Bill Text

Bill Information


PDF |Add To My Favorites |Track Bill | print page

SB-386 Tied-house restrictions: advertising: mixed-use district.(2021-2022)

SHARE THIS:share this bill in Facebookshare this bill in Twitter
Date Published: 02/11/2021 09:00 PM
SB386:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 386


Introduced by Senator Umberg

February 11, 2021


An act to amend Section 25503.6 of, and to add Section 25503.61 to, the Business and Professions Code, relating to alcoholic beverages.


LEGISLATIVE COUNSEL'S DIGEST


SB 386, as introduced, Umberg. Tied-house restrictions: advertising: mixed-use district.
Existing law, 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 at a specified arena in Orange County or Los Angeles County.
This bill would delete that exception as it applies to Orange County. The bill would instead authorize specified licensees to sponsor events promoted by, and to purchase advertising space and time from, or on behalf of, an on-sale licensee that is the owner, operator, agent of the operator, or assignee of the operator’s advertising rights of a mixed-use district located in Orange County. The bill would condition this authorization based on specified requirements, including that the mixed-use district consist of at least 90 acres and include office, residential, retail, and other uses, all of which are situated on land surrounding a fully enclosed arena with a fixed seating capacity in excess of 18,000 seats. The bill would make it a misdemeanor for certain licensees to induce, through coercion or other illegal means, the holder of a wholesaler’s license to fulfill contractual obligations, as specified, and for an on-sale licensee to solicit certain licensees to purchase advertising space or time, as specified. By creating crimes, this bill would impose a state-mandated local program.
This bill would make legislative findings and declarations as to the necessity of a special statute for Orange County.
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: YES  

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


SECTION 1.

 Section 25503.6 of the Business and Professions Code is amended to read:

