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AB-436 Alcoholic beverages: tied-house restrictions: advertising: City of Napa.(2019-2020)

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Date Published: 06/04/2019 09:00 PM
AB436:v98#DOCUMENT

Amended  IN  Senate  June 04, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 436


Introduced by Assembly Member Aguiar-Curry
(Principal coauthor: Senator Dodd)

February 11, 2019


An act to amend Section 25503.6 of add Section 25503.32 to the Business and Professions Code, relating to alcoholic beverages.


LEGISLATIVE COUNSEL'S DIGEST


AB 436, as amended, Aguiar-Curry. Alcoholic beverages: tied-house restrictions: advertising: City of Napa.
The Alcoholic Beverage Control Act generally prohibits a manufacturer, winegrower, distiller, bottler, or wholesaler, among other licensees, or agents of these licensees, from paying a retailer for advertising. The act creates a variety of exceptions from this prohibition, including permitting specified licensees to purchase advertising space and time from, or on behalf of, an on-sale retail licensee that is an owner, manager, or major tenant of certain stadiums, parks, entertainment complexes, and arenas, subject to specified conditions. Existing law requires the purchase of advertising space or time in this context to be conducted pursuant to a written contract with the on-sale licensee, with a specified exception. Existing law makes it a crime for an on-sale licensee to coerce certain licensees to purchase advertising space or time, as specified.
This bill would expand the exceptions described above to also allow beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, craft distillers, or distilled spirits manufacturer’s agents to purchase advertising space and time, in connection with described events, from, or on behalf of, on-sale retail licensees, as described above, at a specified performing arts venue and adjacent performance area located in the City of Napa. By expanding the definition of a crime, this bill would impose a state-mandated local program. time in connection with an on-sale retail licensed premises, subject to specified conditions, including that the licensed premises is operated as an integral part of an opera house located in the City of Napa, as described.
This bill would make legislative findings and declarations as to the necessity of a special statute for the City of Napa.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YESNO  

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


SECTION 1.

 Section 25503.32 is added to the Business and Professions Code, to read:

25503.32.
 (a) Notwithstanding Sections 25500 and 25503, a beer manufacturer, winegrower, rectifier, distilled spirits manufacturer, craft distiller, or a distilled spirits manufacturer’s agent may purchase advertising space and time in connection with an on-sale retail licensed premises, if all the following conditions are met:
(1) The on-sale retail licensed premises is operated as an integral part of an opera house that was constructed in 1880, is listed in the National Register of Historic Places, and is located in the City of Napa.
(2) The administrator of the opera house is a nonprofit charitable corporation or association that is exempt from the payment of income taxes under the Internal Revenue Code of the United States and Chapter 4 (commencing with Section 23701) of Part 11 of Division 2 of the Revenue and Taxation Code.
(3) The advertising space and time is purchased only in connection with specific events that are conducted by and for the benefit of the nonprofit charitable corporation or association that administers the opera house and that are open to the public.
(4) All payments for the purchase of advertising space and time shall be made to the nonprofit charitable corporation or association that administers the opera house. Payments shall not be made, directly or indirectly, to the on-sale retail licensee.
(5) (A) Except as provided in subparagraph (B), purchased advertising space and time shall not promote or be for the benefit of the on-sale retail licensee.
(B) Purchased advertising space and time may identify the on-sale retail licensed premises for purposes of identifying the venue at which the event is being held. This identification shall be relatively inconspicuous in connection with the advertisement as a whole.
(6) An agreement to purchase advertising space and time shall not require, directly or indirectly, the purchase or sale of the advertiser’s products by the on-sale retail licensee. The on-sale retail licensee shall offer for sale, in a bona fide manner, alcoholic beverages manufactured, produced, or distributed by competing licensed beer manufacturers, winegrowers, rectifiers, distilled spirits manufacturers, craft distillers, or distilled manufacturer’s agents.
(b) Advertising space and time purchased pursuant to this section may be included in printed programs for the specific event and in announcements made during the event, as well as any internet, social media, or other media promotion of the event. The advertising may also be placed on or in the on-sale retail licensed premises, or on or in unlicensed areas within the opera house operated by the on-sale retail licensee, only during the time the specific event is taking place.
(c) The Legislature finds that it is necessary and proper to require a separation between manufacturing interests, wholesale interests, and retail interests in the production and distribution of alcoholic beverages in order to prevent suppliers from dominating local markets through vertical integration and to prevent excessive sales of alcoholic beverages produced by overly aggressive marketing techniques. The Legislature further finds that the exceptions established by this section to the general prohibition against tied interests must be limited to their express terms so as not to undermine the general prohibition, and intends that this section be construed accordingly.

SEC. 2.

 The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique conditions located in the City of Napa.