BILL ANALYSIS �
AB 1424
Page 1
( Without Reference to File )
CONCURRENCE IN SENATE AMENDMENTS
AB 1424 (Governmental Organization Committee)
As Amended August 22, 2014
Majority vote
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|ASSEMBLY: |70-0 |(May 16, 2013) |SENATE: | | |
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(vote not available)
Original Committee Reference: G.O.
SUMMARY : Permits winegrowers and beer manufacturers to describe
the "composition" of their products, in addition to other
characteristics already permitted, when engaging in tastings or
instructional events for their licensees or employees. Corrects
a drafting error for an existing tied-house exception in the
Alcoholic Beverage Control Act (ABC Act) relative to the general
prohibition against advertising arrangements between retail,
wholesale and manufacturer licensees that is applicable to
Levi's Stadium in the County of Santa Clara; and contains
language to avoid a chaptering problem with AB 520 (Chesbro) of
the current legislative session.
The Senate amendments :
1)Clarify a current ABC Act exception which allows the purchase
of advertising space and time from, or on behalf of, a major
tenant that does not hold a retail alcoholic beverage license,
at a specified outdoor stadium 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.
2)Incorporate additional changes to Business and Professions
Code Section 25503.5 proposed by AB 520 that would become
operative if this bill and AB 520 are enacted and this bill is
enacted last.
AS PASSED BY THE ASSEMBLY , this bill permitted winegrowers and
beer manufacturers to describe the "composition" of their
products, in addition to other characteristics already
permitted, when engaging in tastings or instructional events for
their licensees or employees.
AB 1424
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FISCAL EFFECT : Unknown
COMMENTS :
Background: Existing "tied-house" law prohibits paid
advertising by winegrowers, beer manufacturers and distilled
spirits producers in cases where an on-sale 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 and other venues].
AB 600 (Bonta), Chapter 139, Statutes of 2014, included Levi's
Stadium (new home of the San Francisco 49ers football team) on
the list of exemptions in the law, thereby allowing the Santa
Clara Stadium Authority to develop certain alcoholic beverage
sponsorship agreement(s) with suppliers.
Purpose of the bill: Current law requires that the on-sale
licensee be the owner, assignee of the owner's advertising
rights, or the major tenant of the owner.
The ABC has been advised that the City of Santa Clara is the
owner of the stadium and that the San Francisco 49ers is the
major tenant. Thus, it is the 49ers - who are not going to be
the on-sale licensee - that will be the party that will be
entering into the sponsorship agreement(s) with suppliers. A
change to current law (AB 600 is needed to further clarify the
terms upon which the Tied-house exemption is being granted.
According to the author's office, language has been added to
this specific provision in law to authorize winegrowers, beer
manufacturers and distilled spirits producers to purchase
advertising space and time from, or on behalf of, a major tenant
of the outdoor stadium (Levi's Stadium) 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.
AB 1424
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The bill also contains language to avoid a potential chaptering
out issue between AB 1424 and AB 520, both of which incorporate
specified changes to Business and Professions Code Section
25503.5. AB 520 is currently pending on the Governor's Desk.
Lastly, according to the author's office, craft brewers are
producing award-winning beers that are recognized and purchased
in national and international markets. These brewers have also
installed tasting rooms to accommodate consumers and to
facilitate tourism and economic growth in their respective local
communities. In addition, craft breweries have taken advantage
of expanded opportunities for on-site beer tastings at
restaurants and bars. During such tasting events, consumers
usually inquire as to the actual "composition" of the beers -
they are also curious about specific ingredients due to various
gastronomic interests or food allergies. The author's office
claims that existing law does not explicitly permit a response
to questions relating to "composition" of the beer. This bill
is simply intended to affirmatively provide that authority.
Related legislation: AB 520, deletes an existing provision of
the ABC Act that grants a winery or distilled spirits
manufacturer the privilege of conducting instructional consumer
tastings at on-sale retail licensed premises and recasts that
provision to create a new Section of law that accounts for
updates in the ABC Act and for code conformity purposes.
(Pending on the Governor's Desk)
Prior legislation: AB 600, extended 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 an outdoor stadium with a
fixed seating capacity of at least 68,000 seats located in the
City of Santa Clara (Levi's Stadium - new home of the San
Francisco 49ers).
AB 605 (Portantino), Chapter 230, Statutes of 2010, among other
things, authorized ABC to issue to the holder of an "off-sale"
retail license an "instructional tasting license" for the
purpose of furnishing tastings of alcoholic beverages to
consumers, subject to certain limitations.
AB 2293 (De Le�n), Chapter 638, Statutes of 2008, added a new
provision to the ABC Act authorizing distilled spirits
manufacturers and winegrowers to provide their product offerings
AB 1424
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directly to consumers (free of charge) during invitation-only
events on premises for which a caterer's permit authorization
has been issued.
SB 1548 (Murray), Chapter 670, Statutes of 2006, authorized beer
manufacturers and wholesalers to offer beer samples (not to
exceed eight ounces per person, per day) to individuals of legal
drinking age at on-sale retail licensed premises under specified
conditions.
Analysis Prepared by : Eric Johnson / G.O. / (916) 319-2531
FN: 0005419