2024 Chaptered Legislation

Code Section Changes by Bill Number

AB 1940 (Villapudua, Chapter 218, Statutes of 2024) Alcoholic beverages: beer returns.

Amends Section 23104.2 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2025)

Summary of Code Section Changes – This bill allows a wholesaler or manufacturer, when accepting the return and exchange of a discontinued or seasonal brand of beer, to provide the retailer with beer produced by a different manufacturer if the original manufacturer has ceased doing business, as specified. Such exchanges will be subject to the existing rules in law, including, but not limited to, that the wholesaler or manufacturer must receive ABC approval for the exchange. This bill also clarifies that the return and exchange of a seasonal or discontinued brand of beer from a retailer to a wholesaler, as authorized in current law, requires the exchanged beer to be of similar quality.

AB 2069 (Gallagher, Chapter 306, Statutes of 2024) Sale of soju and shochu.

Amends Section 23398.5 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2025)

Summary of Code Section Changes – This bill allows domestically produced soju and shochu to qualify for an exception in law currently limited to soju and shochu imported into the United States. As a result, an on-sale licensed premises with wine privileges (e.g. type 41 or type 42 license) may sell soju or shochu that is up to 24 percent alcohol by volume and derived from agricultural products, regardless of where it was produced. To qualify for the exception, the alcohol must be legitimate soju or shochu and be labeled as such.

AB 2094 (Flora, Chapter 213, Statutes of 2024) Alcoholic beverage control: public community college stadiums: City of Bakersfield.

Amends Section 25608 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2025)

Summary of Code Section Changes – This bill authorizes the sale and consumption of alcoholic beverages at a public community college stadium with a capacity of at least 19,000 people in the City of Bakersfield for sporting events or concerts sponsored by a public community college or other events sponsored by noncollege groups.

AB 2174 (Aguiar-Curry, Chapter 308, Statutes of 2024) Alcoholic beverages: beer caterer’s permit.

Amends Section 23320 of, and adds Section 23399.01 to, the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2025)

Summary of Code Section Changes – This bill establishes a beer catering permit (known as a type 91) that can be issued by ABC to a licensed beer manufacturer. The permit authorizes the sale of beer produced by or for the beer manufacturer for consumption at conventions, sporting events, trade exhibits, picnics, social gatherings, community events, or similar events held any place in the state approved by ABC.

In order to exercise the privileges of the permit, the beer manufacturer needs to apply to ABC for a catering event authorization and receive local law enforcement approval. If approved, the beer manufacturer could sell beer produced by or for them within a specified area at the event. The privileges of the permit are exclusively on-sale, meaning alcohol cannot be removed from the licensed area of the event. At all approved events, the beer catering permit holder will be restricted to only privileges authorized by their license and permit, and will be required to comply with all provisions of the ABC Act, such as completion of Responsible Beverage Service training. Violations at a catered event are grounds for discipline against the license, including suspension or revocation, as if the violation occurred at their licensed premises.

Limits on Events and Sales
A beer catering permitholder will be capped at receiving no more than 36 total event authorizations in a calendar year, and no more than two beer caterers may participate per day at a single event. At each event, a beer caterer will be limited to selling no more than 124 gallons of beer. Beer caterers will be required to maintain records of all beer sales conducted under their permit for a minimum of three years.

Associated Fees
Beginning January 1, 2025, the type 91 beer catering permit will have an annual fee of $275 that is subject to increases, as authorized in current law for other ABC license types, in amounts not to exceed annual differentials in the California Consumer Price Index. Separately, an event authorization will carry a fee of $100 when anticipated attendance is less than 1,000 people; $325 when anticipated attendance is 1,000-4,999; and $1,000 when anticipated attendance is 5,000 or more. A beer catering permit may be renewed annually at the same time as the licensee’s beer manufacturing license.

AB 2177 (McKinnor, Chapter 61, Statutes of 2024) Winegrowers: spirits of wine.

Amends Sections 23358 and 23502 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2025)

Summary of Code Section Changes – Under current law, a winegrower is authorized under their license to produce spirits of wine and blend those spirits of wine into wine produced by the winegrower, to sell those spirits of wine to an industrial alcohol dealer (e.g. a hand sanitizer manufacturer) or to a distilled spirits manufacturer, or to destroy them. The authorization to sell spirits of wine to a type 04 distilled spirits manufacturer was codified last year under AB 1704.

This bill expands the authorization granted under AB 1704 to include any person holding a license authorizing the manufacture or rectification of distilled spirits, thereby enabling sales to rectifiers and craft distillers rather than solely type 04 licensees. This bill also makes a conforming update to the Craft Distillers Act of 2015 to reflect that the craft distillers license privilege of producing distilled spirits includes spirits of wine produced by a winegrower.

AB 2359 (Ting, Chapter 393, Statutes of 2024) Alcoholic beverage control: neighborhood-restricted special on-sale general licenses.

Amends Section 23826.13 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2025)

Summary of Code Section Changes – This bill allows 10 new type 87 licenses to be issued by increasing the cap from 30 to 40 total authorized licenses in specified census tracts. Of the new 10 licenses, five may be issued, in any combination, in the following census tracts: 612000, 232000, 234000, 233000, 230030; the other five new licenses may be issued, in any combination, in census tracts 255010, 255020, 256000, 260020, 260010, 260040, 261000, or 263010. This bill also repeals the preapplication meeting requirements currently applicable to the type 87 license. Additionally, this bill grants off-sale privileges for type 87 licenses that are issued on or after January 1, 2025, unless conditioned or prohibited by ABC as part of the existing licensing process. This bill also provides that the holder of a type 87 license issued before January 1, 2025, may submit a petition to ABC requesting to exercise off-sale privileges. If ABC determines good cause exists to deny the petition, in whole or in part, ABC shall endorse the prohibition or other restriction as a condition on the license. If denied, the licensee may make a written request for hearing as prescribed in current law.

AB 2375 (Lowenthal, Chapter 714, Statutes of 2024) Alcoholic beverages: on-sale general public premises: drink lids.

Amends Section 25624 of, and adds and repeals Section 25625 of, the Business and Professions Code, relating to alcoholic beverages.(Effective July 1, 2025)

Summary of Code Section Changes – This bill requires applicants for, and holders of, type 48 licenses to provide a lid with a customer’s drink upon their request. A “lid” is defined to mean a removable cover of any size that attaches to the rim of a beverage. The lid is not required to fit all containers in which alcoholic beverages are served on the premises but must fit at least one. Licensees will be authorized to offer the lid complimentary or charge a fee that does not exceed a reasonable amount based on the wholesale cost.

Type 48 applicants and licensees are also required by this bill to update their signage mandated by last year’s AB 1013 (Lowenthal) pertaining to drug testing kits so that the sign also references lids. Specifically, the signs must read, “Don’t get roofied! Drink lids and drink spiking drug test kits available here. Ask a staff member for details.”

This bill takes effect July 1, 2025, and is scheduled to repeal January 1, 2027, unless extended by the Legislature.

AB 2378 (Calderon, Chapter 309, Statutes of 2024) Alcoholic beverage control: licensing exemption: apprenticeship program for bartending or mixology.

Amends Section 23399.5 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2025)

Summary of Code Section Changes – This bill establishes an alcohol license exemption for bartending or mixology apprenticeship programs approved by the Chief of the Division of Apprenticeship Standards within the Department of Industrial Relations, provided all of the following requirements are met:

1. Students enrolled in the apprenticeship program are at least 21 years of age.
2. The apprenticeship program adopts a policy that the students may taste, but may not consume, the alcoholic beverages served.
3. There is no extra charge or fee for the alcoholic beverages served.

AB 2389 (Lowenthal, Chapter 310, Statutes of 2024) Alcoholic beverages: on-sale general – eating place and on-sale general public premises: drug reporting.

Adds Section 25624.5 to the Business and Professions Code, relating to alcoholic beverages.(Effective January 1, 2025)

Summary of Code Section Changes – This bill requires an applicant for, or holder of, a type 48 license to contact and provide any of the following information to law enforcement or emergency medical services when they are notified by a customer that the customer or another customer believes they have been a victim of drink spiking:

1. A positive test result from a drug testing device.
2. Observation of someone tampering with a customer’s drink.
3. Verbal communication to staff that a customer has been drugged.
4. Observation of symptoms associated with the effects of drink spiking or the controlled substances used for drink spiking.

After contacting law enforcement or emergency medical services, the licensee or their staff must, to the best of their ability, follow any instructions provided by law enforcement or emergency medical services and, to the best of their ability, monitor the customer until law enforcement or emergency medical services arrive at the premises to assess the customer. For purposes of these laws, drink spiking includes, but is not limited to, adding a controlled substance or alcohol to a person’s drink without their knowledge or consent.

AB 2402 (Lowenthal, Chapter 829, Statutes of 2024) Drink spiking.

Amends Section 25681 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2027)

Summary of Code Section Changes – This bill requires, beginning January 1, 2027, Responsible Beverage Service training to include best practices on how to prevent or protect a person from drink spiking and best practices if a person has been drugged from drink spiking. For purposes of this bill, “drink spiking” means putting alcohol or drugs into another person’s drink without their knowing and express consent, also known as roofying.

AB 2589 (Joe Patterson, Chapter 312, Statutes of 2024) Alcoholic beverages: additional licenses: County of El Dorado and County of Placer.

Adds Section 23826.20 to the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2025)

Summary of Code Section Changes – This bill authorizes ABC to issue up to 10 additional new original type 47 licenses in a “retail center” in each the County of El Dorado and the County of Placer. Retail center is defined to mean “a multitenant shopping center that contains at least 300,000 square feet of retail shopping space open to the public”, and 3 of the 10 total licenses per county are reserved for premises in a retail center that contains at least 1,000,000 square feet of retail shopping space open to the public.

ABC may not issue more than 4 licenses per county in the first year this bill takes effect, and the respective county board of supervisors will be authorized to adopt and submit a resolution to ABC that further restricts the number of licenses that may be issued pursuant to the bill, as specified.

The licenses authorized by this bill will be subject to existing priority drawing laws. Existing 47s in a retail shopping center will be precluded from acquiring a license under this bill for their existing premises. Further, licenses issued pursuant to this section cannot be transferred to other counties or to premises not qualifying pursuant to this bill. Additionally, licenses issued pursuant to this bill cannot be sold or transferred for a price greater than the original fee paid. Among other provisions, these licenses may be issued as “for special use” by ABC, and the cancellation or revocation of a license issued pursuant to this bill will authorize ABC to issue an additional license during the regular priority drawing process.

AB 2991 (Valencia, Chapter 426, Statutes of 2024) Alcoholic beverage control: retailer payments: electronic funds transfers.

Amends, repeals, and adds Section 25509 of, and adds Section 25509.1 to, the Business and Professions Code, relating to alcoholic beverages.(Effective January 1, 2026)

Summary of Code Section Changes – This bill requires, beginning January 1, 2026, payment from a licensed retailer to a licensed wholesaler for the delivery of alcoholic beverages to occur via an electronic funds transfer (EFT), as specified. EFT payments pursuant to this bill will be subject to all of the following requirements:

1. The wholesaler must initiate the EFT through the withdrawal of funds from the retailer’s bank account.
2. The EFT must occur by the expiration of the 30th day from the date of delivery.
3. Any costs related to the electronic payment services must be paid by the party that incurred the costs. Wholesalers cannot pay for electronic payment fees incurred by retailers, and retailers cannot pay for electronic payment fees incurred by wholesalers, and service fees must be applied in an equitable manner to the licensee to match the services they receive. Retailers are precluded from accepting a rebate, incentive, or other thing of value from a third-party payment processor for EFTs required by this bill.

This bill designates the wholesaler licensee with the power to select the third-party payment processor used to facilitate the EFT transfer. The wholesaler and retailer may agree on the third-party payment processor, but if the parties are unable to agree, they must use the third-party payment processor used by the retailer as of July 1, 2025 to pay for wholesale alcohol purchase; and, if by July 1, 2025, the retailer does not use a third-party payment processor, the parties must use the third-party payment processor selected by the wholesaler.

This bill authorizes wholesalers to choose to accept credit card payments in lieu of an EFT. If payment is made using a credit card, the retailer will bear the cost of the transaction. In addition, this bill contains a narrow authorization for other non-EFT payments. Specifically, it allows the payment of cash, check, or money order only in the following instances:

1. During temporary service interruptions of the third-party payment processor.
2. If accepting payment following an EFT of insufficient funds.
3. If the retailer licensee holds an interim operating permit or a temporary permit pursuant to existing law.
4. During the first 30 days following the issuance of a license to the retailer.

AB 3069 (Davies, Chapter 429, Statutes of 2024) Tied-house restrictions: advertising exceptions: City of Oceanside.

Amends Section 25503.6 of the Business and Professions Code, relating to alcoholic beverages, and declaring the urgency thereof, to take effect immediately. (Effective September 22, 2024)

Summary of Code Section Changes – This urgency bill authorizes alcohol manufacturers (including beer manufacturers, winegrowers, rectifiers, craft distillers, distilled spirits manufacturers or their agents) to purchase advertising space and time from, or on behalf of, an on-sale retail licensee that is the owner or operator of a fully enclosed arena with a fixed seating capacity in excess of 5,000 seats located in the City of Oceanside. Advertisements and sponsorships authorized by this bill will be subject to the existing requirements generally applicable to other arenas in the state with similar tied-house exceptions (particularly those specified in Business and Professions Code section 25503.6).

AB 3203 (Aguiar-Curry, Chapter 318, Statutes of 2024) Craft distillers: direct shipping.

Amends Section 23504.5 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2025)

Summary of Code Section Changes – This bill temporarily extends direct-to-consumer shipping privileges of California craft distillers from January 1, 2025, until January 1, 2026. Spirits shipped by a California craft distiller must still comply with the requirements set forth in current law, Business and Professions Code section 23504.5.

AB 3206 (McKinnor, Chapter 977, Statutes of 2024) Alcoholic beverages: hours of sale: arenas in the City of Inglewood.

Adds and repeals Sections 23398.7 and 25631.5 of the Business and Professions Code, relating to alcoholic beverages.(Effective January 1, 2025)

Summary of Code Section Changes – This bill allows, until January 1, 2030, alcohol service between 2:00 a.m. and 4:00 a.m. at an on-sale licensed premises operated in a fully enclosed arena with a seating capacity of at least 18,000 seats located in the City of Inglewood, as specified. The Intuit Dome, home of the Los Angeles Clippers, is the only qualifying arena. Alcoholic beverage sales pursuant to this bill must be limited to the morning immediately following a sporting event, concert, or other public or private event at the arena, and can only occur in a private area of the arena available only to members of a private club who are assessed dues in order to gain access to the area, and guests of those members. To exercise these privileges, the City of Inglewood must adopt a specified ordinance and the arena operator needs to receive a permit from ABC established by the bill.

AB 3285 (Committee on Governmental Organization, Chapter 230, Statutes of 2024) Alcoholic beverage control.

Amends Sections 23827 and 25600 of the Business and Professions Code, relating to alcoholic beverage control.(Effective January 1, 2025)

Summary of Code Section Changes – This bill extends the sunset date, from January 1, 2025, until January 1, 2030, applicable to provisions of law that allow specified alcohol manufacturers to donate a portion of the purchase price of an alcoholic beverage to a nonprofit charitable organization if certain conditions are met. This bill also clarifies the authorization provided in existing law for the issuance of new on-sale general licenses in counties with populations of less than 7,000 so that 1) such licenses are available if the county depends upon tourism and 2) such licenses cannot be transferred to a premises that does not meet the requirements for which the license is issued.

SB 969 (Wiener, Chapter 869, Statutes of 2023) Alcoholic beverages: entertainment zones: consumption.

Amends Sections 23039.5, 23357, 23358, 23396, and 25690 of, and adds Sections 25691 and 25692 to, the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2025)

Summary of Code Section Changes – This bill extends the entertainment zone provisions in law established by SB 76 (Wiener, Chapter 700, Statutes of 2023) so that they apply to any city or county rather than solely San Francisco. This bill also repeals provisions in SB 76 that limit alcohol consumption in an entertainment zone to only areas adjacent to and at the same time as a special event licensed by ABC, thereby allowing alcohol consumption in certain public areas of an entertainment zone regardless of whether a licensed special event is occurring. This means that a licensed beer manufacturer, winegrower, and on-sale licensed premises in an entertainment zone may sell alcoholic beverages, allowed by their license and local ordinance, for consumption within the entertainment zone. Specifically, those licensees will be allowed to permit consumers to leave their premises with open alcoholic beverages, not in metal or glass containers, if the premises is located within the entertainment zone, consumption of that type of alcoholic beverage is authorized by the local ordinance creating the zone, open alcohol containers only leave the premises during the hours allowed by the ordinance establishing the zone, and patrons with open containers exit the premises directly into the zone. Only alcohol purchased in an entertainment zone may be consumed within the zone, and licensees are prohibited from allowing alcoholic beverages on their premises that were acquired from another licensed location, among other various provisions. Before participating, the licensee is statutorily required to provide annual notice to ABC of their intent to do so.

SB 1224 (Ochoa Bogh, Chapter 132, Statutes of 2024) Alcoholic beverage control: on-sale general license: County of Riverside.

Amends Section 23824 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2025)

Summary of Code Section Changes – This bill exempts a premises operated as the Riverside County Fairgrounds, on land owned by the County of Riverside, from the requirement of operating as a bona fide public eating place while serving alcoholic beverages if food service is available to the public at all times during which licensed privileges are exercised.

SB 1371 (Bradford, Chapter 606, Statutes of 2024) Alcoholic beverage control: proof of age.

Amends Section 25660 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2025)

Summary of Code Section Changes – This bill establishes that utilization of a biometric system, as defined, that reviews bona fide evidence of majority and identity of a person and that verifies and authenticates the validity of that bona fide evidence, may qualify as an affirmative defense in a criminal prosecution or administrative hearing involving the licensee. For purposes of this bill, “biometrics” is defined to mean the unique characteristics of a person, including, but not limited to, fingerprints, iris, face, or other similar biometric characteristics, or any combination thereof. Further, a “biometric system” is defined as technology that links the identity of a person to that person’s biometrics.

SB 1495 (Wilk, Chapter 137, Statutes of 2024) Tied-house restrictions: for-profit cemeteries: City of Los Angeles.

Adds Section 25503.63 to the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2025)

Summary of Code Section Changes – This bill establishes a tied-house exception that allows alcohol manufacturers (including beer manufacturers, winegrowers and their agents, importers who do not also hold a wholesaler or retail license, distilled spirits manufacturers and their agents, and rectifiers) to purchase advertising space or event sponsorships from the operator of a for-profit cemetery that meets specified requirements. Hollywood Forever Cemetery is the only qualifying cemetery at this time. Advertising and sponsorships authorized by this bill must comply with specified requirements.

2023 Chaptered Legislation

Code Section Changes by Bill Number

AB 416 (Muratsuchi, Chapter 653, Statutes of 2023) Sale of shochu.

Amends Section 23398.5 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2024)

Summary of Code Section Changes – This bill establishes the same exception for shochu that already exists for soju, an imported Korean alcoholic beverage. Specifically, this bill allows an on-sale license with wine privileges (e.g. type 41 or type 42 license) to also sell shochu, an imported Japanese distilled spirit up to 24 percent alcohol by volume that is derived from agricultural products. The department has previously published industry guidance on its interpretation of the soju exception. Specifically, the department clarified that the exception applies to soju imported from any country and not solely Korea (it does not apply to soju made in the United States; imported product may be bottled in the U.S. as long as no other treatment occurs). This same interpretation and application of law will apply to shochu. Additionally, products labeled as containing a mix of soju and shochu qualify for this exception provided they meet the importation requirement and are within the ABV limit.

AB 546 (Villapudua, Chapter 532, Statutes of 2023) Alcoholic beverages: advertising and brandy tastings.

Amends Sections 23363.3, 25503, and 25611.1 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2024)

Summary of Code Section Changes – This bill clarifies that tied-house restrictions in Business and Professions Code section 25503 prohibiting manufacturers and wholesalers from providing anything of value to retailers, except as otherwise authorized by law, 1) applies to all alcoholic beverages and not solely distilled spirits, 2) extends to out-of-state beer manufacturer certificate holders, and 3) includes providing credit or rebates (rather than solely money) for sign or advertisement placement on a retailer’s premises; all of these technical modifications align with the Department’s interpretation of current law. This bill also expressly allows a wholesaler to provide customized signs to retailers for current market price. This authorization is limited to wholesalers, meaning they are the only license group that may sell customized signs for retailers. Lastly, this bill repeals the prohibition against brandy manufacturers offering tastings at their premises in the form of a cocktail or mixed drink. Such tastings must still occur in compliance with Business and Professions Code section 23363.3.

AB 840 (Addis, Chapter 346, Statutes of 2023) Tied-house exceptions: advertising.

Amends Section 25503.6 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2024)

Summary of Code Section Changes – This bill establishes a tied-house exception that allows specified alcohol manufacturers to purchase advertising space and event sponsorships in connection with events held at specified venues located on the campuses of California Polytechnic State University San Luis Obispo, California State University Fresno, California State University Sacramento, California State University Monterey Bay, California State University Fullerton, San Jose State University, California State University Northridge, and St. Mary’s College of California. This bill also amends the existing tied-house exception for a motorsports entertainment complex in the County of San Bernardino by reducing the seating requirement from 50,000 to 25,000.

AB 1013 (Lowenthal, Chapter 353, Statutes of 2023) On-sale general public premises: drug testing devices.

Adds and repeals Section 25624 of the Business and Professions Code, relating to alcoholic beverages. (Effective July 1, 2024)

Summary of Code Section Changes – This bill requires type 48 applicants and licensees, beginning July 1, 2024 and until January 1, 2027 (unless extended by the Legislature), to comply with all of the following:

1. Offer drug testing devices (such as test strips, stickers, straws, or other devices that are designed to detect the presence of controlled substances in a drink), which have not exceeded their expiration date or recommended period of use, that test for “controlled substances” commonly used to spike drinks. These drugs may include, but are not limited to, flunitrazepam, ketamine, and gamma hydroxybutyric acid, also known by other names, including GHB, gamma-hydroxybutyrate, 4-hydroxybutyrate, 4-hydroxybutanoic acid, sodium oxybate, and sodium oxybutyrate.
2. The drug testing devices shall be available for sale to customers, at a price not to exceed a reasonable amount based on the wholesale cost. Alternatively, they may be given to customers free of charge. 

3. Post the following notice in a prominent and conspicuous location: “Don’t get roofied! Drink spiking drug test kits available here. Ask a staff member for details.”

