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AB-1267 Alcoholic beverages: advertising or promoting donation of proceeds to a nonprofit charitable organization.(2021-2022)

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Date Published: 03/18/2021 09:00 PM
AB1267:v98#DOCUMENT

Amended  IN  Assembly  March 18, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1267

Introduced by Assembly Member Cunningham

February 19, 2021

An act to amend Section 25503.9 25600 of the Business and Professions Code, relating to alcoholic beverages.


LEGISLATIVE COUNSEL'S DIGEST


AB 1267, as amended, Cunningham. Tied-house restrictions. Alcoholic beverages: advertising or promoting donation of proceeds to a nonprofit charitable organization.
Existing law, the Alcoholic Beverage Control Act, regulates the application for, and issuance and suspension of, alcoholic beverage licenses by the Department of Alcoholic Beverage Control. The act prohibits a licensee from giving a premium, gift, or free goods in connection with the sale and distribution of any alcoholic beverage, except as provided.
This bill, as an exception to that prohibition, would authorize a licensee to advertise or promote the donation to a nonprofit charitable organization in connection with the purchase of an alcoholic beverage.

Existing law, known as tied-house restrictions, generally prohibits a manufacturer, winegrower, manufacturer’s agent, rectifier, California winegrower’s agent, distiller, bottler, importer, and wholesaler, and any officer, director, or agent of any of those persons, from giving or lending money or a thing of value to a person operating, owning, or maintaining any on-sale premises where alcoholic beverages are sold. Existing law provides that it does not prohibit specified licensees from giving or selling beer, wine, or distilled spirits, as applicable, to certain nonprofit organizations, as specified, at prices other than those contained in schedules filed with the Department of Alcoholic Beverage Control.

This bill would make nonsubstantive changes to that provision.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NO  

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


SECTION 1.

 Section 25600 of the Business and Professions Code is amended to read:

25600.
 (a) (1) No licensee shall, directly or indirectly, give any premium, gift, or free goods in connection with the sale or distribution of any alcoholic beverage, except as provided by rules that shall be adopted by the department to implement this section or as authorized by this division.
(2) (A) Notwithstanding paragraph (1), for purposes of this section, a refund to, or exchange of products for, a dissatisfied consumer by a licensee authorized to sell to consumers shall not be deemed a premium, gift, or free goods given in connection with the sale or distribution of an alcoholic beverage.
(B) A winegrower may advertise or otherwise offer consumers a guarantee of product satisfaction only in newsletters or other publications of the winegrower or at the winegrower’s premises. A winegrower may refund to a dissatisfied consumer the entire purchase price of wine produced by that winegrower and sold to that consumer, regardless of where the wine was purchased.
(3) Notwithstanding paragraph (1), a licensee may advertise or promote the donation to a nonprofit charitable organization in connection with the purchase of an alcoholic beverage.
(b) (1) Except as provided in paragraph (2), no rule of the department may permit a licensee to give any premium, gift, or free goods of greater than inconsequential value in connection with the sale or distribution of beer. With respect to beer, premiums, gifts, or free goods, including advertising specialties that have no significant utilitarian value other than advertising, shall be deemed to have greater than inconsequential value if they cost more than twenty-five cents ($0.25) per unit, or cost more than fifteen dollars ($15) in the aggregate for all those items given by a single supplier to a single retail premises per calendar year.
(2) (A) No rule of the department may impose a dollar limit for consumer advertising specialties furnished by a beer manufacturer to the general public other than three dollars ($3) per unit original cost to the beer manufacturer who purchased it.
(B) With respect to beer, a beer manufacturer may give consumer advertising specialties to the general public that do not exceed three dollars ($3) per unit original cost to the beer manufacturer who purchased it. For purposes of this paragraph, “beer manufacturer” includes a holder of a beer manufacturer’s license, a holder of an out-of-state beer manufacturer’s certificate, an out-of-state vendor that holds a certificate of compliance, or a holder of a beer and wine importer’s general license. A licensee authorized to give consumer advertising specialties pursuant to this paragraph shall not be precluded from doing so on the basis of holding any other type of alcoholic beverage license.
(C) A beer manufacturer, as defined in subparagraph (B) of paragraph (2) shall not require a beer wholesaler to fund the purchase of consumer advertising specialties that beer manufacturers are permitted to give under paragraph (2).
(D) Consumer advertising specialties furnished by a beer manufacturer are intended only for adults of legal drinking age. Coin banks, toys, balloons, magic tricks, miniature bottles or cans, confections, dolls, or other items that appeal to minors or underage drinkers may not be used in connection with the merchandising of beer.
(c) With respect to distilled spirits and wines, a licensee may furnish, give, rent, loan, or sell advertising specialties to a retailer, provided those items bear conspicuous advertising required of a sign and the total value of all retailer advertising specialties furnished by a supplier, directly or indirectly, to a retailer do not exceed fifty dollars ($50) per brand in any one calendar year per retail premises. The value of a retailer advertising specialty is the actual cost of that item to the supplier who initially purchased it, excluding transportation and installation costs. The furnishing or giving of any retailer advertising specialty shall not be conditioned upon the purchase of the supplier’s product. Retail advertising specialties given or furnished free of charge may not be sold by the retail licensee. No rule of the department may impose a dollar limit for consumer advertising specialties furnished by a distilled spirits supplier to a retailer or to the general public of less than five dollars ($5) per unit original cost to the supplier who purchased it. A rule or decision of the department may not approve glassware as an authorized retailer advertising specialty for distilled spirits or wine under this section.
(d) (1) Notwithstanding any other provision of this division, a beer manufacturer or distilled spirits manufacturer may provide directly to consumers free or discounted rides through taxicabs, transportation network companies, or any other ride service for the purpose of furthering public safety. The free or discounted rides may be provided by vouchers, codes, or any other method to deliver the free or discounted ride. A free or discounted ride, or the provision of a voucher, code, or other method of delivery, shall not be conditioned upon the purchase of an alcoholic beverage. A beer and wine wholesaler or distilled spirits importer general that holds a wholesaler’s or retailer’s license only as an additional license shall not directly or indirectly underwrite, share in, or contribute to, the costs of free or discounted rides or serve as an agent of a beer manufacturer or distilled spirits manufacturer to provide free or discounted rides to consumers. Nothing in this provision authorizes a beer manufacturer or distilled spirits manufacturer to provide a gift or anything of value directly or indirectly to a retail licensee.
(2) For purposes of this section:
(A) “Beer manufacturer” has the same meaning as defined in subparagraph (B) of paragraph (2) of subdivision (b).
(B) “Distilled spirits manufacturer” means a distilled spirits manufacturer, holder of a distilled spirits rectifier’s general license, distilled spirits manufacturer’s agent, brandy manufacturer, holder of an out-of-state distilled spirits shipper’s certificate, holder of a distilled spirits importer general’s license, or craft distiller.
(C) “Glassware” means a single-service glass container or nonglass container capable of holding no more than 23 ounces of liquid volume or a decanter, chalice, infusion jar, or similar container of any size and made of any material.

