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SB-1401 Alcoholic beverages.(2013-2014)

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Amended  IN  Senate  March 26, 2014

CALIFORNIA LEGISLATURE— 2013–2014 REGULAR SESSION

Senate Bill
No. 1401

Introduced by Senator Block

February 21, 2014

An act to amend Section 23053.5 of the Business and Professions Code, 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 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 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.
This bill would state the intent of the Legislature to enact legislation to increase enforcement of the Alcoholic Beverage Control Act 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-references.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares the following:
(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.
(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.
(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.
(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.
(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.

SEC. 2.

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

23053.5.
 The department shall have the function of investigation of violations of Chapters 10, 11 12, 13, and 15 of this division and rules of the department relating thereto. To the end ensure 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.

SEC. 3.

 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.
SECTION 1.

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