Amended in Senate August 22, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1424

Introduced by Committee on Governmental Organization (Hall (Chair), Nestande (Vice Chair), Chesbro, Cooley, Hagman, Jones, Jones-Sawyer, Levine, Perea, V. Manuel Pérez, Salas, Torres, and Waldron)

March 21, 2013

An act to amend begin delete Section 25503.5 end delete begin insert Sections 25503.5 and 25503.6 end insert of the Business and Professions Code, relating to alcoholic beverages.

LEGISLATIVE COUNSEL’S DIGEST

AB 1424, as amended, Committee on Governmental Organization. Alcoholic beverages: instruction: begin delete tastings. end delete begin insert tastings: tied-house restrictions: advertising. end insert

The Alcoholic Beverage Control Act permits a winegrower, beer manufacturer, or a beer and wine wholesaler to instruct licensees and their employees on the subject of wine or beer, including, but not limited to, the history, nature, values, and characteristics of those beverages, as provided.

This bill would specifically reference the composition of the beer or wine as a subject that may be included in this type of instruction.

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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. It authorizes, as an exception, the holder of a winegrower’s license, a beer manufacturer, 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 specified facilities located in the City of Santa Clara, as provided.

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This bill would expand that exception to allow the purchase of advertising space and time from, or on behalf of, a major tenant that does not hold a retail alcoholic beverage license, of one of the specified facilities in Santa Clara, and allows that advertising to include the placement of advertising in an on-sale licensed premises operated at that stadium, as provided.

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This bill would make legislative findings and declarations as to the necessity of a special statute for the City of Santa Clara.

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This bill would incorporate additional changes to Section 25503.5 of the Business and Professions Code proposed by AB 520 that would become operative if this bill and AB 520 are enacted and this bill is enacted last.

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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:

SECTION 1.  

Section 25503.5 of the Business and Professions
Code is amended to read:

25503.5.  

(a) A winegrower, beer manufacturer, or a beer and
wine wholesaler may, without charge, instruct licensees and their
employees, or conduct courses of instruction for licensees and
their employees, on the subject of wine or beer, begin delete including end delete
begin insert including, end insert but not limited to, the history, nature, values,
composition, and characteristics of wine or beer, the use of wine
lists, and the methods of presenting and serving wine or beer. The
winegrower, beer manufacturer, or beer and wine wholesaler may
furnish wine or beer and the equipment, begin delete materials end delete begin insert materials, end insert and
utensils that may be required for use in connection with the
instruction or courses of instruction.

(b) A distilled spirits manufacturer, distilled spirits
manufacturer’s agent, distilled spirits general rectifier, or distilled
spirits general importer may, without charge, instruct licensees
and their employees, or conduct courses of instruction for licensees
and their employees, on the subject of distilled spirits, including,
but not limited to, the history, nature, values, and characteristics
of distilled spirits, and the methods of presenting and serving
distilled spirits. The distilled spirits manufacturer or distilled spirits
manufacturer’s agent may furnish distilled spirits and the
equipment, materials, and utensils that may be required for use in
connection with the instruction or courses of instruction.

(c) A winegrower or distilled spirits manufacturer, or its
authorized agent may instruct consumers at an on-sale retail
licensed premises authorized to sell its product with the permission
of the retail on-sale licensee. The instruction may include, without
limitation, the history, nature, values, and characteristics of the
product and the methods of presenting and serving the product.
The instruction of consumers may include the furnishing of not
more than three tastings to any individual in one day. A single
tasting of distilled spirits may not exceed one-fourth of one ounce
and a single tasting of wine may not exceed one ounce. The
winegrower or distilled spirits manufacturer, or its authorized agent
shall remove any unfinished alcoholic beverages that he or she
provided following the instruction. Nothing in this subdivision
shall limit the giving away of samples pursuant to subdivision (a)
of Section 23386.

