of alcoholic beverages and a winegrower 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. Under existing law, the holder of a beer manufacturer's license or a winegrower's license is permitted to purchase advertising space and time from or on behalf of an on-sale retail licensee under certain conditions, if the on-sale licensee owns a specified facility. This bill would extend that authorization to a holder of a distilled spirits manufacturer's license and to a holder of a distilled spirits manufacturer's agent's license. The bill would include a theme or amusement park and the adjacent retail, dining, and entertainment area located in the City of Los Angeles or Los Angeles County within the enumerated facilities permitted to be owned by an on-sale licensee for purposes of the purchase of advertising time and space. This bill would also make it a misdemeanor for an on-sale retail licensee subject to the provisions of the bill, to solicit or coerce a holder of a distilled spirits license to purchase that advertising space or time. By creating a new crime, this bill would impose a state-mandated local program. 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. This bill would declare that it is to take effect immediately as an urgency statute. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 25503.8 of the Business and Professions Code is amended to read: 25503.8. (a) Notwithstanding any other provision of this chapter, the holder of a distilled spirits manufacturer's license, a distilled spirits manufacturer's agent's license, a beer manufacturer' s or winegrower's license may purchase advertising space and time from, or on behalf of, an on-sale retail licensee if all of the following conditions are met: (1) The on-sale licensee is the owner of any of the following: (A) A fully enclosed auditorium or theater with a fixed seating capacity in excess of 6,000 seats, at least 60 percent of the use of which is for plays or musical concerts, not including sporting events. (B) A motion picture studio facility at which public tours are conducted for at least four million people per year. (C) A retail, entertainment development adjacent to, and under common ownership with, a theme park, amphitheater, and motion picture production studio. (D) A theme or amusement park and the adjacent retail, dining, and entertainment area located in the City of Los Angeles, Los Angeles County, or Orange County. (2) The advertising space or time is purchased only in connection with one of the following: (A) In the case of a fully enclosed auditorium or theater, in connection with sponsorship of plays or musical concerts to be held on the premises of the auditorium or theater owned by the on-sale licensee. (B) In the case of a motion picture studio facility, in connection with sponsorship of the public tours or special events conducted at the studio facility. (C) In the case of a retail, entertainment development, in connection with sponsorship of public tours or special events conducted at the development. (D) In the case of a theme or amusement park and the adjacent retail, dining, and entertainment area, located in the City of Los Angeles, Los Angeles County, or Orange County, in connection with daily activities and events at the theme or amusement park and the adjacent retail, dining, and entertainment area. (3) The on-sale licensee serves other brands of distilled spirits, beer or wine in addition to the brand manufactured or marketed by the distilled spirits manufacturer, distilled spirits manufacturer's agent, beer manufacturer or produced by the winegrower purchasing the advertising space or time. (b) Any purchase of advertising space or time conducted pursuant to subdivision (a) shall be conducted pursuant to a written contract entered into by the holder of the distilled spirits manufacturer's license, distilled spirits manufacturer's agent's license, beer manufacturer's or winegrower's license and the on-sale licensee, which contract shall not in any way involve the holder of a distilled spirits, beer, or wine wholesaler's license. (c) Any holder of a distilled spirits manufacturer's license, a distilled spirits manufacturer's agent's license, beer manufacturer's license or winegrower's license who, through coercion or other means, induces a holder of a distilled spirits, beer, or wine wholesaler's license to fulfill 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 or time involved in the contract, 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 solicits or coerces a holder of a distilled spirits, beer, or wine wholesaler's license to solicit a holder of a beer manufacturer' s or winegrower's license 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, 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. SEC. 2. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution. SEC. 3. 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: In order to permit holders of distilled spirits manufacturers' and manufacturers' agents' licenses to purchase advertising space and time under the same conditions as holders of beer manufacturers' or winegrowers' licenses as soon as possible, it is necessary that this act take effect immediately.