BILL NUMBER: SB 557 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY SEPTEMBER 1, 2015
AMENDED IN ASSEMBLY JUNE 29, 2015
AMENDED IN SENATE APRIL 6, 2015
INTRODUCED BY Senator Hall
FEBRUARY 26, 2015
An act to amend Section 25503.6 of the Business and Professions
Code, relating to alcoholic beverages.
LEGISLATIVE COUNSEL'S DIGEST
SB 557, as amended, Hall. Alcoholic beverages: tied-house
restrictions: advertising.
Existing law authorizes the holder of a winegrower's license, a
beer manufacturer, a distilled spirits manufacturer, or a distilled
spirits manufacturer's agent, to purchase advertising space and time
from, or on behalf of, an on-sale retail licensee, under certain
conditions, if the on-sale retail licensee is the owner, manager,
agent of the owner, assignee of the owner's advertising rights, or
major tenant of specified facilities.
This bill would expand the exceptions to existing law to allow
beer manufacturers, winegrowers, distilled spirits rectifiers,
distilled spirits manufacturers, or distilled spirits manufacturer's
agents to purchase advertising space and time from, or on behalf of,
on-sale retail licensees at a fairgrounds with a horse racetrack and
equestrian and sports facilities located in the County of San Diego.
By creating new 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 the County of San Diego.
This bill would incorporate changes to Section 25503.6 of the
Business and Professions Code proposed by both this bill and Senate
Bill 462, which would become operative only if both bills are enacted
and become effective on or before January 1, 2016, and this bill is
chaptered last.
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.
State-mandated 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
distilled spirits rectifier, 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) A fully enclosed arena with a fixed seating capacity in excess
of 18,000 seats located in Orange County or Los Angeles County.
(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 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 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
distilled spirits rectifier, 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 fairgrounds with a horse racetrack and equestrian and sports
facilities located in San Diego County.
(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.
(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 distilled spirits
rectifier, 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 distilled spirits rectifier, the distilled spirits
manufacturer, or the distilled spirits manufacturer's agent and the
on-sale licensee, or with respect to clause (ii) of subparagraph (N)
of paragraph (1) of subdivision (a), the major tenant of the outdoor
stadium.
(c) Any beer manufacturer or holder of a winegrower's license, any
distilled spirits rectifier, 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 distilled spirits rectifier, 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.
SEC. 1.5. 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
distilled spirits rectifier, 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) A fully enclosed arena with a fixed seating capacity in excess
of 18,000 seats located in Orange County or Los Angeles County.
(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
within 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 within
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 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, within 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 within
in San Joaquin County.
(M) A fully enclosed arena with a fixed seating capacity in excess
of 13,000 seats 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
distilled spirits rectifier, 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.
(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.
(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 distilled spirits
rectifier, the distilled spirits manufacturer
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 distilled spirits rectifier, the distilled spirits
manufacturer, or the distilled spirits manufacturer's agent and
the on-sale licensee, or with respect to clause (ii) of
subparagraph (N) of paragraph (1) of subdivision (a), the major
tenant of the outdoor stadium. 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 subparagraph (O) 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
distilled spirits rectifier, 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 distilled spirits rectifier, 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. The Legislature finds and declares that a special law is
necessary and that a general law 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 County of San Diego.
SEC. 3. Section 1.5 of this bill incorporates
amendments to Section 25503.6 of the Business and Professions Code
proposed by this bill and Senate Bill 462. It shall only become
operative if (1) both bills are enacted and become effective on or
before January 1, 2016, (2) each bill amends Section 25503.6 of the
Business and Professions Code, and (3) this bill is enacted after
Senate Bill 462, in which case Section 25503.6 of the Business and
Professions Code, as amended by Senate Bill 462, shall remain
operative only until the operative date of this bill, at which time
Section 1.5 of this bill shall become operative, and Section 1 of
this bill shall not become operative.
SEC. 3. 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.