AB 1088 (Rubio, Chapter 829, Statutes of 2023) Licensed craft distillers: direct shipping.

Amends Section 23504.5 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2024)

Summary of Code Section Changes – This bill temporarily extends direct-to-consumer shipping privileges of California craft distillers from January 1, 2024, until January 1, 2025. Such sales must still comply with Business and Professions Code section 23504.5. To summarize, the temporary privilege allows a licensed craft distiller to directly ship distilled spirits manufactured or produced by the licensee at its premises to a consumer only if the sale complies with all of the following:

1. The amount shipped must not exceed the equivalent of 2.25 liters in any combination of prepackaged containers per day per consumer and shall be solely for the consumer’s personal use and not for resale.
2. The licensed craft distiller must maintain adequate records of the shipments and provide those records to the department upon request.
3. The licensed craft distiller must require the common carrier to obtain the signature of any individual 21 years of age or older before delivering any distilled spirits shipped to an individual in this state.
4. The containers in which the distilled spirits are shipped must be conspicuously labeled with the words: “CONTAINS ALCOHOL: SIGNATURE OF PERSON AGE 21 YEARS OR OLDER REQUIRED FOR DELIVERY.”

This temporary privilege will now expire on January 1, 2025 unless extended by the Legislature.

AB 1217 (Gabriel, Chapter 569, Statutes of 2023) Business pandemic relief.

Amends Section 25607 of the Business and Professions Code, amends Section 65907 of the Government Code, and amends Section 114067 of the Health and Safety Code, relating to pandemic relief. (Effective January 1, 2024)

Summary of Code Section Changes – This bill delays the expiration of COVID-19 Temporary Catering Authorizations from February 28, 2024, to July 1, 2026. This bill also eliminates the authority of the department to continue a COVID-19 Temporary Catering Authorization beyond its expiration if the licensee has a pending application with the department for a premises expansion. As such, all COVID-19 Temporary Catering Authorizations are scheduled to expire July 1, 2026, unless otherwise extended by the Legislature. This bill also extends other pandemic relief measures, unrelated to ABC, that impact food facilities and local governments.

AB 1294 (Boerner, Chapter 471, Statutes of 2023) Tied-house restrictions: advertising exceptions: County of Kings.

Adds Section 25503.62 to the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2024)

Summary of Code Section Changes – This bill establishes a tied-house exception that authorizes specified alcohol manufacturers to purchase advertising space and time from, or on behalf of, a company that owns a facility that includes a wave basin located in Kings County in connection with activities conducted on the premises of a permanent retail licensee located at the wave basin facility. Advertising and sponsorships authorized by this bill must comply with the following requirements: 

1. The premises of the permanent retail licensee includes a wave basin facility with a capacity of at least 9,000 individuals located in Kings County.
2. The sponsorship or advertising space or time must be purchased in connection with the sponsorship of activities that are held at the premises of a permanent retail licensee located at the wave basin facility.
3. Any sponsorship or purchase of advertising space must be accomplished by a written contract entered into by the alcohol manufacturer and the company that owns the wave basin facility in Kings County.
4. An agreement for advertising must not be contingent upon or otherwise require the licensee at the wave basin facility to purchase or sell any alcoholic beverages or other products produced by the event sponsor or purchaser of the advertising space and time.
5. The retail licensee at the wave basin facility must sell other brands of alcohol manufactured or distributed by a competing wholesaler or manufacturer in addition to any brand manufactured, distributed, or owned by the authorized licensee sponsoring an event or purchasing advertising space or time at the wave basin facility.

AB 1668 (Patterson J., Chapter 282, Statutes of 2023) Alcoholic beverages: licenses: County of Placer.

Adds Section 23826.19 to the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2024)

Summary of Code Section Changes – This bill authorizes ABC to issue 10 new original type 47 licenses (on-sale general licenses for bona fide public eating places), but no more than four per year, in the County of Placer. These new licenses would be precluded from being transferred from one county to another or to any premises that does not qualify pursuant to this bill and are not to be sold or transferred for a price greater than the original fee paid by the seller or transferor. Licensees that currently hold a valid on-sale general seasonal license may apply for these newly available licenses. The licenses will be subject to priority drawing laws and regulations.

AB 1704 (Santiago, Chapter 375, Statutes of 2023) Alcoholic beverage licenses.

Amends Sections 23015, 23358, 23961, and 24072.3 of the Business and Professions Code, relating to alcoholic beverages, and declaring the urgency thereof, to take effect immediately. (Effective October 7, 2023)

Summary of Code Section Changes – This urgency bill requires ABC to conduct its priority drawings for on-sale and off-sale general licenses through a live video feed. This bill also allows winegrowers to sell spirits of wine to a type 4 license holder (distilled spirits manufacturer); this privilege does not authorize sales to craft distillers or other license types with distilled spirits production privileges. Additionally, this bill expands eligibility for the brewpub-restaurant license exchange program. Currently, the exchange option is only available to those that have held a brewpub-restaurant license before January 1, 2020.  AB 1704 will allow the exchange of a brewpub-restaurant license that was first issued before January 1, 2020, regardless of any subsequent transfers thereof. Exchanges must still comply with the existing requirements set forth in Business and Professions Code section 24072.3.

SB 76 (Wiener, Chapter 700, Statutes of 2023) Alcoholic beverages: music venue license: entertainment zones: consumption.

Amends Sections 23357, 23358, 23396, and 23552 of the Business and Professions Code, adds Section 23039.5 to, and adds Article 5 (commencing with Section 25690) to Chapter 16 of Division 9 of, the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2024)

Summary of Code Section Changes – This bill authorizes the City and County of San Francisco to create “entertainment zones” where people may carry and consume alcoholic beverages on public streets, sidewalks, and public rights-of-way adjacent to and during special events licensed by ABC. Beer manufacturers, winegrowers, and on-sale licensees located in entertainment zones would be authorized to sell open alcoholic beverages for consumption off the premises within the local jurisdiction-approved entertainment zone if all of the following conditions are satisfied:

1. The premises is located within the entertainment zone.

2. Consumption of that type of alcoholic beverage is authorized by the San Francisco government’s ordinance creating the entertainment zone.
3. Open alcohol containers for consumption in the entertainment zone only leave the premises during the hours allowed by the ordinance establishing the entertainment zone (and only during the hours of alcohol service at the special event licensed by ABC).
4. Patrons with open containers exit the premises directly into an entertainment zone.
5. All alcoholic beverages in the entertainment zone are purchased only at a licensed premises located within the entertainment zone.
6. The premises expressly prohibits open containers or closed containers of alcoholic beverages acquired outside their premises.
7. Delivery of alcoholic beverages to consumers for consumption within the entertainment zone by the licensee or by any third-party delivery service is expressly prohibited unless the delivery is to a residential building or private business that is not a licensee.
8. No alcoholic beverages purchased at the licensed premises may leave the premises in an open glass or metal container for consumption in an entertainment zone.
9. Any other conditions established in the ordinance adopted by the City and County of San Francisco.
10. In order to participate, the licensee must annually notify ABC; those with restricted privileges due to operating conditions or statutory restrictions may be prohibited from exercising entertainment zone privileges that are contrary to their operating conditions. For purposes of this provision, any restrictions on the exercise of off-sale privileges would apply to the removal of alcoholic beverages from the licensed premises for consumption in an entertainment zone.

Before an entertainment zone becomes operable, the City and County of San Francisco must adopt an ordinance on or after January 1, 2024, that establishes a process or procedure by which persons in possession of alcoholic beverages in entertainment zones may be readily identifiable as being 21 years of age or older, among other specified requirements.

Music Venues

Unrelatedly, this bill makes music venue licenses eligible for duplicate licenses, subject to the same fees charged for a duplicate type 47 license. This bill also authorizes a music venue to sell, serve, and permit consumption of alcoholic beverages to guests during private events or private functions not open to the general public within any hours of operation permitted by its license, regardless of whether any live performance occurs. A music venue would not be required to have live entertainment during a private event or private function nor would they be subject to the standard eligibility criteria to be considered a music venue under current law (impose a paid ticket or cover charge for entrance, pay artists, or other general qualification requirements to be considered a music venue as identified in subdivision (c) of section 23550) during a private event or private function. This bill maintains the core intent of the music venue license by requiring the principal purpose of a music venue is to operate as a music entertainment facility, meaning the number of private events or private functions occurring at the music entertainment facility must not exceed the number of live entertainment events occurring at the facility in any calendar year; licensees must maintain records to demonstrate compliance with this requirement.

SB 247 (Wilk, Chapter 212, Statutes of 2023) Alcoholic beverages: licensing exemptions: barbering and cosmetology services.

Amends Section 23399.5 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2024)

Summary of Code Section Changes – In 2016, the Legislature approved an alcohol license exemption for beauty salons and barbershops to serve a limited amount of beer or wine to their customers at no charge during a provided service, as specified in Business and Professions Code Section 23399.5. This bill seeks to further clarify who may be eligible to use this privilege as there is no definition in law of what constitutes a “beauty salon” or “beauty salon service”. Specifically, it makes clear that it applies to an establishment licensed by, and in good standing with, the California Board of Barbering and Cosmetology. The clarifications in the bill are consistent with ABC’s interpretation and application of existing law.

SB 269 (Laird, Chapter 176, Statutes of 2023) Alcoholic beverages: licensed premises: retail sales and consumption.

Amends Section 25607 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2024)

Summary of Code Section Changes – This bill adds craft distillers and brandy manufacturers to the shared-use privileges established by AB 1734 (Bennett, Chapter 175, Statutes of 2022). In practice, this means a beer manufacturer’s license, a winegrower’s license, a craft distiller’s license, or a brandy manufacturer’s license, that are held in any combination and under identical ownership, may overlap at the same premises without necessitating separate sales and consumption areas. Per this bill, this privilege may only be used by a craft distiller if it is at the master license locations of the brewery, winery, and/or distillery.

SB 392 (Bradford, Chapter 604, Statutes of 2023) Tied-house restrictions: advertising exceptions: City of Inglewood.

Amends Section 25503.6 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2024)

Summary of Code Section Changes – This bill authorizes specified alcohol manufacturers to purchase advertising space and time from, or on behalf of, an on-sale retail licensee that is the owner or operator of a fully enclosed arena with a seating capacity of at least 18,000 seats in the City of Inglewood. Advertising authorized by this bill could be placed on or in the arena and within the perimeter of the main entry area immediately adjacent to the arena, which includes an open plaza and bandshell. These advertisements would be permitted only if they are not placed on or in, or otherwise promote, a licensed alcohol retailer other than the arena or the premises located within the main entry that is wholly owned and operated by or for the owner of the arena.

SB 498 (Gonzalez, Chapter 613, Statutes of 2023) Alcoholic beverage control: violations.

Amends Sections 23095 and 25658 of, and adds Section 24200.8 to, the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2024)

Summary of Code Section Changes – This bill authorizes the department to consider as an aggravating factor, when determining the discipline for the unlawful sale or furnishing of alcohol to minors or obviously intoxicated persons, whether there is subsequent death or great bodily injury. This bill also increases the maximum fine amount for an offer in compromise (POIC) that an alcohol licensee may pay in lieu of license suspension as follows:

1. An offer in compromise for retail licensees currently may not be less than $750 dollars or more than $3,000. This bill increases the cap from $3,000 to $6,000.
2. If the petitioning retailer has had any other accusation filed against them during the preceding three years, the offer in compromise currently may not be less than $1,500 or more than $6,000. This bill increases the cap from $6,000 to $12,000.
3. If the licensee is petitioning for an offer in compromise for a second violation of Business and Professions Code section 25658 that occurs within 36 months of the initial violation, the offer in compromise currently may not be less than $2,500 or more than $20,000. This bill increases the cap from $20,000 to $40,000.
4. Lastly, this bill increases the criminal fine, from $1,000 to $3,000, for the sale or furnishing of alcohol to a minor that results in death or great bodily injury.

SB 787 (Dahle, Chapter 113, Statutes of 2023) Number of licensed premises: County of Nevada.

Adds Section 23826.18 to the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2024)

Summary of Code Section Changes – This bill authorizes ABC to issue 10 new original type 47 licenses (on-sale general licenses for bona fide public eating places), but no more than four per year, in the County of Nevada. These new licenses would be precluded from being transferred from one county to another or to any premises that does not qualify pursuant to this bill and are not to be sold or transferred for a price greater than the original fee paid by the seller or transferor. Licensees that currently hold a valid on-sale general seasonal license may apply for these newly available licenses. The licenses will be subject to priority drawing laws and regulations.

SB 788 (Ashby, Chapter 114, Statutes of 2023) Beer manufacturers: cider and perry.

Amends Section 23357 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2024)

Summary of Code Section Changes – This bill removes the requirement that a beer manufacturer must annually produce at least 60,000 barrels of beer in order to manufacture cider or perry under their beer manufacturers license. This bill does not authorize tasting, consumption, or sales to customers at the brewery, which will still require a winegrower’s license.

SB 844 (Jones, Chapter 295, Statutes of 2023) Alcoholic beverage control: retail license transfers and beer returns.

Amends Sections 23104.2 and 24044 of the Business and Professions Code, relating to alcoholic beverages, and declaring the urgency thereof, to take effect immediately. (Effective September 30, 2023)

Summary of Code Section Changes – This urgency bill expands the definition of “seasonal brand of beer”, which governs the allowance for wholesalers or manufacturers to accept returns of beer from retailers and is currently limited to only those commemorating a specific holiday season, so that it includes those that recognize either a season or a holiday. This bill also makes a technical and clarifying update related to public notification requirements involving pending alcohol license applications; these changes are technical in nature and consistent with the department’s interpretation and application of current law.

2022 Chaptered Legislation

Code Section Changes by Bill Number

AB 98 (Kalra, Chapter 267, Statutes of 2022) Tied-house restrictions: advertising exceptions: City of San Jose.

Amends Section 25503.6 of the Business and Professions Code, relating to alcoholic beverages, and declaring the urgency thereof, to take effect immediately. (Effective September 13, 2022)

Summary of Code Section Changes – Business and Professions Code Section 25503.6 (a)(1)(X) grants a tied-house exception for an arena in San Jose with a fixed seating capacity in excess of 15,000 seats. This urgency bill reduces the minimum seating threshold from 15,000 to 4,000. As a result, this urgency bill authorizes 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 to purchase advertising space and time from, or on behalf of, an on-sale retail licensee that is the owner or operator of a fully enclosed arena with a fixed seating capacity in excess of 4,000 seats located in the City of San Jose.

AB 631 (Bloom, Chapter 727, Statutes of 2022) Alcoholic beverage control: licenses: nonprofit cultural film exhibition companies.

Amends Sections 23039 and 24045.7 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2023)

Summary of Code Section Changes – Section 24045.7 of the Business and Professions Code authorizes the Department to issue a special on-sale general license to a nonprofit theater company that is exempt from the payment of income taxes under Section 23701(d) of the Revenue and Taxation Code and Section 501(c)(3) of the Internal Revenue Code of the United States. This license is known as a type 64 license. This bill makes nonprofit cultural film exhibition companies eligible for a type 64 license, subject to the same licensing fees as nonprofit theater companies. A “nonprofit cultural film exhibition company” is defined to mean a company that predominantly exhibits classic, foreign, independent, or rare movies by means of digital or film projection equipment for its members or the general public, or both, in a theater with a seating capacity of at least 100 seats, at least three days per week. Similar to nonprofit theater companies, a nonprofit cultural film exhibition company is not considered a public premises (it is open to all ages), may sell alcoholic beverages to ticketholders only two hours before, during, and one hour after a bona fide film exhibition of the company, and the license is only for a single specified premises.

AB 920 (Aguiar-Curry, Chapter 729, Statutes of 2022) Craft distillers: direct shipping.

Adds and repeals Section 23504.5 of the Business and Professions Code, relating to alcoholic beverages, and declaring the urgency thereof, to take effect immediately. (Effective September 29, 2022)

Summary of Code Section Changes – This urgency bill authorizes a licensed craft distiller, until January 1, 2024, to directly ship distilled spirits manufactured or produced by the licensee at its premises to a consumer only if the sale complies with all of the following:

1. The amount shipped must not exceed the equivalent of 2.25 liters in any combination of prepackaged containers per day per consumer and shall be solely for the consumer’s personal use and not for resale.
2. The licensed craft distiller must maintain adequate records of the shipments and provide those records to the Department upon request.
3. The licensed craft distiller must require the common carrier to obtain the signature of any individual 21 years of age or older before delivering any distilled spirits shipped to an individual in this state.
4. The containers in which the distilled spirits are shipped must be conspicuously labeled with the words: “CONTAINS ALCOHOL: SIGNATURE OF PERSON AGE 21 YEARS OR OLDER REQUIRED FOR DELIVERY.”

AB 1323 (Haney, Chapter 271, Statutes of 2022) Alcoholic beverage control: tied-house exceptions.

Amends Section 25503.35 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2023)

Summary of Code Section Changes – This bill expands an existing tied-house exception by reducing the minimum number of seats, from 2,100 to 1,600, that must be configured in a type 71 licensed premises (for-profit theater in San Francisco) in order for the license holder to receive compensation from a beer manufacturer, winegrower, rectifier, distilled spirits manufacturer, craft distiller, or distilled spirits manufacturer’s agent for advertising space, as specified.

AB 1330 (Mayes, Chapter 272, Statutes of 2022) Alcoholic beverage tied-house restrictions: exceptions: County of Riverside.

Amends Section 25503.6 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2023)

Summary of Code Section Changes – This bill establishes a tied-house exception for a fully enclosed arena in Riverside County with a seating capacity of more than 10,000 seats. This exception allows 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 to purchase advertising space from the on-sale licensee that is the owner or operator of the arena, subject to the same general requirements applicable to other arena tied-house exceptions specified in Business and Professions Code Section 25503.6.

AB 1734 (Bennett, Chapter 175, Statutes of 2022) Alcoholic beverages: licensed premises: retail sales and consumption.

Amends Section 25607 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2023)

Summary of Code Section Changes – This bill authorizes the holder of a beer manufacturer’s license and a winegrower’s license, that are under identical ownership, to have an overlapping premises where retail sales and consumption under each license may be combined, as specified. This change eliminates the need for separate cash registers or points of sale. To exercise this privilege, each license must either be both master licenses or both branch offices, and not a combination of a master license and a branch office; for overlapping branch offices, only alcoholic beverages produced by the licensee may be sold. For additional information, an Industry Advisory is available on the ABC website.

AB 2037 (Flora, Chapter 155, Statutes of 2022) Polling places: alcoholic beverages.

Amends Section 12288 of the Elections Code, relating to elections. (Effective January 1, 2023)

Summary of Code Section Changes – This bill repeals the prohibition against polling places being in an establishment where the sale and dispensation of alcoholic beverages is its primary purpose. The impact of this change is that venues containing bars, such as a veteran’s club, may be utilized as polling locations only if there is no alcohol sales or service occurring while polls are open.

AB 2210 (Quirk, Chapter 391, Statutes of 2022) Cannabis: state temporary event licenses: venues licensed by the Department of Alcoholic Beverage Control: unsold inventory.

Amends Section 26200 of the Business and Professions Code, relating to cannabis. (Effective January 1, 2023)

Summary of Code Section Changes – This bill prohibits the Department of Cannabis Control from denying an application for a state temporary cannabis event license solely on the basis that the location possesses a license issued by the Department of Alcoholic Beverage Control. This bill also prohibits the Department of Alcoholic Beverage Control from taking disciplinary action against one of its licensees on the basis of a state temporary cannabis event license being issued for a premises that utilizes the same premises as the one licensed by ABC. This bill requires that all on-sale and off-sale privileges of alcoholic beverages at the venue must be suspended for the entire day of the event and may not resume until 6:00 a.m. the day after the event has ended. This bill further provides that alcohol consumption on the venue premises must be strictly prohibited for the entire day of the event and may not resume until 6:00 a.m. the day after the event has ended. This bill contains other provisions relating to temporary cannabis events.

AB 2301 (Wood, Chapter 961, Statutes of 2022) Alcoholic beverage sales: beer manufacturers: licensed premises.

Amends Section 25503.28 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2023)

Summary of Code Section Changes – This bill authorizes beer manufacturers to self-distribute beer they produce to on-sale retail licensed locations they operate that are located within a five-mile radius of their premises of production, as specified.

AB 2303 (Aguiar-Curry, Chapter 694, Statutes of 2022) Agave spirits: labeling.

Adds Section 25179 to the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2023)

Summary of Code Section Changes – This bill prohibits the use of the phrase “California agave spirits”, or substantially similar descriptions, on an agave spirits label unless the spirits are produced entirely from agave grown in California and do not contain flavoring or color additives. This does not, however, preclude the use of the word “California” on the label to describe the location of the distillery. This bill authorizes ABC to seize agave spirits labeled in violation of this bill and to dispose of them in compliance with Business and Professions Code Section 25355.

AB 2307 (Berman, Chapter 962, Statutes of 2022) Alcoholic beverages: beer manufacturers: branch offices.

Amends Sections 23389 and 25503.28 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2023)

Summary of Code Section Changes – This bill 1) increases the number of authorized beer manufacturer branch office locations, from six to eight, and increases the number of those branch offices that may be restaurants, from two to four; 2) requires beer manufacturers to have held their sixth branch office license for a minimum of one year before being eligible to receive the seventh or eighth license; 3) maintains the current cap that restricts beer manufacturers to operating no more than six on-sale licenses (for example, beer manufacturers may possess retail privileges at no more than 8 locations, provided that no more than six of which may be on-sale retail licenses, like a type 41 or 47); and 4) removes the requirement that a beer manufacturer branch office must purchase beer and wine from a licensed wholesaler that is not owned by the beer manufacturer.

AB 2921 (Santiago, Chapter 294, Statutes of 2022) Alcoholic beverages.

Amends Sections 23086 and 25503.24 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2023)

Summary of Code Section Changes – This bill modifies the deadline for the ABC Appeals Board to issue a determination after the filing of an appeal by requiring its completion 60 days after an appeal is submitted for decision rather than 60 days after the filing of an appeal. This bill also makes minor technical changes to existing law regarding licensees who conduct market research, including specifying that surveys, as stated, are to gather feedback.

AB 2971 (Committee on Governmental Organization, Chapter 296, Statutes of 2022) Alcoholic beverage control: fees.