(d) The instruction or courses of instruction, authorized in
subdivision (a) or (b), may be given at the premises of the
winegrower, beer manufacturer, beer and wine wholesaler, distilled
spirits manufacturer, distilled spirits manufacturer’s agent, distilled
spirits general rectifier, distilled spirits general begin delete importer end delete begin insert importer, end insert
or of a licensee, including an on-sale retail licensee, or elsewhere.

begin insert

begin insert SEC. 1.5. end insert   

end insert

begin insert Section 25503.5 of the end insert begin insert Business and Professions
Code end insert begin insert is amended to read: end insert

25503.5.  

(a) A winegrower, beer manufacturer, or a beer and
wine wholesaler may, without charge, instruct licensees and their
employees, or conduct courses of instruction for licensees and
their employees, on the subject of wine or beer, begin delete including end delete
begin insert including, end insert but not limited to, the history, nature, values,
begin insert composition, end insert and characteristics of wine or beer, the use of wine
lists, and the methods of presenting and serving wine or beer. The
winegrower, beer manufacturer, or beer and wine wholesaler may
furnish wine or beer and the equipment, begin delete materials end delete begin insert materials, end insert and
utensils that may be required for use in connection with the
instruction or courses of instruction.

(b) A distilled spirits manufacturer, distilled spirits
manufacturer’s agent, distilled spirits general rectifier, or distilled
spirits general importer may, without charge, instruct licensees
and their employees, or conduct courses of instruction for licensees
and their employees, on the subject of distilled spirits, including,
but not limited to, the history, nature, values, and characteristics
of distilled spirits, and the methods of presenting and serving
distilled spirits. The distilled spirits manufacturer or distilled spirits
manufacturer’s agent may furnish distilled spirits and the
equipment, materials, and utensils that may be required for use in
connection with the instruction or courses of instruction.

begin delete

(c) A winegrower or distilled spirits manufacturer, or its
authorized agent may instruct consumers at an on-sale retail
licensed premises authorized to sell its product with the permission
of the retail on-sale licensee. The instruction may include, without
limitation, the history, nature, values, and characteristics of the
product and the methods of presenting and serving the product.
The instruction of consumers may include the furnishing of not
more than three tastings to any individual in one day. A single
tasting of distilled spirits may not exceed one-fourth of one ounce
and a single tasting of wine may not exceed one ounce. The
winegrower or distilled spirits manufacturer, or its authorized agent
shall remove any unfinished alcoholic beverages that he or she
provided following the instruction. Nothing in this subdivision
shall limit the giving away of samples pursuant to subdivision (a)
of Section 23386.

end delete begin delete

(d)

end delete

begin insert (c) end insert  The instruction or courses of instruction, authorized in
subdivision (a) or (b), may be given at the premises of the
winegrower, beer manufacturer, beer and wine wholesaler, distilled
spirits manufacturer, distilled spirits manufacturer’s agent, distilled
spirits general rectifier, distilled spirits general begin delete importer end delete begin insert importer, end insert
or of a licensee, including an on-sale retail licensee, or elsewhere.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 25503.6 of the end insert begin insert Business and Professions Code end insert
begin insert is amended to read: end insert

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
within 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 within 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, within 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 within 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)  begin insert (i) end insert begin insert   end insert An outdoor stadium with a fixed seating capacity of at
least 68,000 seats located in the City of Santa Clara.

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(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.

end insert

(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 begin insert , or with respect to clause (ii) of
subparagraph (N) of paragraph (1) of subdivision (a), the major
tenant of the outdoor stadium end insert .

(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.

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begin insert SEC. 3. end insert   

end insert begin insert

The Legislature finds and declares that a special law
is necessary and that a general law cannot be made applicable
within the meaning of Section 16 of Article IV of the California
Constitution because of the unique circumstances and concerns
applicable to certain facilities in the City of Santa Clara.

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begin insert SEC. 4. end insert   

end insert begin insert

Section 1.5 of this bill incorporates amendments to
Section 25503.5 of the Business and Professions Code proposed
by both this bill and Assembly Bill 520. It shall only become
operative if (1) both bills are enacted and become effective on or
before January 1, 2015, (2) each bill amends Section 25503.5 of
the Business and Professions Code, and (3) this bill is enacted
after Assembly Bill 520, in which case Section 1 of this bill shall
not become operative.

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