25503.6.
 (a) Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrower’s license, a rectifier, a craft distiller, a distilled spirits manufacturer, or distilled spirits manufacturer’s agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee subject to all of the following conditions:
(1) The on-sale licensee is the owner, manager, agent of the owner, assignee of the owner’s advertising rights, or the major tenant of the owner of any of the following:
(A) An outdoor stadium or a fully enclosed arena with a fixed seating capacity in excess of 10,000 seats located in Sacramento County or Alameda County.
(B) (i) A fully enclosed arena with a fixed seating capacity in excess of 18,000 seats located in Orange County or Los Angeles County.
(ii) An outdoor stadium of at least 70,000 seats located in Los Angeles County operated by a joint powers authority.
(C) An outdoor stadium or fully enclosed arena with a fixed seating capacity in excess of 8,500 seats located in Kern County.
(D) An exposition park of not less than 50 acres that includes an outdoor stadium with a fixed seating capacity in excess of 8,000 seats and a fully enclosed arena with an attendance capacity in excess of 4,500 people, located in San Bernardino County.
(E) An outdoor stadium with a fixed seating capacity in excess of 10,000 seats located in Yolo County.
(F) An outdoor stadium and a fully enclosed arena with fixed seating capacities in excess of 10,000 seats located in Fresno County.
(G) An athletic and entertainment complex of not less than 50 acres that includes within its boundaries an outdoor stadium with a fixed seating capacity of at least 8,000 seats and a second outdoor stadium with a fixed seating capacity of at least 3,500 seats located in Riverside County.
(H) An outdoor stadium with a fixed seating capacity in excess of 1,500 seats located in Tulare County.
(I) A motorsports entertainment complex of not less than 50 acres that includes within its boundaries an outdoor speedway with a fixed seating capacity of at least 50,000 seats, located in San Bernardino County.
(J) An exposition park, owned or operated by a bona fide nonprofit organization, of not less than 400 acres with facilities including a grandstand with a seating capacity of at least 8,000 people, at least one exhibition hall greater than 100,000 square feet, and at least four exhibition halls, each greater than 30,000 square feet, located in the City of Pomona or the City of La Verne in Los Angeles County.
(K) An outdoor soccer stadium with a fixed seating capacity of at least 25,000 seats, an outdoor tennis stadium with a fixed seating capacity of at least 7,000 seats, an outdoor track and field facility with a fixed seating capacity of at least 7,000 seats, and an indoor velodrome with a fixed seating capacity of at least 2,000 seats, all located within a sports and athletic complex built before January 1, 2005, in the City of Carson in Los Angeles County.
(L) An outdoor professional sports facility with a fixed seating capacity of at least 4,200 seats located in San Joaquin County.
(M) A fully enclosed arena with a fixed seating capacity in excess of 13,000 seats located in the City of Inglewood.
(N) (i) An outdoor stadium with a fixed seating capacity of at least 68,000 seats located in the City of Santa Clara.
(ii) A beer manufacturer, the holder of a winegrower’s license, a rectifier, a craft distiller, a distilled spirits manufacturer, or distilled spirits manufacturer’s agent may purchase advertising space and time from, or on behalf of, a major tenant of an outdoor stadium described in clause (i), 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.
(O) A complex of not more than 50 acres located on the campus of, and owned by, Sonoma State University dedicated to presenting live artistic, musical, sports, food, beverage, culinary, lifestyle, or other cultural and entertainment events and performances with venues that include a concert hall with a seating capacity of approximately 1,500 seats, a second concert hall with a seating capacity of up to 300 seats, an outdoor area with a seating capacity of up to 5,000 seats, and a further outdoor area with a seating capacity of up to 10,000 seats. With respect to this complex, advertising space and time may also be purchased from or on behalf of the owner of the complex, a long-term tenant or licensee of the venue, whether or not the owner, long-term tenant, or licensee holds an on-sale license.
(P) A fairgrounds with a horse racetrack and equestrian and sports facilities located in San Diego County.
(Q) (i) A stadium with a fixed seating capacity of at least 70,000 seats located in the City of Inglewood and a performance venue with a seating capacity of at least 5,000 seats adjacent to the stadium.
(ii) Advertising authorized by this subparagraph may be placed in areas within the retail, entertainment, commercial, and mixed-use development which includes the stadium and performance venue, provided that the advertising shall not be placed on or in, or otherwise promote, any permanently licensed retail premises other than the stadium or performance venue.
(R) An outdoor stadium with a fixed seating capacity of at least 40,000 seats located in the City and County of San Francisco.
(S) An indoor arena with a fixed seating capacity of at least 13,000 seats located in the City and County of San Francisco.
(T) An outdoor stadium with a fixed seating capacity in excess of 20,000 seats located in the City of Los Angeles.
(U) An outdoor stadium with a fixed seating capacity of at least 43,000 seats located in the City of San Diego.
(V) An outdoor professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the City of San Jose.
(W) An outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose.
(X) A fully enclosed arena with a fixed seating capacity in excess of 15,000 seats located in the City of San Jose.
(2) The outdoor stadium or fully enclosed arena described in paragraph (1) is not owned by a community college district.
(3) The advertising space or time is purchased only in connection with the events to be held on the premises of the exposition park, stadium, or arena owned by the on-sale licensee. With respect to an exposition park as described in subparagraph (J) of paragraph (1) that includes at least one hotel, the advertising space or time shall not be displayed on or in any hotel located in the exposition park, or purchased in connection with the operation of any hotel located in the exposition park. With respect to the complex described in subparagraph (O) of paragraph (1), the advertising space or time shall be purchased only in connection with live artistic, musical, sports, food, beverage, culinary, lifestyle, or other cultural and entertainment events and performances to be held on the premises of the complex. With respect to a fully enclosed arena described in subparagraph (X) of paragraph (1), advertising space or time shall be purchased only for interior advertising in connection with events conducted within the arena.
(4) The on-sale licensee serves other brands of beer distributed by a competing beer wholesaler in addition to the brand manufactured or marketed by the beer manufacturer, other brands of wine distributed by a competing wine wholesaler in addition to the brand produced by the winegrower, and other brands of distilled spirits distributed by a competing distilled spirits wholesaler in addition to the brand manufactured or marketed by the rectifier, the craft distiller, the distilled spirits manufacturer, or the distilled spirits manufacturer’s agent that purchased the advertising space or time.
(b) Any purchase of advertising space or time pursuant to subdivision (a) shall be conducted pursuant to a written contract entered into by the beer manufacturer, the holder of the winegrower’s license, the rectifier, the craft distiller, the distilled spirits manufacturer, or the distilled spirits manufacturer’s agent and any of the following:
(1) The on-sale licensee.
(2) With respect to clause (ii) of subparagraph (N) of paragraph (1) of subdivision (a), the major tenant of the outdoor stadium.
(3) With respect to subparagraphs (O), (Q), (R), and (T) of paragraph (1) of subdivision (a), the owner, a long-term tenant of the complex, or licensee of the complex, whether or not the owner, long-term tenant, or licensee holds an on-sale license.
(c) Any beer manufacturer or holder of a winegrower’s license, any rectifier, any craft distiller, any distilled spirits manufacturer, or any distilled spirits manufacturer’s agent who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesaler’s license to fulfill all or part of those contractual obligations entered into pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space, time, or costs involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(d) Any on-sale retail licensee, as described in subdivision (a), who, directly or indirectly, solicits or coerces a holder of a wholesaler’s license to solicit a beer manufacturer, a holder of a winegrower’s license, a rectifier, a craft distiller, a distilled spirits manufacturer, or a distilled spirits manufacturer’s agent to purchase advertising space or time pursuant to subdivision (a) or (b) shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(e) For the purposes of this section, “beer manufacturer” includes any holder of a beer manufacturer’s license, any holder of an out-of-state beer manufacturer’s certificate, or any holder of a beer and wine importer’s general license.
(f) The Legislature finds that it is necessary and proper to require a separation among 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 shall be limited to their express terms so as not to undermine the general prohibition and intends that this section be construed accordingly.

SEC. 2.