Amends Sections 23320, 23399.52, 24045.78, 24072, 24079, 25600.05, and 25600.5 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2023)

Summary of Code Section Changes – This bill makes technical amendments to the ABC Act that 1) codifies the license designation (type 99) established by the Department to track rare, one-off licenses created by the Legislature; 2) eliminates duplicative licensing fees in several instances where multiple fees are charged for the same investigation; 3) resolves several erroneous referenced code sections; 4) extends the sunset date until January 1, 2028 applicable to invitation-only event authorizations pursuant to Business and Professions Code Section 25600.5; and 5) extends the sunset date until January 1, 2026 applicable to provisions of law allowing beer manufacturers to gift glassware to retailers.

SB 298 (Dodd, Chapter 980, Statutes of 2022) Brewpub-restaurant licenses: bona fide public eating place license.

Adds Section 24072.3 to the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2023)

Summary of Code Section Changes – This bill allows anyone who has held a brewpub-restaurant license as of December 31, 2019 to exchange the license for a bona fide public eating place license. The exchange would be authorized at any time upon the approval of the Department, provided the following:

1. Payment of a $100 exchange fee (the fee may be adjusted annually by the Department pursuant to subdivisions (d) and (e) of Section 23320).
2. Payment of the fee required for a new permanent license for an on-sale general eating place.
3. Compliance with statutory and regulatory licensing requirements.

Licenses issued pursuant to this bill may be designated as an “on-sale general license for special use” and shall not count towards the cap on on-sale general licenses available under Sections 23816 and 23821. Any license exchanged pursuant to this bill would be prohibited from being sold or transferred for a price greater than the fee paid by the seller or transferor.

SB 793 (Wiener, Chapter 468, Statutes of 2022)Alcoholic beverages: music venue licenses.

Amends Section 23320 of, and adds Article 7 (commencing with Section 23550) to Chapter 3 of Division 9 of, the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2023)

Summary of Code Section Changes – This bill establishes a “music venue license” (designated as a type 90 license) to be issued by the Department to a music entertainment facility that may be open to all ages and provide alcoholic beverage service only to adults, including beer, wine, and distilled spirits. Alcoholic beverages may only be consumed on the premises during the time period from two hours before a live performance at the venue until one hour after the live performance. This bill establishes fees in connection with the license and creates a license exchange program that allows a type 47 or type 48 license to be exchanged for a type 90 license.

SB 1011 (Committee on Governmental Organization, Chapter 136, Statutes of 2022) Alcoholic beverages.

Amends Sections 23826.13, 24045.6, 24048, and 24300 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2023)

Summary of Code Section Changes – This bill 1) authorizes the Department to conduct its licensing and enforcement hearings electronically, as specified; 2) authorizes the Department to send its license renewal and cancellation notices electronically; 3) allows license reinstatement fees to be paid using electronic payment methods; 4) clarifies that licenses issued to those in specified census tracts apply to the districts corresponding to the 2010 census; and 5) increases the cap on permits, from three to four, for special temporary licenses that may be issued annually to a nonprofit tax-exempt organization pursuant to Business and Professions Code Section 24045.6.

SB 1013 (Atkins, Chapter 610, Statutes of 2022) Beverage container recycling.

Amends Section 23661.3 of the Business and Professions Code, and amends Sections 14509.4, 14510, 14547, 14549.1, 14549.2, 14550, 14560, 14560.5, 14561, 14571.5, 14571.8, 14575, 14581, and 14591.1 of, and amends and repeals Section 14571.6 of, and amends, repeals, and adds Sections 14504, 14528.5, 14570, 14571.9, and 14572.1 of, and adds Sections 14510.2, 14537.1, 14543, 14544, and 14545 to, and adds Chapter 6.5 (commencing with Section 14578) to Division 12.1 of, and adds and repeals Section 14549.7 of, the Public Resources Code, relating to recycling, and makes an appropriation therefor. (Effective January 1, 2024 or dates as otherwise specified)

Summary of Code Section Changes – This bill adds wine and distilled spirits to the California Beverage Container Recycling and Litter Reduction Act (Bottle Bill) commencing January 1, 2024. This bill, among other provisions, requires wine direct shipper permitholders to register with CalRecycle as a beverage manufacturer and distributor and requires wine direct shipper permitholders to comply with the Bottle Bill, including the reporting and payment provisions applicable to the permitholder as a beverage manufacturer and distributor. If a permitholders fails to comply with Section 14560 or 14575 of the Public Resources Code, ABC may suspend or revoke the wine direct shipper permit.

SB 1280 (Hueso, Chapter 304, Statutes of 2022) Tied-house restrictions: advertising: San Diego State University.

Amends Section 25503.6 of the Business and Professions Code, relating to alcoholic beverages, and declaring the urgency thereof, to take effect immediately. (Effective September 13, 2022)

Summary of Code Section Changes – This urgency bill establishes a tied-house exception that allows alcohol manufacturers (including beer manufacturers, winegrowers, rectifiers, craft distillers, distilled spirits manufacturers or their agents) to purchase advertising space at five distinct stadiums and facilities located on the University campus. The tied-house exception established by this bill is subject to the existing requirements applicable to other exceptions as identified in Business and Professions Code Section 25503.6.

SB 1370 (Pan, Chapter 732, Statutes of 2022) Alcoholic beverages: licensees.

Amends Sections 23039 and 24045.7 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2023)

Summary of Code Section Changes – This bill makes nonprofit radio broadcasting companies eligible for a type 64 license, subject to the same licensing fees as nonprofit theater companies. Similar to nonprofit theater companies, a nonprofit radio broadcasting company is not considered a public premises (it is open to all ages), may sell alcoholic beverages to ticketholders only two hours before, during, and one hour after a bona fide performance, and the license is only for a single specified premises. This bill also expands a current provision in law which creates an exception to tied-house restrictions, by permitting certain licensees to serve on the board of trustees of a nonprofit theater company operating in the County of Napa, the City of Livermore, or the City of Modesto to also include a nonprofit radio broadcasting company and expands the list of cities to include the City of Sacramento.

SB 1452 (Dahle, Chapter 889, Statutes of 2022) Alcoholic beverages: licenses: Counties of El Dorado and Shasta.

Adds Sections 23826.16 and 23826.17 to the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2023)

Summary of Code Section Changes – This bill authorizes ABC to issue 10 additional new type 47 licenses in Shasta County and 10 additional new type 47 licenses in El Dorado County. The bill stipulates that while 10 additional licenses will be authorized for each county, no more than four of these licenses may be issued per year per county. These licenses would be subject to section 23961, meaning if there are more applicants than available licenses they will be subject to priority drawing. Licenses issued pursuant to this bill may not be transferred to another county nor shall they be transferred to any premises not qualify under the parameters of the bill. Further, such licenses may not be sold or transferred for a price greater than the original fee paid by the seller or transferrer. ABC may designate these licenses as on-sale general for special use.

2021 Chaptered Legislation

Code Section Changes by Bill Number

Assembly Bill No. 61 (Gabriel, Chapter 651, Statutes of 2021) Business pandemic relief.

Adds and repeals Section 25750.5 of the Business and Professions Code, adds and repeals Section 65907 of the Government Code, and amends Section 114067 of the Health and Safety Code, relating to business pandemic relief, and declaring the urgency thereof, to take effect immediately. (Effective October 8, 2021)

Summary of Code Section Changes – This urgency bill authorizes the Department of Alcoholic Beverage Control to allow licensees to exercise license privileges in an expanded area authorized pursuant to a COVID-19 Temporary Catering Authorization, subject to the terms and conditions established in the Department’s regulatory relief, for up to 365 days following the end of the Governor’s declared state of emergency related to the pandemic. This bill allows the Department to extend a COVID-19 Temporary Catering Authorization beyond 365 days if the licensee has a pending application for a permanent premises expansion. These provisions sunset July 1, 2024. Lastly, this bill enacts other relief measures, unrelated to the Department, that impact food facilities and local governments.

Assembly Bill No. 83 (Committee on Budget, Chapter 11, Statutes of 2021) Alcoholic beverage control: license renewal fees: waiver.

Amends and renumbers Section 23320.3 of the Business and Professions Code, relating to business and professions, and making an appropriation therefor, to take effect immediately, bill related to the budget. (Effective March 17, 2021)

Summary of Code Section Changes – This urgency bill authorizes the Department of Alcoholic Beverage Control to waive license renewal fees for small beer manufacturers, craft distillers, or winegrowers who produce less than 100,000 gallons annually, and whose licenses expire between March 1, 2021 and February 28, 2023, provided those licenses were active between March 1, 2020 and December 31, 2020.

Assembly Bill No. 239 (Villapudua, Chapter 192, Statutes of 2021) Winegrowers and brandy manufacturers: exercise of privileges: locations.

Amends Section 23390 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2022)

Summary of Code Section Changes – This bill deletes the current prohibition on winegrowers and brandy manufacturers to refill customer-supplied containers of wine at branch offices, warehouses, or United States bonded wine cellars located away from their place of production.

Assembly Bill No. 1149 (Villapudua, Chapter 271, Statutes of 2021) Alcoholic beverages: tied-house restrictions.

Amends Section 25503.2 of the Business and Professions Code, relating to alcoholic beverages, and declaring the urgency thereof, to take effect immediately. (Effective September 23, 2021)

Summary of Code Section Changes – This urgency bill allows specified manufacturers and wholesalers to merchandise (e.g., stock and arrange products on shelves, etc.) single-serve containers of wine and distilled spirits, similar to as currently authorized for beer, at off-sale retail licensed premises.

Assembly Bill No. 1267 (Cunningham, Chapter 207, Statutes of 2021) Alcoholic beverages: advertising or promoting donation to a nonprofit charitable organization.

Amends Section 25600 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2022)

Summary of Code Section Changes – This bill, until January 1, 2025, allows specified alcohol manufacturers to donate a portion of the purchase price of an alcoholic beverage to a nonprofit charitable organization if certain conditions are met, including, but not limited to, that the promotion of the donation does not directly encourage consumption of alcoholic beverages.

Assembly Bill No. 1275 (Jones-Sawyer, Chapter 208, Statutes of 2021) Alcoholic beverage control: minors.

Amends Section 25666 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2022)

Summary of Code Section Changes – This bill modifies the requirement that the Department of Alcoholic Beverage Control produce an alleged minor for examination in a hearing on an accusation charging a licensee with violating provisions relating to providing alcoholic beverages to a minor, employing a minor to prepare or serve alcoholic beverages, or permitting a minor to enter and remain in the licensed premises. This bill maintains the requirement that the Department produce at the administrative hearing any minor used by peace officers as a decoy in underage sales enforcement operations, but removes the requirement with respect to violations involving non-decoy minors.

Assembly Bill No. 1589 (Committee on Governmental Organization, Chapter 306, Statutes of 2021) Alcoholic beverages: appeals: tied-house restrictions.

Amends Sections 23081, 23081.5, 23083, 23088, and 25503.24 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2022)

Summary of Code Section Changes – This bill adds distilled spirits wholesalers to the list of licensees that a retailer is not required to purchase or sell alcoholic beverages from when selling marketing data to that wholesaler. This bill also authorizes the electronic filing of appeals to the Alcoholic Beverage Control Appeals Board and electronic delivery of final orders by the Board.

Senate Bill No. 19 (Glazer, Chapter 274, Statutes of 2021) Winegrowers: tasting rooms.

Amends Sections 23320 and 23390.5 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2022)

Summary of Code Section Changes – This bill authorizes winegrowers and brandy manufacturers to operate up to two off-site retail or winetasting outlets by increasing the number of duplicate licenses they are authorized from one to two. This bill also establishes a $440 application fee for a duplicate winegrower license.

Senate Bill No. 94 (Skinner, Chapter 9, Statutes of 2021) Alcoholic beverage control: barbering and cosmetology: license renewal fees: waiver.

Adds Section 23320.3 to, and adds and repeals Section 7427 of, the Business and Professions Code, relating to business and professions, and making an appropriation therefor, to take effect immediately, bill related to the budget. (Effective February 23, 2021)

Summary of Code Section Changes – This urgency bill authorizes the Department of Alcoholic Beverage Control to waive license renewal fees for specified licensees whose licenses expire between March 1, 2021 and February 28, 2023, provided those licenses were active between March 1, 2020 and December 31, 2020. This bill contains other provisions unrelated to the Department.

Senate Bill No. 314 (Wiener, Chapter 656, Statutes of 2021) Alcoholic beverages.

Amends Sections 23399 and 25607 of, and adds and repeals Section 25750.5 of, the Business and Professions Code, relating to alcoholic beverages, and declaring the urgency thereof, to take effect immediately. (Effective October 8, 2021)

Summary of Code Section Changes – This urgency bill

1. authorizes the Department of Alcoholic Beverage Control to allow licensees to exercise license privileges in an expanded area pursuant to a COVID-19 Temporary Catering Authorization, subject to the terms and conditions established in the Department’s regulatory relief, for up to 365 days following the end of the Governor’s declared state of emergency related to the pandemic, as specified (this provision is identical to one contained in AB 61 (Gabriel));
2. authorizes alcohol manufacturers to share a common licensed area with multiple retailers, subject to various requirements; and
3. allows catering authorizations to be issued for up to 36 events, rather than 24, at a single location annually, except when the Department determines additional events may be catered to satisfy substantial public demand.

Senate Bill No. 386 (Umberg, Chapter 309, Statutes of 2021) Tied-house restrictions: advertising: mixed-use district.

Amends Section 25503.6 of, and adds Section 25503.61 to, the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2022)

Summary of Code Section Changes – This bill broadens the current tied-house exception for the Honda Center in Orange County, expanding it to the full 95-acre mixed-use development surrounding the stadium. Among other provisions, this expansion allows alcohol manufacturers to sponsor events and purchase advertising space from the on-sale licensee that is the owner or operator of the mixed-use district, subject to specified limitations.

Senate Bill No. 389 (Dodd, Chapter 657, Statutes of 2021) Alcoholic beverages: retail on-sale license: off-sale privileges.

Adds and repeals Section 23401.5 of the Business and Professions Code, relating to alcoholic beverages. (Effective January 1, 2022)

Summary of Code Section Changes – This bill authorizes specified restaurants and certain alcohol manufacturers to sell distilled spirits in manufacturer-sealed containers (e.g. cans or bottles) for off-site consumption for which their license permits on-sale consumption if the order is picked up by the consumer and they display identification, as specified. This bill also authorizes those same licensees to sell for off-site consumption distilled spirits and single-serve wine that is not in manufacturer-sealed containers (e.g. a cocktail or margarita) if the order is sold in conjunction with a meal, it is picked up by the consumer, and they display identification, among other requirements. Before exercising the privilege of selling nonmanufacturer-sealed alcoholic beverages for off-site consumption, the eligible licensee must notify the Department of their intent to do so. The Department could restrict or prohibit these privileges by placing conditions on the license under specified circumstances. The provisions of this bill sunset January 1, 2027.

2019 Chaptered Legislation

2018 Chaptered Legislation

Code Section Changes by Bill Number

• Assembly Bill No. 1217 – (Santiago) – Alcoholic beverage licenses: historic cemetery.
  Amends Section 23039 to add Section 24045.76 to, the Business and Professions Code, relating to alcoholic beverages.
• Assembly Bill No. 1890 – (Levine) – Alcoholic beverage licensees: craft distillers, winegrowers, and beer manufacturers.
  Amends Section 25607 of the Business and Professions Code, relating to alcoholic beverages.
• Assembly Bill No. 1891 – (Levine) – Alcoholic beverage licensees: instructional tastings: craft distillers
  Amends Sections 25503.56 and 25503.57 of the Business and Professions Code, relating to alcoholic beverages.
• Assembly Bill No. 1986 – (Cunningham) – Craft distillers: alcoholic beverage licensees: donations
  Amends Section 25503.9 of the Business and Professions Code, relating to alcoholic beverages.
• Assembly Bill No. 2000 – (Kalra) – Alcoholic beverages: tied-house restrictions: advertising
  Amends Sections 25503.6 and 25503.8 of the Business and Professions Code, relating to alcoholic beverages.
• Assembly Bill No. 2146 – (Gloria) – Alcoholic beverages: tied-house restrictions: advertising.
  Amends Section 25503.6 of the Business and Professions Code, relating to alcoholic beverages.
• Assembly Bill No. 2452– (Aguiar-Curry) -Alcoholic beverages: tied-house restrictions.
  Amends Sections 25503.4, 25503.56, and 25503.57 of the Business and Professions Code, relating to alcoholic beverages.
• Assembly Bill No. 2469 – (Berman) – Alcoholic beverages: beer wholesalers: beer sales.
  Amends Section 23378.05 of the Business and Professions Code, relating to alcoholic beverages.
• Assembly Bill No. 2914 – (Cooley) – Cannabis in alcoholic beverages.
  Amends Sections 25621.5 and 26070.2 to the Business and Professions Code, relating to cannabis.
• Assembly Bill No. 3264 – (Committee on Governmental Organization) – Alcoholic beverages: licensees.
  Amends Section 25503.51, and amend Sections 24049.5 and 25600 of, the Business and Professions Code, relating to alcoholic beverages.
• Senate Bill No. 973 – (Dodd) – Alcoholic beverages: annual license fees: surcharge: distilled spirits manufacturers: free or discounted rides.
  Amends Sections 23320.5 and 25600 of the Business and Professions Code, relating to alcoholic beverages.
• Senate Bill No. 1164 (Skinner) – Craft distillers.
  Amends Sections 23363.1, 23502, 23504, 23771, 25173, 25503.3, 25503.5, 25503.56 and 25503.9 of the Business and Professions Code, relating to alcoholic beverages.
• Senate Bill No. 1283 – (Bradford) – Brewpub-restaurant licensees: beer sales.
  Amends Section 23396.3 of the Business and Professions Code, relating to alcoholic beverages.
• Senate Bill No. 1503 – (Committee on Governmental Organization) – Alcoholic beverages: licensees.
  Amends Sections 23800 and 23803 of the Business and Professions Code, relating to alcoholic beverages.

2018 Chaptered Bills Amending the ABC Act

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Assembly Bill Summaries

Assembly Bill No. 1217 – (Santiago), Chapter 474, Statutes of 2018 – Alcoholic beverage licenses: historic cemetery.

An act to amend Section 23039 of, and to add Section 24045.76 to, the Business and Professions Code, relating to alcoholic beverages.

Summary of Code Section Changes

This bill authorizes the department to issue a special on-sale general license to the operator of a for-profit cemetery with specified characteristics; including, it be more than 100 years old, be located in, be designated a Historic-Cultural Monument by the City of Los Angeles, and have an endowment care fund and a memorial care fund that are exempt from the payment of income taxes. The bill would prescribe requirements for issuing the license and the provision of beverages pursuant the license. By expanding the definition of a crime, this bill would impose a state- mandated local program. The bill would also make conforming and technical changes.

This bill makes legislative findings and declarations as to the necessity of a special statute for the City of Los Angeles.

SECTION 1.

Section 23039 of the Business and Professions Code is amended to read:

23039.

(a) “Public premises” means:

(1)  Premises licensed with any type of license other than an on-sale beer license, and maintained and operated for the selling or serving of alcoholic beverages to the public for consumption on the premises, and in which food shall not be sold or served to the public as in a bona fide public eating place, but upon which premises food products may be sold or served incidentally to the sale or service of alcoholic beverages, in accordance with rules prescribed by the department.

(2)  Premises licensed with an on-sale beer license, in which food shall not be sold or served to the public as in a bona fide public eating place, and in which sandwiches, salads, desserts, and similar short orders shall not be sold and served, in accordance with rules prescribed by the department.

(b)  “Public premises” does not include any of the following:

(1)  Railroad dining or club cars, passenger ships, airplanes, or bona fide clubs after the clubs have been lawfully operated for not less than one year.

(2)  Historic units of the state park system.

(3)  Premises being operated under a temporary on-sale beer license other than permitted pursuant to Section 24045.5, or on-sale beer licensed stadia, auditoria, fairgrounds, or racetracks.

(4)  Nonprofit theater companies licensed pursuant to Section 24045.7.

(5)  Theaters licensed pursuant to Section 24045.75.

(6)  Cemeteries licensed pursuant to Section 24045.76.

(7)  Winegrowers’ premises.

SEC. 2.

Section 24045.76 is added to the Business and Professions Code, to read:

24045.76.

(a) The department may issue a special on-sale general license to the operator of any for- profit cemetery that is more than 100 years old, on the National Register of Historic Places, is located in, and designated an Historic-Cultural Monument by, the City of Los Angeles, and holds both an endowment care fund and a memorial care fund that are exempt from the payment of income taxes under Section 501(c)(13) of the Internal Revenue Code.

(b)  The special on-sale general license shall permit sales, service, and consumption of beer, wine, and distilled spirits on the licensed premises. Any special on-sale general license issued pursuant to this section shall not be subject to the limitations provided by Section 23816 and shall not be required to be operated as a bona fide public eating place.

(c)  A special on-sale general license described by this section shall not be issued until any existing licenses issued by the department to the operator for the premises of the for-profit cemetery are canceled.

(d)  (1) The fee for the original special on-sale general license shall be the same as that specified in Section 23954.5 for an original on-sale general license.

(2)  The annual license fee for the special on-sale general license shall be the same of that for an on-sale general license.

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 nature of the cemetery as promoting the long-term preservation of the premises as a hub of social, cultural, and community activity in the City of Los Angeles.

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.

Assembly Bill No. 1890 -– (Levine) Chapter 293, Statutes of 2018 – Alcoholic beverage licensees: craft distillers, winegrowers, and beer manufacturers.

An act to amend Section 25607 of the Business and Professions Code, relating to alcoholic beverages.

Summary of Code Section Changes

This bill allows a licensed craft distiller, licensed winegrower, and licensed beer manufacturer, in any combination, to, with the approval of the department, share a common licensed area where the consumption of alcoholic beverages is permitted if the licensed premises of production are immediately adjacent to each other, are not branch offices, and only under specified circumstances.

SECTION 1.

Section 25607 of the Business and Professions Code is amended to read:

25607.

(a) Except as provided in subdivisions (b) and (c), it is unlawful for any person or licensee to have upon any premises for which a license has been issued any alcoholic beverages other than the alcoholic beverage which the licensee is authorized to sell at the premises under his or her license. It shall be presumed that all alcoholic beverages found or located upon premises for which licenses have been issued belong to the person or persons to whom the licenses were issued. Every person violating the provisions of this section is guilty of a misdemeanor. The department may seize any alcoholic beverages found in violation of this section.

(b)  Except as provided in subdivision (c), a bona fide public eating place for which an on- sale beer and wine license has been issued may have upon the premises brandy, rum, or liqueurs for use solely for cooking purposes.

