BILL ANALYSIS
SB 131
Page 1
( Without Reference to File )
SENATE THIRD READING
SB 131 (Wiggins and Yee)
As Amended September 10, 2009
2/3 vote. Urgency
SENATE VOTE : Vote not relevant
GOVERNMENTAL ORGANIZATION 15-0
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|Ayes:|Coto, Anderson. Chesbro, | | |
| |Cook, | | |
| |De Leon, Evans, Galgiani, | | |
| |Hill, Jeffries, Lieu, | | |
| |Nestande, | | |
| |V. Manuel Perez, Torres, | | |
| |Torrico, Tran | | |
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SUMMARY : Provides a tied house exemption for an alcohol
licensee to make monetary and alcoholic beverage contributions
to a symphony association that is a nonprofit charitable
corporation or association, as defined, and under specified
conditions. Specifically, this bill :
1)Provides a beer manufacturer, holder of a winegrower's
license, a California winegrower's agent, a distilled spirits
manufacturer, holder of a distilled spirits rectifiers general
license, a distilled spirit's manufacturer's agent, and a
licensed retailer may make monetary and alcoholic beverage
contributions to a symphony association that is a nonprofit
charitable corporation or association, as defined.
2)Provides that the symphony association has been incorporated
in the City and County of San Francisco by and through its
predecessor organizations for not less than 99 years and
produces not less than 175 musical events open to the general
public per symphony season.
3)States that the symphony association shall hold a retail
on-sale license in a portion of its premises and provided
that, no such gift shall be used in or for the benefit of the
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symphony association's retail on-sale license.
4)States the contribution shall not be conditioned directly or
indirectly, in any way, on the purchase, sale, or distribution
of any alcoholic beverage, as defined.
5)Provides the 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
beer manufacturer, holder of a winegrower's license,
California winegrower's agent, distilled spirits manufacturer,
holder of a distilled spirits rectifiers general license, a
distilled spirits manufacturer's agent and licensed retailer
by the symphony association.
6)States the symphony association shall serve 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 or marketed by
the winegrower or California winegrower's agent, 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 manufacturer
or distilled spirits manufacturer's agent.
7)Contains language (legislative findings and declarations)
relative to the necessity of requiring a separation between
manufacturing interests, wholesale interests and retail
interests.
8)Contains a December 31, 2014 sunset date.
9)Contains urgency clause.
EXISTING LAW :
1)Establishes the Department of Alcoholic Beverage Control (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 or occupation taxes for this
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purpose.
2)States that the "Tied-house" Law or "three-tier" system
separates the alcoholic beverage industry into three component
parts of manufacturer (first tier), wholesaler (second tier),
and retailer (third tier). The original policy rationale for
this body of law was to prohibit the vertical integration of
the alcohol industry and to protect the public from predatory
marketing practices.
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 (Tied-House Law).
4)Allows an alcohol manufacturer, winegrower's agent, holder of
an importer's general license, distilled spirits
manufacturer's agent, distilled spirits rectifiers general
license to sponsor events promoted by, and may purchase
advertising space and time from, or on behalf of, a live
entertainment marketing company, as specified.
5)Defines an "On-Sale" license as authorizing the sale of all
types of alcoholic beverages namely, beer, wine and distilled
spirits, for consumption on the premises (such as at a
restaurant or bar).
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of the bill : According to the author, this bill
provides a narrow Tied-house exception by allowing the San
Francisco Symphony to accept monetary contributions and
alcoholic beverages from an alcohol licensee.
This Tied-house exception is necessary because the San Francisco
Symphony (SFS) also holds an on-sale retail license for a very
small portion of its facility. The possession of this retail
license prevents an alcohol licensee from providing charitable
contributions (both monetary and product) to this important
non-profit symphony.
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The author states, the San Francisco Symphony has a long and
storied history in San Francisco, but in these tough economic
times it has become imperative to find ways of improving their
profitability through charitable activities. SB 131 will ensure
that the San Francisco Symphony continues to set the highest
possible standard for excellence in musical performance at home
and around the world; enriching, serving, and shaping cultural
life throughout the spectrum of Bay Area communities while
maintaining financial stability.
Background : Under existing provisions of the ABC Act, alcoholic
beverage manufacturers are prohibited, in general, 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 (Tied-House Law). This prohibition
exists as part of California's long standing three-tier policy
of alcoholic beverage laws that will not allow a particular
entity (manufacturer) to give something of value to a member of
another tier (retailer).
Numerous exceptions to this restriction have been enacted
through the years in specific instances where the Legislature
determined that the public's interests were protected. However,
the Legislature traditionally does not grant exemptions that
favors the products of the entity seeking the exemption, or
exemptions that unfairly compromise the role of the
distributors.
The San Francisco Symphony : The San Francisco Symphony founded
in 1911, the SFS now has a budget of $53.7 million and is widely
considered to be among the country's most artistically
adventurous and financially stable arts institutions. Nearly
600,000 people hear 230 concerts and presentations of the SFS
each year. Nearly 60,000 people hear the SFS at no cost each
season.
More than 11,000 individual donors from throughout the region
join businesses and foundations in supporting the SFS.
Throughout its history, the SFS has presented more than 200
world premieres, commissioned more than 100 new works, and
received twelve awards from the American Society of Composers,
Authors, and Publishers for adventurous programming and/or
commitment to American music. Thousands of free tickets to SFS
events are provided to a wide variety of groups each season.
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Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531
FN: 0003129