Amended in Senate March 26, 2014

Senate Bill No. 1401

Introduced by Senator Block

February 21, 2014

An act begin insert to amend Section 23053.5 of the Business and Professions Code, end insert relating to alcoholic beverages.

LEGISLATIVE COUNSEL’S DIGEST

SB 1401, as amended, Block. Alcoholic beverages.

Existing law, the Alcoholic Beverage Control Act, regulates the application, issuance, and suspension of alcoholic beverage licenses by the Department of Alcoholic Beverage Control. Existing begin delete law provides that a person convicted of a violation of the act is guilty of a misdemeanor unless another penalty or punishment is specifically provided end delete begin insert law, known as tied-house restrictions, generally prohibits specified holders of alcoholic beverage licenses from having an ownership interest in any on-sale license or giving anything of value to a person operating, owning, or maintaining an on-sale premises where alcoholic beverages are sold. Existing law specifically grants the department the authority to investigate violations of tied-house restrictions end insert .

This bill would begin delete state the intent of the Legislature to enact legislation to increase enforcement of the Alcoholic Beverage Control Act end delete begin insert specifically grant the Department of Alcoholic Beverage Control the authority to investigate violations relating to beer price posting and marketing regulations and provisions relating to labeling and containers. The bill would direct and authorize the department to hire six, full-time equivalent personnel, additional to the department’s current staff, to investigate and prosecute violations of the tied-house laws. The bill would make a statement of legislative findings and delete obsolete cross- end insert begin insert references end insert .

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:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert The Legislature finds and declares the following: end insert

begin insert

(a) The investigation and enforcement of violations of the
tied-house laws by the Department of Alcoholic Beverage Control
is vital and necessary to the maintenance of a fair and orderly
market in the manufacture, distribution, and retail sales of
alcoholic beverages. These investigations are often extremely
complex, take considerable time, and require extensive resources.

end insert begin insert

(b) The alcoholic beverage industry members seeking to comply
with the law are placed at a competitive disadvantage by those
few members of the industry that choose to violate the tied-house
laws. Due to the complex nature of these investigations, together
with reductions in staff caused by a general reduction in state
services, the prioritization of the limited enforcement personnel
to direct public safety violations, such as sales of alcohol to minors
and intoxicated patrons, and the tremendous growth in licensed
businesses, the department is regularly unable to investigate these
violations.

end insert begin insert

(c) Although the Legislature has enacted a number of exceptions
to the tied-house laws in response to modern business practices
and for the purpose of promoting economic activity beneficial to
the state and local communities, these exceptions are balanced
against the potential for overly aggressive marketing practices
that can lead to negative effects, including the promotion of
excessive consumption of alcoholic beverages or anticompetitive
behavior. These exceptions are, therefore, intentionally narrow in
scope.

end insert begin insert

(d) The separation between manufacturing interests, wholesale
interests, and retail interests in the production and distribution of
alcoholic beverages in order to prevent any entity from dominating
or controlling local markets, including the coercion of violations
of the Alcoholic Beverage Control Act through vertical or
horizontal integration, and to prevent excessive sales of alcoholic
beverages produced by overly aggressive marketing techniques,
remains state policy.

end insert begin insert

(e) In furtherance of these policies, the Legislature highly
encourages the Department of Alcoholic Beverage Control to
devote the necessary resources to adequately and aggressively
enforce the tied-house laws.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 23053.5 of the end insert begin insert Business and Professions Code end insert
begin insert is amended to read: end insert

23053.5.  

The department shall have the function of
investigation of violations of Chapters begin delete 10, 11 end delete begin insert 12, 13, end insert and 15 of
this division and rules of the department relating thereto. To begin delete the
end end delete begin insert ensure end insert that such provisions are more adequately and strictly
enforced, funds for support of this program shall be derived as
follows: In addition to fees otherwise provided for in this division,
the following amounts shall be paid to the department by holders
of the following types of licenses:

 

(a) Retail package off-sale general license	$24 per year
(b) Rectifier’s license	$52 per year
(c) Distilled spirits wholesaler’s license	$52 per year
(d) Distilled spirits manufacturer’s agent’s license	$52 per year
(e) Distilled spirits manufacturer’s license	$52 per year
(f) Distilled spirits importer’s general li­cense	$52 per year
(g) California winegrower’s agent’s license	$52 per year

 

Payment of those amounts shall be made upon issuance or
transfer of these types of licenses, and shall be made by the holders
of these types of licenses at the time specified in this division for
payment of annual renewal fees therefor.

The provisions of Section 23322 shall apply to the amounts to
be paid under this section. All money collected from the fees
provided for in this section shall be deposited in the Alcohol
Beverage Control Fund as provided in Section 25761.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert The Legislature hereby directs and authorizes the
department to hire six, full-time equivalent personnel, additional
to the department’s current staff, to investigate and prosecute
violations of the tied-house laws. end insert

begin delete

SECTION 1.  

It is the intent of the Legislature to enact
legislation to increase enforcement of the Alcoholic Beverage
Control Act.

end delete