(c)  (1) A licensed winegrower, licensed beer manufacturer that holds a small beer manufacturer’s license, and a licensed craft distiller, in any combination, whose licensed premises of production are immediately adjacent to each other and which are not branch offices, may, with the approval of the department and under such conditions as the department may require, share a common licensed area in which the consumption of alcoholic beverages is permitted, only under all of the following circumstances:

(A) The shared common licensed area is adjacent and contiguous to the licensed premises of the licensees.

(B)  The licensed premises of the licensees are not branch offices.

(C)  The shared common licensed area shall be readily accessible from the premises of the licensees without the necessity of using a public street, alley, or sidewalk.

(D)  Except as otherwise authorized by this division, the alcoholic beverages that may be consumed in the shared common licensed area shall be purchased by the consumer only from the licensed winegrower, the licensed beer manufacturer, or the licensed craft distiller.

(E)  The licensed winegrower, the licensed beer manufacturer, and the licensed craft distiller shall be jointly responsible for compliance with the provisions of this division and for any violations that may occur within the shared common licensed area.

(2)  Nothing in this subdivision is intended to authorize the licensed winegrower, the licensed beer manufacturer, or the licensed craft distiller to sell, furnish, give, or have upon their respective licensed premises any alcoholic beverages, or to engage in any other activity, not otherwise authorized by this division, including, without limitation, the consumption on the premises of any distilled spirits purchased by consumers for consumption off the premises pursuant to Section 23504 or the consumption of distilled spirits other than as permitted by Section 23363.1.

Assembly Bill No. 1891 – (Levine) Chapter 273, Statutes of 2018- Alcoholic beverage licensees: instructional tastings: craft distillers

An act to amend Sections 25503.56 and 25503.57 of the Business and Professions Code, relating to alcoholic beverages.

Summary of Code Section Changes

This bill adds craft distillers to the list of licensees authorized to: 1) conduct an instructional tasting event at an off-sale retailer’s premises; and 2) instruct consumers at on-sale retail licensed premises on the history, nature, values, and characteristics of their distilled spirits. This bill also makes changes to Sections 25503.56 and 25503.57 of the Business and Professions Code proposed by AB 2452 to be operative only if this bill and AB 2452 are enacted and this bill is enacted last.

SECTION 1.

Section 25503.56 of the Business and Professions Code is amended to read:

25503.56.

(a) An authorized licensee, or a designated representative of an authorized licensee acting as an agent of the authorized licensee, may conduct, on the area specified by paragraph (1) of subdivision (c) of Section 23396.6, an instructional tasting event for consumers on the subject of wine, beer, or distilled spirits, including, but not limited to, the history, nature, values, and characteristics of wine, beer, or distilled spirits, and the methods of presenting and serving wine, beer, or distilled spirits.

(1)  (A) Except as provided in subparagraph (B), the instructional tasting event may include the serving of alcoholic beverages to an attendee of legal drinking age. An instructional tasting event on the subject of wine or distilled spirits shall be limited to not more than three tastings per person per day. A single tasting of distilled spirits shall not exceed one- fourth of one ounce and a single tasting of wine shall not exceed one ounce. An instructional tasting event on the subject of beer shall be limited to not more than the tasting of eight ounces of beer per person per day. The wine, beer, or distilled spirits tasted shall be limited to the products that are authorized to be sold by the authorized licensee and the licenseholder under its off-sale license.

(B)  A beer and wine wholesaler may conduct an instructional tasting event but shall not serve tastes of beer unless the beer and wine wholesaler also holds a beer manufacturer’s license, an out-of-state beer manufacturer’s certificate, or more than six distilled spirits wholesaler’s licenses.

(C)  No charge of any sort shall be made for the tastings. Except for the purposes of Section 23985, the serving of tastings shall not be deemed a sale of products pursuant to this division.

(D)  A person under 21 years of age shall not serve wine, beer, or distilled spirits at the instructional tasting event.

(E)  All tastes shall be served by an employee of the authorized licensee, the designated representative of the authorized licensee, or by an employee of the designated representative of the authorized licensee.

(F)  An authorized licensee, or a designated representative of an authorized licensee, shall either supply the wine or distilled spirits to be tasted during the instructional tasting event or purchase the wine or distilled spirits from the licenseholder at the original invoiced cost. An authorized licensee, or a designated representative of an authorized licensee, shall purchase beer to be tasted during the instructional tasting event from the licenseholder at the original invoiced cost.

(G)  Any unused wine, beer, or distilled spirits remaining from the tasting shall be removed from the off-sale licensed premises by the authorized licensee or its designated representative.

(2)  If the instructional tasting event is conducted by a designated representative of an authorized licensee, the designated representative shall not be owned, controlled, or employed directly or indirectly by the licenseholder on whose premises the instructional tasting event is held.

(3)  An instructional tasting event shall be limited to a single type of alcoholic beverage. For purposes of this paragraph, “type of alcoholic beverage” means distilled spirits, wine, or beer.

(b)  For purposes of this section:

(1)  “Authorized licensee” means a winegrower, California winegrower’s agent, beer and wine importer general, beer and wine wholesaler, wine rectifier, craft distiller, distilled spirits manufacturer, distilled spirits manufacturer’s agent, distilled spirits importer general, distilled spirits rectifier, distilled spirits general rectifier, rectifier, out-of-state distilled spirits shipper’s certificate holder, distilled spirits wholesaler, brandy manufacturer, brandy importer, California brandy wholesaler, beer manufacturer, or an out-of-state beer manufacturer certificate holder. “Authorized licensee” shall not include an entity that solely holds a combination of a beer and wine wholesale license and an off-sale beer and wine retail license or holds those licenses solely in combination with any license not listed in this paragraph, or holds a limited off-sale retail wine license.

(2)  “Licenseholder” means an off-sale retail licensee issued an instructional tasting license pursuant to Section 23396.6.

(3)  “Location” means the total contiguous area encompassed by the off-sale and on-sale licenses.

(c)  Notwithstanding subparagraph (E) of paragraph (1) of subdivision (a), a licenseholder may conduct an instructional tasting event that includes the serving of tastings only when an authorized licensee or its designated representative are unable to conduct an instructional tasting event previously advertised pursuant to this section and scheduled by the authorized licensee or its designated representative, provided that the licenseholder supplies the wine, beer, or distilled spirits used in the instructional tasting event and provides or pays for a person to serve the wine, beer, or distilled spirits. Instructional tasting events conducted by a licenseholder pursuant to this subdivision are subject to the provisions of this section and Section 23396.6.

(d)  No more than one authorized licensee, or its designated representative, may conduct an instructional tasting event that includes the serving of tastes of wine, beer, or distilled spirits at any one individual licensed premises of a licenseholder per day.

(e)  A licenseholder that also holds an on-sale beer and wine license, an on-sale beer and wine eating place license, or an on-sale general license shall not allow an authorized licensee, or its designated representative, to conduct an instructional tasting event on the same day and at the same location as any instructional tasting event held pursuant to subdivision (b) of Section 23386, Section 25503.4, subdivision (c) of Section 25503.5, or Section 25503.55.

(f)  A licenseholder shall not condition the allowance of an instructional tasting event upon the use of a particular designated representative of an authorized licensee.

(g)  (1) In addition to any point-of-sale advertising or other advertising items allowed under this division or under rules of the department, an authorized licensee or its designated representative, in his or her absolute discretion and with permission of the licenseholder upon whose premises the instructional tasting event will be held, may list in an advertisement to the general public the name and address of the licenseholder, the names of the alcoholic beverages being featured at the instructional tasting event, and the time, date, and location of, and other information about, the instructional tasting event, provided that both of the following apply:

(A) The advertisement does not contain the retail price of the alcoholic beverages.

(B)  The listing of the licenseholder’s name and address is the only reference to the licenseholder in the advertisement.

(2) Pictures or illustrations of the licenseholder’s licensed premises and laudatory references to the licenseholder in these advertisements are not authorized. Nothing in this section shall authorize an authorized licensee or its designated representative to share in the costs, if any, of the licenseholder.

(h)  A licenseholder may advertise an instructional tasting event to the general public. The costs of this advertising shall be borne solely by the licenseholder. Advertising permitted by this subdivision includes flyers, newspaper ads, Internet communications, and interior signage.

(i)  Except as otherwise provided in this division or rules of the department, no premium, gift, free goods, or other thing of value shall be given away by an authorized licensee or its designated representative in connection with an instructional tasting event that includes tastings of an alcoholic beverage.

(j)  The licenseholder or the authorized licensee or its designated representative is authorized to perform setup and breakdown of the instructional tasting event area. The authorized licensee or its designated representative may provide, free of charge to the licenseholder, the equipment, materials, and utensils as may be required for use in connection with the instructional tasting event.

(k) (1) A licenseholder shall not require, or enter into a collusive scheme with, an authorized licensee or its designated representative to conduct one or more instructional tasting events as a condition of the licenseholder’s carrying or continuing to carry a brand or brands of the authorized licensee or as a condition for display or other merchandising plan which is based on an agreement to provide shelf space. An authorized licensee or its designated representative shall not require any preferential treatment or benefit from, or enter into a collusive scheme with, a licenseholder as a condition of conducting one or  more instructional tasting events, require a licenseholder to carry or continue to carry a brand or brands of the authorized licensee as a condition of conducting one or more instructional tasting events, or condition display or other merchandising plans that are based on agreements for the provision of shelf space on the conducting of one or more instructional tasting events. Any agreement, whether written or oral, entered into by and between a licenseholder and an authorized licensee or its designated representative that precludes the conducting of instructional tasting events on the premises of the licenseholder by any other authorized licensee is prohibited. A licenseholder or authorized licensee, or its designated representative, shall not use an instructional tasting event to circumvent any other requirements of this division.

(2) In addition to any other remedies available under this division, upon a finding by the department of a failure to comply with this subdivision, the department shall suspend the instructional tasting license of the licenseholder and the privilege of the authorized licensee to conduct instructional events for not less than six months but for no more than one year.

(l)  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 exception established by this section to the general prohibition against tied interests must be limited to its express terms so as not to undermine the general prohibition, and intends that this section be construed accordingly.

SEC. 1.1.

Section 25503.56 of the Business and Professions Code is amended to read:

25503.56.

(a) An authorized licensee, or a designated representative of an authorized licensee acting as an agent of the authorized licensee, may conduct, on the area specified by paragraph (1) of subdivision (c) of Section 23396.6, an instructional tasting event for consumers on the subject of wine, beer, or distilled spirits, including, but not limited to, the history, nature, values, and characteristics of wine, beer, or distilled spirits, and the methods of presenting and serving wine, beer, or distilled spirits.

(1)  (A) Except as provided in subparagraph (B), the instructional tasting event may include the serving of alcoholic beverages to an attendee of legal drinking age. An instructional tasting event on the subject of wine or distilled spirits shall be limited to not more than three tastings per person per day. A single tasting of distilled spirits shall not exceed one- fourth of one ounce and a single tasting of wine shall not exceed one ounce. An instructional tasting event on the subject of beer shall be limited to not more than the tasting of eight ounces of beer per person per day. The wine, beer, or distilled spirits tasted shall be limited to the products that are authorized to be sold by the authorized licensee and the licenseholder under its off-sale license.

(B)  A beer and wine wholesaler may conduct an instructional tasting event but shall not serve tastes of beer unless the beer and wine wholesaler also holds a beer manufacturer’s license, an out-of-state beer manufacturer’s certificate, or more than six distilled spirits wholesaler’s licenses.

(C)  No charge of any sort shall be made for the tastings. Except for the purposes of Section 23985, the serving of tastings shall not be deemed a sale of products pursuant to this division.

(D)  A person under 21 years of age shall not serve wine, beer, or distilled spirits at the instructional tasting event.

(E)  All tastes shall be served by an employee of the authorized licensee, the designated representative of the authorized licensee, or by an employee of the designated representative of the authorized licensee.

(F)  An authorized licensee, or a designated representative of an authorized licensee, shall either supply the wine or distilled spirits to be tasted during the instructional tasting event or purchase the wine or distilled spirits from the licenseholder at the original invoiced cost. An authorized licensee, or a designated representative of an authorized licensee, shall purchase beer to be tasted during the instructional tasting event from the licenseholder at the original invoiced cost.

(G)  Any unused wine, beer, or distilled spirits remaining from the tasting shall be removed from the off-sale licensed premises by the authorized licensee or its designated representative.

(2)  If the instructional tasting event is conducted by a designated representative of an authorized licensee, the designated representative shall not be owned, controlled, or employed directly or indirectly by the licenseholder on whose premises the instructional tasting event is held.

(3)  An instructional tasting event shall be limited to a single type of alcoholic beverage. For purposes of this paragraph, “type of alcoholic beverage” means distilled spirits, wine, or beer.

(b)  For purposes of this section:

(1)  “Authorized licensee” means a winegrower, California winegrower’s agent, beer and wine importer general, beer and wine wholesaler, wine rectifier, craft distiller, distilled spirits manufacturer, distilled spirits manufacturer’s agent, distilled spirits importer general, distilled spirits rectifier, distilled spirits general rectifier, rectifier, out-of-state distilled spirits shipper’s certificate holder, distilled spirits wholesaler, brandy manufacturer, brandy importer, California brandy wholesaler, beer manufacturer, or an out-of-state beer manufacturer certificate holder. “Authorized licensee” shall not include an entity that solely holds a combination of a beer and wine wholesale license and an off-sale beer and wine retail license or holds those licenses solely in combination with any license not listed in this paragraph, or holds a limited off-sale retail wine license.

(2)  “Licenseholder” means an off-sale retail licensee issued an instructional tasting license pursuant to Section 23396.6.

(3)  “Location” means the total contiguous area encompassed by the off-sale and on-sale licenses.

(c)  Notwithstanding subparagraph (E) of paragraph (1) of subdivision (a), a licenseholder may conduct an instructional tasting event that includes the serving of tastings only when an authorized licensee or its designated representative are unable to conduct an instructional tasting event previously advertised pursuant to this section and scheduled by the authorized licensee or its designated representative, provided that the licenseholder supplies the wine, beer, or distilled spirits used in the instructional tasting event and provides or pays for a person to serve the wine, beer, or distilled spirits. Instructional tasting events conducted by a licenseholder pursuant to this subdivision are subject to the provisions of this section and Section 23396.6.

(d)  No more than one authorized licensee, or its designated representative, may conduct an instructional tasting event that includes the serving of tastes of wine, beer, or distilled spirits at any one individual licensed premises of a licenseholder per day.

(e)  A licenseholder that also holds an on-sale beer and wine license, an on-sale beer and wine eating place license, or an on-sale general license shall not allow an authorized licensee, or its designated representative, to conduct an instructional tasting event on the same day and at the same location as any instructional tasting event held pursuant to subdivision (b) of Section 23386, Section 25503.4, subdivision (c) of Section 25503.5, or Section 25503.55.

(f)  A licenseholder shall not condition the allowance of an instructional tasting event upon the use of a particular designated representative of an authorized licensee.

(g)  In addition to any point-of-sale advertising or other advertising items allowed under this division or under rules of the department, an authorized licensee or its designated representative, in his or her absolute discretion and with permission of the licenseholder upon whose premises the instructional tasting event will be held, may list in any advertisement to the general public for the instructional tasting event the name, address, telephone number, email address, Internet Web site address, and any other electronic media of the licenseholder, the names of the alcoholic beverages being featured at the instructional tasting event, pictures, illustrations, and depictions of the retailer’s premises, personnel, and customers, and the time, date, and location of, and other information about, the instructional tasting event, provided that both of the following apply:

(1)  The advertisement does not contain the retail price of the alcoholic beverages.

(2)  The listing of the licenseholder’s name, address, telephone number, email address, Internet Web site address, and any other electronic media in the advertisement is relatively inconspicuous in relation to the advertisement as a whole. Laudatory references to the licenseholder in these advertisements are not authorized. Pictures, illustrations, or depictions shall be still pictures, illustrations, or depictions only and shall not include any video. The reposting of social media posts, including posts by the retailer, is permitted provided that the reposting complies with all the requirements of this section. Nothing in this section shall authorize an authorized licensee or its designated representative to share in the costs, if any, of the licenseholder.

(h)  A licenseholder may advertise an instructional tasting event to the general public. The costs of this advertising shall be borne solely by the licenseholder. Advertising permitted by this subdivision includes flyers, newspaper ads, Internet communications, and interior signage.

(i)  Except as otherwise provided in this division or rules of the department, no premium, gift, free goods, or other thing of value shall be given away by an authorized licensee or its designated representative in connection with an instructional tasting event that includes tastings of an alcoholic beverage.

(j)  The licenseholder or the authorized licensee or its designated representative is authorized to perform setup and breakdown of the instructional tasting event area. The authorized licensee or its designated representative may provide, free of charge to the licenseholder, the equipment, materials, and utensils as may be required for use in connection with the instructional tasting event.

(k) (1) A licenseholder shall not require, or enter into a collusive scheme with, an authorized licensee or its designated representative to conduct one or more instructional tasting events as a condition of the licenseholder’s carrying or continuing to carry a brand or brands of the authorized licensee or as a condition for display or other merchandising plan which is based on an agreement to provide shelf space. An authorized licensee or its designated representative shall not require any preferential treatment or benefit from, or enter into a collusive scheme with, a licenseholder as a condition of conducting one or more instructional tasting events, require a licenseholder to carry or continue to carry a brand or brands of the authorized licensee as a condition of conducting one or more instructional tasting events, or condition display or other merchandising plans that are based on agreements for the provision of shelf space on the conducting of one or more instructional tasting events. Any agreement, whether written or oral, entered into by and between a licenseholder and an authorized licensee or its designated representative that precludes the conducting of instructional tasting events on the premises of the licenseholder by any other authorized licensee is prohibited. A licenseholder or authorized licensee, or its designated representative, shall not use an instructional tasting event to circumvent any other requirements of this division.

(2) In addition to any other remedies available under this division, upon a finding by the department of a failure to comply with this subdivision, the department shall suspend the instructional tasting license of the licenseholder and the privilege of the authorized licensee to conduct instructional events for not less than six months but for no more than one year.

(l)  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 exception established by this section to the general prohibition against tied interests must be limited to its express terms so as not to undermine the general prohibition, and intends that this section be construed accordingly.

SEC. 2.

Section 25503.57 of the Business and Professions Code is amended to read:

25503.57.

(a) (1) An authorized licensee, or its designated representative, may instruct consumers at an on-sale retail licensed premises authorized to sell its product with the permission of the retail on-sale licensee. The instruction may include, without limitation, the history, nature, values, and characteristics of the wine or distilled spirits and the methods of presenting and serving the wine or distilled spirits.

(2)  The instruction of consumers may include the furnishing of not more than three tastings to any individual in one day. A single tasting of distilled spirits may not exceed one- fourth of one ounce and a single tasting of wine may not exceed one ounce.

(3)  The authorized licensee, or its designated representative, shall either supply the wine or distilled spirits to be tasted during the instructional tasting event or purchase the wine or distilled spirits from the retail on-sale licensee at the original invoiced cost.

(4)  The authorized licensee, or its designated representative, shall remove any unfinished alcoholic beverages that were supplied by the authorized licensee, or its designated representative, following the instruction.

(5)  Nothing in this subdivision shall limit the giving away of samples pursuant to subdivision (a) of Section 23386.

(b)  For purposes of this section, “authorized licensee” means a winegrower, California winegrower’s agent, beer and wine importer general, beer and wine wholesaler, wine rectifier, craft distiller, distilled spirits manufacturer, distilled spirits manufacturer’s agent, distilled spirits importer general, distilled spirits rectifier, distilled spirits general rectifier, rectifier, out-of-state distilled spirits shipper’s certificate holder, distilled spirits wholesaler, brandy manufacturer, brandy importer, or California brandy wholesaler. “Authorized licensee” shall not include any person that solely holds a combination of a beer and wine wholesaler license and an off-sale beer and wine retail license or holds those licenses solely in combination with any license not listed in this paragraph, or in combination with a beer and wine importer general license, or holds a limited off-sale retail wine license.

(c)  Except as otherwise provided in this division or by the rules of the department, no premium, gift, free goods, or other thing of value shall be given away by an authorized licensee or its designated representative in connection with an instructional tasting event conducted pursuant to this section that includes tastings of wine or distilled spirits.

(d)  (1) In addition to any point-of-sale advertising or other advertising items allowed under this division or under rules of the department, an authorized licensee or its designated representative, in his or her absolute discretion and with permission of the retail on-sale licensee upon whose premises the instructional tasting event will be held, may list in an advertisement to the general public the name and address of the on-sale retail licensee, the names of the wines or distilled spirits being featured at the instructional tasting event, and the time, date, and location of, and other information about, the instructional tasting event, provided that both of the following apply:

(A) The advertisement does not contain the retail price of the alcoholic beverages.

(B)  The listing of the on-sale retail licensee’s name and address is the only reference to the on-sale retail licensee in the advertisement.

(2) Pictures or illustrations of the on-sale retail licensee’s licensed premises and laudatory references to the on-sale retail licensee in these advertisements are not authorized. Nothing in this section shall authorize an authorized licensee or its designated representative to share in the costs, if any, of the on-sale retail licensee.

(e)  An on-sale retail licensee may advertise an instructional tasting event to the general public. The costs of this advertising shall be borne solely by the on-sale retail licensee. Advertising permitted by this subdivision includes flyers, newspaper ads, Internet communications, and interior signage.

(f)  No more than one authorized licensee or its designated representative shall conduct an instructional tasting pursuant to this section at the on-sale retail licensed premises of an on-sale retail licensee at any time, and a person shall not act as the designated representative for more than one authorized licensee at that instructional tasting.

SEC. 2.1.

Section 25503.57 of the Business and Professions Code is amended to read:

25503.57.

(a) (1) An authorized licensee, or its designated representative, may instruct consumers at an on-sale retail licensed premises authorized to sell its product with the permission of the retail on-sale licensee. The instruction may include, without limitation, the history, nature, values, and characteristics of the wine or distilled spirits and the methods of presenting and serving the wine or distilled spirits.

(2)  The instruction of consumers may include the furnishing of not more than three tastings to any individual in one day. A single tasting of distilled spirits may not exceed one- fourth of one ounce and a single tasting of wine may not exceed one ounce.

(3)  The authorized licensee, or its designated representative, shall either supply the wine or distilled spirits to be tasted during the instructional tasting event or purchase the wine or distilled spirits from the retail on-sale licensee at the original invoiced cost.

(4)  The authorized licensee, or its designated representative, shall remove any unfinished alcoholic beverages that were supplied by the authorized licensee, or its designated representative, following the instruction.