SECTION 1.Section 25503.9 of the Business and Professions Code is amended to read:
25503.9.

(a)Nothing in this division prohibits a winegrower, a beer and wine wholesaler that also holds an off-sale beer and wine retail license and only sells wine, or the holder of a limited off-sale retail wine license from giving or selling wine, a beer manufacturer from giving or selling beer, a craft distiller, a distilled spirits manufacturer, rectifier, or a distilled spirits manufacturer’s agent from giving or selling distilled spirits, or a distilled spirits wholesaler that also holds a beer and wine wholesaler license or importer general licensee from giving or selling beer, wine, or distilled spirits at prices other than those contained in schedules filed with the department, to any of the following:

(1)A nonprofit charitable corporation or association that is exempt from payment of income taxes under the provisions of 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.

(2)A nonprofit incorporated trade association that is exempt from payment of income taxes under the provisions of 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, and the members of which trade association are licensed under this division. However, the wine, beer, and distilled spirits shall be used solely for a convention or meeting of the nonprofit incorporated trade association.

(3)A nonprofit corporation or association that is exempt from payment of income taxes under the provisions of the Internal Revenue Code of the United States and is defined as a tax exempt organization under Section 23701a, 23701b, 23701d, 23701e, 23701f, 23701g, 23701i, 23701k, 23701l, 23701r, or 23701w of the Revenue and Taxation Code. Wine, beer, and distilled spirits given or sold by a winegrower, beer manufacturer, craft distiller, distilled spirits manufacturer, distilled spirits manufacturer’s agent, distilled spirits wholesaler, or importer general licensee pursuant to this subdivision may be furnished only in connection with public service or fundraising activities including picnics, parades, fairs, amateur sporting events, agricultural exhibitions, or similar events.

(4)A licensee authorized to donate or sell alcoholic beverages to a nonprofit corporation, organization, or association pursuant to this section may also provide services to and otherwise assist the corporation, organization, or association in connection with an event conducted under a temporary license issued by the department.

(b)Nothing in this division prohibits a winegrower, a beer and wine wholesaler that also holds an off-sale beer and wine retail license and only sells wine, or the holder of a limited off-sale retail wine license from giving or selling wine, a beer manufacturer from giving or selling beer, a craft distiller, distilled spirits manufacturer, rectifier, a distilled spirits wholesaler, or a distilled spirits manufacturer’s agent from giving or selling distilled spirits, or a beer and wine wholesaler that also holds an importer’s license from giving or selling beer or wine at prices other than those contained in schedules filed with the department, to any of the following:

(1)A nonprofit charitable corporation or association that is exempt from payment of income taxes under the provisions of 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.

(2)A nonprofit incorporated trade association that is exempt from payment of income taxes under the provisions of 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, and the members of which trade association are licensed under this division. However, the wine, beer, and distilled spirits shall be used solely for a convention or meeting of the nonprofit incorporated trade association.

(3)A nonprofit corporation or association that is exempt from payment of income taxes under the provisions of the Internal Revenue Code of the United States and is defined as a tax exempt organization under Section 23701a, 23701d, 23701e, 23701f, or 23701r of the Revenue and Taxation Code. Wine, beer, and distilled spirits given or sold by a winegrower, beer manufacturer, craft distiller, distilled spirits manufacturer, distilled spirits manufacturer’s agent, a distilled spirits wholesaler, beer and wine wholesaler, or licensed importer pursuant to this subdivision may be furnished only in connection with public service or fundraising activities including picnics, parades, fairs, amateur sporting events, agricultural exhibitions, or similar events.

(c)A nonprofit corporation, organization, or association that is authorized to purchase or accept donations of alcoholic beverages pursuant to this section, and that also holds a permanent retail license issued pursuant to this division, shall not use any alcoholic beverage so purchased or donated in the exercise of any privileges or business under its permanent retail license.