 Section 25503.61 is added to the Business and Professions Code, to read:

25503.61.
 (a) Notwithstanding any other provision of this chapter, a beer manufacturer, holder of a winegrower’s license, rectifier, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, craft distiller, holder of a distilled spirits rectifiers general license, or distilled spirits manufacturer’s agent, regardless of any other licenses held by the foregoing, may sponsor events promoted by, and may purchase advertising space and time from, or on behalf of, an on-sale licensee that is the owner, operator, agent of the operator, or assignee of the operator’s advertising rights of a mixed-use district subject to all of the following conditions:
(1) The owner, operator, agent of the operator, or assignee of the operator’s advertising rights of the mixed-use district has its principal place of business in Orange County.
(2) The mixed-use district consists of not less than 90 acres that include office, residential, hotel, retail, dining, public gathering, and performing arts facilities, as well as a public intermodal transportation center, all of which are situated on land surrounding a fully enclosed arena with a fixed seating capacity in excess of 18,000 seats located in Orange County.
(3) The advertising space or time is purchased only in connection with daily activities, retail, dining, entertainment, and events conducted on the grounds of the mixed-use district.
(4) Any on-sale licensee, including any on-sale licensee owned by the person described in paragraph (1), operating at a venue on the grounds of the mixed-use district shall serve other brands of beer, distilled spirits, and wine in addition to any brand manufactured or distributed by the sponsoring or advertising beer manufacturer, holder of a winegrower’s license, rectifier, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, craft distiller, holder of a distilled spirits rectifiers general license, or distilled spirits manufacturer’s agent.
(5) An agreement for the sponsorship of, or for the purchase of advertising space and time in connection with, the daily activities, retail, dining, entertainment, and events conducted on the grounds of the mixed-use district shall not be conditioned directly or indirectly, in any way, on the purchase, sale, or distribution of any alcoholic beverage manufactured or distributed by the sponsoring or advertising beer manufacturer, holder of a winegrower’s license, rectifier, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, craft distiller, holder of a distilled spirits rectifiers general license, or distilled spirits manufacturer’s agent, or by any on-sale retail licensee.
(b) Any sponsorship of events or purchase of advertising space or time conducted pursuant to subdivision (a) shall be conducted pursuant to a written contract entered into by the beer manufacturer, holder of a winegrower’s license, rectifier, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, craft distiller, holder of a distilled spirits rectifiers general license, or distilled spirits manufacturer’s agent and any of the following:
(1) The person described in paragraph (1) of subdivision (a).
(2) Any on-sale licensee owned by the person described in paragraph (1) of subdivision (a).
(c) Any beer manufacturer, holder of a winegrower’s license, rectifier, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, craft distiller, holder of a distilled spirits rectifiers general license, or distilled spirits manufacturer’s agent who, through coercion or other illegal means, induces, directly or indirectly, a holder of a wholesaler’s license to fulfill those contractual obligations entered into pursuant to this section shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(d) Any on-sale retail licensee who, directly or indirectly, solicits or coerces a holder of a wholesaler’s license to solicit a beer manufacturer, holder of a winegrower’s license, rectifier, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, craft distiller, holder of a distilled spirits rectifiers general license, or distilled spirits manufacturer’s agent to purchase advertising time or space pursuant to this section shall be guilty of a misdemeanor and shall be punished by imprisonment in the county jail not exceeding six months, or by a fine in an amount equal to the entire value of the advertising space or time involved in the contract, whichever is greater, plus ten thousand dollars ($10,000), or by both imprisonment and fine. The person shall also be subject to license revocation pursuant to Section 24200.
(e) For purposes of this section, “beer manufacturer” includes a holder of a beer manufacturer’s license, holder of an out-of-state beer manufacturer’s certificate, or holder of a beer and wine importer’s general license.
(f) Nothing in this section shall authorize the purchasing of advertising space or time directly from, or on behalf of, any on-sale licensee other than the person described in paragraph (1) of subdivision (a) or an on-sale licensee owned by that person.
(g) Nothing in this section shall authorize a beer manufacturer, holder of a winegrower’s license, rectifier, winegrower’s agent, holder of an importer’s general license, distilled spirits manufacturer, craft distiller, holder of a distilled spirits rectifiers general license, or distilled spirits manufacturer’s agent to furnish, give, or lend anything of value to an on-sale retail licensee, either directly or indirectly, other than the person described in paragraph (1) of subdivision (a) or an on-sale licensee owned by that person and except as expressly authorized by this section or this division.
(h) No funds, revenue, or other consideration from any sponsorship of events or purchase of advertising space or time conducted pursuant to this section shall be furnished, given, or lent, either directly or indirectly, by the person described in paragraph (1) of subdivision (a), or by an on-sale licensee owned by that person, to any licensee other than an on-sale licensee owned by the person described in paragraph (1) of subdivision (a).
(i) The Legislature finds that it is necessary and proper to require a separation among 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 shall be limited to their express terms so as not to undermine the general prohibition and intends that this section be construed accordingly.

SEC. 3.

 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 found in Orange County.

SEC. 4.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.