(5)  Nothing in this subdivision shall limit the giving away of samples pursuant to subdivision (a) of Section 23386.

(b)  For purposes of this section, “authorized licensee” means a winegrower, California winegrower’s agent, beer and wine importer general, beer and wine wholesaler, wine rectifier, craft distiller, distilled spirits manufacturer, distilled spirits manufacturer’s agent, distilled spirits importer general, distilled spirits rectifier, distilled spirits general rectifier, rectifier, out-of-state distilled spirits shipper’s certificate holder, distilled spirits wholesaler, brandy manufacturer, brandy importer, or California brandy wholesaler. “Authorized licensee” shall not include any person that solely holds a combination of a beer and wine wholesaler license and an off-sale beer and wine retail license or holds those licenses solely in combination with any license not listed in this paragraph, or in combination with a beer and wine importer general license, or holds a limited off-sale retail wine license.

(c)  Except as otherwise provided in this division or by the rules of the department, no premium, gift, free goods, or other thing of value shall be given away by an authorized licensee or its designated representative in connection with an instructional tasting event conducted pursuant to this section that includes tastings of wine or distilled spirits.

(d)  In addition to any point-of-sale advertising or other advertising items allowed under this division or under rules of the department, an authorized licensee or its designated representative, in his or her absolute discretion and with permission of the retail on-sale licensee upon whose premises the instructional tasting event will be held, may list in any advertisement to the general public for the instructional tasting the name, address, telephone number, email address, Internet Web site address, and any other electronic media of the on-sale retail licensee, the names of the wines or distilled spirits being featured at the instructional tasting event, pictures, illustrations, and depictions of the retailer’s premises, personnel, and customers, and the time, date, and location of, and other information about, the instructional tasting event, provided that both of the following apply:

(1)  The advertisement does not contain the retail price of the alcoholic beverages.

(2)  The listing of the licenseholder’s name, address, telephone number, email address, Internet Web site address, and any other electronic media in the advertisement and any pictures, illustrations or depictions are relatively inconspicuous in relation to the advertisement as a whole. Laudatory references to the licenseholder in these advertisements are not authorized. Pictures, illustrations, or depictions shall be still pictures, or depictions only and shall not include any video. The reposting of social media posts, including posts by the retailer, is permitted provided that the reposting complies with all the requirements of this section. Nothing in this section shall authorize an authorized licensee or its designated representative to share in the costs, if any, of the licenseholder.

(e)  An on-sale retail licensee may advertise an instructional tasting event to the general public. The costs of this advertising shall be borne solely by the on-sale retail licensee. Advertising permitted by this subdivision includes flyers, newspaper ads, Internet communications, and interior signage.

(f)  No more than one authorized licensee or its designated representative shall conduct an instructional tasting pursuant to this section at the on-sale retail licensed premises of an on-sale retail licensee at any time, and a person shall not act as the designated representative for more than one authorized licensee at that instructional tasting.

SEC. 3.

(a) Section 1.1 of this bill incorporates amendments to Section 25503.56 of the Business and Professions Code proposed by both this bill and Assembly Bill 2452. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2019, (2) each bill amends Section 25503.56 of the Business and Professions Code, and (3) this bill is enacted after Assembly Bill 2452, in which case Section 1 of this bill shall not become operative.

(b)  Section 2.1 of this bill incorporates amendments to Section 25503.57 of the Business and Professions Code proposed by both this bill and Assembly Bill 2452. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2019, (2) each bill amends Section 25503.57 of the Business and Professions Code, and (3) this bill is enacted after Assembly Bill 2452, in which case Section 2 of this bill shall not become operative.

Assembly Bill No. 1986 – (Cunningham), Chapter 579, Statutes of 2018- Craft distillers: alcoholic beverage licensees: donations

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

Summary of Code Section Changes

This bill provides tied-house exemption that allows craft distillers to give or sell distilled spirits to certain nonprofit organizations, as specified. The bill allows specified licensees authorized to donate or sell alcoholic beverages under this provision, to provide services or otherwise assist a nonprofit organization in connection with an event conducted under a temporary license issued by the department. The bill also prohibits nonprofit organizations that purchase or receive donations that also have a permanent retail license, from using those alcoholic beverages in the exercise of any privilege or business under that license.

This bill incorporates additional changes to Section 25503.9 of the Business and Professions Code proposed by SB 1164 (Skinner), Chapter 695, Statutes of 2018.

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 distilled spirits manufacturer, craft distiller, rectifier, or a distilled spirits manufacturer’s agent from giving or selling distilled spirits, or an 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 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, distilled spirits manufacturer, distilled spirits manufacturer’s agent, 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.

(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 distilled spirits manufacturer, craft distiller, rectifier, 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, 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 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, distilled spirits manufacturer, distilled spirits manufacturer’s agent, 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.

(d)  A licensee authorized to donate or sell alcoholic beverages to a nonprofit corporation, organization, or association pursuant to this section, except for a beer and wine wholesaler that also holds an importer’s license, 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.

SEC. 1.5.

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 distilled spirits manufacturer, craft distiller, rectifier, or a distilled spirits manufacturer’s agent from giving or selling distilled spirits, or an 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 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, 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.

(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 distilled spirits manufacturer, craft distiller, rectifier, 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, 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 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, 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.

(d)  A licensee authorized to donate or sell alcoholic beverages to a nonprofit corporation, organization, or association pursuant to this section, except for a beer and wine wholesaler that also holds an importer’s license, 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.

SEC. 2.

Section 1.5 of this bill incorporates amendments to Section 25503.9 of the Business and Professions Code proposed by both this bill and Senate Bill 1164. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2019, (2) each bill amends Section 25503.9 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 1164, in which case Section 1 of this bill shall not become operative.

SEC. 3.

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.

Assembly Bill No. 2000 – (Kalra), Chapter 483, Statutes of 2018 – Alcoholic beverages: tied-house restrictions: advertising

An act to amend Sections 25503.6 and 25503.8 of the Business and Professions Code, relating to alcoholic beverages.

Summary of Code Section Changes

This bill provides tied exceptions that allow beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, 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, at specified stadiums located in the City of San Jose. This bill expands the definition of an on-sale retail licensee to include an owner, manager, or major tenant with regard to a specified fully enclosed arena in San Jose.

This bill makes legislative findings and declarations as to the necessity of a special statute for the City of San Jose. This bill also incorporates additional changes to Section 25503.6 of the Business and Professions Code proposed by AB 2146 (Gloria), Chapter 487, Statutes of 2018.

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 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 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)  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.

(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 professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the City of San Jose.

(V)  An outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose.

(W)  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 (W) 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 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 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), (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 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 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. 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 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)  (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 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)  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.

(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 professional sports stadium with a fixed seating capacity of at least 3,000 seats located in the City of San Jose.

(V)  An outdoor professional sports stadium with a fixed seating capacity of at least 15,000 seats located in the City of San Jose.

(W)  A fully enclosed arena with a fixed seating capacity in excess of 15,000 seats located in the City of San Jose.

(X)  An outdoor stadium with a fixed seating capacity of at least 43,000 seats located in the City of San Diego.

(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 (W) 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 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 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), (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 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 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 25503.8 of the Business and Professions Code is amended to read:

25503.8.

(a) Notwithstanding any other provision of this chapter, a beer manufacturer, the holder of a winegrower’s license, a California winegrower’s agent, a rectifier, a distilled spirits manufacturer, or a distilled spirits manufacturer’s agent may purchase advertising space and time from, or on behalf of, an on-sale retail licensee if all of the following conditions are met:

(1)  The on-sale licensee is the owner of any of the following:

(A) A fully enclosed auditorium or theater with a fixed seating capacity in excess of 6,000 seats, at least 60 percent of the use of which is for plays or musical concerts, not including sporting events.

(B)  A motion picture studio facility at which public tours are conducted for at least four million people per year.

(C)  A retail, entertainment development adjacent to, and under common ownership with, a theme park, amphitheater, and motion picture production studio.

(D)  A theme or amusement park and the adjacent retail, dining, and entertainment area located in the City of Los Angeles, Los Angeles County, or Orange County.

(E)  A fully enclosed theater, with box office sales and attendance by the public on a ticketed basis only, with a fixed seating capacity in excess of 6,000 seats, located in Los Angeles County within the area subject to the Los Angeles Sports and Entertainment District Specific Plan adopted by the City of Los Angeles pursuant to ordinance number 174225, as approved on September 6, 2001.

(2)  The advertising space or time is purchased only in connection with one of the following:

(A) In the case of a fully enclosed auditorium or theater, in connection with sponsorship of plays or musical concerts to be held on the premises of the auditorium or theater owned by the on-sale licensee.

(B)  In the case of a motion picture studio facility, in connection with sponsorship of the public tours or special events conducted at the studio facility.

(C)  In the case of a retail, entertainment development, in connection with sponsorship of public tours or special events conducted at the development.

(D)  In the case of a theme or amusement park and the adjacent retail, dining, and entertainment area, located in the City of Los Angeles, Los Angeles County, or Orange County, in connection with daily activities and events at the theme or amusement park and the adjacent retail, dining, and entertainment area.

(E)  In the case of the fully enclosed theater described in subparagraph (E) of paragraph (1) of subdivision (a), in connection with events conducted at the theater.

(3)  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 or marketed by the winegrower or California winegrower’s agent, 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 manufacturer or distilled spirits manufacturer’s agent purchasing the advertising space or time.

(b)  Any 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, the holder of the winegrower’s license, the California winegrower’s agent, the rectifier, the distilled spirits manufacturer, or the distilled spirits manufacturer’s agent, and the on-sale licensee, which contract shall not in any way involve the holder of a wholesaler’s license.

(c)  Any beer manufacturer, rectifier, distilled spirits manufacturer, distilled spirits manufacturer’s agent, holder of a winegrower’s license, or California winegrower’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 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.

(d)  Any on-sale retail licensee, as described in subdivision (a), who solicits or coerces, directly or indirectly, a holder of a wholesaler’s license to solicit a beer manufacturer, rectifier, distilled spirits manufacturer, or distilled spirits manufacturer’s agent, holder of a winegrower’s license, or California winegrower’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. 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 located in the City of San Jose.

SEC. 4.

Section 1.5 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by both this bill and Assembly Bill 2146. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2019, (2) each bill amends Section 25503.6 of the Business and Professions Code, and (3) this bill is enacted after Assembly Bill 2146, in which case Section 1 of this  bill shall not become operative.

SEC. 5.

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.

Assembly Bill No. 2146 – (Gloria), Chapter 487, Statutes of 2018 – Alcoholic beverages: tied-house restrictions: advertising.

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

Summary of Code Section Changes

This bill expands tied-house exceptions to allow beer manufacturers, winegrowers, distilled spirits rectifiers, distilled spirits manufacturers, 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, at a specified stadium located in the City of San Diego.

This bill makes legislative findings and declarations as to the necessity of a special statute for the City of San Diego. This bill also incorporates additional changes to Section 25503.6 of the Business and Professions Code proposed by AB 2000 to be operative only if this bill and AB 2000 are enacted and this bill is enacted last.

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 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 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)  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.

(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.

(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 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 rectifier, 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), (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 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 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. 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 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)  (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 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)  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.

(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 (W) 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 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 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), (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 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 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 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 San Diego.

SEC. 3.

Section 1.5 of this bill incorporates amendments to Section 25503.6 of the Business and Professions Code proposed by both this bill and Assembly Bill 2000. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2019, (2) each bill amends Section 25503.6 of the Business and Professions Code, and (3) this bill is enacted after Assembly Bill 2000, in which case Section 1 of this bill shall not become operative.

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.

Assembly Bill No. 2452– (Aguiar-Curry) Chapter 295, Statutes of 2018 Alcoholic beverages: tied-house restrictions.

An act to amend Sections 25503.4, 25503.56, and 25503.57 of the Business and Professions Code, relating to alcoholic beverages.

Summary of Code Section Changes

This bill revises certain tied-house prohibitions concerning advertising to, allow for pictures, illustrations, and depictions of the retailer’s premises and for the name, address, telephone number, email address, internet web site address, and any other electronic media of the licensee upon whose licensed premises the event will be held.

This bill incorporates additional changes to Section 25503.56 of the Business and Professions Code proposed by AB 1891 (Levine), Chapter 273, Statutes of 2018 and SB 1164 (Skinner), Chapter 695 Statutes of 2018, as well as changes to Section 25503.57 of the Business and Professions Code which are outlined in AB 1891(Levine), Chapter 273, Statutes of 2018).

SECTION 1.

Section 25503.4 of the Business and Professions Code is amended to read:

25503.4.

(a) Notwithstanding any other provision of this division, a winegrower, California winegrower’s agent, wine importer, or any director, partner, officer, agent, or representative of that person, may conduct or participate in, and serve wine at, an instructional event for consumers held at a retailer’s premises featuring wines produced by or for the winegrower or, imported by the wine importer, subject to the following conditions:

(1)  No premium, gift, free goods, or other thing of value may be given away in connection with the instructional event by the winegrower, California winegrower’s agent, wine importer, or retailer, except as authorized by this division.

(2)  No alcoholic beverages may be given away in connection with the instructional event except that minimal amounts of wine, taken from barrels or from tanks, may be supplied and provided as samples at the instructional event. A person authorized by subdivision (a) may also provide no more than three one-ounce tastes of wine per consumer at the instructional event from bottles of wine provided by the authorized person. For purposes of this section, minimal amounts of the samples or tastes provided at the instructional event do not constitute a thing of value. Following the instructional event, any unused wine provided by the authorized person shall be removed from the retailer’s premises by the authorized person.

(3)  No alcoholic beverages may be sold at the instructional event, except that orders for the sale of wine may be accepted by the winegrower if the sales transaction is completed at the winegrower’s premises.

(b)  Notwithstanding Section 25502.2, a person identified in subdivision (a) appearing at an instructional event described in subdivision (a) may, in addition to other permitted activities, provide autographs to consumers on consumer advertising specialties given by the person to a consumer or on any item provided by a consumer. No purchase of any alcoholic beverage shall be required in connection with such autographing.

(c)  Notwithstanding any other provision of this division, in addition to any point-of-sale advertising or other advertising items allowed under this division or under rules of the department, a winegrower, California winegrower’s agent, or wine importer, in advance of an instructional event for consumers being held at a retailer’s premises, may list in any advertisement for the instructional event the name, address, telephone number, email address, Internet Web site address, and any other electronic media of the retailer, the names of the wines being featured at the instructional event, pictures, illustrations, and depictions of the retailer’s premises, personnel, and customers, and the time, date, and location of, and other information about, the instructional event, provided:

(1)  The advertisement does not also contain the retail price of the wines.

(2)  The listing of the retailer’s name, address, telephone number, email address, Internet Web site address, and any other electronic media in the advertisement is relatively inconspicuous in relation to the advertisement as a whole. Laudatory references to the retailer in these advertisements are not authorized. Pictures, illustrations, or depictions shall be still pictures, illustrations, or depictions only and shall not include any video. The reposting of social media posts, including posts by the retailer, is permitted provided that the reposting complies with all the requirements of this section.

(d)  Notwithstanding any other provision of this division, the name, address, telephone number, email address, Internet Web site address, and any other electronic media of a winegrower, wine importer, or winegrower’s agent licensee, the brand names of wine being featured, and the time, date, location, and other identifying information of a wine promotional lecture at retail premises may be listed in advance of the event in an advertisement of the off-sale or on-sale retail licensee.

(e)  Nothing in this section authorizes a winegrower, wine importer, or winegrower’s agent licensee to share in the costs, if any, of the retailer licensee’s advertisement.

(f)  Nothing in this section authorizes any person to consume any alcoholic beverage on any premises licensed with an off-sale retail license.

SEC. 2.

Section 25503.56 of the Business and Professions Code is amended to read:

25503.56.

(a) An authorized licensee, or a designated representative of an authorized licensee acting as an agent of the authorized licensee, may conduct, on the area specified by paragraph (1) of subdivision (c) of Section 23396.6, an instructional tasting event for consumers on the subject of wine, beer, or distilled spirits, including, but not limited to, the history, nature, values, and characteristics of wine, beer, or distilled spirits, and the methods of presenting and serving wine, beer, or distilled spirits.

(1)  (A) Except as provided in subparagraph (B), the instructional tasting event may include the serving of alcoholic beverages to an attendee of legal drinking age. An instructional tasting event on the subject of wine or distilled spirits shall be limited to not more than three tastings per person per day. A single tasting of distilled spirits shall not exceed one- fourth of one ounce and a single tasting of wine shall not exceed one ounce. An instructional tasting event on the subject of beer shall be limited to not more than the tasting of eight ounces of beer per person per day. The wine, beer, or distilled spirits tasted shall be limited to the products that are authorized to be sold by the authorized licensee and the licenseholder under its off-sale license.

(B)  A beer and wine wholesaler may conduct an instructional tasting event but shall not serve tastes of beer unless the beer and wine wholesaler also holds a beer manufacturer’s license, an out-of-state beer manufacturer’s certificate, or more than six distilled spirits wholesaler’s licenses.

(C)  No charge of any sort shall be made for the tastings. Except for the purposes of Section 23985, the serving of tastings shall not be deemed a sale of products pursuant to this division.

(D)  A person under 21 years of age shall not serve wine, beer, or distilled spirits at the instructional tasting event.

(E)  All tastes shall be served by an employee of the authorized licensee, the designated representative of the authorized licensee, or by an employee of the designated representative of the authorized licensee.

(F)  An authorized licensee, or a designated representative of an authorized licensee, shall either supply the wine or distilled spirits to be tasted during the instructional tasting event or purchase the wine or distilled spirits from the licenseholder at the original invoiced cost. An authorized licensee, or a designated representative of an authorized licensee, shall purchase beer to be tasted during the instructional tasting event from the licenseholder at the original invoiced cost.

(G)  Any unused wine, beer, or distilled spirits remaining from the tasting shall be removed from the off-sale licensed premises by the authorized licensee or its designated representative.

(2)  If the instructional tasting event is conducted by a designated representative of an authorized licensee, the designated representative shall not be owned, controlled, or employed directly or indirectly by the licenseholder on whose premises the instructional tasting event is held.

(3)  An instructional tasting event shall be limited to a single type of alcoholic beverage. For purposes of this paragraph, “type of alcoholic beverage” means distilled spirits, wine, or beer.

(b)  For purposes of this section:

(1)  “Authorized licensee” means a winegrower, California winegrower’s agent, beer and wine importer general, beer and wine wholesaler, wine rectifier, distilled spirits manufacturer, distilled spirits manufacturer’s agent, distilled spirits importer general, distilled spirits rectifier, distilled spirits general rectifier, rectifier, out-of-state distilled spirits shipper’s certificate holder, distilled spirits wholesaler, brandy manufacturer, brandy importer, California brandy wholesaler, beer manufacturer, or an out-of-state beer manufacturer certificate holder. “Authorized licensee” shall not include an entity that solely holds a combination of a beer and wine wholesale license and an off-sale beer and wine retail license or holds those licenses solely in combination with any license not listed in this paragraph, or holds a limited off-sale retail wine license.

(2)  “Licenseholder” means an off-sale retail licensee issued an instructional tasting license pursuant to Section 23396.6.

(3)  “Location” means the total contiguous area encompassed by the off-sale and on-sale licenses.

(c)  Notwithstanding subparagraph (E) of paragraph (1) of subdivision (a), a licenseholder may conduct an instructional tasting event that includes the serving of tastings only when an authorized licensee or its designated representative are unable to conduct an instructional tasting event previously advertised pursuant to this section and scheduled by the authorized licensee or its designated representative, provided that the licenseholder supplies the wine, beer, or distilled spirits used in the instructional tasting event and provides or pays for a person to serve the wine, beer, or distilled spirits. Instructional tasting events conducted by a licenseholder pursuant to this subdivision are subject to the provisions of this section and Section 23396.6.

(d)  No more than one authorized licensee, or its designated representative, may conduct an instructional tasting event that includes the serving of tastes of wine, beer, or distilled spirits at any one individual licensed premises of a licenseholder per day.

(e)  A licenseholder that also holds an on-sale beer and wine license, an on-sale beer and wine eating place license, or an on-sale general license shall not allow an authorized licensee, or its designated representative, to conduct an instructional tasting event on the same day and at the same location as any instructional tasting event held pursuant to subdivision (b) of Section 23386, Section 25503.4, subdivision (c) of Section 25503.5, or Section 25503.55.

(f)  A licenseholder shall not condition the allowance of an instructional tasting event upon the use of a particular designated representative of an authorized licensee.

(g)  In addition to any point-of-sale advertising or other advertising items allowed under this division or under rules of the department, an authorized licensee or its designated representative, in his or her absolute discretion and with permission of the licenseholder upon whose premises the instructional tasting event will be held, may list in any advertisement to the general public for the instructional tasting event the name, address, telephone number, email address, Internet Web site address, and any other electronic media of the licenseholder, the names of the alcoholic beverages being featured at the instructional tasting event, pictures, illustrations, and depictions of the retailer’s premises, personnel, and customers, and the time, date, and location of, and other information about, the instructional tasting event, provided that both of the following apply:

(1)  The advertisement does not contain the retail price of the alcoholic beverages.

(2)  The listing of the licenseholder’s name, address, telephone number, email address, Internet Web site address, and any other electronic media in the advertisement is relatively inconspicuous in relation to the advertisement as a whole. Laudatory references to the licenseholder in these advertisements are not authorized. Pictures, illustrations, or depictions shall be still pictures, illustrations, or depictions only and shall not include any video. The reposting of social media posts, including posts by the retailer, is permitted provided that the reposting complies with all of the requirements of this section. Nothing in this section shall authorize an authorized licensee or its designated representative to share in the costs, if any, of the licenseholder.

(h)  A licenseholder may advertise an instructional tasting event to the general public. The costs of this advertising shall be borne solely by the licenseholder. Advertising permitted by this subdivision includes flyers, newspaper ads, Internet communications, and interior signage.

(i)  Except as otherwise provided in this division or rules of the department, no premium, gift, free goods, or other thing of value shall be given away by an authorized licensee or its designated representative in connection with an instructional tasting event that includes tastings of an alcoholic beverage.

(j)  The licenseholder or the authorized licensee or its designated representative is authorized to perform setup and breakdown of the instructional tasting event area. The authorized licensee or its designated representative may provide, free of charge to the licenseholder, the equipment, materials, and utensils as may be required for use in connection with the instructional tasting event.

(k) (1) A licenseholder shall not require, or enter into a collusive scheme with, an authorized licensee or its designated representative to conduct one or more instructional tasting events as a condition of the licenseholder’s carrying or continuing to carry a brand or brands of the authorized licensee or as a condition for display or other merchandising plan which is based on an agreement to provide shelf space. An authorized licensee or its designated representative shall not require any preferential treatment or benefit from, or enter into a collusive scheme with, a licenseholder as a condition of conducting one or more instructional tasting events, require a licenseholder to carry or continue to carry a brand or brands of the authorized licensee as a condition of conducting one or more instructional tasting events, or condition display or other merchandising plans that are based on agreements for the provision of shelf space on the conducting of one or more instructional tasting events. Any agreement, whether written or oral, entered into by and between a licenseholder and an authorized licensee or its designated representative that precludes the conducting of instructional tasting events on the premises of the licenseholder by any other authorized licensee is prohibited. A licenseholder or authorized licensee, or its designated representative, shall not use an instructional tasting event to circumvent any other requirements of this division.

(2) In addition to any other remedies available under this division, upon a finding by the department of a failure to comply with this subdivision, the department shall suspend the instructional tasting license of the licenseholder and the privilege of the authorized licensee to conduct instructional events for not less than six months but for no more than one year.

(l)  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 exception established by this section to the general prohibition against tied interests must be limited to its express terms so as not to undermine the general prohibition, and intends that this section be construed accordingly.

SEC. 2.1.

Section 25503.56 of the Business and Professions Code is amended to read:

25503.56.

(a) An authorized licensee, or a designated representative of an authorized licensee acting as an agent of the authorized licensee, may conduct, on the area specified by paragraph (1) of subdivision (c) of Section 23396.6, an instructional tasting event for consumers on the subject of wine, beer, or distilled spirits, including, but not limited to, the history, nature, values, and characteristics of wine, beer, or distilled spirits, and the methods of presenting and serving wine, beer, or distilled spirits.

(1)  (A) Except as provided in subparagraph (B), the instructional tasting event may include the serving of alcoholic beverages to an attendee of legal drinking age. An instructional tasting event on the subject of wine or distilled spirits shall be limited to not more than three tastings per person per day. A single tasting of distilled spirits shall not exceed one- fourth of one ounce and a single tasting of wine shall not exceed one ounce. An instructional tasting event on the subject of beer shall be limited to not more than the tasting of eight ounces of beer per person per day. The wine, beer, or distilled spirits tasted shall be limited to the products that are authorized to be sold by the authorized licensee and the licenseholder under its off-sale license.

(B)  A beer and wine wholesaler may conduct an instructional tasting event but shall not serve tastes of beer unless the beer and wine wholesaler also holds a beer manufacturer’s license, an out-of-state beer manufacturer’s certificate, or more than six distilled spirits wholesaler’s licenses.

(C)  No charge of any sort shall be made for the tastings. Except for the purposes of Section 23985, the serving of tastings shall not be deemed a sale of products pursuant to this division.

(D)  A person under 21 years of age shall not serve wine, beer, or distilled spirits at the instructional tasting event.

(E)  All tastes shall be served by an employee of the authorized licensee, the designated representative of the authorized licensee, or by an employee of the designated representative of the authorized licensee.

(F)  An authorized licensee, or a designated representative of an authorized licensee, shall either supply the wine or distilled spirits to be tasted during the instructional tasting event or purchase the wine or distilled spirits from the licenseholder at the original invoiced cost. An authorized licensee, or a designated representative of an authorized licensee, shall purchase beer to be tasted during the instructional tasting event from the licenseholder at the original invoiced cost.

(G)  Any unused wine, beer, or distilled spirits remaining from the tasting shall be removed from the off-sale licensed premises by the authorized licensee or its designated representative.

(2)  If the instructional tasting event is conducted by a designated representative of an authorized licensee, the designated representative shall not be owned, controlled, or employed directly or indirectly by the licenseholder on whose premises the instructional tasting event is held.

(3)  An instructional tasting event shall be limited to a single type of alcoholic beverage. For purposes of this paragraph, “type of alcoholic beverage” means distilled spirits, wine, or beer.

(b)  For purposes of this section:

(1)  “Authorized licensee” means a winegrower, California winegrower’s agent, beer and wine importer general, beer and wine wholesaler, wine rectifier, craft distiller, distilled spirits manufacturer, distilled spirits manufacturer’s agent, distilled spirits importer general, distilled spirits rectifier, distilled spirits general rectifier, rectifier, out-of-state distilled spirits shipper’s certificate holder, distilled spirits wholesaler, brandy manufacturer, brandy importer, California brandy wholesaler, beer manufacturer, or an out-of-state beer manufacturer certificate holder. “Authorized licensee” shall not include an entity that solely holds a combination of a beer and wine wholesale license and an off-sale beer and wine retail license or holds those licenses solely in combination with any license not listed in this paragraph, or holds a limited off-sale retail wine license.

(2)  “Licenseholder” means an off-sale retail licensee issued an instructional tasting license pursuant to Section 23396.6.

(3)  “Location” means the total contiguous area encompassed by the off-sale and on-sale licenses.

(c)  Notwithstanding subparagraph (E) of paragraph (1) of subdivision (a), a licenseholder may conduct an instructional tasting event that includes the serving of tastings only when an authorized licensee or its designated representative are unable to conduct an instructional tasting event previously advertised pursuant to this section and scheduled by the authorized licensee or its designated representative, provided that the licenseholder supplies the wine, beer, or distilled spirits used in the instructional tasting event and provides or pays for a person to serve the wine, beer, or distilled spirits. Instructional tasting events conducted by a licenseholder pursuant to this subdivision are subject to the provisions of this section and Section 23396.6.

(d)  No more than one authorized licensee, or its designated representative, may conduct an instructional tasting event that includes the serving of tastes of wine, beer, or distilled spirits at any one individual licensed premises of a licenseholder per day.

(e)  A licenseholder that also holds an on-sale beer and wine license, an on-sale beer and wine eating place license, or an on-sale general license shall not allow an authorized licensee, or its designated representative, to conduct an instructional tasting event on the same day and at the same location as any instructional tasting event held pursuant to subdivision (b) of Section 23386, Section 25503.4, subdivision (c) of Section 25503.5, or Section 25503.55.

(f)  A licenseholder shall not condition the allowance of an instructional tasting event upon the use of a particular designated representative of an authorized licensee.

(g)  In addition to any point-of-sale advertising or other advertising items allowed under this division or under rules of the department, an authorized licensee or its designated representative, in his or her absolute discretion and with permission of the licenseholder upon whose premises the instructional tasting event will be held, may list in any advertisement to the general public for the instructional tasting event the name, address, telephone number, email address, Internet Web site address, and any other electronic media of the licenseholder, the names of the alcoholic beverages being featured at the instructional tasting event, pictures, illustrations, and depictions of the retailer’s premises, personnel, and customers, and the time, date, and location of, and other information about, the instructional tasting event, provided that both of the following apply:

(1)  The advertisement does not contain the retail price of the alcoholic beverages.

(2)  The listing of the licenseholder’s name, address, telephone number, email address, Internet Web site address, and any other electronic media in the advertisement is relatively inconspicuous in relation to the advertisement as a whole. Laudatory references to the licenseholder in these advertisements are not authorized. Pictures, illustrations, or depictions shall be still pictures, illustrations, or depictions only and shall not include any video. The reposting of social media posts, including posts by the retailer, is permitted provided that the reposting complies with all the requirements of this section. Nothing in this section shall authorize an authorized licensee or its designated representative to share in the costs, if any, of the licenseholder.

(h)  A licenseholder may advertise an instructional tasting event to the general public. The costs of this advertising shall be borne solely by the licenseholder. Advertising permitted by this subdivision includes flyers, newspaper ads, Internet communications, and interior signage.

(i)  Except as otherwise provided in this division or rules of the department, no premium, gift, free goods, or other thing of value shall be given away by an authorized licensee or its designated representative in connection with an instructional tasting event that includes tastings of an alcoholic beverage.

(j)  The licenseholder or the authorized licensee or its designated representative is authorized to perform setup and breakdown of the instructional tasting event area. The authorized licensee or its designated representative may provide, free of charge to the licenseholder, the equipment, materials, and utensils as may be required for use in connection with the instructional tasting event.

(k) (1) A licenseholder shall not require, or enter into a collusive scheme with, an authorized licensee or its designated representative to conduct one or more instructional tasting events as a condition of the licenseholder’s carrying or continuing to carry a brand or brands of the authorized licensee or as a condition for display or other merchandising plan which is based on an agreement to provide shelf space. An authorized licensee or its designated representative shall not require any preferential treatment or benefit from, or enter into a collusive scheme with, a licenseholder as a condition of conducting one or more instructional tasting events, require a licenseholder to carry or continue to carry a brand or brands of the authorized licensee as a condition of conducting one or more instructional tasting events, or condition display or other merchandising plans that are based on agreements for the provision of shelf space on the conducting of one or more instructional tasting events. Any agreement, whether written or oral, entered into by and between a licenseholder and an authorized licensee or its designated representative that precludes the conducting of instructional tasting events on the premises of the licenseholder by any other authorized licensee is prohibited. A licenseholder or authorized licensee, or its designated representative, shall not use an instructional tasting event to circumvent any other requirements of this division.

(2) In addition to any other remedies available under this division, upon a finding by the department of a failure to comply with this subdivision, the department shall suspend the instructional tasting license of the licenseholder and the privilege of the authorized licensee to conduct instructional events for not less than six months but for no more than one year.

(l)  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 exception established by this section to the general prohibition against tied interests must be limited to its express terms so as not to undermine the general prohibition, and intends that this section be construed accordingly.

SEC. 3.

Section 25503.57 of the Business and Professions Code is amended to read:

25503.57.

(a) (1) An authorized licensee, or its designated representative, may instruct consumers at an on-sale retail licensed premises authorized to sell its product with the permission of the retail on-sale licensee. The instruction may include, without limitation, the history, nature, values, and characteristics of the wine or distilled spirits and the methods of presenting and serving the wine or distilled spirits.

(2)  The instruction of consumers may include the furnishing of not more than three tastings to any individual in one day. A single tasting of distilled spirits may not exceed one- fourth of one ounce and a single tasting of wine may not exceed one ounce.

(3)  The authorized licensee, or its designated representative, shall either supply the wine or distilled spirits to be tasted during the instructional tasting event or purchase the wine or distilled spirits from the retail on-sale licensee at the original invoiced cost.

(4)  The authorized licensee, or its designated representative, shall remove any unfinished alcoholic beverages that were supplied by the authorized licensee, or its designated representative, following the instruction.

(5)  Nothing in this subdivision shall limit the giving away of samples pursuant to subdivision (a) of Section 23386.

(b)  For purposes of this section, “authorized licensee” means a winegrower, California winegrower’s agent, beer and wine importer general, beer and wine wholesaler, wine rectifier, distilled spirits manufacturer, distilled spirits manufacturer’s agent, distilled spirits importer general, distilled spirits rectifier, distilled spirits general rectifier, rectifier, out-of-state distilled spirits shipper’s certificate holder, distilled spirits wholesaler, brandy manufacturer, brandy importer, or California brandy wholesaler. “Authorized licensee” shall not include any person that solely holds a combination of a beer and wine wholesaler license and an off-sale beer and wine retail license or holds those licenses solely in combination with any license not listed in this paragraph, or in combination with a beer and wine importer general license, or holds a limited off-sale retail wine license.

(c)  Except as otherwise provided in this division or by the rules of the department, no premium, gift, free goods, or other thing of value shall be given away by an authorized licensee or its designated representative in connection with an instructional tasting event conducted pursuant to this section that includes tastings of wine or distilled spirits.

(d)  In addition to any point-of-sale advertising or other advertising items allowed under this division or under rules of the department, an authorized licensee or its designated representative, in his or her absolute discretion and with permission of the retail on-sale licensee upon whose premises the instructional tasting event will be held, may list in any advertisement to the general public for the instructional tasting the name, address, telephone number, email address, Internet Web site address, and any other electronic media of the on-sale retail licensee, the names of the wines or distilled spirits being featured at the instructional tasting event, pictures, illustrations, and depictions of the retailer’s premises, personnel, and customers, and the time, date, and location of, and other information about, the instructional tasting event, provided that both of the following apply:

(1)  The advertisement does not contain the retail price of the alcoholic beverages.

(2)  The listing of the licenseholder’s name, address, telephone number, email address, Internet Web site address, and any other electronic media in the advertisement is relatively inconspicuous in relation to the advertisement as a whole. Laudatory references to the licenseholder in these advertisements are not authorized. Pictures, illustrations, or depictions shall be still pictures, illustrations, or depictions only and shall not include any video. The reposting of social media posts, including posts by the retailer, is permitted provided that the reposting complies with all of the requirements of this section. Nothing in this section shall authorize an authorized licensee or its designated representative to share in the costs, if any, of the licenseholder.

(e)  An on-sale retail licensee may advertise an instructional tasting event to the general public. The costs of this advertising shall be borne solely by the on-sale retail licensee. Advertising permitted by this subdivision includes flyers, newspaper ads, Internet communications, and interior signage.

(f)  No more than one authorized licensee or its designated representative shall conduct an instructional tasting pursuant to this section at the on-sale retail licensed premises of an on-sale retail licensee at any time, and a person shall not act as the designated representative for more than one authorized licensee at that instructional tasting.

SEC. 3.1.

Section 25503.57 of the Business and Professions Code is amended to read:

25503.57.

(a) (1) An authorized licensee, or its designated representative, may instruct consumers at an on-sale retail licensed premises authorized to sell its product with the permission of the retail on-sale licensee. The instruction may include, without limitation, the history, nature, values, and characteristics of the wine or distilled spirits and the methods of presenting and serving the wine or distilled spirits.

(2)  The instruction of consumers may include the furnishing of not more than three tastings to any individual in one day. A single tasting of distilled spirits may not exceed one- fourth of one ounce and a single tasting of wine may not exceed one ounce.

(3)  The authorized licensee, or its designated representative, shall either supply the wine or distilled spirits to be tasted during the instructional tasting event or purchase the wine or distilled spirits from the retail on-sale licensee at the original invoiced cost.

(4)  The authorized licensee, or its designated representative, shall remove any unfinished alcoholic beverages that were supplied by the authorized licensee, or its designated representative, following the instruction.

(5)  Nothing in this subdivision shall limit the giving away of samples pursuant to subdivision (a) of Section 23386.

(b)  For purposes of this section, “authorized licensee” means a winegrower, California winegrower’s agent, beer and wine importer general, beer and wine wholesaler, wine rectifier, craft distiller, distilled spirits manufacturer, distilled spirits manufacturer’s agent, distilled spirits importer general, distilled spirits rectifier, distilled spirits general rectifier, rectifier, out-of-state distilled spirits shipper’s certificate holder, distilled spirits wholesaler, brandy manufacturer, brandy importer, or California brandy wholesaler. “Authorized licensee” shall not include any person that solely holds a combination of a beer and wine wholesaler license and an off-sale beer and wine retail license or holds those licenses solely in combination with any license not listed in this paragraph, or in combination with a beer and wine importer general license, or holds a limited off-sale retail wine license.

(c)  Except as otherwise provided in this division or by the rules of the department, no premium, gift, free goods, or other thing of value shall be given away by an authorized licensee or its designated representative in connection with an instructional tasting event conducted pursuant to this section that includes tastings of wine or distilled spirits.

(d)  In addition to any point-of-sale advertising or other advertising items allowed under this division or under rules of the department, an authorized licensee or its designated representative, in his or her absolute discretion and with permission of the retail on-sale licensee upon whose premises the instructional tasting event will be held, may list in any advertisement to the general public for the instructional tasting the name, address, telephone number, email address, Internet Web site address, and any other electronic media of the on-sale retail licensee, the names of the wines or distilled spirits being featured at the instructional tasting event, pictures, illustrations, and depictions of the retailer’s premises, personnel, and customers, and the time, date, and location of, and other information about, the instructional tasting event, provided that both of the following apply:

(1)  The advertisement does not contain the retail price of the alcoholic beverages.

(2)  The listing of the licenseholder’s name, address, telephone number, email address, Internet Web site address, and any other electronic media in the advertisement is relatively inconspicuous in relation to the advertisement as a whole. Laudatory references to the licenseholder in these advertisements are not authorized. Pictures, illustrations, or depictions shall be still pictures, illustrations, or depictions only and shall not include any video. The reposting of social media posts, including posts by the retailer, is permitted provided that the reposting complies with all the requirements of this section. Nothing in this section shall authorize an authorized licensee or its designated representative to share in the costs, if any, of the licenseholder.

(e)  An on-sale retail licensee may advertise an instructional tasting event to the general public. The costs of this advertising shall be borne solely by the on-sale retail licensee. Advertising permitted by this subdivision includes flyers, newspaper ads, Internet communications, and interior signage.

(f)  No more than one authorized licensee or its designated representative shall conduct an instructional tasting pursuant to this section at the on-sale retail licensed premises of an on-sale retail licensee at any time, and a person shall not act as the designated representative for more than one authorized licensee at that instructional tasting.

SEC. 4.

(a) Section 2.1 of this bill incorporates amendments to Section 25503.56 of the Business and Professions Code proposed by this bill, Assembly Bill 1891, and Senate Bill 1164. That section of this bill shall only become operative if (1) either Assembly Bill 1891 and this bill, Senate Bill 1164 and this bill, or all three bills are enacted and become effective on or before January 1, 2019, (2) each bill amends Section 25503.56 of the Business and Professions Code, and (3) this bill is enacted after Assembly Bill 1891 or Senate Bill 1164, or both, in which case Section 2 of this bill shall not become operative.

(b)  Section 3.1 of this bill incorporates amendments to Section 25503.57 of the Business and Professions Code proposed by both this bill and Assembly Bill 1891. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2019, (2) each bill amends Section 25503.57 of the Business and Professions Code, and (3) this bill is enacted after Assembly Bill 1891, in which case Section 3 of this bill shall not become operative.

Assembly Bill No. 2469 – (Berman) Chapter 492, Statutes of 2018 – Alcoholic beverages: beer wholesalers: beer sales.

An act to add Section 23378.05 to the Business and Professions Code, relating to alcoholic beverages.

Summary of Code Section Changes

This bill codifies standards governing beer warehousing for beer wholesalers in the State of California. This bill requires a beer wholesaler to comply with specified requirements for any sale or offer of sale of beer within the state.

SECTION 1.

Section 23378.05 is added to the Business and Professions Code, to read:

23378.05.

(a) For any sale or offer of sale of beer by a beer wholesaler within the state, the beer wholesaler shall comply with all of the following:

(1)  Pursuant to Section 25000.5, the beer wholesaler shall file and maintain with the department a written territorial agreement with each beer manufacturer prior to the wholesaler’s sale or offer of sale of each beer manufacturer’s beer.

(2)  Pursuant to Section 25000, the beer wholesaler shall file prices with the department for each beer manufacturer’s beer prior to the wholesaler’s sale or offer of sale of each manufacturer’s beer.

(3)  (A) The beer wholesaler shall own or lease a warehouse sufficient to store at one time a stock of beer equal to 10 percent or more of the wholesaler’s annual volume of beer case and keg sales to retailers within this state.

(B)  The beer wholesaler shall maintain at all times in a warehouse either owned or leased by the wholesaler a stock of beer equal to not less than 5 percent of the wholesaler’s annual volume of beer case and keg sales to retailers within this state.

(C)  If a beer wholesaler has more than one leased or owned licensed warehouse premises, the wholesaler shall be required to comply with the conditions of subparagraphs (A) and (B) only in connection with one licensed warehouse premises.

(4)  The beer wholesaler shall receive all beer for sale at the wholesaler’s licensed warehouse premises, unload and maintain the beer on the premises, and record the beer into the wholesaler’s inventory and for the California Beverage Container Recycling and Litter Reduction Act, prior to any sale or reloading for delivery.

(5)  The beer wholesaler shall sell only beer that the wholesaler owns and has in physical possession and that is not acquired, held, or offered for sale under consignment.

(6)  The beer wholesaler shall sell beer only from the wholesaler’s licensed warehouse premises or pursuant to Section 23388.

(7)  The beer wholesaler shall deliver all beer sold to retailers for delivery from the wholesaler’s licensed warehouse premises only with equipment owned, leased, or rented by the wholesaler.

(8)  The beer wholesaler shall sell beer for resale generally and not to a single retailer or retailers that have a direct or indirect interest in the wholesaler or in each other and that are owned in whole or in part or managed or controlled directly or indirectly by the retailer or retailers.

(b)  For purposes of this section, “beer manufacturer” means 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. 2.

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.

Assembly Bill No. 2914 – (Cooley), Chapter 827, Statutes 2018 – Cannabis in alcoholic beverages

An act to add Sections 25621.5 and 26070.2 to the Business and Professions Code, relating to cannabis.

Summary of Code Section Changes

This bill prohibits a cannabis licensee from selling, offering, or providing a cannabis product that is an alcoholic beverage, including, but not limited to, an infusion of cannabis or cannabinoids derived from industrial hemp into an alcoholic beverage.

This bill prohibits an alcoholic beverage licensee from, at its licensed premises, selling, offering, or providing cannabis or cannabis products, including an alcoholic beverage that contains cannabis or cannabis products, and provides that no alcoholic beverage shall be manufactured, sold, or offered for sale if it contains tetrahydrocannabinol or cannabinoids, regardless of source. The bill requires the department to take disciplinary action against a licensee who does so, including, but not limited to, suspension or revocation of the license.

SECTION 1.

Section 25621.5 is added to the Business and Professions Code, to read:

25621.5.

(a) A licensee shall not, at its licensed premises, sell, offer, or provide cannabis or cannabis products, as defined in Section 26001, including an alcoholic beverage that contains cannabis or a cannabis product, and no alcoholic beverage shall be manufactured, sold, or offered for sale if it contains tetrahydrocannabinol or cannabinoids, regardless of source.

(b)  The department shall take disciplinary action against a licensee that violates this section, including, but not limited to, suspension or revocation of the license.

SEC. 2.

Section 26070.2 is added to the Business and Professions Code, to read:

26070.2.

A licensee shall not sell, offer, or provide a cannabis product that is an alcoholic beverage, including, but not limited to, an infusion of cannabis or cannabinoids derived from industrial hemp into an alcoholic beverage.

Assembly Bill No. 3264 – (Committee on Governmental Organization), Chapter 727, Statutes of 2018 – Alcoholic beverages: licensees

An act to add Section 25503.51 to, and to amend Sections 24049.5 and 25600 of, the Business and Professions Code, relating to alcoholic beverages.

Summary of Code Section Changes

This bill allows a distilled spirits wholesaler and a craft distiller to instruct or conduct courses of instruction on distilled spirits, including, but not limited to, the history, nature, values, characteristics, related terminology, and the methods of handling, presenting, and serving those beverages for licensees and their employees.

This bill prohibits the Department of Alcoholic Beverage Control from approving, by rule or decision, glassware as an authorized retailer advertising specialty for distilled spirits or wine.

This bill incorporates additional changes to Section 25600 of the Business and Professions Code outlined in SB 973 (Dodd) Chapter 689, Statutes 2018.

SECTION 1.

Section 24049.5 of the Business and Professions Code is amended to read:

24049.5.

(a) The State Board of Equalization or the Franchise Tax Board may seize and sell the license of an off-sale or on-sale general licensee that, upon termination of business, is delinquent in the payment of taxes due under the Sales and Use Tax Law, Personal Income Tax Law, or Corporation Tax Law, respectively. In order for a seizure and sale of a license to be accomplished under this section, the licensee shall have either surrendered the license to the department or failed to pay the annual renewal fee to the department. Immediately upon seizure the State Board of Equalization or Franchise Tax Board shall give written notice by first-class mail to the department and to the licensee of the seizure and of the intention of the board to sell the license. The seizure and sale shall be in accordance with the provisions of Article 6 (commencing with Section 6796) of Chapter 6 of Part 1 of Division 2 of the Revenue and Taxation Code or Article 4 (commencing with Section 19251) of Chapter 5 of Part 10.2 of Division 2 of the Revenue and Taxation Code, respectively, and with the provisions of this division. Nothing within these provisions shall be construed to permit the State Board of Equalization or Franchise Tax Board to sell alcoholic beverages.

(b)  For the purposes of this section, “termination of business” means the licensee has ceased business operations and has either surrendered the license to the department or the license has expired pursuant to Section 24048.

(c)  The licensee may redeem the license at any time before the date of sale of the license by the board or the appropriate reinstatement deadline, whichever occurs first, by conforming to the requirements for reinstatement of a license pursuant to subdivision (f) of Section 24048.

The person who purchases the license at the sale may reinstate the license by paying the applicable fees, but the transfer shall be effective only on approval of the department after the purchaser has complied with the requirements for transfer provided in this division.

(d)  Paragraph (1) of subdivision (a) of Section 699.720 of the Code of Civil Procedure shall not be construed to limit the authority of the State Board of Equalization or the Franchise Tax Board to seize and sell licenses pursuant to this section.

SEC. 2.

Section 25503.51 is added to the Business and Professions Code, to read:

25503.51.

(a) A distilled spirits wholesaler or craft distiller may, without charge, instruct licensees and their employees, or conduct courses of instruction for licensees and their employees, on the subject of distilled spirits, including, but not limited to, the history, nature, values, characteristics, and related terminology of distilled spirits, and the methods of handling, presenting, and serving distilled spirits. The distilled spirits manufacturer or distilled spirits manufacturer’s agent may furnish distilled spirits and the equipment, materials, and utensils that may be required for use in connection with the instruction or courses of instruction.

(b)  The instruction or courses of instruction, authorized in subdivision (a), may be given at the premises of the distilled spirits wholesaler or craft distiller, or of a licensee, including an on-sale retail licensee, or elsewhere.

SEC. 3.

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.

(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)  Notwithstanding any other provision of this division, a beer 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 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 to provide free or discounted rides to consumers. Nothing in this provision authorizes a beer manufacturer to provide a gift or anything of value directly or indirectly to a retail licensee. For purposes of this subdivision, “beer manufacturer” has the same meaning as defined in subparagraph (B) of paragraph (2) of subdivision (b).

(e)  For purposes of this section, “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.

SEC. 3.5.

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.

(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.

SEC. 4.

Section 3.5 of this bill incorporates amendments to Section 25600 of the Business and Professions Code proposed by both this bill and Senate Bill 973. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2019, (2) each bill amends Section 25600 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 973, in which case Section 3 of this bill shall not become operative.

Senate Bill Summaries

Senate Bill No. 973 – (Dodd) – Alcoholic beverages: annual license fees: surcharge: distilled spirits manufacturers: free or discounted rides.

An act to amend Sections 23320.5 and 25600 of the Business and Professions Code, relating to alcoholic beverages.

Summary of Code Section Changes

This bill increases the ABC license surcharge which funds the California Highway Patrol’s Designated Driver Program from $5 to $10 and requires the Department of California Highway Patrol to prioritize the expenditure of the funds received from the imposition of the surcharge for outreach and education activities in, and adjacent to, individual events or venues, as specified.

This bill also authorizes a distilled spirits manufacturer, as defined, to provide consumers free or discounted rides, as specified, for the purpose of furthering public safety, and prohibits the distilled spirits manufacturer from conditioning a free or discounted ride upon the purchase of an alcoholic beverage. The bill also prohibits a distilled spirits importer general, as described, from directly or indirectly underwriting, sharing in, or contributing to, the costs of free or discounted rides or from serving as an agent of a distilled spirits manufacturer to provide free or discounted rides to consumers.

This bill incorporates additional changes to Section 25600 of the Business and Professions Code outlined in AB 3264, Chapter 727, Statutes of 2018

SECTION 1.

Section 23320.5 of the Business and Professions Code is amended to read:

23320.5.

(a) In addition to the annual fees provided for in Section 23320, the department shall collect a surcharge of ten dollars ($10).

(b)  (1) All money collected from the surcharge described in subdivision (a) shall be deposited in the Motor Vehicle Account in the State Transportation Fund, and shall be used for the Department of the California Highway Patrol’s Designated Driver Program, when appropriated to the Department of the California Highway Patrol for that purpose.

(2)  The Department of California Highway Patrol shall prioritize the expenditure of funds received pursuant to this subdivision for the Designated Driver Program’s outreach and education activities in, and adjacent to, individual events or venues, including, but not limited to, stadiums, parks, entertainment complexes, and arenas.

SEC. 2.

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.

(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.

(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.

SEC. 2.5.

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.

(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.

SEC. 3.

Section 2.5 of this bill incorporates amendments to Section 25600 of the Business and Professions Code proposed by both this bill and Assembly Bill 3264. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2019, (2) each bill amends Section 25600 of the Business and Professions Code, and (3) this bill is enacted after Assembly Bill 3264, in which case Section 2 of this bill shall not become operative.

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.

Senate Bill No. 1164 (Skinner), Chapter 695, Statutes of 2018 – Craft distillers

An act to amend Sections 23363.1, 23502, 23504, 23771, 25173, 25503.3, 25503.5, 25503.56, and 25503.9 of the Business and Professions Code, relating to alcoholic beverages.

Summary of Code Section Changes

This bill contains a number of provisions granting tied-house exceptions for Craft Distillers.

(1)  This bill increases the maximum amount of distilled spirits that a craft distiller is permitted to manufacture to 150,000 gallons. The bill prohibits the department from issuing a craft distiller’s license to any person that manufactures, or has manufactured for it, more than 150,000 gallons of distilled spirits per year, as described above. The bill also eliminates the requirement that the prepackaged containers of the licensee’s spirits described above, be sold only to a person attending these tastings. The bill makes a conforming change in connection with tastings.

(2)  Existing law makes it a crime for various alcoholic beverage licensees to deliver un- denatured ethyl alcohol or other distilled spirits in packages of more than one gallon for use in the trades, professions, or industries, unless the package is plainly labeled, as specified.

This bill applies these provisions to craft distillers.

(3)  Existing law authorizes various alcoholic beverage licensees, including distilled spirits manufacturers, to serve and provide food, beverages, and entertainment at conventions and trade shows of bona fide trade associations and to advertise in regular publications of specified trade associations, among other things. Existing law authorizes various alcoholic beverage licensees, including distilled spirits manufacturers, to provide instruction and to conduct courses on their respective beverages for licensees and to provide beverages in this context. Existing law provides a similar authorization to provide instructional tasting events to consumers and prescribes a variety of limits and conditions in this regard, including restrictions on the number and size of tastings, who may serve them, and how often they may be conducted.

This bill extends the authorizations described above to craft distillers.

(4)  Existing law provides that the Alcoholic Beverage Control Act does not prohibit various alcoholic beverage licensees, including distilled spirits manufacturers, from giving or selling beverages, as specified, to certain charities and prescribes conditions in this regard.

This bill applies these provisions to craft distillers. This bill also makes technical and conforming changes.

(5)  This bill incorporates additional changes to Section 25503.56 of the Business and Professions Code proposed by AB 2452 to be operative only if this bill and AB 2452 are enacted and this bill is enacted last.

This bill incorporates additional changes to Section 25503.9 of the Business and Professions Code proposed by AB 1986 to be operative only if this bill and AB 1986 are enacted and this bill is enacted last.

(6)  By expanding the definition of a crime, this bill imposes a state-mandated local program.

(7)  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 provides that no reimbursement is required by this act for a specified reason.

SECTION 1.

The Legislature finds and declares the following:

(a)  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.

(b)  The exceptions established by this section to the general prohibition against tied interests are to be limited to their express terms, so as not to undermine the general prohibition, and this section shall be construed accordingly.

(c)  It is the intent of the Legislature, in enacting this act, to clarify existing law that encourages the development of the craft distilling industry within the state through the enactment of various limited exemptions to the general provisions of the three-tier system, while also continuing to uphold and support the three-tier system as the appropriate mechanism for regulating and licensing the sale of distilled spirits in California.

SEC. 2.

Section 23363.1 of the Business and Professions Code is amended to read:

23363.1.

(a) A distilled spirits manufacturer’s license or a craft distiller’s license authorizes the licensee to conduct tastings of distilled spirits produced or bottled by, or produced or bottled for, the licensee, on or off the licensee’s premises.

(b)  (1) Distilled spirits tastings may be conducted by the licensee off the licensee’s premises only for an event sponsored by a nonprofit organization. A distilled spirits manufacturer shall not sell or solicit sales of distilled spirits at an event. The sponsoring organization shall first obtain a permit from the department.

(2) For purposes of this subdivision, “nonprofit organization” does not include any community college or other institution of higher learning, as defined in the Education Code, nor does it include any officially recognized club, fraternity, or sorority, whether or not that entity is located on or off the institution’s campus.

(c)  Tastings on the licensee’s premises shall be subject to the following conditions:

(1)  The total volume of tastings of distilled spirits shall not exceed one and one-half ounces per individual per day.

(2)  Tastings shall only include the products that are authorized to be produced or bottled by or for the licensee.

(3)  A person under 21 years of age shall not serve tastes of distilled spirits.

(d)  Notwithstanding Section 25600, the licensee may provide distilled spirits without charge for any tastings conducted pursuant to this section. The licensee may charge for tastings conducted by the licensee on its licensed premises.

(e)  This section shall not relieve the holder of a craft distiller’s license or a distilled spirits manufacturer’s license of any civil or criminal liability arising out of a violation of Section 25602.

SEC. 3.

Section 23502 of the Business and Professions Code is amended to read:

23502.

(a) The department may issue a craft distiller’s license to a person that has facilities and equipment for the purposes of, and is engaged in, the commercial manufacture of distilled spirits. The craft distiller’s license authorizes the licensee to do all of the following:

(1)  Manufacture distilled spirits. For purposes of this article, “manufacture” means the actual distillation of distilled spirits from naturally fermented materials or the redistillation of distilled spirits obtained from another manufacturer of distilled spirits.

(2)  Produce distilled spirits. For purposes of this article, “produce” means to mix, color, flavor, or blend distilled spirits, whether manufactured by the licensee or by another manufacturer of distilled spirits.

(3)  Only sell distilled spirits that are manufactured or produced by the licensee solely to a wholesaler, manufacturer, winegrower, manufacturer’s agent, or rectifier that holds a license authorizing the sale of distilled spirits or to persons that take delivery of those distilled spirits within this state for delivery or use without the state.

(4)  Deal in warehouse receipts.

(5)  Manufacture or produce up to 150,000 gallons of distilled spirits per fiscal year (July 1 through June 30), excluding brandy the craft distiller manufactures or has manufactured for it pursuant to a brandy manufacturer license, as reported to the department in the manner prescribed by the department for the fiscal year prior to the date of submitting an application for the license. At least 65 percent of the total volume of distilled spirits manufactured or produced shall be actually manufactured by the licensee. The volume of distilled spirits authorized by this paragraph shall be calculated by adding the volume of distilled spirits, less waste, drawn off the still with the volume of distilled spirits obtained by the licensee from any other source that is not redistilled by the licensee. For purposes of this paragraph, “volume” means the liquid volume and shall not be based on proof gallons or packaged goods.

(b)  A craft distiller’s license shall not be issued to any person, any officer, director, employee, or agent of such person, or any person who is affiliated with, directly or indirectly, a person that manufactures or has manufactured for them more than 150,000 gallons of distilled spirits per year within or without the state, excluding brandy it manufactures or has manufactured for them pursuant to a brandy manufacturer license, or to any person that is affiliated with, directly or indirectly, a wholesaler.

(c)  (1) The fee for an original craft distiller’s license issued pursuant to this section shall be consistent with the distilled spirits manufacturer’s license and shall be adjusted pursuant to subdivisions (b) and (c) of Section 23320.

(2)  The annual license fee for a craft distiller’s license shall be consistent with the distilled spirits manufacturer’s license and shall be adjusted pursuant to subdivisions (b) and (c) of Section 23320.

(3)  All moneys collected as fees pursuant to this section shall be deposited in the Alcohol Beverage Control Fund as provided in Section 25761.

(d)  A licensed craft distiller shall report to the department, at the time of renewal in the manner prescribed by the department, the amount of distilled spirits manufactured or produced by the licensee specifying, as applicable, the respective amounts of distilled spirits the licensed craft distiller has manufactured itself, obtained from another manufacturer of distilled spirits, and imported, excluding brandy manufactured by or for the licensee pursuant to a brandy manufacturer license, during the previous fiscal year. If the report to the department establishes that the licensee no longer qualifies to hold a craft distiller’s license because the licensee has either exceeded the 150,000 gallon manufacture or production limitation as specified in paragraph (5) of subdivision (a) or actually manufactured less than 65 percent of the total volume of distilled spirits as specified in paragraph (5) of subdivision (a), the department shall renew the license as a distilled spirits manufacturer’s license.

SEC. 4.

Section 23504 of the Business and Professions Code is amended to read:

23504.

Notwithstanding any other provision, a licensed craft distiller may sell up to the equivalent of 2.25 liters in any combination of prepackaged containers per day per consumer of distilled spirits manufactured or produced by the licensee at its premises to a consumer.

SEC. 5.

Section 23771 of the Business and Professions Code is amended to read:

23771.

Except as provided in Section 23771.5, a distilled spirits license of any kind, except a distilled spirits manufacturer’s, a craft distiller’s, or a distilled spirits manufacturer’s agent’s license, shall not be issued to any person, or to any officer, director, employee, or agent of any person that manufactures distilled spirits within or without this state.

SEC. 6.

Section 25173 of the Business and Professions Code is amended to read:

25173.

Any industrial alcohol dealer, distilled spirits manufacturer, craft distiller, brandy manufacturer, or rectifier who delivers undenatured ethyl alcohol or other distilled spirits in packages of more than one gallon for use in the trades, professions, or industries is guilty of a misdemeanor, unless the packages bear a label plainly stating the true and correct name and address of the industrial alcohol dealer, distilled spirits manufacturer, brandy manufacturer, or rectifier.

SEC. 7.

Section 25503.3 of the Business and Professions Code is amended to read:

25503.3.

(a) Notwithstanding any other provision of this division, any winegrower, beer manufacturer, brandy manufacturer, distilled spirits manufacturer, craft distiller, or distilled spirits manufacturer’s agent may, at parties held, or in hospitality rooms maintained, in conjunction with meetings, conventions, or combined conventions and trade shows of bona fide trade associations of retail licensees, serve and provide free of charge, food, alcoholic and nonalcoholic beverages, entertainment, and recreational activities to the retail licensees and their guests while attending those meetings, conventions, or combined conventions and trade shows. Additionally, any person specified in this section may pay a fee to the bona fide trade association for the privilege of providing food, alcoholic or nonalcoholic beverages, entertainment, or recreational activities, or for display booth space, as long as the fee is at the same rate charged all suppliers.

(b)  Any person specified in subdivision (a) may advertise in any regular publication of a bona fide trade association the members of which are food or alcoholic beverage retailers, if that publication does not advertise on behalf of, or directly benefit, any individual retail licensee. The advertising fee paid to the bona fide trade association or its agent shall be at the same rate charged all advertisers.

(c)  Any person specified in subdivision (a) may pay membership dues to a bona fide trade association as long as the dues are at the same rate charged all nonretail members of the association.

(d)  A licensed beer manufacturer or a brewpub-restaurant licensee may serve, for consumption on the premises, beer produced by the licensed beer manufacturer or brewpub-restaurant licensee to attendees at a meeting of a bona fide beer manufacturer trade association or brewers’ guild held on the premises of a licensed beer manufacturer.

SEC. 8.

Section 25503.5 of the Business and Professions Code is amended to read:

25503.5.

(a) A winegrower, beer manufacturer, or a beer and wine wholesaler may, without charge, instruct licensees and their employees, or conduct courses of instruction for licensees and their employees, on the subject of wine or beer, including, but not limited to, the history, nature, values, composition, and characteristics of wine or beer, the use of wine lists, and the methods of presenting and serving wine or beer. The winegrower, beer manufacturer, or beer and wine wholesaler may furnish wine or beer and the equipment, materials, and utensils that may be required for use in connection with the instruction or courses of instruction.

(b)  A craft distiller, distilled spirits manufacturer, distilled spirits manufacturer’s agent, distilled spirits general rectifier, or distilled spirits general importer may, without charge, instruct licensees and their employees, or conduct courses of instruction for licensees and their employees, on the subject of distilled spirits, including, but not limited to, the history, nature, values, and characteristics of distilled spirits, and the methods of presenting and serving distilled spirits. The craft distiller, distilled spirits manufacturer, or distilled spirits manufacturer’s agent may furnish distilled spirits and the equipment, materials, and utensils that may be required for use in connection with the instruction or courses of instruction.

(c)  The instruction or courses of instruction, authorized in subdivision (a) or (b), may be given at the premises of the winegrower, beer manufacturer, beer and wine wholesaler, craft distiller, distilled spirits manufacturer, distilled spirits manufacturer’s agent, distilled spirits general rectifier, distilled spirits general importer, or of a licensee, including an on- sale retail licensee, or elsewhere.

SEC. 9.

Section 25503.56 of the Business and Professions Code is amended to read:

25503.56.

(a) An authorized licensee, or a designated representative of an authorized licensee acting as an agent of the authorized licensee, may conduct, on the area specified by paragraph (1) of subdivision (c) of Section 23396.6, an instructional tasting event for consumers on the subject of wine, beer, or distilled spirits, including, but not limited to, the history, nature, values, and characteristics of wine, beer, or distilled spirits, and the methods of presenting and serving wine, beer, or distilled spirits.

(1)  (A) Except as provided in subparagraph (B), the instructional tasting event may include the serving of alcoholic beverages to an attendee of legal drinking age. An instructional tasting event on the subject of wine or distilled spirits shall be limited to not more than three tastings per person per day. A single tasting of distilled spirits shall not exceed one- fourth of one ounce and a single tasting of wine shall not exceed one ounce. An instructional tasting event on the subject of beer shall be limited to not more than the tasting of eight ounces of beer per person per day. The wine, beer, or distilled spirits tasted shall be limited to the products that are authorized to be sold by the authorized licensee and the licenseholder under its off-sale license.

(B)  A beer and wine wholesaler may conduct an instructional tasting event but shall not serve tastes of beer unless the beer and wine wholesaler also holds a beer manufacturer’s license, an out-of-state beer manufacturer’s certificate, or more than six distilled spirits wholesaler’s licenses.

(C)  No charge of any sort shall be made for the tastings. Except for the purposes of Section 23985, the serving of tastings shall not be deemed a sale of products pursuant to this division.

(D)  A person under 21 years of age shall not serve wine, beer, or distilled spirits at the instructional tasting event.

(E)  All tastes shall be served by an employee of the authorized licensee, the designated representative of the authorized licensee, or by an employee of the designated representative of the authorized licensee.

(F)  An authorized licensee, or a designated representative of an authorized licensee, shall either supply the wine or distilled spirits to be tasted during the instructional tasting event or purchase the wine or distilled spirits from the licenseholder at the original invoiced cost. An authorized licensee, or a designated representative of an authorized licensee, shall purchase beer to be tasted during the instructional tasting event from the licenseholder at the original invoiced cost.

(G)  Any unused wine, beer, or distilled spirits remaining from the tasting shall be removed from the off-sale licensed premises by the authorized licensee or its designated representative.

(2)  If the instructional tasting event is conducted by a designated representative of an authorized licensee, the designated representative shall not be owned, controlled, or employed directly or indirectly by the licenseholder on whose premises the instructional tasting event is held.

(3)  An instructional tasting event shall be limited to a single type of alcoholic beverage. For purposes of this paragraph, “type of alcoholic beverage” means distilled spirits, wine, or beer.

(b)  For purposes of this section:

(1)  “Authorized licensee” means a winegrower, California winegrower’s agent, beer and wine importer general, beer and wine wholesaler, wine rectifier, craft distiller, distilled spirits manufacturer, distilled spirits manufacturer’s agent, distilled spirits importer general, distilled spirits rectifier, distilled spirits general rectifier, rectifier, out-of-state distilled spirits shipper’s certificate holder, distilled spirits wholesaler, brandy manufacturer, brandy importer, California brandy wholesaler, beer manufacturer, or an out-of-state beer manufacturer certificate holder. “Authorized licensee” shall not include an entity that solely holds a combination of a beer and wine wholesale license and an off-sale beer and wine retail license or holds those licenses solely in combination with any license not listed in this paragraph, or holds a limited off-sale retail wine license.

(2)  “Licenseholder” means an off-sale retail licensee issued an instructional tasting license pursuant to Section 23396.6.

(3)  “Location” means the total contiguous area encompassed by the off-sale and on-sale licenses.

(c)  Notwithstanding subparagraph (E) of paragraph (1) of subdivision (a), a licenseholder may conduct an instructional tasting event that includes the serving of tastings only when an authorized licensee or its designated representative are unable to conduct an instructional tasting event previously advertised pursuant to this section and scheduled by the authorized licensee or its designated representative, provided that the licenseholder supplies the wine, beer, or distilled spirits used in the instructional tasting event and provides or pays for a person to serve the wine, beer, or distilled spirits. Instructional tasting events conducted by a licenseholder pursuant to this subdivision are subject to the provisions of this section and Section 23396.6.

(d)  No more than one authorized licensee, or its designated representative, may conduct an instructional tasting event that includes the serving of tastes of wine, beer, or distilled spirits at any one individual licensed premises of a licenseholder per day.

(e)  A licenseholder that also holds an on-sale beer and wine license, an on-sale beer and wine eating place license, or an on-sale general license shall not allow an authorized licensee, or its designated representative, to conduct an instructional tasting event on the same day and at the same location as any instructional tasting event held pursuant to subdivision (b) of Section 23386, Section 25503.4, subdivision (c) of Section 25503.5, or Section 25503.55.

(f)  A licenseholder shall not condition the allowance of an instructional tasting event upon the use of a particular designated representative of an authorized licensee.

(g)  (1) In addition to any point-of-sale advertising or other advertising items allowed under this division or under rules of the department, an authorized licensee or its designated representative, in his or her absolute discretion and with permission of the licenseholder upon whose premises the instructional tasting event will be held, may list in an advertisement to the general public the name and address of the licenseholder, the names of the alcoholic beverages being featured at the instructional tasting event, and the time, date, and location of, and other information about, the instructional tasting event, provided that both of the following apply:

(A) The advertisement does not contain the retail price of the alcoholic beverages.

(B)  The listing of the licenseholder’s name and address is the only reference to the licenseholder in the advertisement.

(2) Pictures or illustrations of the licenseholder’s licensed premises and laudatory references to the licenseholder in these advertisements are not authorized. Nothing in this section shall authorize an authorized licensee or its designated representative to share in the costs, if any, of the licenseholder.

(h)  A licenseholder may advertise an instructional tasting event to the general public. The costs of this advertising shall be borne solely by the licenseholder. Advertising permitted by this subdivision includes flyers, newspaper ads, Internet communications, and interior signage.

(i)  Except as otherwise provided in this division or rules of the department, no premium, gift, free goods, or other thing of value shall be given away by an authorized licensee or its designated representative in connection with an instructional tasting event that includes tastings of an alcoholic beverage.

(j)  The licenseholder or the authorized licensee or its designated representative is authorized to perform setup and breakdown of the instructional tasting event area. The authorized licensee or its designated representative may provide, free of charge to the licenseholder, the equipment, materials, and utensils as may be required for use in connection with the instructional tasting event.

(k) (1) A licenseholder shall not require, or enter into a collusive scheme with, an authorized licensee or its designated representative to conduct one or more instructional tasting events as a condition of the licenseholder’s carrying or continuing to carry a brand or brands of the authorized licensee or as a condition for display or other merchandising plan which is based on an agreement to provide shelf space. An authorized licensee or its designated representative shall not require any preferential treatment or benefit from, or enter into a collusive scheme with, a licenseholder as a condition of conducting one or more instructional tasting events, require a licenseholder to carry or continue to carry a brand or brands of the authorized licensee as a condition of conducting one or more instructional tasting events, or condition display or other merchandising plans that are based on agreements for the provision of shelf space on the conducting of one or more instructional tasting events. Any agreement, whether written or oral, entered into by and between a licenseholder and an authorized licensee or its designated representative that precludes the conducting of instructional tasting events on the premises of the licenseholder by any other authorized licensee is prohibited. A licenseholder or authorized licensee, or its designated representative, shall not use an instructional tasting event to circumvent any other requirements of this division.

(2) In addition to any other remedies available under this division, upon a finding by the department of a failure to comply with this subdivision, the department shall suspend the instructional tasting license of the licenseholder and the privilege of the authorized licensee to conduct instructional events for not less than six months but for no more than one year.

(l)  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 exception established by this section to the general prohibition against tied interests must be limited to its express terms so as not to undermine the general prohibition, and intends that this section be construed accordingly.

SEC. 9.5.

Section 25503.56 of the Business and Professions Code is amended to read:

25503.56.

(a) An authorized licensee, or a designated representative of an authorized licensee acting as an agent of the authorized licensee, may conduct, on the area specified by paragraph (1) of subdivision (c) of Section 23396.6, an instructional tasting event for consumers on the subject of wine, beer, or distilled spirits, including, but not limited to, the history, nature, values, and characteristics of wine, beer, or distilled spirits, and the methods of presenting and serving wine, beer, or distilled spirits.

(1)  (A) Except as provided in subparagraph (B), the instructional tasting event may include the serving of alcoholic beverages to an attendee of legal drinking age. An instructional tasting event on the subject of wine or distilled spirits shall be limited to not more than three tastings per person per day. A single tasting of distilled spirits shall not exceed one- fourth of one ounce and a single tasting of wine shall not exceed one ounce. An instructional tasting event on the subject of beer shall be limited to not more than the tasting of eight ounces of beer per person per day. The wine, beer, or distilled spirits tasted shall be limited to the products that are authorized to be sold by the authorized licensee and the licenseholder under its off-sale license.

(B)  A beer and wine wholesaler may conduct an instructional tasting event but shall not serve tastes of beer unless the beer and wine wholesaler also holds a beer manufacturer’s license, an out-of-state beer manufacturer’s certificate, or more than six distilled spirits wholesaler’s licenses.

(C)  No charge of any sort shall be made for the tastings. Except for the purposes of Section 23985, the serving of tastings shall not be deemed a sale of products pursuant to this division.

(D)  A person under 21 years of age shall not serve wine, beer, or distilled spirits at the instructional tasting event.

(E)  All tastes shall be served by an employee of the authorized licensee, the designated representative of the authorized licensee, or by an employee of the designated representative of the authorized licensee.

(F)  An authorized licensee, or a designated representative of an authorized licensee, shall either supply the wine or distilled spirits to be tasted during the instructional tasting event or purchase the wine or distilled spirits from the licenseholder at the original invoiced cost. An authorized licensee, or a designated representative of an authorized licensee, shall purchase beer to be tasted during the instructional tasting event from the licenseholder at the original invoiced cost.

(G)  Any unused wine, beer, or distilled spirits remaining from the tasting shall be removed from the off-sale licensed premises by the authorized licensee or its designated representative.

(2)  If the instructional tasting event is conducted by a designated representative of an authorized licensee, the designated representative shall not be owned, controlled, or employed directly or indirectly by the licenseholder on whose premises the instructional tasting event is held.

(3)  An instructional tasting event shall be limited to a single type of alcoholic beverage. For purposes of this paragraph, “type of alcoholic beverage” means distilled spirits, wine, or beer.

(b)  For purposes of this section:

(1)  “Authorized licensee” means a winegrower, California winegrower’s agent, beer and wine importer general, beer and wine wholesaler, wine rectifier, craft distiller, distilled spirits manufacturer, distilled spirits manufacturer’s agent, distilled spirits importer general, distilled spirits rectifier, distilled spirits general rectifier, rectifier, out-of-state distilled spirits shipper’s certificate holder, distilled spirits wholesaler, brandy manufacturer, brandy importer, California brandy wholesaler, beer manufacturer, or an out-of-state beer manufacturer certificate holder. “Authorized licensee” shall not include an entity that solely holds a combination of a beer and wine wholesale license and an off-sale beer and wine retail license or holds those licenses solely in combination with any license not listed in this paragraph, or holds a limited off-sale retail wine license.

(2)  “Licenseholder” means an off-sale retail licensee issued an instructional tasting license pursuant to Section 23396.6.

(3)  “Location” means the total contiguous area encompassed by the off-sale and on-sale licenses.

(c)  Notwithstanding subparagraph (E) of paragraph (1) of subdivision (a), a licenseholder may conduct an instructional tasting event that includes the serving of tastings only when an authorized licensee or its designated representative are unable to conduct an instructional tasting event previously advertised pursuant to this section and scheduled by the authorized licensee or its designated representative, provided that the licenseholder supplies the wine, beer, or distilled spirits used in the instructional tasting event and provides or pays for a person to serve the wine, beer, or distilled spirits. Instructional tasting events conducted by a licenseholder pursuant to this subdivision are subject to the provisions of this section and Section 23396.6.

(d)  No more than one authorized licensee, or its designated representative, may conduct an instructional tasting event that includes the serving of tastes of wine, beer, or distilled spirits at any one individual licensed premises of a licenseholder per day.

(e)  A licenseholder that also holds an on-sale beer and wine license, an on-sale beer and wine eating place license, or an on-sale general license shall not allow an authorized licensee, or its designated representative, to conduct an instructional tasting event on the same day and at the same location as any instructional tasting event held pursuant to subdivision (b) of Section 23386, Section 25503.4, subdivision (c) of Section 25503.5, or Section 25503.55.

(f)  A licenseholder shall not condition the allowance of an instructional tasting event upon the use of a particular designated representative of an authorized licensee.

(g)  (1) In addition to any point-of-sale advertising or other advertising items allowed under this division or under rules of the department, an authorized licensee or its designated representative, in his or her absolute discretion and with permission of the licenseholder upon whose premises the instructional tasting event will be held, may list in any advertisement to the general public for the instructional tasting event the name, address, telephone number, email address, Internet Web site address, and any other electronic media of the licenseholder, the names of the alcoholic beverages being featured at the instructional tasting event, pictures, illustrations, and depictions of the retailer’s premises, personnel, and customers, and the time, date, and location of, and other information about, the instructional tasting event, provided that both of the following apply:

(A) The advertisement does not contain the retail price of the alcoholic beverages.

(B)  The listing of the licenseholder’s name, address, telephone number, email address, Internet Web site address, and any other electronic media in the advertisement is relatively inconspicuous in relation to the advertisement as a whole.

(2) Laudatory references to the licenseholder in these advertisements are not authorized. The reposting of social media posts, including posts by the retailer, is permitted provided that the reposting complies with all the requirements of this section. Nothing in this section shall authorize an authorized licensee or its designated representative to share in the costs, if any, of the licenseholder.

(h)  A licenseholder may advertise an instructional tasting event to the general public. The costs of this advertising shall be borne solely by the licenseholder. Advertising permitted by this subdivision includes flyers, newspaper ads, Internet communications, and interior signage.

(i)  Except as otherwise provided in this division or rules of the department, no premium, gift, free goods, or other thing of value shall be given away by an authorized licensee or its designated representative in connection with an instructional tasting event that includes tastings of an alcoholic beverage.

(j)  The licenseholder or the authorized licensee or its designated representative is authorized to perform setup and breakdown of the instructional tasting event area. The authorized licensee or its designated representative may provide, free of charge to the licenseholder, the equipment, materials, and utensils as may be required for use in connection with the instructional tasting event.

(k) (1) A licenseholder shall not require, or enter into a collusive scheme with, an authorized licensee or its designated representative to conduct one or more instructional tasting events as a condition of the licenseholder’s carrying or continuing to carry a brand or brands of the authorized licensee or as a condition for display or other merchandising plan which is based on an agreement to provide shelf space. An authorized licensee or its designated representative shall not require any preferential treatment or benefit from, or enter into a collusive scheme with, a licenseholder as a condition of conducting one or more instructional tasting events, require a licenseholder to carry or continue to carry a brand or brands of the authorized licensee as a condition of conducting one or more instructional tasting events, or condition display or other merchandising plans that are based on agreements for the provision of shelf space on the conducting of one or more instructional tasting events. Any agreement, whether written or oral, entered into by and between a licenseholder and an authorized licensee or its designated representative that precludes the conducting of instructional tasting events on the premises of the licenseholder by any other authorized licensee is prohibited. A licenseholder or authorized licensee, or its designated representative, shall not use an instructional tasting event to circumvent any other requirements of this division.

(2) In addition to any other remedies available under this division, upon a finding by the department of a failure to comply with this subdivision, the department shall suspend the instructional tasting license of the licenseholder and the privilege of the authorized licensee to conduct instructional events for not less than six months but for no more than one year.

(l)  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 exception established by this section to the general prohibition against tied interests must be limited to its express terms so as not to undermine the general prohibition, and intends that this section be construed accordingly.

SEC. 10.

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 an 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 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, 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.

(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, 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, 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 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, 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.

SEC. 10.5.

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 an 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 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, 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.

(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, 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, 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 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, 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.

(d)  A licensee authorized to donate or sell alcoholic beverages to a nonprofit corporation, organization, or association pursuant to this section, except for a beer and wine wholesaler that also holds an importer’s license, 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.

SEC. 11.

Section 9.5 of this bill incorporates amendments to Section 25503.56 of the Business and Professions Code proposed by both this bill and Assembly Bill 2452. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2019, (2) each bill amends Section 25503.56 of the Business and Professions Code, and (3) this bill is enacted after Assembly Bill 2452, in which case Section 9 of this bill shall not become operative.

SEC. 12.

Section 10.5 of this bill incorporates amendments to Section 25503.9 of the Business and Professions Code proposed by both this bill and Assembly Bill 1986. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2019, (2) each bill amends Section 25503.9 of the Business and Professions Code, and (3) this bill is enacted after Assembly Bill 1986, in which case Section 10 of this bill shall not become operative.

SEC. 13.

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.

Senate Bill No. 1283 – (Bradford), Chapter 736, Statutes of 2018 – Brewpub-restaurant licensees: beer sales

An act to amend Section 23396.3 of the Business and Professions Code, relating to alcoholic beverages.

Summary of Code Section Changes

This bill revises the definition of the brewpub- restaurant license to require that the licensed premises have a minimum 7-barrel commercial brewing system located permanently onsite, that is capable of producing at least 7 barrels of beer per brewing cycle. The bill increases the minimum amount to be manufactured by the licensee to 200 barrels. The bill requires that beer produced on the premises be offered for sale to consumers for consumption on or off the premises in a bona fide manner, as specified. The bill authorizes a brewpub-restaurant licensee to label, bottle, package, or refill any container with beer produced on the licensed premises, to sell beer produced by the licensee for consumption off the premises, as provided, and to donate or sell beer manufactured by the licensee to specified nonprofit organizations, as provided.

The bill exempts donated beer from inclusion in the calculation of minimum amounts of beer production required to be manufactured and sold for purposes of the brewpub- restaurant license. The bill limits the amount that specified brewpub-restaurant licenses may be sold or transferred for and would impose a limitation on the number of licenses that may be issued as of a specified date. The bill requires a license holder to maintain records to establish compliance with brewpub-restaurant license requirements, as specified. By expanding the definition of a crime, this bill imposes a state-mandated local program.

SECTION 1.

Section 23396.3 of the Business and Professions Code is amended to read:

23396.3.

(a) (1) A brewpub-restaurant license is a retail license which may be issued to a bona fide public eating place, as defined in Section 23038. The licensed premises shall have a minimum seven-barrel commercial brewing system located permanently onsite that is capable of producing at least seven barrels of beer per brewing cycle, and the licensee shall produce not less than 200 barrels nor more than 5,000 barrels of beer annually on the licensed premises. The license authorizes the sale of beer, wine, and distilled spirits for consumption on the premises, and the sale of beer produced by the brewpub-restaurant licensee for consumption on the premises. The license also authorizes the sale of beer produced by the licensed brewpub-restaurant licensee to a licensed beer and wine wholesaler, subject to the requirements of Chapter 12 (commencing with Section 25000). A brewpub-restaurant license does not authorize any of the following:

(A) The sale, furnishing, or exchange of any alcoholic beverages with any other brewpub- restaurant licensee, any licensed beer manufacturer regardless of any other licenses held by the licensed beer manufacturer, or any retail licensee in California.

(B)  The sale, furnishing, or exchange of any beer produced on the licensed premises bearing the same trademark as any beer produced by a licensed beer manufacturer.

(C)  A brewpub-restaurant licensee to engage a licensed beer manufacturer to produce beer for sale by the brewpub-restaurant licensee.

(2) Beer produced on the premises shall be offered for sale to consumers for consumption on the premises or off-premises in a bona fide manner. In determining whether the licensee is offering beer produced on the premises for sale in a bona fide manner, the department may consider, without limitation, whether, and the extent to which, the licensee actually sells beer manufactured on the licensed premises to consumers.

(b)  A brewpub-restaurant licensee shall purchase all beer, wine, or distilled spirits for sale on the licensed premises from a licensed wholesaler or winegrower, except for the beer produced by the brewpub-restaurant licensee on the licensed premises.

(c)  Notwithstanding any other law, a brewpub-restaurant licensee may label, bottle, package, or refill any container with beer produced on the licensed premises and may, at the licensed premises, sell beer produced and packaged by the licensee to consumers for consumption off the premises.

(d)  A brewpub-restaurant licensee may donate or sell beer produced by the licensee to a nonprofit charitable corporation or association or a nonprofit incorporated trade association pursuant to subdivisions (a) and (b) of Section 25503.9, provided that beer donated pursuant to this section shall not count in the calculation of minimum amounts of beer required to be manufactured and sold pursuant to subdivision (a).

(e)  A brewpub-restaurant licensee shall offer for sale on the licensed premises canned, bottled, or draft beer commercially available from licensed wholesalers.

(f)  (1) The fee for an original brewpub-restaurant license shall be the same as that specified in Section 23954.5 for an original on-sale general license.

(2) The annual license fee for a brewpub-restaurant license shall be the same as that for an on-sale general license.

(g)  An existing brewpub-restaurant license or a brewpub license issued pursuant to an application filed with the department prior to December 31, 2019, shall not be sold or transferred for a price greater than the original license fee paid by the seller or transferor.

(h)  (1) The limitations provided in Section 23816 on the number of licensed premises shall not apply to a brewpub-restaurant license application submitted to the department prior to December 31, 2019.

(2)  The limitations provided in Section 23816 on the number of licensed premises shall apply to a brewpub-restaurant license application submitted to the department on or after December 31, 2019.

(i)  The licensee shall maintain records on a monthly or quarterly basis that are adequate to establish compliance with this section and to enable the department to identify which beer sold by a licensee was produced on the premises in order to establish the licensee’s compliance with subdivisions (a) and (b). These records shall be maintained for a period of at least three years and shall be provided to the department within 30 days of receipt of the department’s written request.

SEC. 2.

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.

Senate Bill No. 1503 – (Senate Committee on Governmental Organization), Chapter 362, Statutes of 2018 – Alcoholic beverages: licensees

An act to amend Sections 23800 and 23803 of the Business and Professions Code, relating to alcoholic beverages.

Summary of Code Section Changes

This bill authorizes the department to place reasonable conditions upon retail licensees, or upon any licensee in the exercise of retail privileges, at the time any physical changes or alterations are made to the licensed premises, subject to approval by the department, that materially or substantially alter the premises or the usage of the premises from the plan contained in the diagram of licensed premises on file with the license application. The bill provides that, for purposes of the removal or modification of conditions, a situation in which the “grounds that caused the imposition of the condition no longer exist” includes, but is not limited to, the situation in which there have been substantial changes in the totality of circumstances such that the department determines that the current circumstances reasonably justify the modification or removal of the conditions.

SECTION 1.

Section 23800 of the Business and Professions Code is amended to read:

23800.

The department may place reasonable conditions upon retail licensees or upon any licensee in the exercise of retail privileges in the following situations:

(a)  If grounds exist for the denial of an application for a license or where a protest against the issuance of a license is filed and if the department finds that those grounds may be removed by the imposition of those conditions.

(b)  Where findings are made by the department which would justify a suspension or revocation of a license, and where the imposition of a condition is reasonably related to those findings. In the case of a suspension, the conditions may be in lieu of or in addition to the suspension.

(c)  Where the department issues an order suspending or revoking only a portion of the privileges to be exercised under the license.

(d)  Where findings are made by the department that the licensee has failed to correct objectionable conditions within a reasonable time after receipt of notice to make corrections given pursuant to subdivision (e) of Section 24200, or subdivision (a) or (b) of Section 24200.1.

(e)  (1) At the time of transfer of a license pursuant to Section 24070, 24071.1, or 24071.2, and upon written notice to the licensee, the department may adopt conditions that the department determines are reasonable pursuant to its investigation or that are requested by the local governing body, or its designated subordinate officer or agency, in whose jurisdiction the license is located. The request for conditions shall be supported by substantial evidence that the problems either on the premises or in the immediate vicinity identified by the local governing body or its designated subordinate officer or agency will be mitigated by the conditions. Upon receipt of the request for conditions, the department shall either adopt the conditions requested or notify the local governing body, or its designated subordinate officer or agency, in writing of its determination that there is not substantial evidence that the problem exists or that the conditions would not mitigate the problems identified. The department may adopt conditions only when the request is filed. Any request for conditions from the local governing body or its designated subordinate officer or agency pursuant to this provision shall be filed with the department within the time authorized for a local law enforcement agency to file a protest or proposed conditions pursuant to Section 23987.

(2) If the license to be transferred subject to paragraph (1) is located in an area of undue concentration as defined in Section 23958.4, the period within which the local governing body or its designated subordinate officer or agency may submit a written request for conditions shall be 40 days after the mailing of the notices required by Section 23987. For purposes of this provision only, undue concentration shall be established when the requirements of both paragraph (1) of subdivision (a) and either paragraph (2) or paragraph (3) of subdivision (a) of Section 23958.4 exist. Pursuant to Section 23987, the department may extend the 40-day period for a period not to exceed an additional 20 days upon the written request of any local law enforcement agency or local government entity with jurisdiction. Nothing in this paragraph is intended to reduce the burden of the local governing body or its designated subordinate officer or agency to support any request for conditions as required by paragraph (1). Notwithstanding Section 23987, the department may not transfer any license subject to this paragraph until after the time period permitted to request conditions as specified in this paragraph.

(f)  At the time of a transfer of a license pursuant to Article 5 (commencing with Section 24070) of Chapter 6.

(g)  At the time any physical changes or alterations are made to the licensed premises, subject to approval by the department, that materially or substantially alter the premises or the usage of the premises from the plan contained in the diagram of licensed premises on file with the license application.

SEC. 2.

Section 23803 of the Business and Professions Code is amended to read:

23803.

(a) The department, upon its own motion or upon the petition of a licensee or a transferee who has filed an application for the transfer of the license, if it is satisfied that the grounds that caused the imposition of the conditions no longer exist, shall order their removal or modification, provided written notice is given to the local governing body of the area in which the premises are located. The local governing body has 30 days to file written objections to the removal or modification of any condition. The department may not remove or modify any condition to which an objection has been filed without holding a hearing as provided in Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

(b)  For purposes of this section, a situation in which the “grounds that caused the imposition of the conditions no longer exist” includes, but is not limited to, the situation in which there have been substantial changes in the totality of circumstances such that the department determines that the current circumstances reasonably justify the modification or removal of the conditions.

(c)  Any petition for the removal or modification of a condition pursuant to this section shall be accompanied by a fee of one hundred dollars ($100).